Macusani Yellowcake (YEL.V) has released the results of the PEA on its uranium properties in the Puno district of Peru. The base case scenario has envisaged a throughput of 8.5 million tonnes per year which would produce an average of 4.3 million pounds of uranium at a cash cost of $20.57/lbs. As the initial capital expenditures are expected to be just $331M (with sustaining capex totaling $228M, or approximately $5 per produced pound of uranium), the payback period is less than three years, which is quite short.
The post-tax IRR is 32.4% and the post-tax NPV8% is a very healthy $417M, and shows how robust this project is. As Macusani had a working capital of $1.3M as of at the end of September, the company should be able to start a PFS before having to raise more capital.
The main hurdle will be to get the environmental permits for this operation, as Macusani is proposing to recover the uranium via a heap leach method.
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Disclosure: The author holds no position in Macusani Yellowcake. Please see our disclaimer for current positions.
