PERTH (miningweekly.com) – ASX-listed Vimy Resources is reviewing the base metal potential at its Mulga Rock uranium project, in Western Australia.

An updated definitive feasibility study (DFS) on the project, completed last year, increased the project’s net present value 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.

Vimy pointed out on Thursday that the original 2018 DFS had also investigated a standalone base metals plant designed to recover copper, zinc, nickel and cobalt as mixed sulphide by-products from the tailings of the uranium plant, however, given the prevailing base metal prices at the time, this option was not pursued further.

However, the growing demand for clean energy solutions has seen a significant rise in base metal prices, said MD and CEO Mike Young, prompting the company to review the viability of the base metals plant.

“De-carbonisation of the global economy is seeing a significant step change in the long-term demand, pricing and security of supply for battery metals. As a result, it is clear that the base metals circuit has gone from marginal to potentially improving the already strong uranium economics of the Mulga Rock project,” said Young.

He noted that initial indications suggest that the project economics could be materially improved in the first eight years of production, when the base metal bearing Ambassador deposit is being mined.

The Ambassador deposit is currently estimated to host some 34.1-million tonnes of base metal resource, grading 280 parts per million (ppm) copper, 960 ppm zinc, 480 ppm nickel and 240 ppm cobalt.

Vimy is expected to derive a life-of-mine base metals by-product credit of between $4/lb and $4.5/lb of uranium oxide produced at current, and forecast base metal prices.

The company on Thursday told shareholders that it would now further investigate the potential upside associated with a base metal plant at Mulga Rock, by updating the base metal resource estimate, reviewing the metallurgical flowsheet, integrating the likely metallurgical recoveries and reagent consumptions for the base metal plant on the project’s net present value, updating capital and operating cost estimates, and updating the economic model for the project to incorporate the base metals plant.

Vimy would also investigate the potential financing options for the whole Mulga Rock project, including the incorporated base metal endowment.