(MENAFN - ProactiveInvestors - Australia) Black Range Minerals' (ASX: BLR) modified Ablation processing circuit has returned uranium recoveries in excess of 99% from samples of mineralisation from its Hansen Deposit in Colorado.
This follows the incorporation of a secondary upgrade circuit to the design after completing extensive testwork on numerous samples of sandstone-hosted uranium mineralisation from several deposits across the U.S.
The outstanding recoveries provides further confidence for Black Range that the purely physical Ablation process will be able to produce a high value concentrate from the 90.9 million pound Hansen/Taylor Ranch Uranium Project.
Black Range expects the process to eliminate the need to construct a conventional processing facility at or near the project, which will in turn have a positive effect on its capital cost as well as minimising the timeline required to obtain permits to start production.
Higher recoveries are also expected to benefit the project's operating cost.
Black Range had in July 2012 formed a joint venture with Ablation Technologies' to market the latter's ore concentration technology, which offers a low cost method of concentrating uranium by applying a physical, grain-size separation process, to ore slurries without the addition of chemicals.
Extensive testwork has shown that, from amenable sandstone-hosted uranium ore types, typically more than 90% of the uranium mineralisation can be recovered into about 10% of the initial sample mass.
Taken together, Ablation offers an extremely effective yet environmentally sensitive uranium concentration method with lower capital and operating costs that can be applied to sandstone-hosted uranium deposits, globally.
As a case in point, a positive Scoping Study at Hansen has forecast that the use of underground borehole mining and the Ablation process would result in operating costs of about US30 per pound of U3O8 and capital costs of less than US80 million.
The joint venture, which has since been incorporated and an operating agreement finalised and executed, holds rights to apply Ablation to all mineral deposits " not just uranium as originally agreed.
Applications of Ablation other than for uranium are yet to be assessed, but it is anticipated that additional opportunities could arise.
Black Range and Ablation are currently constructing a semi-commercial 5 ton per hour capacity processing unit " using off the shelf parts " that can be fit on the back of a single semi-trailer.
This initial unit will be readily mobile, hence easily relocatable from project to project to facilitate advanced on-site testing prior to full-scale operations.
Construction of this unit is expected to be completed in April 2013. It is anticipated that, on completion, this unit will be tested at Ablation's manufacturing facility for several weeks before it is deployed for initial field trials.
The Hansen project area contains JORC Indicated and Inferred resources of 90.9 million pounds of U3O8, at a grade of 600 ppm, found within 5 separate deposits that are located along a 10 kilometre strike line, the largest uranium deposit in Colorado and the third largest deposit in the U.S.
The Life of Mine Operating Costs were estimated at a total of 30.01 per pound of produced uranium, that includes wages of 3.07, UBHM operating costs 13.38, ablation operating costs 3.13, material handling 0.19, water treatment 0.12, milling operating costs 8.14, and site wide costs of 1.99 that were prepared to an accuracy of /- 20% and exclude royalties, taxes and contingency.
Capital Costs were estimated at a total of 141.52 million and include UBHM slurry handling 3.09 million, ablation 34.11 million, material handling 1.91 million, water treatment 12.07 million, site wide costs 7.34 million, engineering and installation 15.00 million, and mill for 68.00 million. Capital costs could be significantly reduced to around 40 million by the separate provision of off-site milling and a BOO agreement for ablation.
The strong recoveries achieved using the Ablation process and the likelihood of faster approvals along with lower capital and operating costs compared to conventional methods all serve to add to the attractiveness of Black Range's Hansen/Taylor Ranch Uranium Project.
Already one of the largest uranium resources in the U.S., the project could be producing uranium as early as the second half of 2013 at a time when production is in short supply.
Further upside is present from the global supply-demand outlook for uranium, which anticipates near-medium term appreciation in the uranium price.
Black Range's current market cap. is demonstrably low on a peer comparison basis at less than 0.14 per pound compared to the peer average of about 1.14 per pound.