- 10 Feb 2016
Marenica Announces Share Purchase Plan
- 09 Feb 2016
Marenica & Hanlong agree to restructure of Convertible Note
- 08 Feb 2016
- 29 Jan 2016
Quarterly Activities & Cashflow Report Ending 31 December 2015
U-pgrade™ - Marenica’s U-pgrade™ process is a major breakthrough for processing surficial uranium deposits. U-pgrade™ is a process that is set to unlock the potential of major global surficial uranium deposits.
U-pgrade™ is Marenica Energy Ltd’s (MEY) processing technology (provisional patent held). It is applicable to surficial uranium deposits with a particular emphasis on calcrete-hosted deposits. On ore samples from the Marenica Uranium Project it has been shown to deliver:
- An upgrade in uranium concentration of approximately 50 times at a recovery of over >70% by rejecting nearly 99% of the waste material (gangue),
- Increase the leach feed grade from 94ppm to >5,000ppm U3O8,
- Significantly improved economics by major reductions in calculated capital and operating costs,
- Internal cost estimates have indicated a potential reduction in process operating costs using U-pgrade™ of between 50% and 70% and a reduction in capital costs of between 30% and 50% compared to conventional heap leach technology,
- Similar results in sea water, which is particularly beneficial in a dry environment such as Namibia,
- Reduced social and environmental impact per pound of annual production compared to ‘conventional’ technology.
Whilst the current low uranium price is a major problem for much of the uranium industry at present, with many of the world’s uranium producers reporting a loss at these prices, the low prices expected in the short to medium term provide an opportunity for Marenica to commercialise the U-pgrade™ process.
MEY has identified a substantial number of resource companies that are waiting for the uranium price to increase to >$75/lb before developing their projects. However, with the application of the U-pgrade™ process the required uranium price to develop these styles of resources can be greatly reduced. MEY believes that the application of U-pgrade™ will revolutionise processing of surficial uranium by providing a means for these projects to be developed at significantly lower costs and well below current project development trigger prices. In addition, existing producing mines or near term producers will be able to substantially increase their margins as a result of implementing the U-pgrade™ process.
The potential application of U-pgrade™ to these sub-economic and low grade resources is the primary target for commercialisation of U-pgrade™.
The intellectual property of U-pgrade™ is held by the wholly owned subsidiary Uranium Beneficiation Pty Ltd (“UB”). Directors of MEY have approved the following plan to commercialise U-pgrade™ for the benefit of the shareholders of Marenica:
- Raising capital in MEY or UB to progress the commercialisation strategy
- Constructing a pilot plant for U-pgrade™ subject to raising sufficient capital
- Completing a pilot plant trial to prove and de-risk the process
- Entering into negotiations with various resource owners to apply U-pgrade™ in their operations
U-pgrade™ positions MEY to offer attractive economic prospects to major surficial global uranium deposits, helping to provide a low-cost energy source for the future. The global uranium market has strong underlying supply/demand fundamentals despite the current low spot price.
The Directors maintain their confidence in the long term uranium demand scenario put forward by most uranium market research groups, with growth expected to be driven by the unstoppable need for power by the developing economies with a growing focus being on the dependable and low carbon emission energy provided by nuclear power. Uranium prices in excess of $75/lb are needed to provide the incentive for the market to be able to deliver the significant new production required to feed the growing global fleet of nuclear power stations. The Directors believe that the utilisation of U-pgrade™ can deliver significant operating cost reductions that will be attractive to many surficial uranium projects at uranium prices well below these incentive prices.
Rather than being hampered by the current low prices in the uranium market, MEY's strategy responds to this near term negative price outlook. MEY believe that the strategy can be successful across all price ranges, especially at or below the current incentive prices for many of our target commercialisation partners. The value of U-pgrade™ comes from an operating and capital cost reduction which is compelling for producers across a wide range of uranium prices.
Demand for uranium is expected to exceed supply by the end of this decade with the following market forecasts being reliably indicated
- Russia’s 20-year deal to sell recycled uranium warheads expires in 2014 (up to 25Mlbs of annual supply removed).
- Major growth economies like China and India have reiterated plans to increase nuclear capacity
- Around 550 reactors worldwide are in operating, planning, construction or proposed phases, with around 426 currently operating
Marenica Energy Ltd is prepared for the short and long term future with its U-pgrade™ process. Marenica expects that its U-pgrade™ process can benefit most surficial uranium mines in operation right now, by reducing operating costs and improving efficiencies, as well as allowing a lower cut-off grade to be applicable, thereby extending mine life and reducing mining costs. The process will also allow current low grade surficial deposits to be deemed economic at lower trigger uranium prices than would otherwise be the case.
Marenica Energy Limited will play a significant role in improving the future cost effectiveness of uranium production together with a reduction in the social and environmental impacts of such projects.