DEV (ASX) phosenergy

Old news but I'm interested to gain comment on the PhosEnergy thing outside the company. Since this was written last November in July Cameco put in the $5million, for which UEQ must have demonstrated something useful. I liked the comment "... struck agreements with two phosphate fertilizer producers to carry out test work at their operations".
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Peter Koven, Financial Post Monday, Nov. 9, 2009

TORONTO -- In its endless efforts to find and produce more uranium, Canadian giant Cameco Corp. is turning to a new source: phosphate rock.

The company plans to invest up to US$16.5-million to partner up with Australian firm Uranium Equities Ltd. on its so-called PhosEnergy Process. The idea is to literally extract uranium out of phosphoric acid streams that are produced in the development of phosphate fertilizer.

It is a very old concept that is being revived because of a strong uranium market. Between 1978 and 1983, production of uranium from phosphoric acid peaked at more than five million pounds per year. But in the mid-1980s, it stopped completely as uranium prices collapsed in the wake of the Chernobyl disaster and stagnant demand.

Today, Uranium Equities claims to have developed new technology that can extract the uranium at a cost of about US$25 to US$30 a pound, which would be very low-cost compared to other new production sources. By comparison, the current uranium spot price is US$45 a pound, and the long-term price is US$64 a pound.

The process has shown potential at a pilot plant, and the focus now is making it work on a commercial basis. If this works commercially, it would result in a [uranium] production process that reduces waste generation, is less expensive to operate, and meets applicable standards, Cameco spokesman Lyle Krahn said in an interview.

Around the world, more than 100 metric tonnes of phosphate rock is processed into phosphoric acid a year. According to Uranium Equities, there are roughly 20 million pounds of recoverable uranium in that rock that are worth about US$1-billion in revenue.

That would be enough to increase global uranium supply by 11%, though it is unlikely that it would ever get produced on that scale. For now, Uranium Equities has struck agreements with two phosphate fertilizer producers to carry out test work at their operations, and negotiations are advanced with two others.

BMO Capital Markets analyst Edward Sterck noted that these figures may imply a negative outlook for the uranium price, but he also pointed out that this idea has been discussed for years with little progress.

It is worth keeping an eye on developments from a longer-term perspective. The key catalyst to watch for is if the technology is ever licensed to an existing phosphoric acid producer, he wrote in a note to clients.

If Cameco invests the entire US$16.5-million, it will earn a 63% stake in the PhosEnergy technology.

Financial Post

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Read more: http://www.financialpost.com/Cameco+Corp+turning+phosphate+rock/2208008/story.html#ixzz11NV8eZSP