Bennet Well Scoping Study Confirms Potential for a Low Cost ISR Uranium Operation

Cauldron Energy Limited (ASX: CXU) (“the Company” or “Cauldron”) is pleased to announce the results of its Scoping Study for a proposed stand-alone Bennet Well Uranium operation, located ~ 100 kms south of the town of Onslow in Western Australia, and ~1,050 kms north of Perth.

Highlights

• Bennet Well Scoping Study confirms the potential for a low cost globally competitive in-situ recovery (ISR) uranium operation;
• Mineral Resource (JORC 2012) at Bennet Well contains 30.9 million pounds (~14,000t) of contained uranium oxide (Indicated plus Inferred Mineral Resource of 38.9 million tonnes grading 360 ppm eU₃O₈);
• A production rate of 1.5 Mlb/year over 11 years produces 16.5 Mlb of U₃O₈ over the life of mine (LOM);
• The mineable resource (extracted from the Mineral Resource) is 27.7Mt @ 373 ppm eU₃O₈ at an optimised cut-off grade of 175 ppm eU₃O₈;
• Leach recoveries based on test work conducted by CSIRO are 67% (to be confirmed by field leach trial);
• Upfront capital is estimated to be A$117.7M (US$82.4M), with on-going capital for wellfield development of A$179.0M (US$125.3M) un-escalated over LOM;
• Operating (US$23.23/lb U₃O₈) and capital costs (US$12.56/lb U₃O₈) bench mark well against other similar uranium projects;
• Project NPV of A$449M (US$314M) pre-tax at a discount rate of 10%, with IRR of 79% and a payback period of 1.5 years using base case assumptions of US$75/lb U3O8 and 0.70 AUD:USD;
• At the current spot uranium price of US$83/lb, and exchange rate of 0.66, the project has a pre-tax NPV of US$380M (A$576M), and an IRR of 93%.
• Project economics greatly assisted by low reagent consumption, a relatively shallow depth to mineralization, and good permeability of the host sands;
• Low environmental footprint, focus on minimal disturbance and continuous rehabilitation, no long-term impact on groundwater, potential for low carbon intensity project;
• Further upside opportunities include:
  • Potential for an increase in the Bennet Well resource estimate with further drilling, noting the Company has a Program of Works approved by DMIRS and intends on drilling early next calendar year,
  • In-fill drilling at bennet Well to improve confidence in the resource (i.e. convert Inferred Resources to Indicated Resources),
  • Processing efficiencies aimed at reducing costs and increasing recovery rates,
  • Further exploration potential for additional uranium mineralization to be defined on several targets in the region.

The Bennet Well Uranium Deposit, forms part of Cauldron’s Yanrey Uranium Project which encompasses a total area of 1,270 km², and remains open to the north and south and has the potential to be larger. An approved drill program will be conducted in the early part of calendar year 2024 and aims to test for extensions to the deposit as well as undertake infill drilling to upgrade parts of the existing mineral resource from inferred status to indicated.

The Study was assisted by consultants from Ravensgate Mining Industry Consultants and metallurgical and processing consultants at ANSTO and CSIRO, and highlights the project’s potential to deliver robust financial returns.

Commenting on the outcomes of the Bennet Well Scoping Study Cauldron’s Chief Executive Officer, Jonathan Fisher, said

“The Company is delighted to report these outstanding initial Scoping Study results for the Bennet Well deposit which further highlight the quality and global significance of Cauldron’s uranium assets. These strong financial estimates and outcomes, driven by modest capital and operating costs, are the culmination of many years of extensive research and development by Cauldron.

Bennet Well, and the wider Yanrey project area, represents a significant opportunity to discover and ultimately develop uranium mineral resources, and this Scoping Study results clearly illustrate the transformational effect the stand-alone Bennet Well operation could have on the potential economics of the entire Yanrey Uranium Project.

As global uranium markets continue to strengthen, Cauldron is pleased to report the cost estimates and outcomes for Bennet Well are very competitive globally with:

• an excellent 79% IRR
• a pre-tax NPV10 of $A449M (US$314M)
• short payback period of 1.5 years
• a strong life of mine C1 operating cost of only US$23.23/lb U₃O₈
• a strong life of mine AISC cost of only US$35.79/lb U₃O₈
• a modest upfront CAPEX of A$117.7M (US$82.4M) plus additional capital for wellfield development over the 11 year mine life of A$179M (US$125.3M)
• annual production of 1.5Mlbs U₃O₈ p.a., and total production of 16.5Mlbs U₃O₈ over life of mine
• total undiscounted cash flow of A$1,042M (US$729M) pre-tax

With continuing feasibility work, Cauldron is confident that there is significant scope to further optimise this Study outcomes for the Bennet Well deposit. The potential integration of mineral resources from additional deposits discovered in the wider Yanrey project area could increase production at Bennet Well and either extend the mine life considerably or allow an increase in annual production rate.

We are now planning our next phase of work based on further defining and converting mineral resources to Indicated status, and at the same time extending the mineral resource base. We will continue to understand the geo-metallurgical model and how that impacts uranium extraction and recovery, and carry out further test work required to bring the project to pre-Feasibility Study level within 12-18 months.

 We know this work will be well supported by the market, despite the politically motivated ban on uranium mining by the current WA State Labor Government. We are confident that this ban will be over-turned in time, either by a change of Labor Party policy or a change in government, and so it is important to put the project back on a development pathway for when the window of opportunity opens.”

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