Scoping Study Update - Samphire Uranium Project
Released
Released
Announcement PDF
ASX Announcement
14 December 2023
Cautionary Statement: SAMPHIRE UPDATED SCOPING STUDY
The Scoping Study referred to in this ASX release has been undertaken for the purpose of initial evaluation of a potential
1.2 Mlb U3O8 per annum in-situ recovery (‘ISR’) mining operation (12.3Mlb U3O8 total Production Target over 12
years) of the Blackbush uranium deposit which forms part of the Samphire Project near Whyalla, South Australia. The
study is a preliminary technical and economic assessment of the potential viability of the Project and builds on an initial
study conducted in early 2023 (ASX release 14 March 2023). The Scoping Study outcomes, Production Target and forecast
financial information referred to in this release are based on low accuracy level technical and economic assessments that
are insufficient to support estimation of Ore Reserves. While each of the modifying factors was considered and applied,
there is no certainty of eventual conversion to Ore Reserves or that the Production Target itself will be realised. Further
exploration and evaluation work and appropriate studies are required before Alligator Energy will be in a position to estimate
any Ore Reserves or to provide any assurance of an economic development case.
Of the JORC compliant Mineral Resource scheduled for ISR extraction in the Scoping Study production plan, 74% is
categorised as an Indicated Mineral Resource and 26% is Inferred. There is a low level of geological confidence associated
with Inferred Mineral Resource and there is no certainty that further exploration work will result in the determination of
Indicated Mineral Resources or that the Production Target itself will be realised. The Inferred Mineral Resource has been
modelled in the mine plan to cover the last ~3 years of the 12-year operation. Alligator Energy notes that the style of
mineralisation and the experience to date in converting Inferred Mineral Resources to the Indicated category provides a
reasonable basis for inclusion in these later years.
The Mineral Resources underpinning the Production Target in the Scoping Study have been prepared by a competent
person in accordance with the requirements of the JORC Code (2012). The Competent Person’s Statement is found on
page 27 of this ASX release. For full details of the Mineral Resource Estimate, please refer to Alligator Energy’s ASX
release dated 7 December 2023; Successful upgrade of Indicated Mineral Resource for the Blackbush Deposit.
This release contains a series of forward-looking statements. Generally, the words "expect," “potential”, "intend,"
"estimate," "will" and similar expressions identify forward-looking statements. By their very nature forward-looking
statements are subject to known and unknown risks and uncertainties that may cause our actual results, performance or
achievements, to differ materially from those expressed or implied in any of our forward-looking statements, which are not
guarantees of future performance. Statements in this release regarding Alligator Energy’s business or proposed
operations, which are not historical facts, are forward-looking statements that involve risks and uncertainties, such as
Mineral Resource Estimates, market prices of metals, capital and operating costs, changes in project parameters as plans
continue to be evaluated, continued availability of capital and financing and general economic, market or business
conditions, and statements that describe Alligator Energy’s future plans, objectives or goals, including words to the effect
that Alligator Energy or Management expects a stated condition or result to occur. Forward-looking statements are
necessarily based on estimates and assumptions that, while considered reasonable by Alligator Energy, are inherently
subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies. Since
forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and
uncertainties and are not guarantees of future performance. Actual results and future events could differ materially from
that anticipated. These and all subsequent written and oral forward-looking statements are based on estimates and
1
opinions of Alligator Energy on the dates they are made and expressly qualified in their entirety by this Statement. The
Company assumes no obligation to update forward-looking information or statements should circumstances or estimates
or opinions change. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only
as of the date they are made.
Alligator Energy has concluded that it has a reasonable basis for providing these forward-looking statements and the
forecast financial information included in this ASX release. This includes a reasonable basis to expect that it will be able to
fund the development of the Samphire Project upon successful delivery of key additional evaluation and regulatory
milestones. The supporting reasons for these conclusions are set out in the ASX release of 14 March 2023. Alligator
confirms that the assumptions on which it considers there is a reasonable basis to expect that it will be able to fund the
development of the Samphire Project (as set out in the release) continue to be relevant and have not materially changed.
