Uranium Energy (UEC) said that its fully owned Roughrider uranium project in Canada will require an initial capital expenditure (capex) of $581.1m, based on the findings of an initial assessment technical report summary.
The assessment includes an economic analysis and mineral resource estimate.
The initial capex for the Canadian uranium project comprises direct costs of $285.4m, indirect costs of $99.9m, owner’s costs of $60.2m, contingency of $99.9m, and pre-production costs of $35.6m.
Uranium Energy said that the expected life of mine (LOM) production is projected to be 61.2 million lbs of U3O8 over nine years, with an average annual production rate of 6.8 million lbs of U3O8.
According to the initial study, the Roughrider deposit will be mined using the longhole stoping method, employing retreat mining in a transverse stope orientation, with varying orientations across the three main mineralised zones.
The processing facility outlined in the initial study of the Roughrider uranium project is designed to operate at a nominal throughput of 400 tonnes per day (tpd).
The average mill feed grade will be 2.36% U3O8 over LOM and a recovery rate will be 97.5%.
The LOM average annual production of yellowcake is projected to be approximately 3.08 million kg at 95% U3O8.
The initial study estimates an after-tax net present value (NPV) of $946m for the Canadian uranium project. It projects a post-tax internal rate of return (IRR) of 40% with an after-tax payback period of 1.4.8 years.
Located in Northern Saskatchewan, the Roughrider uranium project was the flagship asset of Hathor Exploration, which Rio Tinto acquired for $550m. Uranium Energy acquired the project in 2022 for $150m in cash and shares.
Uranium Energy president and CEO Amir Adnani said: “This Initial Economic Assessment marks a pivotal milestone for Roughrider, validating it as a top-tier, high-margin operation with a clear path to development into a world-class mine and mill.
“With a post-tax estimated net present value of $946m, today’s results underscore the strength of our 2022 decision to acquire Roughrider from Rio Tinto for $150m, consistent with our strategy to acquire accretive assets at opportune points in the uranium price cycle.”
Uranium Energy is progressing the Roughrider project through ongoing technical and environmental studies, community engagement, and efforts to identify opportunities to further de-risk the project.
Following the exploration results in 2024, the company intends to update the mineral resource estimate in Q1 2025, which will underpin the development of a pre-feasibility study (PFS) in 2025.
