The Economics Of In Situ Mining Versus Open Pit Mining

In situ mining offers a new and proven method of exploiting sedimentary uranium deposits. The feasibility and economic evaluation of exploiting a uranium reserve by either open pit or underground mining should also include a similar study for in situ mining. This report compares the economics of mining several hypothetical uranium deposits at various depths, grades and reserve sizes by open pit and in situ mining. The evaluation process evolved establishing, where possible, common geological and logistical parameters to both methods of mining. The various assumptions that are unique to either open pit or in situ mining were also drafted, where possible, as equal and common functions to be used in each economic evaluation of the reserve models. After the various parameters were defined, they were programmed to an economic analysis of the various hypothetical uranium deposits by the selected mining method. From the vast array of cost evaluations, total capital and operating cost per pound U308 produced, DCF-ROI, and total net profits before State and Federal taxes were selected as the most meaningful results to compare. From the various geologic parameters used, it was determined that the economic viability of a mining venture is most sensitive to a depth-grade thickness ratio. The three selected evaluation products were plotted against the various depth-grade thickness ratios of the hypothetical uranium deposits. The results of the economic cost analyses show in situ mining generally to be a better method to maximize total net profits and to maximize return on investment.