While Alligator Energy considers all of the material assumptions to be based on reasonable grounds, there is no certainty
that they will prove to be correct or that the range of outcomes indicated by the Scoping Study will be achieved.
To achieve the range of outcomes indicated in the Scoping Study, pre-production funding (inclusive of working capital
estimate) of approximately A$170M to A$200M will likely be required. There is no certainty that Alligator will be able to
source that amount of funding when required. It is also possible that such funding may only be available on terms that may
be dilutive to or otherwise affect the value of Alligator Energy’s shares. It is also possible that Alligator Energy could pursue
other value realisation strategies such as a sale, partial sale or joint venture of the Samphire Project. These could materially
reduce Alligator Energy’s proportionate ownership of the Samphire Project.
Given the uncertainties involved, investors should not make any investment decisions based solely on the results of the
Scoping Study.
No Ore Reserve has been declared. This ASX release has been prepared in compliance with the current JORC Code
(2012) and the ASX Listing Rules. All material assumptions, including sufficient progression of all JORC modifying factors,
on which the production target and forecast financial information are based have been included in this ASX release.
2
ASX Announcement
14 December 2023
Scoping Study Update - Samphire Uranium Project,
South Australia
Alligator Energy Limited (ASX: AGE (Alligator or the Company)) is pleased to announce the results
of an update to the initial Samphire Project Scoping Study1 (released 14 March 2023) which now
incorporates the increased confidence level in the Mineral Resource Estimate for the Blackbush
Deposit (released on 7 December 20232) and a consequent lift in the annualised Production Target
from 1Mlbs pa to 1.2Mlbs pa.
Updated Scoping Study Highlights
•
Updated Scoping Study delivers a 69% increase to the post-tax NPV8 to A$257M.
•
Total uranium mining inventory at Samphire is 17.5 Mlbs U3O8, with 74% from the updated
Indicated Resource category and an assumed recovery of 70%.
•
LOM Production Target increased from 10.0 Mlbs U3O8 to 12.3 Mlbs over the same 12-year
period, with annual Production Target increasing 20% from 1.0Mlbs pa to 1.2Mlbs pa.
•
Enhanced Project economics at a forecast US$75/lb U3O8 realised sales price (previously
US$65/lb) and an unchanged A$:US$ exchange rate of 70 cents:
-
Ungeared, real post-tax NPV8 of A$257M (A$244 M - A$270M) up from A$152M
-
Post-tax internal rate of return (IRR) of 42% (40.0% - 44.1%) up from 29%
-
Reduction in payback period by 30% to 2.45 years from start of production
-
Forecast net project cashflow (post Capex and tax) increase of 52% to A$467M
(A$443M - A$490M).
•
Low initial capital expenditure forecast of A$131M (A$124M-A$138M) being an increase of
2% to achieve the 20% step-up in the steady state annual Production Target - including
consistent application of contingency (30%) and a 5% escalation assumption (down from 10%
previously) due to improved ability to estimate costs.
•
Favourable average cash operating costs (C1) of A$22.94/lb U3O8 (US$16.06/lb U3O8) with a
range of A$21.79/lb - A$24.09/lb) and AISC (including transport, shipping, royalties and
sustaining capital) of A$47.58/lb U3O8 (US$33.31/lb U3O8) with range of A$45.20/lb to
A$49.96/lb when compared to other ISR operations and restart projects.
1 AGE ASX Release 14 March 2023, https://wcsecure.weblink.com.au/pdf/AGE/02643151.pdf
2
AGE ASX Release 7 December 2023; 02751141.pdf (weblink.com.au)
The increased confidence in the uranium mining inventory (lift in Indicated category) and improved
financial outcomes continue to highlight the opportunity for a competitive low-cost uranium operation
at Samphire using the low environmental impact In-Situ Recovery (ISR) method.
