Laramide PEA Confirms Potential FOR Long-Life, Low-Cost IN Situ Recovery Uranium Operation at Churchrock Project, New Mexico, USA
LARAMIDE PEA CONFIRMS POTENTIAL FOR
LONG-LIFE, LOW-COST IN SITU RECOVERY
URANIUM OPERATION AT CHURCHROCK
PROJECT, NEW MEXICO, USA
Highlights:
(All dollars USD)
Large, long-life project with 31.2 million pounds produced over 31 years
Low initial capital costs of
$47.5M
Unit operating costs (including taxes and royalties) of
$27.70
/lb and
ASIC
(all in sustaining
costs) of
$34.83
/lb
Pre-income tax IRR of 62% and NPV (8%) of
$278 million
(at
$75
/lb U
3
O
8
)
Post-income tax IRR 56% and NPV (8%) $239 million (at
$75
/lb U
3
O
8
)
Life of Project post-income tax cash flow exceeds
$1 billion
Upside opportunities include:
Potential for accelerated development of the resource beyond one million pound per annum
straight line case outlined in the PEA; existing license allows for a 3-million-pound capacity
at planned CPP (Central Processing Plant);
Potential for enhanced recoveries (PEA assumes recovery of 68% of the resource in the
production area) or expansion of the current resource through infill and exploration drilling;
Inclusion of Crownpoint resource in future production planning; and
Realized uranium prices more than
$75
/lb pricing assumptions used in the PEA; for
example, at a spot price of
$90
/lb after-tax NPV (8%) is
$294,497,000
.
TORONTO
,
Jan. 11, 2024
/CNW/ - Laramide Resources Ltd. ("
Laramide
" or the "
Company
")
(TSX: LAM) (ASX: LAM) (OTCQX: LMRXF), is pleased to announce the positive results of an
independent Preliminary Economic Assessment ("PEA") for the 100% owned Churchrock In-Situ
Uranium Project ("Churchrock Project") located in
New Mexico
, U.S. The PEA has been prepared in
accordance with the requirements of National Instrument 43-101 ("NI 43-101") by SLR International
Corporation ("SLR"), an independent consulting firm with considerable expertise in mining and
mineral processing, including uranium mining in
the United States
.
"Laramide is pleased with the results described in this PEA analysis of the Churchrock Project,
which is the first economic study to consider the entirety of the large and robust resource amenable
to ISR development. The study confirms that Churchrock has the potential to be a long life, high
margin project," says
Marc Henderson
, President and CEO of Laramide Resources. "Importantly, as
a late-stage development project located in the western
United States
, Churchrock is well positioned
to address some of the potential nuclear utility security of supply concerns clearly reflected in spot
uranium prices which have risen dramatically and now exceed
$90
/lb."
Summary of Economics
The base case economic assessment results in a pre-income tax internal rate of return ("IRR") of
62% and a pre-income tax net present value ("NPV") of
US$287 million
when applying an eight
percent discount rate and
$75
uranium price.
The economic assessment reflects the development of a steady state 3,000 gpm (gallons per
minute) in situ recovery (ISR) operation, which includes Churchrock Satellite Plants, Crownpoint CPP
(Central Processing Plant), and associated wellfields near Churchrock,
New Mexico
. The PEA
assumes recovery of approximately 68% of the uranium resource in the production area.
Following an initial capital cost of
$47.5 million
for the development of the initial wellfield and
associated process infrastructure, subsequent wellfields are developed sequentially, the cost of
which is accounted for in the PEA as sustaining capital.
The capital and operating cost estimates for ISR mineral recovery and yellowcake production in the
PEA are based on factored costs from other comparable ISR operations, judgment, and analogy.
Although there was some previous commercial underground mining production experience at
Churchrock area, this Technical Report concerns only the ISR method for the U
3
O
8
.
An economic analysis was performed using the assumptions outlined in this News Release. The SLR
QPs note that, unlike Mineral Reserves, Mineral Resources do not have demonstrated economic
viability. This PEA is preliminary in nature and is based on Inferred Mineral Resources that are
considered too geologically speculative to have modifying factors applied to them that would enable
them to be categorized as Mineral Reserves, and there is no certainty that this economic
assessment will be realized.
Summary of Capital Costs for 31.2 Mlb LOM Production Schedule (Q1 2022 US dollar basis)
Initial Capital Cost (Year -4 through Year 1)
Total (US$ 000)
Pre-production Permitting
$4,000
Restoration Demonstration
$2,400
Wellfield Cost (SE1/4 of Section 8 only)
$5,356
Satellite IX Plant
$12,939
Elution Plant
$6,026
Environmental
$2,866
Total Direct Costs
$33,587
EPCM / Owners / Indirect Cost
$4,740
Contingency
$8,982
Initial Capital
$47,539
Sustaining Capital (Year 2 through Year 37)
$122,477
Total Capital
$169,990
Reclamation and Closure
$101,100
Total Capital + Reclamation and Closure
$270,115
The LOM average operating cost includes mineral recovery, on-site yellowcake production with
hauling cost to Laramide's Crownpoint Processing Facility approximately 22 miles from Churchrock,
general and administration, and freight of the product from the CPP to a point of sale, along with
various royalties and taxes.
