Marenica Energy again reduces uranium mining cost, lowers threshold for production economics
Tests at the Angela project in the NT confirm Marenica’s U-pgrade process could offer big cost savings to make uranium projects more economically viable.
While Marenica Energy (ASX: MEY) is focused on its flagship Namibian uranium projects as the prime potential company makers, it is not letting the grass grow under its feet with its second pillar, a clutch of Australian projects.
It now seems that its own patented beneficiation process, U-pgrade, could unlock projects in both countries.
Tests at one Australian project have now confirmed previous work in Namibia offers big cost savings, which is vital as uranium prices struggle to reach a level where new mines can be brought into production.
Nevertheless, Namibia remains the priority because, one, it is a uranium-friendly jurisdiction and, two, Marenica may have the option to produce only a concentrate that can be trucked to existing downstream processing plants in the African country.
Australian projects could be vital if nuclear energy adopted
That said, Marenica has a substantial portfolio of Australian projects.
The company has already noted that industry superannuation funds have been making encouraging noises about the need for nuclear power as a means of base load energy and lower electricity prices to boost manufacturing.
In both countries, Marenica faces the same challenge as all other uranium hopefuls: it has to wait for uranium prices to rise to a stage where it is profitable to bring on new production.
Marenica chief executive officer and managing director Murray Hill believes the uranium price reach this level next year.
The latest reported spot price was US$29.50 per pound (A$40.60/lb), still down from the US$50/lb (A$69/lb) or US$60/lb (A$83/lb) most experts say it will need to be to make developing new mines worthwhile.
Of course, contract uranium prices are known to be higher than spot, but clearly not that much higher that they transform the economics of uranium mining.
NT tests confirm company’s process works here as well as Namibia
However, recent news from the company’s Angela project indicates that significant cost savings can be made with one of the key inputs for extracting uranium — acid — that could effectively lower the economic threshold for a mine to be economically viable.
Recent tests at Angela in the Northern Territory shows, with the U-pgrade process, acid consumption could be reduced by 77%.
This confirms the results U-pgrade achieved at a Namibian project. At the company’s key (and eponymous) Marenica project, the process was able to reject 95% of mass prior to the leaching process, lifting its grade in Namibia from 93 parts per million to 5,000ppm uranium oxide — and, again, reducing acid consumption.
At Angela, uranium leach extraction increased to 96% after the calcite mineral had been removed.
Mr Hill said when announcing the Angela test results that they showed “significant” potential operating cost savings.
“These cost savings are likely far beyond the prevailing expectations of the time when Marenica acquired the project,” he added.
“This result also indicates the broader potential application of U-pgrade beyond the calcrete-hosted uranium ores of Namibia, on which this ground-breaking patented process was developed.”
Revolutionising uranium mining
Marenica believes it can revolutionise surficial uranium processing by reducing processing capital and operating costs by approximately 50% – potentially improving the economics of all uranium projects which process surficial uranium and specifically making lower-grade projects much more competitive and financially viable.
The company sees itself as positioned to take “first-mover advantage” ahead of other greenfield developments.
There are 54 nuclear power stations now under construction and it’s expected that, in all, 321 new plants are expected to come into production by 2040.
Marenica has a large land position in the Erongo uranium province in Namibia, a country with an established and long running uranium mining industry.
It has three project areas: the Namib, Mile 72 and Marenica.
Marenica has a large inferred uranium resource of 61 million pounds or 27,670 tonnes.
Snapped up Cameco-Paladin projects
Late last year, Marenica snapped up projects in Australia that were owned 50:50 by Cameco of Canada and Paladin Energy (ASX: PDN).
The wholly-owned projects are Angela with a resource of 31Mlb, Minerva (high-grade uranium and gold), Thatcher Soak with 11Mlb, and Oobagooma, which has a historical resource and therefore cannot be reported. The first two projects are in the NT, the last two in Western Australia.
Marenica also has minority interests in three NT projects controlled by Energy Metals (ASX: EME).
Under this joint venture, Marenica holds 21% of the Bigrlyi uranium-vanadium ground with 21Mlb, 23% of Walbiri with 16Mlb and between 21% and 24% of additional smaller deposits with a total resource of 3.6Mlb.