Samphire Project has similar AISC and C1 costs when compared to other ISR operations and restart
projects as shown in the figure below.
Comparison of AISC and C1 Costs for ISR uranium mine development or restart projects (Data sourced from most
recent published economics data by each Company).
The Updated Scoping Study delivers a 69% increase to the post-tax NPV8 to A$257M driven
by:
•
An increase in the annualised Production Target which lifts revenues and free cashflows over a
similar life-of-mine (LOM) assumption.
•
Improved knowledge base and understanding through AGE progressing with field recovery trial
(FRT) planning, procurement, resource modelling and refinement of process design leading to
some modifications to the original design criteria.
4
•
Updating of other key inputs, principally commodity price and major component costs to reflect
current market indicators.
Chart of changes in Key Project Drivers from March 23 Scoping Study vs Updated Scoping Study (Dec 23).
Next Steps
•
AGE’s planned 2024 Field Recovery Trial (FRT) will assist in further de-risking and optimisation
of the technical aspects of the Project. Timing of the commencement of FRT site
construction now appears likely to commence in the middle of 2024 (subject to receiving
all approvals) due to the required approval processes for this important exploration /
evaluation testwork.
•
Resource growth on Samphire will be targeted from the significant exploration potential as
outlined in the recent Samphire Exploration Target Range (released 7 December 2023) hence leading to the opportunity for an extended LOM and further growth in the annual
Production Target.
•
Several optimisation studies (water, power, roads, product transport and logistics, lowering
emission, environment and social impacts etc.) to be concluded prior to commencement of a
Feasibility Study targeted for the second half of 2024.
5
Key opportunities to enhance project economics include:
•
Field Recovery Trial in 2024 to:
-
Optimise field recovery rates, reagent make-up, plant feed grade, optimal ion exchange
(IX) and elution chemistry and production well spacing/number requirements.
-
Optimise elution volumes and flowrates to reduce operating costs.
•
Assessment of recycling chlorides for use in elution to reduce reagent costs.
•
Assessment of application on single column elution to reduce IX CAPEX.
•
Trade-off and optimisation studies covering logistics and utilities (power & water).
•
Further exploration targeting additional uranium mineralisation, including the potential for the
Plumbush prospect to be a future satellite deposit to the proposed Blackbush plant.
•
Investigating the potential application of a low-cost/ low-impact drilling technique.
Alligator’s CEO Greg Hall stated: “The Updated Scoping Study outcomes have shown a continued
improvement in Samphire Project economics as we increase resource mineralisation quality,
increase production rate and refine the processing flowsheet and costs. An improving forward price
assumption is also of great benefit.
As major capital items were generally sized for a higher throughput in the initial Scoping Study, the
relatively small capital increases were offset by reduced resource drilling during project construction,
resulting in only a minor capital increase for this Updated Scoping Study. More accurate wellfield
design parameters resulted in increased wellfield costs (sustaining capital) and hence an increased
AISC. More detailed modelling of process parameters refined and reduced reagent costs, and further
analysis work has reduced other C1 costs.
We will re-commence our resource expansion drilling around late January 2024 with a dedicated drill
rig all year. Drilling will be initially focussed on Blackbush deposit resource expansion to the east,
north and west, which has the greatest impact on future Project economics. This will be followed by
a multi-year program of work to evaluate the 30% of palaeochannels which have some mineralised
drill intersections, and the ~60% of known palaeochannels that have no drilling.”
Our intent through the Field Recovery Trial, expanded resource, feasibility study and in time mining
lease approvals is to have a robust economic project ready to feed uranium into the growing longterm market later this decade.”
