Canada's Fronteer Development Group has announced a positive preliminary economic assessment for its Michelin uranium project in the central mineral belt of Labrador.
The study supports a financially robust open-pit and underground uranium mining operation at the Michelin and Jacques Lake deposits, and a milling facility at the Michelin site capable of producing up to 3300 tonnes of uranium oxide (U3O8) per year. The project is held by Fronteer's subsidiary, Aurora Energy Resources.
Canada's operating uranium mines are all in Saskatchewan, with Michelin and Jacques Lake being the first to enter the feasibility stages outside of that province. There are also deposits in Nunavut and Quebec.
|Michelin base camp (Image: Aurora)
The Michelin and the adjacent Jacques Lake deposit now have measured and indicated resources of 35,000 tonnes of U3O8, plus 16,000 tonnes inferred resources, mostly requiring underground mining. The economic assessment envisages investment of C$1.05 billion ($980 million) to set up mine and mill with production ramping up to about 3000 tonnes per year.
A provincial government moratorium on uranium mining is in place until March 2011, and expiry of this will coincide with completion of a land use planning assessment being undertaken jointly by the Nunatsiavut and Newfoundland-Labrador governments.
"The assessment confirms our view that the Michelin project is a large-scale, high rate of production project with robust economics," said Mark O'Dea, Fronteer president and CEO. "It is expected to generate significant cash flow over a long mine life, while providing economic benefits and growth opportunities for the local and provincial economies. New uranium production of this magnitude is sought by major utilities worldwide."
The results now provide Fronteer with a context for examining all project development and financing options.
"The Nunatsiavut government is on track with building our regulatory framework, including the land use plan," said first miniter Tony Andersen. "We are open to discussing development and establishing partnerships, and are committed to sustainable long-term growth and stability."
"We acknowledge that Aurora has done and continues to do some fine work in the communities and people are gradually getting a better understanding of the nature of the proposed project," added Andersen.