The report presents an updated preliminary economic assessment for the Coles Hill uranium property in Pittsylvania County, Virginia, based on historical data and recent testwork.
Report context
This Preliminary Economic Assessment (PEA) was prepared in June 2012 for Virginia Energy Resources Inc., which holds approximately a 29% minority equity interest in VA Uranium Holdings, Inc. (Holdco), a Yukon corporation. Holdco’s 100% owned subsidiary, Virginia Uranium Inc., controls the leasehold development and operating rights of the Coles Hill Uranium Property. The property is located near the town of Chatham in Pittsylvania County, Virginia. The report updates the NI 43-101 Preliminary Economic Assessment dated December 2010. The study includes conceptual design, cost updates, and a preliminary economic assessment of the project’s potential economic viability.
Processing route
Alkaline Leach Process Selection
Both acid and alkaline processing methods were investigated. Due primarily to the consumption requirement and relative cost of sulfuric acid, an alkaline process was selected as the most viable in spite of a slightly lower recovery rate. The preferred alternative for the development of the Coles Hill Uranium Project includes on-site mineral processing via a conventional, alkaline mill.
Proposed Process Description
The process design described in the report includes the following unit operations:
Crushing and Grinding
Ore is proposed to be crushed and ground prior to leaching.
Alkaline Leach
The design basis for alkaline leaching was established from historical testwork. Fixed conditions for leaching studies included: ore grind of 99% passing 65 mesh; lixiviant of 50 gpl Na₂CO₃ and 20 gpl NaHCO₃; air flow of 100 cc/min; leaching temperature of 90°C; and leaching time of 24 hours.
Counter Current Decantation (CCD)
The process includes counter current decantation for solid-liquid separation.
Tailings Disposal
The design includes tailings disposal facilities.
Uranium Precipitation, Drying and Packaging
The process concludes with uranium precipitation, drying and packaging.
Historical Testwork Basis
Considerable testwork and evaluation studies were performed on the ore prior to this assessment. Historical studies include:
- Dravo Engineer and Constructors feasibility studies in 1981.
- Pincock, Allen and Holt feasibility study in January 1982.
- Hazen Research acid and alkaline leach studies in 1982.
- Colorado School of Mines Research Institute (CSMRI) comprehensive study of processing characteristics of composite samples from both North and South areas (November 12, 1982).
- UMETCO (formerly Union Carbide) and Marline Uranium evaluation of the Hazen and CSMRI work in a report titled “Swanson Project Geology, Mine and Mill Design and Environmental Studies” (July 13, 1984).
- Recent studies by Resource Development, Inc. (RDi) in Spring 2012.
Ore composites used in the CSMRI studies consisted of about 100 pounds of a composite made up of 170 samples of core from 34 holes. An additional composite of 206 pounds was prepared for metallurgical tests. Comparative assays of major constituents were reported.
CSMRI Alkaline Leach Results
Alkaline leach tests conducted at ambient pressure showed the following results:
| Test No. | Composite Tested | Pressure psig | Equiv Na₂CO₃ lb/ton | Residue U₃O₈ % | Extraction U₃O₈ % |
|---|---|---|---|---|---|
| 8 | South | 0 | 4.7 | 0.0095 | 84.7 |
| 7 | North | 0 | 1.4 | 0.0085 | 86.6 |
Project website: https://www.isoenergy.ca/portfolio/us/coles-hill/
Additional tests demonstrated approximately 89% extraction for the North composite and 87.5% extraction for the South composite in 32 hours of leaching. Higher extractions, equivalent to approximately a 1% increase, could be obtained by extending leaching time to 52 hours.
Resource Development Inc. Testwork (Spring 2012)
A series of tests were conducted to investigate the impact of grind size and Na₂CO₃:NaHCO₃ ratio upon recoveries for 24-hour tests under ambient pressure conditions at 90°C, without air addition. One sample of drill core rejects, designated as high grade, was provided for these studies. The RDi sample analyzed 0.096% U₃O₈, 3.41% CaO, 1.42% MgO and 3.93% Fe₂O₃.
General leaching study process conditions included: grind with a p80=150 mesh, 90°C at atmospheric pressure, 24-hours of leaching with kinetic samples at 6 and 12 hours, ratios of sodium carbonate to sodium bicarbonate from 3.75:1 to 5:1, 55% solids, and slight vortexing agitation.
