Trading Symbol: SXR - Toronto Stock Exchange, JSE Limited (Johannesburg
TORONTO, Ontario, and JOHANNESBURG, South Africa, Jan. 30 /CNW/ - sxr
Uranium One Inc. ("Uranium One") is pleased to provide an update on progress
at its development and exploration projects as well as to announce several key
Dominion Reefs Uranium Mine
The Dominion Reefs Uranium Mine (DRUM) remains on schedule for
commencement of production on February 28, 2007 and the production for the
year 2007 projected in the October 26, 2006 independent technical report on
the Dominion project feasibility study is expected to be met.
Uranium One received its new order mining right for Dominion, as well as
approval for its Environmental Management Programme in October 2006. In
December 2006 Uranium One also received an additional water discharge permit
from the South African Department of Water Affairs and Forestry to release an
additional 70 l/s. This permission is in addition to the water use license
granted in July 2006 and was required to enable the mine to discharge shaft
water that is not required for the operation at present.
The Company has been advised by the National Nuclear Regulator of South
Africa (the NNR) that its application for the Certificate of Registration
required in connection with the Project has been approved in principle and
issuance of the Certificate is expected imminently. In accordance with
applicable regulatory requirements, applications for amendments to the
Certificate of Registration relating to subsequent stages of the Project will
be submitted by Uranium One to the NNR in due course.
The uranium plant is being commissioned in a staged approach and is on
target for the start-up of production under atmospheric leach conditions
during the first quarter of 2007. The pressure leach section will then be
brought on line during April 2007. This staged approach facilitates a quicker
ramp-up of production and recovery rates.
The crushing, milling and densification circuits were successfully
commissioned on November 21, 2006. Gold ore and slimes material are currently
being processed through these circuits. At present, the water, sulphuric acid,
lime and ammonia storage facilities as well as the supply pumps and services
are being commissioned. The coal-fired boiler has been cold commissioned and
is now being hot commissioned.
The plant design allows for the pre-leach and pressure leach circuits to
be bypassed. This allows for the staged commissioning of the circuit, from the
crushing and milling stages through to atmospheric leaching, counter current
decantation thickeners, pin bed clarifier, solvent extraction and ADU
production. The more complex pressure leach circuit will be commissioned once
the rest of the plant is operating satisfactorily. The brick lining for the
first autoclave is scheduled for completion in February 2007 and is scheduled
for cold commissioning in March 2007, followed by hot commissioning in April
2007. The commissioning of the pressure leach circuit will bring the plant up
to full design efficiency and design throughput of 100,000 tonnes per month
per autoclave. The second autoclave will be ready for commissioning in August
2007, thus increasing plant capacity to 200,000 tonnes per month.
The plant production ramp up is initially expected to exceed the ore
production from underground and spare plant capacity will be filled by
processing uranium and gold bearing slime from the Dominion dump resource.
Test work has shown good recoveries are obtainable from the slime material and
an 80,000 tonne per month hydraulic sluicing facility has been commissioned to
supplement production from underground.
At the Rietkuil Section, total development of the R1 decline stands at
1,213 metres. The Rietkuil incline shaft has been dewatered and
re-commissioned to 5 level, where mine development operations have commenced.
At the Dominion Section, development of the D1 and D2 declines total 690 and
280 metres, respectively. Mine development operations at the Dominion Section
have commenced on 1 level.
Underground mine development is at an advanced stage, with over 3,800
metres of footwall development. In addition, approximately 458 metres of
working face has now been opened up and stoping has commenced. Stoping at the
Rietkuil Section commenced on January 3, 2007 and blasting continues on a
daily basis. In the Dominion Section, the first blast on the D2 reef horizon
took place on January 13, 2007.
DRUM Resource Update
On January 17, 2007, Uranium One announced an updated resource estimate
for the Dominion Reefs Uranium Mine. This update showed a 37% increase in the
Indicated uranium resources over the estimate reported in June 2006. The
current mineral resource estimate shows an Indicated uranium resource of 36.4
million tonnes at a grade of 0.81 kg/tonne, containing 64.9 million pounds
U(3)O(8). The focus of the current and ongoing exploration is to further
increase the Indicated resource base by upgrading existing Inferred resources,
such that mine planning may be expedited for production purposes and to
evaluate the Company's ability to expand the rate of production to
approximately 7.0 million pounds by 2012.
