Unique to a mining project in the Athabasca Basin is the Project’s incorporation of costs associated with the progressive reclamation of a tailings management facility into the CapEx, OpEx and sustaining capital costs, which totals approximately $900 million of spending over the LOM. The vast majority of Rook I’s mine reclamation will occur concurrently with production through the design incorporating the underground tailings management facility (“UGTMF”). This will enhance the environmental performance of the operation and reduce the risk of ongoing reclamation, costly decommissioning at the end of the production period, and the post-closure risk to the local environment and communities. As a result of this incorporation of reclamation and the UGTMF at the outset of development, full closure costs are set to be approximately C$70 million at the end of the mine life, materially lower than other uranium mines in Canada , setting a higher standard for environmental performance and the safe disposal of tailings.
Incorporating an average long-term uranium price of approximately USD$95.00 /lb U 3 O 8 (UxC average Long-Term prices from 2029 to 2040, as published in June 2024 ), net of transportation fees, the updated cost estimate results in an After-Tax Net Present Value (8% discount rate) of C$6.3 billion , and a payback period of approximately 12 months, as shown in the sensitivity table below. Despite increased costs, at US$95.00 /lb U 3 O 8 , average annual after-tax net cash flow (“Free Cash Flow”) from the Project (years 1-5) remains materially the same as in the FS (as defined below). As shown in the sensitivity table below, average annual Free Cash Flow is now estimated at C$1.93 billion versus C$2.01 billion , demonstrating that the Project is less sensitive to changes in CapEx relative to uranium price.
Sensitivity of Project Economics to Uranium Prices
The sensitivity of the economic model in the FS to the price of uranium is shown below:
|
Feasibility Study (2020 Dollars) |
Updated/ Revised Estimate (2023 Dollars) |
||||||||
|
Uranium (US$/lb) |
Average Annual Free Cash (Y1 – 5) (C$ billion) |
Payback (Years) |
Internal (%) |
Net (“NPV”) (C$ billion) |
Average Annual Free Cash (Y1 – 5) (C$ billion) |
Payback (Years) |
Internal (%) |
Net (C$ billion) |
|
|
$150 |
3.19 |
0.4 |
101.8 |
12.80 |
3.13 |
0.7 |
61 |
11.52 |
|
|
$100 |
2.11 |
0.6 |
81.6 |
8.13 |
2.04 |
1.0 |
46.9 |
6.79 |
|
|
$95 |
2.01 |
0.6 |
79.2 |
7.67 |
1.93 |
1.0 |
45.2 |
6.32 |
|
|
$80 |
1.68 |
0.7 |
71.5 |
6.27 |
1.61 |
1.2 |
39.6 |
4.89 |
|
|
$50 |
1.04 |
0.9 |
52.4 |
3.47 |
0.97 |
2.0 |
25.2 |
2.10 |
|
|
Notes: |
|
|
1. |
The base case for the economic analysis in the FS (the “FS Base Case”) is based on, among other things, the timing of a final investment decision and a discount rate of 8%. It assumes that 100% of uranium produced from the Project can be sold at a long-term price of US$50 /lb U 3 O … |
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