Shares in Paladin Resources (PDN-T) surged more than 30% in early trading in Toronto on May 9, after the Australian-based explorer said it would spend US$20 million on initial development of its Langer Heinrich uranium project in Namibia.
The first phase of work will include engineering and design work, cost optimization, and procurement of long lead-time items; completion is slated for November.
Construction of an open-pit mine would follow thereafter, with the whole project scheduled for completion in 15 months; the first ore feed is expected in September 2006. The overall price tag rings in at US$92 million, including a 10% contingency plus an “accuracy provision” totalling US$10 million. Paladin says the project payback period is 3.5 years.
Plans at Langer Heinrich centre on reserves totalling 22.2 million tonnes running 0.071% U3O8, based on a uranium price of US$25 per lb., and a cutoff grade of 0.025% U3O8.
Overall, project’s estimated recoverable measured resource totals 15.2 million tonnes grading 0.074% U3O8. Indicated resources are pegged at 9 million tonnes of 0.066% U3O8, with another 22 million tonnes of inferred material grading 0.071%.
The predominant uranium mineralization, carnotite, occurs as cavity and fracture linings, and as grain coatings and disseminations in the calcretized sediments. The deposit comprises seven near-surface pods that measure 1-30 metres in thickness and 50-1,100 metres in width over a 15 km strike length. In some places, the mineralization is covered by up to 8 metres of sands and scree deposited by the Gawib River.
At a proposed processing rate of 1.5 million tonnes per year, and a head feed grade of 0.0875% U3O8, the operation would annually produce an average of 1,180 tonnes of U3O8 during its first 11 years. The subsequent four years would see annual production slip to 401 tonnes as processing targets lower-grade stockpiled ore.
Processing will include alkaline leaching (with heating to 75 C), counter-current decantation, ion exchange, precipitation and calcining to produce saleable uranium oxide concentrates.
The study, completed by GRD Minproc, pegs life-of-mine average operating costs at US$14.18 per lb. U3O8, and US$12.20 per lb. over the first six years. The study is based on uranium prices ranging from US$26 per lb. to US$35 per lb. over the 15-year lifespan. By comparison, the current spot price for U3O8 is US$26.25 per lb.
Paladin says it will apply to the Ontario Securities Commission for permission to release the study’s economic analysis, which incorporates 50% of the project’s inferred resources, something prohibited under Canadian securities laws.
The company has submitted a 25-year development and mining application to Namibia’s Ministry of Mines and Energy; approval is expected by the end of the second quarter. Meanwhile, negotiations for a debt/equity financing package to cover the balance of the capital cost continue.
Meanwhile, in northern Malawi, Paladin recently launched a US$2.3-million bankable feasibility study of its 90%-owned Kayelekera uranium project. The work will include 4,500 metres worth of reverse-circulation drilling aimed at better defining resources.
Some 600 metres worth of diamond drilling in 6 or 7 holes is also planned to provide two 2-tonne samples for metallurgical test work. Paladin hopes to begin development at Kayelekera by the end of 2006.
At last count, Kayelekera’s inferred resources were estimated at 8.1milllion tonnes running 0.13% U3O8, based on a 0.04% cutoff.
Be the first to comment on "Paladin climbs on Langer Heinrich decision"