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Updated Scoping Study - Overview
1.0 Background
The Samphire Uranium Project (‘Samphire Project’ or ‘Project’) is located 20km south of Whyalla
in regional South Australia (Figure 1). The proposed Project in this updated Scoping Study is
focused on the Blackbush Deposit only, based on ISR production of uranium oxide and
encompasses:
•
•
•
•
•
•
•
Establishment of access roads, power and ancillary infrastructure.
Installation of production wellfields.
Reverse osmosis (RO) plant to reduce the salinity of groundwater prior to ISR mining –
required for improved Ion Exchange (IX) loading.
ISR of uranium from wellfields.
IX recovery of uranium from leaching solution using high-capacity Strong Base Anion (SBA)
(salt tolerant) resin3.
Precipitation, calcining (drying) and packaging of Uranium Oxide Concentrate (UOC) into
drums for transport from site and shipping from Port Adelaide.
Environmental management and rehabilitation of mining areas.
The updated Scoping Study process design and engineering was undertaken by Wallbridge Gilbert
Aztec (WGA), the independent consultant involved in the Scoping Study released on 14 March 2023.
WGA applied the AusIMM Scoping Study Class 5 requirements in which the range of estimation
accuracy is +/- 50%. Alligator Energy has been able to obtain updated costings for items such as
reagents, production wells and some mechanical equipment items likely indicating a 30% to 50%
range of accuracy.
Figure 1: Samphire Project Location Map
3 Refer AGE ASX Release 9 December 2022, “Highly Successful uranium leach and extraction tests for Samphire Uranium Project”
https://wcsecure.weblink.com.au/pdf/AGE/02610588.pdf
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2.0 Key Modifying Factors
This release contains requisite information with respect to the select modifying factors and outcomes
that have changed as part of the Updated Scoping Study. Relevant information pertaining to all other
unchanged parameters from the Scoping Study (March 2023) can be found in Alligator Energy Ltd
ASX release dated 14 March 2023, Scoping Study confirms potential for a low cost ISR uranium
operation at the Samphire Project”.
2.1 Revised Mineral Resource Estimate and Production Target
The first Mineral Resource Estimate (MRE) for the Blackbush deposit based on ISR was established
in September 20224 and revised in March 20235 with the inclusion of additional drilling which was
the basis of the March 2023 Scoping Study targeting 1Mlbs U3O8 production p/a with a ramp up and
ramp down for a total Production Target of 10.0 Mlbs U3O8.
Resource infill drilling conducted during 2023 successfully converted an additional 2.2MLbs into an
Indicated Mineral Resource category6. At 250ppm cut-off grade the MRE now stands at an Indicated
Mineral Resource of 12.9Mlbs at 754ppm and an Inferred Mineral Resource of 4.6Mlbs at 447ppm,
totalling 17.5Mlbs at 640ppm U3O8 (refer Mineral Resource Estimate table on page 27 of this report).
The Indicated portion of the MRE now comprises 74% of the total Blackbush Mineral Resource
allowing the Update Scoping Study to draw on additional Indicated Resource for the proposed ISR
mining schedule targeting an increased annual production rate of 1.2 Mlbs U3O8 production p/a for a
total Production Target of 12.3 Mlbs U3O8 over a 12-year period (Figure 2). Annual Production Target
of 1.2M/lbs U3O8 per annum is forecast to be achieved in year three of the Life of Mine and a decline
will occur in the last two years of production.
Figure 2: Production profile comparison (Updated vs Mar 23 Scoping Study).
4 AGE ASX Release 1 September 2022: 2022-08-31 Resource-ASX announcement FINAL (weblink.com.au)
5 AGE ASX Release 2 March 2023: 02639068.pdf (weblink.com.au)
6 AGE ASX Release 7 December 2023: https://wcsecure.weblink.com.au/pdf/AGE/02751141.pdf
8
2.2 Key Physical Parameters
The key changes in parameters compared to the March 2023 Scoping Study are summarised in
Table 2 below.
