JOHANNESBURG (Business Day) -- Gold and uranium miner First Uranium [TSX:FIU] was looking at options for growth, including buying more tailings dams and diversifying abroad, chief operating officer Jim Fisher said on Friday.
He told reporters visiting the company's Buffelsfontein tailings operations that First Uranium was talking to the owners of other tailings dams in the area. Fisher did not specify who First Uranium was talking to, but AngloGold Ashanti [NYSE:AU] is the other main owner of tailings dams in the area.
Tailings dams are the residue of past mining from which significant quantities of gold and uranium can be extracted using modern methods.
Fisher said First Uranium was looking at projects in other countries as the board had given management a mandate to diversify risk. Although he declined to give details of what countries First Uranium was investigating, he said it was not the "stans," referring to former Soviet Union states in eastern Europe.
First Uranium has two gold and uranium projects in South Africa: the Buffelsfontein tailings project, where it is processing 630,000 tonnes of tailings a month, and the reopened Ezulwini gold and uranium underground mine.
The company is targeting annual production of 2.2 million pounds of uranium and 416,000 ounces of gold.
Gold miner Simmer & Jack [JSE:SIM], which owns 62% of First Uranium, has two studies under way into expansion opportunities.
Chief operating officer Deon van der Mescht said the Mega Float Plant, with an estimated cost of about R150 million ($20.8 million) in two phases, would make it possible to accelerate the treatment of rock waste dumps. It would add about 54 kilograms of gold a month to Buffels' production over nine years.
An independent technical report on the project is expected by the end of this month.
The second opportunity was the recently announced Strathmore project.
This could treble the mine's gold and uranium resource base by mining deposits to a depth of 5 kilometres in an area to which the company already holds the rights. Simmers has decided to proceed with a prefeasibility study at a cost of R167.4 million ($23.3 million) into the viability of the project.
Simmers' share price dropped 4.4% to 500 South African cents on the JSE on Friday in line with those of other local gold producers.
