Azarga Uranium (AZZ.TO) released an updated resource estimate on its Gas Hills uranium exploration project in Wyoming. The updated resource now contains almost 10.8 million pounds of uranium in the measured and indicated resource categories, with an additional 0.5 million pounds in the inferred category.
Of those 10.8 million pounds of uranium in the measured and indicated resources, about 7.7 million pounds is amenable to be recovered using ISR technology. The average grade is 0.101% U3O8 using a cutoff grade of 0.10 grade-thickness (the average grade multiplied by the average thickness in feet). Applying a higher cutoff grade of 0.20 grade-thickness would boost the average grade by about 10% to 0.113% while only 1 million pounds would disappear from the measured and indicated resources.
Clearly an improvement over the original 4.7 million pounds of uranium in the indicated resource category and 2.5 million pounds in the inferred resource category, but all eyes will remain on the company’s flagship project. The Dewey Burdock uranium project in South Dakota has a total resource of just over 17 million pounds in the measured and indicated resource categories and a recent PEA outlined a 16 year mine life producing an average of 1 million pounds of uranium per year at an all-in sustaining cost of just over $26/pound, resulting in an after-tax NPV8% of US$148M using an uranium price of $55/pound.
Disclosure: The author has no position in Azarga Uranium. Please read our disclaimer.