With the uranium spot price expected to get a much needed boost as global uranium supply constrains continue to deepen, ASX-listed GoviEx Uranium is fast-tracking its Madaouela uranium project in Niger towards project financing and development.
What’s the benefit of accelerating project development? The current structural deficit in the uranium market requires that new mines are developed in the near term to continue the generation of carbon-free nuclear power.
GoviEx Uranium’s updated prefeasibility study (PFS) succeeded in delivering a project that is technically robust and significantly simplified, reducing development and operational risk. The mining operations at the Madaouela project are planned to commence by open pit at the Miriam deposit in order to improve cash flows in the early years of the project, while achieving this at a much lower uranium price with potential for attractive debt financing.
The updated PFS on the project now accounts for five years of inflation and currently quoted costings since the previous pre-feasibility study issued in 2015.
“We are delighted with the series of elegant engineering solutions our technical team has achieved under the leadership of our CEO, Daniel Major, to place the Madaouela project in pole position and to potentially bring Madaouela online as one of the first new mines developed in this exciting new uranium cycle,” says GoviEx executive chairman Govind Friedland.
“The updated PFS further indicates the technical strength of GoviEx’s main uranium project in Africa,” says GoviEx Uranium CEO Daniel Major.
Lower costs, lower technical risk and financing potential are the main results from this study and GoviEx has taken another important step towards further developing our mining plans through completing the updated PFS.
GoviEx’s internal technical team, working closely with consultants SRK Consulting (UK) and SGS Bateman, has succeeded in simplifying the process plant design, reducing the technical risks of commercially untested options considered in the 2015 PFS, while at the same time increasing uranium recovery and reducing unit operating costs. Uranium recovery is reported as 94.5% for the open pit ore and 92.5% for the underground ore, while molybdenum recovery is improved from 67% to 84.7%, and processing life of mine costs have been reduced by 8% or US$2/lb of U3O8.
The mining rate for the Miriam open pit deposit has been rescheduled to ensure the tenor covers any potential debt financing for the project development.
Operating cash costs, excluding royalties and including molybdenum by-product credits, over the first four years of the mine life are reduced by 20% or $4.7/lb to $18.3/lb of U3O8, and capital costs have been reduced by 8% or $29 million.
Total probable mineral reserves are reported as 24.9 Mt of run-of-mine ore with an average ore grade of 0.85 kg/tU, the contained uranium of 21 054 tU (or 54.7 Mlb U3O8) and defined based on a forecast price of $55/lb of U3O8.
As a result of the revision in ore reserves and resulting associated mining and operations, the life of mine operations for the project is forecast to last 20 years, producing an estimated total uranium sales of 49.65 Mlb U3O8, averaging 2.48 Mlb U3O8 per annum life of mine.
Under the opdated PFS, the open pit alone has the potential to service debt of $150-180 million at a U3O8price of $50-55/lb, as modelled by the company’s debt advisors.
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