Outlines next steps for the Laguna Salada
Deposit
TORONTO, July 7, 2016 /CNW/ - U3O8 Corp.
(TSX: UWE; OTCQX: UWEFF; SSE: UWECL), a
Canadian-based company focused on the development of deposits of
uranium and associated commodities, many of which are used in the
clean energy industry, reports on significant developments in
nuclear energy in Argentina,
South America's largest generator
of electricity from nuclear:
- Argentina's Minister of Energy
and Mines emphasized the Federal Government's support for uranium
production from Argentina to fuel
its growing fleet of nuclear power plants;
- Argentina has signed an
agreement whereby it will import enriched uranium to fuel its small
modular reactor ("SMR"), on which construction is nearing
completion. The Argentine-designed CAREM-25 model is one of the
first modern SMRs to be built in the world. Numerous other SMR
designs, for example those in Canada, USA,
UK, China and Japan, are advancing through the design and
permitting stage. SMRs are projected to be a high-growth area in
the nuclear and clean energy industry;
- A memorandum of understanding has been signed regarding the
financing and construction of Argentina's 4th and 5th
nuclear power plants; and
- The Minister of Energy and Mines has committed to fund upgrades
to eleven nuclear medicine facilities in Argentina.
To the Company's knowledge, there are only three uranium
deposits on which economic studies have been concluded in
Argentina: one has been mined out
and the other two include the State's Cerro
Solo and U3O8 Corp.'s Laguna Salada deposits.
Production from these deposits could provide the uranium required
by Argentina's nuclear reactors
and alleviate Argentina's total
reliance on imported nuclear fuel.
Argentine Federal Government support for local uranium
production
At a recent meeting with Senator Luenzo from Chubut Province,
Energy and Mines Minister, Mr. Jose
Aranguren, emphasized the new Federal Government's support
for the development of the uranium mining industry in Argentina1.
To the Company's knowledge, there are three uranium deposits on
which economic studies have been undertaken in Argentina. The
first, the Sierra Pintada Deposit, has been mined out. The
other two deposits are located in Chubut Province:
- U3O8 Corp.'s Laguna Salada Deposit on which a resource
estimate2 and subsequent preliminary economic assessment
("PEA")3 has been completed in accordance with National
Instrument 43-101 ("NI-43-101"). The cash cost of production at
Laguna Salada was estimated at US$22
per pound of uranium net of by-product vanadium. If actual costs
are in line with this estimate, Laguna Salada would be within the
lower 25% of the uranium industry in terms of production cost. The
Company believes that these estimates contained in the PEA, and the
assumptions upon which they are based, remain current. (The PEA is
preliminary in nature, and includes inferred mineral resources that
are considered too speculative geologically to have the economic
considerations applied to them that would enable them to be
categorized as mineral reserves. There is no certainty that the
results of the PEA will be realized); and
- The Cerro Solo Deposit, which belongs to Argentina's National Atomic Energy Commission
("CNEA"), is located approximately 150km from U3O8 Corp.'s Laguna
Salada Deposit. CNEA has undertaken a resource estimate and
economic assessment of Cerro Solo,
but has not released its economic study, and hence production cost
estimates are not available in the public domain. Cerro Solo is a sandstone-hosted deposit that
would most likely be mined by underground methods.
Argentina purchases enriched
uranium to fuel one of the world's first Small Modular
Reactors
Brazil recently announced that
it has entered into an agreement to sell four tonnes of enriched
uranium to Argentina to fuel its
prototype CAREM-25 small modular reactor4. The
CAREM-25 reactor is one of two SMRs with generation capacity of
less than 50 Megawatts under construction
worldwide5. The CAREM-25 reactor is scheduled to
start generating electricity in late 2017 while the other SMR of
similar size is under construction in Russia. The CAREM-25 is
a pressurized water reactor with integral steam generators and the
entire, passive coolant system is contained within the 3.5 metre
diameter, 11 metre high pressure vessel; the reactor vessel would
be similar in size to a 40 foot shipping container. The
reactor would be refuelled annually with standard enriched reactor
fuel6.
At 25 Megawatts, the CAREM-25 model would have an output of only
1.5%-2.5% of a typical Generation III nuclear reactor. Some
of the SMRs, of which there are many designs progressing through
the permitting process in various countries, are generally based on
technology similar to that which has been used in nuclear-powered
submarines and ships for almost 60 years. SMRs are projected
to have a relatively low capital cost, and are designed to have low
operating costs to provide an affordable, low-carbon source of
energy. The CAREM-25 prototype is being built to unequivocally
demonstrate the cost of construction as well as to define the
actual cost of clean energy production.
