December 2014 Quarter

 

Production by quarter

Langer Heinrich Mine Sep Qtr Dec Qtr
U3O8 Production (lb U3O8) 1,027,033 1,304,079

The quarterly production of 1,304,079lb U3O8 was an increase over the preceding quarter of 27%.

Mining

. Sep Qtr Dec Qtr
Ore mined (t) 910,082 703,901
Grade (ppm U3O8) 802 928
Additional low grade ore mined (t) 345,943 183,341
Grade (ppm U3O8) 328 325
Waste (t) 3,803,470 4,119,374
Total Ore and Waste 5,058,495 5,006,616
Waste/Ore ratio 3.0 4.6

Mining production volumes remained on target (700,000 bank cubic metres ("bcm")/month) and consistent with budget.  The ore to waste ratio during the quarter was up slightly as a result of mining in the deeper Western Pit areas. 

ROM ore stockpiles were sufficient at the end of the quarter for approximately three weeks' ore supply and are being supplemented by medium grade ore from long term stockpiles in line with the mine plan. 

Construction of tailings storage facility three ("TSF#3") extension and re-establishment of Kuell's Wash, a major south-north drainage channel, will start in late January 2015 and should be completed within three months.


Process Plant

The remedial measures reported in the September quarterly report have been effective in bringing the plant back to stable operation. Throughput has returned to acceptable levels, although the improvement in recovery is slower than anticipated, despite the positive impact of new resin.  Throughput for the quarter was up 24.8% from the past quarter and recovery was up by 1.8%, resulting in overall production increasing by 27% from the September quarter levels.

. Sep Qtr Dec Qtr
Ore milled (t) 734,226 916,576
Grade (ppm U3O8) 786 773
Overall recovery (%) 82.7 84.8
Production (lb U3O8) 1,027,033 1,304,079

The process optimisation strategy continues to focus on better utilisation of existing equipment, unit operating costs, operator training (the Company is currently revising all process operating manuals) and supervision and the further integration of process control.

The new resin introduced during the previous quarter continued to perform well with improved barren solution grades. 

Water supply to the project has been secured with a recent 12-month water supply agreement executed with NamWater with a further one year option.  The Namibian Government has recently announced that it is currently in negotiations with Areva to purchase the Areva water desalination plant near Swakopmund to supply water to nearby mines and surrounding communities.  It is expected that the acquisition of this plant will provide further stabilisation to the longer-term water supply.

 

Future Cost Optimisation Focus

The construction of the Bi-carbonate recovery project is well advanced and remains on schedule for commissioning in the March quarter.  After a short assessment period, the next phase of the overall optimisation programme will commence.

 

Production Guidance

As a result of reduced LHM production in the September quarter and the current tightening of the world uranium market, the Company does not intend to make up all of the lost production from the early part of the year during the remainder of FY2015.  The Company will target production at budgeted rates for the remainder of the year, focusing on reducing operating costs and improving process efficiencies.  As a consequence, the FY2015 annual production guidance has been revised to 5.2Mlb to 5.5Mlb U3O8 (a reduction of less than 5%).

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