PEA Points to Low-Cost Uranium Production in USA

Azarga Uranium (TSX: AZZ)(OTC: AZZUF) — currently trading around C$0.25 per share — has released a maiden PEA (Preliminary Economic Assessment) for its Gas Hills ISR Uranium Project, Wyoming. 

The report follows the company’s previously announced resource expansion from 4.73M to 10.77M pounds U3O8 and outlines a base case pre-tax IRR of 116% and NPV of US$120.9 million using an 8% discount rate.

Azarga president & CEO, Blake Steele, commented via press release: 

"We are extremely pleased with the results of our maiden in-situ recovery ("ISR") PEA for the Gas Hills Project. The PEA demonstrates robust economics and expands the future production profile of the Company into the state of Wyoming, which has a long history of successful ISR operations. The PEA results further validate our Company's strategy of developing low-cost ISR projects as we continue to progress our flagship Dewey Burdock Project towards construction. With uranium markets in a structural deficit, Azarga Uranium is exceptionally well positioned to capitalize on the anticipated recovery in the uranium price through its two tier one development stage ISR uranium projects in the USA."

The PEA contemplates a satellite plant development approach with final processing at a central processing facility to be constructed at Azarga’s flagship Dewey Burdock project where final EPA permits are now in-hand. 

The Gas Hills project has a projected production profile of 6.5 million pounds U3O8 over 7 years highlighted by low initial capital expenditures of approximately US$26 million. 

By seeking to construct Gas Hills as a relatively low-cost satellite deposit to the much larger Dewey Burdock project [17 million lbs U3O8 M&I], Azarga estimates direct cash operating costs to be just US$11.52 per pound of production. 

And that’s important with uranium up nearly 30% from the US$25 per pound range in February of this year to currently just over US$32 per pound. 

With uranium finally moving in the right direction, 2021 is proving transformative for Azarga as the only pure-play ISR-focused uranium developer in the United States. 

AZZ should be an interesting one to watch as the company continues to elevate its profile as a future domestic uranium producer and potential takeover target.

You can learn more about Azarga at their corporate website here

And be sure to click here for our feature report on Azarga Uranium. 

Mike Fagan

Mike Fagan
Editor, Resource Stock Digest

Mike Fagan has mining in his blood. As a teenager he staked countless gold and silver properties in Nevada alongside his dad, Brian Fagan, who created the Prospect Generator model that’s still widely used today in the resource space. One of those staking projects was put into production by a major Canadian mining company — a truly rare and profitable experience. That background uniquely qualifies him as a mining stock speculator. One of the most well-known names in the business, Mike is now putting that experience to use for the benefit of Resource Stock Digest and Hard Asset Digest readers.

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