$946 Million Post-Tax NPV
Strong Internal Rate of Return (IRR) of 40%, with 1.4 Year Payback
All-in-Sustaining Costs (AISC) of $20.48 per Pound
Average Life of Mine Production of 6.8 Million Pounds per Year
Situated in the Infrastructure Rich Eastern Athabasca Basin, Saskatchewan, Canada
Uranium Energy Corp (NYSE American: UEC) the "Company" or "UEC") is pleased to report the filing of an initial assessment technical report summary that includes an economic analysis and mineral resource estimate for its 100% owned Roughrider Project, located in Northern Saskatchewan, Canada. All currency references are in United States dollars.
Amir Adnani, President, and CEO stated: "This Initial Economic Assessment marks a pivotal milestone for Roughrider, validating it as a top-tier, high-margin operation with a clear path to development into a world-class mine and mill. With a post-tax estimated net present value of $946 million, today's results underscore the strength of our 2022 decision to acquire Roughrider from Rio Tinto for $150 million, consistent with our strategy to acquire accretive assets at opportune points in the uranium price cycle.
Key competitive advantages that position Roughrider as an elite underground development project include:
- high grade operation with 2.36% U3O8 Life of Mine feed grade,
- one of the lowest capex profiles in Canada and
- location in the Eastern Athabasca Basin, where future development will benefit from proximity to power, roads, and the Points North Landing airport and construction facility.
Additionally, we see significant potential for further value creation as we advance the project through the prefeasibility stage, supported by recent exploration drill results and the discovery of the Roughrider North Deposit.
Roughrider is poised to benefit from uranium and nuclear energy's growing prominence to address North America's rising electricity demand for safe, reliable, economic, and clean energy sources. Given UEC's capabilities as an established uranium producer, we are uniquely positioned to leverage our operational expertise and financial strength to advance and de-risk Roughrider, maximizing value for our shareholders, stakeholders, and rightsholders."
Key Highlights:
- Estimated post-tax NPV8 of $946 million, IRR of 40%, post-tax payback period of 1.4 years based on a long-term uranium price of $85/lb U3O8 and utilizing an 8% discount rate (NPV 8%).
- Expected Life of Mine ("LOM") production of 61.2 million lbs U3O8 produced over nine years with an average annual production rate of 6.8 million lbs U3O8. Initial capex estimated at $545 million including mill and underground mine.
- AISC of $20.48/lb U3O8.
- Average Annual LOM earnings before interest, taxes, depreciation and amortization ("Average EBITDA") of $395 million.
- The Roughrider Project is in the well-established infrastructure of eastern Athabasca Basin, with an adjacent high-voltage 138 kV transmission line, hydroelectric power generation, 7 km north of the commercial airport at Points North Landing, and highway system.
The economic analysis is included in a technical report summary titled "S-K 1300 Initial Assessment Report – Roughrider Uranium Project, Saskatchewan, Canada" issued on November 5, 2024 and prepared for UEC by Tetra Tech Canada Inc., Understood Mineral Resources Ltd., Snowden Optiro, Terracon Geotechnique Ltd. and Clifton Engineering Group Inc.; in accordance with Item 1302 of SEC Regulation S-K 1300 ("S-K 1300") a copy of which is available under UEC's profile at www.sec.gov (the "Technical Report Summary"). The Technical Report Summary has now been filed through EDGAR on Form 8-K and is also available as a Material Document on SEDARplus. The economic analysis included therein and summarized in this news release is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have modifying factors applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that this economic assessment will be realized.
Mine Plan
The initial economic assessment envisions that the Roughrider deposit will be mined using the longhole stoping method utilizing retreat mining in a transverse stope orientation with various orientations between the three main mineralized zones. Various underground mining methods were considered; however, longhole stoping was ultimately selected to reduce cost. Development will be located to the south of the deposits and will be accessed using a ramp decline which will also be the primary source of fresh air ventilation. Exhaust shafts will be used to ventilate the mine.
Ground freezing will be used to control water inflows into the main decline to a depth below the unconformity as well as into the three mining zones. Freeze wells will be installed from surface around the perimeter of each zone with active freezing starting at least 12 months prior to mining. Figure 1 was generated by UEC as a conceptual image of the conventional underground mine. Further details of proposed mining and milling methods are set out in the Technical Report Summary.