Table 2: Comparison of Key Scoping Study Physical Parameters (Dec 2023 vs Mar 2023 Scoping Studies).
Key Physical Parameters
Unit
Updated Study
Scoping Study
(Dec 2023
(Mar 2023)
Change
Operations
Construction period
months
18
18
-
Annual production rate
lbs U3O8 pa
1,200,000
1,000,000
200,000
Initial production life
years
12
12
-
Average grade of Mineral Resource
ppm U3O8
640
720
(80)
Estimated plant feed grade from
wellfield (PLS)
ppm U3O8
110
100
10
Forecast overall uranium recovery7
% / Pore Volumes
70 / 30
70 / 100
- / 70
Mlbs U3O8
12.3
10.0
2.3
Processing
Output
Total Production Target
2.3 Revised CAPEX Estimates for Increased Annual Production Target
A 2% increase in CAPEX (Table 3) was driven by resizing and recosting of equipment due to
increased or decreased size or flowrates. Commensurately, changes in the IX configuration and
sizing and the elution process chemistry required a commensurate increase in tank capacity.
Substantial savings drivers include:
- Reduction in wellfield delineation drilling in the first 3 years was included as minimal further
drilling will be required to site location of production wells due to the current drill density nearing
‘fit for purpose’.
- Optimisation of wellhouses design to a portable modular design.
- Decrease in wellfield conditioning volume, sequencing and duration, reduced the number of
wellhouses required.
The opportunity to include updates based on improved understanding of project parameters were
included along with several equipment additions (e.g. in-house laboratory, disposal water treatment
plant, on-site waste facility). The table below identifies changes to major items over $1M with all
CAPEX changes summarised in Figure 3.
7 This parameter change governing wellfield recovery was based on additional theoretical scenario modelling undertaken by AGE.
9
Table 1: CAPEX changes to items over $1M (Dec 2023 vs Mar 2023 Scoping Studies).
Changes > $1m
Previous Scoping Study (1Mlbspa plant)
- Major equipment items
- Water treatment plant (RO) - conditioning
- Water treatment plant (RO) - disposal
- Resin first fill
- Wellhouse
- Initial drilling
- Other items < $1m
Updated Scoping Study (1.2Mlbspa plant)
A$ (M)
129.3
3.5
1.0
(1.5)
2.2
(2.0)
(4.5)
3.3
131.3
Figure 3: Waterfall chart of changes to CAPEX.
10
2.4 Revisions to OPEX & AISC
An 11% decrease in the OPEX (C1) unit cost resulted from a revision of transport and shipping costs
as the initial scoping study reflected costs more typical of a remote site as opposed to realised
savings due to the proximity of the Project to Whyalla and the Port of Adelaide where permitted
export routes exist and roads are mostly bitumen.
The 10% increase in AISC unit cost was driven by an increase in the number of production wells
required because of the following:
•
Improved understanding of the orebody resulting in a reduction of the open interval (screen
size) from average of 5m to 2m for each production well in line with average thicknesses of
mineralised intervals to achieve efficient lixiviant sweep across multi-levelled zones of
mineralisation.
•
The change above decreased well flow rates by 40% thus requiring an increase in the
number of production wells online at any one time to achieve the production target (Note:
the FRT will assist in optimising this for the feasability study).
•
A change in the parameters governing wellfield recovery based on additional modelling by
AGE from 70% over 100 pore volume exchanges8 (PVEs) to 70% recovery over 30 PVE’s
meaning additional wells are reqiured due to recovery being achieved at a faster rate than
contemplated in the previous study.
Figure 4: Waterfall chart of changes to Operating and AISC
8
Pore Volume Exchange is the volume of water contained within a given volume of porous media, in this case Kanaka sands. Pore
Volume Exchange is the replacement of this volume of water with another fluid, in this case by RO permeate or mining fluid.
