Emerging Uranium District in Peru
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Plateau Energy Metals Inc. (TSXV:PLU), is a resource exploration and development company focused on uranium and lithium exploration in the Macusani Plateau in Puno, Peru. In the Macusani land package, which totals 910 square kilometers of mining concessions, Plateau Energy Metals controls one of the largest lithium-uranium districts in the world. To date, only 15 percent of the property has been explored.
While the Macusani project started out as a primarily a uranium project, Plateau Energy Metals has since uncovered the Falchani discovery zone, which has presented high-grade values for both lithium and uranium. Results from the newly uncovered zone include 512 ppm U3O8 over 50 meters of true thickness from surface, and over 100 meters of high-grade lithium-rich tuff averaging 3,500 ppm lithium (0.79 percent lithium oxide).
In the ten years that Plateau Energy Metals has been in Peru, the company has focused on exploring and growing the resource, as well as consolidating the mining concessions. In 2016, the company released an updated preliminary economic assessment (PEA) which indicates that the Macusani Project can be profitable, particularly in an improving uranium market. With the newly uncovered lithium values, Plateau Energy Metals also plans to take advantage of a growing lithium market that is facing increased demand due to the rise in lithium-ion batteries.
Moving forward, Plateau Energy Metals plans to move the Macusani project toward production in 2020 or 2021 by focusing on environmental permitting; drilling to further delineate, expand and explore resources; and pre-feasibility metallurgical and engineering studies. Plateau Energy Metals most recently completed a C$1.8 million financing in November 2017 and is using the financing to continue carrying the project towards production.
Plateau Energy Metals is led by a highly experienced team specializing in a range of skills across project stages. CEO Ted O’Connor is a highly-regarded economic geologist with decades of experience in uranium exploration and development, including a 20-year long career with industry heavyweight Cameco. Chairman Ian Stalker is the former CEO of UraMin Inc., Niger Uranium and Berkeley Resources and has been a director of Plateau Energy Metals since September 2014.
- 910-square-kilometer land package in stable jurisdiction of Peru’s Macusani plateau
- Control of all defined uranium resources in emerging uranium district: 51.9 M lbs U3O8 Measured and Indicated (248 ppm); 72.1 M lbs U3O8 Inferred (251 ppm) at 75 ppm U cut-off.
- Falchani discovery zone presenting high-grade lithium values averaging over 0.7 percent lithium oxide
- Falchani positioned to enter the top five global non-brine projects
- All lithium resources within uranium resources
- Growing demand of uranium alongside decreased supply to the market.
- 2016 PEA highlights: NPV of US$603M / IRR: 40.6 percent / 1.8 years capital payback (post-tax).
- Proposed large-scale, low-cost production of over 6M lbs U3O8 per year over a 10 year mine life.
- Pathway to production in 2020-2021.
Key Project: Macusani Project, Peru
Plateau Energy Metals’ lithium and uranium Macusani project comprises adjacent mineral claims that total 910 square kilometers or 95 percent of the Macusani plateau. Hosting all of the known uranium deposits in Peru, the project lies 650 kilometers southeast of Lima and has access to labor, water, inexpensive hydro-electric power and major transportation routes.
Just to the east of the property is the Interoceanic Highway which links the project to Pacific and Atlantic ports. The San Gaban hydro generating station is 20 kilometers to the north and high voltage power lines run adjacent to the project.
Plateau Energy Metals has built its land holdings in the region through strategic mergers and acquisitions. In 2012, the company became the dominant land holder on the Macusani Plateau following a merger with Southern Andes. In September 2014, the company completed the acquisition of Minergia S.A.C. from Azincourt Uranium giving it control of nearly the entire plateau.
“I’ve always believed in the region because the work done here shows this has the potential to be an incredibly low-cost production area for uranium despite the grade,” states CEO Ted O’Connor, who formerly served as Cameco’s Director of Corporate Development and was responsible for evaluating growth and diversification opportunities for Cameco’s exploration and development project portfolio in new jurisdictions, including some of the Macusani projects now controlled by Plateau Energy Metals.
