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First Uranium signs gold sale deal with Gold Wheaton Gold
(Canadian Press (delayed) Via Acquire Media NewsEdge) VANCOUVER _ First Uranium Corp. (TSX:FIU), A Toronto-based uranium company with gold operations, has signed a deal to sell gold output from its South African business to Gold Wheaton Gold Corp. (TSXV:GLW), a precious metals company focused on gold platinum and palladium.
The two companies announced they had struck a definitive agreement under which a wholly owned Gold Wheaton unit based in Barbados will buy a minimum of 20,000 ounces of gold in 2009 and up to 25 per cent of the 2.1 million ounces of gold expected to be produced from First Uranium's Mine Waste Solutions tailings recovery operation in South Africa.
In return, Gold Wheaton will pay US$125 million _ $50 million when the deal closes and $75 million three months later, as well as other payments on future production.
The transaction is slated to close Dec. 12.
Gold Wheaton said the gold sales deal won't require the company to contribute to any capital or exploration spending at First Uranium's tailings recovery operation and gives it a right of first refusal on any future gold stream agreements on the uranium company's operations.
"We are pleased to move forward with First Uranium on this transaction and cement a long term relationship," said David Cohen, chairman and CEO of Gold Wheaton.
"In addition to their current production, they have made substantial positive progress on the Phase Two expansion project and remain on track for the planned commissioning in the second quarter of 2009."
First Uranium is primarily a uranium miner and is developing a uranium project in South Africa that should start commercial operations next year. However, it currently generates a majority of its revenues from gold sales as byproducts of its uranium business. The company has operations at the Mine Waste Solutions site and at the Ezulwini Mine in South Africa.
``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 Gordon Miller, president and CEO of First Uranium.
``This transaction also highlighted the value of our substantial co-product gold production.''
First Uranium focuses on its South African uranium and gold operations by the reopening and underground development of the Ezulwini Mine and expansion of the Mine Waste Solutions tailings recovery operation.
Copyright ? 2008 The Canadian Press
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