Hylea Metals Limited announced in June, 2019 the acquisition of a 65% interest in the Kayelekera Uranium Project from Paladin Energy Limited.
HIGHLIGHTS:
ï‚· HCO has entered into an agreement with Paladin to acquire a 65% interest in the Kayelekera Uranium Project in Malawi.
ï‚· The remaining 35% is held by HCO’s joint venture partner Chichewa (20%) and the Government of Malawi (15%). HCO will have an option to acquire a further 20% interest in Kayelekera from Chichewa
ï‚· Kayelekera hosts a high grade resource with an existing open pit mine and demonstrated excellent metallurgical recoveries (87.5%) having historically produced over 10.9 MIb of uranium between 2009 and 2014.
ï‚· Significant infrastructure is already in place including a 3 M lbs per annum resin in pulp extraction plant.
ï‚· The operation is currently on care and maintenance with all assets maintained in good standing. Assets include:- Over US$200M of CAPEX spent on plant and infrastructure:
- Process facility throughput - 1.5mtpa (3.3M lb pa)
- Significant high grade U3O8 JORC 2004 Mineral Resource estimate (refer to Table 2 below).
ï‚· The consideration payable for the acquisition Is as follows (refer Appendix 1 for full details):
- Initial Consideration - $1.8M worth of Hylea ordinary shares
- Deferred Consideration - $3M worth of Hylea ordinary shares to be issued on the 3rd anniversary of completion
- Royalty - 3.5% of gross returns at the Kayelekera mine up to a maximum of $5M; and
- Environmental Bond – Replacement of the environmental of US$10M to be paid over three years.
ï‚· In FY13, the open pit mine produced 1,072,000 tons of ore at an average grade of 1,350 ppm U3O8 with an annualized stripping ratio of 3:14.
ï‚· Large 157 km2 tenement package with excellent exploration potential.
ï‚· Company-transforming acquisition places Hylea at the forefront of aspiring Australian uranium producers: “The acquisition of 65% of Kayelekera is an excellent opportunity for HCO. Kayelekera is a world-class uranium asset that has produced over 10.9 MIb of uranium and represents an opportunity to use the past production
information to re-engineer certain mining and processing processes in order to reduce the overall Capex and Opex of the operations. We are optimistic about the global uranium market and the outlook for firmer pricing” said HCO Managing Director Simon Andrew.
The Kayelekera Uranium Project is located in northern Malawi, southern Africa, 52 km west (by road) of the town of Karonga (Figure 2). The Project is owned through a holding vehicle, Paladin Africa. In addition to the Kayelekera Mining Lease, Paladin Africa also holds five Exclusive Prospecting Licences (‘EPL’) that are coincident
with Karoo sediment basins and are similar to those that host the Kayelekera deposit. The mine produced over 10.9 MIb of uranium between 2009 and 20141 with a significant high grade Resource estimate (refer to Table 2 below for further details).
The Government of Malawi (GoM) owns 15% of Kayelekera, through a 15% holding in Paladin Africa, and supported the project through a Development Agreement that provides a stable fiscal environment for the first 10 years of the project. The GoM is committed to supporting and encouraging the private sector to assume a leading role in the economic development of projects in the mining sector.
Paladin permitted, constructed, commissioned and operated Kayelekera between 2007 and 2014 and produced 10.9Mlb of U3O8 from an open-pit mine ore processed through an acid leach and resin-in-pulp processing plant (Figure 1 above).
In February 2014, Paladin placed Kayelekera on care and maintenance due to the low uranium pricing. Internal studies determined that an improved uranium market would provide an opportunity for Kayelekera to restart and again produce uranium from its remaining Resource (refer to Table 2 below for further details).
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