Alligator Energy Limited announced the results from a Scoping Study for the potential future development of the Blackbush Deposit, Samphire Uranium Project (Samphire Project or Project) south of Whyalla, South Australia.
The Samphire Uranium Project Scoping Study confirms potential for development as a globally competitive low-cost uranium operation using the in-situ recovery (ISR) process. Life-of mine (LOM) Production Target of 10.0 Mlbs U3O8 over 12 years, with annual production target of 1Mlbs pa for 8 years with ramp up and ramp down. Low initial capital expenditure forecast of AUD 129.3 million (AUD 123 million - AUD 136 million) including a significant combined contingency and cost escalation allowance of 40%. Average cash operating costs of AUD 25.59/lb U3O8 (USD 17.92 /lb U3O8) with a range of AUD 24.31/lb - AUD 26.87/lb) and AISC (including transport, shipping, royalties and sustaining capital) of AUD 43.19/lb U3O8 (USD 30.23/lb U3O8) with range of AUD 41.03/lb to AUD 45.35/lb. Attractive projected economics at a forecast USD 65/lb U3O8 realised sales price and AUD:USD exchange rate of 70 cents: - Ungeared, real pre-tax NPV8 of AUD 185 million (AUD 175 million - AUD 194 million) - Ungeared, real post-tax NPV8 of AUD 152 million (AUD 144 million - AUD 160 million) - Post-tax internal rate of return (IRR) of 29% (27.5% - 30.4%) Payback period of 3.5 years from start of production Forecast net project cashflow (post capex and tax) of AUD 305 million (AUD 290 million - AUD 321 million) Project economics greatly assisted by proximity to key infrastructure, a local workforce, low reagent consumption, a shallow uranium deposit and good permeability of the host sands. Low environmental footprint, focus on minimal disturbance and continuous rehabilitation, no long-term impact on saline groundwater, potential for low carbon intensity project. Further upside/optimisation opportunities include: - Future increase in Blackbush resource estimate, as some major capital components are capable of 1.2Mlbs pa throughput. This will provide a solid opportunity to study an increased Production Target with minimal additional capital. Processing efficiencies aimed at reducing costs and increasing recovery rates. Further exploration potential for additional uranium mineralisation, including the potential for the Plumbush prospect to be a satellite deposit to the proposed Blackbush plant.