Project Description and Location:
The Rook I Project is the largest development-stage uranium project in Canada. The proposed new underground mine and mill development is located in the uranium rich district of the southwestern area of the Athabasca Basin; located in the premier mining jurisdiction of Saskatchewan.
The Project is comprised of the land-based, basement-hosted, Arrow Deposit which is identified as one of the leading global resource projects, encompassing robust economic profiles and elite ESG commitments to the advancement of environment and community.
The deposit is 100% owned by NexGen Energy Ltd., and the project will be developed and operated by NexGen.
Feasibility Study (FS):
On February 17, 2021 NexGen released its independent Feasibility Study (FS) of the Rook I Project. The independent Feasibility Study (FS) was completed in accordance with NI 43-101 in 2021 and includes joint work by leading consultants including: Stantec Consulting Limited, Wood Canada Ltd., and Roscoe Postle Associates Inc., with other technical inputs completed by sub-consultants.
Summary of the Feasibility Study Highlights:
NexGen completed its FS of the Rook I Project in 2021. The FS considers the environmental and economic merits from the Arrow Deposit and places the project as one of the leading global resource projects with an elite ESG profile.
The Arrow Deposit’s unique geological profile and location allows for key optimizations development. The project is designed as an underground mining operation, with conventional long hole stope mining methods.
The economic base case was developed encompassing a fixed price of US $50/lb U3O8:
Table 1 – Outstanding Economics Summary of Arrow Deposit Feasibility Study (based on US $50/lb U3O8)
|FS ($ CAD)|
|After-Tax NPV @ 8%||$3.47 Billion|
|After-Tax Internal Rate of Return (IRR)||52.4%|
|After-Tax Payback||0.9 Year|
|Pre-Commitment Early Works Capital||$157 Million|
|Project Execution Capital||$1,143 Million|
|Total Initial Capital Costs (“CAPEX”)||$1,300 Million|
|Average Annual Production (Years 1-5)||28.8 M lbs U3O8|
|Average Annual After -Tax Net Cash Flow (Years 1-5)||$1,038 Million|
|Average Annual Production (Life of Mine)||21.7 M lbs U3O8|
|Average Annual After -Tax Net Cash Flow (Life of Mine)||$763 Million|
|Nominal Mill Capacity||1,300 tonnes per day|
|Average Annual Mill Feed Grade||2.37% U3O8|
|Mine Life||10.7 Years|
|Average Annual Operating Cost (“OPEX”, Life of Mine)||$ 7.58
(US $5.69)/lb U3O8
- The economic analysis was based on the timing of a final investment decision (“FID”) and does not include the Pre-Commitment Early Works Capital, which are costs NexGen intends on expending prior to the FID. Pre-Commitment Early Works scope includes site preparation, initial freeze hole drilling and the supporting infrastructure (concrete batch plant, Phase I camp accommodations and bulk fuel storage) required to support full Project Execution Capital.
- FS based on CAD $1.00 = US $0.75 and US $50/lb U3O8 price.
NPV and IRR Sensitivity to Uranium Price, table 2:
|Uranium Price ($ USD/lb U3O8)||After-Tax NPV8||After-Tax IRR|
|$65/lb U3O8||CAD $4.87 Billion||62.8%|
|$60/lb U3O8||CAD $4.40 Billion||59.5%|
|$55/lb U3O8||CAD $3.93 Billion||56.1%|
|$50/lb U3O8 (Base Case)||CAD $3.47 Billion||52.4%|
|$45/lb U3O8||CAD $3.00 Billion||48.4%|
|$40/lb U3O8||CAD $2.53 Billion||44.0%|
Arrow Mineral Resource Estimate, Table 3:
|FS Mineral Resource|
|Grade (U3O8%)||Contained Metal (U3O8 M lb)|
|Measured and Indicated|
- CIM Definition Standards were followed for Mineral Resources, Mineral Resources are reported inclusive of Mineral Reserves.
- Mineral Resources are reported at a cut-off grade of 0.25% U3O8 based on a long-term price of US$50 per lb U3O8 and estimated costs.
- A minimum mining width of 1.0 m was used
- The effective date of Mineral Resources is June 19th, 2019
- Numbers may not add due to rounding.
- Mineral Resources that are not Mineral Reserves do not have demonstrated economics.
RPA is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could materially affect the Mineral Resource Estimate.
Arrow Deposit, Probable Mineral Reserves Table 4:
|Probable Mineral Reserves|
(U3O8 M lb)
- CIM definitions were followed for Mineral Reserves.
- Mineral Reserves are reported with an effective date of January 21st, 2021.
- Mineral Reserves include transverse and longitudinal stopes, ore development, marginal ore, special waste and a nominal amount of waste required for mill ramp-up and grade control.
- Stopes were estimated at a cut-off grade of 0.30% U3O8.
- Marginal ore is material between 0.26% U3O8 and 0.30% U3O8 that must be extracted to access mining areas.
- Special waste in material between 0.03% and 0.26% U3O8 that must be extracted to access mining areas. 0.03% U3O8 is the limit for what is considered benign waste and material that must be treated and stockpiled in an engineered facility.
- Mineral Reserves are estimated using a long-term metal price of US$50 per pound U3O8, and a 0.75 US$/C$ exchange rate (C$1.00 = US$0.75). The cost to ship the yellow cake product to a refinery is considered to be included in the metal price.
- A minimum mining width of 3.0 m was applied for all long hole stopes.
- Mineral Reserves are estimated using a combined underground mining recovery of 95.5% and total dilution (planned and unplanned) of 33.8%.
- The density varies according to the U3O8 grade in the block model. Waste density is 2.464 t/m3.
- Numbers may not add due to rounding.
Stantec is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could materially affect the Mineral Reserve Estimate.
Mine Plan and Production Profile:
A detailed mine plan based on conventional long-hole stope mining was engineered using Mineral Reserves only.
During the development of the Feasibility Study, geotechnical studies conducted again supported the conventional long-hole stoping mining method, including the use of longitudinal and transverse stopes, 30m level spacing, and the nominal stop strike length of 12 metres to 24 metres.
Figure 1 – Cross Section View of FS Mine Design (Looking Northeast)
Figure 2 – Arrow Deposit Production Profile
Figure 3 – Rook I Feasibility Site Layout