SMR's are expected to be a high-growth area for the nuclear and
clean energy industry because the plants can be located close to
where the electricity is needed without the environmental
footprint, cost and energy loss associated with regional
high-tension power lines connecting the end user with the regional
electricity grid. Apart from providing power for communities
and industries in remote locations, the CAREM-25 reactor is being
marketed as a clean power source for the production of fresh water
by the desalination of seawater. To that end, a joint venture
has been established between the Argentine company INVAP and the
Saudi Arabian nuclear power authority to determine the suitability
of the CAREM-25 reactor for desalination plants in Saudi Arabia7.
Agreement signed regarding the construction of Argentina's 4th and 5th
nuclear power plants
Minister Aranguren has announced the signing of a memorandum of
understanding reaffirming plans for the financing and construction
of two nuclear power plants, Argentina's 4th and
5th. Chinese banks will contribute 85% of the
total estimated cost of US$15
billion8. To put the cost of the reactors
in context, Argentina is currently
spending US$7 billion per year on
energy imports.
Argentina's 4th
reactor will be a Canadian-designed, 800 Megawatt CANDU model that
uses natural (un-enriched) uranium fuel. Construction is
planned to commence in the first quarter of 2017 at the site where
the Atucha I and II reactors are located.
The 5th nuclear power plant will be a 1,150 Megawatt
Hualong 1 reactor, a design by China General Nuclear and China
National Nuclear Corp., that uses enriched fuel. Construction on
the 5th plant is planned to start in the latter half of
2019.
Federal funding for nuclear medicine facility in Chubut
Province
Minister Aranguren also confirmed that the Federal Government is
committed to Argentina's National
Nuclear Medicine Plan through which eleven nuclear medicine centres
throughout the country will be upgraded. One of the centres
for which funding has been guaranteed is the CABIN (Centro de
Aplicaciones Bionucleares) facility in the city of Comodoro
Rivadavia in Chubut Province.9
Planning for the Laguna Salada Deposit
The next steps planned for the Laguna Salada Deposit are trial
mining and pilot plant processing of bulk samples at one of
Argentina's processing
facilities. The aim of this work is to refine mining and
processing costs to feasibility study standards as well as to
provide proof of concept for uranium production from mineralized
gravels at Laguna Salada.
Laguna Salada lies in the "Roaring Forties": latitudes renowned
for high winds. To that end, the Company is involved with a
high-level study to investigate the viability of incorporating
wind-generated power into the Project as a means of further
improving the Project's economics. In addition, although
nuclear reactors do not generate greenhouse gases, nuclear energy
is not classified as "carbon-free" because of the use of fossil
fuels in the mining and transport of uranium. Incorporation
of renewable energy into uranium production from Laguna Salada
provides an opportunity to produce a low-carbon uranium product
that would allow our future customers to move closer to
"carbon-free" nuclear energy.
U3O8 Corp. is committed to providing uranium required to fuel
the nuclear component of the Argentine government's clean energy
initiative. That initiative includes increasing Argentina's nuclear energy capacity as well as
increasing renewable energy production: the recently announced
target is to have 8% of the country's electricity generated by
renewable sources by the end of 2017 and 20% by
2020.10
Technical Information
Dr. Richard Spencer, P.Geo.,
President and CEO of U3O8 Corp. and a Qualified Person as defined
by NI 43-101, has reviewed the technical information in this news
release relating to the Laguna Salada Deposit and the associated
PEA.
About U3O8 Corp.
U3O8 Corp. is focused on exploration and development of deposits
of uranium and associated commodities in South America.
Potential by-products from uranium production include commodities
used in the energy storage industry – in the manufacture of
batteries - such as nickel, vanadium and phosphate. The
Company's mineral resources estimates were made in accordance with
National Instrument 43-101, and are contained in three
deposits:
- Laguna Salada Deposit, Argentina – a PEA shows this near surface,
free-digging uranium - vanadium deposit has low production-cost
potential;
- Berlin Deposit, Colombia – a PEA shows that Berlin also has low-cost uranium production
potential due to revenue that would be generated from by-products
of phosphate, vanadium, nickel, rare earths (yttrium and neodymium)
and other metals that occur within the deposit; and
- Kurupung Deposit, Guyana – a uranium resource has been
estimated in four veins within a uranium-zirconium vein system.
Resources have been estimated on four veins, while consistent
mineralization of the same type has been intersected in scout
drilling of an additional six veins, while yet other veins require
first-time exploration drilling.
Information on U3O8 Corp., its resources and technical reports
are available at www.u3o8corp.com and on SEDAR at
www.sedar.com. Follow U3O8 Corp. on
Facebook: www.facebook.com/u3o8corp, Twitter:
www.twitter.com/u3o8corp and
Youtube: www.youtube.com/u3o8corp.
