August 30, 2011 / 2:48 PM / in 6 years

UPDATE 2-First Uranium narrows quarterly loss

* Lowers gold production outlook at Ezulwini mine

* Shares flat at C$0.43 on TSX (In U.S. dollars unless noted)

TORONTO, Aug 30 (Reuters) - Miner First Uranium FIU.TO narrowed its quarterly loss on Tuesday as higher gold prices outweighed rising operating costs at the company’s two projects in South Africa.

For the first quarter of its fiscal 2012, ended June 30, the company had a consolidated pretax loss of $39.8 million, compared with a loss of $73.5 million a year earlier.

Revenue from gold and uranium sales rose to $42.3 million from $34.2 million.

First Uranium sold 34,439 ounces of gold in the quarter down slightly from 34,761 ounces a year earlier, and 31,407 pounds of uranium, up from 20,500 pounds.

The company also said that it had successfully completed a technical test at its Mine Waste Solutions facility (MWS), 160 kilometres (100 miles) from Johannesburg, where it reprocesses mining tailings to extract gold and uranium.

The test, part of a gold purchase agreement, required MWS to achieve consistent production over the course of three months and was confirmed by Franco-Nevada Corp FNV.TO, which has acquired the gold stream.

First Uranium expects to produce 105,000 to 115,000 ounces of gold at its MWS in fiscal 2012.

Production growth at its Ezulwini mine, 40 kilometres (25 miles) from Johannesburg, was delayed by a change in the mining method at the deposit.

The company lowered its forecast for fiscal 2012 gold production at Ezulwini to 70,000 to 80,000 ounces from a previous 105,000 to 125,000 ounces, and maintained its uranium sales forecast at 110,000 to 130,000 pounds.

Shares of First Uranium were flat at 43 Canadian cents on the Toronto Stock Exchange on Tuesday morning.

$1=$0.98 Canadian Reporting by Julie Gordon; editing by Rob Wilson

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