The Churchrock Project and nearby properties represent one of the largest and highest-grade undeveloped ISR uranium projects in the USA.
Laramide announces positive PEA results for Churchrock Uranium Project. (Credit: Khusen Rustamov from Pixabay)
Laramide Resources Ltd. (“Laramide” or the “Company”) (TSX: LAM) (ASX: LAM) (OTCQX: LMRXF), is pleased to announce the positive results of an independent Preliminary Economic Assessment (“PEA”) for the 100% owned Churchrock In-Situ Uranium Project (“Churchrock Project”) located in New Mexico, U.S. The PEA has been prepared in accordance with the requirements of National Instrument 43-101 (“NI 43-101”) by SLR International Corporation (“SLR”), an independent consulting firm with considerable expertise in mining and mineral processing, including uranium mining in the United States.
“Laramide is pleased with the results described in this PEA analysis of the Churchrock Project, which is the first economic study to consider the entirety of the large and robust resource amenable to ISR development. The study confirms that Churchrock has the potential to be a long life, high margin project,” says Marc Henderson, President and CEO of Laramide Resources. “Importantly, as a late-stage development project located in the western United States, Churchrock is well positioned to address some of the potential nuclear utility security of supply concerns clearly reflected in spot uranium prices which have risen dramatically and now exceed $90/lb.”
Summary of Economics
The base case economic assessment results in a pre-income tax internal rate of return (“IRR”) of 62% and a pre-income tax net present value (“NPV”) of US$287 million when applying an eight percent discount rate and $75 uranium price.
The economic assessment reflects the development of a steady state 3,000 gpm (gallons per minute) in situ recovery (ISR) operation, which includes Churchrock Satellite Plants, Crownpoint CPP (Central Processing Plant), and associated wellfields near Churchrock, New Mexico. The PEA assumes recovery of approximately 68% of the uranium resource in the production area.
Following an initial capital cost of $47.5 million for the development of the initial wellfield and associated process infrastructure, subsequent wellfields are developed sequentially, the cost of which is accounted for in the PEA as sustaining capital.
The capital and operating cost estimates for ISR mineral recovery and yellowcake production in the PEA are based on factored costs from other comparable ISR operations, judgment, and analogy. Although there was some previous commercial underground mining production experience at Churchrock area, this Technical Report concerns only the ISR method for the U3O8.
An economic analysis was performed using the assumptions outlined in this News Release. The SLR QPs note that, unlike Mineral Reserves, Mineral Resources do not have demonstrated economic viability. This PEA is preliminary in nature and is based on Inferred Mineral Resources that are considered too geologically speculative to have modifying factors applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that this economic assessment will be realized.
The LOM average operating cost includes mineral recovery, on-site yellowcake production with hauling cost to Laramide’s Crownpoint Processing Facility approximately 22 miles from Churchrock, general and administration, and freight of the product from the CPP to a point of sale, along with various royalties and taxes.
Source: Company Press Release