Honeymoon gets green light

AUSTRALIA is set to get its fourth uranium mine with sxr Uranium One giving the green light to the development of the Honeymoon project in South Australia, 34 years after the discovery of the deposit.

Honeymoon field leach trial from the air, looking south-west.
The development of the Honeymoon project is expected to cost $US41.5 million ($A54 million) including $5.6 million for working capital costs, and produce 400 tonnes of uranium oxide annually over a life of six to seven years. Cash operating costs are pegged at $14.13 per pound of uranium oxide.Capital expenditure and cash operating costs have increased on a 2004 feasibility estimate of $24.6 million and $12.40 per pound, respectively.The project has a net present value of $37.7 million at an 8% discount and an internal rate of return of 40%, applying a flat uranium price of $46.50/lb over the life of the project. The uranium spot price is currently $48.50/lb.The development decision comes after a review of a 2004 Ausenco feasibility study by Mayfield Engineering and Aker Kvaerner Australia and a revised mineral resource estimate compiled by Adelaide-based Ore Reserve Evaluation Services.Extraction of the yellowcake will be via in situ leaching and the project is fully permitted with a mining licence in effect for 20 years. sxr Uranium One said it plans to finance the project with a mix of finance from debt and internal sources.In addition, sxr Uranium One has revised the indicated resource to 1.2 million tonnes at 0.24% uranium oxide for 2900t. The company said while the grade of the deposit has increased from 0.11%, the resource has reduced by 12%, with the company excluding a number of thin, low-grade intercepts believed not amenable to ISL mining.Honeymoon is expected to come online in 2008.Elsewhere, sxr Uranium One is looking to bring its Dominion uranium project in South Africa, which has 47.49 million pounds in the indicated category and 199.19Mlb in the inferred category, online next February.
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