UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 11, 2022
(Exact name of registrant as specified in its charter)
Ontario | 001-36204 | 98-1067994 |
(State or other jurisdiction | (Commission | (IRS Employer |
of incorporation) | File Number) | Identification No.) |
225 Union Blvd.,
Suite 600
Registrant’s telephone number, including area code: (303) 974-2140
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbols | Name of each exchange on which registered | ||
Common shares, no par value | UUUU |
NYSE American |
||
Common shares, no par value | EFR | Toronto Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b -2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 7.01 Regulation FD Disclosure
On March 11, 2022, Energy Fuels Inc. released an initial assessment entitled "Technical Report Summary for the Alta Mesa Uranium Project, Brooks and Jim Hogg Counties, Texas, USA," an initial assessment entitled "Technical Report on the Bullfrog Project, Garfield County, Utah, USA," an initial assessment entitled "Technical Report on the La Sal Project, San Juan County, Utah, USA," an initial assessment entitled "Technical Report on the Nichols Ranch Project, Campbell and Johnson Counties, Wyoming, USA," an initial assessment entitled "Technical Report on the Pinyon Plain Project, Coconino County, Arizona, USA," an initial assessment entitled "Technical Report on the Roca Honda Project, McKinley County, New Mexico, USA," and a preliminary feasibility study entitled "Preliminary Feasibility Study for the Sheep Mountain Project, Fremont County, Wyoming, USA," attached hereto as Exhibits 99.1, 99.2, 99.3, 99.4, 99.5, 99.6 and 99.7, respectively.
The information furnished pursuant to this Item 7.01, including Exhibits 99.1, 99.2, 99.3, 99.4, 99.5, 99.6 and 99.7, shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ENERGY FUELS INC. (Registrant) |
|
Dated: March 11, 2022 | By: /s/ David C. Frydenlund David C. Frydenlund Chief Financial Officer, General Counsel and Corporate Secretary |
Technical Report Summary for the Alta Mesa
Uranium Project, Brooks and Jim Hogg
Counties, Texas, USA
US SEC Subpart 1300 Regulation S-K Compliant Report
National Instrument 43-101-Standards of Disclosure for Mineral Projects
Compliant Report
Initial Assessment
Prepared by
Prepared by the following Qualified Persons:
Travis Boam, PG, Energy Fuels, Casper, WY, USA
Douglas Beahm, PE, PG, BRS Engineering Inc. Riverton, Wyoming
Effective Date: December 31, 2021
Date and Signature Page
Energy Fuels Personnel:
Travis Boam, PG, Energy Fuels Senior Geologist
This Initial Assessment titled "Technical Report Summary for the Alta Mesa Uranium Project, Brooks and Jim Hogg counties, Texas, USA" which has an effective date of December 31, 2021. I am a co-author of the report.
Dated this February 10, 2022
"original signed and sealed"
/s/ Travis Boam, PG
Travis Boam, PG
Third Party Consultants:
Douglas L. Beahm:
The Initial Assessment titled "Technical Report Summary for the Alta Mesa Uranium Project, Brooks and Jim Hogg counties, Texas, USA" which has an effective date of December 31, 2021. I am a co-author of the report.
Dated this February 10, 2022
"original signed and sealed"
/s/ Douglas L. Beahm
Douglas L. Beahm, PE, PG, SME Registered Member
ALTA MESA URANIUM PROJECT |
Contents
TOC i |
December 31, 2021 |
ALTA MESA URANIUM PROJECT |
7.0 GEOLOGICAL SETTING, MINERALIZATION, AND DEPOSIT | 27 |
7.1 Introduction | 27 |
7.2 Regional Geology | 27 |
7.2.1 Goliad Formation | 27 |
7.2.2 Oakville Formation | 27 |
7.2.3 Catahoula Formation | 30 |
7.2.4 Jackson Group | 30 |
7.3 Local Geologic Detail | 30 |
7.4 Structural Geology | 32 |
7.5 Mineralization | 32 |
8.0 DEPOSIT TYPES | 33 |
9.0 EXPLORATION | 34 |
9.1 Historical Exploration | 34 |
9.2 Recent Exploration | 34 |
9.3 Exploration Target Definition | 34 |
9.4 Exploration Targets | 34 |
10.0 DRILLING | 40 |
10.1 Drilling and Logging Procedures | 40 |
10.2 Summary of Drilling Results | 41 |
11.0 SAMPLE PREPARATION, ANALYSIS, AND SECURITY | 43 |
11.1 Gamma Logging | 43 |
11.2 Disequilibrium | 44 |
11.3 Core Sampling | 45 |
11.4 Quality Assurance/Quality Control | 45 |
11.5 Density | 46 |
11.6 Opinion of Author | 46 |
12.0 DATA VERIFICATION | 47 |
12.1 Data Verification | 47 |
12.2 Drill Hole Database | 47 |
12.3 Opinion of Adequacy | 47 |
13.0 MINERAL PROCESSING AND METALLURGICAL TESTING | 48 |
13.1 Opinion of Author | 48 |
14.0 MINERAL RESOURCE ESTIMATES | 49 |
14.1 General Statement | 49 |
14.2 Mineral Resource Estimate | 49 |
14.2.1 Resource Database | 49 |
14.2.2 Geologic Modeling | 51 |
14.2.3 Grade Capping | 51 |
14.2.4 Compositing | 51 |
14.2.5 Density | 51 |
14.2.6 Radiometric Equilibrium | 51 |
14.2.7 GT Contouring Method | 51 |
14.2.8 Resource Classification | 52 |
14.2.9 Metal Price | 53 |
14.2.10 Cut-off Parameters | 55 |
14.2.11 Reasonable Prospects for Future Economic Extraction | 55 |
TOC ii |
December 31, 2021 |
ALTA MESA URANIUM PROJECT |
14.3 Mineral Resource Summary | 56 |
14.3.1 PAA-7 Lower C Sand | 57 |
14.3.2 D Sand | 57 |
14.3.3 Lower C Sand Outside of PAA-7, PAA-6 and PAA-4 | 57 |
14.3.4 B Sand | 58 |
14.3.5 A Sand | 58 |
14.3.6 South Alta Mesa | 59 |
14.3.7 Mesteña Grande Portion of the Project | 59 |
14.3.8 Mesteña Grande - Mineral Resource Estimation Parameters | 60 |
14.3.9 Mesteña Grande - Oakville Formation | 60 |
14.3.10 Mesteña Grande - Goliad Formation | 60 |
14.3.11 El Sordo - Catahoula Formation | 61 |
14.4 Opinion of Adequacy | 61 |
14.5 Mineral Resource Figures and Drill Hole Locations | 62 |
15.0 MINERAL RESERVE ESTIMATES | 76 |
16.0 MINING METHODS | 77 |
17.0 PROCESSING AND RECOVERY METHODS | 78 |
18.0 INFRASTRUCTURE | 79 |
19.0 MARKET STUDIES | 80 |
20.0 ENVIRONMENTAL STUDIES, PERMITTING, AND PLANS, NEGOTIATIONS, OR AGREEMENTS WITH LOCAL INDIVIDUALS OR GROUPS | 81 |
21.0 CAPITAL AND OPERATING COSTS | 82 |
22.0 ECONOMIC ANALYSIS | 83 |
23.0 ADJACENT PROPERTIES | 84 |
23.1 Garcia Property | 84 |
24.0 OTHER RELEVANT DATA AND INFORMATION | 85 |
24.1 Hydrogeology | 85 |
24.2 Geotechnical | 85 |
25.0 INTERPRETATION AND CONCLUSIONS | 86 |
26.0 RECOMMENDATIONS | 88 |
26.1 Restart of operations at the Alta Mesa Facility: | 88 |
26.2 Exploration and delineation drilling: | 89 |
27.0 REFERENCES | 90 |
28.0 CERTIFICATES | 92 |
TOC iii |
December 31, 2021 |
ALTA MESA URANIUM PROJECT |
Tables
TOC iv |
December 31, 2021 |
ALTA MESA URANIUM PROJECT |
Figures
Figure 3-1. Alta Mesa and Mesteña Grande Location Map | 17 |
Figure 3-2. Alta Mesa and Mesteña Grande Property Map | 18 |
Figure 4-1. Topography of the South Texas Uranium Province | 23 |
Figure 7-1. Geologic Map of the Alta Mesa Project Area | 28 |
Figure 7-2. Regional Stratigraphic Column | 29 |
Figure 7-3. Alta Mesa Type Log Showing Individual Sand Units of the Goliad Fm. | 31 |
Figure 7-4. Generalized Cross Section of the Alta Mesa Project Area | 32 |
Figure 8-1 Idealized Cross Section of a Sandstone Hosted Uranium Roll-Front Deposit | 33 |
Figure 9-1 South Alta Mesa Exploration Targets | 38 |
Figure 9-2. North Alta Mesa Exploration Targets | 39 |
Figure 11-1. PFN Tool Calibration | 43 |
Figure 11-2. Disequilibrium Graph: Natural Gamma vs PFN Grade | 44 |
Figure 4-1 TradeTech Uranium Market Price Projections- FAM 1 (Nominal US$) | 54 |
Figure 4-2 TradeTech Uranium Market Price Projections - FAM 2 (2020 US$) | 54 |
Figure 14-3 Alta Mesa Key Map | 62 |
Figure 14-4 PAA7 LCU | 63 |
Figure 14-5 Paa7 LCL | 64 |
Figure 14-6 D Sand | 65 |
Figure 14-7 Western LC LCU and LCL | 66 |
Figure 14-8 B Sand | 67 |
Figure 14-9 A Sand | 68 |
Figure 14-10 Sam and E Sand | 68 |
Figure 14-11 Mestena Grande Key Map | 70 |
Figure 14-12 Oakville North | 71 |
Figure 14-13 Oakville Central North | 72 |
Figure 14-14 Oakville Central South | 73 |
Figure 14-15 Alta Vista | 74 |
Figure 14-16 Goliad | 75 |
TOC v |
December 31, 2021 |
ALTA MESA URANIUM PROJECT |
1.0 EXECUTIVE SUMMARY
This Initial Assessment has been prepared for Energy Fuels Inc. (EFR or Energy Fuels) by Travis Boam and Douglas Beahm (collectively, authors), on the Alta Mesa Uranium Project (the Project), located in Brooks and Jim Hogg Counties, Texas, USA and is based on and supersedes a 2016 Canadian NI 43-101 compliant report by independent mining consultant Douglas Beahm, PE, Principal Engineer for BRS Engineering (BRS).
Mr. Boam is a Senior Geologist employed by EFR, while Mr. Beahm is an independent consultant and Principal Engineer of BRS. This Initial Assessment conforms to the US Securities and Exchange Commission (SEC) S-K 1300 disclosure requirements and policies for mining properties and the requirements of the Canadian Securities Administrators National Instrument 43-101 -Standards of Disclosure for Mineral Projects ("NI 43-101") and the Canadian Institute of Mining (CIM) Best Practice Guidelines for the Estimation of Mineral Resources and Mineral Reserves ("CIM standards").
Energy Fuels is incorporated in Ontario, Canada. Energy Fuels Resources (USA) Inc., a US- based subsidiary, is a uranium and vanadium mining company, with projects located in Colorado, Utah, Arizona, Wyoming, Texas and New Mexico. EFR operates the White Mesa Mill in Blanding Utah, the only conventional uranium mill operating in the U.S. today with a licensed capacity of over eight million pounds of U3O8 per year. EFR is listed on the NYSE American Stock Exchange (symbol UUUU), and the Toronto Stock Exchange (symbol EFR) and is subject to the disclosure requirements of NI 43-101 and S-K 1300. All costs and prices are listed in US dollars (US$).
The Alta Mesa Uranium Project, (the Project) is an in-situ (ISR) recovery mining project, and past producer consisting of two distinct properties; the Alta Mesa property, which is composed of the Alta Mesa mine area and processing facility, South Alta Mesa (SAM) and Indigo Snake. The second property is the Mesteña Grande, which is composed of Mesteña Grande Goliad (MGG) Mesteña Grande North (MGN), Mesteña Grande Central (MGC), Mesteña Grande Alta Vista (MGAV), and El Sordo. The Project's central processing facility and mine office is located at the Alta Mesa property approximately 11 miles west of the intersection of US 281 and Ranch Road 755, which is also 22 miles south of Falfurrias, Texas. Figure 4-1 shows the location of both properties making up the project in Southeastern Texas.
The Project is located within a portion of the private land holdings of the Jones Ranch, founded in 1897 and includes surface and mineral rights as well as oil and gas and other minerals including uranium. Active uses of the lands in addition to uranium exploration and production activities include agricultural use (cattle), oil and gas development, and private hunting. Previous owners include Chevron Minerals, Total Minerals, Cogema, Uranium Resources Inc. and Mesteña Uranium LLC (MULLC), formed by landowners. In 2016 EFR acquired the Project from MULLC. Section 6.2 (Ownership History) discusses this in more detail.
The Project consists of Uranium Mining Leases for uranium ISR mining (4,598 acres) and Mineral Options (195,501 acres) comprising some 200,099 total acres consisting of acreage associated with currently approved mining permits issued by the Texas Commission on Environmental Quality (TCEQ) and 9 prospect areas as described in Section 4.2.
The Project produced approximately 4.6 million pounds of uranium oxide between 2005 and 2013 via in-situ recovery (ISR) mining using an alkaline lixiviant and is processed at a plant located in Alta Mesa. The facility was in production from 2005 until primary production ceased February 2013. The Project operated in a groundwater clean-up mode until February 2015; therefore, any uranium mined since 2013 remains as in-circuit inventory. The first wellfield (PAA-1) has completed final groundwater restoration and was approved by the Texas Commission on Environmental Quality in March 2018. All other wellfields are being maintained by a small bleed (less than 100 gpm) for permit compliance. The bleed solutions are disposed of in the deep disposal wells.
Mineralization within the South Texas Uranium Province is interpreted to be dominantly roll-front type mineralization and primarily of epigenetic origin (Finch, 1996). Roll-fronts are formed along an interface between oxidizing groundwater solutions which encounter reducing conditions within the host sandstone unit. This boundary between oxidizing and reducing conditions is often referred to as the Reduction/Oxidation (REDOX) interface or front.
ALTA MESA URANIUM PROJECT |
This report provides estimates of Mineral Resources within the Project area. Only the Alta Mesa property has had previous ISR mining. No preliminary economic assessment, pre-feasibility study or feasibility study has been completed to NI 43-101 and S-K 1300 standards; thus, no mineral reserves are stated in this report.
Exploration Target(s) have been identified within the project areas and the range of possible quantity and grade of mineralization. Future exploration plans include closer spaced drilling of the inferred resource at Alta Mesa and at Mesteña Grande with the goal of promoting this Mineral Resource to the Indicated category, though there is no guarantee of positive results in this work. Additional plans at Mesteña Grande also consists of additional geological, metallurgical, and hydrological studies to assess the economics of future extraction. Presuming positive results, it is recommended that exploration of a sufficient portion of the Mesteña Grande inferred resources areas be conducted to define sufficient Mineral Resources to support a preliminary feasibility study for a satellite facility. Section 26.0 (Recommendations) discusses future exploration plans in greater detail.
The current Mineral Resource estimate for the Project is summarized in Table 1-1.
Table 1-1 Alta Mesa and Mesteña Grande Mineral Resource Summary
Classification |
COG |
Area |
Tonnage |
Grade |
Contained Metal |
(G.T.) |
(% U3O8) |
(lbs. U3O8) |
|||
Measured |
0.3 |
Alta Mesa |
54,000 |
0.152 |
164,000 |
Total Measured |
0.3 |
|
54,000 |
0.152 |
164,000 |
Indicated |
0.3 |
Alta Mesa |
1,397,000 |
0.106 |
2,959,000 |
|
0.3 |
Mesteña Grande |
119,000 |
0.120 |
287,000 |
Total Indicated |
0.3 |
|
1,516,000 |
0.107 |
3,246,000 |
Total Measured & Indicated |
0.3 |
|
1,570,000 |
0.109 |
3,410,000 |
Inferred |
0.3 |
Alta Mesa |
1,263,000 |
0.126 |
3,192,000 |
|
0.3 |
Mesteña Grande |
5,733,000 |
0.119 |
13,601,000 |
Total Inferred |
0.3 |
|
6,996,000 |
0.120 |
16,793,000 |
Notes:
1. NI 43-101 and S-K 1300 definitions were followed for all Mineral Resource categories.
2. Mineral Resources are estimated at a 0.3 GT (0.02% U3O8 minimum)
3. Mineral Resources are estimated using a long-term Uranium price of US$65 per pound
4. Total measured Mineral Resource is that portion of the in-place or in situ Mineral Resources that is estimated to be recoverable within existing well fields. Wellfield recovery factors have not been applied to indicated and inferred Mineral Resources
5. Bulk density is 0.0588 tons/ft3 (17.0 ft3/ton)
6. Mineral Resources are exclusive of Mineral Reserves and do not have demonstrated economic viability.
7. Numbers may not add due to rounding
1.1 Conclusions
The authors consider the data and information available for this report to be accurate and reliable for the purposes of estimating Mineral Resources for the Project. Significant Mineral Resources remain within the Project area which may be tributary to the Alta Mesa central processing facility which is fully licensed and has operated continuously from 2005 until production standby in February 2013.
Mineral Resources have been estimated for both the Alta Mesa and Mesteña Grande areas in accordance with NI 43-101 and S-K 1300 standards and definitions and are summarized in Table 1-1 in the measured, indicated and inferred mineral resource category.
ALTA MESA URANIUM PROJECT |
The authors feel the risks to put the Alta Mesa portion of the Project into production are low since all permit for operating are in place and is tributary to the existing Alta Mesa ISR production facility, which is fully licensed to operate. For each new wellfield a production area authorization (PAA) permit will need to be obtained through the permitting process with TCEQ. However, the Mesteña Grande portion of the Project, which will operate as a satellite facility to the Alta Mesa ISR facility, will require full permitting requirements prior to production and operation of its well fields.
The Project does have some risks similar in nature to other mining projects and uranium mining projects specifically, including:
There is a risk that additional drilling may not locate additional Mineral Resources and that mineralization may not be found or may not be continuous along the REDOX boundary and that the actual grade times thickness (GT) along the trends will fall outside the estimated range, either higher or lower. A substantial portion of the Mineral Resource is based on wide-spaced drilling and has been classified as inferred. Inferred Mineral Resources are too speculative to have economic considerations applied to them which would enable them to be categorized as mineral reserves. Inferred Mineral Resources can be assessed in the context of a Initial Assessment which is allowed under NI 43-101 and S-K 1300 standards, the latter as a Preliminary Economic Assessment (PEA). The tonnages, grades, and contained pounds of uranium, as stated in this report, for exploration targets should not be construed to reflect a calculated Mineral Resource (inferred, indicated, or measured). The potential quantities and grades for exploration targets, as stated in this report, are conceptual in nature, and there has been insufficient work to date to define a NI 43-101 and S-K 1300 compliant resource. Furthermore, it is uncertain if additional exploration will result in any of the exploration targets being delineated as a Mineral Resource.
The authors are not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors which would materially affect the Mineral Resource estimates presented in this report. To the authors knowledge there are no other significant factors that may affect access, title, or the right or ability to perform work on the property provided the conditions of all mineral leases and options, and relevant operating permits and licenses, are met. The reader is cautioned that additional drilling may or may not result in discovery of an economic Mineral Resource on the property.
1.2 Recommendations
Recommendations which follow separately are for the restart of operations at the Alta Mesa Facility and continued exploration and delineation drilling. These recommendations are independent of one another.
1.3 Restart of operations at the Alta Mesa Facility:
The following recommendations presume the Alta Mesa Central Processing facility is to resume production under favorable market conditions. Under this scenario the following phased work program is recommended.
Phase 1 - Restart Alta Mesa Operations
Updating of existing operating permits and licenses as necessary to authorize well field and plant operations.
Rehabilitation and modernization of the Alta Mesa processing facility and rehabilitation of the PAA-6 wellfield to allow for resumption of production from PAA-6.
Estimated cost: $980,000
ALTA MESA URANIUM PROJECT |
Phase 2 - Delineate PAA-7 to allow for start of production in PAA-7
PAA-7 Upper LCU1 indicated resource area
PAA-7 Upper LCU2 indicated resource area
PAA-7 Lower LCU1 indicated resource area
PAA-7 Lower LCU2 indicated resource area
Phase 3 - Complete exploration of Alta Mesa inferred Mineral Resource areas
Assumptions for the purposes of estimating the costs of drilling program assume that drilling will be completed across the trend on close spacing and along the trend at a greater spacing (referred to as fence drilling) and include:
Drilling Inferred Mineral Resources to drill hole density of Indicated Mineral Resources
Requires 5 holes per 200 feet of trend length
Approximate 500-600 foot depth, $5,000 per drill hole, approximately $10 per foot
Approximate 1,000-1,200 foot depth per drill hole, $15,000 per drill hole, approximately $15 per foot
Table 1-2 provides cost estimates each of the areas recommended for delineation drilling within the overall Alta Mesa project area.
Table 1-2 Cost Estimates to Elevate Inferred Mineral Resources to Measured and Indicated Mineral Resources
Inferred Zone |
Number of |
Total |
Cost US$ |
Alta Mesa: LC Sand Inferred |
580 |
23,256 |
$2,900 |
D Sand Inferred |
370 |
14,800 |
$1,850 |
South Alta Mesa, A Sand Inferred |
720 |
28,616 |
$3,600 |
South Alta Mesa, B Sand Inferred |
625 |
25,011 |
$3,125 |
South Alta Mesa Inferred |
150 |
6,125 |
$2,250 |
Total $US (rounded) |
|
|
$14,000 |
1.4 Exploration and delineation drilling:
Concurrent with or after Phase 3, continued exploration of the Mesteña Grande is recommended. This would include delineation drilling of the Oakville Central indicated resource area sufficiently to define the mineralization and complete sufficient geological, metallurgical, and hydrological studies to preliminarily assess the economics of future extraction. Presuming positive results, it is recommended that exploration of a sufficient portion of the Mesteña Grande inferred resources areas be conducted to define sufficient Mineral Resources to support a preliminary feasibility study for a satellite facility at Mesteña Grande. The estimated costs to complete the foregoing recommendations are summarized in Table 1-3.
ALTA MESA URANIUM PROJECT |
Table 1-3 Cost Estimates to Elevate Inferred Mineral Resources to Measured and Indicated Mineral Resources
Inferred Zone |
Cost ($000s) |
Mesteña Grande: Goliad and El Sordo Sands |
$9,900 |
Mesteña Grande: Oakville Sands |
$75,000 |
Total $US (rounded) |
$85,000 |
It is also recommended that EFR conducts further exploration drilling to gain additional information about exploration targets to possibly upgrade these areas to Mineral Resources. Exploration targets have been defined primarily in the South Alta Mesa area of the Alta Mesa Project. The estimated costs to complete the foregoing recommendations are summarized in Table 1.4 summarizes the costs associated with additional drilling of the inferred Mineral Resources and Exploration Targets.
Table 1-4 Cost for Exploration Target Drilling to Elevate to Inferred Mineral Resources
Exploration Target |
Cost ($000s) |
Alta Mesa: LC Sand |
$1,000 |
South Alta Mesa: E Sand |
$10,950 |
Indigo Snake |
$4,050 |
Total |
$16,000 |
The cost estimates for exploratory and delineation drilling assume that the entirety of each trend would need to be drilled including all holes along a fence. Drilling would likely begin in the most prospective locations and, assuming successful results, work away along trend. If drilling were unsuccessful, drilling would likely be curtailed. Also, if a drill hole penetrated the planned drill target along a fence, then the additional drill holes planned along that fence would not be needed. Conversely, if the planned drill target was not penetrated with the planned fence additional drilling may be required.
ALTA MESA URANIUM PROJECT |
2.0 INTRODUCTION
2.1 Introduction
The authors, each of which is a QP in accordance with NI 43-101 and S-K 1300 standards, prepared this Initial Assessment of EFR on their Alta Mesa Uranium Project (the Project), located in Brooks and Jim Hogg Counties, Texas, USA and satisfies the updated US Securities and Exchange Commission (SEC) disclosure requirements and policies for mining properties and the requirements of the Canadian Securities Administrators National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") and the Canadian Institute of Mining (CIM) Best Practice Guidelines for the Estimation of Mineral Resources and Mineral Reserves ("CIM standards").
This technical report is based on a previous NI 43-101 compliant report completed for EFR by BRS with an effective date of July 2016. BRS was retained to develop a Mineral Resource estimate and Initial Assessment for the Project by Energy Fuels Inc. based on a site visit and reviewing data at the main Corpus Christi office of Mesteña Uranium in April 2014. Specific work completed during BRS's site visit include:
Based on the authors' review, the drilling and exploration practices are in keeping with industry standards and the drill hole database is reliable as a basis for Mineral Resource estimation.
Additionally, the authors endorse the previous technical report as a basis for this updated report, since no material change has occurred at Alta Mesa from the effective date of the previous BRS report.
The Alta Mesa Uranium Project (Project) is made up of the Alta Mesa and Mesteña Grande properties. The Alta Mesa property produced approximately 4.6 million pounds of uranium oxide between 2005 and 2013 via in-situ Recovery (ISR) mining. The facility was in production from 2005 until primary production ceased February 2013. The Project operated in a groundwater clean- up mode until February 2015; therefore, any uranium mined since 2013 remains as an in-circuit inventory.
This report provides estimates of Mineral Resources for the Alta Mesa and Mesteña Grande properties in addition to exploration target(s) within the project areas and discloses the potential quantity and grade of mineralization, expressed as ranges, for further exploration. The tonnages, grades, and contained pounds of uranium, as stated in this report for exploration targets are estimates and could change once exploration activities are completed. Such exploration targets are conceptual in nature and not a calculated Mineral Resource (inferred, indicated, or measured) under NI 43-101 and S-K 1300 regulations. Furthermore, it is uncertain if additional exploration will result in any of the exploration targets being delineated as a Mineral Resource.
2.2 Registrant of Filing
Energy Fuels is incorporated in Ontario, Canada; its subsidiary, Energy Fuels Resources (USA) Inc. is a US-based uranium and vanadium exploration and mine development company with projects located in Colorado, Utah, Arizona, Wyoming, Texas, and New Mexico.
ALTA MESA URANIUM PROJECT |
Energy Fuels is listed on the NYSE American Stock Exchange (symbol UUUU) and the Toronto Stock Exchange (symbol EFR) and is subject to the disclosure requirements of S-K 1300 and NI 43-101.
2.3 Terms of Reference
This work is based on an independent Initial Assessment conforming to Canadian NI 43-101 and S-K 1300 Standards of Disclosure for Mineral Projects completed by BRS on the Alta Mesa Uranium Project in 2016 and is available on the Canadian Securities Administrators (CSA) filing system ("SEDAR", https://www.sedar.com/homepage_en.htm).
Since the Project has been on care and maintenance since the effective date of the previous report, there has been no material change in the project.
The purpose of this report is to declare Mineral Resources and to constitute the inaugural S-K 1300 compliant technical report summary for the Project.
2.4 Sources of Information
This Initial Assessment is based on an original independent Technical Report conforming to Canadian NI 43-101 Standards of Disclosure for Mineral Projects completed by BRS on the Alta Mesa and Mestena Grande Project in 2016. A representative of BRS visited the Project in April of 2014.
The authors of this report and the sections they are responsible for, include:
Travis Boam, PG, Energy Fuels Senior Geologist: Sections 3, 4, 5, 6, 7, 8, 9, 10, 13 and contributions to relevant portions of Sections 1, 2, 14 and Sections 23 to 27.
Douglas Beahm, PE, PG, BRS: Sections 11, 12, and contributions to relevant portions of Sections 1, 2, 14 and Sections 23-27.
The documentation reviewed and other sources of information utilized in this report are listed in Section 24 (References).
2.5 Site Visit
Douglas Beahm visited the project and local geologic offices during the period of April 15 through April 17, 2014, after reviewing data at the main Corpus Christi office of Mesteña Uranium on April 14, 2014.
During this time Mr. Beahm:
Reviewed drill data including original geophysical and lithological logs;
Reviewed quality control procedures relating to drilling and geophysical logging;
Reviewed procedures and data relating to geophysical logging and instrument calibration;
Visited numerous drill sites and;
Observed and reviewed surveying methodology.
During the site visit copies of all drill data pertinent to the current evaluation was provided in electronic format. Based on review of the data collection and preservation methods employed by MULLC, the author is of the opinion that the drilling and exploration practices employed are in keeping with industry standards and the author concludes that the drill hole database available for the Project is reliable.
ALTA MESA URANIUM PROJECT |
Travis Boam visited the site in November of 2019 and can attest to the condition of the facility and wellfields.
2.6 Purpose of Report
The authors have prepared this Initial Assessment on the Alta Mesa project in accordance with NI 43-101 and S-K 1300 requirements for Mineral Resources properties. The purpose of this report is to declare Mineral Resources and to constitute the inaugural S-K 1300 compliant technical report summary for the Project.
2.7 Effective Date
The effective date of this report is December 31, 2021. The effective date of the Mineral Resource estimate is April 2014.
2.8 List of Abbreviations
Table 2-1 summarizes the list of terms and abbreviations used in this report:
Table 2-1 Terms and Abbreviations
URANIUM SPECIFIC TERMS AND ABBREVIATIONS | ||||
Grade | Parts Per Million | ppm U3O8 | Weight Percent | %U3O8 |
Radiometric Equivalent Grade | ppm eU3O8 | % eU3O8 | ||
Thickness | meters | m | Feet | Ft |
Grade Thickness Product | grade x meters | GT(m) | grade x feet | GT(Ft) |
GENERAL TERMS AND ABBREVIATIONS | |||||
METRIC | US | Metric : US | |||
Term | Abbreviation | Term | Abbreviation | Conversion | |
Area | Square Meters | M2 | Square Feet | Ft2 | 10.76 |
hectare | Ha | Acre | Ac | 2.47 | |
Volume | Cubic Meters | m3 | Cubic Yards | Cy | 1.308 |
Length | Meter | m | Feet | Ft | 3.28 |
Meter | m | Yard | Yd | 1.09 | |
Rod | Meter | 5.03 | Feet | Ft | 16.5 |
Distance | Kilometer | km | Mile | mile | 0.6214 |
Weight | Kilogram | Kg | Pound | Lb | 2.20 |
Metric Ton | km3 | Short Ton | Ton | 1.10 |
ALTA MESA URANIUM PROJECT |
3.0 RELIANCE ON OTHER EXPERTS
3.1 Reliance on Information Required by the Registrant
Qualified Person Travis Boam of EFR has relied on commodity pricing provided by Mr. Curtis Moore, EFR's V.P. Marketing and Corporate Development. Mr. Moore has provided his expertise in determining future uranium pricing, which is included in Section 14.2.9 (Metal Price) and was used as the basis of determining cut-offs. Mr. Boam has reviewed Mr. Moore's recommendations for commodity pricing and is of the opinion that it is reasonable for the purposes of this report.
Similarly, Mr. Boam has relied upon information provided by EFR, including Bruce Larson (P.G), Energy Fuels Director Geology and Land for Sections 4.2, 4.4 and 5.7, and Scott Bakken (P.G), Energy Fuels Director of Regulatory Affairs, in Section 4.3 of this report, specifically mineral tenor, surface rights, taxes, permitting, and environmental liabilities.
ALTA MESA URANIUM PROJECT |
4.0 PROPERTY DESCRIPTION AND LOCATION
4.1 Introduction
The Project is a ISR recovery mining project consisting of two distinct properties; the Alta Mesa property, which is composed of the Alta Mesa mine area and processing facility, South Alta Mesa (SAM), and Indigo Snake; and the Mesteña Grande property, which is composed of Mesteña Grande Goliad (MGG) Mesteña Grande North (MGN), Mesteña Grande Central (MGC), Mesteña Grande Alta Vista (MGAV), and El Sordo. The Project's central processing facility and mine office is located at the Alta Mesa project area at 755 CR 315, Encino, Texas 78353, in Brooks County, Texas, at approximately 26° 54' 08" North Longitude and 98° 18' 54" West Latitude. The site is located approximately 11 miles west of the intersection of US 281 and Ranch Road 755, which is 22 miles south of Falfurrias, Texas. Figure 4-1 shows the location of both project areas in Southeastern Texas
The Project is located within a portion of the private land holdings of the Jones Ranch, founded in 1897. The ranch comprises approximately 380,000 acres. The ranch holdings include surface and mineral rights including oil and gas and other minerals including uranium. Active uses of the lands in addition to uranium exploration and production activities include agricultural use (cattle), oil and gas development, and private hunting. Previous owners include Chevron Minerals, Total Minerals, Cogema, Uranium Resources Inc. and Mesteña Uranium LLC (MULLC), formed by landowners. In 2016 EFR acquired the Project from MULLC. Section 6.2 (Ownership History) discusses this in more detail.
The Project consists of Uranium Mining Leases for uranium ISR mining (4,598 acres) and Mineral Options (195,501 acres) comprising some 200,099 total acres.
For the purposes of this report the Project is defined as constituting several project areas, as shown on Figure 4-1. Alta Mesa and Mesteña Grande Location Map.
The Alta Mesa project area, Brooks County, Texas, comprising 16,010 acres, including,
The Mesteña Grande project areas, Jim Hogg County, Texas, comprising 47,088 acres, including,
An additional 137,001 acres are leased by EFR outside the designated project areas. These areas have mineral potential but have not been explored.
4.2 Land Tenure
Mineral ownership in Texas is a private estate. Private title to all land in Texas emanates from a grant by the sovereign of the soil (successively, Spain, Mexico, the Republic of Texas, and the state of Texas). By a provision of the Texas Constitution the state released to the owner of the soil all mines and mineral substances therein. Under the Relinquishment Act of 1919, as subsequently amended, the surface owner is made the agent of the state for the leasing of such lands, and both the surface owner and the state receive a fractional interest in the proceeds of the leasing and production of minerals (http://www.tshaonline.org/handbook/online/articles/gym01).
ALTA MESA URANIUM PROJECT |
The Project consists of a private Mining Lease (4,598 acres) and Options (195,501 acres) for uranium comprising some 200,099 total acres consisting of acreage associated with currently approved mining permits issued by TCEQ and 9 prospect areas as described.
ALTA MESA URANIUM PROJECT |
Figure 3-1. Alta Mesa and Mesteña Grande Location Map
ALTA MESA URANIUM PROJECT |
Figure 3-2. Alta Mesa and Mesteña Grande Property Map
ALTA MESA URANIUM PROJECT |
4.2.1 Amended and Restated Uranium Solution Mining Lease
The Uranium Solution Mining Lease, originally dated June 1, 2004, covers approximately 4,575 acres, out of the "La Mesteñas" Ysidro Garcia Survey, A-218, Brooks County, Texas and the "Las Mesteñas Y Gonzalena" Rafael Garcia Salinas Survey, A-480, Brooks County, Texas; these have been superseded by the Amended and Restated Uranium Solution Mining Lease dated June 16, 2016, as part of the share purchase agreement between EFR and the various holders of the Mesteña project. The Lease now comprises Tract 5 and a portion of Tracts 1, 4, and 6 of "W.W. Jones Subdivision", said tract being out of the "La Mesteña Y Gonzalena" Rafael Garcia Salinas Survey, Abstract N0. 480 and the "La Mesteñas" Ysidro Garcia Survey, Abstract No. 218, Brooks County, Texas. The Lease now covers uranium, thorium, vanadium, molybdenum, other fissionable minerals, and associated minerals and materials under 4,597.67 acres.
The term of the amended lease is fifteen (15) years which commenced on June 16, 2016, or however long as the lessee is continuously engaged in any mining, development, production, processing, treating, restoration, or reclamation operations on the leased premises. The amended lease can be extended by the Lessee for an additional 15 years.
The lease includes provisions for royalty payments on the net proceeds (less allowable deductions) received by the Lessee. The royalties range from 3.125 to 7.5% depending on the price received for the uranium. The lease also calls for a royalty on substances produced on adjacent lands but processed on the leased premises as shown on Table 4.1.
Table 4.1 Amended Uranium Solution Mining Lease Royalties
Royalty Holders | Number of Acres | Lessor Royalty | Primary Term |
Mesteña Unproven Ltd., Jones Unproven Ltd., Mestaña Proven Ltd. Jones Proven Ltd. |
4597.67 +/- | 7.5% Market value > $95.00/lb. U3O8 6.25% of Market Value > $65/lb. & </= $95/lb. U3O8 3.125% of Market Value </= $65/lb. U3O8 |
15 years from amendment date with option for additional 15 years or as long uranium mining operations continue |
4.2.2 Amended and Restated Uranium Testing Permit and Lease Option Agreement
The Uranium Testing Permit and Lease Option Agreement (Table 4.2), originally dated August 1, 2006, covers all land containing mineral potential as identified through exploration efforts and covers uranium, thorium, vanadium, molybdenum, and all other fissionable materials, compounds, solutions, mixtures, and source materials; this agreement has been superseded by the Amended and Restated Uranium Testing and Lease Option Agreement dated June 16, 2016, as part of the share purchase agreement between Energy Fuels Inc. and the various holders of the Mesteña project. It now covers 195,501 acres.
The term of the amended lease and option agreement is for eight (8) years which commenced on June 16, 2016. The amended lease and option agreement can be extended by the grantee for an additional seven (7) years. Certain payments by the Grantee to the Grantor are required prior to year three (3) of the initial eight (8) year lease. The amended Lease Option Agreement provides for designating acreage to be leased for production by making certain payments to the Grantor (cash or stock). If acreage designation occurs within the first three (3) years of the initial eight (8) year lease, the payments will be deducted from the certain payments required by year three (3) in the lease option agreement. The grantor then has sixty (60) business days to execute and return the lease.
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Table 4.2 Amended and Restated Uranium Testing Permit and Lease Option Agreement Royalties
Mesteña Unproven Ltd, Jones Unproven Ltd, Mesteña Proven Ltd |
195,501 +/- |
7.5% of Market value > $95.00/lb U3O8 |
8 years from amendment date with option for additional 7 years or as long uranium mining operations continue |
4.2.3 Surface Rights
The mineral leases and options include provisions for reasonable use of the land surface for the purposes of ISR mining and mineral processing. Alta Mesa is a fully licensed, operable facility with sufficient sources of power, water, and waste disposal facilities for operations and aquifer restoration. While the current staff level has been reduced, sufficient local personnel were available for mine operations. Alta Mesa LLC either has in place or can obtain the necessary permits and/or agreements, and local resources are sufficient for current and future ISR operations within the Project.
Amended surface use agreements have been entered into with all the surface owners on the various prospect areas as part of the Membership Interest purchase agreement between Energy Fuels Inc and the various holders of the Mesteña Project. These amended agreements, unchanged from those originally entered into on June 1, 2004, provide, amongst other things, for stipulated damages to be paid for certain activities related to the exploration and production of Uranium.
Specifically, the agreements call for US Consumer Price Index (CPI) adjusted payments for the following disturbances: exploratory test holes, development test holes, monitor wells, new roads, and related surface disturbances. The lease also outlines an annual payment schedule for land taken out of agricultural use around the area of a deep disposal well, land otherwise taken out of agricultural use, and pipelines constructed outside of the production area.
Surface rights are expressly stated in the lease and in general provide the lessee with the right to ingress and egress, and the right to use so much of the surface and subsurface of the leased premises as reasonably necessary for ISR mining. Open pit and/or strip mining is prohibited by the lease.
4.3 Permits
The Alta Mesa Project area is permitted for ISR mining and recovery of uranium. These permits include a Radioactive Materials License, Class III Underground Injection Control (UIC) Mine Area Permit, Aquifer Exemption, Production Area Authorizations, and a Class I UIC Deep Disposal Well Permit from the Texas Commission on Environmental Quality (TCEQ). Similar permits would be required for the Mesteña Grande project area depending upon the nature of operations and their integration with the Alta Mesa facility.
Table 14.3 summarizes the current permits held by Alta Mesa LLC (previously known as MULLC). Similar permits would be required for the Mesteña Grande project area depending upon the nature of operations and their integration with the Alta Mesa facility.
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Table 4-1 EFR Alta Mesa Permit Register
Permit/License or Action |
Frequency |
Permit Expiration Date |
Permit Status |
|
|
|
|
FCC - Radio License FRN0020106654 |
10 years |
10/25/2026 |
Active |
Sewage System OSSF |
N/A |
no expiration |
Active |
PAA-1 |
N/A |
no expiration |
Active |
PAA-2 |
N/A |
no expiration |
Active |
PAA-3 |
N/A |
no expiration |
Active |
PAA-4 |
N/A |
no expiration |
Active |
PAA-5 |
N/A |
no expiration |
Active |
PAA-6 |
N/A |
no expiration |
Active |
PAA-7 |
N/A |
no expiration |
Active |
Uranium Exploration Permit 125 |
Annual |
7/24/2022 |
Active |
Radioactive Material License - R05360 |
Until Terminated |
9/20/2009 |
Timely Renewal |
L05939 - Sealed Source RML for PFN |
10 years |
9/30/2025 |
Active |
TCEQ Aquifer Exemption |
N/A |
no expiration |
Active |
EPA Aquifer Exemption |
as needed |
no expiration |
Active |
UIC Class III Mine Area Permit UR03060 |
10 years |
4/4/2023 |
Active |
USCOE 404 exemption SWG-1998-02466 |
as needed |
no expiration |
Active |
UIC Class I disposal well permit WDW-365 |
10 years |
10/20/2020 |
In Renewal |
UIC Class I disposal well permit WDW-366 |
10 years |
10/20/2020 |
In Renewal |
4.3.1 Environmental Liabilities
Financial assurance instruments are held by the state for completed wells, ISR mining, and uranium processing to ensure reclamation and restoration of the affected lands and aquifers in accordance with State regulations and permit requirements. The current (June 2021) approved closure cost estimate for the Alta Mesa Project is provided in Table 4-2.
Table 4-2 Decommissioning Cost Summary
Program |
Amount |
TCEQ - Radioactive Materials License |
$8,073,697 |
TCEQ - UIC Class I and Class III Permits |
$1,653,301 |
|
$9,726,998 |
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4.4 State and Local Taxes and Royalties
Ad valorem tax rates per $ 100 of taxable value applicable to tangible property and royalty for 2013 were as follows:
Brooks County 0.79500000
Brooks County Rd and Bridge 0.14409300
Brooks County ISD 1.5280100
Brooks County FM FC 0.08898200
Brush Country Groundwater 0.02700000
Production from properties is subject to a 15% mineral royalty obligation.
4.5 Encumbrances and Risks
To the authors knowledge there are no other significant factors or risks that may affect access, title, or the right or ability to perform work on the property, if the aforementioned requirements, payments, and notifications are met.
ALTA MESA URANIUM PROJECT |
5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY
5.1 Access
The Project is accessible year-round and is located approximately 11 miles west of the intersection of US Highway 281 (paved) and Ranch Road 755 (paved), 22 miles south of Falfurrias, Texas. Commercial airlines serve both San Antonio and Corpus Christi. Many of the local communities have small airfields and there are numerous private airfields in the region.
5.2 Physiography
The Project is in the Texas counties of Brooks and Jim Hogg, on the coastal plain of the Gulf of Mexico. Three major rivers in the region from south to north are: the Nueces River, which flows into Corpus Christi Bay, and the San Antonio and Guadalupe Rivers, which flow into San Antonio Bay southeast of the city of Victoria (Nicot, et al 2010). Figure 5-1 shows the general topographic conditions for the Project and region.
Figure 4-1. Topography of the South Texas Uranium Province
5.2 Topography and Elevation
Topography of the lower Gulf Coast is relatively flat, whereas the upper Gulf Coast, including most of the current and past mining operations of the South Texas Uranium Province, generally has low relief, rolling plains, except where it is locally dissected by rivers and streams. Elevations range from sea level to about 800 feet above sea level in the southwest.
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5.3 Climate, Flora and Fauna
Overall, the climate in the area is warm and dry, with hot summers and relatively mild winters. However, the region is strongly influenced by its proximity to the Gulf of Mexico and, as a result, has a much more marine- type climate than the rest of Texas, which is more typically continental. Monthly mean temperatures in the region range from 55°F in January to 96°F in August (Nicot, et al 2010). The area rarely experiences freezing conditions and as a result most of the processing facility and infrastructure is located outdoors, and wellfield piping and distribution lines do not require burial for frost protection. Annual precipitation ranges from 20 to 35 inches in the area. Primary risk for severe weather is related to heavy thunderstorms and potentially effects of hurricanes of the Gulf Coast.
Regionally, the area is classified as a coastal sand plain. Brooks County comprises 942 square miles of brushy mesquite land. The near level to undulating soils are poorly drained, dark and loamy or sandy; isolated dunes are found. In the northeast corner of the county the soils are light-colored and loamy at the surface and clayey beneath. The vegetation, typical of the South Texas Plains, includes live oaks, mesquite, brush, weeds, cacti and grasses. In addition to domestic stock, wildlife is abundant in the area including a variety of reptiles, amphibians, birds, small mammals, and big game (White Tail Deer).
5.4 Infrastructure
Local infrastructure includes electricity service which is adequate for mine and mineral processing activities. Supplies, including consumables and capital equipment can be obtained from the major centers of Corpus Christi and Laredo, Texas. The Alta Mesa facility also has telephone and internet service in the form of a T-1 fiber optics line. The processing plant has an automated control and monitoring system which allows remote monitoring of the facility and includes fail safe systems which can shut down portions of the system in the event of an upset condition. The facility is fully secured with on-site and remote monitoring. Water supply for the Project is from established and permitted local wells. Liquid waste from the processing facility is disposed via deep well injection through two permitted Underground Injection Control (UIC) Class I disposal wells. Solid waste from the processing facilities is disposed off-site at licensed disposal facilities. No tailings or other related waste disposal facilities are needed.
5.5 Land Use
The Project is located on an operating cattle ranch. In addition, there is significant local oil and gas development and production. The Alta Mesa area was first developed as an oilfield in the 1930s with production ongoing, primarily for natural gas. Other land uses include farming and recreational uses such as hunting.
5.6 Personnel
While the current staff has been reduced during the care and maintenance stage of the project, sufficient local personnel are available once mine operations are restarted, as has been the case in the past. Senior staff may be transferred from existing EFR locations or recruited from local or regional towns and cities as needed.
5.7 Surface Rights and Local Resources
The mineral leases and options described in Section 4 include provisions for reasonable use of the land surface for the purposes of mining and mineral processing. Alta Mesa is licensed operable facility with sufficient sources of power, water, and waste disposal facilities for operations and aquifer restoration. While the current staff level has been reduced, sufficient local personnel were available for mine operations. The author concludes that EFR either has in place or can obtain the necessary permits and/or agreements, and local resources are sufficient for current and future ISR operations within the Project.
ALTA MESA URANIUM PROJECT |
6.0 HISTORY
6.1 Introduction
The deposits associated with the Alta Mesa Uranium Project (the Project) were discovered by Chevron in the mid 1970s while researching oil and gas logs for natural gamma geophysical signatures. Since that time the Project has been explored and owned by a number of different operators.
6.2 Ownership History
Ownership of the Alta Mesa Project has changed several times in the past.
Early 1970's through June 1985, Chevron Minerals.
June 1985 mineral leases reverted to landowners.
July 1988 to 1993 Total Minerals.
Total Minerals engaged Uranium resource Incorporate (URI) to complete a feasibility study of the project.
1993 Total relinquished mineral leases to Cogema under directive form French government.
1993 to 1996 Cogema.
1996 to 1998 Uranium resource Incorporate (URI) who obtained the Radioactive Materials License for the facility.
1999 Mesteña Uranium LLC (MULLC) was formed by landowners.
MULLC completed most of the drilling on the project.
MULLC began construction of the ISR facility in 2004
Production began in the 4th quarter of 2005.
MULLC operated the facility through February 2013 and the project has been on care and maintenance standby since that time.
June 17, 2016, Energy Fuels Resources (USA) Inc. (EFR) acquired the Project, including both the Alta Mesa and Mesteña Grande.
6.3 Historical Drilling
EFR has not completed any drilling at the Project and therefore, all drilling is considered historical. Initial drilling at the Alta Mesa portion of the project was done by Chevron between 1981 and 1984 when they drilled approximately 360 holes. These holes included exploration, some coring and well completions. Minor drilling and monitor well installation were also completed by Total Metals and Cogema.
Most of the drilling was completed by MULLC between 1999 and 2013. From these drill programs, drill data is available for a total of 10,744 drill holes in the Alta Mesa portion of the project of which 5,620 drill holes were considered barren. Of the remaining 5,124 drill holes approximately 3,000 are within the existing wellfields. However, many of the drill holes within the wellfield have mineralized intercepts in sands that were not mined either above or below the mining units. Wellfields PAA-1 through PAA-3 were mined within the Goliad middle C sand. Wellfield PAA-5 was mined within the B sand and wellfields PAA-4 and PAA-6 are within the lower C sand. In addition, data is available for 460 drill holes in the Mesteña Grande portion of the Project.
ALTA MESA URANIUM PROJECT |
6.4 Historical Production
Between 2005 and 2013, the Project produced approximately 4.6 million pounds of U3O8 via ISR mining. The facility was in production from 2005 until primary production ceased February 2013 due to unfavorable market conditions. During this production period, the maximum and average annual production was 1.07 and 0.57 million pounds of ore concentrate (U3O8 or yellowcake) respectively; with maximum and average annual sales volumes of 0.86 and 0.52 million pounds of yellowcake respectively. Production occurred from six permitted wellfields with one additional wellfield permitted but not developed at the time.
6.5 Historical Resource Estimates
Historical Mineral Resource/reserve estimates were prepared before the implementation of Canada's NI 43-101 and SEC's S-K 1300 standards and do not necessarily use the categories for mineral reserve and Mineral Resource reporting as defined by those standards. The reader should not rely on the historical reserve estimates as they are superseded by the Mineral Resource estimate presented in Section 14.0 of this report.
ALTA MESA URANIUM PROJECT |
7.0 GEOLOGICAL SETTING, MINERALIZATION, AND DEPOSIT
7.1 Introduction
The Project is located in the South Texas Uranium Province, which is known to contain more than 100 uranium deposits which were developed during the 2nd half of the 20th century (Nicot, et al., 2010). Surface geology of the Texas Gulf Coast is composed of Paleogene through Quaternary sedimentary strata and deposits (Figure 7-1).
7.2 Regional Geology
Within the South Texas Uranium Province, uranium mineralization is primarily hosted by four formations. Those in order of descending age are the Miocene/Pliocene Goliad Formation, the Miocene Oakville Formation, the Oligocene/Miocene Catahoula Formation, and the Eocene Jackson Group. These Paleogene and Neogene aged formations are overlain regionally by Pliocene and Pleistocene sands, gravels, silts, and clays (Figure 7-2). The four host sandstones are described in detail below. Descriptions given below (Sections 7.2.1 through 7.2.4) are summarized from a report by Nicot, et al., 2010 on the South Texas Uranium Province
7.2.1 Goliad Formation
The Goliad Formation overlies the Oakville and Fleming Formations with a low-angle truncation and is the oldest "Pliocene" stratum. It also has a high proportion of coarse-grained sediments, including sands and cobbles (Hosman, 1996). Thickness is between 900 and 1,800 ft (Brogdon et al., 1977). The upper part of the Goliad includes finer-grained sands that are cemented by calcium carbonate caliche (Hosman, 1996). Clays are interbedded locally.
7.2.2 Oakville Formation
The Miocene-age Oakville Formation overlies the Catahoula Formation and represents a major pulse in sediments thought to be due to uplift along the Balcones Fault Zone. The Oakville Sandstone is composed of sediments deposited by several fluvial systems, each of which had distinct textural and mineralogical characteristics (Smith et al., 1982). Together with the overlying Fleming Formation, they formed a major depositional episode. These two units are commonly grouped because they are both composed of varying amounts of interbedded sand and clay. Average thickness varies from 300 to 700 ft at the outcrop (Galloway et al., 1982), and the formation is thicker in the subsurface (Henry et al., 1982). The Oakville Sandstone grades into the mixed-load sediments of the overlying Fleming Formation and into the thicker deltaic and barrier systems farther downdip. Sand percentage is high in the paleochannels, whereas finer-grained floodplain deposits are more common in adjacent interchannel environments. Paleosols are not as frequent as in the previous formations, such as the Catahoula Formation and Jackson Group. Farther downdip the amount of sand increases as the formation thickens, but the sand fraction decreases because of additional mud facies. The Jackson Group and Oakville Sandstone also display an important contrast in organic material content, abundant in the Jackson sand bodies (which contain their own reducing material) but lacking in that of the Oakville. An important conclusion related to uranium mineralization is that Oakville- and Goliad-hosted deposits need an external reducing factor, namely reducing fluids coming up faults to precipitate uranium.
ALTA MESA URANIUM PROJECT |
Figure 7-1. Geologic Map of the Alta Mesa Project Area
ALTA MESA URANIUM PROJECT |
Figure 7-2. Regional Stratigraphic Column
ALTA MESA URANIUM PROJECT |
7.2.3 Catahoula Formation
The Catahoula Formation unconformably overlies the Oligocene sediments of the Jackson Group. Catahoula sediments are fluvial rather than marine derived and are composed in varying proportions of sands, clays, and volcanic tuff, depending on location. Sediments of the Catahoula Formation reflect a strong volcanic influence, including numerous occurrences of airborne volcanic ash (Galloway 1977). Thicknesses of strata at the outcrop range from 200 to 1,000 ft. The formation also thickens gulfward as is typical of other Gulf Coast sequences. Sand content ranges from <10% to a maximum of about 50% (Galloway, 1977). Sediments in the lower Catahoula Formation are predominantly gray tuff, whereas pink tuffaceous clay is more common in the upper strata, suggesting a change to more humid climatic conditions during deposition. Volcanic conglomerates and sandstone are most common in the midlevel of the unit. Bentonite and opalized clay layers and alteration products of volcanic glass (zeolites, Camontmorillonite, opal, and chalcedony) are present throughout the formation and indicate syndepositional alteration of tuffaceous beds. Widespread areas of calichification indicate long periods of exposure to soil-forming conditions at the surface (McBride et al., 1968).
7.2.4 Jackson Group
The Jackson Group is part of a major progradational cycle that also includes the underlying Yegua Formation. The Jackson Group includes, from older to younger, the Caddell, the Wellborn, the Manning, and the Whitsett Formations (Eargle, 1959; Fisher et al., 1970). Total thickness averages 1,100 ft in the subsurface but becomes thinner in the outcrop area and is characterized by a complex distribution of lagoon, marsh, barrier-island, and associated facies. The lower part of the Jackson Group consists of a basal 100-ft sequence of marine muds (Caddell Formation) overlain by 400 ft of mostly sands: Wellborn / McElroy Formation with the Dilworth Sandstone, Conquista Clay, and Deweesville / Stones Switch (Galloway et al., 1979) Sandstone members toward the top. The middle part consists of 200 to 400 ft of mostly muds (including the Dubose Clay Member). Several sand units are present in the 400- to 500-ft-thick upper section, including the Tordilla / Calliham Sandstone overlain by the Flashing Clay Member. As indicated in Figure 7-2, units from the Dilworth unit on up are grouped under the Whitsett Formation name (Eargle, 1959). Only the latter contains significant amounts of uranium mineralization in the Deweesville and Tortilla sand members. Kreitler et al. (1992, 38 Section 2) provided more details on these units near the Falls City Susquehanna-Western mill. Uranium mineralization occurs where the strike-oriented barrier sand belt intersects the outcrop. Sand, generally fine and heavily bioturbated by burrows and roots, also contains lignitic material and silicified wood. Discontinuous lignite beds are also present (Fisher et al., 1970).
7.3 Local Geologic Detail
Within the Alta Mesa portion of the Project, Quaternary formations are exposed at the surface (Figure 7-1).
These are conformably underlain by the Goliad Formation, the primary uranium host.
Figure 7-3 is a type-log for the Alta Mesa area which defines the local stratigraphic units and nomenclature used in this report. At the Project, in order of importance, uranium is hosted by the Goliad, Oakville, and Catahoula formations.
Alta Mesa ISR mine units have exploited uranium mineralization in the Goliad C sands within PAA-1, PAA-2, PAA-3, PAA-4, and PAA-6. The B sand was targeted in PAA-5. As discussed in Section 14.0, Mineral Resources have been estimated for the A, B, C, and D sands. Section 9.0 discusses exploration targets in the South Alta Mesa area within successively deeper D, E, F, G, and H sands of the Goliad. Within the Mesteña Grande portion of the project, mineralization is also present in the Goliad Formation but is dominantly found in the Oakville Formation (Refer to Figure 7-2). In the western portion of Mesteña Grande mineralization is found in the Catahoula Formation. The nomenclature between Alta Mesa and Mesteña Grande varies with individual sands at Mesteña Grande designated by number, i.e., 10, 20, 30, etc. rather than by letter A, B, C, etc. as they are in the Alta Mesa portion of the Project. Mineral resources have been estimated for all areas within the Mesteña Grande portion of the project, as discussed in Section 14.0.
ALTA MESA URANIUM PROJECT |
Figure 7-3. Alta Mesa Type Log Showing Individual Sand Units of the Goliad Fm.
ALTA MESA URANIUM PROJECT |
7.4 Structural Geology
The structure of the Gulf Coast area is dominated by an abundance of growth faults that trend with, or are slightly oblique to, stratigraphic strike, which is nearly parallel to the Gulf of Mexico. In addition, local structural features such as salt domes influence the distribution and deposition of uranium mineralization potentially through various mechanisms including effects on groundwater flow and the introduction of additional reductant via the migration of H2S gas along the faulting related to the salt dome intrusion. This mechanism is thought to be of importance at Alta Mesa as shown on Figure 7-4 (Collins and Talbott, 2007) The presence and effects of salt domes are also recognized at other uranium deposits such as Palangana (UEC, 2010). Note that the location of the cross-section shown in Figure 7-4 is shown as section line A-A' on Figure 7-1.
Figure 7-4. Generalized Cross Section of the Alta Mesa Project Area
7.5 Mineralization
Mineralization within the South Texas Uranium Province is interpreted to be dominantly roll-front type mineralization and primarily of epigenetic origin (Finch, 1996). Roll-fronts are formed along an interface between oxidizing groundwater solutions which encounter reducing conditions within the host sandstone unit. This boundary between oxidizing and reducing conditions is often referred to as the REDOX interface or front.
Sandstone uranium deposits are typically of digenetic and/or epigenetic origin formed by low temperature oxygenated groundwater leaching uranium from the source rocks and transporting the uranium in low concentrations down gradient within the host formation where it is deposited along a REDOX interface. Parameters controlling the deposition and consequent thickness and grade of mineralization include the host rock lithology and permeability, available reducing agents, groundwater geochemistry, and time in that the groundwater geochemical system responsible for leaching; transportation and re-deposition of uranium must be stable long enough to concentrate the uranium to potentially economic grades and thicknesses.
ALTA MESA URANIUM PROJECT |
8.0 DEPOSIT TYPES
South Texas uranium deposits are sandstone roll-front uranium deposits as defined in the "World Distribution of Uranium Deposits (UDEPO) with Uranium Deposit Classification", (IAEA, 2009). The key components in the formation of roll-front type mineralization, as shown on Figure 8.1, include:
Figure 8-1 Idealized Cross Section of a Sandstone Hosted Uranium Roll-Front Deposit
(Modified from Granger and Warren -1974 and De Voto- 1978)
ALTA MESA URANIUM PROJECT |
9.0 EXPLORATION
9.1 Historical Exploration
Uranium was first discovered in Texas via airborne radiometric surveys in 1954 along the northern boundary of the South Texas Uranium Province where host formations outcrop. These initial discoveries led to the development of numerous conventional open pit mines. Subsequent exploration primarily by drilling extended mineralization down dip from the outcrop. At Alta Mesa, oil and gas drilling had been ongoing since the 1930's. Interpretation of oil and gas logs led to the recognition of potential host sand units and, in some cases, gamma anomalies. As a result of these anomalies and additional drilling, Chevron discovered uranium at Alta Mesa in the mid 1970's.
9.2 Recent Exploration
Although drilling remains the primary exploration method at the Project, 3D seismic data developed for oil and gas exploration has recently been used to as an exploration tool to locate sand channels and define structures. This exploration technique led to the exploration of the Indigo Snake area and to a lesser extent has aided exploration of the South Alta Mesa area. Figures 9.1 and 9., respectively, show the South Alta Mesa and Indigo Snake interpreted trends.
No exploration has been conducted on the Alta Mesa or Mesteña Grande properties by EFR.
9.3 Exploration Target Definition
For the project areas defined as Exploration Targets there is sufficient geologic evidence from limited drilling and other information to interpret that mineralization may extend from areas of resource production and/or defined Mineral Resources. For Exploration Target areas, favorable conditions for the occurrence of mineralization were determined based on the presence of host sand units and evidence of REDOX interfaces within those host sand units. No estimate of Mineral Resources or reserves in accordance with CIM guidelines has been made for Exploration Target areas. Rather, the following calculations are intended to quantify an Exploration Target for those portions of the Project, as allowed under NI 43-101 Part 2.3.2 and S-K 1300 standards. All tonnages, grade, and contained pounds of uranium, as stated in this report, should not be construed to reflect a calculated Mineral Resource (inferred, indicated, or measured). The potential quantities and grades, as stated in this report, are conceptual in nature and there has been insufficient work to date to define a NI 43-101 or S-K 1300 compliant resource. Furthermore, it is uncertain if additional exploration will result in discovery of an economic Mineral Resource on the property.
9.4 Exploration Targets
For the project areas defined as Exploration Targets there is sufficient geologic evidence from limited drilling and other information to interpret that mineralization may extend from areas of resource production and/or defined Mineral Resources into the targeted areas. For Exploration Target areas, favorable conditions for the occurrence of mineralization were determined based on the presence of host sand units and evidence of REDOX interfaces within those host sand units. No estimate of Mineral Resources or Mineral Reserves in accordance with NI 43-101 and S-K 1300 guidelines has been made for Exploration Target areas. Rather, the following calculations are intended to quantify an Exploration Target for these portions of the Project, as allowed as a Restricted Disclosure under NI 43-101 and the S-K 1300 regulations. The tonnages, grades, and contained pounds of uranium, as stated in this report, for exploration targets should not be construed to reflect a calculated Mineral Resource (inferred, indicated, or measured). The potential quantities and grades for exploration targets, as stated in this report, are conceptual in nature, and there has been insufficient work to date to define a NI 43-101 or S-K 1300 compliant resource. Furthermore, it is uncertain if additional exploration will result in any of the exploration targets being delineated as a Mineral Resource.
ALTA MESA URANIUM PROJECT |
Exploration target calculations are based on a minimum grade cut-off of 0.02 % U3O8 and minimum GT of 0.30. A bulk dry density of 17 cubic feet per ton was used.
Exploration Targets were estimated by applying a range of GT values, determined from all drill data available for the Project, to an interpreted trend length and average width of mineralization.
For the exploration target areas, the REDOX boundary or trend for each of the target areas was defined from drilling and/or in the case of Indigo Snake and to a lesser extent South Alta Mesa, through 3D seismic imaging of the sand channels. There is a risk that mineralization may not be found or may not be continuous along the REDOX boundary and that the actual GT along the trends will fall outside the estimated range.
Trend width was determined from PAA-6 and portions of PAA-4 where drilling density was sufficient to estimate the average trend width. Mineralization in both areas is in the C horizon of the Goliad Formation. The average trend width recommended by EFR is 35 feet. The authors have reviewed this recommendation and are of the opinion it is reasonable and in keeping with industry practice. There is a risk that the average width of mineralization may vary geographically and within other sand units and formations.
Average GT values above a GT cut-off of 0.30 were determined for each host sand unit and are summarized in Table 9-1. A GT range reflecting the standard deviation about the mean was utilized for the estimation of exploration targets. As with the trend width the available data is weighted by intercepts from the C horizon of the Goliad Formation. There is a risk that the average GT may vary in other sand units and formations.
By convention for ISR Mineral Resources the contained pounds of uranium are calculated from the GT value applied to the respective area of mineralization. As such average thickness is not a critical parameter in the determination of the pounds contained but is needed to calculate tonnage and average grade. Based on the typical geometry of the sands a thickness of 10 feet was assumed for exploration targets. This thickness generally corresponds with the average screened interval for wells. Table 9-1 summarizes the minimum GT used in each host sand in the Project.
Table 9-1 GT Average and Range
Host Sand |
Minimum GT 0.30 |
# Intercepts |
A Sand |
0.74 |
72 |
B Sand |
0.87 |
273 |
MCU Sand |
1.33 |
588 |
MCM Sand |
1.46 |
527 |
MCL Sand |
1.25 |
894 |
LCU Sand |
1.00 |
526 |
LCL Sand |
0.95 |
390 |
DU Sand |
0.60 |
24 |
DL Sand |
0.83 |
4 |
Total Intercepts |
|
3,298 |
Mean GT |
1.00 |
|
Standard Deviation |
0.23 |
|
GT Range |
0.77 to 1.23 |
|
ALTA MESA URANIUM PROJECT |
From the forgoing parameters, including trend length (estimated for each area), average trend thickness (10 feet), trend width (35 feet), GT range (0.77 to 1.23), and bulk density (17 ft3/ton), an estimate of the potential quantity and grade of the exploration targets was completed and is summarized in Table 9-2. This estimation was based on a GT cut-off of 0.30.
Table 9-2 Alta Mesa Exploration Targets
Area |
Zone |
Low Range Estimate |
High Range Estimate |
||||
Tons |
Grade |
Pounds |
Tons |
Grade |
Pounds |
||
Alta Mesa |
LCL Sand West of PAA-7 |
271 |
0.077 |
417 |
271 |
0.123 |
666 |
LC Sands North of PAA-7 |
185 |
0.077 |
285 |
185 |
0.123 |
456 |
|
Indigo Snake Area |
342 |
0.077 |
526 |
342 |
0.123 |
841 |
|
South Alta Mesa |
SAM - E SANDS |
559 |
0.077 |
864 |
559 |
0.123 |
1,375 |
SAM - F SANDS |
155 |
0.077 |
240 |
155 |
0.123 |
382 |
|
SAM - G SANDS |
213 |
0.077 |
330 |
213 |
0.123 |
526 |
|
SAM - H SANDS |
203 |
0.077 |
314 |
203 |
0.123 |
499 |
|
SAM - D UPPER SANDS |
347 |
0.077 |
537 |
347 |
0.123 |
854 |
|
SAM - D LOWER SANDS |
395 |
0.077 |
611 |
395 |
0.123 |
973 |
|
Alta Mesa Subtotal |
798 |
0.077 |
1,229 |
798 |
0.123 |
1,963 |
|
South Alta Mesa Subtotal |
1,872 |
0.077 |
2,896 |
1,872 |
0.123 |
4,610 |
|
Grand Total |
2,670 |
0.077 |
4,125 |
2,670 |
0.123 |
6,573 |
The potential tonnages, grade, and contained pounds of uranium for the exploration targets are estimates and could change as proposed exploration activities are completed. They should not be construed to reflect a calculated Mineral Resource (inferred, indicated, or measured). Furthermore, it is uncertain if additional exploration will result in any of the exploration targets being delineated as a Mineral Resource.
The areas for which Exploration Targets have been defined include:
The REDOX boundary shown on Figure 9.1. for the LCL sand of the Goliad Formation west of PAA-1 is defined by wide-spaced drilling and is an extension of the area for which inferred Mineral Resources have been estimated in the same geologic horizon. The depth to mineralization is less than 600 feet. The REDOX trend length is 13,200 feet.
The REDOX boundary shown on Figure 9.1 for the LC sands of the Goliad Formation north of PAA-7 is defined by wide-spaced drilling. The depth to mineralization is less than 600 feet. The REDOX trend length is 4,500 feet for which the estimate applies. This trend length is applicable to both the LC lower and upper sands (LCL and LCU) for a total trend length of 9,000 feet.
REDOX boundaries for the South Alta Mesa area are shown on Figure 9.1.. In cross section, oxidation within the system proceeds generally from east to west. The individual drill logs show the oxidation/reduction conditions observed from lithological logging. Correlation of sands was based on the resistivity and SP logs. Within some of the drill holes, elevated gamma levels indicate proximity to mineralization and show gamma signatures typical of roll-front mineralization. Various sands of the Goliad Formation, including the D upper and lower sands, the E sand, the F sand, the G sand, and the H sand, are present.
ALTA MESA URANIUM PROJECT |
South Alta Mesa is a large area. REDOX trends are based primarily on data from a total of 78 drill holes, however, the interpretation of trend locations was influenced by the 3D seismic data. The seismic image shows the major sand concentrations as shades of gray and the margins of the sand channels in shade of pink. The interpreted trends for the D sands tend to follow the northern margin of the channel system and the E sand is sub-parallel to the southern margin of the channel system. The F, G and H sands are more central to the channel system but tend to be sympathetic to transition areas within the main channel system as depicted by the seismic data.
Depth to mineralization, depending on the sand horizon, may vary from approximately 500 feet to slightly over 800 feet.
Most of the South Alta Mesa area is defined as an exploration target, however, within a limited portion of the area containing the E sand, drilling indicates the presence of mineralization, and the location of the trend is reasonably defined by drilling. For this area an inferred Mineral Resource has been estimated as discussed in Section 14.0.
The REDOX boundary shown on Figure 9.2 follows the sand channel indicated by the 3D seismic profile. Only two drill holes have been completed in the area. Both showed slight mineralization in the Catahoula Formation at depths in the range of 1,600 to 2,200 feet. The mineralized trend is projected based on the seismic data and the limited drill hole data.
ALTA MESA URANIUM PROJECT |
Figure 9-1 South Alta Mesa Exploration Targets
ALTA MESA URANIUM PROJECT |
Figure 9-2. North Alta Mesa Exploration Targets
ALTA MESA URANIUM PROJECT |
10.0 DRILLING
Drill data is available for a total of 10,744 drill holes in the Alta Mesa portion of the project. Of this total 5,620 drill holes were considered barren. Of the remaining 5,124 drill holes approximately 3,000 are within the existing wellfields. However, many of the drill holes within the wellfield have mineralized intercepts in sands that were not mined either above or below the mining units. Wellfields PAA-1 through PAA-3 were mined within the middle C sand. Wellfield PAA-5 was mined within the B sand and wellfields PAA-4 and PAA-6 are within the lower C sand. In addition, data is available for 460 drill holes in the Mesteña Grande portion of the Project. Maps showing drill hole locations are provided in Section 14 of this report, Figures 14.3 through 14.16.
10.1 Drilling and Logging Procedures
MULLC maintains written standard operating procedures for drilling, lithological logging and geophysical logging, and provided copies of these to the Author. Virtually all drilling for the purposes of exploring and resource development, completed by MULLC, consists of rotary drilling. MULLC collected rotary mud samples for lithological logging by 5 foot increments. Lithological logs of the samples are completed in the field by geologists following the standard written procedures and using standard lithological log forms.
Drill hole locations are staked in the field using a Trimble hand-held GPS capable of sub-meter accuracy. The holes are surveyed prior to drilling. As discussed in Section 12, the BRS surveyed 8 exploration drill holes and one well with the MULLC GPS unit. The well location was within 0.13 feet of the recorded location. The drill hole locations deviated from the reported location by 1.33 to 11.28 feet with an average variance of 6.06 feet. It is BRS's conclusion that the majority of the variance is due to the driller not accurately locating the drill hole at the staked location rather than the accuracy of the GPS unit, and thus, recommends that the drill hole location procedure be modified to include both pre and post drilling surveys of the drill holes. Despite this observed variance, it is the Author's opinion that for the purposes of estimating indicated and inferred Mineral Resources the drill hole survey data is reliable. Prior to detailed drilling final wellfield delineation, it is recommended that the drill holes be re-surveyed.
During drilling operations MULLC operated two standard logging trucks which were purchased from Century Geophysical and are capable of natural gamma, resistivity, and Spontaneous Potential (SP) logging. The units are equipped with software to convert downhole gamma measurements to equivalent %eU3O8 by user specified depth increments. MULLC processes all natural gamma data at 0.5 foot increments.
These logging trucks are also equipped to measure downhole deviation by azimuth and declination. The location for the bottom of each drill hole and the true depth is included in the electronic database and was used for Mineral Resource calculations. Of the total 10,744 drill holes in the database only 76 did not have downhole drift surveys, thus, drift surveys were available for over 99% of the drill holes. The average depth of all drill holes was 546 feet the corrected depth for all drill holes for downhole deviation was 543.5 feet or a factor of 0.9954. Based on this average, the actual length of a 10 foot mineralized zone is 9.954 feet or a difference of less than one half of one percent. The Author concludes that the effect of downhole deviation with respect to sample thickness is insignificant for the purposes of this report.
In addition to the standard logging trucks MULLC operated two Prompt Fission Neutron (PFN) logging trucks. The PFN logging provides a direct measurement of uranium content in the borehole and is thus considered to provide direct assay results. MULLC logs all gamma intercepts above 0.02 %eU3O8 with PFN and utilizes only the PFN data for resource calculation. This mitigates the effects of radiometric disequilibrium as the PFN is essentially equivalent to other common uranium assay methods such as X-ray diffraction (XRF). Calibration data for both natural gamma logs and PFN is discussed Section 12. When drilling was active both the natural gamma and PFN logging trucks are calibrated routinely. The Author concludes that the drilling and logging procedures followed by MULLC are in keeping with current industry standards and that the data generated by such procedure is reliable for the purposes of this report.
ALTA MESA URANIUM PROJECT |
10.2 Summary of Drilling Results
As previously stated, the Alta Mesa drill hole database consists of some 10,744 drill holes. Of this total 5,620 or 52% of the drill holes were considered barren. All of the drill data was collected using the same procedures and equipment as described in Section 10.1. Historic drilling by other operators generally was limited to the current Alta Mesa wellfields, and, as a matter of procedure, the exploratory drill holes have been replaced with delineation drill holes. Those holes meeting cut-off criteria during wellfield delineation were converted to wells. MULLC's procedure following wellfield installation is to then recalculate Mineral Resources with the results from the new drill data. Table 10-1 summarizes the drilling results by sand horizon for the Alta Mesa portion of the Project.
Table 10-1- Alta Mesa Drill Holes Summary
Alta Mesa Data |
GT> .5 |
GT> .3 |
GT> .1 |
|
A sand |
GT |
1.15 |
0.74 |
0.43 |
Grade |
0.200 |
0.153 |
0.117 |
|
Thickness |
5.74 |
4.81 |
3.65 |
|
Count |
33 |
72 |
162 |
|
B sand |
GT |
1.22 |
0.87 |
0.54 |
Grade |
0.176 |
0.146 |
0.119 |
|
Thickness |
6.90 |
5.97 |
4.54 |
|
Count |
160 |
273 |
527 |
|
MCU sand |
GT |
1.68 |
1.33 |
0.93 |
Grade |
0.220 |
0.194 |
0.167 |
|
Thickness |
7.65 |
6.86 |
5.54 |
|
Count |
428 |
588 |
911 |
|
MCM sand |
GT |
1.79 |
1.46 |
1.08 |
Grade |
0.245 |
0.218 |
0.190 |
|
Thickness |
7.33 |
6.67 |
5.69 |
|
Count |
402 |
527 |
749 |
|
MCL sand |
GT |
1.51 |
1.25 |
0.99 |
Grade |
0.187 |
0.171 |
0.157 |
|
Thickness |
8.11 |
7.30 |
6.32 |
|
Count |
685 |
894 |
1186 |
|
LCU sand |
GT |
1.28 |
1.00 |
0.68 |
Grade |
0.171 |
0.145 |
0.121 |
|
Thickness |
7.50 |
6.86 |
5.63 |
|
Count |
357 |
526 |
862 |
|
LCL sand |
GT |
1.22 |
0.95 |
0.64 |
Grade |
0.178 |
0.154 |
0.126 |
|
Thickness |
6.90 |
6.17 |
5.11 |
|
Count |
262 |
390 |
647 |
|
DU sand |
GT |
0.88 |
0.60 |
0.40 |
Grade |
0.099 |
0.089 |
0.078 |
|
Thickness |
8.82 |
6.79 |
5.17 |
|
Count |
11 |
24 |
44 |
|
DL |
GT |
1.29 |
0.83 |
0.30 |
Grade |
0.166 |
0.147 |
0.085 |
|
Thickness |
7.75 |
5.63 |
3.47 |
|
Count |
2 |
4 |
19 |
|
Total Intercepts |
2340 |
3298 |
5107 |
ALTA MESA URANIUM PROJECT |
The Mesteña Grande portion of the Project is subdivided into five areas with a total of 460 drill holes. As discussed in Section 14, drill hole spacing is generally widely spaced and as a result the majority of the Mineral Resources are classified as inferred. Table 10-2 summarizes the drill results for the Mesteña Grande portion of the Project.
Table 10-2- Massena Grande Drill Holes Summary
Zone |
Horizon(s) or |
Total Drill |
Barren |
GT >0.1 |
0.1< GT < 0.3 |
0.3< GT < 0.5 |
GT > 0.5 |
Oakville North |
OK10 and OK20 |
30 |
28 |
2 |
1 |
0 |
1 |
Oakville Central |
OK10 and OK20 |
320 |
282 |
38 |
28 |
5 |
5 |
Goliad |
G10 and G20 |
50 |
49 |
1 |
1 |
0 |
0 |
Alta vista |
Alta Vista OK 20 |
22 |
19 |
3 |
3 |
0 |
0 |
El Sordo |
Catahoula |
38 |
33 |
5 |
2 |
1 |
2 |
Totals |
|
460 |
411 |
49 |
35 |
6 |
8 |
ALTA MESA URANIUM PROJECT |
11.0 SAMPLE PREPARATION, ANALYSIS, AND SECURITY
All pertinent data related to the project is housed in a secure facility at the Alta Mesa site. All assay data is in the form of downhole geophysical log data and was completed by the previous owners, MULLC and Alta Mesa LLC. The author of this section has concluded that the data utilized in this report is accurate, reliable and adequate for the purposes of its use in this report and that the sample preparation, security and analytical procedures for all relevant data is adequate.
11.1 Gamma Logging
The primary assay data for the Alta Mesa Uranium Project (the Project) is downhole geophysical log data. Mesteña Uranium LLC, the previous owner of the Project, relied entirely on prompt-fission-neutron (PFN) logging for uranium grade assay and used the natural gamma logging to screen intervals for PFN logging. Of the 10,744 drill holes in the Alta Mesa database, PFN logging data was available for 94.8% of the drill holes. For the Mesteña Grande portion of the Project, all 460 drill holes were completed by Alta Mesa LLC and all gamma intercepts greater than 0.02 %eU3O8 were logged by PFN. When drilling is active both the natural gamma and PFN logging trucks are calibrated on a quarterly basis, or after repairs have been made to the equipment. As an example, according to calibration data, the PFN tools were calibrated 8 times per year in both 2009 and 2010. Natural gamma and PFN calibration are performed at standard facilities. Figure 11-1 shows a typical calibration curve for the PFN tool.
Figure 11-1. PFN Tool Calibration
ALTA MESA URANIUM PROJECT |
11.2 Disequilibrium
Core assays are available from historic drilling completed by Chevron and Total Minerals Incorporated; however, only 7.2% of the current database includes any of this historical data. Both Chevron and Total Minerals Incorporated concluded that the Alta Mesa mineral deposit exhibited positive disequilibrium.
Radioactive isotopes decay until they reach a stable non-radioactive state; the radioactive decay chain isotopes are referred to as daughters. When all the decay products are maintained in close association with the primary uranium isotope U238 for the order of a million years or more, the daughter isotopes will be in equilibrium with the parent isotope (McKay et.al., 2007). Disequilibrium occurs when one or more decay products are dispersed because of differences in solubility between uranium and its daughters. Disequilibrium is considered positive when there is a higher proportion of uranium present compared to daughters and negative where daughters are accumulated, and uranium is depleted. The disequilibrium factor (DEF) is determined by comparing radiometric equivalent uranium grade eU3O8 to chemical uranium grade. Radiometric equilibrium is represented by a DEF of 1, positive DEF by a factor greater than 1, and negative DEF by a factor of less than 1. Total Minerals Incorporated applied a positive DEF of 1.13 to their Mineral Resource estimation (Total, 1989). Whereas MULLC relied on PFN log data for determination of uranium grade and this method is a direct measurement of uranium content not equivalent radiometric assay, assessment of DEF is not applicable in this case where 92.8% of the data is PFN assay. Figure 11-2 shows a disequilibrium graph comparing natural gamma U3O8 equivalent grades with PFN assays.
Figure 11-2. Disequilibrium Graph: Natural Gamma vs PFN Grade
ALTA MESA URANIUM PROJECT |
11.3 Core Sampling
As is common with uranium projects, the primary assay data for the Project is downhole geophysical log data, including both natural gamma equivalent logs and PFN logs. Core for the Project was not collected by the previous owner/operator, Mesteña Uranium LLC. EFR has standard operating procedures in place for lithologic logging and core collection should core be collected from future drilling programs.
11.4 Quality Assurance/Quality Control
MULLC maintained written standard operating procedures for drilling, lithological logging and geophysical logging. Virtually all drilling completed by MULLC for the purposes of exploring and resource development consists of rotary drilling. MULLC collected rotary mud samples for lithological logging by 5-foot increments. Lithological logs of the samples are completed in the field by geologists following the standard written procedures and using standard lithological log forms.
Drill hole locations are staked in the field using a Trimble hand-held GPS capable of sub-meter accuracy. The holes are surveyed prior to drilling. Field surveys of 8 exploration drill holes and one well with the Alta Mesa GPS unit as a check. The well location was within 0.13 feet of the recorded location. The drill hole locations deviated from the reported location by 1.33 to 11.28 feet with an average variance of 6.06 feet. It is this author's conclusion that the majority of the variance is due to the driller not accurately locating the drill hole at the staked location rather than the accuracy of the GPS unit, and thus, recommends that the drill hole location procedure be modified to include both pre and post drilling surveys of the drill holes. Despite this observed variance, the author's opinion is that for the purposes of estimating indicated and inferred Mineral Resources the drill hole survey data is reliable. Prior to final wellfield delineation it is recommended that the drill holes be re-surveyed.
MULLC operated two standard logging trucks which were purchased from Century Geophysical and are capable of natural gamma, resistivity, and SP logging. The units are equipped with software to convert downhole gamma measurements to equivalent %eU3O8 by user specified depth increments. MULLC processed all natural gamma data at 0.5-foot increments.
These logging trucks are also equipped to measure downhole deviation by azimuth and declination. The location for the bottom of each drill hole and the true depth is included in the electronic database and was used for Mineral Resource calculations. Of the total 10,744 drill holes in the database only 76 did not have downhole drift surveys, thus, drift surveys were available for over 99% of the drill holes. The average depth of all drill holes was 546 feet, the corrected depth for all drill holes for downhole deviation was 543.5 feet or a factor of 0.9954. Based on this average, the actual length of a 10-foot mineralized zone is 9.954 feet or a difference of less than one half of one percent. Based on this, the authors conclude that the effect of downhole deviation with respect to sample thickness is insignificant for the purposes of this report.
In addition to the standard logging trucks MULLC operated four Prompt Fission Neutron (PFN) logging trucks along with 8 PFN logging tools. The PFN logging provides a direct measurement of uranium content in the borehole and is thus considered to provide direct assay results. MULLC logged all gamma intercepts above 0.02 %eU3O8 with PFN and utilizes only the PFN data for resource calculation. This mitigates the effects of radiometric disequilibrium as the PFN is essentially equivalent to other common uranium assay methods such as X-ray diffraction (XRF). When drilling is active, both the natural gamma and PFN logging trucks are calibrated routinely.
ALTA MESA URANIUM PROJECT |
11.5 Density
Bulk density data is available for the Project (Babbitt, 1987) in a study commissioned by Total Mineral Incorporated supporting their bulk density. MULLC uses a bulk density of 17cf/ton. Total Minerals Incorporated used a density factor of 16.5cf/ton (Total, 1989). MULLC's use of 17cf/ton rather than16.5 cf/ton is conservative in that it calculates approximately 3% less tonnage per unit volume. The Author used the conservative value for bulk density of 17 cf/ton in all calculations.
11.6 Opinion of Author
The author of this section has concluded that the data utilized in this report is accurate and, reliable and
adequate for the purposes of its use in this report and that the sample preparation, security and analytical
procedures for all relevant data is adequate.
ALTA MESA URANIUM PROJECT |
12.0 DATA VERIFICATION
12.1 Data Verification
In April of 2014, co-author Beahm (BRS, 2014) examined numerous original hard copy drill hole files selected from the various remaining Mineral Resource areas and representing a range of reported drill hole results. Summary and conclusions follow.
The previous owner/operator, Mesteña Uranium LLC, who conducted most of the drilling on the project had written procedures for the collection of drill data including lithological logging, natural gamma logging, and PFN logging, and for the entry of said data into the Geographic Information System (GIS) based master database. All data is stored on a secure server at the Alta Mesa Facility. Hard copies of all original drill hole data are maintained at the facility. The Alta Mesa Facility is secured with external fencing and automated security gates. The building has automatic locking security doors. The facility is continuously monitored by alarm and video surveillance equipment. This equipment is monitored both by on-site staff and remotely.
During drilling both the natural gamma and PFN logging trucks are calibrate routinely as previously discussed (Gamma Logging).
12.2 Drill Hole Database
During the site visit conducted from April 15 through 17, 2014, BRS examined numerous original hard copy drill hole files selected from the various remaining Mineral Resource areas and representing a range of reported drill hole results. Given the volume of data (over 10,000 drill holes), this review was not complete but did allow the author to reach the following conclusions.
The author concluded that the drill hole database is adequate for the purposes of calculating Mineral Resources and fairly represents the actual drill data. Further, if any bias exists it would be of a conservative nature whereas mineralization not reasonably extractable by ISR methods was not included in the database
12.3 Opinion of Adequacy
It is the opinion of the authors that the data collection, assay procedures (geophysical logging), database maintenance, and storage and security for all relevant data are adequate. Further, it is the EFR's opinion that the data is suitable for the purposes of resource estimation as necessary for this report.
ALTA MESA URANIUM PROJECT |
13.0 MINERAL PROCESSING AND METALLURGICAL TESTING
The Alta Mesa Uranium Project (the Project) is an ISR facility that was in production from 2005 until being placed on standby in February 2013. As such, actual mineral recovery data is available for several wellfields. This data is summarized in Table 13-1.
Table 13-1 Actual Mineral Recovery from Alta Mesa
Wellfield |
Horizon |
Pre-Mining Mineral |
Production |
% Recovery |
PAA-1 |
C middle |
1,921,300 |
1,610,000 |
84% |
PAA-2 |
C middle |
2,030,000 |
1,498,200 |
74% |
PAA-3 |
C middle |
262,000 |
290,400 |
111% |
PAA-4 |
Lower C Upper |
527,027 |
|
|
Lower C Lower |
453,960 |
|
|
|
TOTAL |
980,987 |
850,000 |
87% |
|
PAA-5 |
B Ring - B Sand |
41,000 |
|
|
C Ring - B Sand |
48,672 |
|
|
|
TOTAL |
89,672 |
35,000 |
58% |
|
PAA-6 |
Lower C Upper |
377,000 |
|
|
Lower C Lower |
331,000 |
|
|
|
TOTAL |
708,000 |
338,000 |
NA on standby |
From the production data in Table 13-1, the author concludes the following with respect to mineral recovery:
13.1 Opinion of Author
The author of this section has concluded that the data and information utilized is accurate, reliable and adequate for the purposes of its use in this report.
ALTA MESA URANIUM PROJECT |
14.0 MINERAL RESOURCE ESTIMATES
14.1 General Statement
The Mineral Resource estimate stated in this Initial Assessment was initially completed by BRS as part of a NI 43-101 compliant Technical Report (2014) completed for the Alta Mesa Uranium Project (the Project) for Mesteń́a Uranium and updated in 2016 for EFR. The Mineral Resource was estimated using the GT-Contour Method, an industry accepted method and Canadian Institute of Mining (CIM) best practice for uranium deposits mined by in-situ recovery. No material changes have occurred in the subsurface data available for the Project since the Mineral Resource was published in 2016.
14.2 Mineral Resource Estimate
Table 14-1 gives the classified Mineral Resources associated with the Project. The cut-off grade is a grade multiplied by thickness (abbreviated GT) cut-off of 0.3 GT and assumes a minimum grade of 0.02% U3O8.
Table 14-1 Alta Mesa and Mesteña Grande Resource Summary
Classification |
COG |
Area |
Tonnage |
Grade |
Contained Metal |
Measured |
0.3 |
Alta Mesa |
54,000 |
0.152 |
164,000 |
Total Measured |
0.3 |
|
54,000 |
0.152 |
164,000 |
Indicated |
0.3 |
Alta Mesa |
1,397,000 |
0.106 |
2,959,000 |
|
0.3 |
Mesteña Grande |
119,000 |
0.120 |
287,000 |
Total Indicated |
0.3 |
|
1,516,000 |
0.107 |
3,246,000 |
Total Measured & Indicated |
0.3 |
|
1,570,000 |
0.109 |
3,410,000 |
Inferred |
0.3 |
Alta Mesa |
1,263,000 |
0.126 |
3,192,000 |
|
0.3 |
Mesteña Grande |
5,733,000 |
0.119 |
13,601,000 |
Total Inferred |
0.3 |
|
6,996,000 |
0.120 |
16,793,000 |
Notes:
1. NI 43-101 and S-K 1300 definitions were followed for all Mineral Resource categories.
2. Mineral Resources are estimated at a 0.3 GT (0.02% U3O8 minimum)
3. Mineral Resources are estimated using a long-term Uranium price of US$65 per pound
4. Total measured Mineral Resource is that portion of the in-place or in situ Mineral Resources that is estimated to be recoverable within existing well fields. Wellfield recovery factors have not been applied to indicated and inferred Mineral Resources
5. Bulk density is 0.0588 tons/ft3 (17.0 ft3/ton)
6. Mineral Resources are exclusive of Mineral Reserves and do not have demonstrated economic viability.
7. Numbers may not add due to rounding
14.2.1 Resource Database
Alta Mesa
The Alta Mesa drill hole database consists of some 10,744 drill holes. Of this total 5,620 or 52% of the drill holes were considered barren. All the drill data was collected using downhole geophysical tools including both gamma and PFN logging. Historic drilling by other operators generally was limited to the current Alta Mesa wellfields, and, as a matter of procedure, the exploratory drill holes have been replaced with delineation drill holes using PFN logging. Those holes meeting cut-off criteria during wellfield delineation were converted to wells. Alta Mesa procedure following wellfield installation is to then recalculate Mineral Resources with the results from the new drill data.
ALTA MESA URANIUM PROJECT |
Table 14-2 summarizes the drilling results by sand horizon for the Alta Mesa portion of the Project.
Table 14-2 Alta Mesa Drill Holes Summary
Alta Mesa Data |
GT >0.5 |
GT>0.3 |
GT>0.1 |
|
A Sand |
GT |
1.15 |
0.74 |
0.43 |
Grade |
0.200 |
0.153 |
0.117 |
|
Thickness |
5.74 |
4.81 |
3.65 |
|
Count |
33 |
72 |
162 |
|
B Sand |
GT |
1.22 |
0.87 |
0.54 |
Grade |
0.176 |
0.146 |
0.119 |
|
Thickness |
6.90 |
5.97 |
4.54 |
|
Count |
160 |
273 |
527 |
|
MCU Sand |
GT |
1.68 |
1.33 |
0.93 |
Grade |
0.220 |
0.194 |
0.167 |
|
Thickness |
7.65 |
6.86 |
5.54 |
|
Count |
428 |
588 |
911 |
|
MCM Sand |
GT |
1.79 |
1.46 |
1.08 |
Grade |
0.245 |
0.218 |
0.190 |
|
Thickness |
7.33 |
6.67 |
5.69 |
|
Count |
402 |
527 |
749 |
|
MCL Sand |
GT |
1.51 |
1.25 |
0.99 |
Grade |
0.187 |
0.171 |
0.157 |
|
Thickness |
8.11 |
7.30 |
6.32 |
|
Count |
685 |
894 |
1,186 |
|
LCU Sand |
GT |
1.28 |
1.00 |
0.68 |
Grade |
0.171 |
0.145 |
0.121 |
|
Thickness |
7.50 |
6.86 |
5.63 |
|
Count |
357 |
526 |
862 |
Mesteña Grande
The Mesteña Grande portion of the Project is subdivided into five areas with a total of 460 drill holes. Drill hole spacing at Mesteña Grande is generally wide spaced. Table 14-3 summarizes the drill results for the Mesteña Grande portion of the Project.
Table 14-3 Mesteña Grande Drill Holes Summary
Zone |
Horizon(s) or |
Total Drill |
Barren |
GT >0.1 |
0.1< GT<0.3 |
0.3< GT <0.5 |
GT > 0.5 |
Oakville North |
OK10 and OK20 |
30 |
28 |
2 |
1 |
0 |
1 |
Oakville Central |
OK10 and OK20 |
320 |
282 |
38 |
28 |
5 |
5 |
Goliad |
G10 and G20 |
50 |
49 |
1 |
1 |
0 |
0 |
Alta vista |
Alta Vista OK 20 |
22 |
19 |
3 |
3 |
0 |
0 |
El Sordo |
Catahoula |
38 |
33 |
5 |
2 |
1 |
2 |
Totals |
|
460 |
411 |
49 |
35 |
6 |
8 |
ALTA MESA URANIUM PROJECT |
14.2.2 Geologic Modeling
The primary geologic modeling associated with roll-front deposits in Texas is first identifying the sand in which the uranium mineralization is contained. The geophysical logs obtained following drilling contain gamma data as described in previous sections as well as electrical properties of the rock formations. A trained geologist can interpret these electrical logs as different rock types and therefore assign a formation or sand unit to a uranium intercept. The gamma signature and the cuttings logged during drilling can be used to tell what where the drill hole is within the roll front. The drill hole can be on the oxidized or reduced side of the roll front or within the mineralized "nose" of the roll front. All this information is used to define geologic continuity and the location of the mineralization.
14.2.3 Grade Capping
Grade capping was not used in estimating the Mineral Resources at the Project. The GT contour method limits the influence of a high-grade sample by containing an outlier GT interval to a single small contour.
14.2.4 Compositing
Mineralized intercepts meeting a minimum thickness of 1 ft. and grade of 0.02% U3O8 were composited to determine the thickness, grade and thus the GT of the drill hole within each sand. If the composite GT met the minimum criteria of 0.3 GT it would be included in the Mineral Resource estimation.
14.2.5 Density
Bulk density data for the Project was determined from a study commissioned by Total Minerals. EFR used a density factor of 16.5ft³/ton in its Mineral Resource estimates (Total, 1989), while the Mineral Resource in this report uses a value of 17 ft³/ton, which is conservative in that it calculates approximately 3% less tonnage per unit volume.
14.2.6 Radiometric Equilibrium
Data used in this Mineral Resource relies on PFN log data for determination of uranium grade as this method is a direct measurement of uranium content, not an equivalent radiometric assay; PFN assays are considered by to be reasonably equivalent to chemical assays. PFN assay data is available for 92.8% of the drill data used in the report and thus a correction of drill hole data for DEF is not applicable.
14.2.7 GT Contouring Method
Where drilling density was sufficient to complete GT contour calculations, resource estimates were completed in accordance with industry standards, in areas where this was not possible, trend width was determined from producing wellfields PAA-6 and portions of PAA-4 or average GT values where estimated based on overall averages for all Alta Mesa drill hole data. Estimation parameters used for each resource area are provided in the discussions that follow.
When dealing with ISR Mineral Resources, the contained pounds of uranium are calculated from the GT value applied to the respective area of mineralization with the application of the appropriate bulk density. As such average thickness is not a critical parameter in the determination of the pounds contained but is needed to calculate tonnage and average grade. Based on the typical geometry of the sands, a thickness of 10 feet was assumed for exploration targets and corresponds generally with the average screened interval for wells. Mineral resource tonnages were thus calculated assuming an average thickness of 10 feet unless specific data relating to thickness was available.
ALTA MESA URANIUM PROJECT |
14.2.8 Resource Classification
NI 43-101 and S-K 1300standards define a Mineral Resource as a concentration or occurrence of material of economic interest in or on the Earth's crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled. Based on this definition of Mineral Resources, the Mineral Resources estimated in this Initial Assessment have been classified according to the definitions below which are in accordance with both SEC S-K and NI 43-101 definitions.
Measured mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling. The level of geological certainty associated with a measured mineral resource is sufficient to allow a qualified person to apply modifying factors, as defined in this section, in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit. Because a measured mineral resource has a higher level of confidence than the level of confidence of either an indicated mineral resource or an inferred mineral resource, a measured mineral resource may be converted to a proven mineral reserve or to a probable mineral reserve.
Indicated mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling. The level of geological certainty associated with an indicated mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Because an indicated mineral resource has a lower level of confidence than the level of confidence of a measured mineral resource, an indicated mineral resource may only be converted to a probable mineral reserve.
Inferred mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of geological uncertainty associated with an inferred mineral resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Because an inferred mineral resource has the lowest level of geological confidence of all mineral resources, which prevents the application of the modifying factors in a manner useful for evaluation of economic viability, an inferred mineral resource may not be considered when assessing the economic viability of a mining project and may not be converted to a mineral reserve.
The Mineral Resources at the Project have been classified as measured, indicated and inferred for the Alta Mesa Property and indicated and inferred for the Mesteña Grande Property. Measured mineral resources at the Alta Mesa facility and production area are those Mineral Resources calculated by the GT contour method after a well field is fully delineated. In existing well fields such as PAA-2 and PAA-6, the geologic and mineralized continuity defined by tight drill hole spacing, less than 100 feet, is adequate to estimate the mineral resource to a high level of confidence. As such, they could be classified as a measured mineral resource in accordance with NI 43-101 and S-K 1300 standards. In some cases, outside the existing wellfields, the drill density would allow classifications of certain portions of the mineral resource as measured, these areas have been defined as indicated as they are not part of a fully delineated well field. For the purposes of this report measured mineral resources are within existing well fields and represent only that portion of the remaining resource that can reasonably be recovered from the existing wellfields through continued operation of the well fields. EFR considers the remaining mineral resources within the PAA-6 wellfield as having reasonable prospects for future economic extraction. At present it has not been determined whether the PAA-2 meets the criteria for reasonable prospects for future economic extraction. Thus, only the remaining mineral resource within wellfield PAA-6 are considered a current measured mineral resource.
ALTA MESA URANIUM PROJECT |
Indicated mineral resources are based on detailed and reliable exploration, sampling, and testing information gathered through appropriate techniques that are spaced closely enough for both geological and grade continuity to be reasonably assumed. Given the nature of the mineralization in the Project area and the demonstrated continuity of mineralization along the REDOX front from the existing wellfields, indicated mineral resources, are those areas where the location of the REDOX front can be reasonably defined by drill data and where along a continuously mapped REDOX front there are drill holes that intersect the mineralized front and reasonably confirm the presence of mineralization which has reasonable prospects for economic extraction. For the Project, drill hole spacing in areas for which indicated mineral resources are defined range from less than 100 feet to as much as 800 feet along the REDOX front.
Inferred mineral resources are defined as that part of the mineral resource for which quantity and quality can be estimated based on geologic evidence, limited sampling and reasonably assumed but not verified geological and grade continuity. For the Project, the basis of geologic evidence and sampling is drill hole data which is adequate to define the presence and general location of the REDOX front but for which there may not be drill holes which intersect the mineralized front and reasonably confirm the presence on mineralization meeting the criteria for indicated mineral resources. For the Project, drill hole spacing in areas where inferred mineral resources are defined may exceed 800 feet if there is geologic evidence that the REDOX front is present, and its location can reasonably be assumed.
14.2.9 Metal Price
Neither the S-K 1300 nor NI 43-101 rules require a market study for a Technical Report nor preliminary economic assessment respectively. However, EFR has included this section to determine an appropriate metal price in determining the GT breakeven cut-off grade which, in turn, is used to calculate Mineral Resources for Alta Mesa.
Uranium does not trade on the open market and many of the private sales contracts are not publicly disclosed since buyers and sellers negotiate contracts privately. Monthly long-term industry average uranium prices based on the month-end prices are published by Ux Consulting, LLC, and TradeTech, LLC (TradeTech). As a result, an accepted mining industry practice is to use "Consensus Prices" obtained by collating publicly available commodity price forecasts from credible sources.
The authors use TradeTech, an independent provider of uranium prices and nuclear fuel market information; EFR produces a quarterly uranium market study which is based on their comprehensive knowledge of the factors affecting the nuclear fuel cycle industry globally.
Figure 4-1 and Figure 4-2 provides a Long-Term Uranium Price Forecast through 2039 from TradeTech's Uranium Market Study, 2021: Issue 4. The Forward Availability Model (FAM 1 and 2) forecast differ in assumptions as to how future uranium supply enters the market. "FAM 1 represents a good progression of planned uranium projects incorporating some delays to schedules, while FAM 2 assumes restricted project development because of an unsupportive economic environment." (TradeTech, 2021). Currently most US producers are in a mode of care and maintenance and numerous facilities globally are also slowing or shutting in production at least on a temporary basis. At this time in the US, no new projects are being constructed, and very few are moving forward with permitting and/or licensing. This condition aligns more with the FAM 2 projections.
ALTA MESA URANIUM PROJECT |
Figure 4-1 TradeTech Uranium Market Price Projections- FAM 1 (Nominal US$)
Figure 4-2 TradeTech Uranium Market Price Projections - FAM 2 (2020 US$)
Term forecasts beginning 2026 or later and extending into the future are considered the most reasonable for purposes of this report, as they consider the effects of prices on future existing and new production and long-term contracts with investment-grade nuclear utilities. Therefore, term prices are most appropriate for purposes of this report.
Based on this, the planned production from the project is projected to occur when the price projections under the assumption of FAM 2 are generally more than $65 per pound uranium oxide (year 2037). EFR recommends the use of a long-term uranium price of $65.00 per pound uranium oxide for the GT calculation for Mineral Resources at Alta Mesa.
ALTA MESA URANIUM PROJECT |
By their nature all commodity price assumptions are forward-looking. No forward-looking statement can be guaranteed, and actual future results may vary materially
14.2.10 Cut-off Parameters
The SEC defines cut-off grade as "the grade that distinguishes material deemed to have no economic value (it will not be mined in underground mining or if mined in surface mining, its destination will be the waste dump) from material deemed to have economic value (its ultimate destination during mining will be a processing facility)".
The cut-off criteria used in this report is a minimum grade cut-off of 0.02% U3O8 and minimum GT of 0.30. In addition, with respect to reasonable prospects for economic extraction, areas of isolated mineralization with less than an estimated 2,000 pounds uranium will typically not support the cost of well field installation and are therefore not considered in the Mineral Resource estimate.
The calculated cut-off grade for the Project was based on modifying factors including metal prices, metallurgical recoveries, operating costs, and other operational constraints (Table 14.4). Mining costs were based on historical operating costs for the Project.
Table 14-4: Alta Mesa Uranium Project Cut-off Grade Calculation
Item |
Quantity |
Price in US$/lb U3O8 |
US$65.00 |
Process plant recovery |
70-80% |
Total OPEX (includes G&A) |
$27-30/ton |
Break-Even Cut-off grade |
0.03% |
14.2.11 Reasonable Prospects for Future Economic Extraction
The Project produced approximately 4.6 million pounds of uranium oxide between 2005 and 2013 via in-situ recovery (ISR) mining using an alkaline lixiviant and is processed at a plant located in Alta Mesa. The cut-off criteria applied to the current Mineral Resource estimates is consistent with that applied when the Project was producing uranium. Under the stated cut-off criteria and based on a long-term uranium price of $65.00 per pound uranium oxide, the Mineral Resources stated herein have reasonable prospects for future economic extraction.
The mining and mineral processing methods stated in this report have previously been successfully employed at the project. The project is a brown-field development located in a State, which tends to favor mining and industrial development.
For these reasons, the Authors believe that the Alta Mesa Mineral Resources have a low probability of being affected by risk associated with mining; processing; metallurgical; infrastructure; economic; marketing; legal; environmental compliance; plans, negotiations or agreements with local individuals or groups; and governmental factors. The authors are not aware of any factors including environmental, permitting, taxation, socio-economic, marketing, political, or other factors, which would materially affect the Mineral Resource estimate, herein.
ALTA MESA URANIUM PROJECT |
14.3 Mineral Resource Summary
Mineral resources for the Alta Mesa portion of the Project estimated for classifications meeting NI 43-101 and S-K 1300 standards and definitions as measured, indicated, and inferred Mineral Resources, at a 0.30 GT cut-off, are summarized in Table 14-5.
Table 14-5 Alta Mesa Mineral Resource Summary (at 0.30 GT Cut-off Grade)
|
Area |
Tonnage |
Grade |
Contained Metal |
Classification |
PAA-6 |
54,000 |
0.152 |
164,000 |
Total Measured |
54,000 |
0.152 |
164,000 |
|
Indicated |
PAA-7 Upper LCU1 |
84,000 |
0.151 |
256,000 |
PAA-7 Upper LCU2 |
100,000 |
0.151 |
303,000 |
|
PAA-7 Lower LCL1 |
119,000 |
0.152 |
361,000 |
|
PAA-7 Lower LCL2 |
122,000 |
0.152 |
372,000 |
|
D Sand - Upper |
552,000 |
0.060 |
662,000 |
|
D Sand - Lower |
204,000 |
0.083 |
336,000 |
|
LC - Adjacent to PAA1 |
58,000 |
0.171 |
199,000 |
|
B Sand |
92,000 |
0.146 |
268,000 |
|
A Sand - A1 |
43,000 |
0.153 |
133,000 |
|
A Sand - A2 |
23,000 |
0.153 |
69,000 |
|
Total Indicated |
1,397,000 |
0.106 |
2,959,000 |
|
Total Measured and Indicated |
1,451,000 |
0.108 |
3,123,000 |
|
Inferred |
PAA-7 Upper LCU2 |
58,000 |
0.151 |
175,000 |
D Sand - Upper |
74,000 |
0.038 |
57,000 |
|
D Sand - Lower |
231,000 |
0.080 |
370,000 |
|
LC - W Lower C Upper |
99,000 |
0.171 |
338,000 |
|
LC - W Lower C Lower |
124,000 |
0.140 |
350,000 |
|
B Sand |
268,000 |
0.146 |
781,000 |
|
A Sand - A1 |
283,000 |
0.153 |
869,000 |
|
SAM - E Sand |
126,000 |
0.100 |
252,000 |
|
Total Inferred |
1,263,000 |
0.126 |
3,192,000 |
ALTA MESA URANIUM PROJECT |
14.3.1 PAA-7 Lower C Sand
The PAA-7 Mineral Resource area is permitted as a wellfield which required expansion of the existing aquifer exemption. The area was drilled on approximately 50 foot by 200-foot centers, across and along the trend, respectively. Mineralization is at a depth of approximately 550 feet. PAA-7 is adjacent to PAA-4. Mineralization in a portion of PAA-4 was estimated using the GT Contour Method. This data was used to determine appropriate parameters for the width, thickness, and GT for Lower C Lower (LCL) and the Lower C Upper (LCU) sands of the Goliad Formation which are mineralized in the area.
Mineral resource estimation parameters PAA-7 at a 0.30 GT cut-off shown in Table 14-6 below.
Table 14-6 PAA-7 Mineral Resource Estimation Parameters
Horizon |
Classification |
Trend Length (ft) |
Width (ft) |
Area (ft2) |
Thickness (ft) |
Grade (%U3O8) |
GT |
LCU1 |
Indicated |
9,200 |
34.7 |
319,507 |
4.5 |
0.151 |
0.68 |
LCU2 |
Indicated |
10,900 |
34.7 |
378,547 |
4.5 |
0.151 |
0.68 |
LCU2 |
Inferred |
6,300 |
34.7 |
218,793 |
4.5 |
0.151 |
0.68 |
LCL1 |
Indicated |
17,400 |
29.7 |
516,542 |
3.9 |
0.152 |
0.59 |
LCL |
Indicated |
17,900 |
29.7 |
531,385 |
3.9 |
0.152 |
0.59 |
14.3.2 D Sand
Mineralization in the D sand of the Goliad Formation is defined by drilling within two sub-horizons, the upper and lower sands, DU and DL, respectively. The area is drilled on approximately 50 foot by 200-foot centers, across and along the trend, respectively. Most of the mineralization defined to date is in the DU. Mineralization is at a depth of approximately 550 feet. The average width of mineralization was taken to be equivalent to PAA-7, as discussed previously. The average GT represents average values from drill holes in the D sands above the GT cut-off, 24 drill holes in the DU and 4 in the DL. An average thickness of 10 feet was used. Note that mineralization in the D Sand is projected to extend into the exclusion area. Trend lengths within the exclusion area were excluded from the resource estimate.
Mineral resource estimation parameters for the D sand at a 0.30 GT cut-off are shown in Table 14-7.
Table 14-7 D Sand Mineral Resource Estimation Parameters
Horizon |
Classification |
Trend |
Width |
Area |
Thickness |
Grade |
GT |
D Sand |
Indicated |
26,600 |
35 |
938,000 |
10 |
0.060 |
0.60 |
D Sand |
Inferred |
2,300 |
35 |
126,000 |
10 |
0.060 |
0.60 |
D Sand |
Indicated |
9,900 |
35 |
346,500 |
10 |
0.083 |
0.83 |
D Sand |
Inferred |
10,900 |
35 |
392,000 |
10 |
0.083 |
0.83 |
14.3.3 Lower C Sand Outside of PAA-7, PAA-6 and PAA-4
The area is defined by drilling on variable centers, across and along the trend, respectively. Mineralization occurs in the lower C sand of the Goliad Formation at a depth of approximately 525 to 575 feet. The area includes a portion within the PAA-1 wellfield (completed in the Middle C sand but with drilling penetrating the Lower C sand as well). This portion of the Mineral Resource was classified as an indicated Mineral Resource but could have been classified as a measured Mineral Resource based on drill hole spacing. Average thickness and GT for the resource area was determined from the portion of the mineralization within the PAA-1 wellfield. Average width was determined from GT contour estimates of PAA-4 and PAA-6, as discussed previously for the PAA-7 Mineral Resource area.
ALTA MESA URANIUM PROJECT |
The Lower C Sand Outside of PAA-7, PAA-6, and PAA-4 also includes an area for which an Exploration Target has been defined and is described in Section 9.0 (Exploration).
Mineral resource estimation parameters for the Lower C Sand Outside PAA-7, PAA-6, and PAA-4 at a 0.30 GT cut-off are summarized in Table 14-8.
Table 14-8 Lower C Sand Outside PAA-7, PAA-6, and PAA-4 Mineral Resource Estimation Parameters
Horizon |
Classification |
Trend |
Width |
Area |
Thickness |
Grade |
GT |
LCU Sand |
Indicated |
6,373 |
35 |
223,062 |
4.44 |
0.171 |
0.758 |
LCU Sand |
Inferred |
10,822 |
35 |
378,785 |
4.44 |
0.171 |
0.758 |
LUL Sand |
Indicated |
12,433 |
35 |
435,170 |
4.86 |
0.140 |
0.683 |
14.3.4 B Sand
The B sand of the Goliad Formation is present in the majority of the drill holes within the Project and occurs above the C sand, which was mined in the majority of the existing wellfields. The depth of the B sand is less than 500 feet.
Wellfield PAA-5 was completed in the B sand. A GT contour model was developed for portion of the B sand to determine appropriate Mineral Resource estimation parameters for width. Thickness and GT estimation parameters were determined from the average values from some 273 intercepts for the B sand above the minimum GT cut-off. As a cautionary note the recovery from wellfield PAA-5 was considerably lower than the other wellfields within the C sand units. It is not known whether this was a function of the PAA-5 wellfield specifically or the B sand in a more general sense.
Mineral resource estimation parameters for the B Sand at a 0.30 GT cut-off are shown in Table 14-9:
Table 14-9 B Sand Mineral Resource Estimation Parameters
Horizon |
Classification |
Trend |
Width |
Area |
Thickness |
Grade |
GT |
B Sand |
Indicated |
3,549 |
31 |
262,193 |
5.97 |
0.15 |
0.87 |
B Sand |
Inferred |
25,011 |
31 |
763,058 |
5.97 |
0.15 |
0.87 |
14.3.5 A Sand
Mineralization in the A sand of the Goliad Formation is defined by drilling within two sub-horizons, the upper and lower sands, A1 and A2, respectively. The area is drilled on approximately 50 foot by 200 foot centers or closer, across and along the trend, respectively. Most of the mineralization defined to date is in the A1 sand. The A sand is stratigraphically above the B and C sands and is encountered in the majority of the drill holes within the Project. Mineralization is at a depth of less than 500 feet. The average width of mineralization was taken to be equivalent to PAA-7, as discussed previously. The average thickness and GT parameters represent average values from drill holes in the A sands above the GT cut-off, from 72 intercepts.
Mineral resource estimation parameters for the A sand at a 0.30 GT cut-off are shown in Table 14-10.
ALTA MESA URANIUM PROJECT |
Table 14-10 A Sand Mineral Resource Estimation Parameters
Horizon |
Classification |
Trend |
Width |
Area (ft2) |
Thickness |
Grade |
GT |
A1 Sand |
Indicated |
4,367 |
35 |
152,829 |
4.81 |
0.15 |
0.74 |
A2 Sand |
Inferred |
28,616 |
35 |
1,001,555 |
4.81 |
0.15 |
0.74 |
A1 Sand |
Inferred |
2,283 |
35 |
79,905 |
4.81 |
0.15 |
0.74 |
14.3.6 South Alta Mesa
The South Alta Mesa is primarily an exploration target, but within a limited portion of the area, the interpreted REDOX trend, within the E sand of the Goliad, is reasonably defined by drilling. This area meets NI 43-101 and S-K 1300 regulations for classification as an inferred Mineral Resource.
Mineral resource estimation parameters reflecting overall averages for the Alta Mesa drill hole intercepts meeting the minimum GT cut-off criteria are at a width of 35 feet, a thickness of 10 feet, and a GT of 1.00. These parameters were applied to an estimated trend length of 6,125 feet to determine the inferred Mineral Resource for this portion of the South Alta Mesa area.
14.3.7 Mesteña Grande Portion of the Project
Mineral resources for the Mesteña Grande portion of the Project estimated for classifications, meeting NI 43-101 and S-K 1300 standards and definitions as indicated and inferred Mineral Resources, at a 0.30 GT cut-off, as summarized in Table 14-11. Subsequent sections discuss each Mineral Resource area separately.
Table 14-11 Mesteña Grande Mineral Resource Summary
Classification |
Area |
Tonnage |
Grade |
Contained Metal |
(% U3O8) |
(lbs. U3O8) |
|||
Indicated |
Central OK |
119,000 |
0.120 |
287,000 |
Total Indicated |
119,000 |
0.120 |
287,000 |
|
Total Measured and Indicated |
119,000 |
0.120 |
287,000 |
|
Inferred |
North OK 10 |
1,064,000 |
0.120 |
2,555,000 |
North OK 20 |
233,000 |
0.120 |
558,000 |
|
Central OK 10 |
366,000 |
0.120 |
880,000 |
|
Central OK 20 |
2,178,000 |
0.120 |
5,228,000 |
|
Alta Vista OK 20 |
255,000 |
0.120 |
613,000 |
|
Goliad 10 |
675,000 |
0.120 |
1,621,000 |
|
Goliad 20 |
564,000 |
0.120 |
1,354,000 |
|
El Sordo |
397,000 |
0.100 |
794,000 |
|
Total Inferred |
5,733,000 |
0.119 |
13,601,000 |
All estimates are rounded. Mineral resources are not mineral reserves and do not have demonstrated economic viability in accordance with NI 43-101 and S-K 1300 standards. The portion of the Project with defined Measured and Indicated Mineral Resources would support a preliminary feasibility study (PFS) or Feasibility (FS) which could enable them to be categorized as mineral reserves. Inferred Mineral Resources are too speculative to have reasonable prospect for economic extraction applied to them which would enable them to be categorized as mineral reserves. Inferred Mineral Resources could be assessed in the context of a preliminary economic assessment or Initial Assessment which is allowed under NI 43-101 and S-K 1300 rules respectively.
ALTA MESA URANIUM PROJECT |
14.3.8 Mesteña Grande - Mineral Resource Estimation Parameters
Mineral resource estimation parameters for Mesteña Grande, including defined mineralization in the Goliad, Oakville, and Catahoula formations, were based on data from the Alta Mesa portion of the Project. This approach was taken as the drilling at Mesteña Grande is wide spaced. As discussed in Section 10 and tabulated on Table 10.2, a total of 460 holes were completed in the Mesteña Grande area of which 14 were above the minimum GT cut-off. The drilling did define REDOX trends appropriate for the estimation of mineralization but was not sufficient to determine a reasonable width and GT for the mineralization. An average width of 35 feet was determined from GT contour estimates of PAA-4 and PAA-6, as discussed previously, and for the PAA-7 Mineral Resource area. An average GT value of 1.2 was derived from the average of the C horizon of the Goliad Formation at Alta Mesa which has been the primary ISR mining horizon (nearly 3,000 intercepts). A thickness of 10 feet was assumed. Trend lengths were determined for each area from drill hole data as subsequently discussed.
14.3.9 Mesteña Grande - Oakville Formation
The interpreted REDOX trends are defined by approximately 350 drill holes. The majority of the Mineral Resources are classified as inferred although there is one area in the Oakville Central North where closer spaced drilling has reasonably confirmed the presence of mineralization which has reasonable prospect for economic extraction. This mineralization is within the Oakville 10 sand.
The depth to mineralization in the Oakville Formation occurs at depths from 1,050 to 1,300 feet which is substantially deeper than mineralization in the Goliad Formation both at Mesteña Grande and at Alta Mesa. The increased depth will impact production costs. The authors are aware of several similar ISR projects with similar depths to mineralization and concludes there is a reasonable prospect for economic extraction of these resources; however, production costs will likely be higher than those for Alta Mesa or mineralization in the Goliad at Mesteña Grande.
Mineral resource estimation parameters for the Mesteña Grande, Oakville Formation, at a 0.30 GT cut-off shown in Table 14-12.
Table 14-12 Mesteña Grande and Oakville Formation Mineral Resource Estimation Parameters
Horizon |
Classification |
Trend |
Width |
Area (ft2) |
Thickness (ft) |
Grade (%U3O8) |
GT |
Oakville North 20 Sand |
Inferred |
51,700 |
35 |
1,809,500 |
10 |
0.12 |
1.2 |
Oakville North 10 Sand |
Inferred |
11,300 |
35 |
395,500 |
10 |
0.12 |
1.2 |
Oakville Central 10 Sand |
Indicated |
5,800 |
35 |
203,000 |
10 |
0.12 |
1.2 |
Oakville Central 10 Sand |
Inferred |
17,800 |
35 |
623,000 |
10 |
0.12 |
1.2 |
Oakville Central 20 Sand |
Inferred |
105,800 |
35 |
3,703,000 |
10 |
0.12 |
1.2 |
Oakville Alta Vista 20 Sand |
Inferred |
12,400 |
35 |
434,000 |
10 |
0.12 |
1.2 |
14.3.10 Mesteña Grande - Goliad Formation
REDOX trends were defined in the Goliad Formation in the northern portion of Mesteña Grande. The interpreted REDOX trends are defined by approximately 50 drill holes. Mineralization is at depth ranging from 400 to 500 feet. Mineral resources for the Goliad are classified as inferred Mineral Resources and were estimated for the Goliad 10 and Goliad 20 sands.
ALTA MESA URANIUM PROJECT |
Mineral resource estimation parameters for the Mesteña Grande, Goliad Formation, at a 0.30 GT cut-off are shown in Table 14-13.
Table 14-13 Mesteña Grande and Goliad Formation Mineral Resource Estimation Parameters
Horizon |
Classification |
Trend |
Width |
Area (ft2) |
Thickness |
Grade |
GT |
Goliad 10 Sand |
Inferred |
32,800 |
35 |
1,148,000 |
10 |
0.12 |
1.2 |
Goliad 20 Sand |
Inferred |
27,400 |
35 |
959,000 |
10 |
0.12 |
1.2 |
14.3.11 El Sordo - Catahoula Formation
Mineralization in the El Sordo area is in the Catahoula Formation at depths ranging from 450 to 600 feet. The Catahoula Formation is described as primarily composed of volcanic ash-fall tuffs. Regionally, the Catahoula Formation is an important source rock for uranium. BRS reviewed the geophysical logs for the El Sordo area, and the mineralization is within well- developed sand units and BRS's opinion is that a reasonable prospect for economic extraction via ISR mining is feasible. Mineral resources at El Sordo are classified as inferred Mineral Resources based on the following assumptions:
Mineral resource estimation parameters for the El Sordo area, at a 0.30 GT cut-off are shown in Table 14-14.
Table 14-14 El Sordo- Catahoula Formation Mineral Resource Parameters
Horizon |
Classification |
Trend Length (ft) |
Width (ft) |
Area (ft2) |
Thickness (ft) |
Grade (%U3O8) |
GT |
Catahoula C-1 |
Inferred |
8,769 |
35 |
306,915 |
10 |
0.10 |
1.0 |
Catahoula C-2 |
Inferred |
10,509 |
35 |
367,815 |
10 |
0.10 |
1.0 |
14.4 Opinion of Adequacy
It is the opinion of the authors that the Mineral Resource procedures and calculations are suitable for the purposes of resource estimation under NI 43-101 requirements and S-K 1300 for roll-front uranium deposits mined by in-situ recovery methods.
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14.5 Mineral Resource Figures and Drill Hole Locations
Figure 14-3 Alta Mesa Key Map
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Figure 14-4 PAA7 LCU
ALTA MESA URANIUM PROJECT |
Figure 14-5 Paa7 LCL
ALTA MESA URANIUM PROJECT |
Figure 14-6 D Sand
ALTA MESA URANIUM PROJECT |
Figure 14-7 Western LC LCU and LCL
ALTA MESA URANIUM PROJECT |
Figure 14-8 B Sand
ALTA MESA URANIUM PROJECT |
Figure 14-9 A Sand
ALTA MESA URANIUM PROJECT |
Figure 14-10 Sam and E Sand
ALTA MESA URANIUM PROJECT |
Figure 14-11 Mestena Grande Key Map
ALTA MESA URANIUM PROJECT |
Figure 14-12 Oakville North
ALTA MESA URANIUM PROJECT |
Figure 14-13 Oakville Central North
ALTA MESA URANIUM PROJECT |
Figure 14-14 Oakville Central South
ALTA MESA URANIUM PROJECT |
Figure 14-15 Alta Vista
ALTA MESA URANIUM PROJECT |
Figure 14-16 Goliad
ALTA MESA URANIUM PROJECT |
15.0 MINERAL RESERVE ESTIMATES
There are no Mineral Reserves at the Alta Mesa or Mesteña Grande properties.
ALTA MESA URANIUM PROJECT |
16.0 MINING METHODS
This section is not applicable to this Initial Assessment.
ALTA MESA URANIUM PROJECT |
17.0 PROCESSING AND RECOVERY METHODS
This Section is not applicable to this Initial Assessment.
ALTA MESA URANIUM PROJECT |
18.0 INFRASTRUCTURE
This Section is not applicable to this Initial Assessment.
ALTA MESA URANIUM PROJECT |
19.0 MARKET STUDIES
This Section is not applicable to this Initial Assessment.
ALTA MESA URANIUM PROJECT |
20.0 ENVIRONMENTAL STUDIES, PERMITTING, AND PLANS, NEGOTIATIONS, OR AGREEMENTS WITH LOCAL INDIVIDUALS OR GROUPS
This Section is not applicable to this Initial Assessment.
ALTA MESA URANIUM PROJECT |
21.0 CAPITAL AND OPERATING COSTS
This Section is not applicable to this Initial Assessment.
ALTA MESA URANIUM PROJECT |
22.0 ECONOMIC ANALYSIS
This Section is not applicable to this Initial Assessment.
ALTA MESA URANIUM PROJECT |
23.0 ADJACENT PROPERTIES
Several ISR mines lie within the South Texas Uranium Province.
23.1 Garcia Property
The mineralized trends in the Goliad Formation continue to the east onto properties not controlled by Alta Mesa LLC. Chevron conducted exploration drilling in the 1970's on the Garcia property, which is located immediately east of the Alta Mesa project. These exploration efforts identified the presence of several mineralized sands on the Garcia tract. Historical Mineral Resource estimates for this area range from 6.7 million to 9 million pounds.
Such estimates were prepared before the implementation of the SEC's S-K or Canada's NI 43-101 standards
and do not necessarily use the categories for mineral reserve and Mineral Resource reporting as defined by those standards. The author considers this to be a historic Mineral Resource estimate and should not be relied upon. The authors of this report have not been unable to verify this information and this information is not necessarily indicative of the mineralization on the Project.
ALTA MESA URANIUM PROJECT |
24.0 OTHER RELEVANT DATA AND INFORMATION
24.1 Hydrogeology
There has been no hydrologic study on the project site, however pump tests are completed on each well-field as part of the permit application.
24.2 Geotechnical
There has been no geotechnical study on the mineralized zones at Alta Mesa.
ALTA MESA URANIUM PROJECT |
25.0 INTERPRETATION AND CONCLUSIONS
The Project is located within the South Texas Uranium Province and includes both the Alta mesa and Mesteña Grande project areas. Uranium mineralization occurs within known host formations common to the province which have been mined by conventional and ISR methods. Significant Mineral Resources remain within the Project area which may be tributary to the Alta Mesa central processing facility which is fully licensed and operated from 2005 producing approximately 4.6 million pounds of uranium oxide until production standby in February 2013.
Mineral resources have been estimated for both the Alta Mesa and Mesteña Grande areas in accordance with NI 43-101 and S-K 1300 standards and definitions as summarized in Table 1-1 and Table 14-1 and classified as measured, indicated, and inferred. Only the Alta Mesa property has had previous ISR mining. No pre-feasibility study or feasibility study has been completed in accordance with NI 43-101 or S-K 1300 requirements, thus no mineral reserves are stated in this report.
Table 25-1 Alta Mesa and Mesteña Grande Resource Summary
Classification |
COG |
Area |
Tonnage |
Grade |
Contained Metal |
Measured |
0.3 |
Alta Mesa |
54,000 |
0.152 |
164,000 |
Total Measured |
0.3 |
|
54,000 |
0.152 |
164,000 |
Indicated |
0.3 |
Alta Mesa |
1,397,000 |
0.106 |
2,959,000 |
|
0.3 |
Mesteña Grande |
119,000 |
0.120 |
287,000 |
Total Indicated |
0.3 |
|
1,516,000 |
0.107 |
3,246,000 |
Total Measured & Indicated |
0.3 |
|
1,570,000 |
0.109 |
3,410,000 |
Inferred |
0.3 |
Alta Mesa |
1,263,000 |
0.126 |
3,192,000 |
|
0.3 |
Mesteña Grande |
5,733,000 |
0.119 |
13,601,000 |
Total Inferred |
0.3 |
|
6,996,000 |
0.120 |
16,793,000 |
Notes:
1. NI 43-101 and S-K 1300 definitions were followed for all Mineral Resource categories.
2. Mineral Resources are estimated at a 0.3 GT (0.02% U3O8 minimum)
3. Mineral Resources are estimated using a long-term Uranium price of US$65 per pound
4. Total measured Mineral Resource is that portion of the in-place or in situ Mineral Resources that is estimated to be recoverable within existing well fields. Wellfield recovery factors have not been applied to indicated and inferred Mineral Resources
5. Bulk density is 0.0588 tons/ft3 (17.0 ft3/ton)
6. Mineral Resources are exclusive of Mineral Reserves and do not have demonstrated economic viability.
7. Numbers may not add due to rounding
Measured Mineral Resources are limited to fully delineated well fields in the Alta Mesa portion of the Project. While additional Mineral Resources may remain in additional well fields, only the remaining Mineral Resources in well field PAA-6 are considered to meet reasonable prospects for future economic extraction and are thus the only measured Mineral Resources included in the Mineral Resource summary.
Indicated and inferred Mineral Resources have been estimated for both the Alta Mesa and Mestena Grande portions of the project using minimum grade and GT cut-offs based on reasonable prospects for future economic extraction.
Mineral resources at Alta Mesa are near the existing Central Processing Facility. Future development and extraction of Mineral Resources at Mesteña Grande would require the design, permitting and construction of a satellite facility.
In addition to the estimated Mineral Resources, Exploration Targets have been defined in the South Alta Mesa area of the Alta Mesa Project. The Exploration Target for the Project estimated is summarized in Table 25-2.
ALTA MESA URANIUM PROJECT |
Table 25-2 Project Total Exploration Target
Exploration Target |
Low Range Estimate |
High Range Estimate |
||||
Tons |
Grade |
Pounds |
Tons |
Grade |
Pounds |
|
Total |
2,670 |
0.077 |
4,125 |
2,670 |
0.123 |
6,573 |
Note: The tonnages, grades, and contained pounds of uranium for exploration targets are estimates and could change as proposed exploration activities are completed. They should not be construed to reflect a calculated Mineral Resource (measured, indicated or inferred). The potential quantities and grades for exploration targets are conceptual in nature, as there has been insufficient work to date to define a NI 43-101 or S-K 1300 compliant resource. Furthermore, it is uncertain if additional exploration will result in any of the exploration targets being delineated as a Mineral Resource.
The authors consider the data and information available for this report to be accurate and reliable for the purposes of estimating Mineral Resources for the Project.
The authors feel the risks to put the Alta Mesa portion of the Project into production are low since all permits for operating including licenses to resume plant operations at the existing Alta Mesa ISR production facility. For each new wellfield a production area authorization (PAA) permit will need to be obtained through the permitting process with the TCEQ.
However, the Mesteña Grande portion of the Project, which will operate as a satellite facility to the Alta Mesa ISR facility, will require full permitting prior to production and operation of its well fields.
The Project does have some risks similar in nature to other mining projects in general and uranium mining projects specifically, including:
There is a risk that additional drilling may not locate additional Mineral Resources and that mineralization may not be found or may not be continuous along the REDOX boundary and that the actual grade times thickness (GT) along the trends will fall outside the estimated range, either higher or lower. A substantial portion of the Mineral Resource is based on wide-spaced drilling and has been classified as inferred. Inferred Mineral Resources are too speculative to have economic considerations applied to them which would enable them to be categorized as mineral reserves. Inferred Mineral Resources can be assessed in the context of a Initial Assessment study which is allowed under a Preliminary Economic Assessment in accordance NI 43-101 and S-K 1300 requirements. The tonnages, grades, and contained pounds of uranium, as stated in this report, for exploration targets should not be construed to reflect a calculated Mineral Resource (inferred, indicated, or measured). The potential quantities and grades for exploration targets, as stated in this report, are conceptual in nature, and there has been insufficient work to date to define an NI 43-101 or S-K 1300 compliant resource. Furthermore, it is uncertain if additional exploration will result in any of the exploration targets being delineated as a Mineral Resource.
The authors are not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors which would materially affect the Mineral Resource estimates presented in this report. To the author's knowledge there are no other significant factors that may affect access, title, or the right or ability to perform work on the property provided the conditions of all mineral leases and options, and relevant operating permits and licenses, are met. The reader is cautioned that additional drilling may or may not result in discovery of an economic Mineral Resource on the property.
ALTA MESA URANIUM PROJECT |
26.0 RECOMMENDATIONS
Recommendations which follow separately are for the restart of operations at the Alta Mesa Facility and continued exploration and delineation drilling. These recommendations are independent of one another.
26.1 Restart of operations at the Alta Mesa Facility:
The following recommendations presume the Alta Mesa Central Processing facility is to resume production under favorable market conditions. Under this scenario the following phased work program is recommended.
Phase 1 - Restart Alta Mesa Operations
Updating of existing operating permits and licenses as necessary to authorize well field and plant operations.
Rehabilitation and modernization of the Alta Mesa processing facility and rehabilitation of the PAA-6 wellfield to allow for resumption of production from PAA-6.
Estimated cost: $980,000
Phase 2 - Delineate PAA-7 to allow for start of production in PAA-7
PAA-7 Upper LCU1 indicated resource area
PAA-7 Upper LCU2 indicated resource area
PAA-7 Lower LCU1 indicated resource area
PAA-7 Lower LCU2 indicated resource area
Phase 3 - Complete exploration of Alta Mesa inferred Mineral Resource areas
Assumptions for the purposes of estimating the costs of drilling program assume that drilling will be completed across the trend on close spacing and along the trend at a greater spacing (referred to as fence drilling) and include:
Drilling Inferred Mineral Resources to drill hole density of Indicated Mineral Resources
Requires 5 holes per 200 feet of trend length
Approximate 500-600 foot depth, $5,000 per drill hole, approximately $10 per foot
Approximate 1,000-1,200 foot depth per drill hole, $15,000 per drill hole, approximately $15 per foot
Table 26-1 provides cost estimates each of the areas recommended for delineation drilling within the overall Alta Mesa project area.
ALTA MESA URANIUM PROJECT |
Table 26-1 Cost Estimates to Elevate Inferred Mineral Resources to Measured and Indicated Mineral Resources
Inferred Zone |
Number of Holes |
Total Footage |
Cost US$ ($000s) |
Alta Mesa: LC Sand Inferred |
580 |
23,256 |
$2,900 |
D Sand Inferred |
370 |
14,800 |
$1,850 |
South Alta Mesa, A Sand Inferred |
720 |
28,616 |
$3,600 |
South Alta Mesa, B Sand Inferred |
625 |
25,011 |
$3,125 |
South Alta Mesa Inferred |
150 |
6,125 |
$2,250 |
Total $US (rounded) |
|
|
$14,000 |
26.2 Exploration and delineation drilling:
Concurrent with or after Phase 3, continued exploration of the Mesteña Grande is recommended. This would include delineation drilling of the Oakville Central indicated resource area sufficiently to define the mineralization and complete sufficient geological, metallurgical, and hydrological studies to preliminarily assess the economics of future extraction. Presuming positive results, it is recommended that exploration of a sufficient portion of the Mesteña Grande inferred resources areas be conducted to define sufficient Mineral Resources to support a preliminary feasibility study for a satellite facility at Mesteña Grande. The estimated costs to complete the foregoing recommendations are summarized in Table 26-2.
Table 26-2 Cost Estimates to Elevate Inferred Mineral Resources to Measured and Indicated Mineral Resources
Inferred Zone |
Cost ($000s) |
Mesteña Grande: Goliad and El Sordo Sands |
$9,900 |
Mesteña Grande: Oakville Sands |
$75,000 |
Total $US (rounded) |
$85,000 |
It is also recommended that EFR conducts further exploration drilling to gain additional information about exploration targets to possibly upgrade these areas to Mineral Resources. Exploration targets have been defined primarily in the South Alta Mesa area of the Alta Mesa Project. The estimated costs to complete the foregoing recommendations are summarized in Table 26-3.
Table 26-3 summarizes the costs associated with additional drilling of the inferred Mineral Resources and Exploration Targets.
Table 26-3 Cost for Exploration Target Drilling to Elevate to Inferred Mineral Resources
Exploration Target |
Cost ($000s) |
Alta Mesa: LC Sand |
$1,000 |
South Alta Mesa: E Sand |
$10,950 |
Indigo Snake |
$4,050 |
Total |
$16,000 |
The cost estimates for exploratory and delineation drilling assume that the entirety of each trend would need to be drilled including all holes along a fence. Drilling would likely begin in the most prospective locations and, assuming successful results, work away along trend. If drilling were unsuccessful, drilling would likely be curtailed. Also, if a drill hole penetrated the planned drill target along a fence, then the additional drill holes planned along that fence would not be needed. Conversely, if the planned drill target was not penetrated with the planned fence additional drilling may be required.
ALTA MESA URANIUM PROJECT |
27.0 REFERENCES
Publications Cited in this report:
1. Beahm, Douglas L, BRS Engineering, "Alta Mesa Uranium Project Technical Report, Mineral Resources and Exploration Target, National Instrument 43-101, Brooks and Jim Hogg Counties, Texas, USA", June 1, 2014, prepared on behalf of Mesteña Uranium LLC
2. Collins, J. and H. Talbot, U2007 Conference, Corpus Christi, Presented by Mestena Uranium LLC
3. Hosman, R.L., and Weiss, J.S.,1991, Geohydrologic units of the Mississippi Embayment and Texas Coastal uplands aquifer systems, South Central United State-regional aquifer system analysis- Gulf Coastal Plain: U.S. Geological Survey Professional Paper 1416-B, 1996.
4. Brogdon, L.D., C.A. Jones, and J.V Quick, "Uranium favorability by lithofacies analysis, Oakville and Goliad Formations, South Texas: Gulf Coast Association of Geological Societies, 1977.
5. Smith, G. E., W. E. Galloway, and C. D. Henry, Regional hydrodynamics and hydrochemistry of the uranium-bearing Oakville Aquifer (Miocene) of South Texas: The University of Texas at Austin, Bureau of Economic Geology Report of Investigations No. 124, 1982.
6. Galloway, W. E., Epigenetic zonation and fluid flow history of uranium-bearing fluvial aquifer systems, south Texas uranium province: The University of Texas at Austin, Bureau of Economic Geology Report of Investigations No. 119, 1982.
7. Galloway, W. E., Catahoula Formation of the Texas coastal plain: depositional systems, composition, structural development, ground-water flow history, and uranium deposition: The University of Texas at Austin, Bureau of Economic Geology Report of Investigations No. 87, 1977.
8. Galloway, W. E., R. J. Finley, and C. D. Henry, South Texas uranium province geologic perspective: The University of Texas at Austin, Bureau of Economic Geology Guidebook No. 18, 1979.
9. McBride, E. F., W. L. Lindemann, and P. S. Freeman, Lithology and petrology of the Gueydan (Catahoula) Formation in south Texas: The University of Texas at Austin, Bureau of Economic Geology Report of Investigations No. 63, 1968.
10. Eargle, D. H., Stratigraphy of Jackson Group (Eocene), South-Central, Texas: American Association of Petroleum Geologists Bulletin, 43, 1959.
11. Fisher, W. L., C. V. Proctor, W. E. Galloway, and J. S. Nagle, Depositional systems in the Jackson Group of Texas-Their relationship to oil, gas, and uranium: Gulf Coast Association of Geological Societies Transactions, 20, 1970.
12. Kreitler, C. W., T. J. Jackson, P. W. Dickerson, and J. G. Blount, Hydrogeology and hydrochemistry of the Falls City uranium mine tailings remedial action project, Karnes County, Texas: The University of Texas at Austin, Bureau of Economic Geology, prepared for the Texas Department of Health under agreement No IAC(92-93)-0389, September, 1992.
13. De Voto, R. H. "Uranium Geology and Exploration" Colorado School of Mines, 1978.
14. Finch, W. I., Uranium provinces of North America-their definition, distribution, and models: U.S. Geological Survey Bulletin 2141, 1996.
ALTA MESA URANIUM PROJECT |
15. Finch, W. I. and Davis, J. F., "Sandstone Type Uranium Deposits - An Introduction" in Geological Environments of Sandstone-Type Uranium Deposits Technical Document, Vienna: IAEA, 1985.
16. Granger, H. C., Warren, C. G., "Zoning in the Altered Tongue Associated with Roll-Type Uranium Deposits" in Formation of Uranium Ore Deposits, Sedimentary Basins and Sandston-Type Deposits, IAEA, 1974.
17. IAEA, "World Distribution of Uranium Deposits (UDEPO) with Uranium Deposit Classification" 2009 Edition, Vienna: IAEA, 2009.
18. Nicot, J. P., et al, "Geological and Geographical Attributes of the South Texas Uranium Province", Prepared for the Texas Commission on Environmental Quality, Bureau of Economic Geology, April, 2010.
19. McKay, A. D. et al, "Resource Estimates for In Situ Leach Uranium Projects and Reporting Under the JORC Code", Bulletin November/December 2007.
20. Stoeser, D.B., Shock, Nancy, Green, G.N., Dumonceaux, G. M., and Heran, W.D., in press, A Digital Geologic Map Database for the State of Texas: U.S. Geological Survey Data Series.
21. US Securities and Exchange Commission, 17 CFR Parts 229, 230, 239 and 249, Modernization of Property Disclosures for Mining Registrants.
22. TradeTech, Uranium Market Study, 2021: Issue 4.
Unpublished Reports:
1. Goranson, P., Mesteña Uranium LLC, Internal Memorandum Re: Review of Reserve Estimates, July 2007.
Web Sites:
1. British Columbia Securities Commission:
https://www.bcsc.bc.ca/uploadedFiles/NI_43-101-_What_You_Need_to_Know_-_2012-01-
2. Texas Monthly Magazine:
https://www.texasmonthly.com/articles/the-biggest-ranches/
3. Texas State Historical Association- Handbook of Texas:
https://www.tshaonline.org/handbook/entries/mineral-rights-and-royalties
4. Uranium Energy- Palangana Project:
https://www.uraniumenergy.com/projects/texas/palangana-mine/
5. United States Nuclear Regulatory Commission-Nuclear Materials:
https://www.nrc.gov/materials/uranium-recovery/extraction-methods/isl-recovery-facilities.html
ALTA MESA URANIUM PROJECT |
28.0 CERTIFICATES
CERTIFICATE OF QUALIFIED PERSON
DOUGLAS L. BEAHM
I, Douglas L. Beahm, P.E., P.G., do hereby certify that:
1. I am the Principal Engineer and President of BRS Engineering, Inc., 1130 Major Avenue, Riverton, Wyoming 82501.
2. I am a co-author of the report titled "Technical Report Summary for the Alta Mesa Uranium Project, Brooks and Jim Hogg counties, Texas, " and with an effective date of December 31, 2021.
3. I graduated with a Bachelor of Science degree in Geological Engineering from the Colorado School of Mines in 1974. I am a licensed Professional Engineer in Wyoming, Colorado, Utah, and Oregon; a licensed Professional Geologist in Wyoming; and Registered Member of the SME.
4. I have worked as an engineer and a geologist for 48 years. My work experience includes uranium exploration, mine production, and mine/mill decommissioning and reclamation. Specifically, I have worked with uranium projects hosted in similar sandstone environments throughout the Western US.
5. I was last present at the site from April 15 through April 17, 2014, after reviewing data at the Corpus Christi office of Mesteña Uranium on April 14, 2014.
6. I am responsible for Sections 11 and 12 and contributions to relevant portions of Sections 1, 2, 14 and Sections 23-27.
7. I am independent of the issuer applying all of the tests in NI 43-101. I have no financial interest in the property and am fully independent of Energy Fuels Inc. ("EFR"). I hold no stock, options or have any other form of financial connection to EFR. EFR is but one of many clients for whom I consult.
8. I do not have prior working experience on the project.
9. I have read the definition of "qualified person" set out in National Instrument 43-101 and certify that by reason of my education, professional registration, and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101.
10. I have read NI 43-101 and Form 43-101F1, and the Initial Assessment has been prepared in compliance with same.
11. As of the date of this report, to the best of my knowledge, information and belief, the parts of the Initial Assessment for which I am responsible contain all scientific and technical information that is required to be disclosed to make the Initial Assessment not misleading.
12. I consent to the filing of this Initial Assessment with any stock exchange and other regulatory authority.
10 February 2022
Signed and Sealed Douglas L. Beahm,
Dated at Riverton, WY
February 10, 2022
Douglas L. Beahm, PE, PG
Registered Member SME
ALTA MESA URANIUM PROJECT |
I, Travis P. Boam, P.G., do hereby certify that:
1. I am currently employed as a Senior Geologist at Energy Fuels Inc., 120 S Durbin St., Casper, Wyoming 82601.
2. I am a co-author of the report titled "Technical Report Summary for the Alta Mesa Uranium Project, Brooks and Jim Hogg counties, Texas," and with an effective date of December 31,2021
3. I graduated with a Bachelor of Science degree in Geology from the University of Wyoming in 2008.
4. I am a Registered Professional Geologist in the State of Wyoming (PG-4011), and a Registered Professional Geologist in the State of Utah (12451970-2250). I have worked as a geologist for 14 years. My work experience for the purpose of this technical report includes:
a. Senior Geologist with Energy Fuels (USA) Inc. Since 2019 working on all aspects of ISR mine development: resource evaluation and estimation, data evaluation of Texas and Wyoming properties, planning and evaluating uranium sand hosted deposits for ISR amenability.
b. Project Geologist with Uranium One USA inc., Uranerz Energy Corporation, and Energy Fuels (USA) Inc. from 2011-2019 working on drilling programs, ISR wellfield planning and development, production and efficiency evaluations across the Powder River and Great Divide basins of Wyoming.
c. Geologist with Uranium One USA inc. from 2008 - 2011 working as a field geologist controlling field drilling activities, sample/core collection and evaluation.
5. I was last present at the site on the 4th of November 2019.
6. I am responsible for Sections 3 - 10 and 13, in addition to relevant portions of Section 1, 2, 14, and Sections 23-27 of this report.
7. I am an employee of the issuer, Energy Fuels (USA) Inc., and therefore am not independent of the issuer as described in section 1.5 of the Companion Policy 43-101 CP to the National Instrument 43-101.
8. I have read the definition of "qualified person" set out in National Instrument 43-101 and S-K 1300 regulations and certify that by reason of my education, professional registration, and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101 and S-K 1300.
9. I have read NI 43-101 and Form 43-101F1, and the Initial Assessment has been prepared in compliance with same.
10. As of the date of this report, to the best of my knowledge, information and belief, the parts of the Initial Assessment for which I am responsible contain all scientific and technical information that is required to be disclosed to make the Initial Assessment not misleading.
Dated this 10th day of February 2022
(Signed & Sealed) Travis P. Boam
Travis P. Boam, P.G.
Dated at Casper, WY
February 10, 2022
Technical Report on the Bullfrog Project, Garfield County, Utah, USA
SLR Project No: 138.02544.00004
Prepared by
SLR International Corporation
1658 Cole Blvd, Suite 100
Lakewood, CO 80401
USA
for
Energy Fuels Inc.
225 Union Blvd., Suite 600
Lakewood, CO 80229
USA
Effective Date - December 31, 2021
Signature Date - February 22, 2022
Qualified Person
Mark B. Mathisen, C.P.G.
FINAL
Distribution: 1 copy - Energy Fuels Inc.
1 copy - SLR International Corporation
CONTENTS
1.0 SUMMARY | 1-1 |
1.1 Executive Summary | 1-1 |
1.2 Technical Summary | 1-4 |
2.0 INTRODUCTION | 2-1 |
2.1 Sources of Information | 2-1 |
2.2 List of Abbreviations | 2-3 |
3.0 RELIANCE ON OTHER EXPERTS | 3-1 |
3.1 Reliance on Information Provided by the Registrant | 3-1 |
4.0 PROPERTY DESCRIPTION AND LOCATION | 4-1 |
4.1 Location | 4-1 |
4.2 Land Tenure | 4-1 |
4.3 Encumbrances | 4-12 |
4.4 Royalties | 4-12 |
4.5 Other Significant Risks | 4-12 |
5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY | 5-1 |
5.1 Accessibility | 5-1 |
5.2 Vegetation | 5-1 |
5.3 Climate | 5-1 |
5.4 Local Resources | 5-1 |
5.5 Infrastructure | 5-1 |
5.6 Physiography | 5-1 |
6.0 HISTORY | 6-1 |
6.1 Prior Ownership | 6-1 |
6.2 Exploration and Development History | 6-2 |
6.3 Past Production | 6-3 |
7.0 GEOLOGICAL SETTING AND MINERALIZATION | 7-1 |
7.1 Regional Geology | 7-1 |
7.2 Local Geology | 7-1 |
7.3 Mineralization | 7-7 |
8.0 DEPOSIT TYPES | 8-1 |
9.0 EXPLORATION | 9-1 |
9.1 Hydrology | 9-1 |
10.0 DRILLING | 10-1 |
10.1 Historic Bullfrog Drilling | 10-1 |
10.2 Core Drilling | 10-1 |
11.0 SAMPLE PREPARATION, ANALYSES, AND SECURITY | 11-1 |
11.1 Sample Preparation, Analyses, and Security | 11-1 |
11.2 Sample Security | 11-4 |
11.3 Quality Assurance and Quality Control | 11-5 |
11.4 Conclusions | 11-5 |
12.0 DATA VERIFICATION | 12-1 |
12.1 RPA Henry Mountain Complex Data Review (2012) | 12-1 |
12.2 EFR-AMEC Bullfrog Deposit Data Review (2016) | 12-2 |
12.3 SLR Data Verification (2021) | 12-3 |
12.4 Limitations | 12-3 |
13.0 MINERAL PROCESSING AND METALLURGICAL TESTING | 13-1 |
13.1 Metallurgical Testing | 13-1 |
13.2 Opinion of Adequacy | 13-2 |
14.0 MINERAL RESOURCE ESTIMATE | 14-1 |
14.1 Summary | 14-1 |
14.2 Resource Database | 14-2 |
14.3 Geological Interpretation | 14-4 |
14.4 Treatment of High Grade Assays | 14-4 |
14.5 Compositing | 14-4 |
14.6 Search Strategy and Grade Interpolation Parameters | 14-8 |
14.7 Bulk Density | 14-20 |
14.8 Cut-off Grade | 14-20 |
14.9 Classification | 14-21 |
14.10 Block Model Validation | 14-25 |
14.11 Grade Tonnage Sensitivity | 14-25 |
14.12 Mineral Resource Reporting | 14-26 |
15.0 MINERAL RESERVE ESTIMATE | 15-1 |
16.0 MINING METHODS | 16-1 |
17.0 RECOVERY METHODS | 17-1 |
18.0 PROJECT INFRASTRUCTURE | 18-1 |
19.0 MARKET STUDIES AND CONTRACTS | 19-1 |
20.0 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT | 20-1 |
21.0 CAPITAL AND OPERATING COSTS | 21-1 |
22.0 ECONOMIC ANALYSIS | 22-1 |
23.0 ADJACENT PROPERTIES | 23-1 |
23.1 Tony M Property | 23-1 |
23.2 Frank M Deposit | 23-1 |
23.3 Lucky Strike 10 Deposit | 23-2 |
24.0 OTHER RELEVANT DATA AND INFORMATION | 24-1 |
25.0 INTERPRETATION AND CONCLUSIONS | 25-1 |
26.0 RECOMMENDATIONS | 26-1 |
26.1 Phase 1: Exploration/Development Drilling Program | 26-1 |
26.2 Phase 2: Pre-Feasibility Study and Updated Resource Estimate | 26-1 |
27.0 REFERENCES | 27-1 |
28.0 DATE AND SIGNATURE PAGE | 28-1 |
29.0 CERTIFICATE OF QUALIFIED PERSON | 29-1 |
29.1 Mark B. Mathisen | 29-1 |
TABLES
Table 1-1:Summary of Mineral Resources - Effective Date December 31, 2021 | 1-2 |
Table 4-1:List of Claims held by Energy Fuels | 4-2 |
Table 7-1:Naming Convention of the Mineralized Sands for the Henry Mountains Complex | 7-7 |
Table 7-2:Minor Element Concentrations of Various Rock Composites | 7-9 |
Table 11-1:Plateau Disequilibrium Study | 11-4 |
Table 11-2:Statistics for Project and Twin Database Holes | 11-5 |
Table 13-1:Comparison of Composite Head Analyses with Calculated Head Grade Analyses | 13-1 |
Table 14-1:Attributable Mineral Resource Estimate - Effective Date December 31, 2021 | 14-1 |
Table 14-2:Drilling Database for the Bullfrog Deposits | 14-2 |
Table 14-3:Composite Statistics for Individual Sand Units | 14-5 |
Table 14-4:GT Calculations | 14-10 |
Table 14-5:Cut-off Grade Parameters | 14-20 |
Table 14-6:Grade versus Tonnage Curve | 14-25 |
Table 14-7:Attributable Mineral Resource Estimate - Effective Date December 31, 2021 | 14-27 |
Table 26-1:Phase 1 and 2 Estimated Budget | 26-1 |
FIGURES
Figure 4-1:Location Map | 4-10 |
Figure 4-2:Land Tenure Map | 4-11 |
Figure 7-1:Regional Geologic Map | 7-4 |
Figure 7-2:Regional Stratigraphic Column | 7-5 |
Figure 7-3:Detail of the Lower Portion of the Lower Rim of the Saltwash Member | 7-6 |
Figure 14-1:Copper Bench and Indian Bench Deposits Drillhole Location Map | 14-3 |
Figure 14-2:Histogram GT Geometric Intervals for the MU, ML and L Zones | 14-6 |
Figure 14-3:Cumulative Frequency of GT for the MU, ML, and L Zones | 14-7 |
Figure 14-4:Scatter Plot Uranium vs. Thickness | 14-8 |
Figure 14-5:Copper Bench and Indian Bench Deposits MU Sand Unconstrained Grade Map | 14-11 |
Figure 14-6:Copper Bench and Indian Bench Deposits MU Sand Unconstrained Thickness Map | 14-12 |
Figure 14-7:Copper Bench and Indian Bench Deposits MU, ML, and L Sand 0.1% eU3O8 Grade Map | 14-13 |
Figure 14-8:Copper Bench and Indian Bench Deposits MU Sand Constrained Grade Map | 14-14 |
Figure 14-9:Copper Bench and Indian Bench Deposits MU Sand Constrained Thickness Map | 14-15 |
Figure 14-10:Copper Bench and Indian Bench Deposits MU Sand Unconstrained GT Map | 14-16 |
Figure 14-11:Copper Bench and Indian Bench Deposits MU Sand Constrained GT Map | 14-17 |
Figure 14-12:Copper Bench and Indian Bench Deposits MU, ML, and L Sand GT Map | 14-18 |
Figure 14-13:Copper Bench and Indian Bench Deposits MU, ML, and L Sand Thickness Map | 14-19 |
Figure 14-14:Copper Bench and Indian Bench Deposits MU, ML, and L Sand Classification Map | 14-24 |
Figure 14-15:Mineral Resource Grade versus Tons at Various Cut-Off Grades | 14-26 |
1.0 SUMMARY
1.1 Executive Summary
This Independent Technical Report (Technical Report) was prepared by Mark B. Mathisen, C.P.G., of SLR International Corporation (SLR), for Energy Fuels Inc. (Energy Fuels), the parent company of Energy Fuels Resources (USA) Inc. (EFR), with respect to the Bullfrog Project (Bullfrog or the Project), located in Garfield County, Utah, USA. The purpose of this report is to disclose the current Mineral Resource estimate.
EFR's parent company, Energy Fuels, is incorporated in Ontario, Canada. EFR is a US-based uranium and vanadium exploration and mine development company with projects located in the states of Colorado, Utah, Arizona, Wyoming, Texas, and New Mexico. Energy Fuels is listed on the NYSE American Stock Exchange (symbol: UUUU) and the Toronto Stock Exchange (symbol: EFR).
This Technical Report satisfies the requirements of Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101) and United States Securities and Exchange Commission's (SEC) Modernized Property Disclosure Requirements for Mining Registrants as described in Subpart 229.1300 of Regulation S-K, Disclosure by Registrants Engaged in Mining Operations (S-K 1300) and Item 601 (b)(96) Technical Report Summary. Mark B. Mathisen is a Qualified Person (QP) within the meaning of both S-K 1300 and NI 43-101 (SLR QP). The SLR QP visited the Project on July 7, 2021.
Bullfrog consists of two contiguous sandstone-type uranium deposits, Copper Bench and Indian Bench, within the Colorado Plateau physiographic province in southwestern Utah. The Colorado Plateau has been a relatively stable structural province since the end of the Precambrian. During the Paleozoic and Mesozoic, the Colorado Plateau was a stable shelf without major geosynclinal areas of deposition, except during the Pennsylvanian when several thousand feet of black shales and evaporates accumulated in the Paradox Basin of southwestern Colorado and adjacent Utah.
The Project is situated in the southeastern flank of the Henry Mountains Basin, a subprovince of the Colorado Plateau physiographic province. The Henry Mountains Basin is an elongate north-south trending doubly plunging syncline in the form of a closed basin. It is surrounded by the Monument Uplift to the southeast, Circle Cliffs Uplift to the southwest, and the San Rafael Swell to the north.
The Project originally formed part of the Henry Mountains Complex, which consisted of the currently inactive Tony M mine and deposit, collectively known as the Tony M property, and the Southwest, Copper Bench, and Indian Bench deposits, collectively known as the Bullfrog property. In October 2021, Consolidated Uranium Inc. (CUR) acquired the Tony M property and Southwest deposit from EFR. The remaining deposits (Copper Bench and Indian Bench) that occur to the north as part of the historic Bullfrog property remain under EFR ownership.
The Project is currently in the resource delineation phase and EFR envisages this as an underground operation in which the ore will be processed at Energy Fuels' White Mesa Mill, 117 road miles (mi) away in Blanding, Utah. The Mill is on a reduced operating schedule while processing materials as they become available.
A Mineral Resource estimate for the Project, based on 1,155 drillholes totaling 1,101,113 ft, was completed by EFR, and audited and adopted by SLR. Table 1-1 summarizes Mineral Resources based on a $65/lb uranium price using a grade-thickness cut-off grade of 0.5%-ft (minimum 0.165% eU3O8 and minimum 3 ft mining thickness). The effective date of the Mineral Resource estimate is December 31, 2021.
Table 1-1: Summary of Mineral Resources - Effective Date December 31, 2021
Energy Fuels Inc. - Bullfrog Project
Classification |
Deposit |
Tonnage |
Grade |
Contained Metal |
Recovery |
EFR Basis |
Indicated |
Bullfrog |
1,560 |
0.29 |
9,100 |
95.0 |
100 |
Inferred |
Bullfrog |
410 |
0.25 |
2,010 |
95.0 |
100 |
Notes:
1. SEC S-K 1300 definitions were followed for all Mineral Resource categories. These definitions are also consistent with CIM (2014) definitions in NI 43-101.
2. Mineral Resources are estimated at a U3O8 GT cut-off grade of 0.5%-ft (minimum 0.165% eU3O8 over a minimum thickness of 3 ft).
3. The cut-off grade is calculated using a metal price of $65/lb U3O8
4. No minimum mining width was used in determining Mineral Resources.
5. Mineral Resources are based on a tonnage factory of 15.0 ft3/ton (Bulk density 0.0667 ton/ft3 or 2.13 t/m3).
6. Mineral Resources have not been demonstrated to be economically viable.
7. Total may not add due to rounding.
8. Mineral Resources are 100% attributable to EFR and are in situ.
The SLR QP is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could materially affect the Mineral Resource estimate.
