Fission Uranium Corp., [FCU-TSXV; FCUUF-OTCQX; 2FU-FSE] on Monday September 23 released the results of a pre-feasibility study (PFS) for an underground-only mining scenario at its flagship Patterson Lake South uranium property in the Athabasca basin region of northern Saskatchewan.
The company said the underground PFS follows the results of an earlier PFS report, which outlined a hybrid mine approach using both open pit and underground techniques.
Highlights from the earlier PFS report, which was released in April, 2019, envisaged average production of 15 million pounds of U3O8 annually during the first five years of production from mineral reserves of 90.5 million pounds of U3O8.
That scenario was based on initial Capex of $1.5 billion and operating expenditure of US$6.77 per pound. It envisaged a 4-year construction period and 8.2-year mine life.
The underground PFS highlights a substantial reduction in Capex and time requirements for construction of the Triple R Mine due to simplified water control measures for underground mining, the company said in a press release Monday.
With the underground PFS, access to the deposit is envisaged via a decline from land. The revised mining method eliminates the need for a system of dykes and slurry walls, dewatering and overburden removal and results in a reduction of 90% of total mine-related earth movement.
The reduced earth movement results in reduced surface piles and overall minimized surface footprint.
“With the project’s Opex (operating expenditure) of just US$7.18 a pound, an IRR (internal rate of return) (pretax) of 34% and NPV (net present value) (pretax) at 8.0% of $1.33 billion, the underground PFS outlines the potential for highly economic production at PLS,” the company said.
The spot price of uranium has traded recently at US$25.30 a pound.
In the underground-only scenario, the construction time-line would be reduced by one year to 3.0 years. The capital cost would also be cut to $1.18 billion, marking a reduction of 21% from the previous plan.
“While the underground PFS only considers indicated resources from the R780E and R00E zones, the mine plan has been deliberately designed to easily accommodate additional material from the R1515W, R845W and R1620E zones based on potential future conversion of inferred resources to indicated resources,’’ the company said.
Fission shares advanced on the news, rising 2.7% or $0.01 to 38.5 cents. The shares are trading in a 52-week range of 32 cents and 75 cents.
Fission is the company that made headlines in 2012 by discovering high grade uranium zones on the Patterson Lake South (PLS) property. Fission has a 100% ownership of the PLS property, which consists of 17 mineral claims, covering 31,039 hectares on the southwest margin of the Athabasca Basin.
PLS hosts a high-grade, near surface deposit (The Triple R Deposit), which is estimated to contain an indicated resource of 87.7 million pounds of U3O8 in 2.18 million tonnes averaging 1.82% U3O8. On top of that is an inferred resource of 52.8 million pounds of U308, in 1.33 million tonnes averaging 1.80% U3O8.
Fission President Ross McElroy said the company is delighted with the results from the new PFS. “Fission is now able to transition confidently into the Feasibility Study phase,” he said.