NYSE-listed Uranium Energy (UEC) has released a preliminary economic assessment (PEA) for its Roughrider uranium project in Canada, valuing the asset at nearly $1-billion. The project, which UEC acquired from Rio Tinto in 2022 for $150-million, is projected to deliver substantial economic returns.
The PEA estimates a post-tax net present value of $946-million for Roughrider, with an internal rate of return of 40% and an after-tax payback period of 1.4 years, based on a long-term uranium price assumption of $85/lb.
UEC president and CEO Amir Adnani said the results validated the company’s strategic acquisition.
“Today’s results underscore the strength of our 2022 decision to acquire Roughrider from Rio Tinto for $150-million, consistent with our strategy to acquire accretive assets at opportune points in the uranium price cycle,” he stated.
The Roughrider project, located in Saskatchewan’s Eastern Athabasca basin, is expected to produce a total of 61.2-million pounds of uranium octoxide (U3O8) over a nine-year mine life, with an average yearly production rate of 5.8-million pounds.
Initial capital expenditure (capex) is estimated at $545-million, which includes a proposed milling facility with a throughput of 400 t/d. According to the PEA, this will place Roughrider among the lowest capex profiles in Canada’s uranium industry. The project’s all-in sustaining cost is estimated at $20.48/lb.
Adnani pointed to several competitive advantages that position Roughrider as a standout project. These include its high-grade uranium resource, with a life-of-mine feed grade of 2.36% U3O8, and its strategic location within the Eastern Athabasca basin. The project benefits from proximity to critical infrastructure, including power, roads, and the Points North Landing airport and construction facility, which could support future development.
Further, Adnani suggested additional upside potential as the project moves through the prefeasibility stage, particularly with recent exploration successes, including the discovery of the Roughrider North deposit. These developments could enhance the overall value proposition of the asset.
UEC plans to follow up exploration results in 2024 with an updated mineral resource estimate in the first quarter of 2025 to support the development of a prefeasibility study next year.
Source: Creamer Media