Twelve alkaline leaching tests were conducted on the high grade drill core rejects. The tests investigated grind sizes with p80’s from as coarse as 1% coarser than 65-mesh to as fine as 80% passing 200-mesh. Leaching times studied were primarily up to 24-hours, with two tests continuing to 48-hours.
The report notes that additional leaching studies should be undertaken with closer control of the oxidizing conditions during leaching, as there was insufficient oxygen in the slurry during the most current studies, and when pH exceeded 10.5, the oxidizing conditions necessary to place and keep uranium in solution were not optimized.
Recovery Assumptions
Based on the CSMRI test results and the RDi studies, it is stated that extraction of U₃O₈ would be between 85% and 90% after mill losses (1-1.5%) are considered. The assumed average recovery for the preliminary economic assessment is 85%.
Key reported parameters
| Parameter | Value | Basis |
|---|---|---|
| Mineral Resources (Indicated) | 119.59 million long tons at 0.056 wt% eU₃O₈ (132.93 million lbs) | 0.025% eU₃O₈ cutoff, total North and South Coles Hill |
| Mineral Resources (Inferred) | 36.28 million long tons at 0.042 wt% eU₃O₈ (30.41 million lbs) | 0.025% eU₃O₈ cutoff, total North and South Coles Hill |
| Portion of Indicated Resource in PEA | 32.9 million long tons at 0.098 wt% eU₃O₈ (64.2 million lbs) | Underground mine design, 0.06% eU₃O₈ cutoff |
| Mine life | 35 years | Proposed design |
| Processing rate | 3,000 tpd | Proposed design |
| Mill recovery | 85% | Assumed, based on prior metallurgic studies augmented by recent testing |
| Average production grade | 0.0965% U₃O₈ | Proposed design, based on mine plans through geologic model, appropriately diluted |
| Average annual uranium production | 1,885,000 lbs U₃O₈/year | Proposed design |
| Total capital investment prior to production | $147 million (including 25% contingency) | Proposed design |
| Total capital through 4th year of production | $200 million (including 25% contingency) | Proposed design |
| Total capital spending over life of mine | $329 million (including 25% contingency) | Proposed design |
| Average operating cost | $35/lb U₃O₈ over life of mine | Proposed design estimate |
| Uranium price assumption | $64/lb U₃O₈ | Economic analysis |
| Pre-tax IRR | 36.3% | Economic analysis at $64/lb |
| NPV at 7% discount rate | $427 million (including 25% contingency) | Economic analysis |
| CSMRI alkaline extraction (South composite) | 84.7% | Testwork, 24 hours, ambient pressure |
| CSMRI alkaline extraction (North composite) | 86.6% | Testwork, 24 hours, ambient pressure |
| CSMRI alkaline extraction (32 hours) | 87.5-89% | Testwork |
| Drill holes | 263 total (182 rotary-percussion, 74 NQ core, 7 partial core) | Historic (1979-1984) and 2008 drilling |
| Mining method | Sub Level Open Stope (SLOS) underground | Proposed design |
Technical qualifications
This report is not a Preliminary Feasibility Study and as such no Mineral Reserves are stated. Preliminary mine designs have been completed and the portions of the Indicated Mineral Resources within the preliminary mining limits were utilized in the Preliminary Economic Assessment.
Items which require addressing to upgrade the Preliminary Economic Assessment to a Preliminary Feasibility Study include but are not limited to:
- Incorporation of regulatory requirements in mine and mineral processing designs, resulting from the promulgation of uranium specific mining regulations and lifting of the current moratorium on uranium mining in the Commonwealth of Virginia.
- Optimization of tailings facility design with respect to operations, closure, and final reclamation.
- Evaluation of open pit mining options with consideration of utilizing the mined pits for sub-grade tailings disposal.
- Optimization of underground mine methods, designs and scheduling.
- Optimization of mineral processing and beneficiation methods.
The report notes that additional drilling and specific data collection is recommended to better define mineral resources and increase the accuracy and reliability of the mine design and cost estimates.
It will be necessary to obtain suitable additional surface property to accommodate space for tailings cells.
Source: Updated Preliminary Economic Assessment , Coles Hill Uranium Property, June 2012. Relevant sections: Items 1, 2, 4, 5, 13, 14, 15, 17, 21, 22, 25, 26.