LOM Operating Cost Estimate
Item
LOM Operating Cost
(US$ 000)
LOM Unit Operating Cost
(US $/lb)
Wellfield + Satellite IX Plant Ops
$157,141
$5.04
Well Field Development
$194,729
$6.24
Elution Plant Ops
$178,161
$5.71
Waste Management
$160,461
$5.14
Restoration Ops
$32,160
$1.03
G&A
$17,932
$0.57
Capitalized Operating Costs
$(5,356)
$(0.17)
Total Site Operating Costs
$735,228
$23.56
Product Transport to Market
Total Production Costs
$735,228
$23.56
Royalties
$89,680
$2.88
New Mexico Severance Tax
$39,389
$1.26
Total Operating Costs
$909,493
$27.70
Project Description and Resources
The Churchrock Project and nearby properties represent one of the largest and highest-grade
undeveloped ISR uranium projects in the
USA
. The Churchrock Project is located on the western end
of the Grants Mineral Belt in the main portion of the historical Churchrock Mining District,
approximately 10 miles north-northeast of
Gallup
, in
McKinley County New Mexico
. Churchrock is
situated within the sub-district of the Grants Mineral Belt of northwestern
New Mexico
, the most
prolific historical uranium district in
the United States
with cumulative production of 340 million pounds
from 1948 to 2002.
The Churchrock Project consists of two groups of property parcels, Churchrock and
Crownpoint
,
separated by approximately 22 miles. A single U.S. Nuclear Regulatory Commission (US NRC)
license (SUA-1580) covers parts of Churchrock and
Crownpoint
and is in timely renewal status.
Further renewals of the NRC license and other permits, including a
State of New Mexico
aquifer
injection permit, will be required before production activities can commence. This PEA evaluates
uranium mineral recovery by ISR methods at the Churchrock location and processing in a proposed
new facility at the nearby
Crownpoint
location where significant project infrastructure already exists.
The purpose of this PEA is to assess the engineering, development, and operating design criteria
and overall economic and technical merits of the proposed ISR mineral recovery operations at
Churchrock. The potential ISR mineral recovery of other Mineral Resources on the
Crownpoint
property parcels was not evaluated and is not addressed in this PEA.
The history of exploration and mine development activities for the Churchrock Project dates to the
late 1950s. Underground mine development occurred at the Section 17 property (Old Churchrock
Mine), in the early 1960s by Phillips Petroleum and affiliates, and in the early 1980s by United
Nuclear Corporation (
UNC
). Exploration and development activities continued through the early
1990s by Uranium Resources Inc. (URI). The properties were acquired by Laramide in
January 2017
from URI (now Westwater Resources, Inc.).
As of the effective date of this report, Laramide and its predecessor companies have completed a
total of 1,701 holes totaling 1,867,562 ft, from 1957 to 2023, of which 1,694 drill holes were used to
prepare the Mineral Resource estimates. The Churchrock project area consists of all or portions of
eight sections of land totaling approximately 4,683 acres. The properties are accessible from New
Mexico State Highway 566, which crosses the Project, and locally via dirt roads.
Table 1 summarizes the Mineral Resource estimate for the Project (by Section) prepared by SLR,
based on drill hole data available as of
September 30, 2017
, with an effective date of
May 16, 2023
.
Mineral Resources totaling 33.9 million tons at an average grade of 0.075% eU
3
O
8
containing 50.8
million pounds U
3
O
8
(inferred) were reported in 2017
1
. The Churchrock Mineral Resource Estimate
was based on results of several historical surface rotary drilling campaigns from 1957 to 1991 and
completed utilizing the GT contour method, an industry standard for estimating uranium roll-front type
deposits hosted within groundwater-saturated sandstones. The mineralization at the Project has
been previously shown to be amenable to ISR techniques. No Mineral Reserves have been
estimated for the Project.
Table 1: Summary of Mineral Resources by Section
2
Classification
Sand Unit
Tonnage (Tons)
Grade
(% eU
3
O
8
)
Contained
Metal (U
3
O
8
lb)
Inferred
Section 4, T16N-R16W
9,896,000
0.071
14,090,000
Section 7, T16N-R16W
2,500,000
0.058
2,910,000
Section 8, T16N-R16W
6,472,000
0.079
10,220,000
Section 9, T16N-R16W
3,393,000
0.096
6,510,000
Section 17, T16N-R16W
4,518,000
0.074
6,710,000
Section 12, T16N-R17W
4,768,000
0.060
5,700,000
Section 13, T16N-R17W
2,331,000
0.100
4,680,000
Total Inferred
33,879,000
0.075
50,820,000
____________________________________
1
ASX: Laramide announces 51 Million Pounds Mineral Resource Estimate on the Church Rock Uranium Project, October 10, 2017
2
1. CIM (2014) definitions were followed for Mineral Resources.
2. Mineral Resources are reported at a GT cut-off of 0.5 ft-% eU3O8.
3. A minimum thickness of 2.0 ft was used.
4. A minimum cut-off grade of 0.02% eU3O8 (based on historical mineral recovery costs and parameters from the district) was used.
