Cauldron Energy confirms low-cost ISR uranium potential

Company News

by Peter Milios

Cauldron Energy (ASX:CXU) has released the results of its Scoping Study for the proposed Bennet Well Uranium operation, revealing the potential for a globally competitive and low-cost in-situ recovery (ISR) uranium operation. The Bennet Well Uranium Deposit is situated approximately 100 kilometers south of Onslow, Western Australia, and about 1,050 kilometers north of Perth.

The Scoping Study, supported by consultants from Ravensgate Mining Industry Consultants, as well as metallurgical and processing consultants at ANSTO and CSIRO, indicates promising financial returns for the project. With uranium markets on the rise, the Bennet Well operation's strong economic figures underscore its significance within Cauldron's broader Yanrey Uranium Project.

Key Highlights of the Scoping Study:
  • Abundant Uranium Resources: The Bennet Well Mineral Resource (JORC 2012) contains approximately 30.9 million pounds (approximately 14,000 metric tonnes) of contained uranium oxide, with an Indicated plus Inferred Mineral Resource of 38.9 million tonnes grading 360 ppm eU3O8.
  • Production Potential: The Scoping Study envisions a production rate of 1.5 million pounds per year over 11 years, resulting in a total production of 16.5 million pounds of U3O8 over the life of the mine.
  • Mineable Resources: The mineable resource extracted from the Mineral Resource consists of 27.7 million tonnes at 373 ppm eU3O8 at an optimised cut-off grade of 175 ppm eU3O8.
  • Cost Efficiency: The project boasts favorable cost benchmarks, with an estimated upfront capital of A$117.7 million (US$82.4 million), along with on-going capital for wellfield development totaling A$179.0 million (US$125.3 million) over the life of the mine.
  • Robust Economics: The Scoping Study reveals a Project NPV of A$449 million (US$314 million) pre-tax at a discount rate of 10%, an IRR of 79%, and a payback period of just 1.5 years. These figures are based on base case assumptions of US$75/lb U3O8 and an exchange rate of 0.70 AUD:USD.
  • Spot Price Potential: At the current spot uranium price of US$83/lb and an exchange rate of 0.66, the project demonstrates a pre-tax NPV of US$380 million (A$576 million) and an IRR of 93%.
  • Environmental Sustainability: The project's low reagent consumption, shallow depth to mineralisation, and good permeability of host sands contribute to a low environmental footprint, emphasising minimal disturbance and continuous rehabilitation, with no long-term impact on groundwater and the potential for a low carbon intensity project.

Jonathan Fisher, CEO of Cauldron Energy Limited, expressed his satisfaction with the Scoping Study's results, highlighting their significance in the context of Cauldron's uranium assets. He emphasised the potential economic transformation of the entire Yanrey Uranium Project, given the strong financial estimates driven by modest capital and operating costs.

Cauldron is poised to continue its feasibility work, with plans to further optimise the outcomes for the Bennet Well deposit. The potential integration of mineral resources from additional deposits discovered in the wider Yanrey project area could significantly extend the mine life or increase the annual production rate. The company remains confident in the project's prospects, despite the current political ban on uranium mining by the Western Australia State Labor Government, believing that the window of opportunity will open in due course.

With continued exploration, resource development, and a commitment to sustainable practices, Cauldron Energy Limited aims to position itself as a key player in the uranium mining industry, contributing to global energy needs.

Peter Milios

Peter Milios is a recent graduate from the University of Technology - majoring in Finance and Accounting. Peter is currently working under equity research analyst Di Brookman for Corporate Connect Research.

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