1.1.1 Conclusions
The SLR QP offers the following interpretations and conclusions on the Project:
The Henry Mountains District has been the site of considerable past mining and exploration including the drilling and logging of approximately 3,400 rotary holes and 106 core holes, of which 1,115 rotary and 40 core holes were used to prepare the current Mineral Resource estimate for the Project. In the opinion of the SLR QP, the drillhole databases for the Copper Bench-Indian Bench deposits are appropriate and acceptable for Mineral Resource estimation.
EFR completed a Mineral Resource estimate for the Bullfrog (Copper Bench and Indian Bench) deposit in November 2020. Mineral Resources for both deposits were calculated using the industry standard GT-contour method. No mining has taken place on the Project.
The effective date of the Mineral Resource estimate is December 31, 2021. Estimated block model uranium grades are based on radiometric probe grades.
Mineral Resources are based on a $65/lb uranium price at a uranium GT cut-off grade of 0.50%-ft.
Indicated Resources are 1.5 million tons at an average grade of 0.29% eU3O8 containing 9.1 million pounds (Mlb) eU3O8. Additional Inferred Resources total 410,000 tons at an average grade of 0.25% eU3O8, containing 2.0 Mlb eU3O8.
The SLR QP considers the estimation procedures employed at Bullfrog, including compositing and interpolation to be reasonable and in line with industry standard practice.
The SLR QP finds the classification criteria to be reasonable.
The SLR QP considers that the Mineral Resources estimate completed on the Project conforms to the SEC S-K 1300 and NI 43-101 definitions for reporting mineral resources on mining properties.
In the SLR QP's opinion, the assumptions, parameters, and methodology used for the Bullfrog Mineral Resource estimate is appropriate for the style of mineralization and underground mining methods.
The SLR QP supports the conclusions of the expected performance of the metallurgical processes based on historical test work that recovery will be around 95%, similar to that achieved from ore mined at the nearby Tony M Mine.
The SLR QP is not aware of any environmental, permitting, legal, title, taxation, socioeconomic, marketing, political, or other relevant factors that could materially affect the current resource estimate.
1.1.2 Recommendations
The SLR QP makes the following recommendations regarding advancement of the Project. The two-phase programs are interconnected and progressing to Phase 2 is contingent upon completion of the Phase 1 program:
1.1.2.1 Phase 1: Exploration/Development Drilling Program
1. Conduct a 20 to 30 drillhole exploration/development drilling program to: 1) validate historic equilibrium analysis, and 2) advance the Bullfrog property to a Pre-Feasibility Level. Average depth per hole is projected to be approximately 930 ft.
2. Utilize Prompt Fission Neutron (PFN) drillhole geophysical logging as an alternative to collecting core to save costs on equilibrium analysis. PFN logging has proven to be a reliable methodology for equilibrium analysis and has a strong performance record on similar uranium deposits in the USA.
The SLR QP estimates the cost of the Phase 1 work will range from US$650,000 to US$700,000 (estimated costs per drill foot is US$25, which includes the equilibrium analysis costs using the PFN tool).
1.1.2.2 Phase 2: Pre-Feasibility Study and Updated Resource Estimate
1. Following completion of the Phase 1 exploration/development drilling program, revisit and update the Mineral Resource estimate for the Project, using a similar approach to the GT contour methodology and/or block modeling approach, with updated processing and operating costs and recoveries.
2. Complete a Prefeasibility Study (PFS) of the Project based on an updated Mineral Resource estimate.
The SLR QP estimates the cost of this work to be US$60,000 for the updated Mineral Resource estimate and approximately US$550,000 for the PFS (including engineering studies) for a total of approximately US$610,000 for Phase 2.
1.2 Technical Summary
1.2.1 Property Description and Location
Bullfrog consists of two separate contiguous deposits, also known as Copper Bench and Indian Bench. The Project is located in eastern Garfield County, Utah, 17 mi north of Bullfrog Basin Marina on Lake Powell and approximately 40 air mi south of the town of Hanksville, Utah. The Project is located at latitude 37°48'38.71" N and longitude 110°41'50.09" W. All claims are in good standing until September 1, 2022.
Road access to the Project is by paved Highway 276, running between Hanksville, Utah, and Bullfrog Basin Marina, Utah. An unimproved gravel road, maintained by Garfield County, extends west from Highway 276, passes by the portal of the Tony M mine, and extends northerly to the Project. The northern end of the Project can be accessed by the Eggnog Star Spring county road, approximately 10.4 mi north of Ticaboo, Utah, along Highway 276. A network of unimproved, dirt exploration roads provide access over the Project except in the areas of rugged terrain.
The climate is distinctly arid with an average annual precipitation of approximately eight inches, in addition to approximately 12 in. of snow. Local records indicate the temperature ranges from a minimum of -10°F to a maximum of 110°F. These conditions allow year-round exploration to take place.
Skilled labor can be recruited from the region, which has a tradition of uranium mining.
1.2.2 Land Tenure
EFR's property position at the Project consists of 168 unpatented mining claims located on U.S. Bureau of Land Management (BLM) land, encompassing approximately 2,344 acres. EFR acquired the Project in June 2012 and has a 100% interest in the claims.
1.2.3 Existing Infrastructure
The Project is located in a relatively remote area of Utah with limited supporting infrastructure in the area. The town of Ticaboo, Utah, is located approximately five miles south of the Project. The next closest community is Hanksville, Utah, a small town of a few hundred people, located approximately 40 mi north of the Project. The Bullfrog Basin Marina airstrip is located approximately 15 mi south of the Project area.
Materials and supplies are transported to the site by truck approximately 275 mi from Salt Lake City, Utah, and approximately 190 mi from Grand Junction, Colorado. Material mined at Bullfrog will be transported 117 road mi to Energy Fuels' White Mesa Mill near Blanding, Utah, of which 107 mi are on paved roads.
1.2.4 History
During World War I, vanadium was mined from small deposits outcropping in Salt Wash exposures on the eastern and southern flanks of the Henry Mountains. In the 1940s and 1950s, interest increased in both vanadium and uranium, and numerous small mines developed along the exposed Salt Wash outcrops.
In the late 1960s, Gulf Minerals (Gulf) acquired a significant land position southwest of the Henry Mountains Complex property and drilled approximately 70 holes with little apparent success. In 1970 and 1971, Rioamex Corporation conducted a 40 hole drilling program in an east-west zone extending across the southerly end of the Bullfrog property and the northerly end of the Tony M-Frank M property. Some of these holes intercepted significant uranium mineralization.
The ownership history of the Bullfrog and Southwest deposits and The Tony M deposit evolved independently from the mid-1970s until early 2005. The Bullfrog and Southwest deposits were initially explored by Exxon Minerals Company (Exxon), while the Tony M deposit was explored and developed by Plateau, a subsidiary of Consumers Power Company (Consumers) of Michigan. In 2005, International Uranium Corporation (IUC) combined the three deposits into a larger land package. In 2021, EFR divested of the Tony M property and Southwest deposit, retaining the mineral claims associated with the Bullfrog deposits (Copper Bench and Indian Bench).
Exxon conducted reconnaissance in the area in 1974 and 1975, resulting in staking of the first "Bullfrog" claims in 1975 and 1976. The first drilling program in 1977 resulted in the discovery of what became the Southwest deposit. Additional claims were subsequently staked, and drilling continued, first by Exxon's Exploration Group, and then by its Pre-Development Group. Several uranium and vanadium zones were discovered in the Southwest and Copper Bench areas, and mineralization exhibiting potential economic grade was also discovered in the Indian Bench area. With the declining uranium markets of the early 1980s, Exxon prepared a prefeasibility report and then discontinued development of the property. Subsequently, Exxon offered the property to Atlas Minerals Corporation (Atlas) in January 1982.
Atlas entered into an agreement to purchase the Bullfrog property from Exxon in July 1982. From July 1982 to July 1983, Atlas completed 112 drillholes delineating the Southwest and Copper Bench deposits on approximately 100 ft centers. In August 1983, Atlas commissioned Pincock, Allen and Holt, Inc. (PAH), to conduct a feasibility study for development of the Southwest and Copper Bench deposits. From July 1983 to March 1984, Atlas completed a core drilling program throughout the Bullfrog property, as well as a rotary drillhole program to delineate the Indian Bench deposit. In November 1983, Atlas renamed the Bullfrog deposits as the "Edward R. Farley Jr. Deposit", but that name is no longer used.
Atlas continued to hold the Bullfrog property until 1990 when a corporate decision was made to consider its sale. During that year, Mine Reserves Associates, Inc. (MRA) of Tucson, Arizona, was retained to prepare mineral inventory and mineable reserve estimates for the Indian Bench deposit and incorporate the results into a project-wide reserve base. Steve Milne of Milne and Associates (Milne), a principal engineer for the PAH study, was engaged in November 1990 to update the PAH feasibility study and to complete an optimization study on selected mining/milling scenarios. The completed Milne study was submitted to Atlas in December 1990.
Atlas did not sell the Bullfrog property, and in 1991 returned it to Exxon. In late 1992, Energy Fuels Nuclear Inc. (EFNI), no relation to EFR, acting through its subsidiary Energy Fuels Exploration Company, purchased the property from Exxon. EFNI conducted a geologic review and internal economic analysis of the Bullfrog property. In 1997, IUC became the owner of the Bullfrog property as part of an acquisition in which IUC acquired all of EFNI's assets. IUC performed no exploration activities on the properties.
On December 1, 2006, IUC combined its operations with those of Denison Mines Inc. (DMI) and DMI became a subsidiary of IUC. IUC was then renamed Denison.
In June 2012, Energy Fuels acquired 100% of the Henry Mountains Complex through the acquisition of Denison and its affiliates' U.S. Mining Division.
In October 2021, EFR divested of the Tony M property and Southwest deposit to Consolidated Uranium, Inc. (CUR), retaining the mineral claims associated with the Bullfrog (Copper Bench and Indian Bench) Deposits.
1.2.5 Geology and Mineralization
The Copper Bench and Indian Bench Deposits are classified as sandstone hosted uranium deposits. Sandstone-type uranium deposits typically occur in fine to coarse grained sediments deposited in a continental fluvial environment. The uranium may be derived from a weathered rock containing anomalously high concentrations of uranium, leached from the sandstone itself or an adjacent stratigraphic unit. It is then transported in oxygenated groundwater until it is precipitated from solution under reducing conditions at an oxidation-reduction interface. The reducing conditions may be caused by such reducing agents in the sandstone as carbonaceous material, sulfides, hydrocarbons, hydrogen sulfide, or brines.
Uranium mineralization on the Bullfrog property is hosted by favorable sandstone horizons in the lowermost portion of the Salt Wash Member of the Jurassic age Morrison Formation, where detrital organic debris is present. Mineralization primarily consists of coffinite, with minor uraninite, which usually occurs in close association with vanadium mineralization. Uranium mineralization occurs as intergranular disseminations, as well as coatings and/or cement on and between sand grains and organic debris. Vanadium occurs as montroseite (hydrous vanadium oxide) and vanadium chlorite in primary mineralized zones located below the water table.
The vanadium content of the Henry Mountains Basin deposits is relatively low compared to many other Salt Wash hosted deposits on the Colorado Plateau. Furthermore, the Henry Mountains Basin deposits occur in broad alluvial sand accumulations, rather than in major sandstone channels as is typical of the Uravan Mineral Belt deposits of western Colorado. The Henry Mountains Basin deposits do, however, have the same general characteristic geochemistry of the Uravan deposits, and are therefore classified as Salt Wash type deposits.
1.2.6 Exploration Status
Energy Fuels has carried out no work on the Project since acquiring the Bullfrog property in 2012.
1.2.7 Mineral Resources
Mineral Resources have been classified in accordance with the definitions for Mineral Resources in S-K 1300, which are consistent with Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Resources and Mineral Reserves dated May 10, 2014 (CIM, 2014) definitions which are incorporated by reference in NI 43-101.
The SLR QP has reviewed and accepted the Mineral Resource estimate prepared by EFR based on GT contours values which are based on radiometric drillhole logs on the three principal mineralized domains. Mineral Resources have been estimated by EFR using ESRI's ArcGIS software Spline with Barriers tool routine. The Spline with Barriers tool applies a minimum curvature method, as implemented through a one-directional multigrid technique that moves from an initial coarse grid, initialized in this case to the average of the input data, through a series of finer grids until an approximation of a minimum curvature surface is produced at the desired row and column spacing.
Based on the similarity of the Bullfrog deposit to other past producing uranium deposits in the Colorado Plateau and the Henry Mountain Mining district, the proposed mining methods at Bullfrog will include a combination of long-hole stoping, and a random room and pillar operations with pillar extraction by a retreat system.
In the SLR QP's opinion, the assumptions, parameters, and methodology used for the Bullfrog Mineral Resource estimate is appropriate for the style of mineralization and mining methods. The effective date of the Mineral Resource estimate is December 31, 2021.
2.0 INTRODUCTION
This Independent Technical Report (Technical Report) was prepared by Mark B. Mathisen, C.P.G., of SLR International Corporation (SLR), for Energy Fuels Inc. (Energy Fuels), the parent company of Energy Fuels Resources (USA) Inc. (EFR), with respect to the Bullfrog Project (Bullfrog or the Project), located in Garfield County, Utah, USA. The purpose of this report is to disclose the current Mineral Resource estimate.
EFR's parent company, Energy Fuels, is incorporated in Ontario, Canada. EFR is a US-based uranium and vanadium exploration and mine development company with projects located in the states of Colorado, Utah, Arizona, Wyoming, Texas, and New Mexico. Energy Fuels is listed on the NYSE American Stock Exchange (symbol: UUUU) and the Toronto Stock Exchange (symbol: EFR).
This Technical Report satisfies the requirements of Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101) and United States Securities and Exchange Commission's (SEC) Modernized Property Disclosure Requirements for Mining Registrants as described in Subpart 229.1300 of Regulation S-K, Disclosure by Registrants Engaged in Mining Operations (S-K 1300) and Item 601 (b)(96) Technical Report Summary. Mark B. Mathisen is a Qualified Person (QP) within the meaning of both S-K 1300 and NI 43-101 (SLR QP). The SLR QP visited the Project on July 7, 2021.
Bullfrog consists of two contiguous sandstone-type uranium deposits, Copper Bench and Indian Bench, within the Colorado Plateau physiographic province in southwestern Utah. The Colorado Plateau has been a relatively stable structural province since the end of the Precambrian. During the Paleozoic and Mesozoic, the Colorado Plateau was a stable shelf without major geosynclinal areas of deposition, except during the Pennsylvanian when several thousand feet of black shales and evaporates accumulated in the Paradox Basin of southwestern Colorado and adjacent Utah.
The Project is situated in the southeastern flank of the Henry Mountains Basin, a subprovince of the Colorado Plateau physiographic province. The Henry Mountains Basin is an elongate north-south trending doubly plunging syncline in the form of a closed basin. It is surrounded by the Monument Uplift to the southeast, Circle Cliffs Uplift to the southwest, and the San Rafael Swell to the north.
The Project originally formed part of the Henry Mountains Complex, which consisted of the currently inactive Tony M mine and deposit, collectively known as the Tony M property, and the Southwest, Copper Bench, and Indian Bench deposits, collectively known as the Bullfrog property. In October 2021, Consolidated Uranium Inc. (CUR) acquired the Tony M property and Southwest deposit from EFR. The remaining deposits (Copper Bench and Indian Bench) that occur to the north as part of the historic Bullfrog property remain under EFR ownership.
The Project is currently in the resource delineation phase and EFR envisages this as an underground operation in which the ore will be processed at Energy Fuels' White Mesa Mill, 117 road miles (mi) away in Blanding, Utah. The Mill is on a reduced operating schedule while processing materials as they become available.
2.1 Sources of Information
Sources of information and data contained in this Technical Report or used in its preparation are from publicly available sources in addition to private information owned by EFR, including that of past property owners.
This Technical Report was prepared by the SLR QP. The SLR QP visited the Project under care and maintenance on July 7, 2021, in support of CUR acquiring the Tony M and Southwest deposits from EFR in October 2021. The SLR QP toured the operational areas and project offices, inspected various parts of the Project, drillhole locations, and infrastructure, and conducted discussions with EFR Project geologists on current and future plans of operations. The SLR QP is responsible for all sections and the overall preparation of the Technical Report.
During the preparation of this Technical Report, discussions were held with personnel from EFR:
Gordon Sobering, Senior Mine Engineer, Energy Fuels Resources (USA) Inc.
Daniel Kapostasy, P.G., Chief Geologist Conventional Mining, Energy Fuels Resources (USA) Inc.
This Technical Report supersedes the previous NI 43-101 Technical Reports completed by SLR, as the former Roscoe Postle Associates Inc (RPA) and Scott Wilson RPA, dated June 27, 2012, March 19, 2009, and September 9, 2006.
The documentation reviewed, and other sources of information, are listed at the end of this Technical Report in Section 27 References.
2.2 List of Abbreviations
The U.S. System for weights and units has been used throughout this Technical Report. Tons are reported in short tons (ton) of 2,000 lb unless otherwise noted. All currency in this Technical Report is US dollars (US$) unless otherwise noted.
Abbreviations and acronyms used in this Technical Report are listed below.
Unit Abbreviation |
Definition |
Unit Abbreviation |
Definition |
μ |
micron |
L |
liter |
a |
annum |
lb |
pound |
A |
ampere |
m |
meter |
bbl |
barrels |
m3 |
meter cubed |
Btu |
British thermal units |
M |
mega (million); molar |
°C |
degree Celsius |
Ma |
one million years |
cm |
centimeter |
MBtu |
thousand British thermal units |
cm3 |
centimeter cubed |
MCF |
million cubic feet |
d |
day |
MCF/h |
million cubic feet per hour |
°F |
degree Fahrenheit |
mi |
mile |
ft ASL |
feet above sea level |
min |
minute |
ft |
foot |
MPa |
megapascal |
ft2 |
square foot |
mph |
miles per hour |
ft3 |
cubic foot |
MVA |
megavolt-amperes |
ft/s |
foot per second |
MW |
megawatt |
g |
gram |
MWh |
megawatt-hour |
G |
giga (billion) |
ppb |
part per billion |
Ga |
one billion years |
ppm |
part per million |
gal |
gallon |
psia |
pound per square inch absolute |
gal/d |
gallon per day |
psig |
pound per square inch gauge |
g/L |
gram per liter |
rpm |
revolutions per minute |
g/y |
gallon per year |
RL |
relative elevation |
gpm |
gallons per minute |
s |
second |
hp |
horsepower |
ton |
short ton |
h |
hour |
stpa |
short ton per year |
Hz |
hertz |
stpd |
short ton per day |
in. |
inch |
t |
metric tonne |
in2 |
square inch |
US$ |
United States dollar |
J |
joule |
V |
volt |
k |
kilo (thousand) |
W |
watt |
kg/m3 |
kilogram per cubic meter |
wt% |
weight percent |
kVA |
kilovolt-amperes |
WLT |
wet long ton |
kW |
kilowatt |
y |
year |
kWh |
kilowatt-hour |
yd3 |
cubic yard |
3.0 RELIANCE ON OTHER EXPERTS
This Technical Report has been prepared by the SLR QP for Energy Fuels. The information, conclusions, opinions, and estimates contained herein are based on:
Information available to the SLR QP at the time of preparation of this Technical Report,
Assumptions, conditions, and qualifications as set forth in this Technical Report, and
Data, reports, and other information supplied by Energy Fuels and other third party sources.
3.1 Reliance on Information Provided by the Registrant
For the purpose of this Technical Report, the SLR QP has relied on ownership information provided by Energy Fuels in a legal opinion by Parsons Behle & Latimer dated February 7, 2022, entitled Mining Claim Status Report - Bullfrog Mine, Garfield County, Utah. The opinion was relied on in Section 4 Property Description and Location and the Summary of this Technical Report. The SLR QP has not researched property title or mineral rights for the Bullfrog Project as we consider it reasonable to rely on Energy Fuels' legal counsel who is responsible for maintaining this information.
The SLR QP has taken all appropriate steps, in their professional opinion, to ensure that the above information from Energy Fuels is sound.
Except as provided by applicable laws, any use of this Technical Report by any third party is at that party's sole risk.
4.0 PROPERTY DESCRIPTION AND LOCATION
4.1 Location
The Bullfrog Project consists of two separate contiguous deposits, also known as Copper Bench and Indian Bench. The Project is located in eastern Garfield County, Utah, 17 mi north of Bullfrog Basin Marina on Lake Powell and approximately 40 mi south of the town of Hanksville, Utah. It is situated three miles west of Utah State Highway 276 and approximately five miles north of Ticaboo, Utah (Figure 4-1).
The geographic coordinates for the approximate center of the Project are located at latitude 37°48'38.71" N and longitude 110°41'50.09" W. All surface data coordinates are State Plane 1983 Utah South FIPS 4303 (US feet) system.
4.2 Land Tenure
EFR's property position at the Project consists of 168 unpatented mining claims located on U.S. Bureau of Land Management (BLM) land, encompassing approximately 2,344 acres (Figure 4-2). Surface access to conduct exploration, development and mining activities on unpatented mining claims is granted by the U.S. Bureau of Land Management (BLM) as long as National Environmental Protection Act (NEPA) regulations are met. The Project is 100% owned by EFR and was acquired from Denison Mines Corp. and its affiliates in June 2012.
All claims, which are renewed annually in September of each year, are in good standing until September 1, 2022 (at which time they will be renewed for the following year as a matter of course). All unpatented mining claims are subject to an annual federal mining claim maintenance fee of $165 per claim plus approximately $10 per claim for county filing fees to the BLM. Table 4-1 lists the mineral claims covering the Project.
Table 4-1: List of Claims held by Energy Fuels
Energy Fuels Inc. - Bullfrog Project
Claim Name |
¼ Sec |
Sec-Twp-Rng1 |
BLM Serial No |
County |
Location Date |
In Good Standing To |
BF 12 |
SW |
20-34S-11E |
UT101373039 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 14 |
SW |
20-34S-11E |
UT101373040 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 16 |
SW |
20-34S-11E |
UT101373041 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 18 |
SW |
20-34S-11E |
UT101373042 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 18 |
NW |
29-34S-11E |
UT101373042 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 20 |
NW |
29-34S-11E |
UT101373622 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 22 |
NW |
29-34S-11E |
UT101373623 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 24 |
NW |
29-34S-11E |
UT101373624 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 26 |
NW,SW |
29-34S-11E |
UT101423817 |
Garfield |
20-Dec-75 |
31-Aug-22 |
BF 28 |
SW |
29-34S-11E |
UT101549846 |
Garfield |
20-Dec-75 |
31-Aug-22 |
BF 30 |
SW |
29-34S-11E |
UT101403725 |
Garfield |
20-Dec-75 |
31-Aug-22 |
BF 32 |
SW |
29-34S-11E |
UT101425838 |
Garfield |
20-Dec-75 |
31-Aug-22 |
BF 34 |
SW |
29-34S-11E |
UT101405180 |
Garfield |
20-Dec-75 |
31-Aug-22 |
BF 49 |
SE,SW |
20-34S-11E |
UT101373625 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 51 |
SE,SW |
20-34S-11E |
UT101373626 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 53 |
SE,SW |
20-34S-11E |
UT101373627 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 55 |
SE,SW |
20-34S-11E |
UT101373801 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 55 |
NE,NW |
29-34S-11E |
UT101373801 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 57 |
NE,NW |
29-34S-11E |
UT101373802 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 59 |
NE,NW |
29-34S-11E |
UT101373803 |
Garfield |
21-Mar-05 |
31-Aug-22 |
Claim Name |
¼ Sec |
Sec-Twp-Rng1 |
BLM Serial No |
County |
Location Date |
In Good Standing To |
BF 60 |
NE |
29-34S-11E |
UT101373804 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 61 |
NE,NW |
29-34S-11E |
UT101373805 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 62 |
NE |
29-34S-11E |
UT101373806 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 63 |
NE,NW,SE,SW |
29-34S-11E |
UT101479372 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 64 |
NE,SE |
29-34S-11E |
UT101373807 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 65 |
SE,SW |
29-34S-11E |
UT101477279 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 66 |
SE |
29-34S-11E |
UT101373808 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 67 |
SE,SW |
29-34S-11E |
UT101402400 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 68 |
SE |
29-34S-11E |
UT101424826 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 69 |
SE,SW |
29-34S-11E |
UT101403752 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 70 |
SE |
29-34S-11E |
UT101455636 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 71 |
SE,SW |
29-34S-11E |
UT101477582 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 72 |
SE |
29-34S-11E |
UT101424457 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 73 |
SE,SW |
29-34S-11E |
UT101600498 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 73 |
NE,NW |
32-34S-11E |
UT101600498 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 74 |
SE |
29-34S-11E |
UT101403733 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 74 |
NE |
32-34S-11E |
UT101403733 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 101 |
NW,SW |
28-34S-11E |
UT101373809 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 102 |
NE,NW,SE,SW |
28-34S-11E |
UT101373810 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 103 |
SW |
28-34S-11E |
UT101373811 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 104 |
SE,SW |
28-34S-11E |
UT101373812 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 105 |
SW |
28-34S-11E |
UT101403019 |
Garfield |
19-Dec-75 |
31-Aug-22 |
Claim Name |
¼ Sec |
Sec-Twp-Rng1 |
BLM Serial No |
County |
Location Date |
In Good Standing To |
BF 106 |
SE,SW |
28-34S-11E |
UT101401717 |
Garfield |
19-Dec-75 |
31-Aug-22 |
BF 107 |
SW |
28-34S-11E |
UT101457165 |
Garfield |
19-Dec-75 |
31-Aug-22 |
BF 108 |
SE,SW |
28-34S-11E |
UT101424269 |
Garfield |
19-Dec-75 |
31-Aug-22 |
BF 109 |
SW |
28-34S-11E |
UT101500930 |
Garfield |
19-Dec-75 |
31-Aug-22 |
BF 110 |
SE,SW |
28-34S-11E |
UT101404310 |
Garfield |
19-Dec-75 |
31-Aug-22 |
BF 111 |
SW |
28-34S-11E |
UT101404135 |
Garfield |
16-Dec-75 |
31-Aug-22 |
BF 111 |
NW |
33-34S-11E |
UT101404135 |
Garfield |
16-Dec-75 |
31-Aug-22 |
BF 112 |
SE,SW |
28-34S-11E |
UT101339916 |
Garfield |
16-Dec-75 |
31-Aug-22 |
BF 112 |
NE,NW |
33-34S-11E |
UT101339916 |
Garfield |
16-Dec-75 |
31-Aug-22 |
BF 113 |
NW |
33-34S-11E |
UT101314657 |
Garfield |
23-Feb-06 |
31-Aug-22 |
BF 114 |
NE,NW |
33-34S-11E |
UT101609654 |
Garfield |
24-Dec-75 |
31-Aug-22 |
BF 116 |
NE,NW |
33-34S-11E |
UT101423016 |
Garfield |
16-Dec-75 |
31-Aug-22 |
BF 118 |
NE,NW |
33-34S-11E |
UT101315585 |
Garfield |
16-Feb-05 |
31-Aug-22 |
BF 120 |
NE,NW,SE,SW |
33-34S-11E |
UT101315586 |
Garfield |
16-Feb-05 |
31-Aug-22 |
BF 122 |
SE,SW |
33-34S-11E |
UT101315587 |
Garfield |
16-Feb-05 |
31-Aug-22 |
BF 124 |
SE,SW |
33-34S-11E |
UT101315588 |
Garfield |
16-Feb-05 |
31-Aug-22 |
BF 126 |
SE,SW |
33-34S-11E |
UT101424928 |
Garfield |
16-Dec-75 |
31-Aug-22 |
BF 128 |
SE,SW |
33-34S-11E |
UT101402584 |
Garfield |
16-Dec-75 |
31-Aug-22 |
BF 130 |
NE,NW |
4-35S-11E |
UT101400733 |
Garfield |
16-Dec-75 |
31-Aug-22 |
BF 130 |
SE,SW |
33-34S-11E |
UT101400733 |
Garfield |
16-Dec-75 |
31-Aug-22 |
BF 181 |
SE |
28-34S-11E |
UT101373814 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 183 |
SE |
28-34S-11E |
UT101373815 |
Garfield |
21-Mar-05 |
31-Aug-22 |
Claim Name |
¼ Sec |
Sec-Twp-Rng1 |
BLM Serial No |
County |
Location Date |
In Good Standing To |
BF 185 |
SE |
28-34S-11E |
UT101408528 |
Garfield |
20-Dec-75 |
31-Aug-22 |
BF 186 |
SW |
27-34S-11E |
UT101374422 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 186 |
SE |
28-34S-11E |
UT101374422 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 187 |
SE |
28-34S-11E |
UT101339950 |
Garfield |
20-Dec-75 |
31-Aug-22 |
BF 188 |
SW |
27-34S-11E |
UT101374423 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 188 |
SE |
28-34S-11E |
UT101374423 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 189 |
SE |
28-34S-11E |
UT101402324 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 189 |
NE |
33-34S-11E |
UT101402324 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 190 |
SW |
27-34S-11E |
UT101374424 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 190 |
SE |
28-34S-11E |
UT101374424 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 190 |
NE |
33-34S-11E |
UT101374424 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 190 |
NW |
34-34S-11E |
UT101374424 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 191 |
NE |
33-34S-11E |
UT101479219 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 192 |
NE |
33-34S-11E |
UT101424819 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 192 |
NW |
34-34S-11E |
UT101424819 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 193 |
NE |
33-34S-11E |
UT101403787 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 194 |
NE |
33-34S-11E |
UT101601944 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 194 |
NW |
34-34S-11E |
UT101601944 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 195 |
NE |
33-34S-11E |
UT101409126 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 196 |
NE |
33-34S-11E |
UT101601682 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 196 |
NW |
34-34S-11E |
UT101601682 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 197 |
NE,SE |
33-34S-11E |
UT101408563 |
Garfield |
18-Dec-75 |
31-Aug-22 |
Claim Name |
¼ Sec |
Sec-Twp-Rng1 |
BLM Serial No |
County |
Location Date |
In Good Standing To |
BF 198 |
NE,SE |
33-34S-11E |
UT101602044 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 198 |
NW,SW |
34-34S-11E |
UT101602044 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 199 |
SE |
33-34S-11E |
UT101451969 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 200 |
SE |
33-34S-11E |
UT101339009 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 200 |
SW |
34-34S-11E |
UT101339009 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 201 |
SE |
33-34S-11E |
UT101402710 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 202 |
SE |
33-34S-11E |
UT101401658 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 202 |
SW |
34-34S-11E |
UT101401658 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 203 |
SE |
33-34S-11E |
UT101408214 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 204 |
SE |
33-34S-11E |
UT101403717 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 204 |
SW |
34-34S-11E |
UT101403717 |
Garfield |
18-Dec-75 |
31-Aug-22 |
BF 205 |
SE |
33-34S-11E |
UT101495307 |
Garfield |
19-Dec-75 |
31-Aug-22 |
BF 206 |
SE |
33-34S-11E |
UT101480304 |
Garfield |
19-Dec-75 |
31-Aug-22 |
BF 206 |
SW |
34-34S-11E |
UT101480304 |
Garfield |
19-Dec-75 |
31-Aug-22 |
BF 207 |
NE |
4-35S-11E |
UT101422475 |
Garfield |
19-Dec-75 |
31-Aug-22 |
BF 207 |
SE |
33-34S-11E |
UT101422475 |
Garfield |
19-Dec-75 |
31-Aug-22 |
BF 208 |
NW |
3-35S-11E |
UT101404987 |
Garfield |
19-Dec-75 |
31-Aug-22 |
BF 208 |
NE |
4-35S-11E |
UT101404987 |
Garfield |
19-Dec-75 |
31-Aug-22 |
BF 208 |
SE |
33-34S-11E |
UT101404987 |
Garfield |
19-Dec-75 |
31-Aug-22 |
BF 208 |
SW |
34-34S-11E |
UT101404987 |
Garfield |
19-Dec-75 |
31-Aug-22 |
BF 209 |
NE |
4-35S-11E |
UT101315590 |
Garfield |
16-Feb-05 |
31-Aug-22 |
BF 210 |
NW |
3-35S-11E |
UT101408496 |
Garfield |
19-Dec-75 |
31-Aug-22 |
Claim Name |
¼ Sec |
Sec-Twp-Rng1 |
BLM Serial No |
County |
Location Date |
In Good Standing To |
BF 210 |
NE |
4-35S-11E |
UT101408496 |
Garfield |
19-Dec-75 |
31-Aug-22 |
BF 211 |
NE |
4-35S-11E |
UT101315591 |
Garfield |
16-Feb-05 |
31-Aug-22 |
BF 212 |
NW |
3-35S-11E |
UT101301844 |
Garfield |
19-Dec-75 |
31-Aug-22 |
BF 212 |
NE |
4-35S-11E |
UT101301844 |
Garfield |
19-Dec-75 |
31-Aug-22 |
BF 213 |
NE |
4-35S-11E |
UT101315592 |
Garfield |
16-Feb-05 |
31-Aug-22 |
BF 214 |
NW |
3-35S-11E |
UT101315593 |
Garfield |
16-Feb-05 |
31-Aug-22 |
BF 214 |
NE |
4-35S-11E |
UT101315593 |
Garfield |
16-Feb-05 |
31-Aug-22 |
BF 215 |
NE,SE |
4-35S-11E |
UT101315594 |
Garfield |
16-Feb-05 |
31-Aug-22 |
BF 216 |
NW,SW |
3-35S-11E |
UT101315595 |
Garfield |
16-Feb-05 |
31-Aug-22 |
BF 216 |
NE,SE |
4-35S-11E |
UT101315595 |
Garfield |
16-Feb-05 |
31-Aug-22 |
BF 217 |
SE |
4-35S-11E |
UT101315596 |
Garfield |
16-Feb-05 |
31-Aug-22 |
BF 218 |
SW |
3-35S-11E |
UT101315597 |
Garfield |
16-Feb-05 |
31-Aug-22 |
BF 218 |
SE |
4-35S-11E |
UT101315597 |
Garfield |
16-Feb-05 |
31-Aug-22 |
BF 219 |
SE |
4-35S-11E |
UT101316780 |
Garfield |
16-Feb-05 |
31-Aug-22 |
BF 220 |
SW |
3-35S-11E |
UT101316781 |
Garfield |
16-Feb-05 |
31-Aug-22 |
BF 220 |
SE |
4-35S-11E |
UT101316781 |
Garfield |
16-Feb-05 |
31-Aug-22 |
BF 279 |
NW |
34-34S-11E |
UT101374425 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 281 |
NW |
34-34S-11E |
UT101374426 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 283 |
NW |
34-34S-11E |
UT101455667 |
Garfield |
21-Dec-75 |
31-Aug-22 |
BF 285 |
NW,SW |
34-34S-11E |
UT101404393 |
Garfield |
21-Dec-75 |
31-Aug-22 |
BF 286 |
NE,NW,SE,SW |
34-34S-11E |
UT101374427 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 287 |
SW |
34-34S-11E |
UT101404938 |
Garfield |
21-Dec-75 |
31-Aug-22 |
Claim Name |
¼ Sec |
Sec-Twp-Rng1 |
BLM Serial No |
County |
Location Date |
In Good Standing To |
BF 288 |
SE,SW |
34-34S-11E |
UT101374428 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 289 |
SW |
34-34S-11E |
UT101407797 |
Garfield |
21-Dec-75 |
31-Aug-22 |
BF 290 |
SE,SW |
34-34S-11E |
UT101374429 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 291 |
SW |
34-34S-11E |
UT101493255 |
Garfield |
21-Dec-75 |
31-Aug-22 |
BF 292 |
SE,SW |
34-34S-11E |
UT101374430 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 293 |
SW |
34-34S-11E |
UT101405785 |
Garfield |
21-Dec-75 |
31-Aug-22 |
BF 294 |
SE,SW |
34-34S-11E |
UT101374431 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 295 |
NW |
3-35S-11E |
UT101404612 |
Garfield |
21-Dec-75 |
31-Aug-22 |
BF 295 |
SW |
34-34S-11E |
UT101404612 |
Garfield |
21-Dec-75 |
31-Aug-22 |
BF 296 |
NE,NW |
3-35S-11E |
UT101374432 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 296 |
SE,SW |
34-34S-11E |
UT101374432 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 297 |
NW |
3-35S-11E |
UT101494031 |
Garfield |
21-Dec-75 |
31-Aug-22 |
BF 298 |
NE,NW |
3-35S-11E |
UT101374433 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BF 299 |
NW |
3-35S-11E |
UT101600496 |
Garfield |
21-Dec-75 |
31-Aug-22 |
BF 300 |
NE,NW |
3-35S-11E |
UT101374434 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BULL 301 |
NW |
3-35S-11E |
UT101426244 |
Garfield |
04-May-77 |
31-Aug-22 |
BULL 303 |
NW,SW |
3-35S-11E |
UT101402325 |
Garfield |
05-May-77 |
31-Aug-22 |
BULL 305 |
SW |
3-35S-11E |
UT101374435 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BULL 673 |
NW,SW |
3-35S-11E |
UT101302133 |
Garfield |
04-Aug-77 |
31-Aug-22 |
BULL 674 |
NW |
3-35S-11E |
UT101529442 |
Garfield |
04-Aug-77 |
31-Aug-22 |
BULL 675 |
NW |
3-35S-11E |
UT101401669 |
Garfield |
03-Aug-77 |
31-Aug-22 |
BULL 675 |
SW |
34-34S-11E |
UT101401669 |
Garfield |
03-Aug-77 |
31-Aug-22 |
Claim Name |
¼ Sec |
Sec-Twp-Rng1 |
BLM Serial No |
County |
Location Date |
In Good Standing To |
BULL 676 |
SW |
34-34S-11E |
UT101405982 |
Garfield |
03-Aug-77 |
31-Aug-22 |
BULL 677 |
NW,SW |
34-34S-11E |
UT101407675 |
Garfield |
02-Aug-77 |
31-Aug-22 |
BULL 678 |
NW |
34-34S-11E |
UT101401720 |
Garfield |
02-Aug-77 |
31-Aug-22 |
BULL # 713 |
SW |
28-34S-11E |
UT101401745 |
Garfield |
05-Jan-78 |
31-Aug-22 |
BULL # 713 |
SE |
29-34S-11E |
UT101401745 |
Garfield |
05-Jan-78 |
31-Aug-22 |
BULL 714 |
NW,SW |
28-34S-11E |
UT101374436 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BULL 714 |
NE,SE |
29-34S-11E |
UT101374436 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BULL 774 |
NE,NW |
29-34S-11E |
UT101374437 |
Garfield |
21-Mar-05 |
31-Aug-22 |
BULL 793 |
SW |
29-34S-11E |
UT101403721 |
Garfield |
22-Aug-78 |
31-Aug-22 |
FROG 679 |
NW |
4-35S-11E |
UT101374439 |
Garfield |
21-Mar-05 |
31-Aug-22 |
FROG 679 |
SW |
27-34S-11E |
UT101374439 |
Garfield |
21-Mar-05 |
31-Aug-22 |
FROG 679 |
NW |
34-34S-11E |
UT101374439 |
Garfield |
21-Mar-05 |
31-Aug-22 |
FROG # 690 |
SW |
28-34S-11E |
UT101421903 |
Garfield |
12-Dec-77 |
31-Aug-22 |
FROG # 690 |
SE |
29-34S-11E |
UT101421903 |
Garfield |
12-Dec-77 |
31-Aug-22 |
FROG # 690 |
NE |
32-34S-11E |
UT101421903 |
Garfield |
12-Dec-77 |
31-Aug-22 |
FROG # 690 |
NW |
33-34S-11E |
UT101421903 |
Garfield |
12-Dec-77 |
31-Aug-22 |
Notes:
1. Section - Township - Range
Figure 4-1: Location Map
Figure 4-2: Land Tenure Map
4.3 Encumbrances
The annual mining claim holding costs for the Project for 2022 will be $27,720.
Although EFR has completed initial environmental baseline studies and mine plans for permitting purposes at the Bullfrog property, the submittal of permit applications has been deferred pending more favorable market conditions.
4.4 Royalties
There is no royalty burden for the 168 claims that comprise the Project.
4.5 Other Significant Risks
The SLR QP is not aware of any environmental liabilities on the Project. EFR has all required permits to conduct the proposed work on the Project. The SLR QP is not aware of any other significant factors and risks that may affect access, title, or the right or ability to perform the proposed work program on the Project.
5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY
5.1 Accessibility
Road access to the Project is by paved Highway 276, running between Hanksville, Utah, and Bullfrog Basin Marina, Utah. An unimproved gravel road maintained by Garfield County extends west from Highway 276, passes by the portal of the Tony M mine, and extends northerly to the Project. The northern end of the Project can be accessed by the Eggnog Star Spring County Road, approximately 10.4 mi north of Ticaboo, Utah along Highway 276. A network of unimproved, dirt exploration roads provide access over the Project except in the areas of rugged terrain.
5.2 Vegetation
The vegetation consists primarily of small plants including some of the major varieties of blackbrush, sagebrush, and rabbitbrush. A few small junipers are also present.
5.3 Climate
The climate is distinctly arid with an average annual precipitation of approximately eight inches, in addition to approximately 12 in. of snow. Local records indicate the temperature ranges from a minimum of -10°F to a maximum of 110°F. These conditions allow year-round exploration to take place.
5.4 Local Resources
Skilled labor can be recruited from the region, which has a tradition of uranium mining. Materials and supplies are transported to the site by truck approximately 275 mi from Salt Lake City, Utah, and approximately 190 mi from Grand Junction, Colorado. The distance to Energy Fuels' White Mesa Mill near Blanding, Utah, is 117 mi.
5.5 Infrastructure
The Project is located in a relatively remote area of Utah with limited supporting infrastructure in the area. If the Project is developed, it is anticipated that power will be supplied by diesel generators and water will be supplied by a well. The town of Ticaboo, Utah, is located approximately five miles south of the Project. The next closest community is Hanksville, Utah, a small town of a few hundred people, located approximately 40 mi north of the Project. The Bullfrog Basin Marina airstrip is located approximately 15 mi south of the Project area.
5.6 Physiography
The Project is located on the lower southern flank of Mt. Hillers (10,723 ft elevation), and to the west and northwest of Mount Ellsworth and Mt. Holmes (7,930 ft elevation). The land surface slopes south-southwesterly from these mountains to Lake Powell, which has an average elevation of approximately 3,700 ft.
Relief over the area is approximately 800 ft. The elevation in the Project area ranges from 4,550 ft above sea level (ft ASL) at the portal of the Tony M mine, located approximately 3.7 mi to the south of the Project, to 6,800 ft ASL over the northern end of the Project. The terrain is typical canyon lands topography, with some areas deeply dissected by gullies and headwalls of canyons and the rest consisting of gently undulating gravel benches covering the northern part of the project area. The terrain in several parts of the Project is particularly rugged and inaccessible and is the primary reason for the irregular pattern of surface drillholes in parts of the Project.
There are no perennial streams in the vicinity of the Henry Mountains Complex area, but there are ephemeral streams all of which flow in response to snow melt and rainfall. In the western part of the property area, primary surface waters flow from a series of seeps and springs at the base of the Tununk shale, which is located above the Morrison Formation. The major regional water source is provided by wells developed in the Jurassic-Triassic Navajo sandstone aquifer. The Navajo Sandstone is located at a depth of about 1,800 ft in the Bullfrog property area, placing it about 1,000 ft below the Salt Wash uraniferous zones.
6.0 HISTORY
During World War I, vanadium was mined from small deposits outcropping in Salt Wash exposures on the eastern and southern flanks of the Henry Mountains. In the 1940s and 1950s, interest increased in both vanadium and uranium, and numerous small mines developed along the exposed Salt Wash outcrops.
Prior to 2005, all exploration, mine development, and related activities for the two historical properties (Tony M and Bullfrog) were conducted independently. Many historic activities on the Bullfrog and Tony M properties are therefore discussed separately, except where correlations and comparisons are made.
In the late 1960s, Gulf Minerals (Gulf) acquired a significant land position southwest of the Henry Mountains Complex Property and drilled approximately 70 holes with little apparent success. In 1970 and 1971, Rioamex Corporation conducted a 40-hole drilling program in an east-west zone extending across the southerly end of the Bullfrog property and the northerly end of the Tony M-Frank M property. Some of these holes intercepted significant uranium mineralization.
The history of exploration and development of the Bullfrog property and former Tony M property evolved independently from the mid-1970s until early 2005. The Bullfrog property was initially explored by Exxon, while the former Tony M property was explored and developed by Plateau, a subsidiary of Consumers Power Company (Consumers) of Michigan.
6.1 Prior Ownership
In 1982, Atlas Minerals Corporation (Atlas) acquired the Bullfrog property from Exxon, subsequently returning it to Exxon in 1991. The Bullfrog property was then sold by Exxon to EFNI in 1992. In 1997, IUC became the owner of the Bullfrog property as part of an acquisition in which IUC acquired all of EFNI's assets.
Plateau commenced exploration east of Shootaring Canyon in 1974 and drilled the first holes west of the canyon on the former Tony M property in early 1977. Development of the Tony M decline and mine began on September 1, 1978. Under Plateau, the Shootaring Canyon Uranium Processing Facility (Ticaboo Mill) was developed approximately four miles south of the Tony M mine portals. Operational testing commenced at the Ticaboo Mill on April 13, 1982, with the mill declared ready for operation on June 1, 1982. Following extensive underground development, the Tony M mine was put on care and maintenance in mid-1984 as a result of the cancellation of construction of Consumers' dual-purpose nuclear plants in Midland, Michigan. Plateau's Tony M mine uranium production had been committed to the Midland plants.
Ownership of the former Tony M property was transferred from Plateau to Nuclear Fuels Services, Inc. (NFS) in mid-1990. During its tenure, NFS conducted various investigations including delineation drilling and geologic analysis of the former Tony M property. The report documenting "Geologic analysis of the uranium and vanadium ore reserves in the Tony M Orebody" was prepared for NFS by Nuclear Assurance Corporation (NAC, 1989). Drilling by NFS on the former Tony M property, consisting of 39 rotary holes, was targeted to delineate zones of high-grade uranium mineralization. In addition, with the cooperation of NFS, BP Exploration Inc. drilled one stratigraphic core hole (91-8-14c) on the northern former Tony M property in 1991 (Robinson & McCabe, 1997).
In 1994, U.S. Energy Corporation (USEC) of Riverton, Wyoming, then owner of the Ticaboo Mill (which it had acquired from Plateau) entered into an agreement to acquire the Tony M mine and Frank M deposit from NFS. USEC held the mineral properties until the late 1990s when it abandoned them because of the continued low uranium market prices. During this period USEC also conducted a program to close the Tony M mine and reclaim disturbed surface areas, which included backfilling the portals and capping the mine ventilation holes. The buildings and structures were removed, and the terrain was reclaimed and recultivated.
In February 2005, the State of Utah offered the Utah State Mineral Lease covering Section 16 Township 35 South (T35S) Range 11 East (R11E), Salt Lake Meridian, for auction. Both the portal of the Tony M mine and the southern portion of the Tony M deposit are located on this State section. IUC was the successful bidder, and the State of Utah leased Section 16 to IUC. Subsequently, IUC entered into an agreement to acquire the Utah State Mineral Lease and 17 unpatented Federal lode mining claims (TIC) located between Section 16 and the Bullfrog property claims.
On December 1, 2006, IUC combined its operations with those of Denison Mines Inc. (DMI) acquiring all issued and outstanding shares of DMI, and subsequently amending its name to Denison Mines Corp. (Denison). In February 2007, Denison acquired the former Plateau Tony M property, bringing it under common ownership with the Bullfrog property and renaming the properties the Henry Mountain Complex.
In 2007, the Ticaboo Mill was purchased by Uranium One Inc. from USEC. In 2015, Anfield Energy Inc. acquired the mill from Uranium One Inc. The mill is currently in care and maintenance.
In June 2012, EFR acquired 100% of the Henry Mountains Complex through the acquisition of Denison and its affiliates' U.S. Mining Division.
In October 2021, EFR divested of the Tony M property and Southwest deposit to CUR, retaining the mineral claims associated with the Bullfrog (Copper Bench and Indian Bench) deposits.
6.2 Exploration and Development History
The primary method of exploration used for Salt Wash uranium/vanadium deposits and for the Project specifically is rotary drilling into the host sandstone followed by logging of the drillhole using a gamma probe. Typically, core is only collected from a few holes to determine vanadium content and to determine if there are any disequilibrium issues.
Denison, and its predecessor IUC, carried out no physical work on the properties, with the exception of review of available data and critical evaluation, until the end of 2005, when certain activities including underground reconnaissance and permitting were initiated. A Notice of Intent to Conduct Exploration E/017/044 was issued by the Utah Division of Oil, Gas and Mining, Department of Natural Resources on December 2, 2005. In addition, IUC filed a Notice of Intent to Conduct Mineral Exploration, UTU-80017, with the BLM, on March 6, 2006. A notice of exploration activities was sent to the Utah State Institutional and Trust Land Administration (SITLA), the owner of Section 16, on September 7, 2005.
6.2.1 Bullfrog and Southwest Deposits Property History
Exxon conducted reconnaissance in the area in 1974 and 1975, resulting in staking of the first "Bullfrog" claims in 1975 and 1976. The first drilling program in 1977 resulted in the discovery of what became the Southwest deposit. Additional claims were subsequently staked, and drilling was continued, first by Exxon's Exploration Group, and then by its Pre-Development Group. Several uranium and vanadium zones were discovered in the Southwest and Copper Bench areas, and mineralization exhibiting potential economic grade was also discovered in the Indian Bench area. With the declining uranium markets of the early 1980s, Exxon prepared a prefeasibility report and then discontinued development of the Bullfrog property. Subsequently, Exxon offered the Bullfrog property to Atlas Minerals Corporation (Atlas) in January 1982.
Atlas entered into an agreement to purchase the Bullfrog property from Exxon in July 1982. From July 1982 to July 1983, Atlas completed 112 drillholes delineating the Southwest and Copper Bench deposits on approximately 100 ft centers. In August 1983, Atlas commissioned Pincock, Allen and Holt, Inc. (PAH), to conduct a feasibility study for development of the Southwest and Copper Bench deposits. From July 1983 to March 1984, Atlas completed a core drilling program throughout the Bullfrog property, as well as a rotary drillhole program to delineate the Indian Bench deposit. In November 1983, Atlas renamed the Bullfrog deposits as the "Edward R. Farley Jr. Deposit", but that name is no longer used.
Atlas continued to hold the Bullfrog property until 1990 when a corporate decision was made to consider its sale. During that year, Mine Reserves Associates, Inc. (MRA) of Tucson, Arizona, was retained to prepare mineral inventory and mineable reserve estimates for the Indian Bench deposit and incorporate the results into a project-wide reserve base. Steve Milne of Milne and Associates (Milne), a principal engineer for the PAH study, was engaged in November 1990 to update the PAH feasibility study and to complete an optimization study on selected mining/milling scenarios. The completed Milne study was submitted to Atlas in December 1990 (Milne & Associates, 1990).
Atlas did not sell the Bullfrog property, and in 1991 returned it to Exxon. In late 1992, EFNI, no relation to EFR, acting through its subsidiary Energy Fuels Exploration Company, purchased the Bullfrog property from Exxon. EFNI conducted a geologic review and internal economic analysis of the Bullfrog property. In 1997, International Uranium Corp. (IUC) became the owner of the Bullfrog property as part of an acquisition in which IUC acquired all of EFNI's assets. IUC performed no exploration activities on the properties.
On December 1, 2006, IUC combined its operations with those of DMI and DMI became a subsidiary of IUC. IUC was then renamed Denison.
EFR acquired all three deposits - Copper Bench, Indian Bench, and Southwest - through its acquisition of Denison's U.S. assets in June 2012. No mine development has been conducted on the Project and EFR has carried out no exploration work on the Project.
6.3 Past Production
No past production has occurred at the Project.
7.0 GEOLOGICAL SETTING AND MINERALIZATION
7.1 Regional Geology
The Project is part of the Colorado Plateau physiographic province in southwestern Utah. The Colorado Plateau has been a relatively stable structural province since the end of the Precambrian. During the Paleozoic and Mesozoic, the Colorado Plateau was a stable shelf without major geosynclinal areas of deposition, except during the Pennsylvanian when several thousand feet of black shales and evaporates accumulated in the Paradox Basin of southwestern Colorado and adjacent Utah.
Folding and faulting of basement rocks during the Laramide orogeny of Late Cretaceous and Early Tertiary time produced the major structural features of the Colorado Plateau. Compared to the adjacent areas, however, it affected the plateau only slightly. The nearly horizontal strata were gently flexed, producing the uplifts and basins.
Early Tertiary fluvial and lacustrine sedimentation within the deeper parts of local basins was followed in mid-Tertiary time by laccolithic intrusion and extensive volcanism. Intrusions of diorite and monazite porphyry penetrated the sediments at several sites to form the laccolithic mountains of the central Colorado Plateau. Dikes and sills of similar composition were intruded along the eastern edge of the plateau, probably in Miocene time. Faulting along the south and west margins of the plateau was followed Henry Mountains Basin by epeirogenic uplift and northeastward tilting of the plateau and by continuing erosion which has shaped the present landforms.
7.2 Local Geology
The Project is situated in the southeastern flank of the, a subprovince of the Colorado Plateau physiographic province. The Henry Mountains Basin is an elongate north-south trending doubly plunging syncline in the form of a closed basin. It is surrounded by the Monument Uplift to the southeast, Circle Cliffs Uplift to the southwest, and the San Rafael Swell to the north.
The Project is located to the south of Mt. Hillers (10,723 ft) and to the northwest of Mount Ellsworth and Mt. Holmes (7,930 ft). Exposed rocks in the Project area are Jurassic and Cretaceous in age. Host rocks at the Project are Upper Jurassic sandstones of the Salt Wash Member of the Morrison Formation. In addition, a minor portion (i.e., a few percent) of the Tony M uranium mineralization occurs in the uppermost section of the underlying Tidwell Member (PAH, 1985).
Figure 7-1 presents a geologic map of the Bullfrog area.
7.2.1 Stratigraphy
Surface outcrops at the Project include the Tununk Shale Member of the Mancos Shale in the northern portions of the Project area and the Dakota Sandstone and Morrison Formations in the southern portions. Detailed geologic descriptions of the stratigraphic sequence are given below. The stratigraphic section for the Project area is shown in Figure 7-2 and Figure 7-3.
7.2.1.1 Mancos Shale (Tununk Shale Member)
The Tununk Shale Member of the Mancos Shale is a dark gray to blue gray, thinly laminated, calcareous, marine shale that is locally fossiliferous. It contains minor fine-grained quartz sandstone beds. In the Henry Mountains Basin area, it is 440 ft to 720 ft thick (Doelling and Willis, 2018).
7.2.1.2 Dakota Sandstone
The Dakota Sandstone is a grayish orange to light brown, locally fossiliferous sandstone interbedded with light-olive gray shale in the upper half of the formation. The Dakota contains mostly thin, but locally thick, coal beds in the middle of the formation and dark-brown to black carbonaceous claystone, gray shale, siltstone, and some beds of grayish orange to white coarse-grained sandstone in the lower have of the formation (Doelling and Willis, 2018).
7.2.1.3 Morrison Formation
The Morrison Formation is a complex fluvial deposit of Late Jurassic age that occupies an area of approximately 600,000 square miles, including parts of 13 western states and small portions of three Canadian provinces, far to the north and east of the boundary of the Colorado Plateau.
In most areas of major Salt Wash uranium production in Colorado and Utah, the Morrison Formation consists of only the Salt Wash Member and the conformably overlying Brushy Basin Member. The Tidwell Member underlies the Salt Wash Member in some districts.
7.2.1.3.1 Morrison Formation (Brushy Basin Member)
The Brushy Basin Member is comprised of variegated mudstone and claystone, minor sandstone, and conglomerate. In the Project area, the thickness of the Brushy Basin ranges between 0 ft and 300 ft (Doelling and Willis, 2018).
7.2.1.3.2 Morrison Formation (Salt Wash Member)
The Salt Wash Member is subdivided into three major facies. Uranium-vanadium orebodies have been found in each of the three facies, but the great majority of ore has been mined from the interbedded sandstone and mudstone facies. In outcrop, the Salt Wash is exposed as one or more massive, ledge-forming sandstones, the number varying from one district to another. Closer to the source areas, as in Arizona, the Salt Wash is mainly a massive sandstone or conglomeratic sandstone broken only by a few, thin interbeds of siltstone or clay. Farther from the source areas, as in the area of the Uravan mineral belt, three or more discontinuous sandstone ledges are common, generally interbedded with approximately equal amounts of thick, laterally persistent siltstones or mudstones.
The sandstones of the Salt Wash have been classified as modified or impure quartzite, ranging from orthoquartzite to feldspathic or tuffaceous orthoquartzite. Carbonate cement is a relatively common component in the Salt Wash. The sandy strata of the Salt Wash Member contain many mineable concentrations of uranium throughout the Henry Basin, most of which are relatively small. The Henry Mountains deposits, together with adjoining deposits, constitute the largest Salt Wash-hosted uranium concentration on the Colorado Plateau.
In the southern Henry Mountains Basin, including the Project area, the Salt Wash Member ranges from 400 ft to 510 ft thick. In the northern part of the Tony M deposit, core hole 91-8-14c intersected 444 ft of the Salt Wash Member. The lower Salt Wash sandstones are finer grained, while the upper Salt Wash sandstones consist of more coarse-grained clastics. The lower Salt Wash is approximately 150 ft thick in the Project area, thinning and becoming less sandy northward from the Project area. Sandstones comprise 80% of the sequence, with siltstones and mudstones making up the remainder. Significant uranium mineralization occurs only in this lower unit.
7.2.1.3.3 Tidwell and Summerville Formations
The Tidwell Member of the Morrison Formation interbeds with the upper Summerville Formation making the contact difficult to define. The Tidwell is composed of alternating thin beds of light-gray and greenish gray, fine-grained, calcareous sandstone and calcareous moderate red or green shale. The Summerville Formation is a reddish brown, ribbed or thinly bedded siltstone and mudstone and brown to white, fine-grained sandstone. Locally it includes pink and white gypsum near the top. Near the top of the formation, the Summerville contains interbedded red and gray mudstone, pink and white gypsum, gray limestone, and gray sandstone that are part of the overlying Tidwell Formation (Doelling and Willis, 2018).
7.2.2 Structural Geology
The structural geology of the Project reflects a gentle westward dip off the Monument Uplift, toward the axis of the Henry Mountains Basin, except where the strata have been influenced by the adjacent Mount Hillers and Mount Ellsworth intrusive igneous bodies. As a result, strata at Bullfrog dips a few degrees to the west and southwest.
Figure 7-1: Regional Geologic Map
Figure 7-2: Regional Stratigraphic Column
Figure 7-3: Detail of the Lower Portion of the Lower Rim of the Saltwash Member
7.3 Mineralization
7.3.1 Uranium Mineralization
The uranium-vanadium mineralization in the Henry Mountains Basin area is similar to the mineralization observed elsewhere in the Colorado Plateau.
It occurs as intragranular disseminations within the lower fluvial sand facies (Lower Rim) of the Salt Wash Member containing detrital organic debris. Mineralization primarily consists of coffinite, with minor uraninite, which usually occurs in close association with vanadium mineralization. Mineralization occurs as intergranular disseminations, as well as coatings and/or cement on and between sand grains and organic debris (Northrop and Goldhaber, 1990).
The Lower Rim of the Salt Wash Member has been subdivided into an upper, middle, and a lower unit designated as the Upper-Lower, Middle-Lower, and Lower-Lower. Each of these subunits, in turn, have been subdivided into upper, middle, and lower horizons. The Bullfrog deposit primarily occurs in upper and lower portions of the Middle-Lower unit (i.e., 60 ft to 100 ft above the base) with minor mineralization found in the upper portion of the Lower-Lower unit. Minor mineralization is also seen in the underlying Tidwell formation.
Table 7-1 presents a summary of the naming conventions of the mineralized sands for the Henry Mountains Complex.
Table 7-1: Naming Convention of the Mineralized Sands for the Henry Mountains Complex
Energy Fuels Inc. - Bullfrog Project
Member |
Rim |
Unit |
Horizon |
Zone Abbreviation |
Mineralization |
Brushy Basin |
N/A |
N/A |
N/A |
- |
None |
Salt Wash |
Top (Upper) |
N/A |
N/A |
- |
None |
Middle |
N/A |
N/A |
- |
None |
|
|
Upper |
Upper |
- |
None |
|
Middle |
- |
None |
|||
Lower |
- |
None |
|||
Lower |
Middle |
Upper |
MU |
Bullfrog |
|
Middle |
- |
None |
|||
Lower |
ML |
Bullfrog |
|||
Lower |
Upper |
L |
Tony M/Southwest/Bullfrog |
||
Middle |
- |
Tony M/Southwest |
|||
Lower |
- |
Tony M/Southwest |
|||
Tidwell |
N/A |
N/A |
N/A |
- |
Tony M/Southwest (minor) |
The framework minerals of the Salt Wash host beds for the Tony M deposit are predominantly quartz, (averaging 70% to 79% of the rock) with minor, variable amounts of feldspar (ranging from 1% to 14% and averaging 4%). Rock fragments average about 7% but range from 1% to 60%. Accessory minerals form about 2% or less of the rock. The sandstones are classified as modified or impure quartzite, ranging from orthoquartzite to feldspathic orthoquartzite.
The Salt Wash sandstone is cemented by carbonate and silica and/or clay minerals that average about 17% of the total volume of the samples studied. Calcite is the most common carbonate. In the mineralized zones, the proportionate of clay minerals increases and the amount of carbonate decreases. The carbonate in the mineralized zone is also marked by the presence of dolomite. Organic carbon commonly occurs in the concentration of 0.1 to 0.2 weight percent (wt%) but ranges up to 1 wt% or higher in some zones. The predominant type of organic matter is coalified detrital plant debris together with a trace amount (<1%) of unstructured organic matter. This detrital debris occurs as individual elongate fragments a few tens of micrometres to about 5 mm in length. Silicified logs, carbonized organic debris, and pyrite are locally abundant in the uranium-vanadium bearing zone.
Quartz overgrowths in amounts ranging from 1% to 12% are present with the highest concentrations associated directly with the mineralized zone(s).
Other "ore-stage" minerals identified in the U.S. Geologic Survey (USGS) study include pyrite (0% to 3.3%), quartz overgrowths (0% to 17%), dolomite and calcite (Wanty et al., 1990). The quartz overgrowths are often visible to the naked eye within the Tony M mine. While dolomite is associated with the mineralized zones, the abundance of calcite decreases in highly mineralized zones. This is thought to occur because calcite postdates the deposition of vanadium bearing chlorite and other "ore-stage" minerals that preferentially plug the pores of the mineralized zone.
The main uranium mineralized horizons appear as laterally discontinuous, horizontal bands of dark material separated vertically by lighter zones lacking uranium but enriched in vanadium. On a small scale (inches to feet), the dark material often exhibits lithologic control, following cross-bed laminae or closely associated with, though not concentrated directly within, pockets of detrital organic debris.
The Bullfrog deposit extends approximately 3.5 mi along a northwesterly trend to the northeast of the Tony M-Southwest deposit. Mineralization of the Bullfrog deposits ranges in thicknesses of three feet to six feet but occasionally is shown on radiometric logs exceeding 12 ft in some portions of the Project area.
The age of the deposit is 115 million years, indicating that the mineralization formed shortly after deposition of the Brush Basin Member of the Morrison Formation (Ludwig, 1986, in Wanty et al., 1990).
7.3.2 Vanadium Mineralization
Vanadium occurs as montroseite (hydrous vanadium oxide) and vanadium chlorite in primary mineralized zones located below the water table (i.e., the northern portion of the Tony M deposit). Montroseite is the only vanadium oxide mineral identified in this interval. An unusual vanadium-bearing chlorite or an interlayered vanadium-bearing chlorite-smectite is the only authigenic clay mineral(s) recognized. The grain size and sorting characteristics of detrital quartz grains vary within the host rocks; cross-bed laminae with coarser grains and better sorting are invariably more highly mineralized (Wanty et al., 1990).
Above the water table vanadium chlorite is absent, while montroseite and a suite of secondary uranium-vanadium minerals are present. These include tyuyamunite, metatyuyamunite, rauvite, and carnotite all of which have been identified in samples from the southern part of the Tony M deposit. Carnotite is a secondary hydrous potassium-vanadium-uranium mineral, while the other three are similar minerals with calcium replacing potassium. The later minerals occur above the water table in the zone that has been subjected to near surface secondary oxidation.
The V2O5:U3O8 weight ratios in Salt Wash-type deposits range from about 1:1 to 20:1 with the V2O5:U3O8 routinely reported as 5:1 based on U.S. Atomic Energy Commission (AEC) production records of 18,300 tons for the period 1956 to 1965. Focusing only on the South Henry Mountains (also known as the Little Rockies) mining district, the V2O5:U3O8 ratio is markedly lower with ranges from approximately 1.3:1 to approximately 2.0:1. This value is also based on production records for the period 1956 to 1965, comprising about 6,900 tons produced from several small mines all located within a few miles of the Tony M mine (Doelling, 1967).
Determining the concentration of vanadium in a deposit is much more costly and time-consuming than making the equivalent determination for uranium. While indirect determinations of the uranium content may be efficiently made at low cost using gamma logging, chemical analysis is the only way to determine the vanadium content.
Northrop and Goldhaber (1990) established that the relationship between the uranium and vanadium mineralization in the Henry Mountains Mining District is not a simple one. Vanadium enrichment in the mineralized intervals occurred over a thicker interval than uranium. Northrop and Goldhaber (1990) found that while uranium and vanadium often reached their maximum concentration at the top of each uranium-bearing horizon, the vertical distribution of vanadium was frequently distinct from uranium.
While there is a clear tendency for higher-grade uranium to be associated with higher-grade vanadium, the relationship is somewhat erratic and high-grade uranium samples frequently have low concentrations of vanadium.
7.3.3 Other Elements
Table 7-2 shows the concentration of several minor elements occurring with the uranium and vanadium.
Table 7-2: Minor Element Concentrations of Various Rock Composites
Energy Fuels Inc. - Bullfrog Project
Composite Area |
%Cu |
%Zn |
%Pb |
%Mo |
%Zr |
%As |
Ag |
Au |
Copper Bench |
0.004 |
0.005 |
0.002 |
0.02 |
0.07 |
0.21 |
0.02 |
ND |
Indian Bench |
0.003 |
0.008 |
0.003 |
0.04 |
0.05 |
0.23 |
0.02 |
ND |
The average concentration of CaCO3 is a consideration for processing cost and ranges from 5.4% to 11.1%. Northrop and Goldhaber (1990) observed that the character of the mineralized zones which contain significant concentrations of vanadium chlorite and other pore filling minerals effectively blocked the deposition of large amounts of carbonate and therefore the mineralized zones usually have a carbonate content that is less than the non-mineralized Salt Wash sandstone.
Molybdenum concentrations above detection levels were found to occur only close to mineralized horizons, and generally each mineralized horizon has an associated zone of molybdenum enrichment. Vanadium and chromium enrichment in the mineralized intervals occur over a thicker interval than uranium and/or molybdenum.
8.0 DEPOSIT TYPES
Sandstone-type uranium deposits typically occur in fine- to coarse-grained sediments deposited in a continental fluvial environment. The uranium is either derived from a weathered rock containing anomalously high concentrations of uranium, leached from the sandstone itself, or leached from an adjacent stratigraphic unit. It is then transported in oxygenated water until it is precipitated from solution under reducing conditions at an oxidation-reduction front. The reducing conditions may be caused by such reducing agents in the sandstone as carbonaceous material, sulfides, hydrocarbons, hydrogen sulfide, or brines.
There are three major types of sandstone hosted uranium deposits: tabular vanadium-uranium Salt Wash type of the Colorado Plateau, uraniferous humate deposits of the Grants, New Mexico area, and the roll-type deposits of Wyoming. The differences between the Salt Wash deposits and other sandstone hosted uranium deposits are significant. Some of the distinctive differences are as follows:
The deposits are dominantly vanadium, with accessory uranium.
One of the mineralized phases is a vanadium-bearing clay mineral.
The deposits are commonly associated with detrital plant trash, but not redistributed humic material.
The deposits occur entirely within reduced sandstone, without adjacent tongues of oxidized sandstone.
The vanadium content of the Henry Mountains Basin deposits is relatively low compared to many Uravan deposits. Furthermore, the Henry Mountains Basin deposits occur in broad alluvial sand accumulations, rather than in major sandstone channels as is typical of the Uravan deposits of Colorado. The Henry Mountains Basin deposits do have the characteristic geochemistry of the Uravan deposits and are classified as Salt Wash type deposits.
Extensive research by Northrop and Goldhaber (1990) shows that the Henry Mountains Basin deposits were formed at the interface of an underlying brine with overlying oxygenated flowing waters carrying uranium and vanadium in solution. Reduction and deposition of the mineralization were enhanced where the interface occurred within sandstones containing carbonaceous debris. The multiple mineralized horizons developed at favourable intervals as the brine surface migrated upwards. Geochemical studies indicate the uranium and vanadium were leached either from the Salt Wash sandstone or the overlying Brushy Basin Member.
9.0 EXPLORATION
EFR has not conducted any exploration activities on the Project, since acquiring the properties in 2012.
9.1 Hydrology
During development of the Tony M mine by Plateau, water inflows in the order of 100 gpm were pumped to surface for disposal in an evaporation pond. Estimates of inflow indicated that simultaneous maximum inflows to the proposed Bullfrog mine should not exceed 126 gpm (Plateau, 1981).
10.0 DRILLING
Historically the basic tool for exploring on the Project was conducted by rotary drilling using a tricone bit with a nominal diameter of 5.1 in., supplemented by diamond drilling (DD or Core) down to depths of 1,200 ft. Exploration holes at Bullfrog are used to determine lithology and uranium content using radiometric probes.
Drillhole collar locations are recorded on the original drill logs and radiometric logs created at the time of drilling, including easting and northing coordinates in local grid or modified NAD 1983 Utah State Plane FIBPS 4303 (US feet) and elevation of collar in feet above sea level. Due to the horizontally stratified nature of mineralization, downhole deviation surveys are not typically conducted as all drillholes are vertical.
Energy Fuels has not conducted any drilling since acquiring the Project.
10.1 Historic Bullfrog Drilling
Exxon commenced drilling on the Bullfrog property in 1977. Before it sold the Bullfrog property to Atlas in July 1982, Exxon reportedly drilled 1,782 holes. From July 1982 to July 1983, Atlas completed 112 drillholes delineating the Southwest and Copper Bench deposits on approximately 100 ft centers. After July 1983, Atlas completed an additional 49 core hole drilling program throughout the Bullfrog deposit, as well as a 133 rotary drillhole program to delineate the Indian Bench deposit on approximately 200 ft centers. Drillhole spacing in some areas is irregular and more widely spaced where rugged terrain does not allow access. Analysis indicated the Indian Bench deposit is similar to the Copper Bench deposit, and it is a northwesterly continuation of the Copper Bench deposit. The Indian Bench mineralization occurs in the same stratigraphic interval of the Salt Wash Member as the Copper Bench mineralization. The depth of mineralization in the Project is nearly 1,100 ft, with base elevation of the deposit at approximately 4,500 ft ASL.
As of the effective date of this Technical Report, a total of 2,232 drillholes were reportedly completed on the Bullfrog property by both Exxon and Atlas (Schafer, 1991). This drilling includes drilling completed over the Southwest deposit which was acquired by CUR in October of 2021.
10.2 Core Drilling
Records indicate that a total of 81 core holes were drilled in the Southwest, Copper Bench, and Indian Bench deposits by EFR's predecessors. These holes were most likely used for equilibrium analysis work, as discussed in Section 11.1.5. No core from any of the deposits is known to exist and was therefore not available to analyze for this Technical Report, but this is nonmaterial to the resource estimation work.
11.0 SAMPLE PREPARATION, ANALYSES, AND SECURITY
11.1 Sample Preparation, Analyses, and Security
11.1.1 Gamma Logging
Exploration drilling for uranium is unique in that core does not need to be recovered from a hole to determine the metal content. Due to the radioactive nature of uranium, probes that measure the decay products or "daughters" can be measured with a downhole gamma probe; this process is referred to as gamma logging. While gamma probes do not measure the direct uranium content, the data collected (in counts per second or CPS) can be used along with probe calibration data to determine an equivalent U3O8 grade in percent (% eU3O8). These grades are very reliable as long as there is not a disequilibrium problem in the area. Disequilibrium will be discussed below. Gamma logging is common in non-uranium drilling and is typically used to discern rock types.
The original downhole gamma logging of surface holes was done on the Bullfrog property by Century Geophysical Corp. (Century) and Professional Logging Services, Inc. (PLS) under contract to Exxon. Atlas also contracted Century for this service. Standard logging suites included radiometric gamma, resistivity, and self-potential measurements, supplemented by neutron-neutron surveys for dry holes. Deviation surveys were conducted for most of the holes. Century used its Compulog system consisting of truck-mounted radiometric logging equipment, including a digital computer. The natural gamma (counts per second, or cps), self potential (millivolts), and resistance (ohms) were recorded at 1/10th foot increments on magnetic tape and then processed by computer to graphically reproducible form. The data were transferred from the tape to computer for use in resource estimation.
Procedures followed by Exxon, Atlas, and Plateau, together with their contractors Century and PLS, were well documented and at the time followed best practices and standards of companies participating in uranium exploration and development. Onsite collection of the downhole gamma data and onsite data conversion limit the possibility of sample contamination or tampering.
11.1.1.1 Calibration
For the gamma probes to report accurate %eU3O8 values the gamma probes must be calibrated regularly. The probes are calibrated by running the probes in test pits maintained historically by the AEC and currently by the DOE. There are test pits in Grand Junction, Colorado, Grants, New Mexico, and Casper, Wyoming. The test pits have known %U3O8 values, which are measured by the probes. A dead time (DT) and K-factor can be calculated based on running the probes in the test pits. These values are necessary to convert CPS to %eU3O8. The dead time accounts for the size of the hole and the decay that occurs in the space between the probe and the wall rock. DT is measured in microseconds (μsec). The K-factor is simply a calibration coefficient used to convert the DT-corrected CPS to %eU3O8.
Quarterly or semi-annual calibration is usually sufficient. Calibration should be done more frequently if variations in data are observed, or the probe is damaged.
11.1.1.2 Method
Following the completion of a rotary hole, a geophysical logging truck will be positioned over the open hole and a probe will be lowered to the hole's total depth. Typically, these probes take multiple different readings. In uranium deposits, the holes are usually logged for gamma, resistivity, standard potential, and hole deviation. Only gamma is used in the grade calculation. Once the probe is at the bottom of the hole, the probe begins recording as the probe is raised. The quality of the data is impacted by the speed the probe is removed from the hole. Experience shows a speed of 20 feet per minute is adequate to obtain data for resource modeling. Data is recorded in CPS, which is a measurement of uranium decay of uranium daughter products, specifically Bismuth-24. That data is then processed using the calibration factors to calculate a eU3O8 grade. Historically, eU3O8 grades were calculated using the AEC half amplitude method, which gives a grade over a thickness. Currently, the eU3O8 grades tend to be calculated on 0.5-foot intervals by software. Depending on the manufacturer of the probe truck and instrumentation, different methods are used to calculate the eU3O8 grade, but all, including the AEC method, are based on the two equations given below.
The first equation converts CPS to CPS corrected for the dead time (DT) determined as part of the calibration process
The second equation converts the Dead Time Corrected CPS (N) to %eU3O8 utilizing the K-factor (K)
Depending on the drilling and logging environment, additional multipliers can be added to correct for various environmental factors. Typically, these include a water factor for drill hole mud, a pipe factor if the logging is done in the drill steel, and a disequilibrium factor if the deposit is known to be in disequilibrium. Tables for water and pipe factors are readily available.
11.1.2 Core Sampling
11.1.2.1 Sample Preparation
The following information is extracted from the 2012 Technical Report (Roscoe et al., 2012) as reported by the 1983 Report on Disequilibrium Variability (Bhatt, 1983) and 1983 Report on Bullfrog Laboratory Studies (Rajala, 1983) as reported by EFR. EFR has not conducted any drilling at the Project since EFR acquired the property in 2012, and therefore no additional samples have been prepared for analysis. No data was available to the SLR QP for review, and the information is included for reference only.
Atlas drilled a number of core holes, from which core was sampled and analysed. Below is a description of the method used for preparing the composites as reported by Rajala (1983).
Each of the composites consisted of 0.5 ft drill core intervals combined in such a manner as to give a composite head analysis exceeding 0.2% U3O8. Only one-half of the full core was available for composite preparation. The Indian Bench, Southwest, and Copper Bench composite samples contained 45, 104, and 90 core intervals, respectively. When possible, the composites were prepared using equal weights from each interval but, since the sample weight were small (e.g., approximately 50 g), for some of the intervals, the total weight of the composites was limited. Each minus 10-mesh interval was blended on a rolling mat prior to splitting out the appropriate weight for the composite.
The composites were stored in cylindrical containers and then placed on a set of rolls for at least eight hours to achieve complete blending of the intervals. The blended samples were placed on a rolling mat and flattened with a spatula. A head sample, along with 500 g test samples, was split out by random cuts of the primary samples. The head samples were pulverized to minus 100-mesh for chemical analysis.
11.1.2.2 Assaying and Analytical Procedure
Every interval was analyzed for U3O8, V2O5, and CaCO3. The initial U3O8 analyses were performed fluorometrically, with samples greater than 0.02% U3O8 being rerun volumetrically. The Atlas Fluorometric Laboratory also performed the initial V2O5 analyses and the Atlas Ore Lots Laboratory repeated V2O5 assays on samples that assayed greater than 0.2% V2O5. Most CaCO3 analyses were run only once in the Ore Lots Laboratory. Results of the analysis are presented in Section 10 Mineral Processing and Metallurgical Testing. Certification and accreditation of the Atlas Laboratory is unknown as the laboratory is no longer in existence. It was independent of EFR.
11.1.3 Radiometric Equilibrium
Disequilibrium in uranium deposits is the difference between equivalent (eU3O8) grades and assayed U3O8 grades. Disequilibrium can be either positive, where the assayed grade is greater than the equivalent grades, or negative, where the assayed grade is less than the equivalent grade. A uranium deposit is in equilibrium when the daughter products of uranium decay accurately represent the uranium present. Equilibrium occurs after the uranium is deposited and has not been added to or removed by fluids after approximately one million years. Disequilibrium is determined during drilling when a piece of core is taken and measured by two different methods, a counting method (closed-can) and chemical assay. If a positive or negative disequilibrium is determined, a disequilibrium factor can be applied to eU3O8 grades to account for this issue.
Exxon conducted analyses of samples from core drilling in the Southwest and Copper Bench deposits, using results from Core Labs. Exxon found that the radioactive disequilibrium of potentially economic grade intercepts in cores, measured as the ratio of chemical % U3O8 to log radiometric equivalent (% eU3O8), varied from 0.80 to 1.35 and averaged 1.06, close to the equilibrium value of 1.0. Milne (1990) reported that, while the investigation by Atlas of samples from core from an additional 40 drillholes was incomplete at the time, Atlas had identified no significant disequilibrium problem.
The most comprehensive analysis of disequilibrium of uranium in the area was completed by Bhatt (1983) using the results from 2,354 composite samples collected from buggies coming from the Tony M mine over the period 1980 to 1982. Based on sampling records, Bhatt divided the analytical results according to various areas of origin in the mine. This provided the basis to estimate the relative state of disequilibrium for uranium in different areas of the deposit. A summary of Bhatt's results is given in Table 11-1.
Bhatt reports that the analyses of closed can uranium and chemical uranium were performed at the Plateau laboratory at the Ticaboo Mill. Certification and accreditation of the Plateau Laboratory is unknown as it is no longer operational, and it was independent of EFR. Bhatt also reports that many independent check analyses were sent to independent commercial laboratories as a Quality Assurance practice.
Table 11-1: Plateau Disequilibrium Study
Energy Fuels Inc. - Bullfrog Project
Mine Block |
No. of Samples |
Avg. Probe |
Avg. Closed Can |
Avg. Chemical |
Disequilibrium |
B |
426 |
0.104 |
0.117 |
0.114 |
0.98 |
S |
323 |
0.090 |
0.116 |
0.129 |
1.11 |
E |
504 |
0.086 |
0.103 |
0.113 |
1.09 |
F |
262 |
0.113 |
0.133 |
0.141 |
1.06 |
L |
114 |
0.080 |
0.097 |
0.109 |
1.13 |
Q |
21 |
0.094 |
0.105 |
0.064 |
0.61 |
H |
60 |
0.044 |
0.055 |
0.072 |
1.31 |
I |
53 |
0.035 |
0.041 |
0.048 |
1.17 |
Mine Avg. |
1,763 |
0.092 |
0.109 |
0.116 |
1.06 |
Protore1 |
265 |
0.047 |
0.065 |
0.058 |
0.89 |
Source: Bhatt, 1983
Notes:
1. Protore is defined as muck with a grade >0.04% eU3O8 and <0.06% eU3O8
Based on the analysis, Bhatt concluded:
The state of disequilibrium varies from location to location within the deposit.
With the exception of one small area in the southern part of the deposit, the disequilibrium factor is positive.
Low-grade material with less than 0.06% U3O8 is depleted in uranium.
Higher-grade material containing more than 0.06% U3O8 is enriched in uranium.
Bhatt also concluded that the overall weighted disequilibrium factor of chemical to radiometric uranium grade (at a grade x thickness (GT) cut-off of 0.28%-ft) for the Tony M deposit is about 1.06. The disequilibrium factor for Tony M is similar to the factor of 1.06 determined by Exxon for the Southwest and Copper Bench deposits of the Bullfrog property.
Based on the information available, the original gamma log data and subsequent conversion to % eU3O8 values are reliable but slightly conservative estimates of the uranium U3O8 grade. Furthermore, there is no evidence that radiometric disequilibrium would negatively affect the uranium resource estimates of the Copper Bench-Indian Bench deposits.
11.2 Sample Security
EFR has conducted no core sampling since acquiring the properties. All reported core sampling was performed by previous operators Exxon and Atlas. The reported sample preparation, handling of the historic coring, and sample security cannot be confirmed.
11.3 Quality Assurance and Quality Control
EFR Geologists identified 25 twinned drillholes (drilled by Exxon and Atlas) in the Bullfrog deposit of which 23 were reviewed by AMEC (now Wood) in 2016 to determine the reason there was a large discrepancy between the "original" hole, which typically contained high-grade uranium and the "twin", which typically contained lower-grade uranium. Table 11-2 presents the statistics for both the non-twinned drillholes in the database and the twinned drillholes.
Table 11-2: Statistics for Project and Twin Database Holes
Energy Fuels Inc. - Bullfrog Project
|
Project Database (DB) |
Twin Database (DB) |
Twin DB:Project DP |
|||||
No. |
Mean |
Std. |
No. |
Mean |
Mean |
"Original" |
"Twin" |
|
Grade (% eU3O8) |
680 |
0.260 |
0.150 |
23 |
0.406 |
0.262 |
1.563 |
1.008 |
Thickness (ft) |
680 |
3.800 |
2.410 |
23 |
6.065 |
4.870 |
1.596 |
1.281 |
GT (ft-%) |
680 |
1.050 |
0.990 |
23 |
2.486 |
2.368 |
2.368 |
1.136 |
AMEC attributed the decrease in thickness and grade between the "Original" and the "Twin" due to selection bias, i.e., the selection of holes with higher grades and thicker mineralized zones to twin as opposed to issues with the method of logging the original holes. The data for the "twin" is much more in line with the larger project database than the "original". In its recommendations, AMEC suggested EFR twin 20 additional holes with the "originals" coming evenly from every 5th percentile in the project database. As of the issuance of this Technical Report, EFR has not conducted any drilling at Bullfrog.
11.4 Conclusions
In the SLR QP's opinion, the historical radiometric logging, analysis, and security procedures at the Bullfrog are adequate for use in the estimation of the Mineral Resources. The SLR QP also opines that, based on the information available, the original gamma log data and subsequent conversion to % eU3O8 values are reliable. Furthermore, there is no evidence that radiometric disequilibrium would be expected to negatively affect the uranium resource estimates.
The SLR QP is of the opinion that the sample security, analytical procedures, and QA/QC procedures used by EFR meet industry best practices and are adequate to estimate Mineral Resources.
12.0 DATA VERIFICATION
Data verification is the process of confirming that data has been generated with proper procedures, is transcribed accurately from its original source into the project database and is suitable for use as described in this Technical Report.
As part of the resource estimation procedure, drill data is spot checked by EFR personnel and audited by the SLR QP for completeness and validity. Specifically, any data which appears higher or lower than the surrounding data is confirmed by reviewing the original geophysical log. This data review includes confirming that the drill depth was adequate to reflect the mineralized horizon, that the geologic interpretation of host sand is correct, and that the thickness and grade of mineralization is correct.
The primary assay data used to calculate the Mineral Resource estimate for the Bullfrog property is downhole geophysical log data. While the resource estimate methodology has changed since the last Mineral Resource estimate was completed in 2012 (Roscoe et al., 2012), EFR has conducted no additional drilling on the Project or completed any additional data analysis, and the downhole geophysical database remains unchanged since 2012.
The drilling and radiometric logging data associated with the Bullfrog deposit was audited by RPA (now SLR) in 2012, and EFR staff and AMEC (now Wood) consultants in 2016. In all reviews of the Bullfrog data, audits of historic records were completed to assure that the grade, thickness, elevation, and location of uranium mineralization used in preparing the current Mineral Resource estimate corresponded to mineralization indicated by the original gamma logs of drillholes on the Project. EFR and its predecessors reviewed the available information to verify the reliability of the eU3O8 grade as determined by downhole gamma logging. The findings of those studies are provided below.
12.1 RPA Henry Mountain Complex Data Review (2012)
In 2012, RPA conducted audits of historic records to assure that the grade, thickness, elevation, and location of uranium mineralization correspond to mineralization indicated by the original gamma logs of drillholes on the Henry Mountains Complex. RPA reviewed the available information to verify the reliability of the eU3O8 grade as determined by downhole gamma logging.
Exxon and Plateau both conducted programs previously to investigate the state of chemical equilibrium of uranium in their respective deposits, and to verify the reliability of the eU3O8 grade as determined by downhole gamma logging. This was done by comparing the results of chemical analysis of drill core, closed can radiometric analysis of the core samples, and downhole gamma logs for the core intervals in question. Plateau also conducted a much more extensive sampling program from 189,332 tons of mine production, equal to about 80% of total mine production, of mineralized material extracted from the Tony M mine. Analyses of these samples were used to establish the relationship between chemical and radiometric uranium grade within most areas of the deposit (Bhatt, 1983).
While RPA reviewed the detailed results of this verification program as described in Bhatt's 1983 report, RPA did not have access to the original analyses for this investigation. The results of both the core analysis program for the Southwest deposit and Plateau's mine production sampling program indicate that, while the state of chemical equilibrium does vary from zone to zone in the deposits, taken overall, the gamma log estimates of grade are slightly conservative and underestimate the average U3O8 grade by up to 6%. RPA also concurred with Bhatt's conclusion that mineralized material with a grade of <0.06% U3O8 has a chemical uranium content that is lower than the radiometric uranium content and is in a negative state of disequilibrium. Atlas reportedly conducted a program of analysis of core samples, with similar results. RPA did not have access to any of the data from Atlas's investigation.
RPA did not verify any chemical analyses for Copper Bench or Indian Bench deposits because no core samples were available.
12.2 EFR-AMEC Bullfrog Deposit Data Review (2016)
In 2016, EFR contracted AMEC (now Wood) to conduct a review of a newly compiled drillhole database for the Copper Bench and Indian Bench portions of the Bullfrog deposit. The compilation of the database was completed as the first step in calculating an updated resource for the Copper Bench and Indian Bench portions of the Bullfrog deposit. That updated resource is provided in Section 11 of this Technical Report.
EFR geologists reviewed all the original drill logs for the Bullfrog deposit and the downhole gamma data was entered. The Upper-Lower, Middle-Lower, and Lower-Lower sands of the Salt Wash Member of the Morrison Formation were interpreted from the geophysical logs. AMEC geologists reviewed this work and provided a report detailing their report and findings. Recommendations included:
1. Thoroughly checking collar elevations for holes with respect to the surface topography wireframe
2. Thoroughly checking the x, y, z coordinates of desurveyed stratigraphic contacts versus coordinates on the wireframe surfaces where holes pierce the wireframes
3. Interpreting mineralized zones on fences as opposed to cross sections, snapping wireframe contacts to drillholes
4. Using the GAMLOGBF2 version to convert natural gamma to eU3O8 for PD series holes. Using Compulog eU3O8 values supplied by Century for the BF series holes.
Item 1 regarded survey busts in the z direction or errors in converting z elevations to the current coordinate system. All collars were tied to z values from an aerial survey conducted at the Project area in 2005 and have since been corrected. Items 2 and 3 refer to the generation of wireframes used to constrain a block model. As the new resource was completed using GT contours and not a block model, these two recommendations do not apply to the current Mineral Resource estimation. Item 4 refers to how counts per second (CPS) values from the gamma log are converted into % eU3O8 values. Century Geophysical has a proprietary software called COMPULOG that automatically converts CPS to % eU3O8 and Item 4 recommends using that data as is for those holes. For those holes not logged by Century (the later PD series holes were drilled by Professional Logging Services), AMEC recommended using an updated version of the GAMLOG algorithm developed by Scott (1962) to convert the CPS to % eU3O8. That conversion was done by AMEC and those values are what are used in the current Bullfrog deposit drillhole database.
Regarding the geologic picks from the geophysical logs done by EFR geologists, AMEC concluded that the picks were accurate and that it was not practical or necessary to subdivide the geologic units.
Based on these reviews of the grade and thickness of uranium mineralization indicated in the original gamma logs for the Bullfrog deposits and comparisons with the computer-generated GT composites, the SLR QP is of the opinion that the original gamma log data and subsequent conversion to eU3O8 values are reliable and suitable for a mineral resource estimate.
12.3 SLR Data Verification (2021)
The SLR QP visited the Project and the adjacent Tony M-Southwest property in July 2021 in support of CUR's acquisition of the Tony M and Southwest deposits from EFR in 2021. Discussions were held with the EFR technical team and found them to have a strong understanding of the mineralization types and their processing characteristics, and how the analytical results are tied to the results. The SLR QP received the project data from EFR for independent review as a series of MS Excel spreadsheets and ArcGIS digital files. The SLR QP used the information provided to validate the Mineral Resource interpolation, tons, grade, and classification.
12.3.1 Audit of Drillhole Database
In preparing this Technical Report, the SLR QP revisited the work completed in 2012, conducted audits of historic records and a series of verification tests on the drillhole database to assure that the grade, thickness, elevation, and location of uranium mineralization used in preparing the current Mineral Resource estimate correspond to mineralization indicated by the original gamma logs of drillholes on the Project.
The SLR QP's tests included a search for unique, missing, and overlapping intervals, a total depth comparison, duplicate holes, property boundary limits, and verifying the reliability of the % eU3O8 grade conversion as determined by downhole gamma logging. No errors were encountered, and no significant issues were identified.
12.3.2 Audit of GT Contours
Based on its review of the grade and thickness of uranium mineralization indicated in the original gamma logs for the deposits, and comparisons with the computer-generated GT composites, the SLR QP is of the opinion that the original gamma log data and subsequent conversion to eU3O8 values are reliable for use in preparing a Mineral Resource estimate.
The SLR QP has carried out check estimates of the historical polygonal models using the GT drill intercept contour method. The contour method has been described by Agnerian and Roscoe (2002) and has been used for many decades for estimation of uranium resources, particularly in the western U.S.
Total GT values for each drillhole intercept within the Middle-Upper (MU), Middle-Lower (ML), and Lower (L) horizon sandstones (zones) were plotted on plans and contoured. Results indicate that although continuity of mineralization is variable, local continuity exists within each sandstone unit in both plan and section as elongate tabular or irregular shapes. Mineralization also occurs in various horizons within the sandstone domains. The contained pounds of U3O8 estimated by the contour method are in the same general range as the historical polygon estimate.
12.4 Limitations
There were no limitations in place restricting the ability to perform an independent verification of the Project drillhole database. There has been adequate drilling to develop the Mineral Resource models.
12.4.1 Conclusion
The SLR QP is of the opinion that the database contains valid data, the verification procedures for the Bullfrog property comply with industry standards and the data is suitable for the purposes of Mineral Resource estimation.
13.0 MINERAL PROCESSING AND METALLURGICAL TESTING
The White Mesa Mill is located six miles south of Blanding in southeastern Utah. Construction commenced in June 1979 and was completed in May 1980. Its construction by EFNI was based on the anticipated reopening of many small low-grade mines on the Colorado Plateau, and the mill was designed to treat 2,000 tons of ore per day. The mill has operated at rates in excess of the 2,000 tons per day design rate. The mill has been modified to treat higher grade ores from the Arizona Strip, as well as the common Colorado Plateau ores. Processing of Arizona Strip ores is typically at a lower rate of throughput than for the Colorado Plateau ores. The basic mill process is a sulfuric acid leach with solvent extraction recovery of uranium and vanadium.
Since 1980, the mill has operated intermittently in a series of campaigns to process ores from the Arizona Strip as well as from a few higher-grade mines of the Colorado Plateau. Overall, the mill has produced approximately 30 Mlb U3O8 and 33 Mlb V2O5.
13.1 Metallurgical Testing
The following information is extracted from the 2012 Technical Report (Roscoe et al., 2012) and 1983 Report on Bullfrog Laboratory Studies (Rajala, 1983) as reported by EFR. No additional metallurgical testing has been completed on the Project since EFR acquired the Project in 2012 and no data was available to SLR for review.
Drill core from the Bullfrog deposits was tested by Atlas in 1983 to determine metallurgical parameters (Rajala, 1983). Amenability results for a strong acid leach indicated overall recoveries of 99% U3O8 and 90% V2O5. Additional testing of a mild acid leach and an alkaline leach gave recoveries of 97% U3O8 and 40% V2O5 for both. Acid consumption for the strong acid leach was 350 pounds per ton.
Samples from each deposit were combined to give representative composites. Each composite consisted of 0.5 ft drill core intervals combined in such a manner as to give a composite head analysis exceeding 0.2% U3O8. The Southwest, Copper Bench, and Indian Bench composite samples contained, respectively, 104 core intervals from 16 drillholes core intervals, 90 core intervals from seven drillholes, and 45 core intervals from four drillholes. The results of the analyses for uranium, vanadium, and calcium carbonate are compared with the values calculated based on the weighted value of each of the individual core samples included in the composite. Results of the analysis are given in Table 13-1.
Table 13-1: Comparison of Composite Head Analyses with Calculated Head Grade Analyses
Energy Fuels Inc. - Bullfrog Project
In 1982, the Shootaring Canyon mill processed some 27,000 tons of mineralized material from the Tony M mine, but details were not available to SLR (formerly RPA).
From November 2007 to December 2008, a total of 162,384 tons at 0.131% eU3O8, containing 429,112 lb U3O8, were trucked to the White Mesa Mill at Blanding, Utah, for processing. Of this material, 90,025 tons at 0.165% eU3O8 (297,465 lb) were extracted by Denison from the Tony M mine and 72,359 tons at 0.091% eU3O8 (131,647 lb) came from stockpiled material mined by previous operators. Based on this, the recovery for the Tony M material was estimated to be 95%. As the Copper Bench and Indian Bench deposits are similar to the Tony M deposit, similar recoveries should be expected for the Project.
13.2 Opinion of Adequacy
The SLR QP supports the conclusions of the expected performance of the metallurgical processes based on historical test work.
14.0 MINERAL RESOURCE ESTIMATE
14.1 Summary
Mineral Resources have been classified in accordance with the definitions for Mineral Resources in S-K 1300, which are consistent with Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Resources and Mineral Reserves dated May 10, 2014 (CIM, 2014) definitions which are incorporated by reference in NI 43-101.
The SLR QP has reviewed and accepted the Mineral Resource estimate prepared by EFR based on GT contours values which are based on radiometric drillhole logs on the three principal mineralized domains. Mineral Resources have been estimated by EFR using ESRI's ArcGIS software Spline with Barriers tool routine. The Spline with Barriers tool applies a minimum curvature method, as implemented through a one-directional multigrid technique that moves from an initial coarse grid, initialized in this case to the average of the input data, through a series of finer grids until an approximation of a minimum curvature surface is produced at the desired row and column spacing.
Table 14-1 lists the Mineral Resources classified as Indicated and Inferred categories at a cut-off grade of 0.50%-ft GT (minimum 0.165% eU3O8 and minimum 3 ft mining thickness) for the Project. Total Indicated Resources are 1.5 million tons at an average grade of 0.29% eU3O8, containing 9.1 Mlb eU3O8. Additional Inferred Resources total 410,000 tons at an average grade of 0.25% eU3O8, containing 2.0 Mlb eU3O8.
Table 14-1: Attributable Mineral Resource Estimate - Effective Date December 31, 2021
Energy Fuels Inc. - Bullfrog Project
Classification |
Deposit |
Tonnage |
Grade |
Contained Metal |
Recovery |
EFR Basis |
Indicated |
Bullfrog |
1,560 |
0.29 |
9,100 |
95.0 |
100 |
Inferred |
Bullfrog |
410 |
0.25 |
2,010 |
95.0 |
100 |
Notes:
1. SEC S-K 1300 definitions were followed for all Mineral Resource categories. These definitions are also consistent with CIM (2014) definitions in NI 43-101.
2. Cut-off grade is a 0.5%-ft GT cut-off (minimum 0.165% eU3O8 over a minimum thickness of 3 ft).
3. Cut-off grade is calculated using a metal price of $65/lb U3O8.
4. No minimum mining width was used in determining Mineral Resources.
5. Mineral Resources based on a tonnage factor of 15.0 ft3/ton (Bulk density 0.0667 ton/ft3 or 2.13 t/m3).
6. Mineral Resources have not been demonstrated to be economically viable.
7. Total may not add due to rounding.
8. Mineral Resources are 100% attributable to EFR and are in situ.
The SLR QP is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could materially affect the Mineral Resource estimate.
Based on the similarity of the Bullfrog deposit to other past producing uranium deposits in the Colorado Plateau and the Henry Mountain Mining District, the proposed mining methods at Bullfrog will include a combination of long-hole stoping, and a random room and pillar operation with pillar extraction by a retreat system.
14.2 Resource Database
As of the effective date of this Technical Report, historical records of EFR predecessors indicate that approximately 1,810 drillholes have been completed on the Copper Bench and Indian Bench deposit. EFR has conducted no drilling on the Project. The EFR drillhole database for both deposits consist of Excel spreadsheets containing the collar locations, downhole survey (deviation) data, stratigraphy as interpreted from either drill core or the geophysical logs, and the % eU3O8 interval assay values derived from geophysical downhole gamma logs. Calculating equivalent uranium values from natural gamma logs is standard practice in the uranium industry. The Bullfrog database is comprised of 1,155 drillholes (Figure 14-1) totaling 1,101,113 ft of drilling containing 62,681 assays. Table 14-2 details the data associated with the Bullfrog deposit database. Most of the 655 missing holes are due to missing collar coordinates, limited radiometric logs, or incorrect eU3O8 conversion factors and are excluded from estimating Mineral Resources.
Table 14-2: Drilling Database for the Bullfrog Deposits
Energy Fuels Inc. - Bullfrog Project
Deposit |
Number of |
Number of DD |
Total Number |
Total Footage |
Number of |
Drillhole |
Drillhole |
Copper Bench |
954 |
36 |
990 |
926,649 |
56,867 |
100 ft |
100 ft |
Indian Bench |
161 |
4 |
165 |
174,464 |
5,814 |
200 ft |
200 ft |
Total |
1,115 |
40 |
1,155 |
1,101,113 |
62,681 |
|
|
Notes:
1. Drillhole spacing in some areas is irregular and more widely spaced where rugged terrain does not allow access.
Analysis indicates that the Indian Bench deposit is similar to the Copper Bench deposit, and it is a northwesterly continuation of the Copper Bench deposit. The Indian Bench mineralization occurs in the same stratigraphic interval of the Salt Wash Member as the Copper Bench mineralization. The depth below the surface of mineralization is nearly 1,100 ft in the Copper Bench-Indian Bench deposit. The base elevation of the deposit is approximately 4,500 ft ASL.
Figure 14-1: Copper Bench and Indian Bench Deposits Drillhole Location Map
14.3 Geological Interpretation
Since acquiring the Project in 2012, EFR has not completed any additional exploration work on the Project and work completed by EFR predecessors has been accepted and adopted by EFR. The geologic stratigraphy for the Bullfrog deposits were interpreted from either drill core or down hole geophysical logs. Tops and bottoms of the geologic units were input into the database and the eU3O8 assay values were assigned a geologic unit based on this data. Within the Bullfrog portion of the deposit the mineralization is primarily in the Middle part of the Lower Rim of the Salt Wash Member. That zone is subdivided into two primary units, the Middle-Upper (MU) and Middle-Lower (ML) units. A very small portion of the Bullfrog deposit is in the Lower part (L) of the Lower Rim of the Salt Wash Member, similar to the Tony M/Southwest mineralization to the south.
The SLR QP spot checked the interpretation based on composite files provided by EFR and accepts the interpretation as reasonable for this deposit and suitable for estimating Mineral Resources.
14.4 Treatment of High Grade Assays
14.4.1 Capping Levels
Where the assay distribution is positively skewed, or approaches log normal, erratic high grade assay values can have a disproportionate effect on the average grade of a deposit. One method of treating these outliers to reduce their influence on the average grade is to cut or cap them at a specific grade level.
The SLR QP is of the opinion that the influence of high-grade uranium assays must be reduced or controlled and uses several industry best practice methods to achieve this goal, including capping of high-grade values. In the absence of production data to calibrate the cutting level, inspection of the assay distribution including preparation of frequency histograms, probability plots, decile analyses, and capping curves can be used to estimate the cutting level.
Using these methodologies, no outlier probe assay values were identified in the MU, ML, or L zones, therefore, no capping was applied to the probe assays.
14.4.2 High Grade Restriction
No high-grade restrictions were applied to the Mineral Resource estimate as this is not applicable when using the GT contour methodology for resource estimation.
14.5 Compositing
Use of the GT contour method addresses high grade samples. To minimize the influence of single high-grade uranium intervals, EFR chose to composite into two-foot intervals. Compositing into a mineralized zone at a minimum of two feet limits the influence of a single high-grade sample. The GT contour method limits the influence as well by containing an outlier GT interval to a single small contour. The SLR QP is of the opinion that the compositing methods and lengths are appropriate for this style of mineralization and deposit type.
Statistics of drillhole intersection composites over two feet are shown Table 14-3. The average GT of composites for the MU and ML zones are similar, and higher than, that of the L zone.
Table 14-3: Composite Statistics for Individual Sand Units
Energy Fuels Inc. - Bullfrog Project
Description |
MU Sand Composites |
ML Sand Composites |
L Sand Composites |
||||||
% U3O8 |
Thick (ft) |
GT |
% U3O8 |
Thick (ft) |
GT |
% U3O8 |
Thick (ft) |
GT |
|
Count |
436 |
436 |
436 |
331 |
331 |
331 |
16 |
16 |
16 |
Minimum |
0.100 |
2.000 |
0.200 |
0.101 |
0.500 |
0.200 |
0.103 |
2.000 |
0.210 |
Lower Quartile |
0.152 |
2.000 |
0.340 |
0.157 |
2.000 |
0.360 |
0.143 |
2.000 |
0.288 |
Median |
0.201 |
2.000 |
0.520 |
0.216 |
2.000 |
0.590 |
0.189 |
2.000 |
0.400 |
Upper Quartile |
0.291 |
3.500 |
0.960 |
0.318 |
4.000 |
1.080 |
0.336 |
2.000 |
0.743 |
Maximum |
1.112 |
21.000 |
4.910 |
1.118 |
14.000 |
6.450 |
0.487 |
8.500 |
1.700 |
Average |
0.243 |
3.300 |
0.802 |
0.265 |
3.200 |
0.854 |
0.231 |
2.500 |
0.577 |
Std. Dev. |
0.156 |
2.800 |
0.731 |
0.167 |
2.200 |
0.785 |
0.116 |
1.600 |
0.427 |
Figure 14-2 presents a histogram of the composite GT values for the MU, ML, and L zones. As is demonstrated in Figure 14-2, the values are positively skewed, with many low values and few high values, as are the cumulative frequency (Figure 14-3) and uranium versus thickness scatter plot (Figure 14-4). As with any skewed distribution, care must be taken to prevent the highest values from having an undue influence on the average grade of the resource.
In most drillholes, there was only one composite for each of the MU, MU, and L zones. In some instances, there was more than one composite, in which case the composites were added together for grade estimation purposes.
Figure 14-2: Histogram GT Geometric Intervals for the MU, ML and L Zones
Figure 14-3: Cumulative Frequency of GT for the MU, ML, and L Zones
Figure 14-4: Scatter Plot Uranium vs. Thickness
14.6 Search Strategy and Grade Interpolation Parameters
Mineral Resources for the Bullfrog deposits were calculated using the GT contour method. The GT contour method is commonly used in the uranium industry and refers to the estimated grade multiplied by estimated thickness. In many uranium deposits, thin uranium mineralization can be mined due to those zones being higher grade. The GT method allows that information to be accurately calculated and displayed.
For the GT method, composite samples were flagged by each sand unit for each deposit. GT contours were modeled using this composite data for each of the three mineralized sand zones (MU, ML, and L) within the Bullfrog deposit. The modeling process resulted in the creation of grade and thickness grid files or rasters.
Mineral Resources have been estimated by EFR using ESRI's ArcGIS software Spline with Barriers tool routine. The Spline with Barriers tool applies a minimum curvature method, as implemented through a one-directional multigrid technique that moves from an initial coarse grid, initialized in this case to the average of the input data, through a series of finer grids until an approximation of a minimum curvature surface is produced at the desired row and column spacing.
The methodology employed by EFR was chosen to replicate the 2012 Mineral Resource estimate that used the GT contour method (Agnerian and Roscoe, 2001), while allowing for calculating resources at various GT cut-off grades. Each of the deposits was gridded into 25 ft by 25 ft cells and a spline interpolator was used to calculate a grade (% eU3O8) and thickness (feet) raster for each of the sands for the deposit. Figure 14-5 and Figure 14-6 show unconstrained grade and thickness rasters for the MU zone. Based on the grade raster, a 0.10% eU3O8 contour was generated for each of the sand units (Figure 14-7). The 0.10% eU3O8 constrained grade contours were used as a maximum extent to determine a reasonable prospect for economic extraction for each zone. Both the grade (Figure 14-8) and thickness (Figure 14-9) rasters for each of the sands were constrained to the 0.10% U3O8 contour. Those two rasters were then multiplied together to get a GT grid (Figure 14-10 and Figure 14-11).
The 0.10% eU3O8 contour was established as a reasonable outer boundary for mineralization to be considered a resource. The 0.10% eU3O8 contour was inspected and reviewed by the SLR QP and found that the ArcGIS spline methodology matched very closely to the geological and mineralized trends from the 2012 Mineral Resource estimate. In the SLR QP's opinion the use of spline methodology using ArcGIS is appropriate for this style of uranium mineralization and is adequate for the purposes of Mineral Resource estimation and disclosure.
Interpolated grade and thickness for each 25 ft by 25 ft grid node within the grade boundary defined by 0.10% eU3O8 were exported into a series of Excel spreadsheets to calculate GT on a per grid node bases for the MU, ML, and L zones. Table 14-4 shows example of calculation of GT values.
The plan areas of the MU, ML, and L zones resolved into numerous lenses of mineralization above 0.10% eU3O8 (Figure 14-12 and Figure 14-13). Only GT and thickness interpolated values inside the 0.10% eU3O8 "cookie cutter" boundaries were retained, and isolated areas over 0.10% eU3O8 defined by a single drillhole were removed.
The thickness times area products for each set of grid node were summed to give a volume for each of the MU, ML, and L zones. A tonnage factor of 15 ft3/ton was applied to calculate the total tonnage for each domain.
The GT by area products for each grid node were summed and divided by the tonnage factor of 15 ft3/ton for a total that is converted to pounds of contained metal (lb eU3O8) for each zone. The average grade of each node is obtained from converting the total contained pounds of metal (lb eU3O8) into tons of contained metal (ton eU3O8) divided by the total tonnage.
Table 14-4: GT Calculations
Energy Fuels Inc. - Bullfrog Project
Classification |
Zone |
GT Cut-off |
# Cells |
Cell Size |
Area |
Thickness |
Volume |
Tons |
Grade |
GT |
Contained Metal |
Indicated |
Lower Zone |
0.5 |
0 |
625 |
- |
- |
- |
- |
- |
- |
- |
|
Middle Lower Zone |
0.5 |
4,045 |
625 |
2,528,125 |
3.684 |
9,312,764 |
620,854 |
0.299 |
1.102 |
3,714,929 |
|
Middle Upper Zone |
0.5 |
5,739 |
625 |
3,586,875 |
3.922 |
14,067,142 |
937,814 |
0.289 |
1.133 |
5,419,669 |
Total Indicated |
|
0.5 |
- |
- |
6,115,000 |
3.82 |
23,379,907 |
1,558,668 |
0.293 |
1.120 |
9,134,599 |
|
|
|
|
|
|
|
|
|
|
|
|
Inferred |
Lower Zone |
0.5 |
117 |
625 |
73,125 |
2.943 |
215,215 |
14,348 |
0.268 |
0.790 |
77,009 |
|
Middle Lower Zone |
0.5 |
1,352 |
625 |
845,000 |
3.120 |
2,636,362 |
175,758 |
0.267 |
0.832 |
937,293 |
|
Middle Upper Zone |
0.5 |
1,381 |
625 |
863,125 |
3.788 |
3,269,740 |
217,984 |
0.228 |
0.864 |
994,454 |
Total Inferred |
|
0.5 |
|
|
1,781,250 |
3.44 |
6,121,317 |
408,090 |
0.246 |
0.846 |
2,008,756 |
Figure 14-5: Copper Bench and Indian Bench Deposits MU Sand Unconstrained Grade Map
Figure 14-6: Copper Bench and Indian Bench Deposits MU Sand Unconstrained Thickness Map
Figure 14-7: Copper Bench and Indian Bench Deposits MU, ML, and L Sand 0.1% eU3O8 Grade Map
Figure 14-8: Copper Bench and Indian Bench Deposits MU Sand Constrained Grade Map
Figure 14-9: Copper Bench and Indian Bench Deposits MU Sand Constrained Thickness Map
Figure 14-10: Copper Bench and Indian Bench Deposits MU Sand Unconstrained GT Map
Figure 14-11: Copper Bench and Indian Bench Deposits MU Sand Constrained GT Map
Figure 14-12: Copper Bench and Indian Bench Deposits MU, ML, and L Sand GT Map
Figure 14-13: Copper Bench and Indian Bench Deposits MU, ML, and L Sand Thickness Map
14.7 Bulk Density
There is no known density study for the Bullfrog property. Historic bulk density records across the Tony M property located to the south indicate tonnage factors varied from 14 ft3/ton to 17 ft3/ton. Per the 2006 Technical Report (Pool, 2006) a tonnage factor of 14.9 ft3/ton was used by Exxon and Atlas in estimating all mineral resources for the Bullfrog property, while a density of 14.7 ft3/ton was used for the Tony M property. Plateau used a bulk tonnage factor of 15.5 ft3/ton for the Tony M property mineral resource estimation, while EFNI used a density of 15.0 ft3 for the Bullfrog property. The maximum difference of 0.4 ft3/ton is approximately 2.0%, and the SLR QP considers the tonnage factor of 15 ft3/ton to be reliable and reasonable for the purposes of Mineral Resource estimation.
Tonnage factor can be derived from specific gravity (SG) with the following formula:
Tonnage factor = (SG * 62.427962)/2000
Where SG is represented by 2.13 g/cm3, which is typical for uranium ore sands in the Colorado Plateau region.
Although the SLR QP is of the opinion that there is a relatively low risk in assuming that density of mineralized zones is similar to that reported in mining operations south of the Project, additional density determinations, particularly in the mineralized zones, should be carried out to confirm and support future resource estimates.
14.8 Cut-off Grade
For the inclusion of the grid nodes in the Mineral Resource estimate, EFR used a breakeven grade of 0.165% U3O8 using a three feet minimum mining width which equates to a GT cut-off grade of 0.5%-ft
Assumptions used in the determination of a 0.50%-ft GT cut-off grade are presented in Table 14-5:
Total operating cost (mining, G&A, processing) of US$204.20 per ton
Process recovery of 95%
Table 14-5: Cut-off Grade Parameters
Energy Fuels Inc. - Bullfrog Project
Parameter |
Quantity |
Price in US$/lb U3O8 |
65.00 |
Process plant recovery |
95 |
Total Operating Costs per ton |
204.20 |
G&A cost per ton |
Included |
Break-Even Cut-off grade (% eU3O8) |
0.165 |
Minimum Mining Width (ft) |
3.0 |
Cut-off GT (%-ft) |
0.50 |
EFR established the operating costs and cut-off grade based on the following:
A $204.20/ton operating cost was derived by applying a 2.1% increase to the $200/ton operating cost used in the 2012 Technical Report. Mining costs were based on historical operating costs for the Tony M mine.
Internal recent operating costs at EFR's La Sal mine indicate a total operating cost of between $170/ton to $180/ton, with a cut-off grade of 0.15% U3O8 and a GT of 0.45%-ft at a metal price of $60/lb U3O8 and 96% recovery. The lower operating cost at La Sal may be explained by the fact that La Sal is a mature mine with significant sunk costs, including mine development to the deposit. As La Sal utilizes the room and pillar mining method, its production rate may be lower than that expected of an operation for Bullfrog.
Following discussions with EFR La Sal mine personnel, the narrowest mining thickness recommended was two feet in the mineralized zone with six inches of overbreak (at assumed 0% grade) on both the hanging wall and footwall to be used in the GT calculation, equating to three feet.
A recovery of 96% has been used for the White Mesa Mill recovery from most EFR properties; as such, EFR is of the opinion that rounding down to 95% is a reasonable and conservative estimate.
The SLR QP reviewed the operating costs and cut-off grade reported by EFR and is of the opinion they are reasonable for disclosing Mineral Resources.
14.9 Classification
Classification of Mineral Resources as defined in SEC Regulation S-K subpart 229.1300 were followed for classification of Mineral Resources. The Canadian Institute of Mining, Metallurgy and Petroleum definition Standards for Mineral Resources and Mineral Reserves (CIM 2014) are consistent with these definitions.
A Mineral Resource is defined as a concentration or occurrence of material of economic interest in or on the Earth's crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, considering relevant factors such as cut-off grade, likely mining dimensions, location, or continuity, that with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled.
Based on this definition of Mineral Resources, the Mineral Resources estimated in this Technical Report have been classified according to the definitions below based on geology, grade continuity, and drillhole spacing.
Measured Mineral Resource: Is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling. The level of geological certainty associated with a measured mineral resource is sufficient to allow a qualified person to apply modifying factors, as defined in this section, in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit. Because a measured mineral resource has a higher level of confidence than the level of confidence of either an indicated mineral resource or an inferred mineral resource, a measured mineral resource may be converted to a proven mineral reserve or to a probable mineral reserve.
Indicated Mineral Resource: Is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling. The level of geological certainty associated with an indicated mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Because an indicated mineral resource has a lower level of confidence than the level of confidence of a measured mineral resource, an indicated mineral resource may only be converted to a probable mineral reserve.
Inferred Mineral Resource: Is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of geological uncertainty associated with an inferred mineral resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Because an inferred mineral resource has the lowest level of geological confidence of all mineral resources, which prevents the application of the modifying factors in a manner useful for evaluation of economic viability, an inferred mineral resource may not be considered when assessing the economic viability of a mining project and may not be converted to a mineral reserve.
The SLR QP has considered the following factors that can affect the uncertainty associated with the class of Mineral Resources:
All drilling used for the mineral resource calculation at Bullfrog is surface exploration drilling.
Within the heart of the deposit drilling was conducted generally on 100 ft spacing along fence lines typically spaced between 100 ft and 175 ft.
Data verification and validation work confirm drill hole sample databases are reliable.
No significant biases were observed in the QA/QC analysis results.
The GT contour method is commonly used in the uranium industry and refers to the estimated grade multiplied by estimated thickness. In many uranium deposits, thin uranium mineralization can be mined due to those zones being higher grade. The GT method allows that information to be accurately calculated and displayed.
Mineralization is correlated within laterally continuous sands at Bullfrog. All mineralization at Bullfrog is within the Lower Rim of the Salt Wash and is subdivided into the three categories below:
Lower Rim -> Middle Lower Unit -> Upper Horizon (MU)
Lower Rim -> Middle Lower Unit -> Lower Horizon (ML)
Lower Rim -> Lower Unit -> Upper Horizon (L)
Mineral Resources for the Project were classified as either Indicated or Inferred Mineral Resources (Table 14-7) as follows:
14.9.1 Indicated Resource
Indicated Mineral Resources are defined as areas with grade continuity indicated by two or more drillholes that meet the minimum cut-off criteria (0.1%-ft GT) which can reasonably be projected outward and between the drillholes that fit the minimum criteria. The Indicated resource boundary is projected halfway to a barren drillhole and between one-half (½) and three-quarters (¾) the distance between a mineralized drillhole meeting cut-off criteria and mineralized holes not meeting cut-off criteria. In areas not constrained by drilling, the Indicated resource is projected approximately between 50 ft to 100 ft outward from the mineralized drillhole.
14.9.2 Inferred Resource
Inferred Mineral Resources are defined as an area with at least one drillhole that meets the cut-off criteria but does not have bounding drillholes nearby to indicate or constrain grade continuity. Inferred Mineral Resource also include the area that is projected within the constrained areas but outside of the Indicated Mineral Resource criteria. All mineral resources in the L-Zone are defined as Inferred Mineral Resources due to poor mineralized continuity.
Figure 14-14 presents the classifications at the Project.
Figure 14-14: Copper Bench and Indian Bench Deposits MU, ML, and L Sand Classification Map
In the SLR QP's opinion the classification of Mineral Resources is reasonable and appropriate for disclosure.
14.10 Block Model Validation
The EFR 2020 Mineral Resource estimate was audited by the SLR QP and accepted as a current Mineral Resource estimate for EFR. The SLR QP performed the following checks in the course of its audit:
Reviewed a number of drillhole intersection calculations.
Reviewed the geological interpretation and correlation of mineralized intervals.
Compared elevations of adjacent drillhole intersections and groups of intersections as plotted on plans.
Compared both the average grade and elevations for several drillhole intercepts on original gamma logs with intercepts used to estimate resources.
Reviewed the collar coordinates of several drill logs and compared them to locations on the drillholes on the resource base map.
Reviewed the ArcGIS methodology used in resource estimates.
Reviewed the conversion grid node values to tons, grade, and contained eU3O8.
Reviewed the classification of Mineral Resources.
Reviewed the reported cut-off grade based on the long-term uranium price for Mineral Resource reporting of US$65/lb U3O8.
14.11 Grade Tonnage Sensitivity
Table 14-6 and Figure 14-15 present the sensitivity of the Bullfrog Mineral Resource model to various cut-off grades.
Table 14-6: Grade versus Tonnage Curve
Energy Fuels Inc. - Bullfrog Project
Price |
Cut-Off Grade |
Cut-Off GT |
Tonnage |
Grade |
Contained Metal |
$80 |
0.13 |
0.40 |
2,388,292 |
0.261 |
12,486,286 |
$75 |
0.14 |
0.43 |
2,258,101 |
0.268 |
12,087,855 |
$70 |
0.15 |
0.46 |
2,125,206 |
0.274 |
11,664,378 |
$65 |
0.17 |
0.50 |
1,966,758 |
0.283 |
11,120,326 |
$60 |
0.18 |
0.54 |
1,831,172 |
0.290 |
10,620,772 |
$55 |
0.20 |
0.59 |
1,675,224 |
0.299 |
10,016,549 |
$50 |
0.22 |
0.65 |
1,501,648 |
0.310 |
9,300,655 |
$45 |
0.24 |
0.72 |
1,334,231 |
0.321 |
8,558,604 |
$40 |
0.27 |
0.81 |
1,158,454 |
0.333 |
7,726,193 |
$35 |
0.31 |
0.92 |
977,473 |
0.348 |
6,806,878 |
$30 |
0.36 |
1.08 |
788,741 |
0.366 |
5,766,014 |
$25 |
0.43 |
1.29 |
581,740 |
0.389 |
4,530,670 |
Figure 14-15: Mineral Resource Grade versus Tons at Various Cut-Off Grades
14.12 Mineral Resource Reporting
The Bullfrog resource estimate is summarized by area at a GT cut-off grade of 0.50%-ft in Table 14-7. In the SLR QP's opinion, the assumptions, parameters, and methodology used for the Bullfrog Mineral Resource estimate are appropriate for the style of mineralization and proposed mining methods. The effective date of the Mineral Resource estimate is December 31, 2021.
The SLR QP is of the opinion that with consideration of the recommendations summarized in Section 1 and Section 23, any issues relating to all relevant technical and economic factors likely to influence the prospect of economic extraction can be resolved with further work.
The SLR QP is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could materially affect the Mineral Resource estimate.
Table 14-7: Attributable Mineral Resource Estimate - Effective Date December 31, 2021
Energy Fuels Inc. - Bullfrog Project
Classification |
Deposit |
Tonnage |
Grade |
Contained Metal |
EFR Basis (%) |
% Recovery |
Indicated |
Bullfrog |
1,560 |
0.29 |
9,100 |
100 |
95.0 |
Inferred |
Bullfrog |
410 |
0.25 |
2,010 |
100 |
95.0 |
Notes:
1. SEC S-K 1300 definitions were followed for all Mineral Resource categories. These definitions are also consistent with CIM (2014) definitions in NI 43-101.
2. Cut-off grade is a 0.5%-ft GT cut-off (minimum 0.165% eU3O8 over a minimum thickness of 3 ft).
3. Cut-off grade is calculated using a metal price of $65/lb U3O8.
4. No minimum mining width was used in determining Mineral Resources.
5. Mineral Resources based on a tonnage factory of 15.0 ft3/ton (Bulk density 0.0667 ton/ft3 or 2.13 t/m3).
6. Mineral Resources have not been demonstrated to be economically viable.
7. Total may not add due to rounding.
8. Mineral Resources are 100% attributable to EFR and are in situ.
15.0 MINERAL RESERVE ESTIMATE
There are no current Mineral Reserves at the Project.
16.0 MINING METHODS
This section is not applicable.
17.0 RECOVERY METHODS
This section is not applicable.
18.0 PROJECT INFRASTRUCTURE
This section is not applicable.
19.0 MARKET STUDIES AND CONTRACTS
This section is not applicable.
20.0 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT
This section is not applicable.
21.0 CAPITAL AND OPERATING COSTS
This section is not applicable.
22.0 ECONOMIC ANALYSIS
This section is not applicable.
23.0 ADJACENT PROPERTIES
23.1 Tony M Property
Exploration drilling in the Shootaring Canyon area was initiated by Plateau during the mid-1970s in the vicinity of small mine workings and outcropping uranium mineralization east of the canyon. In February 1977, drilling commenced on the former Tony M property and adjacent areas, with Plateau reportedly drilling more than 2,000 rotary drillholes totaling approximately 1,000,000 ft. Over 1,200 holes were drilled on the former Tony M property. Following the discovery of the Tony M deposit in 1977, Plateau developed the former Tony M property from September 1977 to May 1984, at which time mining activities were suspended. By January 31, 1983, over 18 mi of underground workings were developed at the Tony M mine, and a total of approximately 237,000 tons of mineralized material was extracted with an average grade of 0.121% U3O8 containing approximately 573,500 lb U3O8 (Roscoe et al., 2012)
The SLR QP notes that historically the Bullfrog property consisted of the Southwest, Copper Bench, and Indian Bench deposits. Exxon conducted reconnaissance in the Bullfrog property area in 1974 and 1975, staking its first claims in 1975 and 1976. A first phase drilling program in 1977 resulted in the discovery of what became the Southwest deposit. Additional claims were subsequently staked, and drilling was continued, first by Exxon's Exploration Group, and then by its Pre-Development Group. Several uranium and vanadium zones were discovered in the Southwest and Copper Bench areas, and mineralization exhibiting potential economic grade was also discovered in the Indian Bench area. Over the years, the properties changed ownership several times until 2012 when EFR acquired all the properties along with Tony M mine. In October of 2021, Consolidated Uranium Inc. acquired the Tony M mine and Southwest deposits subsequently renaming to the Tony M property.
Uranium mineralization for the Tony M property occurs over three stratigraphic zones of the lowermost 35 ft to 62 ft of the Salt Wash Member sandstone of the Jurassic age Morrison Formation.
23.2 Frank M Deposit
The Frank M deposit was discovered by Plateau during drilling in 1977. The Frank M deposit is located in Sections 2 and 3, T35S, R11E. It is located 0.5 miles southeasterly and a continuation of the Copper Bench mineralization of the Bullfrog deposit.
The host for the Frank M uranium deposit is the fluvial sandstone of the Salt Wash Member of the Jurassic Morrison Formation. The deposit is approximately 7,000 ft long and is commonly between 1,500 ft and 2,000 ft wide. The mineralized zone is located at a depth of 200 ft below ground surface in the east and over 500 ft below ground surface to the west. The average drilling depth in the area is approximately 400 ft. Nearly all of the deposit occurs above the static water table, which only intersects the mineralized horizon near the northwesterly limit of the Project.
On behalf of Plateau, in 1981, Geostat Inc. estimated the resource for the Frank M deposit using geostatistical methods (Plateau, 1981).
Anfield Energy Inc. owns the Frank M property as of the date of this Technical Report.
23.3 Lucky Strike 10 Deposit
The Lucky Strike 10 deposit is located on the southeast rim of Shootaring Canyon about 3.0 mi south of the southern extension of the Copper Bench deposit. It is a southeasterly extension of the Tony M mineralized trend and is located above the water table (Gupta, 1983).
The SLR QP has not been able to verify the information on the adjacent properties and the information is not necessarily indicative of the mineralization on the Project.
24.0 OTHER RELEVANT DATA AND INFORMATION
No additional information or explanation is necessary to make this Technical Report understandable and not misleading.
25.0 INTERPRETATION AND CONCLUSIONS
The SLR QP offers the following interpretations and conclusions on the Project:
The Henry Mountains Mining District has been the site of considerable past mining and exploration, including the drilling and logging of approximately 3,400 rotary holes and 106 core holes, of which 1,115 rotary and 40 core holes were used to prepare the current Mineral Resource estimate for the Project. In the opinion of the SLR QP, the drillhole databases for the Copper Bench-Indian Bench deposits are appropriate and acceptable for Mineral Resource estimation.
EFR completed a Mineral Resource estimate for the Bullfrog (Copper Bench and Indian Bench) deposit in November 2020. Mineral Resources for both deposits were calculated using the industry standard GT-contour method. No mining has taken place on the Project.
The effective date of the Mineral Resource estimate is December 31, 2021. Estimated block model uranium grades are based on radiometric probe grades.
Mineral Resources are based on a $65/lb uranium price at a uranium GT cut-off grade of 0.50%-ft.
Indicated Resources are 1.5 million tons at an average grade of 0.29% eU3O8 containing 9.1 Mlb eU3O8. Additional Inferred Resources total 410,000 tons at an average grade of 0.25% eU3O8 containing 2.0 Mlb eU3O8.
The SLR QP considers the estimation procedures employed at Bullfrog, including compositing and interpolation to be reasonable and in line with industry standard practice.
The SLR QP finds the classification criteria to be reasonable.
The SLR QP considers that the Mineral Resources estimate completed on the Project conforms to the SEC S-K 1300 and NI 43-101 definitions for reporting mineral resources on mining properties.
In the SLR QP's opinion, the assumptions, parameters, and methodology used for the Bullfrog Mineral Resource estimate is appropriate for the style of mineralization and underground mining methods.
The SLR QP supports the conclusions of the expected performance of the metallurgical processes based on historical test work that recovery will be around 95%, similar to that achieved from ore mined at the nearby Tony M Mine.
The SLR QP is not aware of any environmental, permitting, legal, title, taxation, socioeconomic, marketing, political, or other relevant factors that could materially affect the current resource estimate.
26.0 RECOMMENDATIONS
The SLR QP makes the following recommendations regarding advancement of the Project. The two-phase programs are interconnected and progressing to Phase 2 is contingent upon completion of the Phase 1 program:
26.1 Phase 1: Exploration/Development Drilling Program
1. Conduct a 20 to 30 drillhole exploration/development drilling program to: 1) validate historic equilibrium analysis, and 2) advance the Bullfrog property to a Pre-Feasibility Level. Average depth per hole is projected to be approximately 930 ft (Table 26-1).
2. Utilize Prompt Fission Neutron (PFN) drillhole geophysical logging as an alternative to collecting core to save costs on equilibrium analysis. PFN logging has proven to be a reliable methodology for equilibrium analysis and has a strong performance record on similar uranium deposits in the USA.
The SLR QP estimates the cost of the Phase 1 work will range from US$650,000 to US$700,000 (estimated costs per drill foot is US$25, which includes the equilibrium analysis costs using the PFN tool).
26.2 Phase 2: Pre-Feasibility Study and Updated Resource Estimate
1. Following completion of the Phase 1 confirmation drilling program, revisit and update Mineral Resource estimates for the Project, using a similar approach to the GT contour methodology and/or block modeling approach, with updated processing and operating costs and recoveries.
2. Complete a Prefeasibility Study (PFS) of the Project based on an updated Mineral Resource estimate.
The SLR QP estimates the cost of this work to be US$60,000 for the updated Mineral Resource estimate and approximately US$550,000 for the PFS (including engineering studies) for a total of approximately US$610,000 for Phase 2 (Table 26-1).
Table 26-1: Phase 1 and 2 Estimated Budget
Energy Fuels Inc. - Bullfrog Project
Item |
Cost |
Phase 1: |
|
Exploration/Development Drilling (30 holes) |
$697,500 |
|
|
Phase 2: |
|
Update Resource Based on Drilling |
$60,000 |
Mine Plan |
$100,000 |
Surface Engineering (Infrastructure) |
$150,000 |
Haul Road Study |
$50,000 |
Completion of Pre-Feasibility Study |
$250,000 |
Phase 2 Total |
$610,000 |
27.0 REFERENCES
Agnerian, H., and Roscoe, W.E., 2003, The Contour Method of Estimating Mineral Resources, Roscoe Pestle Associates, Inc. paper, 9 pp.
Atlas Minerals Corp., 1991, Bullfrog Project - (Sales Prospectus), Copy #13, March.
Bhatt, B.J., 1983, Final report on the magnitude and variability of uranium disequilibrium based on the mined ore buggy sampling data, Tony M Mine, Shootaring Canyon, Garfield County, Utah, Plateau Resources Ltd., Grand Junction, Colorado.
Canadian Institute of Mining, Metallurgy and Petroleum (CIM), 2014, CIM Definition Standards for Mineral Resources and Mineral Reserves, adopted by the CIM Council on May 10, 2014.
Carpenter, 1980, Elemental, isotopic and mineralogic distributions within a tabular-type sandstone uranium-vanadium deposit, Henry Mountains mineral belt, Garfield County, Utah, Unpub. M. Sc. thesis, Colorado School of Mines, Golden, Colorado, 156 pp.
Consumers Power Company, 1982, Annual Report.
Doelling, H.H. and Willis, G. C., 2018, Interim Geologic Map of the Escalante 30' x 60' Quadrangle, Garfield and Kane Counties, Utah, Utah Geological Survey Open-File Report 690DM, 17 pp.
Doelling, H.H., 1967, Uranium deposits of Garfield County, Utah, Utah Geological Survey, Special Studies 22.
Electronic Code of Federal Regulations, Title 17: Commodity and Securities Exchanges, Chapter II, Part 229 Standard Instructions for Filing Forms Under Securities Act of 1933, Securities Exchange Act of 1934 and Energy Policy and Conservation Act of 1975- Regulation S-K. (https://www.ecfr.gov/cgi-bin/text-idx?amp;node=17:3.0.1.1.11&rgn=div5#se17.3.229_11303)
Energy Fuels Nuclear Inc., 1991, Revised geologic review and economic analysis of Atlas Minerals' Bullfrog Property, Garfield County, Utah, Memo to G.W. Grandey et al., from R.N. Schafer & D.M. Pillmore, March 27.
Energy Fuels Nuclear Inc., 1993a, Bullfrog mine ore reserve access alternatives and production feasibility analysis (Revised 4/15/93), Memo to M.D. Vincelette from R.B. Smith & J.F. Stubblefield, April 15.
Energy Fuels Nuclear Inc., 1993b, Bullfrog Uranium Resources, memo to I.W. Mathisen, Jr., from R.W. Schafer, September 24.
Energy Fuels Nuclear Inc., 1994, Bullfrog Deposit, memo to T.C. Pool from J.T. Cottrell, March 10.
Fischer, R.P., 1968, The uranium and vanadium deposits of the Colorado Plateau Region, in Ore deposits of the United States 1933-1967, Ridge, J.D., AIME, pp.735-746.
Gupta, U.K. et al., 1983, Five year plan for the Shootaring Canyon Processing Facility 1984 through 1988, Vol. 1, Summary and Text, Plateau Resources Ltd., September.
Hunt, C.B., Averitt, P., and Miller, R.L., 1953, Geology and geography of the Henry Mountains Region, Utah, U.S. Geological Survey Professional Paper 228, Washington, DC, 224 pp.
LaPoint, D.J., 1978, Sampling Procedures for Chemical Analysis of Core, Plateau Resources Ltd., July 13, 1978.
Milne & Associates, 1990, Optimization study of the Southwest, Copper Bench, and Indian Bench Deposits, Garfield County, Utah, report prepared for Atlas Precious Metals, Sparks, Nevada, signed by Steve Milne, Registered Professional Engineer, AZ, December 6.
Mine Reserves Associates, Inc., 1990, Mineral Inventory and Mineable Reserves for the Indian Bench Deposit, Garfield County, Utah, Report prepared for Atlas Minerals Corp., Lakewood, Colorado, December 3.
Northrup, H.R. and Goldhaber, M.T., (Editors), 1990, Genesis of the Tabular-Type Vanadium-Uranium deposits of the Henry Mountains Basin, Utah, Economic Geology, v. 85, No. 2, March-April, pp. 215-269.
Northrup, H.R., 1982, Origin of the tabular-type vanadium-uranium deposits in the Henry Structural Basin, Utah, Ph. D. Thesis, T-2614, Colorado School of Mines, Golden, Colorado, 340 pp.
Nuclear Assurance Corp., 1989, Geologic analysis of uranium and vanadium ore reserves in the Tony M orebody, Garfield County, Utah, Report No. NAC-C-89023, prepared for Nuclear Fuel Services, Inc., Norcross, Georgia, August 31, filed of record in the Garfield County Courthouse, September 19, 1989 as a Subscribed and Sworn Affidavit of Work performed by Douglas Underhill.
Parsons Behle & Latimer, 2022, Mining Claim Status Report - Bullfrog Mine, Garfield County, Utah, letter report to Energy Fuels Resources (USA) Inc., February 7, 2022, 15 pp.
Peterson, F., 1977, Uranium deposits related to depositional environments in the Morrison Formation (Upper Jurassic), Henry Mountains mineral belt of southern Utah: U.S. Geol. Survey Circ. 753, pp. 45-47.
Peterson, F., 1978, Measured sections of the lower member and Salt Wash Member of the Morrison Formation (Upper Jurassic) in the Henry Mountains mineral belt of southern Utah: U.S. Geol. Survey Open-File Rept. 78-1094, 95 pp.
Peterson, F., 1980, Sedimentology as a strategy for uranium exploration, in Turner- Peterson, C.E., ed., Uranium in sedimentary rocks: application of the facies concept to exploration: Denver, Soc. Econ. Paleontologists Mineralogists, Rock Mountain Sec., pp. 65-126.
Pincock, Allen & Holt, Inc., 1984a, Minable ore reserve inventory for the Southwest and Copper Bench Deposits, Garfield County, Utah, Tucson, Arizona.
Pincock, Allen & Holt, Inc., 1984b, Mineral inventory for the Tony M deposit, Garfield County, Utah, Tucson, Arizona, November.
Pincock, Allen & Holt, Inc., 1985, Mineable reserve for the Tony M deposit, Garfield County, Utah, PAH Project No. 363.02, Tucson, AZ, signed by Steve Milne, Registered Professional Engineer, Arizona, December 6.
Plateau Resources Ltd., 1981, Summary of the Shootaring Canyon Project, Garfield County, Utah, revised November 1981, Frank M Mine.
Plateau Resources Ltd., 1982, Tony M Kriged Ore Reserve Estimate, Map 7-OR-5, August 23.
Plateau Resources Ltd., 1983, Annual Report to Shareholders, January 26.
Pool, T.C., 2006, Technical Report on the Henry Mountains Complex Uranium Project, Utah, U.S.A., NI 43-101 Technical Report by Scott Wilson Roscoe Postle Associates Inc. for International Uranium Corp., September 9, 2006.
Rajala, J., 1983, Report on Bullfrog Laboratory Studies (conducted by Atlas Minerals), Inter-Office Memo to J.V. Atwood, Atlas Minerals, November 7.
Robinson, J.W. & P.J. McCabe, 1997, Sandstone-Body and Shale-Body Dimensions in a Braided Fluvial System: Salt Wash Sandstone Member (Morrison Formation), Garfield County, Utah, AAPG, v. 81, No. 8 (August 1997), pp. 1267-1291.
Roscoe, W.E and Underhill, D.H., 2009, Technical Report on the Tony M-Southwest Deposit, Henry Mountains Complex Uranium Project, Utah, U.S.A., NI 43-101 Technical Report by Scott Wilson Roscoe Postle Associates Inc. for Denison Mines Corp., March 19, 2009.
Roscoe, W.E., Underhill, D.H, and Pool, T.C., 2012, Technical Report on the Henry Mountains Complex Uranium Property, Utah, U.S.A., NI 43-101 Technical Report by Roscoe Postle Associates Inc. for Energy Fuels Inc., June 27, 2012.
Schafer, R.N., 1991, Bullfrog Evaluation, EFR Memo to I.W. Mathisen, Jr., March 26.
Scott, J.H., 1962: GAMLOG A Computer Program for Interpreting Gamma-Ray Logs; United States Atomic Energy Commission, Grand Junction Office, Production Evaluation Division, Ore Reserves Branch, TM-179, September 1962.
Thamm, J.K., Kovschak, A.A. Jr., and Adams, S.S., 1981, Geology and recognition criteria for sandstone uranium deposits of the Salt Wash type, Colorado Plateau province, US. Dept. Energy Final Rept., GJBX-6(81), Grand Junction, CO, 111 pp.
Underhill, D.H., 1984, Summary description of the Shootaring Canyon orebodies of Atlas Minerals Company, Plateau Resources Ltd., Grand Junction, Colorado.
Underhill, D.H., et al., 1983, Geology Department 5 Year Plan Support Documents, October 7, Plateau Resources Ltd.
US Securities and Exchange Commission, 2018: Regulation S-K, Subpart 229.1300, Item 1300 Disclosure by Registrants Engaged in Mining Operations, and Item 601 (b)(96) Technical Report Summary.
Wanty, R.B., 1986, Geochemistry of vanadium in an epigenetic sandstone-hosted vanadium-uranium deposit, Henry basin, Utah, Unpub Ph. D. Thesis, Colorado School of Mines, Golden, Colorado, 198 pp.
Wanty, R.B., Goldhaber, M.R., and Northrup, H.R., 1990, Geochemistry of Vanadium in an Epigenetic, Sandstone-hosted Vanadium-Uranium deposit, Henry Basin, Utah, Economic Geology, v. 85, No. 2, March-April, pp. 270-284.
28.0 DATE AND SIGNATURE PAGE
This report titled "Technical Report on the Bullfrog Project, Garfield County, Utah, USA" with an effective date of December 31, 2021, was prepared and signed by the following author:
(Signed & Sealed) Mark B. Mathisen | |
Dated at Lakewood, CO | Mark B. Mathisen, C.P.G. |
February 22, 2022 | Principal Geologist |
29.0 CERTIFICATE OF QUALIFIED PERSON
29.1 Mark B. Mathisen
I, Mark B. Mathisen, C.P.G., as an author of this report entitled "Technical Report on the Bullfrog Project, Garfield County, Utah, USA" with an effective date of December 31, 2021 (the Technical Report), prepared for Energy Fuels, Inc., do hereby certify that:
1. I am Principal Geologist with SLR International Corporation, of Suite 100, 1658 Cole Boulevard, Lakewood, CO, USA 80401.
2. I am a graduate of Colorado School of Mines in 1984 with a B.Sc. degree in Geophysical Engineering.
3. I am a Registered Professional Geologist in the State of Wyoming (No. PG-2821), a Certified Professional Geologist with the American Institute of Professional Geologists (No. CPG-11648), and a Registered Member of SME (RM #04156896). I have worked as a geologist for a total of 23 years since my graduation. My relevant experience for the purpose of the Technical Report is:
Mineral Resource estimation and preparation of NI 43-101 Technical Reports.
Director, Project Resources, with Denison Mines Corp., responsible for resource evaluation and reporting for uranium projects in the USA, Canada, Africa, and Mongolia.
Project Geologist with Energy Fuels Nuclear, Inc., responsible for planning and direction of field activities and project development for an in situ leach uranium project in the USA. Cost analysis software development.
Design and direction of geophysical programs for US and international base metal and gold exploration joint venture programs.
4. I have read the definition of "qualified person" set out in National Instrument 43-101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101.
5. I visited the Bullfrog Project (the Project) on July 7, 2021.
6. I am responsible for all sections and overall preparation of the Technical Report.
7. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43-101.
8. I have been involved previously with the Project from 2006 to 2012 when serving as Director of Project Resources with Denison Mines.
9. I have read NI 43-101, and the Technical Report has been prepared in compliance with NI 43-101 and Form 43-101F1.
10. At the effective date of the Technical Report, to the best of my knowledge, information, and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
Dated this 22nd day of February 2022
(Signed & Sealed) Mark B. Mathisen
Mark B. Mathisen, C.P.G.
Technical Report on the La Sal Project, San Juan County, Utah, USA
SLR Project No: 138.02544.00003
Prepared by
SLR International Corporation
1658 Cole Blvd, Suite 100
Lakewood, CO 80401
for
Energy Fuels Inc.
255 Union Blvd., Suite 600
Lakewood, Colorado 80228
USA
Effective Date - December 31, 2021
Signature Date - February 22, 2022
Qualified Person
Mark B. Mathisen, C.P.G.
FINAL
Distribution: 1 copy - Energy Fuels Inc.
1 copy - SLR International Corporation
CONTENTS
1.0 SUMMARY | 1-1 |
1.1 Executive Summary | 1-1 |
1.2 Technical Summary | 1-4 |
2.0 INTRODUCTION | 2-1 |
2.1 Sources of Information | 2-1 |
2.2 List of Abbreviations | 2-3 |
3.0 RELIANCE ON OTHER EXPERTS | 3-1 |
3.1 Reliance on Information Provided by the Registrant | 3-1 |
4.0 PROPERTY DESCRIPTION AND LOCATION | 4-1 |
4.1 Property Description and Location | 4-1 |
4.2 Land Tenure | 4-1 |
4.3 Permits | 4-18 |
4.4 Royalties | 4-19 |
5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY | 5-1 |
5.1 Accessibility | 5-1 |
5.2 Vegetation | 5-1 |
5.3 Climate | 5-1 |
5.4 Local Resources | 5-2 |
5.5 Infrastructure | 5-2 |
5.6 Physiography | 5-2 |
6.0 HISTORY | 6-1 |
6.1 Prior Ownership | 6-1 |
6.2 Exploration and Development History | 6-2 |
6.3 Past Production | 6-3 |
7.0 GEOLOGICAL SETTING AND MINERALIZATION | 7-1 |
7.1 Regional Geology | 7-1 |
7.2 Local Geology | 7-4 |
7.3 Mineralization | 7-12 |
8.0 DEPOSIT TYPES | 8-1 |
9.0 EXPLORATION | 9-1 |
10.0 DRILLING | 10-1 |
10.1 Surface Drilling | 10-1 |
10.2 Underground Drilling | 10-1 |
11.0 SAMPLE PREPARATION, ANALYSES, AND SECURITY | 11-1 |
11.1 Sample Preparation and Analysis | 11-1 |
11.2 Sample Security | 11-3 |
11.3 Quality Assurance and Quality Control | 11-3 |
11.4 Conclusions | 11-6 |
12.0 DATA VERIFICATION | 12-1 |
12.1 SLR Data Verification (2021) | 12-1 |
12.2 Limitations | 12-2 |
13.0 MINERAL PROCESSING AND METALLURGICAL TESTING | 13-1 |
13.1 Metallurgical Testing | 13-1 |
13.2 Opinion of Adequacy | 13-1 |
14.0 MINERAL RESOURCE ESTIMATE | 14-1 |
14.1 Summary | 14-1 |
14.2 Resource Database | 14-2 |
14.3 Geological Interpretation | 14-4 |
14.4 Resource Assays | 14-5 |
14.5 Treatment of High Grade Assays | 14-5 |
14.6 Compositing | 14-9 |
14.7 Trend Analysis | 14-10 |
14.8 Search Strategy and Grade Interpolation Parameters | 14-10 |
14.9 Bulk Density | 14-21 |
14.10 Block Models | 14-21 |
14.11 Cut-off Grade | 14-23 |
14.12 Classification | 14-24 |
14.13 Block Model Validation | 14-25 |
14.14 Grade Tonnage Sensitivity | 14-28 |
14.15 Mineral Resource Reporting | 14-29 |
15.0 MINERAL RESERVE ESTIMATE | 15-1 |
16.0 MINING METHODS | 16-1 |
17.0 RECOVERY METHODS | 17-1 |
18.0 PROJECT INFRASTRUCTURE | 18-1 |
19.0 MARKET STUDIES AND CONTRACTS | 19-1 |
20.0 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT | 20-1 |
21.0 CAPITAL AND OPERATING COSTS | 21-1 |
22.0 ECONOMIC ANALYSIS | 22-1 |
23.0 ADJACENT PROPERTIES | 23-1 |
24.0 OTHER RELEVANT DATA AND INFORMATION | 24-1 |
25.0 INTERPRETATION AND CONCLUSIONS | 25-1 |
26.0 RECOMMENDATIONS | 26-1 |
26.1 Phase 1: Exploration/Development Drilling Program | 26-1 |
26.2 Phase 2: Pre-Feasibility Study and Updated Resource Estimate | 26-1 |
27.0 REFERENCES | 27-1 |
28.0 DATE AND SIGNATURE PAGE | 28-1 |
29.0 CERTIFICATE OF QUALIFIED PERSON | 29-1 |
29.1 Mark B. Mathisen | 29-1 |
TABLES
FIGURES
Figure 4-1: Location Map | 4-2 |
Figure 4-2: Land Tenure Map | 4-3 |
Figure 7-1: Uranium Deposits and Major Structures of the Colorado Plateau | 7-3 |
Figure 7-2: Regional Stratigraphic Column | 7-5 |
Figure 7-3: Regional Geologic Map | 7-6 |
Figure 7-4: Cross Section A-A' of Local Geology | 7-7 |
Figure 11-1: Z-Score for Uranium Standards | 11-4 |
Figure 11-2: Original vs Duplicate Samples for Uranium - White Mesa Mill | 11-5 |
Figure 11-3: Original vs Third Party Check Assay Samples for Uranium | 11-5 |
Figure 14-1: Drillhole Location Map | 14-3 |
Figure 14-2: La Sal West Log Probability Graph | 14-6 |
Figure 14-3: Energy Queen Log Probability Graph | 14-7 |
Figure 14-4: Redd Block Log Probability Graph | 14-7 |
Figure 14-5: Beaver Log Probability Graph | 14-8 |
Figure 14-6: Pandora Log Probability Graph | 14-8 |
Figure 14-7: %U3O8 vs Vanadium:Uranium Ratio for Vanadium Grade Calculations | 14-20 |
Figure 14-8: Longitudinal Section through the Redd Block Deposit | 14-26 |
Figure 14-9: Swath Plots through the Redd Block Deposit | 14-27 |
Figure 14-10:Mineral Resource Grade versus Tons at Various Cut-Off Grades | 14-28 |
1.0 SUMMARY
1.1 Executive Summary
This Independent Technical Report (Technical Report) was prepared by Mark B. Mathisen, C.P.G., of SLR International Corporation (SLR), for Energy Fuels Inc. (Energy Fuels), the parent company of Energy Fuels Resources (USA) Inc. (EFR), with respect to the La Sal Project (La Sal or the Project), located in San Juan County, Utah, USA. The purpose of this Technical Report is to disclose the current Mineral Resource estimate.
Energy Fuels is incorporated in Ontario, Canada. EFR is a US-based uranium and vanadium exploration and mine development company with projects located in the states of Colorado, Utah, Arizona, Wyoming, Texas, and New Mexico. Energy Fuels is listed on the NYSE American Stock Exchange (symbol: UUUU) and the Toronto Stock Exchange (symbol: EFR).
This Technical Report satisfies the requirements of Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101) and United States Securities and Exchange Commission's (SEC) Modernized Property Disclosure Requirements for Mining Registrants as described in Subpart 229.1300 of Regulation S-K, Disclosure by Registrants Engaged in Mining Operations (S-K 1300) and Item 601 (b)(96) Technical Report Summary. Mark B. Mathisen is a Qualified Person (QP) within the meaning of both S-K 1300 and NI 43-101 (SLR QP). The SLR QP visited the La Sal property on November 11, 2021.
The Project is comprised of seven individual mines and properties, Energy Queen, Redd Block, Beaver, La Sal, Pandora, Snowball, and Pine Ridge, which are sandstone-type uranium deposits located within the Colorado Plateau physiographic province in southwestern Utah. The Colorado Plateau has been a relatively stable structural province since the end of the Precambrian. During the Paleozoic and Mesozoic, the Colorado Plateau was a stable shelf without major geosynclinal areas of deposition, except during the Pennsylvanian when several thousand feet of black shales and evaporates accumulated in the Paradox Basin of southwestern Colorado and adjacent Utah. The Pine Ridge property has been reclaimed and any Mineral Resources on that portion of the project will be mined from the Pandora decline, but these resources are excluded from the Mineral Resource estimate. Remaining resources at the Snowball Mine have been incorporated into the Mineral Resource estimates for Pandora.
The Project forms a narrow east-west band, 11 miles long, of contiguous parcels in San Juan County, Utah, near the town of La Sal, Utah. It is located approximately 24 miles southeast of Moab, Utah, and the main facilities at the La Sal Decline are less than one mile west of the town of La Sal, Utah.
The Project, consisting of the five remaining properties (Energy Queen, Redd Block, Beaver, La Sal, and Pandora), is a historical mine currently in standby status with all infrastructure in place needed to restart operations. The mine could quickly be put into operations as an underground uranium or vanadium mine depending on improvements in market conditions. Ore will be processed at Energy Fuel's White Mesa Mill (the Mill), 70 miles away in Blanding, Utah. The Mill is on a reduced operating schedule while processing materials as they become available.
A Mineral Resource estimate for the Project, based on 14,326 drillholes totaling 2,899,916 ft, was completed by EFR, and audited and accepted by the SLR QP. Table 1-1 summarizes Mineral Resources based on a $65/lb uranium price using a cut-off grade of 0.17% eU3O8. The effective date of the Mineral Resource estimate is December 31, 2021.
The SLR QP is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could materially affect the Mineral Resource estimate.
Table 1-1: Summary of Mineral Resources - Effective Date December 31, 2021
Energy Fuels Inc. - La Sal Project
Classification |
Deposit |
Tonnage |
Grade |
Contained |
Grade |
Contained |
Recovery |
EFR Basis |
Inferred |
Pandora |
222 |
0.24 |
1,061 |
1.02 |
4,551 |
96 |
100 |
|
Beaver/La Sal |
118 |
0.23 |
552 |
1.01 |
2,388 |
96 |
100 |
|
Redd Block |
336 |
0.29 |
1,918 |
1.14 |
7,679 |
96 |
100 |
|
Energy Queen |
147 |
0.25 |
749 |
1.07 |
3,129 |
96 |
100 |
Total Inferred |
|
823 |
0.26 |
4,281 |
1.08 |
17,746 |
96 |
100 |
Notes:
1. SEC S-K 1300 definitions were followed for all Mineral Resource categories. These definitions are also consistent with CIM (2014) definitions in NI 43-101.
2. Uranium Mineral Resources are estimated at a cut-off grade of 0.17% U3O8.
3. Vanadium Mineral Resources are estimated based on calculations from U3O8 vs V2O5 regression analysis.
4. The cut-off grade is calculated using a metal price of $65/lb U3O8
5. No minimum mining width was used in determining Mineral Resources.
6. Mineral Resources are based on a tonnage factory of 14.5 ft3/ton (Bulk density 0.0690 ton/ft3 or 2.21 t/m3).
7. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
8. Total may not add due to rounding
9. Mineral Resources are 100% attributable to EFR and are in situ.
1.1.1 Conclusions
The SLR QP offers the following interpretations and conclusions on the Project:
EFR's protocols for drilling, sampling, analysis, security, and database management meet industry standard practices and are appropriate for the estimation of Mineral Resources.
EFR project geologists have a good understanding of the regional, local, and deposit geology and controls on mineralization.
The Project has been the site of considerable past mining and exploration including the drilling and logging of approximately 17,397 surface and underground drillholes rotary holes, of which 14,326 were used to prepare the current Mineral Resource estimate. In the opinion of the SLR QP the drilling database is adequate and acceptable for the purposes of Mineral Resource estimation.
The SLR QP considers the estimation procedures employed at La Sal, including capping, compositing, and interpolation, to be reasonable and in line with industry standard practice for the style of mineralization and deposit type, but notes the following:
Over extrapolation of mineralization wireframe boundaries in areas of sparse or widely spaced drilling using the spline option tool in Vulcan is impacting the accuracy of the wireframes volumes and includes large amounts of internal waste.
Estimation Methodology:
Not applying a minimum mining thickness has resulted in some portions of the wireframes to pinch down, disallowing for block model estimations to occur.
Wireframes are not properly snapped to all drillholes intercepts.
The SLR QP considers the classification criteria to be reasonable.
The SLR QP considers that the Mineral Resource estimate completed on the Project conforms to the SEC S-K 1300 and NI 43-101 definitions for reporting mineral resources.
The SLR QPs are not aware of any environmental, permitting, legal, title, taxation, socioeconomic, marketing, political, or other relevant factors that could materially affect the current resource estimate.
The SLR QP is of the opinion that there is a moderate risk that in some portions of the interpolated wireframes, estimated uranium grades will not reconcile to future drilling results due to the over extrapolating of the wireframes using the spline option in Vulcan in areas of widely spaced drilling and known morphology of Colorado Plateau uranium mineralization. These areas of barren or low-grade uranium mineralization may be areas of potential vanadium mineralization.
1.1.2 Recommendations
1.1.2.1 Phase 1: Exploration/Development Drilling Program
1. Conduct a 50 drillhole exploration/development drilling program to advance the La Sal property to a pre-feasibility study (PFS) level. Average depth per hole is projected to be approximately 630 ft.
The SLR QP estimates the cost of the Phase 1 work will range from US$750,000 to US$850,000 (estimated cost per drill foot is US$25).
1.1.2.2 Phase 2: Pre-Feasibility Study and Updated Resource Estimate
1. Following completion of the Phase 1 confirmation drilling program, revisit, and update Mineral Resource estimates for the Project.
2. Complete a PFS of the Project based on an updated Mineral Resource estimate.
The SLR QP estimates the cost of Phase 2 to be US$60,000 for the updated Mineral Resource estimate and approximately US$300,000 for the PFS for a total of approximately US$410,000 for Phase 2.
The recommended budget for Phase I and Phase II is presented in Table 1-2.
Table 1-2: Recommended Budget
Energy Fuels Inc. - La Sal Project
Item |
Cost |
Phase 1 |
|
Drill Beaver/Redd Block Connection (50 holes) |
$800,000 |
Assaying and Geophysical Logging |
$45,000 |
Phase 1 Total |
$845,000 |
|
|
Phase 2 |
|
Redd Block Shaft/Decline Trade-off |
$50,000 |
Resource Update |
$60,000 |
Pre-Feasibility Study |
$300,000 |
Phase 2 Total |
$410,000 |
In support of the two-phase program outlined above, the SLR QP makes the following recommendations:
1. Compile lithologic data from existing radiometric log data and construct a geologic model that defines mineralized horizons within the Salt Wash. The geologic model will be used to constrain future resource estimations by limiting the amount of internal waste in the wireframes.
2. Continue implementation of the recently completed (2019) V2O5 sampling program to support and supplement resource estimations.
3. Procure a vanadium standard to monitor vanadium assay performance as more vanadium assays are expected to be collected in the future for vanadium resource estimation.
4. Apply a minimum thickness of two feet when constructing wireframes to align with current mining operations more appropriately.
5. Treat missing and unsampled intervals contained within the wireframes as waste.
6. Continue to use dynamic anisotropic models for all estimations where appropriate.
7. Revisit and confirm the historical density values prior to any future resource estimations.
1.2 Technical Summary
1.2.1 Property Description and Location
The Project is comprised of seven individual mines and properties. From east to west, these are Pine Ridge (reclaimed mine), Pandora Mine, Snowball Mine, La Sal Decline, Beaver Shaft, Redd Block IV (property), and the Energy Queen Mine.
The area encompassed by the Project is located on two U.S. Geological Survey 7½ minute quadrangle topographic maps, La Sal West and La Sal East. The geographic coordinates for the approximate center of the Project are latitude 38°18'48.20" N and longitude 109°15'56.28" W. All surface data coordinates are State Plane 1983 Utah South FIPS 4303 (US feet) system.
The Project is easily accessed from the all-weather Utah State Highway 46. Utah 46 enters the Project land about one mile west of the Energy Queen lease. Utah 46 stays within or very near the Project for the next eight miles to the east. The Energy Queen headframe, visible from the highway, is located approximately 500 ft south of Utah 46 and is accessed by a gravel road.
The area of the Project is semi-arid. Temperatures range between an average low of 41°F to an average high of 72°F. Less than 10 in. of precipitation falls per year. Winters are not particularly severe, although there are numerous snowstorms. The temperature drops below 0°F at times, and snow can accumulate to over a foot in the lower elevations and more than two feet at higher elevations.
