Anfield Energy Inc. (TSX-V:AEC, OTCQB:ANLDF) has reported encouraging results from a combined preliminary economic assessment (PEA) for its Utah-based Velvet-Wood Uranium and Vanadium Project and its Colorado-based Slick Rock Uranium and Vanadium Project.
The projects are proximal to each other within the prolific Uravan Mineral Belt and close to the company’s Shootaring Canyon Mill which will act as a centralized mineral processing facility in the PEA.
“We are extremely pleased with the outcome of this PEA as it provides Anfield with evidence of the true potential of both Velvet-Wood and Slick Rock within Anfield’s uranium and vanadium production model. Critically, the future addition of our West Slope project to Anfield’s production model will require little incremental capital expenditure, as Shootaring’s restart costs will have already been borne by both Velvet-Wood and Slick Rock,” Anfield CEO Corey Dias said in a statement.
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“We have been keen to highlight the economic value of combining our assets into one cohesive development project, and the subsequent availability of excess uranium and vanadium production capacity at Shootaring over the life of the mill. We view this excess capacity as providing important additive value through the potential for future integration of other uranium and vanadium projects in the area, such as our West Slope Project, as well as potential toll-milling opportunities,” Dias added.
Highlights include:
- The PEA indicates a pre-tax project internal rate of return of 40% and a net present value of $238 million, based on a discount rate of 8% and a uranium price of $70 per pound, along with a vanadium price of $12 per pound.
- Average annual production of approximately 750,000 pounds of uranium and 2.5 million pounds of vanadium per year is estimated over the 15-year mine life;
- The combined feed of the Velvet-Wood and Slick Rock mines is designed to meet the existing tonnage capacity at Shootaring of 750 tons per day. Additional tonnage capacity would be available after year 8 of the plan.
- Estimated mill-related capital expenditures at Shootaring, including a 25% contingency amount for each item, of: 1) $31.4 million for general upgrades; 2) $13.4 million to install a modern vanadium circuit; and 3) $20 million to update the tailings management facility.
- Estimated mine-related capital expenditures, including engineering and design, mine facilities, mine equipment, and the reopening of the Velvet decline and the sinking of two production shafts at Slick Rock with a 25% contingency, of: 1) $15.3 million for Velvet-Wood; and 2) $27.2 million for Slick Rock.
Anfield said the Shootaring Mill, which was licensed and constructed by Plateau Resources and operated in 1982, has not been decommissioned and has been under care and maintenance since the cessation of operations. The mill license has been maintained and Anfield is currently conducting engineering and design studies for the refurbishment of the mill and tailings facility in support of converting the license from its status of care and maintenance to operations.
“The prospect of Shootaring becoming the next operational conventional uranium and vanadium mill in the United States is significant both economically as well as with respect to security of supply for utilities. This PEA not only represents a significant milestone for Anfield but also outlines a path towards commercial development of its core uranium and vanadium assets. Anfield is clearly well-positioned to benefit from an improving uranium market as nuclear energy becomes a more integral part of the global transition towards electrification,” noted Dias.
The Velvet-Wood project area covers approximately 2,140 acres, including unpatented mining claims and a State of Utah mineral lease related to the Velvet and Wood mine areas while the Slick Rock project area covers approximately 4,860 acres including 293 unpatented mining lodes claims. The Shootaring area covers approximately 265 acres of surface ownership and approximately 905 acres of mineral leases.
Surface Stockpiles
Anfield controls mineralized stockpiles from past mining at two locations, namely one stockpile at the Patty Ann mine area near the historic Velvet mine and several stockpiles near the Shootaring mill. The PEA includes the stockpiles located near the Shootaring mill only. In total, these stockpiles are estimated to contain approximately 77,500 tons of material at an average grade of 0.161% U3O8 and contain approximately 250,000 pounds of uranium.
Project Economics
The company said the PEA provides for a two-year pre-production period. The capital expenditures in the first year are forecasted at approximately $24 million including initial mill and mine permitting and licensing, an updated mining and reclamation plan, and initiation of mine development. In the second year, capital expenditures are forecasted at $88 million (including a 25% contingency) and include completion of the construction of mine facilities and purchasing of equipment and refurbishment of the Shootaring uranium and vanadium mill. The total capital for Life Of Mine is estimated at US$130 million, including sustaining capital.
Anfield is a uranium and vanadium development and near-term production company committed to becoming a top-tier energy-related fuels supplier by creating value through sustainable, efficient growth in its assets.
Contact the author at jon.hopkins@proactiveinvestors.com