9 January 2018
In the news: Plateau Uranium
FROM THE BROKING DESK
We’ll be marketing Ian Stalker of Plateau Uranium†† (PLU CN) in London in the week starting Monday 29 January. Plateau’s share price has trebled since it completed a C$1.8m private placement in November 2017, mainly on the back of encouraging drill results from its Falchani lithium and uranium discovery in the Macusani Plateau Project in south-eastern Peru. In late November it announced that high-grade lithium mineralisation averaging 3,670ppm Li over 61.2m was intersected below thick uranium mineralisation of 511ppm U3O8 over 56m from surface in the north-east of the area, while another drill hole in the south-east intersected 27.5m of 900ppm U3O8from surface and lithium of 3,255ppm over the remaining 37.5m of the hole.
Initial leach test results in December showed that 77-80% of contained lithium can be extracted from Falchani. These very positive results were achieved using sulphuric acid leaching at atmospheric pressure and a moderate temperature of 89ºC over a period of 12 hours, beyond which leaching was reported to have continued. Also, encouragingly, met test results for the uranium were released last week showing that 95% uranium could be leached at 20ºC over six hours, slightly in excess of the 2016 PEA; grades of 511-633ppm U3O8, 1.5-2.0x the existing resources in the PEA, should further improve the (already very low) costs. Falchani mineralisation is located immediately at surface, whereas the 2016 PEA had an average stripping ratio of 2:1 with an estimated production cost of US$17.28/lb U3O8. This positive newsflow is set against a backdrop of continued uranium production cuts from Kazataprom, which is expected to reduce supply by 20% over the next three years.
Plateau’s Macusani Project is now one of the world’s largest undeveloped uranium-lithium districts. It is a unique, shallow, volcanic-hosted supergene deposit in a mining-friendly jurisdiction and close to excellent infrastructure (that includes the Interoceanic Highway). It has access to labour, water and cheap hydro-electric power. Less than 15% of the 910km2 consolidated land package has been drilled, with a NI43-101 resource from March 2016 of 124Mlb U3O8 and 176,000t Li2O. The January 2016 PEA at US$50/lb U3O8 showed an NPV8 of US$603m, an IRR of 40.6% and a post-tax capital payback of 1.8 years. Proposed production would be 6Mlb pa U3O8over a ten-year mine life. As commented, the current LoM cash production cost is at US$17.28/lb, with an initial capital cost around US$300m.
Although Macusani started life as a pure uranium story, recent results have meant that the importance of lithium has increased significantly. By focusing test work on the Falchani area, Plateau will develop the lithium angle to the project more strongly. The key to what it has found so far is the extremely high recoveries; these will go a long way to making the lithium — like the uranium — extremely low cost to extract. There is plenty of work ongoing, so we can expect a lot more newsflow over the coming weeks and months. Please let us know if you’d like a meeting with Ian.
Please Note re MiFID 2
We would like to clarify our position with regard to the new MiFID 2 research regulations that came into force on 2 January this year, which limit the receipt of independent research to that which the buy-side has paid for. We can confirm that RFC Ambrian’s research output is identified as ‘non-independent research’ and is thus freely available to those clients wishing to receive it and is exempt from the new rules.
*RFC Ambrian acts as Nomad to this company
†RFC Ambrian acts as Broker to this company
††RFC Ambrian acts as Agency Broker to this company
**RFC Ambrian has acted as a Placing Agent for this company
***RFC Ambrian acts as Financial Adviser to this company
†††RFC Ambrian has received fees from this company over the last 12 months
This document has been approved under section 21(1) of the FMSA 2000 by RFC Ambrian Limited (“RFC Ambrian”) for communication only to eligible counterparties and professional clients as those terms are defined by the rules of Financial Conduct Authority. Its contents are not directed at retail clients as RFC Ambrian does not provide investment advisory services to retail clients.
RFC Ambrian publishes this document as non-independent research which is a marketing communication under the Conduct of Business rules. It has not been prepared in accordance with the regulatory rules relating to independent research, nor is it subject to the prohibition on dealing ahead of the dissemination of investment research. It does not constitute a personal recommendation and does not constitute an offer or a solicitation to buy or sell any security. Neither RFC Ambrian nor any of its directors, officers, employees or agents shall have any liability, howsoever arising, for any error or incompleteness of fact or opinion in it or lack of care in its preparation or publication; provided that this shall not exclude liability to the extent that this is impermissible under the law relating to financial services. All statements and opinions are made as of the date on the face of this document and are not held out as applicable thereafter. This document is intended for distribution only in those jurisdictions where RFC Ambrian is permitted to distribute its research. In particular, it is not intended for distribution in and is not directed as persons in the United States.
On the date of this document, RFC Ambrian, RFC Ambrian’s holding company, persons connected with it and their respective directors may have a long or short position in any of the investments mentioned in this document.
RFC Ambrian is a member of the London Stock Exchange and is regulated and authorised by the Financial Conduct Authority. RFC Ambrian is registered in England and Wales no. 4236075. Its registered office is at Level 5, Condor House, 10 St Paul’s Churchyard, London EC4M 8AL.