Potential Expansion of DRUM
The feasibility study for the Dominion Reefs Uranium Mine considered
Phase 1 of the current mine plan, whereby an extraction rate of 200,000 tonnes
per month of ore is planned for a 10 year duration, attaining in excess of 4.0
million lbs U(3)O(8) per annum at peak production. A preliminary assessment
for Phase 2 was also presented and has been designed to sustain production
rates at 200,000 tonnes per month for an additional 20 years.
Conceptual studies on Phases 3 and 4 of the mine plan are currently being
undertaken and are scheduled to be completed by Q3 2007. Phase 3 and Phase 4
consider an increase in throughput capacity from 200,000 tonnes per month to
300,000 tonnes per month and 400,000 tonnes per month, respectively.
Current exploration activities are focussed on expanding the Indicated
resource base in anticipation of supporting mine planning for the Phase 3 and
Phase 4 expansions. This is being achieved through the delineation of down dip
extensions of the higher grade channels and by delineating new shallow orebody
extensions such as at Dominion North.
Access in the shallower (less than 500 metres below surface) areas will
be by additional declines. Vertical shafts are planned to access the deeper
areas, with a 1,000 metre deep vertical shaft being considered for the down
dip extensions in the Rietkuil area.
A definitive cost estimate for expanding the plant capacity to 300,000
tonnes per month is being conducted by Bateman Africa. This expansion would
include the addition of a SAG (semi-autogenous grinding) mill, a separate
100,000 tonne per month counter current decantation circuit, an additional
autoclave, boiler and the expansion of the present solvent extraction circuit.
The existing design and plant lay-out would allow for this expansion, with
full integration into the existing plant.
A further increase in effective plant capacity is planned through the
introduction of radiometric ore sorting after primary crushing. A 120 tonne
per hour pilot plant has been ordered at a cost of US$4.3 million and will be
constructed and commissioned by the end of 2007. Test work has indicated that
in excess of 25% of the ore can effectively be sorted and discarded as waste
material. Similar plants at other uranium operations (such as Rio Tinto's
Rossing Uranium Mine in Namibia) have successfully proven the concept of
radiometric sorting. It is anticipated that a full scale radiometric sorting
plant could potentially increase plant throughput to 400,000 tonnes per month
(4.8 million ore tonnes per year sorted to 3.6 million tonnes of ore processed
through the plant per year using radiometric sorting) resulting in potential
U(3)O(8) production by 2012 in excess of 7.0 million pounds per year at
assumed current grades.
Uranium One will continue to assess areas not yet classified as resources
in the Dominion and Rietkuil Sections. Exploration is continuing in these
unclassified areas of the Dominion and Rietkuil Sections with the objective of
further increasing the Inferred resource base and identifying additional
ore-shoots for conversion to Indicated resources.
In addition to the areas being explored at the Dominion and Rietkuil
Sections, Uranium One has also been awarded prospecting rights over the
westerly extension of the Dominion Reefs (discussed in further detail under
Global Exploration Update section below). These prospecting rights consider a
Dominion Reef strike extent of approximately 60 km, effectively resulting in
more than a 400% increase in the strike length of the Dominion Reefs
previously controlled by the Corporation. Within the current mining rights
area at Dominion, comprising an approximate 10 km Dominion Reef strike, three
ore-shoots have been identified and are classified as Indicated resources. Two
of these form the resource base for the current Dominion declines (D1 and D2)
and the third (Dominion North) forms part of the resource base for the Phase 3
and Phase 4 production planning. The modelling of these ore-shoots illustrates
the significant potential of the newly acquired mineral rights area.
Honeymoon Uranium Project Update
The Honeymoon Uranium Project is an advanced in situ leach project
located in South Australia and was approved by the Board of Directors of
Uranium One on August 28, 2006 upon review of a feasibility study prepared by
Mayfield Engineering, Aker Kvaerner and others.
