The Wyoming Business Council board approved a $20 million Industrial Development Bond for construction of Uranerz Energy's Nichols Ranch uranium facility.
The bond would cover more than half the cost of building a partial processing plant and the first in-situ injection and recovery wellfield. The project is expected to cost $35 million total.
Uranerz cleared its final regulatory hurdle for the Nichols Ranch late last month, when the Wyoming Department of Environmental Quality issued the company a deep disposal well permit.
The company expects to begin production on the site in the first quarter of 2013. Uranerz is licensed to produce 2 million pounds of uranium per year, but will likely start with between 600,000 and 800,000 pounds.
Some members of the board expressed caution about the uranium industry. The price has dipped since it peaked at nearly $140 in 2007, falling closer to $50 per pound.
Uranerz President and Chief Executive Officer Glenn Catchpole said his company remains optimistic about the commodity. Worldwide demand far exceeds worldwide production, he said, creating a potentially favorable market.
"If you look at the forecast, our supply deficit is growing," he said. "We're quite comfortable and feel good about where those prices are going to go in the future."
Uranerz signed a deal in December to transport Nichols Ranch uranium to nearby Smith Ranch-Highland, a facility owned by Cameco Resources, for further processing.
In-situ recovery is a technique in which a solution is pumped into rock formations, freeing trapped uranium and transporting it to the surface.
Uranerz is expected to pay back the bond over seven years.