Cebolleta Uranium Project PEA: $84M NPV, 17.7% IRR
Premier American Uranium Inc.'s Cebolleta Uranium Project in USA, Cibola County, New Mexico 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 Uranium Project has reported Preliminary Economic Assessment (PEA) results for the uranium (u3o8) project in USA, Cibola County, New Mexico. 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 (long-term uranium price used in MRE); sensitivity range US$70–$150/lb.
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. Average head grade is 0.12% eU3O8 Indicated (less depletion), 0.10% eU3O8 Inferred. Metallurgical recovery averages 80%.
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 - Underground | 5.89 Mst | 0.15% eU3O8 | 18.14 Mlb eU3O8 |
| Indicated - Open Pit | 3.81 Mst | 0.07% eU3O8 | 5.61 Mlb eU3O8 |
| Subtotal Indicated | 9.70 Mst | 0.12% eU3O8 | 23.75 Mlb eU3O8 |
| Depletion | -1.40 Mst | 0.12% eU3O8 | -3.44 Mlb eU3O8 |
| Total Indicated less Depletion | 8.30 Mst | 0.12% eU3O8 | 20.31 Mlb eU3O8 |
| Inferred - Underground | 1.79 Mst | 0.12% eU3O8 | 4.42 Mlb eU3O8 |
| Inferred - Open Pit | 1.81 Mst | 0.07% eU3O8 | 2.62 Mlb eU3O8 |
| Total Inferred | 3.60 Mst | 0.10% eU3O8 | 7.04 Mlb eU3O8 |
Our Analysis
- IRR after-tax
- 17.7%
higher than 0% of 8 projects we track
- NPV after-tax
- $84M
higher than 0% of 8 projects we track
- Initial capex
- $113M
135% of NPV
costlier than 25% of 8 projects we track
- Payback
- 4.9yrs
slower than 93% of 304 projects we track
- Mine life
- 13yrs
- Discount rate
- 8%
- Study price assumption
- Base case US$90/lb U3O8 (long-term uranium price used in MRE); sensitivity range US$70–$150/lb
A US$113M initial build against a US$31M market capitalisation is the whole story here. The capex is roughly 3.7 times the entire equity value of the company, and 135% of the project's after-tax NPV. A nano-cap cannot write that cheque from the balance sheet, and this is one of ten projects the company carries, so the cash is not ring-fenced. Realistically the money comes from a partner, a streaming or offtake prepayment, or heavy equity issuance, and each route lands on existing holders: farm-down means giving away economics, equity means dilution at a valuation set by whoever is negotiating from strength. That is the decision, not the IRR.
The economics are the supporting act, and they are thin. A 17.7% after-tax IRR sits in the bottom quartile of the eight uranium projects we track, and the US$84M after-tax NPV ranks the same way. Against a practical project-finance hurdle of roughly 15% for a developer with a credible balance sheet, and 20%-plus for a junior with little else to fall back on, this clears the first bar only narrowly and misses the second. Payback of 4.9 years is long, slower than 93% of the 304 projects we track across all commodities, which means capital sits at risk for most of a decade before it returns.
Two things temper the read. The study is a PEA, scoping-level, potentially built on inferred material, with a capital estimate that typically carries a plus or minus 50% band, so the US$113M could move materially in either direction. And the US$90/lb base case sits inside a US$70, US$150/lb sensitivity range, so the returns are genuinely levered to the uranium price rather than to a single fixed assumption. Cibola County, New Mexico is a familiar uranium jurisdiction, which helps on permitting familiarity but does not change the funding arithmetic. The question that decides this project: can a US$31M company fund a US$113M build without handing away the asset?
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.