While uranium exploration has been present in the Eastern Goldfields for the last four decades, an actual uranium industry has never been established in the region – until now.
Several companies, including Toro Energy, Mega Uranium, BHP Billiton and Cemeco, are setting out to change this.
Toro managing director Greg Hall told Australian Mining the total uranium content in the Goldfields is quite significant.
“The Goldfields area has had a lot of uranium exploration dating back to the 1970’s and 1980’s, and a number of uranium deposits were found,” he said.
“The Yeelirie and Kintyre deposits were the most substantial finds, but there was also a range of variable sized deposits found.
“Some of these, like Yeelirie, are hosting secondary deposits, which generally require an alkaline leach rather than an acid leach.
“This puts them in the higher cost category, which is one of the reasons they were never developed back in the 1980’s when the uranium price was quite low.”
Hall said the increase in demand for uranium had now made these deposits a viable option.
“The uranium price has firmed up and the long-term demand curve is looking quite good,” he said.
“Many companies, including our own, are investigating these historical deposits and seeing if there are any extensions.
“We are looking at the economics of the deposits to see how they could be brought into production.”
Toro has two deposits in a combined project called the Wiluna uranium project, about 12 to 15 km from the town of the same name.
The company is currently awaiting approvals from both the Federal and State Governments, which are expected no sooner than the first-half of 2012.
“We have been carrying out a lot of detailed process test work for the best extraction methods and a lot of baseline environmental monitoring for three years or more,” Hall said.
“We are also in the middle of carrying out a test pit onsite with bulk samples of material and have a pilot plant operating in a laboratory in Perth to look at the detailed process options.”
The company is working with the local Indigenous groups and native title claimant groups to negotiate a heritage management agreement for the area.
When all this is done, the company will undertake a final bankable feasibility study, which will finish next year.
Provided the approvals come through, Hall expects a mine could be in production by late-2013.
“We are cashed up with $55 million, so we are able to take this through to decision point and then we will need financing to go from there,” he said.
Most of the deposits in the region are small to medium-sized, with expected lifespans of between 10 and 14 years.
“However, if additional satellite deposits are found in the surrounding area, it could add to the mine life,” Hall said.
Hugh Gallagher, the chief executive of the Goldfields-Esperance Development Commission, believes the activity has already started to have some minimal but noticeable flow-on effects for the region.
“From an economic perspective, uranium mining will broaden the mineral portfolio for the region, which is a good thing,” he told Australian Mining.
“The off-take contracts for uranium mining are long-term, so there will be more stability for the region over a longer period.
“Similarly, the prices do not fluctuate as much as they do with nickel and gold, they are more like iron ore and coal.”
Hall said uranium mining would not have a dramatic effect on the region, but the commodity would strengthen and diversify it.
“You have to remember that these are small mines, it is not the same as starting up a nickel or gold mine,” he said.
“There are already 30 to 40 mines operating there, so these projects are not going to change the whole dynamic of the area.”
“But because uranium is not a short-term resource, it will add a counter-cyclical commodity to the region’s economy.
“So even if the price is down in one commodity, it could be up in another mineral, so the area will always have a positive mining environment.”
According to Hall, the Western Australian Government is very supportive of start-up uranium mining for this reason.
Gallagher hopes the extra political scrutiny surrounding uranium mining will not impact the projects getting off the ground.
“There are lots of extra hoops to jump through with uranium, so the Government needs to improve the communication around the approvals process,” he said.
“The more the community knows, the better its prospects.”