Tanzania Boasts Large, Low-Cost, 4.2 Million-Pound Nyota Uranium Project

---

Written by Richard Finlayson, Senior International Editor for Industrial Info Resources--The East African country of Tanzania is set to become a significant low-cost uranium producer when the Nyota Prospect mining project is commissioned. A definitive feasibility study conducted by Mantra Resources (ASX:MRU) (Perth, Australia) confirmed a robust technical and economic viability for the first phase of the project and indicated an annual production of 4.2 million pounds of uranium oxide (U308).

Nyota Prospect is part of the wholly owned Mkuju River Project (MRP). The definitive feasibility study was based on a mineral resource estimate announced in November 2010 that included total measured and indicated resources of 67.7 million tons, averaging 439 parts per million (ppm) for 65.5 million pounds of U3O8. Excluded from the DFS were an additional 41.2 million tons of inferred resources, averaging 395 ppm for 35.9 million pounds of U3O8.

The projected 10-year life of Phase I of the project is based on the annual throughput of 5.2 million tons of ore at an average grade of 437 ppm, to produce the 4.2 million pounds of U3O8. If inferred resources are upgraded and ongoing exploration work is successful, there is the potential to increase the production figures. The current market price of uranium is $57 per pound.

Steady state operating costs would be $22.02 per pound, and the average strip ratio over the life of the mine is 1:3.6 (ore to waste). The feasibility study is based on an owner-operator mining scenario and the processing plant is based on simple acid leach and conventional resin-in-pulp (RIP) technology. Phase II will start after the RIP circuit has reached a steady state.

The estimated capital cost for Phase I is $390.5 million including $163.1 million for the process plant and $227.4 million for project infrastructure.

Mantra CEO Peter Breese said that the positive results of the Phase I definitive feasibility study demonstrated that the resource base at Nyota could support a large-scale, low-cost, long-life uranium operation. He said that the company believed that by upgrading inferred sources and treatment of lower grade mined ore through the Phase II expansion, as well as continued exploration work to unlock the prospectivity of the broader MRP, there is the potential to increase the production rate and the life of the mine. He added that, based on the detailed implementation plan, the project could be ready for hot commissioning within 21 months from the start of detailed engineering.

Currently, Mantra is conducting a scheme of arrangement procedures with Russia's major uranium resource company ARMZ Uranium Holding (Moscow) under which ARMZ will acquire the issue share capital of Mantra. Some changes in the plan were affected after Japan's Fukushima nuclear power plant disaster, as the two companies considered its possible effect on the nuclear power sector and on the uranium market.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.