It is anticipated that most personnel will be hired from the local area with other personnel being hired from other mining districts around the country.
La Sal, Utah, is a small town consisting of a Post Office and general store. Most supplies necessary for mining operations can be found locally in the towns of Moab, Utah, or Monticello, Utah, 24 mi northwest or 34 mi south of the Project respectively.
1.2.2 Land Tenure
The Project, comprised of Pine Ridge, Pandora Mine, Snowball Mine, La Sal Decline, Beaver Shaft, Redd Block IV, and the Energy Queen Mine, is 100% controlled by Energy Fuels' wholly owned subsidiaries, Energy Fuels Resources Colorado Plateau LLC and Energy Fuels Resources Corporation (collectively referred to as EFR).
1.2.3 Existing Infrastructure
The primary infrastructure as well as electricity and water are already in place at the Project. The mines associated with the Project were in commercial production between 2009 and 2012, before being placed on standby.
1.2.4 History
Prior to the 1960s, the region, including the Project and nearby area, was mined for vanadium, radium, and uranium. Uranium became the emphasis in the region in 1943 when the U.S. Army's Manhattan Project came to the area. After World War II, between 1948 and 1954, exploration work on Morrison Formation outcrops resulted in the discovery of the Rattlesnake Pit two miles southwest of the Energy Queen shaft (U.S. Atomic Energy Commission, 1959). The majority of the work on the Project took place from the 1960s through the 1980s.
Exploration for uranium deposits, both regionally and in the Project area, generally consists of rotary drilling into the Morrison Formation, specifically the Saltwash Member. The drill holes are then probed utilizing a calibrated gamma probe. The gamma probe records gamma radiation given off by the daughter products of uranium decay and that data can be used to determine an equivalent U3O8 grade (eU3O8). At the Project, core was collected from drilling to use for vanadium assays and as a check on the eU3O8 grades.
Uranium and vanadium deposits were discovered east of the Project in the La Sal Creek area by the Raw Materials Division of the Atomic Energy Commission (AEC) in 1952. That program was successful in identifying new and extending known deposits (Vanadium Queen, Gray Daun, Firefly-Pigmy, and others). Private mining increased in 1953 with drilling outlining a favorable belt about 3,000 ft wide by five miles long to Lion Creek. By 1955, other deposits found farther north of La Sal Creek canyon, Hop Creek, suggested other belts might occur on the east flank of the La Sal Mountains and to the southeast (Carter and Gualtieri, 1965 and Chenoweth, 1981).
Throughout the 1960s and into the 1970s, drilling progressed westward from the head of La Sal Creek canyon discovering Morrison uranium deposits at depth at the Pandora, Snowball, and La Sal mines. Drilling continued westward and intensified in the late 1970s, discovering large uranium-vanadium deposits later accessed by shafts, the Beaver Shaft and Hecla Shaft (Energy Queen Mine). The Redd Block IV property was also located and mostly defined during this time.
1.2.5 Geology and Mineralization
The Colorado Plateau covers nearly 130,000 square miles in the Four Corners regions. The Project lies in the Canyon Lands Section in the east-central part of the Plateau in Utah. The La Sal Mountains Intrusion is located to the north and east of the Project and the peaks are visible from most of the Project.
The La Sal deposits are classified as sandstone hosted uranium-vanadium deposits. Sandstone-type uranium deposits typically occur in fine to coarse grained sediments deposited in a continental fluvial environment. The La Sal Trend uranium-vanadium deposits are a similar type to those elsewhere in the Uravan Mineral Belt. The Uravan Mineral Belt was defined by Fisher and Hilpert (1952) as a curved, elongated area in southwestern Colorado where the uranium-vanadium deposits in the Salt Wash Member of the Morrison Formation generally have closer spacing, larger size, and higher grade than those in adjacent areas and the region as a whole. The location and shape of mineralized deposits are largely controlled by the permeability of the host sandstone. Most mineralization is in trends where Top Rim sandstones are thick, usually 40 ft or greater.
The La Sal Trend is a large channel of Top Rim sandstone that trends due east, possibly as a major trunk channel to tributaries that fanned-out to the east to make a portion of the Uravan Mineral Belt. The Energy Queen deposit appears to be at the location of the junction of a tributary channel that joins the main channel from the southwest. The uranium may be derived from a weathered rock containing anomalously high concentrations of uranium, leached from the sandstone itself or an adjacent stratigraphic unit. It is then transported in oxygenated groundwater until it is precipitated from solution under reducing conditions at an oxidation-reduction interface. The reducing conditions may be caused by such reducing agents in the sandstone as carbonaceous material, sulfides, hydrocarbons, hydrogen sulfide, or brines.
1.2.6 Exploration Status
EFR conducted surface exploration drilling on the Energy Queen portion of the Project in 2007 and 2008 prior to EFR acquiring the rest of the Project through its acquisition of Denison Mines in 2012. Following the acquisition of Denison, EFR conducted both surface and underground drilling as part of a test mining program in 2018-2019. During a test mining program, EFR drilled 30 surface holes on the La Sal/Beaver portions of the Project and cored 56 underground longholes from three different underground stopes. The purpose of this longhole campaign was to collect core for vanadium assays.
1.2.7 Mineral Resources
Mineral Resources have been classified in accordance with the definitions for Mineral Resources in S-K 1300, which are consistent with Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Resources and Mineral Reserves dated May 10, 2014 (CIM, 2014) definitions which are incorporated by reference in NI 43-101.
The SLR QP has reviewed and accepted the Mineral Resource estimate prepared by EFR based on block model values based on radiometric drillhole logs on the five principal mineralized domains (La Sal West, Energy Queen, Redd Block, Beaver/La Sal, and Pandora). Mineral Resources have been estimated by EFR using Vulcan software using inverse distance squared (ID2) methods. This Mineral Resource provides estimates for uranium and calculated vanadium mineralization.
For reporting purposes, the five estimates have been summarized into four deposits with EFR electing to combine the La Sal West and Energy Queen resource to remain consistent with previously reported resource estimates.
In the SLR QP's opinion, the assumptions, parameters, and methodology used for the La Sal Mineral Resource estimate are appropriate for the style of mineralization and mining methods. The effective date of the Mineral Resource estimate is December 31, 2021.
2.0 INTRODUCTION
This Independent Technical Report (Technical Report) was prepared by Mark B. Mathisen, C.P.G., of SLR International Corporation (SLR), for Energy Fuels Inc. (Energy Fuels), the parent company of Energy Fuels Resources (USA) Inc. (EFR), with respect to the La Sal Project (La Sal or the Project), located in San Juan County, Utah, USA. The purpose of this Technical Report is to disclose the current Mineral Resource estimate.
Energy Fuels is incorporated in Ontario, Canada. EFR is a US-based uranium and vanadium exploration and mine development company with projects located in the states of Colorado, Utah, Arizona, Wyoming, Texas, and New Mexico. Energy Fuels is listed on the NYSE American Stock Exchange (symbol: UUUU) and the Toronto Stock Exchange (symbol: EFR).
This Technical Report satisfies the requirements of Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101) and United States Securities and Exchange Commission's (SEC) Modernized Property Disclosure Requirements for Mining Registrants as described in Subpart 229.1300 of Regulation S-K, Disclosure by Registrants Engaged in Mining Operations (S-K 1300) and Item 601 (b)(96) Technical Report Summary. Mark B. Mathisen is a Qualified Person (QP) within the meaning of both S-K 1300 and NI 43-101 (SLR QP).
The Project is comprised of seven individual mines and properties, Energy Queen, Redd Block, Beaver, La Sal, Pandora, Snowball, and Pine Ridge, which are sandstone-type uranium deposits located within the Colorado Plateau physiographic province in southwestern Utah. The Colorado Plateau has been a relatively stable structural province since the end of the Precambrian. During the Paleozoic and Mesozoic, the Colorado Plateau was a stable shelf without major geosynclinal areas of deposition, except during the Pennsylvanian when several thousand feet of black shales and evaporates accumulated in the Paradox Basin of southwestern Colorado and adjacent Utah. The Pine Ridge property has been reclaimed and any Mineral Resources on that portion of the project will be mined from the Pandora decline, but these resources are excluded from the Mineral Resource estimate. Remaining resources at the Snowball Mine have been incorporated into the Mineral Resource estimates for Pandora.
The Project forms a narrow east-west band, 11 miles long, of contiguous parcels in San Juan County, Utah, near the town of La Sal, Utah. It is located approximately 24 miles southeast of Moab, Utah, and the main facilities at the La Sal Decline are less than one mile west of the town of La Sal, Utah.
The Project, consisting of the five remaining properties (Energy Queen, Redd Block, Beaver, La Sal, and Pandora), is a historical mine currently in standby status with all infrastructure in place needed to restart operations. The mine could quickly be put into operations as an underground uranium or vanadium mine depending on improvements in market conditions. Ore will be processed at Energy Fuel's White Mesa Mill (the Mill), 70 miles away in Blanding, Utah. The Mill is on a reduced operating schedule while processing materials as they become available.
2.1 Sources of Information
Sources of information and data contained in this Technical Report or used in its preparation are from publicly available sources in addition to private information owned by EFR, including that of past property owners.
This Technical Report was prepared by the SLR QP. The SLR QP visited the La Sal property under care and maintenance on November 11, 2021. The SLR QP toured the operational areas and project offices, inspected various parts of the property, drillhole locations, and infrastructure, and conducted discussions with EFR Project geologists and Mine Superintendent on the current and future plans of operations. The SLR QP is responsible for all sections and the overall preparation of the Technical Report.
During the preparation of this Technical Report, discussions were held with personnel from EFR:
Gordon Sobering, Senior Mine Engineer, Energy Fuels Resources (USA) Inc.
Daniel Kapostasy, P.G., Chief Geologist Conventional Mining, Energy Fuels Resources (USA) Inc.
Race Fisher, Mine Superintendent, Energy Fuels Resources (USA) Inc.
This Technical Report supersedes the previous NI 43-101 Technical Report completed by Peters Geosciences, dated March 25, 2014.
The documentation reviewed, and other sources of information, are listed at the end of this Technical Report in Section 27 References.
2.2 List of Abbreviations
The U.S. System for weights and units has been used throughout this Technical Report. Tons are reported in short tons (ton) of 2,000 lb unless otherwise noted. All currency in this Technical Report is US dollars (US$) unless otherwise noted.
Abbreviations and acronyms used in this Technical Report are listed below.
Unit Abbreviation |
Definition |
Unit Abbreviation |
Definition |
μ |
micron |
L |
liter |
a |
annum |
lb |
pound |
A |
ampere |
m |
meter |
bbl |
barrels |
m3 |
meter cubed |
Btu |
British thermal units |
M |
mega (million); molar |
°C |
degree Celsius |
Ma |
one million years |
cm |
centimeter |
MBtu |
thousand British thermal units |
cm3 |
centimeter cubed |
MCF |
million cubic feet |
d |
day |
MCF/h |
million cubic feet per hour |
°F |
degree Fahrenheit |
mi |
mile |
ft ASL |
feet above sea level |
min |
minute |
ft |
foot |
MPa |
megapascal |
ft2 |
square foot |
mph |
miles per hour |
ft3 |
cubic foot |
MVA |
megavolt-amperes |
ft/s |
foot per second |
MW |
megawatt |
g |
gram |
MWh |
megawatt-hour |
G |
giga (billion) |
ppb |
part per billion |
Ga |
one billion years |
ppm |
part per million |
gal |
gallon |
psia |
pound per square inch absolute |
gal/d |
gallon per day |
psig |
pound per square inch gauge |
g/L |
gram per liter |
rpm |
revolutions per minute |
g/y |
gallon per year |
RL |
relative elevation |
gpm |
gallons per minute |
s |
second |
hp |
horsepower |
ton |
short ton |
h |
hour |
stpa |
short ton per year |
Hz |
hertz |
stpd |
short ton per day |
in. |
inch |
t |
metric tonne |
in2 |
square inch |
US$ |
United States dollar |
J |
joule |
V |
volt |
k |
kilo (thousand) |
W |
watt |
kg/m3 |
kilogram per cubic meter |
wt% |
weight percent |
kVA |
kilovolt-amperes |
WLT |
wet long ton |
kW |
kilowatt |
y |
year |
kWh |
kilowatt-hour |
yd3 |
cubic yard |
3.0 RELIANCE ON OTHER EXPERTS
This Technical Report has been prepared by the SLR QP for EFR's parent company, Energy Fuels. The information, conclusions, opinions, and estimates contained herein are based on:
Information available to the SLR QP at the time of preparation of this Technical Report,
Assumptions, conditions, and qualifications as set forth in this Technical Report, and
Data, reports, and other information supplied by Energy Fuels and other third party sources.
3.1 Reliance on Information Provided by the Registrant
For the purpose of this Technical Report, the SLR QP has relied on ownership information provided by Energy Fuels in a legal opinion by Energy Fuels Inc. dated February 18, 2022 entitled Legal Opinion Regarding La Sal Project Ownership, and this opinion is relied on in Section 4 and the Summary of this Technical Report. The SLR QP has not researched property title or mineral rights for the Project as we consider it reasonable to rely on Energy Fuels' legal counsel, who is responsible for maintaining this information.
The SLR QP have taken all appropriate steps, in his professional opinion, to ensure that the above information from Energy Fuels is sound.
Except as provided by applicable laws, any use of this Technical Report by any third party is at that party's sole risk.
4.0 PROPERTY DESCRIPTION AND LOCATION
The Project is comprised of seven individual mines and properties (Figure 4-1). From east to west, these are Pine Ridge (reclaimed mine), Pandora Mine, Snowball Mine, La Sal Decline, Beaver Shaft, Redd Block IV (property), and the Energy Queen Mine. All the properties that make up the Project are 100% controlled by Energy Fuels' wholly owned subsidiaries, Energy Fuels Resources Colorado Plateau LLC and Energy Fuels Resources Corporation (collectively referred to as EFR).
4.1 Property Description and Location
The Project forms a narrow east-west band, 11 miles long, of contiguous parcels in San Juan County, Utah, near the town of La Sal, Utah (Figure 4-1). The Project is located approximately 24 miles southeast of Moab, Utah, and the main facilities at the La Sal Decline are less than one mile west of the town of La Sal, Utah. Material mined from the Project will be processed at the Mill in Blanding, Utah, approximately 70 road miles south of the Project (Figure 4-1).
The area encompassed by the Project is located on two U.S. Geological Survey 7½ minute quadrangle topographic maps, La Sal West and La Sal East. The geographic coordinates for the approximate center of the Project are latitude 38°18'48.20" N and longitude 109°15'56.28" W. All surface data coordinates are State Plane 1983 Utah South FIPS 4303 (US feet) system.
4.2 Land Tenure
The Project consists of approximately 9,500 acres of mineral rights in a combination of unpatented mining claims owned by EFR, unpatented mining claims leased by EFR, State of Utah mineral leases, a San Juan County surface use, access, and mineral lease, and mining leases on private mineral rights, all located in the La Sal Mining District (Figure 4-2). The land surface overlying some mineral rights is also of varying ownership. Where the federal government controls the surface and minerals, EFR has the right to access, explore, develop, and mine on unpatented mining claims located on land managed by the U.S. Bureau of Land Management (BLM) or U.S. Forest Service (USFS), as long as National Environmental Protection (NEPA) regulations are met. All other properties, regardless of ownership, are covered by access or surface lease agreements with landowners, including ranchers, San Juan County, and the State of Utah (Figure 4-2).
4.2.1 Claims Held by EFR
EFR holds 90 unpatented mining claims on various sections of both USFS and BLM land across the Project. A mining lease between Robert H. Sayre, Jr. and Umetco Minerals, dated July 11, 1973, applies to the 10 unpatented Martha claims at the east end of the Pandora claims. EFR is successor to this lease. Production from these claims is subject to a royalty to Sayre's successors of 10% of the contained value of uranium and vanadium, less certain allowable deductions. The Martha claims lie in Section 31, Township 28 South, Range 25 East and Section 5, Township 29 South, Range 25 East. The mining lease does not include any requirement for annual advance royalties or other lease payments.
All claims, which are renewed annually in September of each year, are in good standing until September 1, 2022 (at which time they will be renewed for the following year as a matter of course). All unpatented mining claims are subject to an annual federal mining claim maintenance fee of $165 per claim plus approximately $10 per claim for county filing fees to the BLM. Table 4-1 lists all claims held by EFR. The SLR QP investigated these claims and found all fees are paid and in good standing through August 31, 2022.
Figure 4-1: Location Map
Figure 4-2: Land Tenure Map
Table 4-1: List of Claims Held by EFR
Energy Fuels Inc. - La Sal Project
Claim Name |
¼ Sec |
Sec-Twp-Rng1 |
BLM Serial No |
County |
Location Date |
In Good |
BUCK # 1 |
SE |
1-29S-23E |
UT101514092 |
San Juan |
10-Dec-04 |
31-Aug-22 |
DAISY 1 |
SW |
31-28S-24E |
UT101680271 |
San Juan |
22-Nov-10 |
31-Aug-22 |
DAISY 2 |
SE,SW |
31-28S-24E |
UT101680272 |
San Juan |
22-Nov-10 |
31-Aug-22 |
DAISY 3 |
SW |
31-28S-24E |
UT101680273 |
San Juan |
22-Nov-10 |
31-Aug-22 |
DAISY 4 |
SE,SW |
31-28S-24E |
UT101680274 |
San Juan |
22-Nov-10 |
31-Aug-22 |
DAISY 5 |
NW |
6-29S-24E |
UT101680275 |
San Juan |
22-Nov-10 |
31-Aug-22 |
DAISY 6 |
NE,NW |
6-29S-24E |
UT101680276 |
San Juan |
22-Nov-10 |
31-Aug-22 |
DAISY 7 |
NW |
6-29S-24E |
UT101671773 |
San Juan |
09-Dec-10 |
31-Aug-22 |
DAISY 8 |
NE,NW |
6-29S-24E |
UT101671774 |
San Juan |
09-Dec-10 |
31-Aug-22 |
DOD 1 |
SW |
31-28S-24E |
UT101680269 |
San Juan |
22-Nov-10 |
31-Aug-22 |
DOD 2 |
SW |
31-28S-24E |
UT101680270 |
San Juan |
22-Nov-10 |
31-Aug-22 |
DOD 3 |
SW |
31-28S-24E |
UT101880498 |
San Juan |
01-Sep-08 |
31-Aug-22 |
HEC 23 |
NE,NW |
6-29S-24E |
UT101526670 |
San Juan |
02-Sep-05 |
31-Aug-22 |
JUDAS 10 |
SE |
1-29S-23E |
UT101526671 |
San Juan |
05-Sep-05 |
31-Aug-22 |
JUDAS 11 |
SW |
6-29S-24E |
UT101526672 |
San Juan |
05-Sep-05 |
31-Aug-22 |
JUDAS 12 |
NW |
7-29S-24E |
UT101526673 |
San Juan |
05-Sep-05 |
31-Aug-22 |
JUDAS 13 |
SE |
1-29S-23E |
UT101373691 |
San Juan |
24-Mar-07 |
31-Aug-22 |
JUDE # 1 |
SE |
1-29S-23E |
UT101514090 |
San Juan |
10-Dec-04 |
31-Aug-22 |
JUDE # 2 |
NE |
12-29S-23E |
UT101514091 |
San Juan |
10-Dec-04 |
31-Aug-22 |
BEAVER # 22 |
SW |
35-28S-24E |
UT101408972 |
San Juan |
30-Aug-69 |
31-Aug-22 |
BEAVER # 23 |
SW |
35-28S-24E |
UT101401704 |
San Juan |
30-Aug-69 |
31-Aug-22 |
BEAVER # 24 |
SE,SW |
35-28S-24E |
UT101492775 |
San Juan |
30-Aug-69 |
31-Aug-22 |
BEAVER # 25 |
SE |
35-28S-24E |
UT101409163 |
San Juan |
30-Aug-69 |
31-Aug-22 |
BEAVER # 26 |
SE |
35-28S-24E |
UT101409149 |
San Juan |
31-Aug-69 |
31-Aug-22 |
BEAVER # 27 |
SE |
35-28S-24E |
UT101408560 |
San Juan |
31-Aug-69 |
31-Aug-22 |
BEAVER # 28 |
SE |
35-28S-24E |
UT101529408 |
San Juan |
31-Aug-69 |
31-Aug-22 |
BOX 1 |
NW |
33-28S-25E |
UT101428895 |
San Juan |
13-May-11 |
31-Aug-22 |
BOX 10 |
SE,SW |
4-29S-25E |
UT101429168 |
San Juan |
15-May-11 |
31-Aug-22 |
BOX 11 |
SW |
4-29S-25E |
UT101429169 |
San Juan |
15-May-11 |
31-Aug-22 |
BOX 12 |
SE,SW |
4-29S-25E |
UT101429170 |
San Juan |
15-May-11 |
31-Aug-22 |
Claim Name |
¼ Sec |
Sec-Twp-Rng1 |
BLM Serial No |
County |
Location Date |
In Good |
BOX 2 |
NE,NW |
33-28S-25E |
UT101428896 |
San Juan |
13-May-11 |
31-Aug-22 |
BOX 3 |
NW |
33-28S-25E |
UT101428897 |
San Juan |
13-May-11 |
31-Aug-22 |
BOX 4 |
NE,NW |
33-28S-25E |
UT101428898 |
San Juan |
13-May-11 |
31-Aug-22 |
BOX 5 |
SW |
4-29S-25E |
UT101428899 |
San Juan |
15-May-11 |
31-Aug-22 |
BOX 6 |
SE,SW |
4-29S-25E |
UT101428900 |
San Juan |
15-May-11 |
31-Aug-22 |
BOX 7 |
SW |
4-29S-25E |
UT101428901 |
San Juan |
15-May-11 |
31-Aug-22 |
BOX 8 |
SE,SW |
4-29S-25E |
UT101428902 |
San Juan |
15-May-11 |
31-Aug-22 |
BOX 9 |
SW |
4-29S-25E |
UT101428903 |
San Juan |
15-May-11 |
31-Aug-22 |
CAL FRAC |
SE |
31-28S-25E |
UT101492539 |
San Juan |
13-Oct-69 |
31-Aug-22 |
CHUCK NO 1 |
NW |
1-29S-24E |
UT101421050 |
San Juan |
22-Sep-70 |
31-Aug-22 |
CHUCK NO 2 |
NW |
1-29S-24E |
UT101496903 |
San Juan |
22-Sep-70 |
31-Aug-22 |
CLOUT 1 |
SE,SW |
33-28S-25E |
UT101526072 |
San Juan |
01-Oct-05 |
31-Aug-22 |
CLOUT 10 |
SW |
33-28S-25E |
UT101526081 |
San Juan |
01-Oct-05 |
31-Aug-22 |
CLOUT 11 |
SW |
33-28S-25E |
UT101526082 |
San Juan |
01-Oct-05 |
31-Aug-22 |
CLOUT 12 |
SW |
33-28S-25E |
UT101526083 |
San Juan |
01-Oct-05 |
31-Aug-22 |
CLOUT 13 |
SW |
33-28S-25E |
UT101520591 |
San Juan |
02-Jul-05 |
31-Aug-22 |
CLOUT 14 |
SW |
33-28S-25E |
UT101520592 |
San Juan |
02-Jul-05 |
31-Aug-22 |
CLOUT 15 |
NW |
4-29S-25E |
UT101520593 |
San Juan |
02-Jul-05 |
31-Aug-22 |
CLOUT 16 |
NW |
4-29S-25E |
UT101526084 |
San Juan |
01-Oct-05 |
31-Aug-22 |
CLOUT 17 |
NW |
4-29S-25E |
UT101526085 |
San Juan |
01-Oct-05 |
31-Aug-22 |
CLOUT 18 |
NW,SW |
4-29S-25E |
UT101526086 |
San Juan |
01-Oct-05 |
31-Aug-22 |
CLOUT 2 |
SE,SW |
33-28S-25E |
UT101526073 |
San Juan |
01-Oct-05 |
31-Aug-22 |
CLOUT 3 |
SE,SW |
33-28S-25E |
UT101526074 |
San Juan |
01-Oct-05 |
31-Aug-22 |
CLOUT 4 |
SE,SW |
33-28S-25E |
UT101526075 |
San Juan |
01-Oct-05 |
31-Aug-22 |
CLOUT 5 |
SE,SW |
33-28S-25E |
UT101526076 |
San Juan |
01-Oct-05 |
31-Aug-22 |
CLOUT 6 |
NE,NW |
4-29S-25E |
UT101526077 |
San Juan |
01-Oct-05 |
31-Aug-22 |
CLOUT 7 |
NE,NW |
4-29S-25E |
UT101526078 |
San Juan |
01-Oct-05 |
31-Aug-22 |
CLOUT 8 |
NE,NW |
4-29S-25E |
UT101526079 |
San Juan |
01-Oct-05 |
31-Aug-22 |
CLOUT 9 |
NE,NW,SE,SW |
4-29S-25E |
UT101526080 |
San Juan |
01-Oct-05 |
31-Aug-22 |
CLOUT G1 |
NE,SE |
33-28S-25E |
UT101429171 |
San Juan |
13-May-11 |
31-Aug-22 |
CLOUT G2 |
SE |
33-28S-25E |
UT101429172 |
San Juan |
13-May-11 |
31-Aug-22 |
CLOUT G3 |
NE |
4-29S-25E |
UT101429173 |
San Juan |
13-May-11 |
31-Aug-22 |
Claim Name |
¼ Sec |
Sec-Twp-Rng1 |
BLM Serial No |
County |
Location Date |
In Good |
FISHER |
NW,SW |
1-29S-24E |
UT101456033 |
San Juan |
28-May-96 |
31-Aug-22 |
FISHER 1 |
NW,SW |
1-29S-24E |
UT101883769 |
San Juan |
13-Oct-09 |
31-Aug-22 |
FISHER 2 |
NW,SW |
1-29S-24E |
UT101883770 |
San Juan |
13-Oct-09 |
31-Aug-22 |
FISHER 3 |
SW |
1-29S-24E |
UT101883771 |
San Juan |
13-Oct-09 |
31-Aug-22 |
ROBIN # 1 |
NE |
1-29S-24E |
UT101423374 |
San Juan |
26-Aug-70 |
31-Aug-22 |
ROBIN # 2 |
NE,NW |
1-29S-24E |
UT101420551 |
San Juan |
26-Aug-70 |
31-Aug-22 |
ROBIN # 3 |
NW |
1-29S-24E |
UT101405941 |
San Juan |
26-Aug-70 |
31-Aug-22 |
ROBIN # 4 |
NW |
1-29S-24E |
UT101752795 |
San Juan |
26-Aug-70 |
31-Aug-22 |
ROBIN # 5 |
NW |
1-29S-24E |
UT101402167 |
San Juan |
26-Aug-70 |
31-Aug-22 |
SNOWBALL # 2 |
SW |
31-28S-25E |
UT101404898 |
San Juan |
18-Jun-68 |
31-Aug-22 |
MARTHA NO 20 |
NE |
5-29S-25E |
UT101423262 |
San Juan |
27-May-66 |
31-Aug-22 |
MARTHA NO 21 |
NE |
5-29S-25E |
UT101495305 |
San Juan |
28-May-66 |
31-Aug-22 |
MARTHA NO 22 |
NE,NW |
5-29S-25E |
UT101407590 |
San Juan |
28-May-66 |
31-Aug-22 |
MARTHA NO 23 |
NW |
5-29S-25E |
UT101543302 |
San Juan |
28-May-66 |
31-Aug-22 |
MARTHA NO 24 |
NW |
5-29S-25E |
UT101401664 |
San Juan |
28-May-66 |
31-Aug-22 |
MARTHA NO 59 |
SE |
31-28S-25E |
UT101407737 |
San Juan |
02-Jun-66 |
31-Aug-22 |
MARTHA NO 60 |
NE,SE |
31-28S-25E |
UT101409159 |
San Juan |
02-Jun-66 |
31-Aug-22 |
MARTHA NO 60A |
SE |
31-28S-25E |
UT101605537 |
San Juan |
22-Oct-68 |
31-Aug-22 |
MARTHA NO 61 |
NE,SE |
31-28S-25E |
UT101403398 |
San Juan |
06-Jun-66 |
31-Aug-22 |
MARTHA NO 62 |
NE |
31-28S-25E |
UT101404397 |
San Juan |
06-Jun-66 |
31-Aug-22 |
RM 17 |
NW |
1-29S-23E |
UT101352679 |
San Juan |
24-Aug-06 |
31-Aug-22 |
RM 18 |
NW |
1-29S-23E |
UT101352680 |
San Juan |
24-Aug-06 |
31-Aug-22 |
RM 19 |
NW |
1-29S-23E |
UT101352681 |
San Juan |
24-Aug-06 |
31-Aug-22 |
RM 20 |
NW |
1-29S-23E |
UT101352682 |
San Juan |
24-Aug-06 |
31-Aug-22 |
RM 22 |
NE |
1-29S-23E |
UT101352683 |
San Juan |
24-Aug-06 |
31-Aug-22 |
RM 23 |
NE |
1-29S-23E |
UT101352684 |
San Juan |
24-Aug-06 |
31-Aug-22 |
RM 24 |
NE |
1-29S-23E |
UT101352685 |
San Juan |
24-Aug-06 |
31-Aug-22 |
RM 25 |
NE |
1-29S-23E |
UT101353635 |
San Juan |
24-Aug-06 |
31-Aug-22 |
Notes:
1. Sec-Twp-Rng = Section-Township-Range
4.2.2 Claims Held by Others
EFR leases the mineral rights on 119 claims located across the Project. These claims are held through four separate mineral leases (MLs) described in detail below. Table 4-2 presents a list of claims held by others. The SLR QP investigated these claims and found all fees have been paid and these are in good standing through September 1, 2022.
4.2.2.1 Crested and T&A Claims
Six Crested and two T&A claims are covered by a Mining Lease dated February 1, 2009, between eight individual owners and Denison, which was acquired by EFR in June 2012. These claims are located in Sections 33 and 34, Township 28 South, Range 24 East and Section 3, Township 29 South, Range 24 East. EFR pays an annual advance royalty determined by the long-term uranium price in the preceding twelve months. Production royalties are on a sliding scale for both uranium and vanadium depending on the respective commodity's market price. The uranium royalty varies from 3% to 8% and the vanadium royalty from 2% to 6%, less allowable deductions. The annual $165/claim annual BLM fees are the responsibility of EFR. No other lease costs apply to these claims.
4.2.2.2 Mike Claims
Six Mike claims are covered by a Mining Lease dated August 1, 2001, between various stakeholders of the Mike claims and Denison, which was acquired by EFR in June 2012. This lease supersedes the original 1970 lease between Umetco and the owners. The claims lie in Section 1, Township 29 South, Range 24 East. Production royalties are on a sliding scale for both uranium and vanadium depending on the respective commodity's market price. The uranium royalty varies from 3% to 8% and the vanadium royalty from 2% to 6%, less allowable deductions. The annual $165/claim annual BLM fees are the responsibility of EFR. No other lease costs apply to these claims.
4.2.2.3 Pandora Claims
The Pandora Mining Lease, dated June 16, 1967, was originally between Robert H. Sayre, Jr. and American Metal Climax, Inc. (American Metal). Successors to American Metal include Atlas Minerals in 1973 and Umetco Minerals Corporation (Umetco) in 1988. EFR is the current successor to the Pandora Mining Lease and its amendments. The Pandora Mining Lease and amendments apply to 105 unpatented Pandora claims. The claims lie in Sections 1 and 12, Township 29 South, Range 24 East, Section 31, Township 28 South, Range 25 East, and Sections 5, 6, and 7, Township 29 South, Range 25 East. Production from these claims is subject to a royalty to Sayre's successors of 10% of the contained value of uranium and vanadium, less certain allowable deductions. The annual $165/claim annual BLM fees are the responsibility of EFR. No other lease costs apply to these claims.
Table 4-2: List of Claims Held by Others
Energy Fuels Inc. - La Sal Project
Claim Name |
¼ Sec |
Sec-Twp-Rng |
BLM Serial No |
County |
Location Date |
In Good |
CRESTED # 20 |
NW |
3-29S-24E |
UT101403110 |
San Juan |
14-May-66 |
31-Aug-22 |
CRESTED # 22 |
SE |
33-28S-24E |
UT101349772 |
San Juan |
14-May-66 |
31-Aug-22 |
CRESTED # 39 |
NW |
3-29S-24E |
UT101408216 |
San Juan |
15-May-66 |
31-Aug-22 |
CRESTED # 40 |
SE |
33-28S-24E |
UT101406248 |
San Juan |
15-May-66 |
31-Aug-22 |
CRESTED # 41 |
NW |
3-29S-24E |
UT101408489 |
San Juan |
15-May-66 |
31-Aug-22 |
CRESTED # 42 |
SW |
34-28S-24E |
UT101456369 |
San Juan |
15-May-66 |
31-Aug-22 |
T AND A-1 |
NW |
3-29S-24E |
UT101404958 |
San Juan |
14-Jun-72 |
31-Aug-22 |
T AND A-2 |
SW |
34-28S-24E |
UT101608576 |
San Juan |
14-Jun-72 |
31-Aug-22 |
MIKE # 10 |
NE,SE,SW |
1-29S-24E |
UT101502185 |
San Juan |
09-Apr-66 |
31-Aug-22 |
MIKE # 2 |
NW |
1-29S-24E |
UT101426425 |
San Juan |
09-Apr-66 |
31-Aug-22 |
MIKE # 2 FRAC |
NW |
1-29S-24E |
UT101401687 |
San Juan |
14-Sep-67 |
31-Aug-22 |
MIKE # 4 |
NW |
1-29S-24E |
UT101404866 |
San Juan |
09-Apr-66 |
31-Aug-22 |
MIKE # 6 |
NW,SW |
1-29S-24E |
UT101550229 |
San Juan |
09-Apr-66 |
31-Aug-22 |
MIKE # 8 |
NE,NW,SW |
1-29S-24E |
UT101409177 |
San Juan |
09-Apr-66 |
31-Aug-22 |
PANDORA # 101A |
NE |
31-28S-25E |
UT101493252 |
San Juan |
10-Nov-82 |
31-Aug-22 |
PANDORA # 102A |
NE |
31-28S-25E |
UT101404019 |
San Juan |
10-Nov-82 |
31-Aug-22 |
PANDORA # 104A |
NE |
31-28S-25E |
UT101407746 |
San Juan |
10-Nov-82 |
31-Aug-22 |
PANDORA # 106A |
NE |
31-28S-25E |
UT101404927 |
San Juan |
10-Nov-82 |
31-Aug-22 |
PANDORA # 109 |
NE,NW |
1-29S-24E |
UT101347029 |
San Juan |
27-May-83 |
31-Aug-22 |
PANDORA # 110 |
NE |
1-29S-24E |
UT101420857 |
San Juan |
27-May-83 |
31-Aug-22 |
PANDORA # 111 |
NW |
6-29S-25E |
UT101340222 |
San Juan |
26-May-83 |
31-Aug-22 |
PANDORA # 112 |
NE,NW |
6-29S-25E |
UT101425835 |
San Juan |
26-May-83 |
31-Aug-22 |
PANDORA # 113 |
NE |
6-29S-25E |
UT101300732 |
San Juan |
02-Jun-83 |
31-Aug-22 |
PANDORA # 114 |
NW |
5-29S-25E |
UT101424487 |
San Juan |
02-Jun-83 |
31-Aug-22 |
PANDORA # 115 |
NW |
5-29S-25E |
UT101425315 |
San Juan |
14-Jun-83 |
31-Aug-22 |
PANDORA # 116 |
NW |
5-29S-25E |
UT101403074 |
San Juan |
14-Jun-83 |
31-Aug-22 |
PANDORA # 117 |
NE,NW |
5-29S-25E |
UT101408516 |
San Juan |
15-Jun-83 |
31-Aug-22 |
PANDORA # 118 |
NE |
5-29S-25E |
UT101402521 |
San Juan |
15-Jun-83 |
31-Aug-22 |
PANDORA # 12 |
SE |
1-29S-24E |
UT101404017 |
San Juan |
16-Dec-66 |
31-Aug-22 |
PANDORA # 16 |
SE |
1-29S-24E |
UT101404251 |
San Juan |
16-Dec-66 |
31-Aug-22 |
Claim Name |
¼ Sec |
Sec-Twp-Rng |
BLM Serial No |
County |
Location Date |
In Good |
PANDORA # 20 |
NE,SE |
1-29S-24E |
UT101405986 |
San Juan |
16-Dec-66 |
31-Aug-22 |
PANDORA # 24 |
NE |
1-29S-24E |
UT101402730 |
San Juan |
16-Dec-66 |
31-Aug-22 |
PANDORA # 28 |
NE |
1-29S-24E |
UT101349158 |
San Juan |
16-Dec-66 |
31-Aug-22 |
PANDORA # 32 |
NE |
1-29S-24E |
UT101780639 |
San Juan |
16-Dec-66 |
31-Aug-22 |
PANDORA # 36 |
NE |
1-29S-24E |
UT101404316 |
San Juan |
16-Dec-66 |
31-Aug-22 |
PANDORA # 4 |
NE |
12-29S-24E |
UT101503405 |
San Juan |
16-Dec-66 |
31-Aug-22 |
PANDORA # 8 |
SE |
1-29S-24E |
UT101421112 |
San Juan |
16-Dec-66 |
31-Aug-22 |
PANDORA # 81 |
NE |
5-29S-25E |
UT101600541 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA 7A |
SE |
1-29S-24E |
UT101422553 |
San Juan |
10-Nov-82 |
31-Aug-22 |
PANDORA NO # 100 |
NE,SE |
31-28S-25E |
UT101404233 |
San Juan |
19-Dec-66 |
31-Aug-22 |
PANDORA NO # 102 |
NE,NW |
31-28S-25E |
UT101401326 |
San Juan |
19-Dec-66 |
31-Aug-22 |
PANDORA NO # 104 |
NE,NW |
31-28S-25E |
UT101401647 |
San Juan |
19-Dec-66 |
31-Aug-22 |
PANDORA NO # 46 |
NE,NW |
6-29S-25E |
UT101408521 |
San Juan |
17-Dec-66 |
31-Aug-22 |
PANDORA NO # 48 |
NE,NW |
6-29S-25E |
UT101409099 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO # 49 |
NW |
6-29S-25E |
UT101604547 |
San Juan |
17-Dec-66 |
31-Aug-22 |
PANDORA NO # 50 |
NE,NW |
6-29S-25E |
UT101404373 |
San Juan |
17-Dec-66 |
31-Aug-22 |
PANDORA NO # 51 |
NE |
6-29S-25E |
UT101402393 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO # 52 |
NE,NW |
5-29S-25E |
UT101601706 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO # 53 |
NW,SW |
6-29S-25E |
UT101502177 |
San Juan |
17-Dec-66 |
31-Aug-22 |
PANDORA NO # 55 |
NE,SE |
6-29S-25E |
UT101339317 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO # 57 |
SW |
6-29S-25E |
UT101401423 |
San Juan |
17-Dec-66 |
31-Aug-22 |
PANDORA NO # 60 |
SW |
5-29S-25E |
UT101453508 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO # 61 |
SW |
6-29S-25E |
UT101405574 |
San Juan |
17-Dec-66 |
31-Aug-22 |
PANDORA NO # 64 |
SE,SW |
6-29S-25E |
UT101602290 |
San Juan |
17-Dec-66 |
31-Aug-22 |
PANDORA NO # 67 |
SW |
5-29S-25E |
UT101347335 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO # 69 |
NW,SW |
5-29S-25E |
UT101339949 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO # 71 |
NW |
5-29S-25E |
UT101477332 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO # 73 |
NW |
5-29S-25E |
UT101407646 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO # 75 |
NW |
5-29S-25E |
UT101405943 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO # 77 |
SW |
32-28S-25E |
UT101402169 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO # 80 |
SE |
32-28S-25E |
UT101500934 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO # 82 |
NE |
5-29S-25E |
UT101423850 |
San Juan |
18-Dec-66 |
31-Aug-22 |
Claim Name |
¼ Sec |
Sec-Twp-Rng |
BLM Serial No |
County |
Location Date |
In Good |
PANDORA NO # 84 |
NE |
5-29S-25E |
UT101423204 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO # 86 |
NW |
4-29S-25E |
UT101401804 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO # 88 |
NW,SW |
4-29S-25E |
UT101402082 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO # 90 |
SW |
4-29S-25E |
UT101405564 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO # 92 |
SW |
32-28S-25E |
UT101402716 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO # 94 |
SE |
31-28S-25E |
UT101402326 |
San Juan |
19-Dec-66 |
31-Aug-22 |
PANDORA NO # 96 |
SE |
31-28S-25E |
UT101420433 |
San Juan |
19-Dec-66 |
31-Aug-22 |
PANDORA NO # 98 |
SE |
31-28S-25E |
UT101339936 |
San Juan |
19-Dec-66 |
31-Aug-22 |
PANDORA NO 101 |
NE |
31-28S-25E |
UT101549848 |
San Juan |
19-Dec-66 |
31-Aug-22 |
PANDORA NO 11 |
SE |
1-29S-24E |
UT101493251 |
San Juan |
16-Dec-66 |
31-Aug-22 |
PANDORA NO 15 |
SE |
1-29S-24E |
UT101405957 |
San Juan |
16-Dec-66 |
31-Aug-22 |
PANDORA NO 19 |
NE,SE |
1-29S-24E |
UT101456707 |
San Juan |
16-Dec-66 |
31-Aug-22 |
PANDORA NO 22 |
NE,NW |
1-29S-24E |
UT101401333 |
San Juan |
17-Dec-66 |
31-Aug-22 |
PANDORA NO 23 |
NE,SE |
1-29S-24E |
UT101405183 |
San Juan |
16-Dec-66 |
31-Aug-22 |
PANDORA NO 26 |
NE,NW |
1-29S-24E |
UT101601932 |
San Juan |
17-Dec-66 |
31-Aug-22 |
PANDORA NO 27 |
NE,NW |
1-29S-24E |
UT101426209 |
San Juan |
16-Dec-66 |
31-Aug-22 |
PANDORA NO 29 |
NW |
1-29S-24E |
UT101422565 |
San Juan |
17-Dec-66 |
31-Aug-22 |
PANDORA NO 30 |
NE,NW |
1-29S-24E |
UT101421177 |
San Juan |
17-Dec-66 |
31-Aug-22 |
PANDORA NO 31 |
NE,NW |
1-29S-24E |
UT101408274 |
San Juan |
16-Dec-66 |
31-Aug-22 |
PANDORA NO 33 |
NW |
1-29S-24E |
UT101407715 |
San Juan |
17-Dec-66 |
31-Aug-22 |
PANDORA NO 34 |
NE,NW |
1-29S-24E |
UT101404868 |
San Juan |
17-Dec-66 |
31-Aug-22 |
PANDORA NO 35 |
NE,NW |
1-29S-24E |
UT101405589 |
San Juan |
16-Dec-66 |
31-Aug-22 |
PANDORA NO 37 |
SW |
31-28S-25E |
UT101408595 |
San Juan |
17-Dec-66 |
31-Aug-22 |
PANDORA NO 38 |
SE,SW |
31-28S-25E |
UT101528260 |
San Juan |
17-Dec-66 |
31-Aug-22 |
PANDORA NO 39 |
SE |
31-28S-25E |
UT101348469 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO 40 |
SE |
31-28S-25E |
UT101425245 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO 41 |
NW |
6-29S-25E |
UT101423215 |
San Juan |
17-Dec-66 |
31-Aug-22 |
PANDORA NO 42 |
NE,NW |
6-29S-25E |
UT101424896 |
San Juan |
17-Dec-66 |
31-Aug-22 |
PANDORA NO 43 |
NE |
6-29S-25E |
UT101491843 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO 44 |
NE,NW |
5-29S-25E |
UT101424941 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO 45 |
NW |
6-29S-25E |
UT101753812 |
San Juan |
17-Dec-66 |
31-Aug-22 |
PANDORA NO 47 |
NE |
6-29S-25E |
UT101405932 |
San Juan |
18-Dec-66 |
31-Aug-22 |
Claim Name |
¼ Sec |
Sec-Twp-Rng |
BLM Serial No |
County |
Location Date |
In Good |
PANDORA NO 54 |
NE,NW,SE,SW |
6-29S-25E |
UT101347030 |
San Juan |
17-Dec-66 |
31-Aug-22 |
PANDORA NO 56 |
NW,SW |
5-29S-25E |
UT101495442 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO 58 |
SE,SW |
6-29S-25E |
UT101425445 |
San Juan |
17-Dec-66 |
31-Aug-22 |
PANDORA NO 59 |
SE |
6-29S-24E |
UT101403084 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO 62 |
SE,SW |
6-29S-25E |
UT101404302 |
San Juan |
17-Dec-66 |
31-Aug-22 |
PANDORA NO 63 |
SW |
6-29S-25E |
UT101405583 |
San Juan |
17-Dec-66 |
31-Aug-22 |
PANDORA NO 65 |
SW |
6-29S-25E |
UT101600501 |
San Juan |
17-Dec-66 |
31-Aug-22 |
PANDORA NO 66 |
SE,SW |
6-29S-25E |
UT101505843 |
San Juan |
17-Dec-66 |
31-Aug-22 |
PANDORA NO 68 |
SE,SW |
5-29S-25E |
UT101423618 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO 7 |
SE |
1-29S-24E |
UT101339721 |
San Juan |
16-Dec-66 |
31-Aug-22 |
PANDORA NO 70 |
NE,NW,SE,SW |
5-29S-25E |
UT101408221 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO 72 |
NE,NW |
5-29S-25E |
UT101406987 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO 74 |
NE,NW |
5-29S-25E |
UT101406988 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO 76 |
NE,NW |
5-29S-25E |
UT101752796 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO 78 |
SE,SW |
32-28S-25E |
UT101401696 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO 79 |
SE |
32-28S-25E |
UT101404377 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO 83 |
NE |
5-29S-25E |
UT101601555 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO 85 |
NE |
5-29S-25E |
UT101425910 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO 87 |
NE,SE |
5-29S-25E |
UT101458194 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO 89 |
SE |
5-29S-25E |
UT101409105 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO 91 |
SE |
31-28S-25E |
UT101609109 |
San Juan |
18-Dec-66 |
31-Aug-22 |
PANDORA NO 93 |
SE |
31-28S-25E |
UT101407140 |
San Juan |
19-Dec-66 |
31-Aug-22 |
PANDORA NO 95 |
SE |
31-28S-25E |
UT101477291 |
San Juan |
19-Dec-66 |
31-Aug-22 |
PANDORA NO 97 |
SE |
31-28S-25E |
UT101494026 |
San Juan |
19-Dec-66 |
31-Aug-22 |
PANDORA NO 99 |
NE,SE |
31-28S-25E |
UT101408974 |
San Juan |
19-Dec-66 |
31-Aug-22 |
4.2.3 State of Utah School and Institutional Trust Lands Administration Mineral Leases
EFR holds approximately 2,182 acres under mineral lease from the State of Utah School and Institutional Trust Lands Administration (SITLA) in seven separate leases. Three of the leases (ML-18301, -49313, and -51440), covering 900 acres of the surface area, are owned by the State of Utah and thereby grant access to EFR for exploration and mining related work. The other 1,282 acres of surface are under private ownership. The private parcels are all subject to valid access and surface use agreements with the landowners. The production royalty for all SITLA leases is 8% on uranium and 4% on vanadium. It is based on the gross value received under contract for the processed products less the actual processing and refining costs. Mining costs are not allowable deductions.
4.2.3.1 ML-18301
The Utah State mineral lease ML-18301, covering all of the 640 acres in Section 36, T28S, R24E, was originally issued to an individual, Robert Manly, on April 25, 1960. Through a series of assignments and amendments, the lease is now held by EFR. The current term of the lease runs through December 31, 2022; it is renewable annually by making an annual rental payment as well as advance royalty payments. The annual rental is $1.00/acre ($640 total) and the advance royalty payment is based on the previous January through November's average uranium and vanadium market prices. Rentals and annual minimum royalties are credited against actual production royalties for the year in which they accrue. Mining costs are not allowable deductions. The surface of approximately 384 acres of the western part of the lease parcel is owned by Charles Hardison Redd and EFR has a surface access agreement with Redd. The surface of the eastern part of the lease, a total of 256 acres, is owned by the State of Utah State. Rights to necessary surface use are granted by the mineral lease. The eastern part of the Beaver/La Sal mine lies within this lease.
4.2.3.2 ML-27247
Mineral lease ML-27247 covers 40 acres in the SW¼, SW¼, Section 35, T28S, R24E. The lease was originally issued on December 4, 1970, to an individual, Gregory Hoskin. Through a series of assignments and amendments, the lease is now held by EFR. The current term of the lease runs through December 31, 2022; it is renewable annually by making advance royalty payments. The surface of the western 20 acres of the lease parcel is owned by Redd Agri LLC (Redd Agri) and the eastern 20 acres is owned by La Sal Livestock. EFR has a surface access agreement with both Redd Agri and La Sal Livestock. Portions of the western part of the Beaver mine lie on this lease parcel. The lease is held by paying an annual rental payment and an annual minimum royalty based on the previous January through November's average uranium and vanadium market prices. Rentals and annual minimum royalties are credited against actual production royalties for the year in which they accrue.
4.2.3.3 ML-27248
As with ML-27247, the Mineral Lease ML-27248 was originally issued to Gregory Hoskin in December 1970 and is now held by EFR following several assignments and amendments. It covers 80 acres in the W½, NW¼, Section 2, Township 29 South, Range 24 East. With the exception of small parcels owned by the San Juan School District and the La Sal Recreation District, the surface is owned by Redd Agri. EFR has a surface use agreement with Redd Agri for those portions held by Redd Agri. Portions of the western part of the Beaver mine are located on this lease. EFR's operations of the Beaver mine and any expected exploration drilling are not affected by access restrictions to the School and Recreation District's acreage. The lease is held by paying in advance an annual rental and an annual minimum royalty based on the previous January through November average uranium and vanadium market prices. Rentals and annual minimum royalties are credited against actual production royalties for the year in which they accrue.
4.2.3.4 ML-49313
In December 2010, EFR purchased Utah State mineral lease ML-49313 from Uranium One with the seller retaining a 1% overriding royalty. Uranium One acquired the lease from the original assignee, William Sheriff. The lease was renewed by EFR on May 1, 2014, for a second 10-year term. This lease covers about 484 acres in the S½, S½ of NW¼, and E½ of NE¼, Section 36, Township 28 South, Range 23 East. The southeast corner of this section is about one mile west of the Energy Queen shaft. It is connected to the Energy Queen lease property by BLM land (W½, Section 31, Township 28 South, Range 24 East, and part of NW¼, Section 6, Township 29 South, Range 24 East) currently covered by unpatented mining claims (Daisy and DOD claims) held by EFR. ML-49313 is contiguous to the north border of the RM and Judas claims. No mining has taken place on this lease. The surface is owned by SITLA. Rights to necessary surface use are granted by the lease. This lease is held by an annual payment. No annual minimum royalties apply.
4.2.3.5 ML-49314
This lease was issued on April 30, 2004, to William Sheriff. Mr. Sheriff assigned it to Energy Metals Corporation in 2006, which then became Uranium One in 2009. In February 2011, Denison (acquired by EFR in June 2012) purchased it from Uranium One. The lease was renewed by EFR on May 1, 2014, for a second 10-year term. The lease covers 640 acres, all of Section 32, Township 28 South, Range 25 East. This lease lies north of the eastern part of the Pandora Mine, but no mining has occurred on this lease. The surface is owned by Paul Redd. EFR has a surface access agreement with Mr. Redd to access a Pandora Mine ventilation hole. The lease is held by paying in advance an annual rental. No annual minimum royalties apply.
4.2.3.6 ML-49315
This lease was issued on April 30, 2004, to William Sheriff. Mr. Sheriff assigned it to Energy Metals Corporation in 2006, which then became Uranium One in 2009. In February 2011, Denison (acquired by EFR in June 2012) purchased it from Uranium One. The lease was renewed by EFR on May 1, 2014, for a second 10-year term. The lease covers almost 138 acres, mostly in the NE¼ and parts of the NW¼, Section 5, Township 29 South, Range 24 East. A portion of the Redd Block Mineral Resource is located on this lease. The surface is owned by SITLA. Rights to necessary surface use are granted by the lease. No mining has yet occurred. This lease is held by paying in advance an annual rental. No annual minimum royalties apply.
4.2.3.7 ML-51440
In September 2008, EFR was the highest bidder on a State of Utah mineral lease, ML-51440, which covers 160 acres in the N½ S½, Section 32, Township 28 South, Range 24 East. This lease was renewed by EFR on October 31, 2018, for a second 10-year term. This lease borders the Redd Block Mineral Resource on the north side. The surface is owned by SITLA. Rights to necessary surface use are granted by the lease. An annual payment is required to hold this lease. No annual minimum royalties apply.
Table 4-3 presents a list of the Utah School and Institutional Trust Lands.
Table 4-3: Utah School and Institutional Trust Lands (SITLA)
Energy Fuels Inc. - La Sal Project
SITLA Lease Number |
Number of Acres |
Public Land Survey System Location |
ML-18301 |
640 |
Sec. 36, T28S, R24E |
ML-27247 |
40 |
SW¼, Sec. 35, T28S, R24E |
ML-27248 |
80 |
W½ NW¼, Sec. 02, T29S, R24E |
ML-49313 |
484 |
S½ S½, NW¼ and E½ NE¼, Sec. 36, T28S, R23E |
ML-49314 |
640 |
Sec. 32, T28S, R25E |
ML-49315 |
138 |
NE in part, NW in part, Sec. 5, T29S, R24E |
ML-51440 |
160 |
N½ S½, Sec. 32, T28S, R24E |
Total |
2,182 |
|
4.2.4 Private Mineral Leases
The private land in the La Sal region is mostly agricultural land. The primary use is dry land ranching, specifically livestock grazing. Several parcels of irrigated hay fields exist as well.
EFR has leased the mineral rights on numerous parcels from various private landowners. The Redd family, as individuals or in legal entities, namely La Sal Livestock and Redd Agri, LLC, has owned much of the subject land for many decades, both mineral rights and surface. A few small parcels have joint ownership of minerals with parties other than the Redd family. The surface estate has been split from the minerals on numerous parcels. EFR has surface use and access agreements in place with all the private landowners that allow for any activities pertaining to exploration, development, and mining.
Most of the mineral ownership east and north of the Energy Queen Mine is vested in Redd Royalties, Ltd. The Energy Queen lease at the west end of the district is not owned by Redd Ranches (a partnership of 11 members of the Redd family) or its affiliates.
4.2.4.1 Superior Uranium - Energy Queen Mining Lease
EFR entered into a 30-day option with Markle Ranch Holdings, LLC on November 15, 2006, to lease the Energy Queen surface rights. A lease was signed on December 15, 2006, for a term of twenty years, which is extendable if mineral production occurs on a continuing basis. The lease gives EFR the right to use any of the 702 acres for exploration, development, or mining purposes. Markle will be paid a small percentage of market value for any material mined on adjoining properties, if such minerals are removed by use of the mineshaft located on the Markle property.
EFR also entered into a 30-day option to lease the Energy Queen mineral rights from Superior Uranium (Superior) on November 15, 2006. A Mining Lease Agreement was signed on December 13, 2006, for a term of twenty years, which is extendable if mineral production occurs on a continuing basis.
The mineral lease and surface lease cover the same 702 acres located in most of Section 6 and the N½ NE¼ and NE¼ NW¼ Section 7, Township 29 South, Range 24 East. A production royalty will be paid on a sliding scale for both uranium and vanadium depending on the market prices of uranium.
The surface and minerals of this parcel were leased previously to Hecla Mining with the surrounding properties controlled by Umetco. These two companies operated the mine, then known as the Hecla Shaft, in a joint venture. The shaft and other surface facilities for the Energy Queen Mine are located in the northeast corner of Section 6.
4.2.4.2 Redd Royalties Block 1-A Mining Lease
The leased parcel referred to as Redd 1-A covers 160 acres in the SE¼ Section 31, Township 28 South, Range 24 East, immediately north of the Energy Queen Mine. This lease was once part of a much larger mining lease dated June 1, 1971, between Union Carbide Corporation (Union Carbide) and Redd Ranches, a partnership of 11 members of the Redd family. The other parcels were released in November 1999. Through a succession of assignments, EFR became the owner of the Mining Lease with the acquisition of Denison's U.S. Mining Division in June 2012. It is the intent of EFR to continue to hold the lease. No mining has occurred on this parcel. The production royalty is a percentage of "gross value". The gross value is the combination of the Uranium Base plus the Vanadium Base. The Uranium Base is determined by a table that has specified dollar amounts based on the U3O8 grade of the ore produced. The Uranium Base is adjusted from the table value by the actual price received for sale of concentrates in the preceding six months. The Vanadium Base is determined by the V2O5 component of an ore purchase price offered by the Mill or other price of V2O5 contained in ore prevailing in the area at the time the ore is fed to the initial process. Surface access is granted to this land in an agreement with La Sal Livestock.
4.2.4.3 Redd Royalties Block 1-B Mining Lease
The leased parcel referred to as Redd 1-B was entered at the same time and in the same form as the Redd 1-A lease described above but covering different parcels of land. The Redd 1-B Mining Lease applies to 1,720 acres in the following sections: S½ SW¼ and SW¼ SE¼, Section 25, NE¼, Section 35, N½ NW¼ and W½ SW¼ Section 36, Township 28 South, Range 23 East; E½ SE¼ and SE¼ NE¼ Section 34 and W½ NW¼ Section 35, Township 28 South, Range 24 East; all of Section 2, Township 29 South, Range 24 East, except the W½ NW¼; the SE¼, E½ SW¼ and E¼ NE¼, Section 3, Township 29 South, Range 24 East; and the N½ Section 11, Township 29 South, Range 24 East. An annual advance royalty is paid to hold this lease. It is the intent of EFR to continue to hold the lease. The production royalty is a percentage of the "gross value"; gross value is defined the same here as under the Redd Royalties Block 1-A mining lease. EFR is granted access to the surface of this Mining Lease under agreements with both La Sal Livestock and Redd Agri.
4.2.4.4 Redd Royalties La Sal Unit Mining Lease
This lease was entered into on February 5, 2008, between Denison (acquired by EFR in June 2012) and Redd Royalties for a 20-year term to cover some of the land previously part of the Redd 1-A that had been released from the 1-A lease in 1999. The leased land lies in the following parcels: NE¼ Section 31, Township 28 South, Range 24 East; S½ NE¼ and SE¼ Section 4, Township 29 South, Range 24 East; and SE½ Section 5, Township 29 South, Range 24 East. It totals approximately 683 acres. An annual advance royalty is paid to hold this lease. No mining has occurred on the subject land. If mining occurs on the lease, a "market value" production royalty will be due on a sliding scale. The "market value" is determined to be the published prices for the two products, uranium and vanadium, in the month the ore is fed to process multiplied by the contained pounds less allowable deductions. The allowable deductions include sales brokerage fees, costs of transporting processed concentrates to point of sale, and applicable production and sales taxes. Payments for surface access agreements are made to Lowry Redd and Charles Redd for specific surface parcel ownership.
4.2.4.5 Redd Royalties Pine Lodge Unit Mining Lease
On January 31, 1968, Union Carbide entered a mining lease with Redd Ranches, a partnership of 11 members of the Redd family, for the rights to more than 3,680 acres north and east of La Sal, Utah. Since then, various parcels have been dropped from the lease. The current lease held by EFR is applicable to only 60 acres described as SE¼ SW¼ and E½ SW¼ Section 31, Township 28 South, Range 25 East. It is the intent of EFR to continue to hold the lease. A production royalty is based upon the "gross value"; gross value is defined the same here as under the Redd Royalties Block 1-A mining lease. Mining in portions of the Snowball Mine took place on the subject land up to the cessation of mining in the Pandora/Snowball Mines in December 2012.
4.2.4.6 Redd Royalties West Pine Lodge Unit Mining Lease
Denison (acquired by EFR in June 2012) entered into a mining lease with Redd Royalties on February 5, 2008, to cover an area previously in the Pine Lodge Unit (described above) that had been dropped from the older lease. The current lease held by EFR applies to 100.4 acres described as W½ NE¼ SW¼; NW¼ SW¼; and Lots 2 and 3, Section 31, Township 28 South, Range 25 East. An annual advance royalty is paid to hold this lease. It is the intent of EFR to continue to hold this lease. No mining has occurred on the subject land. When ore production commences, a "market value" production royalty will be due on a sliding scale. The "market value" is determined to be the published prices for the two products, uranium and vanadium, in the month the ore is fed to process multiplied by the contained pounds, less allowable deductions. The allowable deductions include sales brokerage fees, costs of transporting processed concentrates to point of sale, and applicable production and sales taxes.
4.2.4.7 Redd Royalties Portion of Redd-Mullins Mining Lease
Union Carbide entered into a lease with Katheryn Anne Redd Mullins and 10 other members of the Redd family on April 16, 1973. It covered 50% of the mineral ownership of 280 acres located in S½ SW¼ and S½ SE¼, Section 33, Township 28 South, Range 24 East, and SE¼ SW¼ and W½ SE¼, Section 34, Township 28 South, Range 24 East. The remaining 50% mineral ownership of these parcels is discussed in the subsections Crawford-Kelly portion of Redd-Mullins Land and Barton Norton Estate portion of Redd-Mullins Land.
The lease has undergone various assignments and amendments. The lease is held by an annual advance royalty payment. It is EFR's intent to continue to hold this lease. The production royalty on the 50% mineral ownership on this leased land is due at a percentage of "gross value"; gross value is defined the same here as under the Redd Royalties Block 1-A mining lease. Production from the western end of the Beaver Shaft has occurred on the Section 34 portion of this lease. Surface access is secured through agreements with both La Sal Livestock and Redd Agri for various portions of the leased land.
4.2.4.8 Crawford-Keller portion of Redd-Mullins Land
A 20-year mining lease was entered into between Denison (acquired by EFR in June 2012) and the Erma Crawford Family Trust on April 1, 2008. It applies to the Crawford's 25% mineral ownership of 240 acres of land situated in S½ SW¼ and SW¼ SE¼, Section 33, Township 28 South, Range 24 East, and SE¼ SW¼ and W½ SE¼, Section 34, Township 28 South, Range 24 East. An annual advance royalty payment is made to hold this lease. The production royalty is based on a sliding scale. The "market value" is determined to be the published prices for the two products, uranium and vanadium, in the month the ore is fed to process multiplied by the contained pounds, less allowable deductions. The allowable deductions include sales brokerage fees, costs of transporting processed concentrates to point of sale, and applicable production and sales taxes.
Two additional, identical mining leases were made effective May 1, 2008, and May 12, 2008, between Denison (acquired by EFR in June 2012) and Robert and Pamela Fergusson, and between Denison (acquired by EFR in June 2012) and Carole and Fay Giles, respectively, to lease equally the remaining 25% of mineral rights in the same land parcels. These two leases combined are referred to as the Keller Estate portion of the Redd-Mullins Mining Lease. The annual advance royalty, determined in the same manner as the Crawford portion, is paid in four equal parts to the heirs of the Keller Estate. The Keller Estate lease carries the same production royalty as the Crawford portion.
4.2.4.9 Barton Norton Estate portion of Redd-Mullins Land
Denison (acquired by EFR in June 2012) entered into a mining lease with Joel Norton, representative of the Thora Barton Norton Estate on April 25, 2008. The lease covers a 50% mineral ownership on 40 acres located in the SE¼, Section 33, Township 28 South, Range 24 East. The other 50% mineral right resides with Redd Royalties, as described in the Redd-Mullins Mining Lease subsection. An annual advance royalty payment is made to hold the Barton Norton mineral lease. The vanadium "market value" royalty is variable. The "market value" is determined to be the published prices for the two products, uranium and vanadium, in the month the ore is fed to process multiplied by the contained pounds, less allowable deductions. The allowable deductions include sales brokerage fees, costs of transporting processed concentrates to point of sale, and applicable production and sales taxes. A portion of the Redd Block Mineral Resource is located on this parcel. No mining has taken place on this mineral lease. Surface access is covered by the La Sal Livestock Agreement.
4.2.4.10 San Juan County Mineral Lease
A Metalliferous Mineral Lease between San Juan County, Utah, and Hecla Mining Company was signed April 17, 1967. This gave Hecla the right to explore and mine 262.69 acres located in the S½, Section 32, Township 28 South, Range 24 East, and most of the NW¼, Section 5, Township 29 South, Range 24 East. Two small private parcels in the NW¼ of Section 5 are excluded. A very small parcel, 0.18 acres in Section 10, Township 29 South, Range 24 East, is included in the lease. Hecla assigned 50% interest in the lease to Union Carbide in December 1976 as part of the Hecla-Union Carbide joint venture (JV). This JV operated the Hecla Shaft (now Energy Queen) immediately west of Section 5 on the Superior Uranium Lease. The San Juan County Mineral Lease is held by an annual payment. It is the intent of EFR to continue to hold this lease. An amendment to the lease in January 1968 changed the production royalty to match that used by the State of Utah on it metalliferous leases. When the Energy Queen Mine (Hecla Shaft) ceased operation in 1983, a development drift had advanced into the County land by a few tens of feet. Very little if any ore was produced at that time. The drift was developing toward mineral resources that are now part of the Redd Block Mineral Resources. The mineral lease allows for surface use as necessary for exploration and mining.
Table 4-4 presents a summary of the private and county mineral leases held by EFR.
Table 4-4: Summary of Private and County Mineral Leases Held by EFR
Energy Fuels Inc. - La Sal Project
Lease Name |
Number of Acres |
Public Land Survey System Location |
Superior Uranium Energy Queen |
702.0 gross/net |
All (except claims Daisy 5-8 HEC 23, Judas 10-13) Sec. 6, N½ NE¼ and NE¼ NW¼ Sec. 7, T29S, R24E |
Redd Royalties Block 1-A |
160.0 gross/net |
SE¼ Sec. 31, T28S, R24E |
Redd Royalties Block 1-B |
1720.0 gross/net |
S½ SW¼ and SW¼ SE¼ Sec. 25, NE¼ NE¼ Sec. 35, N½ NW¼, W½ SW¼ Sec. 36, T28S R23E; E½ SE¼, SE¼ NE¼ Sec. 34, W½ NW¼ Sec. 35, T28S R24E; All of Sec. 2, T29S, R24E, except W½ NW¼; SE¼, E½ SW¼ and E¼ NE¼, Sec. 3, N½ Sec. 11 T29S R24E; |
Redd Royalties La Sal Unit |
683.0 gross/net |
NE¼ Sec. 31, T28S, R24E; S½ NE¼ and SE¼ Sec. 4, T29S, R24E; SE½ Sec. 5, R29S, R24E |
Redd Royalties Pine Lodge |
60.0 gross/net |
SE¼ SW¼ and E½ SW¼ SW¼, Sec. 31, T28S, R25E |
Redd Royalties West Pine Lodge |
100.4 gross/net |
W½ NE¼ SW¼; NW¼ SW¼ and Lots 2 and 3, Sec. 31, T28S, R25E |
Redd Royalties Redd-Mullins (50% net) |
280.0 gross/160.0 net |
S½ SW¼ and S½ SE¼, Sec. 33, T28S, R24E; SE¼ SW¼, W½ SE¼, Sec. 34, T28S, R24E |
Crawford-Keller portion of Redd Mullins (25% Net) |
240.0 gross/50.0 net |
S½ SW¼ and SW¼ SE¼, Sec. 33, T28S, R24E; SE¼ SW¼, W½ SE¼, Sec. 34, T28S, R24E |
Barton Norton (50% Net) |
40 gross/20 net |
SE¼ SE¼, Sec. 33, T28S, R24E |
San Juan County Lease |
262.69 gross/net |
S½ S½, Sec. 32, T28S, R24E; NW¼ in part, Sec. 5, T29S, R24E |
4.3 Permits
EFR's La Sal mines are located on a mixture of private, state, and federal lands. Mines on private, state, and federal lands require an approved Notice of Intent (NOI) with the Utah Division of Oil, Gas and Mining (DOGM). As the mines that make up the Project were assembled over a period of time in the 2000s, each had its own set of permits. EFR combined all the permits into a single Project-wide permit in 2018. The entire Project is currently permitted and mining can commence at any time as long as certain permit requirements are met:
If the mine generates water, a ground water discharge permit is required for the treatment plant and ponds and a surface water discharge permit is required for discharge of treated water. Both permits are issued through the Utah Division of Water Quality (DWQ).
Air permits for air emissions including radon are issued by the Utah Division of Air Quality (DAQ), however, smaller mines are typically exempt.
Water well permits, water rights, and stream alteration permits are issued through the Division of Water Resources (DWR).
On federal land, all the state permits listed above are required; however, a Plan of Operations (POO) and a review under NEPA are also required by the federal land managing agency. The Project mines are all existing mines in historic mining areas and approvals by the BLM and U.S. Forest Service (USFS) have been obtained under Environmental Assessments (EAs) and Findings of No Significant Impact (FONSI). The counties in southeastern Utah are rural and sparsely populated, and their county permitting requirements are typically limited to building and utility permits. Agreements for maintaining portions of the county roads used for ore haulage are also fairly common.
The SLR QP is not aware of any significant encumbrances to the Project including current and future permitting requirements and associated timelines, permit conditions, and violations and fines.
The SLR QP is not aware of any environmental liabilities on the Project. Energy Fuels has all required permits to conduct the proposed work on the property. The SLR QP is not aware of any other significant factors and risks that may affect access, title, or the right or ability to perform the proposed work program on the Project.
4.4 Royalties
Royalties have been discussed above as part of Land Tenure.
5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY
5.1 Accessibility
The Project is easily accessed from the all-weather Utah State Highway 46. Utah 46 enters the Project area about one mile west of the Energy Queen lease. Utah 46 stays within or very near the Project for the next eight miles to the east. The Energy Queen headframe, visible from the highway, is located approximately 500 ft south of Utah 46 and is accessed by a gravel road. The Beaver Shaft headframe is also visible from the highway, located a quarter mile north of the La Sal Post Office, store, and school. The Beaver Shaft headframe is accessed by a gravel road. The La Sal Decline portal and surface facilities are also about a quarter mile off the highway on County Road Wilcox N, approximately three-quarters of a mile east of the La Sal Post Office. A gravel road continues eastward, past the La Sal Decline facilities for about 1.2 miles to reach the portal of the Pandora Mine. The Snowball Mine portal is approximately a half mile north of the Pandora Mine surface facilities. The Snowball Mine is only used for ventilation, so the road is not well maintained. Locations of each of the six mines/properties, as well as access, is shown on Figure 4-1.
All State and U.S. Highways in this area are paved roads with weight limits for 18-wheel trucks of 80,000 lb and are maintained year-round. Utah allows trucks to pull an auxiliary trailer, which results in some trucks hauling more than 75,000 net pounds per trip.
Haulage of material from the Project to the Mill in Blanding, Utah, is by Utah 46 and U.S. Highway 191. The distance from the Project to the Mill is approximately 70 miles as shown in Figure 4-1.
5.2 Vegetation
All elevations within four miles of the center and west end of the Complex support moderate growths of sage and rabbitbrush along with other brush, forbs, cacti, yucca, and grasses. Higher elevations contain juniper and piñon pine in the rocky soils, along with scrub oak, aspen, and ponderosa pine on Pine Ridge to the east.
5.3 Climate
The Project is located in Southeastern Utah on the east side of the Colorado Plateau. The climate of the region lends itself to year-round mining operations.
The area of the Project is semi-arid. Temperatures range between an average low of 41°F to an average high of 72°F. Less than 10 in. of precipitation falls per year. Winters are not particularly severe, although there are numerous snowstorms. The temperature drops below 0°F at times, and snow can accumulate to over a foot in the lower elevations and more than two feet at higher elevations. Based on historic operating experience, it is anticipated that mining operations will occur year-round.
All elevations within four miles of the center and west end of the Project support moderate growths of sage and rabbitbrush along with other brush, forbs, cacti, yucca, and grasses. Higher elevations contain juniper and pinyon pine in the rocky soils, along with scrub oak, aspen, and ponderosa pine on Pine Ridge to the east.
5.4 Local Resources
Due to the history of uranium mining near La Sal, Utah, there are a number of miners who live locally in the small towns in the region but travel to other regions of the country to work while the local uranium mines are not operating. It is anticipated that most personnel will be hired from the local area with other personnel being hired from other mining districts around the country.
La Sal, Utah, is a small town consisting of a Post Office and general store. Most supplies necessary for mining operations can be found locally in the towns of Moab, Utah, or Monticello, Utah, 24 mi northwest or 34 mi south of the Project respectively. Young's Machine Company, which builds most of the trucks used in mining activities, is also located in Monticello, Utah. Larger cities with industrial supply houses and services include Grand Junction, Colorado, (140 miles north) and Cortez, Colorado (100 miles south). Additional supplies could be sourced from regional major cities, including Salt Lake City, Utah, and Denver, Colorado, as needed.
5.5 Infrastructure
The primary infrastructure as well as electricity and water are already in place at the Project. The mines associated with the Project were in commercial production between 2009 and 2012, before being placed on standby. A test-mining program that began in April 2018 and ran through May 2019 included the rehabilitation of both the La Sal and Pandora declines and re-established underground utilities to most of the mine workings. An airport in Moab, Utah provides daily service to Salt Lake City, Utah, and Denver, Colorado, both of which have international airports.
Electric transmission and distribution lines exist throughout the project area, of sufficient size to supply the load the mines demanded in the past. Many portions of the electrical distribution system were replaced or refurbished as part of a test-mining and rehabilitation program that occurred at the Project between April 2018 and May 2019. The electrical supply is also adequate for additional demand should more ventilation fans, compressors, and even another production shaft with hoisting equipment be added when production resumes and expands. Natural gas is also available for any future production needs.
Water for the mine is purchased from a local rancher who maintains a water well near the Beaver Shaft. Water pumped from the well is either transported by truck to the facilities where it is distributed to the mines or by utility drops located throughout the Project. The eastern end of the Project, including all the current mine workings associated with the Beaver Shaft, La Sal Decline, and Pandora Mines are dry. The Energy Queen Mine workings and shaft are currently flooded and will need to be dewatered prior to mining. La Sal is a historical mine currently on standby while continuing environmental compliance activities with all infrastructure in place needed to restart operations.
5.6 Physiography
The majority of the Project area between the Energy Queen Shaft and the La Sal Decline is characterized by a broad shallow valley of hay fields and pasturelands at elevations between 6,400 feet above sea level (ft ASL) and 7,000 ft ASL. The eastern edge of the Project area, including areas east of the La Sal Decline, around the Pandora and Snowball Mines to Pine Ridge is hilly and rougher terrain that ranges in elevations between 7,000 ft ASL and 7,800 ft ASL. The north side of the Project area slopes south and southwest, radially away from the La Sal Mountains, which attain an elevation of 11,817 ft ASL at South Mountain, six miles to the north. The south-southwest slopes consist of boulder gravels shed from the mountains, variably covered by windblown loam. Underlying sedimentary rocks dip to the southwest, ranging from steep dips near the mountains to shallow dips near Utah Highway 46.
The surface of the western part of the Project area is drained by small tributaries to West Coyote Creek, which flows westerly to Hatch Creek, thence northwesterly to Kane Spring Creek, and ultimately to the Colorado River. The eastern end of the Project area is drained by south-flowing tributaries to East Coyote Wash, which flows southeasterly for about 10 mi, and then turns to the east for another seven miles before joining the Dolores River in a deeply incised meandering canyon a few miles into Colorado. The Dolores is a tributary of the Colorado River with the confluence about 60 mi to the north of the Project.
6.0 HISTORY
Prior to the 1960s, the region, including the Project and nearby area, was mined for vanadium, radium, and uranium. Uranium became the emphasis in the region in 1943 when the U.S. Army's Manhattan Project came to the area. After World War II, between 1948 and 1954, exploration work on Morrison Formation outcrops resulted in the discovery of the Rattlesnake Pit two miles southwest of the Energy Queen shaft (U.S. Atomic Energy Commission, 1959). The majority of the work on the Project took place from the 1960s through the 1980s.
6.1 Prior Ownership
In the late 1960s, three mining companies controlled most of the Project. Union Carbide had leases and claims in the central portion of the Project including the La Sal Decline, Snowball Mine, Beaver Shaft, and most of the Redd Block IV property; Union Carbide reorganized in the early 1980s and became Umetco. American Metal Climax held the lease on the Pandora Mine as the east end of the Project; that lease was assigned to Atlas Minerals in 1973 and Atlas Minerals assigned it to Umetco in 1988, retaining an overriding royalty. Hecla Mining held the Energy Queen and San Juan County leases on the west end of the Project. Hecla and Union Carbide formed a joint venture on those properties in 1976.
Umetco and Energy Fuels Nuclear, Inc. (EFNI) (no relation to current EFR) entered into an agreement in 1984 whereby Umetco owned 70% capacity in, and was the operator of, the Mill. That operating agreement was restructured in 1988 wherein EFNI became 20% owner of the Umetco uranium-vanadium properties in Colorado and Utah, including the La Sal properties. In 1994, Umetco gave back its interest in the Mill to EFNI and assigned all interest in the La Sal properties, among others, to EFNI, thereby giving EFNI control of all previous Umetco, Hecla, and Atlas properties in the Project. Many of the Umetco personnel continued working for EFNI. Original data of the previous operators also transferred to EFNI ownership. EFNI bought-out the Atlas Minerals royalty on the Pandora Mine in the mid-1990s. The Hecla 50% interest was also acquired by EFNI.
International Uranium Corporation (IUC) bought all assets of EFNI in 1997 including the Project and the Mill. IUC did not retain the Superior Uranium lease (Energy Queen lease). Again, many personnel and all data on the Project transferred to IUC. In 2006, IUC acquired Denison and changed its name to Denison Mines Corporation (Denison). EFR entered into a new lease on the Energy Queen property in late 2006. EFR acquired Denison's U.S. Mining Division in June 2012, thereby becoming owner and operator (through various subsidiaries) of the entire Project and the Mill. Several persons now on the EFR staff have been associated with all or portions of the Project since the 1980s. All historical data on the Project is the property of EFR.
Since the end of commercial mining at the Project in October 2012, EFR has maintained the Project on care and maintenance. To reduce maintenance costs, EFR has dropped a number of unpatented mining claims on the edges of the Project since 2014. In total, approximately 1,385 acres of claims have been dropped.
6.2 Exploration and Development History
Exploration for uranium deposits, both regionally and in the Project area, generally consists of rotary drilling into the Morrison Formation, specifically the Saltwash Member. The drill holes are then probed utilizing a calibrated gamma probe. The gamma probe records gamma radiation given off by the daughter products of uranium decay and that data can be used to determine an equivalent U3O8 grade (eU3O8). At the Project, core was collected from drilling to use for vanadium assays and as a check on the eU3O8 grades.
Uranium and vanadium deposits were discovered east of the Project in the La Sal Creek area by the Raw Materials Division of the Atomic Energy Commission (AEC) in 1952. That program was successful in identifying new and extending known deposits (Vanadium Queen, Gray Daun, Firefly-Pigmy, and others). Private mining increased in 1953 with drilling outlining a favorable belt about 3,000 ft wide by five miles long to Lion Creek. By 1955, other deposits found farther north of La Sal Creek canyon, Hop Creek, suggested other belts might occur on the east flank of the La Sal Mountains and to the southeast (Carter and Gualtieri, 1965 and Chenoweth, 1981).
Throughout the 1960s and into the 1970s, drilling progressed westward from the head of La Sal Creek canyon discovering Morrison uranium deposits at depth at the Pandora, Snowball, and La Sal mines. Drilling continued westward and intensified in the late 1970s, discovering large uranium-vanadium deposits later accessed by shafts, the Beaver Shaft and Hecla Shaft (Energy Queen Mine). The Redd Block IV property was also located and mostly defined during this time.
6.2.1 Exploration
Most of the exploration completed at the Project occurred before EFR acquired the Project in June 2012. As mentioned, the primary method of exploration for these uranium-vanadium deposits was by surface drilling. Once mining commenced, a number of underground longhole drill holes were completed for both exploration and definition.
6.2.2 Drilling
Historical drilling was conducted primarily by Union Carbide, Atlas Minerals, the Union Carbide/Hecla JV, and Denison. The drilling is a combination of surface exploration and development rotary drilling and underground longhole drilling. Data on both surface and underground drilling is currently in the possession of EFR. Details regarding surface and underground drilling are discussed below.
6.2.2.1 Surface Drilling
Most of the historical drilling across the Project was completed by Union Carbide, Atlas Minerals, or the Union Carbide/Hecla JV. Denison also drilled several holes after their acquisition of the Project. Data associated with this drilling is in the form of geologic logs, assay certificates, composited data on maps, and geophysical logs. Table 6-1 summarizes the historical surface drilling at the Project. Total holes drilled include all the records available to EFR and the useable holes are those that were used as part of the Mineral Resource estimate. The most common reason for a hole that had a record but was not used is that the collar coordinates could not be found or validated.
Table 6-1: Summary of Historical Surface Drilling at the Project
Energy Fuels Inc. - La Sal Project
Company |
Total Holes Drilled |
Useable Holes |
% Usable |
Union Carbide |
2,720 |
1,808 |
67% |
Atlas Minerals |
2,157 |
1,264 |
59% |
Denison |
227 |
220 |
97% |
Total |
5,104 |
3,292 |
65% |
6.2.2.2 Longhole (Underground) Drilling
Union Carbide, Atlas Minerals, and Denison conducted extensive underground longhole drilling during production mining to explore or develop the deposit. In most cases, these were short holes, less than 100 ft, and were probed with a handheld gamma meter. Denison completed much longer holes, up to 400 ft, and logged the holes for gamma with a downhole gamma probe. The data for these holes is in the form of handwritten log sheets, electronic gamma logs, and data on maps. Table 6-2 summarizes the historical underground drilling at the Project. There is no record of underground drilling at the Energy Queen (Hecla) mine. The primary reason that some underground drilling is not useable is that no assay data was available for the hole; additionally, some holes could not be located using their collar coordinates.
Table 6-2: Summary of Historical Underground Drilling at the Project
Energy Fuels Inc. - La Sal Project
Company |
Total Holes Drilled |
Useable Holes |
% Usable |
Union Carbide |
2,394 |
1,736 |
73% |
Atlas Minerals |
8,549 |
8,148 |
95% |
Denison |
1,293 |
1,271 |
98% |
Total |
12,236 |
11,155 |
91% |
6.3 Past Production
6.3.1 Pandora
American Metal Climax and Atlas Minerals were the two primary producers from the Pandora Mine from the 1960s through 1988 when Atlas Minerals assigned the Pandora mining lease to Umetco. EFR does not have any records on mine production from either of these two companies.
6.3.2 Snowball/La Sal Decline/Beaver Shaft
Union Carbide controlled the Snowball Mine, La Sal Decline, and Beaver Shaft portions of the Project from early exploration in the 1970s through 1994. Production from these mines occurred during two main phases, between 1977 and 1982 and between 1985 and 1990. A June 29, 1989, review of the Umetco properties states that production from the Beaver and La Sal mines by Union Carbide was approximately 550,000 tons. Given that report was issued prior to when Union Carbide shut down the mines, it is estimated the actual number of tons mined is closer to 580,000 tons.
6.3.3 Energy Queen Shaft (Hecla-Umetco Joint Venture)
The Energy Queen Shaft (formerly known as the Hecla Shaft) was a joint venture between Hecla Mining and Umetco. A shaft was sunk in the late 1970s into the early 1980s and underground development work followed completion of shaft sinking in 1981 to 1982. The mine never reached full production and the majority of the ore mined was as part of development work. Table 6-3 gives production numbers during the development period. The mine was shut down in late 1982 due to low uranium prices.
Table 6-3: Historical Energy Queen Shaft (Hecla) Production
Energy Fuels Inc. - La Sal Project
Notes:
1. Pounds of V2O5 are estimated using a 4.25 V2O5:1 U3O8 ratio
6.3.4 Denison
In response to improving uranium prices, Denison resumed production at the Pandora Mine in late 2006. Rehabilitation work began at the Beaver Shaft and La Sal Decline in December 2008, with production resuming three months later. The production by Denison and EFR (following acquisition of Denison's U.S. Mining Division in June 2012), between 2006 and December 2012 from the mines in the Project area (excluding Energy Queen) was 412,000 tons of ore (1,658,000 lb U3O8 at an average grade of 0.20% U3O8 and 8,431,000 lb V2O5 at an average grade of 1.02% V2O5). Due to declining uranium prices, the production at the Beaver Shaft and La Sal Decline ceased in October 2012 and at the Pandora Mine in December 2012.
6.3.5 Energy Fuels Resources
EFR conducted a test mining program in late 2018 through early 2019. The main objective of the test-mining program at La Sal was to determine if there were areas in the mine that were abandoned due to low uranium grades but contained economic vanadium. Handheld x-ray fluorescence spectrometers (XRFs) were the main tool used to quantify the vanadium . The project mined over 5,000 tons of material with average grades of 1.51% V2O5 and 0.18% U3O8.
Following the test-mining program additional rehabilitation work was done at both the La Sal and Pandora mines. During this time, a decision was made to start commercial production, which began on April 1, 2019, and ran through May 2, 2019. A total of 5,545 tons were produced from both mines at an average grade of 1.43% V2O5 and 0.21% U3O8.
7.0 GEOLOGICAL SETTING AND MINERALIZATION
7.1 Regional Geology
The Colorado Plateau covers nearly 130,000 square miles in the Four Corners region (Figure 7-1). The Project lies in the Canyon Lands Section in the east-central part of the Plateau in Utah. The La Sal Mountains Intrusion is located to the north and east of the Project and the peaks are visible from most of the Project.
Minor uplifts, subsidences, and tiltings have taken place on the Colorado Plateau since Paleozoic times, but mostly the Plateau has been relatively stable resulting in the deposition of fairly flat-lying sedimentary rocks ranging from evaporates, limestones, and marine clastic sediments, through eolian sandstones, to detrital fluvial sediments. The Plateau's basement rocks consist mostly of Proterozoic metamorphics and igneous intrusions.
The Uncompahgre Uplift, forty miles northeast of the La Sal Trend, was active during the late Paleozoic so that Pennsylvanian through early Jurassic sedimentary rocks, which wedge out against the pre-Cambrian crystalline rocks, thicken in the Paradox Basin to the southwest. During the late Mesozoic era the area was inundated by the warm, shallow Cretaceous Seaway, and thick marine shales with sequences of limestone, siltstone, and sandstone were deposited. The Laramide Orogeny during the late Mesozoic caused uplift of the Colorado Plateau region as a relatively intact stratigraphic sequence, with minor folding and faulting.
The thick late Paleozoic-Mesozoic stratigraphic sequences are interrupted locally by salt-cored anticlines (e.g., Lisbon Valley) in the Paradox Basin area, basement fault-related monoclines, and Tertiary laccolithic intrusions (e.g., La Sal Mountains). The salt anticlines are elongated in a northwest-southeast direction, as is the Uncompahgre Uplift. Subsurface flow of the salt was erratically active from the Permian through late Jurassic Periods, thereby affecting deposition of the Triassic and early Jurassic sediments, including the flow of the streams that deposited the Morrison Formation. Sedimentary rocks exposed in the canyons and hogbacks around the La Sal Mountains range from Pennsylvanian through recent and are over 8,500 ft thick (Carter and Gualtieri, 1965).
Approximately four miles to 15 mi north of the Project area are the La Sal Mountains, which consist of Tertiary laccoliths that intruded about 25 million years ago into several different horizons of Paleozoic and Mesozoic sedimentary rocks. There are three main stocks which make the North, Middle, and South Mountains, which are aligned due north-south. Diorite porphyry is the dominant rock type, with minor monzonite porphyry and syenite. The individual intrusive bodies of North and South Mountains are controlled by the salt anticlines and elongate in a northwest direction. The La Sal Mountains were uplifted in the late Tertiary, concurrently with the collapse of the salt anticlines. Deep canyon cutting occurred, continuing through the Pleistocene. The headward canyon-cutting of West and East Coyote Creeks has not yet reached the Project area, leaving the present broad valley. Figure 7-2 is a stratigraphic column of the rock units exposed in the La Sal, Utah, area.
Major uranium deposits of the east-central Colorado Plateau occur principally in two of the fluvial sequences. The older one is located at or near the base of the upper Triassic Chinle Formation. Areas of uranium deposits occur where the basal Chinle consists of channels filled with sandstone and conglomerate that scoured into the underlying sediments. This channel system is known as the Shinarump Member in southern Utah. Farther north, in eastern Utah, the basal member of the Chinle is a younger channel system known as the Moss Back. This is the host of the bulk of the ore mined from the nearby Big Indian District (Lisbon Valley). The Chinle deposition followed a period of tilting and erosion; therefore, the basal contact is an angular unconformity. Where the Chinle channels are in contact with sandstones of the Permian Cutler Formation, good uranium deposits locally occur in the Cutler. The basal Chinle beds at the Project are greater than 2,700 ft below ground surface. Potential for Chinle uranium deposits was explored by Umetco in 1977. A hole drilled in the Mike claims area found minor uranium mineralization in the Moss Back at a depth greater than 2,800 ft. In the western part of Section 2, T29S, R23E, west of the Lisbon Valley Fault, the basal Chinle would be approximately 1,600 ft below ground surface, but, to EFR's knowledge, has not been tested with drilling.
The other significant Colorado Plateau uranium deposits occur in the late Jurassic Morrison Formation. The Morrison comprises two members in the La Sal area. The lower member, the Salt Wash, is the main uranium host. The upper part of the Morrison is the Brushy Basin Member. The Salt Wash consists of about equal amounts of fluvial sandstones and mudstones deposited by braided and meandering river systems. The Brushy Basin was deposited mostly on a large mud flat, probably with many lakes and streams. Much of the material deposited to form the Brushy Basin originated from volcanic activity to the west. The majority of the uranium production has come from the upper sandstones of the Salt Wash Member, known as the Top Rim (historically referred to as the ore-bearing sandstone or OBSS).
In addition to the uranium, many of the deposits contain considerable amounts of vanadium. In general, the Cutler and Shinarump deposits contain very little vanadium, whereas the Salt Wash deposits usually contain large amounts of vanadium. The V2O5:U3O8 ratio for Salt Wash deposits averages approximately 4:1 and can range up to 15:1 in parts of the Uravan Mineral Belt. The economics of the Salt Wash deposits are enhanced by the vanadium content, even when the vanadium prices are depressed. The west end of the La Sal Trend near the Energy Queen Mine generally has a lower vanadium content than the east end at the Pandora Mine. The average historical vanadium content for the La Sal Trend is a 5.25:1 ratio.
Figure 7-1: Uranium Deposits and Major Structures of the Colorado Plateau
7.2 Local Geology
7.2.1 Geology and Stratigraphy
The central part of the Project, from the Beaver Shaft to west of the Energy Queen Mine, lies in the Browns Hole-Coyote Wash syncline. It is overlain by Quaternary gravel deposits and mixed eolian and alluvium deposits. This alluvial fill consists of moderately rounded pebbles, cobbles, and some boulder-sized rocks with interstitial silts and sands deriving from the La Sal Mountains. Thickness ranges from 0 ft to 120 ft, controlled primarily by paleoweathering surfaces of the underlying units, usually the Mancos Shale. In the western part of the Project, erosion has exposed older geologic units of the Cretaceous Mancos Shale, Dakota Sandstone and Burro Canyon Formation. The lithology of these and the underlying stratigraphy is discussed below. These units crop out as small, isolated windows through the wind-blown sandy soil and Quaternary gravels and as a band along the west edge of the Energy Queen lease where West Coyote Wash has cut somewhat deeper. State lease ML-49313 (Section 36) has experienced more erosion, exposing the upper part of the Morrison Formation. Farther southwest in sections 1, 2, and 12, T29S, R23E, older sedimentary rocks are also exposed because of displacement related to the Lisbon Valley Fault and subsequent erosion. Jurassic rocks exposed here include the Entrada Sandstone, Summerville Formation, and both members of the Morrison Formation. At the east end of the Project area, the Pandora-Pine Ridge portion is structurally higher than the Coyote Wash syncline. Here, the Dakota and Burro Canyon rocks cap the southwest sloping ridge. South-flowing tributaries to East Coyote Wash are eroding steep-walled canyons into the Ridge, exposing the underlying Brushy Basin Member of the Morrison Formation.
Rocks of interest in the subsurface at the Project range from the Permian Cutler Formation to the Cretaceous Mancos Shale. A stratigraphic column is presented in Figure 7-2. The units are described below. A portion of the published Utah Geologic Survey geologic map of the area is presented as Figure 7-3. Figure 7-4 shows a generalized cross section of the area adapted from Weir et al. (1960).
Figure 7-2: Regional Stratigraphic Column
Figure 7-3: Regional Geologic Map
Figure 7-4: Cross Section A-A' of Local Geology
7.2.1.1 Colluvium
Surface colluvium consisting of sands, cobbles and boulders shed from the La Sal Mountains make up the surface geology west of the La Sal Decline east towards the Energy Queen Mine. The colluvium is 0 ft to 120 ft thick in this area. This unit poses challenges in the Project area where exploration drilling occurs as a surface casing is typically needed in this area to stabilize the upper portion of the hole. This unit will be a concern for development of the Redd Block IV property where the development of a shaft or decline would need to go through approximately 50 ft of this unit.
7.2.1.2 Mancos Shale
The Mancos Shale is a black to brown to gray, thinly laminated marine shale with thin siltstone beds. Limestone as nodules and thin lenses contains marine fossils, predominately bivalves. Thickness in the area is between 20 ft and 60 ft with an unconformable contact with the overlying alluvial cover and a gradational and intertonguing contact with the underlying Dakota Sandstone.
7.2.1.3 Dakota Sandstone
The Dakota Sandstone consists of interbedded yellowish-brown sandstone and conglomerate with beds of gray carbonaceous shale containing discontinuous thin coal seams. It can be 150 ft to 200 ft thick where all units are present. On the Energy Queen lease, the Mancos and most of the Dakota were eroded prior to deposition of the Quaternary gravels. A very small exposure of the Mancos occurs in a window through the gravels in the northeast corner of Section 36, T28S, R23E. The Mancos was eroded from the south flank of Pine Ridge before any gravels were deposited. The gravel fan from the La Sal Mountains may never have been deposited as far southeast as the Pandora claims.
7.2.1.4 Burro Canyon Formation
The Burro Canyon Formation consists mostly of light-brown and gray sandstones and conglomerates. It contains interbedded green and purplish mudstones with a few thin limestone beds. Locally, silicification altered the limestones to chert and some of the sandstones to orthoquartzite. Orthoquartzite cobbles and boulders litter the slopes in Section 2, T29S, R23E. Massive lenticular sandstone beds form cliffs and ledges when exposed in outcrop in the Pine Ridge canyons. Local thickness is between 80 ft and 120 ft in the east part of the district. The unit is about 180 ft to 220 ft thick in the Energy Queen area and is an aquifer in the region east of the Lisbon Valley Fault to the west end of the Beaver Shaft. The lower contact with the Morrison Formation is unconformable and represents a hiatus of about 30 million years.
7.2.1.5 Brushy Basin Member of the Morrison Formation
Approximately 90% of the Brushy Basin Member of the Morrison Formation is reddish-brown and gray-green mudstone, claystone, and siltstone composed of clays derived from detrital glassy volcanic debris originating from volcanic activity to the southwest (Cadigan, 1967). This material settled on a large floodplain, and fine-grain clastic material is interbedded with a few channel sandstones and conglomerates. A conglomerate found near the base of the Brushy Basin, called the Christmas Tree Conglomerate, commonly contains red and green chert pebbles. The Brushy Basin also contains a few thin fresh-water limestone beds, some of which have been silicified. Devitrification of the volcanic ash may have been a major source of the uranium that leached downward into the Salt Wash Member sandstone and weakly mineralized some of the Brushy Basin sandstone lenses. The Brushy Basin is 350 ft to 450 ft thick in the Project area. The sandstones can be aquifers. The Brushy Basin crops out in most of sections 1, 2, and 12, T29S, R23E. In section 1 and 12, however, much of it is covered by landslide debris. Good exposures are found in the Rattlesnake open pit southwest of Energy Queen and canyons cut in Pine Ridge east of Pandora.
7.2.1.6 Salt Wash Member of the Morrison Formation
The Salt Wash Member of the Morrison Formation consists of interbedded fluvial sandstones (about 60%) and floodplain-type mudstone units (40%) and is the primary host of uranium mineralization at the Project. The Salt Wash sandstones are usually more fine-grained that Brushy Basin sands. They are varieties of orthoquartzite, arkose, and tuffs. Major detrital components are quartz, feldspars, and rock fragments. Minor components include clays, micas, zircon, tourmaline, garnet, and titanium and iron minerals. The cement is authigenetic silicates, calcite, gypsum, iron oxides, and clays. The sandstone units crop out as cliffs or rims, whereas the mudstones form slopes in nearby La Sal Creek Canyon and the Browns Hole-Black Ridge area. These intervening mudstones contain considerable volcanic ash, similar to the Brushy Basin mudstones. Generally, in the upper part of the Salt Wash, the numerous channel sandstones have coalesced into a relatively thick unit referred to as the Top Rim. Similarly, there is a thick sequence of channel sandstones at the base of the member called the Bottom Rim. Usually there are several thinner sequences or lenticular channel sandstones in the central part of the member, which are termed Middle Rim sands. The largest deposits in the Uravan Mineral Belt, the Moab District, and the La Sal Trend are in the Top Rim, commonly referred to as the OBSS. The Salt Wash is over 300 ft thick in the Project area. Good exposures of the Top Rim sandstones (OBSS) are seen in the floor and lowest walls of the Rattlesnake open pit.
The streams that deposited the Salt Wash sandstones flowed mostly in large meander belts across an aggrading, partly eroded plain with varying subsidence rates. The source area for most of the Morrison Formation was a highland about 400 mi to the southwest. The rocks eroding in the source area included volcanic, intrusive igneous, metamorphic, and minor sedimentary strata. Salt Wash streams generally flowed northeastward, however, some of the channel systems were locally diverted by contemporaneous uplifting of the salt-cored anticlines. Kovschak and Nylund (1981) report the lower part of the Salt Wash is missing in the west end of the La Sal Trend as observed in Union Carbide drill holes. They attribute this to the northwestern nose of the Lisbon Valley anticline being slightly positive topographically during early Salt Wash deposition.
The Salt Wash sandstones exhibit several facies and sedimentary features. The sandstone facies are produced from vertically stacked, aggrading stream channels. These features can be seen in some outcrops, sometimes in drill core and in underground mines, however, these features are often too thin to be identified in borehole logs, such as neutron or resistivity logs. Large cross-bedding is common indicating stream thalwegs. Channel sandstone deposits generally fine upward. Flat, thin bedding of low energy areas can be seen along with apparent levies and crevasse splays. Channel overbank deposits within the Salt Wash form discontinuous, upward coarsening clay lenses. Channel scouring is also common as are the associated point bar deposits of the meandering streams. The point bars are characterized by mudstone galls, which are rip-up clasts from the scouring on the outside of previous meanders. The sand grains become finer upstream. There are often abundant logs and other carbonaceous plant material in the point bars, which make them a prime location for uranium deposition. Isolated oxbow lake deposits are also common.
The major Top Rim sandstones of the La Sal Trend have been interpreted as two channels joining in the vicinity of the Energy Queen Mine, then flowing as one large channel due east. The Mike Claims and part of the Pandora Claims are thought to be in a large meander to the south (Kovschak and Nylund, 1981). It is possible that the entire La Sal Trend is a meander belt rather than a straight-flowing channel. The channel or meander belt is about one mile wide in the center part, near the town of La Sal. In this central area, the upper sandstone attains a thickness of about 120 ft with very few thin mudstone beds. At both ends of the La Sal Trend, the Top Rim interval consists of multiple, thinner sandstone beds (35 ft to 50 ft thick) separated by thicker mudstones (up to 10 ft thick). Sandstone grain size is fine to medium, which is somewhat coarser than farther east in the Uravan Mineral Belt.
Fossils in the Morrison include petrified wood and carbonized plant material, dinosaur bone, tracks, and embryos and sparse microfossils in the thin fresh-water limestone beds.
7.2.1.7 Underlying Units
The Morrison Formation overlies the Jurassic and Triassic San Rafael and Glen Canyon Groups. These consist of several hundred feet of red beds. The uppermost is the reddish-brown, thinly bedded mudstone and shale of the Summerville Formation, containing a few thin, slabby sandstone beds. It varies in thickness from about 25 ft to 80 ft thick. Very small exposures of the Summerville exist only along the Lisbon Valley Fault in Sections 2 and 12, T29S, R23E. Underlying the Summerville is the eolian Entrada Sandstone, which is 250 ft to over 300 ft thick. It is an orange-brown, fine- to medium-grained, bleached sandstone consisting of subrounded and moderately sorted grains. Large cross-bed sets are common throughout the unit. In outcrop it often weathers to smooth, massive exposures. Within the project boundary, the Entrada only crops out on the footwall of the Lisbon Valley Fault in the southwest corner of Section 2. It is the oldest stratigraphic unit exposed on the project property. Under the Entrada is a thin shale unit, about 35 ft thick, named the Carmel. The upper unit of the Glen Canyon Group is the Navajo Sandstone. It is a light-brown, massive, cross-bedded eolian sandstone. Its thickness in the region is variable (100 ft to 450 ft), pinching out against most of the salt anticlines. It is 425 ft thick in a drill hole in Section 5, T29S, R24E. The Navajo Sandstone is above the Kayenta Formation. The Kayenta is up to 230 ft thick and composed of lenticular sandstones interbedded with minor siltstones, shales, and conglomerates. The basal unit of the Glen Canyon Group is the Wingate Sandstone. It is also a massive eolian sandstone over 250 ft thick.
The Late Triassic Chinle Formation consists of bright red and red-brown mudstone and siltstone containing lenticular sandstones in the middle part, as well as thin beds of limestone-pebble conglomerate. Important uranium deposits occur in the basal, calcareous, gray conglomerate (Moss Back Member) which has been mined four miles south of the Project area. Minor amounts of vanadium occur with the uranium (0.47% V2O5). The thickness of the Chinle varies greatly in the area, partly due to salt movement, ranging from 200 ft to 600 ft. It was found to be 445 ft thick in the Chinle test hole drilled in Section 5, T29S, R24E. Nearly 78 million pounds (Mlb) of U3O8 (averaging 0.30% U3O8) have been produced from the Moss Back (Chenoweth, 1990), mostly on the southwest limb of the Lisbon Valley Fault. One large mine, the Rio Algom Lisbon mine, produced from approximately 2,700 ft deep on the down dropped side of the Lisbon Valley Fault (Huber, 1981). The depth of the Moss Back is approximately 2,650 ft at the Energy Queen Mine, 2,800 ft to 2,900 ft elsewhere at the Project to the east of the Energy Queen Mine, and about 1,600 ft deep west of the Fault in the southwest corner of Section 2, T29S, R23E. A historic hole at the Mike claims in Section 1, T29S, R24E reportedly encountered 3.0 ft of 0.10% U3O8 in the Moss Back at a depth of approximately 2,800 ft.
Unconformably underlying the Chinle is the Triassic Moenkopi Formation. It is an evenly bedded, chocolate-brown shale and mudstone unit containing thin-bedded ripple-marked sandstone, sporadic limestone lenses, and gypsum layers. The salt anticlines were active following Moenkopi deposition, so it was mostly removed by erosion in the Big Indian District (Huber, 1981).
The Permian Cutler Formation was deposited as a thick clastic wedge derived almost entirely from the Precambrian rocks of the ancestral Uncompahgre Uplift. It contains a variety of rock types from mudstones to conglomerates. Where sandstones lie subjacent to the Moss Back, uranium deposits occur locally. The Cutler overlies the limestones, clastics, and evaporites of the Pennsylvanian Hermosa Formation.
7.2.2 Structural Geology
The local geologic structure at the Project is dominated by the La Sal Mountains intrusion, Pine Ridge Anticline, Browns Hole-Coyote Wash Syncline, and the Lisbon Valley Anticline. The majority of the uranium deposits lie on the eastern flank of the Browns Hole-Coyote Wash Syncline and western flank of the Pine Ridge Anticline. The syncline is the result of the Pine Ridge Anticline, a salt diaper structure formed by underlying Pennsylvanian evaporates on the northeast, and the Lisbon Valley Anticline, also salt-flow related, to the southwest. Dips of the host rocks toward the syncline axis are usually shallow, less than five degrees. The La Sal Mountain intrusion was localized by the same salt-cored structure as the Pine Ridge Anticline. The intrusion of the La Sal Mountains locally bowed the Salt Wash to as much as 40° around the base of the mountains. The Lisbon Valley Fault truncates the deposit to the southwest with approximately 400 ft to 800 ft of displacement. At the west edge of the Project, the Salt Wash is eroded and is not present any further west.
Structurally, the west part of the Project lies in the northwest-trending Browns Hole Syncline formed between the north end of the Lisbon Valley Anticline and the South Mountain intrusion. The Energy Queen shaft is located on the Syncline axis, which has a slight northwest plunge. The beds containing the known deposits at Energy Queen dip gently to the northeast, about one to three degrees, throughout most of the Energy Queen lease and the claims and SITLA lease (ML-49313) to the north and northwest. The west end of the Beaver Shaft and the Redd Block IV property are on the other side of the Browns Hole Syncline axis and dip at about 3.5° to the southwest. As the synclinal structure axis continues to the southeast it flattens, then begins plunging to the southeast and becomes the Coyote Wash Syncline. The host horizon at the Pandora Mine dips southwesterly into the Coyote Wash Syncline at about three degrees. The Pine Ridge Anticline parallels the Coyote Wash Syncline about five miles to the northeast. A collapse feature associated with salt removal at depth (the Pine Ridge graben) occurs along the anticline axis two miles north of the Pandora Mine.
The faults associated with the Pine Ridge graben are far enough north that they have not affected the mining at the Pandora Mine. No faulting occurs in the area of the Beaver Shaft, nor at Redd Block. The proposed mining area of the Energy Queen lease is minimally affected by the Lisbon Valley faulting. Minor faults that are splits of the Lisbon Valley Fault are mapped crossing the claims in Sections 1 and 12, T29S, R23E. These are normal faults striking north-northwest to west-northwest, of small displacement (50 ft to 400 ft), downdropped to the northeast. The main fork of the Lisbon Valley Fault continues northerly in the east part of the claims with about 400 ft of displacement, which is decreasing to the north.
7.3 Mineralization
The uranium and vanadium bearing minerals tend to occur as fine-grained coatings on the detrital sand grains. Minerals fill the pore spaces between the sand grains, and they replace some carbonaceous material and detrital quartz and feldspar grains.
The primary uranium mineral is uraninite (pitchblende - UO2) with minor amounts of coffinite (USiO4OH). Montroseite (VOOH) is the primary vanadium mineral, along with vanadium clays and hydromica. Traces of metallic sulfides occur. In outcrops and shallow oxidized areas of older mines in the surrounding areas, the minerals now exposed are the calcium and potassium uranyl vanadates, tyuyamunite, and carnotite. The remnant deposits in the ribs and pillars of older workings show a variety of oxidized minerals common along the La Sal Trend. These brightly colored minerals result from the moist-air oxidation of the primary minerals. Minerals from several oxidation stages can be seen, including corvusite, rauvite, and pascoite. Undoubtedly, the excess vanadium forms other vanadium oxides depending on the availability of other cations and the pH of the oxidizing environment (Weeks et al., 1959). The Energy Queen Mine has been full of standing water since 1990, so no direct observations have been made of the mine's workings by the SLR QP.
Some stoping areas in the mine workings are well over 1,000 ft long and several hundred feet wide. Individual mineralized beds vary in thickness from several inches to over six feet. There are three horizons in the Top Rim of the Salt Wash that host mineralization in the La Sal Trend, which are 25 ft to 40 ft apart.
8.0 DEPOSIT TYPES
The Project's uranium-vanadium deposits in the Jurassic Salt Wash Member of the Morrison Formation are sandstone-type deposits that fit into the U.S. Department of Energy's (DOE) classification as defined by Austin and D'Andrea (Mickle and Mathews, 1978) Class 240-sandstone; Subclass 244-nonchannel-controlled peneconcordant. Any future deep drilling to explore for deposits in the Triassic basal Chinle Formation (Moss Back Member) would fit the DOE classification as Class 240-sandstone; Subclass 243-channel-controlled peneconcordant. These classes are very similar to those of Dahlkamp (1993) Type 4-sandstone; Subtype 4.1-tabular/peneconcordant; Class 4.1.2 (a) Vanadium-Uranium (Salt Wash type) and Class 4.1.3-basal-channel (Chinle type).
The La Sal Trend uranium-vanadium deposits are a similar type to those elsewhere in the Uravan Mineral Belt. The Uravan Mineral Belt was defined by Fisher and Hilpert (1952) as a curved, elongated area in southwestern Colorado where the uranium-vanadium deposits in the Salt Wash Member of the Morrison Formation generally have closer spacing, larger size, and higher grade than those in adjacent areas and the region as a whole. The location and shape of mineralized deposits are largely controlled by the permeability of the host sandstone. Most mineralization is in trends where Top Rim sandstones are thick, usually 40 ft or greater.
The La Sal Trend is a large channel of Top Rim sandstone that trends due east, possibly as a major trunk channel to tributaries that fanned-out to the east to make a portion of the Uravan Mineral Belt. The Energy Queen deposit appears to be at the location of the junction of a tributary channel that joins the main channel from the southwest. The Rattlesnake open pit is located upstream of this tributary channel (U.S. Atomic Energy Commission, 1959). The deposit in Section 36 (ML-49313) is in the western extension of the main channel. The channel remains relatively straight, and the uranium deposits get larger as it continues eastward through the Redd Block IV and Beaver Shaft deposits. East of the Beaver Shaft, the channel appears to widen and contain large meanders as it continues through the Mike claims of the La Sal Decline and the Snowball and Pandora Mines to the east.
Most of the La Sal Trend and the Uravan Mineral Belt consist of oxidized sediments of the Morrison Formation, exhibiting red, hematite-rich rocks. Individual deposits are localized in areas of reduced, gray sandstone and gray or green mudstone (Thamm et al., 1981). The Morrison sediments accumulated as oxidized detritus in a fluvial environment; however, there were isolated environments where reduced conditions existed, such as oxbow lakes and carbon-rich point bars. During early burial and diagenesis, the through-flowing ground water within the large, saturated pile of Salt Wash and Brushy Basin material remained oxidized, thereby transporting uranium in solution. When the uranium-rich waters encountered the zones of trapped reduced water, the uranium precipitated. Vanadium may have been leached from the iron-titanium mineral grains and subsequently deposited along with, or prior to uranium.
The habits of the deposits in the La Sal Trend have been reported to be typical of the Uravan Mineral Belt deposits. Where the sandstone has thin, flat beds, the mineralization is usually tabular. In massive sections, it "rolls" across the bedding, reflecting the mixing interface of the two waters. This accounts for several horizons within the Top Rim that are mineralized. Very thin clay layers on cross-beds appear to have retarded ground water flow, which enhanced uranium precipitation. The beds immediately above mineralized horizons sometimes contain abundant carbonized plant material and green or gray clay galls. The mudstone beds adjacent to mineralized sandstone are reduced but can grade to oxidized within a few feet. Lithology logs by Union Carbide of core from historical drilling along the La Sal Trend record these same characteristics, as do interpretations of electric bore hole logs and logging of cuttings in rotary drill holes by Denison and EFR geologists. There are no significant differences between mineral depositional habits in the Top Rim and those in lower Salt Wash sands. EFR drilling (2007 to 2008) near the Energy Queen Mine indicated mineralization occurring at the tops of carbonaceous trash zones in drill holes EQ-07-1, EQ-07-16, and EQ-08-18.
The thickness, gray color, and pyrite and carbon contents of sandstones, along with gray or green mudstone, were recognized by early workers as significant and these still serve as exploration guides. The entire main La Sal Trend exhibits these favorable features, however, the bulk of the uranium deposits identified to date are aligned along the south of the Trend. This is the down-dip edge of the channel where the thick reduced sandstone grades and interfingers into pink and red oxidized sandstone and overbank mudstones (Kovschak and Nylund, 1981).
9.0 EXPLORATION
EFR has not conducted any exploration on the Project other than drilling described in Section 10 of this Technical Report since acquiring the properties in 2012.
10.0 DRILLING
EFR conducted surface exploration drilling on the Energy Queen portion of the Project prior to EFR acquiring the rest of the Project through its acquisition of Denison Mines in 2012. Following the acquisition of Denison, EFR conducted both surface and underground drilling as part of a test mining program in 2018 to 2019. Drilling at La Sal is used to determine lithology, uranium content using radiometric probes, and vanadium mineralization from drill core. Energy Fuels has not conducted any drilling since 2019.
10.1 Surface Drilling
EFR drilled 20 surface holes on the Energy Queen portion of the Project in 2007 and 2008 and drilled an additional seven surface holes on the Energy Queen portion of the Project in 2012. During a test mining program, EFR drilled 30 holes on the La Sal/Beaver portions of the Project in 2019. None of the holes drilled on the Energy Queen portion of the Project were cored. Those holes were drilled to an average depth of approximately 565 ft. and probed with a gamma probe, which is typical for uranium exploration. Of the 30 holes drilled in 2019, 20 were cored through the Top Rim of the Saltwash Member, which is the zone containing uranium and vanadium mineralization at the Project. All 30 holes were logged with a gamma probe as well. Table 10-1 summarizes the surface drilling completed by EFR between 2007 and 2019.
Drillhole collar locations are recorded on the original drill logs and radiometric logs created at the time of drilling, including easting and northing coordinates in local grid or modified NAD 1983 Utah State Plane FIBPS 4303 (US feet) and elevation of collar in feet above sea level. Due to the horizontally stratified nature of mineralization, downhole deviation surveys are not typically conducted as all drillholes are vertical.
Table 10-1: Surface Drilling Completed by EFR
Energy Fuels Inc. - La Sal Project
Year |
Mine Area |
No. Drill Holes |
No. Core Holes |
Total Footage |
2007 |
Energy Queen |
16 |
0 |
11,840 (est.) |
2008 |
Energy Queen |
4 |
0 |
2,970.0 |
2012 |
Energy Queen |
7 |
0 |
4,470.0 |
2019 |
La Sal/Beaver |
30 |
20 |
16,961.5 |
Total |
|
57 |
20 |
36,241.5 |
10.2 Underground Drilling
As part of a 2019 test mining program, EFR drilled and cored 56 underground longholes from three different underground stopes. The purpose of this longhole campaign was to collect core for vanadium assays. All holes were planned to 100 ft, but some were stopped short of that if the geology indicated that the hole was no longer in a mineralized zone. In total, 5,198 ft were drilled and cored. Core recovery was above 95%. The test mining program was shut down prior to the collars of these holes being surveyed. Therefore, they are reported here, but are not used as part of the database for the Mineral Resource estimate completed for this Initial Assessment. Table 10-2 presents the 2019 underground drilling at the Project.
Table 10-2: 2019 Underground Drilling at the Project
Energy Fuels Inc. - La Sal Project
Stope ID |
No. Drill Holes |
Footage |
2310 |
19 |
1,781 |
2210 |
11 |
1,067 |
721 |
26 |
2,350 |
Total |
56 |
5,198 |
11.0 SAMPLE PREPARATION, ANALYSES, AND SECURITY
11.1 Sample Preparation and Analysis
11.1.1 Gamma Logging
Drilling for uranium is unique in that core does not need to be recovered from a hole to determine the metal content. Due to the radioactive nature of uranium, probes that measure the decay products or "daughters" can be read with a downhole gamma probe; this process is referred to as gamma logging. While gamma probes do not measure the direct uranium content, the data collected (in counts per second or CPS) can be used along with probe calibration data to determine an equivalent U3O8 grade in percent (%eU3O8). These grades are very reliable as long as there is not an unquantified disequilibrium problem in the area. Disequilibrium will be discussed below. Gamma logging is common in non-uranium drilling to discern rock types. Gamma logging cannot be used to determine vanadium grades.
11.1.1.1 Calibration
For the gamma probes to report accurate %eU3O8 values the gamma probes must be calibrated regularly. The probes are calibrated by running the probes in test pits maintained historically by the AEC and currently by the DOE. There are test pits in Grand Junction, Colorado, Grants, New Mexico, and Casper, Wyoming. The test pits have known %U3O8 values, which are measured by the probes. A dead time (DT) and K-factor can be calculated based on running the probes in the test pits. These values are necessary to convert CPS to %eU3O8. The dead time accounts for the size of the hole and the decay that occurs in the space between the probe and the wall rock. DT is measured in microseconds (μsec). The K-factor is simply a calibration coefficient used to convert the DT-corrected CPS to %eU3O8.
Quarterly or semi-annual calibration is usually sufficient. Calibration should be done more frequently if variations in data are observed or the probe is damaged.
11.1.1.2 Method
Following the completion of a rotary hole, a geophysical logging truck will be positioned over the open hole and a probe will be lowered to the hole's total depth. Typically, these probes take multiple different readings. In uranium deposits, the holes are usually logged for gamma, resistivity, standard potential, and hole deviation. Only gamma is used in the grade calculation. Once the probe is at the bottom of the hole, the probe begins recording as the probe is raised. The quality of the data is impacted by the speed the probe is removed from the hole. Experience shows a speed of 20 feet per minute is adequate to obtain data for resource modeling. Data is recorded in CPS, which is a measurement of uranium decay of uranium daughter products, specifically Bismuth-24. That data is then processed using the calibration factors to calculate a eU3O8 grade. Historically, eU3O8 grades were calculated using the AEC half amplitude method, which gives a grade over a thickness. Currently, the eU3O8 grades tend to be calculated on 0.5-foot intervals by software. Depending on the manufacturer of the probe truck and instrumentation, different methods are used to calculate the eU3O8 grade, but all, including the AEC method, are based on the two equations given below.
The first equation converts CPS to CPS corrected for the dead time (DT) determined as part of the calibration process
The second equation converts the Dead Time Corrected CPS (N) to %eU3O8 utilizing the K-factor (K)
Depending on the drilling and logging environment, additional multipliers can be added to correct for various environmental factors. Typically, these include a water factor for drill hole mud, a pipe factor if the logging is done in the drill steel, and a disequilibrium factor if the deposit is known to be in disequilibrium. Tables for water and pipe factors are readily available.
11.1.2 Core Sampling
Historically, core samples were only collected to verify uranium grades from gamma logging operations and determine a disequilibrium factor, if any. Core was also collected to determine vanadium grades to establish a vanadium to uranium ratio for use in resource calculations and milling. More recently, Denison and EFR collected core to verify gamma logs and to understand the vanadium grade distributions. Of the 3,300+, surface drill holes used in the Mineral Resource calculations for the Project, only approximately 600 cored and had samples assayed. Most of those samples (98%) were taken by Union Carbide, with the others from EFR and Atlas Minerals
11.1.2.1 Sample Preparation
No record of sample preparation is available for historical operations at the Project. In 2019, EFR drilled 30 surface holes, of which 20 were cored. For those 20 holes, the core was logged by a staff geologist. During logging, the core was scanned with both a scintillometer for gamma measurements and a handheld X-ray Fluorescence Spectrometer (XRF) for metal content. Areas of abnormal gamma measurements or showing uranium or vanadium metal were sampled for assay. Core samples were split with half the core being assayed and the other half archived for later use. The hydraulic core splitter was cleaned prior to splitting to prevent contamination. Samples were bagged and labeled with a sample ID, date, and footage interval. Samples were delivered by a staff geologist to the Mill in Blanding, Utah, for uranium and vanadium assay. The White Mesa Mill Laboratory holds no certifications and no accreditations.
Due to an increase of vanadium prices in 2018, EFR started a test-mining program in October 2018 to investigate mining vanadium as a primary product rather than mining it simply as a coproduct with uranium. This involved muck pile sampling, which to that point had never occurred during production mining at the Project. Samples were collected by staff geologists from every six-ton truck exiting the La Sal and Pandora Declines. For a given blast round, trucks were dumped on the surface in windrows and staked with their blast location. As a blast could range anywhere between one and 10 piles, the geologist waited until the entire round was on the surface and then determined how many samples were needed per round. A single sample, which was a 5-gallon bucket, could contain anywhere from one to four piles worth of material. For a given pile, approximately 1-gallon of material was collected randomly from all sides of the pile. Samples that were made up of more than a single pile were combined into a single 5-gallon bucket and mixed. Samples were given a sample ID based on the mine location and round number and were taken to the Mill for analysis on a bi-weekly basis.
11.1.2.2 Assaying and Analytical Procedure
No record of the assaying or analytical procedures are known from historical operations. Assay certificates from Union Carbide indicate that assays were performed at their in-house lab in Grand Junction, Colorado. Samples analyzed in 2019, at the Mill, were analyzed using a set of in-house standard operating procedures using equipment calibrated in line with the manufacturer's recommendations.
11.1.3 Radiometric Equilibrium
Disequilibrium in uranium deposits is the difference between equivalent (eU3O8) grades and assayed U3O8 grades. Disequilibrium can be either positive, where the assayed grade is greater than the equivalent grades, or negative, where the assayed grade is less than the equivalent grade. A uranium deposit is in equilibrium when the daughter products of uranium decay accurately represent the uranium present. Equilibrium occurs after the uranium is deposited and has not been added to or removed by fluids after approximately one million years. Disequilibrium is determined during drilling when a piece of core is taken and measured by two different methods, a counting method (closed-can) and chemical assay. If a positive or negative disequilibrium is determined, a disequilibrium factor can be applied to eU3O8 grades to account for this issue.
Kovschak and Nylund (1981) report no apparent disequilibrium problems during mining along the La Sal Trend. Mining and milling by Denison and EFR shows that well-calibrated gamma probes used by the mining personnel equate well to the mill head grades, indicating no significant disequilibrium problems. This is generally true of Salt Wash uranium deposits due to the age of the mineralization and the hydrologic history of the host rocks. Therefore, EFR has no reason to anticipate any disequilibrium conditions within the unmined portions of the deposit within the Project area.
11.2 Sample Security
ERF's surface drilling program used split-half core for assays. The remaining half core was returned to the core box for archiving. The core was transported to a storage facility owned by Energy Fuels where it remains in a locked shed.
The underground core had a one inch diameter so the entire core was used for assay. At the end of the program, the non-sampled intervals were added to the waste dump.
Samples for both the test mining and drilling were transported to the Mill by an Energy Fuels employee. All samples were transported with Chain of Custody documentation.
11.3 Quality Assurance and Quality Control
No record of the quality assurance and quality control (QA/QC) procedures from historical operations are known. Historical production based on the available data of millions of pounds of uranium and vanadium demonstrate that the quality of the data justified and sustained production. It is assumed that a company the size of Union Carbide had in house QA/QC procedures during sampling and analysis of core samples.
As part of EFR's 2019 drilling program and test-mining program, standards and blanks were submitted to the Mill as part of the sampling program. Vanadium standards of the grades found at La Sal (>1% V2O5) were not found to be readily available through typical suppliers. One standard from a black shale hosted vanadium deposit was found, but due to its color and the titrations performed for vanadium assay, it proved to be unusable. Sandstone hosted uranium standards were purchased from Oreas of various grades (0.0243%, 0.0480%, 0.0973%, and 0.2098% U3O8) and submitted to the Mill regularly. Blanks, consisting of quartz sand, were also submitted. In addition to the standards and blanks, the Mill sent 19 fine grained reject duplicates to a third-party laboratory (Inter-Mountain Laboratory in Sheridan, Wyoming) for analysis as check assay samples. Inter-Mountain Laboratory (now Pace Analytical) holds certifications from the DOE, the US Environmental Protection Agency (EPA) and several other accreditations (http://intermountainlabs.com/certifications.html).
The SLR QP reviewed the EFR data provided for QA/QC. Figure 11-1 is a Z-Score graph of the U3O8 results for standards submitted with respect to their standard deviation. Figure 11-2 is a graph depicting the Duplicates rerun within the White Mesa Laboratory. The results show a minimal amount of bias towards the duplicate sample. Figure 11-3 is a graph showing the check assay samples submitted to the third part laboratory with respect to the original values measured at the Mill. The results show a minimal about of bias towards the third party laboratory.
Figure 11-1: Z-Score for Uranium Standards
Figure 11-2: Original vs Duplicate Samples for Uranium - White Mesa Mill
Notes:
1. WMM: White Mesa Mill.
Figure 11-3: Original vs Third Party Check Assay Samples for Uranium
11.4 Conclusions
The SLR QP is of the opinion that the QA/QC protocols set in place by EFR are of industry standard and are appropriate for supporting the use of the data in resource estimation.
The SLR QP recommends procuring a vanadium standard to monitor vanadium assay performance.
In the SLR QP's opinion, the historical and most recent radiometric logging, analysis, and security procedures at the Project are adequate for use in the estimation of the Mineral Resources. The SLR QP also opines that, based on the information available, the original gamma log data and subsequent conversion to % eU3O8 values are reliable. Furthermore, there is no evidence that radiometric disequilibrium would be expected to negatively affect the uranium resource estimates.
The SLR QP is of the opinion that the sample security, analytical procedures, and QA/QC procedures used by EFR meet industry best practices and are adequate to estimate Mineral Resources.
In the future, EFR should locate a usable vanadium standard or create one using material from the Project to assess the grades from the White Mesa Mill laboratory. In addition, some density analyses should be completed to determine if the used historical value is accurate for the Project.
12.0 DATA VERIFICATION
Data verification is the process of confirming that data has been generated with proper procedures, is transcribed accurately from its original source into the project database and is suitable for use as described in this Technical Report.
As part of this Technical Report, all of the historical data associated with the Project was compiled, organized, and entered into a new database by EFR personnel and audited by the SLR QP for completeness and validity. The data was in the form of assay certificates, probe data, drill hole maps, drill hole logs, assay data sheets, drill logs, and reports. This includes data from Union Carbide, Atlas Minerals, Denison, and EFR (data prior to 2018). Specifically, any data which appears higher or lower than the surrounding data is confirmed by reviewing the original geophysical log. This data review includes confirming that the drill depth was adequate to reflect the mineralized horizon, that the geologic interpretation of host sand is correct, and that the thickness and grade of mineralization is correct.
Certification of database integrity is accomplished by both visual and statistical inspections comparing geology, assay values, and survey locations cross-referenced to historical paper logs. Any discrepancies identified are corrected by the EFR resource geologist referring to hard copy assay information or removed from use in the Mineral Resource estimation.
12.1 SLR Data Verification (2021)
The SLR QP visited the Project on November 11, 2021. Discussions were held with the EFR technical team and found them to have a strong understanding of the mineralization types and their processing characteristics, and how the analytical results are tied to the results. The SLR QP received the project data from EFR for independent review as a series of MS Excel spreadsheets and Vulcan digital files. The SLR QP used the information provided to validate the Mineral Resource interpolation, tons, grade, and classification.
12.1.1 Audit of Drillhole Database
In preparing this Technical Report, the SLR QP conducted audits of EFR records and a series of verification tests on the drillhole database to assure that the grade, thickness, elevation, and location of uranium mineralization used in preparing the current Mineral Resource estimate correspond to mineralization indicated by the EFR geologists
The SLR QP's tests included a search for unique, missing, and overlapping intervals, a total depth comparison, duplicate holes, property boundary limits, and verifying the reliability of the % eU3O8 grade conversion as determined by downhole gamma logging. The SLR QP did not encounter any significant discrepancies with the La Sal data in the vicinity of modeled mineralized zones.
The SLR QP did not identify any significant problems with the interpretations and U3O8 conversion and calculations and is of the opinion that the calibration factors are acceptable. The SLR QP conducted a review of grade continuity for each mineralized sandstone unit. Results indicate continuity of mineralization within the Saltwash sandstone unit in both plan and section in elongate tabular or irregular shapes. The SLR QP is of the opinion that, although continuity of mineralization is variable, drilling confirms that local continuity exists within individual sandstone units.
12.2 Limitations
There were no limitations in place restricting the ability to perform an independent verification of the Project drillhole database. There has been adequate drilling to develop the Mineral Resource models. EFR notes the major limitation associated with the data from drilling completed by Union Carbide and Atlas Minerals is that the data contains no gamma logs that verify probe truck data for holes where no core was collected and assayed. This data is reported on data sheets or maps with a bottom elevation of mineralization, the %eU3O8 grade, and an intercept thickness. While EFR assumes the data is accurate, it is possible there could be a typographical error or misinterpretation of the data.
Another issue identified by EFR is that the majority of the holes drilled by these two companies contain no downhole survey data. The holes are therefore represented as vertical, when it is known these holes drifted from the collar location. It is evident from holes with downhole survey data and from mining that intersected a hole that the holes tend to wander 10 ft to 20 ft to the north of the collar location.
12.2.1 Conclusions
La Sal has been subject to a number of production periods for almost 60 years. There has been adequate drilling to develop the Mineral Resource models that have been used for historically successful mine planning. The Mineral Resource models have performed well, indicating the drill hole database contains valid data. The SLR QP is of the opinion that database verification procedures for La Sal comply with industry standards and are adequate for the purposes of Mineral Resource estimation.
While the exclusion of some gamma logs and downhole deviation data due to missing collar coordinates or radiometric logs requires further investigations the SLR QP opines the fact that millions of pounds of uranium and vanadium have been produced from the Project indicates that the mineralization is present and has been used successfully for mine planning in the past. All previous operators were respected large producers in the uranium mining industry and there is no reason to suspect the data is inaccurate. Methods have been utilized in underground mining to account for the deviation of a drill hole. As the deposit is fairly continuous, the miner can usually "chase" the mineralization towards the drill hole intercept they are trying to mine. Underground drilling can be used to delineate the mineralization during production mining.
13.0 MINERAL PROCESSING AND METALLURGICAL TESTING
Material mined from the Project, including material mined between 2009 and 2012, has been successfully processed at the Mill in Blanding, Utah. Any material mined in the future will be processed at the Mill.
The Mill is located six miles south of Blanding in southeastern Utah. Construction commenced in June 1979 and was completed in May 1980. Its construction by EFNI was based on the anticipated reopening of many small low-grade mines on the Colorado Plateau, and the Mill was designed to treat 2,000 tons of ore per day. The Mill has operated at rates in excess of the 2,000 tons per day design rate. The Mill has been modified to treat higher grade ores from the Arizona Strip, as well as the common Colorado Plateau ores. Processing of Arizona Strip ores is typically at a lower rate of throughput than for the Colorado Plateau ores. The basic mill process is a sulfuric acid leach with solvent extraction recovery of uranium and vanadium.
Since 1980, the Mill has operated intermittently in a series of campaigns to process ores from the Arizona Strip as well as from a few higher-grade mines of the Colorado Plateau. Overall, the Mill has produced approximately 30 million lb U3O8 and 33 million lb V2O5.
13.1 Metallurgical Testing
Metallurgical testing data is not available for the Project. Historically, material mined at the Project has been processed at multiple uranium/vanadium mills in the region with no known issues. Material mined at the Project during the last major mining campaign, 2009 through 2012, was processed at the Mill. During that campaign, the Mill ran approximately 445,000 tons of material mined from the Project. Recovery numbers were 96% for uranium and 70% for vanadium. Since that time, additional work has been conducted on the vanadium circuit and EFR anticipates vanadium recoveries of 75% are achievable. For this Technical Report recoveries of 96% for uranium and 75% for vanadium have been used in the Mineral Resource estimate.
13.2 Opinion of Adequacy
The SLR QP supports the conclusions of the expected performance of the metallurgical processes based on test work conducted by EFR. It is also the SLR QP's opinion that the successful historical mining operations at La Sal supersede any metallurgical testing program and the available operating data is more than adequate to support the stated expected recovery.
14.0 MINERAL RESOURCE ESTIMATE
14.1 Summary
Mineral Resources have been classified in accordance with the definitions for Mineral Resources in S-K 1300, which are consistent with Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Resources and Mineral Reserves dated May 10, 2014 (CIM, 2014) definitions which are incorporated by reference in NI43-101.
The SLR QP has reviewed and accepted the Mineral Resource estimate prepared by EFR based on block model values based on radiometric drillhole logs on the five principal mineralized domains (La Sal West, Energy Queen, Redd Block, Beaver/La Sal, and Pandora). Mineral Resources have been estimated by EFR using Vulcan software using inverse distance squared methods. This Mineral Resource provides estimates for uranium and calculated vanadium mineralization.
For reporting purposes, the five estimates have been summarized into four deposits with EFR electing to combine the La Sal West and Energy Queen resource to remain consistent with previously reported resource estimates.
Table 14-1 summarizes Mineral Resources based on a $65/lb uranium price using a cut-off grade of 0.17% eU3O8. The effective date of the Mineral Resource estimate is December 31, 2021.
The SLR QP is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could materially affect the Mineral Resource estimate.
Table 14-1: Summary of Mineral Resources - Effective Date December 31, 2021
Energy Fuels Inc. - La Sal Project
Classification |
Tonnage |
Grade |
Contained |
Grade |
Contained |
Recovery |
EFR Basis |
Total Inferred |
823 |
0.26 |
4,281 |
1.08 |
17,746 |
96 |
100 |
Notes:
1. SEC S-K 1300 definitions were followed for all Mineral Resource categories. These definitions are also consistent with CIM (2014) definitions in NI 43-101.
2. Uranium Mineral Resources are estimated at a cut-off grade of 0.17% U3O8.
3. Vanadium Mineral Resources are estimated based on calculations from U3O8 vs V2O5 regression analysis.
4. The cut-off grade is calculated using a metal price of $65/lb U3O8
5. No minimum mining width was used in determining Mineral Resources.
6. Mineral Resources are based on a tonnage factory of 14.5 ft3/ton (Bulk density 0.0690 ton/ft3 or 2.21 t/m3).
7. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
8. Total may not add due to rounding
9. Mineral Resources are 100% attributable to EFR and are in situ.
14.2 Resource Database
From 1967 to 2019, EFR and its predecessors have completed 17,397 holes (5,159 surface and 12,236 underground) totalling 3,031,208 ft, of which 14,326 drillholes totalling 2,899,916 ft of drilling have been used in this resource estimation (Figure 14-1). The Project resource database, dated October 2019, includes drilling results from 1967 to 2019 and includes surveyed drillhole collar locations (including dip and azimuth), assay, and radiometric probe (Table 14-2).
Table 14-2: Summary of Available Drillhole Data for Resources
Energy Fuels Inc. - La Sal Project
Parameter |
Number of Records |
Collar |
14,326 |
Survey |
42,713 |
Probe |
718,630 |
Assay U3O8 |
6,166 |
Total Footage (ft) |
2,899,916 |
Figure 14-1: Drillhole Location Map
14.3 Geological Interpretation
Mineralized wireframe models were constructed for all five estimated areas of the Project. Mineralization is confined to the Top Rim sandstones of the Salt Wash at the Project. EFR, however, has not completed a geological model that can be used for guiding mineralized wireframes. Therefore, the mineralized wireframes were constructed using the natural uranium cut-off grade of 0.05% U3O8. In Salt Wash hosted uranium deposits, there is often a very sharp boundary between mineralized and barren material; at the Project, that value is defined as the natural cut-off.
14.3.1 Surface Drilling Only (La Sal West, Energy Queen, and Redd Block)
For Mineral Resource estimation areas that contained only surface drill holes, the following method was used to construct wireframe models. In vertical surface drill holes, the natural cut-off clearly defines the top and bottom of the mineralized zone. The lateral extents were determined by using Theissen or Voroni polygons, which use half the distance between two drill holes to define a lateral extent. If the spacing between two drill holes was greater than 150 ft, the radius of a circle of 150 ft was used as the maximum lateral extend. These polygonal shapes were constructed in 2D and then projected to the top and bottom of the mineralized intercept of the surface drill hole. The polygons were analyzed in cross section and adjacent polygons at the same vertical levels were connected. A spline function was used to then draw a boundary around the compiled polygons. These splines were constructed for the top and bottom of the zone and a triangulation was projected from those tops and bottoms.
The SLR QP inspected the wireframes and agree with their interpretations, however, the spline function can create unnecessary fluctuations in the boundaries and cause an increase and decrease in the volumes which may be artificial. Some of the decreases in the wireframes become too thin for block model estimation.
The SLR QP recommends removing the spline function from the wireframe construction. The SLR QP further recommends using a minimum thickness when creating the wireframes so that pinch outs do not unnecessarily remove the ability for blocks to be estimated.
14.3.2 Surface and Underground Drilling (Beaver/La Sal and Pandora)
In areas that contained both surface drilling and underground longholes, the process was more complex. The first step followed that described above using only the surface drill hole data. Then the spline shape was adjusted to the longhole data. Again, a top and bottom of mineralization were defined by the spline surface and a triangulation was created. The triangulation was then viewed in cross section along strike and barren zones were defined by polygons using both the surface and underground drilling.
The SLR QP inspected the wireframes and agrees with the overall interpretations of the wireframes, however, the wireframes incorporating the underground drilling created large volumes of waste that should have been removed in the wireframing process. Furthermore, the wireframes using the longhole data were not snapped to all data.
For future resource estimation, the SLR QP recommends that a geologic model be completed prior to wireframing to help in the estimation process. Geologic information can be compiled from the downhole radiometric logs to create a lithology model that clearly defines the boundaries of the Salt Wash Formation, which can be used to help guide the mineralized wireframes. In addition, the SLR QP recommends updating the wireframes to remove the waste material found between mineralized intercepts and ensuring the wireframes are snapped to drillhole data points.
14.4 Resource Assays
La Sal West Project mineralization wireframes contain a total of 260 mineralization intercepts. Grade statistics were generated for each of the five block model zones to better understand the uranium mineralization. Samples only represent those contained within the mineralized wireframe models. Some barren zones (0.00 %U3O8) were included in the wireframes to maintain continuity. General uranium statistics for each of the zones are presented in Table 14-3.
Table 14-3: Assays for the La Sal Project (% U3O8)
Energy Fuels Inc. - La Sal Project
Stat |
La Sal West |
Energy Queen |
Redd Block |
Beaver/La Sal |
Pandora |
Count |
92 |
388 |
583 |
222,100 |
199,957 |
Mean |
0.277 |
0.202 |
0.212 |
0.026 |
0.037 |
Std. Dev. |
0.305 |
0.391 |
0.312 |
0.191 |
0.242 |
Variance |
0.093 |
0.153 |
0.097 |
0.040 |
0.060 |
Coef. Of Var. |
1.344 |
1.941 |
1.471 |
7.390 |
6.470 |
Max. |
1.660 |
6.370 |
2.960 |
41.150 |
80.820 |
Upper Quartile |
0.218 |
0.221 |
0.250 |
0.009 |
0.020 |
Median |
0.140 |
0.110 |
0.110 |
0.003 |
0.005 |
Lower Quartile |
0.080 |
0.060 |
0.050 |
0.001 |
0.001 |
Min. |
0 |
0 |
0 |
0 |
0 |
14.5 Treatment of High Grade Assays
14.5.1 Capping Levels
Where the assay distribution is skewed positively or approaches log-normal, erratic high grade assay values can have a disproportionate effect on the average grade of a deposit. One method of treating these outliers to reduce their influence on the average grade is to cut or cap them at a specific grade level.
The SLR QP is of the opinion that the influence of high grade uranium assays must be reduced or controlled and uses a number of industry best practice methods to achieve this goal, including capping of high grade values. The SLR QP employed a number of statistical analytical methods to determine an appropriate capping value including preparation of frequency histograms, probability plots, decile analyses, and capping curves. Using these methodologies, the SLR QP examined the selected capping values for the mineralized domains for the Project.
Examples of the capping analysis log probability graphs for each deposit are shown in Figure 14-2 through Figure 14-6 as applied to the data set for the mineralized domains. The middle grade circled is the used capping level. Capped assay statistics by deposit are summarized in Table 14-4 and compared with uncapped assay statistics.
In the SLR QP's opinion, the selected capping values are reasonable. Capping was applied to the raw assay values during compositing.
Table 14-4: Capped Assays for the La Sal Project (% U3O8)
Energy Fuels Inc. - La Sal Project
Stat |
La Sal West |
Energy Queen |
Redd Block |
Beaver/La Sal |
Pandora |
Cap Grade |
0.830 |
1.500 |
1.110 |
2.780 |
3.000 |
No. Cap Samples |
5 |
2 |
13 |
101 |
45 |
Count |
92 |
388 |
583 |
222,100 |
199,957 |
Mean |
0.202 |
0.187 |
0.200 |
0.025 |
0.036 |
Std. Dev. |
0.214 |
0.231 |
0.251 |
0.120 |
0.121 |
Variance |
0.050 |
0.050 |
0.060 |
0.010 |
0.010 |
Coef. Of Var. |
1.060 |
1.230 |
1.250 |
4.890 |
3.330 |
Max. |
0.830 |
1.500 |
1.110 |
2.780 |
3.000 |
Upper Quartile |
0.210 |
0.220 |
0.243 |
0.009 |
0.020 |
Median |
0.140 |
0.110 |
0.200 |
0.003 |
0.005 |
Lower Quartile |
0.080 |
0.060 |
0.050 |
0.001 |
0.001 |
Min. |
0 |
0 |
0 |
0 |
0 |
Figure 14-2: La Sal West Log Probability Graph
Figure 14-3: Energy Queen Log Probability Graph
Figure 14-4: Redd Block Log Probability Graph
Figure 14-5: Beaver Log Probability Graph
Figure 14-6: Pandora Log Probability Graph
14.5.2 High Grade Restriction
In addition to capping thresholds, a secondary approach to reducing the influence of high-grade composites is to restrict the search ellipse dimension (high yield restriction) during the estimation process. The threshold grade levels, chosen from the basic statistics and from visual inspection of the apparent continuity of very high grades within each estimation domain, may indicate the need to further limit their influence by restricting the range of their influence, which is generally set to approximately half the distance of the main search.
Upon review of the capped assays, the SLR QP agrees with EFR's approach that no high-grade restrictions are required for Mineral Resource estimation.
14.6 Compositing
Composites were created from the capped raw assay values using the downhole compositing function of Maptek's Vulcan modeling software package. The composite lengths used during interpolation were chosen considering the predominant sampling length, the minimum mining width, style of mineralization, and continuity of grade. EFR chose to composite to 1.0 ft, starting at the wireframe pierce point for each wireframe, continuing to the point at which the hole exited the domain (hard boundaries). Composites less than 0.53 m, located at the bottom of the mineralized intercept, were added to the previous interval. A small number of unsampled and missing sample intervals were ignored. Residual composites were maintained in the dataset. The composite statistics by deposit are summarized in Table 14-5.
Table 14-5: Summary of Uranium Composite Data by Deposit
Energy Fuels Inc. - La Sal Project
The SLR QP is of the opinion that the compositing methods and lengths are appropriate for this style of mineralization and deposit type. The SLR QP recommends treating the missing and unsampled intervals contained within a wireframe as waste and assigning a uranium value of 0.0%.
14.7 Trend Analysis
14.7.1 Variography
The SLR QP reviewed a series of variograms prepared by EFR but found the variograms were of poor to fair quality considering the number of composite data based on wide spaced drilling along mineralized trends and not adequate to generate meaningful variograms to derive kriging parameters.
14.8 Search Strategy and Grade Interpolation Parameters
14.8.1 Dynamic Anisotropy and Unfolding
EFR used a combination of dynamic anisotropy (DA) and unfolding techniques where appropriate given the Project shape and grade continuity of mineralization. Mineralization in some parts of the Beaver and Pandora areas were not conducive to using either of these methods so simple oriented search ellipses were used.
For the DA models, EFR created the models within Vulcan and assigned values to the model based on the trend of the mineralization and the wireframe. These values are coded to the block model directly and then used in the individual estimation runs.
For wireframes that contained only two drill holes the unfolding method was used to help guide the search ellipses between the two holes. The top and bottom of each of these wireframes are used to create an unfolded model that is then referenced during the individual estimation runs.
EFR created nearest neighbor (NN) wireframes with an isotropic search ellipse to capture single drill holes with mineralized intercepts that are too far removed from any other drillholes to be considered a continuation of mineralization and that would otherwise be excluded from the Mineral Resource.
14.8.2 Uranium Grade Interpolation
Table 14-6 through Table 14-10 describe the search strategies and parameters used for estimation for each wireframe on a per block model basis. Some search parameters differ within the Beaver and Pandora domains due to denser drill spacing when the underground longholes were included.
The first pass has a search radii ratio of 2 to 1 for the major and semi-major directions and is designed to capture the grade of the drillhole which directly intersects the blocks around it. The minor direction of the ellipse is set at two feet to reflect the average thickness of the mineralization.
The second and third passes retain the 2 to 1 ratio of the major and semi-major search directions and are designed to capture the majority of the blocks contained within the wireframes. Their search ellipses double the major and semi-major radii search distances for each pass. The minor search radius has been set to four feet for both search passes to allow samples from thicker zones to be captured, but still limit the influence of samples in the minor direction.
The fourth pass, for all block models, is a large ellipse (1,600 ft x 800 ft x 8 ft) and is designed to estimate all blocks which are contained within the wireframes and not estimated in the first three passes. Due to the size of the fourth pass, the blocks estimated in these areas are unreasonable for reporting in terms of grade and continuity in this type of deposit given the wide drillhole spacing. Therefore, these blocks are considered exploration potential and have been removed from the reported Mineral Resources.
Table 14-6: Summary Search Strategy for La Sal West
Energy Fuels Inc. - La Sal Project
Wireframe |
Interp. |
Bearing/Plunge |
Dynamic |
First Pass |
Second Pass |
Third Pass |
Fourth Pass |
lw_01_min_01.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
lw_01_min_02.00t |
ID2 |
263°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
lw_01_min_03.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
lw_01_min_05.00t |
ID2 |
162°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
lw_01_min_07.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
lw_01_min_08.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
lw_01_min_13.00t |
ID2 |
262°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
lw_01_min_16.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
lw_01_min_19.00t |
ID2 |
229°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
lw_nn.00t |
NN |
N/A |
Isotropic |
5000 x 5000 x 5000 |
N/A |
N/A |
N/A |
Table 14-7: Summary Search Strategy for Energy Queen
Energy Fuels Inc. - La Sal Project
Wireframe |
Interp. |
Bearing/Plunge |
Dynamic |
First Pass |
Second Pass |
Third Pass |
Fourth Pass Dimensions (ft) |
eq_n_min_01.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
eq_n_min_02.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
eq_n_min_03.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
eq_n_min_04.00t |
ID2 |
156°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
eq_n_min_05.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
eq_n_min_06.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
eq_n_min_09.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
eq_n_min_10.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
eq_n_min_11.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
eq_m_min_01.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
eq_m_min_02.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
eq_m_min_03.00t |
ID2 |
194°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
eq_m_min_04.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
eq_m_min_09.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
eq_m_min_11.00t |
ID2 |
249°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
eq_m_min_12.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
eq_m_min_13.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
eq_m_min_14.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
eq_s_min_05.00t |
ID2 |
144°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
eq_s_min_06.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
eq_min_nn.00t |
NN |
N/A |
Isotropic |
5000 x 5000 x 5000 |
N/A |
N/A |
N/A |
Table 14-8: Summary Search Strategy for Redd Block
Energy Fuels Inc. - La Sal Project
Wireframe |
Interp. |
Bearing/Plunge |
Dynamic |
First Pass |
Second Pass |
Third Pass |
Fourth Pass |
rb_01_min_01.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_01_min_03.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_01_min_06.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_01_min_07.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_01_min_08.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_01_min_09.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_01_min_10.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_02_min_01.00t |
ID2 |
239°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_02_min_02.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_02_min_03.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_02_min_04.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_02_min_05.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_02_min_06.00t |
ID2 |
302°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_02_min_07.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_02_min_08.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_02_min_09a.00t |
ID2 |
239°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_02_min_09b.00t |
ID2 |
183°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_02_min_10a.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_02_min_10b.00t |
ID2 |
179°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_02_min_11a.00t |
ID2 |
283°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
Wireframe |
Interp. |
Bearing/Plunge |
Dynamic |
First Pass |
Second Pass |
Third Pass |
Fourth Pass |
rb_02_min_11b.00t |
ID2 |
158°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_02_min_12.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_02_min_13.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_02_min_16.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_03_min_01.00t |
ID2 |
187°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_03_min_02.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_03_min_03.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_03_min_04.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_03_min_05.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_03_min_06.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_03_min_07.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_03_min_08.00t |
ID2 |
239°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_03_min_09.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_03_min_10.00t |
ID2 |
120°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_03_min_11.00t |
ID2 |
226°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_03_min_13.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_03_min_14.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_03_min_15.00t |
ID2 |
146°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_03_min_16.00t |
ID2 |
200°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_03_min_17.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_03_min_19.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
rb_nn.00t |
NN |
N/A |
Isotropic |
5000 x 5000 x 5000 |
N/A |
N/A |
N/A |
Table 14-9: Summary Search Strategy for Beaver/La Sal
Energy Fuels Inc. - La Sal Project
Wireframe |
Interp. |
Bearing/Plunge |
Dynamic |
First Pass |
Second Pass |
Third Pass |
Fourth Pass |
min_bv_01.00t |
ID2 |
350°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_bv_02.00t |
ID2 |
251°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_bv_03.00t |
ID2 |
301°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_bv_10.00t |
ID2 |
245°/-4° |
Ellipsoid |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_bv_11.00t |
ID2 |
267°/-2.5° |
Ellipsoid |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_bv_13.00t |
ID2 |
0°/0° |
Ellipsoid |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_bv_14.00t |
ID2 |
145°/-4° |
Ellipsoid |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_bv_16.00t |
ID2 |
280°/-1° |
Ellipsoid |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_bv_17.00t |
ID2 |
350°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_bv_18.00t |
ID2 |
200°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_bv_23.00t |
ID2 |
238°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_bv_29.00t |
ID2 |
240°/-9° |
Ellipsoid |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_bv_31.00t |
ID2 |
270°/0.5° |
Ellipsoid |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_bv_32.00t |
ID2 |
220°/1° |
Ellipsoid |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_bv_38.00t |
ID2 |
300°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_bv_39.00t |
ID2 |
327°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_bv_40.00t |
ID2 |
235°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_bv_44.00t |
ID2 |
259°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_bv_46.00t |
ID2 |
272°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_bv_51.00t |
ID2 |
118°/-1° |
Ellipsoid |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
Wireframe |
Interp. |
Bearing/Plunge |
Dynamic |
First Pass |
Second Pass |
Third Pass |
Fourth Pass |
min_bv_52.00t |
ID2 |
283°/1° |
Ellipsoid |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
bv_43_part_02_relimit_02.00t |
ID2 |
270°/0° |
Ellipsoid |
25 x 12.5 x 2 |
50 x 25 x 2 |
100 x 50 x 4 |
400 x200 x 8 |
bv_20_part_02_relimit_01.00t |
ID2 |
282°/0° |
Ellipsoid |
25 x 12.5 x 2 |
50 x 25 x 2 |
100 x 50 x 4 |
400 x200 x 8 |
bv_50_part_02_relimit_01.00t |
ID2 |
260°/0° |
Ellipsoid |
25 x 12.5 x 2 |
50 x 25 x 2 |
100 x 50 x 4 |
400 x200 x 8 |
min_bv_nn.00t |
NN |
N/A |
Ellipsoid |
5000 x 5000 x 5000 |
N/A |
N/A |
N/A |
Table 14-10: Summary Search Strategy for Pandora
Energy Fuels Inc. - La Sal Project
Wireframe |
Interp. |
Bearing/Plunge |
Dynamic |
First Pass |
Second Pass |
Third Pass |
Fourth Pass |
min_pd_01.00t |
ID2 |
353°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_03.00t |
ID2 |
254°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_08.00t |
ID2 |
215°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_09.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_10.00t |
ID2 |
242°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_16.00t |
ID2 |
214°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_18.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_24.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_28.00t |
ID2 |
256°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_30.00t |
ID2 |
326°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_34.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_35.00t |
ID2 |
356°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_41.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
Wireframe |
Interp. |
Bearing/Plunge |
Dynamic |
First Pass |
Second Pass |
Third Pass |
Fourth Pass |
pd_44_relimit.00t |
ID2 |
280°/0° |
Ellipsoid |
25 x 12.5 x 2 |
50 x 25 x 4 |
100 x 50 x 4 |
400 x 200 x 8 |
min_pd_45.00t |
ID2 |
286°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_46.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_47.00t |
ID2 |
220°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_50.00t |
ID2 |
300°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_54.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_57.00t |
ID2 |
225°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
pd_59_relimit_02.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
pd_63_relimit_01.00t |
ID2 |
260°/0° |
Ellipsoid |
25 x 12.5 x 2 |
50 x 25 x 4 |
100 x 50 x 4 |
400 x 200 x 8 |
pd_64_230_relimit_01.00t |
ID2 |
230°/0° |
Ellipsoid |
25 x 12.5 x 2 |
50 x 25 x 4 |
100 x 50 x 4 |
400 x 200 x 8 |
pd_64_270_relimit_02.00t |
ID2 |
270°/0° |
Ellipsoid |
25 x 12.5 x 2 |
50 x 25 x 4 |
100 x 50 x 4 |
400 x 200 x 8 |
pd_65_relimit_02.00t |
ID2 |
235°/0° |
Ellipsoid |
25 x 12.5 x 2 |
50 x 25 x 4 |
100 x 50 x 4 |
400 x 200 x 8 |
min_pd_66.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
pd_67_relimit_1.00t |
ID2 |
270°/0° |
Ellipsoid |
25 x 12.5 x 2 |
50 x 25 x 4 |
100 x 50 x 4 |
400 x 200 x 8 |
pd_70_relimit_02.00t |
ID2 |
110°/0° |
Ellipsoid |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
pd_71_relimit_01.00t |
ID2 |
250°/0° |
Ellipsoid |
25 x 12.5 x 2 |
50 x 25 x 4 |
100 x 50 x 4 |
400 x 200 x 8 |
min_pd_78.00t |
ID2 |
232°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_81.00t |
ID2 |
266°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_86.00t |
ID2 |
182°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_88.00t |
ID2 |
185°/-4° |
Ellipsoid |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
pd_94_relimit_01.00t |
ID2 |
244°/0° |
Ellipsoid |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_96.00t |
ID2 |
310°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
Wireframe |
Interp. |
Bearing/Plunge |
Dynamic |
First Pass |
Second Pass |
Third Pass |
Fourth Pass |
min_pd_97.00t |
ID2 |
320°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_103.00t |
ID2 |
292°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_104.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_111.00t |
ID2 |
N/A |
Dynamic Anisotropy |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_120.00t |
ID2 |
218°/0° |
Unfolding |
50 x 25 x 2 |
200 x 100 x 4 |
400 x 200 x 4 |
1600 x800 x 8 |
min_pd_NN.00t |
NN |
N/A |
Isotropic |
5000 x 5000 x 5000 |
N/A |
N/A |
N/A |
14.8.3 Vanadium Grade Estimation
Historically core was only collected to understand the disequilibrium associated with the uranium mineralization and vanadium to uranium ratio (V2O5:U3O8). Upon determining that disequilibrium was not a concern and given that uranium was the primary mineralization of interest, drill core programs were abandoned in favor of the more cost-effective rotary drilling and downhole radiometric logging. Vanadium assaying was discontinued sometime around the late 1970s. As such, there is much more uranium data than vanadium data. Historically, there is only vanadium data from core drilled by Union Carbide, and that was limited. No underground drilling, other those holes drilled by EFR in 2019, collected core or cuttings for vanadium assay.
Determining the concentration of vanadium (V2O5) ratio in a deposit is much more costly and time-consuming than making the equivalent determination for uranium (U3O8). While indirect determinations of the uranium content may be efficiently made using low cost using gamma logging, chemical analysis is the only way to determine the vanadium content.
The V2O5:U3O8 weight ratios in Salt Wash-type deposits range from about 1:1 to 20:1 with the V2O5:U3O8 routinely reported as 5:1 based on U.S. Atomic Energy Commission (AEC) production records of 18,300 tons for the period 1956 to 1965. A previously published technical reports (Energy Fuels, 2012) used the historical mill average vanadium to uranium ratio of 4.25:1 for vanadium resource estimates. That method typically worked well for mine planning in the La Sal district.
Between June 2017 and May 2018, the price of vanadium V2O5 spiked nearly 60%, rising from approximately $8/lb to over $30/lb. This prompted EFR to revisit and re-evaluate the V2O5:U3O8 ratio at the Project between 2018 and 2019. A limited test-mining and assaying program targeting vanadium indicated that locally the V2O5:U3O8 ratio varied widely between area of the La Sal and Pandora underground mine workings, and that higher-grade vanadium tended to be associated with lower grade uranium with ratios exceeding 10:1.
With this understanding, EFR instead chose to apply a regression analysis study between the two elements incorporating the newly acquired data with chemical assays from the historical Union Carbide drilling.
A power relationship was observed between the uranium grade (% U3O8) and the vanadium to uranium ratio (V2O5:U3O8) (Figure 14-7). The relationship is given by the equation below:
Where y is the V2O5:U3O8 ratio and x is the uranium grade (%U3O8). The vanadium grade (%V2O5) for La Sal can then be calculated by the equation
EFR ran a series of tests applying the regression equation to each individual uranium assay and estimating V2O5 on a block-by-block basis. Results of the tests grossly overestimated the amount of contained V2O5 metal due to the limited number and localized sampling locations. Until additional data is collected EFR has chosen to apply the regression calculation to the total uranium resources rather than estimating the V2O5 mineralization separately.
The SLR QP is of the opinion that the use of a vanadium regression curve and equation is an appropriate way to estimate vanadium resources. The SLR QP recommends that additional V2O5 data be collected for future resource work.
Figure 14-7: %U3O8 vs Vanadium:Uranium Ratio for Vanadium Grade Calculations
14.8.4 Removal of Mined Out Material
14.8.4.1 Beaver/La Sal and Pandora
Historical records of mining at both the Beaver/La Sal and Pandora portions of the Project are incomplete and therefore an accounting of all past mining in those areas is not available. When mining took place between 2009 and 2012, an underground survey of all the main haulage ways as well as accessible current and former workings were surveyed. In areas where surveys could not be completed, historic maps were scanned, and the old drifts digitized. This effort resulted in a two-dimensional model of the underground haulage/production ramps and drifts. This 2D model was then projected up and down several thousand feet and a three-dimensional model was made. Blocks intersecting this model were assigned values between 0.0 and 1.0 based on the proportion of the block falling within the 3D mine workings model and that material was then flagged as "mined". Any block which has a value higher than 0 is not counted in the final resource calculations. Note that this method is conservative in that there are some areas where ore is stacked and only one level was mined. This method assumes that all blocks stacked vertically that fall within the 2D mine workings were mined.
