JOHANNESBURG (miningweekly.com) – A recently completed preliminary economic assessment (PEA) at TSX-V-listed GoviEx Uranium’s Mutanga project, in Zambia, has shown that the project can produce 2.4-million pounds a year of triuranium octoxide (U3O8) yellowcake over an initial 11-year mine life.
The study has also shown that Mutanga would have an 88% ultimate uranium recovery rate, with initial capital costs estimated at $123-million.
Cash operating costs are estimated to be around $31.1/lb of U3O8, excluding royalties, while total life-of-mine (LoM) costs are forecast at $37.9/lb of U3O8.
The PEA is based on measured and indicated mineral resources of 15-million pounds U3O8 and 45-million pounds of inferred mineral resources.
At a long-term uranium price of $58/lb U3O8, the base case economics for this project are positive, and indicate an after-tax net present value of $112-million with an internal rate of return (IRR) of 25% and total LoM net free cash of $268-million.
GoviEx chairperson Govind Friedland noted that the results were encouraging. “[We now have] two mine-permitted projects – Madaouela, in Niger, and Mutanga, in Zambia – and we can clearly see the economic potential for both of these projects to be developed when uranium prices rise, as expected, as a result of the looming supply deficit forecast later this decade,” he added.
Madaouela and Mutanga each have the potential to produce more than 2.4-million pounds a year of U3O8 at steady state, with total LoM costs of less than $38/lb and no shortage of exploration potential to possibly expand the mineral resources.