Blue Sky Uranium Announces a Positive New Preliminary Economic Assessment for the Ivana Uranium-Vanadium Deposit, Amarillo Grande Project, Argentina
OTCQB Venture Market (OTC): BKUCF
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
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
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.
Table 1. PEA Summary Parameters
|
Unit |
|
Physical Parameters |
|
|
Total tonnes feed prep processed (LOM) |
Mt |
23.5 |
Head Grade (U3O8) |
% |
0.038 % |
Head Grade (V2O5) |
% |
0.019 % |
Annual Plant throughput |
tpa |
2,170,000 |
Recovery - Uranium (net) |
% |
84.6 % |
Recovery - Vanadium (net) |
% |
52.5 % |
|
years |
11 |
Total Uranium (U3O8) produced |
Mlbs |
16.5 |
Total Vanadium (V2O5) produced |
Mlbs |
5.2 |
Average Annual U3O8 production |
Mlbs/yr |
1.50 |
Operating Cost Parameters |
|
|
|
$/t feed |
|
Processing Cost (LOM avg) |
$/t feed |
|
Waste & Water Management |
$/t feed |
|
G&A Cost (LOM avg) |
$/t feed |
|
Total Operating Cost |
$/t feed |
|
Pre-Production Capital Costs |
|
|
Mine |
$M |
|
Process Plant |
$M |
|
Waste & Water Management |
$M |
|
Other Infrastructure |
$M |
|
Contingency |
$M |
|
|
$M |
|
Sustaining Capital (LOM) |
$M |
|
Total Capital (LOM) |
$M |
|
Cost Summary |
|
|
LOM U3O8 cost (net of V2O5 credits) |
$/lb |
|
LOM U3O8 cost (net of V2O5 credits) with AISC |
$/lb |
|
Supporting information for the Mineral Resource estimate and the PEA will be detailed in an independent technical report prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") which will be filed on SEDAR+ under the Company's profile within 45 days of the date of this news release.
Mineral Resource Estimate
The effective date of the Mineral Resource estimate is
The Indicated and Inferred mineral resource estimation for the
Table 2. Estimate of Mineral Resource reported at 100 ppm Uranium Cut-off
Zone |
Class |
Tonnes |
Average Grade |
Contained Metal |
||||
U (ppm) |
U308 (%) |
V (ppm) |
V2O5 (%) |
U308 (Mlb) |
V2O5 (Mlb) |
|||
Upper |
Indicated |
2.0 |
122 |
0.014 |
110 |
0.020 |
0.6 |
0.9 |
Lower |
Indicated |
17.6 |
358 |
0.042 |
104 |
0.019 |
16.4 |
7.2 |
Total |
Indicated |
19.7 |
333 |
0.039 |
105 |
0.019 |
17.0 |
8.1 |
|
|
|
|
|
|
|
|
|
Upper |
Inferred |
1.4 |
167 |
0.020 |
170 |
0.030 |
0.6 |
0.9 |
Lower |
Inferred |
4.2 |
293 |
0.035 |
90 |
0.016 |
3.2 |
1.5 |
Total |
Inferred |
5.6 |
262 |
0.031 |
109 |
0.019 |
3.8 |
2.4 |
Notes to Table 1: |
|
Mine Plan
The Ivana operation will consist of surface mining operation delivering mill feed to a nearby processing plant or feed stockpiles. The annual mining rate will be approximately 5.1 Mtpa (13,000 tpd) consisting of waste material and mill feed. The average strip ratio is approximately 1.5:1.
Table 3 presents the potentially excavated tonnages. Mill feed may be delivered directly to the process plant or placed into stockpiles for blending purposes.
Table 3. Potentially Extractable Portion of the Mineral Resource
|
|
U3O8 |
V2O5 |
Waste stripped |
34,756 kt |
- |
- |
Strip Ratio |
1.48 |
|
|
|
23,467 kt |
0.038 % |
0.019 % |
Note: Assumes 3% dilution and 3% ore loss. Cut-off grade of 75 ppm U used to define |
The surface mine will be relatively shallow, with a maximum depth of 30 metres. The length of the mine will be approximately 3000 metres with widths ranging from 100 to 400 metres.
Mining will be done with a fleet of two (5 cubic metre) excavators, a front-end loader and seven 31-tonne articulated trucks along with a fleet of support equipment. The materials mined are unconsolidated gravels and sands and are free digging, therefore drilling and blasting will not be required.
