Uranium Mining and Exploration

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Former top U.S. uranium producer again prepares to mine, mill uranium

After a long absence, Colorado’s Energy Fuels has returned to U.S. uranium mining with the nearly realized goal of once again become a domestic uranium producer and marketer.

Mineweb.com
Author: Dorothy Kosich
Posted: Monday , 17 Dec 2007

RENO, NV -

While a slew of would-be uranium producers have cropped up on the North American junior mining horizon, Energy Fuels (TSX: EFR), formerly the largest U.S. uranium producer in the 1980s, now stands once again on the domestic production threshold.

The former privately-owned Energy Fuel Nuclear, now a Colorado-based public company, recently announced the construction of the first uranium mill to be built in the U.S. in 25 years, a location actually chosen and recommended with the input of state regulators.

In a recent presentation to the Northwest Mining Association Convention, Energy Fuels Vice President-Corporate Marketing, Gary R. Steele, said the rapid development of the Piñion Ridge Mill site can be attributed to licensing authority of the Colorado Department of Public Health and Environment (CDPHE), instead of a federal nuclear regulatory commission.

As part of the environmental data gathering and licensing process, Energy Fuels holds regular monthly meetings and conducts sites visits with state regulators, incorporating their suggestions into the data gathering, site location, and mill design planning. "We have tried to do everything we could due" to make Colorado regulators a stakeholder in the project, Steele said.

Of seven sites Energy Fuels was considering in Colorado and Utah, Steele said two "popped up as best alternatives." The CDPHE regulators helped determine which of the two was the best mill location. By working with the regulators, Energy Fuels is confident of mill start up in 2010. Located in the uranium mining-friendly environment of Montrose County, Colorado, the 1,000 tpd mill will have both uranium and vanadium recovery circuits. It is located on 880 acres or private land owned by Energy Fuels, which Steele estimated is large enough for more than 30 years of tailings disposal.

Steele said a confluence of events generated the resurrection of the new Energy Fuels including: the uranium market; the right people; the ability to finance; and the underlying realities. For instance, he explained that seven reactors have been ordered or are planned for the United States, while 25 reactors have been proposed. Steele estimated that 103 reactors now operating in this country require 52 million pounds or 26,000 tons of U3O8 annually or 505,000 pounds unit. The combined 32 new units would create a potential additional annual demand for 16 million pounds of U3O8 , according to Steele.

In September RBC Dominion Securities estimated actual domestic demand for reactor and inventory requirements to be 166 million pounds of U3O8 in 2006, of which 107 million pounds is primary mine production. Meanwhile, Steele noted that the Edison Electric Institute projects a 40% increase in domestic electricity demand by 2030.

Underlying socio-economic factors have strengthened domestic uranium prospects, Steele asserted. High fuel prices, the gradual acceptance of nuclear power generation by environmental special interests, and the streamlining and risk limitation in the nuclear plant licensing process have encouraged the development of domestic nuclear power, he explained. Meanwhile the federal government has also provided tax incentives and loan guarantees to assist builders of new nuclear capacity, according to Steele.

Steele explained that a 1000 MW nuclear plant requires a footprint about one-third of a square mile, noting that the same capacity solar array needs 50 square miles, while a wind farm requires 200 square miles. Meanwhile, Steele claimed that the annual nuclear waste generated by a typical reactor is about 22 tons and could all fit in the beds of five standard pickups. "All of the spent fuel from all 50 years of all U.S. reactor operations would fit in a single football field, piled 18 feet high," Steele asserted. "There are only 61,000 tons of this material now in storage."

The domestic focus of Energy Fuels is in the former uranium mining districts of Colorado, Utah and Arizona. The company has also convinced the former Energy Fuels Nuclear management team to lead Energy Fuels.

Steele said the company's mining operations "can recommence on short notice." Production activities can begin once mine permits are approved by regulators with the mineralized material to be stockpiled at an approved site until the Piñon Ridge Mill is operating. The company is also pursuing an interim toll milling agreement, according to Steele.

Among the company's portfolio of properties is the Whirlwind Mine, a former Union Carbide operation, which is now undergoing mine rehabilitation. Steele said planned 200 tpd production could begin in 2008. The estimated resource at the mine is 657,000 pounds of uranium and 2.17 million pounds of vanadium.

Utah's Energy Queen mine is another former Union Carbide mine, which is also undergoing mine rehabilitation with a total capex of US$3 million. The 200-300 tpd operation is scheduled to begin in 2008. Energy Queen's estimated resource includes 766,000 pounds of uranium and 3 million pounds of vanadium.

Located near Gateway, Colorado, Energy Fuels' Tenderfoot Mesa is undergoing $1 million in mine rehabilitation with a planned 100tpd operation, which could begin as early as mid-2008.

Online source:
http://www.mineweb.com/mineweb/view/mineweb/en/page38?oid=42189&sn=Detail