ALLIANCE Resources says a scoping study into its Four Mile uranium project in South Australia indicates the project would provide a significantly greater return as a standalone project producing around 5 million pounds per annum.
The company has received the final scoping study report prepared by Como Engineers and Adelaide Control Engineering in relation to the capital cost estimate for the design, procurement and construction of an in-situ recovery and uranium processing facility including related infrastructure at Four Mile as well as estimating the ongoing operating costs of the facility.
The study identified capital costs for the plant and infrastructure as well as operating cost estimates for a number of scenarios, including a 3Mlbpa standalone ISR plant, a 5Mlbpa standalone ISR plant, a 7Mlbpa standalone plant, a 3Mlbpa satellite ISR plant and a 3Mbpa standalone resin-in-pulp plant.
Alliance said the scoping study estimates of capital and operating costs indicated the project offered a significantly greater return if developed as a standalone project with a 5Mlbpa production rate.
The standalone project at 5Mlbpa was estimated to have a capital cost of $168 million and operating cost of $21.73 per pound uranium oxide.
The company is commissioning an optimization study for the design, capital and operating cost estimates for a 5Mlbpa standalone plant.
According to the study, the operating costs for the 5 Mlbpa and 7Mlbpa standalone plant options of $21.73/lb and $19.62/lb respectively were less than the operating costs for the 3Mlbpa standalone and satellite plant of $26.35/lb and $31.33/lb respectively, representing further savings.
Alliance holds a 25% participating interest in the Four Mile JV through its wholly owned subsidiary Alliance Craton Exploration.
The news comes after Alliance filed proceedings in the Melbourne Federal Court of Australia earlier this month against its Canadian joint venture partner and 75% project owner Heathgate Resources and its wholly owned subsidiary Quasar Resources.
It is seeking damages and the restitution of its 75% interest over the Four Mile exploration licence.
Quasar previously committed to a decision to mine based on its own feasibility study that recommended the 3Mlbpa satellite plant for Four Mile connected to the existing Beverley operation which would cost $98 million and have operating costs of $38.80/lb.
While the study met Quasars obligations under the JV agreement, it did not provide enough independently verified information for Alliance as a publicly listed company.
Alliance commissioned an independent scoping study to determine and verify whether Quasars proposed mine development program and budget was fair and equitable.
Using numbers from Alliances standalone scoping study, it estimated a 3Mlbpa operation would have a price tag of $131 million at operating costs of $26.35/lb.
Alliance also estimated that the undiscounted payback for the additional capital required for the standalone plant, based on the difference in operating costs compared to the Quasar model, would be 11 months.
Earlier this year, resources at Four Mile increased by more than 16% to 9.8 million tonnes grading 0.33% uranium oxide for a contained 71Mlb of uranium oxide with 5.7Mt from the Four Mile West deposit (indicated and inferred), and 4.1Mt from Four Mile East (inferred).
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