3.0 Key Economic Outcomes
Projected economics for the Samphire Project from the Updated Scoping Study are outlined in Table
49. A UOC sales price of US$75 per pound was applied (c.f. US$65 in the previous study). The spot
uranium price at time of finalising this report was around US$82.75 per lb U3O8 and the long-term
(LT) price published by market commentators had moved up to US$66 per lb U3O8. This LT price is
based on industry information from some long-term contracts with structured formula prices that
have a fixed price component in the mid to high US$60’s per lb. Industry information also highlights
that a LT pricing formula based on spot price with an increasing floor price, and high or no ceiling
price are also being agreed. This puts the forward pricing curve for those LT contracts well above
the current LT price.
It is against this improving supply-demand and uranium price backdrop that Alligator Energy is
working through the necessary steps to determine the potential for our Samphire Project. Alligator
has, through and with its uranium marketing agent, Kevin Smith of Traxys North America, met with
and introduced the Company to a range of nuclear utilities in Europe and the US. All of these parties
are interested in new future uranium supply. From these meetings, Alligator Energy is now on the
tender list for Requests for Proposals for Uranium Supply from a range of nuclear utilities.
Importantly the Company has engaged with a few utilities who are keen to put in place early offtake
contracts conditional on project approvals and financing.
Based on the forward-looking curves for uranium supply / demand, the improving price, and the
technical, approvals and development path for Samphire, we believe the base case price of US$75
per lb U3O8 used in this Scoping Study is realistic for offtake contracts in the time frame of the Project.
The financial estimates were prepared under the following assumptions:
•
•
•
•
•
•
•
•
•
•
•
•
•
A real discount rate of 8%.
An exchange rate of 1 AUD to 0.70 USD.
Costs are quoted in real Australian Dollar September-November 2023 terms with minimal
exposure of both the Capex or Opex costs to fluctuations in the A$:US$ exchange rate.
Cash flow periods are expressed on an annual calendar year basis.
Total Production Target over the Life of the Mine of 12.3M/lbs U3O8.
Annual production target of 1.2M/lbs U3O8 per annum will be achieved in year three of the
Life of Mine and a decline will occur in the last two years of production.
Uranium sales revenue is assumed to be realised approximately three months after
production.
All costs are stated exclusive of GST.
South Australian royalties of 5% have been applied to the pre-tax cashflows with no royalty
holiday assumed.
Australian corporate tax rate of 30% has been applied to pre-tax but post-royalty cashflows.
The Company’s current accumulated carried forward tax losses together with an estimate
for additional eligible pre-production losses has been assumed as being available to offset
against taxable income in the early years of the production profile.
All uranium quantities are stated in pounds (lbs).
A one-off closure / end-of-mine cost is included within year 12 of $5M.
9 Note this study is in accordance with the AusIMM Scoping Study Class 5 requirements in which the range of estimation accuracy is +/-
50%. Alligator Energy have updated costings for items such as reagents, production wells and some mechanical equipment items likely
indicating a 30% to 50% range of accuracy.
12
•
•
A contingency of 30% applied to direct costs (no contingency applied to operating costs),
and
Project escalation of 5% applied to direct costs.
Key economic attributes from the Updated Scoping Study include:
• Enhanced Project economics at a forecast US$75/lb U3O8 realised sales price:
-
Ungeared, real post-tax NPV8 of A$257M (A$244 M - A$270M) from $152M.
-
Post-tax internal rate of return (IRR) of 42% (40.0% - 44.1%) from 29%.
-
Reduction in payback period by 30% to 2.45 years from start of production.
-
Forecast net project cashflow (post Capex and tax) increase of 52% to A$467M
(A$443M - A$490M).
• A 69% increase to the post-tax NPV8 (now A$257M) driven by:
-
An increase in the annualised Production Target which lifts revenues and free
cashflows over a similar life-of-mine (LOM) assumption.
-
Improved knowledge base and understanding through AGE progressing with field
recovery trial (FRT) procurement, resource modelling and refinement of process
design leading to modifications to the original design criteria.
