JOHANNESBURG (miningweekly.com) - TSX- and JSE-listed First Uranium on Thursday lowered its gold production forecast for 2012 and said it would not achieve its gold and uranium sales target for the financial year.

The company, which warned late last year it might lay off 1 850 people at its Ezulwini mine, downgraded its gold output forecast for the year to between 98 000 oz and 100 000 oz. This is down from a previous guidance of between 105 000 oz and 115 000 oz.

First Uranium also said it would not achieve its target of selling between 70 000 oz and 80 000 oz of gold and 110 000 lb and 130 000 lb of uranium from Ezulwini in the 2012 financial year.

This follows a reduction, during the three months ended December 31, of 14% in uranium production to 30 887 lb, compared with 36 006 lb produced during the second quarter. The company also reported selling 5% less gold during the third quarter compared with 40 529 oz sold in the second quarter.

“Three fatal accidents in the latter half of the 2011 calendar year had a significant negative impact on employee morale and productivity. This is reflected in the lower-than-anticipated production figures, which in turn necessitated the restructuring of the Ezulwini mine in order to secure the future of this operation," said CEO Deon van der Mescht.

A consultation process was under way with organised labour for a planned restructure, which halted all marginal production panels and could affect up to 1 850 jobs.

The Ezulwini mine has been undergoing intensive turnaround processes during the past nine months. However, the expected improvement in production did not materialise, mostly owing to the Section 54 stoppages required following fatal accidents.

Meanwhile, First Uranium’s mine waste solution tailings recovery project, in the North West, reported a 6% quarter-on-quarter improvement in throughput. However, this was offset by a lower delivered feed grade, which decreased by 8% from 0.348 g/t to 0.319 g/t in the third quarter.

As at December 31, 2011, the company held $10.6-million cash reserves.
 

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