Uranium Energy completes initial economic assessment for Roughrider Uranium Project, Saskatchewan
Uranium Energy Corp. [NYSE American: UEC] reported the filing of an initial assessment technical report summary that includes an economic analysis and mineral resource estimate for its 100%-owned Roughrider Project, located in northern Saskatchewan, Canada. All currency references are in US dollars.
Amir Adnani, President, and CEO stated: “This Initial Economic Assessment marks a pivotal milestone for Roughrider, validating it as a top-tier, high-margin operation with a clear path to development into a world-class mine and mill. With a post-tax estimated net present value of $946 million, today’s results underscore the strength of our 2022 decision to acquire Roughrider from Rio Tinto for $150 million, consistent with our strategy to acquire accretive assets at opportune points in the uranium price cycle.
Key competitive advantages that position Roughrider as an elite underground development project include high-grade operation with 2.36% U3O8 Life of Mine feed grade; one of the lowest capex profiles in Canada and location in the Eastern Athabasca Basin, where future development will benefit from proximity to power, roads, and the Points North Landing airport and construction facility.
Additionally, we see significant potential for further value creation as we advance the project through the prefeasibility stage, supported by recent exploration drill results and the discovery of the Roughrider North Deposit.
Roughrider is poised to benefit from uranium and nuclear energy’s growing prominence to address North America’s rising electricity demand for safe, reliable, economic, and clean energy sources. Given UEC’s capabilities as an established uranium producer, we are uniquely positioned to leverage our operational expertise and financial strength to advance and de-risk Roughrider, maximizing value for our shareholders, stakeholders, and rightsholders.”
Key Highlights: Estimated post-tax NPV8 of $946 million, IRR of 40%, post-tax payback period of 1.4 years based on a long-term uranium price of $85/lb U3O8 and utilizing an 8% discount rate (NPV 8%).
Expected Life of Mine (LOM) production of 61.2 million lbs U3O8 produced over nine years with an average annual production rate of 6.8 million lbs U3O8. Initial capex estimated at $545 million including mill and underground mine. AISC of $20.48/lb U3O8.
Average Annual LOM earnings before interest, taxes, depreciation and amortization (Average EBITDA) of $395 million.
The Roughrider Project is in the well-established infrastructure of eastern Athabasca Basin, with an adjacent high-voltage 138 kV transmission line, hydroelectric power generation, 7 km north of the commercial airport at Points North Landing, and highway system.
The initial economic assessment envisions that the Roughrider deposit will be mined using the longhole stoping method utilizing retreat mining in a transverse stope orientation with various orientations between the three main mineralized zones.
The initial construction focus is on the development of the decline, ventilation and secondary egress from surface. Once the decline reaches the deposit, initial focus will be on the Roughrider West (RRW) deposit with the decline held while levels and ventilation are developed in this area. Mining then progresses to the Roughrider East (RRE) deposit and finally Roughrider Far East (RRFE) deposit.
The processing facility incorporated in the initial economic assessment is designed using established methods from other Athabasca operations, such as Rabbit Lake, Key Lake and McClean Lake. It will operate at a nominal throughput of 400 t/d with an LOM average mill feed grade of 2.36% U3O8 and a recovery rate of 97.5%. LOM average annual production of yellowcake product is expected to be about 3.08 million kg (6.80 million lbs) at 95% U3O8. See Table 5 for the key processing parameters and Figure 3 for the recovered uranium LOM plan.
Based on prior metallurgical test work, the following conclusions can be made: The comminution test work showed that Roughrider samples are soft in nature with an average Bond Ball Mill Work Index of 10.6 kWh/t.
Agitated tank leach test results showed that Roughrider mineralization is amenable for uranium extraction via atmospheric acid leaching. On average 98.5% of extraction can be achieved within 12 hours of leach retention time at 50°C with a grind size of 250 µm. Further, it was found that there was no significant difference in dissolution and extraction of uranium from the different deposits (RRW, RRE and RRFE).
Two different approaches (strong acid strip with uranyl peroxide precipitation and ammonia strip with ammonium diuranate precipitation) were examined for production of final yellowcake product. It was found that organic extraction followed by strong acid strip produced higher quality yellowcake meeting refinery specifications compared to the ammonium sulfate strip method.
Tailings neutralization and effluent treatment test work based on the standard approaches used in the Athabasca region indicated that effluent quality meeting the MDMER guidelines can be achieved.
The capital and operating cost estimates are based on a 400 t/d processing throughput. The cost was estimated based on the mine plan and process flowsheet. All costs are reported in US dollars and the Association for the Advancement of Cost Engineering (AACE) Class 5 initial capital cost estimate has been prepared in accordance with the standards of AACE International. The accuracy range of the initial capital cost estimate is ±50%. This estimate was prepared with a base date of the fourth quarter of 2024.
UEC plans to follow-up encouraging exploration results in 2024 with an updated mineral resource estimate on or about the first quarter of 2025 to support the development of a pre-feasibility study in 2025.
Since November 2023, UEC has been continuously exploring the Roughrider Property, see January 31, 2024, August 20, 2024 and September 12, 2024 press releases. As of July 31, 2024, a total of 94 drill holes have been completed, for a total of 29,840 m drilled, with the best drill results so far being between the existing West, East and Far East Zones, down dip of the Far East Zone, and the Roughrider North deposit.
The Roughrider Project is a uranium project located in the eastern Athabasca Basin of northern Saskatchewan, Canada. The project is located approximately 13 km west of Orano’s McClean Lake Mill, near UEC’s existing Athabasca Basin properties. The depth to mineralization at the project is approximately 200 metres and hosted primarily in the basement rocks below the unconformity.
Uranium Energy has two production-ready ISR hub and spoke platforms in South Texas and Wyoming. These two production platforms are anchored by fully operational Central Processing Plants (CPPs) and served by seven U.S. ISR uranium projects with all their major permits in place. In August 2024, production began at the Christensen Ranch project in Wyoming, sending uranium loaded resin to the CPP at Irigaray (Wyoming hub). Additionally, the Company has diversified uranium holdings including one of the largest physical uranium portfolios of U.S. warehoused U3O8; a major equity stake in Uranium Royalty Corp., the only royalty company in the sector; and a Western Hemisphere pipeline of resource stage uranium projects.