•
Low initial capital expenditure forecast of A$131.3M (A$124M-A$138M) being an increase of
2% to achieve the 20% step-up in the steady state annual Production Target - including
consistent application of contingency (30%) and a 5% escalation assumption (down from 10%
previously) due to more accurate basis for estimating costs.
•
Average cash operating costs of A$22.94/lb U3O8 (US$16.06/lb U3O8) with a range of
A$21.79/lb - A$24.09/lb) and AISC (including transport, shipping, royalties and sustaining
capital) of A$47.58/lb U3O8 (US$33.31/lb U3O8) with range of A$45.20/lb to A$49.96/lb.
Table 4: Key Economic Outcomes (LOM)
Metrics
Unit
Updated Study
Scoping Study
(Dec 2023)
(Mar 2023)
Change
Price inputs
LOM average uranium price
US$/lb U3O8
75
65
10
A$:US$ (revenue calculation only)
A$
70 cents
70 cents
-
LOM average uranium price – A$
A$
107
92
15
Valuation, indicative returns and
Mid-point
ratios
NPV8 (post-tax, real, ungeared)
A$M
257
152
105
IRR (post-tax, real, ungeared)
%
42
29
13
Capex
A$M
131.3
129.3
1.9
Years
2.45
3.5
1.05
Sales revenue (gross)
A$M
1,318
929.0
389
Cash operating costs
A$M
297.5
268.0
29.5
Payback period (post-tax from first
production)
Cashflow summary
13
Transport, shipping, marketing and
A$M
(94.8)
(113)
18.2
A$M
(205.8)
(62.7)
143.1
All in sustaining costs (AISC)
A$M
598
433
165
Pre-production Capex
A$M
(131.3)
(129)
(2.3)
Tax Paid
A$M
(133.5)
(61)
(127.5)
Net Cashflow (post-tax)
A$M
467
306
161
Cash Operating Costs (ex-royalties)
A$/lb U3O8
22.9
25.6
2.7
AISC
A$/lb U3O8
47.6
43.2
(4.4)
ASIC in US$
US$/lb U3O8
33.3
30.2
(3.1)
royalties
Sustaining capital (incl. ongoing
wellfield development) – net of residual
Unit operating costs
Key highlights from the Scoping Study update include:
•
•
•
•
•
•
Simple, low impact mining technique which reduces both capital and operating costs,
reduces environmental impact, and is easier to rehabilitate.
Robust project economics with expansion potential from resource extension and
exploration upside.
Low initial capital cost estimate, despite inclusion of significant contingency and escalation.
Globally competitive operating cost profile.
Significant optimisation opportunities.
Field Recovery Trial (FRT) now likely to commence construction in mid-2024 (subject to
receiving all approvals) to confirm parameters to be used in a full feasibility study.
4.0 Funding
Alligator believes that the Updated Scoping Study continues to provide reasonable grounds to
believe that the Samphire Project will be an economically viable project to enable funding to be
procured for development and operation. To achieve the range of outcomes indicated in this Scoping
Study, pre-production capital funding of in excess of A$170M (including working capital) is expected
to be required.
A prerequisite for Alligator to attract future funding, in the form of both debt and equity, will require
the completion of a bankable feasibility study that demonstrates at a higher confidence level that
sufficient financial and technical outcomes exist to satisfy the providers of such funding.
There is no certainty that Alligator will be able to source the required amount of funding. It is also
possible that such funding may only be available on terms that may be dilutive to or otherwise affect
the value of Alligator’s shares. It is also possible that Alligator could pursue other value realisation
strategies such as a sale, partial sale or joint venture. This could materially reduce the Company’s
proportionate ownership in the Project.
14
5.0 Samphire Project: NPV Sensitivity Analysis
A sensitivity analysis was undertaken on several key variables – UOC sales price, A$:US$ exchange
rate,
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