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    uranium investing

    Plateau Uranium PEA Demonstrates $17 Base-case Cash Operating Cost

    Written by Vivien Diniz
    |
    Jan. 25, 2016 04:35PM PST

    Plateau Uranium released the PEA for its the Macusani Plateau project on Monday, and the results are encouraging, to put it mildly.

    Plateau Uranium Inc. (TSXV:PLU) released the preliminary economic assessment (PEA) for its Peru-based Macusani Plateau uranium project on Monday, and the results are encouraging, to put it mildly. 
    Using a conservative future uranium price of US$50 per pound, Plateau has put together an impressive PEA that shows Macusani Plateau has the potential to become a world-class project.
    One of the more impressive highlights of the PEA is its cash operating cost, which will average US$17.28 per pound over the life of the mine. According to Plateau, this operating cost places the company in the lowest quartile of uranium producers in the world.
    As far as initial capital expenditures go, Plateau is looking at an estimated $249.7 million, with $50.1 million in contingencies. From there, the company will be able to build the mine, along with a 10.9-million-tonne-per-year heap leach process plant. It is important to note that Plateau will not require any customized equipment in order to build the plant, and can use “off-the-shelf” equipment and technology.


    Looking further at numbers, the project has a pre-tax net present value of US$852.7 million at an 8-percent discount — that comes to $603.1 million after tax. Meanwhile, the project’s pre-tax internal rate of return sits at 47.6 percent; after-tax that figure is just as positive at 40.6 percent. Overall, the company is eyeing a pre-tax capital payback of 1.69 years, or 1.76 years post tax.
    “The low cost potential of the Macusani Plateau uranium 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,” CEO Ted O’Connor said in a statement.
    Still, with under two years to pay back capital, Plateau is onto something big with Macusani Plateau. Production from the project looks to be in the area of 6.1 million pounds per year over the mine’s life. Furthermore, Plateau plans to process 109 million tonnes at 289 ppm U3O8 during that time. All that is to say that Macusani Plateau stands to be within the top five largest uranium operations in the world.
    Plateau is planning on approaching mineral extraction via standard open-pit mining, with a relatively small — yet higher-grade — underground operation contemplated with an average life-of-mine stripping of 2:1 waste to ore. The company noted Monday that the “[o]ptimized base case includes only 3 of the 5 main mineralized complexes with current mineral resource estimates identified at the project.”

    Plateau has also looked at high-grade scenarios with both heap leach and tank leach processing options.
    “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,” O’Connor said, adding, “[o]ur plan is to move the Macusani Plateau uranium project further along the path to development by progressing our environmental permitting strategy in Peru, initiating further delineation, expansion and exploration drilling, and following through with additional pre-feasibility metallurgical and engineering study work over the coming year. The work completed on the high-grade heap leach and tank leach scenarios has provided up-front, potentially economic options to consider in the future pre-feasibility work.”
    With the future of the uranium market looking bright, Plateau is looking to capitalize on the growth to be had within the sector. Following the PEA’s release, Plateau saw its share price increase 2.67 percent, to end the day at 0.385.
     
    Securities Disclosure: I, Vivien Diniz, hold no direct investment interest in any company mentioned in this article.
    Editorial Disclosure: Plateau Uranium is a client of the Investing News Network. This article is not paid-for content.
    uranium investingmacusani plateauathabasca basintsxv:pluuranium demandplateau uranium
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