Work is proceeding on installing the required infrastructure for the
Honeymoon Uranium Project. Staff quarters to provide on-site accommodation for
50 employees have recently been delivered and installed along with
transportable buildings to provide additional office space. The water
treatment and sewerage plants have been ordered. Design work on the access
road is under way. Specifications on the power supply are being prepared by
ETSA Utilities, South Australia's electricity distributor and easements for
the power line are being sought from the relevant land holders.
In addition to a mining lease, Uranium One holds a newly granted ten year
uranium export licence which expires on December 31, 2016.
Bateman Engineering has been awarded the Engineering, Procurement and
Construction Management (EPCM) Contract for the Honeymoon Uranium Project.
Development of the project is proceeding according to schedule with production
expected to commence in Q1 2008.
Update on U.S. Growth Strategy
Uranium One continues to pursue growth opportunities in the United
States. On January 8, 2007 the Company announced that it had extended for a
further three months the period of exclusivity with U.S. Energy to negotiate
definitive terms for the acquisition of the Shootaring Canyon uranium mill in
Utah and a portfolio of uranium property interests in Utah, Wyoming, Arizona
The United States comprises approximately one-quarter of global nuclear
generating capacity, representing annual demand of over 50 million pounds
U(3)O(8). Domestic production of U(3)O(8) is currently running at an
annualized rate of 4 million pounds per year in the United States. Uranium One
believes that a growing preference for reliance upon domestic sources of
energy points to a need to develop domestic uranium resources within the
To support our strategy of pursuing growth in the United States, as well
as in other jurisdictions, Uranium One has created a new Projects and
Integration Team comprising members of the DRUM project team. This new team
will provide the necessary capacity to evaluate and progress acquisition
targets as identified by the Company and will provide transitional technical
expertise while full local operational teams are being assembled.
Aflease Gold Update
Uranium One's 71.4% owned subsidiary Aflease Gold Limited continues to
develop its Modder East gold project located approximately 30 kilometres east
of Johannesburg, South Africa. The portal of the decline was completed during
the third quarter of 2006 and trackless decline development has initiated from
the base of the portal excavation and advanced a total of 500 metres to date.
The Modder East gold project is expected to be completed on schedule,
with the first gold pour expected in the third quarter of 2009. N M Rothschild
& Sons has been appointed as exclusive financial advisor to Aflease Gold with
respect to securing approximately R300 million (approximately US$41 million)
in project finance to further fund development activities at Modder East.
Global Exploration Update
The Company will continue to drill aggressively throughout 2007, with a
focus on further increasing the confidence of the existing Inferred resource
base to the Indicated category at the Dominion Uranium Project. This focus
will aid Uranium One in completing the preliminary assessment of the potential
to expand the Project to a production rate of approximately 7.0 million pounds
of uranium oxide annually by 2012.
As discussed in the Company's press release dated January 17, 2007
Uranium One has been formally granted additional prospecting rights to the
west of the Dominion Reefs Uranium Mine over an area of 57,565 hectares.
Additional prospecting rights are currently pending, which would bring the
total area of newly acquired ground to 74,380 hectares. Assuming the formal
grant of prospecting rights currently pending, the newly acquired land package
would represent approximately 60 kilometres of strike length of the Dominion
Reefs, representing more than a 400% increase in the strike length previously
controlled by the Company. A map showing the areas covered by the new
prospecting rights is available on the Corporation's website at
For 2007, Uranium One has planned a US$14.1 million exploration program
in South Africa. This includes a 75,000 metre surface diamond drilling
program, focused on the Dominion and Rietkuil Sections, with an overall
objective of delineating the down-dip extensions of identified high grade
zones as well as newly identified high grade ore-shoots. On the newly acquired
prospecting rights, Uranium One is planning a program of airborne geophysics,
surface mapping and surface exploration drilling, expected to commence during
Uranium One has planned a 2007 exploration budget of US$3.4 million for
Australia. The focus of the exploration program for 2007 will be geared
towards further development of existing projects as well as generating
additional targets for future evaluation.
