Energy Fuels will prioritize work at its Canyon mine in Arizona under a revised business plan, which focuses on sustaining the company's production capabilities whilst ensuring it is able to respond quickly to any changes in market conditions.
The Lakewood, Colorado-based company set out its plans in its latest operational update and 2017 production guidance, published yesterday. The main emphasis of the business plan is to sustain production capabilities and uranium resources, whilst retaining "production scalability and optionality" - including permitted mining and processing capacity - so that it can respond to improved market conditions.
It is producing uranium from the Nichols Ranch in situ leach (ISL) project in Wyoming and processing stockpiled ore and other feeds at the White Mesa conventional mill in Utah. Its recently acquired Alta Mesa ISL project in Texas remains on care and maintenance.
It currently claims a licensed capacity of over 11.5 million pounds U3O8 (4423 tU) per year, and believes it has the capability - with improved uranium prices and the receipt of additional permits - to produce 4 to 6 million pounds of U3O8 per year on a sustained basis. However, in the short term, "and for so long as weak uranium prices persist", it said it expects to maintain production at today's "reduced" levels or lower, including 950,000 pounds of U3O8 in 2016 and 800,000 pounds of U3O8 in 2017.
Canyon to the fore
The high-grade Canyon mine, at which work is ongoing to confirm NI 43-101 average grades of 1% U3O8, is identified as a high priority in the revised business plan. The mine's 1,470-feet (448 m) shaft is now 80% complete, and construction of the shaft and three levels is expected to be completed by the end of this year, with additional drilling and evaluation continuing into 2017.
Drilling results from Canyon are increasing the company's level of confidence that production costs from Canyon will be "low-cost and competitive with the best underground mines globally, including mines in Canada", it said. As a result, Canyon is "likely to take a more significant role in the short-to-medium term" as the lowest cost source of primary uranium production in Energy Fuels' portfolio.
The Nichols Ranch and Alta Mesa mines also remain "extremely important" to the company owing to their potential to increase production relatively quickly as markets recover.
Nichols Ranch is expected to produce about 300,000 lbs U3O8 this year, with production of about 350,000 lbs U3O8 per year in 2017 and beyond unless uranium market conditions warrant increasing production.
Energy Fuels acquired Alta Mesa, with its fully permitted and constructed processing plant, through its purchase of Mesteña Uranium in June. It announced maiden resource figures for the project in August, with measured and indicated resources of 3.6 million pounds U3O8 and 16.8 million pounds of inferred resources. No NI 43-101 compliant resource estimates had previously been prepared for the deposit because it was in private ownership.
Alta Mesa will remain on care and maintenance until uranium prices recover. Based on past production, Energy Fuels said it expects Alta Mesa to be among the lowest cost sources of uranium production in its portfolio when market demand increases.
It expects to be able to increase combined production from Nichols Ranch and Alta Mesa to 1.2 million lbs U3O8 or more per year within six to 12 months, with additional wellfield development and minimal other capital expenditures, should market conditions warrant that. "While this increased production is not currently planned for 2016 or 2017, the Company will monitor market conditions and actively seek to sell this material at prices that justify these levels of production," it said.
New feed at White Mesa
Energy Fuels expects to produce about 650,000 lbs U3O8 from the White Mesa mill in Utah this year, as previously announced. This includes 460,000 lbs from stockpiled material previously mined from the now-depleted Pinenut mine and 165,000 lbs stockpiled alternate feed materials.
The mill has also been producing uranium through the recycling of water from its own tailings management system. Known as "pond returns", the water contains dissolved uranium not recovered in earlier processing activities, and represents a new source for White Mesa. A total of about 25,000 lbs U3O8 is expected to be recovered from pond returns this year.
In 2017, the company expects to produce about 450,000 lbs U3O8 at White Mesa, including 150,000 lbs from alternate feed materials and 300,000 lbs from pond returns. Production for 2018 has not yet been determined, but it expects to maintain the mill in a way that would enable processing further alternate feed materials, as well as material from the Canyon Mine, or other conventional sources in 2018.
The final strategic component identified in the plan is advancement of permits at other projects to serve as "pipeline assets" for future production. Energy Fuels plans to continue licensing and permitting at the Jane Dough wellfields, adjacent to Nichols Ranch; to continue licensing and permitting of the Roca Honda project in New Mexico; maintain required permits at projects on standby including Alta Mesa and the Hank (Wyoming), La Sal and Daneros (both Utah) projects; and complete other permits at Sheep Mountain in Wyoming and the Daneros and La Sal expansions.
Energy Fuels has launched a new initiative targeting a reduction in operating costs of 5-20%. Areas to be reviewed include reduced consumption of reagents; increased uranium recovery; the potential recovery of copper resources identified at the Canyon mine; ore sorting; improved operating practices; mechanised mining and conventional mines; and water jet mining.
The company aims to become the largest uranium producer in the USA. CEO and President Stephen Antony said: "In light of today's uncertain uranium market, Energy Fuels is intently focused on preserving, and in the case of Canyon, enhancing the value of the company's uranium assets. We feel that the Company is well placed in the global uranium sector with multiple, 100%-owned production opportunities, which collectively have the potential to produce a large quantity of low-cost uranium in diverse ways in an improved market."
Researched and written
by World Nuclear News