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Dipping a toe into the WNA #uranium "Red Book" while my playoff-bound Bears are off the field at halftime.
Resources below a given price is a different concept than throughput (i.e. production), and (ideally) the market clearing price is shaped by the most expensive pound. /1
Resources below a given price is a different concept than throughput (i.e. production), and (ideally) the market clearing price is shaped by the most expensive pound. /1
When you look at the summary table, there are a LOT of pounds in the least expensive category. You might ask, why don't we just go mine those first? Let's classify them into three categories:
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1. Many cheap pounds are at existing projects
Mines have an optimum throughput determined by ore tonnage/grade, processing costs, and facility size. Odds are pretty good that the "sweet spot" is a decade of mine life or more. It takes years to fully exploit all pounds. /3
Mines have an optimum throughput determined by ore tonnage/grade, processing costs, and facility size. Odds are pretty good that the "sweet spot" is a decade of mine life or more. It takes years to fully exploit all pounds. /3
2. Most of the rest are in the development pipeline
Cheap pounds exist in deposits like Phoenix, Arrow and Triple R. But permitting, plus the throughput issue above, means that most of this resource is years away from exploitation. Technology and further exploration help too. /4
Cheap pounds exist in deposits like Phoenix, Arrow and Triple R. But permitting, plus the throughput issue above, means that most of this resource is years away from exploitation. Technology and further exploration help too. /4
3. Odds & ends & zombies
There are some weird low-cost deposits that aren't exploitable right now. It could be a size issue, like Denison's THT. Or maybe politics like Salamanca. Or maybe the resource is the cheapest portion of a large project, separate but not stand-alone. /5
There are some weird low-cost deposits that aren't exploitable right now. It could be a size issue, like Denison's THT. Or maybe politics like Salamanca. Or maybe the resource is the cheapest portion of a large project, separate but not stand-alone. /5
As I've discussed before, a lot of magic goes into even estimating the all-in cost for many projects, and the WNA is to some degree at the mercy of these liberal assumptions on currency exchange rate, labor costs, and all of the other factors that go into PEAs and PFSs. /6
Anyway - there's a lot of uranium out there. The long-term gravity of the market pulls prices towards the incremental resource. But as smarter folks than I have said, throughput issues dominate & sometimes cheaper pounds remain on the shelf in lieu of faster pounds.
Go Bears! /7
Go Bears! /7
