U3O8 Corp. Highlights Planned Production Profile for Vanadium from the Laguna Salada Deposit Based on a PEA
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Press release
U3O8 Corp. Highlights Planned Production Profile for Vanadium from the Laguna
Salada Deposit Based on a PEA
Toronto, Ontario – September 14th, 2017 – U3O8 Corp. (TSX: UWE), (OTCQB: UWEFF) (“U3O8 Corp.”
or the “Company”) highlights the production schedule from the Preliminary Economic Assessment (“PEA”)
on its Laguna Salada Deposit, in which almost twice as much vanadium would be produced as uranium.
“Vanadium prices have risen strongly in response to a supply shortfa ll that has been developing in the
vanadium market,” said Richard Spencer, President & CEO of U3O8 Corp. “The trigger for the recent sharp
price increase was a change in policy in China that resulted in restricted access to vanadium slag and
higher local production costs, coming on the back of increasing vanadium consumption, notably from the
steel and battery industries. Based on a vanadium pentoxide price of US$5.50 per pound, the 0.8mlb to
1.2mlb vanadium production per year estimated in the PEA would contribute 12% of the Laguna Salada
Project’s revenue. Vanadium pentoxide is now trading at over US$12 per pound. In addition, Argentina
paid an average of US$58 per pound for imported uranium last year, only marginally below the US$60 per
pound price used in the economic analysis in the PEA”.
Production Schedule
The mining schedule defined
in the PEA on Laguna Salada
starts with production from the
richest part of the Deposit so
that revenue would be
maximized so that the capital
required to develop t he
Project would be paid back as
quickly as possible – in two
and a half years as per the
current PEA. Uranium
production would be over one
million pounds (“mlbs”) per
year over the first four years
and then would decline
gradually, averaging 0.6mlbs
over the life of the mine
(Figure 1). Argentina’s current
uranium demand is
approximately 0.55mlbs per
year to fuel its three reactors.
Vanadium production would
be relatively constant at
between 0.8mlbs and 1.2mlbs
per year over the life of the mine that was planned on the basis of the initial resource (Figure 1).
Higher-grade uranium and vanadium encountered in channels at the base of the gravel layer in recent
exploration (results reported on January 11, 2017 , January 19, 2017 and February 7, 2017 ), and not
included in the PEA, adds upside potential to the Project.
0
0.2
0.4
0.6
0.8
1
1.2
1.4
Millions Of Pounds Of Metal
Metal Production Schedule
Figure 1. Laguna Salada PEA: Planned
Metal Production By Year (Data from
Preliminary Economic Assessment)
Uranium
(U3O8)
Vanadium
(V2O5)
2
Vanadium Supply-Demand Scenario
The vanadium market
slipped into deficit this year
with demand outstripping
supply for the first time in a
decade (Figure 2).
Vanadium prices have
responded to this structural
change in the market by
strengthening – the sharp
increase over t he last few
months having been
triggered by new Chinese
regulations that restrict the
importation of vanadium
slag, the processing of
which produced pollutants
(Figure 3). Supply was
further impacted by
production cuts from
Sichuan Province in China
in Sep tember and the
importation of a larger
proportion of iron ore that
does not contain significant
vanadium. Demand for
vanadium in China is
expected to increase about
30% (not yet incorporated
in Figure 2) in response to
new regulations
implemented to make
buildings more resistant to
earthquakes through the
use of vanadium steel
rebar; the addition of one
kilogram (approximately
two pounds) of vanadium to
a tonne of steel doubles its
strength.
Next Steps
The metallurgical test work on Laguna Salada indicates that a greater proportion of the contained vanadium
could be extracted from the gravel and work is planned to support this potential.
The Company is focused on finding ways of reducing both capital and operating cost estimates. Examples
of possible capital cost reductions include using pre -owned “belly-scrapers” from the road -building and
construction industry instead of sophisticated and expensive continuous miners to mine the flat -lying,
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Tonnes of Vanadium
Figure 2. Vanadium Market Summary & Forecast
(sources of data: Camelot FerroAlloys & Vanitec)
Estimated vanadium required for Li-Ion Batteries
Estimated vanadium required for Redox Flow Batteries
Steel, Chemicals
Supply
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
2010
2011
2012
2013
2014
2015
2016
2017
2018
Vanadium Price (V2O5) in US$/lb
Figure 3. Vanadium (V2O5) Price Chart
(sources of data: Metal Bulletin & www.assetmacro.com)
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unconsolidated gravel, and installation of used equip ment for beneficiation to remove the barren pebbles
from the uranium-vanadium – bearing fine sand. In addition, the preference of the Argentine nuclear fuel
enrichment facility to use ammonium diurinate, instead of yellowcake, as feed for its enrichment f acility,
would lower the capital cost estimate for the Laguna Salada Project by approximately 5% through the
elimination of the calcining module from the plant design. A pilot plant would aim to refine capital and
operating costs for both the production of ammonium diurinate and yellowcake.
