Rising battery mineral prices unlock base metal upside to Vimy Resources’ uranium project

Vimy Resources ASX VMY Mulga Rock Project drilling
Drilling at Vimy Resources' Mulga Rock Project.

Uranium explorer Vimy Resources (ASX: VMY) has uncovered battery mineral upside at its Mulga Rock uranium project in Western Australia.

A definitive feasibility study into the project’s viability originally focused on the project’s uranium potential. However, with the rising price for base metals, and cobalt, in particular, Vimy reviewed the viability of developing a base metals plant.

This was initially looked into in 2015 when Vimy’s Mulga Rock pre-feasibility study evaluated incorporating a stand-alone base metals plant into the planned uranium operation.

The base metals circuit would recover copper, zinc, nickel and cobalt from the uranium tailings. However, base metal prices at the time revealed a “break-even” position and the company did not pursue this avenue further.

With today’s higher base metal prices, Vimy reviewed the stand-alone plant concept. The review revealed Vimy could unlock a base metals by-product credit of about US$4 per pound of uranium by installing a base metals plant at the operation.

“Mulga Rock is first and foremost a uranium project that happens to have base metal by-products,” Vimy managing director and chief executive officer Mike Young said.

“However, it makes sense to re-examine the base metals plant given the strength in prices and growing demand for base and battery metals,” Mr Young added.

The review has indicated a base metals circuit would now enhance the project’s uranium economics.

“It appeals to my sense of irony that we could be producing the metals that make batteries as well as the fuel to charge them,” Mr Young noted.

Base metals at Mulga Rock

Base metal resources for Mulga Rock total 34.1 million tonnes grading 0.028% copper, 0.096% zinc, 0.048% nickel, 0.024% cobalt for 9,600t of contained copper, 32,700t of zinc, 16,300t of nickel and 8,200t of cobalt.

Under the proposed plant design in the original pre-feasibility study, base metals would be recovered from the uranium circuit tailings and sold as two separate sulphide concentrates of copper-zinc and nickel-cobalt.

According to Vimy, the concentrates would be sulphide precipitates and have a higher metal content compared to flotation concentrates.

Base metal plant study in 2018

Vimy has planned an updated study for the base metals plant to include the latest drilling data from the definitive feasibility study, which was published in January this year.

The updated resource would then be used to revise pit designs, and the mining schedule.

Vimy will also investigate enhancing its metallurgical flowsheet to boost efficiencies.

An updated economic model will include long-term base metal price forecasts and the data from the 2018 study.

Shares in Vimy were steady at A$0.145 in late morning trade.

Lorna has more than 10 years experience as a finance journalist and editor. She has written for an array of industry publications reporting on various sectors, including: resources, energy, construction, biotech, pharma, science and technology, agriculture, and chemicals. Specialising in resources, Lorna has covered a myriad of small and large cap ASX and dual-listed stocks.