Energy Fuels: Uranium mining on standby November 18, 2013 By Kathy Helms Diné Bureau navajo1@gallupindependent WINDOW ROCK — Reeling from the downward spiral of uranium prices, Canadian-based Energy Fuels announced Thursday that it expects to place the Pinenut Mine on stand-by in July and to discontinue yellowcake production at the White Mesa Mill beginning in August. The company will discontinue U308 production until the latter half of 2015, at which time the mill is expected to resume processing alternate feed materials. Energy Fuels has asked for a license amendment to allow it to process as much as 4,500 tons of alternate feed from the Midnight Mine Superfund Site on the Spokane Indian Reservation in Washington state. Energy Fuels has key uranium properties in Arizona, New Mexico, Utah, Colorado and Wyoming. Current production is focused on the Arizona 1 and Pinenut mines near Grand Canyon National Park. The Arizona 1 Mine has been producing for the past several years and is expected to continue production into early 2014. Production at the Pinenut Mine began in July. Not economical On Nov. 4 the company decided to place shaft-sinking activities on standby at Canyon Mine near the national park because of market conditions and to reduce costs associated with ongoing litigation. Recent U.S. Forest Service decisions regarding the mine have been challenged by Grand Canyon Trust, Center for Biological Diversity, Sierra Club and the Havasupai Tribe. Since July 1 the spot price of uranium has dropped from $39.65 per pound to its current price of $35.35 per pound, according to the company, and the long-term price has dropped from $57 per pound to $50 per pound. “Energy Fuels believes that the current price of U3O8 is below the average economic cost to produce U3O8 from currently operating uranium mines around the world, and is clearly well below the average economic cost to develop and produce from new uranium mines which will be required to fuel the projected growth in nuclear power plants globally,” the company stated in a news release. The drop in uranium prices has adversely impacted uranium production and development plans globally, but the company stated it expects “a very meaningful increase in the spot price in the future,” since medium- to long-term demand remains strong, while the supply is generally constrained. Roca Honda With the Aug. 30 acquisition of Strathmore Minerals Corp., Energy Fuels now owns a 60 percent interest in the Roca Honda uranium project near San Mateo, one of the largest and highest-grade uranium development projects in the United States. Sumitomo Corp., of Japan, holds the other 40 percent interest in Roca Honda. Stephen P. Antony, president and CEO of Energy Fuels, told shareholders in September that average annual production at Roca Honda was expected to average 2.6 million pounds per year over a nine-year mine life. “In addition, we believe there is potential to further improve the economics at Roca Honda by trucking the uranium resources to our White Mesa Mill for processing and avoid the time and capital of permitting and building a new mill facility in New Mexico,” he said. Strathmore had notified the U.S. Nuclear Regulatory Commission that it intended to submit a license application for its Peña Ranch Mill Project in McKinley County in this year’s fourth quarter. But by utilizing the White Mesa Mill near Blanding, Utah, Energy Fuels could be looking at the production of around 400 tons a day by 2019, or possibly late 2018, Antony said. The mill is located 3 miles north of the White Mesa community of the Ute Mountain Ute Tribe. White Mesa is the only conventional uranium mill operating in the United States today. Although Energy Fuels received a final Radioactive Materials License in April for its Pinon Ridge Mill in Montrose County, Colo., the market price for uranium didn’t support construction. Mining outlook As of Sept. 30, Energy Fuels held 426,000 pounds of U3O8 in its inventory. The company also is able to purchase U3O8 in the spot market at prices lower than its production cost. This will allow Energy Fuels to reduce its near-term production and also extend the life-of-mine plan at the Pinenut Mine, according to the company. Energy Fuels does not have any uranium deliveries scheduled during the three months ending Dec. 31. The company expects to produce approximately 400,000-500,000 pounds of U3O8 during Fiscal Year 2014, from both conventional ore and alternate feed sources. Conventional ore processing is expected to resume during the second quarter of FY 2014 to process ore mined through the middle of the fiscal year from the Arizona 1 and Pinenut mines. Depending on the results of additional underground drilling, mining at the Arizona 1 Mine is expected to cease in early 2014 due to the depletion of its known resources. Restart of the Pinenut Mine will be evaluated based on business and market conditions, including the price of U3O8. While waiting on the market to recover, Energy Fuels will continue permitting activities on Roca Honda.
Posted on: Tue, 19 Nov 2013 00:31:55 +0000
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