PNN – Power Minerals Limited

Halba said:

their deposit is borderline uneconomic

low grades, no guarantee of being able to extend the deposit, poor recovery rates(but of course can be improved)

what are chinese doing with this, they must be desperate…AGS is much better, or MTN

IMHO not many quality U deposits in australia…beverley is easily the pick of the bunch and only exposure is through AGS

Halba
the only figs I can go on at the moment are from PNN rpt 31 July06:
“….JORC compliant resource estimate of the Crocker Well Uranium Field and Mt Victoria Deposit and
determined an Inferred Resource of 12.65 million tonnes at an average grade of 0.053% containing
6,740 tonnes (14.85 million lbs) of U3O8 using a cut off grade of 300ppm. If a cut off grade of 250ppm
is applied the resource increases to 8,576 tonnes (18.9 million lbs) of U3O8 with an average grade of
0.048%.
A scoping study for the development of the defined resource at Crocker Well was completed by
GRDMinproc Limited in March, 2006 and identified a mining and process concept to produce U3O8.
The process design was based on a 5.7Mt/annum mining operation producing 1.725Mt/annum ore
from which 585t/annum of U3O8 would be produced. At the current U3O8 price of A$62.17/lb and an
estimated average mining and processing cost of A$27.75/lb the project has the potential to generate
a cash flow of A$44 million per annum. Capital cost to establish a processing plant, mining contractor,
waste disposal, water supply and rehabilitation could be as much as A$160million….”
I must be missing something. From my reading of this (assuming they’re true to their word…), with 11-14 yrs mine life, $43-44 +ve cash flow yr (covering cap costs in 4yrs) what’s borderline about that? Add to the mix the $30+ mill if the chinese deal goes thru. These are big boys, they’d be privvy to things we aren’t, hasn’t it got to make some economic sense to them to have progressed a deal this far? Eitherway, I see this deal as a great template for future deals (not necessarily the same chinese co) with other companies trying to develop U3O8 projects.