Reclamation station
beside Buffels Dam
No. 2 at MWS, where the
tailings slurry is pumped
10km to the existing
gold plant
 
Johannesburg, South Africa — MININGREVIEW.COM — 02 December 2008 – Emerging South African metals company First Uranium Corporation has signed a definitive agreement with Canadian-based Gold Wheaton (GW) in terms of which GW will purchase 25% of the estimated 2.1 million ounces of life-of-mine gold production from First Uranium’s Mine Waste Solutions (MWS) tailings recovery operation in South Africa.

A news release issued here and in Vancouver said application for approval of the transaction would be submitted to the South African Reserve Bank and the South African Revenue Service. Once approved, GW would pay US$50 million R510 million) into an escrow account). Closing of the transaction was expected on or before 12 December 2008.

It added that, subject to financing, a further US$75 million (R765 million) would be paid three months after the closing of the transaction. An ongoing payment equal to the lesser of US$400 per ounce or the prevailing spot price, would be due for each ounce of gold delivered under the contract

“This transaction has received a very positive response from our shareholders, as it will strengthen our balance sheet as we add uranium production to our gold production at both operations,” said First Uranium president and CEO Gordon Miller. “This transaction also highlighted the value of our substantial co-product gold production.”

First Uranium has agreed to a deliver a minimum of 20 000 ounces of gold into the transaction during calendar year 2009. GW will not be required to contribute to any capital or exploration expenditures in respect of First Uranium’s tailings recovery operation.

The release added that, provided that the second payment was made, GW would be granted a right of first refusal on any future gold stream agreements or similar arrangements proposed to be entered into by First Uranium or its subsidiaries in respect of the MWS or the company’s Ezulwini Mine.