Vimy to progress Australian uranium projects

Friday, 14 December 2018

The announcement comes days after the board of the Perth-based company decided to progress the Angularli deposit at Alligator River following the successful completion of a scoping study.

Vimy earlier this year agreed to acquire Alligator River, in Arnhem Land, Northern Territory, from Cameco Australia Pty Ltd for a cash consideration of AUD6.5 million staged over 30 months. The company subsequently announced the completion of a maiden mineral resource estimate for the Angularli deposit with inferred resources of 25.9 million pounds U3O8 (9962 tU) at a cut-off grade of 0.15% U3O8. The project is managed and 75% owned by Vimy, with Rio Tinto Exploration owning the remaining 25%.

The scoping study - a preliminary technical and economic assessment of the potential viability of the Angularli deposit - was carried out for Vimy by Wood PLC, based on the inferred resources announced in March. It draws on the mining approach carried out at the former Nabarlek uranium mine, located 65 km south of Angularli, which operated successfully between 1980 and 1988. Nabarlek, which has now been successfully decommissioned and the site fully rehabilitated, produced 24 million pounds U3O8 from 550,000 tonnes of ore at an average grade of 1.84% U3O8 and so serves as a good proxy for Angularli.

The study assumed that mining at Angularli would use conventional long-hole open stoping methods, which would allow for the underground mine workings to be used for disposal of all the process tailings and eliminate the need for a surface tailings storage facility. Two metallurgical flowsheets - one based on solvent extraction and the other on direct precipitation - were evaluated, with testwork undertaken at the Australian Nuclear Science and Technology Organisation for leaching and recovery, as well as comminution testing by ALS and JKTech. Both flowsheets were shown to be technically feasible, with overall uranium recovery of 97.2 % for solvent extraction and 97.3 % for the direct precipitation options.

Vimy in November announced "encouraging" results from its first drilling programme at Alligator River, where it has an exploration target of 20-60 million pounds U3O8 at a grade of 0.75-1.5% U3O8. Maiden drilling results for the previously undrilled Such Wow prospect, which has a structural corridor more than five times the size of the Angularli prospect, have identified a highly prospective large hydrothermal system.

Vimy's flagship Mulga Rock project, in Western Australia, has already received approval from State and Federal governments, and with secondary permits, licences and approvals underway, the company says it will be "mine ready" in the first half of 2019.

The project has a total of 76.8 million pounds U3O8 of indicated and inferred uranium resources in four deposits, which Vimy intends to mine by shallow open-pit methods, with a central processing plant. Cobalt, copper, nickel and zinc metal concentrates will be extracted after the uranium has been removed, and sold separately. A definitive feasibility study released in January estimated cash operating costs at USD25.11 per pound U3O8 for first five years, with annual production of 3.5 million pounds U3O8 over a mine life of 15 years.

Pent-up demand

The company said yesterday it will use the funding raised through the share placement to progress Mulga Rock to a Final Investment Decision, including advancing offtake contracts and project finance, and general project costs. Funds will also be used to continue work to "unlock the potential" of Alligator River.

Vimy Managing Director and CEO Mike Young said this is happening at a time of improving uranium dynamics and "pent-up demand" from US utilities. "Our recent announcements on Alligator River highlight the huge potential for the development of Angularli and the outstanding exploration potential of Such Wow - and these are only two of over a dozen targets at this project," he said.

"The uranium market continues to improve with the price now 63% above its low point in December 2016 . In a sign of shifting sentiment, many brokers and investors are showing a renewed interest in uranium and many are approaching us for market and project updates."