NexGen updates economics for Rook I

Friday, 2 August 2024

The updated estimated pre-production capital costs - or CapEx - are CAD2.2 billion (USD1.58 billion). The estimated average cash operating cost (OpEx) over the life of mine (LOM) of CAD13.86 per pound U3O8 (USD9.98 per pound) is described by the company as "industry leading".

Previously - in a feasibility study published in 2021 - the project's CapEx had been estimated at CAD1.3 billion, with average OpEx over the LOM at CAD7.58 per pound U3O8. The updated CapEx reflects some CAD310 million in direct and attributable inflationary increases since 2020, and around CAD590 million in increased CapEx from enhancements identified through advanced engineering and procurement activity since March 2021, the company said. The updated OpEx estimate reflects an increase of CAD2.65 per pound U3O8 due to inflationary adjustments and CAD3.63 per pound due to advanced design developments, advancement of procurement, and operational and ongoing elite environmental enhancements.

The design of the mine incorporates an underground tailings management facility, and most of the mine's reclamation will take place concurrently with production. As well as enhancing environmental performance during operation, this will reduce the risk of ongoing reclamation, costly decommissioning at the end of the production period, and the post-closure risk to the local environment and communities. Some CAD900 million of costs associated with the progressive reclamation over the LOM have already been incorporated into the CapEx, OpEx and sustaining capital costs, meaning that full closure costs at the end of the mine's life - expected to be around CAD70 million - will be "materially lower than other uranium mines in Canada".

NexGen is currently working to secure the federal and provincial approvals needed to move forward with the project, and says it is ready for major construction activities to begin immediately when the final federal environmental assessment approval is received: it has already received provincial environmental assessment approval. The project is now about 45% complete, and the company said it is "advancing well with the significant build out of the project development team that includes industry experts in shaft sinking, underground mining and development, and surface operations."

CEO Leigh Curyer said the updated capital cost is an "all-encompassing spend" to bring the project into production, with a payback period of 12 months. "It is a very exciting time at NexGen as the Company advances the finalisation of the Federal Environmental Assessment, readies for immediate commencement of construction on final Federal Approval, and in parallel continue to test the recently discovered Patterson Corridor East mineralisation 3.5kms east of the Arrow deposit," he said.

The Arrow uranium deposit at Rook I has measured and indicated mineral resources of 256.7 million pounds U3O8, supporting an 11-year LOM.