5. Internal maximum dilution of 5.0 ft was used.
6. Grade values have not been adjusted for disequilibrium.
7. Tonnage factor of 15 ft3/ton based on historical used by the mineral recovery operators was applied.
8. Mineralized areas defined by isolated or widely spaced drill holes, or located within the area previously subject to past production were excluded from the estimate.
9. Totals may not add due to rounding.
Technical Report and Qualified Person
Technical information contained in this news release has been reviewed and approved by
Mark B.
Mathisen
, C.P.G., Principal Geologist, and Stuart E. Collins, P.E., Principal Mining Engineer, SLR
International Corporation, who are considered to be independent Qualified Persons ("QP") as
defined in National Instrument 43-101, Standards of Disclosure for Mineral Projects (NI 43-101).
This PEA demonstrates a business case for the further advancement of the Project. Certain
licensing/permitting issues remain to be resolved and further technical studies are recommended to
validate Mineral Resources and hydrological assumptions.
The Churchrock Project PEA has been prepared in accordance with the requirements of NI 43-101
by
Mark B. Mathisen
, C.P.G., and Stuart E. Collins, P.E., SLR International Corporation, Houmao
Liu, Ph.D., P.E., Itasca Denver Inc.,
Lee (Pat) Gochnour
, MMSA (QP), Gochnour & Associate Inc,
Walter L. Niccoli, P.E., Telesto Solutions, Inc., and
Benjamin J. Schiffer
, P.G., WWC Engineering,
who are QPs as defined under NI 43-101. The full technical report on the PEA will be filed on
SEDAR at
www.sedar.com
and Laramide Resources' website
www.laramide.com
within 45 days of
the issuance of this news release.
Follow us on Twitter @LaramideRes
About Laramide Resources Ltd.:
Laramide is focused on exploring and developing high-quality uranium assets in
Australia
and the
western
United States
. The company's portfolio comprises five advanced uranium projects in
districts with historical production or superior geological prospectivity. Each asset has been carefully
chosen for their size, production potential, and are considered late-stage, low-technical risk projects.
The
Westmoreland
project in
Queensland, Australia
, is one of the largest uranium development
assets held by a junior mining company. This project has a PEA that describes an economically
robust, open-pit mining project with a mine-life of 13 years. Additionally, the adjacent Murphy
Project in the Northern Territory of
Australia
is a greenfield asset that Laramide strategically
acquired to control the majority of the mineralized system along the
Westmoreland
trend.
In
the United States
, Laramide's assets include the NRC licensed Crownpoint-Churchrock Uranium
Project, which is proposed to be developed using in-situ recovery ("ISR") production methodology.
The Company also owns the La Jara Mesa project in the historic Grants mining district of
New
Mexico
and an underground project, called
La Sal
, in Lisbon Valley,
Utah
.
Forward-looking Statements and Cautionary Language
This release includes certain statements that may be deemed to be "forward-looking statements".
All statements in this release, other than statements of historical facts, that address events or
developments that management of the Company expect, are forward-looking statements. Forward-
looking statements are frequently, but not always, identified by words such as "expects",
"anticipates", "believes", "plans", "projects", "intends", "estimates", "envisages", "potential",
"possible", "strategy", "goals", "objectives", or variations thereof or stating that certain actions,
events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the
negative of any of these terms and similar expressions. Actual results or developments may differ
materially from those in forward-looking statements. Laramide disclaims any intention or obligation
to update or revise any forward-looking statements, whether as a result of new information, future
events or otherwise, save and except as may be required by applicable securities laws.
Since forward-looking information address future events and conditions, by their very nature they
involve inherent risks and uncertainties. Actual results could differ materially from those currently
anticipated due to a number of factors and risks. These include, but are not limited to, exploration
and production for uranium; delays or changes in plans with respect to exploration or development
projects or capital expenditures; the uncertainty of resource estimates; health, safety and
environmental risks; worldwide demand for uranium; uranium price and other commodity price and
exchange rate fluctuations; environmental risks; competition; incorrect assessment of the value of
acquisitions; ability to access sufficient capital from internal and external sources; and changes in
legislation, including but not limited to tax laws, royalties and environmental regulations.
SOURCE
Laramide Resources Ltd.
View original content:
http://www.newswire.ca/en/releases/archive/January2024/11/c7038.html
%SEDAR: 00003540E
For further information:
To learn more about Laramide, please visit the Company's website at
www.laramide.com or contact: Marc Henderson, President and CEO, Toronto, Canada
+1 (416)
599 7363; Ann Baines, Director, Investor Relations, Toronto, Canada
+1 (647) 832-9904, E:
CO: Laramide Resources Ltd.
CNW 07:30e 11-JAN-24