The share price of GTI Energy soared more than 33% on the ASX on Thursday after the company released a scoping study highlighting the potential for a low-cost, in-situ recovery (ISR) uranium operation at its Lo Herma project in Wyoming’s Southern Powder River basin in the US.

The study, completed by Wyoming-based BRS Engineering, evaluated two development scenarios for the Lo Herma project – a central processing plant (CPP) and a satellite operation – and found both could deliver strong economics with a production target of 800 000 lb/y of uranium oxide (U₃O₈) over a seven-year mine life.

GTI reported a pre-tax net present value, using an 8% discount, of $110-million under the CPP scenario and $118-million for the satellite option, based on a uranium price of $90/lb. Pre-tax internal rates of return were 52% and 66%, respectively.

Capital costs were projected at $67-million for the CPP and $57-million for the satellite alternative, with pre-production capital at $43-million and $32-million, respectively. The company estimated a payback period of 2.5 years from the start of production.

“We are very pleased to present the results of the Lo Herma project scoping study,” said GTI executive director and CEO Bruce Lane. “This study represents an initial estimate for a project based on the Lo Herma deposit, producing 800 000 lb/y of U₃O₈ for supply into the increasing uranium demand supporting the US nuclear power industry.”

Shares in GTI closed at A$0.004, up from A$0.003 the previous day.

Lane emphasised the advantages of Lo Herma’s location and geology. “The capital costs to establish an initial project, either with the preferred option of a central processing plant or as a satellite facility, are quite low due to expected simple metallurgy and Lo Herma’s favourable location near critical infrastructure, a locally based workforce (no FIFO or camp) and experienced mining services and business support centres.”

Operating costs were forecast at about $32/lb U₃O₈, with all-in sustaining costs of $41/lb. The breakeven uranium price for the project over the economic evaluation period is estimated at $60/lb.

GTI noted the opportunity to extend the project’s life beyond seven years by converting the current exploration target into additional mineral resources through further drilling.

The scoping study outlines additional technical steps required before the project can move into feasibility and permitting, including hydrology studies, metallurgical testing, and infrastructure planning.

GTI expects earliest construction to begin in 2028, with commissioning production in 2029.

“The project would be analogous to nearby existing ISR uranium operations in Wyoming’s Southern Powder River basin, a globally recognised, experienced and supportive low-cost uranium mining jurisdiction,” Lane added.

The Lo Herma resource was updated in December, showing a 50% increase to 8.57-million pounds U₃O₈, with 32% in the indicated category and 68% inferred.