Thanks to GT Swiss for correcting my calculation on the economics of a 20tph unit. The point about Cameco being an ideal client (or acquirer) of BLR is an excellent one.
I think that the BLR/Ablation JV will process a wide range of ores. If the weighted average ore grade could come in at 2,000-3,000ppm, that would be great.
As most of us know, the Athabasca basin in Canada has both giant mines and giant ore grades. If we could get some business from Canada, that would pull the overall weighted average up into the thousands of ppms.
According to GT Swiss' corrected calculation, a 20tph unit might be able to do $1.4 million of cash flow, assuming 1,000ppm ore and a $50 uranium price. I suggest then that the NPV of a 20tph unit might be roughly $12 million.
Importantly, GT Swiss shows that a 20tph unit at 80% utilization would process about 140k tons of ore = 280k pounds of uranium, (assuming 1,000ppm). That means a producer like Energy Fuels, who will be producing 3 million pounds annually (once uranium prices rebound), would need about ten 20tph units to handle its volume. Energy Fuels is a 100% conventional miner, so it could in theory use Ablation on 100% of its run-of-mine production.
Ten 20tph units to Energy Fuels would have a combined NPV of 10 x $12mm = $120 million, for just a single customer. Given Cameco's much higher grades and production volume, Cameco as a client would generate off the charts profitability for the BLR/Ablation JV!
It will take years for any of this to transpire, but once orders start rolling in, visibility to my grandiose dreams will become a lot clearer.
Finally, a customer like Cameco would likely require both 20tph and larger units to handle even a fraction of its annual volume. The economics of a 40-50tph unit would be stronger than that of a 20tph unit because we could charge the same fee per ton, but pocket higher per ton margins due to economies of scale on the operating cost side.
BLR Price at posting:
1.2¢ Sentiment: Buy Disclosure: Held