14.8.4.2 Energy Queen
Only limited mining took place at the Energy Queen Mine between 1981 and 1982. Most of the underground work was development, and material was only mined when it was encountered during this development. The mine shut down prior to any significant mining activities. Records from the Union Carbide/Hecla joint venture indicate that 11,791 tons at average grades of 0.17% U3O8 and 0.84% V2O5 (40,043 lb U3O8 and 198,607 lb V2O5) were mined. Due the underground surveys not being fully reliable to remove the material in the same way as Beaver/La Sal and Pandora, the total tons and pounds were subtracted from the Energy Queen Mineral Resource.
14.9 Bulk Density
There is no known density data for the Project. Historically a tonnage factor of 14.5 ft3/ton (Bulk Density 0.0690 ton/ft3) has been used. Mines from within the Project have been producing uranium and vanadium since the 1950s using this tonnage factor and no major issues have been reported. This tonnage factor is used in the calculation of Mineral Resources in this Initial Assessment.
The SLR QP is of the opinion that the density used for the Project is appropriate and can be used in the resource reporting but notes the density value is slightly higher than other similar type deposits in the Colorado Plateau. The SLR QP recommends that EFR revisit and confirm the historical density values prior to any future resource estimations.
14.10 Block Models
Five separate block models were generated as part of this Mineral Resource Estimate. All modeling work was carried out using Maptek's Vulcan software. The Project block models all have block sizes of 20 ft x 20 ft x 1 ft. Before grade estimation, all model blocks were assigned density and mineralized domain codes, based on block centroids. A summary of the block model variables for all block models is provided in Table 14-11. Details regarding the individual block model parameters are given in Table 14-12. The SLR QP notes that not all variables listed were estimated or utilized in the block model estimation.
The SLR QP concludes that the block model parameters are appropriate for this type of deposit and are adequate for use in estimating Mineral Resources.
Table 14-11: Summary of Block Model Variables for all Block Models
Energy Fuels Inc. - La Sal Project
Variable |
Type |
Default |
Description |
U3O8 |
Float (Real * 4) |
0 |
estimated u3o8 grade (%) |
V2O5 |
Float (Real * 4) |
0 |
estimated v2o5 grade (%) |
u_nn |
Double (Real * 8) |
-99 |
uranium nearest neighbor estimate |
v_nn |
Double (Real * 8) |
-99 |
vanadium nearest neighbor estimate |
dens |
Float (Real * 4) |
0.06897 |
density equal to a tonnage factor of 14.5 cu ft/ton |
bound |
Name (TranslationTable) |
waste |
|
est_flag_u |
Integer (Integer * 4) |
0 |
Estimation Pass (1-4) |
est_flag_v |
Integer (Integer * 4) |
0 |
Estimation Pass (1-4) |
no_samp |
Integer (Integer * 4) |
0 |
No of Samples used in Estimation |
no_holes |
Integer (Integer * 4) |
0 |
No of Holes used in Estimation |
nearest_samp |
Double (Real * 8) |
0 |
Distance to Nearest Sample |
class_build |
Integer (Integer * 4) |
3 |
Resource Classification (1=Measured, 2=Indicated, 3=Inferred) |
class_final |
Integer (Integer * 4) |
3 |
Resource Classification (1=Measured, 2=Indicated, 3=Inferred) |
dilution |
Integer (Integer * 4) |
0 |
1 = ore and 2 = dilution |
royalty |
Float (Real * 4) |
-99 |
|
an_bear |
Float (Real * 4) |
-99 |
anisotropy bearing |
an_pl |
Float (Real * 4) |
-99 |
anisotropy plunge |
an_dip |
Float (Real * 4) |
-99 |
anisotropy dip |
an_major |
Float (Real * 4) |
-99 |
anisotropy major axis |
an_semi |
Float (Real * 4) |
-99 |
anisotropy semi-major axis |
an_minor |
Float (Real * 4) |
-99 |
anisotropy minor axis |
gt_u |
Double (Real * 8) |
-99 |
GT Uranium |
gt_v |
Double (Real * 8) |
-99 |
GT Vanadium |
calc_th |
Double (Real * 8) |
-99 |
Calculated thickness from GT Uranium |
resource_bound |
Name (TranslationTable) |
out |
resource boundary flag (EQ, RB, BLS, PD) |
mined |
Double (Real * 8) |
0 |
mined out variable (1 mined, 0 not mined) |
Table 14-12: Summary of Block Model Setups
Energy Fuels Inc. - La Sal Project
Set Up |
La Sal West |
Energy Queen |
Redd Block |
Beaver/ |
Pandora |
|
Origin |
x |
58100 |
64100 |
68700 |
80000 |
89300 |
y |
43400 |
47300 |
49100 |
50400 |
47700 |
|
z |
5750 |
5740 |
5770 |
6050 |
6200 |
|
Rotation |
Bearing |
90 |
90 |
90 |
90 |
90 |
Plunge |
0 |
0 |
0 |
0 |
0 |
|
Dip |
0 |
0 |
0 |
0 |
0 |
14.11 Cut-off Grade
For the inclusion of the blocks in the Mineral Resource estimate, EFR used a cut-off grade of 0.17% eU3O8.
Assumptions used in the determination of cut-off grade are presented in Table 14-13.
Table 14-13: Cut-off Grade Parameters
Energy Fuels Inc. - La Sal Project
Parameter |
Quantity |
Price in US$/lb U3O8 |
65.00 |
Process plant recovery |
96 |
Total Operating Costs per ton |
209.20 |
G&A cost per ton |
Included |
Break-Even Cut-off grade (% eU3O8) |
0.170 |
The Project has had a long history of mining and milling ores, as recently as 2019. As a result, operating costs are robust and support an accurate calculation of the cut-off grade. The cut-off grade reflects the costs associated with mining the Beaver/La Sal mine of the Project. The cut-off grades are expected to be the same at the other deposits. As the Project operates as a uranium mining operation with a vanadium by-product, the cut-off grade assumes the mining and processing of only uranium. Decisions on processing the vanadium contained within the mined tons can be determined based on the vanadium price at the time of milling.
The SLR QP reviewed the operating costs and cut-off grade reported by EFR and is of the opinion they are reasonable for disclosing Mineral Resources.
14.12 Classification
Classification of Mineral Resources as defined in SEC Regulation S-K subpart 229.1300 were followed for classification of Mineral Resources. The Canadian Institute of Mining, Metallurgy and Petroleum definition Standards for Mineral Resources and Mineral Reserves (CIM 2014) are consistent with these definitions.
A Mineral Resource is defined as a concentration or occurrence of material of economic interest in or on the Earth's crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, considering relevant factors such as cut-off grade, likely mining dimensions, location, or continuity, that with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled.
Based on this definition of Mineral Resources, the Mineral Resources estimated in this Technical Report have been classified according to the definitions below based on geology, grade continuity, and drillhole spacing.
Measured mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling. The level of geological certainty associated with a measured mineral resource is sufficient to allow a qualified person to apply modifying factors, as defined in this section, in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit. Because a measured mineral resource has a higher level of confidence than the level of confidence of either an indicated mineral resource or an inferred mineral resource, a measured mineral resource may be converted to a proven mineral reserve or to a probable mineral reserve.
Indicated mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling. The level of geological certainty associated with an indicated mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Because an indicated mineral resource has a lower level of confidence than the level of confidence of a measured mineral resource, an indicated mineral resource may only be converted to a probable mineral reserve.
Inferred mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of geological uncertainty associated with an inferred mineral resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Because an inferred mineral resource has the lowest level of geological confidence of all mineral resources, which prevents the application of the modifying factors in a manner useful for evaluation of economic viability, an inferred mineral resource may not be considered when assessing the economic viability of a mining project and may not be converted to a mineral reserve.
The SLR QP has considered the following factors that can affect the uncertainty associated with the class of Mineral Resources:
Drilling, sampling, sample preparation, and assay procedures follow industry standards.
Data verification and validation work confirm drill hole sample databases are reliable.
Mineralization domains are interpreted manually in cross-sections and refined in longitudinal sections by an experienced resource geologist.
While the extensive surface and underground drilling and history of successful uranium and vanadium mining at the Project would lead to a higher level of classification, the lack of vanadium assays supporting the vanadium resource leads to the lower level of classification.
As discussed earlier, the vanadium grades associated with the Mineral Resource are based on a calculation equation as a result of regression analysis study between estimated uranium grades.
Exploration potential classification is used for internal viewing of the mineralization and has not met the requirements for consideration of Inferred material. All exploration potential material has been removed from the Mineral Resources estimate.
While reported historical production numbers indicate the presence of vanadium and are in general agreement with the estimated model vanadium grades reported, the numbers in the Mineral Resource for all four zones have not been verified by core assayed grades.
The SLR QP recommends that EFR continue to assay core samples for vanadium with any future mining operations.
All the Mineral Resources at the Project are classified as Inferred Mineral Resources.
In the SLR QP's opinion the classification of Mineral Resources is reasonable and appropriate for disclosure.
14.13 Block Model Validation
A number of validation checks were performed on all the block models to verify the grades estimated. These checks included visual checks between composite grades and block grades, statistical checks between composite grades and block grades, swath plots, and reconciliation with mined resources.
All five block models were validated by visual methods. This involved comparing mineralization intercepts and composite grades to block grade estimates. The comparisons showed reasonable correlation with no significant overestimation or overextended influence of high grades. A vertical longitudinal section through the Redd Block deposit is shown in Figure 14-8. A swath plot through the Redd Block zone is provided in Figure 14-9. Overall histogram distributions between the methods were similar as were swath plots looking in at north-south, east-west, and elevation slices for all zones.
Figure 14-8: Longitudinal Section through the Redd Block Deposit
Figure 14-9: Swath Plots through the Redd Block Deposit
14.14 Grade Tonnage Sensitivity
Table 14-14 and Figure 14-10 present the sensitivity of the La Sal Mineral Resource model to various cut-off grades.
Table 14-14: Grade versus Tonnage Curve
Energy Fuels Inc. - La Sal Project
Price |
Cut-Off Grade |
Cut-Off GT |
Tonnage |
Grade |
Contained Metal |
$80 |
0.14 |
0.28 |
1,164,644 |
0.230 |
5,353,583 |
$75 |
0.15 |
0.30 |
1,040,829 |
0.240 |
4,996,677 |
$70 |
0.16 |
0.32 |
937,705 |
0.249 |
4,676,937 |
$65 |
0.17 |
0.34 |
836,899 |
0.259 |
4,343,131 |
$60 |
0.18 |
0.36 |
749,318 |
0.269 |
4,037,845 |
$55 |
0.20 |
0.40 |
592,839 |
0.290 |
3,442,112 |
$50 |
0.22 |
0.44 |
456,692 |
0.315 |
2,873,200 |
$45 |
0.24 |
0.48 |
366,838 |
0.335 |
2,461,051 |
$40 |
0.27 |
0.54 |
272,294 |
0.363 |
1,979,192 |
$35 |
0.31 |
0.62 |
122,849 |
0.456 |
1,121,522 |
$30 |
0.36 |
0.72 |
51,176 |
0.618 |
632,066 |
$25 |
0.44 |
0.88 |
29,574 |
0.792 |
468,659 |
Figure 14-10: Mineral Resource Grade versus Tons at Various Cut-Off Grades
14.15 Mineral Resource Reporting
The Project resource estimate is summarized by area at a cut-off grade of 0.17% U3O8 in Table 14-15. In the SLR QP's opinion, the assumptions, parameters, and methodology used for the Project Mineral Resource estimate are appropriate for the style of mineralization. The effective date of the Mineral Resource estimate is December 31, 2021.
The La Sal West resources are reflected within the Energy Queen Zone for historic reporting consistencies.
The SLR QP is of the opinion that with consideration of the recommendations summarized in Section 1 and Section 23, any issues relating to all relevant technical and economic factors likely to influence the prospect of economic extraction can be resolved with further work.
The SLR QP is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could materially affect the Mineral Resource estimate.
Table 14-15: Summary of Mineral Resources -Effective Date December 31, 2021
Energy Fuels Inc. - La Sal Project
Classification |
Deposit |
Tonnage |
Grade |
Contained |
Grade |
Contained |
Recovery |
EFR Basis |
Inferred |
Pandora |
222 |
0.24 |
1,061 |
1.02 |
4,551 |
96 |
100 |
|
Beaver/La Sal |
118 |
0.23 |
552 |
1.01 |
2,388 |
96 |
100 |
|
Redd Block |
336 |
0.29 |
1,918 |
1.14 |
7,679 |
96 |
100 |
|
Energy Queen |
147 |
0.25 |
749 |
1.07 |
3,129 |
96 |
100 |
Total Inferred |
|
823 |
0.26 |
4,281 |
1.08 |
17,746 |
96 |
100 |
Notes:
1. SEC S-K 1300 definitions were followed for all Mineral Resource categories. These definitions are also consistent with CIM (2014) definitions in NI 43-101.
2. Uranium Mineral Resources are estimated at a cut-off grade of 0.17% U3O8.
3. Vanadium Mineral Resources are estimated based on calculations from U3O8 vs V2O5 regression analysis.
4. The cut-off grade is calculated using a metal price of $65/lb U3O8
5. No minimum mining width was used in determining Mineral Resources.
6. Mineral Resources are based on a tonnage factory of 14.5 ft3/ton (Bulk density 0.0690 ton/ft3 or 2.21 t/m3).
7. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
8. Total may not add due to rounding
9. Mineral Resources are 100% attributable to EFR and are in situ.
15.0 MINERAL RESERVE ESTIMATE
There are no current Mineral Reserves at the Project.
16.0 MINING METHODS
This section is not applicable.
17.0 RECOVERY METHODS
This section is not applicable.
18.0 PROJECT INFRASTRUCTURE
This section is not applicable.
19.0 MARKET STUDIES AND CONTRACTS
This section is not applicable.
20.0 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT
This section is not applicable.
21.0 CAPITAL AND OPERATING COSTS
This section is not applicable.
22.0 ECONOMIC ANALYSIS
This section is not applicable.
23.0 ADJACENT PROPERTIES
This section is not applicable.
24.0 OTHER RELEVANT DATA AND INFORMATION
No additional information or explanation is necessary to make this Technical Report understandable and not misleading.
25.0 INTERPRETATION AND CONCLUSIONS
The SLR QP offers the following interpretations and conclusions on the Project:
EFR's protocols for drilling, sampling, analysis, security, and database management meet industry standard practices and are appropriate for the estimation of Mineral Resources.
EFR project geologists appear to have a good understanding of the regional, local, and deposit geology and controls on mineralization.
The Project has been the site of considerable past mining and exploration including the drilling and logging of approximately 17,397 surface and underground drillholes rotary holes of which 14,326 were used to prepare the current Mineral Resource estimate. In the opinion of the SLR QP the drilling database is adequate and acceptable for the purposes of Mineral Resource estimation.
The SLR QP considers the estimation procedures employed at La Sal, including capping, compositing, and interpolation, to be reasonable and in line with industry standard practice for the style of mineralization and deposit type, but notes the following:
Over extrapolation of mineralization wireframe boundaries in areas of sparse or widely spaced drilling using the spline option tool in Vulcan is impacting the accuracy of the wireframes volumes and includes large amounts of internal waste.
Estimation Methodology:
Not applying a minimum mining thickness has resulted in some portions the wireframes to pinch down disallowing for block model estimations to occur.
Wireframes are not properly snapped to all drillholes intercepts.
The SLR QP is of the opinion that the use of a regression analysis to estimate V2O5 grade values is acceptable given the small amount of valid V2O5 assays compared to the number of radiometric log values for U3O8.
The SLR QP finds the classification criteria to be reasonable.
The SLR QP considers that the Mineral Resources estimate completed on the Project conforms to the SEC S-K 1300 and NI 43-101 definitions for reporting mineral resources on mining properties.
The SLR QPs are not aware of any environmental, permitting, legal, title, taxation, socioeconomic, marketing, political, or other relevant factors that could materially affect the current resource estimate.
The SLR QP is of the opinion that there is a moderate risk that in some portions of the interpolated wireframes, estimated uranium grades will not reconcile to future drilling results due to the over extrapolating of the wireframes using the spline option in Vulcan in areas of widely spaced drilling and known morphology of Colorado Plateau uranium mineralization. These areas of barren or low-grade uranium mineralization may be areas of potential vanadium mineralization.
26.0 RECOMMENDATIONS
The SLR QP makes the following recommendations regarding advancement of the Project. The two-phase programs are interconnected and progressing to Phase 2 is contingent upon completion of the Phase 1 program:
26.1 Phase 1: Exploration/Development Drilling Program
1. Conduct a 50 drillhole exploration/development drilling program to advance the La Sal property to a Pre-Feasibility Level. Average depth per hole is projected to be approximately 630 ft (Table 26-1).
The SLR QP estimates the cost of the Phase 1 work will range from US$750,000 to US$850,000 (estimated costs per drill foot is US$25).
26.2 Phase 2: Pre-Feasibility Study and Updated Resource Estimate
1. Following completion of the Phase 1 confirmation drilling program, revisit, and update Mineral Resource estimates for the Project.
2. Complete a PFS of the Project based on an updated Mineral Resource estimate.
The SLR QP estimates the cost of this work to be US$60,000 for the updated Mineral Resource estimate and approximately US$300,000 for the PFS for a total of approximately US$410,000 for Phase 2 (Table 26-1).
Table 26-1: Recommended Budget
Energy Fuels Inc. - La Sal Project
Item |
Cost |
Phase 1 |
|
Drill Beaver/Redd Block Connection (50 holes) |
$800,000 |
Assaying and Geophysical Logging |
$45,000 |
Phase 1 Total |
$845,000 |
|
|
Phase 2 |
|
Redd Block Shaft/Decline Trade-off |
$50,000 |
Resource Update |
$60,000 |
Pre-Feasibility Study |
$300,000 |
Phase 2 Total |
$410,000 |
In support of the two-Phase program outlined above, the SLR QP makes the following recommendations:
1. Compile lithologic data from existing radiometric log data and construct a geologic model that defines mineralized horizons within the Salt Wash. Geologic model to be used to constrain future resource estimations by limiting the amount of internal waste in the wireframes.
2. Continue implementation of the recently completed (2019) V2O5 sampling program to support and supplement resource estimations.
3. Procure a vanadium standard to monitor vanadium assay performance as more vanadium assays are expected to be collected in the future for vanadium resource estimation.
4. Apply a minimum thickness of two feet when constructing wireframes to align with current mining operations more appropriately.
5. Treat missing and unsampled intervals contained within the wireframes as waste.
6. Continue to use dynamic anisotropic models for all estimations where appropriate.
7. Revisit and confirm the historical density values prior to any future resource estimations.
27.0 REFERENCES
Cadigan, R. A., 1967, Petrology of the Morrison Formation in the Colorado Plateau Region, U.S.G.S. Professional Paper 556.
Canadian Institute of Mining, Metallurgy and Petroleum (CIM), 2014, CIM Definition Standards for Mineral Resources and Mineral Reserves, adopted by the CIM Council on May 10, 2014.
Carter, W.D. and Gualtieri, J.L., 1965, Geology and Uranium-Vanadium Deposits of the La Sal Quadrangle San Juan County, Utah, and Montrose County, Colorado, U.S.G.S. Professional Paper 508.
Chenoweth, W. L., 1981, The Uranium-Vanadium Deposits of the Uravan Mineral Belt and Adjacent Areas, Colorado and Utah, in Western Slope Colorado, New Mexico Geological Society 32nd Guide Book.
Chenoweth, W. L., 1983, Uranium-Vanadium Deposits on the West Flank of the La Sal Mountains, Grand and San Juan Counties, Utah, Grand Junction Geological Society - 1983 Field Trip
Chenoweth, W. L., 1990, Lisbon Valley, Utah's Premier Uranium Area, A summary of Exploration and Ore Production, Utah Geological and Mineral Survey OFR 188.
Dahlkamp, Franz J., 1993, Uranium Ore Deposits, Springer-Verlag.
Doelling, H. H., 1969, Mineral Resources, San Juan County, Utah, and Adjacent Areas, Part II: Uranium and Other Metals in Sedimentary Host Rocks, Utah Geological and Mineralogical Survey, Special Studies 24.
Doelling, H.H., 2004, Geologic Map of the La Sal 30' X 60' Quadrangle, Utah Geological Survey
Electronic Code of Federal Regulations, Title 17: Commodity and Securities Exchanges, Chapter II, Part 229 Standard Instructions for Filing Forms Under Securities Act of 1933, Securities Exchange Act of 1934 and Energy Policy and Conservation Act of 1975- Regulation S-K.(https://www.ecfr.gov/cgi-bin/text-idx?amp;node=17:3.0.1.1.11&rgn=div5#se17.3.229_11303)
Energy Fuels Inc., 2022, Legal Opinion Regarding La Sal Project Ownership, letter report to SLR International Corporation, February 18, 2022, 626 pp.
Fischer, R. P. and Hilpert, L. S., 1952, Geology of the Uravan Mineral Belt, USGS Bulletin 988-A.
Hollingsworth, J. S., January 25, 1991, Summary of Mineable Reserves: Umetco Minerals Corporation, in-house report.
Huber, G.C., 1981, Geology of the Lisbon Valley Uranium District, Southeastern Utah, in Western Slope Colorado, New Mexico Geological Society 32nd Guide Book.
Kovschak, A. A., Jr. and Nylund, R. L., 1981, General Geology of Uranium-Vanadium Deposits of Salt Wash Sandstones, La Sal Area, San Juan County, Utah, in Western Slope Colorado, New Mexico Geological Society 32nd Guide Book.
Mickle, D.G. and Mathews G.W., 1978, Geologic Characteristics of Environments Favorable for Uranium Deposits, International Atomic Energy Agency 270 p.
Minobras Mining Services Company, 1978, Uranium Guidebook for the Paradox Basin, Utah-Colorado: Bonsall, California (formerly Dana Point, California), 95 p.
Peters, D.C., 2011, Updated Technical Report On Energy Fuels Resources Corporation's Energy Queen Project, San Juan County, Utah: Peters Geosciences, 36 p. March 5, 2011.
Peters, D.C., 2014, Technical Report On La Sal District Project (Including the Pandora, Beaver, and Energy Queen Projects), San Juan County, Utah: Peters Geosciences. March 25,2014.
Scott, J.H., Dodd, P.H., Droullard, R.F., Mudra, P.J., 1960, Quantitative Interpretation of Gamma-Ray Logs: U.S.A.E.C., RME-136.
Thamm, J. K., Kovschak, A. A., Jr., and Adams, S. S., 1981, Geology and Recognition Criteria for Sandstone Uranium Deposits of the Salt Wash Type, Colorado Plateau Province-final report, U.S. Department of Energy Report GJBX-6(81).
Trade Tech, 2013 Uranium Price Information from www.uranium.info
U.S. Atomic Energy Commission, 1959, Guidebook to Uranium Deposits of Western United States, RME-141.
U.S.G.S. Professional Paper 320.
US Securities and Exchange Commission, 2018: Regulation S-K, Subpart 229.1300, Item 1300 Disclosure by Registrants Engaged in Mining Operations and Item 601 (b)(96) Technical Report Summary.
Ux Consulting, 2013 Uranium Price Information from www.uxc.com
Weeks, A. D., Coleman, R.G., and Thompson, M. E., 1959, Summary of the Ore Mineralogy, in Geochemistry and Mineralogy of the Colorado Plateau Uranium Ores,
Weir, G.W., Dodson, C.L., and Puffett, W.P., 1960, Preliminary Geologic Map and Section of the Mount Peale 2 SE Quadrangle San Juan County, Utah, U.S.G.S. Mineral Investigations Field Studies Map MF-143.
28.0 DATE AND SIGNATURE PAGE
This report titled "Technical Report on the La Sal Project, San Juan County, Utah, USA" with an effective date of December 31, 2021, was prepared and signed by the following authors:
(Signed & Sealed) Mark B. Mathisen | |
Dated at Lakewood, CO | Mark B. Mathisen, C.P.G. |
February 22, 2022 | Principal Geologist, SLR International Corporation |
29.0 CERTIFICATE OF QUALIFIED PERSON
29.1 Mark B. Mathisen
I, Mark B. Mathisen, C.P.G., as an author of this report entitled "Technical Report on the La Sal Project, San Juan County, Utah, USA" with an effective date of December 31, 2021 (the Technical Report), prepared for Energy Fuels, Inc., do hereby certify that:
1. I am Principal Geologist with SLR International Corporation, of Suite 100, 1658 Cole Boulevard, Lakewood, CO, USA 80401.
2. I am a graduate of Colorado School of Mines in 1984 with a B.Sc. degree in Geophysical Engineering.
3. I am a Registered Professional Geologist in the State of Wyoming (No. PG-2821), a Certified Professional Geologist with the American Institute of Professional Geologists (No. CPG-11648), and a Registered Member of SME (RM #04156896). I have worked as a geologist for a total of 23 years since my graduation. My relevant experience for the purpose of the Technical Report is:
• Mineral Resource estimation and preparation of NI 43-101 Technical Reports.
• Director, Project Resources, with Denison Mines Corp., responsible for resource evaluation and reporting for uranium projects in the USA, Canada, Africa, and Mongolia.
• Project Geologist with Energy Fuels Nuclear, Inc., responsible for planning and direction of field activities and project development for an in situ leach uranium project in the USA. Cost analysis software development.
• Design and direction of geophysical programs for US and international base metal and gold exploration joint venture programs.
4. I have read the definition of "qualified person" set out in National Instrument 43-101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101.
5. I visited the La Sal Project (the Project) on November 11, 2021.
6. I am responsible for all sections and overall preparation of the Technical Report.
7. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43-101.
8. I have been involved previously with the Project from 2006 to 2012 when serving as Director of Project Resources with Denison Mines.
9. I have read NI 43-101, and the Technical Report has been prepared in compliance with NI 43-101 and Form 43-101F1.
10. At the effective date of the Technical Report, to the best of my knowledge, information, and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
Dated this 22nd day of February 2022
(Signed & Sealed) Mark B. Mathisen
Mark B. Mathisen, C.P.G.
Technical Report on the Nichols Ranch Project, Campbell and Johnson Counties, Wyoming, USA
SLR Project No: 138.02544.00001
Prepared by
SLR International Corporation
1658 Cole Blvd, Suite 100
Lakewood, CO 80401
for
Energy Fuels Inc.
225 Union Blvd., Suite 600
Lakewood, CO 80228
USA
Effective Date - December 31, 2021
Signature Date - February 22, 2022
Qualified Persons
Grant A. Malensek, M.Eng., P. Eng.
Mark B. Mathisen, C.P.G.
Jeremy Scott Collyard, PMP, MMSA QP
Jeffrey L. Woods, MMSA QP
Phillip E. Brown, C.P.G., R.P.G.
FINAL
Distribution: 1 copy - Energy Fuels Inc.
1 copy - SLR International Corporation
CONTENTS
1.0 SUMMARY | 1-1 |
1.1 Executive Summary | 1-1 |
1.2 Economic Analysis | 1-6 |
1.3 Technical Summary | 1-11 |
2.0 INTRODUCTION | 2-1 |
2.1 Sources of Information | 2-2 |
2.2 List of Abbreviations | 2-4 |
3.0 RELIANCE ON OTHER EXPERTS | 3-1 |
3.1 Reliance on Information Provided by the Registrant | 3-1 |
4.0 PROPERTY DESCRIPTION AND LOCATION | 4-1 |
4.1 Location | 4-1 |
4.2 Land Tenure | 4-6 |
4.3 Required Permits and Status | 4-22 |
4.4 Encumbrances | 4-22 |
4.5 Royalties | 4-23 |
4.6 Other Significant Factors and Risks | 4-24 |
5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY | 5-1 |
5.1 Accessibility | 5-1 |
5.2 Vegetation | 5-1 |
5.3 Climate | 5-2 |
5.4 Local Resources | 5-2 |
5.5 Infrastructure | 5-2 |
5.6 Physiography | 5-3 |
6.0 HISTORY | 6-1 |
6.1 Prior Ownership | 6-1 |
6.2 Exploration and Development History | 6-2 |
6.3 Historical Resource Estimates | 6-4 |
6.4 Past Production | 6-5 |
7.0 GEOLOGICAL SETTING AND MINERALIZATION | 7-1 |
7.1 Regional Geology | 7-1 |
7.2 Local Geology | 7-4 |
7.3 Property Geology | 7-5 |
7.4 Mineralization | 7-16 |
8.0 DEPOSIT TYPES | 8-1 |
9.0 EXPLORATION | 9-1 |
10.0 DRILLING | 10-1 |
10.1 Nichols Ranch Mining Unit | 10-4 |
10.2 Satellite Properties | 10-4 |
10.3 Procedures | 10-5 |
11.0 SAMPLE PREPARATION, ANALYSES, AND SECURITY | 11-1 |
11.1 Sample Preparation and Analysis | 11-1 |
11.2 Sample Security | 11-7 |
11.3 In Situ Leach Amenability | 11-7 |
11.4 Bulk Density | 11-8 |
11.5 Quality Assurance and Quality Control | 11-9 |
11.6 Conclusions | 11-9 |
12.0 DATA VERIFICATION | 12-1 |
12.1 Nichols Ranch Mining Unit | 12-1 |
12.2 Satellite Properties | 12-3 |
12.3 Limitations | 12-5 |
13.0 MINERAL PROCESSING AND METALLURGICAL TESTING | 13-1 |
13.1 Metallurgical Testing | 13-1 |
13.2 Opinion of Adequacy | 13-2 |
14.0 MINERAL RESOURCE ESTIMATES | 14-1 |
14.1 Summary | 14-1 |
14.2 Resource Database | 14-3 |
14.3 Geological Interpretation | 14-4 |
14.4 Drill Data Statistics | 14-4 |
14.5 Treatment of High-Grade Assays | 14-13 |
14.6 Compositing | 14-13 |
14.7 Search Strategy and Grade Interpolation Parameters | 14-13 |
14.8 Bulk Density | 14-14 |
14.9 Radiometric Equilibrium Factor | 14-15 |
14.10 Cut-Off Grade and GT Parameters | 14-16 |
14.11 Mineral Resource Classification | 14-17 |
14.12 GT Model Validation | 14-19 |
14.13 Mineral Resource Reporting | 14-21 |
15.0 MINERAL RESERVE ESTIMATES | 15-1 |
16.0 MINING METHODS | 16-1 |
TABLES
Table 1-1:PA2 Wellfield Development | 1-5 |
Table 1-2:Base Case After-Tax Cash Flow Summary | 1-9 |
Table 1-3: Alternate Case After-Tax Cash Flow Summary | 1-10 |
Table 1-4:Attributable Mineral Resource Estimate for the Nichols Ranch Uranium Complex - Effective December 31, 2021 | 1-15 |
Table 1-5:Base Case Capital Cost Estimate | 1-18 |
Table 1-6:Base Case Operating Cost Estimate | 1-19 |
Table 2-1:Summary of QP Responsibilities | 2-2 |
Table 4-1:Nichols Ranch Lode Mining Claims | 4-6 |
Table 4-2:Jane Dough Lode Mining Claims | 4-8 |
Table 4-3:Hank Lode Mining Claims | 4-12 |
Table 4-4:North Rolling Pin Lode Mining Claims | 4-14 |
Table 4-5:West North Butte Lode Mining Claims | 4-16 |
Table 4-6:East North Butte Lode Mining Claims | 4-20 |
Table 4-7:Willow Creek Lode Mining Claims | 4-21 |
Table 4-8:Current Reclamation Bond Summary | 4-22 |
Table 6-1:Historic Mineral Resource Estimates | 6-5 |
Table 10-1:Historical Drillhole Summary | 10-1 |
Table 11-1:Radiometric Equilibrium Data | 11-7 |
Table 12-1:EFR Drilling Database | 12-2 |
Table 13-1:Past Production 2014 to 2021 | 13-1 |
Table 14-1:Mineral Resource Estimate for the Nichols Ranch Uranium Complex - Effective Date December 31, 2021 | 14-2 |
Table 14-2:Summary of Available Drillhole Data | 14-3 |
Table 14-3:GT Summaries | 14-5 |
Table 14-4:Drillhole Results | 14-5 |
Table 14-5:Bulk Density Measurements | 14-14 |
Table 14-6:Average Intercept Thickness Nichols Ranch A-Sand Zone | 14-16 |
Table 14-7:Mineral Resource Estimate for the Nichols Ranch Uranium Complex - Effective Date December 31, 2021 | 14-22 |
Table 16-1:Nichols Ranch Area Life of Mine Plan (Attributable to EFR) | 16-9 |
Table 20-1:Environmental Permits for Operation | 20-3 |
Table 20-2:Reclamation Bonds | 20-5 |
Table 21-1:Base Case Capital Cost Estimate Summary | 21-1 |
Table 21-2:SLR Capital Cost Scale Adjustment Summary | 21-2 |
Table 21-3:SLR Capital Cost Escalation Factors | 21-3 |
Table 21-4:SLR 2021 Escalated Base Case Capital Cost Summary | 21-3 |
Table 21-5:Operating Cost Estimate | 21-4 |
Table 21-6:2015 Site Operating Cost Scale Adjustment | 21-5 |
Table 21-7:2021 SLR Operating Cost Escalation Factors | 21-5 |
Table 21-8:SLR 2021 Escalated Base Case Operating Cost Summary | 21-5 |
Table 21-9:Workforce Summary | 21-6 |
Table 22-1: Base Case After-Tax Cash Flow Summary | 22-4 |
Table 22-2:Base Case All-In Sustaining Costs Composition | 22-5 |
Table 22-3:Base Case After-Tax Sensitivity Analysis | 22-7 |
Table 22-4: Alternate Case After-Tax Cash Flow Summary | 22-10 |
Table 22-5:Alternate Case All-in Sustaining Costs Composition | 22-11 |
Table 26-1:PA2 Wellfield Development | 26-1 |
FIGURES
Figure 4-1:Location Map | 4-3 |
Figure 4-2:Land Tenure Map | 4-4 |
Figure 4-3:White Mesa Mill Location and Property Map | 4-5 |
Figure 7-1:Cross Section of Local Geology | 7-1 |
Figure 7-2:Regional Geologic Map | 7-3 |
Figure 7-3:Schematic Fluvial Point Bar System | 7-5 |
Figure 7-4:Regional Stratigraphic Column | 7-7 |
Figure 7-5:Nichols Ranch Radiometric Log Cross Section Log | 7-8 |
Figure 7-6:North Rolling Pin Radiometric Log Cross Section A-A' Log | 7-10 |
Figure 7-7:North Rolling Pin Radiometric Log Cross Section B-B' Log | 7-11 |
Figure 7-8:West North Butte Radiometric Log Cross Section Log A-A' | 7-13 |
Figure 7-9:East North Butte Radiometric Log Cross Section Log B-B' | 7-14 |
Figure 7-10:Willow Creek Radiometric Log Cross Section Log C-C' | 7-15 |
Figure 7-11:Cross Section Stacked Roll Fronts | 7-17 |
Figure 8-1:Typical Roll Front Cross Section | 8-2 |
Figure 8-2:Typical Roll Front (REDOX) Boundary | 8-2 |
Figure 10-1:Historical Drillhole Location Map | 10-2 |
Figure 10-2:EFR Drillhole Location Map | 10-3 |
Figure 11-1:Uranium Roll Front Natural Gamma Log Configuration and Associated Geochemistry | 11-3 |
Figure 11-2:PFN versus Natural Gamma Trace Response | 11-4 |
Figure 13-1:Nichols Ranch Production (2014 to 2021) | 13-2 |
Figure 14-1:Nichols Ranch - PA1 HH-1 through HH-9 A Sand 30 -100 GT Map | 14-6 |
Figure 14-2:Nichols Ranch - PA2 HH-10 through HH-13 A Sand 30 -100 GT Map | 14-7 |
Figure 14-3:Jane Dough Mineralized Trend and GT Contour Map | 14-8 |
Figure 14-4:Hank Mineralized Trend and GT Contour Map | 14-9 |
Figure 14-5:North Rolling Pin Mineralized Trend and GT Contour Map - North Half | 14-11 |
Figure 14-6:North Rolling Pin Mineralized Trend and GT Contour Map - South Half | 14-12 |
Figure 14-7:Nichols Ranch PA1 and PA2 Drilling | 14-20 |
Figure 16-1:Schematic of the ISR Process | 16-1 |
Figure 16-2:Relevant Geologic/Hydrogeologic Units in the Vicinity of the Project Area | 16-7 |
Figure 17-1:Nichols Ranch Plant Flow Sheet | 17-3 |
Figure 18-1:Aerial View of Infrastructure Around the Nichols Ranch Processing Plant | 18-2 |
Figure 18-2:Site Layout | 18-3 |
Figure 19-1:Long Term Uranium Price Forecast | 19-2 |
Figure 22-1:Base Case Annual U3O8 Production by Area | 22-3 |
Figure 22-2:Base Case Project After-Tax Metrics Summary | 22-3 |
Figure 22-3:Base Case Annual AISC Curve Profile | 22-6 |
Figure 22-4:Base Case After-tax NPV 5% Sensitivity Analysis | 22-8 |
Figure 22-5:Alternate Case Annual U3O8 Production by Area | 22-9 |
Figure 22-6:Alternate Case After-tax NPV 5% Sensitivity Analysis | 22-12 |
APPENDIX TABLES AND FIGURES
Table 30-1:Base Case Annual Cash Flow Model | 30-2 |
Table 30-2:Alternate Case Annual Cash Flow Model | 30-4 |
1.0 SUMMARY
1.1 Executive Summary
This Independent Technical Report (Technical Report) was prepared by the Grant A. Malensek, M.Eng., P. Eng., Mark B. Mathisen, C.P.G., Jeremy Scott Collyard, PMP, MMSA QP, Jeffrey L. Woods, MMSA QP and Phillip E. Brown, C.P.G., R.P.G. of SLR International Corporation (SLR), for Energy Fuels Inc. (Energy Fuels), the parent company of Energy Fuels Resources (USA) Inc. (EFR), with respect to the Nichols Ranch Project (Nichols Ranch or the Project), located in eastern Wyoming, USA. EFR owns 100% of the Project, with the exception of the Jane Dough area, over which EFR holds an 81% interest.
EFR's parent company, Energy Fuels, is incorporated in Ontario, Canada. EFR is a US-based uranium and vanadium exploration and mine development company with projects located in the states of Colorado, Utah, Arizona, Wyoming, Texas, and New Mexico. Energy Fuels is listed on the NYSE American Stock Exchange (symbol: UUUU) and the Toronto Stock Exchange (symbol: EFR).
This Technical Report satisfies the requirements of Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101) and the United States Securities and Exchange Commission's (SEC) Modernized Property Disclosure Requirements for Mining Registrants as described in Subpart 229.1300 of Regulation S-K, Disclosure by Registrants Engaged in Mining Operations (S-K 1300) and Item 601(b)(96) Technical Report Summary. The purpose of this Technical Report is to disclose the results of a Preliminary Economic Assessment (PEA) for the Project. The term PEA is used throughout this Technical Report and is consistent with an Initial Assessment (IA) under S-K 1300. Grant A. Malensek, M.Eng., P. Eng., Mark B. Mathisen, C.P.G., Jeremy Scott Collyard, PMP, MMSA QP, Jeffrey L. Woods, MMSA QP and Phillip E. Brown, C.P.G., R.P.G. are all Qualified Persons (QPs) within the meaning of both S-K 1300 and NI 43-101 (SLR QPs).
Resource estimates completed over Nichols Ranch in 2015 (Beahm and Goranson, 2015) and North Rolling Pin in 2010 (Graves, 2010) have been superseded by the Mineral Resource estimates of this Technical Report which includes additional new information and analysis.
The Project includes the Nichols Ranch Uranium Complex (the Complex) near the city of Caspar, Wyoming, and the White Mesa Mill (the Mill) near the city of Blanding, Utah. The Complex is currently on care and maintenance and the Mill is on a reduced operating schedule while processing materials as they become available. When in full operation, the Project is expected to produce uranium concentrate known internationally as yellowcake. A site visit was carried out to the Complex on October 28, 2021, and the Mill on November 11, 2021.
The Mill was developed in the late 1970s by Energy Fuels Nuclear, Inc. (EFNI) as a processing option for the many small mines that are located in the Colorado Plateau region. After approximately two and a half years, the Mill ceased ore processing operations altogether due to low uranium prices. Since 1984, majority ownership interest has alternated between EFNI, Union Carbide Corporation, and Denison Mines Corporation (Denison, previously International Uranium Corporation). EFR acquired the Complex in 2015. EFR has controlled 100% of the Mill's assets and liabilities since August 2012.
The Complex includes the Nichols Ranch Mining Unit, which is comprised of the Nichols Ranch wellfield (Nichols Ranch Wellfield), Nichols Ranch plant (Nichols Ranch Plant), Jane Dough area, and Hank area, and several satellite properties. The production scenario reviewed for this Technical Report assumes that the Nichols Ranch Mining Unit will be developed as an in situ recovery (ISR) mining operation with an onsite processing plant and based on the current resource, an expected 11 year mine life. The Project will produce an average of 366 thousand pounds (klb) of U3O8 per year on-site, which will then be trucked to the Mill for final drying and upgrading before delivery to end-users.
1.1.1 Conclusions
The SLR QPs offer the following conclusions by area.
1.1.1.1 Geology and Mineral Resources
The effective date of the Mineral Resource estimate is December 31, 2021. Estimated uranium grades are based on radiometric probe grades using Grade-Thickness (GT) contour methodology.
Mineral Resources for the Complex are reported at a GT cut-off grade of 0.20 %-ft and have been depleted as of December 31, 2021.
The total production from Nichols Ranch is 1,276,589 lb eU3O8 as of December 31, 2021.
Total Measured + Indicated Resources for the Complex are 3.29 million tons (Mst) at an average grade of 0.106% eU3O8 containing 6.99 million pounds (Mlb) eU3O8. Additional Inferred Resources total 650,000 tons at an average grade of 0.097% eU3O8 containing 1.25 Mlb eU3O8.
There is a low risk of depletion of chemical uranium compared to radiometrically determined uranium at the Complex. Furthermore, there is no evidence that radiometric disequilibrium would be expected to negatively affect the uranium resource estimates of the deposits. Prompt Fission Neutron (PFN) geophysical logging provides direct analysis of the in situ chemical uranium content and is considered by the SLR QP as reliable for the purposes of assessing radiometric equilibrium
The SLR QP is of the opinion the historical radiometric logging, analysis, and security procedures at the Complex were adequate for use in the estimation of the Mineral Resources. The SLR QP also opines that, based on the information available, the original gamma log data and subsequent conversion to % eU3O8 values are reliable.
The sampling, sample preparation, and sample analysis programs are appropriate and to industry standards for the style of mineralization.
Although continuity of mineralization is variable, drilling to date confirms that local continuity exists within individual sandstone units.
No significant discrepancies were identified with the drilling and radiometric logging data and GT interpretations in Nichols Ranch Mining Unit.
Descriptions of recent drilling programs, logging, and sampling procedures have been well documented by EFR, with no significant discrepancies identified.
The QA/QC procedures undertaken support the integrity of the database used for Mineral Resource estimation.
The resource database is valid and suitable for Mineral Resource estimation under S-K 1300 and NI 43-101 standards.
In the SLR QP's opinion, the assumptions, parameters, and methodology used for the Nichols Ranch Mining Unit and North Rolling Pin Mineral Resource estimate are appropriate for the style of mineralization and mining methods.
The SLR QP is not aware of any environmental, permitting, legal, title, taxation, socioeconomic, marketing, political, or other relevant factors that could materially affect the current resource estimate.
1.1.1.2 Mining Methods
1.1.1.3 Mineral Processing
Due to the absence of the on-site drying and packaging circuit, the Project proposes to truck the U3O8 produced on-site 643 road miles to the Mill near Blanding, Utah, for drying and drumming for final delivery to end users.
The Mill has been in operation since 1981 and is equipped with the required equipment using a proven process for the production of uranium oxide (U3O8) product, called "yellowcake". In addition, although it is not part of the production schedule in this Technical Report, the Mill also has the capacity to produce vanadium pentoxide (V2O5).
The Mill is currently on a reduced operating schedule processing materials as they become available. The Mill is currently processing Rare Earth Element (REE) materials in part of the circuit, functioning essentially as a pilot plant, therefore the facility is sufficiently staffed to initiate U3O8 production relatively quickly.
1.1.1.4 Infrastructure
The Complex and the Mill are in historically important, uranium-producing regions of eastern Wyoming and southeastern Utah, respectively. All the regional infrastructure necessary to mine and process commercial quantities of U3O8 is in place.
EFR has operated the Mill tailings cells since 1981, under the requirements of the Utah Department of Environmental Quality Radioactive Materials License.
1.1.1.5 Environment
Nichols Ranch, Jane Dough, and the Hank Unit are fully licensed and permitted for ISR mining by major licenses and permits issued by the United States Nuclear Regulatory Commission (NRC), the Wyoming Department of Environmental Quality, Land Quality Division (WDEQ/LQD), and the Wyoming Department of Environmental Quality, Air Quality Division (WDEQ/AQD). The Hank Unit is also permitted for operation by a Decision Record issued by the Bureau of Land management (BLM).
EFR has strong relationships with state and federal regulatory agencies and has a positive record of environmental performance at Nichols Ranch.
The SLR QP is not aware of environmental, permitting, or social/community factors which would materially affect the Mineral Resource estimates.
1.1.2 Recommendations
The SLR QPs offer the following recommendations by area:
1.1.2.1 Geology and Mineral Resources
The SLR QP offers the following recommendations regarding the data supporting the drillhole database at the Project:
1. Transition from a Microsoft Excel database to acQuire or a similar database.
2. Verify all drilling data collar coordinates as Wyoming NAD27 UTM zone 13 coordinates. EFR should also consider moving to an updated coordinate system, such as WGS 84, for use in online graphic programs.
3. Create 3D geologic models of the Wasatch Formation and individual Sand Units for use in verifying and auditing uranium mineralization.
4. Use a handheld X-ray diffraction (XRF) tool to replace the scintillometer reading in order to obtain more precise mineralogical information.
5. Resume using PFN as a QA/QC tool to confirm disequilibrium within the Satellite Properties not yet exposed to ISR mining.
In addition, the SLR QP provides the following deposit specific recommendations:
1.1.2.1.1 Nichols Ranch Mining Unit
1.1.2.1.1.1 Nichols Ranch
The SLR QP makes the following recommendations regarding advancing the Project with Production Planning and Development for Production Area 2 (PA2):
1. Conduct drilling of 55 delineation to better define the mineralized trends in PA2 to meet a minimum 100 ft grid spacing.
2. Based on the results of the 55 delineation holes, drill and install 120 development wells, associated header houses and manifold to main production pipeline for the remaining four wellfields.
Additional plant upgrades are not required to put PA2 into production. The proposed budget for bringing PA2 into production is shown in Table 1-1.
Table 1-1: PA2 Wellfield Development
Energy Fuels Inc. - Nichols Ranch Project
Item |
Cost |
Drilling (Delineation - 55 holes) |
$110,000 |
Drill and Install Wellfield (120 wells) |
$1,800,000 |
Header House and Manifold Construction |
$390,000 |
Total |
$2,300,000 |
1.1.2.1.1.2 Jane Dough
1. Complete exploration and delineation drilling at Jane Dough, in concurrence with ongoing delineation and production well drilling at Nichols Ranch, starting in the areas most proximate to Nichols Ranch and proceeding southward.
2. Complete an Engineering study to define the most efficient infrastructure for production.
3. Install monitor wells and conduct pump tests for state and federal permit/license requirements in a phased approach as drilling will define multiple production areas (PAs).
1.1.2.1.1.3 Hank
1. Complete additional drilling at Hank to access, define, and upgrade classification of the Mineral Resource.
2. After drilling, complete the economic evaluation of the Hank area project.
1.1.2.1.2 Satellite Properties
1.1.2.1.2.1 North Rolling Pin
1. Install additional monitor wells for future EFR hydrologic studies. Determine groundwater levels and conduct pump tests to evaluate groundwater quality and impact on possible ISR mining.
2. Complete additional delineation drilling to meet a minimum 100 ft grid spacing.
3. Conduct additional radiological disequilibrium studies using PFN, Delayed Fission Neutron (DFN) logging, and/or core assays to develop a site-specific model. Also, conduct a bench scale leach tests to determine amenability to ISR.
4. Complete environmental baseline studies for preparation of state and federal permit/license applications.
5. After drilling, complete an economic evaluation of the North Rolling Pin project.
6. Update the current drilling database with all possible historical holes.
1.1.2.1.2.2 West North Butte, East North Butte, and Willow Creek
1. Update, verify, and certify the drilling database and ensure that all drilling, both historical and recent, is included.
2. Prepare an updated resource estimation upon completion of updating and verifying the database to make 2008 resource estimations current.
3. Install additional monitor wells for future EFR hydrologic studies. Determine groundwater levels and conduct pump tests to evaluate groundwater quality and impact on possible ISR mining.
4. Complete additional drilling to access the mineral resource.
5. Conduct additional radiological disequilibrium studies using PFN, DFN logging, and/or core assays to develop a site-specific model. Also, conduct bench scale leach tests to determine amenability to ISR.
6. Complete environmental baseline studies for preparation of state and federal permit/license applications.
7. After drilling, complete an economic evaluation of the West North Butte, East North Butte, and Willow Creek project.
1.1.2.2 Mining Methods
1. Consistent with the state and federal regulations requirements, environmental monitoring and analysis programs should be implemented to continually collect water level and water quality data when the mine site becomes fully operational.
1.1.2.3 Mineral Processing
1. Continue the intermittent Plant operations with maintenance program.
2. Evaluate the Nichols Ranch Plant's historical operating data to determine possible flow sheet improvements or modifications to improve production rate/economics and make these changes before commencing production.
1.2 Economic Analysis
An economic analysis was performed using the assumptions presented in this Technical Report. The SLR QP notes that, unlike Mineral Reserves, Mineral Resources do not have demonstrated economic viability. This PEA is preliminary in nature, and includes Inferred Mineral Resources that are considered too geologically speculative to have modifying factors applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that this economic assessment will be realized.
The Nichols Ranch base case cash flow is based on Measured, Indicated, and Inferred Mineral Resources (the latter being 17% of the total). An alternative case with only Measured and Indicated Mineral Resources is also presented in this Technical Report.
1.2.1 Base Case (Measured, Indicated, and Inferred Mineral Resources)
1.2.1.1 Economic Criteria
An after-tax cash flow projection for the base case has been generated from the life of mine (LOM) schedule and capital and operating cost estimates in this Technical Report for the Nichols Ranch Mining Unit (Nichols Ranch, Jane Dough, and Hank areas), and is summarized in the Section 1.2.1.2. A summary of the key criteria is provided below.
1.2.1.1.1 Revenue
Mineral Resource used for LOM planning: 3.3 Mst at 0.114% eU3O8 with 7.54 Mlb contained U3O8 (6.66 Mlb contained U3O8 attributable to EFR)
Project areas mined (with % ownership): Nichols Ranch (100%), Jane Dough (81%), and Hank (100%) for net attributable basis of 88.3%
An estimated 85% of the Mineral Resource will be under pattern with 71% U3O8 recovery, equating to an effective resource recovery of 60.4%, or 4.02 Mlb recovered U3O8 attributable to EFR
A total of 17% of the LOM tonnage is Inferred Mineral Resource
Average LOM flow rate: 3,016 gallons per minute (gpm)
Average LOM pregnant leach solution (PLS) concentration: 33 milligrams U3O8 per liter (mg/L)
Sold U3O8: 4.02 Mlb attributable to EFR
Avg annual U3O8 sales: 393 klb/y
Metal price: US$65.00/lb U3O8
Concentrate shipping cost from the Mill to customer: $760/ton U3O8 or $0.38/lb U3O8
1.2.1.1.2 Capital and Operating Costs
One year of preproduction for wellfield development before production in Year 1. All other infrastructure necessary to resume operations at the Complex is already constructed.
Mine life of 11 years
LOM sustaining capital costs of $81.4 million in Q1 2021 US dollar basis
LOM site operating cost (including preproduction wellfield and G&A costs but excluding product transport to market cost, royalties, Ad Valorem tax, and Wyoming severance tax) of $76.1 million, or $19.28/lb U3O8 produced, on Q1 2021 US dollar basis
LOM Restoration/decommissioning costs of $20.7 million in Q1 2021 US dollar basis.
1.2.1.1.3 Royalties and Severance Taxes
Royalties for the Project are applicable to approximately 30% of the Nichols Ranch and Jane Dough Mineral Resources in the production schedule. Royalties are estimated using a rate of 8% of gross revenue generated over these areas.
The Ad Valorem (or Gross Products) tax varies by county and is exclusively a volume based assessment.
1.2.1.1.4 Income Taxes
The economic analysis includes the following assumptions for corporate income taxes (CIT):
Unit of Production depreciation method was used with total allowance of $81.4 million taken during LOM
Percentage depletion method was used with total allowance of $31.0 million taken during LOM
Loss Carry Forwards - Income tax losses may be carried forward indefinitely but may not be used for prior tax years
Federal tax rate of 21%
Wyoming has no corporate income tax
1.2.1.2 Cash Flow Analysis
Table 1-2 presents a summary of the Nichols Ranch base case economics at an U3O8 price of $65.00/lb and production schedule with 17% Inferred Mineral Resources and 83% combined Measured and Indicated Mineral Resources. The SLR QP notes that, unlike Mineral Reserves, Mineral Resources do not have demonstrated economic viability. The economic analysis for the base case contained in this Technical Report is based, in part, on Inferred Resources, and is preliminary in nature. Inferred Resources are considered too geologically speculative to have modifying factors applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that this economic assessment will be realized. The SLR QP notes that with the future exploration drilling planned at the Complex, it would be reasonable to expect a significant amount of Inferred Mineral Resources to become converted into the Indicated category through a subsequent resource model.
On an after-tax basis for the base case, the undiscounted cash flow totals $41.1 million over the mine life. The after-tax Net Present Value (NPV) at 5% discount rate is $31.5 million. The SLR QP notes that after-tax Internal Rate of Return (IRR) is not applicable as the Nichols Ranch Plant at the Complex is already constructed and already operated for a number of years. Capital identified in the economics is for sustaining operations and plant rebuilds as necessary.
Table 1-2: Base Case After-Tax Cash Flow Summary
Energy Fuels Inc. - Nichols Ranch Project
Item |
Unit |
Value |
U3O8 Price |
$/lb |
65.00 |
U3O8 Sales |
Mlb |
4.02 |
Total Gross Revenue |
US$ M |
262 |
Wellfield Costs |
US$ M |
(12) |
Processing Costs |
US$ M |
(39) |
Deep Well Disposal Costs |
US$ M |
(1) |
G&A Costs |
US$ M |
(26) |
Selling Expense |
US$ M |
(2) |
Production Taxes/Royalties |
US$ M |
(22) |
Total Operating Costs |
US$ M |
(101) |
Operating Margin |
US$ M |
161 |
Operating Margin |
% |
62 |
Corporate Income Tax |
US$ M |
(17) |
Operating Cash Flow |
US$ M |
143 |
Sustaining Capital |
US$ M |
(81) |
Restoration/Decommissioning |
US$ M |
(21) |
Total Capital |
US$ M |
(102) |
|
|
|
Pre-tax Free Cash Flow |
US$ M |
58.6 |
Pre-tax NPV @ 5% |
US$ M |
46.1 |
|
|
|
After-tax Free Cash Flow |
US$ M |
41.1 |
After-tax NPV @ 5% |
US$ M |
31.5 |
The average annual U3O8 sales for the base case during the 11 years of operation (and one year of preproduction expense) is 393 klb U3O8 per year at an average All-in Sustaining Cost (AISC) of $50.43/lb U3O8 (or $45.30/lb U3O8 excluding Restoration/ Decommissioning costs).
1.2.1.3 Sensitivity Analysis
The Project is most sensitive to uranium price and recovery, and only less sensitive to operating cost and capital cost at an American Association of Cost Engineers (AACE) International Class 4 level of accuracy (15% to -30% to +20% to +50%). The sensitivities to pounds of U3O8 and metal price are nearly identical. The SLR QP notes that head grade variations in ISR mining are difficult to measure at this PEA stage and thus were not included in this sensitivity analysis.
1.2.2 Alternate Case (Measured and Indicated Mineral Resources Only)
The SLR QP also undertook an analysis of an alternative case, considering only combined Measured and Indicated Mineral Resources (83% of the base case production schedule). The SLR QP notes that while the alternate case does not contain Inferred Mineral Resources, Measured and Indicated Mineral Resources do not have demonstrated economic viability. There is no certainty that economic forecasts on which this PEA is based will be realized.
Using the same cost parameters and ISR mining and processing assumptions as the base case, the alternate case production schedule generates 3.3 Mlb U3O8 over a nine year mine life.
Table 1-3 presents a summary of the Nichols Ranch alternate case economics at an U3O8 price of $65.00/lb. On an after-tax basis, the undiscounted cash flow totals $27.4 million over the mine life. The after-tax NPV at 5% discount rate is $23.7 million.
Table 1-3: Alternate Case After-Tax Cash Flow Summary
Energy Fuels Inc. - Nichols Ranch Project
Item |
Unit |
Value |
U3O8 Price |
$/lb |
65 |
U3O8 Sales |
Mlb |
3.36 |
Total Gross Revenue |
US$ M |
219 |
Wellfield Costs |
US$ M |
(10) |
Processing Costs |
US$ M |
(33) |
Deep Well Disposal Costs |
US$ M |
(1) |
G&A Costs |
US$ M |
(21) |
Product Transport to Market Cost |
US$ M |
(1) |
Production Taxes/Royalties |
US$ M |
(19) |
Total Operating Costs |
US$ M |
(85) |
Operating Margin |
US$ M |
133 |
Operating Margin |
US$ M |
61% |
Corporate Income Tax |
US$ M |
(16) |
Operating Cash Flow |
US$ M |
117 |
Sustaining Capital |
US$ M |
(73) |
Restoration/Decommissioning |
US$ M |
(17) |
Total Capital |
US$ M |
(90) |
|
|
|
Pre-tax Free Cash Flow |
US$ M |
43.7 |
Pre-tax NPV @ 5% |
US$ M |
37.4 |
|
|
|
After-tax Free Cash Flow |
US$ M |
27.4 |
After-tax NPV @ 5% |
US$ M |
23.7 |
The average annual U3O8 sales for the alternate case during the nine years of operation are 418 klb U3O8 per year at an average AISC of $52.00/lb U3O8 (or $47.05/lb U3O8 excluding Restoration/Decommissioning costs)
The after-tax cash flow sensitivities for the alternate case are similar in magnitude to the base case with the Project being most sensitive to uranium price and recovery, and only slightly less sensitive to operating cost and capital cost at an AACE International Class 4 level of accuracy.
1.3 Technical Summary
1.3.1 Property Description and Location
The Complex is located in Campbell and Johnson Counties, in eastern Wyoming, USA in the Pumpkin Buttes Mining District of the Powder River Basin, 80 miles northeast of the city of Casper, Wyoming. The Complex is located approximately at latitude 43°42' North and longitude 106°01' West. The Mill is located in San Juan County, in southeastern Utah, USA, immediately south of the town of Blanding, Utah. The Mill is located at latitude 37°32'10.49" North and longitude 109°30'12" West. The proposed Project will produce approximately 366 klb U3O8 annually.
1.3.2 Land Tenure
Excluding the Jane Dough area in which EFR owns 81%, EFR owns 100% interest in the remaining areas which comprise the Complex land holdings totaling 10,755 acres and the Mill land holdings totalling 5,389 acres.
The Complex is divided into two primary areas, the Nichols Ranch Mining Unit and the Satellite Properties.
The Nichols Ranch Mining Unit includes the following:
Nichols Ranch Area (approximately 740 acres)
Jane Dough Area (approximately 3,680 acres)
Hank Area (approximately 2,250 acres)
Nichols Ranch and Jane Dough are contiguous, and the Hank area is located approximately six miles north of Nichols Ranch.
EFR currently controls four additional properties (the Satellite Properties) which are known to have significant mineralization, but not currently included in the mine permit. These include:
North Rolling Pin (NRP) Area (approximately 1,180 acres)
West North Butte (WNB) Area (approximately 2,360 acres)
East North Butte (ENB) Area (approximately 325 acres)
Willow Creek (WC) Area (approximately 220 acres)
1.3.3 History
The Complex is an advanced stage project which is licensed to operate by the U.S. Nuclear Regulatory Commission (NRC) and the Wyoming Department of Environmental Quality (WDEQ). Construction of the processing facility began in 2011. Plant construction and initial wellfield installation was competed in 2014 and operations were initiated in April 2014. Production of 1,265,805 pounds of uranium oxide has been reported from initiation of production through December 31, 2019, via ISR mining.
1.3.4 Geology and Mineralization
1.3.4.1 Geologic Setting
The Complex is located in the Powder River Basin, which is a large structural and topographic depression sub-parallel to the trend of the Rocky Mountains. The Basin is bounded on the south by the Hartville Uplift and the Laramie Range, on the east by the Black Hills, and on the west by the Big Horn Mountains and the Casper Arch. The Miles City Arch in southeastern Montana forms the northern boundary of the Basin.
The Powder River Basin is an asymmetrical syncline with its axis closely paralleling the western basin margin. During sedimentary deposition, the structural axis (the line of greatest material accumulation) shifted westward resulting in the Basin's asymmetrical shape.
Uranium mineralization at the Complex deposits is hosted by the Eocene Wasatch Formation. The Wasatch Formation was deposited in a multi-channel fluvial and flood plain environment. The climate at the time of deposition was wet tropical to subtropical with medium stream and river sediment load depositing most medium grained materials. The source of the sediments, as evidenced by abundant feldspar grains in the sandstones, was the nearby Laramie and Granite Mountains.
Within the Complex, there is a repetitive transgressive/regressive sequence of sandstones separated by fine-grained horizons composed of siltstone, mudstone, carbonaceous shale, and poorly developed thin coal seams. The fine-grained materials were deposited in flood plain, shallow lake (lacustrine), and swamp environments. Ultimately, deposition of the Wasatch Formation was a function of stream bed load entering the basin and subsidence from within the basin. However, in the central part of the Powder River Basin, long periods of balanced stability occurred. During these periods the stream gradients were relatively low and allowed for development of broad (0.5 mi to 6.0 mi wide) meander belt systems, associated over-bank deposits, and finer grained materials in flood plains, swamps, and shallow bodies of water.
Meander belts in the Wasatch Formation are generally 5 ft to 30 ft thick. The A Sand at Nichols Ranch area is made up of three to four stacked meander belts and the F Sand at Hank area has two to three stacked meander belts. Individual meander belt layers will rarely terminate at the same location twice. Meanders have been noted to frequently terminate in the interior of a belt system but are more likely to terminate somewhere closer to the edge of the meander stream valley. The net effect for fluvial sands is to generally thin away from the main axis of the meander belt system. The A Sand meander belt system at Nichols Ranch area is approximately four miles wide. At Hank, the F Sand meander belt system is smaller than Nichols Ranch at approximately one and a half miles wide.
At the North Rolling Pin area, the mineralized sand horizon (F Sand) occurs within the Wasatch Formation at an approximate depth from surface ranging from 51 ft to 403 ft and averaging 282 ft to the top of the mineralization. Generally, the depth of mineralization decreases from the northeast to the southwest due mainly to topography along which the surface elevation decreases from approximately 5,180 ft to approximately 4,800 ft. The F Sand primarily consists of two stacked sand sets, termed the Upper and Lower F Sands that each average 20 ft to 25 ft thick
The mineralized sand horizons occur within the lower part of the Wasatch Formation, at an approximate depth from surface ranging from 482 ft to 1,012 ft at West North Butte, 540 ft to 660 ft at East North Butte, and 172 ft to 567 ft at Willow Creek. The host sands are primarily arkosic in composition, friable, and contain trace carbonaceous material and organic debris. There are local sandy mudstone/siltstone intervals with the sandstones, and the sands may thicken or pinch-out in some locations. Mineral resources are located in the Eocene age Wasatch Formation in what is identified as the A, B, C and F host sand units of the WNB area, the A and B host sands of the ENB area and in the A and F host sand units of the WC area.
1.3.4.2 Mineralization
The uranium mineralization is composed of amorphous uranium oxide, sooty pitchblende, and coffinite, and is deposited in void spaces between detrital sand grains and within minor authigenic clays. The host sandstone is composed of quartz, feldspar, accessory biotite and muscovite mica, and locally occurring carbon fragments. Grain size ranges from very fine to very coarse sand but is medium-grained overall. The sandstones are weakly to moderately cemented and friable. Pyrite and calcite are associated with the sands in the reduced facies. Hematite or limonite stain from pyrite are common oxidation products in the oxidized facies. Montmorillonite and kaolinite clays from oxidized feldspars are also present in the oxidized facies (Uranerz, 2010a). The uranium being extracted is hosted in a sandstone, roll front deposit at a depth ranging from 400 ft to 800 ft.
1.3.4.3 Deposit
Wyoming uranium deposits are typically sandstone roll front uranium deposits as defined in the "World Distribution of Uranium Deposits (UDEPO) with Uranium Deposit Classification", (IAEA, 2009). The key components in the formation of roll front type mineralization include:
Uranium precipitates from solution at the oxidation/reduction boundary (REDOX) as uraninite (UO2, Uranium oxide), which is dominant, or coffinite (USiO4, uranium silicate).
The geohydrologic regime of the region has been stable over millions of years with groundwater movement controlled primarily by high-permeability channels within the predominantly sandstone formations of the Tertiary.
1.3.5 Exploration Status
On October 15, 1951, J. D. Love discovered uranium mineralization in the Pumpkin Buttes Mining District in the Wasatch Formation on the south side of North Pumpkin Butte in the west central portion of the Powder River Basin. The mineralization was one of eight areas recommended in April 1950 for investigation in the search for uranium bearing lignites and volcanic tuffs. In response to this recommendation, an airborne radiometric reconnaissance of most of these areas was undertaken by the USGS in October 1950. The uranium mineralization discovered by J. D. Love was in the vicinity of an aerial radiometric anomaly identified from this survey (Love, 1952).
Early mining focused on shallow oxidized areas using small open pit mines. Primary exploration methods included geologic mapping and ground radiometric surveys. Modern exploration and mining in the district have focused on deeper reduced mineralization.
Rotary drilling on the Complex is the principal method of exploration and delineation of uranium mineralization. Drilling can generally be conducted year-round on the Project.
As of the effective date of this Technical Report, EFR and its predecessor companies have completed a total of 3,942 drillholes across the Complex over the course of several drilling programs that began in 1960. Of the 3,942 drillholes recorded, EFR drilling database contains 3,504 drillholes totaling 2,363,890 ft drilled of which 449 totaling 281,126 ft have been completed by EFR since acquiring the Project in 2015. The drill record includes both Rotary and Diamond Drill (DD) drilling, monitor wells, and injection and production wells. No drilling has occurred across the properties since December 5, 2016.
1.3.6 Mineral Resources
Mineral Resources have been classified in accordance with the definitions for Mineral Resources in S-K 1300, which are consistent with Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Resources and Mineral Reserves dated May 10, 2014 (CIM, 2014) definitions which are incorporated by reference in NI43-101.
The SLR QP has reviewed and accepted the Mineral Resource estimate prepared by EFR for the Complex. Resource estimates were completed with the following effective dates using the GT contour method and audited by the SLR QP for accuracy and completeness:
Nichols Ranch by EFR in 2021
Jane Dough and Hank by Uranerz in 2015
The effective date of this Mineral Resource estimate is December 31, 2021. The U3O8 Mineral Resource for the Complex is reported at a GT cut-off grade of 0.20 %-ft and have been depleted as of December 31, 2021. The total production from Nichols Ranch is now 1,276,589 pounds eU3O8.as of December 31, 2021.
Total Measured + Indicated Resources for the Complex are 3.294 Mst at an average grade of 0.106% eU3O8 containing 6.988 Mlb eU3O8. Additional Inferred Resources total 0.65 Mst at an average grade of 0.097% eU3O8 containing 1.256 Mlb eU3O8, of which 1.176 Mlb is attributable to EFR. A summary of the Mineral Resource estimate is presented in Table 1-4..
The SLR QP is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could materially affect the Mineral Resource estimate.
Table 1-4: Attributable Mineral Resource Estimate for the Nichols Ranch Uranium Complex - Effective December 31, 2021
Energy Fuels Inc. - Nichols Ranch Project
Project Area |
Classification |
Tonnage |
Grade |
Contained Metal |
EFR Attrib. Basis |
EFR Attributable |
Recovery |
Nichols Ranch Mining Unit + Satellite Properties |
Total Measured |
11,000 |
0.187 |
41,140 |
100.0 |
41,140 |
71.0 |
Total Indicated |
3,283,000 |
0.106 |
6,946,693 |
88.4 |
6,141,663 |
60.4 |
|
Total Measured + Indicated |
3,294,000 |
0.106 |
6,987,833 |
88.5 |
6,182,803 |
60.4 |
|
Total Inferred |
650,000 |
0.097 |
1,256,000 |
93.6 |
1,176,200 |
60.4 |
Notes:
1. SEC S-K 1300 definitions were followed for all Mineral Resource categories. These definitions are also consistent with CIM (2014) definitions in NI 43-101.
2. Measured Mineral Resource includes reduction for production through December 31, 2021.
3. Mineral Resources are 100% attributable to EFR for Nichols Ranch, Hank, and North Rolling Pin, and are in situ.
4. Mineral Resources are 81% attributable to EFR and 19% attributable to United Nuclear Corp in parts of Jane Dough, and are in situ.
5. Mineral Resource estimates are based on a GT cut-off of 0.20 %-ft
6. The cut-off grade is calculated using a metal price of $65/lb U3O8
7. Mineral Resources are based on a tonnage factory of 15.0 ft3/ton (Bulk density 0.0667 ton/ft3 or 2.13 t/m3).
8. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
9. Numbers may not add due to rounding.
1.3.7 Mineral Reserves
There are no current Mineral Reserves at the Complex.
1.3.8 Mining Method
The production schedule in this Technical Report is based on ISR mining of the uranium mineralization at the Nichols Ranch Mining Unit section of the Complex (Nichols Ranch, Jane Dough, and Hank areas). ISR is an injected-solution mining process that reverses the natural processes that originally deposited the uranium in the sandstones. On-site ground water is being fortified with gaseous oxygen and introduced to the zones of uranium mineralization through a pattern of injection wells. The solution dissolves the uranium from the sandstone host.
The uranium-bearing solution is brought back to surface through production wells where the uranium is concentrated at a central processing plant and dried into yellowcake for market.
ISR mining and milling utilizes the five steps described below. The first three steps describe the mining process while steps 4 and 5 describe the milling (i.e., processing and refinement).
1. A solution called lixiviant (typically containing water mixed with oxygen and/or hydrogen peroxide, as well as sodium bicarbonate or carbon dioxide) is injected through a series of wells into the mineralized zones to dissolve and to complex the uranium.
2. The lixiviant with uranium in solution is then collected in a series of recovery wells, through which it is pumped to a processing plant, where the uranium is extracted from the solution through an ion-exchange process.
3. Once the uranium has been extracted, the lixiviant is fortified and reused in the wellfield. Typically, 99% of the solution is reused. The remaining percentage is waste which is disposed of in deep injection wells within EPA exempted aquifers.
4. The uranium extract is then further purified, concentrated, and dried to produce a material, which is called "yellowcake" because of its yellowish color.
5. Finally, the yellowcake is packed in 55-gallon drums to be transported to a uranium conversion facility, where it is processed through the stages of the nuclear fuel cycle to produce fuel for use in nuclear power reactors.
Due to the absence of the on-site drying and packaging circuit, the U3O8 slurry produced on-site will be trucked 643 road miles to the Mill near Blanding, Utah, for drying and drumming for final delivery to end users.
A production schedule has been developed for this Technical Report with a mine life of 11 years producing an average of 366 klb of U3O8 per year.
1.3.9 Mineral Processing
1.3.9.1 Nichols Ranch Plant
The Nichols Ranch Plant is licensed and designed to have four major solution circuits: 1) the recovery circuit, 2) the elution circuit, 3) the precipitation and filtration circuit, 4) the drying and packaging circuit. The first three solution circuits are constructed and operated from 2014 to 2019. Due to the absence of the on-site drying and packaging circuit, the Project proposes to truck the U3O8 produced on-site 643 road miles to the Mill near Blanding, Utah, for drying and drumming for final delivery to end users.
The Nichols Ranch Plant's recovery circuit includes the flow of lixiviant from the wellfield to the sand filters, or directly to the ion exchange (IX) columns, and back to the wellfield. The uranium that is liberated underground is extracted in the ion exchange system of the process plant. The bleed from the circuit is permanently removed from the lixiviant flow to create a "cone of depression" in the wellfield's static water level and ensure that the lixiviant is contained by the inward movement of groundwater within the designated recovery area. The bleed is disposed of by means of injection into two deep, approved, Class I - Non Hazardous disposal wells. The volume of the concentrated bleed is approximately 0.5% to 1.5% of the circulating lixiviant flow for the Nichols Ranch area and projected to be 2.5% to 3.5% for the Hank area.
The elution circuit consists of transferring the uranium loaded resin bed contained in an IX column into an elution column and to circulate a briny-carbonated solution through the resin bed to remove the uranium from the ion exchange resin until it is completely stripped. The barren or eluted ion exchange resin is then transferred back from the elution column to the IX column.
The uranium concentration in the eluate will be built up at a controlled concentration range of between 20 g/L to 40 g/L. This uranium rich eluate is ready for the de-carbonation process that occurs in the uranium precipitation circuit.
The precipitation and filtration circuit starts when the eluate is treated with acid to destroy the carbonate portion of the dissolved uranium complex. In addition to adding the acid slowly, a common defoamer may be used to reduce the foaming activity. The precipitation reagents, hydrogen peroxide and sodium hydroxide, are added to the eluate to start precipitating uranium yellowcake. The yellowcake slurry is then filtered, washed, and loaded into a slurry trailer. When full, the yellowcake slurry trailer is transported by road to the Mill in Blanding, Utah, where it will be unloaded, dried, and drummed for final delivery to end users.
1.3.9.2 White Mesa Mill
Yellowcake produced at the Nichols Ranch Plant will only be dried and packaged at the Mill.
The Mill is currently on a reduced operating schedule processing materials as they become available. The Mill is currently processing Rare Earth Element (REE) materials in part of the circuit, functioning essentially as a pilot plant, therefore the facility is sufficiently staffed to initiate U3O8 production relatively quickly.
1.3.10 Project Infrastructure
The Complex previously operated from 2014 to 2019 and is located within uranium-producing regions of central Wyoming. All the infrastructure necessary to mine and process significant commercial quantities of U3O8 is in place.
The Infrastructure items include:
The Complex, near Casper, Wyoming , and Mill near Blanding, Utah
A power line is reaching the Complex from a substation located 15 miles away on HI 50.
The Complex water is non potable and comes from 2 of on-site water wells.
Propane gas is used for heating and is delivered by vendors to the Complex.
Property access by maintained dirt roads, paved roads, and highways
Finished U3O8 yellowcake can be transported by truck to customer facilities nationwide
Accommodations for employees
1.3.11 Market Studies
The majority of uranium is traded via long-term supply contracts, negotiated privately without disclosing prices and terms. Spot prices are generally driven by current inventories and speculative short-term buying. Monthly long-term industry average uranium prices based on the month-end prices are published by Ux Consulting, LLC, and Trade Tech, LLC. An accepted mining industry practice is to use "Consensus Forecast Prices" obtained by collating commodity price forecasts from credible sources, with the long-term forecast price used for estimating Mineral Reserves, and 10% to 20% higher prices used for estimating Mineral Resources.
For Mineral Resource estimation and cash flow projections, EFR selected a U3O8 price of $65.00/lb, on a Cost, Insurance, and Freight (CIF) basis to customer facility, based on independent forecasts. The SLR QP considers this price to be reasonable and consistent with industry practice.
1.3.12 Environmental, Permitting and Social Considerations
Nichols Ranch, Jane Dough, and the Hank areas are fully licensed and permitted for ISR mining and processing by major licenses and permits issued by the NRC, the WDEQ/LQD, Wyoming Department of Environmental Quality, Water Quality Division (WDEQ/WQD), and the WDEQ/AQD. Portions of the Hank area, totaling 280 acres, are on public lands managed by the BLM. This area is permitted for operation by the BLM and a FONSI and Decision Record were issued in July 2015. Nichols Ranch and the Hank areas consist of 3,370 acres and Jane Dough has approximately an additional 3,680 acres which have been approved and amended to the permitted Project boundary.
EFR has strong relationships with state and federal regulatory agencies and has a positive record of environmental performance at Nichols Ranch. The SLR QP is not aware of environmental, permitting, or social/community, factors which would materially affect the mineral resource estimates.
1.3.13 Capital and Operating Cost Estimates
The base case capital cost estimate summarized in Table 1-5 covers the life of the Project and includes sustaining capital and restoration/decommissioning capital in Q1 2021 US dollar basis. These cost estimates are based on 2015 estimates for a 6.3 Mlb production schedule that has been adjusted by the SLR QP to 4.0 Mlb for this Technical Report and escalated to a Q1 2021 US dollar basis using subscription-based Mining Cost Services (MCS) cost indices (Infomine, 2021). The SLR QP is of the opinion that the inflationary indices since Q1 2021 are too volatile to apply against a long lived asset.
Table 1-5: Base Case Capital Cost Estimate
Energy Fuels Inc. - Nichols Ranch Project
Capital Cost Area |
Cost |
Wellfield Development |
61,327 |
Trunkline |
227 |
Soft Costs |
12,721 |
Capital Cost Area |
Cost |
Plant - CPP Buildout |
4,990 |
Plant - Hank Pipeline |
2,177 |
Total Sustaining Capital |
81,442 |
Restoration/Decommissioning |
20,664 |
Grand Total |
102,105 |
The average LOM operating cost of $24.5568/lb U3O8 produced for the base case is summarized in Table 1-6 in Q1 US dollar basis. The production cost estimate of $18.91/lb U3O8 is based on 2015 estimates for a 6.3 Mlb production schedule that has been adjusted by the SLR QP to 4.0 Mlb for this Technical Report and escalated to a Q1 2021 US dollar basis using the MCS cost indices. The SLR QP is of the opinion that the inflationary indices since Q1 2021 are too volatile to apply against a long lived asset.
Table 1-6: Base Case Operating Cost Estimate
Energy Fuels Inc. - Nichols Ranch Project
Item |
Cost |
Unit Cost |
Wellfield |
11,575 |
2.88 |
Processing |
39,494 |
9.81 |
Deep Well Disposal |
656 |
0.16 |
G & A |
25,865 |
6.43 |
Total Site Operating Costs |
77,590 |
19.28 |
Product Transport to Market |
1,533 |
0.38 |
Total Production Costs |
79,123 |
19.66 |
Ad Valorem Tax |
10,583 |
2.63 |
WY Severance Tax |
6,408 |
1.59 |
Royalties |
4,717 |
1.17 |
Total Operating Costs |
100,832 |
25.06 |
In the SLR QP's opinion, the base case capital and operating cost estimates meet an AACE International Class 4 cost estimate with an accuracy range of 15% to -30% to +20% to +50%.
2.0 INTRODUCTION
This Independent Technical Report (Technical Report) was prepared by Grant A. Malensek, M.Eng., P. Eng., Mark B. Mathisen, C.P.G., Jeremy Scott Collyard, PMP, MMSA QP, Jeffrey L. Woods, MMSA QP and Phillip E. Brown, C.P.G., R.P.G. of SLR International Corporation (SLR), for Energy Fuels Inc. (Energy Fuels), the parent company of Energy Fuels Resources (USA) Inc. (EFR), with respect to the Nichols Ranch Project (Nichols Ranch or the Project), located in eastern Wyoming, USA, for EFR's parent company, Energy Fuels Inc. EFR owns 100% of the Project, with the exception of the Jane Dough area, over which EFR holds an 81% interest.
EFR's parent company, Energy Fuels, is incorporated in Ontario, Canada. EFR is a US-based uranium and vanadium exploration and mine development company with projects located in the states of Colorado, Utah, Arizona, Wyoming, Texas, and New Mexico. Energy Fuels is listed on the NYSE American Stock Exchange (symbol: UUUU) and the Toronto Stock Exchange (symbol: EFR).
This Technical Report satisfies the requirements of Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101) and the United States Securities and Exchange Commission's (SEC) Modernized Property Disclosure Requirements for Mining Registrants as described in Subpart 229.1300 of Regulation S-K, Disclosure by Registrants Engaged in Mining Operations (S-K 1300) and Item 601(b)(96) Technical Report Summary. The purpose of this Technical Report is to disclose the results of a Preliminary Economic Assessment (PEA) for the Project. The term PEA is used throughout this Technical Report and is consistent with an Initial Assessment (IA) under S-K 1300.
Resource estimates completed over Nichols Ranch in 2015 (Beahm and Goranson, 2015) and North Rolling Pin in 2010 (Graves, 2010) have been superseded by the Mineral Resource estimates of this Technical Report which includes additional new information and analysis.
The Project includes the Nichols Ranch Uranium Complex (the Complex) near the city of Caspar, Wyoming, and the White Mesa Mill (the Mill) near the city of Blanding, Utah. The Complex is currently on care and maintenance and the Mill is on a reduced operating schedule while processing materials as they become available. When in full operation, the Project is expected to produce uranium concentrate known internationally as yellowcake. Grant A. Malensek, M.Eng., P. Eng., Mark B. Mathisen, C.P.G., Jeremy Scott Collyard, PMP, MMSA QP, Jeffrey L. Woods, MMSA QP and Phillip E. Brown, C.P.G., R.P.G. are all QPs within the meaning of both S-K 1300 and NI 43-101 (SLR QPs).
The Mill was developed in the late 1970s by Energy Fuels Nuclear, Inc. (EFNI) as a processing option for the many small mines that are located in the Colorado Plateau region. After approximately two and a half years, the Mill ceased ore processing operations altogether due to low uranium prices. Since 1984, majority ownership interest has alternated between EFNI, Union Carbide Corporation, and Denison Mines Corporation (Denison, previously International Uranium Corporation). EFR acquired the Complex in 2015. EFR has controlled 100% of the Mill's assets and liabilities since August 2012.
The Complex includes the Nichols Ranch Mining Unit, which is comprised of the Nichols Ranch wellfield (Nichols Ranch Wellfield), Nichols Ranch plant (Nichols Ranch Plant), Jane Dough area, and Hank area, and several satellite properties. The production scenario reviewed for this Technical Report assumes that the Nichols Ranch Mining Unit will be developed as an in situ recovery (ISR) mining operation with an onsite processing plant and based on the current resource, an expected 11 year mine life. The Project will produce an average of 366 thousand pounds (klb) of U3O8 per year on-site, which will then be trucked to the Mill for final drying and upgrading before delivery to end-users.
2.1 Sources of Information
Sources of information and data contained in this Technical Report or used in its preparation are from publicly available sources in addition to private information owned by EFR, including that of past property owners.
The SLR QPs, Messers. Mathisen, Collyard, and Woods, in addition to Mr. Tedros Tesfay, PhD, SLR Senior Hydrogeologist, visited the Complex on October 28, 2021, and inspected the wellfields and ISR Plant. The SLR QPs, Messers. Malensek, Collyard, and Woods, also visited the Mill on November 11, 2021, and toured the operational areas, mill offices, and tailings storage facility (TSF).
Table 2-1 presents a summary of the SLR QP responsibilities for this Technical Report.
Table 2-1: Summary of QP Responsibilities
Energy Fuels Inc. - Nichols Ranch Project
Qualified Person |
Company |
Title/Position |
Section |
Grant A. Malensek, M.Eng., P. Eng. |
SLR |
Senior Principal Mining Engineer |
1.2, 1.3.11, 1.3.13, 19, 21, 22, and 30 |
Mark B. Mathisen, C.P.G. |
SLR |
Principal Geologist |
1.1.1.1, 1.1.2.1, 1.3.1 to 1.3.7, 2, 3, 4.1, 4.2, 4.4, 4.5, 5.1 to 5.4, 5.6, 6 to 12, 14, 15, 23, 24, 25.1, and 26.1 |
Jeremy Scott Collyard, PMP, MMSA QP |
SLR |
Mining & Minerals Sector Lead |
1.1.1.5, 1.3.12, 4.3, 4.6, 20, and 25.5 |
Jeffrey L. Woods, MMSA QP |
Woods Process Services |
Principal Consulting Metallurgist |
1.1.1.3, 1.1.1.4, 1.1.2.3, 1.1.2.4, 1.3.9, 1.3.10, 5.5, 13, 17, 18, 25.3, 25.4, 26.3, and 26.4 |
Phillip E. Brown, C.P.G., R.P.G. |
Consultants in Hydrogeology |
Principal Consulting Hydrogeologist |
1.1.1.2, 1.1.2.2, 1.3.8, 16, 25.2, and 26.2 |
All |
- |
- |
27 |
During the preparation of this Technical Report, discussions were held with EFR, Uranerz (a wholly owned subsidiary of EFR), and the Mill personnel:
Gordon Sobering, PE, QP, Senior Mine Engineer, Energy Fuels Resources (USA) Inc.
Bernard Bonifas, Director of ISR Operations, Uranerz Energy Corporation
Bruce Larsen, Director of Geology and Land, Uranerz Energy Corporation
Travis Boam, Senior Geologist, Uranerz Energy Corporation
Benjamin Vrbas, Environmental Safety Health Manager, Uranerz Energy Corporation
Tony Hinde, Project Manager, Uranerz Energy Corporation
Daniel Kapostasy, P.G., Chief Geologist Conventional Mining, Energy Fuels Resources (USA) Inc.
Scott Bakken, Vice President, Regulatory Affairs, Energy Fuels Resources (USA) Inc.
This Technical Report supersedes the previous NI 43-101 Technical Report completed by Beahm and Goranson, dated February 28, 2015, and the previous Technical Report completed by Graves, dated June 4, 2010.
This Technical Report was prepared by the SLR QPs. The documentation reviewed, and other sources of information, are listed at the end of this Technical Report in Section 27.0, References.
2.2 List of Abbreviations
The U.S. System for weights and units has been used throughout this Technical Report . Tons are reported in short tons (ton) of 2,000 lb unless otherwise noted. All currency in this Technical Report is US dollars (US$) unless otherwise noted.
Abbreviations and acronyms used in this Technical Report are listed below.
Unit Abbreviation |
Definition |
Unit Abbreviation |
Definition |
μ |
micron |
L |
liter |
a |
annum |
lb |
pound |
A |
ampere |
m |
meter |
bbl |
barrels |
m3 |
meter cubed |
Btu |
British thermal units |
M |
mega (million); molar |
°C |
degree Celsius |
Ma |
one million years |
cm |
centimeter |
MBtu |
thousand British thermal units |
cm3 |
centimeter cubed |
MCF |
million cubic feet |
d |
day |
MCF/h |
million cubic feet per hour |
°F |
degree Fahrenheit |
mi |
mile |
ft ASL |
feet above sea level |
min |
minute |
ft |
foot |
MPa |
megapascal |
ft2 |
square foot |
mph |
miles per hour |
ft3 |
cubic foot |
MVA |
megavolt-amperes |
ft/s |
foot per second |
MW |
megawatt |
g |
gram |
MWh |
megawatt-hour |
G |
giga (billion) |
ppb |
part per billion |
Ga |
one billion years |
ppm |
part per million |
gal |
gallon |
psia |
pound per square inch absolute |
gal/d |
gallon per day |
psig |
pound per square inch gauge |
g/L |
gram per liter |
rpm |
revolutions per minute |
g/y |
gallon per year |
RL |
relative elevation |
gpm |
gallons per minute |
s |
second |
hp |
horsepower |
ton |
short ton |
h |
hour |
stpa |
short ton per year |
Hz |
hertz |
stpd |
short ton per day |
in. |
inch |
t |
metric tonne |
in2 |
square inch |
US$ |
United States dollar |
J |
joule |
V |
volt |
k |
kilo (thousand) |
W |
watt |
kg/m3 |
kilogram per cubic meter |
wt% |
weight percent |
kVA |
kilovolt-amperes |
WLT |
wet long ton |
kW |
kilowatt |
y |
year |
kWh |
kilowatt-hour |
yd3 |
cubic yard |
3.0 RELIANCE ON OTHER EXPERTS
This Technical Report has been prepared by the SLR QPs for Energy Fuels. The information, conclusions, opinions, and estimates contained herein are based on:
Information available to the SLR QPs at the time of preparation of this Technical Report,
Assumptions, conditions, and qualifications as set forth in this Technical Report, and
Data, reports, and other information supplied by Energy Fuels and other third party sources.
3.1 Reliance on Information Provided by the Registrant
For the purpose of this Technical Report, the SLR QPs have relied on ownership information provided by Energy Fuels in a legal opinion by Brown, Drew, Massey & Durham, LLP dated February 7, 2022 entitled Ownership Summary, Nichols Ranch Project, Campbell and Johnson Counties, Wyoming. The SLR QPs have not researched property title or mineral rights for the Project as we consider it reasonable to rely on Energy Fuels' legal counsel who is responsible for maintaining this information. The opinion was relied on in Section 4 Property Description and Location and the Summary of this Technical Report.
The SLR QPs have relied on Energy Fuels for guidance on applicable taxes, royalties, and other government levies or interests, applicable to revenue or income from the Project, to the extent such information constitutes legal matters or governmental factors outside the expertise of the SLR QPs in the Executive Summary and Section 22.0. Taxation calculations in the cash flow model presented in this Technical Report were reviewed and approved by Kara. P. Beck, EFR Tax Manager in an email dated December 14, 2021.
The SLP QPs have taken all appropriate steps, in their professional opinion, to ensure that the above information from Energy Fuels is sound.
Except for the purposes legislated under applicable laws, any use of this Technical Report by any third party is at that party's sole risk.
4.0 PROPERTY DESCRIPTION AND LOCATION
4.1 Location
4.1.1 Nichols Ranch Uranium Complex
Nichols Ranch is located in the Pumpkin Buttes Mining District of the Powder River Basin in Campbell and Johnson Counties in Wyoming. The Complex facilities and mine office are located at latitude of 43°42' N and longitude 106°01' W. The Complex is located approximately 70 mi southwest of Gillette, Wyoming, and 80 mi northeast of Casper, Wyoming (Figure 4-1).
The Complex (Figure 4-2) is divided into two primary areas, the Nichols Ranch mining unit (the Nichols Ranch Mining Unit) and the satellite properties (the Satellite Properties).
The Nichols Ranch Mining Unit includes the following:
Nichols Ranch Area contains approximately 740 acres and is located in Sections 7, 8, 17, and 18, Township 43 North (T43N), Range 76 West (R76W), Sixth Principal Meridian at approximately 43°42' N and 106°01' W.
Jane Dough Area permit boundary encompasses approximately 3,680 acres of land in Sections 20, 21, 27, 28, 29, 30, 31, 32, 33, and 34, T43N, R76W, at approximately 43°41' N and 106°01' W.
Hank Area encompasses approximately 2,250 acres of land and is located in Sections 30 and 31, T44N, R75W, and Sections 5, 6, and 7, T43N, R75W. The location is approximately 43°44' N and 105°55' W.
Nichols Ranch and Jane Dough are contiguous, and the Hank area is located approximately six miles north of Nichols Ranch. All surface data is in local grid or modified NAD 1927 UTM Zone 13 (US feet) system.
EFR currently controls four additional properties (the Satellite Properties) which are known to have significant mineralization, but not currently included in the mine permit. These include:
North Rolling Pin (NRP) Area is located in the Pumpkin Buttes region of the Powder River Basin in the state of Wyoming, approximately 62 air mi northeast of the city of Casper. The North Rolling Pin area is located within Campbell County, Wyoming, in the SE¼ of SE¼ Section 10, Section 11, NW¼ Section 14, and NE¼ and NW¼ of SE¼ Section 15, T43N, R76W, and SW¼ of SW¼, SE¼, and SE¼ of the NE¼ Section 35, T44N, R76W. The location is approximately 43°41' N and 105°58' W. Mining claims cover approximately 1,180 acres. This area is located approximately 2.5 mi east of Nichols Ranch.
West North Butte (WNB) Area is located in Sections 10, 11, 12, 13, 14, 15, 23, 25, and 26, T44N, R76W, in Campbell County, Wyoming, in the Powder River Basin. The location is approximately 43°47' N and 105°58' W. Mining claims cover approximately 2,360 acres. This area is located approximately 6.4 mi northeast of Nichols Ranch.
East North Butte (ENB) Area is located in Section 24, T44N, R76W, and Section 19, T44N, R75W in Campbell County, Wyoming, in the Powder River Basin. The location is approximately 43°46' N and 105°55' W. Mining claims cover approximately 325 acres. This area is located approximately seven miles northeast of Nichols Ranch.
4.1.2 White Mesa Mill
The Mill is located on 4,816 acres of private land owned by EFR. This land is located in Township 37 South and 38 South, Range 22 East, Salt Lake Principal Meridian. The Mill is located approximately six miles south of Blanding, Utah, along US Highway 191. EFR also holds 253 acres of mill site claims and a 320 acre Utah state lease. No facilities are planned on the claims or leased land, which will be used as a buffer surrounding the operations (Figure 4-3).
Figure 4-3 shows the relative locations of the Complex and the Mill, and the proposed haul route for the Nichols Ranch U3O8 production to the Mill. The Complex and the Mill are located approximately 643 road miles apart. Each operation would be considered as a "stand-alone" operation, i.e., each would have its own administration, warehouse, accounting, environmental, and safety staff.
Figure 4-1: Location Map
Figure 4-2: Land Tenure Map
Figure 4-3: White Mesa Mill Location and Property Map
4.2 Land Tenure
4.2.1 Nichols Ranch Uranium Complex
4.2.1.1 Nichols Ranch Mining Unit
4.2.1.1.1 Nichols Ranch Area
The permit boundary for the Nichols Ranch area, located in Sections 7, 8, 17, and 18, T43N, R76W, encompasses 1,120.00 acres. Within the Nichols Ranch permit boundary, EFR has 38 unpatented lode-mining claims, two fee mineral leases and three Surface Use Agreements (SUAs). The claims and fee leases encompass approximately 920 acres. The mineral fee leases and SUA have a 10 year term. Provisions are set by the SUA for reimbursement to the surface owner for damages resulting from operations.
Claims do not have an expiration date, however, affidavits must be filed annually with the federal U.S. Bureau of Land Management (BLM) and respective county recorder's offices in order to maintain the claims' validity. In addition, most of the unpatented lode claims are located on Stock Raising Homestead land where the U.S. government has issued a patent for the surface to an individual and reserved the minerals to the U.S. government subject to the location rights by claimants as set forth in the 1872 Mining Law.
Table 4-1 presents the Nichols Ranch lode mining claims. The Nichols Ranch lode mining claims are held by Uranerz, which is 100% owned by EFR.
Table 4-1: Nichols Ranch Lode Mining Claims
Energy Fuels Inc. - Nichols Ranch Project
Claim Name |
¼ Sec |
Sec-Twp-Rng |
BLM Serial No |
County |
Location Date |
Expiry Date |
EB-69 |
SE |
17-43N-76W |
WY101420762 |
Campbell |
09/15/1968 |
9/1/2022 |
EB-70 |
SE |
17-43N-76W |
WY101420906 |
Campbell |
09/15/1968 |
9/1/2022 |
EB-71 |
NE, SE |
17-43N-76W |
WY101608724 |
Campbell |
09/15/1968 |
9/1/2022 |
EB-73 |
NE |
17-43N-76W |
WY101731931 |
Campbell |
09/15/1968 |
9/1/2022 |
EB-81 |
SW |
17-43N-76W |
WY101422980 |
Johnson |
09/19/1968 |
9/1/2022 |
EB-83 |
SW |
17-43N-76W |
WY101606644 |
Johnson |
09/19/1968 |
9/1/2022 |
EB-85 Am |
NW, SW 17; SE, NW SE 18 |
17-43N-76W |
WY101343361 |
Johnson |
09/19/1968 |
9/1/2022 |
EB-87 Am |
NW 17, NE 18 |
17,18-43N-76W |
WY101425489 |
Johnson |
09/19/1968 |
9/1/2022 |
EB-88 |
NW |
17-43N-76W |
WY101422584 |
Johnson |
09/19/1968 |
9/1/2022 |
EB-89 Am |
NW, NE |
17,18-43N-76W |
WY101423120 |
Johnson |
09/19/1968 |
9/1/2022 |
EB-90 |
NW |
17-43N-76W |
WY101422355 |
Johnson |
09/19/1968 |
9/1/2022 |
EB-91 Am |
NW 17, NE 18 |
17,18-43N-76W |
WY101731972 |
Johnson |
09/19/1968 |
9/1/2022 |
EB-92 |
NW |
17-43N-76W |
WY101854615 |
Johnson |
09/19/1968 |
9/1/2022 |
Claim Name |
¼ Sec |
Sec-Twp-Rng |
BLM Serial No |
County |
Location Date |
Expiry Date |
EB-93 Am |
NW 17, NE 18 |
17-43N-76W |
WY101458512 |
Johnson |
09/19/1968 |
9/1/2022 |
EB-77 |
SW |
17-43N-76W |
WY102524364 |
Johnson |
01/27/2006 |
9/1/2022 |
EB-78 |
SW |
17-43N-76W |
WY102524365 |
Johnson |
01/27/2006 |
9/1/2022 |
EB-79 |
SW |
17-43N-76W |
WY102524366 |
Johnson |
01/27/2006 |
9/1/2022 |
EB-80 |
SW |
17-43N-76W |
WY102524367 |
Johnson |
01/27/2006 |
9/1/2022 |
EB-82 |
SW |
17-43N-76W |
WY102524368 |
Johnson |
01/27/2006 |
9/1/2022 |
EB-84 |
SW |
17-43N-76W |
WY102524369 |
Johnson |
01/27/2006 |
9/1/2022 |
EB-86 |
NW,SW |
17-43N-76W |
WY102524370 |
Johnson |
01/27/2006 |
9/1/2022 |
EB-94 |
NW |
17-43N-76W |
WY102524371 |
Johnson |
02/06/2006 |
9/1/2022 |
EB-95 |
SE,SW 7, NW 17,NE 18 |
7,8,17,18-43N-76W |
WY102524372 |
Johnson |
02/06/2006 |
9/1/2022 |
EB-96 |
SW 8, NW 17 |
8,17-43N-76W |
WY102524373 |
Johnson |
02/06/2006 |
9/1/2022 |
EB-98 |
SE, SW |
8-43N-76W |
WY101313966 |
Johnson |
01/28/2006 |
9/1/2022 |
EB-99 |
SW |
7,8-43N-76W |
WY102524374 |
Johnson |
01/28/2006 |
9/1/2022 |
EB-100 |
SE |
8-43N-76W |
WY102524375 |
Johnson |
01/28/2006 |
9/1/2022 |
EB-68 |
SE |
17-43N-76W |
WY101856483 |
Campbell |
01/27/2006 |
9/1/2022 |
EB-97 |
SE 7, SW 8 |
7,8-43N-76W |
WY101856484 |
Johnson |
01/28/2006 |
9/1/2022 |
EB-102 |
NE |
17-43N-76W |
WY101856485 |
Campbell |
09/26/2007 |
9/1/2022 |
EB-103 |
NE |
17-43N-76W |
WY101519051 |
Campbell |
09/26/2007 |
9/1/2022 |
EB-104 |
NE |
17-43N-76W |
WY101519052 |
Campbell |
09/26/2007 |
9/1/2022 |
EB-105 |
NE |
17-43N-76W |
WY101519053 |
Campbell |
09/26/2007 |
9/1/2022 |
EB-106 |
NE |
17-43N-76W |
WY101519054 |
Campbell |
09/26/2007 |
9/1/2022 |
EEB-1 |
NE, SE |
18-43N-76W |
WY101519055 |
Johnson |
08/11/2009 |
9/1/2022 |
EF-1 |
NW |
17-43N-76W |
WY101474091 |
Campbell |
03/22/2016 |
9/1/2022 |
EF-2 |
NW 17, NE 18 |
17-43N-76W |
WY101474092 |
Campbell |
03/22/2016 |
9/1/2022 |
4.2.1.1.2 Jane Dough Area
The permit boundary for the Jane Dough area encompasses approximately 3,680 acres. Within the Jane Dough permit boundary, EFR controls 117 unpatented lode-mining claims, three SUAs, and 16 fee mineral leases. The fee mineral leases and claims encompass approximately 3,121.43 acres. The fee mineral leases and SUAs have terms of 10 years, which can be extended indefinitely. The SUAs have set provisions for reimbursement to the surface owner for damages resulting from EFR operations. In the south half of Section 28, T43N, R76W, EFR controls 59.29% of the fee mineral estate under various fee mineral leases mentioned above.
Portions of the Jane Dough area were formerly held separately by EFR and the joint venture (JV) on the Arkose project (Arkose Project). These holdings have been combined. EFR retains 100% of the mineral rights for the portion it originally held and 81% of the mineral rights for the Arkose Mining Venture portion of Jane Dough. Mineral Resources for Jane Dough reflect this partition of mineral ownership.
Table 4-2 presents the Jane Dough lode mining claims. The Jane Dough lode mining claims are held by Uranerz, which is 100% owned by EFR.
Table 4-2: Jane Dough Lode Mining Claims
Energy Fuels Inc. - Nichols Ranch Project
Claim Name |
¼ Sec |
Sec-Twp-Rng |
BLM Serial No |
County |
Location Date |
Expiry Date |
EB-40 |
SW |
21-43N-76W |
WY101423165 |
Campbell |
9/17/1968 |
9/1/2022 |
EB-42 |
SW |
21-43N-76W |
WY101605103 |
Campbell |
9/17/1968 |
9/1/2022 |
EB-43 |
NE,NW |
20,21-43N-76W |
WY102523137 |
Campbell |
2/6/2006 |
9/1/2022 |
EB-44 |
NW |
21-43N-76W |
WY102524361 |
Campbell |
2/6/2006 |
9/1/2022 |
EB-45 |
NE,NW |
20,21-43N-76W |
WY102524362 |
Campbell |
2/6/2006 |
9/1/2022 |
EB-46 |
NW |
21-43N-76W |
WY102524363 |
Campbell |
2/6/2006 |
9/1/2022 |
RK-453 |
NW |
33-43N-76W |
WY102523280 |
Campbell |
2/8/2006 |
9/1/2022 |
RK-454 |
NW |
33-43N-76W |
WY102523281 |
Campbell |
2/8/2006 |
9/1/2022 |
RK-455 |
NW |
33-43N-76W |
WY102523282 |
Campbell |
2/8/2006 |
9/1/2022 |
RK-456 |
NW |
33-43N-76W |
WY102523283 |
Campbell |
2/8/2006 |
9/1/2022 |
RK-457 |
NW |
33-43N-76W |
WY102523284 |
Campbell |
2/8/2006 |
9/1/2022 |
RK-458 |
NW |
33-43N-76W |
WY102524508 |
Campbell |
2/8/2006 |
9/1/2022 |
TR-229 |
SE |
29-43N-76W |
WY101512156 |
Campbell |
2/24/2006 |
9/1/2022 |
TR-230 |
SE |
29-43N-76W |
WY101512157 |
Campbell |
2/24/2006 |
9/1/2022 |
TR-231 |
SE |
29-43N-76W |
WY101512158 |
Campbell |
2/24/2006 |
9/1/2022 |
TR-232 |
SE |
29-43N-76W |
WY101512159 |
Campbell |
2/24/2006 |
9/1/2022 |
TR-233 |
SE |
29-43N-76W |
WY101512160 |
Campbell |
2/24/2006 |
9/1/2022 |
TR-234 |
SE |
29-43N-76W |
WY101512161 |
Campbell |
2/24/2006 |
9/1/2022 |
TR-235 |
SE |
29-43N-76W |
WY101513425 |
Campbell |
2/24/2006 |
9/1/2022 |
TR-236 |
SE |
29-43N-76W |
WY101513426 |
Campbell |
2/24/2006 |
9/1/2022 |
TR-237 |
SE |
29-43N-76W |
WY101513427 |
Campbell |
2/24/2006 |
9/1/2022 |
TR-238 |
NE |
29-43N-76W |
WY101513428 |
Campbell |
2/24/2006 |
9/1/2022 |
TR-239 |
NE |
29-43N-76W |
WY101513429 |
Campbell |
2/24/2006 |
9/1/2022 |
TR-240 |
NE |
29-43N-76W |
WY101513430 |
Campbell |
2/24/2006 |
9/1/2022 |
TR-241 |
NE |
29-43N-76W |
WY101513431 |
Campbell |
2/24/2006 |
9/1/2022 |
Claim Name |
¼ Sec |
Sec-Twp-Rng |
BLM Serial No |
County |
Location Date |
Expiry Date |
TR-242 |
SE,NE |
20,29-43N-76W |
WY101513432 |
Campbell |
2/24/2006 |
9/1/2022 |
TR-243 |
SE |
20,29-43N-76W |
WY101513433 |
Campbell |
2/24/2006 |
9/1/2022 |
TR-244 |
SE |
20-43N-76W |
WY101513434 |
Campbell |
2/24/2006 |
9/1/2022 |
TR-245 |
SE |
20-43N-76W |
WY101513435 |
Campbell |
2/24/2006 |
9/1/2022 |
TR-246 |
SE |
31-43N-76W |
WY101514714 |
Johnson |
2/23/2006 |
9/1/2022 |
TR-247 |
SE |
31-43N-76W |
WY101514715 |
Johnson |
2/23/2006 |
9/1/2022 |
TR-248 |
SE |
31-43N-76W |
WY101514716 |
Johnson |
2/23/2006 |
9/1/2022 |
TR-249 |
SE |
31-43N-76W |
WY101514717 |
Johnson |
2/23/2006 |
9/1/2022 |
TR-250 |
SE |
31-43N-76W |
WY101514718 |
Johnson |
2/23/2006 |
9/1/2022 |
TR-251 |
NE,SE |
31-43N-76W |
WY101514719 |
Johnson |
2/23/2006 |
9/1/2022 |
TR-252 |
NE |
31-43N-76W |
WY101514720 |
Johnson |
2/23/2006 |
9/1/2022 |
TR-253 |
NE |
31-43N-76W |
WY101514721 |
Johnson |
2/23/2006 |
9/1/2022 |
TR-254 |
NE |
31-43N-76W |
WY101514722 |
Johnson |
2/23/2006 |
9/1/2022 |
TR-255 |
SE,NE |
30,31-43N-76W |
WY101514723 |
Johnson |
2/23/2006 |
9/1/2022 |
TR-256 |
SE |
30-43N-76W |
WY101514724 |
Johnson |
2/23/2006 |
9/1/2022 |
TR-257 |
SE |
30-43N-76W |
WY101515999 |
Johnson |
2/23/2006 |
9/1/2022 |
TR-258 |
SE |
30-43N-76W |
WY101516000 |
Johnson |
2/23/2006 |
9/1/2022 |
TR-259 |
SE |
30-43N-76W |
WY101516001 |
Johnson |
2/23/2006 |
9/1/2022 |
TR-260 |
SE |
30-43N-76W |
WY101516002 |
Johnson |
2/23/2006 |
9/1/2022 |
TR-261 |
SE |
30-43N-76W |
WY101516003 |
Johnson |
2/23/2006 |
9/1/2022 |
TR-262 |
SE |
30-43N-76W |
WY101516004 |
Johnson |
2/23/2006 |
9/1/2022 |
TR-263 |
SE |
30-43N-76W |
WY101516005 |
Johnson |
2/23/2006 |
9/1/2022 |
TR-264 |
NE,SE |
30-43N-76W |
WY101516006 |
Johnson |
2/23/2006 |
9/1/2022 |
WC-319 |
SE |
32-43N-76W |
WY102523401 |
Campbell |
2/22/2006 |
9/1/2022 |
WC-320 |
SE |
32-43N-76W |
WY102523402 |
Campbell |
2/22/2006 |
9/1/2022 |
WC-321 |
SE |
32-43N-76W |
WY102523403 |
Campbell |
2/22/2006 |
9/1/2022 |
WC-322 |
SE |
32-43N-76W |
WY102523404 |
Campbell |
2/22/2006 |
9/1/2022 |
WC-323 |
SE |
32-43N-76W |
WY102523405 |
Campbell |
2/22/2006 |
9/1/2022 |
WC-324 |
SE |
32-43N-76W |
WY102523406 |
Campbell |
2/22/2006 |
9/1/2022 |
WC-325 |
SE |
32-43N-76W |
WY102523407 |
Campbell |
2/22/2006 |
9/1/2022 |
WC-326 |
SE |
32-43N-76W |
WY102523408 |
Campbell |
2/22/2006 |
9/1/2022 |
WC-327 |
SE |
32-43N-76W |
WY102523409 |
Campbell |
2/22/2006 |
9/1/2022 |
WC-328 |
SE |
32-43N-76W |
WY102523410 |
Campbell |
2/22/2006 |
9/1/2022 |
Claim Name |
¼ Sec |
Sec-Twp-Rng |
BLM Serial No |
County |
Location Date |
Expiry Date |
WC-365 |
SW |
32-43N-76W |
WY102522273 |
Johnson |
2/22/2006 |
9/1/2022 |
WC-366 |
SW |
32-43N-76W |
WY102522274 |
Johnson |
2/22/2006 |
9/1/2022 |
WC-367 |
SW |
32-43N-76W |
WY102522275 |
Johnson |
2/22/2006 |
9/1/2022 |
WC-368 |
SW |
32-43N-76W |
WY102522276 |
Johnson |
2/22/2006 |
9/1/2022 |
WC-369 |
SW |
32-43N-76W |
WY102522277 |
Johnson |
2/22/2006 |
9/1/2022 |
WC-370 |
SW |
32-43N-76W |
WY102522278 |
Johnson |
2/22/2006 |
9/1/2022 |
WC-371 |
SW |
32-43N-76W |
WY102522279 |
Johnson |
2/22/2006 |
9/1/2022 |
WC-372 |
SW |
32-43N-76W |
WY102523468 |
Johnson |
2/22/2006 |
9/1/2022 |
WC-373 |
SW |
32-43N-76W |
WY102523469 |
Johnson |
2/22/2006 |
9/1/2022 |
WC-374 |
SW |
32-43N-76W |
WY102523470 |
Johnson |
2/22/2006 |
9/1/2022 |
DS-3 |
NE,SE |
28-43N-76W |
WY101353836 |
Campbell |
12/10/2006 |
9/1/2022 |
DS-4 |
SE,NE |
21,28-43N-76W |
WY101353837 |
Campbell |
12/10/2006 |
9/1/2022 |
DS-5 |
NE,SE |
28-43N-76W |
WY101353838 |
Campbell |
12/10/2006 |
9/1/2022 |
DS-6 |
SE,NE |
21,28-43N-76W |
WY101353839 |
Campbell |
12/10/2006 |
9/1/2022 |
DS-7 |
NE,SE |
28-43N-76W |
WY101353840 |
Campbell |
12/10/2006 |
9/1/2022 |
DS-8 |
SE,NE |
21,28-43N-76W |
WY101353841 |
Campbell |
12/10/2006 |
9/1/2022 |
DS-9 |
NE,NW,SE,SW |
28-43N-76W |
WY101353842 |
Campbell |
12/10/2006 |
9/1/2022 |
DS-10 |
SE,NE,SW |
21,28-43N-76W |
WY101353843 |
Campbell |
12/10/2006 |
9/1/2022 |
DS-11 |
NW,SW |
28-43N-76W |
WY101354747 |
Campbell |
12/10/2006 |
9/1/2022 |
DS-12 |
SW,NW |
21,28-43N-76W |
WY101354748 |
Campbell |
12/10/2006 |
9/1/2022 |
DS-13 |
NW,SW |
28-43N-76W |
WY101354749 |
Campbell |
12/10/2006 |
9/1/2022 |
DS-14 |
SW,NW |
21,28-43N-76W |
WY101354750 |
Campbell |
12/10/2006 |
9/1/2022 |
DS-15 |
NW,SW |
28-43N-76W |
WY101354751 |
Campbell |
12/10/2006 |
9/1/2022 |
DS-16 |
SW,NW |
21,28-43N-76W |
WY101354752 |
Campbell |
12/10/2006 |
9/1/2022 |
DS-17 |
NW,SW |
28,29-43N-76W |
WY101354753 |
Campbell |
12/10/2006 |
9/1/2022 |
DS-18 |
NW 28; NE 29 |
20,21,28,29-43N-76W |
WY101354754 |
Campbell |
12/10/2006 |
9/1/2022 |
DS-19 |
NE,SE |
29-43N-76W |
WY101354755 |
Campbell |
12/10/2006 |
9/1/2022 |
DS-20 |
SE 20; NE 29 |
20,29-43N-76W |
WY101354756 |
Campbell |
12/10/2006 |
9/1/2022 |
DS-21 |
NE,SE |
29-43N-76W |
WY101354757 |
Campbell |
12/10/2006 |
9/1/2022 |
DS-22 |
SE 20; NE 29 |
20,29-43N-76W |
WY101354758 |
Campbell |
12/10/2006 |
9/1/2022 |
DS-23 |
NE,SE |
29-43N-76W |
WY101354759 |
Campbell |
12/10/2006 |
9/1/2022 |
DS-24 |
SE 20; NE 29 |
20,29-43N-76W |
WY101354760 |
Campbell |
12/10/2006 |
9/1/2022 |
4.2.1.1.3 Hank Area
The Hank area permit boundary encompasses approximately 2,250 acres. Within the permit boundary, EFR has 49 unpatented lode-mining claims, and one SUA covering approximately 1,392.58 acres.
Table 4-3 presents the Hank lode mining claims. The Hank lode mining claims are held by Uranerz, which is 100% owned by EFR.
Table 4-3: Hank Lode Mining Claims
Energy Fuels Inc. - Nichols Ranch Project
Claim Name |
¼ Sec |
Sec-Twp-Rng |
BLM Serial No |
County |
Location Date |
Expiry Date |
B-81 |
SE |
31-44N-75W |
WY101606674 |
Campbell |
9/15/1968 |
9/1/2022 |
B-83 |
SE |
31-44N-75W |
WY101421365 |
Campbell |
9/15/1968 |
9/1/2022 |
B-85 |
SE |
31-44N-75W |
WY101426704 |
Campbell |
9/15/1968 |
9/1/2022 |
B-87 |
SE |
31-44N-75W |
WY101604478 |
Campbell |
9/15/1968 |
9/1/2022 |
B-89 |
NE |
31-44N-75W |
WY101731939 |
Campbell |
9/15/1968 |
9/1/2022 |
B-91 |
NE |
31-44N-75W |
WY101607996 |
Campbell |
9/15/1968 |
9/1/2022 |
B-93 |
NE |
31-44N-75W |
WY101608986 |
Campbell |
9/15/1968 |
9/1/2022 |
B-94A |
NW |
31-44N-75W |
WY101424771 |
Campbell |
9/15/1968 |
9/1/2022 |
B-95 |
NE |
31-44N-75W |
WY101342049 |
Campbell |
9/15/1968 |
9/1/2022 |
B-96A |
NW |
31-44N-75W |
WY101603271 |
Campbell |
9/15/1968 |
9/1/2022 |
MB-1 |
NE |
6-43N-75W |
WY101736673 |
Campbell |
6/22/2006 |
9/1/2022 |
MB-2 |
NE |
6-43N-75W |
WY101736674 |
Campbell |
6/22/2006 |
9/1/2022 |
MB-30 |
NE |
6-43N-75W |
WY101736675 |
Campbell |
6/22/2006 |
9/1/2022 |
MB-4 |
NE |
6-43N-75W |
WY101736676 |
Campbell |
6/22/2006 |
9/1/2022 |
MB-5 |
NE |
6-43N-75W |
WY101736677 |
Campbell |
6/22/2006 |
9/1/2022 |
MB-6 |
NE |
6-43N-75W |
WY101736678 |
Campbell |
6/22/2006 |
9/1/2022 |
MB-7 |
NE |
6-43N-75W |
WY101736679 |
Campbell |
6/22/2006 |
9/1/2022 |
MB-8 |
NE |
6-43N-75W |
WY101736680 |
Campbell |
6/22/2006 |
9/1/2022 |
MB-9 |
NE |
6-43N-75W |
WY101736681 |
Campbell |
6/22/2006 |
9/1/2022 |
MB-10 |
NE,SE |
6-43N-75W |
WY101736682 |
Campbell |
6/22/2006 |
9/1/2022 |
MB-11 |
SE |
6-43N-75W |
WY101736683 |
Campbell |
6/22/2006 |
9/1/2022 |
MB-12 |
SE |
6-43N-75W |
WY101737755 |
Campbell |
6/22/2006 |
9/1/2022 |
MB-13 |
SE |
6-43N-75W |
WY101737756 |
Campbell |
6/22/2006 |
9/1/2022 |
MB-14 |
SE |
6-43N-75W |
WY101737757 |
Campbell |
6/22/2006 |
9/1/2022 |
MB-15 |
SE |
6-43N-75W |
WY101737758 |
Campbell |
6/22/2005 |
9/1/2022 |
Claim Name |
¼ Sec |
Sec-Twp-Rng |
BLM Serial No |
County |
Location Date |
Expiry Date |
MB-16 |
SE |
6-43N-75W |
WY101737759 |
Campbell |
6/22/2006 |
9/1/2022 |
MB-17 |
SE,NE |
6,7-43N-75W |
WY101737760 |
Campbell |
6/22/2006 |
9/1/2022 |
MB-18 |
SE,NE |
6,7-43N-75W |
WY101737761 |
Campbell |
6/22/2006 |
9/1/2022 |
MB-19 |
NE |
7-43N-75W |
WY101737762 |
Campbell |
8/1/2006 |
9/1/2022 |
MB-20 |
NE |
7-43N-75W |
WY101737763 |
Campbell |
8/1/2006 |
9/1/2022 |
MB-21 |
NE |
7-43N-75W |
WY101737764 |
Campbell |
8/1/2006 |
9/1/2022 |
MB-22 |
NE |
7-43N-75W |
WY101737765 |
Campbell |
8/1/2006 |
9/1/2022 |
MB-23 |
NE |
7-43N-75W |
WY101737766 |
Campbell |
8/1/2006 |
9/1/2022 |
MB-24 |
NE |
7,8-43N-75W |
WY101737767 |
Campbell |
8/1/2006 |
9/1/2022 |
MB-25 |
NW |
7-43N-75W |
WY101737768 |
Campbell |
8/1/2006 |
9/1/2022 |
MB-26 |
NE |
7-43N-75W |
WY101737769 |
Campbell |
8/1/2006 |
9/1/2022 |
MB-28 |
NE |
7-43N-75W |
WY101737770 |
Campbell |
8/1/2006 |
9/1/2022 |
MB-30 |
SE |
7-43N-75W |
WY101737771 |
Campbell |
8/1/2006 |
9/1/2022 |
JS-1 |
SE |
6-43N-75W |
WY101372157 |
Campbell |
2/27/2007 |
9/1/2022 |
JS-2 |
SW |
6-43N-75W |
WY101372158 |
Campbell |
2/27/2007 |
9/1/2022 |
JS-3 |
SW |
6-43N-75W |
WY101372159 |
Campbell |
2/27/2007 |
9/1/2022 |
JS-4 |
SW |
6-43N-75W |
WY101372160 |
Campbell |
2/27/2007 |
9/1/2022 |
JS-5 |
SW,NW |
6-43N-75W |
WY101372859 |
Campbell |
2/27/2007 |
9/1/2022 |
JS-6 |
SW |
6-43N-75W |
WY101372860 |
Campbell |
2/27/2007 |
9/1/2022 |
JS-7 |
NW |
6-43N-75W |
WY101372861 |
Campbell |
2/27/2007 |
9/1/2022 |
JS-8 |
NW |
6-43N-75W |
WY101372862 |
Campbell |
2/27/2007 |
9/1/2022 |
JS-9 |
SW |
6-43N-75W |
WY101372863 |
Campbell |
2/27/2007 |
9/1/2022 |
JS-10 |
SW |
6-43N-75W |
WY101372864 |
Campbell |
2/27/2007 |
9/1/2022 |
JS-11 |
SW |
6-43N-75W |
WY101372865 |
Campbell |
2/27/2007 |
9/1/2022 |
JS-12 |
SW,NW |
6-43N-75W |
WY101372866 |
Campbell |
2/27/2007 |
9/1/2022 |
JS-13 |
SW |
6-43N-75W |
WY101372867 |
Campbell |
2/27/2007 |
9/1/2022 |
JS-14 |
NW |
6-43N-75W |
WY101372868 |
Campbell |
2/27/2007 |
9/1/2022 |
JS-15 |
NW |
6-43N-75W |
WY101372869 |
Campbell |
2/27/2007 |
9/1/2022 |
JS-16 |
NW |
6-43N-75W |
WY101372870 |
Campbell |
2/27/2007 |
9/1/2022 |
JS-17 |
NW |
6-43N-75W |
WY101372871 |
Campbell |
2/27/2007 |
9/1/2022 |
B-100 |
NW |
31-44N-75W |
WY101673158 |
Campbell |
2/22/2008 |
9/1/2022 |
B-101 |
SW |
31-44N-75W |
WY101674116 |
Campbell |
2/22/2008 |
9/1/2022 |
Claim Name |
¼ Sec |
Sec-Twp-Rng |
BLM Serial No |
County |
Location Date |
Expiry Date |
B-102 |
SW |
31-44N-75W |
WY101674117 |
Campbell |
2/22/2008 |
9/1/2022 |
B-103 |
SW |
31-44N-75W |
WY101674118 |
Campbell |
2/22/2008 |
9/1/2022 |
B-104 |
SW,NW |
31-44N-75W |
WY101674119 |
Campbell |
2/22/2008 |
9/1/2022 |
B-105 |
SW |
31-44N-75W |
WY101674120 |
Campbell |
2/22/2008 |
9/1/2022 |
B-106 |
NW |
31-44N-75W |
WY101674121 |
Campbell |
2/22/2008 |
9/1/2022 |
B-107 |
NW |
31-44N-75W |
WY101674122 |
Campbell |
2/22/2008 |
9/1/2022 |
HB-1 |
NE,SE |
31-44N-75W |
WY101563325 |
Campbell |
8/10/2009 |
9/1/2022 |
HB-2 |
SW,SE |
31-44N-75W |
WY101563326 |
Campbell |
8/10/2009 |
9/1/2022 |
HB-3 |
SW,SE |
31-44N-75W |
WY101563327 |
Campbell |
8/10/2009 |
9/1/2022 |
4.2.1.2 Satellite Properties
4.2.1.2.1 North Rolling Pin
The North Rolling Pin area has 54 unpatented lode-mining claims and one SUA. There are no mineral fee leases associated with the NRP area. There is one SUA that will remain in force so long as the terms of the agreement are met. All of the unpatented lode mining claims have annual filing requirements with the BLM, to be paid on or before September 1 of each year. The claims area encompasses approximately 1,180 acres.
Table 4-4 presents the NRP lode mining claims. The NRP lode mining claims are held by Uranerz, which is 100% owned by EFR.
Table 4-4: North Rolling Pin Lode Mining Claims
Energy Fuels Inc. - Nichols Ranch Project
Claim Name |
¼ Sec |
Sec-Twp-Rng |
BLM Serial No |
County |
Location Date |
Expiry Date |
PB #11 |
SE,SW |
10,11-43W-76N |
WY101436323 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #12 |
SE,SW |
11-43W-76N |
WY101436324 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #13 |
SE,SW |
10,11-43W-76N |
WY101436325 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #14 |
SE,SW |
11-43W-76N |
WY101436326 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #15 |
SE,SW |
10,11-43W-76N |
WY101437051 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #16 |
SE,SW |
11-43W-76N |
WY101437052 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #17 |
SE,SW,NW,NE |
10,11,14,15-43W-76N |
WY101437053 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #18 |
SE,SW,NW,NE |
11,14-43W-76N |
WY101437054 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #19 |
NW,NE |
14,15-43W-76N |
WY101437055 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #20 |
NE,NW |
14-43W-76N |
WY101437056 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #21 |
NW,NE |
14,15-43W-76N |
WY101437057 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #22 |
NE,NW |
14-43W-76N |
WY101437058 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #23 |
NW,NE |
14,15-43W-76N |
WY101437059 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #24 |
NE,NW |
14-43W-76N |
WY101437060 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #25 |
NW,NE |
14,15-43W-76N |
WY101437061 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #26 |
NE,NW |
14-43W-76N |
WY101437062 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #27 |
SE |
10-43W-76N |
WY101437063 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #28 |
SE |
10-43W-76N |
WY101437064 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #29 |
SE,SW,NW,NE |
10,15-43W-76N |
WY101437065 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #30 |
SE,NE |
10,15-43W-76N |
WY101437066 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #31 |
NE,NW |
15-43W-76N |
WY101437067 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #32 |
NE |
15-43W-76N |
WY101437068 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #33 |
NE,NW |
15-43W-76N |
WY101437069 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #34 |
NE |
15-43W-76N |
WY101437070 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #35 |
NE,NW |
15-43W-76N |
WY101437822 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #36 |
NE |
15-43W-76N |
WY101437823 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #37 |
NE,NW,SE,SW |
15-43W-76N |
WY101437824 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #38 |
NE,SE |
15-43W-76N |
WY101437825 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #39 |
SE,SW |
15-43W-76N |
WY101437826 |
Campbell |
12/2/2006 |
9/1/2022 |
PB #40 |
SE,SW |
15-43W-76N |
WY101437827 |
Campbell |
12/2/2006 |
9/1/2022 |
PB 53 |
NE |
11-43W-76N |
WY101437971 |
Campbell |
6/16/2008 |
9/1/2022 |
PB 54 |
NE |
11-43W-76N |
WY101437972 |
Campbell |
6/16/2008 |
9/1/2022 |
Claim Name |
¼ Sec |
Sec-Twp-Rng |
BLM Serial No |
County |
Location Date |
Expiry Date |
PB 55 |
NE |
11-43W-76N |
WY101437973 |
Campbell |
6/16/2008 |
9/1/2022 |
PB 56 |
NE |
11-43W-76N |
WY101437974 |
Campbell |
6/16/2008 |
9/1/2022 |
PB 57 |
SW |
2-43W-76N |
WY101437975 |
Campbell |
6/9/2008 |
9/1/2022 |
PB 58 |
SW |
2-43W-76N |
WY101437976 |
Campbell |
6/9/2008 |
9/1/2022 |
PB 59 |
NW,SW |
2-43W-76N |
WY101437977 |
Campbell |
6/9/2008 |
9/1/2022 |
PB 60 |
NW |
2-43W-76N |
WY101437978 |
Campbell |
6/9/2008 |
9/1/2022 |
PB 61 |
NW |
2-43W-76N |
WY101437979 |
Campbell |
6/9/2008 |
9/1/2022 |
PB 62 |
NW |
2-43W-76N |
WY101437980 |
Campbell |
6/9/2008 |
9/1/2022 |
PB 63 |
NW |
2,[35]-43[44]N-76N |
WY101437981 |
Campbell |
6/9/2008 |
9/1/2022 |
PB 64 |
SW |
35-44N-76N |
WY101437982 |
Campbell |
6/9/2008 |
9/1/2022 |
PB 65 |
SW |
35-44N-76N |
WY101437983 |
Campbell |
6/9/2008 |
9/1/2022 |
PB 66 |
SW |
35-44N-76N |
WY101437984 |
Campbell |
6/9/2008 |
9/1/2022 |
4.2.1.2.2 West North Butte
The West North Butte area claims were acquired by Uranerz, which was acquired by EFR in 2015. There are no fee leases associated with West North Butte. There is one SUA that will remain in force provided the terms of the agreement are met.
Table 4-5 presents the West North Butte lode mining claims. The WNB lode mining claims are held by Uranerz, which is 100% owned by EFR.
Table 4-5: West North Butte Lode Mining Claims
Energy Fuels Inc. - Nichols Ranch Project
Claim Name |
¼ Sec |
Sec-Twp-Rng |
BLM Serial No |
County |
Location Date |
Expiry Date |
P 179 |
SE,NE |
26-44W-76W |
WY101426369 |
Campbell |
2/15/1987 |
9/1/2022 |
P 180 |
NE |
26-44W-76W |
WY101497208 |
Campbell |
2/15/1987 |
9/1/2022 |
P 181 |
SE,NE |
26-44W-76W |
WY101491777 |
Campbell |
2/15/1987 |
9/1/2022 |
P 182 |
NE |
26-44W-76W |
WY101739809 |
Campbell |
2/15/1987 |
9/1/2022 |
P 189 |
NE,SE |
23-44W-76W |
WY101426736 |
Campbell |
2/16/1987 |
9/1/2022 |
P 190 |
SE |
23-44W-76W |
WY101528512 |
Campbell |
2/16/1987 |
9/1/2022 |
P 191 |
NE,SE |
23-44W-76W |
WY101458339 |
Campbell |
2/16/1987 |
9/1/2022 |
P 192 |
SE |
23-44W-76W |
WY101739818 |
Campbell |
2/16/1987 |
9/1/2022 |
B1767 |
SE |
14,23-44W-76W |
WY101340343 |
Campbell |
2/16/1987 |
9/1/2022 |
Claim Name |
¼ Sec |
Sec-Twp-Rng |
BLM Serial No |
County |
Location Date |
Expiry Date |
B1768 |
NE |
23-44W-76W |
WY101502230 |
Campbell |
2/16/1987 |
9/1/2022 |
B1769 |
NE |
14,23-44W-76W |
WY101490716 |
Campbell |
2/17/1987 |
9/1/2022 |
B1770 |
NE |
23-44W-76W |
WY101856854 |
Campbell |
2/17/1987 |
9/1/2022 |
WSC #1 |
SE |
14-44W-76W |
WY101342071 |
Campbell |
2/24/1987 |
9/1/2022 |
WSC #2 |
SW,NE,SE |
13,14-44W-76W |
WY101502225 |
Campbell |
2/24/1987 |
9/1/2022 |
WC #114 |
NW,SW |
10-44W-76W |
WY101490711 |
Campbell |
2/18/1987 |
9/1/2022 |
WC #116 |
NW,SW |
10-44W-76W |
WY101856849 |
Campbell |
2/18/1987 |
9/1/2022 |
WC #118 |
NW,SW |
10-44W-76W |
WY101607538 |
Campbell |
2/18/1987 |
9/1/2022 |
WC #120 |
NE,NW,SE,SW |
10-44W-76W |
WY101339579 |
Campbell |
2/18/1987 |
9/1/2022 |
WC #122 |
NE,SE |
10-44W-76W |
WY101340187 |
Campbell |
2/18/1987 |
9/1/2022 |
WC #124 |
NE,SE |
10-44W-76W |
WY101426152 |
Campbell |
2/18/1987 |
9/1/2022 |
WC #175 |
NW,NE |
14, 15-44W-76W |
WY101422765 |
Campbell |
2/19/1987 |
9/1/2022 |
WC #177 |
NW,NE,SE,SW |
14, 15-44W-76W |
WY101420778 |
Campbell |
2/19/1987 |
9/1/2022 |
WC #177A |
SE,SW |
10, 11-44W-76W |
WY101508383 |
Campbell |
2/19/1987 |
9/1/2022 |
WC #178 |
SE |
10-44W-76W |
WY101604763 |
Campbell |
2/19/1987 |
9/1/2022 |
WC #180 |
SE |
10-44W-76W |
WY101608014 |
Campbell |
2/19/1987 |
9/1/2022 |
WC #182 |
SE |
10-44W-76W |
WY101502253 |
Campbell |
2/19/1987 |
9/1/2022 |
JC #1 |
SWSE |
13,14-44W-76W |
WY101343371 |
Campbell |
2/21/1987 |
9/1/2022 |
JC #2 |
SW,NE,SE |
14-44W-76W |
WY101858037 |
Campbell |
2/22/1987 |
9/1/2022 |
JC #3 |
NE,SE |
14-44W-76W |
WY101855630 |
Campbell |
2/22/1987 |
9/1/2022 |
JC #20 |
SE |
14-44W-76W |
WY101858017 |
Campbell |
2/24/1987 |
9/1/2022 |
JC #22 |
SE,SW |
14-44W-76W |
WY101423115 |
Campbell |
2/24/1987 |
9/1/2022 |
JC #24 |
NE,NW,SE,SW |
14-44W-76W |
WY101527278 |
Campbell |
2/24/1987 |
9/1/2022 |
JC #25 |
SW |
14-44W-76W |
WY101507069 |
Campbell |
2/24/1987 |
9/1/2022 |
JC #26 |
NENW,SW |
14-44W-76W |
WY101455493 |
Campbell |
2/24/1987 |
9/1/2022 |
JC #27 |
NW,SW |
14-44W-76W |
WY101602473 |
Campbell |
2/24/1987 |
9/1/2022 |
JC #28 |
NE,NW |
14-44W-76W |
WY101603105 |
Campbell |
2/24/1987 |
9/1/2022 |
JC #29 |
NW,SW |
14-44W-76W |
WY101425162 |
Campbell |
2/24/1987 |
9/1/2022 |
JC #30 |
NE,NW |
14-44W-76W |
WY101339791 |
Campbell |
2/25/1987 |
9/1/2022 |
JC #31 |
NW |
14-44W-76W |
WY101455756 |
Campbell |
2/26/1987 |
9/1/2022 |
Claim Name |
¼ Sec |
Sec-Twp-Rng |
BLM Serial No |
County |
Location Date |
Expiry Date |
JC #33 |
NW<NE |
14,15-44W-76W |
WY101608050 |
Campbell |
2/26/1987 |
9/1/2022 |
JC #35 |
NW,NE |
14,15-44W-76W |
WY101421197 |
Campbell |
2/26/1987 |
9/1/2022 |
P 175 |
SE,NE |
26-44W-76W |
WY101525153 |
Campbell |
6/20/2005 |
9/1/2022 |
P 176 |
NE |
26-44W-76W |
WY101525718 |
Campbell |
6/20/2005 |
9/1/2022 |
P 177 |
SE,NE |
26-44W-76W |
WY101525719 |
Campbell |
6/20/2005 |
9/1/2022 |
P 178 |
NE |
26-44W-76W |
WY101525720 |
Campbell |
6/20/2005 |
9/1/2022 |
WC 126 |
SE |
10-44W-76W |
WY101525721 |
Campbell |
7/6/2005 |
9/1/2022 |
WC 128 |
SE |
10-44W-76W |
WY101525722 |
Campbell |
7/6/2005 |
9/1/2022 |
WC 130 |
NW,SW |
10,11-44W-76W |
WY101525723 |
Campbell |
7/6/2005 |
9/1/2022 |
WC 132 |
NW,SW |
11-44W-76W |
WY101525724 |
Campbell |
7/6/2005 |
9/1/2022 |
WC 157 |
SE,SW |
10-44W-76W |
WY101525725 |
Campbell |
7/6/2005 |
9/1/2022 |
WC 159 |
SE |
10-44W-76W |
WY101525726 |
Campbell |
7/6/2005 |
9/1/2022 |
WC 172 |
NE |
15-44W-76W |
WY101525727 |
Campbell |
7/7/2005 |
9/1/2022 |
WC 173 |
NW,NE |
14-44W-76W |
WY101525728 |
Campbell |
7/7/2005 |
9/1/2022 |
WC 174 |
NE |
15-44W-76W |
WY101525729 |
Campbell |
7/7/2005 |
9/1/2022 |
WC 176 |
NE |
15-44W-76W |
WY101525730 |
Campbell |
7/7/2005 |
9/1/2022 |
WC 179 |
SE,SW |
11-44W-76W |
WY101525731 |
Campbell |
7/6/2005 |
9/1/2022 |
WC 181 |
SE,SW |
11-44W-76W |
WY101525732 |
Campbell |
7/6/2005 |
9/1/2022 |
B 900 |
NW |
25-44W-76W |
WY101525733 |
Campbell |
6/20/2005 |
9/1/2022 |
B 901 |
NW |
25-44W-76W |
WY101525734 |
Campbell |
6/20/2005 |
9/1/2022 |
B 902 |
NW |
25-44W-76W |
WY101525735 |
Campbell |
6/20/2005 |
9/1/2022 |
JC 42 |
NW |
23-44W-76W |
WY101525736 |
Campbell |
6/28/2005 |
9/1/2022 |
JC 43 |
SW,NW |
14-44W-76W |
WY101525737 |
Campbell |
6/28/2005 |
9/1/2022 |
JC 44 |
NW |
23-44W-76W |
WY101525738 |
Campbell |
6/28/2005 |
9/1/2022 |
JC 45 |
SW,NW |
14-44W-76W |
WY101526363 |
Campbell |
6/28/2005 |
9/1/2022 |
JC 46 |
SW,NW |
14-44W-76W |
WY101526364 |
Campbell |
6/28/2005 |
9/1/2022 |
JC 47 |
SE,SW,NE,NW |
14-44W-76W |
WY101526365 |
Campbell |
6/28/2005 |
9/1/2022 |
B1765 |
NW |
23-44W-76W |
WY101526366 |
Campbell |
6/28/2005 |
9/1/2022 |
B1766 |
NW |
23-44W-76W |
WY101526367 |
Campbell |
6/28/2005 |
9/1/2022 |
B1771 |
SE |
14-44W-76W |
WY101526368 |
Campbell |
6/20/2005 |
9/1/2022 |
B1772 |
NE |
23-44W-76W |
WY101526369 |
Campbell |
6/20/2005 |
9/1/2022 |
B1773 |
SE |
14-44W-76W |
WY101526370 |
Campbell |
6/20/2005 |
9/1/2022 |
Claim Name |
¼ Sec |
Sec-Twp-Rng |
BLM Serial No |
County |
Location Date |
Expiry Date |
B1774 |
NE |
23-44W-76W |
WY101526371 |
Campbell |
6/20/2005 |
9/1/2022 |
B1775 |
SW |
13-44W-76W |
WY101526372 |
Campbell |
6/20/2005 |
9/1/2022 |
P185 |
NE,SE |
23-44W-76W |
WY101526373 |
Campbell |
6/20/2005 |
9/1/2022 |
P 186 |
SE |
23-44W-76W |
WY101526374 |
Campbell |
6/20/2005 |
9/1/2022 |
P 187 |
NE,SE |
23-44W-76W |
WY101526375 |
Campbell |
6/20/2005 |
9/1/2022 |
P 188 |
SE |
23-44W-76W |
WY101526376 |
Campbell |
6/20/2005 |
9/1/2022 |
JC 32 |
NW |
14-44W-76W |
WY101526377 |
Campbell |
7/5/2005 |
9/1/2022 |
JC 34 |
SW,NW |
11,14-44W-76W |
WY101526378 |
Campbell |
7/5/2005 |
9/1/2022 |
JC 36 |
SW,NW |
11,14-44W-76W |
WY101526379 |
Campbell |
7/5/2005 |
9/1/2022 |
JC 4 |
NE,SE |
14-44W-76W |
WY101526380 |
Campbell |
7/5/2005 |
9/1/2022 |
JC 5 |
NE |
14-44W-76W |
WY101526381 |
Campbell |
7/5/2005 |
9/1/2022 |
JC 6 |
NE |
14-44W-76W |
WY101526382 |
Campbell |
7/5/2005 |
9/1/2022 |
JC 7 |
SE,NE |
11,14-44W-76W |
WY101526383 |
Campbell |
7/5/2005 |
9/1/2022 |
B1796 |
NW,SW |
13-44W-76W |
WY101526384 |
Campbell |
6/27/2005 |
9/1/2022 |
B1797AM |
SW |
13-44W-76W |
WY101526959 |
Campbell |
6/27/2005 |
9/1/2022 |
B1798 |
SW |
13-44W-76W |
WY101526960 |
Campbell |
6/27/2005 |
9/1/2022 |
B1799AM |
SW |
13-44W-76W |
WY101526961 |
Campbell |
6/27/2005 |
9/1/2022 |
B1800 |
SW |
13-44W-76W |
WY101526962 |
Campbell |
6/27/2005 |
9/1/2022 |
B1801AM |
SW |
13-44W-76W |
WY101526963 |
Campbell |
6/27/2005 |
9/1/2022 |
B1802A |
SW |
13-44W-76W |
WY101526964 |
Campbell |
6/27/2005 |
9/1/2022 |
B1803A |
SE,SW |
13-44W-76W |
WY101526965 |
Campbell |
6/27/2005 |
9/1/2022 |
JC #1 AM |
SW,SE |
13,14-44W-76W |
WY101312466 |
Campbell |
2/25/2006 |
9/1/2022 |
JC #2 AM |
SW,NE,SE |
13,14-44W-76W |
WY101312467 |
Campbell |
2/25/2006 |
9/1/2022 |
JC #3 AM |
NE,SE |
14-44W-76W |
WY101312468 |
Campbell |
2/25/2006 |
9/1/2022 |
JC #20 AM |
SE |
14-44W-76W |
WY101312469 |
Campbell |
2/25/2006 |
9/1/2022 |
JC #22 AM |
SE,SW |
14-44W-76W |
WY101312470 |
Campbell |
2/25/2006 |
9/1/2022 |
JC #24 AM |
NE,NW,SE,SW |
14-44W-76W |
WY101312471 |
Campbell |
2/25/2006 |
9/1/2022 |
JC #25 AM |
SW |
14-44W-76W |
WY101312472 |
Campbell |
2/26/2006 |
9/1/2022 |
JC #26 AM |
NE,NW,SW |
14-44W-76W |
WY101313683 |
Campbell |
2/25/2006 |
9/1/2022 |
JC #27 AM |
NW,SW |
14-44W-76W |
WY101313684 |
Campbell |
2/26/2006 |
9/1/2022 |
WSC #1 AM |
SE |
14-44W-76W |
WY101313685 |
Campbell |
2/25/2006 |
9/1/2022 |
P 200 |
NW |
23-44W-76W |
WY101511313 |
Campbell |
6/28/2007 |
9/1/2022 |
4.2.1.2.3 East North Butte
The East North Butte area claims were acquired by Uranerz. There are no fee leases associated with East North Butte. There is one SUA which will remain in force so long as the terms of the agreement are met.
Table 4-6 presents the ENB lode mining claims. The ENB lode mining claims are held by Uranerz, which is 100% owned by EFR.
Table 4-6: East North Butte Lode Mining Claims
Energy Fuels Inc. - Nichols Ranch Project
Claim Name |
¼ Sec |
Sec-Twp-Rng |
BLM Serial No |
County |
Location Date |
Expiry Date |
B-745 |
NE,NW,SE,SW |
[19]24-44N-[75]76W |
WY101491337 |
Campbell |
2/12/1987 |
9/1/2022 |
B-747 |
NW |
[19]24-44N-[75]76W |
WY101422726 |
Campbell |
2/12/1987 |
9/1/2022 |
B-748 |
NW,SW |
19-44N-75W |
WY101425036 |
Campbell |
2/12/1987 |
9/1/2022 |
B-749 |
NW,SW,NE,SE |
[19]24-44N-[75]76W |
WY101340291 |
Campbell |
2/12/1987 |
9/1/2022 |
B-750 |
NE |
19-44N-75W |
WY101855804 |
Campbell |
2/12/1987 |
9/1/2022 |
B-751 |
NE |
[19]24-44N-[75]76 |
WY101856833 |
Campbell |
2/12/1987 |
9/1/2022 |
B-752 |
NE,SE |
19-44N-75W |
WY101425739 |
Campbell |
2/12/1987 |
9/1/2022 |
B-753 |
SE |
[19]24-44N-[75]76W |
WY101423911 |
Campbell |
2/12/1987 |
9/1/2022 |
B-754 |
SE |
[19]24-44N-[75]76W |
WY101422333 |
Campbell |
2/12/1987 |
9/1/2022 |
B-1767 |
SE |
14,23-44N-76W |
WY101527286 |
Campbell |
2/12/1987 |
9/1/2022 |
B-1768 |
SE,NE |
23-44N-76W |
WY101505868 |
Campbell |
2/12/1987 |
9/1/2022 |
B-1769 |
SW,SE |
14,23-44N-76W |
WY101853424 |
Campbell |
2/12/1987 |
9/1/2022 |
B-1770 |
SW,SE |
23-44N-76W |
WY101731356 |
Campbell |
2/12/1987 |
9/1/2022 |
4.2.1.2.4 Willow Creek
The Willow Creek area claims were acquired by Uranerz. There are no fee leases associated with Willow Creek. There is one SUA will remain in force so long as the terms of the agreement are met.
Table 4-7 presents the WC lode mining claims. The WC lode mining claims are held by Uranerz, which is 100% owned by EFR.
Table 4-7: Willow Creek Lode Mining Claims
Energy Fuels Inc. - Nichols Ranch Project
Claim Name |
¼ Sec |
Sec-Twp-Rng |
BLM Serial No |
County |
Location Date |
Expiry Date |
B 860 |
NE |
35-44N-76W |
WY101421379 |
Campbell |
2/17/1968 |
9/1/2022 |
B 862 |
NE |
35-44N-76W |
WY101731000 |
Campbell |
2/17/1968 |
9/1/2022 |
B 858 |
SE |
35-44N-76W |
WY101339516 |
Campbell |
2/17/1968 |
9/1/2022 |
B 857 |
SE |
35-44N-76W |
WY101345848 |
Campbell |
2/17/1968 |
9/1/2022 |
B 853 |
SE |
35-44N-76W |
WY101420734 |
Campbell |
2/17/1968 |
9/1/2022 |
B 852 |
SE |
35-44N-76W |
WY101527318 |
Campbell |
2/17/1968 |
9/1/2022 |
B 851 |
SE |
35-44N-76W |
WY101529741 |
Campbell |
2/17/1968 |
9/1/2022 |
B 855 |
SE |
35-44N-76W |
WY101606669 |
Campbell |
2/17/1968 |
9/1/2022 |
B 854 |
SE |
35-44N-76W |
WY101607982 |
Campbell |
2/17/1968 |
9/1/2022 |
B 850 |
SE |
35-44N-76W |
WY101608041 |
Campbell |
2/17/1968 |
9/1/2022 |
B 856 |
SE |
35-44N-76W |
WY101731194 |
Campbell |
2/17/1968 |
9/1/2022 |
4.3 Required Permits and Status
All of the unpatented lode mining claims have annual filing requirements with the BLM, to be paid on or before September 1 of each year. Mining claims are subject to the Mining Law of 1872. Changes in the mining law could affect the mineral tenure. The unpatented lode mining claims will remain the property of EFR provided they adhere to required filing and annual payment requirements with Johnson and Campbell Counties and the BLM. The SUAs will remain in force so long as the mining claims are maintained.
4.3.1 Exploration
EFR has conducted exploration drilling at Nichols Ranch but has not conducted any exploration drilling at Jane Dough, Hank, or the Satellite Properties since acquiring the properties in 2015. EFR has in place a Drilling Notification (DN), issued for exploration drilling, from the Wyoming Department of Environmental Quality, Land Quality Division (WDEQ/LQD).
4.3.2 Production
The Nichols Ranch, Jane Dough, and Hank areas are fully licensed and permitted for ISR mining and processing by major licenses and permits issued by the US Nuclear Regulatory Commission (NRC) and the Wyoming Department of Environmental Quality (WDEQ). Portions of the Hank area, totaling 280 acres, are on public lands managed by the BLM. This area is permitted for operation by the BLM and a Finding of No Significant Impact (FONSI) and Decision Record was issued in July 2015. The permitted Project boundary includes the Nichols Ranch and Hank areas, consisting of 3,370 acres, and was amended to include the Jane Dough area, approximately an additional 3,680 acres.
4.4 Encumbrances
To the SLR QP's knowledge there are no environmental liabilities which are not included in current bonds held by the jurisdictional regulatory agencies. Financial assurance instruments are held by the State for drilling, ISR mining, and uranium processing. The bonds are required to insure reclamation and restoration of the affected lands and aquifers in accordance with federal and state regulations and permit requirements. The WDEQ regulations require an annual review of the bonding, and bonds may be adjusted annually to reflect changes in conditions at the mine. The current approved closure cost estimate for the Complex is provided in Table 4-8.
Table 4-8: Current Reclamation Bond Summary
Energy Fuels Inc. - Nichols Ranch Project
Program/Permit |
Amount |
Date Approved/Agency |
WDEQ/LQD1 Permit to Mine and NRC2 Source Materials License |
6,435,000 |
5/29/2019 |
WDEQ/LQD1 Drilling Notification DN336 |
50,000 |
1/8/2018 |
Note:
1. Wyoming Department of Environmental Quality - Land Quality Division
2. US Nuclear Regulatory Commission
4.5 Royalties
4.5.1 Nichols Ranch Mining Unit
4.5.1.1 Nichols Ranch Area
In Section 21, the northern portion of Section 28, eastern portion of Section 20, and northeast quarter of Section 29, unpatented lode mining claims have an overriding royalty interest burden of 6% or 8% depending on the sale price of uranium. In the southern portion of Section 32, 20 of the unpatented lode mining claims have an overriding royalty of 0.25% based on production. In the southern portion of Section 28 where North Jane is located, 14 fee mineral leases have royalties ranging from 2% to 10% depending on the sale price of uranium. In the western half of Section 29 two mineral leases have a royalty of 6% or 8% depending on the sale price of uranium. Surface owners have a set rate for reimbursement of any land taken out of service for mining activities and two of the Surface Owners could receive an extraction fee on production with a burden of 1% or 2% percent depending on the sale price of uranium.
The unpatented lode mining claims will remain the property of EFR provided it adheres to the required filing and annual payment requirements with Campbell County and the BLM. The SUA's will remain in force so long as the mining claims are maintained. Legal surveys of unpatented lode mining claims are not required and are not known to have been completed.
All of the unpatented lode mining claims have annual filing requirements (US$165 per claim) with the BLM, to be paid on or before September 1 of each year.
4.5.1.2 Jane Dough Area
In the south portion of Section 32, twenty of the unpatented lode mining claims have an overriding royalty of 0.25% based on production. In the southern half of Section 28 and northern half of section 32, five fee mineral leases have royalties ranging from 2% to 10% depending on the sale price of uranium. In the west half of Section 29, two mineral leases have a royalty of 6% or 8% depending on the sale price of uranium. Surface owners have a set rate for reimbursement of any land taken out of service for mining activities and two of the Surface Owners could receive an extraction fee on production with a burden of 1% or 2%, depending on the sale price of uranium.
The unpatented lode mining claims will remain the property of EFR provided it adheres to required filing and annual payment requirements with Campbell County and the BLM. The SUAs will remain in force so long as the mining claims are maintained. Legal surveys of unpatented lode mining claims are not required and are not known to have been completed.
All of the unpatented lode mining claims have annual filing requirements with the BLM, to be paid on or before September 1 of each year.
4.5.1.3 Hank Area
All claims were located or acquired by EFR and a portion of the claims were subject to a 6% to 8% royalty which has since been extinguished. Four claims may be subject to a 5% overriding royalty vested in Brown Land Company and its successors. The claims will remain the property of EFR provided they adhere to required filing and annual payment requirements with Campbell County and the BLM. All of the unpatented lode claims have annual filing requirements with the BLM, to be paid on or before September 1 of each year.
The SUA will remain in force so long as the terms of the agreements are met. Legal surveys of unpatented claims are not required and are not known to have been completed.
4.5.2 Satellite Properties
4.5.2.1 North Rolling Pin Area
Lode mining claims in the North Rolling Pin area are not subject to royalties. There are no fee mineral leases.
4.5.2.2 West North Butte Area
The claims were acquired by Uranerz and none of the unpatented lode claims in the West North Butte area are subject to a royalty. There are no fee leases associated with West North Butte. There is one SUA which will remain in force so long as the mining claims are maintained.
4.5.2.3 East North Butte Area
None of the unpatented lode claims in the ENB area are subject to a royalty. There are no fee mineral leases.
4.5.2.4 Willow Creek Area
The claims were acquired by Uranerz and none of the unpatented lode claims in the WC area are subject to a royalty. There are no fee leases associated with Willow Creek.
4.6 Other Significant Factors and Risks
The SLR QP is not aware of any environmental liabilities on the Project. EFR has all required permits to conduct the proposed work on the Project. The SLR QP is not aware of any other significant factors and risks that may affect access, title, or the right or ability to perform the proposed work program on the Project.
From the time of construction to the effective date of this Technical Report the Complex has experienced two minor compliance issues. Both issues pertained to the Permit to Mine issued by WDEQ/LQD and were resolved quickly under normal regulatory procedures.
4.6.1 Mine Closure Plans and Bonds
A reclamation plan is in place for the Complex which includes groundwater restoration, site decontamination and decommissioning, and surface reclamation and decommissioning. A general reclamation schedule and a reclamation cost estimate are provided in the reclamation plan. WDEQ regulations require an annual review of the bonding, and bonds may be adjusted annually to reflect changes in conditions at the mine.
Detailed reclamation plans, including site decommissioning, will be provided to the WDEQ/LQD for approval prior to initiation.
5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY
5.1 Accessibility
5.1.1 Nichols Ranch Uranium Complex
The site is 80 mi northeast of Casper, Wyoming and accessible via two-wheel drive on existing county and/or private gravel and dirt roads by proceeding north approximately 10 mi from Wyoming Highway 387 on the IDT Road and approximately 12 mi northwest of the junction of Wyoming Highway 387 and Wyoming Highway 50.
5.1.2 Satellite Properties
5.1.2.1 North Rolling Pin
The NRP property is accessible via two-wheel drive on existing private gravel and dirt roads, many of which have been improved by coal bed methane (CBM) development. The approximate center of the NRP property is approximately nine miles north of Wyoming Highway 387. Some road development and improvements may be required at a later time to facilitate future development of wellfields or satellite facilities.
5.1.2.2 West North Butte, East North Butte and Willow Creek
WNB, ENB, and WC are accessible via two-wheel drive on existing county and/or private gravel and dirt roads. The approximate center of the Satellite Properties is roughly 8 mi to 11 mi west of Wyoming Highway 50, and the southern edge of the Satellite Properties is approximately 12 mi to 15 mi north of Wyoming Highway 387. Road development and improvements may be required at a later time to facilitate future development of wellfields and processing facilities. The north-northwest half of the WNB area is located in an area of significant topographical relief and would likely require significant excavation to construct roads to potential wellfields or require the use of directional drilling to develop the resource.
5.2 Vegetation
Vegetation and wildlife surveys of the Complex area were completed as part of the environmental baseline studies required for permitting and licensing. Vegetation communities consist primarily of sagebrush shrub-land and mixed grasslands, with limited juniper, greasewood, and wetland communities. The Complex area has the potential to provide habitat for mule deer, elk, pronghorn antelope, jackrabbit, cottontail rabbit, coyote, bobcat, mountain lion, red fox, badger, raccoon, skunk, chipmunk, rodents, songbirds, waterfowl, eagles, hawks, owls, sage grouse, chukar, wild turkey, Hungarian partridge, mourning dove, magpie, and crow. Most species are yearlong residents, however, some species such as elk, eagles, songbirds, and waterfowl are more abundant during migration periods.
5.3 Climate
In the vicinity of the Complex, the climate is semi-arid and receives an annual precipitation of approximately 13 in., the majority of which falls from February to April as snow. Cold, wind, and snow/blizzards may occasionally present challenges for winter exploration and construction work in this area however operations can take place year round. The summer months are typically hot, dry, and clear, except for infrequent high-intensity, short-duration storm events.
5.4 Local Resources
The Complex is located in Johnson and Campbell Counties. These counties are generally rural; according to the 2010 United States Census, there were 8,569 people living in Johnson County and 46,133 people living in Campbell County. Most of the workers at the Complex are from the local area and nearby communities such as Casper, Wyoming, approximately 80 mi southwest of the Complex. Casper is the county seat of Natrona County and, as of the 2010 census, has a population of 55,316. Casper has numerous industrial supply and service companies to support mining operations. EFR maintains an office in Casper to support its Wyoming mining operations.
The SLR QP concludes that EFR either has in place or can obtain the necessary permits and/or agreements, and local resources are sufficient for current and future ISR operations within the Complex.
5.5 Infrastructure
EFR has secured sufficient surface access rights for exploration and development of the Complex. The Nichols Ranch Mining Unit is a fully licensed, operable facility with sufficient sources of power, water, and waste disposal facilities for operations and aquifer restoration.
The basic infrastructure (power, water, and transportation) necessary to support an ISR mining operation has been established at the Nichols Ranch Mining Unit and is located within reasonable proximity of all satellite properties within this Technical Report . Existing infrastructure is associated with local oil, gas, and CBM development.
Non-potable water is and/or will be supplied by wells developed at or near the sites. Water extracted as part of ISR operations will be recycled for reinjection. Typical ISR mining operations also require a disposal well for limited quantities of fluids that cannot be returned to the production aquifers. Two deep disposal wells have been permitted and are operational at the Nichols Ranch Plant
The proximity of the Complex to paved roads will facilitate transportation of equipment, supplies, personnel, and product to and from the properties. Although the population within 50 mi of the subject properties consists mainly of rural ranch residences, personnel required for exploration, construction, and operation are available in the nearby towns of Wright, Midwest, Edgerton, Gillette, Buffalo, and Casper, Wyoming.
Power transmission lines are located on or near parts of the Project. EFR has secured power from the local electrical service provider to accommodate all operational needs.
Tailing storage areas, waste disposal areas, heap leach pad(s) are not part of the required infrastructure for the Complex, as ISR operations do not require these types of facilities. Waste disposal is accomplished via deep well injection. EFR has two such wells permitted and in operation at Nichols Ranch.
5.6 Physiography
The Complex is located within the Wyoming Basin physiographic province in the western portion of the Powder River Basin, within the Pumpkin Buttes Mining District. The Pumpkin Buttes are a series of small buttes rising up to nearly 6,000 feet above sea level (ft ASL) in elevation and approximately 1,000 ft above the surrounding plains. The rock capping the top of the buttes is the Oligocene age White River Formation erosional remnant, which is believed to have overlain the majority of the Powder River Basin. The volcanic tuffs in the White River Formation have been cited as the source of uranium in the basin (Davis, 1969). Historic and current land use in the Pumpkin Buttes Mining District includes livestock grazing, mineral development, and oil and gas development.
5.6.1 Nichols Ranch Mining Unit
The Nichols Ranch Mining Unit is situated in a low-lying plain with elevations ranging from roughly 4,600 ft ASL to 4,900 ft ASL. There are two main ephemeral drainages at the site. Both are tributaries of Cottonwood Creek, which drains to the Cheyenne River.