At the Company's existing projects, the 2007 program will include a deep
test drill hole at Karkarook during the first quarter, geophysical surveys on
the Stuart Shelf and in the Honeymoon granite area, as well as an initial
15,000 metre rotary mud drill program at Goulds Dam.
Uranium One will also purchase a second PFN tool and will build a logging
truck for a platform to run the new PFN tool by the middle of the year.
On January 11, 2007 Uranium One was notified by Pitchstone Exploration
Ltd., that it had completed its requirements under a joint venture agreement
between the two companies to earn a 50% interest in five projects in the
eastern Athabasca Basin. Pitchstone is the operator of the joint venture and
recently announced a C$5 million 2007 exploration programme that anticipates
drilling 13,000 metres at the Darby-Candle, Waterfound and Moon Lake
properties. An electromagnetic survey is also planned for the Darby-Candle and
Lynx Lake properties to test for conductive basement formations.
Uranium One is also pleased to announce several changes to its management
team. In order to create capacity for the development of acquired assets, a
new Projects and Integration Team has been created. The Projects and
Integration Team will be tasked with the investigation, approval and
implementation of such projects as identified by the Company on a global
Bruce Jones, formerly Executive Vice President, Africa and Europe, has
been appointed to lead this team and now holds the title of Executive Vice
President, Projects and Integration. Robert van Niekerk will now assume the
role of Executive Vice President, Africa and Europe with primary focus on
Dominion. Robert was previously Executive Vice President, Aflease Gold. Norman
Schwab has been appointed Acting Chief Operating Officer at Aflease Gold.
Norman previously held the position of Vice President, Mining and Projects at
Commenting on the Company's progress with its projects, Neal Froneman,
Uranium One CEO said:
"I am pleased that Uranium One has delivered on all its targets thus far
at Dominion, Honeymoon and at Aflease Gold. All key personnel are now focused
on achieving a smooth transition from development to production at Dominion.
We are focused on maximizing value for our shareholders by working to expand
production at Dominion expeditiously to approximately 7.0 million pounds
U(3)O(8) per annum by 2012. We look forward to completing our preliminary
assessment of the potential expansion to demonstrate to the market the
tremendous organic growth potential within our company."
About sxr Uranium One
sxr Uranium One Inc. is a Canadian uranium and gold resource company with
a primary listing on the Toronto Stock Exchange and a secondary listing on the
JSE Limited (the Johannesburg stock exchange). The Corporation owns the
Dominion Uranium Project in South Africa and the Honeymoon Uranium Project in
South Australia, and is actively pursuing growth opportunities in the uranium
sector in the United States. The Corporation holds an approximate 71.4%
interest in Aflease Gold Limited, which owns the Modder East Gold Project in
South Africa. Through a 50/50 joint venture with Pitchstone Exploration Ltd.,
the Corporation is also engaged in uranium exploration activities in the
Athabasca Basin of Saskatchewan.
No stock exchange, securities commission or other regulatory authority
has approved or disapproved the information contained herein.
This News Release includes certain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995 and
"forward-looking information" within the meaning of applicable Canadian
legislation. All statements other than statements of historical fact included
in this release including, without limitation, statements regarding potential
mineralization, reserves, resources, estimates of future mining, recovery,
production rates and operating costs, and future plans and objectives of
Uranium One, are forward-looking statements (or forward-looking information)
that involve various risks and uncertainties. There can be no assurance that
such statements will prove to be accurate and actual results and future events
could differ materially from those anticipated in such statements. Important
factors could cause actual results to differ materially from Uranium One's
expectations. Such factors include, among others, the actual results of
exploration activities, actual results of reclamation activities, the
estimation or realization of mineral reserves and resources, the timing and
amount of estimated future production, costs of production, capital
expenditures, costs and timing of the development of new deposits,
availability of capital required to place Uranium One's properties into
production, conclusions of economic evaluations, changes in project parameters
as plans continue to be refined, future prices of commodities, possible
variations in ore grade or recovery rates, failure of plant, equipment or
processes to operate as anticipated, accidents, labour disputes and other
risks of the mining industry, delays in obtaining governmental approvals,
permits or financing or in the completion of development or construction
activities, Uranium One's hedging practices, currency fluctuations, title
disputes or claims limitations on insurance coverage, as well as those factors
discussed under "Risk Factors" in Uranium One's Annual Information Form and
Management's Discussion and Analysis as filed with securities regulatory
authorities in Canada. Although Uranium One has attempted to identify
important factors that could cause actual results to differ materially, there
may be other factors that cause results not to be as anticipated, estimated or
There can be no assurance that such statements will prove to be accurate
as actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not place undue
reliance on forward-looking statements. Uranium One does not undertake to
update any forward-looking statements that are included herein, except in
accordance with applicable securities laws.
