PERTH (miningweekly.com) – A review of the Mulga Rock uranium project, in Western Australia, has revealed a potential upside to the project through base metal by-product credits, ASX-listed Vimy Resources reported on Thursday.
The company noted that while its January 2018 definitive feasibility study (DFS) confirmed the robust financials and simple, low-cost mining process, the study focused solely on uranium. However, growing demand for base metals had now prompted the company to review the viability of the proposed base metals plant, with initial indications pointing to greatly improved economics.
“Mulga Rock is first and foremost a uranium project that happens to have base metal by-products. However, it makes sense to re-examine the base metals plant given the strength in prices and growing demand for base and battery metals,” said Vimy MD and CEO Mike Young.
“It now appears that the base metals circuit has gone from break-even to a position of enhancing the already strong uranium economics of the Mulga Rock project.”
The DFS estimated that the project would deliver some 47.1-million pounds of uranium oxide over a life-of-mine of 15 years, based on a 2.4-million-tonne-a-year throughput.
The study estimated a capital cost of A$493-million, with all-in sustaining operating costs reaching $34/lb over the life of the project.
Vimy on Thursday reported that Mulga Rock was expected to recover 3 000 t of copper, 13 500 t of zinc, 6 200 t of nickel and 2 550 t of cobalt over the life of the mine, with the base metals plant expected to cost A$52-million.
The base metals would be recovered from the tailings of the uranium circuit and sold as two separate precipitated sulphide concentrates.
The ASX-listed junior noted that at current base metal spot prices, Vimy could derive a base metals by-product credit of around $4/lb uranium oxide.
“It appeals to my sense of irony that we could be producing the metals that make batteries, as well as the fuel to charge them,” Young said.
The company would complete an updated study on the base metals plant in 2018, which would include the latest drilling data, a production schedule, a review of the metallurgical flowsheet, capital and operating costs, and an updated economic model.
Young said that there would have to be a compelling business case to incorporate the base metals plant into the overall Mulga Rock project, to justify the additional project execution risk.