is the net cost per pound after van credits, taxes and royalties not somewhere around $21.42? from the 2010 financial year report:
An average cash operating cost of US$13.52 per recovered pound U3O8 after Vanadium credits was estimated over production life. Other cash costs, inclusive of royalties and state taxes, were estimated at US$7.90 per pound U3O8. Total cash cost was estimated at US$21.42 per pound U3O8.
Non cash cost comprising depreciation of plant and equipment and amortisation of capitalised project expenses, was estimated at $8.60 per recovered pound U3O8 or approximately US$129 million over life of production. The PFS economics included an allocation of US$11 million specifically for resource delineation and extension and a decommissioning allowance of US$15 million at end of production life.
Based on the assumptions above the base case PFS analysis produced an NPV after tax of US$162m (discounted at 10%) with an IRR of 47.8% on the initial capital investment, and net cash inflows after tax of US$407m over the 13 year mine life. Importantly, the results of the PFS provided the basis to proceed to the Definitive Feasibility Study (DFS), with a view to development and construction of a centralised ISR processing plant to produce 1.5Mlbs U3O8 per annum. The DFS is estimated to be completed in the first quarter of 2011.
PEN Price at posting:
4.5¢ Sentiment: Buy Disclosure: Held
