Encouraging Signs from Tournigan’s Ongoing PFS at Kuriskova Property

Tournigan Energy (TSX-V:TVC, FSE:TGP) has seen some encouraging newsflow of late, raising C$3 million in a private placement last month and more recently announcing metallurgical test results confirming strong recovery levels should be likely at the company’s flagship Kuriskova uranium project. In addition, the ongoing pre-feasibility study (PFS) is progressing well, with additional test work planned on the back of these recent recovery results, to optimise other process parameters.

Tournigan is a uranium exploration and development company, with a portfolio of highly prospective properties in Eastern Europe. The company has a market capitalisation of C$23.3 million, with no debt, and following the recent private placement, has around C$6.4 million in cash and approximately C$6.5 million in working capital. The company’s key asset is the 100% owned Kuriskova uranium property located in central Slovakia, which consists of 32 square kilometres of mineral licenses.

The Kuriskova property is located 10 kilometres north west of the city of Kosice, in east-central Slovakia, and lies close to the main paved road between Kosice and Spisska Nova Ves. The property is readily accessed through a series of minor roads and four wheel drive trails that traverse the mineralised zones.

Earlier this year, a NI 43-101 compliant resource update on the property was released, building on the already strong numbers seen in the previous estimate form early 2009. The report showed, considering a 0.05% uranium oxide (U3O8) cut off, 20.5 million pounds of U3O8 indicated resource, at an average grade of 0.57% U3O8. In addition, the report showed 17.5 million pounds U3O8 inferred resource at an average grade of 0.23% U3O8. This represents an increase of around 5.9 million pounds of U3O8 to the original indicated resource, and shows an increase in the average grade of the indicated resource from 0.56% to 0.57% U3O8.

The report also included the discovery of a new zone of high grade uranium mineralisation, which showed an average grade of 0.68% U3O8. This zone remains open along strike and has the potential to add significant amounts of high grade uranium mineralisation with further drilling.

A preliminary economic assessment of the project’s potential, conducted in 2009, also shows a very positive outlook for the project, particularly following Tournigan’s success in raising the necessary finance to advance the Kuriskova project. The report estimated the mine life of the project to be 11 years, averaging 2.4 million pounds of U3O8 production over the first five years, and averaging 1.4 million pounds over the entire mine life. This considered uranium recovery at 90%, and a uranium price of US$65 per pound (/lb).

The report estimated the project would need an initial capital investment of US$168 million, and would have operating costs of US$17/lb U3O8 for the first five years, and US$32/lb over the average life of the mine. This showed a net present value, considering a 12% discount rate, of US$135 million, with a base case internal rate of return (IRR) of 35.8% pre-tax. Dorian Nicol, Tournigan's President and Chief Executive Officer, also noted at the time “among the encouraging conclusions of the preliminary assessment are project payback within approximately one third of the projected mine life and production costs substantially below projected long term sales prices”.

These latest results from the pre-feasibility study metallurgical testing, confirmed the estimated recovery rates in the preliminary economic assessment, showing high levels of both uranium and molybdenum can be recovered using conventional milling methods. Specifically, the test indicated that over 90% of the uranium and 85% of the molybdenum can be recovered by pressure oxidation, using a whole ore leach process in two hours, utilising an alkaline process at a grind size of P80 - 300 mesh and temperature of 200 degrees centigrade. Dorian Nicol said of the results, “these encouraging test results show that an alkaline leaching process using benign carbonate reagents (not sulphuric acid) can effectively recover both uranium and molybdenum from representative composite samples".

The update also outlines some of Tournigan’s upcoming plans, with additional test work still being undertaken, to optimise the process parameters (including grind size, temperature, pressure oxidation time, carbonate concentration) for the recovery of uranium and molybdenum, as part of the ongoing test program for a pre-feasibility study. The company report other aspects of the pre-feasibility study also continue to progress well, noting a 4,500 meter drill program has just begun at Kuriskova, focusing on the high grade Zone 45 area.

This ongoing work for the pre-feasibility study is set to bring continuing newsflow and updates form Tournigan over the next few months, helping to develop a fuller picture of the Kuriskova project’s value. The possibility of expanding the current know resource even further, through additional exploration, leaves a lot of upside potential at the project, both in terms of higher grades and additional mineralised zones. Following the recent success of the company’s C$3 million private placement, it has improved even further its financial standing to accomplish this.