A new report gives Laramide Resources’ (TSX: LAM; US-OTC: LMRXF; ASX: LAM) Churchrock uranium project in New Mexico a 31-year life, and shows it could become one of the few mines in North America to use the lower cost in-situ recovery (ISR) method.
The operation’s output would equal 31.2 million lb. and could produce uranium at US$75 per lb. U3O8, according to the preliminary economic assessment (PEA) released Thursday.
The PEA pegs the project’s post-tax net present value (at 8% discount) at US$239 million, its internal rate of return at 56% and with initial capital costs of US$47.5 million.
“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 per lb.,” Laramide president and CEO Marc Henderson said in a news release.
The assessment comes as the price of uranium, which sat at US$92.50 per lb. on Thursday has risen above its post-Fukushima slump and reached levels not seen since 2007. The increase, driven by several factors including rising demand for the nuclear metal as countries try to wean themselves off fossil fuels has helped push some uranium projects towards production. Energy Fuels (TSX: EFR; NYSE: UUUU) last month announced the start of production at its mines in neighbouring Arizona and Utah.
Total capital costs for Churchrock, located near the namesake town in northwestern New Mexico, come to US$270.1 million including sustaining costs to year 37 and reclamation and closure.
Life-of-mine operating costs, which include uranium recovery, on-site yellowcake production and hauling costs to Laramide’s Crownpoint processing plant come to US$909.4 million.
The PEA assumes a uranium recovery rate of about 68%, and development of a steady state, 3,000-gallon-per-minute ISR operation that would include satellite plants at Churchrock, the Crownpoint plant and associated wells.
“We believe Laramide needs to take steps in shoring up management and technical teams, and social licence in the Four Corners area, to help move development forward,” he said.
Talbot added that he estimates production can start in 2027 and reach steady-state production of about 940,000 lb. of U3O8 in 2030.
Churchrock hosts 33.9 million inferred tons grading 0.075% U3O8 containing 50.8 million lb. U3O8, according to a 2017 resource estimate. That resource was based on 569,232.9 metres of drilling across 1,694 holes conducted by previous exploration companies and Laramide, which acquired the Churchrock properties in 2017.
The New Mexico project is also among just a handful of uranium sites in North America where ISR mining is being pursued. The method involves pumping a solution through underground boreholes, where the solution separates the uranium from the rock and pumps it back to the surface for extraction. It’s generally less costly than traditional hard rock mining, doesn’t require the digging of large pits and leaves fewer tailings.
Shares in Laramide were up 2.5% to 81¢ apiece on Thursday afternoon, marking a new high in its 52-week range that has a floor of 33¢. The company has a market capitalization of $201.5 million.
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