http://www.miningweekly.com/article/now-first-uranium-sells-ezulwini-gold-stream-2009-11-06

6th November 2009

Updated 6 hours ago

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that the deal would not only strengthen its balance sheet, but hopefully help the market see the value of the company's gold production.

"This second transaction with Gold Wheaton highlights the value of our substantial co-product gold production at Ezulwini," CEO Gordon Miller commented on Friday.

The company will use the proceeds of the Ezulwini gold-stream sale as a buffer "to mitigate the effects of future challenges in economic and industry conditions or any adjustments to the company's capital or operating programs, such as delays in permitting or production," he said.

Gold Wheaton will make an initial $50-million upfront payment when the deal closes, and then pay the lesser of $400/oz and the prevailing spot price for 7% of the gold produced from the mine.

The firms have agreed that Ezulwini will deliver at least 16 500 oz next year, 12 500 oz in 2011, and an average of 26 000 oz/y of gold thereafter.

Gold Wheaton plans to finance the transaction from cash on hand, CEO David Cohen said in a statement.

"The long life gold and uranium mine should be at the lower end of the production cost curve and has significant potential upside for additional production from its large resource base," he commented.

The transaction is expected to close later this month.

Shares in First Uranium rose 2,2% in Toronto on Friday morning, to C$2,81 apiece by 10:11. Gold Wheaton gained 7%, to 30,5 Canadian cents.

First Uranium is currently producing both gold and uranium from Ezulwini. At MWS, gold production is under way and the company has said it plans to complete the first uranium plant module by year end.

However, the company has run into trouble with a plan to build a new tailings storage facility, after South African

a previous approval for construction of the facility.

First Uranium said on Friday it had halted work on the tailings storage facility, and was in discussions with officials to address concerns about the project.

SHARE CONSOLIDATION

Meanwhile, Gold Wheaton also announced on Friday that it will ask shareholders to approve a consolidation of its shares, on the basis on one new common share for every ten issued and outstanding common shares.

No fractional shares will be issued and any fractions of a share will be rounded down to the nearest whole number of common shares, the firm said.

Edited by: Liezel Hill