The initial construction focus is on the development of the decline, ventilation and secondary egress from surface (red to yellow). Once the decline reaches the deposit, initial focus will be on the Roughrider West ("RRW") deposit with the decline held while levels and ventilation are developed in this area (green). Mining then progresses to the Roughrider East ("RRE") deposit (cyan) and finally Roughrider Far East ("RRFE") deposit (blue).
Mill, Processing and Tailings Design
The processing facility incorporated in the initial economic assessment is designed using established methods from other Athabasca operations, such as Rabbit Lake, Key Lake and McClean Lake. It will operate at a nominal throughput of 400 t/d with an LOM average mill feed grade of 2.36% U3O8 and a recovery rate of 97.5%. LOM average annual production of yellowcake product is expected to be about 3.08 million kg (6.80 million lbs) at 95% U3O8. See Table 5 for the key processing parameters and Figure 3 for the recovered uranium LOM plan.
Based on prior metallurgical test work, the following conclusions can be made:
- The comminution test work showed that Roughrider samples are soft in nature with an average Bond Ball Mill Work Index of 10.6 kWh/t.
- Agitated tank leach test results showed that Roughrider mineralization is amenable for uranium extraction via atmospheric acid leaching. On average 98.5% of extraction can be achieved within 12 hours of leach retention time at 50°C with a grind size of 250 µm. Further, it was found that there was no significant difference in dissolution and extraction of uranium from the different deposits (RRW, RRE and RRFE).
- Two different approaches (strong acid strip with uranyl peroxide precipitation and ammonia strip with ammonium diuranate precipitation) were examined for production of final yellowcake product. It was found that organic extraction followed by strong acid strip produced higher quality yellowcake meeting refinery specifications compared to the ammonium sulfate strip method.
- Tailings neutralization and effluent treatment test work based on the standard approaches used in the Athabasca region indicated that effluent quality meeting the MDMER guidelines can be achieved.
The Technical Report Summary provides for the construction of a tailing management facility ("TMF") to store the uranium tailings produced from processing. The TMF will be located approximately one km northeast of the proposed processing plant on gently sloping terrain. Thickened slurry tailings will be deposited into three adjacent storage cells sequentially constructed over the LOM. The design incorporates a double liner seepage containment system and a 'pervious surround' rock filter. This approach will allow for staged TMF cell construction and progressive reclamation. Containment will be enhanced by construction of a filter rock drain system used successfully at other uranium operations and identified as the 'pervious surround' approach. The storage of tailings solids below grade will reduce risk and promote secure physical containment.
At closure, the water cover will be pumped out of the cell and a cover of soil and geomembrane layers will be placed over the tailings surface. With the multi-cell design, it will be possible to progressively reclaim the TMF storage cells during the operational phase.
Capital Expenditure
The capital and operating cost estimates are based on a 400 t/d processing throughput. The cost was estimated based on the mine plan and process flowsheet. All costs are reported in US dollars and the Association for the Advancement of Cost Engineering ("AACE") Class 5 initial capital cost estimate has been prepared in accordance with the standards of AACE International. The accuracy range of the initial capital cost estimate is ±50%. This estimate was prepared with a base date of the fourth quarter of 2024.
Next Steps, Licensing and Permitting
UEC continues to advance the Roughrider Project through technical and environmental studies, community engagement and assessing opportunities to further de-risk the project. The parallel processes of updating the environmental baseline work and Indigenous engagement will support a future Environmental Impact Assessment required for uranium production. UEC plans to follow-up encouraging exploration results in 2024 with an updated mineral resource estimate on or about the first quarter of 2025 to support the development of a pre-feasibility study in 2025.
Resource Update and Exploration
The 2024 mineral resource estimate that is set out in the Technical Report Summary has been prepared in accordance with the requirements of S-K 1300. To meet the requirement of reasonable prospects of eventual economic extraction, the mineral resource estimate is reported within a constrained mineable shape optimizer as informed by a breakeven cut-off grade of 0.30% U3O8. The mineral resource estimate is reported diluted, including waste and mineralization below cut-off.
