GTI Energy’s updated scoping study for its Lo Herma Uranium Project in Wyoming highlights a promising low-cost in-situ recovery operation with robust economics and a 7-year mine life. The study outlines a central processing plant scenario delivering strong returns amid a supportive regulatory and infrastructure environment.
- 7-year mine life with 5.98 million pounds U3O8 production target
- Pre-tax NPV8 of ~US$110 million and IRR of 52% for central processing plant
- Low capital expenditure estimated at US$67 million for CPP option
- Breakeven uranium price around US$60 per pound
- Project benefits from favorable geology, existing infrastructure, and regulatory support
Robust Scoping Study Highlights Lo Herma’s Potential
GTI Energy Ltd has released an updated scoping study for its wholly owned Lo Herma Uranium Project, located in Wyoming’s Southern Powder River Basin. The study, prepared by BRS Engineering Inc., demonstrates the potential for a low-cost in-situ recovery (ISR) uranium operation with a planned mine life of seven years and a production target of nearly 6 million pounds of uranium oxide (U3O8).
The preferred development scenario involves constructing a central processing plant (CPP) capable of producing 800,000 pounds of U3O8 annually. This base case yields a pre-tax net present value (NPV8) of approximately US$110 million and an internal rate of return (IRR) of 52%, assuming a uranium price of US$90 per pound. An alternative satellite operation, which would toll process uranium at a third-party facility, shows slightly higher NPV and IRR but requires securing a processing agreement.
Economics and Capital Efficiency
Capital expenditure for the CPP option is estimated at US$67 million, with a payback period of about 2.5 years from production start. Operating costs are competitive, with cash costs around US$32 per pound of U3O8 and all-in sustaining costs near US$41 per pound. The breakeven uranium price over the economic evaluation period is approximately US$60 per pound, positioning the project well within current and forecast uranium price ranges.
GTI Energy emphasises the project’s low capital intensity, supported by simple metallurgy, favorable geology, and proximity to existing infrastructure and workforce. The Lo Herma deposit’s shallow depth and good permeability of host sandstones further enhance the viability of ISR mining, a method known for its lower environmental footprint compared to conventional mining.
Geology, Resources, and Development Pathway
The Lo Herma Project hosts a JORC-compliant mineral resource estimate of 8.57 million pounds of uranium, with 32% classified as indicated and 68% as inferred resources. The mineralisation occurs as roll-front deposits within permeable sandstone formations, amenable to ISR extraction below the water table. Recent drilling campaigns have expanded and upgraded the resource base, including a significant new area added in late 2023.
Further drilling and hydrogeological testing are planned to refine resource confidence and optimize wellfield designs. Metallurgical studies confirm uranium can be efficiently leached using conventional alkaline ISR chemistry. GTI anticipates commencing construction as early as 2028, with production targeted for 2029, subject to permitting and financing milestones.
Permitting, Infrastructure, and Market Outlook
Situated on a mix of unpatented mining claims and state mineral leases, the project benefits from Wyoming’s well-established ISR uranium mining jurisdiction and supportive regulatory framework. Existing power lines, roads, and workforce availability near Casper and Glenrock enhance project logistics. Environmental assessments indicate minimal impact on local ecology, with ongoing stakeholder engagement planned.
Uranium market fundamentals remain supportive, with industry price forecasts ranging from US$80 to US$93 per pound over the coming years. GTI’s base case price assumption of US$90 per pound aligns with recent market studies and government outlooks, underpinning the project’s robust economics.
Funding and Risks
GTI estimates pre-production capital funding requirements of approximately US$43 million for the CPP scenario. While the company expresses confidence in securing financing following further studies, it acknowledges risks including uranium price volatility, permitting challenges, and the need to upgrade inferred resources to indicated status. The satellite operation option offers lower upfront capital but depends on third-party processing agreements yet to be finalized.
Overall, the Lo Herma Scoping Study presents a compelling case for a low-cost, environmentally responsible uranium project positioned to meet growing demand in the US nuclear sector.
Bottom Line?
As GTI Energy advances Lo Herma towards feasibility and financing, market watchers will keenly observe uranium price trends and resource upgrades shaping its next phase.
Questions in the middle?
- Will GTI secure the necessary funding and permits to commence construction by 2028?
- Can further drilling convert inferred resources to indicated status, enhancing project confidence?
- How will evolving uranium market dynamics impact the project's economic viability?