5.6.2 Satellite Properties
5.6.2.1 North Rolling Pin
The North Rolling Pin area consists of sagebrush and native grasses, covering rolling hills, steep walled gullies, and ephemeral streams. Elevations range from approximately 4,800 ft ASL to 5,180 ft ASL.
5.6.2.2 West North Butte, East North Butte and Willow Creek
The West North Butte and East North Butte areas are located on the west and southeast flanks of the North Pumpkin Butte, respectively. The Willow Creek area is located approximately two miles south of the West North Butte deposit.
These areas consist of sagebrush and native grasses, covering rolling hills, steep walled gullies, and flat-topped North Butte. Elevations range from approximately 4,900 ft ASL to 5,800 ft ASL, and generally slope from northeast to southwest.
6.0 HISTORY
The Complex was originally part of a large exploration area encompassing Townships 33 through 50 North of Ranges 69 through 79 West, on the Sixth Principal Meridian. In 1966, Mountain West Mines Inc. (MWM - now Excalibur Industries) began a drilling exploration program in this area. In 1967, MWM entered into an agreement with Cleveland-Cliffs Iron Company (CCI) for further exploration and option if suitable resources were found. CCI exercised its option in 1976 with plans to begin underground mining operations near North Butte, approximately six and a half miles northeast of Nichols Ranch. As economic conditions changed, and with the development of ISR mining technology, CCI's interest in the area waned. By the late 1980s, it began selling select properties or allowing them to revert back to MWM.
6.1 Prior Ownership
Uranerz acquired six uranium properties in the Powder River Basin from a third party in 2005, including the Complex.
In June 2015, EFR acquired all of the outstanding shares of Uranerz. Under that transaction, EFR acquired the Project, the Hank Project, the Reno Creek Property, the West North Butte Property, the North Rolling Pin Property, and the Arkose Mining Venture (a joint venture of ISR mining properties held 81% by Uranerz and 19% by United Nuclear Corp.), uranium sales contracts, and other assets, as well as the shares of Uranerz, which holds those assets. In May 2018, EFR sold its non-core Reno Creek Property to Uranium Energy Corp. In August 2018, EFR acquired royalties on the Project, along with royalties on several operating, standby, and advanced-stage ISR projects in Wyoming owned and operated by Power Resources, Inc., a wholly owned subsidiary of Cameco Corporation.
6.1.1 Nichols Ranch Mining Unit
The Nichols Ranch Mining Unit includes: (i) the Nichols Ranch Plant; (ii) the Nichols Ranch Wellfield; (iii) the Jane Dough area; and (iv) the Hank area, which includes the permitted but not constructed Hank satellite plant and the Hank deposit. A portion of the Jane Dough area is held through the Arkose Mining Venture, in which the EFR has an 81% interest.
6.1.2 Satellite Properties
6.1.2.1 North Rolling Pin
The North Rolling Pin area is located within a large exploration area encompassing Townships 33 through 50 North of Ranges 69 through 79 West, on the Sixth Principal Meridian. In 1966, MWM (now Excalibur Industries) began a successful drilling exploration program in a portion of the larger area. In 1967, MWM entered into an agreement with CCI for further exploration and option if suitable resources were found. CCI exercised its option in 1976 with plans to begin underground mining operations in the vicinity of North Butte. Changing economic conditions and the development of ISR mining technology reportedly ended much of CCI's interest in the area.
In addition to CCI, other uranium exploration companies during the last forty years have controlled property either within or near the North Rolling Pin Property. These included Kerr McGee, Conoco, Texaco, American Nuclear, Tennessee Valley Authority, Rio Algom Mining Corporation (Rio Algom), and Uranerz. The mining claims and leases originally controlled by most of these companies were let go over the years due to market conditions. These property abandonments continued into 2004.
In February 2007, Uranerz purchased the North Rolling Pin claims group from Robert Shook as part of a larger 138 Federal mining claims acquisition. Uranerz subsequently expanded the properties by staking additional claims in the immediate area.
6.1.2.2 West North Butte, East North Butte and Willow Creek
The West North Butte, East North Butte, and Willow Creek areas were originally part of a large exploration area encompassing Townships 33 through 50 North of Ranges 69 through 79 West, on the 6th principal meridian. In 1966, MWM (now Excalibur Industries) began a successful drilling exploration program in a portion of this area. In 1967, MWM entered into an agreement with CCI for further exploration and option if suitable resources were found. CCI exercised its option in 1976 with plans to begin underground mining operations in the vicinity of North Butte. Changing economic conditions and the development of ISR mining technology reportedly ended much of CCI's interest in the area.
In addition to CCI, other uranium exploration companies during the last forty years have controlled property either within or near the Satellite Properties. These included Kerr McGee, Conoco, Texaco, American Nuclear, Tennessee Valley Authority, and Uranerz U.S.A., Inc. Areva NC, via subsidiary Cogema Resources Inc. (Cogema), and Power Resources Inc. (a subsidiary of Cameco Corporation) have retained portions of their original land positions in the area. The mining claims and leases originally controlled by most of these companies were let go over the years due to market conditions. These property abandonments continued into 2004.
WNB, ENB, and WC cover an area of land located on the west, east and south flank of North Butte in Campbell County, Wyoming. Detailed disclosure pertaining to the chain of title of the properties comprising these areas is not known to the Authors or Uranerz representatives and is beyond the scope of this Technical Report. The following is a brief description of what is known about ownership history of these areas.
The locators of the claims acquired rights to the properties comprising the West North Butte area in 1987. In January 2007, Uranerz completed an acquisition of an undivided one-hundred percent interest in the claims comprising the West North Butte area.
The locators of the claims acquired rights to the properties comprising the East North Butte Area in 1987. In January 2007, Uranerz completed an acquisition of an undivided 100% interest in the claims comprising the East North Butte area.
The locators of the claims acquired rights to the properties comprising the Willow Creek area in the 1960s. In December 2005, Uranerz entered into an option agreement to acquire an undivided one-hundred percent interest in the claims comprising the Willow Creek area. The terms of the option agreement were satisfied in 2007 and the transfer of the claims to Uranerz was completed.
6.2 Exploration and Development History
On October 15, 1951, J. D. Love discovered uranium mineralization in the Pumpkin Buttes districts in the Wasatch Formation on the south side of North Pumpkin Butte in the west-central portion of the Powder River Basin. The mineralization was one of eight areas recommended by the U.S. Geologic Survey (USGS) in April 1950 for investigation in the search for uranium bearing lignites and volcanic tuffs. In response to this recommendation, an airborne radiometric reconnaissance of most of these areas was undertaken by the USGS in October 1950. The uranium mineralization discovered by J. D. Love was near an aerial radiometric anomaly identified from this survey (Love, 1952).
6.2.1 Nichols Ranch Uranium Complex
Exploration drilling was conducted in the Jane Dough area, Section 21 and 28, T43N, R76W, between the late 1960s and late 1970s by CCI. Little interest was generated by the completion of 46 holes from this drilling. Between 1968 and 1980 CCI drilled 150 holes and installed 3 water wells on the Nichols Ranch and Jane Dough areas. Texas Eastern Nuclear Inc. completed limited drilling and exploration on Nichols Ranch in 1985. In the early 1990s, Rio Algom also completed limited drilling in the area. In December 2005, Uranerz purchased the Nichols Ranch, Jane Dough, and Hank claims groups as part of a six-property agreement to option from Excalibur Industries. Uranerz then expanded the properties by staking additional claims in the immediate and surrounding areas.
Uranerz Energy Corporation began exploration drilling began on the Nichols Ranch area on July 11, 2006, and continued to June 6, 2015. A total of 1,098 holes (253 exploration holes, 105 monitor wells, and 740 production wells) were drilled during that time. A total of 51 exploration holes were drilled on the Hank area in 2008.
Uranerz received the Source Material License SUA-1597 in July of 2011. Nichols Ranch ISR operations began on April 15, 2014, after completion of a pre-operational inspection by the NRC Region IV office. There were two planned Production Areas (PA1 and PA2) in the Nichols Ranch area. Five header houses and their respective wellfields were installed and in operation in June 2015, when EFR acquired Uranerz, in Production Area #1. Header house #6 was commissioned in November 2015. In 2016, the EFR completed drilling 12 delineation holes and drilling and casing of 86 extraction wells in Header Houses #7 and #8 in Production Area #1. Header House #7 was turned on in March 2016 and Header House #8 was turned on in June 2016. In Production Area #2, 133 extraction and injection wells were drilled and cased. Header House #9 was completed and turned on in March 2017. No drilling or other development activities have been performed since 2017.
In January 2008, Uranerz entered into a JV on the Arkose Project, resulting in an 81% undivided interest in the mineral rights controlled by the JV. Uranerz commenced exploration on the Arkose Project in 2008. A total of 1,971 exploration holes were drilled on the Arkose Mining Venture from April 2008 to August 2012. A portion of the Arkose Mining Venture holdings were subsequently incorporated into the Jane Dough portion of the Nichols Ranch Mining Unit and remain subject to the 81% ownership, as discussed in Section 4.0 of this Technical Report.
6.2.2 Satellite Properties
6.2.2.1 North Rolling Pin
Mining claims were first staked in the North Rolling Pin area by MWM sometime before 1968. Exploration drilling was conducted in the North Rolling Pin area Sections 11, 14 and 15, T43N, R76W, between 1968 and 1982 by CCI. A total of 476 exploration holes were drilled including 10 core holes. CCI was reported to be investigating the NRP area for open pit mining potential but never carried those plans past the exploration phase. In 2008 and 2009, Uranerz drilled 18 exploration holes in Sections 11 and 14. This drilling was performed to evaluate the potential for mineralization below the zones explored by CCI and for confirmation of the previously identified mineralization in the F Sand.
6.2.2.2 West North Butte, East North Butte and Willow Creek
Between 1968 and 1985, CCI drilled approximately 380 exploratory holes within the West North Butte, East North Butte, and Willow Creek areas. From 1983 to 1985, Texas Eastern Nuclear drilled approximately 12 exploratory holes in these areas. From approximately 1990 to 1992, Rio Algom drilled approximately 5 exploratory holes. In 2006, Uranerz completed an acquisition of these areas, and in 2007 and 2008, drilled approximately 127 exploratory holes.
6.3 Historical Resource Estimates
Mineral resource estimates were reported using the Grade-Tonnage (GT) Contour method for the Nichols Ranch Mining Unit in 2015 (Beahm and Goranson, 2015), and Satellite Properties, North Rolling Pin in 2010 (Graves, 2010), and West North Butte, East North Butte and Willow Creek in 2008 (Graves and Woody, 2008) The primary data used in all the evaluation is equivalent uranium values as quantified by downhole geophysical logging reported as % eU3O8. Radiometric equilibrium was evaluated and a disequilibrium factor (DEF) of 1 was used. The minimum uranium grade included in the estimate was 0.02% eU3O8. Mineral resources were reported at a cut-off of 0.20 GT, which is the cut-off applied at the Nichols Ranch operation during this time.
The SLR QP and EFR do not consider the historical resource estimates completed over West North Butte, East North Butte, and Willow Creek to be current Mineral Resources or Mineral Reserves as defined in S-K 1300 or NI 43-101, nor has EFR or the SLR QP completed sufficient work to confirm these estimates. These estimates (Graves and Woody, 2008) are historical and obsolete and only included here as an indication of mineralization and should not be relied upon (Table 6-1). This resource estimate has been excluded from the current Mineral Resource Estimate.
Resource estimates completed over Nichols Ranch in 2015 (Beahm and Goranson, 2015) and North Rolling Pin in 2010 (Graves, 2010) have been superseded by the Mineral Resource estimates in Section 14.0 of this Technical Report which includes additional new information and analysis.
Resource estimates for the Jane Dough and Hank properties were also completed in 2015 (Beahm and Goranson, 2015). EFR and the SLR QP reviewed these estimates and found them acceptable for reporting Mineral Resources as described in Section 14.0 of this Technical Report.
Table 6-1: Historic Mineral Resource Estimates
Energy Fuels Inc. - Nichols Ranch Project
Project Area |
Classification |
Sand |
Tonnage |
Grade |
Contained |
Attributable Metal |
Reference |
West North Butte, East North Butte, and Willow Creek |
Measured |
A, B/LB, C, and F |
- |
- |
- |
- |
Graves and Woody, 2008 |
Indicated |
A, B/LB, C, and F |
926,292 |
0.153 |
2,837,015 |
2,837,015 |
||
Measured + Indicated |
A, B/LB, C, and F |
926,292 |
0.153 |
2,837,015 |
2,837,015 |
||
Inferred |
A, B/LB, C, and F |
1,116,969 |
0.120 |
2,681,928 |
2,681,928 |
Notes:
1. 100% of West North Butte, East North Butte, and Willow Creek are attributed to Uranerz.
2. Mineral resources are reported at GT cut-off of 0.20.
6.4 Past Production
6.4.1 Nichols Ranch Mining Unit
6.4.1.1 Nichols Ranch Area
The Nichols Ranch area includes a formerly operating ISR plant and wellfields, licensed to operate by the NRC and WDEQ. Construction of the Nichols Ranch Plant began in 2011. Plant construction and initial wellfield installation were competed in 2014 and operations were initiated on April 15, 2014. Production of 302,359 lb of uranium oxide was reported from initiation of production through June 2015, prior to EFR acquisition. The Nichols Ranch area is licensed at an annual capacity of two million pounds uranium oxide.
EFR completed construction of an elution and precipitation circuit at the Nichols Ranch Plant in early February 2016. Yellowcake slurry was then transported from the Nichols Ranch Plant to the Mill for drying and packaging. The Nichols Ranch Plant is currently licensed to allow for the construction and operation of a drying and packaging circuit should conditions warrant.
Operations at Nichols Ranch area ceased in 2019 and it is currently on care and maintenance.
6.4.1.2 Jane Dough and Hank
The Jane Dough and Hank areas are included in the Nichols Ranch permit, however, no production has occurred at either area.
6.4.2 Satellite Properties
In the early 1970s there was limited production on the North Rolling Pin property, however no production has occurred on the remaining Satellite Properties.
6.4.2.1 North Rolling Pin
In the early 1970s CCI and Wyoming Mineral Corporation (WMC) conducted research and development (R&D) activities at an ISR test site located in the North Rolling Pin area, including production of an unknown amount of granular yellowcake. It should be noted that production of granular yellowcake at the North Rolling Pin pilot plant did not exceed 500 lb as dictated by the limitation set forth in the Source Material License granted to CCI by the NRC.
Records indicate that CCI applied for a Source Materials License on December 26, 1973, and approval was granted on May 23, 1974 (SUA-1199). Research and development permitting was not required by the State of Wyoming at the time of the operation. The North Rolling Pin pilot plant was located in the northwest corner of Section 14, T43N, R76W. The plant was portable, mounted on two 45-foot mobile trailers and had a rated capacity of 25 gpm. The wellfield consisted of twelve wells: eight were used for the injection and recovery and four were utilized as monitor wells. The lixiviant used in the tests was a low strength ammonium carbonate/bicarbonate solution with a hydrogen peroxide oxidant. The stripping of the uranium from the resin was affected with a chloride elution and the precipitation process utilized hydrochloric acid and ammonia (In-Situ Consulting, 1979). On June 19, 1974, two 5-spot tests were conducted at the site by WMC. The tests ended November 1, 1974, and WMC concluded that the test work demonstrated that the confinement generated by injecting water into wells outside the system that provides leaching agent to the host is possible.
Poor weather in late fall of 1974 cut short the restoration efforts by WMC. CCI hoped the reclamation work already conducted by WMC would satisfy the restoration liability, but post assaying data confirmed above background concentrations in most of the wells and did not show adequate restoration. CCI contracted In-Situ Consulting for technical assistance and continued with groundwater restoration efforts. CCI began field preparation for their restoration efforts in June 1978, which involved the installation of a piping system to all wells, setting pumps, locating generators, fuel tanks, an evaporation pond and bladder tanks (In-Situ Consulting, 1979). In July 1980, CCI was authorized to begin the comprehensive site restoration scheme and on November 5, 1982, the Source Material License (SUA-1199) was terminated based on successful completion of final site restoration and an NRC closeout inspection.
6.4.2.2 West North Butte, East North Butte and Willow Creek
No past production has occurred on these areas.
7.0 GEOLOGICAL SETTING AND MINERALIZATION
7.1 Regional Geology
The Complex is located in the Powder River Basin, which is a large structural and topographic depression sub-parallel to the trend of the Rocky Mountains. The Basin is bounded on the south by the Hartville Uplift and the Laramie Range, on the east by the Black Hills, and on the west by the Big Horn Mountains and the Casper Arch. The Miles City Arch in southeastern Montana forms the northern boundary of the Basin.
The Powder River Basin is an asymmetrical syncline with its axis closely paralleling the western basin margin. During sedimentary deposition, the structural axis (the line of greatest material accumulation) shifted westward resulting in the Basin's asymmetrical shape (Figure 7-1). On the eastern flank of the Powder River Basin, sedimentary rock strata dip gently to the west at approximately 0.5° to 3.0°. On the western flank, the strata dip more steeply, 0.5° to 15° to the east with the dip increasing as distance increases westward from the axis. The general surficial geology of this portion of the Powder River Basin is shown on Figure 7-2.
Figure 7-1: Cross Section of Local Geology
The Powder River Basin hosts a sedimentary rock sequence that has a maximum approximate thickness of 15,000 ft along the synclinal axis. The sediments range in age from Recent (Holocene) to early Paleozoic (Cambrian - 500 million to 600 million years ago) and overlie a basement complex of Precambrian-age (more than a billion years old) igneous and metamorphic rocks. Geologically, the Powder River Basin is a closed depression in what was, for a long geologic time period, a large basin extending from the Arctic to the Gulf of Mexico. During the Paleozoic and Mesozoic eras, the configuration of this expansive basin changed as the result of uplift on its margins. By the late Tertiary Paleocene time, marked uplift of inland masses surrounding the Powder River Basin resulted in accelerated subsidence in the southern portion of the basin with thick sequences of arkosic (containing feldspar) sediments being deposited. Arkosic sediments were derived from the granitic cores of the Laramie and Granite Mountains exposed to weathering and erosion by the Laramide uplift. Near the end of Eocene time, northward tilting and deep weathering with minor erosion took place in the basin. Subsidence resumed in the late Oligocene and continued through the Miocene and into the Pliocene. A great thickness of tuffaceous sediments was deposited in the basin during at least a part of this period of subsidence. By the late Pliocene, regional uplift was taking place, leading to a general rise in elevation of several thousand feet. The massive erosional pattern that characterizes much of the Powder River Basin began with the Pliocene uplift and continues to the present.
The White River Formation is the youngest Tertiary unit that still exists in the Powder River Basin. Locally, its only known remnants are found on top of the Pumpkin Buttes. Elsewhere the unit consists of thick sequences of buff-colored tuffaceous sediments interspersed with lenses of fine sand and siltstone. A basal conglomerate forms the resistant cap rock on top of the buttes. This formation is not known to contain significant uranium mineralization in this area.
The Wasatch Formation is the next underlying unit and consists of interbedded mudstones, carbonaceous shales, silty sandstones, and relatively clean sandstones. Near the Pumpkin Buttes, the Wasatch Formation is known to be 1,575 ft thick (Sharp and Gibbons, 1964). The interbedded mudstones, siltstones, and relatively clean sandstones in the Wasatch vary in degree of lithification from uncemented to moderately well-cemented sandstones, and from weakly compacted and cemented mudstones to fissile shales. The Wasatch Formation hosts significant uranium mineralization.
The next underlying unit is the Fort Union Formation. In the Powder River Basin this unit is lithologically similar to the Wasatch Formation. The Fort Union includes interbedded silty claystones, sandy siltstones, relatively clean sandstones, claystones, and coal. The degree of lithification is quite variable, ranging from virtually uncemented sands to moderately well-cemented siltstones and sandstones. The total thickness of the Fort Union in this area is approximately 3,000 ft. The Fort Union hosts significant uranium mineralization at various locations in the basin.
Figure 7-2: Regional Geologic Map
7.2 Local Geology
Uranium mineralization at the Complex deposits is hosted by the Eocene Wasatch Formation. The Wasatch Formation was deposited in a multi-channel fluvial and flood plain environment. The climate at the time of deposition was wet tropical to subtropical with medium stream and river sediment load depositing most medium grained materials. The source of the sediments, as evidenced by abundant feldspar grains in the sandstones, was the nearby Laramie and Granite Mountains.
Within the Complex, there is a repetitive transgressive/regressive sequence of sandstones separated by fine-grained horizons composed of siltstone, mudstone, carbonaceous shale, and poorly developed thin coal seams. The fine-grained materials were deposited in flood plain, shallow lake (lacustrine), and swamp environments. Ultimately, deposition of the Wasatch Formation was a function of stream bed load entering the basin and subsidence from within the basin. However, in the central part of the Powder River Basin, long periods of balanced stability occurred. During these periods the stream gradients were relatively low and allowed for development of broad (0.5 mi to 6.0 mi wide) meander belt systems, associated over-bank deposits, and finer grained materials in flood plains, swamps, and shallow bodies of water. Evidence for depositional stability exists as several coal bed markers with little or no channel scouring are in contact with the major sand horizons (Davis, 1969). The base of the A Sand at Nichols Ranch and Jane Dough is underlain by basal lignite and carbonaceous shales.
7.2.1 Depositional Environment
In a fluvial meandering stream process, the flow channel is sinuous in plan view with the highest flow energy concentrated on the outside edge of the channel as it turns through a meander. This results in cutting into the outside channel wall and caving material into the channel especially during flooding. In cross section view, the outside edge of a meander is the steepest and the inside of the meander is sloped more gently. The inside edge of a meander is where deposition takes place. Finer materials are deposited in the shallower (upper) slow flow region of the inside slope and coarser materials are deposited in the lower region. The major fraction of sand in the Wasatch Formation in the Pumpkin Buttes Mining District is medium grained with lesser fractions of coarse and fine grains (Figure 7-3). This is accompanied with mostly medium scale festoon cross bedding and current lamented cross bedding. These features can only be seen in cores.
The meandering stream environment is a process of cut and fill. Each time a cut occurs, the inside slope fills with sand and sediment. A single increment of this process results in a structure called a point bar. In a typical point bar sedimentation process, grain size and sediment structure are fining upwards in the upstream portion of the single point bar accumulation (Visher, 1972). An accumulation of point bars is sometimes referred to as a meander belt. As the meander process progresses, meander loops eventually migrate down gradient in the direction of flow and can laterally spread out in almost any direction. The size of the complete meander belt system is a function of the size of the valley or basin and stream flow rate, load, and gradient. If the subsidence rate and stream load are in the proper proportion, successive layers of meander belts, or meander belt systems, may form as the stream channel wanders back and forth during subsidence.
Meander belts in the Wasatch Formation are generally 5 ft to 30 ft thick. The A Sand at Nichols Ranch area is made up of three to four stacked meander belts and the F Sand at Hank area has two to three stacked meander belts. Individual meander belt layers will rarely terminate at the same location twice. Meanders have been noted to frequently terminate in the interior of a belt system but are more likely to terminate somewhere closer to the edge of the meander stream valley. The net effect for fluvial sands is to generally thin away from the main axis of the meander belt system. The A Sand meander belt system at Nichols Ranch area is approximately four miles wide. At Hank, the F Sand meander belt system is smaller than Nichols Ranch at approximately one and one-half miles wide.
Figure 7-3: Schematic Fluvial Point Bar System
7.3 Property Geology
7.3.1 Nichols Ranch Mining Unit
7.3.1.1 Nichols Ranch and Jane Dough
At Nichols Ranch and Jane Dough, the Eocene Wasatch Formation is exposed at the surface with limited areas of quaternary alluvial and colluvial deposits. Eight fluvial sandstone horizons or units have been identified at Nichols Ranch and Jane Dough. Beginning with the deepest unit, they are the 1, A, B, C, F, G and H Sand units shown on the regional stratigraphic column (Figure 7-4). Separating the sand units are horizons composed of siltstones, mudstones, carbonaceous shales, and poorly developed thin coals. The primary mineralized sandstone unit (A Sand) is in the lower part of the Wasatch Formation, at an approximate average depth from surface of 550 ft. At Nichols Ranch, additional mineralization occurs in the F sand of the Wasatch Formation at a depth of approximately 220 ft. The host sands are primarily arkosic in composition, friable, fine- to coarse-grained, and contain trace amounts of carbonaceous material and organic debris.
For the Mineral Resource estimate and ISR wellfield planning, development, and operations at Nichols Ranch, the A Sand has been divided into 10 sub-units with variable extents both laterally and vertically (Figure 7-5). On an electric log resistivity curve, the grading is apparent where the curve sharply deflects from low to higher resistance and then gradually returns to lower resistance in an upward direction. Other meander belt system sand features such as overbank and crevasse deposits are present as fingers of sand that taper out from a meander termination. These are thin sands without a lot of grain size sorting. Inter-meander channel sands occur between meanders that are migrating in different directions. These sands have more uniform grain size and show on the electric log as a semi-flat curve with only small variations. Tributary and meander cut-off channel sand features form where pre-existing sediments are scoured by a river or stream and subsequently fill with medium and coarse sediments. These channels may cut randomly into meander belts, flood plain or swamp sediments. On the electric resistivity log, channel fills have a massive semi-rounded signature
7.3.1.2 Hank
Hank is approximately six miles east-northeast of Nichols Ranch. Eocene Wasatch Formation is exposed at the surface with limited areas of quaternary alluvial and colluvial deposits. The mineralized sand horizon (F Sand) is in the lower part of the Wasatch Formation at an approximate average depth of 365 ft. The host sands are primarily arkosic in composition, friable, fine- to very coarse-grained, and contain trace amounts of carbonaceous material and organic debris.
Figure 7-4: Regional Stratigraphic Column
Figure 7-5: Nichols Ranch Radiometric Log Cross Section Log
7.3.2 Satellite Properties
7.3.2.1 North Rolling Pin
At the North Rolling Pin area, the mineralized sand horizon (F Sand) occurs within the Wasatch Formation at an approximate depth from surface ranging from 51 ft to 403 ft and averaging 282 ft to the top of the mineralization (Figure 7-6 and Figure 7-7). Generally, the depth of mineralization decreases from the northeast to the southwest due mainly to topography along which the surface elevation decreases from approximately 5,180 ft to approximately 4,800 ft. The F Sand ranges in thickness from approximately 30 ft to 60 ft, and generally increases in thickness in the southwest portion of Section 11 and thins toward the northeast and southwest in the area. The F Sand primarily consists of two stacked sand sets, termed the Upper and Lower F Sands that each average 20 ft to 25 ft thick. The nature of these sand sets, as described above, is a major control on the mineralization occurring at North Rolling Pin.
The host sand is primarily arkosic in composition, friable, and contains trace carbonaceous material and organic debris. There are local sandy mudstone/siltstone intervals with the sandstone, and the sand may thicken or pinch-out in some locations. The North Rolling Pin area lies east of the synclinal axis of the Powder River Basin, and the host Wasatch Formation dips approximately one degree to two degrees to the west.
Mineralization was also noted in 27 drillholes that occur in the shallower G Sand of the Wasatch Formation, however, there is limited exploration data in the G Sand. Based on the available data, mineralization in the G Sand is inconsistent and is not included in this Mineral Resource estimate.
Figure 7-6: North Rolling Pin Radiometric Log Cross Section A-A' Log
Figure 7-7: North Rolling Pin Radiometric Log Cross Section B-B' Log
7.3.2.2 West North Butte, East North Butte and Willow Creek
The mineralized sand horizons occur within the lower part of the Wasatch Formation, at an approximate depth from surface ranging from 482 ft to 1,012 ft at West North Butte, 540 ft to 660 ft at East North Butte, and 172 ft to 567 ft at Willow Creek. The host sands are primarily arkosic in composition, friable, and contain trace carbonaceous material and organic debris. There are local sandy mudstone/siltstone intervals with the sandstones, and the sands may thicken or pinch-out in some locations. In the WNB and WC area, the dip of the host formation is approximately at one degree to two degrees as the claims are on the east side of the synclinal axis (Berglund, 2006, 2007).
The stratigraphy of the Wasatch consists of alternating layers of sand and shale with lignite marker beds. At the Satellite Properties, there are four primary Wasatch Formation sand members (F, C, B, and A Sands). The F Sand unit is the shallowest, and the A Sand member is the deepest.
Mineral resources are located in the Eocene age Wasatch Formation in what is identified as the A, B, C and F host sand units of the WNB area, the A and B host sands of the ENB area and in the A and F host sand units of the WC area.
7.3.2.2.1 West North Butte
Roll fronts were identified in the F, C, B, Lower B, and A sands in the WNB area (Berglund, 2007). Data from mineralization identified in the F, C, B, Lower B, and A sands were used to develop the resource estimate presented herein. The Lower B sand resource estimate was combined with the B sand for this estimate. The average depth to the mineralization for the F, C, B, lower B, and A sands are approximately 482 ft, 898 ft, 985 ft, 741 ft, and 1,012 ft, respectively. Mineralized thickness ranges from 1 ft to 29 ft, with average grades greater than 0.03% eU3O8 and GT>0.2 for the area. Figure 7-8 provides a cross section that illustrates the relative position of the host sand in the WNB area.
7.3.2.2.2 East North Butte
Two roll fronts were identified in the ENB area: the B and A sands (Brown, 2005). Data from mineralization identified in the B and A sands were used to develop the Mineral Resource estimate presented in this Technical Report. The average depth to mineralization for the B and A sands are approximately 540 ft and 660 ft, respectively. Mineralized thickness ranges from one foot to three feet, with an average mineralization thickness greater than 0.03% eU3O8 and GT>0.2 of 5.7 ft (per log intercept) for the area. Figure 7-9 provides a cross section that illustrates the relative position of the host sand in the ENB area.
7.3.2.2.3 Willow Creek
Four roll fronts were identified in this WC area (Berglund, 2006): the F sand, the B sand, the Upper A sand, and the Lower A sand. The roll fronts were interpreted using gamma characteristics, the sand boundaries determined from the resistivity logs, and the alteration noted on the lithology logs. Mineralization identified in the F and Lower A sands (referred to as the A sand herein) were used in developing the Mineral Resource estimate presented in this Technical Summary. The average mineralization depths to the F and A sands are approximately 172 ft and 567 ft, respectively. Mineralized thickness ranges from 1 ft to 21.5 ft, with an average mineralization thickness greater than 0.03% eU3O8 and GT>0.2 of 9.3 ft (per log intercept) for the area. Figure 7-10 provides a cross section that illustrates the relative position of the host sands in the WC area.
Figure 7-8: West North Butte Radiometric Log Cross Section Log A-A'
Figure 7-9: East North Butte Radiometric Log Cross Section Log B-B'
Figure 7-10: Willow Creek Radiometric Log Cross Section Log C-C'
7.4 Mineralization
The uranium mineralization is composed of amorphous uranium oxide, sooty pitchblende, and coffinite, and is deposited in void spaces between detrital sand grains and within minor authigenic clays. The host sandstone is composed of quartz, feldspar, accessory biotite and muscovite mica, and locally occurring carbon fragments. Grain size ranges from very fine to very coarse sand but is medium-grained overall. The sandstones are weakly to moderately cemented and friable. Pyrite and calcite are associated with the sands in the reduced facies. Hematite or limonite stain from pyrite are common oxidation products in the oxidized facies. Montmorillonite and kaolinite clays from oxidized feldspars are also present in the oxidized facies (Uranerz, 2010a). The uranium being extracted is hosted in a sandstone, roll front deposit at a depth ranging from 400 ft to 800 ft.
There are two theories (Uranerz, 2014) as to the origin of uranium in the Powder River Basin and Pumpkin Buttes Mining District. The first theory places the source of uranium from the weathering of the mountain cores which have also been cited as the source for the arkosic host sandstones. The basement rocks of the Granite Mountains, for example, have been determined to have high concentrations of uranium (20 ppm to 30 ppm). It has also been estimated that the granites have lost 70% of their original uranium content. Emplacement of the uranium under this theory would have taken place beginning 40 million to 45 million years ago, shortly after the host sands were deposited in the basins. The second theory places the source of uranium as overlaying Oligocene and Miocene rhyolite volcanic tuffs with uranium leaching into the groundwater system as the volcanic tuffs weathered. The rhyolite volcanic tuffs were the result of volcanic activity to the west. Emplacement of the uranium has been cited as 20 million to 32 million years ago. Since both theories are plausible, some geologists subscribe to a dual theory where each possible source contributed some percentage to the overall uranium occurrence.
Regardless of the source of the uranium, both theories would require a climate with active chemical weathering to breakdown the rock matrix and put the uranium into groundwater solution. One suggested environment for this to occur is the modern-day savanna climate. Savanna climates are characterized by very wet, humid annual periods followed by hot and dry periods. This type of climate produces rapid chemical weathering and high oxidation potentials, which would have been needed to solubilize the uranium and keep it in solution until the groundwater system encountered a reducing, oxygen deficient environment such as the carbon trash rich sands in the Powder River Basin. When the uranium charged groundwater flowed into the reduced sandstone environment, the oxidized uranium precipitated out of solution along the interface between the two chemical environments. The uranium was deposited in 'C' shaped rolls, which are five feet to 30 ft thick, and in plan view may be a few feet to 500 ft wide and tens of miles in length. Along the length of the trace of the chemical roll, ore grade uranium may be found, however, ore is not likely along every mile of the front. During the time that uranium was emplaced, as is true today, the groundwater in the Powder River Basin generally flowed to the north and northwest. As the original uranium-charged groundwater flowed in the host sands, the chemical reductant was consumed and the roll fronts migrated down the hydrologic gradient, leaving in their wake a characteristic yellow to red to brown stain on the sandstone grains. As many as 11 separate roll front systems (Figure 7-11) have been identified in different horizons of the Wasatch Formation in the Powder River Basin area.
Figure 7-11: Cross Section Stacked Roll Fronts
8.0 DEPOSIT TYPES
Wyoming uranium deposits are typically sandstone roll front uranium deposits as defined in the "World Distribution of Uranium Deposits (UDEPO) with Uranium Deposit Classification", (IAEA, 2009). The key components in the formation of roll front type mineralization include:
As depicted on Figure 8-1 and Figure 8-2, roll fronts are formed along an interface between oxidizing groundwater solutions which encounter reducing conditions within the host sandstone unit. This boundary between oxidizing and reducing conditions is often referred to as the REDOX interface or front.
Sandstone uranium deposits are typically of digenetic and/or epigenetic origin formed by low temperature oxygenated groundwater leaching uranium from the source rocks and transporting the uranium in low concentrations down gradient within the host formation where it is deposited along a REDOX interface. Parameters controlling the deposition and consequent thickness and grade of mineralization include the host rock lithology and permeability, available reducing agents, groundwater geochemistry, and time in that the groundwater/geochemical system responsible for leaching; transportation and re-deposition of uranium must be stable long enough to concentrate the uranium to potentially economic grades and thicknesses. Roll front mineralization is common to Wyoming uranium districts including the Powder River Basin, Gas Hills, Shirley Basin, Great Divide Basin, and others, as well as districts in South Texas and portions of the Grants, New Mexico District.
Figure 8-1: Typical Roll Front Cross Section
Figure 8-2: Typical Roll Front (REDOX) Boundary
9.0 EXPLORATION
On October 15, 1951, J.D.Love discovered uranium mineralization in the Pumpkin Buttes Mining District in the Wasatch Formation on the south side of North Pumpkin Butte in the west central portion of the Powder River Basin. The mineralization was one of eight areas recommended in April 1950 for investigation in the search for uranium bearing lignites and volcanic tuffs. In response to this recommendation, an airborne radiometric reconnaissance of most of these areas was undertaken by the USGS in October 1950. The uranium mineralization discovered by J. D. Love was in the vicinity of an aerial radiometric anomaly identified from this survey (Love, 1952).
Early mining focused on shallow oxidized areas using small open pit mines. Primary exploration methods included geologic mapping and ground radiometric surveys. Modern exploration and mining in the district have focused on deeper reduced mineralization.
Rotary drilling on the Complex is the principal method of exploration and delineation of uranium mineralization. Drilling can generally be conducted year-round on the Project. Since acquiring the properties in 2015, EFR has conducted no additional exploration other than in-fill/delineation rotary drilling on the properties including wellfield installation at Nichols Ranch.
Hydrogeological and geotechnical information pertaining to the Project is described in Section 16.4 and Section 16.5 of this Technical Report.
10.0 DRILLING
As of the effective date of this Technical Report, EFR and its predecessor companies have completed a total of 3,942 drillholes (Table 10-1) across the Complex over the course of several drilling programs that began in 1960. Of the 3,942 drillholes recorded, EFR's drilling database contains 3,504 drillholes totaling 2,363,890 ft drilled of which 449 totaling 281,126 ft have been completed by EFR since acquiring the Project in 2015 (Figure 10-1 and Figure 10-2). The drill record includes both Rotary and Diamond Drill (DD) drilling, monitor wells, and injection and production wells. No drilling has occurred across the properties since December 5, 2016.
Drillhole collar locations are recorded on the original drill logs and radiometric logs created at the time of drilling, including easting and northing coordinates in local grid or modified NAD 1927 UTM Zone 13 and elevation of collar in feet above sea level. Due to the horizontally stratified nature of mineralization, downhole deviation surveys are not typically conducted as all drillholes are vertical.
Table 10-1: Historical Drillhole Summary
Energy Fuels Inc. - Nichols Ranch Project
Property |
Historic Drillholes |
EFR Drillholes |
Total |
Nichols Ranch Mining Unit |
|||
Nichols Ranch |
1,328 |
449 |
1,777 |
Jane Dough |
786 |
0 |
786 |
Hank |
309 |
0 |
309 |
Satellite Properties |
|||
North Rolling Pin |
494 |
0 |
494 |
West North Butte, East North Butte and Willow Creek |
576 |
0 |
576 |
Total |
3,493 |
449 |
3,942 |
In the opinion of the SLR QP, the drilling, logging, sampling, and conversion and recovery factors at the Project meet or exceed industry standards and are adequate for use in the estimation of Mineral Resources.
Figure 10-1: Historical Drillhole Location Map
Figure 10-2: EFR Drillhole Location Map
10.1 Nichols Ranch Mining Unit
10.1.1 Historic Drilling 1960 to 2015
Drilling records indicated that between 1960 and 1985, CCI drilled approximately 143 exploratory holes within the Nichols Ranch Mining Unit area. Between 2005 and 2015, Uranerz completed approximately 1,185 exploratory holes which includes 11 DD holes. In total, EFR predecessors drilled 1,328 holes across the Nichols Ranch, Jane Dough and Hank areas.
10.1.2 EFR Drilling 2015 to 2016
EFR has conducted its own exploration of the properties with delineation drilling on the Nichols Ranch area. The drillhole data demonstrates that mineralization is present and is of sufficient quality and density to support mineral resource estimation. Drillhole data is dominantly based on interpretation of downhole geophysical logs typically consisting of natural gamma, resistivity, and SP (Spontaneous Potential). Resistivity and SP were utilized for defining lithology and correlating the logs. Geophysical logging was historically completed by commercial geophysical logging companies. Recent and current geophysical logging is being completed by EFR personnel using modern logging units owned by EFR.
Data in the possession of EFR includes nearly 100% of the total original geophysical and lithologic logs both historic and recent.
10.2 Satellite Properties
Available historical data were developed by previous owners of the Satellite Properties during several drilling programs conducted sporadically between 1968 to 2015. EFR is in possession of most of the historical geophysical and lithologic logs and drillhole location maps but has not conducted its own exploration of the Satellite Properties. Drilling data, comprised primarily of downhole geophysical logs (natural gamma, resistivity, and spontaneous potential), indicate that mineralization is present within the Satellite Properties and define its three-dimensional location. In addition, the historic information includes density and chemistry data from six core holes.
10.2.1 North Rolling Pin
Between 1968 to 2008, CCI and Uranerz completed 494 drillholes across the North Rolling Pin area. The geophysical and lithologic log data from 386 of the 494 drillholes were used in the evaluation of the North Rolling Pin area. It was noted that data from 108 CCI drillholes were missing, and it was concluded (Graves, 2010) that most of these drillholes were left out of the sequence and were not drilled.
The exploration drillholes were spaced approximately 25 ft to 50 ft apart in rows orientated perpendicular to the mineralization trend or in clusters of close spaced drilling. Additional fences were then drilled approximately every 400 to 600 feet along the length of the trend.
Of the data from 386 drillholes, 198 of the holes had mineralization with a GT of 0.2 or greater and were used for the mineral resource estimate completed in 2008 (Graves, 2010).
10.2.2 West North Butte, East North Butte and Willow Creek
Between 1968 and 1985, CCI drilled approximately 256 exploratory holes in West North Butte, 45 in East North Butte, and 131 in Willow Creek). From 1983 to 1985, Texas Eastern Nuclear drilled approximately 12 exploratory holes in the Willow Creek area. From approximately 1990 to 1992, Rio Algom drilled approximately five exploratory holes at Willow Creek. In 2006, Uranerz completed an acquisition of the WNB, ENB, and WC areas, and between 2007 to 2009, drilled 127 exploratory holes (29 in WNB, 82 in ENB, and 16 in WC). Of the 576 drillholes completed, 52 holes (45 in ENB, 7- in WC) were missing geophysical logs and were excluded from the mineral resource estimate completed in 2010 (Graves and Woody, 2010).
The holes were typically spaced approximately 25 feet apart perpendicular to the trend and approximately 400 feet apart parallel to the trend.
10.3 Procedures
10.3.1 Collar Coordinates and Surveying
Drillhole collar locations are recorded on the original drill logs created at the time of drilling, including easting and northing coordinates in local grid (Wyoming State Plane, NAD 27 datum) and elevation of collar in feet above sea level National Geodetic Datum of 1929 (NGVD29).
EFR is using an Astech GPS system for surveying drillhole and well locations. This instrument can measure horizontal coordinates within 0.25 m (0.8 ft). EFR uses on-site control points for static post-processing corrections of the GPS data which slightly increases the accuracy. The SLR QP is of the opinion that, for the deposit type, all survey methods used for the collar locations would be expected to provide adequate accuracy for the drillhole locations.
All drilling is vertical. The dip of the formation is relatively flat, two degrees to three degrees to the northeast. EFR drilling contracts include cost penalties for downhole deviation in excess of 1%. If the downhole deviation exceeds 2%, EFR can require the hole be re-drilled at the contractor's expense. Downhole deviation is measured as part of the geophysical logging and is available for all recent drilling. Given the flat formational dip and restrictions placed on downhole deviation, the variance in thickness measured by geophysical logging and true thickness (less than 1%) will not appreciably affect mineral resource estimation.
10.3.2 Drill Logging
EFR has established standard procedures for drillhole, lithologic, and geophysical logging of rotary drill and diamond drillholes.
10.3.2.1 Rotary Drilling (Rotary)
Drill cuttings are caught every five feet from surface to total depth.
These drill cuttings are described by the field geologist using the standard lithologic log developed in-house by EFR.
Adjusting cutting depths to match the geophysical logs noting sample lag.
The downhole log (including natural gamma and SP) is then scanned into the data system for future evaluation and record keeping.
10.3.2.2 Diamond Drilling (DD)
Locating core holes such that they are representative of the deposit.
Sealing core samples in protective plastics sleeves prior to placing the core into boxes.
Completion of geophysical logging of the drillhole for natural gamma, resistivity, and SP.
Minimizing the time between collection of the core and chemical analysis.
Adjusting the core depths to match the geophysical logs noting sample lag and recovery.
Completing a detailed lithological log of all drillholes using a standardized lithological log format.
11.0 SAMPLE PREPARATION, ANALYSES, AND SECURITY
11.1 Sample Preparation and Analysis
11.1.1 Gamma Logging
The primary assay data used in calculating Mineral Resource estimates for the Complex are downhole geophysical logs. Additional data include limited core assays and Prompt Fission Neutron (PFN) geophysical logging.
Exploration drilling for uranium is unique in that core does not need to be recovered from a hole to determine the metal content. Due to the radioactive nature of uranium, probes that measure the decay products or "daughters" can be measured with a downhole gamma probe; this process is referred to as gamma logging. While gamma probes do not measure the direct uranium content, the data collected (in counts per second (CPS) can be used along with probe calibration data to determine an equivalent U3O8 grade in percent (% eU3O8). These grades are very reliable as long as there is not a disequilibrium problem in the area. Disequilibrium will be discussed below. Gamma logging is common in non-uranium drilling and is typically used to discern rock types.
The original downhole gamma logging of surface holes was done on the Bullfrog property by Century Geophysical Corp. (Century) and Professional Logging Services, Inc. (PLS) under contract to Exxon. Atlas also contracted Century for this service. Standard logging suites included radiometric gamma, resistivity, and self-potential measurements, supplemented by neutron-neutron surveys for dry holes. Deviation surveys were conducted for most of the holes. Century used its Compulog system consisting of truck-mounted radiometric logging equipment, including a digital computer. The natural gamma (counts per second, or cps), self potential (millivolts), and resistance (ohms) were recorded at 1/10th foot increments on magnetic tape and then processed by computer to graphically reproducible form. The data were transferred from the tape to computer for use in resource estimation.
Procedures followed by Exxon, Atlas, and Plateau, together with their contractors Century and PLS, were well documented and at the time followed best practices and standards of companies participating in uranium exploration and development. Onsite collection of the downhole gamma data and onsite data conversion limit the possibility of sample contamination or tampering.
11.1.1.1 Calibration
For the gamma probes to report accurate %eU3O8 values the gamma probes must be calibrated regularly. The probes are calibrated by running the probes in test pits maintained historically by the AEC and currently by the DOE. There are test pits in Grand Junction, Colorado, Grants, New Mexico, and Casper, Wyoming. The test pits have known %U3O8 values, which are measured by the probes. A dead time (DT) and K-factor can be calculated based on running the probes in the test pits. These values are necessary to convert CPS to %eU3O8. The dead time accounts for the size of the hole and the decay that occurs in the space between the probe and the wall rock. DT is measured in microseconds (μsec). The K-factor is simply a calibration coefficient used to convert the DT-corrected CPS to %eU3O8.
Quarterly or semi-annual calibration is usually sufficient. Calibration should be done more frequently if variations in data are observed or the probe is damaged.
11.1.1.2 Method
Following the completion of a rotary hole, a geophysical logging truck will be positioned over the open hole and a probe will be lowered to the hole's total depth. Typically, these probes take multiple different readings. In uranium deposits, the holes are usually logged for gamma, resistivity, standard potential, and hole deviation. Only gamma is used in the grade calculation. Once the probe is at the bottom of the hole, the probe begins recording as the probe is raised. The quality of the data is impacted by the speed the probe is removed from the hole. Experience shows a speed of 20 feet per minute is adequate to obtain data for resource modeling. Data is recorded in CPS, which is a measurement of uranium decay of uranium daughter products, specifically Bismuth-24. That data is then processed using the calibration factors to calculate a eU3O8 grade. Historically, eU3O8 grades were calculated using the AEC half amplitude method, which gives a grade over a thickness. Currently, the eU3O8 grades tend to be calculated on 0.5-foot intervals by software. Depending on the manufacturer of the probe truck and instrumentation, different methods are used to calculate the eU3O8 grade, but all, including the AEC method, are based on the two equations given below.
The first equation converts CPS to CPS corrected for the dead time (DT) determined as part of the calibration process
The second equation converts the Dead Time Corrected CPS (N) to %eU3O8 utilizing the K-factor (K)
Depending on the drilling and logging environment, additional multipliers can be added to correct for various environmental factors. Typically, these include a water factor for drill hole mud, a pipe factor if the logging is done in the drill steel, and a disequilibrium factor if the deposit is known to be in disequilibrium. Tables for water and pipe factors are readily available.
For all recent drilling Century's Compulog™ software is utilized to convert natural gamma measurement to equivalent % U3O8 grade (% eU3O8). The output data is provided both electronically and in hard copy by 0.5 ft intervals. This grade data is then summed for thickness and GT for the appropriate mineralized intervals. This procedure is the current industry standard method. Hard copies of all original drillhole data are maintained either at the Nichols Ranch facility or the Casper, Wyoming office. Both facilities are secure.
11.1.2 Prompt Fission Neutron Logging
Natural gamma is the traditional tool used to measure eU3O8 grade and evaluate resources but in some sandstone-hosted deposits, uranium is not in equilibrium with its daughters as they are too young, and uranium is still actively mobile. Typical gamma logging tools measure radioactive decay products which develop in the uranium decay chain rather than the uranium-238 (238U) of interest. After a long period of geologic time the decay products measured by gamma logging tools will be directly proportional to the uranium in the ore zone provided that geologic processes have not caused the uranium to be separated from the gamma emitters being measured, such as 214Bi, 226Ra, 222Rn and others (Campbell et al., 2008). The uranium and decay products naturally separate down gradient, with a higher percent of the latter remaining behind in the tails of the roll front and the uranium (in higher percent than the decay products) moving ahead in the nose of the ore body, albeit slower than the groundwater flow rate (Figure 11-1). The gamma log does not indicate the correct grade (actual chemical content) neither up gradient nor down gradient of the ore zone. The grade calculation made from the gamma log can be either higher or lower than what is actually present in these areas (Figure 11-2).
Due to biogeochemical processes, uranium may have moved into an area of low gamma, thus increasing the grade, or out of an area of high gamma, thus decreasing the grade. When this occurs over a wide area, the ore body, or a part thereof, is said to be in disequilibrium. In order to determine actual uranium grades, a representative number of core samples will need to be obtained for laboratory analysis and compared to the eU3O8 results for each core hole. This will determine the amount of disequilibrium in the ore zone of the deposit.
Figure 11-1: Uranium Roll Front Natural Gamma Log Configuration and Associated Geochemistry
Source: After Penney, 2011
Figure 11-2: PFN versus Natural Gamma Trace Response
Prompt Fission Neutron (PFN) was invented by Sandia Laboratories & Mobil R&D in Texas during the 1970s to directly measure in situ ore grade uranium.
The PFN logging tool overcomes the problem of disequilibrium by measuring the uranium-235 (235U) in the formation. In the PFN tool, a pulsed neutron source electronically generates 108 14-MeV neutrons per second which ultimately cause fission of 235U in the formation. The thermal and epithermal neutrons returning to the tool from the formation are counted in separate detector channels to provide a measure of 235U free from variations in neutron output and borehole factors common with natural gamma measurements.
In this way PFN is essentially equivalent to other common uranium assay methods such as X-ray diffraction (XRF) completed in a laboratory or field environment and is thus considered to provide direct assay results. The tool has no electric logs (resistivity and self-potential) and so must be run after these logs have been run. The lowest practical grade measurement is approximately 0.02% eU3O8. Like the standard gamma tool, the PFN tool must be calibrated by taking measurements in test pits of known grade and porosity.
11.1.3 Core Sampling
There are two main purposes of collecting DD core:
1. Radiometric equilibrium (Section 0) - the condition in which a radioactive species and its successive radioactive products have attained such relative proportions that they all disintegrate at the same numerical rate and therefore maintain their proportions constant.
2. In situ leach amenability studies - intended to demonstrate that the uranium mineralization is capable of being leached using conventional ISR chemistry.
DD core is pulled from the hole by the drilling contractor and laid out in a core box. Core sampling is the primary responsibility of the EFR field geologist. The general process for core sampling is as follows:
The boxes are to be properly labeled with Hole number and interval contained within the box.
Measure the core down to the 1/10th of a foot.
Describe and record the lithology in terms of lithology and oxidation/reduction indications.
A scintillometer reading is measured for at least every foot and smaller increments when required.
Cut the core into 2-foot lengths, bag in plastic sleeves, and place in cores boxes to be further processed or stored.
Split the core vertically on a foot-by-foot basis, retaining half of the core sample in the core box after re-sealing with plastic.
Complete appropriate Chain of Custody forms which identify the sample by hole number and depth and contain instructions as to the analysis requested as well as any special handling needed. Sign and date the chain of Custody form.
Deliver the samples to the laboratory and retain a copy of the Chain of Custody which has in turn been signed and dated by the lab.
Require the laboratory to return the sample results with a copy of the Chain of Custody form.
Require the laboratory to provide written quality control and assurance procedures (QA/QC) and specify the method and accuracy of the appropriate standard analytical methods and procedures used.
Check and confirm the analytical results when received to ensure all samples were assayed.
Select duplicate samples from the reserved core splits for confirmatory analysis if there are any anomalies in the analytical data.
Assays of samples from core drilling were collected by company geologists and submitted to various independent commercial laboratories for analysis prior to EFR ownership. Records and files indicate CCI used Hazen Research, Inc. in Golden, Colorado, in the early 1980s and Uranerz used Energy Laboratories, Inc. (ELI), in Casper, Wyoming in 2007 through 2009 for at least some of this analytical work. Results of these analyses were compared to eU3O8 values from gamma logs to evaluate logging tool performance, validity of gamma logging, radiometric equilibrium, and leach amenability studies.
Hazen Research holds certifications from various state regulatory agencies and from the US Environmental Protection Agency (EPA). and ELI is NELAP accredited with certifications USEPA: WY00002; FL-DOH NELAC: E87641; Oregon: WY200001; Utah: WY00002; Washington: C1012.
No diamond drilling has been completed on the properties since 2009.
EFR and the SLR QP recommend that a handheld XRF tool should be considered to replace the scintillometer reading to obtain more precise mineralogical information.
11.1.4 Radiometric Equilibrium
Disequilibrium in uranium deposits is the difference between equivalent (eU3O8) grades and assayed U3O8 grades. Disequilibrium can be either positive, where the assayed grade is greater than the equivalent grades, or negative, where the assayed grade is less than the equivalent grade. A uranium deposit is in equilibrium when the daughter products of uranium decay accurately represent the uranium present. Equilibrium occurs after the uranium is deposited and has not been added to or removed by fluids after approximately one million years. Disequilibrium is determined during drilling when a piece of core is taken and measured by two different methods, a counting method (closed-can) and chemical assay.
By definition, radiometric equilibrium is radioactive isotopes decay until they reach a stable non-radioactive state. The radioactive decay chain isotopes are referred to as daughters. When all the decay products are maintained in close association with the primary uranium isotope uranium 238 (238U) for the order of a million years or more, the daughter isotopes will be in equilibrium with the parent isotope (McKay et al., 2007). Disequilibrium occurs when one or more decay products are dispersed as a result of differences in solubility between uranium and its daughters.
Disequilibrium is considered positive when there is a higher proportion of uranium present compared to daughters and negative where daughters are accumulated, and uranium is depleted. The disequilibrium factor (DEF) is determined by comparing radiometric equivalent uranium grade eU3O8 to chemical uranium grade. Radiometric equilibrium is represented by a DEF of 1, positive radiometric equilibrium by a factor greater than 1, and negative radiometric equilibrium by a factor of less than 1.
Except in cases where uranium mineralization is exposed to strongly oxidized conditions, most of the sandstone roll front deposits reasonably approximate radiometric equilibrium. The nose of a roll front deposit tends to have the most positive DEF and the tails of a roll front would tend to have the lowest DEF (Davis, 1969).
It was concluded in the 2015 Preliminary Economic Assessment (Beahm, 2015) that while the core data collection and assay procedures did follow industry standard procedures, the core data reflected higher GT portions of the deposit and as such were not necessarily representative of the mineralization as a whole. The available PFN data did provide a reasonable representation across the mineralized roll front from oxidized to reduced conditions and in the opinion of the author was more representative than core data for the evaluation of radiometric equilibrium. A comparison of chemical data vs probe data showed that no disequilibrium factor is needed for the Complex.
In previous Nichols Ranch Technical Reports, (Beahm and Anderson (2007), Brown (2009), and Graves (2010) have recommended a DEF factor of 1 based on the nature of the mineral deposit and limited core data. The Hank Technical Report (TREC, 2008) recommended a DEF factor of 1.18 based on limited core data.
In April 2012, Uranerz completed logging of 16 drillholes at Nichols Ranch utilizing PFN. PFN provides direct analysis of the in situ chemical uranium content and is considered by the SLR QP as reliable for the purposes of assessing radiometric equilibrium. Of the 16 PFN holes, 12 had sufficient mineralization for evaluation of radiometric equilibrium. These data are summarized in Table 11-1.
Table 11-1: Radiometric Equilibrium Data
Energy Fuels Inc. - Nichols Ranch Project
Hole ID |
Depth |
PFN Tool |
Radiometric (Gamma Log) |
DEF |
T.D. |
Deviation |
||||
Thick |
Grade |
GT |
Thick |
Grade |
GT |
|||||
1A-2 |
547 |
16 |
0.068 |
1.09 |
15 |
0.069 |
1.04 |
1.05 |
567 |
2.73 |
1A-3 |
556 |
10.5 |
0.099 |
1.04 |
12.5 |
0.116 |
1.45 |
0.72 |
575 |
4.69 |
1A-28 |
551.5 |
20.5 |
0.347 |
7.12 |
21 |
0.396 |
8.31 |
0.86 |
575 |
5.56 |
1A-31 |
541 |
11.5 |
0.419 |
4.82 |
12 |
0.251 |
3.01 |
1.60 |
555 |
5.4 |
A-39 |
559 |
6 |
0.057 |
0.34 |
6.5 |
0.044 |
0.29 |
1.20 |
569 |
1.47 |
1A-44 |
562.5 |
6 |
0.201 |
1.21 |
8 |
0.152 |
1.22 |
0.99 |
569 |
6.74 |
1B-1 |
626.5 |
7.5 |
0.066 |
0.50 |
8 |
0.072 |
0.58 |
0.85 |
637 |
5.34 |
1B-3 |
605 |
8 |
0.109 |
0.88 |
7 |
0.090 |
0.63 |
1.39 |
620 |
11.85 |
1B-4 |
624.5 |
7.5 |
0.060 |
0.45 |
7 |
0.085 |
0.59 |
0.76 |
634 |
5.77 |
1B-9 |
633.5 |
3.5 |
0.319 |
1.40 |
3.5 |
0.162 |
0.57 |
2.47 |
640 |
1.85 |
1B-16 |
625.5 |
16 |
0.082 |
1.12 |
16 |
0.119 |
1.90 |
0.59 |
644 |
13.25 |
1B-17 |
558.5 |
8 |
0.037 |
0.30 |
8.5 |
0.055 |
0.47 |
0.64 |
592 |
7.53 |
Total GT |
|
|
|
20.27 |
|
|
20.05 |
1.01 |
|
|
Since acquiring the Project, EFR has not conducted any PFN logging as past production and assaying have confirmed that radiometric equilibrium is nearly equal to one and not material to the resource estimate.
11.2 Sample Security
EFR has conducted no core sampling since acquiring the Project. All reported core sampling was performed by previous operators. The reported sample preparation, handling of the historic coring, and sample security cannot be confirmed.
11.3 In Situ Leach Amenability
Uranium leach amenability studies were conducted on Uranerz uranium core samples between April 22 to April 27, 2007, and January 9 to February 13, 2009. The tests were conducted at ELI's facility in Casper, Wyoming. Leach amenability studies are intended to demonstrate that the uranium mineralization is capable of being leached using conventional ISR chemistry. The tests are designed to present an indication of an ore's reaction rate and the potential uranium recovery.
Analysis of the resulting leach solution indicated leach efficiencies of 65% to 74%. Tails analysis indicated efficiencies of 76% to 79% (Garling, 2013).
The following excepts on the leach amenability procedures were extracted from documents from ELI (ELI, 2007, 2009a, 2009b)
The leach solution was prepared using sodium bicarbonate (2 g/L NaHCO3) as the source of the carbonate complexing agent (formation of uranyldicarbonate (UDC) or uranyltricarbonate ion (UTC)). Hydrogen peroxide is added as the uranium oxidizing agent as the tests are conducted at ambient pressure. A sequential leach "bottle roll" test was conducted on the core interval selected by Uranerz personnel. The tests are not designed to approximate in situ conditions (permeability, porosity, pressure) but are merely an indication of an ore's reaction rate and the potential uranium recovery
The core sample (designation U36-2l-l24C from depth of 467 ft to 473 ft) was dried at approximately 60°C for more than 16 hours in a convection oven and pulverized to less than 10 mesh. The processed core was then analyzed for uranium. Chemical analysis was conducted on a strong mineral acid digest of the dried and pulverized core samples. This digest consists of a 1-gram sub sample digested with 50% nitric acid heated in a water bath at 95°C for more than 16 hours. Following the heating period, the volume is adjusted to a known level, typically 50 mL. Uranium analysis is performed on the solution by Inductively Coupled Argon Plasma (ICP) emission spectroscopy against certified commercial standards.
The Leach Amenability Procedure was then performed. A 200-g sub sample of the dried and pulverized core was placed into a two-litre wide mouth plastic container and a lixiviate comprised of 2.0 g/L HCO3 (NaHCO3) and 0.5 g/L H2O2 was added at an approximate five pore volume liquid to solid ratio. Uranerz dictated the five pore volume charge of 1,000 mL of the lixiviate was added to the 200-gram sub sample. The reaction vessel was then rotated on a TCLP extractor for approximately 16 hours at 30 revolutions per minute (RPM). Then, the entire liquid portion of the leach was separated by filtration (centrifuged only if necessary). The solid portion was reintroduced to the reaction vessel, and a fresh charge of lixiviate was added. This was repeated six times to produce pore volumes 1-5, 6-10, 11-15, 16-20, 21-25, and 26-30. All these pore volumes were analyzed on an ongoing basis for Dissolved Uranium.
Since 2009, no additional leach amenability studies have been conducted on the Project. The SLR QP is of the opinion that this is not material to the Mineral Resource estimate or future operations as actual recovery factors have been established from the previous ISR operations at the Complex. No additional work is required.
11.4 Bulk Density
Limited site-specific data was available for review of bulk density. Previous Technical Reports for the Complex have used bulk density factors ranging from 15.5 cubic feet per ton (ft3/ton) to 18.3 ft3/ton. A third-party consultant, BRS, recommended a density of 16 ft3/ton be used for Nichols Ranch, Jane Dough and Hank areas and another third-party consultant, TREC, recommended a density of 15.5 ft³/ton be used for North Rolling Pin and West North Butte areas. BRS has direct conventional mining experience within the same and/or very similar geologic settings in Wyoming and has direct knowledge of appropriate bulk density for this level of estimate.
EFR recommended a density of 15.5 ft³/ton or 16.0 ft³/ton be used for all Mineral Resource estimations, based on available data and its direct mining experience within the host formation. The difference in densities between 15.5 ft³/ton and 16 ft³/ton results in a calculation difference of 3% in the Mineral Resource estimate and is considered by the SLR QP as an acceptable variance.
11.5 Quality Assurance and Quality Control
The primary assay data used to calculate the Mineral Resource estimate for the Complex is downhole radiometric log data. Calibration data for both natural gamma and PFN geophysical logging units are available for both historical and recent drilling.
The SLR QP was not able to review QA/QC of field sampling performed by EFR personnel as the Project is currently under care and maintenance and no drilling activities are currently being conducted. However, examination of previous reports and files shows that EFR and its predecessors utilized training programs, and indicated that field personnel demonstrated basic geological abilities and management oversight operations met or exceeded industry best practices and standards at that time. Exploratory drillhole cutting samples are recovered in a wet or damp condition and soon after they are described by a field geologist. Down hole radiometric logging was checked against the driller's logs. The data are considered accurate and reliable for the purpose of completing a mineral resource estimate of the Project.
When drilling is active, both the natural gamma and PFN logging trucks are calibrated at least every three months. Natural gamma calibration is performed at U.S. Department of Energy (DOE) standard calibration facilities located in Casper, Wyoming. Commercial logging services for both natural gamma and PFN logging are calibrated at the DOE standard facilities located in Casper, Wyoming, and/or Grand Junction, Colorado.
Calibration data for historical drill data was included in the geophysical log header information.
11.6 Conclusions
EFR has conducted no core sampling since acquiring the properties. All reported core sampling was performed by a previous operators CCI and Uranerz. The reported sample preparation and handling of the historic coring cannot be confirmed. The test results from the historical coring programs were not available for review, thus were not included in the calculation of resource quantities.
In the SLR QP's opinion, the historical radiometric logging, analysis, and security procedures at the Complex were adequate for use in the estimation of the Mineral Resources. The SLR QP also opines that, based on the information available, the original gamma log data and subsequent conversion to % eU3O8 values are reliable.
The SLR QP is of the opinion that the sample security, analytical procedures, and QA/QC procedures used by EFR meet industry best practices and are adequate to estimate Mineral Resources.
Furthermore, there is no evidence that radiometric disequilibrium would be expected to negatively affect the uranium resource estimates of the deposits however the SLR QP recommends that EFR resume using PFN as a QA/QC tool to confirm the disequilibrium factor within the Satellite Properties not yet exposed to ISR mining.
12.0 DATA VERIFICATION
Data verification is the process of confirming that data has been generated with proper procedures, is transcribed accurately from its original source into the project database and is suitable for use as described in this Technical Report.
As part of the resource estimation procedure drill data is spot checked by EFR personnel and audited by the SLR QP for completeness and validity. Specifically, any data which appears higher or lower than the surrounding data is confirmed by reviewing the original geophysical log. This data review includes confirming that the drill depth was adequate to reflect the mineralized horizon, that the geologic interpretation of host sand is correct, and that the thickness and grade of mineralization is correct.
The primary assay data used to calculate the Mineral Resource estimate for the Nichols Ranch Mining Unit and Satellite Properties is downhole geophysical log data. Calibration data for both natural gamma and PFN geophysical logging units are available for both historical and recent drilling.
The historical geophysical logs were interpreted by EFR using standard procedures for the interpretation of natural gamma logging employing the half amplitude method for the interpretation of historic analog data. The SLR QP reviewed and confirmed drill data contained in various electronic databases and constrained mineral resource estimates above a 0.2 GT.
12.1 Nichols Ranch Mining Unit
12.1.1 Nichols Ranch
The SLR QP visited the Complex on October 28 to 29, 2021. During the visit, the SLR QP reviewed historical plans and sections, geological reports, historical and recent drillhole logs, the digital drillhole database, historical drillhole summary radiometric logs and survey records, and property boundary surveys, and toured site facilities, locations of current installed wellfields, and associated header house complexes. Discussions were held with the EFR technical team who demonstrated a strong understanding of the mineralization types and their processing characteristics, and how the analytical results are tied to the results. The SLR QP did not visit EFR offices in Casper, Wyoming.
EFR maintains a complete set of drillhole data, as well as other exploration data, for the entire project in Microsoft Excel spreadsheets and hard copy logs at the Nichols Ranch facility. Files at the EFR Nichols Ranch office and warehouses were contained in file cabinets, and map files covering the Nichols Ranch area as well as other areas were available for review. The files were generally complete and contained original data consisting of gamma-ray logs, mini logs, drillhole summaries, resource estimation sheets, copies of drillhole maps, "mine estimation" maps, reports of mine plans, survey documents, logging truck calibration records, and a few representative cross sections.
Certification of database integrity is accomplished by both visual and statistical inspections comparing geology, assay values, and survey locations cross-referenced to historical paper logs. Any discrepancies identified are corrected by the EFR resource geologist referring to hard copy assay information.
Records from the Microsoft Excel database including collar GT intercepts are then extracted for each target and imported into ArcGIS software for geologic modeling and resource estimation. Currently only data from the Nichols Ranch deposit has been imported into the ArcGIS software. All data for the remaining properties remain in Microsoft Excel format or hard copy format.
As part of the data verification process the SLR QP conducted a series of independent verification tests on the drillhole database provided by EFR for the properties acquired from Uranerz in 2015. Verification tests were run to check drill collar coordinates and elevation, radiometric log intercept data, U3O8 conversion and calibrations factor, total GT calculations, and redox trend boundaries. The SLR QP did not encounter any significant discrepancies with the Nichols Ranch data in the vicinity of modeled mineralized zones but did identify drillholes with missing coordinates and/or elevations, improper total depth drilled compared to radiometric logs, and radiometric log data with no drill collar information.
The SLR QP did not identify any significant problems with the interpretations and U3O8 conversion and calculations and is of the opinion that the calibration factors are acceptable. The SLR QP conducted a review of grade continuity for each mineralized sandstone unit. The SLR QP reviewed 0.5 ft natural gamma radiometric (probe) data and related information to validate the reported grade and grade thickness (GT) values shown on the drillhole intercept maps. Results indicate continuity of mineralization within each sandstone unit in both plan and section in elongate tabular or irregular shapes. The SLR QP is of the opinion that, although continuity of mineralization is variable, drilling confirms that local continuity exists within individual sandstone units.
Of the total 1,777 drillholes reported drilled across the Nichols Ranch deposit, the EFR database is missing data from 96 records or roughly 5.7% (Table 12-1). The discrepancies and uncertainty identified by the SLR QP do not affect the Mineral Resource estimate. The SLR QP recommends that the missing data be corrected prior to the next in-fill drilling programs or resource updates.
Table 12-1: EFR Drilling Database
Energy Fuels Inc. - Nichols Ranch Project
Property |
Historic # |
EFR |
Total # |
EFR Database |
||
# of Records |
Missing # |
Missing % |
||||
Nichols Ranch Mining Unit |
||||||
Nichols Ranch |
1,328 |
449 |
1,777 |
1,681 |
-96 |
-5.4% |
Jane Dough |
786 |
0 |
786 |
771 |
-15 |
-1.9% |
Hank |
289 |
0 |
289 |
299 |
10 |
3.5% |
Satellite Properties |
||||||
North Rolling Pin |
494 |
0 |
494 |
379 |
-115 |
-23.3% |
West North Butte, East North Butte and Willow Creek |
576 |
0 |
576 |
374 |
-202 |
-35.1% |
|
|
|
|
|
|
|
Total |
3,473 |
449 |
3,922 |
3,504 |
-418 |
-10.7% |
The remaining property data used to support this current Mineral Resource estimate has been reviewed and disclosed previously in Canadian NI 43-101 Technical Reports for the Jane Dough, Hank, and Satellite Properties. Those data verification efforts carried out by the TREC and Uranerz in 2008, 2010, and 2015 and reviewed and audited by the SLR QP are summarized in the following subsections.
12.1.2 Jane Dough and Hank (Beahm and Goranson, 2015)
During a site visit on February 19, 2015, Douglas Beaham, an independent qualified person, examined the original hard copy drillhole files for the Jane Dough and Hank deposits at the Uranerz office in Casper, Wyoming. Uranerz provided electronic scans of all geophysical and lithological logs for the drillholes used in the 2015 Technical Report along with electronic data summaries. The 2015 mineral resource estimate presented herein was developed based on geophysical data, grade calculations, lithological logs, and cross sections from 213 CCI and 857 Uranerz drillholes. The data was considered accurate and reliable for the purpose of completing a mineral resource estimate. A total of 1,075 drillholes (786 from the Jane Dough deposit and 289 from the Hank deposit) were spot checked. Specifically, any data which appeared higher or lower than the surrounding data was confirmed by reviewing the original geophysical log. This data review included confirming that the drill depth was adequate to reflect the mineralized horizon, that the geologic interpretation of host sand was correct, and that the thickness and grade of mineralization was correct. It was reported (Beahm and Goranson, 2015) that although some discrepancies were found in the data and were corrected prior to the mineral resource estimate, the data was generally found to be accurate and representative of the mineralization in the areas.
The SLR QP did not identify any significant problems with the interpretations and U3O8 conversion and calculations and is of the opinion that the calibration factors are acceptable. The SLR QP conducted a review of grade continuity for each mineralized sandstone unit. The SLR QP reviewed 0.5 ft natural gamma radiometric (probe) data and related information to validate the reported grade and grade times thickness (GT) values shown on the drillhole intercept maps. Results indicate continuity of mineralization within each sandstone unit in both plan and section in elongate tabular or irregular shapes. The SLR QP is of the opinion that although continuity of mineralization is variable, drilling confirms that local continuity exists within individual sandstone units.
Of the total 1,075 drillholes reported drilled across the Jane Dough and Hank deposits, the EFR database is missing data from 15 records from Jane Dough and has additional 10 holes at Hank, or less than 0.5% (Table 12-1). The discrepancies and uncertainty identified by the SLR QP with the EFR database do not affect the Mineral Resource estimate completed in 2015.
12.2 Satellite Properties
12.2.1 North Rolling Pin Data Verification (Graves, 2010)
The 2010 NI 43-101 compliant Technical Report of the North Rolling Pin deposit was authored by Douglas Graves, an independent qualified person. Graves, P.E., visited the site on November 19, 2008. Historic drilling records indicate that a total of approximately 494 rotary drillholes were completed across the NRP property. Geophysical and lithologic log data from 386 of the 494 drillholes were reviewed and audited by Graves. These data were used to identify the sand host, mineralization depth, and grade and thickness of mineralization. The grade calculation data were checked for accuracy of depth, thickness, grade, and host sandstone identification and were compared with the geophysical logs. Each geophysical log header was checked against the data summary sheet to confirm the drillhole number and location, and the material grade summaries presented on the geophysical logs were compared with the data summary sheets, and the data were confirmed. The drillhole locations were plotted and checked for accuracy by comparison with the original drillhole map, corrections were applied to some drillholes, and then confirmed.
Data was assumed to have been collected in a manner consistent with standard industry practices at the time. Logging of each drillhole utilized the same basic methodology that has been used for over 50 years in the uranium industry. The radiometric logs were generally run with analog equipment prior to 1980 and more recent logging utilizes digital equipment. It is assumed that the appropriate logging tool "k" factor was developed for the historic geophysical logging equipment. The radiometric logging information was considered accurate and reliable by the Douglas Graves (Graves, 2010) for the purpose of developing the resource estimate.
Of the 368 geophysical logs from CCI drilling and 18 logs from Uranerz drilling in North Rolling Pin, 198 had mineralization using a minimum 0.2 GT cutoff. The 2010 mineral resource estimate presented herein was developed based on geophysical data, grade calculations, lithological logs, and cross sections from 188 CCI and 10 Uranerz drillholes. The data was considered accurate and reliable for the purpose of completing a mineral resource estimate.
As part of the data verification process, the SLR QP conducted a series of independent verification tests on the drillhole database provided by EFR for the properties acquired from Uranerz in 2015. Verification tests were run to check drill collar coordinates and elevation, radiometric log intercept data, U3O8 conversion and calibrations factor, total GT calculations, and REDOX trend boundaries.
The SLR QP did not encounter any significant discrepancies with the North Rolling Pin database, agrees with previous verification work, and considers the data accurate and reliable for the purpose of reporting a mineral resource estimate
12.2.2 West North Butte, East North Butte and Willow Creek (Graves and Woody, 2008)
The 2008 NI 43-101 compliant Technical Report of the West North Butte, East North Butte, and Willow Creek deposits was authored by Douglas Graves and Donald Woody, both independent qualified persons. The Authors visited the site on November 19, 2008, to observe the on-going uranium exploration activities being conducted by Uranerz on the properties.
It is reported that both Graves and Woody conducted a detailed review of 573 (285 WNB, 127 ENB, and 164 WC) exploratory holes drilled within the area. These data were used to identify the sand host, mineralization depth, and grade and thickness of mineralization. Historically, six core samples were collected for density determination and chemical analyses (Hazen, 1980). Density testing indicated an average in-place density of 15.5 ft3/ton. U3O8 testing indicated grades ranging from .050% to 0.235%, however, these test results could not be correlated to gamma logs.
Historical data were assumed to have been collected in a manner consistent with standard industry practices at the time, and the Authors considered the historical information accurate and reliable for the purposes of completing a mineral resource estimate. It is assumed that appropriate k factor calibration was performed for the geophysical logging equipment. Most historical electric and lithologic logs are available for review, but historical core and original drill cutting samples are no longer available.
The 2008 mineral resource estimate was developed based on all geophysical and lithological data from 573 exploratory holes drilled within the WNB, ENB, and WC areas.
As part of the data verification process, the SLR QP conducted a series of independent verification tests on the drillhole database provided by EFR for the properties acquired from Uranerz in 2015. Verification tests were run to check drill collar coordinates and elevation, radiometric log intercept data, U3O8 conversion and calibrations factor, total GT calculations, and REDOX trend boundaries. The SLR QP encountered significant discrepancies with the EFR West North Butte, East North Butte, and Willow Creek database that included:
Missing collar coordinate information from 202 of the 573 reported drillholes used in the 2008 resources estimate
Missing digital files of drillhole uranium intercept values and eU3O8 conversion calculations
Unassigned coordinates to GT contour maps and sand unit designations
The SLR QP consider the EFR database for the West North Butte, East North Butte, and Willow Creek deposits incomplete and unreliable for the purpose of auditing or validating the 2008 mineral resource estimate. The SLR QP is of the opinion that the although the resource estimate completed in 2008 adhered to industry best practices and standards at the time, the inability to validate the model excludes it from the current resource estimate discussed in Section 14.0 of this Technical Report . Until EFR validates and certifies the drilling database, the resource estimate should be regarded as historical and should not be relied upon.
12.3 Limitations
There were no limitations in place restricting the ability to perform an independent verification of the Project drillhole database.
12.3.1 Conclusions
Nichols Ranch had near-continuous production for over five years beginning in 2014. There has been adequate drilling to develop the Mineral Resource models that have been used in the GT contour models and for successful mine planning. The SLR QP is of the opinion that database verification procedures for the Project comply with industry standards and are adequate for the purposes of Mineral Resource estimation.
EFR has not completed a thorough verification of drilling data reported on the West North Butte, East North Butte, and Willow Creek areas. The SLR QP opines that, although the resource estimate completed in 2008 (Graves and Woody, 2008) adhered to industry best practices and standards at the time, the inability for EFR or the SLR QP to validate the model excludes it from the current resource estimate discussed in Section 14.0 of this Technical Report . The resource estimate should be regarded as historic and should not be relied upon until EFR completes validation of the historic drilling.
13.0 MINERAL PROCESSING AND METALLURGICAL TESTING
13.1 Metallurgical Testing
The ISR method used at the Complex is a standard method for uranium recovery in the Western United States. Pilot testing and actual production from other uranium deposits in the Powder River Basin indicated that the uranium located at the Complex would be amenable to ISR production. No site-specific metallurgical testing is available for the Complex, however, initial production began at the Nichols Ranch portion of the Complex in 2014, and uranium was successfully produced until the Complex was put on standby at the end of 2019.
After five years of commercial production (2014 to 2019) via ISR utilizing an alkaline lixiviant, the ISR factor based on actual production was 68%. This factor was derived from the estimated pounds under a production well pattern and how many pounds were produced from that pattern. For example, if 100,000 lb of U3O8 were estimated to be under pattern and 70,000 lb of U3O8 were produced, ISR factor would be 71%. Figure 13-1 shows the production history of uranium by ISR at Nichols Ranch since 2014.
Based on this historical production (Table 13-1 and Figure 13-1) a recovery factor on similar uranium deposits in the Wasatch Formation should use a recovery factor of 71%. This would include both the Jane Dough and Hank deposits as well as the Satellite Deposits described in this Technical Report.
Table 13-1: Past Production 2014 to 2021
Energy Fuels Inc. - Nichols Ranch Project
Year |
Production |
Cumulative |
Recovery Total |
2014 |
199,509 |
199,509 |
11.7 |
2015 |
272,844 |
472,353 |
27.8 |
2016 |
334,700 |
807,053 |
47.5 |
2017 |
258,554 |
1,065,607 |
62.7 |
2018 |
140,191 |
1,205,798 |
70.9 |
2019 |
69,626 |
1,275,424 |
75.0 |
2020 |
630 |
1,276,054 |
75.0 |
2021 |
535 |
1,276,589 |
75.1 |
Figure 13-1: Nichols Ranch Production (2014 to 2021)
13.2 Opinion of Adequacy
It is the SLR's QP opinion that the successful historical operation of the ISR supersedes any metallurgical testing program and the available operating data is more than adequate to support the stated recovery.
14.0 MINERAL RESOURCE ESTIMATES
14.1 Summary
Mineral Resources have been classified in accordance with the definitions for Mineral Resources in S-K 1300, which are consistent with Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Resources and Mineral Reserves dated May 10, 2014 (CIM, 2014) definitions which are incorporated by reference in NI43-101.
The SLR QP has reviewed and accepted the Mineral Resource estimate prepared by EFR for the Complex. Resource estimates were completed with the following effective dates using the GT contour method and audited by the SLR QP for accuracy and completeness:
Nichols Ranch by EFR in 2021
Jane Dough and Hank by Uranerz in 2015
The effective date of this Mineral Resource estimate is December 31, 2021. The U3O8 Mineral Resource for the Complex is presented in Table 14-1 at a GT cut-off grade of 0.20 %-ft and have been depleted as of December 31, 2021. The total production from Nichols Ranch is 1,276,589 lb eU3O8 as of December 31, 2021.
Total Measured and Indicated Resources for the Complex are 3.294 million tons (Mst) at an average grade of 0.106% eU3O8 containing 6.988 Mlb eU3O8, of which 6.182 Mlb is attributable to EFR. Additional Inferred Resources total 0.65 Mst at an average grade of 0.097% eU3O8 containing 1.256 Mlb eU3O8, of which 1.176 Mlb is attributable to EFR.
The SLR QP is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could materially affect the Mineral Resource estimate.
Table 14-1: Mineral Resource Estimate for the Nichols Ranch Uranium Complex - Effective Date December 31, 2021
Energy Fuels Inc. - Nichols Ranch Project
Project Area |
Classification |
Tonnage |
Grade |
Contained Metal |
EFR Attrib. Basis |
EFR Attributable |
Recovery |
Nichols Ranch Mining Unit + Satellite Properties |
Total Measured |
11,000 |
0.187 |
41,140 |
100.0 |
41,140 |
71.0 |
Total Indicated |
3,283,000 |
0.106 |
6,946,693 |
88.4 |
6,141,663 |
60.4 |
|
Total Measured + Indicated |
3,294,000 |
0.106 |
6,987,833 |
88.5 |
6,182,803 |
60.4 |
|
Total Inferred |
650,000 |
0.097 |
1,256,000 |
93.6 |
1,176,200 |
60.4 |
Notes:
1. SEC S-K 1300 definitions were followed for all Mineral Resource categories. These definitions are also consistent with CIM (2014) definitions in NI 43-101.
2. Measured Mineral Resource includes reduction for production through December 31, 2021.
3. Mineral Resources are 100% attributable to EFR for Nichols Ranch, Hank, and North Rolling Pin, and are in situ.
4. Mineral Resources are 81% attributable to EFR and 19% attributable to United Nuclear Corp in parts of Jane Dough, and are in situ.
5. Mineral Resource estimates are based on a GT cut-off of 0.20 %-ft
6. The cut-off grade is calculated using a metal price of $65/lb U3O8
7. Mineral Resources are based on a tonnage factory of 15.0 ft3/ton (Bulk density 0.0667 ton/ft3 or 2.13 t/m3).
8. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
9. Numbers may not add due to rounding.
14.2 Resource Database
The basis of the Nichols Ranch Mining Unit and Satellite Properties Mineral Resource estimates was gamma logs collected by EFR and its predecessors. The resource databases as of the effective date of this Technical Report includes data from 3,504 drillholes totaling over 2.36 million ft of drilling completed through 2016 of the 3,942 historical drillholes reported drilled across the properties (Table 14-2).
Table 14-2: Summary of Available Drillhole Data
Energy Fuels Inc. - Nichols Ranch Project
Property |
Operator |
Number of Drillholes |
Total Depth Drilled |
Nichols Ranch Mining Unit |
|||
Nichols Ranch |
Cleveland Cliffs |
82 |
50,552 |
|
Uranerz |
1,150 |
735,403 |
|
EFR |
449 |
281,126 |
Nichols Ranch Total |
|
1,681 |
1,067,081 |
|
|
|
|
Jane Dough |
Cleveland Cliffs |
45 |
46,714 |
|
Uranerz |
726 |
468,074 |
Jane Dough Total |
|
771 |
514,788 |
|
|
|
|
Hank |
Cleveland Cliffs |
168 |
252,000 |
|
Uranerz |
131 |
123,526 |
Hank Total |
|
299 |
375,526 |
Nichols Ranch Mining Unit Total |
|
2,751 |
1,957,395 |
Satellite Properties |
|||
North Rolling Pin |
Cleveland Cliffs |
379 |
114,495 |
North Rolling Pin Total |
|
379 |
114,495 |
|
|
|
|
West North Butte |
Cleveland Cliffs |
263 |
263,000 |
|
Uranerz |
111 |
29,000 |
West North Butte Total |
|
374 |
292,000 |
Satellite Total |
|
753 |
406,495 |
|
|
|
|
Total |
|
3,504 |
2,363,890 |
The SLR QP's audit of the missing historic drillholes records and files supplied for review by EFR concluded that most of these drillholes were either not actually drilled, intercepted no mineralization, and/or are missing radiometric downhole data and excluded from the EFR database. The actual number of records used in previous resource estimation technical reports for the Satellite Properties (Graves and Woody, 2008; Graves, 2010) are in agreement. The SLR QP is of the opinion that the EFR drillhole database for the Nichols Ranch Mining Unit and Satellite Properties excluding West North Butte, East North Butte and Willow Creek deposits is valid and suitable to estimate Mineral Resources. West North Butte, East North Butte and Willow Creek deposits are excluded from the Mineral Resource statement.
14.3 Geological Interpretation
Mineral Resource calculations are based on chemically equivalent uranium grades. A minimum grade cut-off of 0.02% U3O8 and minimum GT of 0.20 was used in the calculations along with a bulk dry density of 15.5 ft3/ton or 16 ft3/ton, as subsequently discussed in Section 14.8.
GT contouring is a method used to project similar GT values within the same geologic zone or unit across a reasonable distance of control. GT contours are built off the REDOX boundary within the sand host. The REDOX boundary is interpreted by the geologist and defines the shape of the ore body/roll front by distinguishing altered and unaltered sands within the zone of interest. Detail is controlled by the density of the drilling. Contours are more generalized with wider spaced drilling and become more detailed as drill spacing becomes more densely populated along the REDOX boundary. GT contouring is an accepted practice in roll front uranium geology.
14.4 Drill Data Statistics
14.4.1 Nichols Ranch Mining Unit
14.4.1.1 Mineralization Thickness
Mineralization is a typical Powder River Basin type roll front deposit, as described in Section 7.4. Specifically, at the Nichols Ranch Mining Unit, an upper and lower unit of the A Sand hosts mineralization within the Nichols Ranch and Jane Dough areas and the F Sand hosts mineralization within portions of Nichols Ranch. Individual sand units are approximately 25 ft to 50 ft thick; however, the mineralization in any sand rarely exceeds 15 ft. No F sand mineralization is reported in the current Mineral Resource estimate at Nichols Ranch.
The range and averages for thickness and GT of mineralization for Nichols Ranch, Jane Dough, and Hank are provided in Table 14-3.
Table 14-3: GT Summaries
Energy Fuels Inc. - Nichols Ranch Project
Deposit |
Cut-off GT |
Avg. GT |
Avg. Thick |
Min GT |
Max GT |
Min Thick |
Max Thick |
Nichols Ranch |
0.2 |
0.94 |
6.4 |
0.2 |
12.1 |
1 |
28 |
0.5 |
1.46 |
8.2 |
0.5 |
12.1 |
1 |
28 |
|
Jane Dough |
0.2 |
0.78 |
7 |
0.2 |
6.33 |
1 |
42 |
0.5 |
1.16 |
9 |
0.5 |
6.33 |
1 |
42 |
|
Hank |
0.2 |
0.72 |
7.6 |
0.2 |
3.22 |
1 |
27.5 |
0.5 |
1.13 |
10.3 |
0.2 |
3.22 |
2 |
27.5 |
14.4.1.2 Grade
Table 14-4 shows the number of drillhole assays per range of GT values for Nichols Ranch, Jane Dough, and Hank.
Table 14-4: Drillhole Results
Energy Fuels Inc. - Nichols Ranch Project
Deposit |
>0.02 e%U3O8, |
0.2-0.5 GT |
>0.5 GT |
|
Nichols Ranch |
367 |
302 |
274 |
690 |
Jane Dough |
433 |
160 |
87 |
106 |
Hank |
168 |
21 |
37 |
63 |
Figure 14-1 and Figure 14-2 present the Nicholas Ranch PA1 and PA2 GT maps, respectively.
Figure 14-3 and Figure 14-4 present the Jane Dough and Hank mineralized trend and GT contour maps, respectively.
Figure 14-1: Nichols Ranch - PA1 HH-1 through HH-9 A Sand 30 -100 GT Map
Figure 14-2: Nichols Ranch - PA2 HH-10 through HH-13 A Sand 30 -100 GT Map
Figure 14-3: Jane Dough Mineralized Trend and GT Contour Map
Figure 14-4: Hank Mineralized Trend and GT Contour Map
14.4.2 Satellite Properties
14.4.2.1 North Rolling Pin
14.4.2.1.1 Mineralization Thickness
Mineralized F Sand intercept thickness ranges from 1 ft to 30 ft, with an average mineralization thickness of 12.5 ft, for grades greater than 0.03% eU3O8 and GT greater than 0.2. The average mineralized thickness for the Upper F Sand is 7.6 ft and for the Lower F Sand is 10.1 ft.
14.4.2.1.2 Grade
The average grade of the North Rolling Pin Upper and Lower F Sand Measured Resource, based on eU3O8 (radiometric equivalent weight percent) for GT greater than 0.20 is 0.062% eU3O8; the average grade of the Indicated Resource is 0.052% eU3O8. The combined Measured and Indicated Resources average grade is 0.058% eU3O8. The Inferred average grade at GT cut-off of 0.20 was 0.042% eU3O8. Figure 14-5 and Figure 14-6 present the North Rolling Pin mineralized trend and GT contour maps for the northern and southern portions, respectively.
14.4.2.1.3 Trend Length
Exploration drillhole "fences" are spaced approximately 400 ft to 600 ft along trend and approximately 25 ft to 50 ft between holes is common in clusters of drilling or along fences perpendicular to the trend. The mineralization trend within the Upper F and Lower F Sands appears to be discontinuous with several mineral resource bodies being separated by regions of minimal mineralization, or barren of mineralization, as defined by drilling along the reduction/oxidation boundary in the F Sand. The exploratory drilling defines discontinuous mineralized trends for the Upper F Sand of approximately 7,200 ft, and approximately 10,800 ft in length for the Lower F Sand mineralization trend.
14.4.2.1.4 Trend Width
Using a minimum GT value of 0.20, the trend width of the Upper F Sand, measured across the strike of the trend ranges from 20 ft to 140 ft, averaging approximately 60 ft. The Lower F Sand trend varies in width from 20 ft to 160 ft, and averages approximately 70 ft.
Figure 14-5: North Rolling Pin Mineralized Trend and GT Contour Map - North Half
Figure 14-6: North Rolling Pin Mineralized Trend and GT Contour Map - South Half
14.5 Treatment of High-Grade Assays
14.5.1 Capping Levels
Unlike conventional uranium mining, applying capping levels are not applicable to ISR mining techniques.
14.5.2 High Grade Restriction
Unlike conventional uranium mining, applying high-grade restriction searches are not applicable to ISR mining techniques.
14.6 Compositing
Unlike conventional uranium mining, compositing is not applicable to ISR mining techniques.
14.7 Search Strategy and Grade Interpolation Parameters
Mineral Resources have been estimated using the GT (Grade x Thickness) contour method for each of the mineral sandstone horizons or units identified across the deposits (1, A, B, C, F, G and H). The uranium resource can generally be defined by existing drilling information which is of sufficient density and continuity to identify a meandering discontinuous mineralized trend. The grade and mineralized zone thickness were obtained from historical and recent drilling.
The GT contour method is well suited for estimating tonnage and average grades of relatively planar mineralized bodies. It is a smoothing technique that allows the geologist to apply judgment regarding the variability of the mineralization within the plane of the mineralized body. This technique is particularly effective in generating a realistic landscape of metal values along the plane of the mineralized body and limiting the effect of local high values. The technique is best applied to estimate tonnage and average grade of relatively planar bodies, i.e., where the two dimensions of the mineralized body are much greater than the third dimension (Agnerian and Roscoe, 2001). For these types of deposits, the contour method can provide a clear view of the "mineralization landscape" with "peaks and valleys" along the plane of the mineralization. Due to the two-dimensional nature of the contour method, data from drillhole intersections means the reported averaged assay grade is across the entire thickness of the mineralized body being considered. If necessary, the average intersection value is diluted to a specified minimum thickness.
The rationale for all Mineral Resource estimation methods is that there is continuity of mineralization from one sample point to another, whether they are drillhole pierce points, underground workings, surface trenches, or wellfields. When a mineral deposit has been tested by many drillholes, the estimate of tonnage and average grade by all of the conventional methods will likely be similar. When a deposit has been tested by a relatively few widely spaced or irregularly spaced drillholes, however, the estimates by various methods may vary greatly and a few high-grade or wide intercepts may have a large influence on the average grade or tonnage of the deposit. The contour method can be effective in reducing the influence of high-grade or wide intersections as well as the effects of widely spaced, irregularly spaced, or clustered drillholes. This is particularly the case for roll front uranium deposits. It can also be applied to estimate Mineral Reserves by deleting certain portions of the Mineral Resources estimated by the same method, such as clipping the edges of the contoured area, deleting certain parts of the tonnage estimate as pillars and sills and/or applying economic factors to the Mineral Resources.
The Mineral Resource estimates were calculated using GT contours with a minimum grade cut-off of 0.03% eU3O8 and a minimum mineralization thickness of 1.0 feet. The GT values of the subject sand intervals for each hole were plotted on a drillhole map and contour lines were drawn along the mineralization trend using ArcGIS software. The contour map was developed from the calculated GTs for various GT ranges. The areas within the GT contour boundaries, up to certain distances from the drillhole and to certain maximum areas of influence, were used for calculating estimates for resources. All resources were limited to the extent of the 0.2 GT boundaries. The contained pounds of uranium were calculated using the following formula:
Mineral Resource, pounds = (Area, ft2) X (GT, %-ft) X (20 lb) X (DEF) / (RD, ft3/ton)
Area (ft2) = Area of influence in square feet (measured from contour interval)
GT (percent x feet) = Material grade in percent times feet thickness of mineralization (GT multiplied by 20 lb to convert from short tons to pounds as 1% of a short ton equals 20 lb)
DEF (1.00) = Disequilibrium factor (1.00)
RD (15.5) = Rock density (15.5 ft3/ton)
Tonnage was calculated based on grade, pounds and a tonnage conversion factor for a given GT contour area.
14.8 Bulk Density
The SLR QP reviewed 11 records of bulk density determinations from 11 holes (four Nichols Ranch, four Jane Dough, and three Hank) collected in 2006 and 2008. Of the 11 records, coordinates (location) of seven (one Nichols Ranch, four Jane Dough, and two Hank) are contained within the EFR drillhole database, of which only six have recorded density measurements (Table 14-5).
Table 14-5: Bulk Density Measurements
Energy Fuels Inc. - Nichols Ranch Project
Area |
Drillhole ID |
Date |
Comment |
Sample Depth |
Density |
Nichols Ranch |
U06-099 |
8/23/2006 |
Coordinates Unknown: No density analysis record. |
- |
- |
U06-100 |
12/8/2006 |
Core from 465-530. Lost core from 495-508 |
524 |
17.6 |
|
U06-101 |
12/8/2006 |
Coordinates Unknown: Core from 630-658 |
633 |
17.2 |
|
URZN1-2 |
12/8/2006 |
Coordinates Unknown: Core from 502-534. missing from 512-518, 517-520 |
510 |
12.5 |
Area |
Drillhole ID |
Date |
Comment |
Sample Depth |
Density |
Jane Dough |
U36-21-124C |
11/19/2008 |
Core 465-477 recovered 12'. No density analysis record. |
- |
- |
U36-21-125C |
11/19/2008 |
Core 580-582 recovered 12', No density analysis record. |
- |
- |
|
A36-29-125C |
11/26/2008 |
Core 530-545 recovered 14.3', No density analysis record. |
- |
- |
|
A36-29-132C |
12/2/2008 |
Core 603-618 recovered 15', No density analysis record. |
- |
- |
|
Hank |
U06-104 |
12/8/2006 |
Core 455-478 |
461 |
17.9 |
U06-105 |
12/8/2006 |
Core 370-392.5 |
379 |
18.2 |
|
URZHF-1 |
12/8/2006 |
Coordinates Unknown: Core 360-380 |
369 |
18.9 |
|
|
|
|
Average Density (ft3/ton): |
|
17.1 |
Bulk density records range for 12.5 ft3/ton to 18.9 ft3/ton with an average of 17.1 ft3/ton, which agrees with values used in previous estimates. Previous Technical Reports for the Complex have used density factors ranging from 15.5 ft3/ton to 18.3 ft3/ton. A third-party consultant, BRS, recommended a density of 16 ft3/ton be used for the Nichols Ranch, Jane Dough, and Hank areas. Another third-party consultant, TREC, recommended a density of 15.5 ft³/ton be used for North Rolling Pin and West North Butte areas. The difference in densities between 15.5 ft³/ton and 16 ft³/ton calculates a difference of 3% in the resource estimate and is considered by the SLR QP to be an acceptable variance.
The Mineral Resources estimated in this PEA use a tonnage factor of 15.5 ft3/ton. This is the typical tonnage factor used by most operators in the Powder River Basin for mineralized intervals in the Wasatch Formation sandstone unit. This tonnage factor was derived by the major operators from years of actual mining.
Although the SLR QP is of the opinion that there is a relatively low risk in assuming that density of mineralized zones is similar to that reported in adjacent mining operations, the SLR QP recommends conducting additional density determinations, particularly in the mineralized zones, to confirm and support future resource estimates.
14.9 Radiometric Equilibrium Factor
Based on the available data and the geologic setting of the mineral deposits at Nichols Ranch, Jane Dough, Hank, North Rolling Pin, West North Butte, East North Butte, and Willow Creek, EFR concluded that the use of a DEF factor of 1.0 was appropriate for resource estimation.
The SLR QP is of the opinion that, based on the information available, the original gamma log data and subsequent conversion to eU3O8% values are reliable but slightly conservative estimates of the uranium U3O8 grade. This is supported by past production uranium recoveries and historical reported DEF for uranium deposits in the Powder River Basin. Furthermore, there is no evidence that radiometric disequilibrium would be expected to negatively affect the uranium resource estimates of the Nichols Ranch Mining Unit and Satellite Properties. Disequilibrium however can be expected to vary slightly across the deposits, as is common in low-grade roll front uranium deposits, and the SLR QP recommends that EFR consider running additional PFN probes in the future, particularly in the Satellite Properties.
14.10 Cut-Off Grade and GT Parameters
14.10.1 Nichols Ranch Mining Unit
EFR and its predecessor Uranerz established minimum grade, thickness, and GT parameters based on conventional Powder River Basin uranium mining practices and recent operating costs at Nichols Ranch. Various economic and mining parameters enter into the final cut-off grade and/or GT to calculate the in-ground mineral resources during the economic evaluation stage of the individual projects.
The cut-off criteria used by EFR at their ISR facility at Nichols Ranch is a minimum grade cut-off of 0.02% eU3O8 and minimum GT of 0.20. The SLR QP is familiar with cut-off criteria as applied for similar operations and concurs that a minimum GT cut-off of 0.20 does meet criteria for reasonable economic extraction via ISR given the depths and general operating conditions at the Complex.
The average depth below the surface to the base of the mineralization ranges from approximately 560 ft in the Nichols Ranch and Jane Dough areas and 390 ft in the Hank area. Table 14-6 shows average thickness values of the A-Sand at Nichols Ranch.
Energy Fuels Inc. | Nichols Ranch Project, SLR Project No: 138.02544.00001 |
||
Technical Report - February 22, 2022 | 14-15 |
Table 14-6: Average Intercept Thickness Nichols Ranch A-Sand Zone
Energy Fuels Inc. - Nichols Ranch Project
Sand Unit |
Zone |
# |
Total Zone Thickness |
Avg. Zone Thickness |
Total # |
Total Thickness |
Avg. Thickness |
A-10 |
PA1 HH9 |
- |
- |
- |
2 |
4.5 |
2.25 |
PA2 |
2 |
4.5 |
2.25 |
||||
A-20 |
PA1 HH9 |
15 |
49.0 |
3.27 |
19 |
63.5 |
3.34 |
PA2 |
4 |
14.5 |
3.63 |
||||
A-30 |
PA1 HH9 |
74 |
345.0 |
4.66 |
96 |
425.5 |
4.43 |
PA2 |
22 |
80.5 |
3.66 |
||||
A-40 |
PA1 HH9 |
61 |
273.0 |
4.48 |
85 |
360.5 |
4.24 |
PA2 |
24 |
87.5 |
3.65 |
||||
A-50 |
PA1 HH9 |
53 |
295.0 |
5.57 |
89 |
441.5 |
4.96 |
PA2 |
36 |
146.5 |
4.07 |
||||
A-60 |
PA1 HH9 |
45 |
240.5 |
5.34 |
99 |
449.5 |
4.54 |
PA2 |
54 |
209.0 |
3.87 |
||||
A-70 |
PA1 HH9 |
69 |
390.0 |
5.65 |
103 |
533.5 |
5.18 |
PA2 |
34 |
143.5 |
4.22 |
||||
A-80 |
PA1 HH9 |
37 |
188.0 |
5.08 |
67 |
320.5 |
4.78 |
PA2 |
30 |
132.5 |
4.42 |
||||
A-90 |
PA1 HH9 |
72 |
419.5 |
5.83 |
99 |
531.5 |
5.37 |
PA2 |
27 |
112.0 |
4.15 |
||||
A-100 |
PA1 HH9 |
56 |
253.5 |
4.53 |
77 |
307.0 |
3.99 |
PA2 |
21 |
53.5 |
2.55 |
14.10.2 Satellite Properties:
Two GT cut-off grades were used previously to evaluate the reported resources in this Technical Report, both using a minimum grade cut-off of 0.03% eU3O8. The 0.20 GT was used to present an appropriate value relative to current ISR operations and is recommended for reporting purposes. The 0.50 GT has been used to highlight the areas of highest mineralization and value if economics dictate the need for lower operating costs.
14.11 Mineral Resource Classification
Classification of Mineral Resources as defined in S-K 1300 were followed for classification of Mineral Resources. The Canadian Institute of Mining, Metallurgy and Petroleum definition Standards for Mineral Resources and Mineral Reserves (CIM 2014) are consistent with these definitions.
A Mineral Resource is defined as a concentration or occurrence of material of economic interest in or on the Earth's crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, considering relevant factors such as cut-off grade, likely mining dimensions, location, or continuity, that with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled.
Based on this definition of Mineral Resources, the Mineral Resources estimated in this PEA have been classified according to the definitions below based on geology, grade continuity, and drillhole spacing.
Measured mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling. The level of geological certainty associated with a measured mineral resource is sufficient to allow a qualified person to apply modifying factors, as defined in this section, in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit. Because a measured mineral resource has a higher level of confidence than the level of confidence of either an indicated mineral resource or an inferred mineral resource, a measured mineral resource may be converted to a proven mineral reserve or to a probable mineral reserve.
Indicated mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling. The level of geological certainty associated with an indicated mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Because an indicated mineral resource has a lower level of confidence than the level of confidence of a measured mineral resource, an indicated mineral resource may only be converted to a probable mineral reserve.
Inferred mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of geological uncertainty associated with an inferred mineral resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Because an inferred mineral resource has the lowest level of geological confidence of all mineral resources, which prevents the application of the modifying factors in a manner useful for evaluation of economic viability, an inferred mineral resource may not be considered when assessing the economic viability of a mining project and may not be converted to a mineral reserve.
The SLR QP has considered the following factors that can affect the uncertainty associated with the class of Mineral Resources:
Drilling, sampling, sample preparation, and assay procedures follow industry standards.
Data verification and validation work confirm drillhole sample databases are reliable.
No significant biases were observed in the QA/QC analysis results.
Resources were estimated using the GT contour method by projecting average width and GT along a measured REDOX trend defined by drillholes. Appropriate average width and GT applied to each specific mineral resource area was determined from drillhole data. The GT contour method is commonly used in the uranium industry and refers to the estimated grade multiplied by estimated thickness. In many uranium deposits, thin uranium mineralization can be mined due to those zones being higher grade. The GT method allows this information to be accurately calculated and displayed.
Mineralization is correlated within laterally continuous sands at Nichols Ranch. All mineralization at Nichols Ranch is within the Wasatch Formation which has been broken into eight fluvial sandstone horizons or units identified as the 1, A, B, C, F, G and H Sand units.
Mineral Resources for the Project were classified as either Measured, Indicated, or Inferred Mineral Resources as detailed in the following subsections.
14.11.1 Measured Mineral Resources
The Nichols Ranch area was an active ISR mine. Within the defined wellfields, which correspond to the areas for which Measured Mineral Resources have been estimated, detailed delineation drilling or well installation require a drillhole spacing of less than 100 ft.
14.11.2 Indicated Mineral Resources
Indicated Mineral resources are defined to be those areas where the location of the REDOX front can be reasonably defined by drill data and where along a continuously mapped REDOX front there are drillholes that intersect the mineralized front and reasonably confirm the presence on mineralization which has reasonable prospect for economic extraction. For the Complex, drillhole spacing in areas for which EFR estimated indicated mineral resources ranges from less than 100 ft spacing to as much as 800 ft along the REDOX front.
14.11.3 Inferred Mineral Resources
Inferred Mineral Resources for the Complex are those areas for which EFR calculated have a drillhole spacing exceeding 800 ft along trend provided that there is geologic evidence that the REDOX front is present and its location can reasonably be assumed.
The SLR QP is of the opinion that the Mineral Resource classification criteria used is reasonable and appropriate for disclosure.
14.12 GT Model Validation
The SLR QP received the project data from EFR for independent review as a series of Microsoft Excel spreadsheets, ArcGIS software, and associated digital files. The SLR QP used the information provided to validate the Mineral Resource interpolation, tons, grade, and classification.
Drillhole collar locations and GT values were confirmed by plotting drill collar coordinates, GT intercepts, oxidation-reduction boundary, and well pattern grid layout within the Header House 1 and Header House 3 zones within the Production Area #1 portion of the Nichols Ranch deposit (Figure 14-7).
Figure 14-7: Nichols Ranch PA1 and PA2 Drilling
14.13 Mineral Resource Reporting
The Nichols Ranch Mining Unit and Satellite Properties Mineral Resource estimate is summarized by area at a GT cut-off grade of 0.20 %-ft in Table 14-7. In the SLR QP's opinion, the assumptions, parameters, and methodology used for the Nichols Ranch Mineral Resource estimates are appropriate for the style of mineralization and mining methods.
The SLR QP is of the opinion that with consideration of the recommendations summarized in Section 1.0 and Section 26.0 of this Technical Report, any issues relating to all relevant technical and economic factors likely to influence the prospect of economic extraction can be resolved with further work.
The SLR QP is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could materially affect the Mineral Resource estimate.
Table 14-7: Mineral Resource Estimate for the Nichols Ranch Uranium Complex - Effective Date December 31, 2021
Energy Fuels Inc. - Nichols Ranch Project
Classification |
Project Area |
Sand |
Tonnage |
Grade |
Contained Metal |
EFR Attrib. Basis |
EFR Attributable |
Recovery |
Measured |
Nichols Ranch |
A |
11,000 |
0.187 |
41,140 |
100.0 |
41,140 |
71.0 |
|
Jane Dough |
|
0 |
0.000 |
0 |
0.0 |
0 |
0.0 |
|
Hank |
|
0 |
0.000 |
0 |
0.0 |
0 |
0.0 |
Total Measured |
|
|
11,000 |
0.187 |
41,140 |
100.0 |
41,140 |
71.0 |
|
|
|
|
|
|
|
|
|
Indicated |
Nichols Ranch |
A |
359,000 |
0.166 |
1,189,693 |
100.0 |
1,189,693 |
60.4 |
|
Jane Dough |
A |
1,892,000 |
0.112 |
4,237,000 |
81.0 |
3,431,970 |
60.4 |
|
Hank |
F |
450,000 |
0.095 |
855,000 |
100.0 |
855,000 |
60.4 |
|
North Rolling Pin |
F |
582,000 |
0.057 |
665,000 |
100.0 |
665,000 |
60.4 |
Total Indicated |
|
|
3,283,000 |
0.106 |
6,946,693 |
88.4 |
6,141,663 |
60.4 |
Total Measured + Indicated |
|
|
3,294,000 |
0.106 |
6,987,833 |
88.5 |
6,182,803 |
60.4 |
|
|
|
|
|
|
|
|
|
Inferred |
Jane Dough |
A |
188,000 |
0.112 |
420,000 |
81.0 |
340,200 |
60.4 |
|
Hank |
F |
423,000 |
0.095 |
803,000 |
100.0 |
803,000 |
60.4 |
|
North Rolling Pin |
F |
39,000 |
0.042 |
33,000 |
100.0 |
33,000 |
60.4 |
Total Inferred |
|
|
650,000 |
0.097 |
1,256,000 |
93.6 |
1,176,200 |
60.4 |
Notes:
1. SEC S-K 1300 definitions were followed for all Mineral Resource categories. These definitions are also consistent with CIM (2014) definitions in NI 43-101.
2. Measured Mineral Resource includes reduction for production through December 31, 2021.
3. Mineral Resources are 100% attributable to EFR for Nichols Ranch, Hank, and North Rolling Pin, and are in situ.
4. Mineral Resources are 81% attributable to EFR and 19% attributable to United Nuclear Corp in parts of Jane Dough, and are in situ.
5. Mineral Resource estimates are based on a GT cut-off of 0.20 %-ft
6. The cut-off grade is calculated using a metal price of $65/lb U3O8
7. Mineral Resources are based on a tonnage factory of 15.0 ft3/ton (Bulk density 0.0667 ton/ft3 or 2.13 t/m3).
8. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
9. Numbers may not add due to rounding.
15.0 MINERAL RESERVE ESTIMATES
There are no current Mineral Reserves at the Project.
16.0 MINING METHODS
16.1 Introduction
This PEA is based on ISR mining of the uranium mineralization at the Complex using alkaline lixiviant. EFR conducted ISR mining at the Complex, specifically the Nichols Ranch area, from 2014 through 2019. Figure 16-1 below is a general schematic of the ISR process.
Source: NRC, 2016
Figure 16-1: Schematic of the ISR Process
ISR is an injected-solution mining process that reverses the natural processes that originally deposited the uranium in the sandstones. On-site groundwater is fortified with gaseous oxygen and introduced to the zones of uranium mineralization through a pattern of injection wells. The solution dissolves the uranium from the sandstone host.
The uranium-bearing solution is brought back to surface through production wells where the uranium is concentrated at a central processing plant and dried into yellowcake for market.
ISR mining and milling utilizes the five steps described below. The first three steps describe the mining process while steps 4 and 5 describe the milling (i.e., processing and refinement).
3. A solution called lixiviant (typically containing water mixed with oxygen and/or hydrogen peroxide, as well as sodium bicarbonate or carbon dioxide) is injected through a series of wells into the mineralized zones to dissolve and to complex the uranium.
4. The lixiviant with uranium in solution is then collected in a series of recovery wells, from which it is pumped to a processing plant, where the uranium is extracted from the solution through an ion-exchange process.
5. Once the uranium has been extracted, the lixiviant is fortified and reused in the wellfield. Typically, 99% of the solution is reused. The remaining percentage is waste which is disposed of in deep injection wells within EPA exempted aquifers.
6. The uranium extract is then further purified, concentrated, and dried to produce a material, which is called "yellowcake" because of its yellowish color.
7. Finally, the yellowcake is packed in 55-gallon drums to be transported to a uranium conversion facility, where it is processed through the stages of the nuclear fuel cycle to produce fuel for use in nuclear power reactors.
At the Nichols Ranch Plant, the concentrated uranium, in a slurry form, is loaded into a slurry trailer and shipped to the Mill in Blanding, Utah, for drying and packaging.
16.2 Mining Method
For the production schedule described in this Technical Report, the mineralized zones at the Nichols Ranch area, Jane Dough area, and Hank area will be divided into individual production areas where injection and recovery wells will be installed. As is typical with the other IRS mining commercial operations, the wells will be arranged in variations of 5-spot patterns. In some situations, a line-drive pattern or staggered line-drive pattern may be employed. Horizontal and vertical excursion monitor wells are and will be installed at each wellfield as dictated by geologic and hydro-geologic parameters, and as approved by the WDEQ/LQD. The facilities have been and will be constructed according to acceptable engineering practices.
16.3 Mining Operations
16.3.1 Uranium Recovery
The proposed uranium ISR process involves the dissolution of the water-soluble uranium compound from the mineralized host rock at neutral pH ranges. It consists of two steps:
16.3.2 Lixiviant Composition
The lixiviant for an alkaline ISR uranium process is a dilute carbonate/bicarbonate aqueous solution that is fortified with an oxidizing agent. During the injection of lixiviant, oxygen will be added to oxidize the uranium underground. Carbon dioxide is provided to adjust the pH to avoid calcium carbonate and calcium sulfate precipitation. Additionally, carbon dioxide dissolved in water provides another source of the carbonate/bicarbonate ions. Finally, sodium carbonate/bicarbonate may be used to adjust the carbonate/bicarbonate concentration.
The barren solution that leaves the uranium ion exchange system will be refortified with chemicals prior to the re-injection into the mineralized zone of the aquifer. The process continues until the economics become unfavorable.
16.3.3 Chemical Reactions
Oxidation of tetravalent uranium is achieved by using oxygen or hydrogen peroxide. For economic reasons, oxygen is widely used in commercial applications. EFR will utilize oxygen as the primary oxidant; however, hydrogen peroxide may be used if needed to increase the oxidation potential in the lixiviant if there are chemical or physical conditions that will reduce the effectiveness of the addition of gaseous oxygen.
The end product of the carbonate/bicarbonate complexing process can be identified as uranyldicarbonate, [UO2(CO3)2]2- (UDC), at neutral pH ranges and as uranyltricarbonate, [UO2(CO3)3]4- (UTC), at more alkaline pH ranges.
The chemical reactions for the alkaline recovery process are listed as follows:
Oxidation: UO2 + ½ O2 = UO3
UO2 + H2O2 = UO3 + H2O
Complexing: UO3 + 2HCO3- = [UO2(CO3)2]2- + H2O
UO3 + 2HCO3- + CO3- = [UO2(CO3)3]4- + H2O
The ion exchange process utilizes polystyrene resin that is designed to provide exchange sites that are highly selective for the capture of uranium from the pregnant lixiviant. A strong base resin will be used for the ion exchange of either the uranyldicarbonate complex, [UO2(CO3)2]2- (UDC), or the uranyltricarbonate complex, [UO2(CO3)3]4- (UTC), in the process plant.
The chemical reactions are listed as follows:
[UO2(CO3)2]2- + R2+ = R[UO2(CO3)2]
[UO2(CO3)3]4- + 2R2+ = R2[UO2(CO3)3]
R denotes the active site on the ion exchange resin.
16.4 Hydrogeology Data
16.4.1 Summary of Previous Work
Before the injection of leaching solutions was first initiated, the following information was submitted to the appropriate local and federal agencies as part of previous permitting efforts (Uranerz, Addendum MP-G, 2010; Addendum MPI, 2015):
Results of analytical and numerical modeling for each mining area. These results were used in the wellfield design within the production zone and impact assessment and/or hydraulic connection with overlying and underlying adjacent aquifers/aquitards.
Results of aquifer testing, which were used to evaluate the following:
Hydraulic connection of perimeter monitor wells with production unit ore zone wells.
Hydraulic properties of the ore zone aquifer.
The presence or absence of hydrologic boundaries in the ore zone.
Hydrologic communication between the ore zone aquifer and monitor well ring, and its interaction with overlying and underlying aquifers.
Well completion reports (annual reports reviewed from 2011 to 2020).
Active production and monitoring wells survey data.
Potentiometric (2011 to 2020) surface maps for the ore zones to be mined, the overlying and underlying aquifers. This includes approximated groundwater flow directions, hydraulic gradients, and seasonal fluctuations of water levels inferred from the potentiometric surfaces.
Structural contour maps of the ore hosting zone, and overlying and underlying aquifers/aquitards.
Baseline water quality of the upper and lower aquifers and monitor well upper control limits.
Baseline water quality of the perimeter monitor ring and upper control limits.
RTVs were calculated from the water quality data collected from the ore zone monitoring wells.
RTVs will be used for groundwater restoration evaluations within the production area.
16.4.2 Overview
Multiple rounds of hydrogeologic characterizations have been performed in the Complex and surrounding areas in connection with recoverable uranium deposits, ISR mining methods, and groundwater resources. These studies have generated data, including water quality data, aquifer properties, historical pumping rates, numerical and analytical modeling, etc. (Hodson et al., 1973; Whitehead, 1996; Uranerz, 2010; 2019; EFR, 2020).
The Nichols Ranch Mining Unit consists of three mining areas: the Nichols Ranch area, Jane Dough area, and the Hank area. These mining areas are located in the Cottonwood and Willow Creek drainages. On a regional scale, groundwater occurs in the Quaternary alluvial aquifer underlying major drainages as well as deeper bedrock aquifers. The Wasatch Formation, the uppermost geologic unit, comprises regional aquifers. Groundwater in the Wasatch aquifers generally flows to the north and northwest in the mining areas. The aquifers and confining units of interest in the mining areas from top and bottom are within the Wasatch Formation (Figure 7-1).
Analytical (WELFLO, Walton (1989) and numerical modeling (MODFLOW, Harbaugh and McDonald, 1996) simulations were conducted to understand the extent of interaction between the "ore"-hosting sands and adjacent aquifers and aquitards. Modeling also was used to evaluate operational drawdown, gradient changes, recovery, horizontal wellfield flare, and vertical flare in the aquifers of interest and adjacent aquitards.
16.4.2.1 Site Hydrogeology
The SLR QP visited the Complex from October 27 to 29, 2021. Subsequently, the SLR QP requested from EFR basic hydrogeologic information such as water level surveys, pumping tests, flow rates, and any secondary documentation, such as numerical modeling and reports. EFR provided relevant reports and documents prepared to support permit applications. The SLR QP used these documents, information gathered during the site visit, and other publicly available to highlight the following main findings.
The potentially economic mineralization primarily occurs in two sandstone members of the Wasatch Formation, designated as the A Sand in the Nichols Ranch and Jane Dough areas, and the F Sand in the Hank Unit (Figure 7-4). These two "ore"-hosting members are generally separated by the B and C sandstones and adjacent aquitards. The aquitards are labeled by combining the two adjoining sandstone units (i.e., BC Aquitard). The "ore" zones for the Nichols Ranch, Jane Dough, and the Hank areas are approximately 300 ft below ground surface (bgs) to 700 ft bgs, 400 ft bgs to 600 ft bgs, and 200 ft bgs to 600 ft bgs, respectively. The local aquifer Sand Units are described sequentially in geochronological order, 1, A, B, C, F, G, and H Sandstones (Figure 16-2).
Permeability properties and water quality of the groundwater hosted in these aquifer units are also known. The transmissivity, which is defined as hydraulic conductivity multiplied by aquifer thickness, and yield from the Wasatch Formation are also highly variable, with a yield of up to a few hundred gallons per minute when a large thickness of saturated sands is completed in a well. The water quality in these aquifers would also generally be good, with a total dissolved solid (TDS) concentration typically from <1,000 milligrams per litre (mg/L) to <2,000 mg/L.
16.4.2.1.1 Hydrogeological Characteristics of the Major Units of Interest
The depth at which groundwater is first encountered across the Project area varies and depends on surface topography. The hydraulic properties of the recovery aquifers and associated underlying and overlying aquifers have been evaluated in the Project area using both multiwell pumping tests and single-well tests (BLM, 2015). Summary of the detailed aquifer properties estimated through numerous single well and multiwell pump tests are provided in Uranerz (2010). Aquifers suitable for ISR mining of uranium are by their nature confined, minimizing the possibility of cross-aquifer contamination.
Uranium Bearing Aquifer (Hank Unit) -F Sand: This unit is approximately 20 ft to 120 ft thick and 200 ft bgs to 600 ft bgs. The water levels in the F Sand fall below the base of the overlying GF aquitard in the northern portion and slightly above in the southern portion (Figure 16-2). The hydraulic conductivity of the F Sand in the Hank Unit varied greatly from 0.14 ft/day to 9.4 ft/day, with an average of 0.6 ft/day in this area. The water level in the production zone at the Hank Unit is near the top of the sand, therefore, the F Sand is not fully saturated. Accordingly, the F Sand aquifer is unconfined. The primary storage property for an unconfined aquifer is specific yield and estimated to be approximately 0.05 ft/day for the F Sand in this area. The F Sand is underlain by the FC aquitard (45 ft to 110 ft thick) and C Sand. The C Sand has been designated as the aquifer underlying the production zone in areas present. The C Sand is approximately 10 ft to 60 ft thick and discontinuous. The B Sand underlies the "ore" zone where it is not present. The hydraulic conductivity of the C Sand is approximately 0.025 ft/day (Uranerz, 2012 and BLM, 2015).
Uranium Bearing Aquifer (Nichols Ranch and Jane Dough Areas) -A Sand: The primary mineralized sand horizons are in the lower part of the Wasatch, at an approximate average depth of 550 ft and average thickness of 100 ft. At Nichols Ranch, some mineralization also occurs in the Wasatch at a depth of approximately 400 ft (150 ft thickness). Transmissivities for the A Sand vary from 13.5 ft2/day to 61.6 ft2/day. A value of 46.9 ft2/day is thought to be the most representative of the A Sand. Horizontal hydraulic conductivity varies from 0.18 ft/day to 0.7 ft/day and a value of 0.5 ft/day is thought to best represent the A Sand. Groundwater in the A Sand flows northwest with an average value of 0.0033. Based on this gradient, an effective porosity of 0.05, and an average hydraulic conductivity of 0.5 ft/day, the average groundwater flow rate is estimated to be 0.033 ft/day (Uranerz, 2012 and BLM, 2015).
Source: Uranerz, 2012.
Figure 16-2: Relevant Geologic/Hydrogeologic Units in the Vicinity of the Project Area
16.5 Geotechnical Data
No geotechnical work has been completed at either the Complex or Satellite Properties. All Mineral Resources will be extracted using ISR wellfields and therefore do not require the completion of geotechnical work typically done for conventional mining.
No geotechnical work has been completed at either the Complex or Satellite Properties. All Mineral Resources will be extracted using ISR wellfields and therefore do not require the completion of geotechnical work typically done for conventional mining.
16.6 Life of Mine Plan
EFR has divided the Nichols Ranch Mining Unit into three separate project areas, Nichols Ranch, Jane Dough, and Hank. These areas are descriptive of distinct areas within the areas held by EFR and the Arkose Mining Venture. The Nichols Ranch area consists of the Nichols Ranch Plant and two production areas, PA1 and PA2. PA1 began production in March 2014 with eight active production header houses; one header house has been constructed at PA2. Two of the four permitted deep disposal wells have been constructed and were in operation at the Nichols Ranch area until mining operations ceased in 2019.
The permitted and licensed Jane Dough area is adjacent to the south of the Nichols Ranch area and contains properties held by the Arkose Mining Venture and 100% by EFR. It will be developed as an adjacent property through a pipeline to the Nichols Ranch Area. Two production areas (PA1 and PA2) are planned for the Jane Dough area.
The Hank area is 100% EFR owned and is located approximately six miles east of the Nichols Ranch area. It is fully licensed and permitted to operate as a satellite to the Nichols Ranch area.
The life of mine (LOM) schedule, shown in Table 16-1, summarizes the primary production followed by wellfield restoration and reclamation. Final decommissioning is planned to occur with the completion of restoration with the final production area.
Within a production wellfield, the basic component of mine development and production is the production pattern. A pattern consists of one recovery well and one or more injection wells that feed it. Injection wells can be and often are shared by multiple recovery wells and function as distribution points for injection flow. In a similar manner, the recovery wells act as collection points for production solutions that are gathered at the header houses prior to transfer by pipeline to the recovery or the processing facilities. The Hank area will be developed in a similar manner. The Hank Unit is licensed as a satellite recovery facility and its design throughput of 2,500 gpm would be additive to the throughput generated from the Nichols Ranch and Jane Dough areas.
It is proposed that the remainder of PA2 on the Nichols Ranch area, as well as PA1 and PA2 on the Jane Dough area would be developed in such a way as to reach and maintain the plant permitted throughput capacity of 3,500 gpm. In other words, as the production (as related to head grade) from the initial header houses decreases below economic limits, replacement production patterns from additional header houses will be placed into operation to maintain the desired flow rate and head grade.
The Nichols Ranch Plant, and the allocation of resources to the production areas within Nichols Ranch, Jane Dough and Hank areas, is designed to produce between 300,000 and 500,000 lb U3O8 per year for several years. It is estimated that approximately 4.0 million lb U3O8 will be recovered from all three areas of the Nichols Ranch Mining Unit.
Table 16-1: Nichols Ranch Area Life of Mine Plan (Attributable to EFR)
Energy Fuels Inc. - Nichols Ranch Project
Years |
Units |
LOM |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
Nichols Ranch |
klb |
718 |
648 |
70 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
Jane Dough |
klb |
2,277 |
- |
428 |
251 |
526 |
456 |
311 |
305 |
- |
- |
- |
- |
- |
Hank |
klb |
1,028 |
- |
- |
- |
- |
- |
- |
10 |
307 |
415 |
158 |
138 |
- |
Total Produced |
klb |
4,023 |
648 |
498 |
251 |
526 |
456 |
311 |
315 |
307 |
415 |
158 |
138 |
- |
Flow Rate |
gpm |
2,912 |
2,640 |
3,281 |
3,333 |
3,137 |
3,055 |
3,333 |
3,291 |
3,308 |
3,030 |
1,952 |
1,670 |
- |
Head Grade |
mg/L |
33 |
56 |
35 |
17 |
38 |
34 |
21 |
22 |
21 |
31 |
18 |
13 |
- |
Working Days |
days |
365 |
365 |
365 |
365 |
365 |
365 |
365 |
365 |
365 |
365 |
365 |
365 |
- |
Total Sold |
|
4,023 |
648 |
498 |
251 |
526 |
456 |
311 |
315 |
307 |
415 |
158 |
138 |
- |
16.7 Mine Equipment
Due to the nature of the ISR process, the principal mine equipment is focused on the production wellfields. As stated earlier, the most basic components of the wellfield are the recovery and injection wells that comprise the basic production patterns. Each well is constructed using a drillhole to the mineralized portion of the aquifer using a conventional mud rotary drill rig. Each well will be cased with a polyvinyl chloride (PVC) pipe that is sized and sufficiently pressure rated, and the annulus between the drillhole and the casing will be grouted from the bottom to top using a beneficiated cement slurry as a seal. Each well will be under-reamed and will be completed with or without a screen and filter pack, depending on geologic conditions. Following a mechanical integrity test, the wells will be configured for use. Each recovery well will be fitted with a downhole submersible pump and each injection well will be configured with downhole tubing to facilitate oxygen addition. Each well, whether injection or recovery, will be connected to the appropriate surface facilities within a header house.
Header houses are used to distribute barren solutions or barren lixiviant to injection wells and collect pregnant solutions from recovery wells. Each header house is connected to two trunk lines, with one receiving barren lixiviant from the Nichols Ranch Plant and one delivering pregnant lixiviant to the Nichols Ranch Plant. A typical header house will include manifolds, valves, flow meters, pressure gauges, filters, instrumentation, and oxygen supply for incorporation into the barren lixiviant for injection, as required. Each header house may service between 60 and 120 wells, injection, and recovery, depending on the characterization of the mineralization and the production pattern geometry.
Pipelines between the header houses and the Nichols Ranch Plant will be used to transport wellfield solutions. Flows and pressures will be controlled at the header houses and monitored at both the recovery plant and the header houses. High density polyethylene (HDPE), PVC, stainless steel, or equivalent piping is used in the wellfield and has been selected to meet design operating conditions. The lines from the plant, header houses, and individual wells (injection and recovery) will be buried for freeze protection and to minimize pipe movement.
16.8 Mine Workforce
It is planned that nine staff will be employed at the wellfield during operations for wellfield development, construction projects, and operations.
17.0 RECOVERY METHODS
17.1 Introduction
The Nichols Ranch Plant is licensed and designed to have four major solution circuits: 1) the recovery circuit, 2) the elution circuit, 3) the precipitation and filtration circuit, 4) the drying and packaging circuit. The first three solution circuits are constructed and operated from 2014 to 2019. Due to the absence of the on-site drying and packaging circuit, the Project proposes to truck the U3O8 produced on-site to the Mill near Blanding, Utah, for drying and drumming for final delivery to end users. The Mill is approximately 643 road miles from the Complex.
The recovery circuit includes the flow of lixiviant from the wellfield to the sand filters, or directly to the ion exchange (IX) columns, and back to the wellfield. The uranium that is liberated underground is extracted in the ion exchange system of the process plant. The bleed from the circuit is permanently removed from the lixiviant flow to create a "cone of depression" in the wellfield's static water level and ensure that the lixiviant is contained by the inward movement of groundwater within the designated recovery area. The bleed is disposed of by means of injection into two deep, approved, Class I - Non Hazardous disposal wells. The volume of the concentrated bleed is approximately 0.5% to 1.5% of the circulating lixiviant flow for the Nichols Ranch and Jane Dough areas and projected to be 2.5% to 3.5% for the Hank area.
The elution circuit consists of transferring the uranium loaded resin bed contained in an IX column into an elution column and to circulate a briny-carbonated solution through the resin bed to remove the uranium from the ion exchange resin until it is completely stripped. The barren or eluted ion exchange resin is then transferred back from the elution column to the IX column.
The uranium concentration in the eluate will be built up at a controlled concentration range of between 20 g/L to 40 g/L. This uranium rich eluate is ready for the de-carbonation process that occurs in the uranium precipitation circuit.
The precipitation and filtration circuit starts when the eluate is treated with acid to destroy the carbonate portion of the dissolved uranium complex. In addition to adding the acid slowly, a common defoamer may be used to reduce the foaming activity. The precipitation reagents, hydrogen peroxide and sodium hydroxide, are added to the eluate to start precipitating uranium yellowcake. The yellowcake slurry is then filtered, washed, and loaded into a slurry trailer. When full, the yellowcake slurry trailer is transported by road to the Mill in Blanding, Utah, where it will be unloaded, dried, and drummed for final delivery to end users.
17.2 Chemical Reactions
17.2.1 Elution Process and Resin Handling
The ion exchange resin is ready for elution when it is fully loaded with uranium. The elution process reverses the loading reactions for the ion exchange resin and strips the uranium from the resin. The eluant will be an aqueous solution containing salt and sodium carbonate and/or sodium bicarbonate.
The chemical reactions are listed as follows:
R [UO2(CO3)2] = [UO2(CO3)2]2- + R2+
R2[UO2(CO3)3] = [UO2(CO3)3]4- + 2R2+
The elution circuit at the Nichols Ranch Plant is designed to also accept and elute uranium loaded resin from other satellite operations. Two Department of Transportation approved trailers are used to transport the resin to other processing facilities or EFR's own satellite facilities. The resin is hydraulically removed from the trailer and screened to remove formation sand and other debris.
17.2.2 Yellowcake Production
Yellowcake is produced from the rich eluates that are recovered from the loaded ion exchange resin. The eluate from the elution circuit is de-carbonated by lowering the pH below 2 with hydrochloric acid. The yellowcake product will be precipitated with hydrogen peroxide and a base such as sodium hydroxide or ammonia.
De-carbonation: [UO2(CO3)2]2- + 4H+ = UO22+ + 2CO2 + 2H2O
[UO2(CO3)3]4- + 6H+ = UO22+ + 3CO2 + 3H2O
Precipitation: UO22+ + H2O2 + 4H2O = UO4·4H2O + 2H+
The precipitated yellowcake slurry is transferred to a filter press where excess liquid will be removed. Following a freshwater wash step that will flush the dissolved chlorides, the resulting product cake is pumped to the yellowcake slurry trailer. Once full, the slurry trailer will be transported to the Mill to be dried.
17.3 Flow and Material Balance
The ion exchange system for the Nichols Ranch Plant is licensed to accommodate flow rates up to 3,500 gpm. To contain the lixiviant within the designated wellfield recovery area, a small portion of the barren solution is withdrawn from the ion exchange circuit. The amount of bleed is estimated to be in the average range of 1% of the overall flow rate or equivalent to approximately 35 gpm.
The bleed solution is mainly disposed of directly through the two deep disposal wells but can be used to rinse and clean-up freshly eluted resin, make-up fresh eluant in the elution circuit, back wash sand filters, and wash yellowcake if necessary. A nominal flow and material balance for the Nichols Ranch Plant is presented in Figure 17-1. The flow shown is an example capacity for the facilities and does not represent any design or regulatory limits.
The processing facilities are typical for this service and industry standard, as such It is SLR QP's opinion that processing facilities are suitable for purpose.
Figure 17-1: Nichols Ranch Plant Flow Sheet
17.4 Sources of Plant Liquid Effluents and Disposal Methods
Liquid effluents are expected to be generated from pumping test water, process bleed, process solutions, wash-down water, and restoration water. The water generated during pumping tests is expected to satisfy Wyoming Department of Environmental Quality, Water Quality Division (WDEQ/WQD) Class IV groundwater standards at a minimum and has minimal potential radiological impact on soils or surface water.
The process bleed and wash-down water are transferred to waste tanks and then to a deep disposal well. This deep disposal well has been constructed and operated in a manner similar to other operating deep disposal wells at similar ISR uranium sites. EFR has permitted four and constructed two deep disposal wells at the Nichols Ranch area and has permitted four disposal wells and constructed none at the Hank area. These deep disposal wells were permitted through the WDEQ. As required, the disposal wells have been completed in approved formations and operated according to permit requirements. All the deep disposal wells have also received an aquifer exemption from the EPA that is included with the Underground Injection Control (UIC) Class I - Non-Hazardous permit issued by the WDEQ.
The Jane Dough area will not require additional disposal wells since it will be operated directly through the Nichols Ranch Plant and will be able to use the existing disposal well capacity.
The restoration water will be treated by reverse osmosis or other purification technology. The treated restoration water will be re-injected into the process with the restoration water bleed transferred to the deep disposal well.
It is SLR QP's opinion that the current installed equipment will not exceed or require modifications to the existing infrastructure for future operations.
17.5 Plant Workforce
It is planned that ten staff, consisting of one manager and nine operators, will be employed at the Nichols Ranch Plant during operations.
17.6 White Mesa Mill Drying/Packaging Operation
As outlined in Section 17.2, slurried yellowcake product will be trucked 643 road miles to the Mill in Blanding, Utah, where it will be dried and packaged for final delivery to end users. The Mill has been in operation since 1981 with the required equipment using a proven process to produce yellowcake. In addition, although it is not part of the production schedule in this Technical Report, the Mill also has the capacity to produce vanadium pentoxide (V2O5).
The Mill is currently on a reduced operating schedule processing materials as they become available. The Mill is currently processing Rare Earth Element (REE) materials in part of the circuit, functioning essentially as a pilot plant, therefore the facility is sufficiently staffed to initiate U3O8 production relatively quickly.
18.0 PROJECT INFRASTRUCTURE
18.1 Introduction
The Complex previously operated from 2014 to 2019. The basic infrastructure (power, water, and transportation) necessary to support an ISR mining operation has been established at the Nichols Ranch area. This basic infrastructure can also support Jane Dough and Hank areas. Jane Dough is immediately proximate to Nichols Ranch. Hank is approximately six miles northeast of Nichols Ranch and would require additional infrastructure.
18.2 Access Roads
The proximity of the Complex to paved roads will facilitate transportation of equipment, supplies, personnel, and product to and from the Complex. Although the population within 50 mi of the subject property consists mainly of rural ranch residences, personnel required for exploration, construction, and operation are available in the nearby towns of Wright, Midwest, Edgerton, Gillette, Buffalo, and Casper, Wyoming.
18.3 Power
Power transmission lines are located on or near parts of the Project. EFR has secured power from the local electrical service provider to accommodate all operational needs.
18.4 Water Supply
Non-potable water will be supplied by wells. Water extracted as part of ISR operations will be recycled for reinjection. Typical ISR mining operations also require a disposal well for limited quantities of fluids that cannot be returned to the production aquifers. Deep disposal wells are permitted and installed for the Nichols Ranch Plant.
18.5 Tailings
Tailings storage areas, waste disposal areas, and heap leach pads will not be a part of the infrastructure for the Complex, as ISR operations do not require these types of facilities. Solutions from the wellfields are recirculated within the wellfield. The waste stream bleed from the system is injected into the deep disposal wells.
18.6 Mine Support Facilities
The permitted option for Hank includes construction and operation of a satellite plant facility similar to that at Nichols Ranch. If constructed, the Hank plant would consist of an ion exchange circuit and lixiviant make-up circuit, bleed treatment, and disposal well. Most of the process equipment would be housed in an approximate 80 ft by 160 ft metal building with eave heights less than 40 ft, with some of the bulk chemical storage tanks located outside of the process building. Carbon dioxide would be added to the lixiviant as the fluid exits the Hank satellite facility and returns to the header houses, where oxygen and/or sodium bicarbonate could be added prior to injection into the wellfield. If operated as a satellite facility, Hank would ship resin to a central processing plant for final processing and packaging of yellowcake.
The other major option for the development of Hank would be to convey fluids from Hank to the Nichols Ranch Plant. This option would have additional permitting requirements for the pipeline and capital and operating expenditures related to the transfer of solutions between Nichols Ranch and Hank. These costs would be offset by reduced capital and operating expenditures related to the construction and operation of the satellite plant and disposal well(s).
The preferred alternative for the purposes of this PEA is operation of Hank as an adjacent property through pipelines to the Nichols Ranch Plant.
Figure 18-1 provides an aerial view of the infrastructure immediate to the Nichols Ranch Plant. Figure 18-2 provides the infrastructure layout of PA1 and PA2.
Figure 18-1: Aerial View of Infrastructure Around the Nichols Ranch Processing Plant
Figure 18-2: Site Layout
19.0 MARKET STUDIES AND CONTRACTS
19.1 Markets
The majority of uranium is traded via long-term supply contracts, negotiated privately without disclosing prices and terms. Spot prices are generally driven by current inventories and speculative short-term buying. Monthly long-term industry average uranium prices based on the month-end prices are published by Ux Consulting, LLC, and Trade Tech, LLC. An accepted mining industry practice is to use "Consensus Forecast Prices" obtained by collating commodity price forecasts from credible sources.
19.1.1 Supply
According to the World Nuclear Association (World Nuclear, 2021), world uranium requirements totaled more than 47,700 t U in 2020, with the global pandemic accelerating a trend of slowly-decreasing production:
2016 - 63,207 t U
2017 - 60,514 t U
2018 - 54,154 t U
2019 - 54,742 t U
2020 - 47,731 t U
The top five producing countries (Kazakhstan, Australia, Namibia, Canada, and Uzbekistan) accounted for over 80% of world production in 2020.
The share of uranium produced by ISR mining has steadily increased mainly due to the addition of ISR operations in Kazakhstan, and now accounts for over 50% of production.
Over half of uranium mine production is from state-owned mining companies, some of which prioritize secure supply over market considerations.
19.1.2 Demand
Demand is primarily as a source for nuclear power plants. The use of nuclear power generation plants has become increasingly acceptable politically. Both China and India have indicated an intention to increase the percentage of power generated by nuclear plants. The largest increase in demand will come from those two countries.
Demand for uranium fuel is more predictable than for most other mineral commodities, due to the cost structure of nuclear power generation, with high capital and low fuel costs. Once reactors are built, it is very cost-effective to keep them running at high capacity and for utilities to make any adjustments to load trends by cutting back on fossil fuel use. Demand forecasts for uranium thus depend largely on installed and operable capacity, regardless of economic fluctuations.
The World Nuclear Association website notes that mineral price fluctuations are related to demand and perceptions of scarcity. The price cannot indefinitely stay below the cost of production, nor can it remain at a very high price for longer than it takes for new producers to enter the market and for supply anxiety to subside.
19.1.3 Price
The key to understanding any mineral market is knowing how the mineral price is determined. There are generally considered to be two prices in the uranium market: 1) long term contract prices, and 2) spot prices. These are published by companies that provide marketing support to the industry with UxC being the most commonly followed price report. Over the long term price follows the classic market force of supply demand balance with a "speculative" investment market that creates price volatility.
Figure 19-1 provides a Long Term Uranium Price Forecast through 2035 from TradeTech LLC (TradeTech) from the third quarter of 2021. The Forward Availability Model (FAM 1 and 2) forecast differ in assumptions as to how future uranium supply enters the market. "FAM 1 represents a good progression of planned uranium projects incorporating some delays to schedules, while FAM 2 assumes restricted project development because of an unsupportive economic environment." (TradeTech, 2021). Currently most US producers are in a mode of care and maintenance and numerous facilities globally are also slowing or shutting in production at least on a temporary basis. At this time in the US, no new projects are being constructed, and very few are moving forward with permitting and/or licensing. This condition aligns more with the FAM 2 projections.
Figure 19-1: Long Term Uranium Price Forecast
Consensus forecasts collected by the SLR QP are in line with the FAM2 - Spot prices in Figure 19-1. General industry practice is to use a consensus long-term forecast price for estimating Mineral Reserves, and 10% to 20% higher prices for estimating Mineral Resources.
For Mineral Resource estimation and cash flow projections, EFR selected a U3O8 price of $65.00/lb, on a Cost, Insurance, and Freight (CIF) basis to customer facility, based on independent forecasts. The SLR QP considers this price to be reasonable and consistent with industry practice.
The SLR QP has reviewed the market studies and analysis reports and is of the opinion they support the findings of this Technical Report and disclosure of the Mineral Resource estimates.
19.2 Contracts
At this time, EFR has not entered into any long term agreements for the provision of materials, supplies or labor for the Project. The construction and operations will require negotiation and execution of a number of contracts for the supply of materials, services, and supplies.
20.0 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT
20.1 Summary
The Complex is located within the Powder River Basin of Wyoming approximately 80 mi northeast of Casper, Wyoming. The Powder River Basin is one of the largest uranium mining districts in Wyoming and currently accounts for most of the Wyoming's uranium production. Current uranium production in the Powder River Basin of Wyoming and at Nichols Ranch is completed via ISR mining methods. ISR mining began at the Nichols Ranch area in 2014. The Complex is currently on care and maintenance.
Nichols Ranch, Jane Dough, and the Hank areas are fully licensed and permitted for ISR mining and processing by major licenses and permits issued by the NRC, the WDEQ/LQD, the WDEQ/WQD, and the Wyoming Department of Environmental Quality, Air Quality Division (WDEQ/AQD). Portions of the Hank area, totaling 280 acres, are on public lands managed by the BLM. This area is permitted for operation by the BLM and a FONSI and Decision Record were issued in July 2015. Nichols Ranch and the Hank areas consist of 3,370 acres and Jane Dough has approximately an additional 3,680 acres which have been approved and amended to the permitted Project boundary.
20.2 Environmental Studies
Extensive environmental studies including air quality, soil and geology, hydrogeology and hydrology, ecology (wildlife and vegetation), and archaeology have been completed for Nichols Ranch, Jane Dough, and Hank areas. These studies have been conducted to support the permitting of the ISR mining and processing plant. There are no ongoing environmental studies, beyond compliance-based data collection and reporting.
20.2.1 Baseline Studies
EFR conducted monitoring including groundwater, surface water, air quality, and waste to detail baseline environmental conditions at the mine site to support permitting efforts. Background water quality within the mineralized zone, overlying and underlying aquifers, and surficial aquifer was characterized to establish the Upper Control Limits (UCLs) for excursion monitoring during operations and the Restoration Target Values (RTVs).
Baseline studies are performed on an as needed basis for the installation of new facilities including wellfields, roads, Hank satellite plant, and new monitoring locations.
20.2.1.1 Hank and Jane Dough Area Groundwater Characterization
Background water quality within the mineralized zones, overlying and underlying aquifers, and surficial aquifer will be characterized prior to operation of the Hank and Jane Dough areas. This baseline study will result in the establishment of the UCLs to allow for excursion monitoring during operations and the RTV.
20.3 Project Permitting
Nichols Ranch operates within applicable State of Wyoming permitting requirements and will operate in accordance with the BLM approved Plan of Operations for the Hank Unit.
The Complex operates under the following primary permits:
Radioactive Source Material License No. SUA-1597
Air Quality Permit CT-8644
Permit to Mine No. 778
Aquifer Exemption(s)
Wellfield Authorization(s)
Hank Unit Plan of Operations, Environmental Assessment and Decision Record
Class I Underground Injection Control Permit (Deep Well Disposal) No. 10-392
Wyoming Pollutant Discharge Elimination System (WYPDES) Stormwater Permit(s)
Table 20-1presents a list of active permits including the approving authority, validity period and expiry dates, status (current, canceled or superseded), and indicating if renewal is required or not. The list of approved legal permits for the Complex provided to the SLR QP by EFR addresses the following aspects:
Air Emissions
Groundwater Discharge
Surface Water Discharge
Radioactive Material Handling
Water Appropriation
Reclamation Planning and Bonding
Table 20-1: Environmental Permits for Operation
Energy Fuels Inc. - Nichols Ranch Project
Authority |
Obligation/Licence |
Date of Issue |
Expiration Date |
Status |
Environmental Certifications |
||||
NRC WDEQ/LQD |
Radioactive Source Material License, Amendment No. 5 |
3/22/2017 |
Renewal Application submitted May 2021 |
Active |
WDEQ/LQD |
Hank and Nichols Permit to Mine |
12/29/2010 |
N/A |
Active |
WDEQ/LQD |
Jane Dough Amendment Permit to Mine |
3/17/2017 |
N/A |
Active |
WDEQ/LQD |
Wellfield Authorization(s) |
Various |
N/A |
Active |
WDEQ/WQD |
Nichols and Hank Deep Disposal Well Class I UIC Permit (10-392) |
10/22/2012 |
10/22/2022 |
Active |
WDEQ/WQD |
Stormwater Discharge Permit for Industrial Activities WYPDES/(WYR001394) |
3/1/2018 |
8/31/2022 |
Active |
WDEQ/WQD |
Stormwater Discharge Permit for Large Construction Activities WYPDES (WYR104331) |
9/11/2020 |
8/1/2025 |
Active |
WDEQ/WQD |
Public Water Supply (WY5601665) |
6/27/2013 |
NA |
Active |
WDEQ/AQD |
Air Quality Permit (CT-8644) |
10/2/2009 |
NA |
Active |
Johnson County |
Permit to Construct Septic Leach Field |
11/17/2016 |
NA |
Active |
BLM |
Decision Record |
7/17/2015 |
NA |
Active |
EPA |
Nichols Ranch and Hank Aquifer Exemption |
11/8/2012 |
NA |
Active |
EPA |
Jane Dough Aquifer Exemption |
1/10/2017 |
NA |
Active |
Johnson County |
On-site Waste Disposal Permit |
1/17/2012 |
NA |
Active |
Wyoming State Engineer |
Permit to Appropriate Ground Water for ISR |
Various |
PA1-A through PA1-H expire 12/31/2022 |
Active |
Wyoming State Engineer |
Permit to Appropriate Ground Water for Processing, Dust Suppression, etc. (204846, 199792, 201105) |
Various |
199792 and 201105 expire 12/31/2031 |
Active |
Wyoming State Engineer |
Permit to Appropriate Ground Water for Potable Water System (201694, 203597) |
Various |
201694 expires 12/31/2026 and 203597 expires 12/31/2024 |
Active |
Notes:
1. Effective September 30, 2018, the State of Wyoming became an Agreement State under the Atomic Energy Act (as amended) for the regulation of uranium mills and uranium ISR facilities, and regulation of the Source Material License was transferred from the NRC to WDED/LQD
20.4 Environmental Requirements
EFR is committed to the operation of its facilities in a manner that prioritizes the safety of its workers, contractors and community, the protection of the environment and the principles of sustainable development.
20.4.1 Monitoring and Reporting
20.4.1.1 Air Quality
Air quality monitoring and reporting is conducted in accordance with the Radioactive Source Material License No. SUA-1597 and the Permit to Mine. Monitoring has been conducted from the beginning of operations to present; monitoring is conducted at various frequencies, from continuously to annually, based on operational status. Monitoring includes air particulates, gamma, and radon.
20.4.1.2 Hydrogeology
Groundwater monitoring and reporting is conducted in accordance with multiple permits including the Permit to Mine and the UIC Permit. Monitoring is conducted at various frequencies and has been conducted from the beginning of operations to present. Groundwater monitoring locations include injection and production wells, perimeter and vertical monitoring wells, and domestic and livestock wells. Monitoring includes injection rates, injection pressures, injection volumes, annular and operating pressures, groundwater elevation and water quality. Reporting to WDEQ/WQD is conducted quarterly and annually.
20.4.1.3 Surface Hydrology
Surface water sampling and reporting is conducted in accordance with multiple permits. Monitoring is conducted at various frequencies and has been conducted from the beginning of operations to present. Reporting to WDEQ/LQD is conducted quarterly and annually.
Stormwater monitoring is conducted in accordance with Stormwater Discharger Permit for Industrial Activities WYPDES permit. Monitoring is conducted on a semi-annual basis and during storm events.
20.4.1.4 Soil and Sediment
Soil and sediment sampling and reporting is conducted in accordance with multiple permits at various locations in the vicinity of the air particulate sampling stations and pre-operational baseline sampling locations on an annual basis. The samples are analyzed for various radionuclides. Monitoring has been conducted from the beginning of operations to present. Reporting to WDEQ/LQD is conducted quarterly and annually.
20.4.2 Compliance
From the time of construction to the effective date of this Technical Report, the Complex has experienced two minor compliance issues. Both issues pertained to the Permit to Mine issued by WDEQ/LQD and were resolved quickly under normal regulatory procedures.
20.4.3 Mine Closure Plan
The reclamation plan that presents EFR's plans and estimated costs for the restoration of groundwater, decontamination and decommissioning of the Nichols Ranch Plant site and wellfields, surface reclamation and decommissioning, and post-reclamation monitoring was revised in September 2019. The objective of the reclamation plan is to return the subsurface and surface of the Nichols Ranch, Hank, and Jane Dough areas to conditions compatible with the pre-mining uses. All affected groundwater will be restored to a condition of use equal to or exceeding that which existed prior to Project construction. All lands disturbed by the Nichols Ranch Plant and mining will also be restored to their pre-mining use of livestock grazing and wildlife habitat.
Groundwater restoration includes groundwater sweeping, groundwater treatment, and monitoring. Following groundwater restoration, well abandonment will occur in accordance with WDEQ/LQD regulations. The Nichols Ranch Plant site and wellfield decommissioning consists of decontamination of elements of the Nichols Ranch Plant site, as needed, and the dismantling and selling, where possible, of equipment for future use. Surface reclamation including roads and wellfields consists of surface preparation (regrading, ripping, etc.), the placement of salvaged topsoil, and revegetation.
20.4.4 Reclamation Cost Estimate and Bonds
Financial assurance instruments are held by the State for drilling, ISR mining, and uranium processing. The bonds are required to insure reclamation and restoration of the affected lands and aquifers in accordance with federal and state regulations and permit requirements. The current approved surety estimate is $6,668,575 and detailed in Table 20-2. The Company has continuously maintained a bond amount of $6,800,000 since the Project was permitted and licensed.
Table 20-2: Reclamation Bonds
Energy Fuels Inc. - Nichols Ranch Project
Program/Permit |
Amount |
Date Approved |
WDEQ/LQD Permit to Mine and NRC Source Materials License |
6,668,575 |
3/4/2021 |
WDEQ/LQD Drilling Notification DN336 |
50,000 |
8/29/2017 |
20.5 Social and Community
EFR is committed to the operation of its facilities in a manner that prioritizes the safety of its workers, contractors and community, the protection of the environment, and the principles of sustainable development. The surrounding communities have a long history of working with and for the region's mining and mineral resource industry, and their support for the Project has been strong.
The Fraser Institute Annual Survey of Mining Companies, 2020, ranks Wyoming as 2nd out of 77 jurisdictions using a Policy Perception Index, which indicates a very favorable perception by the mining industry towards Wyoming mining policies. The SLR QP not aware of environmental, permitting, or social/community, factors which would materially affect the Mineral Resource estimates.
21.0 CAPITAL AND OPERATING COSTS
The capital and operating cost estimates for ISR mining and yellowcake production at the Nichols Ranch Mining Unit are based on factored costs from other operations, judgment, and analogy. Although there was some commercial production experience at Nichols Ranch area from 2014 to 2019, the change in the cost basis for this Technical Report, due to the proposed reduction in overall U3O8 production rates and the requirement for cost escalation, makes the accuracy, in the SLR QP's opinion, an American Association of Cost Engineers (AACE) International Class 4 cost estimate with an accuracy range of 15% to -30% to +20% to +50%.
21.1 Capital Costs
Capital costs estimated for the Project will include the development of wellfields in the Nichols Ranch, Jane Dough, and Hank areas, additional trunk lines, and pipeline network to the Hank area, and the completion of the central processing plant at the Nichols Ranch area. Capital costs do not include those capital costs associated with milling, as the Mill will only be used for drying and packing yellowcake from the Complex.
For this Technical Report, the SLR QP adjusted the original 2015 capital cost estimate by the following methodologies:
Adjustment of 2015 costs to reflect reduction in production scale from the 2015 schedule (6.3 Mlb) to 2021 (4.0 Mlb) using the "0.6 capital rule"; and
Escalation of adjusted 2015 costs to first quarter (Q1) 2021 US dollar basis using subscription-based Mining Cost Services (MCS) cost indices (Infomine, 2021). The SLR QP is of the opinion that the inflationary indices since Q1 2021 are too volatile to apply against a long lived asset.
Table 21-1 summarizes the capital costs adjusted for the smaller 4.0 Mlb production schedule and cost escalation in Q1 2021 US dollar basis. The two methodologies are described in further detail below.
Table 21-1: Base Case Capital Cost Estimate Summary
Energy Fuels Inc. - Nichols Ranch Project
Capital Cost Area |
Cost |
Wellfield Development |
61,327 |
Trunkline |
227 |
Soft Costs |
12,721 |
Plant - CPP Buildout |
4,990 |
Plant - Hank Pipeline |
2,177 |
Total Sustaining Capital |
81,442 |
Restoration/Decommissioning |
20,664 |
Grand Total |
102,105 |
21.1.1 SLR Capital Cost Adjustments
The 2015 capital cost estimate of $114.3 million supported a production schedule that included 100% of Nichols Ranch, Jane Dough, and Hank Mineral Resources, which totalled 6.3 Mlb U3O8. The new base case production schedule in this Technical Report totals 4.0 Mlb (37% lower than the 2015 schedule) and accounts for the mined depletion through 2019 at Nichols Ranch and only the 81% of EFR attributable pounds of U3O8 at Jane Dough.
To scale the 2015 capital cost estimate of $114.3 million to reflect the currently envisioned smaller scale operation, the SLR QP used the 0.6 capital cost rule as follows:
Thus, the scaled 2015 capital cost estimate of $87.1 million for the smaller 4.0 Mlb operation is $27.2 million or 23.8% lower as shown in Table 21-2.
Table 21-2: SLR Capital Cost Scale Adjustment Summary
Energy Fuels Inc. - Nichols Ranch Project
21.1.3 SLR Capital Cost Escalation Methodology
The SLR QP subsequently escalated the adjusted 2015 capital cost estimate cost of $87.1 million to Q1 2021 US dollar basis using subscription-based MCS cost indices dated July 2021. The March 2021 index value was selected as it was the last finalized data point in the July 2021 MCS guide at the time of this Technical Report.
The Mill capital cost indices were chosen as, in the SLR QP's view, ISR mining and processing is composed mainly of pumping and reagent activities found in mill operations compared to classic mining scenarios. The only exceptions were for minor payroll costs during decommissioning, which use a mine labor factor, and for bonding costs, which were assumed to remain unchanged. The capital cost escalation factors are presented in Table 21-3 with the 2021 escalated capital cost presented in Table 21-4.
Table 21-3: SLR Capital Cost Escalation Factors
Energy Fuels Inc. Nichols Ranch Project
Capital Cost Area |
MCS Source |
2015 Index |
March 2021 Index |
% Change |
Wellfield Development |
Table 5 Mill |
101.0 |
120.3 |
19.1 |
Trunkline |
Table 5 Mill |
101.0 |
120.3 |
19.1 |
Soft Costs |
Table 5 Mill |
101.0 |
120.3 |
19.1 |
CPP Buildout |
Table 5 Mill |
101.0 |
120.3 |
19.1 |
Hank Pipeline |
Table 5 Mill |
101.0 |
120.3 |
19.1 |
Bonding |
None |
1.0 |
1.0 |
None |
Groundwater Restoration |
Table 5 Mill |
101.0 |
120.3 |
19.1 |
Decommissioning |
Table 5 Mill |
101.0 |
120.3 |
19.1 |
Payroll |
Table 2 - "A" |
26.7 |
28.6 |
7.3 |
Table 21-4: SLR 2021 Escalated Base Case Capital Cost Summary
Energy Fuels Inc. - Nichols Ranch Project
The escalation effect on capital costs from 2015 to Q1 2021 is estimated to be 17.2%, or $15.0 million for the Complex over the scaled 2015 capital costs at 4.0 Mlb production schedule. The SLR QP notes that the current capital cost estimate of $102.1 million is still 10% lower than the original 2015 capital cost estimate of $114.3 million, wholly due to reduction in scale of the operation.
21.2 Operating Costs
The LOM average operating cost includes mining, on-site yellowcake production with hauling cost to the Mill located near Blanding, Utah, general and administration, and freight of the product from the Mill to a point of sale, along with various royalties and taxes which are described in more detail in Section 22.0. Table 21-5 summarizes the operating cost estimates used for the base case in this PEA in Q1 2021 US dollar basis.
Table 21-5: Operating Cost Estimate
Energy Fuels Inc. - Nichols Ranch Project
Item |
US$ (000) (including Yr -1) |
$/lb Produced |
Wellfield |
11,575 |
2.88 |
Processing |
39,494 |
9.81 |
Deep Well Disposal |
656 |
0.16 |
G & A |
25,865 |
6.43 |
Total Site Operating Costs |
77,590 |
19.28 |
Product Transport to Market |
1,533 |
0.38 |
Total Production Costs |
79,123 |
19.66 |
Ad Valorem Tax |
10,583 |
2.63 |
WY Severance Tax |
6,408 |
1.59 |
Royalties |
4,717 |
1.17 |
Total Operating Costs |
100,832 |
25.06 |
To arrive at the current operating cost estimate in Table 21-5, and similar to the capital cost adjustment, the SLR QP adjusted the original 2015 operating cost estimate by the following methodologies describe in more detail below:
Adjustment of 2015 costs to reflect reduction in production scale from 2015 (6.3 Mlb) to 2021 base case production schedule (4.0 Mlb) production totals by lowering fixed costs by 15%; and
Escalation of adjusted 2015 costs to Q1 2021 US dollar basis using MCS cost indices. The SLR QP is of the opinion that the inflationary indices since Q1 2021 are too volatile to apply against a long lived asset.
