TORONTO (miningweekly.com) – Peru has the potential to become a significant uranium supplier within five to six years, when exploration junior Macusani Yellowcake (YEL) starts production from its 900 km² complex of properties, located on the uranium-rich Macusani Plateau, in the south-east of the country.

MD Dr Laurence Stefan is confident the trio of deposits comprising its flagship project has “blue-sky” potential to host more than 500-million pounds of uranium and could put Peru on the uranium map as a major South American producer of the radioactive metal.

Following its merger with rival explorer Southern Andes Energy in April last year, the company owns about 80% of the entire Macusani Plateau, which includes the Colibri 2 and 3, Kihitian and Corachapi deposits.

The company is stepping up exploration on these properties and would bring on line a sixth drill during April to speed up the exploration process over the next three to four months, before the Peruvian winter halts activities. Stefan said as soon as the current drill campaign had been completed, the company would complete a preliminary economic assessment (PEA), which it plans to publish soon afterwards.

Speaking to Mining Weekly Online during the Prospectors and Developers Association of Canada's 2013 convention, Stefan pointed out that it is currently the only active explorer on the plateau. Together with a joint venture between Vena Resources and uranium major Cameco, the Macusani Plateau currently hosts about 110-million pounds of uranium, of which YEL owns between 60-million to 70-million pounds.

However, Southern Andes had previous undertaken extensive exploration of the plateau, and with YEL currently working on reinterpreting the historical data from the eastern part of the plateau, Stefan is confident that the potential exists that its own resources could grow well beyond 300-million pounds.

He noted that the western part of the plateau still remained underexplored owing to its inaccessibility, but, with that potential included, the Macusani Plateau could hold more than 500-million pounds of uranium.

This did not compare with Canada’s Athabasca basin in northern Saskatchewan and Alberta, which is the world’s top source of high-grade uranium, but would more likely be comparable with the resources of Namibia, Niger or Kazakhstan.

Meanwhile, following the catastrophic nuclear meltdown of the Fukushima Daiichi nuclear power plant, in Japan, in 2011, uranium prices have been under pressure. Stefan believed $40/lb would be the stop sign and that demand increases and little additional supply coming on stream, should ensure rising prices by 2014.

Stefan said the Macusani-complex had ores amenable to simple heap-leach extraction, placing YEL’s production costs among the lowest in the industry. A 2010 PEA estimated cash production costs of less than $22/lb.

The deposits comprise large, near-surface deposits, suitable for openpit extraction, with metallurgical recoveries of more than 90%.

YEL currently has 300 000 lb of uranium in the measured category, 11.5-million pounds in the indicated category and 27.6-million pounds in the inferred resources category for a total resource of about 40-million pounds.

As at January 31, the company had $6-million cash in the bank.

Its stock traded at 12 Canadian cents apiece on the Toronto Venture Exchange on Thursday.