Announcement • May 14
Premier American Uranium Commences Drilling at Cebolleta as Part of 2026 Metallurgical Testing
Premier American Uranium Inc. commenced drilling at its Cebolleta Uranium Project in New Mexico, marking an important step in the Company’s 2026 work program focused on advancing metallurgical optimization and project economics. The drill program is designed to support a comprehensive metallurgical testing campaign, with core samples to be used in a 42-week laboratory program aimed at optimizing the uranium recovery assumptions contained in the 2025 Preliminary Economic Assessment. Drilling is underway with up to 16 PQ core holes to provide sufficient volume of test material, intended to be representative of underground mined rock from Sohio Areas I, II and III. Core samples will be selectively composited for mineralogical characterization, bottle roll recovery testing, and long-term column leach tests to simulate heap leaching. Results are expected to inform potential improvements to heap leach recovery and future economic studies. Core drilling is expected to conclude in June. The metallurgical program, led by Dr. Terry McNulty and conducted at Hazen Research, will examine the efficacy of multiple oxidants, lixiviants, and application rates with the goal of optimizing heap-leach uranium recovery and informing key assumptions for future economic studies to unlock additional value from the Project. The 2025 Preliminary Economic Assessment outlines a potential 13-year mine life producing an average of 1.4 million pounds of U3O8 annually, with peak production of 2.0 million pounds, for total life-of-mine production of 18.1 million pounds payable eU3O8. At a base case uranium price of USD 90/lb U3O8, the study demonstrates an after-tax NPV (8%) of USD 83.9 million (USD 106 million pre-tax) and an after-tax IRR of 17.7%, with direct pre-production capital expenditures of USD 64.2 million and total initial capital expenditures of approximately USD 112.7 million, including indirect costs and contingency, excluding USD 4.5 million in permitting and closure. The Project is expected to generate life-of-mine after-tax free cash flow of USD 287 million and operating cash flow of USD 496 million, supported by average total cash costs of USD 59.92 per pound produced. The 2025 Preliminary Economic Assessment also highlights strong leverage to uranium prices, with after-tax NPV (8%) increasing to USD 154 million at USD 100/lb, USD 325 million at USD 125/lb, and USD 488 million at USD 150/lb U3O8. The 2025 Preliminary Economic Assessment is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no certainty that the 2025 Preliminary Economic Assessment will be realized. Mr. Mathisen has verified the exploration, sampling, analytical, and testing data supporting the mineral resource estimate and the 2025 Preliminary Economic Assessment through a review and audit of historical and recent databases, comparisons with original geophysical logs and assay records, and inspections of drill hole collar, interval, and grade data for completeness and accuracy. Verification included a site visit on September 12, 2023, a review of drilling and downhole logging procedures, and an evaluation of the 2023 twin-hole and 2025 Willie P database audits, which confirmed a strong correlation with historical results and overall data reliability. Although no historical core or quality assurance/quality control reference materials are available, and most legacy holes lack deviation surveys, no limitations were placed upon the Qualified Person during the verification process, and the Qualified Person considers the verification methods and resulting database adequate for mineral resource estimation and compliant with NI 43-101 requirements. Additional scientific and technical information in this news release not specific to the 2025 Preliminary Economic Assessment and mineral resource estimate and relating to the 2026 work program has been reviewed and approved by Terrance McNulty, PE, a consultant of Premier American Uranium, who is a Qualified Person as defined in NI 43-101. Photos accompanying this announcement are available.
