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Anatolia Energy flow tests results to assist imminent Temrezli PFS

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Anatolia Energy (ASX:AEK) has received results from hydrogeological test work at its flagship Temrezli Uranium Project in Turkey which indicated higher potential production flow rates.

The hydrogeological work represents some of the final components to the Temrezli Pre-Feasibility Study, which Anatolia expects to deliver in the coming weeks.

Significantly, there could also be a positive impact on well field operating costs as a result of the testwork when combined with improved metallurgical recoveries which would result in a more optimal well field design.

The program was planned by HydroSolutions, who have significant experience in ground water conditions relating to In Situ Recovery (ISR) uranium operations.

ISR projects are more akin to pumping operations than conventional mines. 

One deep and two shallow monitoring wells were drilled at Site B.


Key Results of Flow Tests


- Positive well yields were observed during the construction of TUR110-DO2 with estimated flows in the order of up to 150 L/min;
- Production flow rates of 48 L/min. to be incorporated into the well field design vs. 38 L/min. assumed in the Preliminary Economic Assessment (PEA);
- Extraction and re-injection of groundwater from TUR110-DO2 and TUR101-DO1 respectively achieved near 1:1 ratio; and
- Slug test results confirm low permeability of the overlying and confining clay horizon. 

Anatolia Energy Interim CEO & MD, Paul Cronin said:

“Confirmation that we have better water flows in our largest mineralised lens than currently used in our well field planning model gives us every confidence that we will develop a more robust and representative hydrogeological model for the Temrezli deposit.

"It is interesting to note that we now believe that difference in well performance relates to well development and conditioning techniques as we are seeing better well performance each time we pump a well. 

"Clearly well development will be a critical step in constructing the well patterns in order to maximize injection rates, and we will be incorporating these successful techniques into our Standard Operating Procedures.

"These most recent hydrological results, coupled with the improved metallurgical recoveries will result in a more optimal well field design, and have a significant positive impact on well field operating costs.”


Flow test results in more detail

The hydrological tests were to further characterise the hydrostratigraphic units and designed to:

- Confirm the high water flows seen previously from Lens 1;
- Assess the hydraulic response of Lens 1 to extraction and injection rates projected for the in-situ (ISR) mining project;
- Refine well conditioning completion techniques to local aquifer conditions; and
- Evaluate the permeability of the overlying and confining clay unit for inclusion in the Environmental Impact Assessment.

Critical field observations collected during the program were:

- During conditioning of TUR110-DO2 air-lifted water flows were estimated to be similar to the 150 litres per minute observed in the nearby well TUR101-DO1, confirming the lateral extent of the high permeability in Lens 1. Anatolia estimates that Lens 1 makes up almost 30% of the resource;
- The results of the extraction and injection tests from TUR101-DO1 and TUR110-DO2 indicate better hydraulic response than initially estimated in the well field planning model for Lens 1;
- There was sufficient lateral permeability of the uranium ore-bearing aquifer (Lens 1) to allow all the ground water extracted from TUR110-DO2 to be re-injected into TUR101-DO1 under unpressurised conditions ;and
- Slug test work confirmed the low permeability of the overlying and confining clay unit


Drilling

Hydrogeological drilling was undertaken in the NE where the deposit is characterised by the development of multiple stacked lenses within a predominantly sandstone sequence up to 110 m thick.


PFS is due in weeks

Data collected from the hydrologic tests will be used to further the conceptual hydrogeological model of the deposit and to redevelop numerical models being utilised by Tetra Tech for detailed well field planning. 

The hydrogeological work represents some of the final components to the Temrezli PFS, which the Company expects to deliver in the coming weeks.


Robust Updated Preliminary Economic Assessment (PEA)

The upgraded Mineral Resource for Temrezli stands at 13.3 million pounds at a high average grade of 1,157ppm.

The updated PEA highlighted potential for a 1 million pound per annum U308 ISR uranium facility with Operating costs of US$20.22/lb and AISC of US$23.50/lb.

Upfront Capex was US$30.2 million with a 10 year mine life. This produced an NPV of US$186.5m at US$60/lb U308 price and an IRR of 109%.


Near term production potential


The Company has commenced a PFS at Temrezli which is due for completion in early CY15. The project is not likely to require a BFS given similar ISR projects in overseas markets.

Anatolia could begin construction in 2015 following completion of environmental permitting. First production could be as early as mid-to late 2016.


Resource upside


Near term upside potential exists from the nearby Sefaatli deposit 40 kilometres away where historic drilling intercepted mineralisation up to 2,400ppm at depths less than 150 metres. 

Under a production scenario it would likely host a satellite IX plant.


Analysis


The hydrological results are significant when coupled with the improved metallurgical recoveries will result in a more optimal well field design with a significant positive impact on well field operating costs.

With the PFS at Temrezli due for completion in early CY15, this is a significant milestone and price catalyst for Anatolia Energy.

Temrezli already boasts the second lowest capital intensity of recently developed/developing ISR projects of US$3.28/lbpa with a peer average of US$5.70/lbpa.

Temrezli represents one of the few global uranium projects with a medium term production scenario with all-in sustaining costs below current spot prices.

Proactive Investors is initiating coverage of Anatolia Energy.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

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