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U308 (TSX:UWE) has reported progress achieved in the quarter towards driving down production cost estimates at its Laguna Salada Deposit in Argentina. As quoted in the press release: The Company also reports that it has decided, under IFRS rules, to write down the value of its Colombian deposit in its 2016 year-end financial statements. This …
U308 (TSX:UWE) has reported progress achieved in the quarter towards driving down production cost estimates at its Laguna Salada Deposit in Argentina.
As quoted in the press release:
The Company also reports that it has decided, under IFRS rules, to write down the value of its Colombian deposit in its 2016 year-end financial statements. This is an accounting measure that reflects the limited work undertaken in Colombia under the difficult conditions in the uranium resource sector over the last three years, while available funds have been focused on advancing the Laguna Salada Deposit in Argentina. The Berlin Deposit in Colombia remains in good standing and will be reactivated by the Company as soon as adequate funding becomes available.
Prioritization of the Laguna Salada Deposit in Argentina
With the limited funding that has been available to the Company during the downturn in the resource sector, and while uranium prices sunk to their lowest levels in a decade in December 2016, the Company focused its expenditure on its priority project, advancing it towards a feasibility study in a cost-effective manner. The Laguna Salada Deposit in Argentina is considered the Company’s top priority asset under current market conditions for the following reasons:
- The deposit is flat-lying and shallow, with the uranium-vanadium layer exposed at surface in some areas and extending to a depth of only three metres in others. The advantage of this geometry is that it allows for mining to begin in the richest part of the deposit, where margins are highest, resulting in a quick payback of the capital borrowed for construction of the mine and plant, and freeing up cash flow to be returned to shareholders as soon as possible;
- The Preliminary Economic Assessment[1] on Laguna Salada estimated cash costs of production of approximately US$12 per pound of uranium in year one, while the highest grade material is mined. New discoveries of uranium and vanadium elsewhere in the Laguna Salada Project area (see press releases dated January 11, January 19 and February 7, 2017) returned grades that are similar to, or higher than, the grade of the material modeled to be mined in year one. Hence, this newly discovered material has potential to add to the Deposit’s resource and to improve its economics
