Aurora Energy Metals (ASX:1AE) has completed a Scoping Study over its namesake uranium project in southeast Oregon, US that it says shows a feasible pathway to development of a proposed 1.15-million-pound-per-annum operation.
The headline outcomes show a potential 11-year mine life producing 1.15 million pounds of uranium each year, which is expected to return between $502 million and $1.1 billion in free cash flow based on a price of between US$90 ($136) and US$125 ($189) per pound.
The Scoping Study predicts a pre-tax net present value using a discount rate of 8% of between $232 million and $632 million and a pre-tax internal rate of return of 25% to 49%.
The pre-production cost is forecast to be US$161 million with cash operating costs tipped at US$46.10 per pound using contract resin treatment.
Chairman Peter Lester says the study has identified a relatively simple processing flowsheet based on beneficiation and atmospheric leaching, with scope to further improve recoveries.
“Based on the Scoping Study, we plan to process ores on the company’s private land in Nevada to simplify permitting, utilise existing infrastructure and reduce capital requirements,” he says.
“The production of a loaded resin for off-site toll treatment to final product has also been adopted, bringing further efficiencies to the project.”
According to the study, beneficiation by scrubbing raises the average mined grade of 380 parts per million (ppm) U3O8 by 25% to deliver a leach feed grade above 470ppm.
The operation is targeting a 2-million-tonne-per-annum run of mine production rate over the life of mine at a low strip ratio of 2.1:1.
Initial leach tests resulted in an overall recovery of 69%, but Aurora says opportunities exist to improve recoveries and these continue to be investigated through further metallurgical testwork.
The company has identified three technically viable transport options – trucking, slurry pipeline and rope conveyor – to transfer mined material from mine to Nevada processing site.
The Scoping Study also found no federal, state or local regulatory or permitting issues that would be a hurdle to bringing the Aurora Uranium Project into production.
Despite being the biggest consumer of uranium with around 93 nuclear reactors, in 2022 the US only produced 194,000 pounds of uranium – roughly 0.5% of demand.
This is a significant decrease from the just under 5 million pounds it produced just a decade ago.
With the recently introduced ban on Russian uranium, the US is expected to lose 12% of its supply.
“The widely held expectation of a uranium supply ‘crunch’ in the US provides the comfort of high projected demand for our product from the domestic market,” Lester says.
“Additionally, we are confident this heightened focus on domestic mineral production will not only help expedite projects like ours but also attract government support for financing new uranium mines.
“The indicative project development timetable aligns with the anticipated U3O8 supply deficit over the next decade, underpinned by the recently passed US legislation to ban imported uranium from Russia from 2028 onwards.”
Write to Angela East at Mining.com.au
Images: Aurora Energy Metals
