Australian exploration company Lotus Resources (ASX: LOT) has started work on a definitive feasibility study following recent engineering work on the restart of its flagship Kayelekera uranium project in Malawi.
Strong test results on power supply, ore sorting, acid recovery and tailings indicated the potential for significantly improved yields and yields compared to a scoping study for the project published last October.
This study highlighted the potential of the project to support a viable long-term operation in the right uranium price environment, with sufficient production volumes to cope with the impending uranium supply shortage.
He set a baseline scenario comparable to historic mining which produced around 11 million pounds of uranium oxide equivalent, but assumed a lower rated throughput of 1.4 million tonnes per year to ensure that the process would be self-sufficient in acid.
Two scenarios were considered in the scoping study – the first would deal only with high grade material while the second would deal with medium grade dumps at the end of mine life.
Mine power study
The first results of a technical study on mining energy identified that a mixture of sources of supply (including connection to the national grid, solar energy and energy recovery from the acid plant ) could be the most reliable and cost effective option for the project and could result in significant reductions in carbon dioxide emissions.
Lotus has started discussions with the Malawian power supply company ESCOM and hired an electricity consultant in the country to assess the investment and operating costs for the connection to a grid in the town of Karonga (at approx. 50 kilometers from Kayelekera) or other substations near the mine. .
Metso Outotec is preparing a study to recover energy from a steam turbine at the mine’s acid plant, and solar suppliers have been invited to send in proposals for solar options.
Ore sorting tests
Two test programs on four run-of-the-mill ore samples indicated a significant step change for the project, with grades increasing up to 100% (relative to the feed sample) and recoveries of up to ‘to 92%.
Lotus said the ability to increase production rates and convert low-grade ores could significantly extend the life of the Kayelekera mine.
The evaluation of tailings storage is underway, the current preferred option being to maximize storage in the existing facility before turning to joint disposal of tailings and waste rock in the depleted open pit.
This option is supposed to offer a lower investment cost over the life of the mine compared to that cited in the scoping study.
Lotus has shortlisted a number of South African consulting firms to help with the completion of the final feasibility study, which is expected to reduce site visits and associated costs.
Improved prices and costs
Managing Director Keith Bowes said the results of the technical work “have been impressive” and indicate significantly improved production rates and operating costs.
âMost notable has been the work of sorting the ore using technology that was not available when Kayelekera was previously in production,â he said.
âThis aspect alone could see annual production rates increasing more easily over time. [mineâs] original nameplate of 3 million pounds per year [and possibly] extend mine life by converting marginal ores to higher grade ores.
He said that the combined results of all technical studies suggest that a significant reduction in project costs could be achieved.