Forward-Looking Statements
Certain information in
this release are forward-looking statements with respect to the
development plans and economic potential of U3O8 Corp's current
projects. Forward-looking statements consist of statements
that are not purely historical, including statements regarding
beliefs, plans, expectations or intentions for the future, and
include, but not limited to, statements with respect to: (a) the
low-cost development goal of Laguna Salada, (b) the Laguna Salada
and Berlin PEAs, and (c) the potential of the Kurupung district in
Guyana. Basis for such assumptions include that: (i)
actual results of our exploration, resource goals,
metallurgical testing, economic studies and development activities
will continue to be positive and proceed as planned, and
assumptions in the Laguna Salada and Berlin PEAs prove to be
accurate, (ii) requisite regulatory and governmental approvals will
be received on a timely basis on terms acceptable to U3O8 Corp.,
and (iii) economic, political and industry market conditions will
be favourable. However, such statements are subject to risks and
uncertainties that may cause actual results, performance or
developments to differ materially from those contained in the
statements, including, but not limited to: (1) that a mine will be
achieved on the Laguna Salada Project, the Berlin Deposit and other
exploration projects, (2) that beneficiation test work will
continue to be favourable and results from small scale
metallurgical testing can be duplicated on a larger scale, (3) the
inherent uncertainties and speculative nature associated with
exploration results, resource estimates, potential resource growth,
future metallurgical test results, changes in project parameters as
plans evolve, (4) volatility of commodity prices and market
conditions for uranium; (5) dependence on regulatory approvals and
changes in legislation, environmental compliance, community support
and the political and economic climate, (6) availability of future
financing, and (7) exploration risk and other factors beyond the
control of U3O8 Corp. including those factors set out in the "Risk
Factors" in our Annual Information Form available on SEDAR at
www.sedar.com. Readers are cautioned that the assumptions used in
the preparation of such information, although considered reasonable
at the time of preparation, may prove to be imprecise and, as such,
undue reliance should not be placed on forward-looking statements.
U3O8 Corp. assumes no obligation to update such information, except
as may be required by law. For more information on the above-noted
PEAs, refer to the September 18, 2014 technical report titled
"Preliminary Economic Assessment of the Laguna Salada
Uranium-Vanadium Deposit, Chubut Province, Argentina" and the
January 18, 2013 technical report titled "U3O8 Corp. Preliminary
Economic Assessment on the Berlin Deposit, Colombia."
1 Aranguren, interesado por desarrollar uranio
integral en Chubut. Diario Once.
http://www.oncediario.com.ar/clientes/diario11/index.php?option=com_content&view=article&id=15832:aranguren-interesado-por-desarrollar-uranio-integral-en-chubut&catid=36:chubut&Itemid=196&utm_source=newsletter&utm_medium=email&utm_campaign=noticias_mineras_todos_los_dias
2 May 20, 2011: "Laguna Salada Project, Chubut
Province, Argentina, NI 43-101
Technical Report on Laguna Salada: Initial Resource
Estimate." prepared by Tenova Mining & Minerals (Australia) Pty Ltd.
3 September 18, 2014 technical report:
"Preliminary Economic Assessment of the Laguna Salada Uranium
Vanadium Deposit, Chubut Province, Argentina." prepared by Tenova Mining
& Minerals (Australia) Pty
Ltd.
4 "Brazil to
export enriched uranium." World Nuclear News.
http://www.world-nuclear-news.org/UF-Brazil-to-export-enriched-uranium-2206167.html
5 "Small nuclear power reactors." World Nuclear
Association.
http://www.world-nuclear.org/information-library/nuclear-fuel-cycle/nuclear-power-reactors/small-nuclear-power-reactors.aspx
6 "Nuclear Power in Argentina." World Nuclear Association.
http://www.world-nuclear.org/information-library/country-profiles/countries-a-f/argentina.aspx
7 "Saudi Arabia and
Argentina form R&D joint
venture." World Nuclear News.
http://www.world-nuclear-news.org/NP-Saudi-Arabia-and-Argentina-form-joint-venture-0903158.html
8 "China and
Argentina reaffirm reactor
agreement." World Nuclear News.
http://www.world-nuclear-news.org/NN-China-and-Argentina-reaffirm-reactor-agreement-0107164.html
9 See note 1.
10 "Argentina Launches Major Push for
Renewable Energy." The Wall Street Journal.
http://www.wsj.com/articles/argentina-launches-major-push-for-renewable-energy-1463611609
SOURCE U3O8 Corp.