Published on Tuesday March 05 2013 (AEST)
URANIUM Equities' PhosEnergy process can produce uranium oxide for less than $US18 per pound, the Adelaide company says.
UEQ has just finished a pre-feasibility study for the PhosEnergy process, which extracts uranium as a by-product of phosphate fertiliser production. The study found that a commercial production facility producing 880,000 pounds of uranium per year would cost $US156 million, including a $25.4 million contingency.
The $US18 cost is well below the current spot price of $US42 per pound. Joint investor Cameco has now committed to the next phase of the project, putting in another $US4 million to take the project to the definitive feasibility study stage. The investment will take Cameco's stake in the PhosEnergy project to 73 per cent, with UEQ holding the rest. UEQ managing director Bryn Jones said the PFS was a great result following the successful demonstration plant test program in the US last year.
"This clearly indicates the robust nature of the process and its ability to produce uranium at a cash operating cost which would be well within the lowest cost quartile for uranium producers globally," Mr Jones said. "The next phase of commercialisation is expected to comprise an on-site demonstration of the PhosEnergy process at the site of an existing phosphate producer in North America, and this phase will underpin a definitive feasibility study and enable us to address full scale commercialisation from the PhosEnergy process.
"The continued financial support of Cameco is indicative of not only the robustness of the PhosEnergy process the engineering completed to date but also the commercial opportunities represented." UEQ is in discussions with phosphate producers to allow on-site demonstrations of the existing demonstration plant, and would need to strike a deal with a phosphate facility to take the project further. "These commercial negotiations will consider the capital risk taken by both parties, the phosphate producer's appetite for exposure to the uranium market and the long mine life of phosphate projects, generally over 20 years," the company said.
"The initial focus for commercialisation is expected to be the phosphate fertiliser industry in the USA, where UEQ estimates there is an opportunity to recover approximately 6 million pounds of uranium per annum. "The worldwide PhosEnergy production opportunity is in the region of 20 million pounds of uranium per annum." UEQ stock was up 40.63 per cent in early trade to 4.5c, with 1.4 million shares traded.
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