Technical Information
Cautionary Note: the Preliminary Economic A ssessment is preliminary in nature, and includes inferred
mineral resources that are considered too speculative geologically to have the economic considerations
applied to them that would enable them to be categorized as mineral reserves, and there is no certainty
that the results of the PEA assessment will be realized.
Dr. Richard Spencer, P.Geo., CGeol., President and CEO of U3O8 Corp. and a Qualified Person as defined
by National Instrument 43-101, has approved the technical information in this news release relating to the
Laguna Salada Deposit and the related PEA.
About U3O8 Corp.
U3O8 Corp. is focused on exploration and development of deposits of uranium and battery commodities in
South America. Battery commodities that occur with uranium resources include vanadium, nickel, zinc and
phosphate. The Company’s mineral resources estimates were made in accordance with National
Instrument 43-101, and are contained in three deposits:
• Laguna Salada Deposit, Argentina – a PEA shows this near surface, free-digging uranium - vanadium
deposit has low production-cost potential;
• Berlin Deposit, Colombia – a PEA shows that Berlin also has low -cost uranium production potential
due to revenue that would be generated from by-products of phosphate, vanadium, nickel, rare earths
(yttrium and neodymium) and other metals that occur within the deposit; and
• Kurupung Deposit, Guyana – a uranium resource has been estimated in four veins within a uranium-
zirconium vein system. Resources have been estimated on four veins, while consistent mineralization
of the same type has been intersected in scout drilling of an add itional six veins, while yet other veins
require first-time exploration drilling.
Information on U3O8 Corp., its resources and technical reports are available at www.u3o8corp.com and on
SEDAR at www.sedar.com. Follow U3O8 Corp. on Facebook: www.facebook.com/u3o8corp, Twitter:
www.twitter.com/u3o8corp and YouTube: www.youtube.com/u3o8corp.
For further information, please contact:
Richard Spencer, President & CEO, U3O8 Corp. Tel.: (416) 868-1491 [email protected]
Forward-Looking Statements
This news release includes certain “forward looking statements” related with the development plans, economic potential
and growth targets of U3O8 Corp’s projects. Forward -looking statements consist of statements that are not purely
historical, including statements regarding beliefs, plans, expectations or intensions for the future, and include, but not
limited to, statements with respect to: (a) the low -cost and near-term development of Laguna Salada, (b) the Laguna
Salada and Berlin PEAs, (c) the potentia l of the Kurupung district in Guyana, (d) impact of the U - pgradeTM process
on expected capital and operating expenditures, and (e) the price and market for uranium. These statements are based
on assumptions, including that: (i) actual results of our explo ration, resource goals, metallurgical testing, economic
studies and development activities will continue to be positive and proceed as planned, and assumptions in the Laguna
Salada and Berlin PEAs prove to be accurate, (ii) a joint venture will be formed with the provincial petroleum and mining
company on the Argentina project, (iii) requisite regulatory and governmental approvals will be received on a timely
basis on terms acceptable to U3O8 Corp., (iv) economic, political and industry market conditions wi ll be favourable,
and (v) financial markets and the market for uranium will improve for junior resource companies in the short-term. Such
statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ
materially from those contained in such statements, including, but not limited to: (1) changes in general economic and
4
financial market conditions, (2) changes in demand and prices for minerals, (3) the Company’s ability to establish
appropriate joint ve nture partnerships, (4) litigation, regulatory, and legislative developments, dependence on
regulatory approvals, and changes in environmental compliance requirements, community support and the political and
economic climate, (5) the inherent uncertainties and speculative nature associated with exploration results, resource
estimates, potential resource growth, future metallurgical test results, changes in project parameters as plans evolve,
(6) competitive developments, (7) availability of future financing , (8) exploration risks, and other factors beyond the
control of U3O8 Corp. including those factors set out in the “Risk Factors” in our Annual Information Form available on
SEDAR at www.sedar.com. Readers are cautioned that the assumptions used in the pr eparation of such information,
although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance
should not be placed on forward -looking statements. U3O8 Corp. assumes no obligation to update such information ,
except as may be required by law. For more information on the above -noted PEAs, refer to the September 18, 2014
technical report titled “Preliminary Economic Assessment of the Laguna Salada Uranium -Vanadium Deposit, Chubut
Province, Argentina” and the January 18, 2013 technical report titled “U3O8 Corp. Preliminary Economic Assessment
on the Berlin Deposit, Colombia.”