21.2.1 SLR Operating Cost Adjustments
To better reflect the smaller scale 4.0 Mlb operation, the SLR QP first developed a fixed and variable operating cost structure using the 2015 production schedule and US dollar cost basis. The SLR QP then adjusted the costs based on experience and judgment by lowering the fixed operating dollar cost component by 15% but keeping the variable cost inputs the same. Table 21-6 shows the overall impact of approximately 37.4% increase in operating costs from $11.71/lb U3O8 to $16.02/lb U3O8 on a 2015 US dollar cost basis from these adjustments.
Table 21-6: 2015 Site Operating Cost Scale Adjustment
Energy Fuels Inc. - Nichols Ranch Project
Item |
2015 (6.3 Mlb) Costs (Est) |
Scaled 2015 (4 Mlb) Costs |
$/lb % Change |
||
US$ (000) |
$/lb produced |
US$ (000) |
$/lb produced |
||
Total Fixed Costs |
46,368 |
7.32 |
39,422 |
9.80 |
33.9 |
Total Variable Costs |
28,010 |
4.42 |
25,890 |
6.43 |
45.5 |
Total Site Operating Costs |
74,182 |
11.71 |
65,311 |
16.23 |
38.6 |
21.2.2 SLR Operating Cost Escalation Methodology
After adjusting the operating costs for the smaller production schedule, the SLR QP escalated those adjusted operating costs from 2015 US dollar basis to Q1 2021 US dollar basis using MCS cost indices dated July 2021. The March 2021 index value was selected as it was the last finalized data point in the July 2021 MCS guide at the time of this Technical Report. The operating cost escalation factors are presented in Table 21-7.
Table 21-7: 2021 SLR Operating Cost Escalation Factors
Energy Fuels Inc. - Nichols Ranch Project
The operating cost escalation by area is presented in Table 21-8.
Table 21-8: SLR 2021 Escalated Base Case Operating Cost Summary
Energy Fuels Inc. - Nichols Ranch Project
Operating Cost Summary |
Scaled 2015 Cost |
Escalated Q1 2021 |
Variance |
Wellfield |
9,533 |
11,575 |
2,150 |
Processing |
32,527 |
39,494 |
7,413 |
Deep Well Disposal |
540 |
656 |
116 |
G & A |
22,711 |
25,865 |
3,154 |
Total Site Operating Costs |
65,311 |
77,590 |
12,833 |
Product Transport to Market |
1,291 |
1,533 |
241 |
Total Production Costs |
66,602 |
79,123 |
13,074 |
% Variance |
|
|
18.8% |
Note:
1. Escalated Q1 2021 G&A expenses include an extra allowance of $1.5 million for preproduction activity in Year -1 as this cost was not in the original 2015 cost estimate.
The escalation effect on direct operating costs during this five year period from 2015 through Q1 2021 is estimated to be approximately 18.8% for the Complex over the adjusted 2015 capital costs at 4.0 Mlb production schedule.
21.2.3 Workforce Summary
The operation will employ a total of 25 employees at the site, as presented in Table 21-9. It is assumed that corporate-related functions such as administration, finance, human resources, and procurement will be done from EFR's Lakewood, Colorado, head office.
Table 21-9: Workforce Summary
Energy Fuels Inc. - Nichols Ranch Project
Category |
Total |
Drilling, Wellfield Development and Surface Reclamation |
|
Manager |
1 |
Wellfield Development |
1 |
Geologist |
1 |
Subtotal |
3 |
Projects, Construction & Maintenance |
|
Manager |
1 |
Construction Supervisor |
1 |
Wellfield Construction Technician |
1 |
Maintenance |
1 |
Subtotal |
4 |
Plant Operations |
|
Manager |
1 |
Operators |
9 |
Subtotal |
10 |
Wellfield Operations |
|
Manager |
1 |
Utility Technician |
1 |
Subtotal |
2 |
General and Administrative |
|
Mine Manager |
1 |
Environmental, Safety, and Health (ESH) Manager |
1 |
Radiation Safety Officer (RSO) |
1 |
Radiation Safety Technician (RST) |
1 |
Environmental Technician |
1 |
Lab Technician |
1 |
Subtotal |
6 |
Grand Total |
25 |
22.0 ECONOMIC ANALYSIS
An economic analysis was performed using the assumptions presented in this Technical Report. The SLR QP notes that, unlike Mineral Reserves, Mineral Resources do not have demonstrated economic viability. This PEA is preliminary in nature, and includes Inferred Mineral Resources that are considered too geologically speculative to have modifying factors applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that this economic assessment will be realized.
The Nichols Ranch base case cash flow is based on Measured, Indicated, and Inferred Mineral Resources (the latter being 17% of the total). An alternative case with only Measured and Indicated Mineral Resources is also presented in this Technical Report.
22.1 Base Case (Measured, Indicated, and Inferred Mineral Resources)
22.1.1 Economic Criteria
An after-tax cash flow projection for the base case has been generated from the LOM schedule and capital and operating cost estimates in this Technical Report for the Nichols Ranch Mining Unit (Nichols Ranch, Jane Dough, and Hank areas), and is summarized in the Section 22.1.2. A summary of the key criteria is provided below.
22.1.1.1 Revenue
Mineral Resource used for LOM planning: 3.3 Mst at 0.114% eU3O8 with 7.54 Mlb contained U3O8 (6.66 Mlb contained U3O8 attributable to EFR)
Project Areas mined (with % ownership): Nichols Ranch (100%), Jane Dough (81%), and Hank (100%) for net attributable basis of 88.3%
An estimated 85% of the Mineral Resource will be under pattern with 71% U3O8recovery, equating to an effective resource recovery of 60.4%, or 4.02 Mlb recovered U3O8 attributable to EFR
A total of 17% of the LOM tonnage is Inferred Mineral Resource
Average LOM flow rate: 3,016 gallons per minute (gpm)
Average LOM pregnant leach solution (PLS) concentration: 33 milligrams U3O8 per liter (mg/L)
Sold U3O8: 4.02 Mlb attributable to EFR
Avg annual U3O8 sales: 393 klb/y
Metal price: US$65.00/lb U3O8
Concentrate shipping cost from the Mill to customer: $760/ton U3O8 or $0.38/lb U3O8
22.1.1.2 Capital and Operating Costs
One year of preproduction period for wellfield development for production in Year 1. All other infrastructure necessary to resume operations at the Complex is already constructed.
Mine life of 11 years
LOM sustaining capital costs of $81.4 million in Q1 2021 US dollar basis
LOM site operating cost (including preproduction wellfield and G&A costs but excluding product transport to market cost, royalties, Ad Valorem tax, and Wyoming severance tax) of $76.7 million, or $19.28/lb U3O8 produced, on Q1 2021 US dollar basis
LOM Restoration/decommissioning costs of $20.7 million in Q1 2021 US dollar basis.
22.1.1.3 Royalties and Production Taxes
Royalties for the Project are applicable to approximately 30% of the Nichols Ranch and Jane Dough Mineral Resources in the production schedule. Royalties are estimated using a rate of 8% of gross revenue generated over these areas.
The Ad Valorem (or Gross Products) tax varies by county and is exclusively a volume based assessment.
The current Wyoming state severance tax for the privilege of extracting uranium is 4% of Gross Product value above $60.00/lb U3O8. However, after the allowable wellhead deduction the effective severance tax rate can range from 0% to 5% of gross revenue, depending on the price paid. For the Project, it is estimated at approximately 2.45% of gross revenue over LOM.
22.1.1.4 Income Taxes
The economic analysis includes the following assumptions for corporate income taxes (CIT):
Unit of Production depreciation method was used with total allowance of $81.4 million taken during LOM
Percentage depletion method was used with total allowance of $31.0 million taken during LOM
Loss Carry Forwards - Income tax losses may be carried forward indefinitely but may not be used for prior tax years
Federal tax rate of 21%
Wyoming has no corporate income tax
22.1.2 Cash Flow Analysis
The SLR QP notes that, unlike Mineral Reserves, Mineral Resources do not have demonstrated economic viability. The economic analysis for the base case contained in this Technical Report is based, in part, on Inferred Resources, and is preliminary in nature. Inferred Resources are considered too geologically speculative to have modifying factors applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that this economic assessment will be realized. The SLR QP notes that with the future exploration drilling planned at the Complex, it would be reasonable to expect a significant amount of Inferred Mineral Resources to become converted into the Indicated category through a subsequent resource model.
The Project production schedule, with one year of preproduction, and as currently envisioned with 17% Inferred Mineral Resources and 83% combined Measured and Indicated Mineral Resources is shown in Figure 22-1 and the resulting after-tax free cash flow profile is shown in Figure 22-2.
Note:
1. PLS = Pregnant Leach Solution
Figure 22-1: Base Case Annual U3O8 Production by Area
Figure 22-2: Base Case Project After-Tax Metrics Summary
Table 22-1 presents a summary of the Nichols Ranch base case economics at an U3O8 price of $65.00/lb. The full annual cash flow model is presented in Appendix 1 of this Technical Report. On a pre-tax basis, the undiscounted cash flow totals $58.6 million over the mine life. The pre-tax NPV at a 5% discount rate is $46.1 million. On an after-tax basis for the base case, the undiscounted cash flow totals $41.1 million over the mine life. The after-tax NPV at 5% discount rate is $31.5 million. The SLR QP notes that after-tax IRR is not applicable as the Nichols Ranch Plant at the Complex is already constructed and already operated for a number of years. Capital identified in the economics is for sustaining operations and plant rebuilds as necessary.
Table 22-1: Base Case After-Tax Cash Flow Summary
Energy Fuels Inc. - Nichols Ranch Project
Item |
Unit |
Value |
U3O8 Price |
$/lb |
65 |
U3O8 Sales |
Mlb |
4.02 |
Total Gross Revenue |
US$ M |
262 |
Wellfield Costs |
US$ M |
(12) |
Processing Costs |
US$ M |
(39) |
Deep Well Disposal Costs |
US$ M |
(1) |
G&A Costs |
US$ M |
(26) |
Product Transport to Market Cost |
US$ M |
(2) |
Production Taxes/Royalties |
US$ M |
(22) |
Total Operating Costs |
US$ M |
(101) |
Operating Margin |
US$ M |
161 |
Operating Margin |
US$ M |
62% |
Corporate Income Tax |
US$ M |
(17) |
Operating Cash Flow |
US$ M |
143 |
Sustaining Capital |
US$ M |
(81) |
Restoration/Decommissioning |
US$ M |
(21) |
Total Capital |
US$ M |
(102) |
|
|
|
Pre-tax Free Cash Flow |
US$ M |
58.6 |
Pre-tax NPV @ 5% |
US$ M |
46.1 |
|
|
|
After-tax Free Cash Flow |
US$ M |
41.1 |
After-tax NPV @ 5% |
US$ M |
31.5 |
Table 22-2 shows the average annual U3 O8 sales for the base case during the 11 years of operation (and one year of preproduction expense) is 393 klb U3O8per year at an average All-in Sustaining Cost (AISC) of $50.43/lb U3O8 (or $45.30/lb U3O8 excluding Restoration/ Decommissioning costs).
Table 22-2: Base Case All-In Sustaining Costs Composition
Energy Fuels Inc. - Nichols Ranch Project
Item |
Cost |
Unit Cost |
Mining |
12 |
2.88 |
Process |
39 |
9.81 |
Deep Well Disposal |
1 |
0.16 |
G & A |
26 |
6.43 |
Subtotal Site Costs |
78 |
19.28 |
Product Transport to Market |
2 |
0.38 |
Total Direct Cash Costs |
79 |
19.66 |
Production Taxes/Royalties |
22 |
5.39 |
Total Cash Costs |
101 |
25.06 |
Sustaining Capital |
81 |
20.24 |
Restoration/Decommissioning |
21 |
5.14 |
Subtotal Sustaining Costs |
102 |
25.37 |
Total All-in Sustaining Costs |
203 |
50.43 |
U3O8 Sales (Mlb) |
|
4.02 |
Average U3O8 Sales per Year (klb) |
|
393 |
Figure 22-3 shows the annual AISC trend during the base case mine operations against an overall average AISC of $50.43/lb U3O8 over the 11-year LOM. The AISC variations are mainly due to changes in grades and mine schedule. The AISC metric can range from $24/lb U3O8 to $75/lb U3O8 through the Project life.
Figure 22-3: Base Case Annual AISC Curve Profile
22.1.3 Sensitivity Analysis
Project risks can be identified in both economic and non-economic terms. Key economic risks were examined by running cash flow sensitivities calculated over a range of variations based on realistic fluctuations within the listed factors:
U3O8 price: $10/lb increments between $45/lb and $85/lb
Net Recovery: -20%/+20% (percentage under pattern and metallurgical recovery)
Operating cost per ton milled: -30%/+50% (AACE International Class 4 range)
Capital cost: -30%/+50% (AACE International Class 4 range)
The after-tax cash flow sensitivities for the base case are shown in Table 22-3 and Figure 22-4. The Project is most sensitive to uranium price and recovery, and only slightly less sensitive to operating cost and capital cost at an AACE International Class 4 accuracy level. The sensitivities to pounds of U3O8 and metal price are nearly identical. The SLR QP notes that head grade variations in ISR mining are difficult to measure at this PEA stage and thus were not included in this sensitivity analysis.
Table 22-3: Base Case After-Tax Sensitivity Analysis
Energy Fuels Inc. - Nichols Ranch Project
Factor Change |
U3O8 Price |
NPV at 5% |
0.69 |
45.00 |
(18) |
0.85 |
55.00 |
7 |
1.00 |
65.00 |
31 |
1.15 |
75.00 |
55 |
1.31 |
85.00 |
78 |
Factor Change |
Net Recovery |
NPV at 5% |
0.80 |
48.3 |
0 |
0.90 |
54.4 |
16 |
1.00 |
60.4 |
31 |
1.10 |
66.5 |
47 |
1.20 |
72.5 |
62 |
Factor Change |
Operating Costs |
NPV at 5% |
0.70 |
13.69 |
48 |
0.85 |
16.49 |
40 |
1.00 |
19.28 |
31 |
1.25 |
23.94 |
18 |
1.50 |
28.60 |
4 |
Factor Change |
Capital Costs |
NPV at 5% |
0.70 |
71 |
54 |
0.85 |
87 |
43 |
1.00 |
102 |
31 |
1.25 |
128 |
13 |
1.50 |
153 |
(6) |
Figure 22-4: Base Case After-tax NPV 5% Sensitivity Analysis
22.2 Alternate Case (Measured and Indicated Mineral Resources Only)
The SLR QP also undertook an analysis of an alternative case, considering only combined Measured and Indicated Mineral Resources (83% of the base case production schedule). The SLR QP notes that while the alternate case does not contain Inferred Mineral Resources, Measured and Indicated Mineral Resources do not have demonstrated economic viability. There is no certainty that economic forecasts on which this PEA is based will be realized.
Using the same cost parameters and ISR mining and processing assumptions as the base case, the alternate case production schedule generates 3.36 Mlb U3O8 over a nine year mine life as shown in Figure 22-5.
Figure 22-5: Alternate Case Annual U3O8 Production by Area
Table 22-4 presents a summary of the Nichols Ranch alternate case economics at an U3O8 price of $65.00/lb. The full annual cash flow model is presented in Appendix 1 of this Technical Report. On a pre-tax basis, the undiscounted cash flow totals $43.7 million over the mine life. The pre-tax NPV at a 5% discount rate is $37.4 million. On an after-tax basis, the undiscounted cash flow totals $27.4 million over the mine life. The after-tax NPV at 5% discount rate is $23.7 million.
Table 22-4: Alternate Case After-Tax Cash Flow Summary
Energy Fuels Inc. - Nichols Ranch Project
Item |
Unit |
Value |
U3O8 Price |
$/lb |
65 |
U3O8 Sales |
Mlb |
3.36 |
Total Gross Revenue |
US$ M |
219 |
Wellfield Costs |
US$ M |
(10) |
Processing Costs |
US$ M |
(33) |
Deep Well Disposal Costs |
US$ M |
(1) |
G&A Costs |
US$ M |
(21) |
Product Transport to Market Cost |
US$ M |
(1) |
Production Taxes/Royalties |
US$ M |
(19) |
Total Operating Costs |
US$ M |
(85) |
Operating Margin |
US$ M |
133 |
Operating Margin |
US$ M |
61% |
Corporate Income Tax |
US$ M |
(16) |
Operating Cash Flow |
US$ M |
117 |
Sustaining Capital |
US$ M |
(73) |
Restoration/Decommissioning |
US$ M |
(17) |
Total Capital |
US$ M |
(90) |
|
|
|
Pre-tax Free Cash Flow |
US$ M |
43.7 |
Pre-tax NPV @ 5% |
US$ M |
37.4 |
|
|
|
After-tax Free Cash Flow |
US$ M |
27.4 |
After-tax NPV @ 5% |
US$ M |
23.7 |
Table 22-5 shows the average annual U3O8 sales for the alternate case during the nine years of operation are 418 klb U3O8 per year at an average AISC of $52.00/lb U3O8 (or $47.05/lb U3O8 excluding Restoration/Decommissioning costs).
Table 22-5: Alternate Case All-in Sustaining Costs Composition
Energy Fuels Inc. - Nichols Ranch Project
Item |
US$ M |
US$/lb U3O8 |
Mining |
10 |
2.9 |
Process |
33 |
10.0 |
Deep Well Disposal |
1 |
0.2 |
G & A |
21 |
6.4 |
Subtotal Site Costs |
65 |
19.4 |
Product Transport to Market |
1 |
0.4 |
Total Direct Cash Costs |
66 |
19.8 |
Production Taxes/Royalties |
19 |
5.5 |
Total Cash Costs |
85 |
25.3 |
Sustaining Capital |
73 |
21.7 |
Restoration/Decommissioning |
17 |
5.0 |
Subtotal Sustaining Costs |
90 |
26.7 |
Total All-in Sustaining Costs |
175 |
52.00 |
U3O8 Sales (Mlb) |
|
3.36 |
Average U3O8 Sales per Year (klb) |
|
418 |
The after-tax cash flow sensitivities for the alternate case are shown in Figure 22-6 and are similar in magnitude to the base case with the Project being most sensitive to uranium price and recovery, and only slightly less sensitive to operating cost and capital cost at a AACE International Class 4 level of accuracy.
Figure 22-6: Alternate Case After-tax NPV 5% Sensitivity Analysis
23.0 ADJACENT PROPERTIES
The Complex is located within the Pumpkin Buttes Mining District, which was the first commercial uranium production district in Wyoming. Uranium was first discovered in the Pumpkin Buttes in 1951. Through 1967, intermittent production from approximately 55 small mines produced 36,737 tons of mined product containing 208,143 lb of uranium (Breckenridge et al., 1974). This early mining focused on shallow oxidized areas by small open pit mines. Primary exploration methods included geologic mapping and ground radiometric surveys. Modern exploration and mining in the district have focused on deeper reduced mineralization.
Significant mine developments located near the Nichols Ranch property and within and or near the Pumpkin Butte Mining District in which EFR has no material interest include:
More recent ISR tests and operating uranium production near the Complex include:
The Willow Creek Project (formerly known as the Irigaray and Christensen Ranch Project), a commercial ISR mine, now controlled by Uranium Energy Corp, and located seven miles north of Nichols Ranch, has produced over 4.5 Mlb of U3O8 and is currently undergoing renovations in preparation for the resumption of operations.
CCI had a small ISR pilot plant, located approximately three miles south of the Willow Draw project and four miles southeast of the Nichols Ranch/Jane Dough areas, which reportedly produced approximately 12,000 lb eU3O8 (Beahm and Anderson, 2007).
The Ruth pilot test located six miles southwest of North Rolling Pin produced 32,000 lb U3O8.
The Cameco Smith Ranch-Highland Mine is located approximately 45 miles from the Project. Smith Ranch-Highland Mine utilizes ISR for uranium extraction and has been in production since 1997.
The Cameco North Butte Project located immediately north of Hank.
The SLR QP has been unable to verify this information on adjacent properties. This information on adjacent properties is not necessarily indicative of the mineralization at the Nichols Ranch property.
24.0 OTHER RELEVANT DATA AND INFORMATION
No additional information or explanation is necessary to make this Technical Report understandable and not misleading.
25.0 INTERPRETATION AND CONCLUSIONS
The SLR QPs offer the following conclusions by area.
25.1 Geology and Mineral Resources
The effective date of the Mineral Resource estimate is December 31, 2021. Estimated uranium grades are based on radiometric probe grades using GT contour methodology.
Mineral Resources for the Complex are reported at a GT cut-off grade of 0.20 %-ft and have been depleted as of December 31, 2021.
The total production from Nichols Ranch is 1,276,589 lb eU3O8 as of December 31, 2021.
Total Measured + Indicated Resources for the Complex are 3.29 Mst at an average grade of 0.106% eU3O8 containing 6.99 Mlb eU3O8. Additional Inferred Resources total 650,000 tons at an average grade of 0.097% eU3O8 containing 1.25 Mlb eU3O8.
There is a low risk of depletion of chemical uranium compared to radiometrically determined uranium at the Complex. Furthermore, there is no evidence that radiometric disequilibrium would be expected to negatively affect the uranium resource estimates of the deposits. PFN geophysical logging provides direct analysis of the in situ chemical uranium content and is considered by the SLR QP as reliable for the purposes of assessing radiometric equilibrium
The SLR QP is of the opinion the historical radiometric logging, analysis, and security procedures at the Complex were adequate for use in the estimation of the Mineral Resources. The SLR QP also opines that, based on the information available, the original gamma log data and subsequent conversion to % eU3O8 values are reliable.
The sampling, sample preparation, and sample analysis programs are appropriate and to industry standards for the style of mineralization.
Although continuity of mineralization is variable, drilling to date confirms that local continuity exists within individual sandstone units.
No significant discrepancies were identified with the drilling and radiometric logging data and GT interpretations in Nichols Ranch Mining Unit.
Descriptions of recent drilling programs, logging, and sampling procedures have been well documented by EFR, with no significant discrepancies identified.
The QA/QC procedures undertaken support the integrity of the database used for Mineral Resource estimation.
The resource database is valid and suitable for Mineral Resource estimation under S-K 1300 and NI 43-101 standards.
In the SLR QP's opinion, the assumptions, parameters, and methodology used for the Nichols Ranch Mining Unit and North Rolling Pin Mineral Resource estimate are appropriate for the style of mineralization and mining methods.
The SLR QP is not aware of any environmental, permitting, legal, title, taxation, socioeconomic, marketing, political, or other relevant factors that could materially affect the current resource estimate.
25.2 Mining Methods
25.3 Mineral Processing
Due to the absence of the on-site drying and packaging circuit, the Project proposes to truck the U3O8 produced on-site 643 road miles to the Mill near Blanding, Utah, for drying and drumming for final delivery to end users.
The Mill has been in operation since 1981 and is equipped with the required equipment using a proven process for the production of U3O8 product, called "yellowcake". In addition, although it is not part of the production schedule in this Technical Report, the Mill also has the capacity to produce V2O5.
The Mill is currently on a reduced operating schedule processing materials as they become available. The Mill is currently processing REE materials in part of the circuit, functioning essentially as a pilot plant, therefore the facility is sufficiently staffed to initiate U3O8 production relatively quickly.
25.4 Infrastructure
The Complex and the Mill are in historically important, uranium-producing regions of eastern Wyoming and southeastern Utah, respectively. All the regional infrastructure necessary to mine and process commercial quantities of U3O8 is in place.
EFR has operated the Mill tailings cells since 1981, under the requirements of the Utah Department of Environmental Quality Radioactive Materials License.
25.5 Environment
Nichols Ranch, Jane Dough, and the Hank Unit are fully licensed and permitted for ISR mining by major licenses and permits issued by the NRC, the WDEQ/LQD, and the WDEQ/AQD. The Hank Unit is also permitted for operation by a Decision Record issued by the Bureau of Land management (BLM).
EFR has strong relationships with state and federal regulatory agencies and has a positive record of environmental performance at Nichols Ranch.
The SLR QP is not aware of environmental, permitting, or social/community factors which would materially affect the Mineral Resource estimates.
26.0 RECOMMENDATIONS
The SLR QPs offer the following recommendations by area:
26.1 Geology and Mineral Resources
The SLR QP offers the following recommendations regarding the data supporting the drillhole database at the Project:
1. Transition from a Microsoft Excel database to acQuire or a similar database.
2. Verify all drilling data collar coordinates as Wyoming NAD27 UTM zone 13 coordinates. EFR should also consider moving to an updated coordinate system, such as WGS 84, for use in online graphic programs.
3. Create 3D geologic models of the Wasatch Formation and individual Sand Units for use in verifying and auditing uranium mineralization.
4. Use a handheld XRF tool to replace the scintillometer reading in order to obtain more precise mineralogical information.
5. Resume using PFN as a QA/QC tool to confirm disequilibrium within the Satellite Properties not yet exposed to ISR mining.
In addition, the SLR QP provides the following deposit specific recommendations:
26.1.1 Nichols Ranch Mining Unit
26.1.1.1 Nichols Ranch
The SLR QP makes the following recommendations regarding advancing the Project with Production Planning and Development for PA2:
1. Conduct drilling of 55 delineation to better define the mineralized trends in PA2 to meet a minimum 100 ft grid spacing.
2. Based on the results of the 55 delineation holes, drill and install 120 development wells, associated header houses and manifold to main production pipeline for the remaining four wellfields.
Additional plant upgrades are not required to put PA2 into production. The proposed budget for bringing PA2 into production is shown in Table 26-1.
Table 26-1: PA2 Wellfield Development
Energy Fuels Inc. - Nichols Ranch Project
Item |
Cost |
Drilling (Delineation - 55 holes) |
$110,000 |
Drill and Install Wellfield (120 wells) |
$1,800,000 |
Header House and Manifold Construction |
$390,000 |
Total |
$2,300,000 |
26.1.1.2 Jane Dough
1. Complete exploration and delineation drilling at Jane Dough, in concurrence with ongoing delineation and production well drilling at Nichols Ranch, starting in the areas most proximate to Nichols Ranch and proceeding southward.
2. Complete an Engineering study to define the most efficient infrastructure for production.
3. Install monitor wells and conduct pump tests for state and federal permit/license requirements in a phased approach as drilling will define multiple Pas.
26.1.1.3 Hank
1. Complete additional drilling at Hank to access, define, and upgrade classification of the Mineral Resource.
2. After drilling, complete the economic evaluation of the Hank area project.
26.1.2 Satellite Properties
26.1.2.1 North Rolling Pin
1. Install additional monitor wells for future EFR hydrologic studies. Determine groundwater levels and conduct pump tests to evaluate groundwater quality and impact on possible ISR mining.
2. Complete additional delineation drilling to meet a minimum 100 ft grid spacing.
3. Conduct additional radiological disequilibrium studies using PFN, DFN logging, and/or core assays to develop a site-specific model. Also, conduct a bench scale leach tests to determine amenability to ISR.
4. Complete environmental baseline studies for preparation of state and federal permit/license applications.
5. After drilling, complete an economic evaluation of the North Rolling Pin project.
6. Update the current drilling database with all possible historical holes.
26.1.2.2 West North Butte, East North Butte, and Willow Creek
1. Update, verify, and certify the drilling database and ensure that all drilling, both historical and recent, is included.
2. Prepare an updated resource estimation upon completion of updating and verifying the database to make 2008 resource estimations current.
3. Install additional monitor wells for future EFR hydrologic studies. Determine groundwater levels and conduct pump tests to evaluate groundwater quality and impact on possible ISR mining.
4. Complete additional drilling to access the mineral resource.
5. Conduct additional radiological disequilibrium studies using PFN, DFN logging, and/or core assays to develop a site-specific model. Also, conduct bench scale leach tests to determine amenability to ISR.
6. Complete environmental baseline studies for preparation of state and federal permit/license applications.
7. After drilling, complete an economic evaluation of the West North Butte, East North Butte, and Willow Creek project.
26.2 Mining Methods
1. Consistent with the state and federal regulations requirements, environmental monitoring and analysis programs should be implemented to continually collect water level and water quality data when the mine site becomes fully operational.
26.3 Mineral Processing
1. Continue the intermittent Mill operations with maintenance program.
2. Evaluate the Nichols Ranch Plant's historical operating data to determine possible flow sheet improvements or modifications to improve production rate/economics and make these changes before commencing production.
27.0 REFERENCES
AACE International, 2012, Cost Estimate Classification System - As applied in the Mining and Mineral Processing Industries, AACE International Recommended Practice No. 47R-11, 17 p.
Agnerian, H., and W. E. Roscoe, 2003, The Contour Method of Estimating Mineral Resources, Roscoe Pestle Associates, Inc. paper, 9 pp
Andrew Johns, Raymond James Uranium Price Outlook, http://www.andrewjohns.ca/sites/default/files/iMin111814c_061826.pdf
Beahm, D. and A. Anderson, 2007, Nichols Ranch uranium project, Campbell and Johnson Counties, WY. Mineral Resource Report 43-101, prepared for Uranerz Energy Corp. BRS Inc. , April 3, 2007, update Sept. 13, 2007, 44 p
Beahm, D.L., and P. Goranson, 2015, Nichols Ranch Uranium Project Preliminary Economic Assessment, Campbell and Johnson Counties, Wyoming, USA, prepared for Uranerz Energy Corp. BRS Engineering, February 28, 2015, 112 p
Berglund, A., 2006, Willow Creek Project, Uranium Resource Estimation, prepared in March 2006.
Berglund, A., 2007a: North Rolling Pin Project, Uranium Resource Estimation, prepared in March 2007.
Berglund, A., 2007b: Northwest North Butte Project, Uranium Resource Estimation, prepared in November 2007.
Breckenridge, R.M., G.B. Glass, F.K. Root, and W.G. Wendell, 1974: Campbell County, Wyoming: Geologic Map Atlas and Summary of Land, Water, and Mineral Resources. County Resource Series (CRS-3), Wyoming State Geological Survey.
Brown, Drew, Massey & Durham, LLP, 2022, Ownership Summary, Nichols Ranch Project, Campbell and Johnson Counties, Wyoming, letter report to Uranerz Energy Corporation and Energy Fuels Resources, February 7, 2022, 4 pp.
Brown, K., 2005, Uranerz Internal Report North Butte Uranium Ore Reserve Estimate on the Shook, Don and UEC Claims, August 2005.
Brown, K., 2006, Uranerz Internal Report Geology and Uranium Reserves, Nichols Ranch Claims, Wyoming, February 2006.
Brown, K., 2006a, Uranerz Internal Report, Geology and Uranium Reserves, Hank Claims, Wyoming, April 2006.
Brown, K., 2006b, Uranerz Internal Report, Geology and Uranium Reserves of the Collins Draw Claims, Pumpkin Buttes, Wyoming, September 2006.
Brown, K., 2007, Uranerz Internal Report, Geology and Uranium Reserves of the Doughstick Claims, Pumpkin Buttes, Wyoming, January 2007.
Brown, K., 2009, Technical Report, Nichols Ranch Property Johnson and Campbell Counties, Wyoming, June 2009.
Bureau of Land Management and Wyoming (BLM and WY). 2015. Environmental Assessment for Uranerz Energy Corporation's Proposed Hank Unit Uranium In-Situ Recovery Project, Campbell County, Wyoming,WYW-169904.
Cameco, Uranium Price, https://www.cameco.com/invest/markets/uranium-price (accessed Month, Day, Year).
Campbell County, Wyoming Memorandum of Understanding [No. WY 19] Between the Governor of Wyoming and the United States By and Through the State Director, Bureau of Land Management, Wyoming, U.S. Department of the Interior.
Campbell, M. D., and K. T. Biddle, 1977, Frontier areas and exploration techniques - Frontier uranium exploration in the South-Central United States, in Geology [and environmental considerations] of alternate energy resources, uranium, lignite, and geothermal energy in the South-Central States, pp. 3-40 (Figure 17 - p. 34): Published by the Houston Geological Society, 364 p.
Campbell, M.D., et al., 2008, The Nature and Extent of Uranium Reserves and Resources and their Environmental Development in the U.S. and Overseas, AAPG Energy Mineral Div., Uranium Committee Annual Report of 2008, AAPG EMD Annual Meeting, San Antonio, Texas, April 23, 2008, 21p.
Canadian Institute of Mining, Metallurgy and Petroleum (CIM), 2014, CIM Definition Standards for Mineral Resources and Mineral Reserves, adopted by the CIM Council on May 10, 2014.
Dahlkamp, F. J., 2010, Uranium Deposits of the World, USA and Latin America, Springer, 2010th Edition, August 20, 2010, 536 pp.
Davis, J.F., 1969: Uranium Deposits of the Powder River Basin, Contributions to Geology, Wyoming Uranium Issue, University of Wyoming.
Energy Fuels Resources (USA) Inc. Technical Report Summary for the Nichols Ranch Uranium Complex, Campbell and Johnson Counties, Wyoming. US SEC Subpart 1300 Regulation S-K Compliant Report Initial Assessment, December 31, 2020.
Energy Laboratories, Inc, 2007, Report on Leach Amenability to George Hartman/Uranerz Energy Corporation, June 4, 2007, unpublished, p. 9
Energy Laboratories, Inc, 2009a, Report on Leach Amenability Doughstick to Glenda Thomas/Uranerz Energy Corporation, February 6, 2009, unpublished, p. 9
Energy Laboratories, Inc, 2009b, Report on Leach Amenability South Doughstick to Glenda Thomas/Uranerz Energy Corporation, February 6, 2009, unpublished, p. 6
Garling, R. A., 2013, Uranium Leach Amenability Test Summary, R and D Enterprises, Inc., Memorandum to Glenda Thomas/Uranerz Energy Corporation, February 5, 2013
Granger, H.C. and C.G. Warren, 1979: Zoning in the altered tongue with roll-type uranium deposits, IAEA-SM-183/6.
Graves, D.H. and D.R. Woody, 2008, Technical Report West North Butte Satellite Properties Campbell County, Wyoming, U.S.A., TREC, Inc., NI 43-101 Technical Report prepared for Uranerz Energy Corporation, December 9, 2008, p. 47
Graves, D.H., 2010, Technical Report North Rolling Pin Property, Campbell County, Wyoming, U.S.A., TREC, Inc., NI 43-101 Technical Report prepared for Uranerz Energy Corporation, June 4, 2010, p. 47
Harbaugh, A.W., McDonald, M.G. (1996) Open-File Report Vol. 1996 (96-486), Programmer's documentation for MODFLOW-96, an update to the U.S. Geological Survey.
Hodson, W.G., Pearl, R.H., and Druse, S.A., 1973, Water resources of the Powder River basin and adjacent areas, northeastern Wyoming: U.S. Geological Survey Hydrologic Investigations Atlas HA-465.
In-Situ Consulting, 1979: North Rolling Pin In-Situ Solution Mine Test and Restoration Summary. Prepared by Dick Watkins for the NRC (Nuclear Regulatory Commission) January 1979.
McKay, A.D., P. Stoker, K.F. Bampton, I.B. Lambert, I.B., 2007. Resource estimates for in situ leach uranium projects and reporting under the JORC code, November 2007, pp. 58-67.
NRC, 2011. In Situ Uranium Recovery Process. U.S. Nuclear Regulatory Commission. https://www.nrc.gov/materials/uranium-recovery/extraction-methods/isl-recovery-facilities.html. Accessed February, 2022.
NRC, 2016. In Situ Uranium Recovery Process. U.S. Nuclear Regulatory Commission, July 2016. https://www.nrc.gov/materials/uranium-recovery/extraction-methods/isl-recovery-facilities.html. Accessed January 21, 2022.
Penney, R., 2011, From kicking rocks to PFN, the exploration and the technology, UXA's approach to finding uranium, UXA Resources Limited, ABN 65 112 714 397, The AusIMM, Sydney Branch, February 16, 2011, p. 40
Rackley, R.I., 1972: Environment of Wyoming Tertiary Uranium Deposits, AAPG Bulletin Vol. 56, No. 4.
Scott, J.H., 1962: GAMLOG A Computer Program for Interpreting Gamma-Ray Logs; United States Atomic Energy Commission, Grand Junction Office, Production Evaluation Division, Ore Reserves Branch, TM-179, September 1962.
Sharp, W.N. and A.B. Gibbons, 1964: Geology and Uranium Deposits of the Southern Part of the Powder River Basin, Wyoming. U.S. Geological Survey Bulletin 1147-D, 164 pp.
TREC, Inc., 2008, Technical Report, Hank Property, Campbell County, Wyoming, USA. Prepared for Uranerz Energy Corporation, May 1, 2008.
Uranerz Energy Corporation, 2010: Nichols Ranch ISR Project Uranium Solution Mine Campbell and Johnson Counties, Wyoming. U.S.N.R.C. Source Material License Application, Appendix D5 Geology.
Uranerz Energy Corporation, 2010a, Nichols Ranch ISR Project Uranium Solution Mine Campbell and Johnson Counties, Wyoming. U.S.N.R.C. Source Material License Application, Appendix D5 Geology.
Uranerz Energy Corporation, 2012, Nichols Ranch ISR Project WDEQ Permit to Mine N. 778 NRC SUA-1597. Nichols Ranch Unit PA#1, Wellfield Package Hydrologic Test.
Uranerz Energy Corporation, 2014, Nichols Ranch ISR Project U.S.N.R.C Source Material SUA-1597 Jane Dough Amendment, April 2014, 28pp.
Uranerz Energy Corporation, 2019, Nichols Ranch ISR Project Mine Plan.
US Securities and Exchange Commission, 2018, Regulation S-K, Subpart 229.1300, Item 1300 Disclosure by Registrants Engaged in Mining Operations and Item 601 (b)(96) Technical Report Summary.
Visher, G.S., 1972, Physical characteristics of fluvial deposits, in Rigby, J. K., and Hamblin, W. K., eds., Recognition of ancient sedimentary environments: Soc. Econ. Paleontologists and Mineralogists Spec. Pub. 16, pp. 84-97.
Walton, W.C. 1989. Analytical Groundwater Modeling: Flow and Contaminant Migration. Lewis Publishers, Chelsea, MI.
Whitehead, R.L., 1996, Montana, North Dakota, South Dakota, Wyoming, chap. I of Ground water atlas of the United States: U.S. Geological Survey Hydrologic Atlas 730, 24 p. [Also available at https://pubs.usgs.gov/ha/ha730/ch_i/index.html.]
Wyoming Department of Environmental Quality, Permit to Mine No. 778, 206_01_Appendix D6_Hydrology_Nichols Hank_Text
Wyoming Department of Environmental Quality, Permit to Mine No. 778, 206_05_Appendix JD-D6_Hydrology Text_JaneDough_Text
Wyoming Department of Environmental Quality, Permit to Mine No. 778, 206_01_Appendix D6_Hydrology_Nichols Hank_Text
28.0 DATE AND SIGNATURE PAGE
This report titled, "Technical Report on the Nichols Ranch Project , Campbell and Johnson Counties, Wyoming, USA", with an effective date of December 31, 2021, was prepared and signed by:
(Signed & Sealed) Grant A. Malensek | |
Dated at Lakewood, CO | Grant A. Malensek, M.Eng., P.Eng. |
February 22, 2022 | Senior Principal Mining Engineer, SLR |
(Signed & Sealed) Mark B. Mathisen | |
Dated at Lakewood, CO | Mark B. Mathisen, C.P.G. |
February 22, 2022 | Principal Geologist, SLR |
(Signed & Sealed) Jeremy Scott Collyard | |
Dated at Lakewood, CO | Jeremy Scott Collyard, PMP, MMSA QP |
February 22, 2022 | Mining & Minerals Sector Lead, SLR |
(Signed & Sealed) Jeffrey L. Woods | |
Dated at Sparks, NV | Jeffrey L. Woods, MMSA QP |
February 22, 2022 |
Principal Consulting Metallurgist, Woods Process Services |
(Signed & Sealed) Phillip E. Brown | |
Dated at Evergreen, CO | Phillip E. Brown, C.P.G., R.P.G. |
February 22, 2022 |
Principal Consulting Hydrogeologist, Consultants in Hydrogeology |
29.0 CERTIFICATE OF QUALIFIED PERSON
29.1 Grant A. Malensek
I, Grant A. Malensek, M.Eng., P.Eng., as an author of this report entitled "Technical Report on the Nichols Ranch Project, Campbell and Johnson Counties, Wyoming, USA" with an effective date of December 31, 2021 prepared for Energy Fuels Inc., do hereby certify that:
1. I am a Senior Principal Mining Engineer with SLR International Corporation, of Suite 100, 1658 Cole Boulevard, Lakewood, CO, USA 80401.
2. I am a graduate of the University of British Columbia, Canada, in 1987 with a B.Sc. degree in Geological Sciences and Colorado School of Mines, USA in 1997 with a M.Eng. degree in Geological Engineering.
3. I am registered as a Professional Engineer/Geoscientist in the Province of British Columbia (Reg.# 23905). I have worked as a mining engineer for a total of 25 years since my graduation. My relevant experience for the purpose of the Technical Report is:
• Feasibility, Prefeasibility, and scoping studies
• Fatal flaw, due diligence, and Independent Engineer reviews for equity and project financings
• Financial and technical-economic modelling, analysis, budgeting, and forecasting
• Property and project valuations
• Capital cost estimates and reviews
• Mine strategy reviews
• Options analysis and project evaluations in connection with mergers and acquisitions
4. I have read the definition of "qualified person" set out in National Instrument 43-101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101.
5. I visited the Nichols Ranch Project on October 28, 2021.
6. I am responsible for Sections 1.2, 1.3.11, 1.3.13, 19, 21, 22, and 30, and contributions to Section 27 of the Technical Report.
7. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43-101.
8. I have had no prior involvement with the property that is the subject of the Technical Report.
9. I have read NI 43-101, and the Technical Report has been prepared in compliance with NI 43-101 and Form 43-101F1.
10. At the effective date of the Technical Report, to the best of my knowledge, information, and belief, the Sections 1.2, 1.3.11, 1.3.13, 19, 21, 22, and 30 of the Technical Report for which I am responsible contain all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
Dated this 22nd day of February, 2022
(Signed & Sealed) Grant A. Malensek
Grant A. Malensek, M.Eng., P.Eng.
29.2 Mark B. Mathisen
I, Mark B. Mathisen, C.P.G., as an author of this report entitled "Technical Report on the Nichols Ranch Project, Campbell and Johnson Counties, Wyoming, USA" with an effective date of December 31, 2021 prepared for Energy Fuels Inc., do hereby certify that:
1. I am a Principal Geologist with SLR International Corporation, of Suite 100, 1658 Cole Boulevard, Lakewood, CO, USA 80401.
2. I am a graduate of Colorado School of Mines in 1984 with a B.Sc. degree in Geophysical Engineering.
3. I am a Registered Professional Geologist in the State of Wyoming (No. PG-2821), a Certified Professional Geologist with the American Institute of Professional Geologists (No. CPG-11648), and a Registered Member of SME (RM #04156896). I have worked as a geologist for a total of 23 years since my graduation. My relevant experience for the purpose of the Technical Report is:
• Mineral Resource estimation and preparation of NI 43-101 Technical Reports.
• Director, Project Resources, with Denison Mines Corp., responsible for resource evaluation and reporting for uranium projects in the USA, Canada, Africa, and Mongolia.
• Project Geologist with Energy Fuels Nuclear, Inc., responsible for planning and direction of field activities and project development for an in situ leach uranium project in the USA. Cost analysis software development.
• Design and direction of geophysical programs for US and international base metal and gold exploration joint venture programs.
4. I have read the definition of "qualified person" set out in National Instrument 43-101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101.
5. I visited the Nichols Ranch Project on October 28, 2021.
6. I am responsible for Sections 1.1.1.1, 1.1.2.1, 1.3.1 to 1.3.7, 2, 3, 4.1, 4.2, 4.4, 4.5, 5.1 to 5.4, 5.6, 6 to 12, 14, 15, 23, 24, 25.1, and 26.1, and contributions to Section 27 of the Technical Report.
7. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43-101.
8. I have had no prior involvement with the property that is the subject of the Technical Report.
9. I have read NI 43-101, and the Technical Report has been prepared in compliance with NI 43-101 and Form 43-101F1.
10. At the effective date of the Technical Report, to the best of my knowledge, information, and belief, Sections 1.1.1.1, 1.1.2.1, 1.3.1 to 1.3.7, 2, 3, 4.1, 4.2, 4.4, 4.5, 5.1 to 5.4, 5.6, 6 to 12, 14, 15, 23, 24, 25.1, and 26.1 of the Technical Report for which I am responsible contain all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
Dated this 22nd day of February 2022
(Signed & Sealed) Mark B. Mathisen
Mark B. Mathisen, C.P.G.
29.3 Jeremy Scott Collyard
I, Jeremy Scott Collyard, PMP, MMSA QP, as an author of this report entitled "Technical Report on the Nichols Ranch Project, Campbell and Johnson Counties, Wyoming, USA" with an effective date of December 31, 2021 prepared for Energy Fuels Inc., do hereby certify that:
1. I am the United States Mining and Minerals Sector Lead and a Director Environmental Scientist with SLR International Corporation, of Suite 100, 1658 Cole Boulevard, Lakewood, CO, USA 80401.
2. I am a graduate of the University of Montana in 2022 with a B.S. degree in Forestry.
3. I am a registered Qualified Person with the Mining and Metallurgical Society of America (MMSA) (QP No. 1544QP). I have worked as an environmental scientist in the mining sector for a total of 18 years since my graduation. My relevant experience for the purpose of the Technical Report is:
• Previous involvement in the preparation of NI 43-101 reports.
• My past experience as an Associate - Senior Environmental Scientist, MWH Americas, Inc./Stantec responsible for environmental permitting and compliance in the mining and industrial sector. Responsible for mine closure planning, cost estimating, and implementation.
4. I have read the definition of "qualified person" set out in National Instrument 43-101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101.
5. I visited the Nichols Ranch Project on October 28, 2021.
6. I am responsible for Sections 1.1.1.5, 1.3.12, 4.3, 4.6, 20, and 25.5, and contributions to Section 27 of the Technical Report.
7. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43-101.
8. I have had no prior involvement with the property that is the subject of the Technical Report.
9. I have read NI 43-101, and the Technical Report has been prepared in compliance with NI 43-101 and Form 43-101F1.
10. At the effective date of the Technical Report, to the best of my knowledge, information, and belief, Sections 1.1.1.5, 1.3.12, 4.3, 4.6, 20, and 25.5 of the Technical Report for which I am responsible contain all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
Dated this 22nd day of February, 2022
(Signed & Sealed) Jeremy Scott Collyard
Jeremy Scott Collyard, PMP, MMSA QP
29.4 Jeffery L. Woods
I, Jeffery L. Woods, MMSA QP, as an author of this report entitled "Technical Report on the Nichols Ranch Project, Campbell and Johnson Counties, Wyoming, USA" with an effective date of December 31, 2021 prepared for Energy Fuels Inc., do hereby certify that:
1. I am Principal Consulting Metallurgist with Woods Process Services, of 1112 Fuggles Drive, Sparks, NV 89441.
2. I am a graduate of Mackay School of Mines, University of Nevada, Reno, Nevada, U.S.A., in 1988 with a B.S. degree in Metallurgical Engineering.
3. I am a member in good standing of Society for Mining, Metallurgy and Exploration, membership #4018591.I have practiced my profession continuously for 34 years since graduation. My relevant experience for the purpose of the Technical Report is:
• Review and report as a consultant on numerous exploration, development, and production mining projects around the world for due diligence and regulatory requirements
• Metallurgical engineering, test work review and development, process operations and metallurgical process analyses, involving copper, gold, silver, nickel, cobalt, uranium, and base metals located in the United States, Canada, Mexico, Honduras, Nicaragua, Chile, Turkey, Cameroon, Peru, Argentina, and Colombia
• Senior Process Engineer for a number of mining-related companies
• Manager and Business Development for a small, privately owned metallurgical testing laboratory in Plano, Texas, USA
• Vice President Process Engineering for at a large copper mining company in Sonora, Mexico
• Global Director Metallurgy and Processing Engineering for a mid-tier international mining company
4. I have read the definition of "qualified person" set out in National Instrument 43-101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101.
5. I visited the Nichols Ranch Project on October 28, 2021, and the White Mesa Mill on November 11, 2011.
6. I am responsible for Section 1.1.1.3, 1.1.1.4, 1.1.2.3, 1.1.2.4, 1.3.9, 1.3.10, 5.5, 13, 17, 18, 25.3, 25.4, 26.3, and 26.4, and contributions to Section 27 of the Technical Report.
7. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43-101.
8. I have had no prior involvement with the property that is the subject of the Technical Report.
9. I have read NI 43-101, and the Technical Report has been prepared in compliance with NI 43-101 and Form 43-101F1.
10. At the effective date of the Technical Report, to the best of my knowledge, information, and belief, the Sections 1.1.1.3, 1.1.1.4, 1.1.2.3, 1.1.2.4, 1.3.9, 1.3.10, 5.5, 13, 17, 18, 25.3, 25.4, 26.3, and 26.4, in the Technical Report for which I am responsible contain all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
Dated 22nd day of February, 2022
(Signed & Sealed) Jeffrey L. Woods
Jeffery L. Woods, MMSA QP
29.5 Phillip E. Brown
I, Phillip E. Brown, C.P.G., R.P.G.., as an author of this report entitled "Technical Report on the Nichols Ranch Project, Campbell and Johnson Counties, Wyoming, USA" with an effective date of December 31, 2021 prepared for Energy Fuels Inc., do hereby certify that:
1. I am Principal Consulting Hydrogeologist with Consultants in Hydrogeology, of 26241 Wolverine Trail, Evergreen, Colorado 80439.
2. I am a graduate of Virginia Tech in 1972 with a B.S. Geology and M.S. in Civil Engineering.
3. I am registered as a Certified Professional Geologist Reg# CPG-6209 and as Professional Engineer/Geologist in the State of Alaska Reg#560. I have worked as a mining hydrogeologist for a total of 45 years since my graduation. My relevant experience for the purpose of the Technical Report is:
• Review Consultant on the Jackpile Uranium Mine.
• Performed a hydrogeologic investigation for Power Tech's Centennial In-situ Uranium Project in Weld County, Colorado.
• Former Senior Hydrogeologist for Peabody Coal Company.
• Performed numerous hydrogeologic evaluations dewatering studies on mines throughout the Western United States and the World. Mines have included Nevada Copper's, Pumpkin Hollow Mine in Nevada, B2 Gold, Santa Pancha Mine, Nicaragua, New Market Gold's Cosmo Howley Gold Mine in the Northern Territory, Australia, Entrée Gold's Ann Mason Copper Project in Nevada, improved underground dewatering system at the Palmarejo Gold Mine in Chihuahua, Mexico, and numerous others.
4. I have read the definition of "qualified person" set out in National Instrument 43-101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101.
5. I am responsible for Section 1.1.1.2, 1.1.2.2, 1.3.8, 16, 25.2, and 26.2, and contributions to Section 27 of the Technical Report.
6. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43-101.
7. I have had no prior involvement with the property that is the subject of the Technical Report.
8. I have read NI 43-101, and the Technical Report has been prepared in compliance with NI 43-101 and Form 43-101F1.
9. At the effective date of the Technical Report, to the best of my knowledge, information, and belief, the Sections 1.1.1.2, 1.1.2.2, 1.3.8, 16, 25.2, and 26.2 in the Technical Report for which I am responsible contain all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
Dated 22nd day of February, 2022
(Signed & Sealed) Phillip E. Brown
Phillip E. Brown, C.P.G., R.P.G.
30.0 APPENDIX 1
Table 30-1: Base Case Annual Cash Flow Model
Energy Fuels Inc. -Nichols Ranch Project
Table 30-2: Alternate Case Annual Cash Flow Model
Energy Fuels Inc. -Nichols Ranch Project
Technical Report on the Pinyon Plain Project, Coconino County, Arizona, USA
SLR Project No: 138.02544.00002
Prepared by
SLR International Corporation
1658 Cole Blvd, Suite 100
Lakewood, CO 80401
USA
for
Energy Fuels Inc.
225 Union Blvd., Suite 600
Lakewood, CO 80228
USA
Effective Date - December 31, 2021
Signature Date - February 22, 2022
Qualified Person
Mark B. Mathisen, C.P.G.
FINAL
Distribution: 1 copy - Energy Fuels Inc.
1 copy - SLR International Corporation
CONTENTS
10.0 DRILLING | 10-1 |
10.1 Drilling | 10-1 |
11.0 SAMPLE PREPARATION, ANALYSES, AND SECURITY | 11-1 |
11.1 Sample Preparation and Analysis | 11-1 |
11.2 Sample Security | 11-4 |
11.3 Quality Assurance and Quality Control | 11-4 |
11.4 Density Analyses | 11-15 |
11.5 Conclusions | 11-15 |
12.0 DATA VERIFICATION | 12-1 |
12.1 SLR Data Verification (2021) | 12-1 |
12.2 Audit of Drillhole Database | 12-1 |
12.3 Verification of Assay Table | 12-1 |
12.4 Limitations | 12-1 |
13.0 MINERAL PROCESSING AND METALLURGICAL TESTING | 13-1 |
13.1 Metallurgical Testing | 13-1 |
13.2 Opinion of Adequacy | 13-9 |
14.0 MINERAL RESOURCE ESTIMATE | 14-1 |
14.1 Summary | 14-1 |
14.2 Resource Database | 14-4 |
14.3 Geological Interpretation | 14-4 |
14.4 Resource Assays | 14-7 |
14.5 Treatment of High Grade Assays | 14-7 |
14.6 Compositing | 14-10 |
14.7 Trend Analysis | 14-11 |
14.8 Search Strategy and Grade Interpolation Parameters | 14-13 |
14.9 Bulk Density | 14-14 |
14.10 Block Models | 14-15 |
14.11 Cut-off Grade | 14-16 |
14.12 Classification | 14-17 |
14.13 Block Model Validation | 14-20 |
14.14 Grade Tonnage Sensitivity | 14-23 |
14.15 Mineral Resource Reporting | 14-25 |
15.0 MINERAL RESERVE ESTIMATE | 15-1 |
16.0 MINING METHODS | 16-1 |
17.0 RECOVERY METHODS | 17-1 |
18.0 PROJECT INFRASTRUCTURE | 18-1 |
TABLES
Table 1-1:Summary of Attributable Mineral Resources - Effective Date December 31, 2021 | 1-2 |
Table 4-1:Claims Held by EFR for the Pinyon Plain Project | 4-3 |
Table 6-1:Drilling at Pinyon Plain Project by Previous Operators | 6-2 |
Table 10-1:Underground Drillhole Database Summary | 10-1 |
Table 10-2:Selected Copper and Uranium Assay Intercepts | 10-3 |
Table 10-3:Declustered Cu Assay Statistics | 10-5 |
Table 11-1:QA/QC Samples for the Pinyon Plain Project Drilling | 11-5 |
Table 11-2:Summary of QA/QC Submittals | 11-6 |
Table 11-3:Expected Values and Ranges of Copper CRM | 11-8 |
Table 11-4:Summary of CRM Performance | 11-8 |
Table 11-5:Basic Comparative Statistics of 2017 Duplicate Assays | 11-12 |
Table 11-6:Check Assays List | 11-13 |
Table 13-1:Conventional Acid Leach Test Results | 13-2 |
Table 13-2:Roasted Acid Test Results | 13-3 |
Table 13-3:Summary of Uranium and Copper Recoveries (Hazen) | 13-8 |
Table 14-1:Summary of Attributable Mineral Resources - Effective Date December 31, 2021 | 14-2 |
Table 14-2:Summary of Available Drillhole Data | 14-4 |
Table 14-3:Summary Statistics of Uncapped U3O8 Assays | 14-7 |
Table 14-4:Summary Statistics of Uncapped vs. Capped Assays | 14-8 |
Table 14-5:Summary of Uranium Composite Data by Zone | 14-10 |
Table 14-6:Estimation Steps of Block Model Variables | 14-13 |
Table 14-7:Uranium Interpolation Plan | 14-14 |
Table 14-8:Summary of Block Model Variables | 14-15 |
Table 14-9:Pinyon Plain Project Cut-off Grade Calculation | 14-16 |
Table 14-10:Comparison of Block and Composite Uranium Grades | 14-23 |
Table 14-11:Block Model Sensitivity to Cut-off Grade and Uranium Price in the Main, Main-Lower, and Juniper I Zones | 14-24 |
Table 14-12:Summary of Attributable Mineral Resources - Effective Date December 31, 2021 | 14-26 |
FIGURES
Figure 4-1:Location Map | 4-2 |
Figure 4-2:Land Tenure Map | 4-4 |
Figure 7-1:Regional Geologic Map | 7-2 |
Figure 7-2:Regional Stratigraphic Column | 7-3 |
Figure 7-3:Cross Section of Local Geology | 7-5 |
Figure 7-4:Pinyon Plain Horizontal Slice Main Zone - Slice 5,200' Level | 7-6 |
Figure 10-1:Surface Drillhole Collar Locations | 10-2 |
Figure 10-2:Histogram of Declustered Cu Assays | 10-5 |
Figure 11-1:Results of Blank Samples | 11-7 |
Figure 11-2:Control Charts of Copper CRM | 11-9 |
Figure 11-3:Average Copper Grade of CRM Over Time | 11-10 |
Figure 11-4:Scatter Plot of Independent vs Primary Laboratory Check Assay Results for U3O8 | 11-13 |
Figure 11-5:Scatter Plot of Independent vs. Primary Laboratory Check Assay Results for Copper | 11-14 |
Figure 11-6:Scatter Pot of the Weighted Average of Probe and Assay U3O8 Results Over Drillhole Intercepts within the Main Zone | 11-15 |
Figure 13-1:Laboratory Comparison - Conventional Leaching | 13-5 |
Figure 13-2:Laboratory Comparison - Roasting Pre-Treatment and Leaching | 13-5 |
Figure 14-1:Uranium and Copper Mineralized Zones | 14-6 |
Figure 14-2:Histogram of U3O8 Resource Assay in M_01 and J_1_01 Domains | 14-9 |
Figure 14-3:Log Normal Probability Plot with Capping Grades | 14-9 |
Figure 14-4:Length Histogram | 14-11 |
Figure 14-5:U3O8 Variogram Models | 14-12 |
Figure 14-6:Block Classification within the Main Zone | 14-19 |
Figure 14-7:Cross Section Comparing Block and Composite U3O8 Grades in the Main Zone | 14-21 |
Figure 14-8:Plan View Comparing Block and Composite U3O8 Grades in the Main Zone | 14-22 |
Figure 14-9:Grade Tonnage Curve Main, Main-Lower, and Juniper I Zones | 14-25 |
1.0 SUMMARY
1.1 Executive Summary
This Independent Technical Report (Technical Report) was prepared by Mark B. Mathisen, C.P.G., of SLR International Corporation (SLR), for Energy Fuels Inc. (Energy Fuels), the parent company of Energy Fuels Resources (USA) Inc. (EFR), with respect to the Pinyon Plain Project (Pinyon Plain or the Project), located in Coconino County, Arizona, USA. The purpose of this report is to disclose the current Mineral Resource estimate.
EFR's parent company, Energy Fuels, is incorporated in Ontario, Canada. EFR is a US-based uranium and vanadium exploration and mine development company with projects located in the states of Colorado, Utah, Arizona, Wyoming, Texas, and New Mexico. Energy Fuels is listed on the NYSE American Stock Exchange (symbol: UUUU) and the Toronto Stock Exchange (symbol: EFR).
This Technical Report satisfies the requirements of Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101) and United States Securities and Exchange Commission's (SEC) Modernized Property Disclosure Requirements for Mining Registrants as described in Subpart 229.1300 of Regulation S-K, Disclosure by Registrants Engaged in Mining Operations (S-K 1300) and Item 601 (b)(96) Technical Report Summary. Mark B. Mathisen is a Qualified Person (QP) within the meaning of both S-K 1300 and NI 43-101 (SLR QP). The SLR QP visited the Project on November 16, 2021.
The Project is a uranium and copper breccia pipe deposit in northern Arizona. The Project was originally included as part of the Arizona Strip Uranium Project. The Arizona Strip Uranium Project was located in the Arizona Strip District, a mining district located in northwestern Arizona, and contained three deposits: the Pinenut Mine, the Arizona 1 Mine, and the Project (formerly known as the Pinyon Plain pipe). The Pinenut and Arizona 1 breccia pipes are located between the town of Fredonia, Arizona, and the Grand Canyon National Park. The Pinenut Mine was mined-out in 2015 and is currently being reclaimed. The Arizona 1 Mine is currently on standby. The Project is located south of the Grand Canyon National Park, and is the only deposit documented in this Technical Report. It has been considered separate from the Arizona Strip Uranium Project since 2017.
EFR acquired the Project in 2012, through its acquisition of Denison Mines Corporation's (Denison) US assets. At that time the Project was permitted and contained a headframe, hoist, and compressor, and a shaft to a depth of 50 ft. EFR refurbished the surface facilities and extended the shaft an additional 228 ft to a depth of 278 ft. In late 2013, the Project was placed on standby due to low uranium prices. In October 2015, EFR re-started the Project and committed to completing the shaft and underground delineation drilling program. From October 2015 to March 2017, the shaft was sunk to a depth of 1,452 ft, and three development levels were started at the 1,003 ft, 1,220 ft, and 1,400 ft depths, all of which have functioned as drill stations. The final depth for the shaft is 1,470 ft.
The Project is currently on standby while continuing environmental compliance activities with all infrastructure in place needed to restart operations. EFR envisages this an underground operation in which the mineralized material will be processed at EFR's White Mesa Mill (the Mill), 320 miles away in Blanding, Utah. The Mill is on a reduced operating schedule while processing materials as they become available.
The Project was previously referred to as the Canyon Mine, however, in November of 2020 EFR changed the project name to Pinyon Plain because the former name was not descriptive of the location of the Project and had resulted in misleading information and confusion among members of the public, with many people mistakenly assuming the Project is in the Grand Canyon or within the National Park itself.
A Mineral Resource estimate for the Project, based on 130 diamond drillholes totalling 79,775 ft, was completed by EFR, and audited by the SLR QP. Table 1-1 summarizes Mineral Resources based on a $65/lb uranium price at an equivalent uranium cut-off grade of 0.40% U3O8 for zones containing copper (the Main Zones) and 0.30% U3O8 for the Juniper and Upper zones. The effective date of the Mineral Resource estimate is December 31, 2021.
The SLR QP is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could materially affect the Mineral Resource estimate.
Table 1-1: Summary of Attributable Mineral Resources - Effective Date December 31, 2021
Energy Fuels Inc. - Pinyon Plain Project
Classification |
Zone |
COG |
Tonnage |
Grade |
Contained |
Recovery |
Grade |
Contained |
Recovery |
Main Zone |
|||||||||
Measured |
Main |
0.40 |
6,000 |
0.46 |
55,000 |
96 |
9.60 |
1,155,000 |
90 |
Indicated |
Main |
0.40 |
90,000 |
0.92 |
1,644,000 |
96 |
5.89 |
10,553,000 |
90 |
Total Measured + Indicated |
|
|
96,000 |
0.88 |
1,699,000 |
96 |
6.10 |
11,708,000 |
90 |
Inferred |
Main |
0.40 |
- |
- |
- |
- |
- |
- |
- |
Main-Lower |
0.40 |
4,000 |
0.22 |
16,000 |
96 |
6.50 |
470,000 |
90 |
|
Total Inferred |
|
|
4,000 |
0.20 |
16,000 |
96 |
5.88 |
470,000 |
90 |
Juniper |
|||||||||
Indicated |
Juniper I |
0.30 |
37,000 |
0.95 |
703,000 |
96 |
- |
- |
- |
Inferred |
Juniper I |
0.30 |
2,000 |
0.58 |
24,000 |
96 |
- |
- |
- |
Juniper II |
0.30 |
1,000 |
0.36 |
8,000 |
96 |
- |
- |
- |
|
Total Inferred |
|
|
3,000 |
0.53 |
32,000 |
96 |
- |
- |
- |
Upper Zones |
|||||||||
Inferred |
Cap |
0.30 |
300 |
0.33 |
2,000 |
96 |
- |
- |
- |
Upper |
0.30 |
9,000 |
0.44 |
76,000 |
96 |
- |
- |
- |
|
Total Inferred |
|
|
9,300 |
0.42 |
78,000 |
96 |
- |
- |
- |
Notes:
1. SEC S-K 1300 definitions were followed for all Mineral Resource categories. These definitions are also consistent with CIM (2014) definitions in NI 43-101.
2. Mineral Resources are estimated at an equivalent uranium cut-off grade of 0.40% U3O8 for copper bearing zone and 0.30% U3O8 for non-copper bearing zones, with estimated recoveries of 96% for uranium and 90% for copper.
3. Mineral Resources are estimated using a long-term uranium price of US$65 per pound, and copper price of US$4.00 per pound.
4. A copper to U3O8 conversion factor of 18.19 was used for converting copper grades to equivalent U3O8 grades (% U3O8 Eqv) for cut-off grade evaluation and reporting.
5. No minimum mining width was used in determining Mineral Resources.
6. Bulk density is 0.082 ton/ft3 (12.2 ft3/ton or 2.63 t/m3).
7. Mineral Resources are exclusive of Mineral Reserves and do not have demonstrated economic viability.
8. Numbers may not add due to rounding.
9. Tonnages of uranium and copper cannot be added as they overlap in the Main and Main Lower Zone.
10. Mineral Resources are 100% attributable to EFR and are in situ.
1.1.1 Conclusions
The SLR QP offers the following conclusions on the Project.
1.1.1.1 Geology and Mineral Resources
The effective date of the Mineral Resource estimate is December 31, 2021. Estimated block model uranium grades are based on chemical assay and radiometric probe grades
Mineral Resources are based on a $65/lb uranium price at a uranium cut-off grade of 0.31% based on a combination of long-hole stoping, shrinkage stoping, and drift and fill underground mining methods with trucking mineralized material from the Project 320 miles to Energy Fuels' White Mesa Mill located near Blanding, Utah.
Measured Resources total 6,000 ton at an average grade of 0.46% eU3O8 for a total of 55,000 lb U3O8. Indicated Resources total 127,000 ton at an average grade of 0.92% eU3O8 for a total of 2,347,000 lb U3O8. Inferred Resources total 16,300 ton at an average grade of 0.39% eU3O8 for a total of 126,000 lb U3O8.
Sampling and assaying procedures have been adequately completed and carried out using industry standard quality assurance/quality control (QA/QC) practices. These practices include, but are not limited to, sampling, assaying, chain of custody of the samples, sample storage, use of third-party laboratories, standards, blanks, and duplicates.
The SLR QP considers the estimation procedures employed at Pinyon Plain, including compositing, top-cutting, variography, block model construction, and interpolation to be reasonable and in line with industry standard practice.
The SLR QP finds the classification criteria to be reasonable.
In the SLR QP's opinion, the assumptions, parameters, and methodology used for the Pinyon Plain Mineral Resource estimate is appropriate for the style of mineralization and mining methods.
1.1.2 Recommendations
The SLR QP makes the following recommendations regarding the Project based on EFR's construction and development plans to start operations at the Pinyon Plain mine (focused on the Main Zone only). The two-phase programs are independent of each other and advancing to Phase 2 is not contingent on positive results of the Phase 1 program.
1.1.2.1 Phase 1: Determine Work Plans and Completed Engineering Designs
1. Review the condition of existing surface and underground infrastructure and develop engineering drawings, as needed
2. Develop mine plans
3. Determine underground labor and equipment requirements and develop contracts
4. Construct surface ore pad
The SLR QP estimates the cost of the Phase 1 work will range from $4.2 million to $4.8 million dollars.
1.1.2.2 Phase 2: Underground Mine Development
1. Construct underground infrastructure to include loading pockets, cages, and loading buckets
2. Develop mine access from shaft stations, including spiral ramp, mine levels, ore passes and sumps
3. Develop ventilation/secondary egress borehole
4. Install mine ventilation and pumping plans
The SLR QP estimates the cost of the Phase 2 work will range from $8.8 million to $9.2 million dollars.
In addition to the two-phase program for resuming mining operations, the SLR QP makes the following recommendations regarding the QA/QC data supporting the drillhole database at the Project. The following recommendations are independent of the engineering and mine development work and are provided for any future exploration or delineation drilling programs:
1. Submit field duplicates using two split core samples at a rate of one in 50.
2. Continue to monitor for low-grade bias of copper and slight low-grade bias of U3O8 at White Mesa Mill.
3. Continue to monitor for temporal trends (change in average grade of Certified Reference Material (CRM) data over time) observed at White Mesa Mill to ensure assay accuracy.
4. Procure CRM made from the Project resource material (matrix matched), to obtain an improved understanding of laboratory performance as applied to Project samples.
5. Source three matrix-matched or matrix-similar CRMs for U3O8 that represent low, medium, and high grade ore at the Project. Incorporate the CRMs in the sample stream sent to White Mesa Mill at a rate of one in 25. Ensure the certified values of these CRMs are blind to the laboratory. In addition, submit these CRMs to independent laboratories with check assays at a rate of one in 10 to obtain a meaningful sample size for analysis.
6. Implement a duplicate assay protocol for field, coarse and pulp samples that is blind to the laboratory, and that the rates of insertion for duplicate samples be approximately one in 50 for field duplicates, and one in 25 for coarse and pulp duplicate samples.
7. Continue to work to smooth the connection of the uranium wireframes between sections in future updates.
8. Explore the use of dynamic anisotropy for the interpolation of uranium mineralization within the Main Zone in future updates, where copper mineralization follows the contact of the breccia pipe with the country rock.
9. The SLR QP recommends that future updates to the copper mineralization include some marginal material where appropriate to increase the continuity and volume of the wireframes, particularly the high grade copper wireframe.
1.2 Technical Summary
1.2.1 Property Description and Location
The Project is a fully permitted underground uranium and copper deposit in northern Arizona, located on a 17-acre site within the Kaibab National Forest. It is situated 153 mi north of Phoenix, 86 mi northwest of Flagstaff, and seven miles southeast of Tusayan, in Sections 19 and 20, Township 29 North, Range 03 East, Gila and Salt River Meridian (GSRM), Coconino County, Arizona.
Access to the Project site is via State Highway 64 and Federal Highway 180 to within five miles of the project site, then over unsurfaced public U.S. Forest Service (USFS) roads. The Atchison, Topeka and Santa Fe railway line passes east-west 50 mi south of the site at Williams, and a spur of the railway, which passes 10 mi west of the Project site, services the Grand Canyon National Park. Airports at Flagstaff, Phoenix, and Tusayan provide air access to the area.
Material mined at Pinyon Plain will be transported 320 mi on paved roads to EFR's White Mesa Mill in Blanding, Utah, for processing.
The climate in northern Arizona is semi-arid, with cold winters and hot summers. January temperatures range from approximately 7°F to 57°F and July temperatures range from 52°F to 97°F. Annual precipitation, mostly in the form of rain but with some snow, is about 12 in.
Northern Arizona is part of the Colorado Plateau, a region of the western United States characterized by semi-arid, high-altitude, gently sloping plateaus dissected by steep walled canyons, volcanic mountain peaks, and extensive erosional escarpments. The Project is located on the Coconino Plateau within the Colorado Plateau, at an elevation of approximately 6,500 feet above sea level (ft ASL).
Although the Coconino Plateau is sparsely populated, tourist traffic to Grand Canyon National Park results in large numbers of people passing through the region daily. Personnel for future mining operations are expected to be sourced from the nearby towns of Williams and Flagstaff, Arizona (50 miles and 70 miles, respectively), as well as other underground mining districts in the western United States.
1.2.2 Land Tenure
EFR's property position at the Project consists of nine unpatented mining claims (Canyon 64-66, 74-76, and 84-86), located on USFS land, encompassing approximately 186 acres. EFR acquired the Project in June 2012 and has a 100% interest in the claims. The Project is located at latitude 35°52'58.65" N and longitude 112° 5'47.05" W. All claims are in good standing until September 30, 2022.
1.2.3 Existing Infrastructure
Existing infrastructure includes a shaft, headframe, hoist, compressor, surface maintenance shops, employee offices, a water well, evaporation pond, water treatment plant, rock stockpile pads, water tanks and a fuel tank. An existing power line terminates at the site.
1.2.4 History
Uranium exploration and mining of breccia pipe deposits started in the region in 1951. In the late-1970s, Energy Fuels Nuclear, Inc. (EFNI) formed a uranium exploration venture with several Swiss utilities and acquired significant uranium reserves in southeast Utah. EFNI permitted and built the 2,000 stpd White Mesa Mill near Blanding, Utah, to process Colorado Plateau ore, which was expected to average 0.13% U3O8.
As part of their exploration program, EFNI identified and investigated more than 4,000 circular features, which potentially indicate mineralized breccia pipes, in northern Arizona.
The Project is located on mining claims that EFNI acquired from Gulf Mineral Resources (Gulf) in 1982 who originally staked the claims in April 1978. EFNI was acquired by the Concord group in the early-1990s. The Concord group declared bankruptcy in 1995, and most of the EFNI assets, including the Project, were acquired by International Uranium Corporation (IUC) in 1997. IUC merged with Denison Mines Inc. on December 1, 2006, and the new company changed its name to Denison Mines Corporation. In June 2012, Energy Fuels acquired all of Denison's mining assets and operations in the United States. Currently the Project claims are held by EFR, a wholly owned subsidiary of EFR Arizona Strip LLC. Between 1978 and 1994, Gulf and EFNI drilled 45 surface holes, including a deep water well, totalling 62,289 ft.
A mine shaft and conveyances were developed for underground exploration and are operational, however, no past production has occurred at the Project.
1.2.5 Geology and Mineralization
Parts of two distant physiographic provinces are found in Arizona: the Basin and Range Province located in the southern portion of the state; and the Colorado Plateau Province located across the northern and central portions of the state. Pinyon Plain lies within the Colorado Plateau Province.
The region has experienced volcanic activity since the Pliocene epoch. A number of lava-capped buttes rise above the general landscape, and lava flows cover large areas in the southern part of the district. Faulting has exerted significant control on the geologic development and geomorphic history of the region. Major structural features include the Grand Wash, Hurricane, and Toroweap fault systems, all trending generally north-south with an eastern up-thrown side. These faults are topographically prominent and show impressive scarps though other less prominent fault systems exist.
The surface expression of the Pinyon Plain breccia pipe is a broad shallow depression in the Permian Kaibab Formation. The pipe is essentially vertical with an average diameter of less than 200 ft but is considerably narrower through the Coconino and Hermit horizons (80 ft in diameter). The cross-sectional area is in the order of 20,000 ft2 to 25,000 ft2. The pipe extends for at least 2,300 ft vertically from the Toroweap limestone to the upper Redwall horizons. The ultimate depth of the pipe is unknown. Uranium mineralization is concentrated in an annular ring within the breccia pipe.
Mineralization extends vertically both inside and outside the pipe over approximately 1,700 vertical ft, but potentially economic grade mineralization has been found mainly in the collapsed portions of the Coconino, Hermit, and Esplanade horizons and at the margins of the pipe in fracture zones. Sulfide zones are found scattered throughout the pipe but are especially concentrated in a sulfide cap near the Toroweap-Coconino contact, where the cap averages 20 ft in thickness and consists of pyrite and bravoite, an iron-nickel sulfide. The mineralization assemblage consists of uranium-pyrite-hematite with massive copper sulfide mineralization common in and near the uranium zone. The strongest mineralization appears to occur in the lower Hermit-upper Esplanade horizons in an annular fracture zone.
In the mineralized zone, the uranium mineralization occurs largely as blebs, streaks, small veins, and fine disseminations of uraninite/pitchblende (UO2). Mineralization is mainly confined to matrix material, but may extend into clasts and larger breccia fragments, particularly where these fragments are Coconino sandstone. In addition to uranium, copper mineralization is also found within the breccia pipe. Typically replacing the matrix material, copper occurs as chalcocite, bornite, tennantite, and covellite. Arsenic is present where tennantite mineralization occurs. Additionally, lower quantities of silver, zinc, lead, molybdenum, copper, nickel, and vanadium are present and scattered throughout the pipe.
1.2.6 Exploration Status
Gulf drilled eight exploration holes at the site from 1978 through May 1982 but found only low-grade uranium in this pipe. Additional drilling completed by EFNI in 1983 identified a major deposit. No drilling activity was completed on the Project between EFNI's final drill program in 1994 and EFR's underground drilling program in 2016 to 2017.
1.2.7 Mineral Resources
Mineral Resources have been classified in accordance with the definitions for Mineral Resources in S-K 1300, which are consistent with Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Resources and Mineral Reserves dated May 10, 2014 (CIM, 2014) definitions which are incorporated by reference in NI43-101.
A geologic and resource model of the breccia pipe host was constructed based on drill logs. Mineralization wireframes for U3O8 were based on assays at a nominal cut-off grade of 0.15% based on underground mining methods and trucking mineralized material 320 miles from the Project to be milled at Energy Fuels' White Mesa Mill located near Blanding, Utah. The Project resource database, dated June 17, 2017, includes drilling results from 1978 to 2017 and includes surveyed drillhole collar locations (including dip and azimuth), assay, radiometric probe, and lithology data from 130 diamond drillholes totalling 79,775 ft of drilling.
The SLR QP has reviewed and accepted the Mineral Resource estimate prepared by EFR based on block models constrained with 3D wireframes on the principal mineralized domains. Mineralized values for U3O8 and copper were interpolated into blocks using inverse distance squared (ID2) or ordinary kriging (OK).
2.0 INTRODUCTION
This Independent Technical Report (Technical Report) was prepared by Mark B. Mathisen, C.P.G., of SLR International Corporation (SLR), for Energy Fuels Inc. (Energy Fuels), the parent company of Energy Fuels Resources (USA) Inc. (EFR), with respect to the Pinyon Plain Project (Pinyon Plain or the Project), located in Coconino County, Arizona, USA. The purpose of this report is to disclose the current Mineral Resource estimate.
EFR's parent company, Energy Fuels, is incorporated in Ontario, Canada. EFR is a US-based uranium and vanadium exploration and mine development company with projects located in the states of Colorado, Utah, Arizona, Wyoming, Texas, and New Mexico. Energy Fuels is listed on the NYSE American Stock Exchange (symbol: UUUU) and the Toronto Stock Exchange (symbol: EFR).
This Technical Report satisfies the requirements of Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101) and United States Securities and Exchange Commission's (SEC) Modernized Property Disclosure Requirements for Mining Registrants as described in Subpart 229.1300 of Regulation S-K, Disclosure by Registrants Engaged in Mining Operations (S-K 1300) and Item 601 (b)(96) Technical Report Summary. Mark B. Mathisen is a QP within the meaning of both S-K 1300 and NI 43-101 (SLR QP).
The Project is a uranium and copper breccia pipe deposit in northern Arizona. The Project was originally included as part of the Arizona Strip Uranium Project. The Arizona Strip Uranium Project was located in the Arizona Strip District, a mining district located in northwestern Arizona, and contained three deposits: the Pinenut Mine, the Arizona 1 Mine, and the Project (formerly known as the Pinyon Plain pipe). The Pinenut and Arizona 1 breccia pipes are located between the town of Fredonia, Arizona, and the Grand Canyon National Park. The Pinenut Mine was mined-out in 2015 and is currently being reclaimed. The Arizona 1 Mine is currently on standby. The Project is located south of the Grand Canyon National Park, and is the only deposit documented in this Technical Report. It has been considered separate from the Arizona Strip Uranium Project since 2017.
EFR acquired the Project in 2012, through its acquisition of Denison Mines Corporation's (Denison) US assets. At that time the Project was permitted and contained a headframe, hoist, and compressor, and a shaft to a depth of 50 ft. EFR refurbished the surface facilities and extended the shaft an additional 228 ft to a depth of 278 ft. In late 2013, the Project was placed on standby due to low uranium prices. In October 2015, EFR re-started the Project and committed to completing the shaft and underground delineation drilling program. From October 2015 to March 2017, the shaft was sunk to a depth of 1,452 ft, and three development levels were started at the 1,003 ft, 1,220 ft, and 1,400 ft depths, all of which have functioned as drill stations. The final depth for the shaft is 1,470 ft.
The Project is currently on standby while continuing environmental compliance activities with all infrastructure in place needed to restart operations. EFR envisages this an underground operation in which the mineralized material will be processed at EFR's White Mesa Mill (the Mill), 320 miles away in Blanding, Utah. The Mill is on a reduced operating schedule while processing materials as they become available.
The Project was previously referred to as the Canyon Mine, however, in November of 2020 EFR changed the project name to Pinyon Plain because the former name was not descriptive of the location of the Project and had resulted in misleading information and confusion among members of the public, with many people mistakenly assuming the Project is in the Grand Canyon or within the National Park itself.
2.1 Sources of Information
Sources of information and data contained in this Technical Report or used in its preparation are from publicly available sources in addition to private information owned by EFR, including that of past property owners.
This Technical Report was prepared by Mark B. Mathisen, C.P.G., Principal Geologist, SLR, who is an independent qualified person. The SLR QP visited the Project under care and maintenance on November 16, 2021. The SLR QP toured the operational areas, project offices, and water treatment facility (WTF) and conducted discussions with EFR Project geologists on current and future plans of operations. The SLR QP is responsible for all sections and the overall preparation of the Technical Report.
During the preparation of this Technical Report, discussions were held with personnel from EFR:
Gordon Sobering, Senior Mine Engineer, Energy Fuels Resources (USA) Inc.
Daniel Kapostasy, P.G., Chief Geologist Conventional Mining, Energy Fuels Resources (USA) Inc.
Matthew Germansen, Mine Geologist, Energy Fuels Resources (USA) Inc.
This Technical Report supersedes the previous NI 43-101 Technical Report completed by the SLR QP, as the former Roscoe Postle Associates Inc (RPA), dated October 6, 2017.
The documentation reviewed, and other sources of information, are listed at the end of this report in Section 27 References.
2.2 List of Abbreviations
The U.S. System for weights and units has been used throughout this report. Tons are reported in short tons (ton) of 2,000 lb unless otherwise noted. All currency in this Technical Report is US dollars (US$) unless otherwise noted.
Abbreviations and acronyms used in this Technical Report are listed below.
Unit Abbreviation |
Definition |
Unit Abbreviation |
Definition |
μ |
micron |
L |
liter |
a |
annum |
lb |
pound |
A |
ampere |
m |
meter |
bbl |
barrels |
m3 |
meter cubed |
Btu |
British thermal units |
M |
mega (million); molar |
°C |
degree Celsius |
Ma |
one million years |
cm |
centimeter |
MBtu |
thousand British thermal units |
cm3 |
centimeter cubed |
MCF |
million cubic feet |
d |
day |
MCF/h |
million cubic feet per hour |
°F |
degree Fahrenheit |
mi |
mile |
ft ASL |
feet above sea level |
min |
minute |
ft |
foot |
MPa |
megapascal |
ft2 |
square foot |
mph |
miles per hour |
ft3 |
cubic foot |
MVA |
megavolt-amperes |
ft/s |
foot per second |
MW |
megawatt |
g |
gram |
MWh |
megawatt-hour |
G |
giga (billion) |
ppb |
part per billion |
Ga |
one billion years |
ppm |
part per million |
gal |
gallon |
psia |
pound per square inch absolute |
gal/d |
gallon per day |
psig |
pound per square inch gauge |
g/L |
gram per liter |
rpm |
revolutions per minute |
g/y |
gallon per year |
RL |
relative elevation |
gpm |
gallons per minute |
s |
second |
hp |
horsepower |
ton |
short ton |
h |
hour |
stpa |
short ton per year |
Hz |
hertz |
stpd |
short ton per day |
in. |
inch |
t |
metric tonne |
in2 |
square inch |
US$ |
United States dollar |
J |
joule |
V |
volt |
k |
kilo (thousand) |
W |
watt |
kg/m3 |
kilogram per cubic meter |
wt% |
weight percent |
kVA |
kilovolt-amperes |
WLT |
wet long ton |
kW |
kilowatt |
y |
year |
kWh |
kilowatt-hour |
yd3 |
cubic yard |
3.0 RELIANCE ON OTHER EXPERTS
This Technical Report has been prepared by the SLR QP for EFR's parent company, Energy Fuels. The information, conclusions, opinions, and estimates contained herein are based on:
Information available to the SLR QP at the time of preparation of this Technical Report,
Assumptions, conditions, and qualifications as set forth in this Technical Report, and
Data, reports, and other information supplied by Energy Fuels and other third party sources.
3.1 Reliance on Information Provided by the Registrant
For the purpose of this Technical Report, the SLR QP has relied on ownership information provided by Energy Fuels in a legal opinion by Parsons Behle & Latimer dated January 19, 2022, entitled Mining Claim Status Report - Pinyon Mine, Coconino County, Arizona. The opinion was relied on in Section 4 Property Description and Location and the Summary of this Technical Report. The SLR QP has not researched property title or mineral rights for the Project as we consider it reasonable to rely on Energy Fuels' legal counsel who is responsible for maintaining this information.
The SLR QP has taken all appropriate steps, in their professional opinion, to ensure that the above information from Energy Fuels is sound.
Except as provided by applicable laws, any use of this Technical Report by any third party is at that party's sole risk.
4.0 PROPERTY DESCRIPTION AND LOCATION
The Project is a fully permitted underground uranium and copper deposit in northern Arizona. The mineral rights are held by EFR, a wholly-owned subsidiary of EFR Arizona Strip LLC.
4.1 Location
The Project is a fully permitted underground uranium and copper deposit in northern Arizona, located on a 17-acre site within the Kaibab National Forest. It is situated 153 mi north of Phoenix, 86 mi northwest of Flagstaff, 47 mi north of Williams, and seven miles southeast of Tusayan, in Sections 19 and 20, Township 29 North, Range 03 East, Gila and Salt River Meridian (GSRM), Coconino County, Arizona (Figure 4-1).
The geographic coordinates for the approximate center of the Project are located at latitude 35°52'58.65" N and longitude 112°5'47.05" W. All surface data coordinates are State Plane 1983 Arizona Central FIPS 0202 (US feet) system.
Figure 4-1: Location Map
4.2 Land Tenure
EFR's property position at the Project consists of nine unpatented mining claims (Canyon 64-66, 74-76, and 84-86), located on U.S. Forest Service (USFS) land, encompassing approximately 186 acres (Figure 4-2). Gulf Mineral Resources (Gulf) originally staked the claims in 1978 and various companies have maintained the claims since the original staking. EFR acquired the Project in June 2012 and has a 100% interest in the claims.
All claims, which are renewed annually in September of each year, are in good standing until September 30, 2022 (at which time they will be renewed for the following year as a matter of course). All unpatented mining claims are subject to an annual federal mining claim maintenance fee of $165 per claim plus approximately $10 per claim for county filing fees to the BLM. Table 4-1 lists the mineral claims covering the Project.
Table 4-1: Claims Held by EFR for the Pinyon Plain Project
Energy Fuels Inc. - Pinyon Plain Project
Sec. |
¼ Section |
Type |
Claim |
Claimant |
Loc. Date |
Expiration |
19 & 20 |
NE(19),NW(20) |
Lode |
Canyon #64 |
EFR Arizona Strip LLC. |
4/5/1978 |
Sept. 2022 |
19 & 20 |
NE,SE(19),NW,SW(20) |
Lode |
Canyon #65 |
EFR Arizona Strip LLC. |
4/5/1978 |
Sept. 2022 |
19 & 20 |
SE(19),SW(20) |
Lode |
Canyon #66 |
EFR Arizona Strip LLC. |
4/5/1978 |
Sept. 2022 |
20 |
NW |
Lode |
Canyon #74 |
EFR Arizona Strip LLC. |
4/5/1978 |
Sept. 2022 |
20 |
NW,SW |
Lode |
Canyon #75 |
EFR Arizona Strip LLC. |
4/5/1978 |
Sept. 2022 |
20 |
SW |
Lode |
Canyon #76 |
EFR Arizona Strip LLC. |
4/5/1978 |
Sept. 2022 |
20 |
NE,NW |
Lode |
Canyon #84 |
EFR Arizona Strip LLC. |
4/4/1978 |
Sept. 2022 |
20 |
NE,NW,SE,SW |
Lode |
Canyon #85 |
EFR Arizona Strip LLC. |
4/4/1978 |
Sept. 2022 |
20 |
SE,SW |
Lode |
Canyon #86 |
EFR Arizona Strip LLC. |
4/4/1978 |
Sept. 2022 |
Figure 4-2: Land Tenure Map
4.3 Royalties
A uranium royalty on the Project was retained at one time by the successors to Gulf Oil Company; however, the current status of the royalty is under investigation by EFR. If valid, the royalty rate is a 3.5% weighted average price tied to the Atomic Energy Commission Circular 5.
$20.96/ton of mill feed at a 0.88% U3O8 grade
$8.57/ton of mill feed at a 0.39% U3O8 grade
$6.64/ton of mill feed at a 0.31% U3O8 grade
4.4 Other Significant Risks
The SLR QP is not aware of any environmental liabilities on the Project. Energy Fuels has all required permits to conduct the proposed work on the Project. The SLR QP is not aware of any other significant factors and risks that may affect access, title, or the right or ability to perform the proposed work program on the Project.
5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY
5.1 Accessibility
Access to the Project site is via State Highway 64 and Federal Highway 180 to within five miles of the site, then over unsurfaced public USFS roads (Figure 4-1). The Atchison, Topeka and Santa Fe railway line passes east-west 50 mi south of the site at Williams, and a spur of the railway, which passes 10 mi west of the Project site, services the Grand Canyon National Park. Airports at Flagstaff, Phoenix, and Tusayan provide air access to the area.
Although the Coconino Plateau is sparsely populated, tourist traffic to Grand Canyon National Park results in large numbers of people passing through the region daily.
The White Mesa Mill, owned by Energy Fuels Inc., is located 320 road mi from the Project.
5.2 Vegetation
Vegetation on the plateaus is primarily ponderosa pine forest with some open pinyon-juniper woodland and shrubs. The local climate allows for a year-round mining operation.
5.3 Climate
The climate in northern Arizona is semi-arid, with cold winters and hot summers. January temperatures range from approximately 7°F to 57°F and July temperatures range from 52°F to 97°F. Annual precipitation, mostly in the form of rain but with some snow, is about 12 in.
5.4 Local Resources
Personnel and supplies for future mining operations are expected to be sourced from the nearby towns of Williams and Flagstaff, Arizona (50 miles and 70 miles, respectively), as well as other underground mining districts in the western United States.
5.5 Infrastructure
In addition to the mine shaft, existing surface mine infrastructure includes surface maintenance shops, employee offices and change rooms, a water well, an evaporation pond, water treatment plant, explosive magazines, water tanks, fuel tank, and rock stockpile pads (ore and development rock). Electrical power is available through an existing power line that terminates at the site. The Project is currently on standby while continuing environmental compliance activities.
In 1982, Energy Fuels Nuclear, Inc. (EFNI), which is not part of Energy Fuels Inc., acquired the Project. From 1982 to 1987, EFNI conducted exploration drilling, permitted the mine, constructed certain surface facilities including a headframe, hoist, and compressor, and sunk the shaft to a depth of 50 ft. From 1987 to 2013, the Project was put on standby due to low uranium prices. In 2012, EFR acquired the Project through its acquisition of Denison Mines Corporation's US assets (Denison). Beginning in 2013, EFR refurbished the surface facilities and extended the shaft an additional 228 ft to a depth of 278 ft. In late 2013, the project was again placed on standby due to low uranium prices. In October 2015, EFR re-started the Project and committed to completing the shaft and underground delineation drilling program. From October 2015 to March 2018, the shaft was sunk to a depth of 1,470 ft, and three development levels were started at the 1,000 ft (5,506 ft ASL), 1,220 ft (5,286 ft ASL); and 1,400 ft (5,106 ft ASL) depths, all of which have functioned as drill stations.
During 2019, a 1,000,000-gallon water tank was installed, in addition to the existing 400,000-gallon tank installed in 2017. These above-ground storage tanks are used for operational flexibility and extra water storage capacity during winter months. Three floating, downcasting, enhanced evaporators were installed in the Non-Stormwater Impoundment to aid in evaporation. The tanks and evaporators are part of Energy Fuels’ water balance management practices at the site.
During 2020, a fourth floating, down-casting, enhanced evaporator was installed at the site to increase the operational flexibility of the water balance management practices. Additionally, a water capture and pumping system was installed in the shaft to segregate unimpacted water and store it for beneficial use. During 2021, a water treatment plant was installed to process water for offsite transport. The water treatment plant was commissioned in April 2021. Water use agreements have been entered into with local farmers and ranchers through which they may utilize excess water from the Pinyon Plain Project for their own beneficial uses within the Coconino Plateau groundwater basin.
5.6 Physiography
Northern Arizona is part of the Colorado Plateau, a region of the western United States characterized by semi-arid, high-altitude, gently sloping plateaus dissected by steep walled canyons, volcanic mountain peaks, and extensive erosional escarpments. The Project is located on the Coconino Plateau within the Colorado Plateau, at an elevation of approximately 6,500 feet above sea level (ft ASL).
Overall, the land is flat lying across several square miles surrounding the Project. Elevation at the site is 6,500 ft ASL with a southern downward slope averaging 100 ft per mile. Two major regional topographical features include the Red Butte, a lava capped mesa 4.5 mi south at an elevation of 7,234 ft ASL, and the Colorado River, 15 mi to the north at an elevation of 2,500 ft ASL.
Major landforms in the general area of the Project include nearly level drainage bottoms of recent alluvium, gently sloping plateau ridgetops, and moderately sloping canyon sideslopes. Soils have developed from residual or colluvial parent materials, and outcrops of bedrock are typically exposed along shoulder slopes and ridgetops. The Coconino Rim, a north-facing escarpment east and north of the deposit, is the major landform obstructing access between Pinyon Plain and highways to the east.
6.0 HISTORY
Uranium exploration and mining of breccia pipe deposits started in the region in 1951 when a geologist with the U.S. Geological Survey noted uranium ore on the dump of an old copper prospect on the South Rim of the Grand Canyon in Northern Arizona. The prospect was inside Grand Canyon National Park, but on fee land that predated the Park. The Golden Crown Mining Company, which later merged with Western Gold and Uranium Inc., mined a significant high grade uranium deposit, the Orphan Mine, from 1956 to 1969. By the time mining ended, 4.26 million pounds (Mlb) of uranium, along with some minor amounts of copper, vanadium, and silver had been produced (Bennett, n.d.).
After the discovery of this first uranium deposit in the 1950s, an extensive search for other uranium deposits was made by the government and mining industry, but only a few low-grade prospects were found. Exploration started again in the early-1970s.
In the mid-1970s, Western Nuclear leased the Hack Canyon prospect located approximately 25 mi north of the Grand Canyon and found high grade uranium mineralization offsetting an old shallow copper-uranium site. In the next few years, a second deposit was found a mile away along a fault.
In the late-1970s, EFNI formed a uranium exploration venture with several Swiss utilities and acquired significant uranium reserves in southeast Utah. EFNI permitted and built the 2,000 stpd White Mesa Mill near Blanding, Utah, to process Colorado Plateau ore, which was expected to average 0.13% U3O8. When the uranium market fell in 1980, the higher-grade Hack Canyon property was leased by EFNI from Western Nuclear in December 1980 as a likely low-cost source of U3O8 mill feed. Development started promptly, and the Hack Canyon deposits were in production by the end of 1981. They proved to be much better than the initial estimates suggested in terms of both grade and tonnage.
As part of their exploration program, EFNI identified and investigated more than 4,000 circular features, which potentially indicate mineralized breccia pipes, in northern Arizona. Approximately 110 of the most prospective features were further explored by deep drilling, and nearly 50% of those drilled were shown to contain uranium mineralization. Ultimately, nine pipes were developed. Total mine production from the EFNI breccia pipes from 1980 through 1991 was approximately 19.1 Mlb of U3O8 at an average grade of just over 0.60% U3O8.
6.1 Prior Ownership
The Project is located on mining claims that EFNI acquired from Gulf in 1982. Gulf originally staked the claims in April 1978. EFNI was acquired by the Concord group in the early-1990s. The Concord group declared bankruptcy in 1995, and most of the EFNI assets, including the Project, were acquired by International Uranium Corporation (IUC) in 1997. IUC merged with Denison Mines Inc. on December 1, 2006, and the new company changed its name to Denison Mines Corporation. In June 2012, Energy Fuels Inc. acquired all of Denison's mining assets and operations in the United States. Currently the Project claims are held by EFR, a wholly-owned subsidiary of EFR Arizona Strip LLC.
6.2 Exploration and Development History
Since 1994, exploration activities undertaken on the Project have only included drilling. Prior to that, exploration activities carried out by EFR's predecessors from 1983 to 1987 include:
Ground control source audio magneto tellurium (CSAMT) surveys
Ground magnetics
Ground very low frequency (VLF) surveys
Time domain electro-magnetic surveys (TDEM)
Surface gravity surveys
Airborne electromagnetic (EM) surveys
6.2.1 Drilling
The basic tool for exploring breccia pipes in northern Arizona is deep rotary drilling, supplemented by core drilling, up to a depth of 2,000 ft or more from surface. All drillholes are surveyed for deviation and logged using gamma logging equipment, as described in Section 11.1.1. Previous operators drilled 45 surface holes, including a deep water well, totalling 62,289 ft (Table 6-1). Gulf drilled eight exploration holes at the Project site from 1978 to May 1982 but found only low-grade uranium mineralization. Additional drilling by EFNI in 1983 identified economic uranium mineralization at the Pinyon Plain breccia pipe.
After EFNI identified mineralization, shallow drilling was conducted to locate the center of the collapse feature (holes S01-S13), as a guide to the throat of the underlying breccia pipe. EFNI followed this up with additional deep drilling to better define the mineralization.
Table 6-1: Drilling at Pinyon Plain Project by Previous Operators
Energy Fuels Inc. - Pinyon Plain Project
Year |
Company |
Location |
# Holes |
Total Depth |
Hole ID |
Type |
1978-1982 |
Gulf |
Surface |
8 |
13,041 |
COG Series |
Rotary |
1983 |
EFNI |
Surface |
5 |
10,504 |
CYN Series 01-05 |
Rotary |
1984 |
EFNI |
Surface |
13 |
1,350 |
CYN Series S01-S13 |
Rotary |
1984 |
EFNI |
Surface |
10 |
18,462 |
CYN Series 06-14C & 16C |
Core/Rotary |
1985 |
EFNI |
Surface |
2 |
3,534 |
CYN 15C & CYN 15W1 |
Core |
1986 |
EFNI |
Surface |
1 |
3,086 |
55-515772 |
Water Well |
1994 |
EFNI |
Surface |
6 |
12,312 |
CYN Series 17-22 |
Rotary |
Total |
|
|
45 |
62,289 |
|
|
6.3 Past Production
A mine shaft and conveyances were developed for underground exploration and are operational, however, no past production has occurred at the Project.
7.0 GEOLOGICAL SETTING AND MINERALIZATION
7.1 Regional Geology
The Project is located on the Colorado Plateau, south of the Grand Canyon, within the Kaibab National Forest. The Project's mineralization is controlled by a collapse structure known as a breccia pipe. This breccia pipe is one of thousands of collapse structures found on the north and south rims of the Grand Canyon. The Pinyon Plain pipe extends from the surface (Moenkopi Formation) through various geologic strata into the Redwall Limestone.
Parts of two distant physiographic provinces are found in Arizona: the Basin and Range Province located in the southern portion of the state; and the Colorado Plateau Province located across the northern and central portions of the state. Pinyon Plain lies within the Colorado Plateau Province.
Surface exposures near the Project reveal sedimentary and volcanic rocks ranging in age from upper Paleozoic to Quaternary. The area is largely underlain by Mississippian through Triassic Period sedimentary rocks, however, exposed within the Grand Canyon are older rocks reaching Precambrian in age.
The region has experienced volcanic activity since the Pliocene epoch. A number of lava-capped buttes rise above the general landscape, and lava flows cover large areas in the southern part of the district. Faulting has exerted significant control on the geologic development and geomorphic history of the region. Major structural features are the Grand Wash, Hurricane, and Toroweap fault systems, all generally trending north-south with an eastern up thrown side. These faults are topographically prominent and show impressive scarps though other less prominent fault systems exist.
The deep incision of the Grand Canyon and associated side canyons, such as Kanab Creek, have dewatered the sedimentary section. Regionally ground water is encountered in the Redwall limestone, which coincides with the deeper formations exposed in the Grand Canyon. Perched ground water, usually in very limited quantities, is often encountered at the base of the Coconino sandstone in contact with the low permeability Hermit shale sequence. Figure 7-1 is a map showing the regional geology of the Project. Figure 7-2 presents a regional stratigraphic column.
Figure 7-1: Regional Geologic Map
Figure 7-2: Regional Stratigraphic Column
7.2 Local Geology
The surface expression of the Project is a broad shallow depression in the Permian Kaibab Formation. The pipe is essentially vertical with an average diameter of less than 200 ft, but it is considerably narrower through the Coconino and Hermit horizons (80 ft in diameter). The cross-sectional area is approximately 20,000 ft² to 25,000 ft². The pipe extends for at least 2,300 ft vertically from the Toroweap limestone to the upper Redwall horizons (Figure 7-3). The ultimate depth of the pipe is unknown. Uranium mineralization is concentrated in an annular ring within the breccia pipe.
7.2.1 Structural Geology
Regional joint systems rooted below the Redwall trend northwest-southeast and northeast-southwest. The regional joints and fractures lead to upward caving of the karstic voids in the Redwall Limestone vertically through the overlying Paleozoic sediments. As surface water and groundwater interact with the pipe, a circular brecciated column forms inside of the fracture controlled boundary.
Fractures related to the pipe can surround the brecciated zone and extend thin "ring fractures" up to 300 ft beyond the breccia pipe. Vertical joints and associated breccia pipes increase permeability and porosity, leading to the mineralization observed in the region. Figure 7-4 presents a horizontal section looking down at the breccia pipe and shows the distribution of mineralization with reference to the pipe structure.
7.2.2 Alteration
The Pinyon Plain breccia pipe is surrounded by bleached zones, particularly notable in the Hermit Formation where unaltered red sediments contrast sharply with gray-green bleached material. Bleaching is common within 100 ft of the pipe boundary. Sulfide mineralization, commonly in the form of pyrite, is found as streaks or blebs within the bleached zones.
Figure 7-3: Cross Section of Local Geology
Figure 7-4: Pinyon Plain Horizontal Slice Main Zone - Slice 5,200' Level
7.3 Mineralization
Mineralization at the Project extends vertically approximately 1,700 ft, both inside and outside the pipe, but high-grade uranium and copper mineralization is found primarily in the collapsed portions of the Coconino, Hermit, and Esplanade horizons and at the margins of the pipe in fracture zones. Sulfide zones are found scattered throughout the pipe but are especially concentrated (within a sulfide cap) near the Toroweap-Coconino contact, where the cap averages 20 ft thick and consists of pyrite and bravoite, an iron-nickel sulfide. The ore assemblage consists of uranium-pyrite-hematite with massive copper sulfide mineralization common in and near the high-grade zone. The strongest mineralization appears to occur in the lower Hermit-upper Esplanade horizons in an annular fracture zone.
The metal of interest at the Project is uranium, though significant copper mineralization co-exists in the breccia pipe. As the rocks making up the breccia within the pipe are all sedimentary rocks, mineralization typically occurs within the matrix material (primarily sand) surrounding the larger breccia clasts.
7.3.1 Uranium Mineralization
Uranium mineralization at the Project is concentrated in three stratigraphic levels or zones (Upper/Cap, Main, and Juniper) within a collapse structure ranging from 80 ft to 230 ft wide with a vertical extension from a depth of 650 ft to over 2,100 ft, resulting in approximately 1,450 ft of mineralization. Mineralized intercepts range widely up to several tens of feet with grades in excess of 1.00% U3O8. In previous reports and EFR news releases, the mineralization was subdivided into six distinct zones; those six have been combined into the three listed above for simplicity. The Upper/Cap Zone combines the previously reported Upper and Cap Zones. The Main Zone combines the previously reported Main and Main-Lower Zones and the Juniper combines the previously reported Juniper I and Juniper II Zones.
Age dating of mineralization (U-Pb) indicates a range from 101 million to 260 million years, which suggests that the earliest uranium mineralization had occurred in the Permian Period before the pipes completely formed in the Triassic Period.
Consistent with other breccia pipe deposits, in the mineralized zone, the uranium mineralization occurs largely as blebs, streaks, small veins, and fine disseminations of uraninite/pitchblende (UO2). Mineralization is mainly confined to matrix material, but may extend into clasts and larger breccia fragments, particularly where these fragments are of Coconino sandstone. Uranium mineralization occurs primarily as uraninite and various uranium phase minerals (unidentifiable minerals) with lesser amounts of brannerite and uranospinite.
7.3.2 Copper Mineralization
Currently, there is no reasonable prospect for the economic extraction of copper at the Project.
Significant copper mineralization occurs at the Project within the Main Zone, both with uranium mineralization and outside of uranium mineralization.
Copper mineralization can be disseminated throughout the matrix material (commonly replacing calcite cement) with higher-grade mineralization typically occurring as vug fills, blebs, or streaks within the matrix and sometimes zoning the breccia clasts. The highest-grade copper mineralization completely replaces the matrix cement or replaces the matrix material all together.
Energy Fuels Inc. | Pinyon Plain Project, SLR Project No: 138.02544.00002 | ||
Technical Report - February 22, 2022 | 7-7 |
Copper mineralization occurs primarily as tennantite, chalcocite, and bornite with lesser amounts of covellite. Pyrite and sphalerite are also found throughout the pipe. Silver is commonly associated with the copper mineralization in the Main Zone. Assay values of silver greater than one ounce per short ton are common where copper grades are high. Arsenic is present where tennantite mineralization occurs. Additionally, lower quantities of silver, zinc, lead, molybdenum, copper, nickel, and vanadium are present and scattered throughout the pipe.
8.0 DEPOSIT TYPES
Paleozoic Era sedimentary rocks of northern Arizona are host to thousands of breccia pipes. The pipes extend from the Mississippian Redwall Limestone up to the Triassic Chinle Formation, a total of approximately 4,000 ft of section. Due to erosion and other factors, however, no single pipe has been observed cutting through the entire section. No pipe occurs above the Chinle Formation or below the Redwall Limestone. Breccia pipes mineralized with uranium are called Solution-Collapse Breccia Pipe Uranium deposits, which are defined as U.S. Geological Survey Model 32e (Finch, 1992).
Breccia pipes within the Arizona Strip District are vertical or near vertical, circular to elliptical bodies of broken rock comprised of slabs, rotated angular blocks and fragments of surrounding and stratigraphically higher formations. The inclusion of breccia made of stratigraphically higher formations suggests that the pipes formed by solution collapse of underlying calcareous rocks, such as the Redwall Limestone. Surrounding the blocks and slabs making up the breccia is a matrix of fine material comprised of surrounding and overlying rock from various formations. For the most part, the matrix consists of siliceous or calcareous cement.
Breccia pipes are comprised of three interrelated features: a basinal or structurally shallow depression at surface (designated by some as a collapse cone); a breccia pipe, which underlies the structural depression; and annular fracture rings, which occur outside, but at the margin of the pipes. Annular fracture rings are commonly, but not always, mineralized. The structural depression may range in diameter up to 0.5 miles or more, whereas breccia pipe diameters can range up to approximately 600 ft, but normally range from 200 ft to 300 ft in diameter.
Mineralization in the breccia pipes takes place by water flowing along fractures and through porous materials that provide conduits for fluid flow and typically takes place in stages. Wenrich and Sutphin (1989) identified at least four separate mineralizing events that occur within the Arizona Strip District pipes, with uranium and copper mineralization occurring as part of the last two mineralizing events.
To date, mineralized breccia pipes appear to occur in clusters or trends. Spacing between pipes ranges from hundreds of feet within a cluster to several miles within a trend. Pipe location may have been controlled by deep-seated faults, but karstification of the Redwall Limestone in the Mississippian and Permian Periods is considered to have initiated formation of the numerous and widespread pipes in the region.
9.0 EXPLORATION
EFR has completed no exploration work on the Project other than underground development drilling discussed in Section 10, since acquiring the properties in 2012.
9.1 Geotechnical
In 1987, the geotechnical consulting firm of Dames and Moore (1987) completed an evaluation of mine stability and subsidence potential at the Project.
The scope of work was based on a review of geologic and geotechnical data from similar breccia pipe uranium mines on the Arizona Strip (the Orphan Mine, the Hack 2 Mine, Kanab North, and the Pigeon Mine), including the stability of existing underground stopes.
Numerical modeling of stopes was analyzed at depths of 800 ft, 1,200 ft, and 1,600 ft below surface with a surrounding rock strength of 3,000 psi. Stope dimensions at these mines varied from 60 ft high by 30 ft wide (Orphan Mine) to 350 ft high by 200 ft wide (Hack 2 Mine). Ground support was limited to rock bolts in the stope backs and no backfill.
The report concluded that stopes up to 350 ft high at a depth of 1,200 ft would not develop significant stability problems as long as prudent ground supports were employed. In addition, the report predicted mined out stopes would fill with rubblized rock as a result of subsidence reaching surface in several hundred years; the surface expression would be less than two feet over a broad area and would be difficult to observe in the field.
Since the geotechnical report was produced, EFR has decided to fill stopes with waste rock, which will significantly reduce any post-mining surface expression from ground subsidence.
9.2 Hydrogeology
Experience from past mining in breccia pipes on the Colorado Plateau indicates water inflows to be low to absent. A hydrologic model has not been done on the Project, however, since the completion of the mineshaft and drill stations in 2017, the mine inflow has averaged 20 gpm during care and maintenance.
Strata overlying and hosting the mineralization consist of individual beds of sandstones, shales, and limestones with varying degrees of fracturing, faulting, and lithification. Some rock members may contain groundwater in confined perched zones, others may have solution cavities of varying sizes, while other rock types retard the downward percolation of groundwater.
As part of the Draft Environmental Impact Statement (EIS) for the USFS, a report on groundwater conditions was completed by Errol L. Montgomery & Associates (Montgomery, 1985).
The report concluded the following based on the analysis of hydrogeologic and hydrochemical data obtained during the environmental impact investigations:
The proposed mine will have little or no impact on groundwater circulation and storage in perched aquifers. Similarly, there will be negligible impact on the yield from nearby springs or wells to the groundwater.
The proposed mine will have little or no impact on the chemical quality of the groundwater in the perched aquifers.
With the implementation of planned mitigation actions, there is a low possibility of deterioration of the groundwater chemistry.
10.0 DRILLING
EFR acquired the Project from Denison in 2012. Since that time, exploration work carried out by EFR at the Project has included the drilling of 80 core holes and 25 percussion holes from three subsurface levels accessed from the production shaft to delineate mineralization extents, results of which were used to update the geologic model and Mineral Resource estimates discussed in the following sections of this report.
Three mineralized zones have been identified on the Project; from top downward, they are the Upper/Cap Zone, the Main Zone, and the Juniper Zone. Mineral Resources (Section 14) are reported on the Main and Juniper Zones; the Upper/Cap Zone is currently an exploration target.
10.1 Drilling
As of the effective date of this report, EFR and its predecessors have completed 150 holes (45 surface and 105 underground), totalling 92,724 ft, from 1978 to 2017 using core, rotary, and percussion methods. No drilling was conducted on the Project from 1994 to 2016.
Drillhole collar locations are recorded on the original drill logs and radiometric logs created at the time of drilling, including easting and northing coordinates in local grid or modified NAD 1983 Arizona Central FIBPS 0202 (US feet) and elevation of collar in feet above sea level. Drillhole orientation were surveyed with a Reflex EZ Shot or similar deviation tool in the drill string every time a length of drill pipe was added.
From 2016 to 2017, EFR completed 105 underground drillholes totalling 30,314 ft from drill stations developed from the Pinyon Plain mineshaft. No drilling has taken place on the Project since 2017. A summary of drilling completed by EFR is presented in Table 10-1, and Figure 10-1 shows the locations of all the drill collars from EFR and the previous operators.
Table 10-1: Underground Drillhole Database Summary
Energy Fuels Inc. - Pinyon Plain Project
Year |
Company |
Location |
# Holes |
Total Depth |
Hole ID |
Type |
2016 |
EFR |
1-3 Level |
15 |
12,435 |
CMCH Series 001 - 015 |
Core |
2016 |
EFR |
1-4 Level |
25 |
4,179 |
CMLH Series 001 - 025 |
Percussion |
2016-2017 |
EFR |
1-4 Level |
42 |
8,420 |
CMCH Series 016 - 058 |
Core |
2017 |
EFR |
1-5 Level |
23 |
5,401 |
CMCH Series 059 - 081 |
Core |
Total |
|
|
105 |
30,314 |
|
|
Figure 10-1: Surface Drillhole Collar Locations
All core was removed by the drillers from the wireline core barrel and placed in core boxes, orienting the core to fit together where possible and limiting a core box to a single run. The driller labeled the core box with the drillhole ID, box number, and start/finish depths on both the bottom of the core box and the core box lid. The driller also placed blocks or core markers in the core box to indicate the "from" and "to" depths of the core run as well as the core run number. If core was not recovered during a core run, a wooden block was placed in the core box by the driller with the "from" and "to" depths of no recovery (if known). Core was transported from the drill station by the driller or the geologist to surface for logging.
Upon arrival at the core logging facility on surface, core was photographed and screened radiometrically using a Radiation Solutions RS‐125 Super‐SPEC device and elementally using a handheld x-ray fluorescent (XRF) analyzer. Drill core recovery percentage was noted. Core was then logged by the field geologist, noting the depth of each stratigraphic unit, and a description of lithology and structures. Details noted on the lithology log include colour, texture, grain size, cementation, and mineralogy of each lithologically distinct unit, as well as the type of fracture and any voids or vugs.
All drillholes on the Property were logged with a radiometric probe to measure the natural gamma radiation, from which an indirect estimate of uranium content was made and is discussed in Section 11.1.1.
In the opinion of the SLR QP, the drilling, logging, sampling, and conversion and recovery factors at the Project meet or exceed industry standards and are adequate for use in the estimation of Mineral Resources.
10.1.1 Copper Mineralization
During exploration drilling at the Project in 2016, copper mineralization was discovered within the breccia pipe. The core from the underground drilling program was analyzed for copper mineralization with an Olympus Vanta handheld XRF device. Sections of core that showed grades of approximately 0.5% Cu or above where uranium was not present were sampled for chemical assay. Sections of core that contained uranium (identified with a scintillometer) were also sampled for chemical assay to determine both the uranium and copper content. Table 10-2 lists a number of selected composited intercepts of copper mineralization. Figure 10-2 and Table 10-3 provide some detail of the statistics associated with the copper mineralization.
Table 10-2: Selected Copper and Uranium Assay Intercepts
Energy Fuels Inc. - Pinyon Plain Project
Table 10-3: Declustered Cu Assay Statistics
Energy Fuels Inc. - Pinyon Plain Project
Item |
Value |
No. Samples |
3,500 |
Mean |
2.37% |
Standard Deviation |
5.14 |
Variance |
26.36 |
Coef. Of Variation |
2.17 |
Maximum |
55.66% |
Upper Quartile |
1.81% |
Median |
0.17% |
Lower Quartile |
0.04% |
Minimum |
0.00% |
Figure 10-2: Histogram of Declustered Cu Assays
11.0 SAMPLE PREPARATION, ANALYSES, AND SECURITY
11.1 Sample Preparation and Analysis
This section references the Standard Operating Procedure (SOP) Handbook for core handling, sampling, and quality assurance/quality control (QA/QC) protocols for core drilling at the Project, prepared by EFR in December 2016 (Energy Fuels, 2016).
Samples respect geological contacts and vary from 2 ft to 10 ft in length, depending on core recovery, length of the lithological unit, and mineralization. Most core samples were four feet long, except where broken along lithological or mineralization contacts. Core outside the breccia pipe was considered barren and was not sampled. Sample interval and number were marked on the core log, the core-sampling log, and the sample bags.
Sample core was cut in half, lengthwise, by technicians with a diamond saw, returning half of the split core to the core box and submitting the other half for sample preparation and analysis. The sample number, which references the drillhole name, depth, and sample length, was written on two aluminum tags. One sample tag was stapled to the sample bag and an additional sample tag was placed within the bag. The sample tag that was affixed to the outside of the sample bag also contained the sample date and the sampler's initials.
Once sampled, the remaining half core splits were returned to the core box and archived onsite.
11.1.1 Gamma Logging
All drillholes completed by EFR at the Project were logged with a Mount Sopris gamma logging unit employing a natural gamma probe. The probe measures natural gamma radiation using one 0.5-inch by 1.5-inch sodium iodide (NaI) crystal assembly. Normally, accurate concentrations can be measured in uranium grades ranging from less than 0.1% to as high as 5% U3O8. Data are logged at a speed of 15 ft to 20 ft per minute down hole and 15 ft to 20 ft per minute up hole, typically in open holes. Occasionally, unstable holes are logged through the drill pipe and the grades are adjusted for the material type and wall thickness of the pipe used.
The radiometric or gamma probe measures gamma radiation which is emitted during the natural Radioactive decay of uranium (U) and variations in the natural radioactivity originating from changes in concentrations of the trace element thorium (Th) as well as changes in concentration of the major rock forming element potassium (K).
Potassium decays into two stable isotopes (argon and calcium) which are no longer radioactive and emits gamma rays with energies of 1.46 mega electron-volts (MeV). Uranium and thorium, however, decay into daughter products which are unstable (i.e., radioactive). The decay of uranium forms a series of about a dozen radioactive elements in nature that finally decay to a stable isotope of lead. The decay of thorium forms a similar series of radioelements. As each radioelement in the series decays, it is accompanied by emissions of alpha or beta particles, or gamma rays. The gamma rays have specific energies associated with the decaying radionuclide. The most prominent of the gamma rays in the uranium series originate from decay of 214Bi (bismuth 214), and in the thorium series from decay of 208Tl (thallium 208).
The natural gamma measurement is made when a detector emits a pulse of light when struck by a gamma ray. This pulse of light is amplified by a photomultiplier tube, which outputs a current pulse that is accumulated and reported as counts per second (cps). The gamma probe is lowered to the bottom of a drillhole, and data are recorded as the tool travels to the bottom and then is pulled back up to the surface. The current pulse is carried up a conductive cable and processed by a logging system computer that stores the raw gamma cps data.
The basis of the indirect uranium grade calculation (referred to as "eU3O8" for "equivalent U3O8") is the sensitivity of the detector used in the probe, which is the ratio of cps to known uranium grade and is referred to as the probe calibration factor. Each detector's sensitivity is measured when it is first manufactured and is also periodically checked throughout the operating life of each probe against a known set of standard "test pits," with various known grades of uranium mineralization, or through empirical calculations. Application of the calibration factor, along with other probe correction factors, allows for immediate grade estimation in the field as each drillhole is logged.
Downhole total gamma data are subjected to a complex set of mathematical equations, considering the specific parameters of the probe used, speed of logging, size of bore hole, drilling fluids, and presence or absence of any type of drillhole casing. The result is an indirect measurement of uranium content within the sphere of measurement of the gamma detector.
An EFR in-house computer program known as GAMLOG converts the measured cps of the gamma rays into 0.5 ft increments of equivalent percent U3O8 (%eU3O8). GAMLOG is based on the Scott's Algorithm developed by James Scott of the Atomic Energy Commission (AEC) in 1962 (Scott, 1962) and is widely used in the industry.
The conversion coefficients for conversion of probe cps to percent equivalent uranium grades are based on the calibration results obtained at the United States Department of Energy Uranium Calibration Pits in Grand Junction, Colorado, USA.
In those holes associated with copper mineralization or where EFR personnel reported that the probe underestimated U3O8 grades above 2% due to saturation of the probe's sodium iodide crystal, (a normal occurrence associated with gamma logging for uranium), EFR used chemical assay for both copper and uranium. Where there was lower grade uranium and areas of low-grade copper mineralization, radiometric data was used in lieu of chemical assays.
11.1.1.1 Calibration
For the gamma probes to report accurate %eU3O8 values the gamma probes must be calibrated regularly. The probes are calibrated by running the probes in test pits maintained historically by the AEC and currently by the DOE. There are test pits in Grand Junction, Colorado, Grants, New Mexico, and Casper, Wyoming. The test pits have known %U3O8 values, which are measured by the probes. A dead time (DT) and K-factor can be calculated based on running the probes in the test pits. These values are necessary to convert CPS to %eU3O8. The dead time accounts for the size of the hole and the decay that occurs in the space between the probe and the wall rock. DT is measured in microseconds (μsec). The K-factor is simply a calibration coefficient used to convert the DT-corrected CPS to %eU3O8.
Quarterly or semi-annual calibration is usually sufficient. Calibration should be done more frequently if variations in data are observed or the probe is damaged.
11.1.1.2 Method
Following the completion of a rotary hole, a geophysical logging truck will be positioned over the open hole and a probe will be lowered to the hole's total depth. Typically, these probes take multiple different readings. In uranium deposits, the holes are usually logged for gamma, resistivity, standard potential, and hole deviation. Only gamma is used in the grade calculation. Once the probe is at the bottom of the hole, the probe begins recording as the probe is raised. The quality of the data is impacted by the speed the probe is removed from the hole. Experience shows a speed of 20 feet per minute is adequate to obtain data for resource modeling. Data is recorded in CPS, which is a measurement of uranium decay of uranium daughter products, specifically Bismuth-24. That data is then processed using the calibration factors to calculate a eU3O8 grade. Historically, eU3O8 grades were calculated using the AEC half amplitude method, which gives a grade over a thickness. Currently, the eU3O8 grades tend to be calculated on 0.5-foot intervals by software. Depending on the manufacturer of the probe truck and instrumentation, different methods are used to calculate the eU3O8 grade, but all, including the AEC method, are based on the two equations given below.
The first equation converts CPS to CPS corrected for the dead time (DT) determined as part of the calibration process
The second equation converts the Dead Time Corrected CPS (N) to %eU3O8 utilizing the K-factor (K)
Depending on the drilling and logging environment, additional multipliers can be added to correct for various environmental factors. Typically, these include a water factor for drill hole mud, a pipe factor if the logging is done in the drill steel, and a disequilibrium factor if the deposit is known to be in disequilibrium. Tables for water and pipe factors are readily available.
11.1.2 Core Sampling
11.1.2.1 Sample Preparation
Samples were delivered by a staff geologist to Energy Fuel's White Mesa Mill in Blanding, Utah, for uranium and copper assaying. The White Mesa Mill Laboratory holds no certifications and no accreditations.
Upon delivery of the samples to White Mesa Mill, samples were weighed, dried for 16 to 24 hrs, and weighed again to determine the moisture content. The samples were crushed using a Bico Jaw Crusher and Metso Minerals cone crusher and split using a riffle splitter before pulverization using a ring and puck pulverizer. The crushers, splitters, and pulverisers are cleaned between uses with abrasive sand.
11.1.2.2 Assaying and Analytical Procedure
A split of the pulverized sample was digested in the laboratory in a combination of nitric, perchloric, and hydrofluoric acid, diluted, and analyzed. Determination of uranium content in the sample was performed by a spectrophotometric analysis using the Thermo Scientific Biomate 3 Spectrophotometer. Other analyses were performed either on the Perkin Elmer Optima 5300V ICP-OES or the Perkin Elmer ELAN DRC II ICP-MS. Calibrations were performed daily on these instruments, and every four in 100 analyses were spiked with a standard solution after analysis to ensure consistency of results.
11.1.3 Radiometric Equilibrium
Disequilibrium in uranium deposits is the difference between equivalent (eU3O8) grades and assayed U3O8 grades. Disequilibrium can be either positive, where the assayed grade is greater than the equivalent grades, or negative, where the assayed grade is less than the equivalent grade. A uranium deposit is in equilibrium when the daughter products of uranium decay accurately represent the uranium present. Equilibrium occurs after the uranium is deposited and has not been added to or removed by fluids after approximately one million years. Disequilibrium is determined during drilling when a piece of core is taken and measured by two different methods, a counting method (closed-can) and chemical assay. If a positive or negative disequilibrium is determined, a disequilibrium factor can be applied to eU3O8 grades to account for this issue.
A comparison of chemical data vs probe data showed that no disequilibrium factor is needed for the Project.
11.2 Sample Security
Bagged samples were placed in barrels, which were secured in the back of a truck for transport and delivered by EFR personnel to the laboratory at White Mesa Mill for analytical testing. White Mesa Mill personnel were responsible for shipping check samples to various third-party laboratories. A chain of custody form was maintained at all times.
Following analysis, dried, crushed samples were stored in sealed, plastic bottles for long-term storage. Pulverized samples were also stored in sealed, plastic bottles. All samples are stored out of the elements to ensure stored sample quality.
The laboratory at White Mesa Mill uses a combination of digital exports from the instrument's computer and hand entry from logbooks to maintain a master spreadsheet, which calculates grade based on the various inputs. Certificates of analysis were provided to EFR personnel in secured Adobe Acrobat and Microsoft Excel format.
EFR believes the sample preparation, security, and analytical procedures are acceptable for the purposes of a Mineral Resource estimate and meet industry standards.
11.3 Quality Assurance and Quality Control
Quality assurance (QA) consists of evidence to demonstrate that the assay data has precision and accuracy within generally accepted limits for the sampling and analytical method(s) used in order to have confidence in the assay data used in a resource estimate. Quality control (QC) consists of procedures used to ensure that an adequate level of quality is maintained in the process of collecting, preparing, and assaying the exploration drilling samples. In general, QA/QC programs are designed to prevent or detect contamination and allow assaying (analytical), precision (repeatability), and accuracy to be quantified. In addition, a QA/QC program can disclose the overall sampling-assaying variability of the sampling method itself.
QA/QC samples, including duplicates, blanks, certified reference materials (CRMs or standards), and checks, were submitted by the onsite team at the Project, the Lakewood, Colorado, office of EFR, and EFR's White Mesa Mill laboratory. The submission rate and responsible party of each sample type is listed in Table 11-1.
Table 11-1: QA/QC Samples for the Pinyon Plain Project Drilling
Energy Fuels Inc. - Pinyon Plain Project
Sample Type |
Responsible Party |
Collection Method |
Rate of Insertion |
|
Duplicates |
Field |
Field Geologist |
¼ core |
1 in 100 |
Coarse |
WMM2 Lab personnel |
Second split of crushed sample |
2 in 100 |
|
Pulp |
WMM Lab personnel |
Second split of pulverized sample |
2 in 100 |
|
CRM1 |
|
Lakewood Office |
Shipped directly to lab |
4 in 100 |
Blank |
Coarse |
Lakewood Office |
Shipped directly to lab |
2 in 100 |
Pulp |
Lakewood Office |
Shipped directly to lab |
2 in 100 |
|
Check Assay |
|
WMM Lab personnel |
Split of reject sample |
4 in 100 |
CRM1 with Check Assay |
|
WMM Lab personnel |
|
10 in 100 |
Bulk Density |
|
WMM Lab personnel |
Core samples |
As Available |
Notes:
1. CRM = Certified Reference Material
2. WMM = White Mesa Mill
CRMs and fine blanks were shuffled (random sequence applied), numbered, and catalogued in the Lakewood, Colorado, office by EFR technical personnel prior to shipment to the White Mesa Mill laboratory manager. These samples (blind to the White Mesa Mill manager, laboratory manager, and laboratory personnel) were inserted into the sample stream by the laboratory manager. The coarse blanks were not blind to the White Mesa Mill laboratory manager.
Check assays were performed by three independent laboratories (Section 11.3.4) and were submitted by White Mesa Mill personnel. Drilling and assaying were performed in 2016 and 2017; however, all assay results were received by Project personnel in 2017. Table 11-2 outlines the number of submitted QA/QC samples and the portion of the total database they comprise.
Results of the QA/QC program were compiled in a series of Microsoft Excel tables and charts on a regular basis as the program progressed and were distributed to the project and laboratory personnel. QA/QC trends were discussed as the program progressed and action was taken to correct issues.
Table 11-2: Summary of QA/QC Submittals
Energy Fuels Inc. - Pinyon Plain Project
Sample Type |
Count |
Percentage of Assay Samples |
Drillholes |
130 |
- |
Assay Samples |
3,413 |
- |
Probe Samples |
97,994 |
- |
Probe / Assay Duplicates |
563 |
16% |
Coarse Blanks |
63 |
2% |
Fine Blanks |
63 |
2% |
Copper CRMs |
125 |
4% |
Field Duplicates |
36 |
1% |
Coarse Duplicates |
62 |
2% |
Pulp Duplicates |
69 |
2% |
Check Assays |
114 |
3% |
Total QA/QC Samples |
532 |
16% |
11.3.1 Blanks
The regular submission of blank material is used to assess contamination during sample preparation and to identify sample numbering errors. EFR submitted blank samples at an insertion rate of one in 50 at both the coarse and fine preparation stages. The coarse blank sample is a granite matrix sourced from ASL and certified as barren for both copper and uranium, and the fine blank material was purchased from Ore Research and Exploration (reference material OREAS 24b). OREAS 24b has certified values of 0.0038% Cu and 0.000174% U. The SLR QP reviewed the results of the blank samples submitted alongside drill core and tabulated the number of failures for both coarse and fine blanks. A blank sample was considered to have failed if the assay returned a copper or uranium value more than ten times the detection limit for the assay method. No failures were reported for the coarse or fine blank samples, as presented in Figure 11-1.
Figure 11-1: Results of Blank Samples
11.3.2 Certified Reference Material
Results of the regular submission of CRMS (standards) are used to identify problems with specific sample batches and biases associated with the primary assay laboratory. Three different copper CRMs were submitted into the sample stream at White Mesa Mill, representing low, medium, and high grade copper material for an insertion rate of one in 25. The matrix of the material, expected value, and tolerance limits are listed in Table 11-3. The CRMs were assayed using a 4-acid digest or aqua regia technique with inductively coupled plasma (ICP) or atomic absorption (AA) finish.
Table 11-3: Expected Values and Ranges of Copper CRM
Energy Fuels Inc. - Pinyon Plain Project
CRM |
Cert. Date |
Matrix |
Expected Value |
Tolerance 2 S.D. |
CDN-CM-41 |
2016 |
Minto Mine: Hypogene Cu Sulfide hosted in Granodiorite |
1.71 |
0.05 |
CDN-ME-1410 |
2014 |
High Sulfide VMS |
3.80 |
0.17 |
OREAS 1131 |
2009 |
Tritton Cu Project: Chalcopyrite Breccia Ore |
13.5 |
0.8 |
Notes:
1. Certified tolerance is a 95% confidence interval from 13.3% to 13.8% Cu.
No U3O8 specific CRMs were sent to White Mesa Mill. As part of the mill's daily protocol for running samples, the equipment was calibrated daily using U3O8 CRM 129-A, sourced from the New Brunswick Laboratory at the U.S. Department of Energy. The SLR QP recommends sourcing three matrix-matched or matrix-similar CRMs for U3O8, representing low, medium, and high grades at the Project, and incorporating them into the sample stream sent to White Mesa Mill at a rate of one in 25.
The SLR QP calculated failure rates of each copper CRM, prepared contact plots, and looked at temporal trends of the CRMs. Failure rates, defined as a copper value reporting more than three standard deviations (SD) from the expected value, or two consecutive copper values reporting more than two SD from the expected values were tabulated, and are presented in Table 11-4. All CRMs assayed at White Mesa Mill displayed a low bias relative to the expected copper value, as well as a positive temporal trend, and a high failure rate. Control plots of each CRM are presented in Figure 11-2 and a graph of the average copper value by date for each CRM is shown in Figure 11-3. Two of the CRMs, CDN-CM-41 and CDN-ME-1410, are made of a material unlike the material at the Project.
The SLR QP recommends that EFR continue to monitor for low-grade bias of copper and slight low-grade bias of U3O8 at the White Mesa Mill laboratory and continue to monitor for temporal trends (change in average grade of CRM data over time) observed at White Mesa Mill laboratory. The SLR QP also recommends EFR procure CRM made from the Project resource material (matrix matched), to obtain an improved understanding of laboratory performance as applied to Project samples; source three matrix-matched or matrix-similar CRMs for U3O8 that represent low, medium, and high grade ore at the Project; incorporate the CRMs in the sample stream sent to White Mesa Mill at a rate of one in 25 and ensure the certified values of these CRMs are blind to the laboratory. In addition, submit these CRMs to independent laboratories with check assays at a rate of one in 10 to obtain a meaningful sample size for analysis.
Table 11-4: Summary of CRM Performance
Energy Fuels Inc. - Pinyon Plain Project
CRM |
Expected Value |
Submittals |
Failures |
Percentage of Failures |
CDN-CM-41 |
1.71 |
39 |
31 |
79% |
CDN-ME-1410 |
3.80 |
49 |
25 |
51% |
OREAS 113 |
13.5 |
37 |
20 |
54% |
Total |
|
125 |
76 |
61% |
Figure 11-2: Control Charts of Copper CRM
Figure 11-3: Average Copper Grade of CRM Over Time
11.3.3 Duplicates
Duplicate samples help to monitor preparation and assay precision and grade variability as a function of sample homogeneity and laboratory error. The field duplicate includes the natural variability of the original core sample, as well as levels of error at various stages, including core splitting, sample size reduction in the preparatory laboratory, sub-sampling of the pulverized sample, and the analytical error. Coarse reject and pulp duplicates provide a measure of the sample homogeneity at different stages of the preparation process (crushing and pulverizing).
Field duplicate samples were collected by the onsite geologist and submitted to the laboratory as separate samples, adjacent in the sample stream and clearly marked as such. A total of 1% of the drillhole samples have been duplicated by splitting the half core sample into two quarter core samples. The duplicate protocol and procedure for collecting, submitting, and analyzing coarse and pulp duplicate assays is carried out by the White Mesa Mill. A total of 2% of the drillhole samples were resubmitted at the coarse and pulp assay preparation stages for comparison.
Results for both coarse and pulp sample pairs show excellent correlation (Table 11-5) with very good repeatability for both copper and uranium. Of the field, coarse, and pulp duplicate sample sets, however, less than 20% of each of the submitted sample types report grades above the COG of 0.29% U3O8 and less than 10% are above the expected average grade of 1% U3O8.
Over half of the field duplicates reported U3O8 values with a relative difference greater than 20%, which may be related to the uranium occurring as blebs or vug fill. Only one of the four field sample pairs within the grade range of interest, however, had a relative difference greater than 20%. Over half of the field duplicates reported copper values with a relative difference greater than 20%. Only five of the 16 sample pairs with a grade higher than 1% Cu, however, had a relative difference greater than 20%. The SLR QP recommends collecting additional field samples, in the form of ½ core, in the grade range of interest, in order to draw deeper conclusions about the nature of the material at Pinyon Plain.
The SLR QP also recommends implementing a duplicate assay protocol for field, coarse, and pulp samples that is blind to the laboratory, and recommends that the rates of insertion for duplicate samples be approximately one in 50 for field duplicates and one in 25 for coarse and pulp duplicate samples.
Table 11-5: Basic Comparative Statistics of 2017 Duplicate Assays
Energy Fuels Inc. - Pinyon Plain Project
|
Field |
Coarse |
Pulp |
|||
Original |
Duplicate |
Original |
Duplicate |
Original |
Duplicate |
|
U3O8 |
||||||
Count |
36 |
36 |
62 |
62 |
69 |
69 |
Mean (%) |
0.14 |
0.13 |
0.30 |
0.31 |
1.13 |
1.12 |
Max. Value (%) |
1.45 |
1.00 |
9.71 |
9.80 |
25.90 |
25.36 |
Min. Value (%) |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
Median (%) |
0.02 |
0.01 |
0.02 |
0.02 |
0.02 |
0.03 |
Variance |
0.10 |
0.06 |
1.67 |
1.73 |
19.74 |
19.03 |
Std. Dev. |
0.32 |
0.25 |
1.29 |
1.31 |
4.44 |
4.36 |
Corr. Coefficient |
0.961 |
1.000 |
1.000 |
|||
% Diff. Btw Means |
8.5 |
-2.0 |
1.3 |
|||
Copper |
||||||
Count |
35 |
35 |
61 |
61 |
69 |
69 |
Mean (%) |
4.12 |
4.33 |
2.22 |
2.21 |
3.51 |
3.42 |
Max. Value (%) |
24.22 |
22.60 |
22.38 |
22.84 |
30.50 |
26.14 |
Min. Value (%) |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
Median (%) |
0.34 |
0.44 |
0.14 |
0.12 |
0.20 |
0.20 |
Variance |
48.18 |
49.38 |
19.86 |
20.06 |
52.68 |
49.60 |
Std. Dev. |
6.94 |
7.03 |
4.46 |
4.48 |
7.26 |
7.04 |
Corr. Coefficient |
0.983 |
0.997 |
0.997 |
|||
% Diff. Btw Means |
-5.0 |
0.6 |
2.5 |
11.3.4 Check Assays
A total of 114 assays were sent for re-assay at one of three independent laboratories to ascertain if any bias is present within the primary laboratory, Energy Fuel Inc.'s White Mesa Mill laboratory:
American West Analytical Laboratories, located in Salt Lake City, Utah - Accredited by the National Environmental Laboratory Accreditation Program (NELAP) in Utah and Texas; and state accredited in Colorado, Idaho, New Mexico, Wyoming, and Missouri
Energy Laboratories, located in Casper, Wyoming - NELAP accredited Certifications USEPA: WY00002; FL-DOH NELAC: E87641; Oregon: WY200001; Utah: WY00002; Washington: C1012
Inter-Mountain Laboratory (now Pace Analytical), located in Sheridan, Wyoming - EPA, DOE, and several other accreditations (http://intermountainlabs.com/certifications.html)
The number of check assay samples sent to each laboratory is presented in Table 11-6. Because Inter-Mountain Labs (IML) is the only laboratory with a significant number of samples, and the only laboratory to include CRMs, it was chosen for comparison with the primary laboratory at White Mesa Mill. Scatter plots of the primary and independent laboratory results for U3O8 and copper are shown in Figure 11-4 and Figure 11-5, respectively.
Table 11-6: Check Assays List
Energy Fuels Inc. - Pinyon Plain Project
Laboratory |
No. Check Assay Samples Sent |
No. Cu CRMs Sent |
American West Analytical Labs |
10 |
- |
Energy Laboratories |
5 |
- |
Inter-Mountain Labs |
99 |
11 |
Total |
114 |
11 |
The results indicate a slight low bias of both copper and U3O8 results at White Mesa Mill. This finding is supported by the low bias observed in the copper CRM results from White Mesa Mill. Copper CRM results from IML are not conclusive due to the small number of samples submitted, however, the CRM results from IML were mostly slightly above the expected value, with no failures.
Notes:
1. EL = Energy Laboratories
2. IML = Inter-Mountain Labs
3. AWAL = American West Analytical Labs
Figure 11-4: Scatter Plot of Independent vs Primary Laboratory Check Assay Results for U3O8
Notes:
1. EL = Energy Laboratories
2. IML = Inter-Mountain Labs
3. AWAL = American West Analytical Labs
Figure 11-5: Scatter Plot of Independent vs. Primary Laboratory Check Assay Results for Copper
11.3.5 Comparison of Probe vs. Assay Results
A total of 97,944 U3O8 0.5 ft probe samples were included in the Mineral Resource database where chemical assay data were not available. To check for disequilibrium and ensure that no bias was present between assay and probe results, EFR assayed several drillholes for which probe data were available. Drillhole intervals in the Main Zone were flagged and weighted averages were calculated for the results of each method over the interval of interest. These weighted averages were then compared using basic statistics, including scatter and quantile-quantile plots. A total of 14 sample pairs were removed that returned results above 2% U3O8, to account for probe saturation. A scatter plot of the 77 sample pair results is shown in Figure 11-6.
Figure 11-6: Scatter Pot of the Weighted Average of Probe and Assay U3O8 Results Over Drillhole Intercepts within the Main Zone
The results indicate good correlation between the assay and probe data, with negligible bias.
11.4 Density Analyses
Bulk densities were determined at White Mesa Mill for a majority of the samples submitted (2,630 of 3,347). A single piece of split core sample, at least four inches in length, was measured in all dimensions using calipers to calculate volume, and then weighed dry. Density was calculated using the measured volume and the mass. An additional 37, full core, six-inch samples, were submitted to White Mesa Mill to verify the caliper method. These 37 full core samples were measured with calipers to calculate volume and then weighed dry. Additionally, these samples were immersed in water to determine volume via water displacement. The densities calculated by both methods were compared. The densities calculated using the caliper method were approximately 1% greater than those calculated using water displacement on the same core samples, which is a negligible difference.
11.5 Conclusions
The SLR QP is of the opinion that the sample security, analytical procedures, and QA/QC procedures used by EFR meet industry best practices and are adequate to estimate Mineral Resources.
12.0 DATA VERIFICATION
Data verification is the process of confirming that data has been generated with proper procedures, is transcribed accurately from its original source into the project database and is suitable for use as described in this Technical Report.
As part of the resource estimation procedure, drill data is spot checked by EFR personnel and audited by the SLR QP for completeness and validity.
12.1 SLR Data Verification (2021)
The SLR QP visited the Project on November 16, 2021. Discussions were held with the EFR technical team and found them to have a strong understanding of the mineralization types and their processing characteristics, and how the analytical results are tied to the results. The SLR QP received the project data from EFR for independent review as a series of MS Excel spreadsheets and Vulcan digital files. The SLR QP used the information provided to validate the Mineral Resource interpolation, tons, grade, and classification.
12.2 Audit of Drillhole Database
The SLR QP conducted a series of verification tests on the drillhole database provided by EFR. These tests included a search for missing information and tables, unique location of drillhole collars, and overlapping sample or lithology intervals. Empty tables were limited to lithology, alteration, and geotechnical results. No database issues were identified.
12.3 Verification of Assay Table
The SLR QP compared 100% of the assay sample database for both copper and uranium to assay results in Excel format from White Mesa Mill. Several values in the database were recorded at 0% Cu or 0% U3O8. The industry standard is to record assays which return a value below detection limit at a value equal to half the detection limit. This is not expected to materially impact the Mineral Resources. No other discrepancies were found.
12.4 Limitations
There were no limitations in place restricting the ability to perform an independent verification of the Project drillhole database.
12.4.1 Conclusion
The SLR QP is of the opinion that database verification procedures for the Project comply with industry standards and are adequate for the purposes of Mineral Resource estimation.
13.0 MINERAL PROCESSING AND METALLURGICAL TESTING
13.1 Metallurgical Testing
Preliminary metallurgical bench tests have been completed on samples from the Project to determine both uranium and copper metallurgical performance. Copper mineralization presents an upside to the Project, however, and warrants additional metallurgical test work to attempt to improve recoveries and lower processing costs.
Test work was completed at the White Mesa Mill's metallurgical laboratory while confirmatory testing was conducted at the Australian Nuclear Science and Technology Organization (ANSTO), an independent metallurgical laboratory in New South Wales, Australia, that operates a Quality Management System which complies with the requirements ISO 9001:2015 for conduct of strategic and applied nuclear research across three themes, Nuclear Fuel Cycle, Environment, and Human Health Testing included conventional acid leaching, flotation of conventionally leached residue, and roasting pre-treatment followed by conventional acid leaching. The primary goal of the work was to determine if the existing White Mesa Mill process flow sheet would be suitable for processing the Project's mineralized material types, and if not, what process flow sheet would be appropriate while minimizing capital modifications to the White Mesa Mill circuit.
Several metallurgical testing programs have been completed on the Project's mineralized material types. The goal of these tests is to maximize uranium and copper recoveries, and to minimize changes to the White Mesa Mill circuit and any associated capital requirements, while also minimizing process operating costs and uranium deportment to the final copper product.
Two metallurgical composites were used for testing during 2016 and 2017.
The first metallurgical composite was created in October 2016 and was made from 37 core samples. White Mesa Mill laboratory testing showed the average grades for this composite were 0.81% U3O8 and 9.78% Cu. This composite was the most representative of the Main Zone of the deposit from the samples available at the time. Testing was done on this composite from October 2016 to January 2017. The preliminary conventional acid leaching test work was conducted to determine uranium and copper recoveries. Leaching conditions, including temperature, solids density, and free acid and chlorate dosages, were varied between a total of 17 tests.
Uranium recoveries were high for this test series ranging from 96.3% to 99.8%. Copper recoveries were significantly lower ranging from 18.7% to 55.5%. Sulfuric acid consumption was higher than normal for ores treated at White Mesa Mill ranging between 221 pounds per short ton (lb/ton) to 670 lb/ton. Sodium chlorate consumptions were 0 lb/ton to 164 lb/ton of feed, which is significantly higher than the normal ore range of 0 lb/ton to 30 lb/ton.
Owing to the poor copper metallurgical performance during conventional acid leaching, flotation testing of conventional leaching residue was examined. Due to the possibility of uranium deportment to the copper concentrate, it was decided to run flotation concentration tests on leached residue in order to potentially minimize uranium concentrations. Flotation of copper worked very well with rougher copper recovery at 72% with a copper concentrate grade of 33.3%. Unfortunately, uranium deportment to the concentrate exceeded normal treatment charge/refining charge (TC/RC) limits at 0.105% U3O8, making flotation an unlikely processing option.
A second (and larger) composite was made in January of 2017 and was used for testing from that point on. This composite was the most representative of the Main Zone of the deposit from the samples available at the time. The metallurgical testing composite was generated from 60 core samples representing 240 ft of half drill core (approximately 360 lb) from the Pinyon Plain deposit. A split of this composite was also sent to ANSTO in Australia for independent testing. White Mesa Mill laboratory testing showed the average grades for this composite were 0.76% U3O8 and 9.93% Cu. The primary goal of this program was to determine the metallurgical response using the conventional acid leach process currently in use at White Mesa Mill. Summary results are presented in Table 13-1 below.
As expected, uranium recoveries averaged 93.4%, ranging from a low of 68.3% to 99.8%. Copper recoveries were considerably lower, averaging 26.9% and ranging from 4% to 53.7%. Reagent consumptions using the conventional leaching averaged 900 lb/ton for sulfuric acid and 20 lb/ton for chlorate.
Table 13-1: Conventional Acid Leach Test Results
Energy Fuels Inc. - Pinyon Plain Project
Test # |
Recovery |
Targets |
Actual |
Consumption |
||||||
U3O8 |
Cu |
Free Acid |
Temp |
EMF |
% Solids |
Free Acid |
EMF |
Acid |
Chlorate |
|
1 |
98.2 |
37.6 |
85 |
85 |
none |
50 |
80.9 |
385 |
224.0 |
80.0 |
2 |
98.0 |
48.6 |
80 |
80 |
500 |
50 |
76.4 |
443 |
434.0 |
128.0 |
3 |
96.8 |
50.0 |
50 |
80 |
500 |
50 |
48.5 |
457 |
361.0 |
128.0 |
4 |
94.0 |
53.7 |
20 |
80 |
500 |
50 |
18.1 |
439 |
265.0 |
144.0 |
5 |
98.0 |
46.9 |
80 |
80 |
450 |
50 |
76.9 |
438 |
420.0 |
120.0 |
6 |
99.2 |
53.3 |
80 |
80 |
500 |
33 |
85.3 |
415 |
316.0 |
80.0 |
7 |
96.7 |
35.9 |
50 |
50 |
500 |
50 |
39.7 |
658 |
280.0 |
100.0 |
8 |
96.6 |
17.0 |
50 |
ambient |
500 |
50 |
51.5 |
846 |
258.0 |
80.0 |
9 |
97.0 |
33.1 |
50 |
50 |
400 |
50 |
52.4 |
396 |
309.0 |
80.0 |
10 |
95.5 |
6.8 |
50 |
50 |
none |
50 |
49.5 |
409 |
228.0 |
0.0 |
11 |
96.7 |
17.2 |
50 |
50 |
none |
50 |
47.0 |
416 |
246.0 |
20.0 |
12 |
80.9 |
9.2 |
50 |
ambient |
none |
50 |
47.5 |
401 |
228.0 |
20.0 |
13 |
80.1 |
7.8 |
80 |
ambient |
none |
50 |
73.0 |
398 |
291.0 |
20.0 |
14 |
99.8 |
11.9 |
50 |
60 |
none |
50 |
43.1 |
366 |
220.0 |
20.0 |
15 |
97.5 |
18.4 |
50 |
60 |
none |
33 |
54.9 |
366 |
362.0 |
20.0 |
16 |
97.2 |
30.6 |
50 |
60 |
none |
50 |
48.5 |
386 |
276.0 |
40.0 |
17 |
96.6 |
20.7 |
20 |
50 |
none |
50 |
19.1 |
357 |
154.6 |
20.0 |
18 |
97.8 |
19.0 |
20 |
80 |
none |
50 |
15.2 |
325 |
147.2 |
20.0 |
19 |
82.4 |
16.6 |
50 |
60 |
none |
50 |
48.0 |
318 |
209.8 |
10.0 |
Test # |
Recovery |
Targets |
Actual |
Consumption |
||||||
U3O8 |
Cu |
Free Acid |
Temp |
EMF |
% Solids |
Free Acid |
EMF |
Acid |
Chlorate |
|
20 |
68.3 |
4.0 |
50 |
60 |
none |
50 |
45.6 |
278 |
180.3 |
0.0 |
Avg. |
93.4 |
26.9 |
|
|
|
|
|
|
270.5 |
56.5 |
Max. |
99.8 |
53.7 |
|
|
|
|
|
|
434.0 |
144.0 |
Min. |
68.3 |
4.0 |
|
|
|
|
|
|
147.2 |
0.0 |
Due to low copper recoveries, a series of tests were run to determine the effect of a roasting pre-treatment. Roasting temperatures were varied between 450°C and 650°C. As shown in Table 13-2, roasting improved recoveries for both uranium and copper, averaging 86% and 87.6% respectively. Using the optimum roasting temperature of 650°C, recoveries averaged 91.6% for uranium and 94.9% for copper. Reagent consumptions on the roasted material averaged 250 lb/ton for sulfuric acid and 15 lb/ton chlorate using temperatures of 650°C for the roasting phase and 50°C for the leaching phase.
Table 13-2: Roasted Acid Test Results
Energy Fuels Inc. - Pinyon Plain Project
Test # |
Roasting |
Recovery |
Targets |
Actual |
Consumption |
|||||||
Temp |
Time |
U3O8 |
Cu |
Free Acid |
Temp |
EMF |
% Solids |
Free Acid |
EMF |
Acid |
Chlorate |
|
2 |
450 |
45 |
78.8 |
85.2 |
80 |
60 |
none |
4 |
76.9 |
379.0 |
5500 |
0 |
3 |
550 |
45 |
98.7 |
98.4 |
80 |
60 |
none |
4 |
78.4 |
550.0 |
5500 |
0 |
4 |
650 |
45 |
99.2 |
92.2 |
80 |
60 |
none |
4 |
78.4 |
603.0 |
5500 |
0 |
5 |
550 |
45 |
60.9 |
63.3 |
80 |
60 |
none |
4 |
67.1 |
337.0 |
4600 |
0 |
7 |
550 |
45 |
95.4 |
87.3 |
80 |
60 |
none |
4 |
59.8 |
536.0 |
4600 |
20 |
8 |
550 |
90 |
93.3 |
86.0 |
80 |
60 |
none |
4 |
60.3 |
534.0 |
4600 |
20 |
9 |
550 |
45 |
85.3 |
81.8 |
80 |
80 |
none |
4 |
72.0 |
349.0 |
4875 |
20 |
10 |
550 |
120 |
63.6 |
73.9 |
80 |
80 |
none |
15 |
81.8 |
336.0 |
4325 |
0 |
11 |
650 |
120 |
94.7 |
96.0 |
80 |
80 |
none |
15 |
75.5 |
432.0 |
4325 |
0 |
12 |
650 |
20 |
81.3 |
76.0 |
80 |
80 |
none |
15 |
78.0 |
341.0 |
1195 |
0 |
13 |
650 |
40 |
89.3 |
87.4 |
80 |
80 |
none |
15 |
80.9 |
382.0 |
1195 |
0 |
14 |
650 |
60 |
94.9 |
91.9 |
80 |
80 |
none |
15 |
77.9 |
417.0 |
1195 |
0 |
15 |
650 |
60 |
76.4 |
88.4 |
20 |
20 |
none |
15 |
24.0 |
322.0 |
460 |
0 |
16 |
650 |
60 |
82.8 |
92.0 |
50 |
50 |
none |
15 |
49.9 |
400.0 |
775 |
0 |
17 |
650 |
60 |
82.6 |
92.6 |
20 |
80 |
none |
15 |
20.6 |
405.0 |
506 |
0 |
18 |
650 |
60 |
84.0 |
90.3 |
80 |
20 |
none |
15 |
76.0 |
354.0 |
1150 |
0 |
Test # |
Roasting |
Recovery |
Targets |
Actual |
Consumption |
|||||||
Temp |
Time |
U3O8 |
Cu |
Free Acid |
Temp |
EMF |
% Solids |
Free Acid |
EMF |
Acid |
Chlorate |
|
19 |
650 |
60 |
95.9 |
97.3 |
80 |
80 |
none |
15 |
85.0 |
433.0 |
1380 |
0 |
20 |
650 |
60 |
99.1 |
92.2 |
20 |
50 |
none |
15 |
17.6 |
555.0 |
450 |
10 |
21 |
650 |
60 |
30.6 |
90.9 |
30 |
50 |
none |
40 |
30.9 |
412.0 |
318 |
10 |
22 |
650 |
60 |
79.7 |
93.3 |
80 |
80 |
none |
40 |
83.3 |
396.0 |
580 |
0 |
23 |
650 |
60 |
97.8 |
95.4 |
none |
80 |
none |
33 |
41.7 |
458.0 |
479 |
10 |
24 |
650 |
60 |
95.8 |
93.4 |
none |
80 |
none |
33 |
26.0 |
426.0 |
350 |
10 |
25 |
650 |
60 |
96.5 |
93.7 |
none |
50 |
none |
33 |
51.0 |
445.0 |
450 |
10 |
26 |
650 |
60 |
80.9 |
92.0 |
none |
50 |
none |
20 |
26.5 |
400.0 |
450 |
10 |
27 |
650 |
60 |
86.6 |
94.5 |
none |
50 |
none |
20 |
22.4 |
405.0 |
450 |
10 |
28 |
650 |
60 |
97.1 |
96.3 |
none |
50 |
none |
20 |
31.9 |
642.0 |
450 |
20 |
29 |
650 |
60 |
97.2 |
96.7 |
none |
50 |
none |
20 |
28.9 |
654.0 |
450 |
20 |
30 |
440 |
60 |
68.4 |
26.2 |
none |
80 |
none |
33 |
45.6 |
325.0 |
350 |
10 |
31 |
606 |
60 |
93.4 |
84.6 |
none |
80 |
none |
33 |
25.5 |
395.0 |
350 |
10 |
32 |
770 |
60 |
89.7 |
88.2 |
none |
80 |
none |
33 |
15.2 |
631.0 |
350 |
10 |
Avg. |
|
|
86.0 |
87.6 |
|
|
|
|
|
|
1992.2 |
6.5 |
Max. |
|
|
99.2 |
98.4 |
|
|
|
|
|
|
5500.0 |
20 |
Min. |
|
|
30.6 |
26.2 |
|
|
|
|
|
|
317.5 |
0 |
Two different metallurgical testing programs have been completed at ANSTO's facilities in Australia. These series of tests were conducted on the second bulk composite generated at White Mesa Mill and coincide with the White Mesa Mill's program from January 2017. Pertinent test work focused on conventional acid leaching (one test) and roasting pre-treatment followed by acid leaching (six tests). Comparisons between the White Mesa Mill and ANSTO test work results are presented in Figure 13-1 and Figure 13-2 for conventional leaching and roasting pre-treatment respectively. Results from the White Mesa Mill laboratory are in red and results from the ANSTO laboratory are blue. It should be noted that the results presented incorporate the entire data set and no outliers were culled.
Figure 13-1: Laboratory Comparison - Conventional Leaching
Figure 13-2: Laboratory Comparison - Roasting Pre-Treatment and Leaching
In 2018 Hazen Research Inc. (Hazen) in Golden, Colorado conducted bench- and pilot-scale programs to demonstrate copper extraction from ore at the Project. Hazen Research holds certifications from various state regulatory agencies and from the US Environmental Protection Agency (EPA). And ELI is NELAP accredited with certifications USEPA: WY00002; FL-DOH NELAC: E87641; Oregon: WY200001; Utah: WY00002; Washington: C1012.
Bench-scale experiments were conducted to determine the preferred operating conditions for the pilot-scale roasting and leaching programs. Four roasting experiments were performed to evaluate two variables: temperature and excess air. Four batch, bench-scale sulfuric acid (H2SO4) leach tests of the batch calcines were conducted, using the leach conditions set by EFR, to measure roasting success. Four additional bench-scale leach tests of pilot kiln calcine and pre-roasted calcine also were conducted. The results of this work showed that uranium and copper recoveries exceeding 95% and 90%, respectively, could be expected from the Project ore evaluated in this program. Results suggested that leaching efficiency was controlled, in large part, by the degree of sulfide oxidation and that oxygen availability was a key variable in roasting.
A continuous roasting program was performed to demonstrate oxidative roasting of the Project ore and to generate calcine for subsequent pilot acid leaching. Target parameters for the pilot roast were discussed and accepted by EFR. The target parameters included a 4% to 5% oxygen concentration in the off-gas, 1-hour residence time, and 650°C burden temperature. Approximately 360 kg of ore were processed in the pilot kiln system. Roasted product (calcine) was collected continuously and sampled on an hourly basis. The product samples were assayed for acid insoluble sulfur to determine the extent of sulfide oxidation. The average sulfide oxidation from the product samples was 95%. During operations, a runaway temperature excursion occurred causing material to stick to the kiln wall. As a result, the residence time through the kiln may have been affected, as suggested by incomplete sulfide oxidation. A single batch pilot acid leach using 60 kg of pilot calcine was performed to confirm the leaching results and generate pregnant leach solution (PLS) for subsequent uranium and copper solvent extraction (SX). The conditions prescribed by EFR for the leach evaluation were 350 lb/ton H2SO4, 10 lb/ton sodium chlorate (NaClO3), 33% solids, and 80°C. The leaching time was 24 hours in a 70 gal agitated tank; kinetic samples were obtained at two hours, four hours, and eight hours. The final slurry was filtered in a filtering centrifuge and washed thoroughly. The PLS and wash were collected; washed solids were dried and analyzed. Uranium extraction from calcine was 95% and copper extraction was 90% at 24 hours. Kinetic data suggested that leaching was essentially complete for both metals at eight hours.
