Roughrider vs. PLSInteresting comments by Rio Tinto on its Roughrider deposit (albeit from a job posting):
- "Roughrider has the potential to emerge as one of the top-three global undeveloped deposits and rival Cigar Lake";
- "If a mine was built it would be in the lowest-cost quartile of global mines and would warrant a new stand-alone mill";
- "A vision starts to emerge of a foundtation Tier-1 mine/mill complex with production and ife rivalling Rio Tinto's existing mines...";
Recall that Roughrider has a NI 43-101 compliant combined resource of 57.94 milion pounds U308 (though likely more once the far east zone is accounted for), at an average depth
STARTING at 215 meters.
I have heard many times that DML is the "perfect takeover" candidate for Rio, one of the primary reasons being DML's 22.5% interest in the McClean lake mill. But if Rio thinks Roughrider warrants a new stand-alone mill, this point is largely moot. Rio might be interested in eventually getting its hands on J-zone, perhaps either as a 100% owner or through a JV with DML, but unless Rio wants to go "all-in" on uranium, I don't see them making a run at DML anytime soon.
But enough about DML. I post last week inquiring about the cost of building a mill on the west side of the basin, saying that this is a cost that needs to be taken into consideration. Now I believe that the cost of building a mill is largely a moot point. The feasibility study done on the Roughrider deposit estimated that the capital cost of a mill would be around $250 million (taking into consideration contingencies) - a large chunk of change, but still a cost that would allow the deposit to become one of the lowest cost producers in the world. The feasibility of building a stand-alone mill is confirmed by Rio's comments above.
If 60 million pounds starting at a depth of 215 meters warrant a stand alone mill and would result in a mine with one of the lowest costs of production in the world, imagine what the costs of production could be at our 100 million + pound uranium deposit that starts at 50 meters AND is open-pittable.
I feel much more comfortable knowing that a realistic estimate of the cost of building a new mill would be in the $250 million range. At that price, when taking into consideration the size and potential at PLS, I don't think it matters whether or not any surrounding companies hit uranium or not. PLS will warrant a stand-alone mill and will be mined. Any synergies that could form from other uranium discoveries in the area would just be icing sugar on top of the cake.
I like my PLS. I think you have to be crazy to be selling right now. Just my humble opinion.
Reference:
https://www.theaustralian.com.au/business/mining-energy/rio-tinto-eyes-uranium-mine-upgrade-at-candas-saskatchewan/story-e6frg9df-1226862700687#mm-premium