Slovakian uranium deposit is good asset, Tournigan says

A preliminary assessment of Tournigan Energy‘s (TVC-V) Kuriskova uranium deposit in Slovakia calculates a payback within roughly one third of the projected mine life and production costs substantially below projected long-term sales prices.

At current levels Kuriskova’s estimated mineral resources would sustain underground mining at a rate of 276,000 tonnes of material per year for about 15 years.

Total operating costs have been estimated at US$31 per lb. U₃O₈ over the mine life and during the first five years of production US$17 per lb. U₃O₈.

Those costs include a byproduct credit for molybdenum of about US$1 per lb. U₃O ₈. Operating costs are exclusive of mineral royalties, which are estimated at US$4 per lb. U₃O₈. In addition, during the life of mine sustaining capital requirements will add up to about US$88 million.

Kuriskova is 5 km northwest of the city of Košice, a regional industrial centre in eastern Slovakia. The project is accessible off a main road along a network of un-surfaced tracks that cut across the forest.

Uranium was originally discovered at Kuriskova in 1985 and Tourniqan acquired its 100% stake in the deposit in 2005.

Work on state-funded projects like Kuriskova stopped in 1996 when the country returned to a market economy system and the government was unable to continue to fund its mining projects. (Slovakia was created in 1993 when Czechoslovakia split into the Czech and Slovak Republics.)

Results of initial metallurgical test work at Kuriskova indicate uranium recoveries of 90% and molybdenum recoveries of 65% can be achieved using conventional flotation and alkaline leaching circuits that would produce separate uranium or yellowcake and molybdenum concentrates, the preliminary assessment found.

The average annual production of concentrates would be about 627 tonnes of uranium oxide and 42 tonnes of molybdenum in molybdenite.

The base case internal rate of return is estimated at 32.8% on a pre-tax basis with a payback of 5.3 years. Initial capital costs have been estimated at US$156 million.

At a 12% discount rate, the pre-tax net present value is estimated at US$117 million.

The next step is a prefeasibility study and Tournigan is planning a surface infill drilling program to try to upgrade more of the inferred resource into the indicated category and at a higher grade. The company plans further step-out drilling where the high-grade mineralization is open along strike and at depth.

Additional geotechnical and hydrological studies are required to evaluate alternative mine designs that could improve costs and schedules for construction and mine production.

The preliminary assessment was based on pre-tax financial parameters that were calculated on long-term uranium and molybdenum prices of US$65 per lb. U₃O₈ and US$12.50 per lb. molybdenum in molybdenite.

The current resource estimate was calculated in April this year and at a cut-off grade of 0.05% uranium includes indicated resources of 1.19 million tonnes gradng 0.558% U₃0₈ for 14.65 million lbs U₃0 _8, plus inferred resources of 3.78 million tonnes grading 0.215% U₃0₈ for contained U₃0₈ of 17.90 million lbs.

The Kuriskova deposit is part of a belt of largely strata-bound uranium-molybdenum deposits hosted in a sequence of Permian-age meta-volcanic/sedimentary rocks in eastern Slovakia.

The deposit has a northwest-southeast strike and a variably steep-moderate southwest dip (60 degrees in the upper part, 47 degrees in the lower part).

The overall dimensions of the deposit’s main zone start at about 120 metres below surface and extend to a depth of about 650 metres. The deposit has been defined about 650 metres along strike by 530 metres down-dip by 2.5 metres thick.

Tournigan is bullish about Slovakia and it’s pro-uranium mining policies. Citing statistics from the World Nuclear Association, the B.C.-based junior says Slovakia is the world’s third-highest per capita consumer of nuclear generated power after France and Lithuania.

In 2007, roughly 55% of Slovakia’s power production of 14,200 million kilowatt-hours was produced from nuclear power plants with a total capacity of 1,685 megawatts from four operating reactors.

In addition to Kuriskova, Tournigan has five other exploration targets along the Slovakian uranium belt.

At presstime Tournigan was trading at 35¢ per share. It has a 52-week trading range of 13.5¢-96¢ per share and has 122.7 million shares outstanding.