04/11/2010 - 10:10

EMA puts $260m cost on WA uranium mine

04/11/2010 - 10:10

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Development of the big Mulga Rocks uranium project in the north-eastern Goldfields is expected to cost $260 million, Perth-based uranium aspirant Energy & Minerals Australia said today.

EMA puts $260m cost on WA uranium mine

Development of the big Mulga Rocks uranium project in the north-eastern Goldfields is expected to cost $260 million, Perth-based uranium aspirant Energy & Minerals Australia said today.

Announcing the results of its scoping study into the project, EMA said the project was expected to generate an internal rate of return of 30 per cent on the investment and produce 1200 tonnes of uranium oxide a year for over a decade.

EMA said the project, 240km north east of Kalgoorlie, should produce 12,000t of uranium between 2014 and 2025 at an average cost of $US23 per pound, or around half the current market price.

Based on forecast prices of $US65 a pound at start-up in 2014, rising to $US75 by 2016, EMA said the project would generate net free cashflow of $750 million over its life, including by-product credits.

The mine will combine both in-situ leaching of sandstone hosted uranium, followed by conventional processing of lignite-hosted material that will be extracted via an open pit mine starting in the third year of operation.

In-situ leaching, whereby the uranium is recovered by pumping a weak acid solution into the orebody and then extracted, will continue until 2024, while open mining is expected to continue until 2026.

Total mine revenue is forecast at $2.6 billion over the life of the mine, including $US465 million from the sale of associated nickel, cobalt and rare earths by-products.

The project hosts known uranium resources of over 27,000t in the Amabassador, Shogun and Emperor deposits, making it one of Western Australia's largest untapped uranium resources.

EMA shares were trading 1 cent higher at 24 cents on the news.

 

 

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