Laramide Resources presents strong economic study for Churchrock uranium project!

What a timing! Just this morning, we drew the attention of Goldinvest.de readers to the fact that Canadian uranium company Laramide Resources (WKN 157084 / TSX/ASX LAM) has benefited greatly from the recent positive developments in the uranium sector – and just now the company is presenting brand-new, strong profitability data on its Churchrock project in the US state of New Mexico!

The Churchrock project and nearby properties represent one of the largest and highest grade undeveloped ISR (In Situ Recovery) uranium projects in the USA! Churchrock is located at the western end of the Grants Mineral Belt, in the main part of the former mining district of the same name. The project is located in the sub-district of the Grants Mineral Belt in northwestern New Mexico, the richest, historic uranium district in the USA. Around 340 million pounds of uranium were mined here between 1948 and 2002!

Long service life and high efficiency

And it is possible that Laramide will further increase uranium production in the region in the future, as the recently published PEA (Preliminary Economic Assessment) for Churchrock predicts a mine life of 31 years and a total production of 31.2 million pounds for the project.

One advantage of the in-situ method is the initial investment cost, which at USD 47.5 million is at the low end of the cost range, as are the operating costs per unit (including taxes and duties) of USD 27.7 per pound and AISC (all in sustaining costs) of USD 34.83 per pound!

The PEA certifies that the Churchrock project has a pre-tax internal rate of return (IRR) of 62% and a net present value (discounted at 8%) of USD 278 million. After tax, the IRR is still a high 56% and the net present value (8%) is USD 239 million! Laramide assumes a uranium price of “only” USD 75 per pound of uranium oxide (U3O8) in the PEA, while even the spot price is currently over USD 90 per pond. According to the study, Churchrock can generate a cash flow of more than USD 1 billion after income tax over the entire operating period!

Numerous opportunities to further improve efficiency

However, the above figures are the baseline scenario. According to Laramide, for example, there is potential for accelerated development of the resource beyond the 1 million pounds of uranium per year mentioned above. The existing license allows for a capacity of up to 3 million pounds per year in the planned central processing plant.

According to Laramide, it could also be possible to increase the extraction rates. The PEA assumes a recovery rate of 68% in the production area. In addition, the existing resource could be increased through confirmation and exploration drilling, and the Crownpoint resource could be included in future production plans. And, according to Laramide, it is also potentially possible to realize a uranium price of over USD 75 per pound. At a spot price of USD 90 per pound, for example, the net present value (8%) after taxes would already be USD 294.497 million, according to the company!

No wonder Laramide’s CEO Marc Henderson is pleased: “Laramide is pleased with the results of this PEA analysis of the Churchrock project, which is the first economic study to consider the entire large and robust resource that is amenable to ISR development. The study confirms that Churchrock has the potential to be a long-life, high-margin project. Importantly, as an advanced development project in the western United States, Churchrock is well positioned to address some of the potential security of supply concerns of nuclear utilities. These are clearly reflected in uranium spot prices, which have risen dramatically and now exceed $90/lb.”