NexGen has revised the cost estimates for its 100%-owned Rook I uranium project in Saskatchewan, Canada.
The changes reflect both inflationary pressures and advancements in engineering, procurement, constructability, and environmental performance.
Updated Capital and Operating Costs
The updated pre-production capital expenditure (CapEx) is estimated at CAD 2.2 billion (USD 1.58 billion), while the average cash operating cost (OpEx) over the life of the mine (LOM) is projected to be CAD 13.86 per pound of U3O8 (USD 9.98 per pound), which the company considers “industry-leading.”
Changes from Previous Feasibility Study
These figures represent a significant increase from the 2021 feasibility study, which estimated a CapEx of CAD 1.3 billion and an average LOM OpEx of CAD 7.58 per pound U3O8.
The updated CapEx accounts for CAD 310 million in inflationary increases since 2020 and CAD 590 million in enhancements identified through advanced engineering and procurement.
The OpEx increase includes CAD 2.65 per pound due to inflation and CAD 3.63 per pound due to design improvements, procurement advancements, and environmental enhancements.
Underground Tailings Management and Progressive Reclamation
The mine design incorporates an underground tailings management facility, with most reclamation activities occurring concurrently with production.
This approach not only enhances environmental performance during operations but also reduces long-term reclamation risks and costs.
A substantial portion of the reclamation costs, approximately CAD 900 million, has already been factored into the CapEx, OpEx, and sustaining capital costs.
As a result, the estimated closure cost at the end of the mine’s life is expected to be around CAD 70 million, significantly lower than other uranium mines in Canada.
Project Status and Outlook
NexGen is actively working to secure the necessary federal and provincial approvals to proceed with construction.
The project is currently about 45% complete, and the company is confident that major construction can commence immediately upon receiving the final federal environmental assessment approval.
The company has also expanded its project development team with industry experts in shaft sinking, underground mining, and surface operations.
CEO’s Perspective on Updated Costs
CEO Leigh Curyer emphasized that the updated capital cost encompasses all expenses required to bring the project into production, with an anticipated payback period of 12 months.
He expressed excitement about the project’s progress, particularly the ongoing exploration of the recently discovered Patterson Corridor East mineralization, located 3.5 km east of the Arrow deposit.
Arrow Deposit and Mineral Resources
The Arrow uranium deposit at Rook I has measured and indicated mineral resources of 256.7 million pounds U3O8, supporting an 11-year life of mine.