Uranium Energy Corp Completes Initial Economic Assessment for the World Class Roughrider Project
Rhea-AI Summary
Uranium Energy Corp (UEC) has completed an Initial Economic Assessment for its Roughrider Project in Saskatchewan, Canada, revealing strong financial metrics. The project shows a post-tax NPV of $946 million, an IRR of 40%, and a 1.4-year payback period. The mine plan projects an average production of 6.8 million pounds of uranium annually over a 9-year life span, with total production of 61.2 million pounds. The project features all-in-sustaining costs of $20.48 per pound and requires an initial capital investment of $545 million. Located in the infrastructure-rich Eastern Athabasca Basin, the project benefits from proximity to power, roads, and airport facilities.
Positive
- Strong post-tax NPV of $946 million with 40% IRR
- Competitive AISC of $20.48/lb U3O8
- High-grade operation with 2.36% U3O8 life of mine feed grade
- Average annual EBITDA of $395 million
- Favorable location with existing infrastructure reducing development costs
- High process recovery rate of 97.5%
Negative
- High initial capital expenditure requirement of $545 million
- Relatively short mine life of 9 years
News Market Reaction – UEC
On the day this news was published, UEC declined 0.63%, reflecting a mild negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
NYSE American: UEC
Strong Internal Rate of Return (IRR) of
All-in-Sustaining Costs (AISC) of
Average Life of Mine Production of 6.8 Million Pounds per Year
Situated in the Infrastructure Rich Eastern Athabasca Basin,
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
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
Key Highlights:
- Estimated post-tax NPV8 of
$946 million 40% , post-tax payback period of 1.4 years based on a long-term uranium price of$85 8% discount rate (NPV8% ), Table 1. - 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 - AISC of
$20.48 - Average Annual LOM earnings before interest, taxes, depreciation and amortization ("Average EBITDA") of
$395 million - The Roughrider Project is in the well-established infrastructure of eastern
Athabasca Basin, with an adjacent high-voltage 138 kV transmission line, hydroelectric power generation, 7 km north of the commercial airport at Points North Landing, and highway system. See Figure 4.
The economic analysis is included in a technical report summary titled "S-K 1300 Initial Assessment Report – Roughrider Uranium Project,
Table 1. Base Case Financial Highlights
Base Case Financials | ||
Pre-Tax Cash Flow (undiscounted) | ($ millions) | |
Pre-Tax NPV8 | ($ millions) | |
Pre-Tax IRR | % | 53 % |
Pre-Tax Payback Period | Years | 1.2 |
Post-Tax Cash Flow | ($ millions) | |
Post-Tax NPV8 | ($ millions) | |
Post-Tax IRR | % | 40 % |
Post-Tax Payback Period | Years | 1.4 |
The base case reflected in the analysis assumes, among other things, an
Table 2. Key Physical Highlights
Initial Assessment Report Physical Highlights | ||
Avg. LOM Annual Production | M lbs U3O8 | 6.8 |
LOM Production | M lbs U3O8 | 61.2 |
Mine Life | Years | 9 |
Mill Processing rate | tonnes / day | 400 |
Underground peak mining rate | tonnes / day | 818 |
LOM tonnes processed | tonnes | 1,205,000 |
LOM Avg. Head Grade | %U3O8 | 2.36 |
Process Recovery | % | 97.5 |
Table 3. Cost Summary
Initial Assessment Report Financial Highlights* | ||
Mining | $ / lb U3O8 | |
Processing | $ / lb U3O8 | |
Surface and G&A | $ / lb U3O8 | |
Average LOM Operating Cost | $ / lb U3O8 | |
Royalties | $ / lb U3O8 | |
Offsite Charges | $ / lb U3O8 | |
Sustaining Capital + Closure | $ / lb U3O8 | |
All in Sustaining Costs (AISC) | $ / lb U3O8 | |
*Note: totals may not add due to rounding. |
Table 4. Sensitivity to Uranium Price
Roughrider Project Financial Estimates based on Uranium Price | |||
Uranium Price | After-Tax NPV8 | After-Tax IRR | Annual Average |
| 64 % | | |
| 46 % | | |
| 42 % | | |
| 40 % | | |
| 21 % | | |
Mine Plan
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. Various underground mining methods were considered; however, longhole stoping was ultimately selected to reduce cost. Development will be located to the south of the deposits and will be accessed using a ramp decline which will also be the primary source of fresh air ventilation. Exhaust shafts will be used to ventilate the mine.
Ground freezing will be used to control water inflows into the main decline to a depth below the unconformity as well as into the three mining zones. Freeze wells will be installed from surface around the perimeter of each zone with active freezing starting at least 12 months prior to mining. Figure 1 was generated by UEC as a conceptual image of the conventional underground mine. Further details of proposed mining and milling methods are set out in the Technical Report Summary.
The initial construction focus is on the development of the decline, ventilation and secondary egress from surface (red to yellow). 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 (green). Mining then progresses to the Roughrider East ("RRE") deposit (cyan) and finally Roughrider Far East ("RRFE") deposit (blue). See Figure 2.
