Uranium companies have been awaiting a price recovery since the Fukushima Daiichi nuclear reactor disaster in March 2011. Since early 2016 the spot uranium price has remained below US$30 per lb. uranium oxide (U3O8). Many uranium producers have curtailed and shuttered operations, maintaining assets while hoping for a more profitable future. Juniors have developed impressive projects, poised to take advantage of a change in market conditions. The Northern Miner presents the top-10 large, high-grade uranium projects.
(Figures in tonnes and lbs. are rounded. Data source: The Northern Miner and Mining Intelligence.)
1. McArthur River
- Owner: Cameco (70%), Orano (30%)
- Proven and probable reserves: 2,572,500 tonnes @ 6.91% U3O8
- Measured and indicated resources: 132,900 tonnes @ 2.65% U3O8
- Inferred resources: 80,500 tonnes @ 2.25% U3O8
- Contained U3O8: 183,100 tonnes (403,626,000 lbs.)
The McArthur River deposit is in northern Saskatchewan, 40 km west of the eastern margin of the Athabasca basin, a world-class district for uranium deposits.
The mine produced 325.2 million lb. U3O8 from 2000 to 2017. Mining was suspended at McArthur River in February 2018 and it remains on care and maintenance indefinitely.
The mine’s mineral reserves support a 23-year mine life. Cameco (TSX: CCO; NYSE: CCJ), McArthur River’s 70% owner and operator, has a restart plan that would see it produce 4 million lb. U3O8 in the first year of restarted operations, and 18 million lb. annually for the next 20 years. A 2018 technical report pegs operating costs at US$14.97 per lb. U3O8.
McArthur River’s geologic setting is typical of other deposits in the region. It is situated at or near the unconformity contact separating late Paleoproterozoic sandstone (of the basal portion of the Athabasca Group) from Paleoproterozoic metasedimentary gneisses and migmatites (of the Wollaston Group), which are interfolded with Archean granitoid gneisses.
France-based Orano owns 30% of McArthur River.
- Owner: NexGen Energy
- Proven and probable reserves: 3,433,100 tonnes @ 3.09% U3O8
- Measured and indicated resources: 2,890,000 tonnes @ 4.03% U3O8
- Inferred resources: 4,836,000 tonnes @ 0.86% U3O8
- Contained U3O8: 158,000 tonnes (348,420,000 lbs.)
- Resources include reserves
NexGen Energy’s (TSX: NXE) Arrow deposit is on its Rook I property, in the southwest part of the Athabasca basin. Since acquiring the property in 2013 it has discovered and developed the Arrow deposit, releasing a prefeasibility study in 2018.
The study outlined an operation with initial capital costs of $1.25 billion, plus $250 million in sustaining and closure costs for a nine-year mining operation running at 1,000 tonnes per day, producing 25.4 million lb. U3O8 per year, at average operating costs of $5.81 per pound.
In 2019, the company completed an infill drilling program and plans to deliver a bankable feasibility study in the first half of 2020. NexGen reports recent drill results show continuous high-grade mineralization, consistent with the prefeasibility study findings.
The company is also advancing an environmental assessment for the project and pursuing agreements with four local communities.
- Owner: Energy Resources of Australia
- Measured and indicated resources: 15,090,000 tonnes @ 0.55% U3O8
- Inferred resources: 10,030,000 tonnes @ 0.54% U3O8
- Contained U3O8: 137,000 tonnes (302,100,000 lbs.)
The Jabiluka deposit is located in Australia’s Northern Territory within the Kakadu National Park, a UNESCO World Heritage Site, which also hosts the Ranger uranium mine, 22 km to the south.
Jabiluka (and Ranger) is owned by Energy Resources of Australia (ASX: ERA), which is itself 68.4% owned by Rio Tinto (NYSE: RIO).
The project is under long-term care and maintenance. An agreement with the Mirarr Traditional Owners ensures the project cannot be developed without Mirarr’s consent, which the company is uncertain will be forthcoming.
The Mirarr and environmental groups have opposed Jabiluka’s development. In 1998 the project was halted by a 5,000-person blockade on-site. Since 2003 the company has worked on rehabilitating disturbed land on the property. Surface and subsurface infrastructure has been removed and a planting program saw 16,000 stems take root from 2005 to 2015.
4. Cigar Lake
- Owner: Cameco (50%), Orano (37%), Idemitsu Kosan (8%), TEPCO (5%)
- Proven and probable reserves: 553,100 tonnes @ 14.48% U3O8
- Measured and indicated resources: 321,300 tonnes @ 14.41% U3O8
- Inferred resources: 180,000 tonnes @ 5.97% U3O8
- Contained U3O8: 137,000 tonnes (302,100,000 lbs.)
The extremely high-grade Cigar Lake mine entered production in 2014 in northern Saskatchewan. The mine produced 64.9 million lb. U3O8 from ore grading an average of 14.5% U3O8 since its commissioning in 2014.
According to Cameco’s latest report, Cigar Lake was on schedule to deliver 9 million lb. U3O8 in 2019. The company estimates operating costs will be between $15 and $16 per lb. for the mine life, which extends to 2029.
Cigar Lake’s ore is extracted via a unique jet-boring process, which Cameco developed for the deposit. The process begins when brine, chilled to -40 degrees Celsius, is piped underground and circulated through pipes to freeze the surrounding rock. Once frozen, machines bore production tunnels through the rock. From the tunnel, the jet boring system drills a pilot hole in the orebody, where a nozzle is then inserted to bore through the rock with a high-pressure water jet, flushing out loose ore, which is pumped to surface in a slurry.
Cameco operates and owns half of Cigar Lake, while Orano, Idemitsu Kosan and TEPCO own minority interests.