Before uranium SX, deionized (DI) water was added to the PLS to simulate the dilution that would occur in countercurrent washing of leach solids. An eight-stage continuous SX circuit was assembled using glass mixers and settlers. Solvent (tertiary amine extractant [Alamine 336], isodecanol, aliphatic diluent) was mixed with the PLS and separated in four countercurrent stages, followed by solvent scrubbing, two sodium carbonate (Na2CO3) strip stages for uranium recovery and concentration, and a wash stage to prepare the solvent for recycling. The circuit was operated for 30 hours and demonstrated greater than 99% uranium extraction with only about 2.5 mg/L U3O8 reporting to the raffinate (tailings stream). The uranium SX was operated as a precursor to copper SX and was not in itself a research and development effort.
The combined uranium SX raffinate solution became feed to copper SX. Components of the uranium SX circuit, after cleaning and tubing replacement, were used to assemble the copper SX, and the stage configuration was identical. The copper SX solvent was 20% LIX 984N (aldoxime-ketoxime blend) in aliphatic diluent. The stripping agent was 180 g/L H2SO4; no copper was introduced into the strip feed to ensure that the copper cathode produced in the electrowinning (EW) step would be 100% ore-sourced. The copper SX circuit was operated for 35 hours over 4 days and produced 15.8 L of pregnant strip solution at a concentration of 38.2 g/L Cu. Copper extraction during steady-state operation exceeded 96%, with raffinate copper levels of less than 0.3 g/L.
The copper SX strip product became feed to a small-scale, continuous copper EW operation. A single glass cell was assembled using a calcium-lead alloy anode and a stainless steel cathode. A small Hewlett Packard rectifier provided the power to apply a current density of 300 ampere per square foot (A/ft2) to the cathode. The operation design targeted a 3 g/L to 4 g/L reduction in copper concentration, from 38 g/L Cu to 34 g/L Cu. This reduction was achieved over 64 hours of continuous operation, and an approximately 50 g copper plate was produced. An impurity scan of the copper product by glow discharge mass spectroscopy (GDMS) conducted by Northern Analytical Laboratory, Inc. (NAL), in Londonderry, New Hampshire, showed generally low levels or an absence of the 78 impurities analyzed. Lead was present at 300 ppm, which was attributed to loss from the lead anode caused by a nonoptimized EW setup and operation; commercial EW operation should minimize or eliminate lead as a cathode impurity.
During the bench- and pilot-scale programs, Hazen was able to demonstrate that extraction of copper from the Project ore using EFR's process is technically feasible. The data collected from the bench-scale experiments were repeatable in the pilot-scale demonstration in terms of uranium and copper extractions. The results and observations from both programs elucidated potential issues for commercial scaleup, including material stickiness during roasting and the formation of uranium precipitate (metazeunerite, Cu(UO2)2(AsO4)2·8H2O) in diluted acid leach liquor.
Residual sulfide after roasting affects copper extraction as confirmed in the bench- and pilot-scale leaches. The average residual sulfide removed from the roasted products during the pilot-scale program was 95%, which resulted in a copper extraction of 90%.
During the pilot-scale roasting program, temperature excursions were experienced, likely due to the exothermic oxidation of sulfides. The temperature excursions caused the ore to become sticky, which may have affected the residence time through the kiln. There was still a considerable amount of residual sulfide on the roasted product, which suggests that material stuck on the kiln walls may have caused a decrease in the effective cross-sectional area of the kiln. At the end of the pilot roast program, the kiln was inspected and cleaned out. A total of 8 kg of material was found stuck on the kiln walls and required physical separation. Because of the short duration of the continuous roasting program, evaluating this phenomenon was not considered.
Acid leaching of calcine at the conditions established by EFR showed good uranium and copper dissolution, exceeding 90% for both metals in some experiments. Uranium appeared to leach more rapidly than copper. In one roast-leach experiment, copper extraction exceeded 90% in two hours of leaching; the batch roast conditions for this calcine sample were 650°C and double the standard airflow (six litres per minute, L/min). These and other data collected in the program confirm the relationship between sulfide oxidation and both leaching potential and leaching kinetics.
Uranium SX of the dilute acid leach PLS proceeded very well and showed excellent results; the use of tertiary amine for SX of uranium in a sulfate system is a proven and robust unit operation. The SX circuit operated well within the conditions evaluated. Hazen recommended that the formation of metazeunerite in the dilute PLS be further evaluated to determine the conditions of its precipitation, which deprives leach liquor of both uranium and copper.
Copper was successfully recovered from uranium SX raffinate by SX using LIX 984N. After circuit shakedown and adjustment of the overall extraction, the copper tenor in the raffinate was consistently less than 0.3 g/L Cu. Stripping using copper-free strong H2SO4 generated pregnant strip solution with more than 40 g/L Cu. Analysis of stripped, washed organic showed approximately 3 g/L Cu, suggesting that an additional strip stage may have been beneficial. Arsenic was notably absent at a significant concentration in the strip product; therefore, it was unavailable as a potential impurity in copper EW.
Copper EW from pregnant SX strip solution was carried out in a small glass cell using a single lead-calcium anode and single stainless steel cathode. Preoperational design resulted in achievement of the operating targets: 300 A/ft2 current density, and a nominal 3 g/L Cu bite in a single pass. A 50 g copper plate was produced, which contained minimal impurities (as shown by GDMS analysis) other than lead, a typical contaminant when using a lead anode. Because of the short duration of the copper EW operation, optimization of the system was not evaluated. Therefore, further evaluation of the copper EW process is recommended to determine how improvements to impurity levels can be made. The lead content, especially, can be significantly reduced or eliminated through EW operational changes to reduce cell turbulence.
The roast-acid leach, uranium SX, copper SX, and copper EW process designed by EFR for the Pinyon Plaindeposit and modeled at bench and pilot scale by Hazen comprises a series of proven, robust unit operations. Each of these operations performed well in the test work. Minor idiosyncrasies in some experimental work discussed in individual report sections herein may point to potential process optimization paths, however, the overall process showed strong competency to recover and concentrate the uranium and copper values. A summary of uranium and copper recoveries from each unit operation is provided in Table 13-3.
Table 13-3: Summary of Uranium and Copper Recoveries (Hazen)
Energy Fuels Inc. - Pinyon Plain Project
Unit of Operation |
Recovery % |
|
U |
Cu |
|
Pilot Leach |
95 |
90 |
Uranium SX |
100 |
N/A |
Copper SX |
N/A |
95 |
Copper EW |
N/A |
100 |
Overall Calculated Recoveries |
95 |
86 |
Notes:
1. N/A = not applicable
2. Recoveries are calculated from the inputs and outputs of individual unit operations
To economically produce copper cathode, the copper cathode grade will need to be considered when scaling to a commercial capacity. Based on the GDMS results from NAL, certain impurities may need to be further evaluated for refinement depending on market criteria.
13.2 Opinion of Adequacy
The copper is expected to be processed using roasting, followed by acid leach and solvent extraction. Acid leach followed by solvent extraction is the current process used for uranium recovery. Following solvent extraction, a saleable copper product is expected to be produced by electrowinning. To recover copper from the Pinyon Plain mineralized material, some modifications to White Mesa Mill process circuits are required. The copper modifications are expected to include using the existing vanadium solvent extraction circuit for copper extraction, the addition of a roaster to improve copper recovery, and the addition of an electrowinning circuit. Bench and pilot scale test work done by HAZEN in 2018 indicates that acid leaching after roasting pre-treatment is expected to result in satisfactory copper and uranium recoveries.
The metallurgical test results provided by the White Mesa Mill, ANSTO, and Hazen indicate that metallurgical recoveries using optimum roasting and leach conditions are expected to be approximately 96% for uranium and 86 to 90% for copper.
The metallurgical composites that were used for metallurgical testing are representative of the various types and styles of mineralization for the Main Zone of the deposit, which contain copper. The average U3O8 grades for these two test composites were close to the average grade of the U3O8 presented as a resource in this Technical Report.
There are no known processing factors or deleterious elements that could have a significant effect on potential economic extraction.
The White Mesa Mill has a significant operating history using the uranium SX circuit, which has included milling relatively high grade copper ores with no detrimental impact to the uranium recovery or product grade. Expected White Mesa Mill modifications to recover copper include utilizing the existing vanadium solvent extraction circuit for copper and the addition of an EW circuit. Carry over of uranium to the copper electrolyte is not expected and will be verified by future laboratory test work.
The SLR QP supports the conclusions of the expected performance of the metallurgical processes based on test work data from the White Mesa Mill, ANSTO, and Hazen, in addition to historical operating data from White Mesa Mill. In the SLR QP's opinion, the metallurgical test work is adequate for the purposes of Mineral Resource estimation.
14.0 MINERAL RESOURCE ESTIMATE
14.1 Summary
Mineral Resources have been classified in accordance with the definitions for Mineral Resources in S-K 1300, which are consistent with Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Resources and Mineral Reserves dated May 10, 2014 (CIM, 2014) definitions which are incorporated by reference in NI43-101.
The SLR QP has reviewed and accepted the Mineral Resource estimate prepared by EFR based on block models constrained with 3D wireframes on the principal mineralized domains. Mineralized values for U3O8 and copper values were interpolated into blocks using inverse distance squared (ID2) or ordinary kriging (OK).
A geologic and resource model of the breccia pipe host was constructed based on drill logs. Mineralization wireframes for U3O8 were based on assays at a nominal cut-off grade of 0.15%. Low and high grade copper wireframes were based on nominal cut-off grades of 1% and 8%, respectively.
Table 14-1 summarizes Mineral Resources based on a $65/lb uranium price at an equivalent uranium cut-off grade of 0.40% U3O8 for zones (the Main Zone and Main-Lower Zones) containing copper and 0.30% U3O8 for the Juniper and Upper zones. Uranium and copper estimates pertain to the same deposit and there is an overlap of tonnages in the Main and Main Lower zones, therefore they are listed separately in Table 14-1.
Based on the similarity of the Pinyon Plain deposit to other past producing breccia pipe deposits in northern Arizona, the proposed mining methods at Pinyon Plain will include a combination of long-hole stoping, shrinkage stoping, and drift and fill. Metallurgical test results provided by EFR White Mesa Mill laboratory personnel indicated that metallurgical recoveries using optimum roasting and leach conditions will be approximately 96% for uranium and 90% for copper. The effective date of this Mineral Resource estimate is December 31, 2021, and it is in situ. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
The SLR QP is of the opinion that with consideration of the recommendations summarized in Section 1 and Section 26, any issues relating to all relevant technical and economic factors likely to influence the prospect of economic extraction can be resolved with further work.
The SLR QP is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could materially affect the Mineral Resource estimate.
Table 14-1: Summary of Attributable Mineral Resources - Effective Date December 31, 2021
Energy Fuels Inc. - Pinyon Plain Project
Classification |
Zone |
COG |
Tonnage |
Grade |
Contained |
Recovery |
Grade |
Contained |
Recovery |
Main Zone |
|||||||||
Measured |
Main |
0.40 |
6,000 |
0.46 |
55,000 |
96 |
9.60 |
1,155,000 |
90 |
Indicated |
Main |
0.40 |
90,000 |
0.92 |
1,644,000 |
96 |
5.89 |
10,553,000 |
90 |
Total Measured + Indicated |
|
|
96,000 |
0.88 |
1,699,000 |
96 |
6.10 |
11,708,000 |
90 |
Inferred |
Main |
0.40 |
- |
- |
- |
- |
- |
- |
- |
Main-Lower |
0.40 |
4,000 |
0.22 |
16,000 |
96 |
6.50 |
470,000 |
90 |
|
Total Inferred |
|
|
4,000 |
0.20 |
16,000 |
96 |
5.88 |
470,000 |
90 |
Juniper |
|||||||||
Indicated |
Juniper I |
0.30 |
37,000 |
0.95 |
703,000 |
96 |
- |
- |
- |
Inferred |
Juniper I |
0.30 |
2,000 |
0.58 |
24,000 |
96 |
- |
- |
- |
Juniper II |
0.30 |
1,000 |
0.36 |
8,000 |
96 |
- |
- |
- |
|
Total Inferred |
|
|
3,000 |
0.53 |
32,000 |
96 |
- |
- |
- |
Upper Zones |
|||||||||
Inferred |
Cap |
0.30 |
300 |
0.33 |
2,000 |
96 |
- |
- |
- |
Upper |
0.30 |
9,000 |
0.44 |
76,000 |
96 |
- |
- |
- |
|
Total Inferred |
|
|
9,300 |
0.42 |
78,000 |
96 |
- |
- |
- |
Notes:
1. SEC S-K-1300 definitions were followed for all Mineral Resource categories. These definitions are also consistent with CIM (2014) definitions in NI 43-101.
2. Mineral Resources are estimated at an equivalent uranium cut-off grade of 0.40% U3O8 for copper bearing zone and 0.30% U3O8 for non-copper bearing zones, with estimated recoveries of 96% for uranium and 90% for copper.
3. Mineral Resources are estimated using a long-term uranium price of US$65 per pound, and copper price of US$4.00 per pound.
4. A copper to U3O8 conversion factor of 18.19 was used for converting copper grades to equivalent U3O8 grades (% U3O8 Eqv) for cut-off grade evaluation and reporting.
5. No minimum mining width was used in determining Mineral Resources.
6. Bulk density is 0.082 ton/ft3 (12.2 ft3/ton or 2.63 t/m3).
7. Mineral Resources are exclusive of Mineral Reserves and do not have demonstrated economic viability.
8. Numbers may not add due to rounding.
9. Tonnages of uranium and copper cannot be added as they overlap in the Main and Main Lower Zone.
10. Mineral Resources are 100% attributable to EFR and are in situ.
14.2 Resource Database
As of the effective date of this report, EFR and its predecessors have completed 150 holes (45 surface and 105 underground) totalling 92,724 ft from 1978 to 2017. No drilling was conducted on the Project from 1994 to 2016. In 2016 and 2017, EFR completed 105 underground drillholes totalling 30,314 ft at the Project. For this Resource estimate, all of the underground holes and 25 of the 45 surface holes were used in the modeling of mineralization. Twenty surface holes were excluded because they are located outside the pipe and contain no mineralization.
The Project resource database, dated June 17, 2017, includes drilling results from 1978 to 2017 and includes surveyed drillhole collar locations (including dip and azimuth), assay, radiometric probe, and lithology data from 130 diamond drillholes totalling 79,775 ft of drilling.
The resource dataset for the Main Zone is primarily based on assay data, supported by probe composites where assay data was not available. This practice is unique for Arizona Strip District uranium deposits, where it is normal to use mostly probe assay data due to the large copper component at the deposits. A summary of the Project resource database is presented in Table 14-2.
Table 14-2: Summary of Available Drillhole Data
Energy Fuels Inc. - Pinyon Plain Project
Table |
Number of Records |
Collar |
130 |
Survey |
23,483 |
Geology |
512 |
Geotech |
488 |
Lab |
3,651 |
Probe |
120,942 |
Assay, including: |
|
Probe U3O8 |
97,994 |
Assay U3O8 |
3,409 |
Assay Cu |
3,409 |
14.3 Geological Interpretation
14.3.1 Uranium
Uranium mineralization at the Project is concentrated in six vertical zones (Cap, Upper, Main, Main Lower, Juniper I, and Juniper II) within a collapse structure ranging from 100 ft to 230 ft wide with a vertical extension from a depth of 650 ft to over 2,100 ft, resulting in approximately 1,450 ft of mineralization vertically. Intercepts range widely up to several tens of feet, with grades in excess of 1.00% U3O8. Uranium mineralization is hosted within each zone; copper mineralization has been modeled within the Main and Main Lower Zones only. For reporting purposes, the six zones have been combined into three geologic zones: the Upper/Cap, Main, and Juniper Zones (Figure 14-1). The bulk of mineralization for both commodities is hosted within the Main Zone. At present, no structural features other than the pipe boundary have been incorporated into the geological model.
The model of the breccia pipe host was constructed based on drill logs. Geological interpretations supporting the estimate were generated by EFR personnel and audited for completeness and accuracy by the SLR QP. Topographical surfaces, solids, and mineralized wireframes were modeled using Maptek's Vulcan software.
EFR created a series of north-south and east-west polylines spaced at 10 ft. The polylines were edited and joined together in 3D using tie lines. During this "stitching" process, polylines and/or tie lines were snapped to composite control intervals, which were interpreted using a 0.15% eU3O8 cut-off. Occasionally, lower grade intersections were included to facilitate continuity. Extension distance for the mineralized wireframes was half-way to the next hole, or approximately 20 ft vertically and horizontally past the last drill intercept. In total, 38 uranium wireframes, or domains, were contained within the three geologic zones and assigned identifier numbers for Upper/Cap (17 domains), Main (12 domains), and Juniper (9 domains). The domains ranged in size from 105 ton to 100,500 ton for a total of 187,700 ton. Domains M_01 (Main) and J_1_01 (Juniper I) account for over 80% of the total tons. A detailed description of these two domains follows.
Within the M_01 domain, the uranium mineralization occurs within the structurally prepared breccia pipe and adjacent to the country rock forming a donut shape roughly 185 ft in diameter and extending from an elevation of 5,325 ft to 5,115 ft. Mineralization consists predominantly of uraninite/pitchblende that occurs as massive to semi-massive accumulations ranging in thickness from less than five feet to 50 ft but is generally in the 30 ft to 40 ft range (horizontally). Within this area, the center or throat of the breccia pipe is essentially barren of uranium mineralization.
EFR proposes that the underlying J_1_01 zone that extends from 4,925 ft elevation to 4,700 ft elevation may be the down-dropped center block of uranium mineralization from the overlying M_01 domain. The shape, depth extension, and horizontal thickness of the mineralization, which ranges from five feet to 50 ft but is generally 25 ft to 30 ft, generally mimics the dimensions of the unmineralized portion of the M_01 zone.
The SLR QP reviewed the uranium mineralization domains and found them to be appropriately extended beyond existing drilling, snapped, and referenced to the principal mineralization controls. The SLR QP recommends EFR continue to work to smooth the connection of the uranium wireframes between sections in future updates.
14.3.2 Copper
Copper mineralization models at Pinyon are restricted to the Main and Main Lower Zones. Copper mineralization present within the Juniper zone has not been modeled at this time due to the much lower sample assay values overall. Final wireframe surfaces, as well as a cross section of mineralization from within the Main Zone, are shown in Figure 14-1.
Within the Main zone, the copper mineralization domain has been modeled at a nominal cut-off grade of 1% Cu, encapsulating mineralization within the breccia pipe. The mineralization tends to concentrate at the contact between the breccia pipe and the country rock, creating a toroid (donut) shape, and elongated at depth. A few flat lying structures carry mineralization into the center of the pipe. Mineralization ranges in thickness from five feet to 80 ft thick (horizontally) but is generally from 20 ft to 40 ft thick. The domain is located from 5,320 ft to 5,120 ft elevation and ranges from 50 ft. deep in the southeast of the breccia pipe and up to 200 ft deep elsewhere.
Additionally, a high grade domain has been modeled in the Main Zone at a cut-off grade of approximately 8% Cu. High grade mineralization also follows the contact with the country rock, but does not extend into the center, or to the southeast, creating a C-shape which is oriented to the southeast and vertically elongated. Mineralization has been modeled to be thickest in the northeast; however, this is also the region with the best access, and therefore the closest drill hole spacing, allowing for a more robust interpretation. The high grade domain is as elongate as the lower grade domain, but patchier, particularly at depth. The high grade domain accounts for approximately 30% of the total copper domain in the Main Zone. The copper domain overlaps approximately 50% of the uranium domain.
Within the Main Lower Zone, mineralization has been captured within three separate wireframes, using a cut-off grade of 1% Cu, delineated using from one to five drill holes. As with the Main Zone, mineralization is modeled towards the edge of the breccia pipe. There is no high grade domain in the Main Lower Zone.
The SLR QP reviewed the copper mineralization domains and found them to be appropriately extended beyond existing drilling, snapped, and referencing the principal mineralization controls. The SLR QP recommends that future updates to the copper mineralization include some marginal material where appropriate to increase the continuity and volume of the wireframes, particularly the high grade copper wireframe.
Figure 14-1: Uranium and Copper Mineralized Zones
14.4 Resource Assays
The mineralization wireframe models were used to code the drillhole database and to identify samples within the mineralized wireframes. These samples were extracted from the database on a group-by-group basis, subjected to statistical analyses for their respective domains, and then analyzed by means of histograms and probability plots. A total of 5,203 samples were contained within the mineralized uranium wireframes. The sample statistics are summarized by zone in Table 14-3. The coefficient of variation (CV) is a measure of variability of the data.
Table 14-3: Summary Statistics of Uncapped U3O8 Assays
Energy Fuels Inc. - Pinyon Plain Project
Zone |
Count |
Minimum |
Maximum |
Mean |
Variance |
SD |
CV |
CAP |
99 |
0.009 |
1.040 |
0.213 |
0.020 |
0.141 |
0.660 |
UPPER |
733 |
0.000 |
4.585 |
0.337 |
0.160 |
0.405 |
1.200 |
MAIN |
3,128 |
0.000 |
45.121 |
0.886 |
5.750 |
2.397 |
2.710 |
MAIN-LOWER |
108 |
0.000 |
1.835 |
0.267 |
0.090 |
0.305 |
1.140 |
JUNIPER-1 |
955 |
0.000 |
22.720 |
0.612 |
2.580 |
1.606 |
2.630 |
JUNIPER-2 |
180 |
0.000 |
1.489 |
0.254 |
0.030 |
0.159 |
0.630 |
ALL ZONES |
5,203 |
0.000 |
45.121 |
0.710 |
4.010 |
2.002 |
2.820 |
14.5 Treatment of High Grade Assays
14.5.1 Capping Levels
Where the assay distribution is skewed positively or approaches log-normal, erratic high grade assay values can have a disproportionate effect on the average grade of a deposit. One method of treating these outliers to reduce their influence on the average grade is to cut or cap them at a specific grade level. In the absence of production data to calibrate the capping level, inspection of the assay distribution can be used to estimate a "first pass" cutting level.
The SLR QP is of the opinion that the influence of high grade uranium assays must be reduced or controlled and uses a number of industry best practice methods to achieve this goal, including capping of high grade values. The SLR QP employs a number of statistical analytical methods to determine an appropriate capping value including preparation of frequency histograms, probability plots, decile analyses, and capping curves. Using these methodologies, the SLR QP examined the selected capping values for the mineralized domains for the Project.
Examples of the capping analysis are shown in Figure 14-2 and Figure 14-3 as applied to the data set for the mineralized domains. Very high grade uranium outliers were capped at 15% U3O8 within the M_01 and J_1_01 domains, resulting in a total of 16 capped assay values. Capped assay statistics by zones are summarized in Table 14-4 and compared with uncapped assay statistics.
In the SLR QP's opinion, the selected capping values are reasonable and have been correctly applied to the raw assay values for the Pinyon Plain Mineral Resource estimate.
Table 14-4: Summary Statistics of Uncapped vs. Capped Assays
Energy Fuels Inc. - Pinyon Plain Project
Zone |
Cap |
Upper |
Main |
|||
Descriptive Statistics |
Uncap |
Cap |
Uncap |
Cap |
Uncap |
Cap |
Number of Samples |
99 |
99 |
733 |
733 |
3,128 |
3,128 |
Minimum (%U3O8) |
0.009 |
0.009 |
0.000 |
0.000 |
0.000 |
0.000 |
Maximum (%U3O8) |
1.040 |
1.040 |
4.585 |
4.585 |
45.121 |
15.000 |
Mean (%U3O8) |
0.213 |
0.213 |
0.337 |
0.337 |
0.886 |
0.842 |
Variance |
0.020 |
0.020 |
0.160 |
0.160 |
5.750 |
3.710 |
SD (%U3O8) |
0.141 |
0.141 |
0.405 |
0.405 |
2.397 |
1.927 |
CV |
0.660 |
0.660 |
1.200 |
1.200 |
2.710 |
2.290 |
Number of Caps |
0 |
0 |
0 |
0 |
0 |
13 |
Zone |
Main-Lower |
Juniper-1 |
Juniper-2 |
|||
Descriptive Statistics |
Uncap |
Cap |
Uncap |
Cap |
Uncap |
Cap |
Number of Samples |
108 |
108 |
955 |
955 |
180 |
180 |
Minimum (%U3O8) |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
Maximum (%U3O8) |
1.835 |
1.835 |
22.720 |
15.000 |
1.489 |
1.489 |
Mean (%U3O8) |
0.267 |
0.267 |
0.612 |
0.595 |
0.254 |
0.254 |
Variance |
0.090 |
0.090 |
2.580 |
2.000 |
0.030 |
0.030 |
SD (%U3O8) |
0.305 |
0.305 |
1.606 |
1.414 |
0.159 |
0.159 |
CV |
1.140 |
1.140 |
2.630 |
2.380 |
0.630 |
0.630 |
Number of Caps |
0 |
0 |
0 |
3 |
0 |
0 |
Figure 14-2: Histogram of U3O8 Resource Assay in M_01 and J_1_01 Domains
Figure 14-3: Log Normal Probability Plot with Capping Grades
14.5.2 High Grade Restriction
In addition to capping thresholds, a secondary approach to reducing the influence of high-grade composites is to restrict the search ellipse dimension (high yield restriction) during the estimation process. The threshold grade levels, chosen from the basic statistics and from visual inspection of the apparent continuity of very high grades within each estimation domain, may indicate the need to further limit their influence by restricting the range of their influence, which is generally set to approximately half the distance of the main search.
Upon review of the capped assays, the SLR QP agrees with EFR's approach that no high-grade restrictions are required for a Mineral Resource estimation.
14.6 Compositing
Composites were created from the capped, raw assay values using the downhole compositing function of Maptek's Vulcan modeling software package. The composite lengths used during interpolation were chosen considering the predominant sampling length, the minimum mining width, style of mineralization, and continuity of grade. The majority of assay intervals within the mineralized domains varied in length from 0.5 ft (probe data) to 10 ft (assay data), as presented in Figure 14-4, with a few samples outside this range. Most assay samples were four feet, and the drillhole samples were composited to four feet, starting at the wireframe pierce point for each domain, continuing to the point at which the hole exited the domain. A small number of unsampled and missing sample intervals were ignored. Residual composites were maintained in the dataset. The composite statistics by zone are summarized in Table 14-5.
Table 14-5: Summary of Uranium Composite Data by Zone
Energy Fuels Inc. - Pinyon Plain Project
Figure 14-4: Length Histogram
14.7 Trend Analysis
14.7.1 Variography
EFR generated downhole and directional variograms using the four-foot U3O8 composite values located within the M_01 and J_1_01 mineralized domains (Figure 14-5) for uranium. The variograms were used to support search ellipsoid anisotropy, linear trends observed in the data, and Mineral Resource classification decisions.
Long range directional variograms were focused in the primary plane of mineralization, which commonly strikes northeast and dips steeply to the southeast. Most ranges were interpreted to be from 40 ft to 60 ft.
Figure 14-5: U3O8 Variogram Models
14.8 Search Strategy and Grade Interpolation Parameters
The steps in calculating the U3O8 grade are presented in Table 14-6, including a description of each step and the variable parameters. Section 14.11 describes how the cut-off grade was determined in this report.
Table 14-6: Estimation Steps of Block Model Variables
Energy Fuels Inc. - Pinyon Plain Project
Estimation of uranium grades was controlled by the grade zones. In the larger domain wireframes, search ellipsoid geometry of the major, semi-major, and minor axis was oriented into the structural plane of the mineralization, as indicated by the variography ranges for each domain. Within the small domain wireframes, the search ellipse was isotropic. The interpolation strategy involved setting up search parameters in three nested estimation runs for each domain. Each subsequent pass was doubled in size. A maximum of three passes was employed to interpolate all blocks.
First, second, and third pass search ellipses maintained normalized anisotropic ratios. Grade interpolation was carried out using OK on mineralized domains M_01 and J_1_01 with ID2 on all remaining mineralized domains. Depending on the pass and domain wireframe, a minimum of one to eight to a maximum of 1 to 16 composites per block estimate were employed, with a maximum of two to six composites per drillhole. Hard boundaries were used to limit the restrict composites to within the domain wireframe in which they were located. A nearest neighbor (NN) block model was also prepared for comparison purposes. Search parameters are listed in Table 14-7 for the Project.
In order to reduce the influence of very high grade composites, grades greater than a designated threshold level for each domain were restricted to shorter search ellipse dimensions. The threshold grade level of 7% eU3O8 was chosen from the basic statistics and from visual inspection of the apparent continuity of very high grades within each domain, which indicated the need to limit their influence to 32 ft by 22 ft by 4 ft or 40 ft by 21.6 ft by 16 ft, domain dependant.
Table 14-7: Uranium Interpolation Plan
Energy Fuels Inc. - Pinyon Plain Project
Domain |
Wireframe1 |
Interp. Type |
Bearing/Plunge |
First Pass Dimensions |
CAP |
c_01 |
ID2 |
335°/-1° |
64 x 44 x 8 |
CAP |
c_03 |
ID2 |
345°/1° |
64 x 44 x 8 |
UPPER |
u_04 |
ID2 |
84°/-33° |
64 x 44 x 8 |
UPPER |
u_08 |
ID2 |
44.5°/-10° |
64 x 44 x 8 |
UPPER |
u_09 |
ID2 |
44.5°/-4° |
64 x 44 x 8 |
UPPER |
u_10 |
ID2 |
150°/-28° |
64 x 44 x 8 |
UPPER |
u_12 |
ID2 |
177°/2° |
64 x 44 x 8 |
MAIN |
m_01 |
OK |
315°/-70° |
64 x 44 x 8 |
MAIN LOWER |
ml_01 |
ID2 |
345°/0° |
64 x 44 x 8 |
MAIN LOWER |
ml_02 |
ID2 |
356.5°/12° |
64 x 44 x 8 |
MAIN LOWER |
ml_05 |
ID2 |
245.5°/-5° |
64 x 44 x 8 |
MAIN LOWER |
ml_06 |
ID2 |
287.5°/4° |
64 x 44 x 8 |
MAIN LOWER |
ml_08 |
ID2 |
62.5°/-33° |
64 x 44 x 8 |
JUNIPER I |
j_1_01 |
OK |
350°/10° |
80 x 43.2 x 32 |
JUNIPER I |
j_1_02 |
ID2 |
298°/-3° |
64 x 44 x 8 |
JUNIPER II |
j_2_01 |
ID2 |
284.5°/0° |
64 x 44 x 8 |
Notes:
1. Wireframes not included in this table were interpolated using an omnidirectional search ellipse, the first pass of which was 20 ft x 20 ft x 20 ft
14.9 Bulk Density
Bulk density was determined by EFR with specific gravity (SG) measurements on drill core by measuring a minimum four inch piece of core in all directions with calipers to determine a volume. The sample is then weighed to get a mass and the density calculated. This method was used to determine the density of 2,857 samples. The density is modeled using inverse distance weighting squared and an average value across the deposit of 0.082 t/ft3 was calculated.
This method of density determination was validated using the water immersion method according to the Archimedes principle, after the core has been sealed in wax. SG is calculated as weight in air (weight in air - weight in water). Under normal atmospheric conditions, SG (a unitless ratio) is equivalent to density in t/m3. The validation utilized 37 bulk density measurements that were collected on six-inch drill core samples from the main mineralized zones to represent local major lithologic units, mineralization styles and alteration types. Samples were collected on full core, which had been retained in the core box prior to splitting for sampling. EFR determined the difference between the caliper method and water immersion method is about 1% in favor of the caliper method.
A global density of 0.082 t/ft3 was assigned to the block model.
14.10 Block Models
All modeling work was carried out using Maptek's Vulcan software version 10.0 software. The Pinyon Plain block model has 4 ft by 4 ft by 4 ft whole blocks and an origin at 646,630 ft East, 1,776,530 ft North, 4,450 ft elevation. The block model is not rotated, and extends 360 ft east-west, 320 ft north-south and 1,460 ft elevation. Before grade estimation, all model blocks were assigned density and mineralized domain codes (copper and uranium), based on majority rules. A summary of the block model variables is provided in Table 14-8.
Table 14-8: Summary of Block Model Variables
Energy Fuels Inc. - Pinyon Plain Project
Variable |
Type |
Default |
Description |
u3o8_ok |
Double |
-99 |
U3O8 estimation using ordinary kriging |
u3o8_idw |
Double |
-99 |
U3O8 estimation using inverse distance |
u3o8_nn |
Double |
-99 |
U3O8 estimation using nearest neighbor |
ok_u_est_flag |
Integer |
0 |
Ordinary Kriging Estimation Flag |
ok_u_samp_flag |
Integer |
0 |
No. of samples used in ordinary kriging |
ok_u_holes_flag |
Integer |
0 |
No. of holes used in ordinary kriging |
idw_u_est_flag |
Integer |
0 |
Inverse Distance Estimation Flag |
idw_u_samp_flag |
Integer |
0 |
No. of samples used in inverse distance |
idw_u_holes_flag |
Integer |
0 |
No. of samples used in inverse distance |
nn_u_nearest_samp |
Double |
0 |
Distance to nearest neighbor |
class |
Integer |
0 |
Block Classification |
dens |
Double |
0.082 |
Density of Block (Default is 12.2 cu ft/ton - 0.082) |
bound |
Name |
out |
Mineralized Boundary Zone (C, U, M, ML, J_1, J_2) |
u3o8_final |
Double |
-99 |
Final U3O8 idw or ok block grade |
u_tri_flag |
Integer |
0 |
block in U shape (in =1, out=0) |
14.11 Cut-off Grade
The Pinyon Plain Mineral Resource estimate is summarized in Table 14-1 by block model area. Two cut-off grades were used for the resource estimate. For the uranium and copper bearing zones, a 0.40% uranium equivalent (% eU3O8) cut-off grade was used. For the uranium-only zones, a 0.30% eU3O8 cut-off grade was used. The two cut-off grades account for separate process campaigns with different unit costs.
Assumptions used in the determination of cut-off grade are presented in Table 14-9.
Total operating cost (mining, G&A, processing) of US$459 per short ton for the Main Zone and US$375 per short ton for the Juniper Zone
Royalty cost of $7/ton
Process recovery of 96% for uranium and 90% for copper
Uranium price of US$65.00/lb and Copper price of US$4.00/lb. The prices are based on independent, third-party, and market analysts' average forecasts as of 2021, and the supply and demand projections are for the period 2021 to 2035. In the SLR QP's opinion, these long-term price forecasts are a reasonable basis for estimation of Mineral Resources.
Table 14-9: Pinyon Plain Project Cut-off Grade Calculation
Energy Fuels Inc. - Pinyon Plain Project
The SLR QP reviewed the operating costs and cut-off grade reported by EFR and is of the opinion they are reasonable for disclosing Mineral Resources.
14.12 Classification
Classification of Mineral Resources as defined in SEC Regulation S-K subpart 229.1300 were followed for classification of Mineral Resources. The Canadian Institute of Mining, Metallurgy and Petroleum definition Standards for Mineral Resources and Mineral Reserves (CIM 2014) are consistent with these definitions.
A Mineral Resource is defined as a concentration or occurrence of material of economic interest in or on the Earth's crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, considering relevant factors such as cut-off grade, likely mining dimensions, location, or continuity, that with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled.
Based on this definition of Mineral Resources, the Mineral Resources estimated in this Technical Report have been classified according to the definitions below based on geology, grade continuity, and drillhole spacing.
Measured mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling. The level of geological certainty associated with a measured mineral resource is sufficient to allow a qualified person to apply modifying factors, as defined in this section, in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit. Because a measured mineral resource has a higher level of confidence than the level of confidence of either an indicated mineral resource or an inferred mineral resource, a measured mineral resource may be converted to a proven mineral reserve or to a probable mineral reserve.
Indicated mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling. The level of geological certainty associated with an indicated mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Because an indicated mineral resource has a lower level of confidence than the level of confidence of a measured mineral resource, an indicated mineral resource may only be converted to a probable mineral reserve.
Inferred mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of geological uncertainty associated with an inferred mineral resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Because an inferred mineral resource has the lowest level of geological confidence of all mineral resources, which prevents the application of the modifying factors in a manner useful for evaluation of economic viability, an inferred mineral resource may not be considered when assessing the economic viability of a mining project and may not be converted to a mineral reserve.
The SLR QP has considered the following factors that can affect the uncertainty associated with each class of Mineral Resources:
Reliability of sampling data:
Drilling, sampling, sample preparation, and assay procedures follow industry standards.
Data verification and validation work confirm drill hole sample databases are reliable.
Confidence in interpretation and modeling of geological and estimation domains:
Mineralization domains are interpreted manually in cross-sections and refined in longitudinal sections by an experienced resource geologist.
There is good agreement between the drill holes and mineralization wireframe shapes.
The mineralization wireframe shapes are well defined by sample data in areas classified as Measured and Indicated.
Confidence in block grade estimates:
Blocks were classified as Measured, Indicated, or Inferred based on drillhole spacing, confidence in the geological interpretation, and apparent continuity of mineralization.
14.12.1 Measured Mineral Resources
Classification of Measured Resources was limited to blocks contained in the Main Zone, directly adjacent to underground drilling station 1-4, where 67 drillholes were collared in a fan pattern on general drillhole spacing of 15 feet. A cross section of block classification in the Main Zone is shown in Figure 14-6.
14.12.2 Indicated Mineral Resources
The remainder of the blocks within the Main Zone, as well as the blocks in primary wireframe within Juniper I, j_1_01, were assigned a classification of Indicated, in which drillhole pierce point spacing is generally less than 25 feet from underground drilling station 1-4.
14.12.3 Inferred Mineral Resources
All remaining blocks in the model were limited to an Inferred classification.
In the SLR QP's opinion the classification of Mineral Resources is reasonable and appropriate for disclosure.
Figure 14-6: Block Classification within the Main Zone
14.13 Block Model Validation
The SLR QP reviewed and validated the block model using various modeling and interpolation aspects of the Pinyon Plain model. Observations and comments from the model validation are provided below.
Mineralization wireframes were checked for conformity to drillhole data, continuity, similarity between sections, overlaps, appropriate terminations between holes and into undrilled areas, and minimum mining thicknesses. The wireframes were snapped to drillhole intervals, are reasonably consistent, continuous, and generally representative of the extents and limits of the mineralization. The SLR QP recommends that EFR continue to work to smooth the connection of the uranium wireframes between sections in future updates.
Capping statistics were reviewed and audited for a series of individual zones and compared to the statistics of capping groups defined by EFR. The SLR QP is satisfied with the chosen caps.
Compositing routines were checked to confirm that composites started and stopped at the intersections with the wireframes and that the composite coding is consistent with the wireframes. The SLR QP is satisfied with the compositing routines and finds the composites appropriate for Mineral Resource estimation.
Contact plots were prepared for selected mineralization domains and confirmed the appropriateness of hard boundaries between the domains during estimation.
Visual inspection and comparison of drillhole composites against mineralized solids were carried out for a number of sections with focus on the Main and Juniper I domains for both copper and uranium. The mineralized solids were found to conform reasonably well to the drillhole composite grades, although some evidence of smoothing was present. A cross section and plan section comparing uranium composite and uranium block grades are presented in Figure 14-7 and Figure 14-8.
Figure 14-7: Cross Section Comparing Block and Composite U3O8 Grades in the Main Zone
Figure 14-8: Plan View Comparing Block and Composite U3O8 Grades in the Main Zone
The SLR QP reviewed the variogram models for selected mineralization groups and prepared variogram models representing selected individual mineralization domains for comparison, then validated the trend of the variogram against observed trends and grade shells created in Leapfrog Geo software. The SLR QP recommends exploring the use of dynamic anisotropy for the interpolation of mineralization within the Main Zone in future updates, where mineralization follows the contact of the breccia pipe with the country rock.
The SLR QP validated the grades estimated in the block models prepared by EFR using basic statistics, visual inspection, volumetric comparison, swath plots, and a re-estimation of a portion of the Main Zone using the ID2 method. The grades of re-estimated areas were found to be within 10%.
A statistical comparison of the estimated block grades with the four-foot composites is shown in Table 14-10. The block results compare well with the composites, indicating a reasonable overall representation of the uranium grades in the block model.
Table 14-10: Comparison of Block and Composite Uranium Grades
Energy Fuels Inc. - Pinyon Plain Project
14.14 Grade Tonnage Sensitivity
Table 14-11 shows the block model sensitivity to cut-off grade and uranium prices. Figure 14-9 presents the grade tonnage curve for all zones.
Table 14-11: Block Model Sensitivity to Cut-off Grade and Uranium Price in the Main, Main-Lower, and Juniper I Zones
Energy Fuels Inc. - Pinyon Plain Project
Price |
Cut-Off Grade |
Tonnage |
Grade |
Contained Metal |
$80 |
0.25 |
177,000 |
0.73 |
2,569,000 |
$75 |
0.27 |
169,000 |
0.76 |
2,547,000 |
$70 |
0.28 |
165,000 |
0.77 |
2,536,000 |
$652 |
0.30 |
157,000 |
0.80 |
2,511,000 |
$60 |
0.33 |
148,000 |
0.84 |
2,475,000 |
$55 |
0.36 |
139,000 |
0.87 |
2,439,000 |
$50 |
0.40 |
130,000 |
0.92 |
2,387,000 |
$45 |
0.44 |
122,000 |
0.96 |
2,329,000 |
$40 |
0.50 |
111,000 |
1.01 |
2,246,000 |
$35 |
0.57 |
99,000 |
1.08 |
2,144,000 |
$30 |
0.67 |
85,000 |
1.19 |
2,017,000 |
$25 |
0.80 |
69,000 |
1.35 |
1,859,000 |
Notes:
1. U3O8 Recovery and operating costs held constant
2. Base Case Scenario
Figure 14-9: Grade Tonnage Curve Main, Main-Lower, and Juniper I Zones
14.15 Mineral Resource Reporting
A summary of the Pinyon Plain Mineral Resources is presented in Table 14-12. Mineral Resources are based on a $65/lb uranium price at an equivalent uranium cut-off grade of 0.40% U3O8 for zones (the Main Zone and Main-Lower Zones) containing copper and 0.30% U3O8 for the remaining zones. Uranium and copper estimates pertain to the same deposit and there is an overlap of tonnages in the Main and Main Lower zones, therefore they are listed separately. In the SLR QP's opinion, the assumptions, parameters, and methodology used for the Pinyon Plain Mineral Resource estimate is appropriate for the style of mineralization and mining methods. The effective date of the Mineral Resource estimate is December 31, 2021.
The SLR QP is of the opinion that with consideration of the recommendations summarized in Section 1 and Section 26, any issues relating to all relevant technical and economic factors likely to influence the prospect of economic extraction can be resolved with further work.
The SLR QP is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could materially affect the Mineral Resource estimate.
Table 14-12: Summary of Attributable Mineral Resources - Effective Date December 31, 2021
Energy Fuels Inc. - Pinyon Plain Project
Classification |
Zone |
COG |
Tonnage |
Grade |
Contained |
Recovery |
Grade |
Contained |
Recovery |
Main Zone |
|||||||||
Measured |
Main |
0.40 |
6,000 |
0.46 |
55,000 |
96 |
9.60 |
1,155,000 |
90 |
Indicated |
Main |
0.40 |
90,000 |
0.92 |
1,644,000 |
96 |
5.89 |
10,553,000 |
90 |
Total Measured + Indicated |
|
|
96,000 |
0.88 |
1,699,000 |
96 |
6.10 |
11,708,000 |
90 |
Inferred |
Main |
0.40 |
- |
- |
- |
- |
- |
- |
- |
Main-Lower |
0.40 |
4,000 |
0.22 |
16,000 |
96 |
6.50 |
470,000 |
90 |
|
Total Inferred |
|
|
4,000 |
0.20 |
16,000 |
96 |
5.88 |
470,000 |
90 |
Juniper |
|||||||||
Indicated |
Juniper I |
0.30 |
37,000 |
0.95 |
703,000 |
96 |
- |
- |
- |
Inferred |
Juniper I |
0.30 |
2,000 |
0.58 |
24,000 |
96 |
- |
- |
- |
Juniper II |
0.30 |
1,000 |
0.36 |
8,000 |
96 |
- |
- |
- |
|
Total Inferred |
|
|
3,000 |
0.53 |
32,000 |
96 |
- |
- |
- |
Upper Zones |
|||||||||
Inferred |
Cap |
0.30 |
300 |
0.33 |
2,000 |
96 |
- |
- |
- |
Upper |
0.30 |
9,000 |
0.44 |
76,000 |
96 |
- |
- |
- |
|
Total Inferred |
|
|
9,300 |
0.42 |
78,000 |
96 |
- |
- |
- |
Notes:
1. SEC S-K 1300 definitions were followed for all Mineral Resource categories. These definitions are also consistent with CIM (2014) definitions in NI 43-101.
2. Mineral Resources are estimated at an equivalent uranium cut-off grade of 0.40% U3O8 for copper bearing zone and 0.30% U3O8 for non-copper bearing zones, with estimated recoveries of 96% for uranium and 90% for copper.
3. Mineral Resources are estimated using a long-term uranium price of US$65 per pound, and copper price of US$4.00 per pound.
4. A copper to U3O8 conversion factor of 18.19 was used for converting copper grades to equivalent U3O8 grades (% U3O8 Eqv) for cut-off grade evaluation and reporting.
5. No minimum mining width was used in determining Mineral Resources.
6. Bulk density is 0.082 ton/ft3 (12.2 ft3/ton or 2.63 t/m3).
7. Mineral Resources are exclusive of Mineral Reserves and do not have demonstrated economic viability.
8. Numbers may not add due to rounding.
9. Tonnages of uranium and copper cannot be added as they overlap in the Main and Main Lower Zone.
10. Mineral Resources are 100% attributable to EFR and are in situ.
15.0 MINERAL RESERVE ESTIMATE
There are no current Mineral Reserves at the Project.
16.0 MINING METHODS
This section is not applicable.
17.0 RECOVERY METHODS
This section is not applicable.
18.0 PROJECT INFRASTRUCTURE
This section is not applicable.
19.0 MARKET STUDIES AND CONTRACTS
This section is not applicable.
20.0 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT
This section is not applicable
21.0 CAPITAL AND OPERATING COSTS
This section is not applicable
22.0 ECONOMIC ANALYSIS
This section is not applicable.
23.0 ADJACENT PROPERTIES
This section is not applicable.
24.0 OTHER RELEVANT DATA AND INFORMATION
No additional information or explanation is necessary to make this Technical Report understandable and not misleading.
25.0 INTERPRETATION AND CONCLUSIONS
The SLR QP offers the following interpretations and conclusions regarding Pinyon Plain:
The effective date of the Mineral Resource estimate is December 31, 2021. Estimated block model uranium grades are based on chemical assay and radiometric probe grades
Mineral Resources are based on a $65/lb uranium price at a uranium cut-off grade of 0.31% based on a combination of long-hole stoping, shrinkage stoping, and drift and fill underground mining methods with trucking mineralized material from the Project 320 miles to Energy Fuels Inc.'s White Mesa Mill, located near Blanding, Utah.
Measured Resources total 6,000 ton at an average grade of 0.46% eU3O8 for a total of 55,000 lb U3O8. Indicated Resources total 127,000 ton at an average grade of 0.92% eU3O8 for a total of 2,347,000 lb U3O8. Inferred Resources total 16,300 ton at an average grade of 0.39% eU3O8 for a total of 126,000 lb U3O8.
Sampling and assaying procedures have been adequately completed and carried out using industry standard quality assurance/quality control (QA/QC) practices. These practices include, but are not limited to, sampling, assaying, chain of custody of the samples, sample storage, use of third-party laboratories, standards, blanks, and duplicates.
The SLR QP considers the estimation procedures employed at Pinyon Plain, including compositing, top-cutting, variography, block model construction, and interpolation to be reasonable and in line with industry standard practice.
The SLR QP finds the classification criteria to be reasonable.
In SLR QP's opinion, the assumptions, parameters, and methodology used for the Pinyon Plain Mineral Resource estimate is appropriate for the style of mineralization and mining methods.
In SLR QP's opinion, there are not any significant risks and uncertainties that could reasonably be expected to affect the reliability or confidence in the Mineral Resource estimate.
26.0 RECOMMENDATIONS
The SLR QP makes the following recommendations regarding the Project based on EFR's construction and development plans to start operations at the Pinyon Plain mine (focused on the Main Zone only). The two-phase programs are independent of each other and advancing to Phase 2 is not contingent on positive results of the Phase 1 program.
26.1 Phase 1: Determine Work Plans and Completed Engineering Designs
1. Review the condition of existing surface and underground infrastructure and develop engineering drawings, as needed
2. Develop mine plans
3. Determine underground labor and equipment requirements and develop contracts
4. Construct surface ore pad
The SLR QP estimates the cost of the Phase 1 work will range from $4.2 million to $4.8 million dollars.
26.2 Phase 2: Underground Mine Development
1. Construct underground infrastructure to include loading pockets, cages and loading buckets
2. Development mine access from shaft stations, including spiral ramp, mine levels, ore passes and sumps
3. Develop ventilation/secondary egress borehole
4. Install mine ventilation and pumping plans"
The SLR QP estimates the cost of the Phase 2 work will range from $8.8 million to $9.2 million dollars.
In addition to the two-phase program for resuming mining operations, the SLR QP makes the following recommendations regarding the QA/QC data supporting the drillhole database at the Project. The following recommendations are independent of the engineering and mine development work and are provided for any future exploration or delineation drilling programs:
1. Submit field duplicates using two ½ core samples at a rate of one in 50.
2. Continue to monitor for low-grade bias of copper and slight low-grade bias of U3O8 at White Mesa Mill.
3. Continue to monitor for temporal trends (change in average grade of CRM data over time) observed at White Mesa Mill to ensure assay accuracy.
4. Procure CRM made from the Project resource material (matrix matched), to obtain an improved understanding of laboratory performance as applied to Project samples.
5. Source three matrix-matched or matrix-similar CRMs for U3O8 that represent low, medium, and high grade ore at the Project. Incorporate the CRMs in the sample stream sent to White Mesa Mill at a rate of one in 25. Ensure the certified values of these CRMs are blind to the laboratory. In addition, submit these CRMs to independent laboratories alongside check assays at a rate of one in 10 to obtain a meaningful sample size for analysis.
6. Implement a duplicate assay protocol for field, coarse and pulp samples that is blind to the laboratory, and that the rates of insertion for duplicate samples be approximately one in 50 for field duplicates, and one in 25 for coarse and pulp duplicate samples.
7. Continue to work to smooth the connection of the uranium wireframes between sections in future updates.
8. Explore the use of dynamic anisotropy for the interpolation of uranium mineralization within the Main Zone in future updates, where copper mineralization follows the contact of the breccia pipe with the country rock.
9. The SLR QP recommends that future updates to the copper mineralization include some marginal material where appropriate to increase the continuity and volume of the wireframes, particularly the high grade copper wireframe.
27.0 REFERENCES
ANSTO Minerals, 2017 Progress Note 1, Processing of Pinyon Plain Mine Ore, Dated May 16, 2017, ANSTO Minerals, 2017 Progress Note 2-Update on Batch Tests; Processing of Pinyon Plain Mine Ore, Dated June 14, 2017
Bennett, D. (n.d.). Orphan Mine. Retrieved November 2021, from Nature, Culture and History at the Grand Canyon: https://grcahistory.org/history/logging-mining-and-ranching/mining/orphan-mine/
Canadian Institute of Mining, Metallurgy and Petroleum (CIM), 2014: CIM Definition Standards for Mineral Resources and Mineral Reserves, adopted by CIM Council on May 10, 2014.
Cottrell, J.T., 1994, Internal Memorandum to I.W. Mathisen on Canyon Resource - 1994 Changes; written for Energy Fuels Nuclear, Inc., unpublished, June 27, 1994.
Dames & Moore, 1987: Evaluation of Underground Mine Stability and Subsidence Potential, Proposed Pinyon Plain Mine, Arizona.
Electronic Code of Federal Regulations, Title 17: Commodity and Securities Exchanges, Chapter II, Part 229 Standard Instructions for Filing Forms Under Securities Act of 1933, Securities Exchange Act of 1934 and Energy Policy and Conservation Act of 1975- Regulation S-K. (https://www.ecfr.gov/cgi-bin/text-idx?amp;node=17:3.0.1.1.11&rgn=div5#se17.3.229_11303)
Energy Fuels, 2016, Standard Operating Procedure: Core Handling, Sampling and QA/QC Protocols for Core Drilling at the Pinyon Plain Mine, internal report.
Finch, W.I., 1992, Descriptive Model of Solution-Collapse Breccia Pipe Uranium Deposits, in, Bliss, J.D., ed., Developments in Mineral Deposit Modeling, U.S. Geological Survey Bulletin 2004, p. 33-35.
Mathisen, M.B, Wilson, V., Woods, J.L, 2017: Technical Report on the Canyon Mine, Coconino County, Arizona, USA, RPA NI 43-101 report prepared for Energy Fuels Inc. Available at www.sedar.com
Mathisen, I.W., Jr., 1985, Internal Memorandum, written for Energy Fuels Nuclear, Inc., unpublished, January 15, 1985.
Montgomery, E.L., et. al, 1985, Appendix F -Groundwater Conditions Canyon Mine Region, Coconino County, Arizona, Draft Environmental Impact Statement Canyon Uranium Mine, p. 206
Parsons Behle & Latimer, 2022, Mining Claim Status Report - Pinyon Plain Mine, Coconino County, Arizona, letter report to Energy Fuels Resources (USA) Inc., January 19, 2022, 8 pp.
Pool, T.C., and Ross, D.A., 2012: Technical Report on the Arizona Strip Uranium Projects, Arizona, USA, RPA NI 43-101 Report prepared for Energy Fuels Inc. (June 27,2012), Available at www.sedar.com
Scott, J.H., 1962: GAMLOG A Computer Program for Interpreting Gamma-Ray Logs; United States Atomic Energy Commission, Grand Junction Office, Production Evaluation Division, Ore Reserves Branch, TM-179, September 1962.
Shumway, L., 2017: Energy Fuels Nuclear, Inc. Internal Memorandum dated June 9, 2017
US Department of Agriculture, Forest Service, Southwestern Region, Kaibab National Forest, 1985: Draft Environmental Impact Statement, Pinyon Plain Uranium Mine, Appendix F Groundwater Conditions.
US Securities and Exchange Commission, 2018: Regulation S-K, Subpart 229.1300, Item 1300 of Regulation S-K, Disclosure by Registrants Engaged in Mining Operations and Item 601 (b)(96) of Regulation S-K, Technical Report Summary.
Wenrich, K.J., and Sutphin, H.B., 1989, Lithotectonic setting necessary for formation of a uranium rich, solution collapse breccia pipe province, Grand Canyon Region, Arizona, in Metallogenesis of uranium deposits; Technical committee meeting on metallogenesis of uranium deposits, organized by the International Atomic Energy Agency, Vienna, 9-12 March 1987, p. 307-344
Wenrich, K.J., 1992, Breccia Pipes in the Red Butte Area of the Kaibab National Forest, Arizona, U.S. Geological Survey, Open File Report 92-219, p. 14
28.0 DATE AND SIGNATURE PAGE
This report titled "Technical Report on the Pinyon Plain Project, Coconino County, Arizona, USA" with an effective date of December 31, 2021, was prepared and signed by the following authors:
(Signed & Sealed) Mark B. Mathisen | |
Dated at Lakewood, CO | Mark B. Mathisen, C.P.G. |
February 22, 2022 | Principal Geologist |
29.0 CERTIFICATE OF QUALIFIED PERSON
29.1 Mark B. Mathisen
I, Mark B. Mathisen, C.P.G., as an author of this report entitled "Technical Report on the Pinyon Plain Project, Coconino County, Arizona, USA" with an effective date of December 31, 2021 (the Technical Report), prepared for Energy Fuels, Inc., do hereby certify that:
1. I am Principal Geologist with SLR International Corporation, of Suite 100, 1658 Cole Boulevard, Lakewood, CO, USA 80401.
2. I am a graduate of Colorado School of Mines in 1984 with a B.Sc. degree in Geophysical Engineering.
3. I am a Registered Professional Geologist in the State of Wyoming (No. PG-2821), a Certified Professional Geologist with the American Institute of Professional Geologists (No. CPG-11648), and a Registered Member of SME (RM #04156896). I have worked as a geologist for a total of 23 years since my graduation. My relevant experience for the purpose of the Technical Report is:
4. I have read the definition of "qualified person" set out in National Instrument 43-101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101.
5. I visited the Pinyon Plain Project (the Project) on November 16, 2021.
6. I am responsible for all sections and overall preparation of the Technical Report.
7. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43-101.
8. I have been involved previously with the Project from 2006 to 2012 when serving as Director of Project Resources with Denison Mines. Since the Project was acquired by Energy Fuels Resources (USA) in 2012 I have had no involvement with the Project that is the subject of the Technical Report.
9. I have read NI 43-101, and the Technical Report has been prepared in compliance with NI 43-101 and Form 43-101F1.
10. At the effective date of the Technical Report, to the best of my knowledge, information, and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
Dated this 22nd day of February 2022
(Signed & Sealed) Mark B. Mathisen
Mark B. Mathisen, C.P.G.
Technical Report on the Roca Honda Project, McKinley County, New Mexico, USA
SLR Project No: 138.02544.00006
Prepared by
SLR International Corporation
1658 Cole Blvd, Suite 100
Lakewood, CO 80401
USA
for
Energy Fuels Inc.
25 Union Blvd., Suite 600
Lakewood, CO 80228
USA
Effective Date - December 31, 2021
Signature Date - February 22, 2022
Qualified Persons
Grant A. Malensek, M.Eng, P.Eng.
Mark B. Mathisen, C.P.G.
David M. Robson, P.Eng., MBA
Jeffrey L. Woods, MMSA QP
Phillip E. Brown, C.P.G., R.P.G.
Daniel D. Kapostasy, P.G.
FINAL
Distribution: 1 copy - Energy Fuels Inc.
1 copy - SLR International Corporation
CONTENTS
1.0 SUMMARY | 1-1 |
1.1 Executive Summary | 1-1 |
1.2 Economic Analysis | 1-6 |
1.3 Technical Summary | 1-11 |
2.0 INTRODUCTION | 2-1 |
2.1 Sources of Information | 2-2 |
2.2 List of Abbreviations | 2-4 |
3.0 RELIANCE ON OTHER EXPERTS | 3-1 |
3.1 Reliance on Information Provided by the Registrant | 3-1 |
4.0 PROPERTY DESCRIPTION AND LOCATION | 4-1 |
4.1 Location | 4-1 |
4.2 Land Tenure | 4-5 |
4.3 Required Permits and Status | 4-16 |
4.4 Royalties | 4-19 |
4.5 Other Significant Factors and Risks | 4-19 |
5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY | 5-1 |
5.1 Accessibility | 5-1 |
5.2 Vegetation | 5-1 |
5.3 Climate | 5-2 |
5.4 Local Resources | 5-2 |
5.5 Infrastructure | 5-3 |
5.6 Physiography | 5-4 |
6.0 HISTORY | 6-1 |
6.1 Prior Ownership | 6-1 |
6.2 Exploration and Development History | 6-2 |
6.3 Past Production | 6-3 |
7.0 GEOLOGICAL SETTING AND MINERALIZATION | 7-1 |
7.1 Regional Geology | 7-1 |
7.2 Local Geology | 7-5 |
7.3 Mineralization | 7-11 |
8.0 DEPOSIT TYPES | 8-1 |
9.0 EXPLORATION | 9-1 |
9.1 Exploration | 9-1 |
9.2 Geotechnical and Hydrogeology | 9-1 |
10.0 DRILLING | 10-1 |
10.1 Historic Drilling | 10-1 |
11.0 SAMPLE PREPARATION, ANALYSES, AND SECURITY | 11-1 |
11.1 Sample Preparation and Analysis | 11-1 |
11.2 Sample Security | 11-8 |
11.3 Quality Assurance and Quality Control | 11-8 |
11.4 Conclusions | 11-9 |
12.0 DATA VERIFICATION | 12-1 |
12.1 David Fitch Data Verification (2004 to 2008) | 12-1 |
12.2 Roscoe Postle Associates Data Verification (2010 to 2011) | 12-2 |
12.3 Roscoe Postle Associates Data Verification (2016) | 12-8 |
12.4 Amec Foster Wheeler Data Verification (2016) | 12-10 |
12.5 Limitations | 12-10 |
13.0 MINERAL PROCESSING AND METALLURGICAL TESTING | 13-1 |
13.1 Introduction | 13-1 |
13.2 Mineralized Sand Zones | 13-1 |
13.3 Historical Metallurgical Testing | 13-2 |
13.4 Conclusions | 13-3 |
13.5 Opinion of Adequacy | 13-4 |
14.0 MINERAL RESOURCE ESTIMATE | 14-1 |
14.1 Summary | 14-1 |
14.2 Resource Database | 14-2 |
14.3 Geological Interpretation | 14-3 |
14.4 Resource Assays | 14-6 |
14.5 Treatment of High Grade Assays | 14-7 |
14.6 Compositing | 14-13 |
14.7 Trend Analysis | 14-16 |
14.8 Search Strategy and Grade Interpolation Parameters | 14-17 |
14.9 Bulk Density | 14-21 |
14.10 Block Models | 14-22 |
14.11 Cut-off Grade | 14-23 |
14.12 Classification | 14-23 |
14.13 Block Model Validation | 14-26 |
14.14 Grade Tonnage Sensitivity | 14-29 |
14.15 Mineral Resource Reporting | 14-30 |
15.0 MINERAL RESERVE ESTIMATE | 15-1 |
16.0 MINING METHODS | 16-1 |
16.1 Introduction | 16-1 |
16.2 Mining Method | 16-1 |
16.3 Mine Design | 16-4 |
16.4 Grade Control | 16-9 |
16.5 Geotechnical Parameters | 16-11 |
16.6 Hydrogeology | 16-12 |
16.7 Production Schedule | 16-17 |
16.8 Underground Mobile Equipment | 16-19 |
16.9 Health and Safety | 16-20 |
17.0 RECOVERY METHODS | 17-1 |
17.1 Introduction | 17-1 |
17.2 Ore Receiving | 17-1 |
17.3 Grinding | 17-1 |
17.4 Leaching | 17-1 |
17.5 Counter Current Decantation | 17-6 |
17.6 Solvent Extraction | 17-6 |
17.7 Precipitation, Drying and Packaging | 17-6 |
17.8 Mill Upgrades | 17-7 |
17.9 Process Design Criteria | 17-7 |
18.0 PROJECT INFRASTRUCTURE | 18-1 |
18.1 Introduction | 18-1 |
18.2 Access Roads | 18-1 |
18.3 Power | 18-1 |
18.4 Diesel, Gasoline, and Propane | 18-4 |
18.5 Communications | 18-4 |
18.6 Water Supply | 18-5 |
18.7 Mine Support Facilities | 18-5 |
18.8 Roca Honda Surface Equipment | 18-12 |
18.9 White Mesa Mill | 18-12 |
18.10 Security | 18-14 |
18.11 Landfill | 18-15 |
19.0 MARKET STUDIES AND CONTRACTS | 19-1 |
19.1 Markets | 19-1 |
19.2 Contracts | 19-3 |
20.0 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT | 20-1 |
20.1 Roca Honda Mine | 20-1 |
20.2 White Mesa Mill | 20-5 |
21.0 CAPITAL AND OPERATING COSTS | 21-1 |
21.1 Capital Cost | 21-1 |
21.2 Operating Cost | 21-4 |
22.0 ECONOMIC ANALYSIS | 22-1 |
22.1 Base Case (Measured, Indicated, and Inferred Mineral Resources) | 22-1 |
22.2 Alternate Case (Measured and Indicated Mineral Resources Only) | 22-10 |
23.0 ADJACENT PROPERTIES | 23-1 |
23.1 Historical Production from Adjacent Properties | 23-1 |
24.0 OTHER RELEVANT DATA AND INFORMATION | 24-1 |
25.0 INTERPRETATION AND CONCLUSIONS | 25-1 |
25.1 Geology and Mineral Resources | 25-1 |
25.2 Mining | 25-1 |
25.3 Hydrogeology | 25-2 |
25.4 Mineral Processing | 25-2 |
25.5 Infrastructure | 25-3 |
25.6 Environment | 25-3 |
26.0 RECOMMENDATIONS | 26-1 |
26.1 Geology and Mineral Resources | 26-1 |
26.2 Mining and Mineral Reserves | 26-1 |
26.3 Hydrogeology | 26-2 |
26.4 Mineral Processing | 26-2 |
27.0 REFERENCES | 27-1 |
28.0 DATE AND SIGNATURE PAGE | 28-1 |
29.0 CERTIFICATE OF QUALIFIED PERSON | 29-1 |
29.1 Grant A. Malensek | 29-1 |
29.2 Mark B. Mathisen | 29-2 |
29.3 David M. Robson | 29-3 |
29.4 Jeffrey L. Woods | 29-4 |
29.5 Phillip E. Brown | 29-5 |
29.6 Daniel D. Kapostasy | 29-6 |
30.0 APPENDIX 1 | 30-1 |
TABLES
Table 1-1:Roca Honda Four-Year Estimated Budget | 1-5 |
Table 1-2:Base Case After-Tax Cash Flow Summary | 1-8 |
Table 1-3: Alternate Case After-Tax Cash Flow Summary | 1-10 |
Table 1-4:Attributable Mineral Resource Estimate for Roca Honda - Effective Date December 31, 2021 | 1-14 |
Table 1-5:Capital Cost Estimate | 1-17 |
Table 1-6:Operating Cost Estimate | 1-18 |
Table 2-1:Summary of QP Responsibilities | 2-2 |
Table 4-1:List of Claims held by Energy Fuels | 4-7 |
Table 4-2:List of White Mesa Mill Claims held by Energy Fuels | 4-15 |
Table 4-3:Roca Honda Project Royalty Summary | 4-19 |
Table 7-1:Stratigraphy found at the Roca Honda Project | 7-5 |
Table 10-1:Drilling at and Near the Roca Honda Mine by Section | 10-2 |
Table 10-2:Summary of Exploration Drilling Completed at Roca Honda | 10-2 |
Table 11-1:Strathmore Core Assay Results | 11-3 |
Table 12-1:SLR Survey Check | 12-2 |
Table 12-2:SLR Core Gamma-Ray Check | 12-2 |
Table 12-3:Lithology: Radiometric Log vs Core Log | 12-4 |
Table 12-4:%U3O8 Grade: Gamma Log vs Core Assay | 12-6 |
Table 13-1:Metallurgical Recovery by Zone | 13-1 |
Table 13-2:Mount Taylor Processing Data | 13-3 |
Table 14-1:Mineral Resource Estimate for Roca Honda - Effective Date December 31, 2021 | 14-1 |
Table 14-2:Roca Honda Resource Drillhole Database | 14-2 |
Table 14-3:General Grade Statistics for Sections 9, 10, and 16 | 14-6 |
Table 14-4:General Grade Statistics for Section 17 | 14-7 |
Table 14-5:Section 17 Statistics after Capping | 14-10 |
Table 14-6:Sections 9, 10 and 16 Mineralized Wireframe Composites | 14-14 |
Table 14-7:Section 17 Mineralized Wireframe Composites | 14-15 |
Table 14-8:Ordinary Kriging Parameters | 14-17 |
Table 14-9:Vulcan Domain Search Parameter | 14-17 |
Table 14-10:Section 9, 10, and 16 Grade Estimation Parameters | 14-19 |
Table 14-11:Section 17 Vulcan Estimation Method and Ellipsoid Rotation | 14-20 |
Table 14-12:Section 17 Grade Estimation Parameters | 14-21 |
Table 14-13:Density Determination of Core Samples | 14-22 |
Table 14-14:Section 9, 10 and 16 Block Model Extents | 14-22 |
Table 14-15:Section 17 Block Model Extents | 14-23 |
Table 14-16 :Grade versus Tonnage Curve | 14-29 |
Table 14-17:Mineral Resource Estimate for Roca Honda - Effective Date December 31, 2021 | 14-31 |
Table 16-1:Key Life of Mine Production Statistics | 16-3 |
Table 16-2:Summary of Hydraulic Parameters for the Westwater Canyon Member | 16-13 |
Table 16-3:Radionuclide Data from Permit Area Water Monitoring Wells | 16-14 |
Table 16-4:Summary of Aquifer Characteristics in the Vicinity of the Roca Honda Permit Area (Modified after USDA, 2013) | 16-16 |
Table 16-5:Production Schedule | 16-18 |
Table 16-6:Mine Equipment Summary | 16-19 |
Table 17-1:Principal Process Operation Criteria | 17-7 |
Table 18-1:Roca Honda Mine Estimated Electrical Load | 18-2 |
Table 18-2:White Mesa Mill Connected Load Rating | 18-3 |
Table 18-3:White Mesa Mill Operating Load Rating | 18-4 |
Table 18-4:Mine Surface Infrastructure Space Requirements - Buildings | 18-11 |
Table 18-5:Surface Equipment Fleet | 18-12 |
Table 20-1:Environmental Permits for the White Mesa Mill Operation | 20-8 |
Table 21-1:Capital Cost Estimate | 20-1 |
Table 21-2:2021 SLR Capital Cost Escalation Factors | 20-3 |
Table 21-3:Operating Cost Estimate | 20-4 |
Table 21-4:2021 SLR Operating Cost Escalation Factors | 20-5 |
Table 21-5:Underground Mine Operating Cost Summary | 20-6 |
Table 21-6:Mill Operating Cost Summary | 20-7 |
Table 21-7:Mill Operating Reagent Usage Details | 20-8 |
Table 21-8:Mine G&A Costs | 20-9 |
Table 21-9:Staff Requirements | 20-9 |
Table 22-1:Base Case After-Tax Cash Flow Summary | 22-4 |
Table 22-2:Base Case All-in Sustaining Costs Composition | 22-6 |
Table 22-3:Base Case After-tax Sensitivity Analysis | 22-8 |
Table 22-4: Alternate Case After-Tax Cash Flow Summary | 22-11 |
Table 22-5:Alternate Case All-in Sustaining Costs Composition | 22-12 |
Table 26-1:Roca Honda Four-Year Estimated Budget | 26-1 |
FIGURES
Figure 4-1:Location Map | 4-2 |
Figure 4-2:White Mesa Mill Location and Property Map | 4-3 |
Figure 4-3:Roca Honda Mine, White Mesa Mill, and Proposed Haul Route Location Map | 4-4 |
Figure 4-4:Land Tenure Map | 4-13 |
Figure 4-5:Proposed Pipeline Route | 4-18 |
Figure 7-1:Regional Geologic Map | 7-2 |
Figure 7-2:Regional Stratigraphic Column | 7-3 |
Figure 7-3:Cross Section of Local Geology | 7-4 |
Figure 7-4:Roca Honda Upper-Jurassic Stratigraphy | 7-10 |
Figure 10-1:Drillhole Location Map | 10-5 |
Figure 12-1:Historical Drillhole Mineralized Total GT Intercepts vs. Radiometric Data for Section 17 | 12-9 |
Figure 14-1:Mineral Resource Estimate Block Model Boundaries | 14-4 |
Figure 14-2:Histogram Plot of Roca Honda Sections 9, 10 and 16 | 14-8 |
Figure 14-3:Log Normal Probability Plot of Roca Honda Sections 9, 10 and 16 | 14-9 |
Figure 14-4:Cumulative Frequency Plot of Roca Honda Sections 9, 10 and 16 | 14-10 |
Figure 14-5:A-Sand Log-Normal Probability Plot | 14-11 |
Figure 14-6:B-Sand (Low Grade) Log-Normal Probability Plot | 14-12 |
Figure 14-7:B-Sand (High Grade) Log-Normal Probability Plot | 14-13 |
Figure 14-8:Longitudinal Section through the Northeast Section 10 Model | 14-27 |
Figure 14-9:Swath Plot of the Roca Honda Project | 14-29 |
Figure 14-10:Roca Honda Resource Grade vs. Tons | 14-30 |
Figure 16-1:Proposed Underground Workings | 16-6 |
Figure 16-2:Generalized Hydrogeologic Section of the San Juan Basin showing Major Aquifers | 16-13 |
Figure 17-1:White Mesa Mill Location and Haulage Route | 17-3 |
Figure 17-2:White Mesa Mill Facility Layout | 17-4 |
Figure 17-3:White Mesa Mill Flowsheet | 17-5 |
Figure 18-1:Surface Infrastructure Map | 18-6 |
APPENDIX TABLES AND FIGURES
Table 30-1:Base Case Annual Cash Flow Model | 30-1 |
Table 30-2:Alternate Case Annual Cash Flow Model | 30-3 |
1.0 SUMMARY
1.1 Executive Summary
This Technical Report (Technical Report) was prepared by Grant A. Malensek, M.Eng., P.Eng., Mark B. Mathisen, C.P.G., David M. Robson, P.Eng., MBA, Phillip E. Brown, C.P.G., R.P.G., and Jeffrey L. Woods, MMSA QP of SLR International Corporation (SLR) and Daniel Kapostasy, P.G. of Energy Fuels Resources (USA) Inc. (EFR), for Energy Fuels Inc. (Energy Fuels), the parent company of Energy Fuels Resources (USA) Inc., with respect to the Roca Honda Project (Roca Honda or the Project), located in Central New Mexico, USA. EFR owns 100% of the Project.
EFR's parent company, Energy Fuels Inc., is incorporated in Ontario, Canada. EFR is a US-based uranium and vanadium exploration and mine development company with projects located in the states of Colorado, Utah, Arizona, Wyoming, Texas, and New Mexico. EFR is listed on the NYSE American Stock Exchange (symbol: UUUU) and the Toronto Stock Exchange (symbol: EFR).
This Technical Report satisfies the requirements of Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101) and the United States Securities and Exchange Commission's (SEC) Modernized Property Disclosure Requirements for Mining Registrants as described in Subpart 229.1300 of Regulation S-K, Disclosure by Registrants Engaged in Mining Operations (S-K 1300) and Item 601 (b)(96) Technical Report Summary. The purpose of this Technical Report is to disclose the results of a Preliminary Economic Assessment (PEA) for the Project. The term PEA is used throughout this Technical Report and is consistent with an Initial Assessment (IA) under S-K 1300. Grant A. Malensek, M.Eng., P. Eng., Mark B. Mathisen, C.P.G., David M. Robson, P.Eng., MBA, Jeffrey L. Woods, MMSA QP, and Phillip E. Brown, C.P.G., R.P.G. are all Qualified Persons (QPs) within the meaning of both S-K 1300 and NI 43-101 (SLR QPs); Daniel Kapostasy is a Qualified Person (QP) within the meaning of both S-K 1300 and NI 43-101 (EFR QP).
The Project includes the proposed Roca Honda Mine (the Mine) near the city of Grants, New Mexico, and the existing White Mesa Mill (the Mill) near the city of Blanding, Utah. The Project is currently in the planning and permitting stages and the Mill is on a reduced operating schedule while processing materials as they become available. When in full operation, the Project is expected to produce four million short tons of uranium ore to be shipped to the White Mesa Mill for processing (to produce concentrate known internationally as yellowcake). A site visit was carried out to the Roca Honda Project on October 19, 2021, and the Mill on November 11, 2021.
The Roca Honda Mine has a long history of exploration and development with a number of owners since its discovery in the mid-1960s by Kerr-McGee Oil Industries (Kerr-McGee). Ownership has since passed from Kerr-McGee, its subsidiaries, and successor (Rio Algom) to Western Nuclear Corporation (Western Nuclear) - Section 16 only, U.S. Conoco Inc. (Conoco) - Section 11 only, Strathmore Resources (Strathmore), and Roca Honda Resources (RHR). Since May 2016, EFR has had a 100% interest in the Mine. The White Mesa uranium/vanadium mill was developed in the late 1970s by Energy Fuels Nuclear, Inc. (EFNI) as a processing option for the many small mines that are located in the Colorado Plateau region. After approximately two and a half years, the Mill ceased ore processing operations altogether due to low uranium prices. Since 1984, majority ownership interest has alternated between EFNI, Union Carbide Corporation, and Denison Mines Corporation (Denison, previously International Uranium Corporation). Since August 2012, EFR has controlled 100% of the Mill's assets and liabilities.
It is anticipated the Mine will be developed as an underground operation with an expected 11year mine life. The mining rate is nominally 400,000 short tons (ton) of mill feed per year, which will be trucked 272 mi to the Mill and produce 28 million pounds (Mlb) of U3O8 (2.5 Mlb of U3O8 annually) for delivery to end-users.
1.1.1 Conclusions
The SLR QPs offer the following conclusions by area.
1.1.1.1 Geology and Mineral Resources
• The Roca Honda Mine is a significant high grade uranium deposit.
• Drilling to date has intersected localized, high-grade mineralized zones contained within five sandstone units of the Westwater Canyon Member of the Morrison Formation.
• The sampling, sample preparation, and sample analysis programs are appropriate and to industry standards for the style of mineralization.
• Although continuity of mineralization is variable, drilling to date confirms that local continuity exists within individual sandstone units.
• No significant discrepancies were identified with the survey location, lithology, and electric and gamma log interpretations data in historical holes.
• No significant discrepancies were identified with the lithology and electric and gamma log data interpretations in RHR holes.
• Descriptions of recent drilling programs, logging, and sampling procedures have been well documented by RHR, with no significant discrepancies identified.
• There is a low risk of depletion of chemical uranium compared to radiometrically determined uranium in the Roca Honda deposit.
• The sample security, analytical procedures, and QA/QC procedures used by EFR meet industry best practices and are adequate to estimate Mineral Resources.
• The resource database is valid and suitable for Mineral Resource estimation under S-K 1300.
• The assumptions, parameters, and methodology used for the Roca Honda Mineral Resource estimate is appropriate for the style of mineralization and mining methods
• The SLR QP is not aware of any environmental, permitting, legal, title, taxation, socioeconomic, marketing, political, or other relevant factors that could materially affect the current resource estimate.
1.1.1.2 Mining
• The proposed Mine is currently in the planning and permitting stages.
• The mineralization is relatively flat-lying and will be mined with a combination of step room-and-pillar (SRP) and drift-and-fill (DF) extraction methods.
• In the development of the Mineral Resource estimate for this PEA, the SLR QP used a diluted cut-off grade of 0.110% U3O8, a minimum mining thickness of six feet, and the historical mining recovery of 85% for the SRP mining method and 90% recovery for the DF mining method.
• The PEA is based on mining a total of 4.02 million tons of mineralized material, at a grade of 0.36% U3O8, containing 28.994 Mlb of U3O8.
• The Mine will be accessed from two shafts, one located in Section 16, and the other located in Section 17. The shaft on Section 17 has been partially developed.
• Mining is partially dependent upon the use of a suitable cemented backfill. Test work to demonstrate that a suitable backfill will be generated before and during the mine development period needs to be completed.
1.1.1.3 Hydrogeology
• The 2016 groundwater model results demonstrate that, over the projected 11 year mine life, the average annual inflow rates of all the mine workings will range from approximately 2,170 gpm to approximately 5,920 gpm with an average of nearly 4,700 gpm. Steinhaus (2014) has estimated the median flow rate extracted from the Wastewater Canyon Formation near the proposed Mine to range from 9 m3/min (2,380 gpm) to 19 m3/min (5,020 gpm) using an analytical model (Theis equation's Copper Jacob straight-line approximation method).
• The permit granted by the New Mexico State Engineer's office to RHR in 2012 for Sections 16, 10, and 9 allows dewatering at a rate of 4,500 gpm. This permit does not include Section 17.
• Dewatering from the underground mine will cause declines (depressurizing) within the confined aquifer systems of the Westwater Canyon Member (Westwater) of the Morrison Formation, where the mine workings will be developed. The New Mexico Office of the State Engineer determined that the dewatering of the Westwater Canyon Member would impact some domestic wells (RPA, 2015). The maximum drawdown of 10 ft in the Gallup Sandstone is not expected to extend past site boundaries. A 10 ft drawdown in the Dakota Sandstone may occur within a 2,000 ft radius around the shaft. Aquifers overlying and/or underlying the Westwater may be affected insignificantly due to confining units that separate the aquifers. The groundwater flow model simulated that the impact of depressurizing on area streams would be negligible (RPA, 2015).
• Per the court settlement reached between Pueblo of Acoma and RHR, the treated mine water will be piped to the community of Milan to assist in recharging the Rio San Jose. The parties acknowledge that up to 430 gpm may be used for mining operations and retained in the Rio San Jose Basin. The water produced from depressurizing activities will be treated to state and federal water discharge standards before delivering to users in the Rio San Jose Basin through the pipeline. An influx of this quantity of water into the overlying soil/alluvium found in the irrigated area will likely raise the water table; however, no adverse impact on the water quality of the underlying alluvial Westwater Canyon Member of the Morrison Formation aquifer is expected (NM-MEJDC, 2015).
• Because Mine water will be piped to Milan, treated, and used for aquifer recharge, local shallow aquifers will not be affected. Such aquifers that could otherwise be vulnerable to potential accidental impacts from facility activity or discharged water, include the alluvium, the Point Lookout Sandstone, and the Dalton Sandstone Member of the Crevasse Canyon Formation.
1.1.1.4 Mineral Processing
• The Mill has been in operation since 1981 and is equipped with the required equipment using a proven process for the production of uranium oxide (U3O8) product, called "yellowcake". In addition, although it is not part of the production schedule in this Technical Report, the Mill also has the capacity to produce vanadium pentoxide (V2O5).
• Mill operations can receive run-of-mine (ROM) material from the Roca Honda Mine and various other mines. Material will be dumped from trucks on an ore pad at the Mill and stockpiled by type to be blended as needed. Material will be weighed, sampled, and probed for uranium grade. The ore pad area has an approximate capacity of 450,000 tons.
• The Mill utilizes agitated hot acid leach and solvent extraction to recover uranium. Historical metallurgical tests and Mill production records on similar mineralized material confirm this processing method will recover 95% of the contained uranium.
• The Mill is currently on a reduced operating schedule processing materials as they become available.
1.1.1.5 Infrastructure
• The Roca Honda Mine and White Mesa Mill are in historically important, uranium-producing regions of central New Mexico and southeastern Utah. All the regional infrastructure necessary to mine and process commercial quantities of U3O8 is in place.
• EFR has been operating the White Mesa tailings cells since 1981, which is currently operating under the requirements of the Utah Department of Environmental Quality Radioactive Materials License (RML).
1.1.1.6 Environment
• Extensive baseline studies have been completed for the Roca Honda Mine site area.
• Rock characterization studies indicate that waste rock from the Mine will not be acid generating.
• The Draft Environmental Impact Statement (DEIS) for the Mine was published by the U.S. Forest Service (USFS) in February 2013. A Supplement to the DEIS is expected to be completed in late 2022 or early 2023 with an expected RoD and Final EIS anticipated in 2023. A mine permit is expected to be issued following the RoD and Final EIS.
• Environmental considerations are typical of underground mining and processing facilities and are being addressed in a manner that is reasonable and appropriate for the stage of the Project.
• All required permits for the White Mesa Mill to operate are in place.
• There are no violations or regulatory matters of any significance or that are not being addressed under normal regulatory procedures.
• The EFR QP is not aware of any environmental, permitting, legal, title, taxation, socioeconomic, marketing, political, or other relevant factors that could materially affect the current resource estimate.
1.1.2 Recommendations
The SLR QPs offer the following recommendations by area:
1.1.2.1 Geology and Mineral Resources
The SLR QP makes the following recommendations regarding advancing the Project forward in a non-phased and independent approach. The proposed work (Table 1-1) would be completed during the four years of preproduction, followed by a final investment decision from Energy Fuels.
Table 1-1: Roca Honda Four-Year Estimated Budget
Energy Fuels Inc. - Roca Honda Project
Item | Cost (US$) |
Drilling to increase measured and indicated resources (208 Holes) | $7,930,000 |
Geophysical Logging and Assay | $218,000 |
Pre-Feasibility Study | $300,000 |
Total | $8,448,000 |
In addition, the SLR QPs recommend the following which are independent of the proposed budget:
1. Although there is a relatively low risk in assuming that density of mineralized zones is similar to that reported in mining operations east and west of the Roca Honda property, conduct additional density determinations, particularly in the mineralized zones, to confirm and support future resource estimates.
2. Although there is a low risk of depletion of chemical uranium compared to radiometrically determined uranium in the Roca Honda mineralization, complete additional sampling and analyses to supplement results of the limited disequilibrium testing to date.
3. Modify the sample analysis QA/QC protocol to include the regular submission of blanks and standards for future drill programs.
4. Prepare fault modeling once additional data have been obtained to support future mine design work.
5. Digitize historical drilling logs for Sections 9, 10, and 16 at 0.5 ft intervals, similar to the work completed on Section 17 for any future Mineral Resource estimates.
6. Complete additional confirmation drilling at the earliest opportunity to confirm historical drillhole data on all zones.
7. Use a secondary alternative estimation method (ID2, ID3, or Ordinary Kriging) as an additional check for the block model validation.
1.1.2.2 Mining and Mineral Reserves
1. Implement a program of additional sampling and laboratory testing concurrently with the definition drilling program to support the geotechnical designs which are based on a limited number of core samples. Boreholes should be located on the centerline of the various proposed ventilation shafts. The cores from these holes will define the different lithologies to be encountered and provide samples for rock strength testing and other needed geotechnical design information. The geotechnical study on the proposed Section 16 shaft core hole was completed in 2012. More detailed geotechnical designs and cost estimates for shaft construction should be completed.
2. Continue to evaluate the feasibility of starting access to the mine operations in Section 17 by way of the existing 1,478 ft deep (14 ft diameter) shaft.
3. Investigate more thoroughly the applicability of using roadheaders, and other selective mining methods that may reduce dilution for development and stope mining. This will reduce the tonnage and increase the grade of mineralized material shipped and processed at the Mill.
1.1.2.3 Hydrogeology
1. Consistent with state and federal regulations requirements, implement environmental monitoring and analysis programs to collect water level and water quality data when the mine site becomes fully operational.
2. Update on an annual basis the numerical groundwater model based on mine inflows and drawdowns in monitoring wells.
3. Expand the well distribution to confirm the predicted cone of depression.
4. Develop specific plans for future monitoring of springs, both flow and quality, similar to previous monitoring programs completed on site.
1.1.2.4 Mineral Processing
1. Continue the White Mesa Mill intermittent operations with maintenance program.
2. Evaluate historical operating data to determine possible flowsheet improvements or modifications to improve the mill production rate/economics and make these changes before commencing production.
1.2 Economic Analysis
An economic analysis was performed using the cost estimates presented in this Technical Report. It is important to note that, unlike Mineral Reserves, Mineral Resources do not have demonstrated economic viability. The PEA is preliminary in nature, and it includes Inferred Mineral Resources that are considered too speculative geologically to have modifying factors applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that this economic assessment will be realized.
The Roca Honda base case cash flow is based on Measured, Indicated, and Inferred Mineral Resources (the latter being 45% of the total). An alternative case with only Measured and Indicated Mineral Resources is also presented in this Technical Report.
1.2.1 Base Case (Measured, Indicated, and Inferred Mineral Resources)
1.2.1.1 Economic Criteria
An after-tax cash flow projection for the base case has been generated from the life-of-mine (LOM) schedule and capital and operating cost estimates in this Technical Report, and is summarized in the Cash Flow Analysis (Section 19.2). A summary of the key criteria is provided below.
1.2.1.1.1 Revenue
1.2.1.1.2 Capital and Operating Costs
1.2.1.1.3 Royalties and Severance Taxes
New Mexico mining and private royalties on the value of special minerals extracted were applied as shown below:
1.2.1.1.4 Income Taxes
The economic analysis includes the following assumptions for corporate income taxes (CIT):
1.2.1.2 Cash Flow Analysis
Table 1-2 presents a summary of the Roca Honda Project base case economics at a U3O8 price of $65.00/lb and a production schedule that includes 45% Inferred Mineral Resources and 55% combined Measured and Indicated Mineral Resources. It is important to note that, unlike Mineral Reserves, Mineral Resources do not have demonstrated economic viability. The economic analysis for the base case contained in this Technical Report is based, in part, on Inferred Resources, and is preliminary in nature. Inferred Resources are considered too geologically speculative to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no certainty that economic forecasts on which this Preliminary Economic Assessment is based will be realized.
On an after-tax basis, the undiscounted cash flow for the base case totals $253.7 million over the mine life. The after-tax Net Present Value (NPV) at 5% discount rate is $55.9 million and the Internal Rate of Return (IRR) is 7.6%, with simple payback (PB) from start of commercial production (CP) occurring in 8.1 years.
Table 1-2: Base Case After-Tax Cash Flow Summary
Energy Fuels Inc. - Roca Honda Project
The average annual U3O8 sales for the base case during the 11 years of operation is 2.5 Mlb per year at an average All-in Sustaining Cost (AISC) of $39.12/lb U3O8.
1.2.1.3 Sensitivity Analysis
The Project is most sensitive to head grade, uranium price, and recovery, and only less sensitive to operating cost and capital cost. The sensitivities to metallurgical recovery, head grade, pounds of U3O8, and metal price are nearly identical.
1.2.2 Alternate Case (Measured and Indicated Mineral Resources Only)
The SLR QP also completed a high level analysis of a scenario (the alternate case) with a production schedule that included only Measured and Indicated Mineral Resources, i.e., excluding Inferred Mineral Resources, which comprised 45% of the tons in the base case. Using the same mining and processing assumptions and operating cost parameters as the base case, the alternate case production schedule has 1.79 million tons at 0.41% U3O8 generating 14.0 Mlb U3O8 over the same 11 year mine life but at a milling rate of 490 tpd compared to 1,150 tpd in the base case.
As part of the alternate case analysis, it was necessary to scale the base case capital cost estimate (completed for a milling rate of 1,150 tpd) down to the 490 tpd rate in the alternate case. The SLR QP used the 0.6 capital cost rule as follows:
Alternate Case capital cost = $482 M*(490/1,150)^0.6
Thus, the alternate case capital cost estimate at a milling rate of 490 tpd is $289 million, a reduction of $193 million, or 40%, compared to the base case capital cost estimate.
Table 1-3 presents a summary of the Roca Honda alternate case economics at an U3O8 price of $65.00/lb. On a pre-tax basis, the undiscounted cash flow totals $170 million over the mine life. The pre-tax NPV at a 5% discount rate is $46.0 million with pre-tax IRR of 8.6%. On an after-tax basis, the undiscounted cash flow totals $130 million over the mine life. The after-tax NPV at 5% discount rate is $22.0 million with after-tax IRR of 6.8%.
Table 1-3: Alternate Case After-Tax Cash Flow Summary
Energy Fuels Inc. - Roca Honda Project
Item | Unit | Value |
After-tax NPV @ 5% | US$ M | 22.0 |
After-tax NPV @ 8% | US$ M | (12.0) |
After-tax NPV @ 12% | US$ M | (37.7) |
After-tax IRR | % | 6.8% |
After-tax Undiscounted PB from Start of CP | Years | 8.5 |
The average annual U3O8 sales for the alternate case during the 11 years of operation are 1.3 Mlb per year at an average AISC of $35.07/lb U3O8
The after-tax cash flow sensitivities for the alternate case are similar in magnitude to the base case with the Project being most sensitive to head grade, uranium price, and recovery, and only slightly less sensitive to operating cost and capital cost at a AACE International Class 4 accuracy level.
1.3 Technical Summary
1.3.1 Property Description and Location
The Roca Honda Project is located in McKinley County, in Central New Mexico, USA, in the Ambrosia Lake subdistrict, immediately northeast of the city of Grants, New Mexico. The geographic coordinates for the approximate center of the Project are located at latitude 35°22'4.23" N and longitude 107°41'56.62".. The White Mesa Mill is located in San Juan County, in southeastern Utah, USA, immediately south of the town of Blanding, Utah. The Mill is located at latitude 37°32'10.49" N and longitude 109°30'11.94" W. The Project will have the capacity to produce approximately 2.5 Mlb of U3O8 annually.
EFR owns 100% interest in the Project comprising of Roca Honda project land holdings totaling 4,440 acres and White Mesa Mill land holdings totalling 5,389 acres.
The Mine is located approximately three miles northwest of the community of San Mateo, New Mexico, in McKinley County, and approximately 22 miles by road northeast of Grants, New Mexico, via State Highway NM 605. The Mill is located approximately six miles south of Blanding, Utah, along US Highway 191 and 290 miles by highway northwest of the Mine.
Climate in the Mine area may be classified as arid to semi-arid continental, characterized by cool, dry winters, and warm, dry summers. Grants has an annual average temperature of 50°F, with an average summer high of 87°F and low of 52°F, and average winter high of 47°F and low of 18°F. In the Mill area, the climate of southeastern Utah is classified as dry to arid continental. Although varying somewhat with elevation and terrain, the climate in the vicinity of the Mill can be considered as semi-arid and typified by warm summers and cold winters. Blanding has an annual average temperature of 50°F. July is usually the warmest month with an average high of 91°F and low of 61°F, and January is usually the coldest month with an average high of 42°F and low of 22°F.
The Mine would employ 257 personnel who would be based around the town of Grants, Cibola County, New Mexico, which is the largest community near the Mine area. As of the 2020 census, Cibola County has a population of 27,172 people of which 8,866 people reside in Grants. Additionally, the city of Albuquerque, New Mexico is located approximately 100 miles east of the Mine area and could be a source of most materials and technical support needed for the Project.
To process mill feed from the Mine for the 11 year mine life, the Mill would employ 75 personnel who would be mostly based in the town of Blanding, San Juan County, Utah, and environs.
The Mine and Mill are located in historically important uranium-producing regions of central New Mexico and southeastern Utah, respectively. All the infrastructure necessary to mine and process significant commercial quantities of U3O8 currently exists. Infrastructure items include high voltage electrical supplies, water sources, paved roads and highways for transporting ROM mill feed crude ore and finished products, and accommodations for employees. Local and State infrastructure also includes hospitals, schools, airports, equipment suppliers, fuel suppliers, and communication systems.
The Mine is located at elevations ranging from 7,100 ft above sea level (ft ASL) to 7,680 ft ASL with easterly and southerly dipping slopes. The Mine area is sparsely populated, rural, and largely undeveloped. The predominant land uses include low-density livestock grazing, hay cultivation, and recreational activities such as hiking, sightseeing, picnicking, and seasonal hunting. Vegetation in the Mine area consists mainly of grasses, pinyon pine, and juniper trees.
Material mined at Roca Honda will be trucked 272 mi to EFR's White Mesa Mill in Blanding, Utah for processing. The Mill is located at elevations ranging from about 5,550 ft ASL to 5,650 ft ASL. It is located near the center of White Mesa, one of the many finger-like north-south trending mesas that make up the Great Sage Plain located in Utah. The nearly flat upland surface of White Mesa is underlain by resistant sandstone caprock, which forms steep prominent cliffs separating the upland from deeply entrenched intermittent stream courses on the east, south and west.
1.3.2 Land Tenure
EFR owns 100% interest in the Project comprising of Roca Honda project land holdings totaling 4,440 acres and White Mesa Mill land holdings totalling 5,389 acres.
1.3.3 Existing Infrastructure
The Roca Honda project and White Mesa Mill are in historically important, uranium-producing regions of central New Mexico and southeastern Utah. All the infrastructure necessary to mine and process significant commercial quantities of U3O8 is in place.
Infrastructure items include:
Local and State infrastructure such as hospitals, schools, airports, equipment suppliers, fuel suppliers, and communication systems
1.3.4 History
The Roca Honda Mine has a long history of exploration and development with a number of owners. Kerr-McGee Oil Industries (Kerr-McGee), its subsidiaries, and successor (Rio Algom) completed significant work in from the mid-1960s until 1982 succeeded by Western Nuclear, Conoco, and Strathmore. Roca Honda Resources (RHR) was established on July 26, 2007, when Strathmore (60%) formed a limited liability company with Sumitomo Corporation (40%) and transferred the property to RHR. In August 2013, EFR acquired a 100% interest in Strathmore, and assumed Strathmore's 60% ownership interest in RHR. In June 2015, EFR acquired a 100% interest in the mineral properties controlled by Uranium Resource Incorporated (URI). In May 2016, EFR completed the purchase of Sumitomo Corporation's 40% interest in RHR and, since then, has a 100% interest in the Property.
Material mined at Roca Honda will be trucked to EFR's White Mesa Mill in Blanding, Utah for processing. The White Mesa uranium/vanadium mill was developed in the late 1970s by Energy Fuels Nuclear, Inc. (EFNI) as a processing option for the many small mines that are located in the Colorado Plateau region. After approximately two and one-half years, the Mill ceased ore processing operations altogether due to low uranium prices. Since 1984 the Mill has run on selected campaign basis, with majority ownership interest alternating between EFNI, Union Carbide Corporation, and Denison. Since August 2012, EFR has controlled 100% of the Mill's assets and liabilities.
1.3.5 Geology and Mineralization
More than 340 Mlb of U3O8 have been produced from the Grants uranium deposits in New Mexico between 1948 and 2002. The Grants uranium district is one of the largest uranium provinces in the world. The Grants uranium district extends from east of Laguna to west of Gallup in the San Juan Basin of New Mexico. Three types of sandstone uranium deposits are recognized: tabular, redistributed (roll-front, fault-related), and remnant-primary.
Rocks exposed in the Ambrosia Lake subdistrict of the Grants uranium district, which includes the Project area, include marine and non-marine sediments of Late Cretaceous age, unconformably overlying the uranium-bearing Upper Jurassic Morrison Formation. The uppermost sequence of conformable strata consists of the Mesaverde Group, Mancos Shale, and Dakota Sandstone. All rocks that outcrop at the Project area are of Late Cretaceous age; these rocks and the Quaternary Period deposits that cover them in some places.
The uranium mineralization found in the Mine area is contained within five sandstone units of the Westwater Canyon Member. Zones of mineralization vary from approximately one foot to 30 ft thick, 100 ft to 600 ft wide, and 200 ft to 3,000 ft in length in elongated pods. Uranium mineralization in the Mine area west to east, and northwest to southeast depending on general area within the Mine area, consistent with trends of the fluvial sedimentary structures of the Westwater Canyon Member, and the general trend of mineralization across the Ambrosia Lake subdistrict.
Uranium mineralization in the Mine area is believed to be predominantly primary ("trend") mineralization, with some secondary mineralization due to oxidation and mobilization of uranium near permeable geologic structures. Uranium mineralization consists of dark organic-uranium oxide complexes. The uranium in the Mine area is dark grey to black in color and is found between depths of approximately 1,380 ft to 2,600 ft below the surface.
Primary mineralization pre-dates the formation of the Laramide aged structures in the Mine area, with a small amount of vertical offset of mineralization present across the local faults. There is a possibility of some redistribution and stack ore along faults, however, it appears that most of the Roca Honda mineralization is primary. Paleochannels that contain quartz-rich, arkosic, fluvial sandstones are the primary mineralization control associated with this trend.
1.3.6 Exploration Status
No exploration or drilling work has been conducted at the Mine since EFR acquired it in August 2013.
EFR is planning a large infill-drilling program of approximately 200 surface drillholes prior to any mining operations taking place at the Mine. Core recovered from this program will be used for assay checks of geophysical probes, disequilibrium and metallurgical studies, and geotechnical and hydrologic studies to refine mine plans. This program is being permitted as part of the overall mine permitting process and no timeframe for this drilling has been set.
1.3.7 Mineral Resources
Mineral Resources have been classified in accordance with the definitions for Mineral Resources in S-K 1300, which are consistent with Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Resources and Mineral Reserves dated May 10, 2014 (CIM, 2014) definitions which are incorporated by reference in NI 43-101. The Mineral Resource estimate is summarized in Table 1-4.
Table 1-4: Attributable Mineral Resource Estimate for Roca Honda - Effective Date
December 31, 2021
Energy Fuels Inc. - Roca Honda Project
Classification | Area | Tonnage (000 ton) |
Grade (% U3O8) |
Contained Metal (000 lb U3O8) |
Recovery (%) |
Measured | Sec. 9, 10 &16 | 208 | 0.477 | 1,984 | 95 |
Sec. 17 | - | - | - | ||
Indicated | Sec. 9, 10 &16 | 1,303 | 0.483 | 12,580 | 95 |
Sec. 17 | 336 | 0.454 | 3,058 | 95 | |
Total Measured + Indicated | Sec. 9, 10, 16 & 17 | 1,847 | 0.477 | 17,622 | 95 |
Inferred | Sec. 9, 10 &16 | 1,198 | 0.468 | 11,206 | 95 |
Sec. 17 | 315 | 0.419 | 2,636 | 95 | |
Total Inferred | Sec. 9, 10, 16 & 17 | 1,513 | 0.457 | 13,842 | 95 |
Notes:
1. SEC S-K definitions were followed for all Mineral Resource categories. These definitions are also consistent with CIM (2014) definitions in NI 43-101.
2. Mineral Resources are estimated at a U3O8 cut-off grade of 0.19% U3O8.
3. A minimum mining thickness of six feet was used, along with $241/ton operating costs, $65/lb U3O8 price, and 95% recovery.
4. Bulk density is 0.067 ton/ft3 (15.0 ft3/ton or 2.14 t/m3).
5. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
6. Mineral Resources are 100% attributable to EFR and are in situ.
7. Numbers may not add due to rounding.
The EFR QP is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could materially affect the Mineral Resource estimate.
1.3.8 Mineral Reserves
There are no current Mineral Reserves at the Roca Honda Project.
1.3.9 Mining Method
This Technical Report includes 4.02 million tons of mineralized material at a diluted grade of 0.36% U3O8 containing 28.994 Mlb U3O8. To arrive at this estimate, the SLR QP used a diluted cut-off grade of 0.110% U3O8, a minimum mining thickness of six feet, and the historical mining recovery of 85% for the SRP mining method and 90% recovery for the DF mining method. The SLR QP notes that Inferred Resources are considered too geologically speculative to have mining and economic considerations applied to them to be categorized as Mineral Reserves.
Dilution is estimated to average 17.1% at a grade of 0.030% U3O8. This includes both low grade and waste material. Dilution estimates are based on one foot of overbreak in the roof and six inches in the floor of all single lift stopes. In the case of multi-lift stopes, the initial cuts include only six inches of dilution from the floor of the drift. The final cut includes both floor dilution and roof dilution. Average minimum stope height is six feet.
The mineralization is relatively flat-lying and will be mined using both SRP stoping in the lower grade zones and DF stoping in the higher grade zones. The transition grade was calculated at 0.265% U3O8. Stopes with average diluted grades of less than 0.265% U3O8 will be mined using the SRP method. Stopes with average diluted grades higher than 0.265% U3O8 will be mined using the DF method. With the SRP method, permanent pillars will be left in a pre-designed pattern and low-strength cemented rockfill (CRF) will be placed in mined-out areas as backfill. For the DF method, a high-strength CRF will be placed in the mined-out areas. The mineralized zones range in thickness from 6 ft to 21 ft. Zones in the 6 ft to 12 ft thickness range will be mined in one pass. Mineralized zones exceeding 12 ft in thickness will be mined in two sequential overhand cuts with each cut being approximately one half of the overall zone thickness.
The LOM schedule is based on initiating development from the production shafts located in Section 16 and Section 17. The mining areas in the Southwest mining area will be connected to the Northeast mining area via a 3,600 ft twin decline. Primary development connecting the shaft to the various mineralized zones (including the twin decline) will be driven 10 ft wide by 12 ft high to allow for infrastructure. Stope access development connecting the primary development to the individual stopes will be driven 10 ft wide by 10 ft high.
The mining sequence in each area is dependent upon the development schedule, but in general, prioritizes the mining of the largest and highest grade zones in each area of the mine. There is also a requirement to sequence the mining of any stacked zones from top down.
Stope mining begins approximately four years after the start of construction and the operating mine life spans eleven years. The production rate averages approximately 1,030 stpd during the time that mining occurs in Sections 9 and 16 only, increasing to 1,200 stpd when mining in Sections 9, 16, and 10 simultaneously and dropping to 1,020 stpd when mining from Section 10 only.
Depressurization of the three main aquifers in the Project area will be accomplished using depressurization wells and underground long holes that supply water to underground pumping stations that ultimately feed water to the Section 16 shaft sump pumps, and three discharge pump stations located in the shaft. It has been estimated that the mine will discharge a nominal 2,500 gpm of water at temperatures between 90°F and 95°F.
The deposit will be developed and mined based on single-pass ventilation using a series of separate and independent intake and exhaust networks. The design requires a total of 12 ventilation raises (five in Section 17, three in Section 16, two in Section 9, and three in Section 10). Two of the ventilation raises, one in Section 16 and one in Section 10, will be equipped with emergency evacuation hoisting equipment.
1.3.10 Mineral Processing
The White Mesa Mill is currently on a reduced operating schedule processing materials as they become available. The Mill is in the process of processing Rare Earth materials in part of the circuit, functioning essentially as a pilot plant. Owing to the work, the facility is sufficiently staffed to initiate production relatively quickly.
The Mill uses a Semi Autogenous (SAG) mill operating in closed circuit with vibratory screens for comminution. Mill feed is fed to the communication circuit via front end loader. Nameplate production rate for the circuit is 150 short tons per hour (stph).
The Mill uses an atmospheric hot acid leach followed by counter current decantation (CCD) and a clarifier stage to remove suspended solids. Clarified pregnant leach solution (PLS) reports to the solvent extraction (SX) circuit where uranium and vanadium are extracted from the aqueous solution to an organic phase. Salt and sulfuric acid are then used to strip the uranium from the organic phase.
After stripping of the uranium from the organic in SX, uranium is precipitated with anhydrous ammonia, dissolved, and re-precipitated to improve product quality. The resulting precipitate is then washed and dewatered using centrifuges to produce a final U3O8 product called "yellowcake". The yellowcake is dried in a multiple hearth dryer and packaged in drums weighing approximately 800 lb to 1,000 lb for shipping to uranium converters.
Tailings from the acid leach plant are stored in permitted 40 acre tailing cells located in the southwest and southern portion of the mill site. Spent process solutions are stored in the evaporation cells for reuse with excess solutions allowed to evaporate.
1.3.11 Market Studies
The majority of uranium is traded via long-term supply contracts, negotiated privately without disclosing prices and terms. Spot prices are generally driven by current inventories and speculative short-term buying. Monthly long-term industry average uranium prices based on the month-end prices are published by Ux Consulting, LLC, and Trade Tech, LLC. An accepted mining industry practice is to use "Consensus Forecast Prices" obtained by collating commodity price forecasts from credible sources, with the long-term forecast price used for estimating Mineral Reserves, and 10% to 20% higher prices used for estimating Mineral Resources.
For Mineral Resource estimation and cash flow projections, EFR selected a U3O8 price of $65.00/lb, on a Cost, Insurance, and Freight (CIF) basis to customer facility, based on independent forecasts showing long-term prices of approximately $55.00/lb. The SLR QP considers the selected price to be reasonable and consistent with industry practice.
1.3.12 Environmental, Permitting and Social Considerations
A number of permits are required for the operation of Roca Honda Mine to be issued by local, state, and federal agencies including:
Roca Honda is in an advanced stage of permitting and EFR is anticipating a RoD in 2023 which will be followed by the issuance of other state and federal permits.
The White Mesa Mill is permitted to operate and does so on an intermittent basis when sufficient feed is obtained and market factors warrant.
There are no violations or regulatory matters of any significance or that are not being addressed under normal regulatory procedures.
1.3.13 Capital and Operating Cost Estimates
The base case capital cost estimate summarized in Table 1-5 covers the life of the Project and includes initial capital costs, expansion capital, and end-of-mine-life recovery of working capital. The Project capital costs are based on 2015 US dollars, based on the previous technical report authored by SLR's predecessor RPA. For this Technical Report, the SLR QP escalated these costs to Q1 2021 US dollar basis using subscription-based Mining Cost Services (MCS) cost indexes (Infomine, 2021). In the SLR QP's opinion, inflationary indices since Q1 2021 are too volatile to apply against a long lived asset. The escalation effect during the five year period (2016 to 2021) is estimated to be 16.3% or $67.4 million over 2015 estimates.
Table 1-5: Capital Cost Estimate
Energy Fuels Inc. - Roca Honda Project
Capital Cost Area | Units | Project Capital Totals |
Preproduction (Years -4 to 1) |
Production (Years 2 to 11) |
Total Development Capital | US$ (000) | 414,038 | 316,373 | 97,665 |
Working Capital | US$ (000) | - | 16,622 | (16,622) |
Exploration | US$ (000) | 2,926 | 2,926 | - |
Sustaining Capital | US$ (000) | 61,403 | - | 61,403 |
Closure & Reclamation | US$ (000) | 3,952 | - | 3,952 |
Total Capital Costs | US$ (000) | 482,319 | 335,921 | 146,399 |
The average LOM operating costs and unit rates are shown in Table 1-6. The Project operating costs are based on 2015 US dollars, based on the previous technical report authored by SLR's predecessor RPA. For this Technical Report, the SLR QP escalated these costs to Q1 2021 US dollar basis using MCS cost indexes. The escalation effect during this five year period (2016 to 2021) is estimated to be 10.3% or $89.0 million for an increase of $21.77/ton milled over 2015 estimates.
Table 1-6: Operating Cost Estimate
Energy Fuels Inc. - Roca Honda Project
Operating Cost Summary | US$ (000) | $/ton milled |
Mining | 445,896 | 110.91 |
Mill Feed Transport | 207,660 | 51.65 |
Processing | 250,642 | 62.35 |
Surface Facility Maintenance | 5,353 | 1.33 |
G & A | 36,327 | 9.04 |
Total Site Operating Costs | 945,877 | 235.28 |
Product Transport to Market | 9,401 | 2.34 |
Total Production Costs | 955,278 | 237.63 |
Royalties | 25,993 | 6.47 |
Severance Taxes | 30,877 | 7.68 |
Total Operating Costs | 1,012,148 | 251.78 |
2.0 INTRODUCTION
SLR International Corporation (SLR) was retained by Energy Fuels Resources (USA) Inc. (EFR) to prepare a Technical Report on Roca Honda Project (Roca Honda or the Project), located in Central New Mexico, USA, for EFR's parent company, Energy Fuels Inc. EFR owns 100% of the Project.
This Technical Report satisfies the requirements of Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101) and the United States Securities and Exchange Commission's (SEC) Modernized Property Disclosure Requirements for Mining Registrants as described in Subpart 229.1300 of Regulation S-K, Disclosure by Registrants Engaged in Mining Operations (S-K 1300) and Item 601 (b)(96) Technical Report Summary. This Technical Report is considered by SLR to meet the requirements of a Preliminary Economic Assessment (PEA) as defined in Canadian NI 43-101 regulations. The term PEA is used throughout this Technical Report and is consistent with an Initial Assessment (IA) under S-K 1300.
EFR's parent company, Energy Fuels Inc., is incorporated in Ontario, Canada. EFR is a US-based uranium and vanadium exploration and mine development company with projects located in the states of Colorado, Utah, Arizona, Wyoming, Texas, and New Mexico. EFR is listed on the NYSE American Stock Exchange (symbol: UUUU) and the Toronto Stock Exchange (symbol: EFR).
The Project includes the proposed Roca Honda Mine (the Mine) near the city of Grants, New Mexico, and the existing White Mesa Mill (the Mill) near the city of Blanding, Utah. The Project is currently in the planning and permitting stages and the Mill is on a reduced operating schedule while processing materials as they become available. When in full operation, the Project is expected to produce uranium concentrate known internationally as yellowcake.
The Roca Honda area has a long history of exploration and development with a number of owners since its first discovery in the mid-1960s by Kerr-McGee Oil Industries (Kerr-McGee). Ownership has since passed from Kerr-McGee, its subsidiaries, and successor (Rio Algom Mining LLC) to Western Nuclear Corporation (Western Nuclear) -Section 16 only, U.S. Conoco Inc. (Conoco) -Section 11 only, Strathmore Resources (Strathmore), and Roca Honda Resources (RHR). Since May 2016, EFR has had a 100% interest in the Mine. The White Mesa uranium/vanadium mill was developed in the late 1970s by Energy Fuels Nuclear, Inc. (EFNI) as a processing option for the many small mines that are located in the Colorado Plateau region. After approximately two and a half years, the Mill ceased ore processing operations altogether due to low uranium prices. Since 1984, majority ownership interest has alternated between EFNI, Union Carbide Corporation, and Denison Mines Corporation (Denison, previously International Uranium Corporation). Since August 2012, EFR has controlled 100% of the Mill's assets and liabilities.
The proposed Roca Honda Mine underground operation is expected to have a mine life of 11 years with a mining rate of approximately 400 thousand tons of mill feed per year, which will be trucked 272 mi to the Mill which would produce 28 million pounds (Mlb) of U3O8 (2.5 Mlb of U3O8 annually), for delivery to end-users.
The economic analysis contained in this Technical Report is based, in part, on Inferred Resources, and is preliminary in nature. Inferred Resources are considered too geologically speculative to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no certainty that economic forecasts on which this Preliminary Economic Assessment is based will be realized.
2.1 Sources of Information
Sources of information and data contained in this Technical Report or used in its preparation are from publicly available sources in addition to private information owned by EFR, including that of past property owners.
The QPs, Messers. Malensek, Mathisen, and Kapostasy visited Roca Honda on October 19, 2021, and inspected various parts of the property, however, did not inspect the existing Section 17 infrastructure which was inaccessible at the time of the visit as surface access agreements are still being negotiated by EFR and current landowner. The SLR QPs, Messers. Malensek and Woods visited the Mill on November 11, 2021, and toured the operational areas, mill offices, and tailings storage facility (TSF). The EFR QP Mr. Kapostasy last visited the White Mesa Mill on September 16 to 17, 2021.
Table 2-1 presents a summary of the QP responsibilities for this Technical Report.
Table 2-1: Summary of QP Responsibilities
Energy Fuels Inc. - Roca Honda Project
Qualified Person | Company | Title/Position | Section |
Grant A. Malensek, M.Eng., P. Eng. | SLR | Senior Principal Mining Engineer | 1.2, 1.3.11, 1.3.13, 19, 21, 22, 30 |
Mark B. Mathisen, C.P.G. | SLR | Principal Geologist | 1.1.1.1, 1.1.2.1, 1.3.1, 1.3.2, 1.3.4, 1.3.5, 1.3.6, 1.3.7, 1.3.8, 2, 3, 4.1, 4.2, 4.4, 4.5, 5.1, 5.2, 5.3, 5.4, 5.6, 6, 7, 8, 9.1, 9.2, 10, 11, 12, 14, 15, 23, 24, 25.1, 26.1 |
David M. Robson, P.Eng. MBA | SLR | Principal Mining Engineer | 1.1.1.2, 1.1.2.2, 1.3.9, 16.1 to 16.5, 16.7 to 16.10, 25.2, 26.2 |
Jeffrey L. Woods, MMSA QP | Woods Process Services | Principal Consulting Metallurgist | 1.1.1.4, 1.1.1.5, 1.1.2.4, 1.3.3, 1.3.10, 5.5, 13, 17, 18.1 to 18.8, 18.9.1, 18.10, 18.11, 25.4, 25.5, 26.4 |
Phillip E. Brown, C.P.G., R.P.G. | Consultants in Hydrogeology | Principal Consulting Hydrogeologist | 1.1.1.3, 1.1.2.3, 16.6, 25.3, 26.3 |
Daniel Kapostasy, P.G. | EFR | Director of Technical Services | 1.1.1.6, 1.3.12, 4.3, 18.9.2, 20, 25.6 |
All | - | - | 27 |
During the preparation of this Technical Report, discussions were held with personnel from EFR:
• Gordon Sobering, PE, QP, Senior Mine Engineer
• Dan Kapostasy, P.G., Director of Technical Services
• Timo Groves, PE, Process Engineering, White Mesa Mill
• Steve Snyder, Mill Engineer, White Mesa Mill
• Scott Bakken, P.G., Vice President, Regulatory Affairs
This Technical Report supersedes the previous NI 43-101 Technical Report completed by SLR, as the former Roscoe Postle Associates Inc (RPA), dated October 27, 2016.
The documentation reviewed, and other sources of information, are listed at the end of this Technical Report in Section 27 References.
2.2 List of Abbreviations
The U.S. System for weights and units has been used throughout this Technical Report. Tons are reported in short tons (ton) of 2,000 lb unless otherwise noted. All currency in this Technical Report is US dollars (US$) unless otherwise noted.
Abbreviations and acronyms used in this Technical Report are listed below.
Unit Abbreviation | Definition | Unit Abbreviation | Definition |
μ | micron | L | liter |
a | annum | lb | pound |
A | ampere | m | meter |
bbl | barrels | m3 | meter cubed |
Btu | British thermal units | M | mega (million); molar |
°C | degree Celsius | Ma | one million years |
cm | centimeter | MBtu | thousand British thermal units |
cm3 | centimeter cubed | MCF | million cubic feet |
d | day | MCF/h | million cubic feet per hour |
°F | degree Fahrenheit | mi | mile |
ft ASL | feet above sea level | min | minute |
ft | foot | MPa | megapascal |
ft2 | square foot | mph | miles per hour |
ft3 | cubic foot | MVA | megavolt-amperes |
ft/s | foot per second | MW | megawatt |
g | gram | MWh | megawatt-hour |
G | giga (billion) | ppb | part per billion |
Ga | one billion years | ppm | part per million |
gal | gallon | psia | pound per square inch absolute |
gal/d | gallon per day | psig | pound per square inch gauge |
g/L | gram per liter | rpm | revolutions per minute |
g/y | gallon per year | RL | relative elevation |
gpm | gallons per minute | s | second |
hp | horsepower | ton | short ton |
h | hour | stpa | short ton per year |
Hz | hertz | stpd | short ton per day |
in. | inch | t | metric tonne |
in2 | square inch | US$ | United States dollar |
J | joule | V | volt |
k | kilo (thousand) | W | watt |
kg/m3 | kilogram per cubic meter | wt% | weight percent |
kVA | kilovolt-amperes | WLT | wet long ton |
kW | kilowatt | y | year |
kWh | kilowatt-hour | yd3 | cubic yard |
3.0 RELIANCE ON OTHER EXPERTS
This Technical Report has been prepared by SLR for EFR. The information, conclusions, opinions, and estimates contained herein are based on:
3.1 Reliance on Information Provided by the Registrant
For the purpose of this Technical Report, the SLR QP has relied on ownership information provided by Energy Fuels Resources (USA) Inc. in a legal opinion by Haynes and Boon dated February 15, 2022, entitled Limited Review of Grants Uranium District Properties located in McKinley County, New Mexico (Roca Honda Claims and Section 17 Mineral Estate, Exhibits A through F. The opinion was relied on in Section 4 Property Description and Location and the Summary of this Technical Report. The SLR QP has not researched property title or mineral rights for the Roca Honda Project as it is considered reasonable to rely on EFR's legal counsel who is responsible for maintaining this information.
The SLR QP has relied on EFR for guidance on applicable taxes, royalties, and other government levies or interests, applicable to revenue or income from Roca Honda in the Summary and Section 22. The taxation calculations in the cash flow model presented in this Technical Report were reviewed and approved by Kara. P. Beck, EFR Tax Manager, in an email dated December 14, 2021, and the SLR QP considers it reasonable to rely on EFR's in house tax manager who deals regularly with the applicable taxes.
The Qualified Persons have taken all appropriate steps, in their professional opinion, to ensure that the above information from Energy Fuels Inc. is sound. Except as provided by applicable laws, any use of this Technical Report by any third party is at that party's sole risk.
4.0 PROPERTY DESCRIPTION AND LOCATION
4.1 Location
4.1.1 Roca Honda Mine
The Roca Honda Mine is located approximately three miles northwest of the community of San Mateo, New Mexico, in McKinley County, and approximately 22 miles by road northeast of Grants, New Mexico (Figure 4-1).
The property is in the east part of the Ambrosia Lake subdistrict of the Grants uranium district in northwest New Mexico. The Project comprises nearly all of Sections 5, 6, 8, 9, 10, and a narrow strip of Section 11; the New Mexico State Lease, consisting of Section 16; and the fee mineral in Section 17, all in Township 13 North, Range 8 West, New Mexico Principal Meridian (Figure 4-1).
The geographic coordinates for the approximate center of the Project are located at latitude 35°22'4.23" N and longitude 107°41'56.62" W. All surface data coordinates are NAD 1983 State Plane New Mexico West FIPS 3003 (US feet) system.
4.1.2 White Mesa Mill
The White Mesa Mill is located on 4,816 acres of private land owned by EFR. This land is located in Township 37 South and 38 South, Range 22 East, Salt Lake Principal Meridian. The Mill is located approximately six miles south of Blanding, Utah, along US Highway 191. EFR also holds 253 acres of mill site claims and a 320 acre Utah state lease. No facilities are planned on the claims or leased land, which will be used as a buffer surrounding the operations (Figure 4-2).
Figure 4-3 shows the relative locations of the Roca Honda Mine and the White Mesa Mill, and the proposed haul route for the Roca Honda mineralized material to the Mill. The Mine and the Mill are located approximately 290 road miles apart. Each operation would be considered as a "stand-alone" operation, i.e., each would have its own administration, warehouse, accounting, environmental, and safety staff.
Figure 4-1: Location Map
Figure 4-2: White Mesa Mill Location and Property Map
Figure 4-3: Roca Honda Mine, White Mesa Mill, and Proposed Haul Route Location Map
4.2 Land Tenure
4.2.1 Roca Honda Mine
Since May 27, 2016, the Mine has been held solely by Strathmore Resources (US) Ltd (Strathmore), which is a wholly owned subsidiary of Energy Fuels Inc. Strathmore acquired the initial portion of the property on March 12, 2004, from Rio Algom Mining LLC (Rio Algom), a successor to Kerr-McGee Corporation (Kerr-McGee), which had staked the claims in 1965 and had continuously maintained them. Roca Honda Resources LLC (RHR) was established on July 26, 2007, when Strathmore formed a limited liability company with Sumitomo Corporation of Japan and transferred the property to RHR. Energy Fuels Inc. acquired a 100% interest in Strathmore in August 2013 and assumed Strathmore's 60% ownership interest in RHR. Energy Fuels Inc. acquired the remaining 40% ownership interest in RHR in May 2016 and is now 100% owner of the Mine.
The Mine covers an area of 4,440 acres and includes 63 unpatented lode-mining claims in Sections 9, 10 and 11; 64 unpatented claims in Sections 5 and 6; 36 unpatented claims in Section 8; one adjoining New Mexico State General Mining Lease in Section 16; and the fee mineral interest in all of Section 17 (Figure 4-4). The mining claims also extend onto a 9.4 acre narrow strip of Section 11. The New Mexico State Lease was acquired by David Miller (former Strathmore CEO) on November 30, 2004, and subsequently transferred to Strathmore. Strathmore subsequently relinquished the lease and acquired it again in December 2015 (HG-0133) for a new 15-year term expiring on December 14, 2030. The "Rocca Honda" Claims in Sections 5 and 6 were staked by Miller and Associates in September 2004 and assigned to RHR on August 28, 2013. Strathmore acquired the "Roca Honda" claims in Section 8 and the fee mineral interest in Section 17 on June 26, 2015, from Uranium Resource Incorporated (URI).
Mining claim numbers RH 252, RH 279, RH 306, and RH 333, located in the southern part of Section 10, overlap into the northern part of Section 15, which is privately owned land, therefore, the overlapping portion of these claims is not valid. The Roca Honda property extends only to the Section 15 boundary.
Mining claim numbers RH 325 to RH 333 are located along the eastern boundary of Section 10, extending west across the Section 11 line by approximately 150 ft.
The initial 63 unpatented, contiguous mining claims (the Roca Honda group), covering an area of approximately 1,248.5 acres, are located on Sections 9, 10, and 11, which are federally owned lands within the Cibola National Forest administered by the U.S. Forest Service (USFS). Section 5 is also administered by the USFS while claims in Section 6 are located on U.S. Bureau of Land Management (BLM) land. Section 8 is split estate, the private surface belonging to Fernandez Ranch. Sections 5, 6, 9, 10, and 11 are open to the public, with the land used for a variety of purposes including grazing, mineral extraction, hunting, hiking, and other outdoor recreation activities. All claims are listed in the U.S. BLM Mining Claim Geographic Index Report Mineral and Land Record System (MLRS). The claims covering Section 9, 10, and part of 11 have a location date of June 29 and 30, 1965. The claims in Section 8 have location dates of September 10, 1997. The Roca Honda claims in Sections 5 and 6 were located on September 6, 2004. The latest assessment year shown in MLRS is 2021 and the claims are shown as "Active".
There is a 1% gross revenue, no deduction royalty payable to the original claim holders for the claims on Section 9. There are no royalties associated with the claims on Sections 5, 6, 8, 10, or 11.
All claims, which are renewed annually in September of each year, are in good standing until September 1, 2022 (at which time they will be renewed for the following year as a matter of course). All unpatented mining claims are subject to an annual federal mining claim maintenance fee of $165 per claim payable to the BLM and recording an affidavit and Notice of Intent to hold with the McKinley County Clerk, New Mexico. County recording fees for the claims are approximately $425 per year.
New Mexico General Mining Lease number HG-0133, located on Section 16, covers an area of 638 acres. The mining lease has a primary, secondary, tertiary, and quaternary term, each with annual rentals to be paid in advance. Strathmore first acquired a lease on Section 16 in November 2004 (Lease number HG-0036-002). As there was no provision to extend the lease past 2019 other than by production, Strathmore dropped the lease as its payment came due in December 2015. The New Mexico Land Office held an auction of the lease parcel that same month. Strathmore was the successful bidder, paying a $100,000 bonus. The new lease has a primary term of three years, and the annual rental is $1.00/acre ($640). The secondary term for years 4 and 5 will require a payment of $10/acre each year, and the tertiary term, years 6 through 10, will cost $3.00/acre each year. The lease will have a quaternary term for years 11 through 15 requiring an annual rental of $10.00 per acre plus an escalating advanced royalty of $10.00 per acre per year. By acquiring the new lease, Strathmore may now hold the land until production can begin up to December 14, 2030. At the end of the quaternary term, the lease may be automatically extended if production has begun. The lease stipulates a 5% of gross returns royalty to the State of New Mexico "less actual and reasonable transportation and smelting or reduction costs, up to 50% of the gross returns" for production of uranium, which is designated a "special mineral" in the lease.
The surface of Section 17, also referred to as the Lee Ranch, is leased to Fernandez Company, Ltd. (Fernandez) as rangeland for grazing. Table 4-1 lists the mineral claims covering the Roca Honda Project. Figure 4-4 shows the Roca Honda land holdings.
Table 4-1: List of Claims held by Energy Fuels
Energy Fuels Inc. - Roca Honda Project
Claim Name | ¼ Sec | Sec-Twp-Rng | BLM Serial No | County | Location Date (DD-MM-YY) |
In Good Standing To (DD-MM-YY) |
ROCA HONDA #163 | NW | 9-13N-8W | NM101334915 | McKinley | 29-Jun-65 | 31-Aug-22 |
ROCA HONDA #164 | NW | 9-13N-8W | NM101336426 | McKinley | 29-Jun-65 | 31-Aug-22 |
ROCA HONDA #165 | NW | 9-13N-8W | NM101435023 | McKinley | 29-Jun-65 | 31-Aug-22 |
ROCA HONDA #166 | NW | 9-13N-8W | NM101332645 | McKinley | 29-Jun-65 | 31-Aug-22 |
ROCA HONDA #167 | NW,SW | 9-13N-8W | NM101431944 | McKinley | 29-Jun-65 | 31-Aug-22 |
ROCA HONDA #168 | SW | 9-13N-8W | NM101375805 | McKinley | 29-Jun-65 | 31-Aug-22 |
ROCA HONDA #169 | SW | 9-13N-8W | NM101482787 | McKinley | 29-Jun-65 | 31-Aug-22 |
ROCA HONDA #170 | SW | 9-13N-8W | NM101485222 | McKinley | 29-Jun-65 | 31-Aug-22 |
ROCA HONDA #171 | SW | 9-13N-8W | NM101379368 | McKinley | 29-Jun-65 | 31-Aug-22 |
ROCA HONDA #190 | NE,NW | 9-13N-8W | NM101481302 | McKinley | 29-Jun-65 | 31-Aug-22 |
ROCA HONDA #191 | NE,NW | 9-13N-8W | NM101481597 | McKinley | 29-Jun-65 | 31-Aug-22 |
ROCA HONDA #192 | NE,NW | 9-13N-8W | NM101333452 | McKinley | 29-Jun-65 | 31-Aug-22 |
ROCA HONDA #193 | NE,NW | 9-13N-8W | NM101431602 | McKinley | 29-Jun-65 | 31-Aug-22 |
ROCA HONDA #194 | NE,NW,SE,SW | 9-13N-8W | NM101484159 | McKinley | 29-Jun-65 | 31-Aug-22 |
ROCA HONDA #195 | SE,SW | 9-13N-8W | NM101338428 | McKinley | 29-Jun-65 | 31-Aug-22 |
ROCA HONDA #196 | SE,SW | 9-13N-8W | NM101433748 | McKinley | 29-Jun-65 | 31-Aug-22 |
ROCA HONDA #197 | SE,SW | 9-13N-8W | NM101484015 | McKinley | 29-Jun-65 | 31-Aug-22 |
ROCA HONDA #198 | SE,SW | 9-13N-8W | NM101484975 | McKinley | 29-Jun-65 | 31-Aug-22 |
ROCA HONDA #217 | NE | 9-13N-8W | NM101431408 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #218 | NE | 9-13N-8W | NM101484151 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #219 | NE | 9-13N-8W | NM101485066 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #220 | NE | 9-13N-8W | NM101338911 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #221 | NE,SE | 9-13N-8W | NM101339063 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #222 | SE | 9-13N-8W | NM101432015 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #223 | SE | 9-13N-8W | NM101484967 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #224 | SE | 9-13N-8W | NM101484601 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #225 | SE | 9-13N-8W | NM101337639 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #244 | NE | 9-13N-8W | NM101434515 | McKinley | 30-Jun-65 | 31-Aug-22 |
NW | 10-13N-8W |
Claim Name | ¼ Sec | Sec-Twp-Rng | BLM Serial No | County | Location Date (DD-MM-YY) |
In Good Standing To (DD-MM-YY) |
ROCA HONDA #245 | NE | 9-13N-8W | NM101482706 | McKinley | 30-Jun-65 | 31-Aug-22 |
NW | 10-13N-8W | |||||
ROCA HONDA #246 | NE | 9-13N-8W | NM101379274 | McKinley | 30-Jun-65 | 31-Aug-22 |
NW | 10-13N-8W | |||||
ROCA HONDA #247 | NE | 9-13N-8W | NM101378276 | McKinley | 30-Jun-65 | 31-Aug-22 |
NW | 10-13N-8W | |||||
ROCA HONDA #248 | NE,SE | 9-13N-8W | NM101336452 | McKinley | 30-Jun-65 | 31-Aug-22 |
NW,SW | 10-13N-8W | |||||
ROCA HONDA #249 | SE | 9-13N-8W | NM101432406 | McKinley | 30-Jun-65 | 31-Aug-22 |
SW | 10-13N-8W | |||||
ROCA HONDA #250 | SE | 9-13N-8W | NM101482102 | McKinley | 30-Jun-65 | 31-Aug-22 |
SW | 10-13N-8W | |||||
ROCA HONDA #251 | SE | 9-13N-8W | NM101334819 | McKinley | 30-Jun-65 | 31-Aug-22 |
SW | 10-13N-8W | |||||
ROCA HONDA #252 | SE | 9-13N-8W | NM101333461 | McKinley | 30-Jun-65 | 31-Aug-22 |
SW | 10-13N-8W | |||||
ROCA HONDA #271 | NW | 10-13N-8W | NM101481347 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #272 | NW | 10-13N-8W | NM101480569 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #273 | NW | 10-13N-8W | NM101484570 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #274 | NW | 10-13N-8W | NM101333411 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #275 | NW,SW | 10-13N-8W | NM101379361 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #276 | SW | 10-13N-8W | NM101431523 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #277 | SW | 10-13N-8W | NM101372205 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #278 | SW | 10-13N-8W | NM101379226 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #279 | SW | 10-13N-8W | NM101336273 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #298 | NE,NW | 10-13N-8W | NM101480402 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #299 | NE,NW | 10-13N-8W | NM101333224 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #300 | NE,NW | 10-13N-8W | NM101338876 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #301 | NE,NW | 10-13N-8W | NM101484199 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #302 | NE,NW,SE,SW | 10-13N-8W | NM101379288 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #303 | SE,SW | 10-13N-8W | NM101377506 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #304 | SE,SW | 10-13N-8W | NM101335760 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #305 | SE,SW | 10-13N-8W | NM101433626 | McKinley | 30-Jun-65 | 31-Aug-22 |
Claim Name | ¼ Sec | Sec-Twp-Rng | BLM Serial No | County | Location Date (DD-MM-YY) |
In Good Standing To (DD-MM-YY) |
ROCA HONDA #306 | SE,SW | 10-13N-8W | NM101481490 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #325 | NE | 10-13N-8W | NM101434814 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #326 | NE | 10-13N-8W | NM101434021 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #327 | NE | 10-13N-8W | NM101485234 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #328 | NE | 10-13N-8W | NM101335611 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #329 | NE,SE | 10-13N-8W | NM101334244 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #330 | SE | 10-13N-8W | NM101482069 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #331 | SE | 10-13N-8W | NM101337707 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #332 | SE | 10-13N-8W | NM101334957 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA #333 | SE | 10-13N-8W | NM101483670 | McKinley | 30-Jun-65 | 31-Aug-22 |
ROCA HONDA 55 | NW | 8-13N-8W | NM101337609 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 56 | NW | 8-13N-8W | NM101481229 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 57 | NW | 8-13N-8W | NM101432731 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 58 | NW | 8-13N-8W | NM101338298 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 59 | NW,SW | 8-13N-8W | NM101333255 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 60 | SW | 8-13N-8W | NM101482685 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 61 | SW | 8-13N-8W | NM101434717 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 62 | SW | 8-13N-8W | NM101484019 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 63 | SW | 8-13N-8W | NM101434121 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 82 | NW | 8-13N-8W | NM101339095 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 83 | NW | 8-13N-8W | NM101337675 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 84 | NW | 8-13N-8W | NM101337615 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 85 | NW | 8-13N-8W | NM101481610 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 86 | NW,SW | 8-13N-8W | NM101432736 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 87 | SW | 8-13N-8W | NM101378404 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 88 | SW | 8-13N-8W | NM101333259 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 89 | SW | 8-13N-8W | NM101482688 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 90 | SW | 8-13N-8W | NM101483901 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 109 | NE,NW | 8-13N-8W | NM101431405 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 110 | NE,NW | 8-13N-8W | NM101379367 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 111 | NE,NW | 8-13N-8W | NM101481536 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 112 | NE,NW | 8-13N-8W | NM101481299 | McKinley | 10-Sep-97 | 31-Aug-22 |
Claim Name | ¼ Sec | Sec-Twp-Rng | BLM Serial No | County | Location Date (DD-MM-YY) |
In Good Standing To (DD-MM-YY) |
ROCA HONDA 113 | NE,NW,SE,SW | 8-13N-8W | NM101431639 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 114 | SE,SW | 8-13N-8W | NM101337126 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 115 | SE,SW | 8-13N-8W | NM101337076 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 116 | SE,SW | 8-13N-8W | NM101485060 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 117 | SE,SW | 8-13N-8W | NM101484150 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 136 | NE | 8-13N-8W | NM101484982 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 137 | NE | 8-13N-8W | NM101483906 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 138 | NE | 8-13N-8W | NM101335002 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 139 | NE | 8-13N-8W | NM101380232 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 140 | NE,SE | 8-13N-8W | NM101481594 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 141 | SE | 8-13N-8W | NM101481306 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 142 | SE | 8-13N-8W | NM101431142 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 143 | SE | 8-13N-8W | NM101337131 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCA HONDA 144 | SE | 8-13N-8W | NM101337084 | McKinley | 10-Sep-97 | 31-Aug-22 |
ROCCA HONDA 1 | NW | 6-13N-8W | NM101675210 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 2 | NW | 6-13N-8W | NM101675211 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 3 | NW | 6-13N-8W | NM101675212 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 4 | NW | 6-13N-8W | NM101675213 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 5 | NW | 6-13N-8W | NM101675214 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 6 | NW | 6-13N-8W | NM101675215 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 7 | NW | 6-13N-8W | NM101675216 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 8 | NW | 6-13N-8W | NM101675217 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 9 | NW | 6-13N-8W | NM101675218 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 10 | NW | 6-13N-8W | NM101675219 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 11 | SW | 6-13N-8W | NM101651088 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 12 | SW | 6-13N-8W | NM101651089 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 13 | SW | 6-13N-8W | NM101651090 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 14 | SW | 6-13N-8W | NM101651091 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 15 | SW | 6-13N-8W | NM101651092 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 16 | SW | 6-13N-8W | NM101651093 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 17 | NE | 6-13N-8W | NM101651094 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 18 | NE | 6-13N-8W | NM101651095 | McKinley | 6-Sep-04 | 31-Aug-22 |
Claim Name | ¼ Sec | Sec-Twp-Rng | BLM Serial No | County | Location Date (DD-MM-YY) |
In Good Standing To (DD-MM-YY) |
ROCCA HONDA 19 | NE | 6-13N-8W | NM101651096 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 20 | NE | 6-13N-8W | NM101651097 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 21 | NE | 6-13N-8W | NM101652080 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 22 | NE | 6-13N-8W | NM101652081 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 23 | NE | 6-13N-8W | NM101652082 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 24 | NE | 6-13N-8W | NM101652083 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 25 | NE | 6-13N-8W | NM101652084 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 26 | NE | 6-13N-8W | NM101652085 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 27 | SE | 6-13N-8W | NM101652086 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 28 | SE | 6-13N-8W | NM101652087 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 29 | SE | 6-13N-8W | NM101652088 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 30 | SE | 6-13N-8W | NM101652089 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 31 | SE | 6-13N-8W | NM101652090 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 32 | SE | 6-13N-8W | NM101652091 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 33 | NW | 5-13N-8W | NM101652092 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 34 | NW | 5-13N-8W | NM101652093 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 35 | NW | 5-13N-8W | NM101652094 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 36 | NW | 5-13N-8W | NM101652095 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 37 | NW | 5-13N-8W | NM101652096 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 38 | NW | 5-13N-8W | NM101652097 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 39 | NW | 5-13N-8W | NM101652098 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 40 | NW | 5-13N-8W | NM101652952 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 41 | NW | 5-13N-8W | NM101652953 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 42 | NW | 5-13N-8W | NM101652954 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 43 | SW | 5-13N-8W | NM101652955 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 44 | SW | 5-13N-8W | NM101652956 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 45 | SW | 5-13N-8W | NM101652957 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 46 | SW | 5-13N-8W | NM101652958 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 47 | SW | 5-13N-8W | NM101652959 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 48 | SW | 5-13N-8W | NM101652960 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 49 | NE | 5-13N-8W | NM101652961 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 50 | NE | 5-13N-8W | NM101652962 | McKinley | 6-Sep-04 | 31-Aug-22 |
Claim Name | ¼ Sec | Sec-Twp-Rng | BLM Serial No | County | Location Date (DD-MM-YY) |
In Good Standing To (DD-MM-YY) |
ROCCA HONDA 51 | NE | 5-13N-8W | NM101652963 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 52 | NE | 5-13N-8W | NM101652964 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 53 | NE | 5-13N-8W | NM101652965 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 54 | NE | 5-13N-8W | NM101652966 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 55 | NE | 5-13N-8W | NM101652967 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 56 | NE | 5-13N-8W | NM101652968 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 57 | NE | 5-13N-8W | NM101652969 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 58 | NE | 5-13N-8W | NM101652970 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 59 | SE | 5-13N-8W | NM101651101 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 60 | SE | 5-13N-8W | NM101652078 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 61 | SE | 5-13N-8W | NM101652079 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 62 | SE | 5-13N-8W | NM101651098 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 63 | SE | 5-13N-8W | NM101651099 | McKinley | 6-Sep-04 | 31-Aug-22 |
ROCCA HONDA 64 | SE | 5-13N-8W | NM101651100 | McKinley | 6-Sep-04 | 31-Aug-22 |
Figure 4-4: Land Tenure Map
4.2.2 White Mesa Mill
The Mill is located approximately six miles south of Blanding, Utah, on US Highway 191 on a parcel of land, owned by EFR, encompassing all or part of Sections 21, 22, 27, 28, 29, 32, and 33 of Township 37 South, Range 22 East, and Sections 4, 5, 6, 8, 9, and 16 of Township 38 South, Range 22 East, Salt Lake Base and Meridian, shown in Figure 4-2 and described as follows:
Additional land is controlled by 46 mill site claims, which are active for the 2021 assessment year. Total White Mesa Mill land holdings cover approximately 5,389 acres. Holding costs for the 46 claims include a claim maintenance fee of $165.00 per claim payable to the BLM before September 1 of each calendar year. All claims are in good standing until September 1, 2022 (Table 4-2).
Table 4-2: List of White Mesa Mill Claims held by Energy Fuels
Energy Fuels Inc. - Roca Honda Project
Claim Name | ¼ Sec | Sec-Twp-Rng | BLM Serial No | County | Location Date (DD-MM-YY) |
In Good Standing To (DD-MM-YY) |
WHITE MESA MS # 1 | NW | 28-37S-22E | UT101404934 | San Juan | 03-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 10 | NE | 29-37S-22E | UT101421406 | San Juan | 03-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 11 | NE | 29-37S-22E | UT101405798 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 12 | NE | 29-37S-22E | UT101406980 | San Juan | 03-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 13 | NE | 29-37S-22E | UT101404616 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 14 | NE | 29-37S-22E | UT101300937 | San Juan | 03-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 15 | NE | 29-37S-22E | UT101401744 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 16 | NE | 29-37S-22E | UT101459559 | San Juan | 03-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 17 | NE | 29-37S-22E | UT101494043 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 18 | NE | 29-37S-22E | UT101500939 | San Juan | 03-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 19 | NE | 29-37S-22E | UT101401966 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 2 | NW | 28-37S-22E | UT101421175 | San Juan | 03-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 20 | NE | 29-37S-22E | UT101402907 | San Juan | 03-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 21 | NE | 29-37S-22E | UT101424110 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 22 | NE | 29-37S-22E | UT101600530 | San Juan | 03-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 23 | NE | 29-37S-22E | UT101604881 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 24 | NE | 29-37S-22E | UT101404900 | San Juan | 03-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 25 | SE | 29-37S-22E | UT101422624 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 26 | SE | 29-37S-22E | UT101407386 | San Juan | 03-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 27 | SE | 29-37S-22E | UT101401670 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 28 | SE | 29-37S-22E | UT101401413 | San Juan | 03-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 29 | SE | 29-37S-22E | UT101339263 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 3 | NW | 28-37S-22E | UT101423609 | San Juan | 03-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 30 | SE | 29-37S-22E | UT101403753 | San Juan | 03-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 4 | NW | 28-37S-22E | UT101404369 | San Juan | 03-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 5 | NW | 28-37S-22E | UT101339278 | San Juan | 03-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 57 | SE | 29-37S-22E | UT101490658 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 58 | SE | 29-37S-22E | UT101403003 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 59 | SE | 29-37S-22E | UT101423620 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 6 | NW | 28-37S-22E | UT101403782 | San Juan | 03-Aug-78 | 31-Aug-22 |
Claim Name | ¼ Sec | Sec-Twp-Rng | BLM Serial No | County | Location Date (DD-MM-YY) |
In Good Standing To (DD-MM-YY) |
WHITE MESA MS # 60 | SE | 29-37S-22E | UT101403751 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 61 | SE | 29-37S-22E | UT101402599 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 62 | SE | 29-37S-22E | UT101759473 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 63 | SE | 29-37S-22E | UT101424484 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 64 | SE | 29-37S-22E | UT101477271 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 65 | SE | 29-37S-22E | UT101402875 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 66 | SE | 29-37S-22E | UT101349156 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 67 | SE | 29-37S-22E | UT101403399 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 68 | SE | 29-37S-22E | UT101456709 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 69 | SE | 29-37S-22E | UT101408276 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 7 | NW | 28-37S-22E | UT101404956 | San Juan | 03-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 70 | SE | 29-37S-22E | UT101423217 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 71 | SE | 29-37S-22E | UT101402395 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 72 | SE | 29-37S-22E | UT101405575 | San Juan | 08-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 8 | NW | 28-37S-22E | UT101402114 | San Juan | 03-Aug-78 | 31-Aug-22 |
WHITE MESA MS # 9 | NE | 29-37S-22E | UT101492702 | San Juan | 08-Aug-78 | 31-Aug-22 |
4.3 Required Permits and Status
A permit application was submitted in October 2009 to the State of New Mexico Mining and Minerals Division of the Energy, Minerals and Natural Resources Department. The permit application included:
A Plan of Operations (PoO), which addresses various aspects of environmental assessment, protection, and analysis related to the Project, was submitted to the U.S. Forest Service, Cibola National Forest, at the same time. Details regarding these permits can be found in Section 20.0 of this report.
Additionally, in order to construct and operate the Roca Honda Mine, the following permits are required from various state and federal agencies:
Figure 4-5: Proposed Pipeline Route
4.4 Royalties
Royalties are described in Section 3.2. Table 4-3 details the royalties below.
Table 4-3: Roca Honda Project Royalty Summary
Energy Fuels Inc. - Roca Honda Project
Section1 | Surface Owner | Royalty (%) |
Payee |
9 | U.S. Forest Service | 1 | Unknown |
16 | State of New Mexico | 5 | State of New Mexico |
Notes:
1. All sections are in Township 13 North, Range 8 West, New Mexico Principal Meridian.
4.5 Other Significant Factors and Risks
The EFR QP is not aware of any environmental liabilities on the property. The Roca Honda Mine is in an advanced stage of permitting and has yet to obtain the permits necessary to operate the Mine.
There are no violations or regulatory matters of any significance or that are not being addressed under normal regulatory procedures.
5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY
The Roca Honda Mine is located approximately 17 mi (22 mi by road) northeast of Grants, New Mexico. The southern part of the property, located on Sections 16 and 17, can be reached by travelling north from Milan, New Mexico, on State Highway 605 toward the town of San Mateo to mile marker 18 and then north on a private gravel road.
When mining commences, it is proposed that mill feed produced at the Mine will be shipped to EFR's fully licensed and operating White Mesa Mill in Blanding, Utah. The haulage distance from the Mine to the Mill is approximately 250 mi.
5.1 Accessibility
5.1.1 Roca Honda Mine
Access rights from Highway 605 onto Section 16 have been subject to temporary agreements with the surface owner, Fernandez, the latest of which expired on December 31, 2015. When Strathmore acquired the mineral rights to Section 17 in the URI transaction, it understood it acquired surface access rights to Section 17 and Section 16, which would provide all necessary access. EFR is in discussions with Fernandez to determine whether any further access rights may be required.
The north part of the Roca Honda property can be reached by travelling 23.5 miles from Milan, New Mexico, on paved public Highway 605, and then west on USFS dirt roads to the southeast corner of Section 10 (Figure 4-1). There are numerous drill roads that provide access to different parts of Sections 9 and 10, many of which require maintenance.
5.1.2 White Mesa Mill
The White Mesa Mill is accessed by US Highway 191. The majority of mill employees live in Blanding, Utah, and surrounding communities. The Mill is serviced by commercial line power, and all other supplies are trucked to the site. Ranching is the primary land use surrounding the Mill and tourism is the primary economy of Blanding, Utah, excluding uranium processing and State and Federal government services.
5.2 Vegetation
5.2.1 Roca Honda Mine
Vegetation in the Roca Honda Project area consists of grasses, piñon pine and juniper trees.
5.2.2 White Mesa Mill
The natural vegetation presently occurring within a 25-mile (40-km) radius of the Mill site is very similar to that of the region, characterized by pinyon-juniper woodland integrating with big sagebrush (Artemisia tridentata) communities.
5.3 Climate
5.3.1 Roca Honda Mine
Climate in the Project area may be classified as arid to semi-arid continental, characterized by cool, dry winters, and warm, dry summers. The area is in the north end of Climate Division 4 (Southwestern Mountains) for New Mexico (Sheppard et al., 1999). Abundant sunshine, low relative humidity, and large annual and diurnal ranges in temperature are characteristics of this climate division, which is a significant distance from any source of oceanic moisture (600 mi from the Pacific Ocean and 800 mi from the Gulf of Mexico).
On average, the Project area receives approximately 11 in. of precipitation annually, the majority occurring with thunderstorms in July and August. Winter is the driest season, with an average of approximately 13 in. of snow falling annually, mostly during December through February. Snow is light on the valley floors and increases at higher elevations on the nearby mesas and mountains.
Grants, New Mexico, has an annual average temperature of 50°F, with an average summer high of 87°F and low of 52°F, and average winter high of 47°F and low of 18°F. Operations may be conducted throughout the year.
5.3.2 White Mesa Mill
The climate of southeastern Utah is classified as dry to arid continental. Although varying somewhat with elevation and terrain, the climate in the vicinity of the Mill can be considered as semi-arid with normal annual precipitation of about 13.3 in. Most precipitation is in the form of rain with snowfall accounting for about 29% of the annual total precipitation. There are two separate rainfall seasons in the region, the first in late summer and early autumn (August to October) and the second during the winter months (December to March). The mean annual relative humidity is about 44% and is normally highest in January and lowest in July.
The weather in the Blanding, Utah, area is typified by warm summers and cold winters. The National Weather Service Station in Blanding, Utah, is located about 6.25 mi north of the Mill. Data from the station is considered representative of the local weather conditions.
The mean annual temperature in Blanding was 50.3°F, based on the current Period of Record Summary (1904 to 2006). January is usually the coldest month, and July is usually the warmest month. The town of Blanding, Utah, has an approximate area of 2.4 mi.2, temperatures average 53°F, and it has a precipitation average of 14 in. Operations at White Mesa Mill can be conducted throughout the year.
5.4 Local Resources
5.4.1 Roca Honda Mine
The community of Grants, located in Cibola County, is the largest community near the Mine area. As of the 2020 census, there are 8,866 people residing in Grants, New Mexico, where personnel experienced in open pit and underground mining, construction, and mineral processing are available. Additionally, the city of Albuquerque is located approximately 100 mi east of the Project area and could be a source of most materials and technical support needed for the Project.
5.4.2 White Mesa Mill
The Mill is the only fully licensed and operating conventional uranium mill in the United States, and only one of three fully licensed mills and the only operating conventional uranium mill in North America. The facility has a licensed capacity of 2,000 stpd and can produce up to eight million pounds of uranium per year. The Mill also has a co-recovery circuit to produce vanadium from Colorado Plateau ores, and an alternate feed circuit to process other uranium-bearing materials, such as those derived from uranium conversion and other metal processing.
The Mill is strategically located in Blanding, Utah, central to the uranium mines of the Four Corners region of the United States. The Mill was constructed in 1980 by EFNI. In 2007, a $31 million refurbishment of the facility was completed. To extract uranium (U3O8) and vanadium (V2O5), the Mill utilizes sulfuric acid leaching and a solvent extraction recovery process. The uranium is purchased by utility companies and shipped to conversion facilities as the next step in the production of fuel for nuclear power. The vanadium is shipped mostly to steel and alloy manufacturers.
In full operation, the Mill employs about 150 people. Blanding is a town in San Juan County, Utah, United States, where personnel experienced in mill operations are available. The population was approximately 3,500 in 2020, making it the most populated town in San Juan County.
5.5 Infrastructure
5.5.1 Roca Honda Project Site
There is limited infrastructure related to historical operations within the Roca Honda project area. A partially completed shaft (completed to a depth of 1,478 ft) and shop buildings exist in the northeast quarter of Section 17. The remaining infrastructure is limited to a very good gravel access road and existing drill roads of varying quality. High voltage power lines run across the northern extent of the Project area and low voltage lines cross through Section 17. Water for drilling is generally sourced either from the town of Milan, or from local ranch wells. Dewatering for any future mine development will source a greater quantity of water than is required for ongoing operations.
A monitoring well network composed of three wells, completed in the Westwater Canyon Member of the Morrison Formation (Westwater), was installed in 2007 to 2008 by RHR.
5.5.2 White Mesa Mill
The Mill was constructed from 1979 to 1980 and is a fully functioning uranium/vanadium mill. The Mill is capable of functioning independent of off-site support except for commercial power from Rocky Mountain Power and supplemental water supply from the City of Blanding and the San Juan Water Conservancy District. Off-site infrastructure includes paved highway access from US Highway 191, and rights-of-way for commercial power and a water supply pipeline from Recapture Reservoir, which brings up to 1,000 acre-feet of water per year to the mill site. The mill also has four deep (+2,000 ft) water supply wells which supply process water during normal operations. In addition to the mill processing equipment, which includes the grinding and leaching circuits, counter current decantation (CCD), solvent extraction, and precipitation and drying circuits, the mill has several days' reagent storage for sulfuric acid, ammonia, salt, soda ash, caustic soda, ammonium sulfate, flocculants, kerosene, amines, and Liquified Natural Gas (LNG). The on-site infrastructure also includes an ore stockpile area and existing TSF.
5.6 Physiography
5.6.1 Roca Honda Project Site
The Mine area is sparsely populated, rural, and largely undeveloped. The predominant land uses include low-density livestock grazing, hay cultivation, and recreational activities such as hiking, sightseeing, and seasonal hunting.
The proposed Mine area has moderately rough topography in Sections 9 and 10 and consists of shale slopes below ledge-forming sandstone beds, forming mesas that dip 7° to 11° northeast. Section 9 consists mostly of steep slopes in the west and south, with a large sandstone mesa, named Jesus Mesa, in the north-central part. Section 10 consists mostly of the dip-slope of a sandstone bed that dips from 8° to 11° due east. Sections 16 and 17 have less topographic relief because they lie mainly below the mesas. Surface elevations range from 7,100 ft to 7,680 ft and with easterly and southerly dipping slopes (Fitch, 2010).
Jesus Mesa occupies approximately half of Section 9 and slopes into Section 10. The top and upper portion of the mesa is sparsely vegetated, with the slopes along the southern perimeter of the mesa consisting of sandstone ledges with areas of exposed shale. The landscape along the southwest, north, and southeast perimeters of the mesa are moderately vegetated, with the slopes dissected by drainages ranging from a few feet to 40 ft deep.
The rough topography is not expected to adversely impact mining operation activities.
5.6.2 White Mesa Mill
The Mill site is located near the center of White Mesa, one of the many finger-like north-south trending mesas that make up the Great Sage Plain located in Utah. The nearly flat upland surface of White Mesa is underlain by resistant sandstone caprock, which forms steep prominent cliffs separating the upland from deeply entrenched intermittent stream courses on the east, south and west.
Surface elevations across the Mill site range from about 5,550 ft ASL to 5,650 ft ASL and the gently rolling surface slopes to the south at a rate of approximately 60 feet per mile.
Maximum relief between the mesa's surface and Cottonwood Canyon on the west is approximately 750 ft where Westwater Creek joins Cottonwood Wash. These two streams and their tributaries drain the west and south sides of White Mesa. Drainage on the east is provided by Recapture Creek and its tributaries. Both Cottonwood Wash and Recapture Creeks are normally intermittent streams and flow south to the San Juan River, however, Cottonwood Wash has been known to flow perennially in the vicinity during wet years.
6.0 HISTORY
6.1 Prior Ownership
Kerr-McGee staked the Roca Honda unpatented mining claims in Sections 9 and 10 on June 29 and 30, 1965. Kerr-McGee, its subsidiaries, and successor (Rio Algom) completed significant exploration and development work in Sections 3, 4, 5, 6, 8, 9, 10, 16, and 17, T13N, R8W, from the mid-1960s until 1982 and held the claims on Sections 9, 10, and 16 until the properties were acquired by Strathmore on March 12, 2004.
Section 16, T13N, R8W, is owned by the State of New Mexico. State Mining Leases for Section 16 were issued to various companies over the years. Rare Metals Corporation (Rare Metals) held a State Mining Lease in the 1950s and performed the first exploration drilling on the Section. Subsequently, Western Nuclear Corporation (Western Nuclear) held a State Mining Lease during the period 1968 to lease expiration on May 21, 1971. Reserve Oil and Minerals Corporation (Reserve) owned a 25% carried interest in the lease at that time. Western Nuclear and Reserve acquired another lease on Section 16 in October 1979 with a 15-year expiration date of October 2, 1994. During the lease period, an assignment was made to a company named U.Q.I.T.U., and further, the lease was cancelled or relinquished on February 15, 1990, before its expiration date (New Mexico State Land Office form, March 20, 2006). Quivira Mining Company (Quivira), a wholly owned subsidiary of Kerr-McGee, acquired lease number Q-1414 effective July 1, 1990, with a 15-year term expiration date of July 1, 2005 (signed New Mexico State Lease Document). Kerr-McGee cancelled or relinquished the lease on November 11, 2000, before the date of expiration. David Miller (former CEO of Strathmore) acquired a new State Mining Lease for Section 16, Lease Number HG 0036-002 in November 2004 and subsequently assigned the lease to Strathmore. Strathmore dropped that lease in December 2015. A new 15-year lease on the parcel, HG-0133, was acquired that same month by Strathmore.
RHR was established on July 26, 2007, when Strathmore (60%) formed a limited liability company with Sumitomo Corporation (40%) and transferred the lease to RHR.
Conoco purchased Sections 11 and 12 on the property from the Homestake Mining Company (Homestake) in the early 1970s and explored them until 1981. Other historical drilling activity within the Project area or off trend has been done in the past but cannot be attributed to a specific operator at this time due to a lack of records.
URI gained control of Sections 13, 15 and 17, T13N, R8W, in 1997 as part of the acquisition of the Uranco Inc. properties in New Mexico. Section 8 was procured through staking of new claims (Roca Honda Claims) in 1997. This was the extent of the land position that URI held in the Project area from 1996 through 2012, for a total at the time of 2,560 non-contiguous acres.
