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Table 1 - PEA Summary (Base Case at $60/lb uranium price):
----------------------------------------------------------------------------Annual mill throughput 500,000 tonnes----------------------------------------------------------------------------Total U3O8 produced 16.3 million pounds----------------------------------------------------------------------------Average annual production of U3O8 1.2 million pounds----------------------------------------------------------------------------Mine life 15 years----------------------------------------------------------------------------Cumulative free cash flow (pre- tax) $892 million----------------------------------------------------------------------------NPV (pre-tax) at a 10% discount $181 million----------------------------------------------------------------------------IRR (pre-tax) 17%----------------------------------------------------------------------------Pay-back period 4.5 years----------------------------------------------------------------------------Cash cost per pound of U3O8, net of by-product credits less than $0 per pound----------------------------------------------------------------------------Capital investment: Initial capital $365 million ------------------------------------------ Sustaining capital $31 million ------------------------------------------ 10% Contingency $41 million ------------------------------------------ Total Capital $437 million----------------------------------------------------------------------------
The PEA is preliminary in nature as it includes inferred mineral resources that are considered too speculative geologically for economic consideration that would enable them to be classified as mineral reserves. Mineral resources are not mineral reserves and have not demonstrated economic viability. There is no certainty that the PEA will be realized.
Based on the PEA, the Berlin Project is expected to generate $3.0 billion in revenue with free cash flow of $892 million over the 15-year life of the mine.
Berlin's pre-tax NPV at a 10% discount is $181 million. The project's NPV and IRR are shown at various discount rates and uranium prices in Table 2. Berlin NPV's sensitivity to a plus or minus 10% change in capital and operating expenditures is shown in Table 3.
Uranium (33%), phosphate (29%), vanadium (9%) and yttrium (10%) represent the most significant commodities in the mineralized material at Berlin. Revenue from the by-products covers the cost of extracting the uranium, resulting in Berlin having a production cash cost of less than $0 per pound of uranium. Gypsum (6% of revenue) is an additional by-product generated from calcite when acetic acid is used in the beneficiation step of the process. Commodity prices of the other elements used in the PEA are shown in Table 4.
An increase in resources is likely to result in a higher IRR from the current 17% by providing flexibility to extend the mine life and/or increase the mining rate.
