Vimy Resources (ASX:VMY) has released a definitive feasibility study (DFS) for its Mulga Rock uranium project, confirming strong finances and a low-cost mining process.
Released on Tuesday (January 30), the DFS shows that Mulga Rock, which Vimy says is Australia’s largest and most advanced uranium project, is expected to have a mine life of 15 years with annual production of 3.5 million pounds of U3O8.
The study improves upon the findings of a 2015 prefeasibility study, and estimates that initial cash operating costs will come in at US$25.11 per pound of U3O8 for the first five years of operation.

Life-of-mine cash operating costs are pegged at US$27.95 per pound, with a pre-tax NPV of AU$530 million at an 8-percent discount; meanwhile, free cashflow after royalties is forecast at AU$134 million per year. These metrics assume a uranium contract price of $60 per pound of U3O8 at the time of first production, which is targeted for 2021.
Capital costs are estimated at AU$493 million, including AU$41.7 million in contingencies. Included in the capital costs are pre-production mining costs, as well as mining, plant, infrastructure and indirects.
Vimy CEO Mike Young believes that the DFS results, combined with an increasingly favorable uranium market, have laid the foundation for Vimy to become Australia’s next supplier of uranium oxide, and the operator of Western Australia’s first uranium mine.
Young said on Tuesday, “[t]he DFS is the result of two years of incredibly diligent work by the Vimy team and demonstrates the robustness of the Mulga Rock Project and its potential to become a strategically important supplier of uranium for nuclear power stations all over the world.”
The release also states that Mulga Rock has been de-risked by test pits and comprehensive process piloting. Before the DFS took place, three commercial converters were able to sample and confirm the quality of uranium oxide concentrate (UOC) produced at a pilot plant established in Perth in 2016. 
Quality assurance was a vital step for Vimy at Mulga Rock, as developers are required to prove that their UOC meets global industry standards before long-term offtake agreements are signed.
According to Young, Vimy is currently “accelerat[ing] negotiations with future offtake partners,” and is looking to secure financing ahead of a final investment decision at Mulga Rock in H2 of this year.
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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.