Cebolleta PEA: $84M NPV, 17.7% IRR
Premier American Uranium Inc.'s Cebolleta in New Mexico, USA (Cibola County) has a Preliminary Economic Assessment (PEA) outlining an after-tax NPV of $84M, an after-tax IRR of 17.7%, and initial capital of $113M. The mine plan runs 13 years at about 1.4 Mlb U3O8/yr per year.
Premier American Uranium Inc.'s Cebolleta has reported Preliminary Economic Assessment (PEA) results for the uranium (u3o8) project in New Mexico, USA (Cibola County). The study headlines an after-tax net present value of $84M at a 8% discount rate. It reflects Premier American Uranium Inc.'s (PUR.V) latest disclosed economics for the asset.
Economics. The after-tax NPV is $84M using a 8% discount rate. After-tax IRR is 17.7%. Initial capital expenditure is estimated at $113M. The study models a payback period of 4.9 years. Economics are based on Base case US$90/lb U3O8; sensitivity at US$100/lb gives NPV US$153.7M.
Production and mine plan. The project envisions an open pit & underground operation. Life of mine is 13 years. Average annual production is approximately 1.4 Mlb U3O8/yr. Metallurgical recovery averages 80%.
Resources and ownership. The company holds a 100% interest in the project.
These figures are extracted from Premier American Uranium Inc.'s technical disclosures and reflect the most recent PEA on file. Compare this project against other developers and producers in our project economics database, and always verify the numbers against the original technical report before making any investment decision.
Reserves & Resources
| Category | Tonnage | Grade | Contained |
|---|---|---|---|
| Indicated | 9.70 Mst | 0.12% eU3O8 | 23.75 Mlb eU3O8 |
| Total Indicated less Depletion | 8.30 Mst | 0.12% eU3O8 | 20.31 Mlb eU3O8 |
| Inferred | 3.60 Mst | 0.10% eU3O8 | 7.04 Mlb eU3O8 |
Our Analysis
- IRR after-tax
- 17.7%
higher than 11% of 317 projects we track
- NPV after-tax
- $84M
higher than 38% of 8 projects we track
- Initial capex
- $113M
135% of NPV
costlier than 30% of 402 projects we track
- Payback
- 4.9yrs
slower than 92% of 253 projects we track
- Mine life
- 13yrs
- Discount rate
- 8%
- Study price assumption
- Base case US$90/lb U3O8; sensitivity at US$100/lb gives NPV US$153.7M
The financing question is the project’s defining feature. With initial capex of $113M sitting at roughly 2.9x the company’s entire US$38M market cap, this is not a build the company can quietly absorb. The cheque is simply too large for a nano-cap to write without substantial external backing, and the realistic paths all carry consequences for existing holders: significant equity dilution, a strategic partner taking a large stake, or heavy debt against a single-asset, scoping-level plan. The fact that this is one of ten projects in a diversified portfolio spreads operational risk but does little to solve the funding gap, since the market cap is the denominator that matters here.
The economics are a supporting act, and they are modest. The 17.7% after-tax IRR ranks in the bottom quartile of the 317 projects we track, and it sits below the 20% threshold typically required for a higher-risk junior with a thin balance sheet. The 4.9-year payback is long, and the after-tax NPV of $84M, while ranking above 38% of uranium peers, is still only about 2.2x the market cap. That gap cuts both ways: it could signal the market has not priced the asset, or it could reflect skepticism about whether a PEA with a plus or minus 50% capital band can be financed at all. The US$90/lb base case and the US$100/lb sensitivity producing a US$153.7M NPV are useful reference points, but they are study assumptions, not guarantees.
The jurisdiction is a genuine positive. New Mexico is a mining-friendly US state, which lowers permitting and political risk relative to many uranium jurisdictions, and that should lend some credibility to the development timeline. But a PEA is preliminary, and the capital estimate carries a wide band. The single question that decides whether this works is not the IRR or the NPV: it is who writes the $113M cheque, and at what cost to current shareholders. Until that is answered, the headline returns are theoretical.
Our take, benchmarked against the project economics in the Mining Stocks database. Figures are estimates drawn from company technical reports — not investment advice; always verify against the source filing.