A uranium mining project near Whyalla could run for 12 years and cost $130m to build
Alligator Energy says its Samphire uranium project near Whyalla would cost $130m to build and could run for 12 years.
A $130m uranium mining project near Whyalla has “attractive economics” and could run for 12 years, proponent Alligator Energy says.
The company released a scoping study to the Australian Securities Exchange on Tuesday, with the caveat that it was “preliminary” assessment based on a low level of certainty around the ore reserves which underpin the other projections.
The study says the company could bring the in-situ mining operation into production with a low capital cost of $129.3m, with that including a “significant” contingency and cost-escalation allowance of 40 per cent.
The envisaged project would produce 10 million pounds of uranium over 12 years, with a peak eight-year period producing 1Mlb per annum.
The all in sustaining cost to produce uranium, including production costs as well as royalties and shipping, would be in the range of $41.03 per pound to $45.35 per pound, the company said.
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With a forecast uranium oxide price of $US65 per pound, this represented “attractive’’ economics the company said, with the project having an anticipated payback period of 3.5 years and net cashflow of $305m.
The Samphire project would be an in-situ mining operation, in which the uranium is dissolved with dilute acid underground and brought to the surface via a series of wells.
This process is in use at Heathgate Resources’ Beverley uranium mine further north in South Australia, which has been operating since 1999.
Alligator said it planned to start a field recovery trial late this year, subject to receiving the required approvals.
Once this trial was complete, the company intends to progress to a full feasibility study for the Samphire project, which would involve further technical and economic work.
“It is estimated that the earliest construction start would be in 2026, with initial commissioning production the following year,’’ the company told the ASX.
Alligator chief executive Greg Hall said there was increasing demand for uranium supply globally, which the project could feed into.
“The capital costs to establish an initial project are quite low, even with significant contingency and inflation assumptions, as the location adjacent to the City of Whyalla offers distinct advantages; a locally based workforce (no FIFO and camp); very experienced mining services and business support; and a lower cost of key infrastructure.
“Alligator recognises this would be the first uranium project in this region, and there will be many questions and much interest from our stakeholders.
“We will continue to engage and work with stakeholders and ensure even at this early stage that the benefits such a project can bring are being realised.’’
The Samphire project is 20km south of Whyalla.
Alligator said it would continue to drill at the site, targeting resource extensions and increased confidence in its mineral estimations.
Alligator shares were 2.8 per cent lower in early trade on Tuesday at 3.5c.
