PEA Confirms Potential For Long-Life/Low-Cost In Situ Recovery At Churchrock Project

PEA Confirms Potential For Long-Life/Low-Cost In Situ Recovery At Churchrock Project

TORONTO – Laramide Resources Ltd. announced the positive results of an independent Preliminary Economic Assessment (PEA) for theChurchrock In-Situ Uranium Project located in New Mexico. The PEA has been prepared in accordance with the requirements of National Instrument 43-101 (NI 43-101)

“Laramide is pleased with the results described in this PEA analysis of the Churchrock Project, which is the first economic study to consider the entirety of the large and robust resource amenable to ISR development.  The study confirms that Churchrock has the potential to be a long life, high margin project,” said, Marc Henderson, President and CEO. “Importantly, as a late-stage development project located in the western United States, Churchrock is well positioned to address some of the potential nuclear utility security of supply concerns clearly reflected in spot uranium prices which have risen dramatically and now exceed $90/lb.”

The base case economic assessment results in a pre-income tax internal rate of return (IRR) of 62% and a pre-income tax net present value (NPV) of US$287 million when applying an eight percent discount rate and $75 uranium price. The economic assessment reflects the development of a steady state 3,000 gpm (gallons per minute) in situ recovery (ISR) operation, which includes Churchrock Satellite Plants, Crownpoint CPP (Central Processing Plant), and associated wellfields near Churchrock, New Mexico. The PEA assumes recovery of approximately 68% of the uranium resource in the production area.

Following an initial capital cost of $47.5 million for the development of the initial wellfield and associated process infrastructure, subsequent wellfields are developed sequentially, the cost of which is accounted for in the PEA as sustaining capital.

The capital and operating cost estimates for ISR mineral recovery and yellowcake production in the PEA are based on factored costs from other comparable ISR operations, judgment, and analogy. Although there was some previous commercial underground mining production experience at Churchrock area, this Technical Report concerns only the ISR method for the U3O8. An economic analysis was performed using the assumptions outlined. The SLR QPs note that, unlike Mineral Reserves, Mineral Resources do not have demonstrated economic viability. This PEA is preliminary in nature and is based on Inferred Mineral Resources that are considered too geologically speculative to have modifying factors applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that this economic assessment will be realized.