In addition, this news release uses the terms "indicated resources" and
"inferred resources" as defined in accordance with the SAMREC Code (South
African Code for Reporting of Mineral Resources and Mineral Reserves prepared
by the South African Mineral Resource Committee) ("SAMREC") under the auspices
of the South African Institute of Mining and Metallurgy effective March 2000
or as amended from time to time. A mineral resource is a concentration or
occurrence of natural, solid, inorganic or fossilized organic material in or
on the earth's crust in such form and quantity and of such a grade or quality
that it has reasonable prospects for economic extraction. The location,
quantity, grade, geological characteristics and continuity of a mineral
resource are known, estimated or interpreted from specific geological evidence
and knowledge. A measured mineral resource is that part of a mineral resource
for which quantity, grade or quality, densities, shape and physical
characteristics can be estimated with a level of confidence sufficient to
allow the appropriate application of technical and economic parameters to
support mine planning and evaluation of the economic viability of the deposit.
The estimate is based on detailed and reliable exploration, sampling and
testing information gathered through appropriate techniques from locations
such as outcrops, trenches, pits, workings and drillholes that are spaced
closely enough to confirm both geological and grade continuity. An indicated
mineral resource is that part of a mineral resource for which quantity, grade
or quality, densities, shape and physical characteristics can be estimated
with a level of confidence sufficient to allow the appropriate application of
technical and economic parameters to support mine planning and evaluation of
the economic viability of the deposit. The estimate is based on detailed and
reliable exploration and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits, workings and
drillholes that are spaced closely enough for geological and grade continuity
to be reasonably assumed. An inferred mineral resource is that part of a
mineral resource for which quantity and grade or quality can be estimated on
the basis of geological evidence and limited sampling and reasonably assumed,
but not verified, geological and grade continuity. The estimate is based on
limited exploration and sampling gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drillholes. Mineral
resources which are not mineral reserves do not have demonstrated economic
The indicated and inferred resource estimates provided herein in
accordance with SAMREC will be reconciled to the guidelines set out in the
Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on
Mineral Resources and Mineral Reserves, adopted by CIM Council on August 20,
2000, as may be amended from time to time by the CIM, in accordance with
National Instrument 43-101 - Standards of Disclosure for Mineral Projects,
("NI 43-101") in the independent technical report being prepared by SRK for
filing in accordance with the requirements of NI 43-101.
Investors are cautioned not to assume that all or any part of the mineral
deposits in the Measured and Indicated resource categories will ever be
converted into reserves. In addition, "Inferred resources" have a great amount
of uncertainty as to their existence and economic and legal feasibility. It
cannot be assumed that all or any part of an Inferred mineral resource will
ever be upgraded to a higher category. Under South African rules, estimates of
inferred mineral resources may not form the basis of feasibility or
pre-feasibility studies or economic studies except under conditions noted in
SAMREC. Under Canadian rules, estimates of Inferred mineral resources may not
form the basis of feasibility or pre-feasibility studies or economic studies
except for preliminary assessments as defined under NI 43-101. Investors are
cautioned not to assume that all or any part of an Inferred resource exists or
is economically or legally mineable.
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Uranium One's website - www.uranium1.com.
For further information:
For further information: Neal Froneman, Chief Executive Officer, Tel: +
27 11 482 3605; Chris Sattler, Vice President, Investor Relations, Tel: (416)