Added value from lithium discovery
While the Macusani project was launched as a primarily uranium-focused property, the company has since uncovered high-grade values of lithium. Having gained access to the Chaccaconiza area following an agreement with the local community, Plateau was able to conduct exploration activities on the highly prospective area in the southcentral portion of the company’s mineral claims. Within this region, the company uncovered the Falchani zone, which seems to host a resource of 1.2 kilometers by 1.7 kilometers. Outcrop samples from the newly discovered zone have shown results of 1.0 percent U3O8 and 1,140 ppm lithium.
Plateau Energy Metals also conducted a drilling program on the Falchani zone in late 2017. Results from this program included 36.5 meters of 0.71 percent lithium oxide and 45.0 meters of 633 ppm U3O8 from the first drill hole. Further results also included 61.2 meters of 79 percent lithium oxide and 56.0 meters of 511 ppm U3O8. The lithium mineralization in the discovery zone remains open at depth.
In March 2018, Plateau Energy Metals reported further drill results from the Falchani zone. Drilling highlights included an intersection of 3.228 ppm lithium (0.70 percent lithium oxide) over 152 meters at 78 meters below surface. They also included 196 meters of 2,910 ppm lithium (0.63 percent lithium oxide) and thin surface uranium mineralization of 2.5 meters of 585 ppm U3O8 and 2.5 meters of 827 ppm U3O8.
The growing Falchani footprint could position it among the top five non-brine lithium projects globally, particularly as results present a consistent grade of over 0.7 percent lithium oxide. Continued exploration on the Falchani zone is aimed at completing a maiden resource estimate before the end of the first half of 2018. The company has also began metallurgical work on their lithium resources, having sent test samples to ANSTO in Sydney, Australia.
In July 2018, Plateau Energy Metals released a maiden resource estimate for the Falchani project. The highlights of the resource estimate, based on a 0.1 percent lithium oxide cut-off grade, included resources for both the lithium-rich tuff sequence and the wider lithium-rich package including upper and lower breccia units.
The first showed an indicated resource of 0.63 million tonnes of lithium carbonate equivalent and an inferred resource of 1.41 million tonnes of lithium carbonate equivalent. The second region presented an indicated resource of 0.67 million tonnes of lithium carbonate equivalent and an inferred resource of 1.76 million tonnes of lithium carbonate equivalent.
Additional lithium resources
In March 2016, Plateau Energy Metals filed a technical report highlighting the amount of lithium and potassium resources contained within four of the company’s defined uranium deposits as well as the potential by-product value for the Macusani project. Initial leach testing shows recovery rates of up to 73 percent for lithium. Expected products from extraction of lithium from Macusani would include lithium carbonate and potassium sulphate.
Highlights of the lithium and potassium mineral resource estimate (based on a 75ppm U cut-off grade) include:
- Indicated: 31 M tonnes grading 0.13 percent lithium oxide, 4.47 percent potassium oxide and 268 ppm uranium oxide, containing 67,000 t of lithium oxide, 2.34 Mt potassium oxide and 31 M lbs uranium oxide
- Inferred: 68 M tonnes grading 0.12 percent lithium oxide, 4.49 percent potassium oxide and 283 ppm uranium oxide, containing 109,000 t of lithium oxide, 3.93 Mt potassium oxide and 54.8 M lbs uranium oxide
2015 Updated Uranium Resource Estimate
In 2015, Plateau Energy Metals released an updated resource estimate for the Macusani Project.
2016 Preliminary Economic Assessment
In January 2016, Plateau Energy Metals completed an updated PEA using the 2015 Resource Update. The strong PEA results further validate the merits of the company’s consolidation and organic growth strategy to control all defined uranium resources in Peru.
