WESTERN SLOPE – Energy Fuels, Inc., the country’s largest uranium and vanadium producer, which is planning to build the Piñon Ridge Uranium Mill in the Paradox Valley, announced on Oct. 17 that following an evaluation of its operations, production sources, and soft market conditions it will shift its short-term focus toward lower cost uranium sources in its portfolio.

Specifically, according to a press release dated Oct. 17, Energy Fuels will concentrate on mining its lower cost, high-grade breccia pipes located in northern Arizona. As a result of this strategy, uranium mines located in southeastern Utah and southwestern Colorado are on standby. These mines include the Beaver and Daneros properties. Energy Fuels officials will continue to monitor market conditions and will evaluate the reopening of the Beaver and Daneros mines when deemed appropriate.

“In the short-term, we are shifting our focus,” Energy Fuels spokesman Curtis Moore said on Tuesday. “A big part of that decision is that uranium markets have been quite soft recently. What we think is happening is that the nuclear reactors in Japan are not starting up as quickly as originally thought, there is a plentiful amount of uranium on the market right now and, quite frankly, the U.S. and the world economies remain somewhat stagnant right now.”

Moore said the mines on the Arizona strip, located just north of the Grand Canyon are some of the best uranium deposits in the U.S. while the ore grades in Utah and Colorado cost more to produce.

“In Arizona we don’t have to mine as much material to get the uranium out of it,” he said.

Will this shift in focus in the short-term have any bearing on Energy Fuels’ plans to build the proposed Piñon Ridge Uranium Mill in Montrose County? More than likely, no.

“If the markets remain flat for a long time, it could impact that,” Moore said. “But right now, most people agree that the uranium markets are going to come around at some point. The prices are going to rise … they have to rise if you are looking at the economics of it.”

After acquiring all of Denison Mines Corp. mining and milling assets earlier this year, including the White Mesa uranium mill in Blanding, Utah, Energy Fuels expects production from that mill to be between 1 and 1.1 million pounds of uranium and between 2 and 2.2 million pounds of vanadium in 2013.

Mining is expected to continue at the Energy Fuels’ Arizona 1 property during the first three quarters of 2013. In addition, mining is expected to commence at the Pinenut property in Arizona during the second quarter of 2013.

“Energy Fuels is well-equipped to adjust our operations to address market conditions. Within our portfolio of assets, we have lower cost sources of production, such as the high-grade breccia pipe mines in the Arizona Strip and the ability to process alternate feed materials at the White Mesa Mill for which there is no mining cost,” Energy Fuels President and CEO Stephen Antony said. “In addition, we have term contracts with multiple utilities which enable the company to sell significant quantities of U3O8 at a substantial premium to the current spot price. These assets will play a particularly important role in how we manage our business at this time, when the current U3O8 spot price, in our view, does not reflect the strong fundamentals of the uranium sector over the medium- to long-term.

“Although our Colorado Plateau properties will be placed on standby for the time being, we will maintain these assets with the ability to resume production in a timely fashion upon commodity prices improving. In addition, we will continue to invest in development projects that will keep Energy Fuels as the leading U.S. uranium producer, including the development of the Canyon mine in Arizona and the continuation of permitting activities at our Sheep Mountain project in Wyoming.”

A second hearing before the Colorado Department of Public Health and Environment will begin on Nov. 7 to review Energy Fuels’s application for the radioactive materials license needed to begin construction on the Piñon Ridge Uranium Mill in the Paradox Valley.

According to Energy Fuels, the company is America’s largest conventional uranium and vanadium producer, supplying nearly a third of the uranium produced in the U.S. The company operates the White Mesa Mill, which is the only conventional uranium mill currently operating in the U.S., capable of processing 2,000 tons per day of uranium ore. Energy Fuels has projects located throughout the Western U.S., including producing mines and mineral properties in various stages of permitting and development.



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