First Uranium Sees South African Output in Early 2009

Canadian-listed First Uranium has materials and equipment in place to finish construction of its Ezulwini uranium plant, and expects to have it up in running in the first three months of 2009 following two delays, the company's chief executive said Thursday.

The company had originally planned to have the operation up and running in August, but has had to delay it twice, most recently announcing it would push the start back from October to early next year.

Gordon Miller, the company's CEO, said the delays were due to order backlogs for items such as steel, concrete, and equipment, which have been in short supply during the mine building boom in the last few years.

"We were in the middle of that cycle and just got pushed to the back of the queue," he said in an interview.

"It's there now, and the question is just constructing it and starting up."

That supply crunch has since disappeared, he said, as declining prices for most metals - including uranium - have halted many construction projects and forced the closure of a handful of mines.

The company has been mining ore from Ezulwini, which contains both uranium and gold, and the 100,000t per month uranium plant is expected to start production by the end of the company's fourth quarter, which ends in March 2009.

First Uranium is a unit of South Africa's Simmer & Jack Mines. Its main listing is on the Toronto Stock Exchange with a secondary listing on the JSE.

The Toronto-listed shares rose 20 Canadian cents to close at C$1.75 on Thursday.

First Uranium bought the Ezulwini mine in 2006 after it was mothballed in 2001 due to weak commodity prices.

Interest in the mine was revived by a surge in uranium's spot price, which hit a high of $136 a pound by the end of June last year, up from $7 in 2000, because of strong demand from nuclear power plants and limited supply.

Uranium's spot price has since weakened. It fell as low as $44 at the end of October, but has since risen to $55 this week.

By Agnieszka Flak and Cameron French, Reuters