Economics improved at Mulga Rock
PERTH (miningweekly.com) – An updated definitive feasibility study (DFS) on the Mulga Rock uranium project, in Western Australia, has improved the project economics.
ASX-listed Vimy Resources said that the projected net present value has increased by 14% on the original DFS, to $393-million, while the internal rate of return has increased by 23%, to 31%.
Capital cost estimates for the project have been reduced by 20%, to $255-million, with the pay-back period reduced by eight months, to 2.4 years. Free cash flow projections from the updated DFS have also increased by 22%, to $61-million a year.
The project’s production rate has remained unchanged from the 2018 DFS at 3.4-million pounds a year, while the mine life has also remained unchanged at 15 years.
“The DFS refresh reinforces the global importance of the Mulga Rock project, which is the largest advanced uranium project in Australia, a first-world jurisdiction with low sovereign risk,” said Vimy CEO Mike Young.
“With a completed DFS and state and federal government approvals, it is leader of the pack in terms of the next wave of world-wide uranium projects.”
Young said that the refresh had been transformational for the project, and moved Mulga Rock into the middle of the uranium producer cost curve, and on par with higher cost Kazakh operations, as well as ahead of most other uranium juniors.
“As we move into the coming contracting cycle, the utilities will look very favourably on our location in Australia, our multi-mine pipeline, and our long, sustainable mine life at Mulga Rock.”
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