PDAC-Macusani to boost Peru uranium resource by 50 pct
* Canada explorer says well funded for next 18 mos
* Plans to release new resource estimate by April
* Aims to have drills operating later this year
By Julie Gordon
TORONTO, March 7 (Reuters) - Canada's Macusani Yellowcake, moving forward with plans to develop Peru's first uranium mine, has outlined a new deposit on its property that will boost the company's resource by almost 50 percent, its chief executive told Reuters.
Macusani next month will release a new official estimate that increases the amount of uranium believed to be contained at its project to about 40 million pounds from a current 27 million pounds, CEO Peter Hooper said on the sidelines of the PDAC conference in Toronto.
The event, the global mining industry's largest annual gathering, is organized by the Prospectors and Developers Association of Canada.
"The plan is to have 50 to 60 million pounds by the end of this year," said Hooper. "Hopefully, next year, we'll get up to 100 million pounds."
Toronto-based Macusani is exploring numerous deposits in the Macusani plateau in Southern Peru and has outlined four main targets for development.
The company, which is taking over its neighbor Southern Andes Energy, plans to have six drills running on the combined properties throughout the second half of 2012.
"The merged companies gives us an extension of all our properties," said Hooper. "So there's an immediate bump, that's where the extra drills are going."
If shareholders approve the takeover, the company will have about $13 million in the bank, plenty of funds to keep the drills turning for about 18 mouths, said Hooper.
The British Geological Survey discovered the Macusani uranium district, tucked into the southeast corner of Peru, during the 1980's.
The barren fields, which contain millions of pounds of uranium, are now being explored by Macusani, Fission Energy and Vena Resources, a company backed by Cameco Corp, Canada's largest uranium producer.
Hooper, who has had talks with Fission in the past, sees his company building a central processing plant and trucking ore from satellite deposits to be processed into yellowcake, or partially processed uranium, for shipment.
Macusani aims to produce 5 million pounds a year, with a scoping study expected by the end of this year.
The company will then move toward permitting, construction and operations, though Hooper would be open to making a deal with a more experienced uranium producer.
"If this gets to that stage we will become a target, that's for sure," he said.
Macusani's plans are ambitious, and there are challenges in developing an entirely new uranium district. The deposits are low grade and the uranium price will need to rise into the $60 a pound range for the project to be economically feasible.
Since Japan's Fukushima nuclear disaster last March, the uranium price had hovered around $50 a pound.
"One of the perceptions is this is too low-grade, full stop," said Hooper. "Well, low grade works, if it's the right volume and it's the right economics."
He sees the potential for a low-cost, heap leach process, similar to that proposed for various projects in Africa.
With heap leach, the ore is piled onto a heap and sprayed with an acid solution that dissolves the uranium. The uranium is then collected and pumped to an ion-exchange system, which converts the liquid to a solid yellowcake for shipping.
Macusani plans to release a study on the project metallurgy in the second quarter of this year.
With good infrastructure, including existing roads and a nearby power source, Hooper expects capital costs to be in the range of $400 million.
Hooper, an avid kayaker who has spent his career in regions ranging from South Africa to the northern reaches of the Canadian province of Manitoba, is now eyeing negotiations with the Peruvian government over permits.
"We would like to push this and have a prefeasibility out by 2013," he said. "So we need to start talking now."