Australian exploration company Lotus Resources (ASX: LOT) has commenced work on a definitive feasibility study following recent technical work relating to the restart of its flagship Kayelekera uranium project in Malawi.
Strong results from tests on power supply, ore sorting, acid recovery and tailings have indicated potential for significantly enhanced outputs and returns when compared to a project scoping study released last October.
That study highlighted the project’s potential to support a viable long-term operation in the right uranium price environment, with production volumes sufficient to meet impending uranium supply shortfall.
It defined a base case scenario comparable to the historic operation, which produced approximately 11 million pounds of uranium oxide equivalent, but assumed a lower nominal throughput of 1.4 million tonnes per annum to ensure the process would be acid self-sufficient.
Two scenarios were considered in the scoping study – the first would treat only high-grade material while the second would treat medium-grade stockpiles at the end of the life of mine.
Mine power study
Initial results from a mine power technical study have identified that a mix of supply sources (including connection to the national grid, solar power and energy recovery from the acid plant) could be the most reliable and cost-effective option for the project and could result in significant carbon dioxide emissions reductions.
Lotus has begun discussions with Malawian electricity supply company ESCOM and contracted an in-country power consultant to assess capital and operating costs for connecting to a grid at the town of Karonga (approximately 50km from Kayelekera) or other substations in close proximity to the mine.
Metso Outotec is preparing a study for recovering energy via a steam turbine from the mine’s acid plant, and solar providers have been requested to send proposals for solar options.
Ore sorting testwork
Two testwork programs on four samples of run-of-mine ore indicated a significant step change for the project, with grades increasing by up to 100% (when compared to the feed sample) and recoveries up to 92%.
Lotus said the ability to increase production rates and convert lower marginal grade ores could result in a significant extension to Kayelekera’s mine life.
The assessment of tailings storage is ongoing, with the current preferred option being to maximise storage in the existing facility before turning to co-disposal of tailings and waste rock in the depleted open pit.
This option is believed to offer a reduced life-of-mine capital cost compared to that quoted in the scoping study.
Lotus has pre-selected a number of South African consulting firms to assist with completion of the definitive feasibility study, which is expected to reduce site visits and associated costs.
Improved rates and costs
Lotus managing director Keith Bowes said results from the technical work “have been impressive” and indicate significantly improved production rates and operating costs.
“The most notable has been the ore sorting work using a technology that was not available when Kayelekera was previously in production,” he said.
“This aspect alone could see annual production rates more readily increase to the [mine’s] original nameplate of 3 million pounds per year [and possibly] extend the mine life through conversion of marginal ores into higher grade ores.”
He said the combined findings of all technical studies provide confidence that a material reduction in project costs could be achieved.