Mill, Processing and Tailings Design
The processing facility incorporated in the initial economic assessment is designed using established methods from other
Table 5. Mill Processing Parameters
Key Processing Data | ||
Mill Processing Rate | tonnes / day | 400 |
LOM tonnes Processed | tonnes | 1,205,000 |
LOM Average Head Grade | %U3O8 | 2.36 |
LOM Feed | M lbs U3O8 | 62.7 |
Process Recovery | % | 97.5 |
LOM Recovered | M lbs U3O8 | 61.2 |
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 Technical Report Summary provides for the construction of a tailing management facility ("TMF") to store the uranium tailings produced from processing. The TMF will be located approximately one km northeast of the proposed processing plant on gently sloping terrain. Thickened slurry tailings will be deposited into three adjacent storage cells sequentially constructed over the LOM. The design incorporates a double liner seepage containment system and a 'pervious surround' rock filter. This approach will allow for staged TMF cell construction and progressive reclamation. Containment will be enhanced by construction of a filter rock drain system used successfully at other uranium operations and identified as the 'pervious surround' approach. The storage of tailings solids below grade will reduce risk and promote secure physical containment.
At closure, the water cover will be pumped out of the cell and a cover of soil and geomembrane layers will be placed over the tailings surface. With the multi-cell design, it will be possible to progressively reclaim the TMF storage cells during the operational phase.
Capital Expenditure
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 ±
Table 6. Estimated Capital Cost Summary
Capital | Value ($ million) |
Mining | 96.8 |
Processing Plant | 89.5 |
Infrastructure | 80.1 |
Tailings and Waste Rock Management | 19.0 |
Direct | 285.4 |
Indirect | 99.9 |
Owner's Cost | 60.2 |
Contingency | 99.9 |
Total Initial Capital Cost | 545.5 |
Pre-production Cost | 35.6 |
Total Initial Capital Cost (inc. pre-production) | 581.1 |
Note: Totals may not add due to rounding. |
*Includes EPCM cost of |
Next Steps, Licensing and Permitting
UEC continues to advance the Roughrider Project through technical and environmental studies, community engagement and assessing opportunities to further de-risk the project. The parallel processes of updating the environmental baseline work and Indigenous engagement will support a future Environmental Impact Assessment required for uranium production. 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.
Resource Update and Exploration
The 2024 mineral resource estimate that is set out in the Technical Report Summary has been prepared in accordance with the requirements of S-K 1300. To meet the requirement of reasonable prospects of eventual economic extraction, the mineral resource estimate is reported within a constrained mineable shape optimizer as informed by a breakeven cut-off grade of
The mineral resource estimate set forth in the Technical Report Summary is summarized in Table 7. No Mineral Reserves have been estimated at the project.
Table 7: Mineral Resource Statement for the Project (as of November 5, 2024)
Zone | Classification | Tonnage (kt) | Grade U3O8 (%) | Contained U3O8 |
RRW | Indicated | 431 | 1.89 | 17.97 |
Inferred | 152 | 2.80 | 9.39 | |
RRE | Indicated | - | - | - |
Inferred | 390 | 2.57 | 22.05 | |
RRFE | Indicated | 268 | 1.67 | 9.89 |
Inferred | 78 | 1.13 | 1.94 | |
Total | Indicated | 699 | 1.81 | 27.86 |
Inferred | 620 | 2.45 | 33.38 |
Notes | |
1. | Reported on a |
2. | To establish reasonable prospects of eventual economic extraction, a cut-off grade of |
3. | The mineral resource estimate was prepared by Understood Mineral Resources Ltd., one of the independent qualified persons under the Technical Report Summary. The MSO shapes were estimated by Snowden Optiro, one of the independent qualified persons under the Technical Report Summary. |
4. | The tonnage is presented in metric tonnes and contained metal is reported in both metric tonnes and imperial pounds. Estimates have been rounded and may not add up due to significant figure rounding. |
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.
For further details of the initial economic assessment and the resource estimate for the Roughrider Project disclosed herein, including important information regarding their underlying assumptions and methodologies, readers should refer to the Technical Report Summary.
About
The
All of
Uranium mineralization in the
About the Roughrider Uranium Project
The Roughrider Project is a uranium project located in the eastern
Qualified Person
The technical information in this news release has been reviewed and approved by James Hatley, P.Eng., UEC's Vice President Production,
About Uranium Energy Corp
Uranium Energy Corp is America's largest and fastest growing supplier of uranium needed to produce safe, clean, reliable nuclear energy. UEC is advancing the next generation of low-cost, environmentally friendly ISR mining uranium projects in
Stock Exchange Information:
NYSE American: UEC
WKN: AØJDRR
ISN: US916896103
Safe Harbor Statement
Except for the statements of historical fact contained herein, the information presented in this news release constitutes "forward-looking statements" as such term is used in applicable
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SOURCE Uranium Energy Corp