Fission Uranium announced on September 3 summary results of an NI 43-101-compliant preliminary economic assessment (PEA) of the high-grade uranium resource identified to date within the Triple R uranium deposit at its 100% owned Patterson Lake South (PLS) property in northern Saskatchewan’s Athabasca basin. The PEA considers production of a total of 100.8 million lb of U3O8 over a 14-year mine life, with production averaging 13 million lb per year (lb/y) of U3O8 for six years, followed by an average of 3 million lb/y for eight years.
Capital requirements to develop a mine on the Triple R deposit are estimated at C$1.1 billion. Life-of-mine operating costs are estimated at $14.02/lb of U3O8. Project development time from the start of construction is estimated at three years.
Base-case economics for Triple R development assume a price of $65/lb for U3O8, which may prove to be justified over time. However, the spot price for U3O8 at the time of the Fission announcement was in the range of $36 to $37/lb.
The PEA considers the PLS project as a standalone mine and mill. The study envisions a combination of open-pit and underground mining. Processing plant design is based on throughput of 1,000 metric tons per day (mt/d). Open-pit mining would produce a total of 1.56 million mt grading 2.21% U3O8; underground mining would produce 3.25 million mt grading 0.42% U3O8.
Metallurgical test work suggests processing recoveries of 95%.
The PEA does not include the recently discovered R600W zone, which has the potential to increase project outcomes.
In addition to managing radiological issues common to high-grade uranium mining, a key technical challenge to developing the operation will be water control related to Patterson Lake and saturated sandy overburden. The PEA proposes a system of dykes and slurry walls similar to techniques successfully implemented at a number of other Canadian mining operations. The development scenario does not require any new, untested mining or construction methods.
Fission President, COO, and Chief Geologist Ross McElroy said, “This PEA is an incredibly important milestone for Fission and shows the viability of development and profitability of the unique, shallow, large and high-grade Triple R uranium deposit. The study confirms this unique deposit is a robust project with very strong economics.”
Fission and Denison Mines announced plans for a merger of the two companies in July (E&MJ, September 2015, p. 10). At the time of Fission’s announcement of the PLS PEA, the timing of the closure of the merger had not been announced.
The two key properties of the combined company will be Fission’s PLS project and Denison’s 60%-owned Wheeler River project.