Marmota reconsiders uranium after global price rise

Rising global uranium prices have prompted South Australian mining company Marmota to revisit its Junction Dam project west of Broken Hill.

The company is also continuing to advance its Aurora Tank gold project in the Gawler Craton region in the north-west of South Australia and also has copper interests on the state’s Yorke Peninsula.

The strategic review of Marmota’s uranium asset is somewhat of a return to its roots for the Adelaide-based company that began as a uranium explorer.

The Junction Dam site in South Australia’s north-east is about 50 km west of Broken Hill and 15 km from the Honeymoon uranium mine and tenement. Honeymoon is one of only four permitted uranium mines in Australia but was mothballed in 2013 because it had become too costly to run.

The Olympic Dam and Beverley uranium mines are also in South Australia, which hosts 25% of the world’s uranium deposits and 80% of Australia’s deposits.

Honeymoon’s new owner Boss Resources announced in January this year it had developed technology to lower operating costs and was looking to commence production at Honeymoon within a year if prices improved. This year the world uranium price has risen 35% from US$24.90 per pound on 1 January to $33.70 in June.

Marmota owns 100% of the uranium rights at Junction Dam but has not been active in uranium since 2014, at which point it had spent $8 million on uranium exploration.

Exploration results at Junction Dam show an inferred resource of 5.4 million pounds with potential to increase the size of the resource with further drilling. In a statement to the Australian Securities Exchange, the company said sentiment in the uranium sector had significantly improved, and continues to improve as prices started rising significantly for the first time in many years.

It said the Marmota Board had begun a strategic review of its uranium assets in a bid to add value to shareholders. Marmota Chairman Colin Rose said revisiting the company’s previous work was exciting and rewarding.

“Prompted by the increasing uranium price and market interest, Marmota has for the first time in more than five years started looking again at our uranium assets, which is after all how the company originally started,” he told the ASX. “The purpose, of course, is to unleash the value and potential of the uranium assets for the benefit of the company and its shareholders, and we are exploring a number of ways to do that, while keeping our focus firmly on our gold discovery at Aurora Tank.”

Image: Boss Resources is looking to recommence production at the Honeymoon uranium mine in north-east South Australia, which is adjacent to Marmota's Junction Dam uranium project.