5. Patterson Lake South
- Owner: Fission Uranium
- Proven and probable reserves: 2,299,000 tonnes @ 1.61% U3O8
- Measured and indicated resources: 2,215,000 tonnes @ 2.1% U3O8
- Inferred resources: 1,221,000 tonnes @ 1.22% U3O8
- Contained U3O8: 61,400 tonnes (135,389,000 lbs.)
- Resources include reserves
Junior developer Fission Uranium (TSX: FCU) has been advancing Patterson Lake South since discovering the deposit in 2012.
In 2019, the company released two prefeasibility studies on the project. The first study envisioned a hybrid open-pit and underground operation and the second study contemplated an underground-only scenario, with lower costs, a smaller footprint and a faster build time.
The hybrid study outlines total capital costs of $1.71 billion and operating costs of $9.03 per lb. U3O8. The first six years would see open-pit mining, with underground mining starting in year five until the eighth and final year of the mine’s life.
The underground-only study estimated a total of $1.46 billion in capital expenses and operating costs of $9.57 per lb. U3O8 for a seven-year mining operation. The mine would take three years to build — one year less than the hybrid scheme.
The camp at Denison Mines’ Wheeler uranium project in northern Saskatchewan’s Athabasca basin. Credit: Denison Mines.
6. Wheeler River
- Owner: Denison Mines (90%), Japan-Canada Uranium (10%)
- Proven and probable reserves: 1,398,000 tonnes @ 3.55% U3O8
- Measured and indicated resources: 1,809,000 tonnes @ 3.3% U3O8
- Inferred resources: 82,000 tonnes @ 1.71% U3O8
- Contained U3O8: 61,000 tonnes (134,559,000 lbs.)
- Resources include reserves
The Wheeler River project is comprised of two high-grade deposits, Phoenix and Gryphon, in the southeastern Athabasca basin.
Phoenix is the smaller of the two, with probable reserves of just 141,000 tonnes, but it has an exceptional grade of 19.1% U3O8. Gryphon has 1.26 million probable tonnes at 1.8% U3O8.
Operator and 90%-owner Denison Mines (TSX: DML) released a prefeasibility study for Wheeler River in 2018, which outlined development of both deposits, using in-situ recovery for higher-grade Phoenix and underground mining for Gryphon.
Production would average 7.8 million lb. U3O8 per year over a 14-year mine life. Required preproduction capital would amount to $1.13 billion. Operating would cost $4.33 and $15.21 per lb. U3O8 produced at Phoenix and Gryphon.
Japan-Canada Uranium owns a 10% stake in Wheeler River.
- Owner: Orano
- Measured and indicated resources: 10,418,000 tonnes @ 0.47% U3O8
- Inferred resources: 731,000 tonnes @ 0.28% U3O8
- Contained U3O8: 51,000 tonnes (112,493,000 lbs.)
Orano’s Kiggavik deposit, 80 km west of Baker Lake, Nunavut, was suspended after the project was rejected by the Nunavut Impact Review Board and Canada’s Minister of Indigenous and Northern Affairs in 2016.
The proposed project would have seen the development of a series of open-pit and underground mines feeding a centralized mill for 14 years, followed by a five-year decommissioning phase.
Concerns over the development focused on the potential for negative environmental and socioeconomic effects.
Orano is 45%-owned by the Government of France.
- Owner: Cameco (70%), Japan-Canada Uranium (30%)
- Measured and indicated resources: 1,442,600 tonnes @ 2.39% U3O8
- Inferred resources: 412,400 tonnes @ 3.19% U3O8
- Contained U3O8: 47,600 tonnes (105,014,000 lbs.)
The provincial government of Saskatchewan approved the environmental assessment for Cameco’s 70%-owned Millennium deposit in 2013.
In that assessment Cameco says Millennium is amenable to underground mining and would require a 21 km access road as well as ore transport, freshwater intake and mine-water discharge structures. The project would make use of existing mill and waste management facilities in northern Saskatchewan for its envisioned 10-year mine life.
However, amid a weak uranium market, Cameco has not advanced Millennium since that approval. The company says no work is planned for the asset until market conditions improve.
Japan-Canada Uranium holds a 30% stake in Millennium.
9. Rabbit Lake
- Owner: Cameco
- Measured and indicated resources: 1,836,500 tonnes @ 0.95% U3O8
- Inferred resources: 2,460,900 tonnes @ 0.62% U3O8
- Contained U3O8: 32,700 tonnes (72,101,000 lbs.)
In operation for more than 41 years, Rabbit Lake was the longest-running uranium mine in North America, according to its owner Cameco.
Poor uranium prices pushed the company to place the underground mine on care-and-maintenance in 2016. The project costs Cameco between $30 million and $35 million per year to maintain. The mine is licensed through October 2023.
Rabbit Lake produced 4.2 million lb. U3O8 in 2015 — its latest full year of production. Between 1975 and 2015 the mine produced 202.2 million lb. U3O8.
10. Fox Lake
- Owner: Cameco (78%), Orano (22%)
- Inferred resources: 386,700 tonnes @ 7.99% U3O8
- Contained U3O8: 30,900 tonnes (68,117,000 lbs.)
Cameco announced the high-grade inferred resource for the Fox Lake deposit in 2016. Fox Lake is on the Read Lake property, near its McArthur River project in northern Saskatchewan’s Athabasca basin.
In 2016, Cameco earmarked $7 million for exploration at Read Lake, which was the last time any activity has been announced for the property.
Cameco has wound down exploration activity to save money during the current uranium market lull.
Cameco owns 78% of Read Lake and Orano owns the rest.