* 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 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."