The plant will have a capacity of 31.2 million pounds and can produce uranium at $75 per pound of U3O8, according to a preliminary economic assessment (PEA) released Thursday.
PEA puts the project’s after-tax net present value (discounted at 8%) at $239 million, with an internal rate of return of 56% and an initial capital cost of $47.5 million.
“As a late-stage development project in the western United States, Churchrock is well-positioned to address some of the potential nuclear power supply security concerns that are clearly reflected in spot uranium prices, which have risen significantly and currently exceed $90 per pound . Laramide President and CEO Henderson said in a press release.
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Uranium was trading at $92.50 a pound on Thursday, having surpassed the post-Fukushima collapse to reach levels not seen since 2007. The growth is due to a number of factors, including rising demand for the core metal as countries seek to wean themselves off fossil fuels, which has helped push some uranium projects into production. Energy Fuels (TSX: EFR; NYSE: UUUU) last month announced the start of production at its mines in neighboring Arizona and Utah.
Churchrock, located near the city of the same name in northwest New Mexico, has a total capital cost of $270.1 million, including ongoing costs during 37 years of construction and rehabilitation and closure.
Mine life cycle operating costs are $909.4 million, including uranium recovery, on-site yellowcake production and transportation costs to Laramide’s Crownpoint processing plant.
PEA assumes a uranium recovery rate of approximately 68% and develops a 3,000-gallon-per-minute stationary ISR operation that includes satellite facilities at Churchrock, the Crownpoint plant and associated wells.
Based on a 2017 resource estimate, Churchrock inferred to host 33.9 million tonnes grading 0.075% U3O8 and 50.8 million pounds U3O8. The resource is based on 569,232.9 meters of drilling from 1,694 holes completed by previous explorers and Laramide, which acquired the Churchrock property in 2017.
The New Mexico project is also one of the few uranium sites in North America that conducts ISR mining. This method involves pumping a solution through underground boreholes that separates the uranium from the rock and pumps it back to the surface for extraction. It is typically less expensive than traditional hard rock mining, does not require digging large pits, and leaves less residue.
Laramide shares were up 2.5% at C$0.81 per share on Thursday afternoon, setting a new 52-week range high. The company has a market capitalization of C$201.5 million.
