In 2013/2014 the Kayelekera Mine (KM) produced 2.350Mlb (1,066t) U3O8, down from the previous year, as a result of the transition to care and maintenance in the last quarter of the year. Once uranium prices offer sufficient incentive for restart, production, with some RIP/elution upgrades, is expected to be up to 3.3Mlb per annum.
During the last year of operation, the project made exceptional progress on cost reductions mainly on the acid supply front, where the project became acid independent through a number of measures. Improvements made were increases in onsite acid production, and the addition of the nano-filtration plant, which assisted with acid recycle. In addition to acid management, other improvements were also realised in the milling, leach and RIP efficiencies, particularly with completion of modifications in the RIP section.
In late 2012, the Company announced a major cost reduction initiative to substantially reduce operating costs at KM. This has been a major focus as the project attained sustainable and steady production. The main area of savings was through a significant reduction in acid importation, which has been a major cost barrier for the past few years. This area was very closely managed and resulted in C1 costs being reduced to approximately US$33/lb, a reduction of nearly 40% over the past two years of production. In addition, initiatives such as grid power connection which, while not concluded as originally scheduled, still remain as further opportunities for cost reduction.
MINERAL RESOURCES AND ORE RESERVES ESTIMATION
A revised and updated geological model has been completed for the project based on extensive pit mapping and structural modelling. This work was undertaken to significantly improve the understanding of the structurally complex nature of the resource and aid in targeting mineralisation within the regional tenement package. At this stage, no additional resource drilling within the Kayelekera deposit is anticipated; however, this may be reviewed based on analysis of the geology modelling.
Mineral Resources and Ore Reserves conforming to both the JORC(2004) code and NI 43-101 are detailed below.
Mineral Resource at 300ppm U3O8 Cut-off
|Total Measured & Indicated
(Figures may not add due to rounding and are quoted inclusive of any Ore Reserves and are depleted for mining to end of June 2014).
The Mineral Resource is unchanged from that previously reported except for depletion due to mining activities to 30 June 2014. The Mineral Resource estimate is based on Multi Indicator Kriging techniques with a specific adjustment based on parameters derived from the mining process.
Economic analysis on this Mineral Resource has indicated a break-even cut-off grade of 400ppm U3O8.
Ore Reserve at 400ppm U3O8 Cut-off
(Figures may not add due to rounding and are depleted for mining to end of June 2014).
The underlying Ore Reserve is unchanged from that announced in 2008 and has only been depleted for mining until 30 June 2014.