“Completing the updated PEA is a very important milestone for Plateau Energy Metals,” stated CEO O’Connor. “The new PEA results show the significant potential of the Macusani Plateau Energy Metals district to become a future uranium production centre. The low cost potential of the Macusani Plateau Energy Metals project, with estimated production costs similar to some of the best uranium operations in the Athabasca Basin and Kazakhstan, combined with significant estimated annual production levels, and estimated capital costs of less than US$300 million, near significant infrastructure in mining friendly Peru, all highlight the potential strategic nature of our project to supply the growing near-term uranium demand expected within the next 4 years.”
More than 60 million pounds of production planned over 10 years.
The 2016 PEA proposes the construction of a conventional open pit mining operation with a centralized processing facility operating over a 10-year life with a throughput of approximately 30,000 tonnes per day. Heap leach processing will be used to extract uranium into a weakly acidic aqueous leach solution with uranium recovery through exchange and a solvent extraction acid recovery circuit.
The proposed mine plans include predominantly open pit mining with underground mining proposed for some of the deeper high grade portions of the Kihitian complex to be accessed from the pit bottom.
Further Upside Potential—Regional Exploration
In terms of regional exploration, significant upside potential remains at Macusani with 85 percent of the 910 square kilometer exploration land package undrilled. Un-tested mineralized prospects have been identified at surface and will be evaluated in the coming year of work planned.
In March 2017, the company also conducted further drilling on the property, reporting positive results from its Pinocho target that included intersections of over 2,350 ppm U3O8 over 2.0 and 3.0 meters.
Path to Production
Plateau Energy Metals’ plan is to move the Macusani project further along the path to production by
- progressing through the environmental permitting process,
- undergoing further delineation, expansion and exploration drilling, and
- conducting additional pre-feasibility metallurgical and engineering study work to also assess the lithium and potassium by-product opportunity.
Following constructive meetings with government officials including leaders from the Ministry of Mines and Energy, and the Peruvian Institute of Nuclear Energy, Plateau Energy Metals received approval for its Environmental Baseline Study. “Acceptance of the environmental baseline study by the affected Andean communities near the Macusani uranium and lithium project is a significant milestone for Plateau Uranium and we continue to receive strong social acceptance for developing the project. Acceptance and approvals for the design, scope and methodology of the baseline study received from environmental authorities is a further indication of Peruvian government support for the project and is the first step towards permitting future uranium and lithium production,” said O’Connor.
Ian Stalker — Chairman
Ian Stalker is the former CEO of UraMin Inc., the London and Toronto listed public uranium company that was acquired by Areva for US$2.5 billion in August 2007. Prior to joining UraMin, he Stalker was a Vice President of Gold Fields Ltd., which at one point was the world’s fourth largest gold producer. Stalker has more than 30 years of development and operational mining experience in countries across the world. With an enviable hands-on approach, he worked his way up from operational roles early on in his career to executive positions with some of the largest mining companies in the world.
Alex Holmes – CEO and Director
Mr. Holmes has spent more than 15 years working in the mining industry. Most recently, he was a partner and co-founder of Oxygen Capital Corp., leading business development activities for all affiliated companies, including True Gold Mining Inc. where he served as VP Business Development and co-founder. Alex played an instrumental role as part of the senior leadership team from initial asset acquisition in 2013, reserves and resources growth, advancing the project from Preliminary Economic Assessment to Feasibility Study, through project finance and ultimately gold production in early 2016. Over that period Alex and team raised in excess of $215 million to construct and operate True Gold’s Karma mine. Previously, he led the mining teams at two independent Canadian investment banks and raised capital for and advised on transactions for numerous companies.
