Blue Sky Uranium Corp. (TSXV: BSK) (FSE: MAL2) (OTC: BKUCF), "Blue Sky") is pleased to announce the results of a new Preliminary Economic Assessment ("PEA") for the Ivana Uranium-Vanadium deposit at the Company's 100% owned Amarillo Grande Project in Rio Negro Province, Argentina. The updated PEA incorporates a new mineral resource estimate, in which approximately 80% of the resources are now in the Indicated category. The PEA demonstrates robust economics from a surficial mining operation, entailing 11 years of uranium and vanadium production:
PEA Highlights (All figures in US dollars)
- After-tax NPV 8%: $227.7 million
- After-tax IRR: 38.9%
- After-tax Payback period: 1.9 years
- Pre-production Capital Cost: $159.7 million, includes $35.4 million contingency
- Life of mine ("LOM") Sustaining Capital Cost: $27.3 million, includes $5.4 million contingency
- Average LOM Total Cash Cost net of credits: $23.29/lb U3O8
- Average LOM All-In Sustaining Costs ("AISC") net of credits: $24.95/lb U3O8
PEA Key Assumptions & Inputs
- Uranium price: $75/lb U3O8
- Vanadium Price $7.5/lb V2O5
- Years of Construction: 2
- Years of Production: 11
- Strip Ratio: 1.5:1 (waste/ore)
- Dilution: 3%
- Average Mining rate (waste + mill feed): 5.10 Mtpa
- Processing throughput: 2.17 Mtpa
- Process Plant Recoveries (Net), Uranium: 84.6%
- Process Plant Recoveries (Net), Vanadium: 52.5%
- Average Annual Production (LOM): 1.5 Mlbs/y U3O8
- LOM uranium production: 16.5 Mlbs U3O8
"This PEA reaffirms that the Ivana deposit is a leading low-cost uranium-vanadium project. We believe that this resurgent uranium market has a strong long-term outlook and we are therefore preparing to complete a prefeasibility study for Ivana as soon as possible," stated Nikolaos Cacos, Blue Sky President & CEO. "We will also continue our on-going exploration work to discover and delineate new uranium and vanadium resources throughout the remaining highly prospective district-scale Amarillo Grande project."
Additional detailed processing studies are underway to further de-risk and enhance the economics for development of the Ivana deposit. This technical work will be incorporated into the program to support a prefeasibility study ("PFS"), which the Company is preparing to commence in the coming months.
PEA Summary
A summary of key physical parameters and costs for the PEA are presented in Table 1 below. All figures are in US dollars. The Mineral Resource estimate included in the PEA is reported according to the classification criteria set out in the Canadian Institute of Mining, Metallurgy, and Petroleum Definition Standards for Mineral Resources and Reserves ("CIM Definition Standards").
Readers are cautioned that the PEA is preliminary in nature and is intended to provide an initial assessment of the project's economic potential and development options. The PEA mine schedule and economic assessment includes numerous assumptions and is based on both Indicated and Inferred mineral resources. Inferred resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA results will be realized. Mineral resources are not mineral reserves and do not have demonstrated economic viability. Additional exploration will be required to potentially upgrade the classification of the inferred mineral resources to be considered in future advanced studies.
