Grade quality should determine investment in uranium
As so many uranium projects have closed or performed poorly, before starting any uranium venture, the economic fundamentals need to be ensured and, most importantly, the required uranium grade needs to be in place, stresses global energy and resource specialist Venmyn Deloitte MD Andy Clay.
The grade of a potential project should be the overarching concern of those interested in investing in uranium mining projects.
“Uranium can be used in military or civilian applications, with its main use being in civilian applications as a fuel source for nuclear power plants,” Clay explains.
He asserts that many countries, including South Africa and Kazakhstan, have vast low-grade uranium deposits.These grades may be technically acceptable for power plant use, following processing, but may not provide the project owner with high returns.
In the previous higher commodity environment, Clay contends that, these vast resources were attractive,but investors are increasingly being advised to focus more on grade than deposit size when considering an investment.
He says the search for high-quality resources is happening, although he observes that the ease of processing is another criterion that is important, as projects that are mechanically and chemically suitable for mining and processing are also likely to reduce costs.
“Resources are being oversold and, for specialist minerals, such as uranium, it is all about grade,” he emphasises.
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