MONTROSE COUNTY – Last week, Energy Fuels, Inc., the Canadian mining company planning to build the Piñon Ridge Uranium Mill in the Paradox Valley, announced what it called a “favorable” independent report for Montrose County confirming its estimates that there is a sufficient, economically mineable uranium resource in the region to supply its planned mill.
The report was prepared by Economic & Planning Systems, Inc., a national consulting firm with offices in Denver and in Sacramento, Calif. The report was requested by Montrose County in order to determine the feasibility and magnitude of regional uranium operations, given supply, demand, and competitive restraints.
The report concludes that world uranium demand is expected to double, assuming planned and proposed nuclear reactors are built, and that uranium production in the United States, including production in Montrose County, will increase to satisfy future levels of demand and fill the gap from dwindling stockpiles.
The Uravan Mineral Belt, one of the richest uranium deposits in the United States is estimated to contain between 31 percent and 36 percent of the nation’s uranium resource.
The Montrose County uranium resource has the market advantage of containing high-grade uranium and large quantities of vanadium, which adds significant value to area mining properties. The uranium resource available to supply a mill in Montrose County is as much as 2,667 tons per day, at a uranium price of $50 per pound, and as much as 4,333 tons per day at a uranium price of $100 per pound.
Energy Fuels’ Piñon Ridge Mill is currently licensed for a capacity of 500 tons per day, with the potential to expand to 1,000 tons per day through additional permitting. The Piñon Ridge Mill will also have a vanadium circuit to produce significant quantities of this strategic metal.
“It is very positive to obtain independent third-party verification of our projections,” Energy Fuels President and CEO, Steve Antony, said in last week’s announcement. “The bottom line is that there are considerable quantities of uranium and vanadium resource that can potentially be mined economically in this region – by us and by others. This report highlights that there is little milling capacity to bring that resource to market. These factors, combined with uranium demand projections, give further justification for the construction of the Piñon Ridge Mill.”
The only competition to the planned mill is the White Mesa Mill in Blanding, Utah.
Last month Energy Fuels announced plans to expand and consolidate its uranium and vanadium mines in preparation of the mill’s scheduled 2013 opening. Throughout the rest of this year, the company will conduct a summer and fall drill program on properties it currently owns to verify the amount of ore to see if expansion at those properties is a possibility.
Last April, the company updated its mineral resource estimates on its two primary mines, the Whirlwind and Energy Queen Mines, as well as its San Rafael project. The updated estimates resulted in a measured mineral increase of about 27 percent from 5.1 million pounds of uranium to more than 6.4 million pounds. Inferred mineral resource increased by approximately 18 percent from 3.7 million pounds to over 4.3 million pounds.
Energy Fuels officials said the company received a strong market validation of its business model when it secured $11.5 million in financing last March, even as the Japanese nuclear crisis continued to unfold. And while that crisis continues to bring scrutiny to nuclear energy around the world, officials say there is and will still be a need to process uranium ore.
Before construction of the mill gets underway, Energy Fuels must still clear several hurdles including a legal challenge to the mill’s radioactive materials license approval. The lawsuit was filed in District Court last February by Sheep Mountain Alliance and alleges that during their review regulators never allowed the public to ask them or Energy Fuels representatives technical questions about the project, which the Telluride-based environmental group believes is a violation of the federal Atomic Energy Act.