Perth, July 21, 2008 (ABN Newswire) - Energy Metals (ASX:EME)(PINK:EYMTF), as manager of the Bigrlyi Joint Venture, is pleased to announce the results of an in-house Updated Scoping Study recently completed at the Bigrlyi Uranium and Vanadium Project in the Northern Territory.
This study is based on the current resource announced 12 March 2008 (23.4M lbs U3O8 and 43.7M lbs V2O5) and supersedes the Initial Scoping Study for Bigrlyi announced 12 November 2007.
The Updated Scoping Study demonstrates substantially improved results compared with the Initial Scoping Study, including:
- Uranium production increased from 8.4M lbs to 16.2M lbs (up 93%)
- Vanadium production increased from 7.0M lbs to 14.5M lbs (up 107%)
- Mine life increased from 8 to 12 years, with improved plant utilisation
Discussion
An Updated Scoping Study has been completed into the development of the Bigrlyi Project. The study was conducted by mining engineer Andrew Hutson from Paladin Energy Limited and was based on the enlarged resource announced by Energy Metals on 12 March 2008, as summarised below:
Indicated and Inferred Resources
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Cut Off U3O8 V2O5 U3O8 V2O5 U3O8 V2O5
(ppm U3O8) Mt ppm) (ppm) (t) (t) (Mlb) (Mlb)
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500 7.56 1,396 2,616 10,555 19,780 23.4 43.7
1000 4.01 1,993 3,367 7,996 13,510 17.6 29.8
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Tonnes are metric (2204.62 pounds, t may not total due to round-off errors).
Assumptions used in the study include a uranium (U3O8) price of US$75 per lb (below the current long term price of US$80 - US$85 per lb), a vanadium (V2O5) price of US$4 per lb (also below current spot prices of around US$17 per lb) and an Australian dollar rate of US$0.75. Other key assumptions include a treatment rate of 0.5Mt per annum, U3O8 and V2O5 metallurgical recoveries of 90% and 50% respectively and a 5% gross royalty. Energy Metals considers the assumed recovery rates to be reasonable based on the results of independent metallurgical test work as announced to the market on 19 June 2008.
For the purposes of the study, a mine plan involving six open pits at three deposits (A2/3, A4 and A15) was chosen. These pits range in size from 0.8Mt to 74.7Mt. The open pits included in the scoping study deliver a total of 4.93Mt to the Run-of-Mine (ROM) stockpiles at an average grade of 1,537 ppm U3O8 and 2,529 ppm V2O5, recovering 15.0M lbs U3O8 and 13.7M lbs V2O5 over ten years.
Scheduled ROM tonnages are estimated assuming dilution and recovery of 5% and 95% respectively. The open pit operations are quite robust to changes in most costs, although the narrow nature of the resource lenses will require mining selectivity.
The study also assessed underground resource exploitation below conceptual pit designs using conventional decline access and stoping methodologies (principally Bench and Uphole Retreat stoping) with a minimum mining width of 4 metres.
Utilising these parameters one underground mine was designed at A15, producing 0.48Mt ROM at 1,214 ppm U3O8 and 1,496 ppm V2O5 to recover an additional 1.2M lbs U3O8 and 0.8M lbs V2O5 over two years.
Conclusions
The Updated Scoping Study (which will be independently reviewed) demonstrates that the Bigrlyi Project is economically attractive and based on current resources and assumptions has the potential to produce 16.2M lbs of U3O8 and 14.5M lbs V2O5 over a mine life of 12 years. The identification and inclusion of additional resources since the Initial Scoping Study has significantly improved projected returns.
As the Bigrlyi mineralisation remains open adjacent to open pit and underground mining positions evaluated by the study, Energy Metals considers that there remains excellent scope to delineate additional resources, which would further enhance Bigrlyi's economics. Ongoing metallurgical and engineering studies are also expected to identify opportunities to extend mine life and further improve project economics.
Furthermore the Project is located in the Northern Territory, a jurisdiction which supports the development of new uranium mines.
The next drilling campaign will commence at Bigrlyi in August 2008 and is expected to continue until the end of the field season.