Mine waste materials will be used for construction activities on site (e.g., construction of the surface tailings management facility (TMF), inpit cell divider berms, etc.). Waste materials not used in construction will be stockpiled outside of the footprint of the pit. Waste will be managed in the external stockpiles until it is used as in-pit backfill or for reclamation activities.
Processing & Recovery
Mined mill feed may be delivered directly to the processing plant or stockpiled. Stockpiles provide a surge capacity between the mining and processing, and enable blending, to manage the head grade of the process plant feed. Mill feed will then be processed in two stages. The net process recovery is 85% for uranium (derived from 89% leach feed preparation recovery and 95% subsequent alkaline leach circuit recovery); and 53% net for vanadium (derived from 89% leach feed preparation recovery and 59% subsequent alkaline leach circuit recovery). Recoveries were determined through the mineralogical, metallurgical and process engineering test work program completed by The
Feed material will first be processed through the leach feed preparation plant, a semi-mobile screening and scrubbing facility located at the proposed mining site. The leach feed preparation plant will liberate fine material (<100 um) from the larger particles (>100 um) and scrub away and recover fine uranium and vanadium mineral particles coating the large particles, into a leach feed slurry. The rejected coarse fraction (approx. 75% of the mill feed mass from which most of the original uranium and vanadium has been stripped) will be dewatered, and either stockpiled on surface (during the first three years of operations) or backhauled by the mine fleet for backfill into containment cells within mined out sections of the pit.
In the second process stage the slurry containing the fine fraction of the mineralized material will be pumped to the leach plant. An alkaline leach circuit (sodium carbonate and bicarbonate) will be used to dissolve uranium and vanadium from the leach feed minerals. No oxidant is required. Subsequently, uranium and vanadium will be separated by selective chemical precipitation, with uranium solids then calcined to U3O8 or UO3 and vanadium solids calcined to V205.
Tailings slurry from the alkaline leach circuit (approx. 25% of the mill feed mass and from which the majority of uranium and vanadium has been stripped) will initially be pumped to a surface TMF where it will settle and release water. This released water will be reclaimed and pumped to the water treatment circuit in the process plant where it will be further treated, resulting in solids that are pumped back to the TMF with the alkaline leach tailings. The final pH adjusted water will be returned to the process water tank for reuse. The TMF will be used for tailings management for the first three years of mill production.
The fine tailings will be pumped into containment cells in mined out sections of the pit after the surface TMF reaches design capacity (approximately Year 4 of mill production), for co-disposal with mine waste rock and coarse rejects. Long term storage of all waste material from mining operations will comply with all local and international regulations and requirements.
Infrastructure
The Ivana operation will take advantage of local infrastructure whenever possible. Employees will reside in local communities, most likely the town of Valcheta, approximately 25 km from the mine site. Grid power will be accessible to the project via the construction of a 30 km powerline. For the PEA it is assumed that process water will be supplied from on-site pumping wells. Ground water at the mine site is classified as non-potable for humans and animals but suitable for processing use. Future studies will further assess the local water resources.
Other site infrastructure will include maintenance shops, administration offices, a mine dry, diesel fuel storage, and warehouses.
Capital and Operating Costs
The life-of-mine capital and operating costs are summarized in Tables 4 and 5. The costs assume a fully owner-operated project. The closure and reclamation cost are estimated at
Table 4. Capital Cost Summary
Area |
Units |
Pre- Production |
Sustaining (LOM) |
Total LOM |
Mine |
$M |
18.8 |
11.3 |
30.1 |
Process Plant |
$M |
96.3 |
1.3 |
97.5 |
Waste & Water Management |
$M |
5.4 |
8.2 |
13.7 |
Other Infrastructure |
$M |
3.8 |
1.1 |
4.9 |
Contingency |
$M |
35.4 |
5.4 |
40.8 |
Total Capital |
$M |
159.7 |
27.3 |
187.0 |
Note: cost accuracy is commensurate with a PEA level study, with +/- 35% accuracy. |
Table 5. Operating Cost Summary
Area |
Units |
Unit |
Total |
|
$/t mat'l |
2.09 |
116.6 |
|
$/t feed |
4.97 |
116.6 |
Processing Cost |
$/t feed |
8.52 |
199.9 |
Waste & Water Management |
$/t feed |
0.09 |
2.2 |
G&A |
$/t feed |
1.92 |
45.0 |
Total Operating Cost |
$/t feed |
15.50 |
363.7 |
Project Economics and Sensitivities
The economic results of the PEA are summarized in Table 6 on both a before-tax and after-tax basis. For the PEA Base Case a long-term uranium price of
Uranium provides approximately 97% of the project's revenue stream at the base case prices.
