Long pipeline of projects
Laramide Resources Ltd., (LAM) continues to develop its Westmoreland uranium project, one of the largest deposits in Australia. In October 2012, the Queensland government lifted the ban on uranium mining. Since then, Laramide has been focused on bringing the near-surface deposit comprising 51.9Mlb of U3O8 into production. Laramide also has a joint venture agreement with Rio Tinto in a highly prospective area that lies along strike with Westmoreland. Laramide also owns a royalty portfolio in New Mexico that covers Uranium Resources’ Churchrock project.
Australian assets: Westmoreland project
Laramide’s flagship project is the Westmoreland project, a sandstone-hosted and open-pitable deposit with a total resource of 51.9Mlb U3O8 grading at 0.089% U3O8. The company hopes to expand the overall resource size and advance the project to production. It is also engaged with several joint venture agreements in the Northern Territory and NW Queensland.
US assets: La Sal and La Jara Mesa
Laramide also owns two development-stage assets, La Sal and La Jara Mesa, in the US. In its portfolio, Laramide has strategic positions and several uranium royalties in the Grants Mineral District of New Mexico, US. La Jera Mesa has a compliant resource estimate of 10.3Mlb U3O8 and the project is currently progressing through the permitting and consultation process. A decision is expected in 2014 and if approved would allow underground development and mine production. The La Sal project is located c 100km from Energy Fuel’s White Mesa Mill. The project has been fully permitted for a bulk sampling programme and Laramide has a toll milling agreement in place with Energy Fuels to process the material. A commercial mining permit will be required after the bulk sampling programme has been completed.
Outlook: Potential near-term cash flow
While Laramide is focused on advancing its flagship Westmoreland project, it could achieve a near-term cash flow following the commencement of production at its La Sal project in Utah and from its royalty agreement with Uranium Resources if it begins production at its Churchrock property. Small-scale production at the La Sal project could be launched now that permits have been approved and a toll milling agreement is in place with Energy Fuels’ White Mesa processing facility. As visibility on the cash flow generation improves, the company might enjoy a valuation premium that the market normally attributes to producing assets.
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