Macusani Yellowcake Inc.
TSX VENTURE : YEL
FRANKFURT : QG1

Macusani Yellowcake Inc.

April 26, 2010 14:17 ET

Macusani Yellowcake Announces Positive Preliminary Economic Assessment for the Colibri II/III Uranium Property With A Pre-Tax IRR of 20.7% at US$65 U3O8 Long Term Price

TORONTO, ONTARIO--(Marketwire - April 26, 2010) - Macusani Yellowcake Inc. (TSX VENTURE:YEL)(FRANKFURT:QG1) (the "Company") is pleased to announce the completion of a positive Preliminary Economic Assessment ("PEA") for the Colibri II/III uranium deposit located on the Macusani Plateau, Puno in southeastern Peru. The PEA is based on a NI 43-101 technical resource report dated April 2010 by the Mineral Corporation. (Please note that all dollar figures are quoted in US dollars except where indicated).

The PEA was prepared by GBM Minerals Engineering Consultants Limited ("GBM") of the U.K. The PEA supports a robust, positive investment return at a $65 per lb long term U3O8 price. The pre-tax internal rate of return ("IRR") is estimated at 20.7% and the pre-tax net present value ("NPV") using a 13% discount rate was calculated at $64.1 million on a 100% equity basis with a payback period of 5.32 years from the start of the two-year construction period (3.32 years from the start of mining). Initial capital costs are estimated at $147.9 million (including a contingency of $20.4 million) and total capital costs are estimated at $162.2 million including the initial capital costs and $14.3 million of sustaining capital. Total operating costs for the project are estimated at $250 million or $21.65 per pound of U3O8 (equivalent) produced.

The study assumes an open pit/heap leach operation that would produce an average of 1.17 million lbs of U3O8 (equivalent) per year for ten years from 3.0 million tonnes of mineralized material per year (plus 0.3 million tonnes of waste) assuming a head grade of 200 ppm (0.02% or 0.40 lbs/short ton) and a uranium recovery rate of 89%. The uranium would be recovered from the leach solution using a continuous fixed bed ion exchange plant (or "CFIX").

Mr. Peter Hooper, CEO of the Company stated "We are very encouraged by the positive results of this PEA which shows cash costs at approximately 50% of the current uranium spot price. We are highly motivated to continue to develop significant uranium resources on the Macusani Plateau to improve the economic potential even further. We believe that the economic parameters demonstrated by this study will also be applicable to the Company's higher grade Corachapi and Kihitian projects located in the vicinity."

The key parameters and results are shown in the following table:

Preliminary Economic Assessment Highlights: Colibri II/III Deposit

Total U3O8 produced (1) 11.7 million pounds
Average head grade (U3O8) 200 ppm or 0.020%
Strip ratio (waste:mineralized material) 0.1:1
Average annual production U3O8 1.17 million pounds
Uranium recovery rate 89%
Life of Mine 10 years
   
IRR (pre-tax) 20.7%
NPV at 13% (pre-tax) $64.14 million
Payback period (2) 5.32 years
Direct unit cash costs $21.65/lb U3O8
Initial capital costs (3) $147.9 million
- including contingency of: $20.4 million
Total capital costs (4) $162.2 million
   
Long term uranium price $65 per lb U3O8
Long term diesel price $0.70/litre
Long term sulphuric acid price $100/tonne
   
Notes: (1) U3O8 grade and annual throughput are derived from preliminary pit optimization information developed by Wardell Armstrong International Ltd. NI 43-101 compliant mineral resources were calculated by The Mineral Corporation and filed on SEDAR
    (2) Includes two-year construction period. Payback from start of mining is estimated at 3.32 years.
    (3) Calculated to an accuracy of -15% to +25%. 
    (4) Includes sustaining capital of $14.3 million. 
 

The Colibri II/III properties are well located in the vicinity of a major trans-continental highway as well as adequate fresh water supplies and available electrical power. The PEA takes into account the high altitude location of the project at approximately 4,330 metres (14,200 feet) above sea level which would result approximately 30% reduction in the efficiency of certain electrical and diesel equipment.

The PEA assumes that uranium mineralized material would be mined in a shallow open pit at a rate of 3.0 million tonnes per year using blasting and front end loaders. The limited overburden and shallow nature of the pit would result in a very low stripping ratio of waste-to-mineralized material at 0.1:1 or 300,000 tonnes of waste per annum.

The run-of-mine mineralized material would be delivered to a crushing plant adjacent to the pit then carried by conveyor belt to a series of 12 heap leach cells. The mineralized material would be stacked on the cell pads and would be irrigated with a diluted sulphuric acid solution. The resulting pregnant solution would be collected in a pond then pumped to a holding tank in a continuous fixed bed ion exchange plant ("CFIX" plant) located 1.5 kilometres from the mine. The CFIX plant is composed of a series of vessels loaded with a cationic resin which has a high affinity for uranyl sulphate where the pregnant solution is concentrated. The concentrate solution is then reacted with hydrogen peroxide to precipitate out the uranium as uranyl peroxide which is thickened and dried to produce saleable yellowcake.  

The PEA is preliminary in nature and incorporates inferred mineral resources that require additional geologic work to have economic considerations applied to them. There is no certainty that the reserves development, production and economic forecasts on which this PEA is based will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Qualified Persons

Mr. Alex Mitchell, BSc (Hons), CEng, MIMMM, Principal Metallurgist with GBM Mining Engineering Consultants Limited, an independent consultant, and Mr. Owen Daniel Mihalop, BSc, MSc, CEng, MIMMM, Principal Mining Engineer and Technical Director of Wardell Armstrong International Ltd., an independent consultant, are Qualified Persons, as defined under National Instrument 43-101, and have reviewed the scientific or technical data contained in this release.

About Macusani Yellowcake

Macusani Yellowcake Inc. is a Canadian uranium exploration company with over 24,000 hectares (240 km2) of mineral properties in south-eastern Peru, on the Macusani Plateau. The shares are traded on the TSX Venture Exchange under the symbol 'YEL' and on the Frankfurt Exchange under the symbol 'QG1'.

There are 59,881,284 common shares of Macusani Yellowcake Inc. outstanding.

This news release includes certain forward-looking statements concerning the future performance of Macusani's business, operations and financial performance and condition, as well as management's objectives, strategies, beliefs and intentions. Forward-looking statements are frequently identified by such words as "may", "will", "plan", "expect", "anticipate", "estimate", "intend" and similar words referring to future events and results. Forward-looking statements are based on the current opinions and expectations of management. All forward-looking information is inherently uncertain and subject to a variety of assumptions, risks and uncertainties, including the speculative nature of mineral exploration and development, fluctuating commodity prices, competitive risks and the availability of financing, as described in more detail in the Company's recent securities filings available at www.sedar.com. Actual events or results may differ materially from those projected in the forward-looking statements and Macusani cautions against placing undue reliance thereon. Neither Macusani nor its management assume any obligation to revise or update these forward-looking statements.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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