Laurence Stefan, M.Sc. & Ph.D. — President and Chief Operating Officer, Director
Dr. Laurence Stefan is a founder of Macusani Yellowcake and has served as its Managing Director in Peru since October 2007 when the Company went public. He is also the founder of the Colibri Group of Companies, a mineral service company based in Lima, Peru. Dr. Stefan previously worked at Gold Fields of South Africa and JCI (Pty) Ltd. with recent years spent mainly on South American projects. He has been involved in basic and specialized research in uranium metallurgical, recovery and enrichment programs at various gold-uranium mines along the Witwatersrand Basin in South Africa and Namibia.
Ted O’Connor, P.Geo., M.Sc., B.Sc.— Director
Ted O’Connor is a Professional Geoscientist with more than 22 years of experience, predominantly in the uranium exploration industry. He has spent the last 19 years with Cameco, one of the world’s largest uranium producers. Most recently he was a Director of Cameco’s Corporate Development group where he was responsible for evaluating, directing and exploring for uranium deposits throughout North America, Australia, South America and Africa. O’Connor successfully led new project generation from early exploration through to discovery on multiple unconformity uranium projects. He was also responsible for opportunity evaluation, acquisition and for managing Cameco’s exploration partnerships aimed at growing and diversifying Cameco’s exploration portfolio in new jurisdictions and other uranium model types. In addition to being a Director in Cameco’s Corporate Development group, O’Connor has also held director and executive positions in several of Cameco’s wholly owned subsidiaries working in Australia, North and South America and Europe. Prior to joining Cameco, O’Connor was an exploration field and underground mine geologist for major mining companies and junior explorers searching for gold, diamonds and base metals.
Alan Ferry — Director
Alan Ferry has more than 25 years of experience in the investment industry following a career as a geologist, mainly in uranium exploration. He has significant experience in mining analysis, mineral economics and corporate finance. His professional memberships include the Toronto Society of Financial Analysts, the Chartered Financial Analysts Institute, the Prospectors and Developers Association and the Canadian Institute of Mining and Metallurgy. In addition, he is a past president of the Mineral Resource Analysts Group of Toronto. Ferry sits on the boards of directors of several publicly traded mining and exploration companies, notably as Lead Director of Guyana Goldfields Inc. and Chairman of Avalon Rare Metals Inc.
Maryse Belanger — Director
Maryse Belanger brings over 30 years of experience in the mining industry with strengths in operational excellence and efficiency. Most recently, she was the CEO and Managing Director of Mirabela Nickel where she was responsible for the remarkable turnaround of the company and the reestablishment of the Santa Rita Nickel-Copper sulphide open pit mine in Brazil. From 2012 to 2014, Belanger was Senior Vice President, Technical Services at Goldcorp where she oversaw the global geology, mine planning and design, metallurgy, hydrology, tailings dam and geotechnical engineering functions. During her career, Belanger has also gained considerable expertise providing oversight and project management support for some of the mining industry’s key strategic acquisitions. Prior to joining Goldcorp, she was Director, Technical Services for Kinross Gold Corporation for Brazil and Chile. She holds a Bachelor of Science degree in Geology and a graduate certificate in Geostatistics and is fluent in English, French, Spanish and Portuguese. She has been an active board member at Mirabela, True Gold Mining Inc., CEEC International Ltd. and is a member of Westcoast Women in Engineering, Science and Technology (WWEST).
Christian Milau — Director
Christian Milau is a Chartered Professional Accountant with executive experience in acquisitions, financing, mine development, construction and operations. Milau was most recently CEO of True Gold Mining, successfully negotiating and closing True Gold’s sale and acquisition by Endeavour Mining Corp. for $240 million in April 2016. At True Gold, he was instrumental in the development of the Karma Gold Project where, under his leadership, True Gold was able to successfully negotiate agreements with the government and community in Burkina Faso, recommence construction, complete development, and reach production, all in under 12 months. In addition to his extensive background in finance and capital markets, Milau brings important operational, government and stakeholder relations experience, including successfully negotiating various community, security, fiscal and tax agreements. Prior to True Gold, Milau held senior positions at Endeavour Mining Corp., New Gold Inc., and in investment banking at BNP Paribas in London.
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