TORONTO (miningweekly.com) – Gold and uranium producer First Uranium believes it has secured the funds needed for capital spending at its South African operations over the next nine months, but continues to look at other financing options just in case it turns out to need them, CEO Gordon Miller indicated on Tuesday.

These include ongoing discussions with a South African bank, on a debt facility.

The JSE- and TSX-listed company owns the Ezulwini mine and Mine Waste Solutions (MWS) tailings recovery operation.

Both assets contain gold and uranium, and First Uranium has taken a staged, modular approach to ramping them up.

At Ezulwini, both the gold and uranium plants have been commissioned, and the remaining capital required is for underground mine development, deferred exploration and sustaining capital.

However, at MWS, First Uranium has yet to commission the first two uranium plant modules, and must still build and start up the third gold module and the third stream of the uranium flotation plant.

In August, the company finalised a one-year term credit facility of R160-million with shareholder and fellow South African miner Simmer & Jack Mines, and announced earlier this month that it has entered into a second gold-streaming deal with Vancouver-based Gold Wheaton.

Gold Wheaton will buy 7% of the gold produced at the Ezulwini mine for $50-million upfront and then the lesser of $400/oz and the prevailing spot price as the gold is delivered.

The deal is expected to close before year end.

“With the combined effects of the credit facility, the Gold Wheaton agreement, and cash from production forecast, the company should be able to fund the necessary capital expenditures over the next nine months needed to complete the third module of the gold plant and the third module of the flotation circuit,” Miller said.

However, he assured analysts and investors the company was still working to address any concerns about financing risk.

“In the unlikely event that the Gold Wheaton transaction does not close, First Uranium would need to find other sources of funds to finance the completion of the planned capital expenditure.

“We are active in this regard, and are working parallel strategies that may be implemented if needed.”

The company has indicated in the past that it has been talking to a South African Bank about a credit facility, and these discussions are still continuing.

Although Miller had said previously that he expected the debt facility would be wrapped up by the end of this year, he was more circumspect in his comments on Tuesday.

“It depends very much on how the negotiations go; if they are favourable terms that are attractive to the company, then things may go faster, but if they are not favourable they may go slower.”

A lot of the technical and legal work has already been completed, it is now a question of agreeing on commercial terms, Miller said.

However, he added that there are also “other alternatives” under consideration.

As at September 30, the funding required to complete the current capital projects at the Ezulwini mine and MWS was $217-million, of which $193-million is planned to be spent in the next twelve months.

First Uranium had available cash resources of $60-million at the end of the September quarter, which is the second quarter of its financial year.

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