Alligator Energy Ltd (ASX:AGE) has confirmed the potential for a 'globally competitive' low-cost in-situ recovery (ISR) uranium operation in a scoping study for the Blackbush deposit within the Samphire Project, south of Whyalla in South Australia.
The study supports a production estimate of 1 million pounds per annum of uranium, with a life-of-mine production target of 10 million pounds over 12 years solely from the Blackbush deposit alone.
It also put forward a low initial capital expenditure forecast of A$129.3 million, including a significant combined contingency and cost escalation allowance of 40%.
Notably, the Samphire Project economics was assisted by proximity to key infrastructure, a local workforce, low reagent consumption, a shallow uranium deposit and good permeability of the host sands.
Furthermore, a low environmental footprint, focus on minimal disturbance and continuous rehabilitation, and no long-term impact on saline groundwater demonstrate the potential for a low carbon intensity project.
Increasing uranium demand
Alligator CEO Greg Hall said: “We are very pleased to present the excellent results of the Samphire Project Scoping Study.
“This study represents an initial estimate of a project based on the Blackbush deposit only within Samphire, producing 1 million pounds per annum of U3O8 for supply into the increasing uranium demand supporting the low-carbon global nuclear power industry.
“The capital costs to establish an initial project are quite low, even with significant contingency and inflation assumptions, as the location adjacent to the City of Whyalla offers distinct advantages; a locally based workforce (no FIFO and camp); very experienced mining services and business support; and a lower cost of key infrastructure.
“Operating costs are in line with similar ISR operations, despite the hypersaline quality of the groundwater within the deposit.
“The planned FRT will assist to verify these costs.
“Alligator recognises this would be the first uranium project in this region, and there will be many questions and much interest from our stakeholders.
“We will continue to engage and work with stakeholders and ensure even at this early stage that the benefits such a project can bring are being realised.
"South Australia is an experienced and globally recognised uranium mining jurisdiction and Alligator is pleased to be working in this supportive framework.”
Further upside
There is a potential for a future increase in the Blackbush resource estimate, as some major capital components can support throughput of up to 1.2 million pounds per annum.
This presents an opportunity to explore an increased production target with minimal additional capital investment.
Alligator is also targeting processing efficiencies to reduce costs and increase recovery rates.
Furthermore, there is further exploration potential for additional uranium mineralisation, including the possibility of the Plumbush prospect becoming a satellite deposit to the proposed Blackbush plant.
Forward plan
Alligator estimates that the earliest construction start would be in 2026, with initial commissioning of production the following year.
The next steps at Samphire Uranium Project will include:
- a pilot Field Recovery Trial (FRT) targeted for late 2023 will assist in further de-risking technical aspects of the project;
- continued drilling to target resource extension and increased confidence, with continuous rehabilitation of drill sites;
- additional studies are planned to consider power and water supply and alternates, logistics and equipment supply sources, product transport route, and further environmental and amenity considerations, to then be followed post-FRT by a proposed full feasibility assessment; and
- ongoing engagement with all stakeholders to obtain further understanding of their concerns, questions, and issues of a future project; take account of these and develop a mutual solution.