Mineral resource focused company GoviEx says preliminary economic assessment (PEA) for the expanded Mutanga envisions an average annual production rate of 2.4 million pounds of U3O8 yellowcake over an initial 11-year mine life.
According to the PEA the initial capital costs are estimated at US$123 million, with estimated cash operating costs of US$31.1/lb U3O8, excluding royalties. Total life-of-mine (“LoM”) costs are forecast at US$37.9/lb U3O8.
The PEA is based on Measured and Indicated Mineral Resources of 15 million pounds (Mlb) U3O8 and 45 Mlb of Inferred Mineral Resources.
“At a long-term uranium price of US$58/lb U3O8, the base case project economics for this project are positive, and indicate an after-tax net present value of US$112 million (at 8% discount rate) with an internal rate of return (IRR) of 25% and total LoM net free cash of US$268 million,” GoviEx said in a statement.
The PEA is considered 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.
In October 2017, GoviEx completed a transaction to acquire the uranium mineral interests of African Energy Resources Ltd.
The combination of African Energy’s Chirundu and Kiraba Valley properties with GoviEx’s Mutanga Project united have improved the potential economies of scale of the Mutanga Project.
The acquired Chirundu and Kariba Valley properties included a mining licence, a prospecting licence, and a pending exploration licence.
The Chirundu large scale mining licence covers two uranium deposits: Gwabe and Njame.
With the addition of the Chirundu and Kariba Valley properties, the Mutanga Project now consists of three contiguous, fully-permitted mining licences in a contiguous property of approximately 140 km in strike length.