Energy Fuels looks to be the name in American uranium miningNorthern Miner
When uranium prices finally get around to coming back around Energy Fuels (TSX: EFR) is positioning itself to be one of the first places for investors to park their capital.
The company has the distinction of being the only conventional uranium producer in the U.S. with 1.2 million lbs of U3O8 project to be produced this year. Conventional refers to the fact Energy Fuels extracts uranium from the ground the good old fashioned way: it digs it out. In contrast the rest of U.S. uranium production comes from in-situ recovery systems (ISR), which pump fluids into the ground that then carry mineralization out.
But Energy Fuels isn't digging rather than pumping as a point of principal. It is simply blessed with properties that are high grade enough to make conventional mining economic. Ore being processed at the company's White Mesa mill averages 0.62% U3O8, which represents some of the highest grades found in the world outside of Saskatchewan's Athabasca Basin.
That high grade material is actually coming from over the Utah border as it is being mined at the company's Arizona One mine, roughly 56-km south of Fredonia, and trucked roughly 500-km to White Mesa, which is situated in Blanding, Utah. White Mesa has the capacity to process 1,800 tonnes of ore per day and has produced as much as 4.5 million lbs. of U3O8 a year in the past when prices where more conducive to larger scale production.
The mill was built back in 1980 by and refurbished by Energy Fuels in 2007 for US$31 million. The mill is also equipped to handle uranium bearing tailings from third party producers and is the only facility in North America that is able to process such alternate feeds.
Energy Fuels CEO Stephen Antony calls it a profitable line of business given that Energy Fuels is free from any mining costs. But White Mesa and Arizona One are only part of the Energy Fuels story. Indeed the mill stands in the midst of a flurry of Energy Fuel assets that the company designates as “stand-by” mines.
The list includes, Pinenut in Arizona; Henry Mountains, Daneros and La Sal Complex in Utah; and Whirlwing and the Sunday Complex in Colorado. With such an array of assets standing at the ready Antony says the company could ramp up to producing 3.5 million lbs of U3O8 should prices climb to above US$75 per lb. That larger production profile would involve bringing a second mill on line in the form of the Sheep Mountain project in Wyoming.
To ensure that is well positioned for a climb in prices, the company is currently engaged in the permitting process at the project. And its vision of production growth doesn't stop there. At the end of May the company announced that it was looking to takeover Strathmore Minerals in an all stock deal that would give Strathmore shareholders 1.47 Energy Fuels commons shares for each of their own — a 31% premium at the time. If successful the deal would unlock synergies that come from the two companies having complementary asset bases in the southwest U.S. and in Wyoming.
The most near term synergy is to be found in connection with Strathmore’s Roca Honda project in northwestern New Mexico, which is roughly 400-km from White Mesa. That is close enough to still be within trucking distance and would allow Energy Fuels to avoid the costs of building a new mill in New Mexico. And there are more synergies to be found up in Wyoming between Energy Fuels’ Sheep Mountain and Strathmore’s Gas hill project.
The projects sit just 45-km from one another allowing for the potential of a common processing facility, increased mine life and simplified permitting….along with the usual general and administrative expense savings that emerge when two companies become one.
The deal would also land Energy Fuels some new, and well heeled partners since Strathmore is partnered with Korea Electric Power Corporation (KEPCO) and Sumitomo Corp. of Japan. KEPCO, which generates 93% of South Korea’ electricity, has the right o earn up to 40% in Gas Hills by spending another US$32 million on development, while Sumitomo has a 40% stake in Roca Honda.
With partners like that, and synergistic assets set to unleash new torrents of production, Energy Fuels may soon be the dominant uranium player not only in the southwest, but throughout the U.S.
Energy Fuels looks to be the name in American uranium mining - See more at: https://www.northernminer.com/news/energy-fuels-looks-to-be-the-name-in-american-uranium-mining/1002465621/#sthash.2Q7Zxjow.dpuf
Energy Fuels looks to be the name in American uranium mining - See more at: https://www.northernminer.com/news/energy-fuels-looks-to-be-the-name-in-american-uranium-mining/1002465621/#sthash.2Q7Zxjow.dpuf
Energy Fuels looks to be the name in American uranium mining - See more at: https://www.northernminer.com/news/energy-fuels-looks-to-be-the-name-in-american-uranium-mining/1002465621/#sthash.2Q7Zxjow.dpuf
Energy Fuels looks to be the name in American uranium mining - See more at: https://www.northernminer.com/news/energy-fuels-looks-to-be-the-name-in-american-uranium-mining/1002465621/#sthash.2Q7Zxjow.dpuf
Energy Fuels looks to be the name in American uranium mining - See more at: https://www.northernminer.com/news/energy-fuels-looks-to-be-the-name-in-american-uranium-mining/1002465621/#sthash.2Q7Zxjow.dpuf
Link: https://www.northernminer.com/news/energy-fuels-looks-to-be-the-name-in-american-uranium-mining/1002465621/