Energy Fuels Looks to Expand Its Uranium Resources
by Gus Jarvis
Jul 05, 2011 | 3665 views | 0 0 comments | 12 12 recommendations | email to a friend | print
Plans to Acquire More Mines on Colorado Plateau

MONTROSE COUNTY – With its radioactive materials license in place and full confidence it will successfully overcome the lawsuit filed by Sheep Mountain Alliance, Energy Fuels, Inc., the Canadian company planning to build the Piñon Ridge uranium mill in the Paradox Valley, recently announced its plans to expand and consolidate its uranium and vanadium mines in preparation of the mill’s scheduled 2013 opening.

Throughout the second half of this year, the company’s mining expansion/consolidation plans include a summer and fall drill program on properties it currently owns to verify the amount of ore and to assess the viability of expansion.

In addition, company spokespersons say, current market conditions represent a buying opportunity to acquire additional properties that can provide long-term resources to feed the Piñon Ridge uranium mill.

“We are looking to have from four to six mines in operation to feed ore into the mill,” Energy Fuels’ Director of Communications and Legal Affairs Curtis Moore said Tuesday. “We have two mines that are permitted and ready to go. They are on standby. We do own and control some other properties and there are some other mines in the area [where] we are doing some evaluations of their mineral resources to determine whether or not to open them.”

If a particular mine shows promise of providing enough uranium, Moore said, the company will do what it needs to do to acquire legal ownership and then go through the process to get the mine permitted.

“Energy Fuels is quietly assembling an impressive array of properties on the Colorado Plateau,” Energy Fuels President and CEO Stephen Antony said in a statement released on June 16. “This summer, we intend to expand our resource portfolio even further. In addition to the licensing and construction of the Piñon Ridge Mill, a vital aspect of Energy Fuels’ strategy is to convert historic known resources into compliant NI 43-101 resources through near-term drill programs and data acquisition. Our ultimate goal is to bring these proven and formerly producing mines back into production and process the material at the Piñon Ridge Mill.”

In April, the company updated its mineral resource estimates on its primary two mines, the Whirlwind and Energy Queen Mines, and on its San Rafael project. The updated estimates, which Energy Fuels said was completed by an independent Golden, Colo., geologist, result in a measured mineral increase of about 27 percent, from 5.1 million pounds of uranium to more than 6.4 pounds. Inferred mineral resource increased by approximately 18 percent from 3.7 million pounds to over 4.3 million pounds.

The growth in resources reported in these updated reports, according to the company, came primarily from adjoining-property acquisitions. Significant pounds were added at San Rafael that became accessible as a result of the Hollie Claims acquisition from Titan Uranium.

“These additional resource pounds are a direct result of our consolidation initiative in Colorado and Utah,” Antony said. “We think this is just the beginning of what we can accomplish with a clear focus and the new investment capital that we are raising.”

Energy Fuels officials said the company received a strong market validation of its business model when it secured $11.5 million in financing in March, even as the Japanese nuclear crisis continued to unfold. And while that crisis continues to bring scrutiny to nuclear energy around the world, Moore said there is and will continue to be a need to process uranium ore.

“It was definitely a bit of a shock to the uranium markets,” Moore said. “But once the initial shock was going to pass, most people in the industry really believe that basic economics are going to take over and there will still be a market for uranium.”

Moore went on to say that there are 435 nuclear reactors around the world with 104 of them in the United States, and that even though countries like the U.S. and Germany have decided to take a step back and reevaluate their nuclear energy policies, other countries will continue to drive the market.

“Countries like China and Brazil reevaluated right after the disaster,” he said. “Soon after, they said everything was safe and they were going to proceed as they were before. There is a lot of demand for uranium. The U.S. and Germany were not big drivers of that demand.”

Before construction of the mill gets underway, Energy Fuels must still clear several hurdle-, including a legal challenge to the mill’s radioactive materials license approval. That lawsuit, filed in District Court in February by Sheep Mountain Alliance, alleges that during review, regulators never allowed the public to ask them or Energy Fuels representatives technical questions about the project, which the Telluride-based environmental group contends is an apparent violation of the federal Atomic Energy Act.

The complaint also alleges that state regulators did not follow the provisions of the Colorado Radiation Control Act when they issued the radioactive materials license before the company had posted the necessary financial warranties to cover the costs of the cleanup of the radioactive and toxic tailings and waste involved with yellowcake production.

“We are very optimistic in prevailing on that lawsuit,” Moore said.

The lawsuit seeks the revocation of the state-issued radioactive materials license to Energy Fuels. If successful, the legal challenge would require Energy Fuels to submit a complete application before state regulators could begin a new approval process that follows the basic standards outlined in the Atomic Energy Act and complies with state law.

Despite the lawsuit, Energy Fuels is advancing toward completion of construction plans and acquiring the remaining permits and approvals, including construction approval from the U.S. Environmental Protection Agency for the tailings impoundment and an air quality permit from the State of Colorado.

If built, the uranium mill be one of two operating mills in the U.S.

“Historically, Colorado and Utah were home to the most important uranium producing districts in the World,” Antony said. “These areas still contain significant quantities of uranium and vanadium that can be produced competitively and economically. The Colorado Plateau can again be a major uranium producing area of worldwide significance.”
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