Vimy Resources completes MRUP Scoping Study

THE BOURSE WHISPERER: Vimy Resources (ASX: VMY) has received results of a Scoping Study for the company’s Mulga Rock uranium project (MRUP) in Western Australia.

The Study by Amec Foster Wheeler Australia and Coffey Mining included a preliminary economic evaluation, which concluded the project to be economic at current long-term contract prices for uranium.

Key findings from the Study include:
Attractive deposit with sufficient scale and long mine life

• MRUP is the third largest undeveloped uranium deposit in Australia

• Total resource estimate of 59.7 million tonnes at 550ppm uranium for a contained 72.7 million pounds uranium

• Life of Mine (LoM) of 16 years with an estimated total production of 47 million pounds uranium

• 70 per cent of the uranium mining inventory for first 7 years is from Indicated Resources.

Low cash cost, robust financials

• C1 cost in years 1 to 7 of US$25 per pound uranium, including by-product credits

• C1 cost for LoM of US$29 per pound uranium, including by-product credits

• MRUP will generate an average annual EBITDA of $161 million at US$75 per pound uranium price

• Robust pre-tax NPV of $764 million with a 39 per cent IRR and a 2.6 year payback

• Breakeven price US$46 per pound uranium, including capital payback (at 10% discount rate)

Low risk and low cost mining process

• Simple open-pit mining operation up to a maximum depth of 74 metres

• Process plant to use low-cost acid leaching and resin-in-pulp

• MRUP environmental approvals and permitting are well advanced

• A number of opportunities have been identified to further reduce operating and capital costs, which will be incorporated into the Pre-feasibility Study currently underway.

“The Vimy team has always been driven by their very strong belief in the viability of the MRUP,” Vimy Resources managing director Mike Young said in the company’s announcement to the Australian Securities Exchange.

“MRUP stands apart from many of the potential uranium projects in Australia in that it is financially viable at current long term uranium contract prices.

“This Scoping Study verifies this and reaffirms our aggressive schedule to develop the project.

“We look forward to finalising the Pre-feasibility Study in August and starting the Feasibility Study in September 2015.”