Era sets priorities for Ranger mine

PERTH (miningweekly.com) – Uranium miner Energy Resources of Australia (Era) has identified three priorities at its Ranger mine, in the Northern Territory, following a strategic review of the uranium project.

The review was initiated after Era failed to gain approval for an extension of its Ranger authority. The current authority permitted mining and processing activities to continue until January 2021 and allowed for access for rehabilitation activities until 2026.

The miner told shareholders on Wednesday that the review had determined three near-term strategic priorities for the Ranger mine, including the continued rehabilitation of the project area, maximising the generation of cash flow from the processing of stockpiled ore, and preserving the option for the future development of the Ranger 3 Deeps mine through ongoing care and maintenance of the exploration decline and related infrastructure.

Era in June last year suspended work on the feasibility study for the proposed Ranger 3 Deeps underground mine, owing to the economic challenges faced by the resources sector and the uncertain market conditions in the uranium sector.

The Ranger 3 Deeps project considered the development of an underground mine to recover uranium from the Ranger 3 Deeps mineral resource, with most of the mining expected to occur between 200 m and 500 m below surface.

Era said on Wednesday that, given the current operating environment, the option to develop the project in future would be preserved through ongoing care and maintenance of the exploration decline and related infrastructure at a cost of about A$4-million a year.

The Ranger 3 Deeps underground mine could only be viable with an extension to the current Ranger authority, with Era noting that an amendment to the Atomic Energy Act would be required to enable an application for an authority extension.

A reactivation of the project later than mid-2018 would likely require Era to manage a production gap between the cessation of low-grade stockpiled ore processing in late 2020 and the start of the Rangers 3 Deeps production at a later point, and would risk compromising the project’s viability, the ASX-listed Era cautioned.

If developed, the Ranger 3 Deeps would be expected to provide about ten years of additional production at the Ranger mine, in a period where forecast consensus prices were expected to have recovered from the current historical lows.

If executed, Era would also need to identify an appropriate financing solution to fund the project’s development.

Era said on Wednesday that while no further expenditure had been authorised for the Ranger 3 Deeps mine, the company would periodically review whether it was appropriate to initiate targeted studies aimed at optimising the value of the project.

In the meantime, the company would continue with the progressive rehabilitation of the Rangers project area, while focusing on maximising cash flow from current operations.

As at December 31, some 10 383 t of uranium oxide were stockpiled at the Ranger project and, based on current assumptions, processing of the stockpiled ore could potentially be sustained until late 2020.

A major operational focus in the near-term would be to offset the impact of declining grades in the stockpiled ore with productivity improvements and targeted cost reductions.

Era said maximising the cash flow from the processing of stockpiled ore would enable the company to strengthen its financial position, build confidence in the developer of high-quality rehabilitation outcomes and provide a foundation for Era to examine future growth options.