An updated preliminary economic assessment (PEA) for Laramide Resources' (TSX, ASX: LAM)(US-OTC: LMRXF) proposed Westmoreland uranium mine in Australia places the project's value at approximately $741 million — nearly double the figure estimated a decade earlier under different assumptions. The valuation gap between the project's estimated worth and Laramide's market capitalization of roughly C$142 million ($101 million) reflects the early-stage nature of the study and the permitting hurdles that remain before development can proceed.

According to a statement released by Laramide on Wednesday, the new study is based on a 7.5% discount rate and a long-term uranium price of $90 per lb. U₃O₈. That price assumption aligns with the elevated uranium market environment that has taken hold since 2023, when spot prices rose sharply amid renewed global interest in nuclear energy as a low-carbon power source. Under those parameters, Westmoreland would deliver a 33% internal rate of return with a payback period of roughly 2.5 years. Initial capital expenditure is estimated at $456 million, plus an $84-million contingency, with sustaining capital of $84 million over the mine's life.

The Westmoreland project is located in Queensland, approximately 2,000 km northwest of Brisbane.

Replacing the 2016 PEA

The updated analysis supersedes a 2016 PEA and incorporates revised engineering, environmental and mine planning, metallurgical design, operating cost estimates, and updated uranium market assumptions, Laramide said. The earlier study, which applied a 10% discount rate and a uranium price of $65 per lb., valued Westmoreland at $400 million after tax.

"This PEA confirms that Westmoreland remains a compelling development proposition in a sector with limited supply visibility, particularly in the medium and longer term," Laramide CEO Marc Henderson said in the statement. "Identifying and supporting new mine development is becoming an increasingly urgent priority, especially given the rapidly increasing demand requirements of a global nuclear energy industry that is once again growing strongly."

Global uranium supply is concentrated among a small number of producers, with Kazakhstan, Canada, Namibia, and Australia accounting for the majority of world output. New mine supply has lagged growing demand from countries expanding nuclear capacity, including China, which continues to build reactors at scale, and several European nations reconsidering nuclear phase-out policies.

Queensland Uranium Mining Ban

Although Laramide stated it is prepared to file a mining lease application "as soon as permitted by the Queensland government," the company's efforts to develop Westmoreland must navigate a longstanding ban on uranium mining in the state.

Most Australian states either prohibit or effectively prevent uranium mine development. South Australia and the Northern Territory host the country's operating uranium mines, while nuclear energy itself is banned nationwide. A bill currently before the New South Wales Legislative Assembly seeks to overturn that state's ban on uranium mining.

Laramide's push could potentially benefit from India's expanding efforts to secure uranium supplies. Two weeks ago, Australia signed the final administrative arrangements on a deal to supply uranium for civilian nuclear use to India, the world's most populous country. Australia's uranium reserves could help India meet its target of 100 gigawatts of nuclear energy capacity by 2047.

"While we concur that Australia's uranium endowment is substantial and applaud the mutual intent that often emerges from these types of high-level political meetings, the reality is that Australia's relevance as a consequential and reliable uranium supplier is diminishing quickly and will require pro-active actions on the part of national and state political leaders in Australia if the country intends to reverse its shrinking share of what is now an expanding global uranium market," Henderson added.

Open-Pit Operation

Westmoreland is currently envisioned as an 11-year open-pit operation processing 2.9 million tonnes of ore annually through a conventional mill and leach circuit. Average annual production is estimated at approximately 4.9 million lb. U₃O₈, with total life-of-mine output of 47.9 million lb.

Uranium recovery is projected at 95%, and average cash operating costs are estimated at $32.40 per pound. Power options assessed for the project include hybrid diesel generation, solar energy, and battery storage, according to Laramide.

Defined Resources

Per a January 2025 resource estimate, the property holds 27.8 million indicated tonnes grading 770 parts per million (ppm) uranium, representing 48.1 million contained lb. of uranium oxide (U₃O₈). Inferred tonnage totals 11.8 million tonnes at 680 ppm uranium for 17.7 million contained lb. U₃O₈.

No mineral reserves have been declared to date.

The updated PEA factors only the defined uranium resources and excludes exploration upside from nearby satellite targets, Laramide noted. It also does not account for potential gold or rare earth mineralization identified within the broader district.

Laramide shares declined 5.7% to 50¢ Thursday morning in Toronto, reducing the company's market capitalization to approximately C$142 million ($101 million). The stock has traded between 46¢ and 91¢ over the past year.