Some more research - burning the midnight oil...p. 9 of the 2018...

Some more research - burning the midnight oil...

p. 9 of the 2018 update states the following:

"No detailed mining methodologies or metallurgical recoveries have been applied to the MRE. The comparable style Wiluna Deposit in WA (Toro) will be mined by open pit, possibly using some form of continuous miner. At the mining stage, the mineralisation will be defined by grade control, probably through gamma measurements. Metallurgical sighter test work was carried out by Toro for Napperby and found similar characteristics to other calcrete style deposits. Further test-work is planned by Core to determine the metallurgical amenability of the mineralization to on-site beneficiation, where there has been considerable technological advancement in recent years."

This Wiluna Deposit sits at 79Mt @ 0.0482% for 84Mlb U3O8 (200ppm cut-off) for six deposits. The market doesn't really rate Toro's Wiluna Deposit highly. Given the Napperby Resource is a smaller resource with a lower grade, I doubt it will get into production. Here's a cost curve from VMY's corporate presentation in May 2021:


If you benchmark the Napperby deposit style against the similar Langer Heinrich deposit (at ~USD$35/lb AISC), then you'd probably give Napperby a ~USD$40-45 AISC. That would put it as one of the more expensive plays on the market. But if the bull market in uranium really gets going, its good to know CXO has this optionality to give shareholders a possible capital return by spinning out this asset.

I haven't addressed CXO's uranium asset in SA. This one also looks promising, but there's not enough information to make an assessment.

I should stress, I don't think this could become a legitimate mine. But if we see a 2007-style run in uranium, (i.e. to USD$100/lb) then CXO's assets could become a nice 10% coupon for CXO holders. Thanks for coming along for the ride, I've learned a fair amount about the uranium market, and I hope you've learned to treat CXO's uranium prospects with some level of suspicion.

Cheers!