Energy Fuels Inc. ("Energy Fuels" or the "Company") is pleased to announce that preparations have begun to restart active mining operations at the Canyon mine, a high-grade "breccia pipe" uranium mine located in northern Arizona, USA.
The Company expects to begin to transition mining personnel from its currently-producing Pinenut mine to the Canyon mine during the 2nd quarter of 2015, at which point the Company expects the economic resources at the Pinenut mine to be depleted. The Company's skilled mining personnel have gained valuable experience mining high-grade "breccia pipe" deposits, including the Arizona 1 and Pinenut mines. In addition, the Company has placed orders for significant capital and operational equipment to be utilized during mine development and ore production operations.
At the current time, surface development at the Canyon mine, including a headframe, evaporation pond, hoist, environmental controls, and an office/maintenance facility, is in place. In addition, to date, approximately 275 feet of shaft has been sunk. To complete the mine, the Company expects to sink an additional 1,200 feet of shaft, install two ventilation shafts, and complete underground development. According to a 2012 Technical Report, prepared in accordance with National Instrument 43-101, the Canyon deposit has 1.63 million pounds of uranium with an average grade of 0.98% eU3O8 contained in 83,000 tons of Inferred Mineral Resources.
Ongoing ore production at the Company's Pinenut mine continues to meet expectations, in terms of total tonnage mined, ore grade and pounds of uranium recovered. All ore currently being produced at the Pinenut mine is in the process of being transported to the Company's White Mesa Mill, which the Company expects to process in a future mill campaign to meet the Company's FY-2016 and FY-2017 contract delivery requirements.
Both Pinenut and Canyon are "breccia pipe" uranium deposits located in Northern Arizona. These deposits contain the highest-grade uranium deposits in the U.S., and among the highest-grade uranium deposits in the World (outside of Canada's Athabasca Basin). As a result of their high-grades, these projects are among the lowest cost sources of uranium production in Energy Fuels' portfolio. Mining these deposits also results in minimal environmental impact and low capital costs, as they typically require less than 20-acres of surface disturbance which will be fully reclaimed at the end of the mine's life. In addition to the Pinenut and Canyon mines, the Company holds the EZ Complex, two closely situated high-grade "breccia pipe" uranium deposits located in Northern Arizona. The Company is currently evaluating commencing permitting operations on the EZ Complex.
The Company is also pleased to provide an update on its alternate feed materials processing. Alternate feed materials are typically the lowest-cost sources of uranium production in Energy Fuels' portfolio, and among the lowest-cost sources of uranium production in the World. At the current time, the White Mesa Mill continues to process alternate feed materials under existing contracts and mill license amendments. Earlier in 2014, the Mill was issued a new license amendment for processing another source of alternate feed materials and began receiving that material in mid-2014. The Mill has also applied for an additional license amendment to process another new source of alternate feed material.
Stephen P. Antony, President and CEO of Energy Fuels stated: "Over the past six months, uranium spot prices have increased by about 35%, and are currently showing strength. Nevertheless, prices still remain too low to result in the increases in uranium production we expect the World will need to meet expected long-term demand. Until these expected price increases occur, Energy Fuels is continuing to focus on our lowest cost sources of uranium production, including mining our Arizona projects and processing alternate feed materials. Production at the Pinenut mine has exceeded our expectations over the past year, and I personally thank our miners and mill workers for their professionalism, hard-work and commitment to safety and environmental protection. We look forward to achieving similar success at the Canyon mine."
Mr. Antony continued: "We also expect to grow the Company's near-term production and future scalability through our recently announced agreement to acquire Uranerz Energy Corporation. Uranerz (NYSE MKT:URZ)(TSX:URZ) is the newest uranium producer in the U.S. They produce uranium at their Nichols Ranch Project utilizing in-situ recovery (ISR) in Wyoming's Powder River Basin, a district that produces about 50% of all uranium produced in the U.S. Indeed, with our pending acquisition of Uranerz, I believe people are now beginning to recognize that Energy Fuels is clearly emerging as the dominant mining company focused on U.S. uranium production."
Stephen P. Antony, P.E., President & CEO of Energy Fuels, is a Qualified Person as defined by National Instrument 43-101 and has reviewed and approved the technical disclosure contained in this news release.