Refurbished uranium mines ready for market upturn

Energy Fuels has been carrying out a limited conventional vanadium test-mining programme at the connected mines, which are at the La Sal complex in southeast Utah. The mine refurbishments have been carried out during the test-mining campaign and the mines are now ready to enter full production "shortly following a positive commercial decision", the company said. To date, about 5200 tons of mineralised material has been mined under the test programme, with observed ore grades of about 1.60% V2O5 and 0.19% U3O8.

The company has also tested new mining methods which it says will improved grade control at the mine site, resulting in reduced costs, higher grades and higher value for mined material. It said these new techniques will be deployed "at full production rates" once a decision is made to go back into full production at the La Sal Complex and its other fully permitted and developed uranium/vanadium mines on the Colorado Plateau, "as market conditions warrant".

"Due to the inherent volatility of vanadium prices, the economics of these mines are expected to be supported primarily by uranium sales contracts at prices higher than today's spot price, which may result from generally improved global uranium market conditions, or the ongoing government investigation into uranium imports into the US," the company said. "Once uranium prices improve sufficiently, the company expects to be able to produce significant quantities of vanadium from these mines at costs competitive to some of the lowest-cost primary vanadium mines in the world, and in a more sustainable way than has been achievable for our mines in the past, due to the new grade control techniques developed during this campaign."

Energy Fuels in January restarted vanadium recovery operations at its White Mesa mill for the first time since 2013. White Mesa, in Utah, is the only operating conventional uranium mill in the USA, and is currently producing vanadium from existing pond solutions. The mill has produced about 45 million pounds of vanadium pentoxide (V2O5) during its 40-year history but thanks to facility upgrades and improved procedures put in place in 2018 is now producing the highest purity V2O5 of its entire history, the company said.

Energy Fuels President and CEO Mark Chalmers said the ability to adjust vanadium production very easily in response to changing market conditions allowed the company to respond flexibly to to market volatility. He said the company believed it had "shifted the paradigm" for both mining and processing of uranium/vanadium deposits on the Colorado Plateau. "This will become even more important to Energy Fuels if the Trump Administration decides to help support domestic uranium mining through the ongoing Section 232 investigation into uranium imports," he said. "This could result in uranium sales contracts at prices that would support commencing full-scale production from these mines at current or lower vanadium prices. And, if vanadium prices rise further - which they could at any time - we will be in the enviable position of being able to fully capitalise on those higher prices almost immediately.

Chalmers said: "We are first and foremost a uranium producer. But in addition, our successful re-establishing of the company as the only primary producer of vanadium in North America … and our ability to capitalise on high vanadium prices … highlights the unique optionality of Energy Fuels, in addition to our unsurpassed uranium mining readiness and capacity and our uranium recycling and clean-up businesses. These key attributes significantly differentiate our company from a typical 100% uranium-only play. We are extremely proud of these other aspects of our business model, which provide value to our shareholders … during periods of low uranium prices and which also complement our uranium production activities during periods of higher uranium prices."