Peru-based Plateau Uranium (TSXV:PLU) announced its preliminary economic assessment (PEA) for the Macusani Plateau  in Peru on Monday, and the results were encouraging, to put it mildly. 

Using a conservative future uranium price of US$50, Plateau Uranium has put together an impressive PEA that delineates the potential for Macusani Plateau to become a world class project.

One of the more impressive highlights of the company’s PEA is its cash operating costs, which look to average US$17.28 per pound over the life of the mind. According to Plateau, this operating cost places the company in the lowest quartile of uranium producers in the world.

As far as initial capital expenditures go, Plateau is looking at an estimated $249.7 million, with a $50.1 million in contingencies. From here, the company can build the mine along with a 10.9 million tonne per year heap leach process plant. It is important to note that the company will not require any customized equipment in order to build the plant, and can  use “off-the-shelf” equipment and technology.

Plateau also has a net present value (NPV) – with an 8 percent discount rate – of US$852.7 million pre-tax and a post tax figure of $603.1 million. Looking at the pre-tax internal rate of return (IRR), Plateau is looking at 47.6 percent. Meanwhile, after-tax that figure is just as positive at 40.6 percent. Overall the company is eying a pre-tax capital payback estimated at 1.69 years, whereas post-tax, that figure is 1.76 years.

“The low cost potential of the Macusani Plateau uranium project, with estimated production costs similar to some of the best uranium operations in the Athabasca Basin and Kazakhstan, combined with significant estimated annual production levels, and estimated capital costs of less than US$300 million, near significant infrastructure in mining friendly Peru, all highlight the potential strategic nature of our project to supply the growing near-term uranium demand expected within the next 4 years.” Chief Execitive Officer Ted O’Connor said in a statement.

Still, with under 2 years to payback capital, Plateau is on to something big with the Macusani Plateau deposits.

In fact, the company highlighted its expectations for production from the project, which look to be in the area of 6.9 million pounds per year over the course of the life of mine. Furthermore, Plateau plans to process 109.0 million tonnes at 289 ppm U3O8 over a 10-year life of mine period. All this to say that the Macusani Plateau project stands to be within the top five largest uranium operations in the world.

Get the Top Stories on Resource Investing FREE!   Learn what is going on before you buy from this FREE Special Report, Who is Kitco? to US Mint: Sold Out! – Top Articles from Resource Investing News.

Plateau is planning on approaching mineral extraction via standard open pit mining, with a relatively small, yet higher grade underground operation contemplated with an average life of mine stripping of 2:1 waste to ore. The company noted that the “[o]ptimized base case includes only 3 of the 5 main mineralized complexes with current mineral resource estimates identified at the project.”

Plateau also looked at high grade scenarios with both heal heap leach and tank leach processing options.

“The strong PEA results further validate the merits of the Company’s consolidation and organic growth strategy to control all defined uranium resources in Peru.” O’Connor said, adding “Our plan is to move the Macusani Plateau uranium project further along the path to development by progressing our environmental permitting strategy in Peru, initiating further delineation, expansion and exploration drilling, and following through with additional pre-feasibility metallurgical and engineering study work over the coming year. The work completed on the high-grade heap leach and tank leach scenarios has provided up-front, potentially economic options to consider in the future pre-feasibility work.”

With things looking bright in the future for the uranium market, the company is looking to capitalize on the growth to be had within the sector.

Following the news, Plateau Uranium saw its share price increase 2.67 percent, to trade at 0.385.

Securities Disclosure: I, Vivien Diniz, hold no direct investment interest in any company mentioned in this article.

The post Plateau Uranium PEA Demonstrates $17 per Pound Base Case Cash Operating Costs appeared first on Investing News Network.