Table 6. Economics and Sensitivity
|
|
Uranium Price Sensitivity |
Spot |
||
Price - U3O8 |
$/lb |
|
|
|
|
Price - V2O5 |
$/lb |
|
|
|
|
Pre-Tax |
|
|
|
|
|
NPV (0%) |
$M |
|
|
|
|
NPV (8%) |
$M |
|
|
|
|
IRR |
% |
41.4 % |
50.4 % |
58.8 % |
74.2 % |
After-Tax |
|
|
|
|
|
NPV (0%) |
$M |
|
|
|
|
NPV (8%) |
$M |
|
|
|
|
IRR |
% |
31.7 % |
38.9 % |
45.3 % |
57.0 % |
Payback |
years |
2.3 |
1.9 |
1.7 |
1.3 |
Opportunities
Infill drilling at the Ivana deposit is expected to upgrade the mineral resource from the Inferred and indicated categories. It is estimated that an infill RC drilling program of approximately 3,000m in 180 holes will be required in order to further upgrade resources within the pit shell zone.
There is also potential to expand mine feed at Ivana, particularly to the west, where recent infill drilling returned low-uranium – rich-vanadium resources that may be potentially considered for mine-life extension during high-price scenario (see Blue Sky news release dated
Additional improvements to the project economics are expected as more detailed engineering studies are undertaken and optimization studies are completed.
Future work on Ivana will include additional infill drilling to upgrade mineral resources, as well as advanced engineering studies that will incorporate the ongoing comprehensive environmental base line study and additional metallurgical and process test works, as well as mine design optimization, detailed permitting assessment, among other items required for the completion of a PFS.
A
bout the
The Company's 100% owned
The Ivana deposit is located in the southernmost of three target areas that comprise the Amarillo Grande Uranium-Vanadium project. Mineralization was first identified at Ivana after field follow-up of a 2010 regional high-resolution airborne radiometric and magnetic survey.
The Ivana deposit displays characteristics of both surficial-type and sandstone-type uranium-vanadium deposits. In plan view, the Ivana uranium-vanadium mineralization has a broad C-shaped pattern with some isolated outlying areas of peripheral mineralization. The uranium mineralization at Ivana is comprised of secondary uranium minerals which include carnotite, a coffinite-like mineral that has been called β-coffinite (beta-coffinite), as well as lesser tyuyamunite, leibigite, and an unidentified uranium-bearing mineral species.
Mineralization occurs within 25 m of surface in two stacked zones. The upper zone is comprised of predominantly carnotite mineralization, and the lower zone contains a mixture of mainly carnotite and β-coffinite mineralization. The two zones occur together through most of the deposit but there are localized areas where only one zone is present. The upper zone averages 2.7 m in thickness, with a maximum of 10 m, while the lower zone has a maximum of 20 m and has an average thickness of 6 m.
The Amarillo Grande project is believed to have district-scale potential for discovery of similar styles of mineralization.
QA/QC
The resource estimation was based on 838 RC drill holes, representing 10,968 metres of drilling with one metre samples. The drilling was completed in four phases starting in
Qualified Persons and NI 43-101 Disclosure
The results of the Company's drilling program were reviewed, verified (including sampling, analytical and test data) and compiled by the Company's geological staff under the supervision of David Terry, Ph.D.,
A National Instrument 43-101 ("NI 43-101") Technical Report supporting the Mineral Resource Estimate and the Preliminary Economic Assessment will be filed on SEDAR+ within 45 days of this news release.
The Mineral Resource Estimate and associated information in this news release were prepared under the direction of
The PEA and associated information in this news release were prepared under the direction of consultant
Additional contributing independent Qualified Persons for the PEA are:
- Chuck Edwards, P.Eng. FCIM (metallurgy & processing)
- Ken Embree,
P.Eng ., of Knight Piésold Ltd (environmental, waste & water management)
All the QP's have reviewed and approved the content of this news release.
About
For additional details on the project and properties, please see the Company's website: www.blueskyuranium.com
ON BEHALF OF THE BOARD
"Nikolaos Cacos"
______________________________________
Neither
This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. Readers are encouraged to refer to the Company's public disclosure documents for a more detailed discussion of factors that may impact expected future results. The Company undertakes no obligation to publicly update or revise any forward-looking statements. We advise U.S. investors that the
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