Canadian miner Laramide Resources has confirmed in an independent preliminary economic assessment (PEA) on the Churchrock uranium project, in New Mexico, the long-life and high-margin potential of the project.
The PEA marks the first economic study to consider the entirety of the large and robust resource amenable to in-situ recovery (ISR) mining.
"Importantly, as a late-stage development project located in the western US, 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,” says Laramide president and CEO Marc Henderson.
The PEA confirms the potential for a 31.2-million pound operation over 31 years, with a $1-billion cash flow generation ability.
The base case economic assessment shows a pre-income-tax internal rate of return of 62% and a pre-income-tax net present value of $287-million when applying an 8% discount rate and $75/lb uranium price.
The economic assessment envisions the development of a steady state 3 000 gallons per minute ISR operation, which includes satellite plants, a central processing plant and associated wellfields.
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 as sustaining capital.
The Churchrock project and nearby properties represent one of the biggest and highest-grade undeveloped ISR uranium projects in the US.
The project currently has mineral resources totalling 33-million tons at an average grade of 0.075% uranium oxide (U3O8), containing 50.8-million pounds of U3O8 (inferred).