Canadian mining company Macusani Yellowcake has announced that its uranium properties on the Macusani Plateau in the Puno district, south-eastern Peru, will make the company a significant South American uranium producer, according to preliminary economic assessment (PEA) results.
The company released the PEA results, which were prepared by GBM Minerals Engineering Consultants in conjunction with the Mineral Corporation and Wardell Armstrong International, about the Macusani Plateau project.
According to PEA, the project has the potential to be a large, low-cost uranium mining operation and indicates that its existing mineral resource holds excellent exploration and expansion potential.
Results from the PEA demonstrated that at an eight percent discount rate, the project had a pre-tax net present value (NPV) of $708m and an after-tax NPV of $417m.
It also has an internal rate of return of 47.5% before tax, while after taxes had been paid, the internal rate of return stood at 32.4% when using a uranium price of $65/lb of U3O8, which the company said was considered as the long-term price by industry analysts.
The life of mine (LOM) annual U3O8 production are estimated to average 4.30mlbs over a ten year mine life, while total sustaining capital costs are estimated at $228m for LOM.
The PEA also estimated initial capital expenditures for mine construction and a 8.5 million-tonne per year process plant at $331m. Macusani Yellowcake CEO Dr. Laurence Stefan said the PEA completion marks significant milestone for Macusani Yellowcake on a number of levels.
"Firstly, the estimated production cost of $20.57/lb demonstrates that we have a project that has the potential to be one of the lowest cost uranium producers in the world due to a low stripping ratio in the open pit operations, anticipated low acid consumption and high process plant recoveries expected to be achieved in a short period of time," Stefan added.
"Secondly, the PEA demonstrates that the Macusani plateau has significant potential to become a major uranium producing district considering that only small areas have been explored to date," Stefan continued.
"And finally, the PEA paves the way for further development of our project and the completion of a pre-feasibility study, which we expect to initiate in 2014."