URI obtained control of the rest of the Mine area (positions in Sections 2, 3, 4, 5, 6, 11, and 12, T13N, R8W; Sections 31 and 32, T14N, R8W) through the acquisition of Neutron Energy Inc. (NEI) in 2012. The NEI land position in the Project area consisted of leased claims from Enerdyne Endy Claims LLC, which were acquired by NEI in February 2006. In 2014, URI divested itself of the Section 13 and 15 properties through a land trade with Rio Grande Resources Corp. in exchange for other property assets in Texas.
In August 2013, EFR acquired a 100% interest in Strathmore and assumed Strathmore's 60% ownership interest in RHR. In June 2015, EFR acquired a 100% interest in the mineral properties controlled by URI. In May 2016, EFR completed the purchase of Sumitomo Corporation's 40% interest in RHR.
The White Mesa uranium/vanadium mill was developed in the late 1970s by ENFI as a processing option for the many small mines that are located in the Colorado Plateau region. At the time of its construction, it was anticipated that high uranium prices would stimulate ore production, however, prices started to decline about the same time as mill operations commenced in the late 1970s.
As uranium prices fell, mines near the White Mesa Mill region were affected, and mine output declined. After approximately two and one-half years, the Mill ceased ore processing operations altogether, began to recycle solution, and entered a total shutdown phase. In 1984, a majority ownership interest was acquired by Union Carbide Corporation's (UCC) Metals Division, which later became Umetco Minerals Corporation (Umetco), a wholly- owned subsidiary of UCC. This partnership continued until May 26, 1994, when EFNI reassumed complete ownership. In May 1997, Denison and its affiliates purchased the assets of EFNI, and Denison was the owner of the White Mesa Mill facility until 2012. In August 2012, EFR purchased all of White Mesa Mill's assets and liabilities.
6.2 Exploration and Development History
Most of the historical exploration at the Mine area was completed by four separate companies: Kerr-McGee, Western Nuclear, Conoco, and Strathmore. Exploration by the four companies is discussed below. A fifth company, Rare Metals, did some exploration work on Section 16, but that data has not been found.
6.2.1 Kerr-McGee
Kerr-McGee completed significant exploration and development work on Sections 3, 4, 5, 6, 8, 9, 10, 16, and 17, T13N, R8W, from the mid-1960s until 1992. The land position on Section 17 was leased from Santa Fe at the time. During its work program, Kerr-McGee drilled approximately 1,200 drillholes across the 3,840 acres it controlled on Sections 5, 6, 8, 9, 10, 16, and 17, and an unknown number of drillholes on Sections 3 and 4.
In July of 1966, the first drillhole was completed on Section 9 of the Mine property. Discovery was made in drillhole number 7 completed on August 2, 1970, which encountered mineralization at a depth of 1,900 ft. From 1966 to 1982, 188 drillholes were completed for a total of 389,736 ft. In Section 10, the first hole was drilled in October 1967. Discovery was made in drillhole number 6 completed on March 19, 1974, which encountered mineralization at a depth of 2,318 ft. From 1967 to 1985, 178 drillholes were completed for a total of 429,215 ft.
Kerr-McGee advanced the project, named the Lee Mine, to a feasibility level study. In 1981, Kerr-McGee began construction of the Lee Mine with the development of a 14 ft diameter shaft in the northeast quarter of Section 17. In 1982, the project was abandoned prior to completion of the shaft due to soft uranium market conditions. The shaft penetrated the Westwater of the Morrison Formation to a total depth of 1,478 ft; the shaft's planned depth was 1,655 ft. The shaft was sealed at surface and no further work was completed.
6.2.2 Western Nuclear
The first drilling on Section 16 was in the 1950s by Rare Metals, which drilled 13 holes, including two that intercepted high-grade uranium mineralization at depths of 1,531 ft and 1,566 ft. No records of the total drilled footage can be located. Subsequently, Western Nuclear acquired a mining lease for Section 16 from the State and began drilling in 1968, with the first drillhole completed on August 17, 1968. The second drillhole intercepted high-grade uranium mineralization at a depth of 1,587 ft. From 1968 through September 1970, Western Nuclear drilled 70 holes totaling 115,455 ft, including 10 abandoned holes that did not reach the target bed (Recapture Member). Two of the drillholes reported cored intervals, but the cores and analyses are not available.
6.2.3 Conoco
In the early 1970s, Conoco acquired land in the area including Sections 2, 11, and 12, T13N, R8W, a portion of which was purchased from Homestake. Initial exploration was completed by drilling north-south fences on Section 2 and into Section 11. Activities were limited to minimal assessment drilling until 1979, when the major discovery and development work by Kerr-McGee was ongoing at the Lee Mine, directly to the west of Conoco's land position. Conoco then refocused drilling on the western half of Section 11, intercepting uranium mineralization of significant grade and thickness. Drilling continued until 1981, extending the mineralization trend from Section 10 across the southwest quarter of Section 11.
Although Conoco did not feel it had the success it had hoped for, it remained optimistic about the local area as stated in an internal Conoco report from that time (Wentworth, 1982):
Despite previous disappointments, our Roca Honda and Jan claim blocks are believed to represent one of the better uranium prospects left in the Grants Mineral Belt. The property is well situated along the projected Westwater mineral trend in an area of interpreted favorable stratigraphy where the potential exists for large rich tabular ore bodies…
6.2.4 Strathmore Resources
From June to November 2007, RHR, 60% owned by Strathmore, drilled four pilot holes on Section 16. Three holes were completed as monitoring wells totalling 8,050 ft for environmental baseline and monitoring purposes. One drillhole was located outside of the known mineralization and three holes were located within mineralized areas. Drill sites were chosen based on their proximity to existing roads to limit disturbance. Drilling was conducted by Stewart Brothers Drilling, based in Grants, New Mexico.
When completing the four pilot holes, RHR cored the Westwater Sandstone in each of the holes.
The cored holes were PQ-diameter (3.345 in.) and had samples taken principally for laboratory testing of hydraulic conductivity, effective porosity, density, and chemical analysis.
The four pilot holes were logged by Jet West Geophysical Services, LLC (Jet West) of Farmington, New Mexico, for gamma, resistivity, deviation, standard potential, and temperature.
In November 2011, a core hole (S14-Jmw-CH-11) was drilled at the Section 16 shaft location to a depth of 2,053 ft. Core was tested at Advanced Terra Testing for numerous geotechnical properties and a geotechnical report was issued by URS in June 2012.
6.3 Past Production
No production from uranium mineralization has taken place at the Project.
7.0 GEOLOGICAL SETTING AND MINERALIZATION
7.1 Regional Geology
The Project is located in the southeast part of the Ambrosia Lake subdistrict of the Grants uranium district (McLemore and Chenoweth, 1989) and is near the boundary between the Chaco slope and the Acoma sag tectonic features. This subdistrict is in the southeastern part of the Colorado Plateau physiographic province and is mostly on the south flank (referred to as the Chaco slope) of the San Juan Basin. Figure 7-1 presents the regional geology of the Project.
Bounding the San Juan Basin to the south-southwest is the Zuni uplift, where rocks as old as Precambrian are exposed 25 mi to 30 mi southwest of the Project area. Less than five miles to the east and south of the Project area, Neogene volcanic rocks of the Mount Taylor volcanic field cap Horace Mesa and Mesa Chivato. On the Chaco slope, sedimentary strata mainly of Mesozoic age dip gently northeast into the central part of the San Juan Basin. The Project area is structurally complex and is included in the part of the subdistrict that is described as the most folded and faulted part of the Chaco slope.
The San Juan Basin and bounding structures were largely formed during the Laramide orogeny near the end of the Late Cretaceous through Eocene Period (Lorenz and Cooper 2003). This Laramide tectonism produced compression of the San Juan Basin between the San Juan and Zuni uplifts, resulting in faults and fold axes oriented north to north-northeast. The more intensively faulted east part of the Chaco slope may be related to the development of the McCarty's syncline, which lies just east of the faulted Fernandez monocline (Kirk and Condon, 1986).
The San Rafael fault zone cuts the Fernandez monocline and has right-lateral displacement as evidence of shear near the San Juan Basin margin. Other faults in or near the Project area are mostly normal with dip-slip displacement and vertical movement less than 40 ft. The large, northeast-striking San Mateo normal fault about two miles west of the Project area has vertical displacement of as much as 450 ft (Santos, 1970). Strata in the Project area along the Fernandez monocline dip east to southeast at four to eight degrees toward the McCarty's syncline, an expression of the Acoma sag (Santos, 1966a and 1966b).
The Morrison Formation outcrops near the south edge of the San Juan Basin and dips gently northward into the basin. Formations of Late Cretaceous age that overlie the Morrison Formation, in ascending order, are Dakota Sandstone, Mancos Shale, Gallup Sandstone, Crevasse Canyon Formation, Point Lookout Sandstone, and Menefee Formation. The Gallup Sandstone, Crevasse Canyon Formation, Point Lookout Sandstone, and Menefee Formation compose the Mesaverde Group. Figure 7-2 presents the regional stratigraphy. Figure 7-3 is a cross section of the geology pertaining to the property.
The Morrison Formation was deposited in a continental environment, mainly under fluvial conditions. These deposits were derived from an uplifted arc terrane to the west and locally from the Mogollon highlands to the south (Lucas, 2004). The Zuni uplift, currently bordering the San Juan Basin to the southwest, did not exist in Late Jurassic time and therefore was not a source for Morrison Formation sediments.
Formations of Late Cretaceous age were deposited in or on the margin of the Western Interior Seaway, a shallow continental sea, and the formations represent transgressive or regressive episodes of the Seaway. The Mancos Shale and its several tongues were deposited on the shallow marine sea bottom, and the formations of the Mesaverde Group were deposited along the western shoreline of the Seaway.
Figure 7-1: Regional Geologic Map
Figure 7-2: Regional Stratigraphic Column
Figure 7-3: Cross Section of Local Geology
7.2 Local Geology
7.2.1 Stratigraphy
Rocks exposed in the Ambrosia Lake subdistrict of the Grants uranium district, which includes the Project area, include marine and non-marine sediments of Late Cretaceous age, unconformably overlying the uranium-bearing Upper Jurassic Morrison Formation. In this section, geologic units are discussed from youngest to oldest. The uppermost sequence of conformable strata consists of the Mesaverde Group, Mancos Shale, and Dakota Sandstone. All rocks that outcrop at the Project area are of Late Cretaceous age; these rocks and the Quaternary Period deposits that cover them in some places are shown in the geologic map in Figure 7-1.
The formations and members and their approximate depth from the surface are shown in the stratigraphic section in Figure 7-2, which is based on historical drilling in the area. The Menefee Formation does not outcrop in the Project area, but a partial thickness of it is below Quaternary colluvium as sub-crop in the southeast quarter of Section 10. Due to the inter-tonguing nature of some of the Cretaceous units in the area, some members or tongues of the Mancos Shale and Dakota Sandstone are included in sequence within the dominant formation in the discussion below.
Approximate thicknesses for the formations and members are provided in Table 7-1. These thicknesses were determined from geologic mapping by Santos (1966a and 1966b), borehole data from 2007 drilling by RHR in Section 16, and borehole data from historical drilling by Kerr-McGee and Western Nuclear.
Table 7-1: Stratigraphy found at the Roca Honda Project
Energy Fuels Inc. - Roca Honda Project
Formation | Unit Symbol | Unit Name | Avg. Thickness (ft) |
Max. Thickness (ft) |
Min. Thickness (ft) |
Data Source |
N/A | Qal | Alluvium | - | Varies | - | 2007 Sec. 16 Drilling |
Menefee | Kmf | Menefee Fm. | Not Present at Project Area | |||
Point Lookout Sandstone | Kp | Point Lookout Sandstone | - | 120 | - | Geo. Maps (Santos 1966a and 1966b) |
Crevasse Canyon | Kcg | Gibson Coal Member | - | 240 | - | Geo. Maps (Santos 1966a and 1966b) |
Crevasse Canyon | Kcda | Dalton Sandstone Member | - | 100 | - | Geo. Maps (Santos 1966a and 1966b) |
Mancos Shale | Kmm | Mulatto Tongue | 305 | 318 | 292 | |
Crevasse Canyon | Kcbp | Borrego Pass Lentil | 40 | - | -- | |
Crevasse Canyon | Kcdi | Dilco Coal Member | 120 | 128 | 108 | 2007 Sec. 16 Drilling |
Gallup Sandstone | Kg | Gallup Sandstone | 73 | 76 | 68 | 2007 Sec. 16 Drilling |
Formation | Unit Symbol | Unit Name | Avg. Thickness (ft) |
Max. Thickness (ft) |
Min. Thickness (ft) |
Data Source |
Mancos Shale | Kmp | Pescado Tongue | 21 | 22 | 20 | 2007 Sec. 16 Drilling |
Gallup Sandstone | Kgb | Gallup Sandstone (basal unit) | 11 | 16 | 8 | 2007 Sec. 16 Drilling |
Mancos Shale | Km | Mancos Shale | 710 | 720 | 702 | 2007 Sec. 16 Drilling |
Dakota Sandstone | Kdt | Twowells Sandstone | 49 | 52 | 46 | 2007 Sec. 16 Drilling |
Mancos Shale | Kmw | Whitewater Arroyo Tongue | 148 | 150 | 146 | 2007 Sec. 16 Drilling |
Dakota Sandstone | Kd | Dakota Sandstone | 52 | 68 | 19 | Historical Data |
Morrison | Jmb | Brushy Basin Member | 105 | 269 | 22 | Historical Data |
Morrison | Jmw | Westwater Canyon Member | Broken into sub-units and detailed below | |||
Morrison | Jmw A | A Sandstone | 34 | 59 | - | Historical Data |
Morrison | Jmw Aob | A-B1 Shale | 16 | 100 | - | Historical Data |
Morrison | Jmw B1 | B1 Sandstone | 33 | 56 | - | Historical Data |
Morrison | Jmw B1ob | B1-B2 Shale | 10 | 37 | - | Historical Data |
Morrison | Jmw B2 | B2 Sandstone | 27 | 56 | 6 | Historical Data |
Morrison | Jmw B2ob | B2-C Shale | 13 | 39 | - | Historical Data |
Morrison | Jmw C | C Sandstone | 48 | 90 | 5 | Historical Data |
Morrison | Jmw Cob | C-D Shale | 15 | 39 | - | Historical Data |
Morrison | Jmw D | D Sandstone | 17 | 45 | 2 | Historical Data |
Morrison | Jmr | Recapture Member | - | - | - |
7.2.1.1 Alluvium
Quaternary alluvial material overlies bedrock throughout the San Mateo Creek valley, and although it probably accepts and transmits groundwater from precipitation to underlying bedrock units, it is most likely unsaturated except near San Mateo Creek. San Mateo Creek alluvial materials consist of unconsolidated sands and silts. Well logs indicate this material is from 10 ft to 80 ft thick, although it may be significantly thicker in some areas (OSE, 2008).
7.2.1.2 Menefee Formation
The Menefee Formation, an upper unit of the Mesaverde Group, consists of two members, the Allison Member and the Cleary Coal Member, which underlies the Allison Member. The formation consists of thin to thick sandstone beds interbedded with shale and coal seams. Geophysical logs from the San Juan Basin indicate that the formation typically consists of approximately 30% sandstone, 65% shale, and less than 5% coal (Brod and Stone, 1981). Beds of the Allison Member do not outcrop in the Project area, but are farther to the north, in the central San Juan Basin. Beds of the Cleary Coal Member outcrop east and south of the Roca Honda area on the east flank of the Fernandez monocline. In the Project area, this member occurs as sub-crop beneath Quaternary colluvium in the southeast quarter of Section 10.
7.2.1.3 Point Lookout Sandstone
The Point Lookout Sandstone is a regressive marine beach sandstone in the middle of the Mesaverde Group. The Point Lookout Sandstone generally consists of light grey, thick bedded, very fine to medium grained, locally cross-bedded sandstone. This unit is as much as 120 ft thick in the Project area. A resistant cap of Point Lookout Sandstone forms the top of Jesus Mesa in the Project area and represents the dip slope. Just east of Jesus Mesa, the steeper slope that dips to the southeast in Section 10 represents the dip slope of the Point Lookout Sandstone along the Fernandez Monocline.
7.2.1.4 Crevasse Canyon Formation
The Crevasse Canyon Formation is a lower unit of the Mesaverde Group that outcrops through much of the west part of the Roca Honda Project area. The unit consists of the following members (from youngest to oldest): the Gibson Coal Member, Dalton Sandstone Member, Borrego Pass Lentil, and the Dilco Coal Member. The Mulatto Tongue of the Mancos Shale is below the Dalton Sandstone Member and above the Borrego Pass Lentil. The Mulatto Tongue is approximately 300 ft thick in the Project area and is a marine deposit representing a transgression of the Western Interior Seaway.
The Gibson Coal Member Is as much as 240 ft thick in the area of interest and outcrops mainly on the steep slopes of the Jesus Mesa. The Dalton Sandstone Member, a regressive marine beach sandstone, is as much as 100 ft thick.
Shale and silty sandstone of the Mulatto Tongue of the Mancos Shale outcrop on gentle slopes and are covered in places by Quaternary alluvium and colluvium in the southwest part of the Roca Honda area. Below the Mulatto Tongue is the Borrego Pass Lentil, a transgressive marine sandstone that was previously referred to as the Stray sandstone of local usage (Santos, 1966a). Boreholes drilled in 2007 in the Project area indicate that the Borrego Pass Lentil is about 40 ft thick. The entire thickness of the Mulatto Tongue is not exposed in the western part of the Project area because several normal faults disrupt the sequence. Therefore, it is not known whether the Borrego Pass Lentil, which lies just below the Mulatto Tongue, outcrops in that area.
The Dilco Coal Member has an average thickness of about 120 ft and outcrops in Section 17. The member contains thin sandstone, shale, and discontinuous coal beds representative of a backshore swamp environment associated with a regression of the Western Interior Seaway (Fassett, 1989).
7.2.1.5 Gallup Sandstone
The lowest formation of the Mesaverde Group is the Gallup Sandstone, which is solely in the subsurface in the Roca Honda Project area and is separated into two units by the thin Pescado Tongue of the Mancos Shale. The upper unit (or main body) of the Gallup Sandstone is a regressive marine beach sandstone that is fine to medium grained and is about 75 ft thick. The Pescado Tongue, approximately 20 ft thick, consists of thin alternating and interfingering beds of sandstone, siltstone, and shale. A thin, fine to coarse grained sandstone (average thickness of approximately 10 ft) forms the basal bed of the Gallup Sandstone and marks a brief regression of the Western Interior Seaway. The upper Gallup sandstone is a regional aquifer with good water quality water.
7.2.1.6 Mancos Shale
The main body of Mancos Shale represents the full transgression of the Western Interior Seaway and, in the Roca Honda area, its subsurface thickness averages approximately 710 ft. The marine deposits of this formation consist mainly of dark grey to black silty shale with minor interbedded sandstone. In the southern San Juan Basin, the lower part of the Mancos Shale is intertongued with the underlying upper part of the Dakota Sandstone. The intertongued units generally represent a transgressive rock sequence (Landis et al., 1973).
In the subsurface of the Project area, the main body of Mancos Shale is underlain by the Twowells Sandstone Tongue of the Dakota Sandstone (Pike 1947), which is about 50 ft thick. Underlying the Twowells Sandstone Tongue is the Whitewater Arroyo Shale Tongue of the Mancos Shale (Owen, 1966), which is about 150 ft thick. In the Project area, the base of the Mancos Shale is considered to be the base of the Whitewater Arroyo Shale Tongue.
7.2.1.7 Dakota Sandstone
Marine shoreface deposits of Dakota Sandstone are composed mainly of fine-grained gray sandstone. In the subsurface in the Project area, the Dakota Sandstone is approximately 50 ft thick. In the main Ambrosia Lake subdistrict about five miles northwest of the Roca Honda area, the Dakota Sandstone is composed of four members (Landis et al., 1973). For ease of presentation, the four members are not shown in Figure 7-2. The four members are in descending stratigraphic order: Paguate Sandstone Tongue of the Dakota Sandstone, Clay Mesa Shale Tongue of the Mancos Shale, Cubero Sandstone Tongue of the Dakota Sandstone, and Oak Canyon Member of the Dakota Sandstone. The Dakota Sandstone is the lowermost Upper Cretaceous formation, unconformably overlies the Upper Jurassic Morrison Formation, and is a regional aquifer with poor quality water from the overlying Gallup Sandstone.
7.2.1.8 Morrison Formation
The Upper Jurassic Morrison Formation is comprised of four members that are recognized by the U. S. Geologic Survey (USGS) in the Grants uranium district. These members are, in descending order, Jackpile Sandstone Member, Brushy Basin Member, Westwater Canyon Member, and Recapture Member. The Jackpile Sandstone Member, the uppermost fluvial sandstone in the formation, was not deposited in the Ambrosia Lake subdistrict, but was deposited east of Mount Taylor, where it hosts uranium mineralization in the Laguna subdistrict.
The uppermost member of the Morrison Formation in the roca Honda area is the Brushy Basin Member. The mostly greenish-grey, mudstone-dominated Brushy Basin Member is variable in thickness (22 ft to 269 ft), but the average thickness is approximately 105 ft, based on historical drilling in the area.
The fluvial/lacustrine deposits of the Brushy Basin Member are underlain by the Westwater Canyon Member, which hosts the uranium deposits in the Roca Honda area. The fluvial, sandstone dominated Westwater Canyon Member is approximately 100 ft to 250 ft thick under the Mine area, and consists of grey, light yellow-brown and reddish grey arkosic sandstone (Fitch, 2006). The Westwater Canyon Member is informally subdivided into sandstone and shale units. The sandstone units, which contain the uranium mineralization, have grains composed of quartz (~61%), feldspar (~35%), chert (~3%), and heavy minerals (<1%). The Recapture Member is composed of greyish-red siltstone and claystone.
Figure 7-4 is a detailed stratigraphic section of the Upper Jurassic Stratigraphy of the Roca Honda Mine.
Figure 7-4: Roca Honda Upper-Jurassic Stratigraphy
7.2.2 Structural Geology
Regional structures in the Grants uranium district, specifically the Ambrosia Lake subdistrict west of the Property, formed during the Mesozoic and continued developing into the Tertiary. This period of deformation is coincident with the formation of the San Juan Basin. Most of these structures are related to the uplift of the Zuni Mountains, which has been periodically active since Pennsylvanian time (Santos, 1970). Structures associated with this period of Mesozoic-Tertiary deformation include normal faults; transform faults, as well as pre- and post-Dakota Sandstone folds. The regional trend of the major structures throughout the Grants uranium district is to the north-northeast but varies widely.
There are four major fault systems in the Ambrosia Lake subdistrict. The two nearest the Roca Honda project, the San Mateo and San Rafael fault zones, are located to the west and south of the project respectively. The San Mateo fault zone is composed of normal faults with throw down to the east, and has a maximum vertical offset of 450 ft. Additionally, thinning of the Brushy Basin Member on opposite sides of this zone suggest that there is some lateral movement associated with this fault zone as well. This would suggest this overall fault zone is a right-lateral oblique fault zone with large components of both horizontal and vertical motion. The San Rafael fault zone, the largest in the region, differs in that most if not all movement is horizontal, with up to 20,000 ft of right-lateral displacement (Santos, 1970).
Pre-Dakota folding is not present in the Ambrosia Lake subdistrict, but is common in the Laguna Sub-district, approximately 30 mi to the southeast. There pre-Dakota folds have a maximum amplitude greater than 100 ft (Santos, 1970). Within the Ambrosia Lake subdistrict, the major period of folding occurred following deposition of the Late Cretaceous Dakota Sandstone. The two largest folds in the region, the McCartys Syncline and the Ambrosia Dome, formed during this period of deformation, and have structural relief greater than 1,000 ft (Santos, 1970). A third smaller fold, the San Mateo Dome, is located north of the Roca Honda project and dips east-southeast into the McCartys Syncline, giving local bedding a 7° to 11° dip (Falk, 1978).
Geologic structures at the Mine are associated with regional deformation, which occurred during the late Cretaceous, following deposition of the geologic strata seen at the Mine. There is no evidence of recent activity. The primary structures are high angle, north to northeast trending normal faults that cut across the western portion of Sections 9 and 16, with no major faults evident on Section 10.
Maximum offset along these faults is approximately 150 ft and has been estimated from the location of lithological contacts along a north-trending fault in Section 17 and adjacent borehole data. Down dip offsets to the west and northwest have been interpreted for all faults at the Mine.
The dip along the Fernandez Monocline varies from approximately 3° to 4° in the western portion of the property, to as much as 20° in Section 10. Possible minor accommodation faults related to the monocline may be encountered in the subsurface on Section 10, however, offsets should be minor.
Previous detailed structural geology work by Kerr-McGee on Section 17 indicates complex normal fault geometry, with the potential for some apparent structures to have formed as stress relief and in strike slip duplexes along bends in transform faults when reviewed at a larger scale (Carter, 2016).
7.3 Mineralization
The uranium mineralization found in the Mine area is contained within five sandstone units of the Westwater Canyon Member. Zones of mineralization vary from approximately one foot to 30 ft thick, 100 ft to 600 ft wide, and 200 ft to 3,000 ft in length in elongated pods. Uranium mineralization in the Mine area west to east, and northwest to southeast depending on general area within the Mine area, consistent with trends of the fluvial sedimentary structures of the Westwater Canyon Member, and the general trend of mineralization across the Ambrosia Lake subdistrict.
Core recovery from the 2007 drilling program indicates that uranium occurs in sandstones with large amounts of organic/high carbon material. Non-mineralized host rock is much lighter (light brown to light grey,) and it has background to slightly elevated radiometric readings.
Uranium mineralization in the Mine area is believed to be predominantly primary ("trend") mineralization, with some secondary mineralization due to oxidation and mobilization of uranium near permeable geologic structures. Uranium mineralization consists of dark organic-uranium oxide complexes. The uranium in the Mine area is dark grey to black in color and is found between depths of approximately 1,380 ft to 2,600 ft below the surface. Although coffinite and uraninite have been identified in the Grants uranium district, their abundance is not sufficient to account for the total uranium content in a mineralized sample. Admixed and associated with the uranium are enriched amounts of vanadium, molybdenum, copper, selenium, and arsenic, in order of decreasing abundance.
The primary mineralization pre-dates the formation of the Laramide aged structures in the Mine area, with a small amount of vertical offset of mineralization present across the local faults. There is a possibility of some redistribution and stack ore along faults, however, it appears that most of the Roca Honda mineralization is primary. Redistributed, post-fault, or stack mineralization occurs in the Ambrosia Lake subdistrict of the Grants uranium district, but is not apparent in the Roca Honda area.
7.3.1 Mineralization Controls
Paleochannels that contain quartz-rich, arkosic, fluvial sandstones are the primary mineralization control associated with this trend. Previous mining operations within the immediate area suggest that faults in the Roca Honda area associated with the San Mateo fault zone post-date the emplacement of uranium, therefore, it may be expected that mineralized zones in the Roca Honda area are offset by faults.
Mineralization is generally confined to the fluvial sandstones of the Westwater Canyon Member and the Poison Canyon Sandstone of the Brushy Basin Member, though there may be some localized seepage into the under/overlying shales and mudstones, as well as some minor extension (less than 10 ft) of mineralization into the underlying Recapture Member. Within the Mine area, the Westwater Canyon Member contains as many as seven individual sandstones, which the uranium mineralization is spread across. In Sections 9 and 16, the mineralization is typically found in the upper sandstones (A, B1, and B2). In the north-central portion of the Mine area (Section 10 and 11), the mineralization is concentrated in the lower sandstone units (C and D) due to a pinching out of the upper sands and a thickening of the Brushy Basin Member. In the far western area of the project (Section 17), the uranium mineralization is generally in the upper two to three sandstones (A, B1 and B2), with very few mineralized occurrences in the lower half of the Westwater Canyon Member. To the east of the Mine area, the mineralization is spread across all of the sandstone units (including the Poison Canyon Sandstone); this area also appears to be in a region of overall mineral convergence at multiple horizons within the Westwater Canyon Member and observed within the Mount Taylor Mine (Riese, 1977).
Sedimentary features may exhibit control on a small scale. At the nearby Johnny M mine, a sandstone scour feature truncates underlying black mineralization, indicating nearly syngenetic deposition of uranium mineralization with the sandstone beds. In places, uranium mineralization is related to clay-gall (cobbles) layers within the host sandstone.
Geochemical environments in the host sandstone also play an important role in controlling the location of the uranium mineralization. Historical mining operations at both the Johnny M Mine and the Mount Taylor Mine indicate that the uranium mineralization is generally located within a “halo” of reduced (“bleached”) ground. This reduced ground is reflected by light grey sandstone hues and blue-green reduced rims on clay-galls containing ferric iron.
8.0 DEPOSIT TYPES
More than 340 Mlb of U3O8 have been produced from the Grants uranium deposits in New Mexico between 1948 and 2002. The Grants uranium district is one of the largest uranium provinces in the world. The Grants uranium district extends from east of Laguna to west of Gallup in the San Juan Basin of New Mexico. Three types of sandstone uranium deposits are recognized: tabular, redistributed (roll-front, fault-related), and remnant-primary. The tabular deposits formed during the Jurassic Westwater Canyon time period. Subsequently, oxidizing solutions moved down dip, modifying tabular deposits into redistributed roll-front and fault-related deposits. Evidence, including age dates and geochemistry of the uranium deposits, suggests that redistributed deposits could have been formed shortly after deposition in the early Cretaceous Period and from a second oxidation front during the mid-Tertiary Period (McLemore, 2010)
Primary mineralization deposits are generally irregular, tabular, flat-lying bodies elongated along an east to southeast direction, ranging from thin pods a few feet in thickness and length to bodies several tens or hundreds of feet long. The deposits are roughly parallel to the enclosing beds but may form rolls (tabular lenses) that cut across bedding. The deposits may occur in more than one layer, form distinct trends, commonly parallel to depositional trends, and occur in clusters. Primary mineralization in the Ambrosia Lake subdistrict consists mostly of uranium-enriched humic matter that coats sand grains and impregnates the sandstone, imparting a dark color to the rock. The uranium mineralization consists largely of unidentifiable organic-uranium oxide complexes that are light grey-brown to black. A direct correlation exists between uranium content and organic-carbon content by weight percent in the "ores" (Squyres, 1970; Kendall, 1972).
9.0 EXPLORATION
9.1 Exploration
EFR has not conducted any exploration activities on the Project since acquiring the properties in August 2013.
9.2 Geotechnical and Hydrogeology
Geotechnical designs for the Mine are based on the laboratory testing of a limited number of core samples. Section 16.3 Mine Design and Section 16.5 Geotechnical Parameters provide additional information.
Hydrogeologic studies are discussed in Section 16.6.
10.0 DRILLING
No exploration or drilling work has been conducted at the Mine since EFR acquired it in August 2013.
EFR is planning a large infill-drilling program of approximately 200 surface drillholes prior to any mining operations taking place at the Mine. Core recovered from this planned program will be used for assay checks of geophysical probes, disequilibrium and metallurgical studies, and geotechnical and hydrologic studies to refine mine plans. This program is being permitted as part of the overall mine permitting process and no timeframe for this drilling has been set.
Drillhole collar locations are recorded on the original drill logs and radiometric logs created at the time of drilling, including easting and northing coordinates in local grid or modified NAD 1983 New Mexico West State Plane FIBPS 3003 (US feet) and elevation of collar in feet above sea level. The SLR QP is not aware of any drillhole orientation surveys as downhole deviation surveys are not typically conducted as all drillholes are vertical.
10.1 Historic Drilling
Historical exploration drilling within the project area generally utilized truck mounted mud rotary drills with holes 4 ¾ in. in diameter. The holes were drilled through the Westwater Canyon Member and several feet into the underlying non-hosting Recapture Member of the Morrison Formation. Sample cuttings were typically taken at five-foot intervals by the driller and laid out on the ground in piles for each interval in rows of 20 samples, or 100 ft. Upon completion of a drillhole, the hole was logged using natural gamma log, determining uranium grade through industry standard grade calculation methods (equivalent uranium = eU3O8), and verifying with laboratory assays (chemical uranium = cU3O8).
Drilling on the Roca Honda property has been conducted in phases by Rare Metals, Kerr-McGee, Western Nuclear, and RHR from 1950 to 2011, and consists of 1,450 surface drillholes totalling more than 2,312,000 ft. EFR holds a large database of historical data from the various operators of the Mine area, including those listed in Table 10-1 by Section. In total, there are 1,790 originals or copies of drill logs for the Mine area in the database. Many of the remaining drill logs, and specifically those from Sections 5, 6, and 8, are still held by EFR as part of the historical Kerr-McGee database acquired by the company.
EFR holds the gamma-ray logging calibration data for the Kerr-McGee drilling in the San Mateo Valley. Kerr-McGee did not place the calibration data on each individual drillhole log header, but rather listed the probe identification number, which could be traced back to a calibration log that contained all pertinent data on that probe to determine eU3O8. A discussion of gamma-logging and calibration data is described in Section 11.1.1 of this Technical Report.
In addition to the historical exploration drilling data, EFR holds numerous internal reports, resource estimates, geologic maps, and mine planning documents prepared by multiple companies and their consultants across the project area. The SLR QP is not aware of any drilling or sampling errors that could materially impact the accuracy and reliability of the mineral resource estimate but does recommend completing additional confirmation drilling at the earliest opportunity to confirm historical drillhole data on all zones.
A drill summary table by Section is included in Table 10-2. Figure 10-1 shows the locations of drillholes by Section for the Mine.
Table 10-1: Drilling at and Near the Roca Honda Mine by Section
Energy Fuels Inc. - Roca Honda Project
Township | Range | Section | # of Drillholes | Total Depth (ft) |
T13N | R08W | 31 | 36 | 80,661 |
41 | 41 | 81,470 | ||
5 | 93 | 168,629 | ||
6 | 171 | Unknown | ||
8 | 231 | 389,050 | ||
9 | 188 | 377,428 | ||
10 | 178 | 429,215 | ||
11 | 4 | 10,848 | ||
15 | 1 | 2,896 | ||
16 | 75 | 123,667 | ||
17 | 518 | 841,952 | ||
T14N | R08W | 311 | 184 | Unknown |
321 | 70 | Unknown | ||
Total | 1,790 | 2,505,816+ |
Notes:
1. Portions of Sections 3 & 4, T13N, R08W and Sections 31 & 32, T14N, R08W, are no longer controlled by EFR
Table 10-2: Summary of Exploration Drilling Completed at Roca Honda
Energy Fuels Inc. - Roca Honda Project
Township, Range, Section |
Year | Company | # of Drillholes (Cum. Total) |
Total Depth (ft) |
T13N, R08W, 5 | 1957 | Rare Metals | 11 (11) | 20,493 |
1958 | Rare Metals | 7 (18) | 11,122 | |
1966 | Kerr-McGee | 3 (21) | 5,485 | |
1967 | Kerr-McGee | 1 (22) | 1,730 | |
1969 | Kerr-McGee | 1 (23) | 1,761 | |
1972 | Kerr-McGee | 4 (27) | 7,547 | |
1975 | Kerr-McGee | 14 (41) | 24,243 | |
1976 | Kerr-McGee | 13 (54) | 23,442 | |
1977 | Kerr-McGee | 20 (74) | 39,602 | |
1979 | Kerr-McGee | 1 (75) | 1,775 |
Figure 10-1: Drillhole Location Map
11.0 SAMPLE PREPARATION, ANALYSES, AND SECURITY
11.1 Sample Preparation and Analysis
11.1.1 Gamma Logging
The standard procedure for sampling uranium deposits in the United States involves drilling a hole and running a gamma probe down hole to produce a gamma log. The data gained from the gamma log, typically counts per second (cps), can be converted to a percent equivalent U3O8 (%eU3O8) using calibration data specific to each probe. This method limits the amount of core needed to evaluate a uranium deposit. It is common practice to use this data in place of core assay data for Mineral Resource estimates. Typically, core is only collected to validate gamma log data, determine disequilibrium, or for use in amenability or geotechnical studies. As mentioned in Sections 9.0 and 10.0, EFR has not conducted any exploration work at the Roca Honda Mine, however drilling and coring completed by Strathmore Resources/RHR is addressed in this Section, as well as discussions on procedures and methods used to estimate the Mineral Resource.
Drilling for uranium is unique in that core does not need to be recovered from a hole to determine the metal content. Due to the radioactive nature of uranium, probes that measure the decay products or "daughters" can be read with a downhole gamma probe, a process referred to as gamma logging. While gamma probes do not measure the direct uranium content, the data collected (in cps) can be used along with probe calibration data to determine an equivalent U3O8 grade in percent (%eU3O8). These grades are very reliable as long as there is not a disequilibrium problem in the area. Gamma logging is common in non-uranium drilling and is typically used to discern rock types.
11.1.1.1 Calibration
For the gamma probes to report accurate %eU3O8 values the gamma probes must be calibrated regularly. The probes are calibrated by running the probes in test pits maintained historically by the U.S. Atomic Energy Commission (AEC) and currently by the U.S. Department of Energy (DOE). Test pits are in Grand Junction, Colorado, Grants, New Mexico, and Casper, Wyoming. The test pits have known %U3O8 values, which are measured by the probes. A dead time (DT) and K-factor can be calculated based on running the probes in the test pits. These values are necessary to convert cps to %eU3O8. The DT accounts for the size of the hole and the decay that occurs in the space between the probe and the wall rock. DT is measured in microseconds (μsec) while the K-factor is simply a calibration coefficient used to convert the DT corrected cps to %eU3O8.
Quarterly or semi-annual calibration of a gamma probe is usually sufficient; however, calibration should be done more frequently if variations in data are observed or if the probe is damaged.
11.1.1.2 Method
Following the completion of a rotary hole, a geophysical logging truck will be positioned over the open hole and a probe will be lowered to the hole's total depth. In uranium deposits, these probes take different readings, including gamma, resistivity, standard potential, and hole deviation. Only gamma is used in grade calculation. Once the probe is at the bottom of the hole, the probe begins recording as it raised. The quality of the data is impacted by the speed the probe is removed from the hole. Experience shows a speed of 20 feet per minute (ft/min) is adequate to obtain data for resource modeling. Data is recorded in cps, which is a measurement of uranium decay of uranium daughter products, specifically Bismuth-24. That data is then processed using the calibration factors to calculate a eU3O8 grade. Historically, eU3O8 grades were calculated using the AEC half amplitude method, which gives a grade over a thickness. Currently, the eU3O8 grades tend to be calculated on 0.5-foot intervals by software. Depending on the manufacturer of the probe truck and instrumentation, different methods are used to calculate the eU3O8 grade, however all, including the AEC method are based on two equations:
Depending on the drilling and logging environment, additional multipliers can be added to correct for various environmental factors. Typically, these include a water factor for drillhole mud, a pipe factor if the logging is done in the drill steel, and a disequilibrium factor if the deposit is known to be in disequilibrium. Tables for water and pipe factors are readily available.
The equivalent U3O8 (eU3O8) content was calculated by Kerr-McGee following the industry-standard method developed originally by the AEC (Kerr-McGee manual, undated). For mineralized zones greater than two feet thick, an upper and lower boundary was initially determined by choosing a point approximately one-half of the height from background to peak of the anomaly. The cps were determined for each one-foot interval and then divided by the number of intervals to calculate an average cps for the anomaly. The cps were converted to percent eU3O8 using the appropriate Kerr-McGee charts for the specific logging unit used. This was the same method used by Western Nuclear for drillholes on Section 16. This method was an industry accepted practice at the time of drilling and results give a composite grade over a given thickness. As the thickness is not standard, data is for various lengths.
As part of an effort to update the data at the Mine, all the Kerr-McGee logs for Section 17 were scanned and the gamma logs were digitized at 0.5 ft intervals. This standardized the data to a set length (0.5 ft) and allowed the mineralized zones to be defined at a higher level of detail. The logs for the five holes drilled by RHR were also calculated at 0.5 ft intervals.
11.1.2 Core Sampling
RHR developed and implemented stringent standard operating procedures for lithologic logging of cuttings and core, and core handling (Strathmore, 2008).
The standard operating procedures provide guidance for proper and consistent core collection practices, and to ensure that proper core handling procedures, quality control, and required documentation are undertaken. The RHR Lead Geologist was responsible for implementing the core handling and sampling procedures.
The RHR field geologist was responsible for ensuring that all standard operating procedures were conducted in accordance with Strathmore standards, under the direction of the RHR Lead Geologist.
The field geologist observed the core from the time it was pulled from the hole until it was transported to a locked storage facility adjoining RHR's geology office located in Grants, New Mexico.
Core intervals selected for sampling were split in half lengthwise with a hydraulic splitter. One half was sent for analysis, with the other half logged and archived with the remaining core. Core samples were inserted into sample bags labelled with the well identification and core run.
Core recovery measurements were taken following the core logging procedure and recorded on the lithologic log. Core recoveries within the RHR drillholes are as follows:
11.1.2.1 RHR Core Sampling Results
RHR completed four pilot holes for monitor wells and cored the Westwater Sandstone in each of the holes. RHR also completed a geotechnical hole in 2011 that is not included in the resource database.
Selected intervals of core were split and sampled for multi-element chemical analysis (uranium, vanadium, organic carbon) by inductively coupled plasma mass spectrometry (ICP-MS) and atomic emission spectrometry (ICP-AES) or for hydrologic studies. Chemical analyses were performed by independent laboratories: Energy Laboratories, Inc. (ELI), located in Casper, Wyoming, by ICP-MS and ICP-AES methods, and by the Mineral Lab, Inc., located in Lakewood, Colorado, using X-ray fluorescence methods (XRF). Uranium was reported as U (ppm) and converted to %U3O8 (ppm U* 1.17924/10,000).
Additional sampling continued in 2008. Samples were taken adjacent to the 2007 core samples. Chemical analysis results from the 2007 and 2008 sampling programs are listed in Table 11-1.
Table 11-1: Strathmore Core Assay Results
Energy Fuels Inc. - Roca Honda Project
Hole ID | Sample ID | From (ft) |
To (ft) |
ICP (%U3O8) |
XRF (%U3O8) |
Closed Can (%U3O8) |
ICP/Closed Can |
XRF/Closed Can |
S1a-Jmw-CH-07 | RH07-0020 | 1884.00 | 1885.00 | 0.0001 | 0.0024 | |||
RH07-0021 | 1896.00 | 1897.00 | 1.2028 | 0.9434 | ||||
RH07-0022a | 1895.00 | 1905.00 | 0.6792 | 0.5896 | 0.647 | 105.0% | 91.1% |
Hole ID | Sample ID | From (ft) |
To (ft) |
ICP (%U3O8) |
XRF (%U3O8) |
Closed Can (%U3O8) |
ICP/Closed Can |
XRF/Closed Can |
RH07-0022b | 1895.00 | 1905.00 | 0.6780 | 0.5896 | 0.654 | 103.7% | 90.2% | |
RH07-0023 | 1918.30 | 1919.10 | 0.0067 | 0.0050 | ||||
RH07-0024 | 1948.40 | 1949.50 | 0.0054 | 0.0090 | ||||
RH07-0025 | 1981.00 | 1982.00 | 0.0016 | 0.0041 | ||||
RH07-0026 | 1983.50 | 1984.50 | 1.0247 | 1.4150 | 0.595 | 172.2% | 237.8% | |
RH07-0027 | 2047.00 | 2048.00 | 0.0020 | 0.0019 | ||||
RH07-0028 | 2090.40 | 2091.40 | 0.0007 | 0.0025 | ||||
RH07-0029 | 1925.50 | 1926.20 | 0.0015 | 0.0050 | ||||
RH07-0030 | 1958.50 | 1959.00 | 0.0002 | 0.0046 | ||||
RH07-0031 | 2013.50 | 2014.00 | 0.0014 | 0.0045 | ||||
S2-Jmw-07 | RH08-0008 | 1734.80 | 1734.90 | 0.0088 | ||||
RH08-0009 | 1735.30 | 1735.40 | 0.0292 | |||||
RH07-0011 | 1735.80 | 1736.80 | 0.3762 | 0.4599 | ||||
RH08-0010 | 1737.30 | 1737.40 | 0.4493 | |||||
RH08-0011 | 1737.80 | 1737.90 | 0.0973 | |||||
RH08-0012 | 1738.30 | 1738.40 | 0.0075 | |||||
RH08-0013 | 1738.80 | 1738.90 | 0.0077 | |||||
RH07-0012 | 1759.00 | 1761.00 | 1.1910 | 1.5330 | ||||
RH08-0014 | 1761.40 | 1761.50 | 0.7464 | |||||
RH08-0015 | 1761.90 | 1762.00 | 1.0047 | |||||
RH08-0016 | 1796.50 | 1796.60 | 0.0054 | |||||
RH08-0017 | 1797.00 | 1797.10 | 0.0057 | |||||
RH08-0018 | 1797.50 | 1797.60 | 0.0010 | |||||
RH07-0013 | 1798.00 | 1799.30 | 0.1863 | 0.2476 | ||||
RH08-0019 | 1799.50 | 1799.60 | 0.0028 | |||||
RH07-0034a | 1756.00 | 1761.00 | 0.6745 | 0.8254 | 0.583 | 115.7% | 141.6% | |
RH07-0034b | 1756.00 | 1761.00 | 0.7052 | 0.8254 | 0.702 | 100.5% | 117.6% |
Hole ID | Sample ID | From (ft) |
To (ft) |
ICP (%U3O8) |
XRF (%U3O8) |
Closed Can (%U3O8) |
ICP/Closed Can |
XRF/Closed Can |
S3-Jmw-CH-07 | RH08-0020 | 1916.00 | 1916.10 | 0.0039 | ||||
RH08-0021 | 1916.50 | 1916.60 | 0.0053 | |||||
RH08-0022 | 1917.00 | 1917.10 | 0.0046 | |||||
RH08-0023 | 1917.50 | 1917.60 | 0.0058 | |||||
RH08-0024 | 1918.00 | 1918.10 | 0.0074 | |||||
RH08-0025 | 1918.50 | 1918.60 | 0.0068 | |||||
RH08-0026 | 1919.00 | 1919.10 | 0.0125 | |||||
RH08-0027 | 1919.50 | 1919.60 | 0.0111 | |||||
RH08-0028 | 1920.00 | 1920.10 | 0.0084 | |||||
RH07-0032 | 1920.50 | 1921.50 | 0.0798 | 0.0909 | 0.0369 | 216.3% | 246.4% | |
RH08-0029 | 1922.00 | 1922.10 | 0.0288 | |||||
RH08-0030 | 1922.50 | 1922.60 | 0.0300 | |||||
RH08-0031 | 1923.00 | 1923.10 | 0.0179 | |||||
RH08-0032 | 1923.50 | 1923.60 | 0.0180 | |||||
RH08-0033 | 1924.00 | 1924.10 | 0.0222 | |||||
RH08-0034 | 1924.50 | 1924.60 | 0.0131 | |||||
RH08-0035 | 1925.00 | 1925.10 | 0.0136 | |||||
RH08-0036 | 1925.50 | 1925.60 | 0.0132 | |||||
RH08-0037 | 1926.00 | 1926.10 | 0.0182 | |||||
RH08-0038 | 1926.50 | 1926.60 | 0.0137 | |||||
RH08-0039 | 1927.00 | 1927.10 | 0.0099 | |||||
RH08-0040 | 1927.50 | 1927.60 | 0.0037 | |||||
RH08-0042 | 1937.00 | 1937.10 | 0.0006 | |||||
RH08-0044 | 1938.00 | 1938.10 | 0.0010 | |||||
RH08-0045 | 1938.50 | 1938.60 | 0.0015 | |||||
RH08-0046 | 1939.00 | 1939.10 | 0.0017 | |||||
RH08-0047 | 1939.50 | 1939.60 | 0.0044 | |||||
RH08-0048 | 1940.00 | 1940.10 | 0.0037 | |||||
RH08-0049 | 1940.50 | 1940.60 | 0.0033 | |||||
RH07-0033 | 1941.00 | 1942.00 | 0.0238 | 0.0282 | ||||
S4-Jmw-CH-07 | RH07-0005 | 1787.20 | 1788.00 | 0.0013 | ||||
RH07-0006 | 1807.20 | 1805.50 | 0.0002 | |||||
RH07-0007 | 1847.60 | 1848.80 | 0.0001 | |||||
RH07-0008 | 1882.90 | 1884.30 | 0.0001 |
11.1.2.2 Sample Preparation, Analysis, and Security
RHR implemented and followed strict standard operating procedures as documented in Standard Operation Procedure 006 "Sample handling, packaging, shipping, and chain of custody" (2008). The Standard Operating Procedure (SOP) outlines the preparation of environmental and waste characterization samples for shipment to the off-site analytical laboratory, and the chain of custody (CHC) procedures to follow from the sample collection stage to the entry of results into the RHR database.
An RHR or contract geologist monitored removal of core from the core barrel to transportation of core to the locked storage facility adjoining RHR's geology office in Grants. Sampling was done at this facility. All logging, sampling, and handling of core was supervised by the RHR Senior Development Geologist and performed by RHR contract geologists.
All samples were collected, packaged, sealed, and labelled according to the SOP. All sample containers used for transport were checked for the existence of external contamination. If contamination was identified, the container was decontaminated in accordance with the applicable SOP.
All samples were packaged to minimize the possibility of breakage during shipment. The shipping package was sealed with tape or locked, so that tampering could be readily detected.
Prior to transporting the samples to the analytical laboratory for analysis, the field geologist checked each sample for proper containment, preservatives, if required, and labels, and verified that the correct information was recorded on the COC form and seals. If discrepancies were noted, the sample documentation was corrected. Samples were then packaged and shipped to the designated analytical laboratories. All sample information was recorded in a sample logbook, including date and time of sample collection, sampler name, sample location and depth interval, sample number, sample type, and observations during sampling (e.g., temperature, wind).
The sampler attached a unique sample label to each sample with the date and time of sample collection, sample location and depth interval, sample number and sample type.
A COC/analytical request form was completed and accompanied all sample shipments from the field to the laboratory. Samples were shipped via a commercial carrier or transported to the analytical laboratory under COC procedures.
Upon receipt of samples, laboratory personnel confirmed that the contents of the shipment were accurately recorded by the COC, then signed and dated the COC, indicating receipt of the samples. After the samples had been verified with the COC documentation, custody of the samples was relinquished to the laboratory personnel.
In the SLR QP's opinion, past records indicate that RHR followed industry best practices in the sample preparation, analysis, and security procedures at Roca Honda, and the data are adequate for use in the estimation of Mineral Resources.
11.1.2.3 Assaying and Analytical Procedure
Closed can analyses were also conducted on samples for comparison with ICP and XRF results. The closed can method involves calculating the "radiometric assay" of the sample by determining the amount of gamma radiation given off by the daughter products of natural uranium radioactive decay. The difference between the "radiometric assay" and the chemical assay determined using ICP and XRF is what is referred to as disequilibrium.
11.1.3 Radiometric Equilibrium
Uranium grade is determined by measuring the radioactivity levels of certain daughter products formed during radioactive decay of uranium atoms. Most of the gamma radiation emitted by nuclides in the uranium decay series is not from uranium, but from daughters in the series.
Where daughter products are in equilibrium with the parent uranium atoms, the gamma-ray logging method will provide an accurate measure of the amount of parent uranium that is present. A state of disequilibrium may exist where uranium has been remobilized and daughter products remain after the uranium has been depleted, or where uranium occurs and no daughter products are present. Where disequilibrium exists, the amount of parent uranium present can be either underestimated or overestimated. It is important to obtain representative samples of the uranium mineralization to confirm the radiometric estimate by chemical methods.
Core is sampled over mineralized intervals as determined by a hand-held Geiger counter or scintillometer to define mineralized boundaries. Core intervals are split and sampled. Each sample is crushed and pulverized, and then two, separate assays are made of the same pulps. One assay is a scaler-radiometric or closed can radiometric log; the other is a chemical assay. The disequilibrium factor is the ratio of the actual amount of uranium (measured by chemical assay) to the calculated amount (based on the gamma-ray activity of daughters). If the quantities are equal, there is no disequilibrium. If the ratio is less than one, some uranium has been lost and the calculated values are overestimating the quantity of uranium.
The degree of disequilibrium will vary with the mineralogy of the radioactive elements and their surroundings (which may create a reducing or oxidizing environment), climate, topography, and surface hydrology.
The sample volume will also affect the determination of disequilibrium, as a small core sample is more likely to show extreme disequilibrium than a larger bulk sample. In some cases, the parents and daughters may have moved apart over the length of a sample, but not over a larger scale, such as the mineralized interval.
Generally, checks are made for disequilibrium when drilled resources reach approximately 100,000 lb to 500,000 lb of contained U3O8 (Fitch, 1990). In new areas, disequilibrium is checked after the first few core holes. For large uranium producers with years of operating experience in well-known districts, such as the Ambrosia Lake subdistrict, and with extensions on-trend with mined deposits, it was common to drill out most of the resources and obtain several core hole intercepts of selected mineralized zones for logging, assaying, and metallurgical checks prior to large capital expenditures such as shaft-sinking and underground development.
Analysis of chemical equilibrium of uranium for the Grants uranium district indicates that various relationships are present. In most areas and deposits, uranium is in equilibrium, or is slightly enriched relative to gamma determinations, i.e., chemU3O8 is greater than eU3O8.
There is no report of core holes or core assays for the drilling performed by Kerr-McGee on Sections 9 and 10. Western Nuclear reports cored intervals on Section 16 for Hole 68 and Hole 69, however, no logging and/or assay data are available (Fitch, 2010). Kerr-McGee reports include information for holes 17-514-C through 17-518-C in Section 17, however, assay data are only available for holes 17-516-C and 17-517-C.
Based on Kerr-McGee's extensive operating experience in the Ambrosia Lake subdistrict of the Grants uranium district there were no historical concerns regarding disequilibrium for gamma-ray results (Fitch, 2010). Additionally, RHR core showed no major negative disequilibrium. Therefore, based on this information, no disequilibrium factor has been applied to the Mine eU3O8 gamma logs and/or assays.
RHR has results of analyses of chemical equilibrium in four samples from three core holes (totalling 17 ft of mineralized core) located in Section 16. Results indicate positive average equilibrium (chemU3O8/eU3O8) for the four samples.
Based on a review of available reports describing the state of chemical equilibrium for uranium in the vicinity of the Roca Honda deposit and in similar deposits with primary-type uranium mineralization, EFR and the SLR QP consider it possible that the Roca Honda deposit, taken as a whole, will have an average state of equilibrium that is slightly favorable with regard to chemical uranium versus eU3O8.
EFR is of the opinion that there is a low risk of negative equilibrium, i.e., chemical uranium lower than radiometrically determined uranium, in the Roca Honda deposit. Additional sampling and analyses are recommended by the SLR QP to supplement results of the limited disequilibrium testing conducted by RHR.
11.2 Sample Security
EFR has conducted no core sampling since acquiring the properties. All reported core sampling was performed by previous operators RHR. The reported sample preparation, handling of the historic coring, and sample security cannot be confirmed.
11.3 Quality Assurance and Quality Control
Quality assurance (QA) consists of evidence to demonstrate that the gamma logging and assay data has precision and accuracy within generally accepted limits for the sampling and analytical method(s) used in order to have confidence in a resource estimate. Quality control (QC) consists of procedures used to ensure that an adequate level of quality is maintained in the process of collecting, preparing, and assaying the exploration drilling samples. In general, QA/QC programs are designed to prevent or detect contamination and allow assaying (analytical), precision (repeatability), and accuracy to be quantified. In addition, a QA/QC program can disclose the overall sampling-assaying variability of the sampling method itself.
11.3.1 Kerr-McGee
Gamma-ray logs were run by Kerr-McGee and Century Geophysical for Sections 9, 10, and 17 and by Geoscience Associates logging trucks and Century Geophysical for Section 16. The radiometric probe method of analysis provides a continuous record of mineralization with depth. The probe is calibrated with a known radioactive source, is lowered to the bottom of the drillhole, and processes and records a continuous gamma-log while being lifted. When a mineralized interval is encountered, the probe is pulled up through the zone to determine the upper limit, lowered again, and the mineralized zone is run a second time at a less sensitive scale to better fit the plot on the log paper. All information of the second run is recorded on the log for later computation of grade.
Each logging truck periodically made logging runs of the Atomic Energy Commission (AEC) test pit, a set of shallow holes with known concentrations and thickness of uranium. In addition to the gamma log, plots are made of the resistivity and spontaneous potential (SP). The resistivity and SP generate a continuous strip chart of the lithologies as the probe is removed from the drillholes. The log plot records gamma anomalies correlated to specific footages and lithologic units directly at the source, so there is no possibility of a later mix-up of data.
The probe 11-8stimate11-8onn procedure with the AEC test pit is the standard by which the uranium industry operated. The test pits were designed with similar grade and uranium mineralization common to the Grants uranium district. EFR has a record of probe calibration dates and data for Kerr-McGee log trucks.
11.3.2 RHR
The four RHR pilot holes and the geotechnical hole were probed by Jet West. Jet West maintains a policy of regularly calibrating gamma-ray probes, to determine instrument K-factor, using the five calibration pits (cased holes) in Grand Junction that owned by the DOE and maintained by Navarro Research and Engineering, Inc. Jet West provides a digital and graphic log with cps as well as %eU3O8 computed by the K-factor and other recorded calibration factors.
The QA/QC procedures undertaken by Jet West for geophysical logging of holes have been reviewed by the SLR QP and meet industry best practices.
All sample preparation, ICP-MS, ICP-AES, and radiometric analysis of the core samples was performed by ELI. All analysis was performed in compliance with National Environmental Laboratory Accreditation Conference (NELAC) and ELI is certified in the NELAC program. Further, ELI practices rigorous internal COC and QA/QC processes (www.energylab.com).
RHR did not submit blanks or standard reference samples. All QA/QC work was completed internally by the respective third-party laboratories.
Duplicate samples were submitted for analysis in 2007 and are listed in Table 11-1. Two duplicate samples are insufficient to make statistical comparisons, however, the duplicate ICP sample results are within 4% of the original results and considered acceptable.
11.4 Conclusions
The SLR QP is of the opinion that the sample security, analytical procedures, and QA/QC procedures used by EFR meet industry best practices and are adequate to estimate Mineral Resources.
The SLR QP recommends modifying the sample analysis QA/QC protocol to include the regular submission of blanks and standards for future drill programs.
12.0 DATA VERIFICATION
Data verification is the process of confirming that data has been generated with proper procedures, is transcribed accurately from its original source into the project database and is suitable for use as described in this Technical Report.
As part of the resource estimation procedure drill data is spot checked by EFR personnel and audited by the SLR QP for completeness and validity.
The data used to support this current Mineral Resource estimate has been reviewed and disclosed previously in Canadian NI 43-101 Technical Reports. Those data verification efforts carried out by the same SLR QP in 2011, 2016, and 2021 are summarized in this Section. Additionally, EFR hired Amec Foster Wheeler (Amec), now Wood, in 2016 to review the drillhole data as part of a drill spacing study. The findings of that study are also provided.
12.1 David Fitch Data Verification (2004 to 2008)
The initial NI 43-101 compliant Technical Reports for Sections 9, 10, and 16 of the Project were authored by David Fitch, an independent qualified person.
Fitch conducted a detailed review of the extensive files in Strathmore's warehouse in Riverton, Wyoming, from October 14 to 15, 2004, and visited the property on October 16, 2004 (Fitch, 2008). Over 300 boxes, file cabinets, and map files covering the Roca Honda property as well as other projects were available for review. The files were generally complete and contained original data consisting of gamma-ray logs, mini logs, drillhole summaries, resource estimation sheets, copies of drillhole maps, "mine estimation" maps, reports of mine plans, survey documents, logging truck calibration records, and a few representative cross-sections. During the site visit, a number of drillhole locations, claim posts, and the US Mineral Survey monuments for MS2292 were examined.
A detailed review of Section 16 data continued in February and March 2006. This included drillhole maps by Rare Metals, Western Nuclear, and Kerr-McGee, reduced gamma-ray logs (scale of 1 in. = 50 ft), drill data summary sheets with depths, thickness, grade and horizon of uranium mineralization, drift survey results, and color of host rock. The dataset also included a set of drillhole data sheets prepared by Kerr-McGee for Section 16 that summarized the mineralized intercepts by drillhole, together with a rough calculation of "ore reserves" with the initials "JWS" and dated 9-25-79. These notes did not have supportive maps with block outlines and may have been preliminary evaluation notes.
Items not recovered for review, but listed in the data list, are mylar cross-sections, lithological logs, and AEC test pit logging files, which are stored at RHR field offices.
Fitch conducted a site visit from November 18 to 19, 2007, to examine core from the pilot holes and review additional files, maps, and data in the field and in the RHR regional office in Santa Fe, New Mexico. Several mineralized intervals of core from RHR holes drilled in 2007 were examined by Fitch, who concluded that there was no apparent contamination or disturbance of core.
Additional analytical data for the RHR pilot holes drilled on Section 16 were received and reviewed in February 2008.
Fitch concluded that the data collected by Kerr-McGee and Western Nuclear was of high quality and prepared in a reliable manner.
12.2 Roscoe Postle Associates Data Verification (2010 to 2011)
In 2010, SLR, formerly Roscoe Postle Associates Inc. (RPA), was hired by Strathmore to complete a NI 43-101 Preliminary Economic Assessment on Sections 9, 10, and 16 of the Project.
SLR QPs visited the Strathmore office in Riverton, Wyoming, from March 1 to 5, 2010. During the visit, the SLR QP reviewed historical plans and sections, geological reports, historical and recent drillhole logs, digital drillhole database, historical drillhole summary radiometric logs and survey records, property boundary surveys, and previous resource estimates for the Project. Discussions were also held with Strathmore personnel involved in the Project.
The SLR QP data review included a discussion between SLR and David Fitch, author of the 2006, 2008, and 2010 NI 43-101 Technical Reports.
The SLR QP visited the Roca Honda property, the Grants office, and the Santa Fe office in May 2011. During the visit, the SLR QP examined plans and sections, reviewed core logging and sampling procedures, and checked a few property boundary markers and drillhole collar locations. As part of the data verification process, the SLR QP independently measured cps of selected drill core samples using a handheld scintillometer, and checked a few drillhole collars and section boundaries on the property using a handheld GPS. Results are presented in Table 12-1 and Table 12-2. A few independent checks are insufficient to make statistical comparisons, however, the SLR QP's checks confirm the RHR drillhole locations and presence of uranium mineralization.
No significant discrepancies were identified during the verification process or the independent field data verification.
Table 12-1: SLR Survey Check
Energy Fuels Inc. - Roca Honda Project
Surveyed Point |
Location |
UTM NAD 83 |
TRMann State Plane |
TRMann State Plane |
|||
Easting |
Northing |
Easting |
Northing |
Easting |
Northing |
||
Hole 16-011 |
Sec. 16 |
256,220 |
3,916,432 |
2,769,084 |
1,587,580 |
2,769,092 |
1,587,588 |
Hole 16-040 |
Sec. 16 |
256,272 |
3,916,432 |
2,769,255 |
1,587,585 |
2,769,267 |
1,587,572 |
Sec. Corner |
Sec. 9 SE Corner |
256,367 |
3,916,566 |
2,769,554 |
1,588,034 |
2,769,553 |
1,588,037 |
Hole 10-096 |
Sec. 10 |
257,518 |
3,917,310 |
2,773,259 |
1,590,582 |
2,773,263 |
1,590,582 |
Claim Corner |
303, 330, 304, 331 |
257,571 |
3,917,021 |
2,773,460 |
1,589,639 |
2,773,452 |
1,589,642 |
Table 12-2: SLR Core Gamma-Ray Check
Energy Fuels Inc. - Roca Honda Project
Hole ID |
From |
To |
CPS |
CPS |
S2-Jmw-CH-07 |
1,758.0 |
1,758.3 |
100 |
60 |
S1-Jmw-CH-07 |
1,898.0 |
1,898.3 |
210-220 |
111 |
S1-Jmw-CH-07 |
1,898.0 |
1,901.0 |
110-220 |
105-162 |
S1-Jmw-CH-07 |
1,901.0 |
1,905.0 |
85-220 |
25-109 |
12.2.1 RHR Database Revisions
All Kerr-McGee drillhole collar locations were originally surveyed in a historical local grid coordinate system. In 2008, Thomas R. Mann and Associates (TRMann) surveyed the Roca Honda property, which included a limited ground survey of control points and an aerial survey, which produced aerial imagery and surface contours. All surface data were converted into the TRMann coordinate system, which is a modified NAD 83 State Plane New Mexico Western Zone system (Surveying Control Inc., 2008).
Available historical records for Section 16 contained discrepancies or had data missing for drillhole collar locations. RHR reviewed all database records and historical aerial photographs from 1978 and determined an appropriate location for each collar. Some Section 16 holes had recorded "no drift" records and were therefore assigned no drift in the RHR database.
Some holes were removed from the RHR digital database as the drillhole records were determined to be unreliable, either due to missing survey data or missing geophysical log.
In August 2010, a resurvey of the property was conducted by Land Survey Company LLC, to collect data on the Section corners, mineral surveys, Section 11 drillhole collars, and RHR wells.
All Section corners and mineral survey markers that were located in the field and determined to be reliable, were surveyed. Section 11 collars marked either by a collar casing or drillhole cuttings were surveyed. RHR wells drilled in 2007 were resurveyed.
There were 11 collars, marked by wooden posts or pipes, within Section 16, determined to be reliable and surveyed. Collar locations for the remaining Section 16 holes were calculated based on the locations of the surveyed holes.
A detailed description of the 2010 field survey and resultant plan map are included in the memorandum titled "August 3 Field Survey" (Kapostasy, 2010).
12.2.2 Database Verification 2011
The SLR QP checked the Vulcan digital drillhole database against available historical records, including Kerr-McGee drillhole summary sheets, drillhole plan maps, historical collar survey summaries, and gamma logs. Drillhole collar locations and downhole drift were checked for all holes drilled on Sections 9, 10, and 16. The SLR QP checked approximately 10% of historical drillhole records for discrepancies in lithology and radiometric log records in the areas of the interpreted mineralized zones. Drill logs and associated data sheets also include K-factors, dead time, hole size, date drilled, and date logged.
The SLR QP did not encounter any significant discrepancies with the Sections 9 and 10 drillholes in the vicinity of modeled mineralized zones.
The SLR QP reviewed the revised Section 16 collar locations and is of the opinion that the surveyed drill locations are accurate. The remaining locations were located based on an origin calculated using the surveyed holes and coordinates given by Western Nuclear. These locations have a small level of uncertainty associated with them as the origin used is an average and has an error of ± 3 ft. In the SLR QP's opinion this uncertainty is insignificant and does not affect the calculated resource.
The SLR QP recommends removing the Section 16 drillholes with no recorded drift from the drillhole database in the future. Drillholes in Sections 9 and 10 with no recorded drift were removed from the database, and it is unlikely that the Section 16 holes would not deviate. Only a few Section 16 drillholes have no recorded drift, and as they are located away from mineralized models, they do not have an impact on the current resource model.
No significant discrepancies were identified with the lithology and assay data in the Section 16 drillholes.
The SLR QP also checked the 2007 RHR drillhole data in the digital database against original records. No significant discrepancies were encountered. The 2011 geotechnical hole is accurately located.
Downhole gamma-ray, SP, and resistivity logs generated on the RHR drillholes were analyzed by RHR for lithology and uranium grades. Interpreted lithology and measured uranium grades were entered and compiled with all historical drillholes in MS Excel spreadsheets, and later imported into a Vulcan database. RHR geologists also recorded detailed descriptions of logged lithology based on visual inspection of recovered core; however, this information was not entered into the database and was used for comparative purposes.
The SLR QP reviewed the conversion of drillhole collar coordinates from historical to TRMann coordinates. No significant discrepancies were identified.
The SLR QP notes that descriptions of recent drilling programs, logging and sampling procedures have been well documented by RHR. No significant discrepancies were identified.
In 2012, the SLR QP reviewed RHR original lithology logs, gamma-ray, SP, and resistivity logs. All data corresponded with respect to lithology intervals and %U3O8 grades and disequilibrium analysis, as presented in Table 12-3. A detail description of the lithology can be found in Section 7 and is presented in the stratigraphic column in Figure 7-4. The data presented in Table 12-3 and Table 12-4 include a comparison between two different holes, S1-Jmw-CH-007 and S1a-Jmw-CH-007, drilled 30 ft apart.
Table 12-3: Lithology: Radiometric Log vs Core Log
Energy Fuels Inc. - Roca Honda Project
Drillhole |
Vulcan Database |
Core Lithology |
||||
|
From |
To |
Lithology |
From |
To |
Lithology |
S1-Jmw-CH-07 (compared to S1a-Jmw-CH-07) |
1,904.0 |
1,927.0 |
A |
1,896.0 |
1,924.5 |
A |
1,927.0 |
1,940.0 |
Aob |
1,924.5 |
1,943.1 |
Aob |
|
1,940.0 |
1,957.0 |
B1 |
1,943.1 |
1,956.4 |
B1 |
|
1,957.0 |
1,968.0 |
B1ob |
1,956.4 |
1,964.0 |
B1ob |
|
1,968.0 |
1,997.0 |
B2 |
1,964.0 |
2,004.0 |
B2 |
|
1,997.0 |
2,016.0 |
B2ob |
2,004.0 |
2,018.6 |
B2ob |
|
2,016.0 |
2,064.0 |
C |
2,018.6 |
2,078.9 |
C |
|
2,064.0 |
2,070.0 |
Cob |
2,078.9 |
2,086.3 |
Cob |
|
2,070.0 |
2,084.0 |
D |
2,086.3 |
N/A |
D |
Energy Fuels Inc. | Roca Honda Project, SLR Project No: 138.02544.00006 | ||
Technical Report - February 22, 2022 | 12-5 |
Table 12-4: %U3O8 Grade: Gamma Log vs Core Assay
Energy Fuels Inc. - Roca Honda Project
Drillhole |
Vulcan Database |
Core Assay |
||||
|
From |
To |
%U3O8 |
From |
To |
%U3O8 |
Jmw-CH- |
|
|
|
1,884.0 |
1,885.0 |
0.000130 |
|
|
|
1,896.0 |
1,897.0 |
1.203 |
|
1,904.3 |
1,910.8 |
0.37 |
1,895.0 |
1,905.0 |
0.679 |
|
1,910.8 |
1,915.8 |
0 |
|
|
|
|
1,915.8 |
1,917.3 |
0.06 |
|
|
|
|
1,917.3 |
1,953.8 |
0 |
1,918.3 |
1,919.1 |
0.007 |
|
|
|
|
1,925.5 |
1,926.2 |
0.002 |
|
|
|
|
1,948.4 |
1,949.5 |
0.005 |
|
1,953.8 |
1,957.3 |
0.48 |
|
|
|
|
1,957.3 |
1,971.5 |
0 |
1,958.5 |
1,959.0 |
0.000165 |
|
1,971.5 |
1,981.0 |
0.16 |
|
|
|
|
1,981.0 |
1,983.0 |
0 |
1,981.0 |
1,982.0 |
0.002 |
|
1,983.0 |
1,984.5 |
0.08 |
1,983.5 |
1,984.5 |
1.025 |
|
1,984.5 |
1,987.8 |
0 |
|
|
|
|
1,987.8 |
1,989.8 |
0.06 |
|
|
|
|
1,989.8 |
2,073.0 |
0 |
2,013.5 |
2,014.0 |
0.001 |
|
|
|
|
2,047.0 |
2,048.0 |
0.002 |
|
2,073.0 |
2,074.5 |
0.09 |
|
|
|
|
2,074.5 |
2,108.0 |
0 |
2,090.4 |
2,091.4 |
0.001 |
|
S2-Jmw-CH-007 |
1,628.0 |
1,731.0 |
0 |
|
|
|
1,731.0 |
1,734.0 |
0.16 |
1,731.0 |
1,732.0 |
0.376 |
|
1,734.0 |
1,748.0 |
0 |
|
|
|
|
1,748.0 |
1,757.0 |
0.56 |
1,750.0 |
1,755.0 |
0.675 |
|
1,757.0 |
1,792.0 |
0 |
1,753.8 |
1,755.0 |
1.191 |
|
1,792.0 |
1,793.5 |
0.2 |
|
|
|
|
1,793.5 |
2,010.0 |
0 |
1,792.0 |
1,793.3 |
0.186 |
Notes:
1. Gamma-ray results taken from S1-Jmw-CH-007, core samples taken from S1a-Jmw-CH-007
12.2.3 K-Factors
The SLR QP reviewed the logs and related information for 10 drillholes to confirm the interpretation and calculation of grade and thickness recorded by RHR in the resource database. The review was limited by the availability of probe logs in the full size format, and only included holes from Section 10. The holes were drilled by Kerr-McGee over the period from 1958 to 1979. K-factors and the identification numbers of the units and probes used for surveying were recorded on the logs and drill summary reports. RHR provided K-factors with corresponding probe numbers from historical Kerr-McGee documents.
The SLR QP did not identify any significant problems with the interpretations and calculations and is of the opinion that the historical K-factors are acceptable.
The SLR QP is of the opinion that the database issues will not significantly affect the current resource model, and that the database is valid and suitable to estimate Mineral Resources at the Project.
12.2.4 Continuity of Mineralization
The SLR QP conducted a preliminary review of grade continuity for each mineralized sandstone unit. Results indicate continuity of mineralization within each sandstone unit in both plan and section in elongate tabular or irregular shapes. Mineralization also occurs in various horizons within the sandstone units. Based on a minimum cut-off of 0.1% U and six-foot thickness, in general for each mineralized sandstone unit (A, B1, B2, C, and D), 3% of the mineralization is located adjacent to the upper sandstone boundary, 83% is located within the unit, and 14% is located adjacent to the lower boundary. Although the majority of this high-grade mineralization is located mid unit, continuity is variable perhaps due to local controlling sedimentary features or structures. This will affect the interpretation of continuity between holes.
Mineralization intersected in recent RHR holes aligns with and confirms mineralization trends based on historical holes. In addition, recent holes barren of mineralization are located in areas of barren historical holes. Grades intersected in recent holes are comparable to, or are higher than, grades in adjacent mineralized historical holes. Although this comparison is limited to areas local to recent drilling, it provides additional support for the use of historical holes for resource estimation.
The SLR QP is of the opinion that although continuity of mineralization is variable, drilling confirms that local continuity exists within individual sandstone units.
Energy Fuels Inc. | Roca Honda Project, SLR Project No: 138.02544.00006 | ||
Technical Report - February 22, 2022 | 12-7 |
12.3 Roscoe Postle Associates Data Verification (2016)
12.3.1 Database
In 2010, SLR, formerly RPA, was hired by Strathmore to complete a NI 43-101 Preliminary Economic Assessment on Sections 9, 10, and 16 of the Project.
In June 2015, the SLR QP conducted a series of verification tests on the drillhole database provided by Strathmore for the properties acquired from URI This database contained drillhole collar, deviation, lithology, and assay tables. The SLR QP's tests included a search for unique, missing, and overlapping intervals, a total depth comparison, duplicate holes, property boundary limits, and a visual search for extreme or deviant survey values. A limited number of holes were identified which lacked coordinates, drill depth, lithological, or geotechnical information. No other errors were encountered, and no significant issues were identified
The SLR QP did not perform an independent verification of the laboratory chemical assays for the historical drilling in Section 17 due to the unavailability of the data.
12.3.2 Radiometric Data vs. Historical GT Plan Maps
The SLR QP reviewed 0.5 ft natural gamma radiometric (probe) data and related information from Section 17 to validate the reported grade and grade times thickness (GT) values shown on the drillhole intercept map in Figure 10-1. The review included holes from Section 17 only. The holes were drilled by Kerr-McGee and Western Nuclear over the period from 1969 to 1978. Kerr-McGee did not place the calibration data on each individual drillhole log header, but rather listed the probe identification number, which could be traced back to a calibration log that contained all pertinent data on that probe to determine eU3O8. Strathmore provided calibration factors and estimated grades with corresponding probe numbers from historical Kerr-McGee documents.
The SLR QP did not identify any significant problems with the interpretations and calculations (Figure 12-1).
Figure 12-1: Historical Drillhole Mineralized Total GT Intercepts vs. Radiometric Data for Section 17
12.3.3 Continuity of Mineralization
The SLR QP conducted a preliminary review of grade continuity for the A, B1, and B2 mineralized sandstone units within Section 17. The SLR QP has carried out check estimates of the historical polygonal models using the GT drill intercept contour method. The contour method has been described by Agnerian and Roscoe (2002) and has been used for many decades for estimation of uranium resources particularly in the western U.S.
Total GT values for each drillhole intercept within the A, B1, and B2 sandstones (domains) were plotted on plans and contoured. The areas between the contours were measured and multiplied by the GT geometric mean in the contour interval. The GT values are proportional to pounds of U3O8 per square foot and the sum of these values times area are converted to total pounds of U3O8 for each domain.
Results indicate that although continuity of mineralization is variable, local continuity exists within each sandstone unit in both plan and section as elongate tabular or irregular shapes. Mineralization also occurs in various horizons within the sandstone domains. The contained pounds of U3O8 estimated by the contour method are in the same general range as the historical polygon estimate.
12.4 Amec Foster Wheeler Data Verification (2016)
Amec Foster Wheeler (Amec), now Wood, reviewed the drillhole data associated with the Project as part of a drill spacing study for EFR. The review included looking at cross-sections, the drillhole database, conversion of coordinates, and geologic surfaces. Overall, the findings were that the current database and interpretations are adequate for the level of study (NI 43-101 Preliminary Economic Assessment) being completed. Recommendations were made for future studies. The conclusions and recommendations from Amec are summarized below.
12.4.1 Conclusions
EFR and SLR appear to have done a thorough verification of drilling data. The data are typical of exploration done in the district during the 1970s.
The amount of core drilling is limited, and the available disequilibrium analysis information is inadequate, however, disequilibrium has not been reported to be an issue in mines located east or west of Roca Honda.
The database was spot-checked against primary documents and found to be correct. This includes comparison of digitized logs versus original strip logs.
EFR has been converting its digitized logs to eU3O8 without the consideration of tail factors. Kerr-McGee's intercepts (that use tail factors) are 10% higher in grade.
12.4.2 Recommendations to Upgrade Report
Since the previous Mineral Resource estimate was completed, EFR has conducted no additional drilling on the Project and the SLR QP's review of the data for this Technical Report found no differences in the drilling database that were not already identified in the previous sections. To advance the Project, the SLR QP recommends the following:
Drill at least 10 holes on each section and obtain cores from the mineralized zones.
Conduct a thorough disequilibrium analysis using chemical analyses at a reputable laboratory with blind submittal of certified reference materials. Obtain closed-can gamma readings on pulps. Possibly determine eU3O8 using a prompt fission neutron (PFN).
Conduct drilling programs to achieve a nominal 100 ft spacing in areas targeted for conversion to reserves.
12.5 Limitations
There were no limitations in place restricting the ability to perform an independent verification of the Project drillhole database.
12.5.1 Conclusion
The SLR QP is of the opinion that database verification procedures for the Project comply with industry standards and are adequate for the purposes of Mineral Resource estimation.
13.0 MINERAL PROCESSING AND METALLURGICAL TESTING
13.1 Introduction
There is no metallurgical testing or operational experience that is specific to the Roca Honda Mine, however, the nature of the Grants uranium district is that the Westwater Canyon uranium mineralized sand zones occur, throughout the Ambrosia Lake subdistrict, and have yielded millions of pounds that were locally milled using conventional uranium leaching technology in the past. For this reason, one can draw some conclusions regarding mineral processing at Roca Honda.
Historical production and milling experience for mineralization from the Ambrosia Lake subdistrict was incorporated into the milling assumptions for Roca Honda, which EFR and the SLR QP considers appropriate for a PEA to NI 43-101 standards.
RHR, a previous property owner, began preliminary metallurgical test work on Roca Honda material, but this test work was stopped when the company was acquired by EFR.
Future exploration drill plans by EFR will include collecting a sufficient amount of mineralized material to resume metallurgical test work on Roca Honda mineralization.
All metallurgical work done by previous owners on the Mine is summarized below.
13.2 Mineralized Sand Zones
There are four mineralized sand zones on the Roca Honda property: A, B, C, and D. Table 13-1 presents the metallurgical recovery for the four mineralized domains, which are based on discounted, historical process recoveries from different mills located in the Grants uranium district. The expected metallurgical recovery presented below is +/- 1% of the initial 95% overall recovery calculation.
Table 13-1: Metallurgical Recovery by Zone
Energy Fuels Inc. - Roca Honda Project
Sand Domain |
Tonnage |
% of |
Grade |
Production |
% of |
|
A |
615 |
23.6 |
0.377 |
92.2 |
8,557 |
18.9 |
B |
1,160 |
34.5 |
0.430 |
90.0 |
8,974 |
30.7 |
C |
1,132 |
33.7 |
0.611 |
95.7 |
13,240 |
45.3 |
D |
275 |
8.2 |
0.303 |
90.0 |
1,500 |
5.1 |
SW Deposit |
1,301 |
38.7 |
0.395 |
90.7 |
9,316 |
31.9 |
NE Deposit |
1,407 |
41.9 |
0.551 |
94.6 |
14,661 |
50.3 |
Sec. 17 Deposit |
651 |
19.4 |
0.437 |
91.2 |
5,193 |
17.8 |
Grand Total |
3,360 |
100.0 |
0.468 |
92.7 |
29,170 |
100 |
Notes:
1. The breakdown of the resource uses a 0.19% eU3O8 cut-off grade.
2. Values in the table are based on RPA's 2012 Technical Report. The SLR QP did not update the mine design and production schedule, which was developed using a cut-off grade of 0.13% U3O8. The previous work was reviewed, and it was determined that stopes remain above the updated cut-off grade of 0.19% U3O8. Some material below 0.19% U3O8 is included within the stope designs and should be considered incremental material.
3. Recovery percentage is assumed.
4. Numbers may not add due to rounding.
13.3 Historical Metallurgical Testing
As part of the technical back-up for the 2016 Preliminary Economic Assessment (PEA) completed by RPA, RHR provided two reports of metallurgical test work by Kerr-McGee regarding the Lee Ranch mine and the Marquez project. The first is a Technical Center Memorandum (TCM) No. 80011, titled "Characterization of Uranium Ore from the Lee Mine, McKinley County, New Mexico" and dated August 28, 1980. This TCM deals exclusively with the uranium mineralization in Section 17. The other document is TCM-82007, dated June 30, 1982, and titled "Marquez Uranium Ore Characterization - Interim Report," This document addresses the uranium recovery from the A and B Westwater Canyon sand zones with particular emphasis on the "refractory ores" in the B zone of the Marquez properties.
It was reported that the Marquez mill also completed metallurgical testing of mineralized material from throughout the Grants uranium district as the Marquez mill was being designed to be used as a toll mill, though it was never operational. EFR is unaware of any publicly available test data that included mineralized material from Roca Honda. The Juan Tafoya mill was built on the border between Section 31 and 32, Township 13 N, Range 4 W, Sandoval County, in the late 1970s. The Juan Tafoya mill was designed to process 2,200 stpd as a uranium processing mill with conventional acid leach solvent extraction (SX) circuit, primarily for Westwater member mineralized material from the Marquez deposit. A 1,842 ft shaft was sunk to develop the Marquez deposit. Both mine and mill were closed in 2001 and dismantled without any mining of the deposit.
13.3.1 TCM-82007
The Kerr-McGee report TCM-82007 addresses the A zone "ores" and the "refractory" ore in the B zone of the Marquez project, both from the Westwater Canyon A and B sands. The Marquez deposits are 20.6 mi east of the Mine on the eastern side of the Mount Taylor Volcanic Field. Similar horizons of the Westwater are planned for development in the proposed EFR plan.
13.3.2 Mount Taylor
Lyntek in 2011 received information from John Litz regarding his experience with the Mount Taylor ore. It is understood that Mount Taylor was mining primarily C sand zone ore of the Westwater Canyon Member of the Morrison Formation. The Mount Taylor mine is approximately five miles to the southeast of the proposed Roca Honda Section 16 shaft location. It should be noted that the sedimentary lithologic strata appear to be consistent between the Mount Taylor mine and the Roca Honda project.
Table 13-2 provides a summary of the general operating parameters of the Mount Taylor mine and an associated uranium mill that operated in the Grants, New Mexico area, up to 1988.
Table 13-2: Mount Taylor Processing Data
Energy Fuels Inc. - Roca Honda Project
Conditions |
Temp |
Leach |
H2SO4 |
NaClO3 |
Extraction |
Kerr-McGee processing Conventional Agitated Leach |
54 |
3 h |
130 |
3.2 |
95.7 |
Heap Leach Column Leach Test Results1 |
Ambient |
51 days |
123 |
6-9 |
95-98 |
Severe Leach Conditions Laboratory Agitated Leach Test2 |
85 |
16 h |
150 |
6 |
98-99 |
Notes:
1. The sample was cured overnight with 80 lb/ton H2SO4, 30 g/L H2SO4 lixiviant, added NaClO3 to SX raffinate to maintain oxidizing conditions. Lixiviant rate 12 gpm/ft2. Uranium extraction: 95% to 98% at 51 days.
2. The procedure included an acid kill at 65°C for one hour.
The Homestake Mill, also in the Grants New Mexico area, was used to process the Mount Taylor ore and used a pressurized alkaline leach circuit as compared to the acid leach at the other mills. The recovery reported at the Homestake Mill was 95%, while the other mills reported higher recoveries.
13.3.3 Lee Ranch mine
A historic mine plan for Sections 9 and 10 reported no concerns of metallurgical problems in the original Roca Honda mine, now known as the Lee Ranch mine (Falk, 1978). Kerr-McGee operated an acid leach mill, processing over 7,000 stpd from the Ambrosia Lake subdistrict, with typical recoveries of 94% to 97%.
In 1980 and 1982, Kerr-McGee prepared two reports on metallurgical test work that discuss uranium recovery from the A and B sand zones on the Lee Ranch mine (located on Section 17) and the Marquez Project (approximately 15 mi east of Section 16), with particular emphasis on the "refractory" ores in the B zone.
The 1980 report concedes that the results are at best qualitative and not definitive and therefore are weighted appropriately in the historical results for the Grants Uranium District.
The 1982 Kerr-McGee report addresses the A zone "ores" and the "refractory ore" in the B zone of the Marquez project. The Marquez project was at the east end of the district, well away from the proposed Roca Honda shaft. The work reported is more comprehensive than the 1980 report and is somewhat academic. The report results are also weighted appropriately in the historical results for the District.
Metallurgical test work was completed for Mount Taylor ore by Mr. John Litz, a metallurgical engineer with extensive uranium experience. The Mount Taylor mine is approximately five miles to the southeast of Section 16. Mount Taylor was mining primarily C zone sands.
13.4 Conclusions
Kerr-McGee metallurgical test results were completed on A and B sand zones at its Grants facility (Kerr-McGee Corp, 1980). The A and B zone mineralization represent 58.1% of the Roca Honda mineralization. Operational experience from Mount Taylor is from unspecified sand zones, but is believed to be from C zone sands and represent 33.7% of the Roca Honda mineralization. There is no data available regarding the D zone sands, but they represent only 8.2% of the Roca Honda mineralization.
The SLR QP supports the conclusions of the metallurgical test work on the basis of Kerr-McGee test reports and historical metallurgical data as modified with current technology, namely:
Grind to 28 mesh
Agitated leach at 60°C for three hours with 130 lb/ton of H2SO4 and 3.5 lb/ton of NaClO3
Uranium precipitation using ammonia
RHR completed some initial metallurgical work in late 2012 to early 2013 on mineralized material from the 2007 core program and compared it with Mount Taylor ore. The purpose was to see if the chemistry of the two deposits was similar enough to use Mount Taylor ore, which is readily available, in place of Roca Honda mineralization for future Strathmore metallurgical work. Once Strathmore was acquired by EFR, that work ceased. Future exploration drill plans will include collecting a sufficient amount of mineralized material to begin metallurgical test work on Roca Honda mineralization. Deleterious elements have not been commonly observed to date although they may be detected with additional metallurgical testing.
For this Technical Report a uranium recovery of 95% will be used in the processing of Roca Honda mineralized material at the White Mesa Mill. Additional site specific metallurgical samples are required for testing in order to validate the mill recoveries. For this Preliminary Economic Assessment report, the White Mesa Mill process and costs are based on historical processing results and methods. It should be noted that the specific origins of historical mill feed cannot be readily identified to date although they most undoubtably come from the uranium mining districts in the western USA, most notably in the Colorado Plateau region.
13.5 Opinion of Adequacy
The SLR QP is of the opinion that the metallurgical data used for the Mineral Resource estimate and Preliminary Economic Assessment is adequate for these purposes.
14.0 MINERAL RESOURCE ESTIMATE
14.1 Summary
Mineral Resources have been classified in accordance with the definitions for Mineral Resources in S-K 1300, which are consistent with Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Resources and Mineral Reserves dated May 10, 2014 (CIM, 2014) definitions.
The Mineral Resource estimate for the Project is divided into a Section 9, 10, and 16 Mineral Resource (Northeast and Southwest deposits) and a Section 17 Mineral Resource. The Section 9, 10, and 16 Mineral Resource estimate was completed by SLR, formerly RPA, for a NI 43-101 Preliminary Economic Assessment (PEA) on the Project in 2011 (with revisions to the cut-off grade in the 2016 revised report). SLR's 2016 Mineral Resource estimate was reviewed by the SLP QP for inclusion in this PEA and is still considered valid, as no material changes have been made at the Project since that time. EFR acquired Section 17 in 2015 and estimated a Mineral Resource on that portion of the Project in 2017, which the SLR QP reviewed and endorses. Mineral Resources estimated by the SLR QP (Sections 9, 10 and 16) in addition to that calculated by EFR (Section 17) meet the definition of a Mineral Resource as stated in the SEC's S-K 1300 regulations. In both cases, Mineral Resources were constrained by wireframes generated around individual mineralized zones. The Section 17 Mineral Resource includes some Mineral Resources in Section 16, which were not previously estimated due to a lack of data. The proximity of drillholes in Section 17 allowed this portion of the Mineral Resource to be estimated and included in this Technical Report. The effective date of this Mineral Resource estimate is December 31, 2021. The Roca Honda Mineral Resource estimate is summarized in Table 14-1.
Table 14-1: Mineral Resource Estimate for Roca Honda - Effective Date December 31, 2021
Energy Fuels Inc. - Roca Honda Project
Classification |
Area |
Tonnage |
Grade |
Contained Metal |
Recovery |
Measured |
Sec. 9, 10 &16 |
208 |
0.477 |
1,984 |
95 |
Sec. 17 |
- |
- |
- |
|
|
Indicated |
Sec. 9, 10 &16 |
1,303 |
0.483 |
12,580 |
95 |
Sec. 17 |
336 |
0.454 |
3,058 |
95 |
|
Total Measured + Indicated |
Sec. 9, 10, 16 & 17 |
1,847 |
0.477 |
17,622 |
95 |
Inferred |
Sec. 9, 10 &16 |
1,198 |
0.468 |
11,206 |
95 |
Sec. 17 |
315 |
0.419 |
2,636 |
95 |
|
Total Inferred |
Sec. 9, 10, 16 & 17 |
1,513 |
0.457 |
13,842 |
95 |
Notes:
1. SEC S-K definitions were followed for all Mineral Resource categories. These definitions are also consistent with CIM (2014) definitions in NI 43-101.
2. Mineral Resources are estimated at a U3O8 cut-off grade of 0.19% U3O8.
3. A minimum mining thickness of six feet was used, along with $241/ton operating costs, $65/lb U3O8 price, and 95% recovery.
4. Bulk density is 0.067 ton/ft3 (15.0 ft3/ton or 2.14 t/m3).
5. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
6. Mineral Resources are 100% attributable to EFR and are in situ.
7. Numbers may not add due to rounding.
The EFR QP is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could materially affect the Mineral Resource estimate.
14.2 Resource Database
The Roca Honda drillhole database is maintained in a Microsoft Access database and a Vulcan Isis database. The databases include tables for collar, survey, lithology, and mineral grades. The RHR database includes drilling from 1957 to 2011, comprising a total of 1,532 drillholes with 2,487,093 ft of drilling at an average hole length of 1,895 ft, of which five drillholes totalling 13,161 ft at an average hole length of 2,193 ft were drilled by RHR in 2007 (four holes) and 2011 (one hole).
Of the 1,532 surface holes, only 924 drillholes totaling 1,767,372 ft of drilling were used for resource estimation as some holes are located outside of the bounds of the current Mineral Resource estimate and/or have unreliable and/or unconfirmed drillhole collar coordinates. Table 14-2 lists the number of holes and corresponding Sections included in the final resource database.
Table 14-2: Roca Honda Resource Drillhole Database
Energy Fuels Inc. - Roca Honda Project
Section |
Company(s) |
# of Drillholes |
Total Footage |
Sec. 9, T13N, R08W |
Kerr-McGee |
182 |
377,428 |
Sec. 10, T13N, R08W |
Kerr-McGee |
167 |
429,215 |
Sec. 11, T13N, R08W |
Conoco |
4 |
10,848 |
Sec. 16, T13N, R08W |
Western Nuclear/Strathmore |
65 |
125,720 |
Sec. 17, T13N, R08W |
Kerr-McGee |
506 |
824,161 |
Total |
|
924 |
1,767,372 |
The drillhole database has been audited by various groups over the last 10 years. Details regarding these audits can be found in Section 9.0 (Data Verification).
The database used in this Mineral Resource estimation is considered by the SLR QP to be sufficiently reliable for grade modeling and use in a Mineral Resource estimation.
14.3 Geological Interpretation
14.3.1 Lithology Wireframe Models
EFR generated lithology wireframe models for the hanging wall and footwall of the Jmw A, Jmw B1, Jmw B2, Jmw C, and Jmw D sandstone units across the Mine. Integrated stratigraphic grid models based on modeling algorithms were generated in Vulcan for lithology surface wireframes using the drillhole intervals corresponding to the respective sand unit horizons.
The SLR QP reviewed the lithology surfaces and noted that the modeling algorithms do not always adhere to the sand unit intervals in the drillholes. Although there are no overall significant discrepancies between the models and the logged lithology intervals, for this Technical Report, the SLR QP revised the lithology surfaces using Leapfrog software to include the interbedded clay units separating the individual A through D sands. This new modeling shows that the previously reported mineralization that is located adjacent to, but outside, the major sand units exist across the contacts between the interbedded clays and overlying sand units.
14.3.2 Mineralization Wireframe Models
The Mine was subdivided into three modeling zones based on sand units and mineralization extents. The Northeast zone includes mineralization in the C and D sands in Section 10. The Southwest zone includes mineralization in the A and B sand units crossing the Section 9, 10, and 16 boundaries. Section 17 included mineralization in the A and B sand units primarily in Section 17, but also part of the western edge of Section 16. Block model and modeling boundaries are shown in Figure 14-1.
Figure 14-1: Mineral Resource Estimate Block Model Boundaries
14.3.2.1 Sections 9, 10 and 16
All mineralization surfaces for sections 9, 10, and 16 were generated by SLR in ARANZ Geo Limited's Leapfrog version 2.1.1.209. Mineralized drillhole intervals were selected by sand unit, with a minimum thickness of six feet, a minimum grade of 0.1% U3O8, and minimum grade x thickness of 0.6. Additional intervals below the minimum thickness and grade were selected in holes adjacent to the mineralized holes to restrict the extent of the wireframe models.
Surfaces were generated for the hanging wall and footwall of mineralized zones within each sand unit. These surfaces were used to create solids for each mineralized zone.
A 0.10% eU3O8 grade contour was created around mineralized intervals with a minimum thickness of six feet in plan view. Solids were generated from the grade contours and used as boundaries to "cookie cut" individual mineralization solids.
The SLR QP conducted audits of the wireframes to ensure that the wireframes used in preparing their resource estimate correspond to the reported mineralization. The quality control measures, and the data verification procedures included the following:
Checked for overlapping wireframes to determine possible double counting.
Checked mineralization/wireframe extensions beyond last holes to determine if they are reasonable and consistent.
Compared basic statistics of assays within wireframes with basic statistics of composites within wireframes for both uncut and cut values.
Checked for capping of extreme values and effect of coefficient of variation.
Checked for reasonable compositing intervals.
Checked that composite intervals start and stop at wireframe boundaries.
Checked that assigned composite rock type coding is consistent with intersected wireframe coding.
Checked that blocks were classified as Measured, Indicated, and Inferred.
Validated the solids for closure and consistent topology and checked that the triangles intersect properly (crossing).
Any issues found were corrected with the appropriate Vulcan utility to ensure accurate volume and grade calculations.
The wireframes in Section 9, 10 and 16 are considered by the SLR QP to be sufficiently reliable for grade modeling and use for Mineral Resource estimation.
14.3.2.2 Section 17
Mineralized wireframes generated for Section 17 were created by EFR using a combination of ArcGIS and Maptek's Vulcan software. Historically, resources for tabular uranium deposits, similar to the one found at the Mine, were estimated using either the polygonal or the circle-tangent method. A combination of those two methods was used to determine the plan view extent of the wireframes. Mineralized intercepts were loaded into ArcGIS and grouped by sand (A, B1 or B2). Theissen polygons were generated around each of the points to determine an Area of Influence (AOI) for each intercept. Additionally, circles with radii of 100 ft and 150 ft were created for each point to give a maximum AOI for each point. If the distance between two intercepts was less than 100 ft, the Theissen polygon was used as the maximum bounding AOI. If the distance between two intercepts was greater than or equal to 100 ft, but not on trend, the 100 ft radius circle was used. If the distance between intercepts was greater than or equal to 150 ft and on trend, the 150 ft radius circle was used.
Theissen polygons were grouped if they were continuous (i.e., adjacent) and contained an intercept of a minimum 3 ft of 0.10% U3O8. For continuity purposes, a few holes below this cut-off were included. A final boundary was constructed around these grouped polygons (pods) and exported for use in triangulating the wireframes in Vulcan.
Wireframes were created for all areas utilizing Maptek's Vulcan software. Once all the data was grouped by sand unit and into plan-view pods utilizing the method described above, the intercepts within those pods were connected in cross-section view to create mineralized wireframes. While the plan view shapes grouped adjacent intercepts, the mineralized zones in those holes do not necessarily relate to each other. Within a given sand unit, the mineralization tends to be at the very top or bottom of the sand. Less commonly, the mineralization is in the middle of the sand unit or is the thickness of the sand unit. If two adjacent holes within the same pod have mineralization at two different levels, those intercepts are probably not related. Every mineralized intercept within a pod needed to be identified and connected with matching intercepts. The result of this is that a single pod that was identified in plan view may turn into multiple pods after studying the intercepts.
A series of rules were created for linking intercepts in cross section. Those details are given below:
A minimum two-foot thickness at a nominal 0.2% U3O8 cut-off was used to select intercepts.
Holes that did not meet these criteria, but had some mineralization, were allowed to be included for continuity. These holes were limited to a two-foot thickness.
In thicker zones, the outer (top or bottom) 1.5 ft needed to meet a composited grade of 0.2% U3O8.
A thick intercept was split into two or more intercepts if it contained internal low-grade material that was thicker than three feet and below the 0.2% U3O8 cut-off.
If a drillhole was included that did not contain 0.5 ft intercept data, but contained material of grade, the whole intercept was taken. This pertains to drillholes where the original Kerr-McGee intercept was used.
This method resulted in 14 mineralized wireframes for the A-Sand, two for the B-sand (where the B1 and B2 sands could not be differentiated), four for the B1-Sand, and five for the B2-Sand.
14.4 Resource Assays
14.4.1 Sections 9, 10, and 16
Roca Honda mineralization wireframes contain a total of 270 mineralization intercepts from 103 drillholes. Grade statistics are shown in Table 14-3.
Table 14-3: General Grade Statistics for Sections 9, 10, and 16
Energy Fuels Inc. - Roca Honda Project
Statistic |
A-Sand |
B1-Sand |
B2-Sand |
C-Sand |
D-Sand |
No. of Samples |
39 |
57 |
90 |
55 |
29 |
Statistic |
A-Sand |
B1-Sand |
B2-Sand |
C-Sand |
D-Sand |
Min. Grade (%U3O8) |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
25th Percentile (%U3O8) |
0.000 |
0.000 |
0.000 |
0.020 |
0.050 |
Median Grade (%U3O8) |
0.170 |
0.159 |
0.203 |
0.170 |
0.160 |
75th Percentile (%U3O8) |
0.500 |
0.420 |
0.440 |
0.440 |
0.250 |
Max. Grade (%U3O8) |
0.950 |
0.910 |
1.240 |
2.350 |
0.550 |
Avg. Grade (%U3O8) |
0.303 |
0.215 |
0.269 |
0.487 |
0.202 |
Std. Deviation (%U3O8) |
0.257 |
0.258 |
0.297 |
0.456 |
0.136 |
14.4.2 Section 17
Mineralization wireframes for the three mineralized sands in Section 17 contain 1,266 mineralized intercepts. The two mineralized solids that contain both the B1 and B2 sands contained intercepts that were anomalously high. Statistics for this zone (B-Sand high-grade) were interpreted differently than statistics for the rest of the B-Sand (B-Sand low-grade) and were therefore broken out as their own group. Grade statistics for the Section 17 model zone is shown in Table 14-4.
Table 14-4: General Grade Statistics for Section 17
Energy Fuels Inc. - Roca Honda Project
Statistic |
A-Sand |
B-Sand |
B-Sand |
No. of Samples |
697 |
345 |
159 |
Min. Grade (%U3O8) |
0.001 |
0.001 |
0.001 |
25th Percentile (%U3O8) |
0.216 |
0.227 |
0.08 |
Median Grade (%U3O8) |
0.316 |
0.417 |
0.357 |
75th Percentile (%U3O8) |
0.474 |
0.607 |
0.767 |
Max. Grade (%U3O8) |
1.602 |
2.702 |
5.884 |
Avg. Grade (%U3O8) |
0.365 |
0.501 |
0.665 |
Std. Deviation (%U3O8) |
0.231 |
0.427 |
0.901 |
14.5 Treatment of High Grade Assays
14.5.1 Capping
14.5.1.1 Sections 9, 10, and 16
All mineralization intercepts located inside the mineralization wireframes were used together to determine an appropriate capping level for all mineralized zones. Mineralization intercept data were analyzed using a combination of histogram, probability, percentile, and cutting curve plots. All mineralization intercepts flagged inside the mineralization wireframes are plotted in Figure 14-2 through Figure 14-4.
The assay data used in the Section 9, 10, and 16 Mineral Resource was calculated using the industry standard AEC ½ amplitude method used throughout the U.S. uranium mining industry during the time the Roca Honda data was collected (1960s and 1970s). This method estimated a mineralized zone assigning a single grade and thickness to that zone. Modern data is usually calculated on standard 0.5 ft intervals. To determine any capping needed for the Section 9, 10, and 16 resource the original gamma logs would need to be scanned and digitized to provide the 0.5 ft data. It is recommended that for any future Mineral Resource estimates, that this work be done to update the drillhole database.
Figure 14-2: Histogram Plot of Roca Honda Sections 9, 10 and 16
Figure 14-3: Log Normal Probability Plot of Roca Honda Sections 9, 10 and 16
Figure 14-4: Cumulative Frequency Plot of Roca Honda Sections 9, 10 and 16
14.5.1.2 Section 17
Unlike the data used for the Sections 9, 10, and 16 Mineral Resource, the data used for the Section 17 resource was digitized and reported on 0.5 ft intervals. Using this data, histograms, and log-normal probability plots (Figure 14-5 to Figure 14-7) were created to determine grade caps for the A-Sand, B-Sand (low-grade), and B-Sand (high-grade) zones (Table 14-5).
Table 14-5: Section 17 Statistics after Capping
Energy Fuels Inc. - Roca Honda Project
Statistic |
A-Sand |
B-Sand |
B-Sand |
Max. Grade (%U3O8) |
0.748 |
1.574 |
2.333 |
Avg. Grade (%U3O8) |
0.350 |
0.483 |
0.602 |
Std. Deviation (%U3O8) |
0.187 |
0.364 |
0.684 |
Figure 14-5: A-Sand Log-Normal Probability Plot
Figure 14-6: B-Sand (Low Grade) Log-Normal Probability Plot
Figure 14-7: B-Sand (High Grade) Log-Normal Probability Plot
14.5.2 High Grade Restriction
In addition to capping thresholds, a secondary approach to reducing the influence of high-grade composites is to restrict the search ellipse dimension (high yield restriction) during the estimation process. The threshold grade levels, chosen from the basic statistics and from visual inspection of the apparent continuity of very high grades within each estimation domain, may indicate the need to further limit their influence by restricting the range of their influence, which is generally set to approximately half the distance of the main search.
Upon review of the capped assays, the SLR QP agrees with EFR's approach that no high-grade restrictions are required for a Mineral Resource estimation.
14.6 Compositing
14.6.1 Sections 9, 10 and 16
Run-length composites were generated at six-foot lengths inside the domain wireframes and flagged by mineralization domain. Nine composites had lengths of 0.5 ft or less. These accounted for a small percentage of the total composites and will not significantly affect the resource estimate. The SLR QP recommends reviewing and removing all small length composites in future resource composite databases.
Two composite databases were generated for resource estimation, rhr_sw_6ft.cmp.isis for the A and B zones and rhr_ne_6ft_.cmp.isis for the C and D zones. Detailed statistics for the final composite database are presented in Table 14-6.
Table 14-6: Sections 9, 10 and 16 Mineralized Wireframe Composites
Energy Fuels Inc. - Roca Honda Project
Wireframe |
No. |
Lower |
Median |
Upper |
Max. |
Mean |
SD |
CV |
|
A1_04 |
1 |
0.59 |
0.59 |
0.59 |
0.59 |
0.59 |
0.59 |
|
|
A1_03 |
24 |
0.00 |
0.00 |
0.26 |
0.56 |
0.95 |
0.31 |
0.28 |
0.91 |
A1_02 |
1 |
0.23 |
0.23 |
0.23 |
0.23 |
0.23 |
0.23 |
|
|
A1_01 |
4 |
0.16 |
0.23 |
0.34 |
0.41 |
0.44 |
0.32 |
0.10 |
0.32 |
A1_05 |
1 |
0.17 |
0.17 |
0.17 |
0.17 |
0.17 |
0.17 |
|
|
A1_06 |
1 |
0.12 |
0.12 |
0.12 |
0.12 |
0.12 |
0.12 |
|
|
B1_05 |
8 |
0.00 |
0.29 |
0.48 |
0.55 |
0.85 |
0.43 |
0.24 |
0.56 |
B1_04 |
10 |
0.00 |
0.03 |
0.16 |
0.22 |
0.30 |
0.15 |
0.09 |
0.65 |
B1_06_S-01-03 |
6 |
0.00 |
0.00 |
0.19 |
0.70 |
0.73 |
0.30 |
0.31 |
1.02 |
B1_08 |
1 |
0.57 |
0.57 |
0.57 |
0.57 |
0.57 |
0.57 |
|
|
B1_07_S_01 |
2 |
0.13 |
0.13 |
0.52 |
0.96 |
0.91 |
0.52 |
0.39 |
0.75 |
B1_02 |
4 |
0.00 |
0.20 |
0.39 |
0.44 |
0.49 |
0.32 |
0.19 |
0.59 |
B1_01_S |
1 |
0.65 |
0.65 |
0.65 |
0.65 |
0.65 |
0.65 |
|
|
B1_10 |
1 |
0.44 |
0.44 |
0.44 |
0.44 |
0.44 |
0.44 |
|
|
B1_09_S_01-02 |
3 |
0.00 |
0.07 |
0.29 |
0.60 |
0.70 |
0.33 |
0.29 |
0.87 |
B1_05_0 |
6 |
0.12 |
0.12 |
0.22 |
0.28 |
0.48 |
0.24 |
0.12 |
0.51 |
B1_11 |
1 |
0.66 |
0.66 |
0.66 |
0.66 |
0.66 |
0.66 |
|
|
B2_04 |
44 |
0.00 |
0.09 |
0.37 |
0.55 |
1.18 |
0.38 |
0.32 |
0.83 |
B2_09 |
3 |
0.00 |
0.03 |
0.10 |
0.24 |
0.28 |
0.13 |
0.12 |
0.91 |
B2_01 |
3 |
0.02 |
0.13 |
0.44 |
0.63 |
0.69 |
0.38 |
0.28 |
0.72 |
B2_03 |
1 |
0.26 |
0.26 |
0.26 |
0.26 |
0.26 |
0.26 |
|
|
B2_02 |
6 |
0.16 |
0.21 |
0.26 |
0.31 |
0.36 |
0.26 |
0.06 |
0.25 |
B2_05 |
2 |
0.36 |
0.36 |
0.80 |
1.24 |
1.24 |
0.80 |
0.44 |
0.55 |
B2_06 |
8 |
0.00 |
0.10 |
0.21 |
0.32 |
0.42 |
0.21 |
0.14 |
0.65 |
B2_10 |
3 |
0.00 |
0.05 |
0.18 |
0.38 |
0.44 |
0.21 |
0.18 |
0.87 |
B2_08 |
1 |
0.40 |
0.40 |
0.40 |
0.40 |
0.40 |
0.40 |
|
|
Wireframe |
No. |
Lower |
Median |
Upper |
Max. |
Mean |
SD |
CV |
|
C1 |
7 |
0.00 |
0.05 |
0.28 |
0.67 |
1.62 |
0.47 |
0.53 |
1.13 |
C2 |
3 |
0.28 |
0.43 |
0.88 |
1.98 |
2.35 |
1.17 |
0.87 |
0.74 |
C3 |
12 |
0.00 |
0.10 |
0.14 |
0.17 |
1.03 |
0.19 |
0.26 |
1.35 |
C4 |
20 |
0.00 |
0.19 |
0.32 |
0.60 |
1.47 |
0.43 |
0.37 |
0.85 |
C5 |
3 |
0.06 |
0.07 |
0.11 |
0.16 |
0.18 |
0.12 |
0.05 |
0.42 |
C2_2_1 |
3 |
0.08 |
0.09 |
0.11 |
0.11 |
0.11 |
0.10 |
0.01 |
0.14 |
C2_2_2 |
1 |
0.12 |
0.12 |
0.12 |
0.12 |
0.12 |
0.12 |
|
|
C2_2_3 |
2 |
0.00 |
0.00 |
0.12 |
0.24 |
0.24 |
0.12 |
0.12 |
1.00 |
D1_03 |
2 |
0.14 |
0.14 |
0.20 |
0.26 |
0.26 |
0.20 |
0.06 |
0.30 |
D1_01-02 |
13 |
0.05 |
0.12 |
0.19 |
0.29 |
0.55 |
0.22 |
0.13 |
0.60 |
D1_04 |
3 |
0.16 |
0.17 |
0.20 |
0.23 |
0.24 |
0.20 |
0.03 |
0.16 |
D1_05 |
6 |
0.00 |
0.11 |
0.14 |
0.16 |
0.49 |
0.17 |
0.15 |
0.88 |
Notes:
1. SD = Standard Deviation
2. CV = Coefficient of variation
14.6.2 Section 17
Run-length composites were generated at 0.5 ft lengths inside the domain wireframes and flagged by mineralization domain. Three composite databases were generated for resource estimation, rhlr_a_sand_rlc_half_ft.cmp.isis, rhlr_b_sand_hg_rlc_half_ft.cmp.isis, and rhlr_b_sand_lg_rlc_half_ft
.cmp.isis. Detailed statistics for the final composite database are presented in Table 14-7.
Table 14-7: Section 17 Mineralized Wireframe Composites
Energy Fuels Inc. - Roca Honda Project
Notes:
1. SD = Standard Deviation
2. CV = Coefficient of variation
14.7 Trend Analysis
14.7.1 Variography
14.7.1.1 Sections 9, 10, and 16
Suitable variograms could not be generated for individual or combined domain models due to the small number of contained composite samples. Search ranges were determined visually based on continuity of mineralization and drillhole spacing.
14.7.1.2 Section 17
A single variogram for the A-sand was calculated using all the samples contained in the mineralized domains for the A-sand. Two variograms were calculated for the B-sands, one for the high-grade mineralized domains and one for the low-grade mineralized domains. Table 14-8 details the variogram models used for OK.
Table 14-8: Ordinary Kriging Parameters
Energy Fuels Inc. - Roca Honda Project
Domain |
Nugget |
No. |
Structure |
Sil |
Azimuth |
Major Axis |
Semi- |
Minor Axis |
A-Sand |
0.50 |
1 |
Spherical |
0.50 |
120.0 |
195.0 |
110.0 |
8.5 |
B-Sand |
0.45 |
1 |
Spherical |
0.55 |
40.0 |
270.0 |
175.0 |
6.0 |
B-Sand |
0.40 |
1 |
Spherical |
0.60 |
140.0 |
315.0 |
205.0 |
3.5 |
14.8 Search Strategy and Grade Interpolation Parameters
Grade interpolation for all three zones were completed using Maptek's Vulcan software. Grades were assigned to blocks based on two primary modeling algorithms, Inverse Distance and Ordinary Kriging.
14.8.1 Sections 9, 10, and 16
Block grades were estimated using the Inverse Distance Cubed (ID3) method. Domain models were used as hard boundaries to limit the extent of influence of composite grades within the domains.
Search directions were determined visually for each domain. Isotropic search ranges in the major and semi-major directions following the trend of individual domain models were applied. Minor search ranges were also determined visually and were shorter. Search directions and trends are listed in Table 14-9.
Two grade estimation passes were run with the major, semi-major, and minor search ranges increased by a factor of 1.5 in the second estimation run. Estimation flags were stored for each estimation run based on increasing search distances. The number of samples and holes were stored in separate block variables for use in determining resource classification.
Octant restrictions were not enforced to preserve local grades. Only the closest composites to block centroids (adhering to defined trends) were used. Grade estimation parameters are listed in Table 14-10.
Table 14-9: Vulcan Domain Search Parameter
Energy Fuels Inc. - Roca Honda Project
Domain Model |
General Trend |
Vulcan Rotation |
|||
Azimuth |
Dip |
Z Rotation |
Y Rotation |
X Rotation |
|
A1 |
10 |
-5.5E |
100 |
-5.5 |
0 |
A2 |
10 |
-4.0E |
100 |
-4.0 |
0 |
A3 |
10 |
-4.5E |
100 |
-4.5 |
0 |
A4 |
10 |
-7.0E |
100 |
-7.0 |
0 |
Domain Model |
General Trend |
Vulcan Rotation |
|||
Azimuth |
Dip |
Z Rotation |
Y Rotation |
X Rotation |
|
A5 |
10 |
-11.0E |
100 |
-11.0 |
0 |
A6 |
10 |
-15.0E |
100 |
-15.0 |
0 |
B1_1 |
10 |
-8.0E |
100 |
-8.0 |
0 |
B1_2 |
10 |
-5.0E |
100 |
-5.0 |
0 |
B1_3 |
10 |
-5.0E |
100 |
-5.0 |
0 |
B1_4 |
10 |
-3.5E |
100 |
-3.5 |
0 |
B1_5 |
10 |
-2.5E |
100 |
-2.5 |
0 |
B1_6 |
10 |
-7.5E |
100 |
-7.5 |
0 |
B1_7 |
10 |
-16.0E |
100 |
-16.0 |
0 |
B1_8 |
10 |
-5.0E |
100 |
-5.0 |
0 |
B1_9 |
10 |
-15.0E |
100 |
-15.0 |
0 |
B1_10 |
10 |
-7.0E |
100 |
-7.0 |
0 |
B1_11 |
10 |
-10.0E |
100 |
-10.0 |
0 |
B2_1 |
10 |
-6.0E |
100 |
-6.0 |
0 |
B2_2 |
10 |
-7.0E |
100 |
-7.0 |
0 |
B2_3 |
10 |
-7.0E |
100 |
-7.0 |
0 |
B2_4 |
10 |
-6.5E |
100 |
-6.5 |
0 |
B2_5 |
10 |
-4.5E |
100 |
-4.5 |
0 |
B2_6 |
10 |
-2.0W |
100 |
2.0 |
0 |
B2_7 |
10 |
-4.0E |
100 |
-4.0 |
0 |
B2_8 |
10 |
-3.0E |
100 |
-3.0 |
0 |
B2_2_1 |
10 |
-16.0E |
100 |
-16.0 |
0 |
C1 |
15 |
-9.0E |
105 |
-9.0 |
0 |
C2 |
40 |
-12.0E |
130 |
-120 |
0 |
C3 |
10 |
-7.0E |
100 |
-7.0 |
0 |
C4 |
40 |
-10.0E |
130 |
-10.0 |
0 |
C5 |
40 |
-8.0E |
130 |
-8.0 |
0 |
C2_2_1 |
10 |
-9.0E |
100 |
-9.0 |
0 |
C2_2_2 |
40 |
-13.0E |
130 |
-13.0 |
0 |
C2_2_3 |
40 |
-9.0E |
130 |
-9.0 |
0 |
D1 |
10 |
-7.0E |
100 |
-7.0 |
0 |
D2 |
40 |
-7.0E |
100 |
-7.0 |
0 |
Domain Model |
General Trend |
Vulcan Rotation |
|||
Azimuth |
Dip |
Z Rotation |
Y Rotation |
X Rotation |
|
D3 |
10 |
-8.0E |
100 |
-8.0 |
0 |
D4 |
40 |
-7.0E |
130 |
-7.0 |
0 |
Table 14-10: Section 9, 10, and 16 Grade Estimation Parameters
Energy Fuels Inc. - Roca Honda Project
Estimation |
Wireframe |
Search Ranges |
Number of Samples per Estimate |
||||
Major Axis |
Semi-Major Axis |
Minor Axis |
Min. Samples |
Max. Samples |
Max. Samples |
||
1 |
All C & D |
600 |
200 |
50.0 |
1 |
3 |
1 |
1 |
All A, B1 & B2 |
600 |
200 |
25.0 |
1 |
3 |
1 |
2 |
All C & D |
900 |
300 |
75.0 |
1 |
3 |
1 |
2 |
All A, B1 & B2 |
900 |
300 |
37.5 |
1 |
3 |
1 |
3 |
A1, B1_1 & C1 |
1,350 |
450 |
112.5 |
1 |
3 |
1 |
14.8.2 Section 17
Block grades were estimated using the Inverse Distance Squared (ID2), Ordinary Kriging (OK), or Nearest Neighbor (NN) methods. Domain models were used as hard boundaries to limit the extent of influence of composite grades within the domains.
Where wireframes contained only a single drillhole, the NN method was used; in cases where there was enough data to generate variograms, OK was used; and in all other cases, ID2 was used. ID2 was used in Section 17 instead of ID3 because the drill spacing is much tighter than in Sections 9, 10, and 16 and nearby drillholes were determined to have better grade continuity, and therefore more holes should have a greater influence on a block estimate than the nearest drillhole.
Search directions were determined visually for each domain. Anisotropic search ranges were used oriented along the major trend of the mineralized zones. As the mineralization tends to be tabular in nature, tops and bottoms of the mineralization were modeled as part of the wireframe process. Those top and bottom surfaces were used to generate unfolding models that were used in place of dip and plunge (Y Rotation and X Rotation), as given in Table 14-11.
Up to three grade estimation passes were run with the major, semi-major, and minor search ranges increased by a factor of 2.0 in the second and third estimation runs. Estimation flags were stored for each estimation run based on increasing search distances. The number of samples and holes were stored in separate block variables for use in determining resource classification.
Octant restrictions were not enforced to preserve local grades. Only the closest composites to block centroids (adhering to defined trends) were used. Grade estimation parameters are listed in Table 14-12.
Table 14-11: Section 17 Vulcan Estimation Method and Ellipsoid Rotation
Energy Fuels Inc. - Roca Honda Project
Domain Model |
Estimation Method |
Vulcan Rotation |
||
Z Rotation |
Y Rotation |
X Rotation |
||
A1 |
OK |
90 |
Unfolding |
|
A2 |
ID2 |
110 |
Unfolding |
|
A3 |
ID2 |
15 |
Unfolding |
|
A4 |
ID2 |
180 |
0.0 |
0.0 |
A5 |
OK |
90 |
Unfolding |
|
A6 |
OK |
90 |
Unfolding |
|
A7 |
NN |
90 |
-2.0 |
0.0 |
A8 |
ID2 |
5 |
1.0 |
0.0 |
A9 |
NN |
90 |
-2.0 |
0.0 |
A10 |
NN |
90 |
-2.0 |
0.0 |
A11 |
NN |
0 |
0.0 |
0.0 |
A12 |
OK |
90 |
Unfolding |
|
A13 |
ID2 |
70 |
Unfolding |
|
A14 |
ID2 |
11 |
3.0 |
0.0 |
B1_1 |
OK |
140 |
0.0 |
0.0 |
B1_2 |
ID2 |
125 |
Unfolding |
|
B1_3 |
ID2 |
100 |
-3 |
-0.5 |
B1_4 |
NN |
0 |
0.0 |
0.0 |
B2_1 |
ID2 |
100 |
Unfolding |
|
B2_2 |
ID2 |
120 |
Unfolding |
|
B2_3 |
NN |
0 |
0.0 |
0.0 |
B2_4 |
ID2 |
90 |
Unfolding |
|
B2_5 |
ID2 |
100 |
Unfolding |
|
Bh_1 |
OK |
40 |
0.0 |
0.0 |
Bh_2 |
ID2 |
75 |
Unfolding |
Table 14-12: Section 17 Grade Estimation Parameters
Energy Fuels Inc. - Roca Honda Project
Estimation |
Wireframe |
Search Ranges |
Number of Samples per Estimate |
||||
Major Axis |
Semi-Major |
Minor Axis |
Min. |
Max. |
Max. |
||
1 |
All A |
156.0 |
88.0 |
0.8 |
4 |
24 |
2 |
1 |
All B1 & B2 |
200.0 |
100 |
2.0 |
4 |
24 |
2 |
2 |
All A |
312.0 |
176.0 |
1.6 |
4 |
24 |
2 |
2 |
All B1 & B2 |
400.0 |
200.0 |
4.0 |
4 |
24 |
2 |
3 |
All A |
624.0 |
352.0 |
3.2 |
4 |
24 |
2 |
3 |
All B1 & B2 |
800.0 |
400.0 |
8.0 |
4 |
24 |
2 |
Note:
1. Blocks estimated using the Nearest Neighbor method were estimated using an isotropic search radius of 1,000 ft in all directions to select a single nearest sample.
14.9 Bulk Density
No records of sampling for bulk density determinations were found from work performed prior to Strathmore's 2007 core drilling project. The Mineral Resources estimated in this Preliminary Economic Assessment uses a tonnage factor of 15 ft3/ton. This is the typical tonnage factor used by most operators, including Kerr-McGee in the Ambrosia Lake subdistrict and the Mount Taylor deposit, for mineralized intervals in the Westwater Canyon Member sandstone unit. This tonnage factor was derived by the AEC and the major operators from years of actual mining and milling based on over 300 Mlb of U3O8 that was produced in the Ambrosia Lake subdistrict.
The completed density determinations by RHR of 11 core samples from the four pilot holes S1-Jmw-CH-07, S2, S3, and S4 yield an average tonnage factor of 15.9 ft3/ton for mostly barren sandstone of the Westwater unit (Table 14-13). One sample, RH07-0009, is from a mineralized interval and has a tonnage factor less than (i.e., density greater than) 15 ft3/ton. Additional mineralized core samples would be required to justify using a tonnage factor other than 15 ft3/ton.
Although the SLR QP is of the opinion that there is a relatively low risk in assuming that density of mineralized zones is similar to that reported in mining operations east and west of the Roca Honda property, additional density determinations, particularly in the mineralized zones, should be carried out to confirm and support future resource estimates.
Table 14-13: Density Determination of Core Samples
Energy Fuels Inc. - Roca Honda Project
Sample ID |
Drillhole |
From |
To |
Thickness |
Lab |
Sand Unit |
Dry Bulk |
Tonnage |
Wet Bulk |
RH07-0017 |
S1-Jmw-CH-07 |
1,919.1 |
1,919.9 |
0.8 |
DBS&A1 |
A |
1.81 |
17.7 |
2.05 |
RH07-0018 |
S1-Jmw-CH-07 |
1,947.5 |
1,948.4 |
0.9 |
DBS&A1 |
B1 |
1.88 |
17.0 |
2.12 |
RH07-0019 |
S1-Jmw-CH-07 |
2,089.3 |
2,090.4 |
1.1 |
DBS&A1 |
D |
2.04 |
15.7 |
2.23 |
RH07-00093 |
S2-Jmw-CH-07 |
1,762.0 |
1,762.8 |
0.8 |
DBS&A1 |
A |
2.52 |
12.7 |
2.56 |
RH07-0010 |
S2-Jmw-CH-07 |
1,801.0 |
1,802.0 |
1.0 |
DBS&A1 |
B1 |
2.04 |
15.7 |
2.26 |
RH07-0015 |
S3-Jmw-CH-07 |
1,928.3 |
1,929.3 |
1.0 |
DBS&A1 |
B2 |
2.01 |
15.9 |
2.25 |
RH07-0016 |
S3-Jmw-CH-07 |
2,025.4 |
2,026.3 |
0.9 |
DBS&A1 |
D |
1.89 |
16.9 |
2.15 |
RH07-0001 |
S4-Jmw-CH-07 |
1,808.9 |
1,809.7 |
0.8 |
DBS&A1 |
B2 |
2.09 |
15.3 |
2.27 |
RH07-0002 |
S4-Jmw-CH-07 |
1,840.0 |
1,841.0 |
1.0 |
DBS&A1 |
C |
2.04 |
15.7 |
2.22 |
RH07-0003 |
S4-Jmw-CH-07 |
1,858.3 |
1,859.1 |
0.8 |
DBS&A1 |
C |
1.84 |
17.4 |
2.13 |
RH07-0004 |
S4-Jmw-CH-07 |
1,871.0 |
1,872.0 |
1.0 |
DBS&A1 |
D |
2.17 |
14.7 |
2.33 |
Average |
|
|
|
|
|
|
2.03 |
15.9 |
2.23 |
Notes:
1. Analysis by Daniel B. Stephens and Associates, Inc., Albuquerque, New Mexico
2. Tonnage Factor (cubic feet/short ton) calculated from 2,000 lb/(specific gravity x 62.43 lb/ft3)
3. Sample RH07-0009 is from a mineralized interval corresponding to a grade of 1% U3O8
14.10 Block Models
14.10.1 Sections 9, 10 and 16
Two Roca Honda non-rotated block models were generated in Vulcan. The NE_Ore_Body.bmf includes mineralization in the C and D sand units. The SW_Ore_Body.bmf includes mineralization in the A, B1, and B2 sand units.
Parent blocks are 50 ft (x) by 50 ft (y) by 30 ft (z) in size. Blocks inside mineralization wireframes were limited to a maximum of 10 ft (x) by 10 ft (y) by 6 ft (z) with one foot by one foot by one-foot sub-blocks generated along mineralization domain wireframe boundaries. Block model extents are listed in Table 14-14.
Table 14-14: Section 9, 10 and 16 Block Model Extents
Energy Fuels Inc. - Roca Honda Project
Block Model |
Min. Easting |
Max. Easting |
Min. Northing |
Max. Northing |
Min. Elevation |
Max. Elevation |
NE_Ore_Body |
2,771,110 |
2,774,960 |
1,588,750 |
1,592,500 |
4,480 |
5,230 |
SW_Ore_Body |
2,765,970 |
2,770,670 |
1,586,830 |
1,589,930 |
5,060 |
5,540 |
Resource model boundaries extend beyond the Roca Honda property in order to include data in drillholes located outside the property boundaries, however, only Mineral Resources located within the property are reported.
14.10.2 Section 17
A single non-rotated block model was generated in Vulcan for Section 17. The Lee_Ranch_2018.bmf includes mineralization in the A, B1 and B2 sand units.
Parent Blocks are 25 ft (x) by 25 ft (y) by 1 ft (z) in size with 5 ft (x) by 5 ft (y) by 0.5 ft (z) sub-blocks generated along mineralization domain wireframe boundaries. Block model extents are listed in Table 14-15.
Table 14-15: Section 17 Block Model Extents
Energy Fuels Inc. - Roca Honda Project
Block Model |
Min. Easting |
Max. Easting |
Min. Northing |
Max. Northing |
Min. Elevation |
Max. Elevation |
Lee_Ranch_2018 |
2,758,800 |
2,765,300 |
1,583,475 |
1,587,825 |
5,570 |
5,870 |
14.11 Cut-off Grade
The Roca Honda Mineral Resource estimate is summarized in Table 14-1 by block model area at a 0.19% U3O8 cut-off grade.
Assumptions used in the determination of a 0.19% U3O8 cut-off grade are:
Total operating cost (mining, G&A, processing) of US$241 per ton
Royalty cost of 5% (only on Section 16)
Process recovery of 95%
Uranium price of US$65.00/lb.
The uranium prices used in the PEA are higher than the current spot uranium price (as of the date of this Technical Report) of approximately US$46 per pound. The prices are based on independent, third-party and market analysts' average forecasts as of 2021, and the supply and demand projections are for the period 2021 to 2035 (Section 16). In QP's opinion, these long-term price forecasts are a reasonable basis for estimation of Mineral Resources.
14.12 Classification
Classification of Mineral Resources as defined in SEC Regulation S-K subpart 229.1300 were followed for classification of Mineral Resources. The Canadian Institute of Mining, Metallurgy and Petroleum definition Standards for Mineral Resources and Mineral Reserves (CIM 2014) are consistent with these definitions.
A Mineral Resource is defined as a concentration or occurrence of material of economic interest in or on the Earth's crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled.
Based on this definition of Mineral Resources, the Mineral Resources estimated in this Preliminary Economic Assessment have been classified according to the definitions below based on geology, grade continuity, and drillhole spacing.
Measured mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling. The level of geological certainty associated with a measured mineral resource is sufficient to allow a qualified person to apply modifying factors, as defined in this section, in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit. Because a measured mineral resource has a higher level of confidence than the level of confidence of either an indicated mineral resource or an inferred mineral resource, a measured mineral resource may be converted to a proven mineral reserve or to a probable mineral reserve.
Indicated mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling. The level of geological certainty associated with an indicated mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Because an indicated mineral resource has a lower level of confidence than the level of confidence of a measured mineral resource, an indicated mineral resource may only be converted to a probable mineral reserve.
Inferred mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of geological uncertainty associated with an inferred mineral resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Because an inferred mineral resource has the lowest level of geological confidence of all mineral resources, which prevents the application of the modifying factors in a manner useful for evaluation of economic viability, an inferred mineral resource may not be considered when assessing the economic viability of a mining project and may not be converted to a mineral reserve.
The SLR QP has considered the following factors that can affect the uncertainty associated with the class of Mineral Resources:
• Reliability of sampling data:
Mineral Resources for the Project were classified as either Measured, Indicated or Inferred Mineral Resources as follows:
14.12.1 Section 9, 10 and 16
Classification of the Mineral Resource in Sections 9, 10 and 16 and within the mineralized domains is primarily based on drillhole spacing continuity of grade and was completed manually after a review of the geology and mineralization.
14.12.1.1 Measured
Blocks estimated by drillholes with a maximum spacing of approximately 100 ft and well established geological and grade continuity were classified as Measured Mineral Resources.
14.12.1.2 Indicated
Blocks estimated by drillholes with a maximum spacing of approximately 200 ft and sufficient geological and grade continuity were classified as Indicated Mineral Resources. Manual adjustments were made to eliminate the unusual artifacts generated from the estimation passes.
14.12.1.3 Inferred
Mineral Resources have been defined by the wide spacing of drillholes and resultant uncertainty in geological and grade continuity. More drilling is required to determine continuity of mineralization in areas of wide drill spacing in order to upgrade Inferred Resources to the Indicated category.
14.12.2 Section 17
Classification of the Mineral Resource in Section 17 and within the mineralized domains is primarily based on geologic continuity, grade continuity, and a number or parameters associated with each block. The detailed wireframe modeling completed prior to grade estimation combined sample data that were in the same geologic sand unit and with similar grades, so blocks within a given mineralized domain already have geologic and grade continuity associated with them.
14.12.2.1 Indicated
Blocks that met the following conditions were classified as indicated:
Estimated in either the 1st or 2nd pass
Utilized more than a single drillhole and single sample in the estimation (i.e., not estimated by Nearest Neighbor)
Was within 100 ft of the nearest sample
14.12.2.2 Inferred
Blocks that were estimated in the 3rd pass, estimated by the Nearest Neighbor method, or over 100 ft from the closest sample were classified as inferred. More drilling is required to determine continuity of mineralization in areas of wide drill spacing in order to upgrade Inferred Resources to Indicated
In the SLR QP's opinion the classification of Mineral Resources is reasonable and appropriate for disclosure.
14.13 Block Model Validation
All three block model zones were validated by visual methods. This involved comparing mineralization intercepts and composite grades to block grade estimates. The comparisons showed reasonable correlation with no significant overestimation or overextended influence of high grades. A vertical longitudinal section through the Northeast Section 10 model is presented in Figure 14-8.
Additional validation methods were used for the different block model zones and are discussed below.
Figure 14-8: Longitudinal Section through the Northeast Section 10 Model
14.13.1 Section 9, 10 and 16
Final block grades were compared to NN block grades by domain. NN grade estimates were run with run-length composites generated across the thickness of the mineralization models. The comparison showed good correlation with less that 10% difference in average grades for most domains. A few mineralized sand wireframe domains showed larger grade differences. B2_05 had a higher NN grade due to widely spaced high-grade composites influencing a higher number of blocks. B1_09_S_01-02 contained only one hole, with a higher run-length composite compared to lower grade six-foot composites.
No significant discrepancies were identified with the block grade validation.
The SLR QP recommends using an inverse distance squared (ID2) estimation as an additional check for the block model validation.
14.13.2 Section 17
Final block statistics were compared to composite statistics for the same mineralized domain. Overall, no major issues were identified. Additionally, histograms and swath plots were generated for the larger mineralized domains to compare a NN estimate with either the OK or ID2 estimates. Figure 14-9 shows the results of the swath plot analysis. Overall histogram distributions between the methods were similar as were swath plots looking in at north-south, east-west, and elevation slices.
The SLR QP recommends using an inverse distance cubed (ID3) estimation as an additional check for the block model validation.
Figure 14-9: Swath Plot of the Roca Honda Project
14.14 Grade Tonnage Sensitivity
Table 14-16 and Figure 14-10 present the sensitivity of the Roca Honda Mineral Resource model to various cut-off grades.
Table 14-16 : Grade versus Tonnage Curve
Energy Fuels Inc. - Roca Honda Project
Price |
Cut-Off Grade |
Cut-Off GT |
Tonnage |
Grade |
Contained Metal |
$80 |
0.160 |
0.32 |
3,777 |
0.436 |
32,906 |
$75 |
0.170 |
0.34 |
3,615 |
0.448 |
32,375 |
$70 |
0.183 |
0.37 |
3,443 |
0.461 |
31,766 |
$65 |
0.190 |
0.38 |
3,360 |
0.468 |
31,464 |
$60 |
0.213 |
0.43 |
3,146 |
0.486 |
30,597 |
$55 |
0.232 |
0.46 |
3,001 |
0.499 |
29,954 |
Price |
Cut-Off Grade |
Cut-Off GT |
Tonnage |
Grade |
Contained Metal |
$50 |
0.256 |
0.51 |
2,809 |
0.517 |
29,014 |
$45 |
0.284 |
0.57 |
2,515 |
0.545 |
27,433 |
$40 |
0.320 |
0.64 |
2,164 |
0.585 |
25,319 |
$35 |
0.365 |
0.73 |
1,732 |
0.646 |
22,358 |
$30 |
0.426 |
0.85 |
1,378 |
0.710 |
19,571 |
$25 |
0.511 |
1.02 |
999 |
0.803 |
16,037 |
Figure 14-10: Roca Honda Resource Grade vs. Tons
14.15 Mineral Resource Reporting
The Roca Honda Mineral Resource estimate is summarized by domain at a 0.19% U3O8 cut-off grade in Table 14-17. In the SLR QP's opinion, the assumptions, parameters, and methodology used for the Roca Honda Mineral Resource estimates are appropriate for the style of mineralization and mining methods.
The SLR QP is of the opinion that with consideration of the recommendations summarized in Section 1 and Section 26, any issues relating to all relevant technical and economic factors likely to influence the prospect of economic extraction can be resolved with further work.
The SLR QP is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could materially affect the Mineral Resource estimate.
Table 14-17: Mineral Resource Estimate for Roca Honda - Effective Date December 31, 2021
Energy Fuels Inc. - Roca Honda Project
Classification |
Area |
Tonnage |
Grade |
Contained Metal |
Recovery |
Measured |
Sec. 9, 10 &16 |
208 |
0.477 |
1,984 |
95 |
Sec. 17 |
- |
- |
- |
|
|
Indicated |
Sec. 9, 10 &16 |
1,303 |
0.483 |
12,580 |
95 |
Sec. 17 |
336 |
0.454 |
3,058 |
95 |
|
Total Measured + Indicated |
Sec. 9, 10, 16 & 17 |
1,847 |
0.477 |
17,622 |
95 |
Inferred |
Sec. 9, 10 &16 |
1,198 |
0.468 |
11,206 |
95 |
Sec. 17 |
315 |
0.419 |
2,636 |
95 |
|
Total Inferred |
Sec. 9, 10, 16 & 17 |
1,513 |
0.457 |
13,842 |
95 |
Notes:
1. SEC S-K definitions were followed for all Mineral Resource categories. These definitions are also consistent with CIM (2014) definitions in NI 43-101.
2. Mineral Resources are estimated at a U3O8 cut-off grade of 0.19% U3O8.
3. A minimum mining thickness of six feet was used, along with $241/ton operating costs, $65/lb U3O8 price, and 95% recovery.
4. Bulk density is 0.067 ton/ft3 (15.0 ft3/ton or 2.14 t/m3).
5. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
6. Mineral Resources are 100% attributable to EFR and are in situ.
7. Numbers may not add due to rounding.
15.0 MINERAL RESERVE ESTIMATE
There are no current Mineral Reserves at the Project.
16.0 MINING METHODS
16.1 Introduction
As currently envisaged, mining at the Project will be based on an average production rate of 1,050 stpd using a combination of step room-and-pillar (SRP) and drift-and-fill (DF) mining methods. Rubber tired mechanized mining equipment will provide operational flexibility in the mine in response to changing orebody geometry. Broken mineralized material will be transported by truck to ore passes leading to a skip pocket and hoisted to surface from either the Section 16 or Section 17 shaft. Cemented rockfill will be placed in mined out areas for ground control. Mining will prioritize the highest-grade areas first by Section, and in the case of stacked mineralized zones, top-down. Mineralized material will be stockpiled on surface and hauled by truck to EFR's White Mesa Mill for processing.
Mine surface infrastructure will be based at the Section 16 shaft area and include all support buildings, mine ventilation fans, batch plant, ore and waste stockpiles, pump infrastructure and a water treatment plant with associated holding ponds.
A minor amount of infrastructure will also be required on Section 17 (Lee Ranch) to support mine operations. A concrete lined shaft, with a 14 ft finished diameter, exists in Section 17 to a depth of 1,475 ft. An additional 186 ft of sinking is required to reach its design elevation. Existing infrastructure on Section 17 includes line power, a hoist house, maintenance building, and a one-acre pond used to hold water during shaft sinking. Access is from a well-maintained two-lane gravel road.
The layouts of the mine and mill sites are shown In Figure 18-1 and Figure 17-2 respectively.
Mine production is anticipated to begin after four years of preproduction which includes Section 17 shaft rehabilitation and development, dewatering of the mineralized zone, underground development to the mineralized zones, and surface infrastructure construction, including the Section 16 shaft and associated ventilation raises. Mine production would begin in year five and lasts eleven years, followed by reclamation.
16.2 Mining Method
The Westwater Canyon Member, which hosts the mineralized horizons, is comprised primarily of sandstones with interbedded shales and mudstones. The A and B mineralized horizons (in Sections 9, 16, 17) are located in the upper area of the Westwater Canyon Member. The C and D mineralized horizons (in Section 10) are located in the lower portion of the Westwater Canyon Member. The Recapture Zone is located immediately below the Westwater. Due to significant historical difficulties in both developing and maintaining the integrity of drifts in the Recapture Zone, the mine design avoids any excavations in this Zone.
It is proposed that the deposit will be developed and mined by two modified room-and-pillar methods using ground support during development to ensure roof stability, especially in weak ground conditions.
Room-and-pillar mining is a simple, low-capital cost mining method where 70% to 90% recovery can be expected dependent upon the rock strengths and geological structures encountered. Although pillars are anticipated to remain unmined, even with tight backfilling and artificial support, the method is sufficiently flexible to achieve required production rates, control cut-off grades, and maintain safe working conditions. The operational sequence must be modified when mining heights are high (>12 ft) since multi-cuts and stacked pillars (low width-to-height ratios) are required and backfilling must be used to ensure pillar stability. This method becomes a hybrid of the cut-and-fill method in areas where the mineralization is thick (12 ft to 21 ft high) because slender pillars are ineffective for roof support and strong global backfill support must enhance local roof support.
With the wide range of mineralized zone thicknesses (from 6 ft to 21 ft) and dips/plunges (from flat to 15°), one of the mining methods selected for Roca Honda is SRP. Permanent pillars will be left in a pre-designed pattern and cemented rockfill (CRF) will be placed in mined-out areas as backfill. This method, recommended for the lower grade mineralized lenses, allows for mobile equipment to be used effectively in the range of dips/plunges encountered at Roca Honda.
DF methods are well suited for selective precision mining in variable-grade areas and are quite flexible, resulting in high extraction ratios. The volume of open ground at any one time is small since drifts are mined and immediately backfilled before adjacent drifts are mined. The development can be placed in the mineralized areas, minimizing waste rock. This method is not well suited for high production rates, unless many stopes are simultaneously opened, which requires a laterally extensive mineralized zone. The cost of local support (roof cabling through multi-cuts) is high because all cuts must be fully supported. This method would be considered in variable high-grade areas, where maximum recovery is desired.
DF mining is recommended for the higher-grade mineralized lenses at Roca Honda. This method is widely used in other mines with similar ground conditions and will result in higher mining recoveries as the need to leave permanent pillars will be significantly reduced. This method, however, requires a high quality, high strength engineered backfill in order to be successful. For the DF method, a high-strength CRF will be placed in the mined-out areas.
Bulk mining methods were investigated, particularly for the thick (up to 20 ft) zones. One method considered involved mining of the thick zones in staggered primary and secondary panels using engineered cemented backfill. This method was not considered to be applicable due to the weak rock conditions. The low rock strengths and limited stand-up time made this method impractical given the relatively high stope walls, which would be exposed during the benching process.
The minimum thickness used in the development of the Mineral Resource estimate was six feet. The mineralized zones range in thickness from 6 ft to 21 ft. Mineralized zones with thicknesses from 6 ft to 12 ft will be mined in one pass. Mineralized zones exceeding 12 ft in thickness will be mined in two sequential overhand cuts with each cut being approximately one-half of the overall zone thickness. The transition grade, defined as the grade where a switch from one mining method to the other would occur, was assumed to be 0.265% U3O8. Stopes with average diluted grades of less than 0.265% U3O8will be mined using the SRP method. Stopes with average diluted grades greater than 0.265% U3O8 will be mined using the DF method.
In Sections 9, 16, and 17, the mineralized horizons will be further defined using longhole drills from a dedicated drilling horizon located below the mineralized zones. In Section 10, the mineralized horizons will be defined using longhole drills on a stope by stope basis.
The proposed Life of Mine (LOM) schedule was developed based on initiating development from the production shaft located in Section 16 and mining material from Section 16 while developing the Section 17 shaft and mining that area, followed by Sections 9 and 10. The mining areas in Sections 9 and 16 will be connected to Section 10 by means of a 3,600 ft twin decline haulage way. Section 16 will be connected to Section 17 by a single haulage way.
Primary development connecting the shaft to the various mineralized zones (including the twin decline) will be driven 10 ft wide by 12 ft high. Stope access development connecting the primary development to the individual stopes will be driven 10 ft wide by 10 ft high.
The mining sequence in each Section is dependent upon the development schedule. Generally, the extraction schedule is sequenced to prioritize the mining of the largest and highest-grade zones in each section of the mine. Where mineralized zones are stacked, they will be mined in a top-down sequence.
Stope mining begins approximately four years after the start of construction and the operating mine life spans eleven years. The production rate averages approximately 1,050 stpd over the life of the mine, assuming 350 operating days per year.
Depressurization of the three main aquifers in the Mine area will be accomplished by the use of 19 depressurization wells and underground long holes that will supply water to 11 underground pumping stations that will ultimately feed water to the Section 16 and 17 shaft sump pumps and three discharge pump stations located in each shaft. It has been estimated that the mine will discharge a nominal 2,500 gpm of water at temperatures between 90°F and 95°F. An additional 2,000 gpm will be produced by surface wells, resulting in a total discharge rate as high as 4,500 gpm.
The deposit will be developed and mined based on single-pass ventilation using a series of separate and independent intake and exhaust networks. The design requires a total of 12 ventilation raises (five in Section 17, three in Section 16, two in Section 9, and three in Section 10). Two of the ventilation raises, one in Section 16 and one in Section 10, will be equipped with emergency evacuation hoisting equipment.
The LOM statistics for the Roca Honda Mine are summarized in Table 16-1.
Table 16-1: Key Life of Mine Production Statistics
Energy Fuels Inc. - Roca Honda Project
Metric Area |
Units |
Life of Mine Quantity |
Development - Primary |
000 ft |
19.2 |
Development - Stope Access |
000 ft |
128.3 |
Stope Mineralization |
000 tons |
3,788.9 |
Development Mineralization |
000 tons |
231.3 |
Total Production |
000 tons |
4,020.2 |
Waste Tons |
000 tons |
884.5 |
Backfill Required |
000 tons |
2,625.1 |
Notes:
1. Tables may not add due to rounding.
16.2.1 Mineralized Material Transportation
Mining will be done with rubber-tired mechanized equipment to provide operational flexibility. Broken mineralized material will be hauled and deposited in an ore pass leading to a skip pocket chamber in both the Section 16 and Section 17 shafts. At each of the two skip loading pockets, 15 in. fine mineralized material will be stored in a 650 ton storage area. From the shaft stations, the mineralized material will be transported to surface by a vertical shaft double drum hoist. A summary of key shaft parameters include:
Finished Diameter: 18 ft (Section 16); 14 ft (Section 17)
Headframe Type: Structural Steel with Backlegs
Hoist Capacity: 1,500 stpd (Section 16), 800 stpd (Section 17)
Personnel Cage Capacity: 10 to 12 miners
Emergency Hoist Capacity: 10 to 12 miners
Shaft depth: 2,100 ft (Section 16); 1,667 ft (Section 17)
Once the mineralized material is hoisted to the surface, it will be transferred into highway trucks, which will deliver the material to the Mill.
16.3 Mine Design
The key design criteria for the Roca Honda Project were:
Mine capacity up to 1,700 stpd and process plant capacity up to 2,000 stpd (700,000 stpa)
227,000 tons in year one, approximately 400,000 stpa thereafter
Eleven year mine life
Mine production from Sections 9, 10, 16, and 17
Mechanized mining using SRP and DF underground methods
Double-drum shaft hoisting of mineralized material to the surface and highway truck haulage to the Mill
Backfill where needed to maximize mineral extraction
Mechanized equipment of medium size, suitable for headings of 100 ft2 to 150 ft2, is recommended for the Mine. Mechanized equipment will be selected to minimize employee exposure to working areas.
The stoping plan starts in the highest-grade areas of Sections 16 and 17, and then proceeds to Sections 9 and 10. The stoping is planned in a series of primary and secondary stopes.
Mining methods considered included the following constraints:
Open stope areas will require stable back conditions during extraction. Back stability will need to consider rock strength, and proximity and condition of recent workings and groundwater drainage conditions.
Blocks of ground serving as temporary or permanent pillars must remain stable during extraction of adjacent ground.
Backfilling of primary openings needs to provide sufficient back support to allow secondary pillars to be mined with a stable back.
Backfill from primary openings should not slough into rib pillar cross-cuts during extraction.
Backfill operations will require tight filling against supported rock including pillar ribs and stope backs by up-dip filling operations. In multi-cut areas that require working from fill, the working mat surface should be sufficiently competent to support equipment.
Temporary access ramps should remain stable during their expected life and can be re-cut provided roof and rib stability can be maintained.
Backfilling operations should include water management provisions to control drainage to main haulages.
Mineralized lenses can be stacked one above the other with as little as tens of feet of separation.
Considerations should be made in each mining area for variations in mining-induced stresses, rock failure mechanisms, and local ground deformations.
Stopes were designed with flat footwalls and were oriented in each of the three areas to maximize the mineralized extraction and minimize dilution due to the variations in the footwall of Section 10. Stopes will be accessed through a system of ramps located outside the Mineral Resources in Sections 9, 10, 16, and 17, plus a small part in Section 11. The locations of the workings are shown in Figure 16-1. The access ramps will connect to a haulage drift and to ventilation raises to the surface. For each stope, a short stope access will be driven to the first cut and then slashed to access subsequent cuts above or below the initial cut.
Mine ventilation will be achieved with surface fans located at exhaust raise locations. Fresh air will enter the mine via the Section 16 or 17 production shafts or an intake ventilation raise. Fresh air will travel through primary haulage ways to active mining areas. Fresh air will then enter active stopes via the fresh air stope access drift, pass through the stope, and finally exit the stope where the air will be directed toward a one pass only ventilation exhaust raise.
Figure 16-1: Proposed Underground Workings
16.3.1 Mining Recovery and Dilution
The deposit is relatively flat-lying and will be mined using both SRP stoping in the lower grade zones and DF stoping in the higher-grade sections. Dilution is estimated to average 17.1% at a grade of 0.030% U3O8. This relationship includes both low grade and waste material; dilution estimates are based on one foot of overbreak in the roof and six inches in the floor of all single lift stopes. In the case of multi-lift stopes, the initial cuts include only six inches of floor dilution. The final cut includes both floor dilution and roof dilution.
To arrive at the Mineral Resources that are potentially mineable in this PEA, the SLR QP used a diluted cut-off grade of 0.110% U3O8, a minimum mining thickness of six feet, and an average calculated mining recovery of 88%. The resource model and underlying data have not changed, however, the SLR QP has reported Mineral Resources at a higher cut-off grade, consistent with the production scenario proposed in this PEA.
16.3.2 Shaft Pillar Considerations
Each of the proposed shafts at Roca Honda should be located as near to the centroid of the mineralized zones as possible to minimize haulage distances, while maintaining appropriate shaft pillar distances.
The shafts should not penetrate the Recapture mudstone formation to any appreciable extent to avoid swelling and closure problems when the already wet shaft becomes distressed.
The shafts should be located at least 400 ft from the major northeast-southwest fault system to minimize the potential for mining-induced stress displacements.
And finally, the shafts should be at least 350 ft from any high extraction mining to avoid having mineralized material tied up in shaft pillar and mining-induced subsidence differential displacements impacting stability of the shaft liner and hoist guide alignment.
16.3.3 Geotechnical Analysis
The estimated geotechnical conditions determined the mine design parameters. These parameters included support for open spans in both long-term haulages and in short-term drifts within a stope. The support requirements were used to estimate the cost for ground support.
The approach adopted uses empirical methods for making estimates of the support parameters based on similar case histories in a range of applicable ground conditions. The use of empirical methods has been shown to be a reasonable approach to assessing ground support as long as anticipated ground conditions are within the data range. Although rock mass strengths at Roca Honda are considered poor to average quality, their Rock Mass Rating (RMR) values are within the data range of the empirical methods.
No analyses beyond these empirical assessments were performed to check the recommended support parameters. As the mining project develops, additional geotechnical analyses will be warranted, to include site specific geotechnical data from underground and appropriate rock mechanics analyses, which might include numerical modeling.
To account for the anticipated variability in rock quality a range of rock mass strengths were considered. For this reason, a range of three anticipated ground conditions were defined: weak, medium, and strong. For each of these, the SLR QP estimated the percentage of excavations that will be in each ground condition, and thus the type of support required for the type of opening (long-term primary, stope access development, and short-term stope drifts).
The groundwater table is estimated to be at a depth of 886 ft at the Section 16 proposed shaft location (elevation of 6,378 ft ASL, where the ground elevation is 7,264 ft ASL). Standing water in the Section 17 shaft is at a depth of 750 ft (elevation 6407 ft ASL) where the ground elevation is 7,157 ft ASL.
16.3.3.1 Development Areas
Stability of open spans in a blocky rock mass is anticipated to be governed by the thickness of bedding in the roof and intersection of joints producing massive sandstone blocks that may be removable into the opening. Stability was analyzed using a simple limit equilibrium method that balanced block loads and support loads. The analysis used the following assumptions.
Drift width = 10 ft
Unit weight of roof rock = 145 lb/ft3
Maximum bedding slab thickness = 50% of room width
Minimum shear strength of roof rock = 350 psi
The minimum safety factor for bolts is 1.50. The bolts were assumed to be 45 kilopound per square inch (ksi) yield steel.
16.3.4 Underground Layout
16.3.4.1 Mine Development
Primary level development will be excavated 12 ft high by 10 ft wide incorporating a semi-circular arched back in the upper 3 ft of the heading. This heading size was selected as the best compromise between the need to minimize the drift excavation dimensions and span due to the relatively weak rock conditions, yet be sufficiently large to allow adequate clearance for suitably sized mobile equipment and the associated piping, electrical and communications cables, services, and 36 in. diameter rigid ventilation ducting. This heading size was also selected as these drifts will be the primary ventilation routes for both intake and exhaust air, most importantly between the production shafts and area workings.
It is expected that the weak sandstones and shales will degrade from vehicular traffic. The use of road base material will therefore be necessary. Roadbeds will be constructed by placing a "Tensar" mesh mat on the floor of the drift to prevent mixing of the weak floor material and the roadbed material. A six-inch layer of screened rock will be placed on the mesh mat. All roads will be ditched and crowned.
Due to its higher grade and lower dewatering requirements, construction and development will begin at Section 17 with the construction of dewatering infrastructure followed by the rehabilitation and completion of the Section 17 shaft and associated underground infrastructure, including ventilation raises. Total vertical requirements will total 1,531 ft and be completed in year 2 of development. At the end of year 1, lateral development and underground construction will begin and be completed at the end of year 2. A total of 3,985 ft of horizontal development will be completed at this time.
Also in year 2, Section 16 shaft construction will begin and timed to reach the shaft station level simultaneously with development from Section 17. The 3,600 ft decline connecting the Southwest (primarily Section 9 and 16) and Northeast (primarily Section 10) mineralized zones has been designed as a twinned heading. This is required for ventilation purposes, both during the driving of the decline as the need for booster fans is eliminated, and for subsequent mining in the Northeast. When completed, one of the decline headings will serve as a dedicated fresh airway connecting the Northeast workings to the Section 16 production shaft fresh air intake. The other decline heading will serve as a dedicated exhaust airway, connecting to the various exhaust boreholes in the Southwest mining area, thus supplementing the exhaust capacity of the boreholes in the Northeast area. Depressurizing of the water in the decline area will precede the initiation of the decline construction, and it will be maintained after completion.
Development productivity calculations were prepared to estimate the rate of advance and the manpower and equipment requirements for the development work. The productivity was developed from first principles with each part of the development cycle time estimated to generate the overall cycle time for development headings.
In all cases, the mucking was assumed to be to a muck bay with re-mucking as a separate activity such that the face could be turned around as rapidly as possible. Truck loading and hauling are considered to be activities that can be undertaken simultaneously with the other activities at the face.
16.4 Grade Control
Grade control is the responsibility of geologists, engineers, production miners, ore control technicians, surveyors, truck drivers, samplers, and metallurgists at the Mine.
Approximately 100 Mlb of U3O8 have been produced from mines located close to (approximately 15 mi) the Mine. The grade control procedures, methods, and key items discussed below are an amalgamation of the information gathered from EFR staff and other articles from the public domain.
16.4.1 Roca Honda Grade Control
Grade control is a day-to-day mine production activity that must be maintained during underground development and mining. The goals of grade control are to identify the limits of mineralization prior to blasting, accurately account for the tons and grade of the broken material after blasting that will be transferred from the Mine to the Mill, mine all the mineralized material, and minimize dilution. In addition, it was reported by Kerr-McGee and others that the mines in the Ambrosia Lake subdistrict generally realized a positive reconciliation of the milled tonnage compared to the geological resource model.
Measurements and evaluations can be divided into two general time frames:
Before Blasting: Guide the mining teams by giving them the mineralized volume according to cut-off grade and local stope constraints. This grade control is based on radioactivity measured either by a counter on the working face, by a gamma ray probe in blast holes and long holes, or by a beta/gamma scaler or x-ray counter. Physical samples will also be collected for chemical assay, on a regular basis but not for every blast. The gamma ray probe is the normal method for pre-blast measurements by RHR.
After Blasting: Provide the ability to sort mineralized material and waste, which can become mixed during blasting, to avoid milling material that would be too expensive to process (dilution). During mucking it is possible to segregate the different grades of mineralized materials and waste selectively. The blasted material will be sampled for chemical assay and probed with a Geiger-Müller-type probe or an instrument similar to the Princeton Gamma Tech (PGT) X-Ray Fluorescence Microanalysis System and/or the SAM 940 Handheld Radioisotope. Also, mineralized materials will need to be segregated by land title for royalty purposes. The gamma ray probe is the normal method of post blast measurements planned to be used by EFR.
Grade control for the Mine will be essential in reducing dilution, improving the head-grade to the process Mill, and aiding the geology and engineering department with accurately estimating and planning mine development and stope production. Dilution in mines is a major issue that increases costs.
Sampling is used to help optimize the delivery of head grade to the mill, and to separate the different royalty groups. Protocols are necessary in order to have a successful grade control program. The sampling areas of the underground mine grade control system are listed below:
Selected production development and stope blast holes
All development and production blasted material (muck piles)
Development headings and production heading sampling, which would contain, but not be limited to the following areas:
Back sampling
Rib sampling
Sill sampling
All underground transfer points (re-muck bays, storage drifts)
Hoisting areas, which include the surface and storage pads located near the shafts
One of the most important methods that needs to be employed for a successful grade program is the visual inspection of the face by a well-trained geologist, engineer, technician, or underground mine foreman. EFR's experience has been that geologists and grade control technicians will become experienced in visually identifying the limits of mineralization for determining the best control method for a given stope.
Precise recordings of all planned and active mining faces, i.e., mine plan and production (as-built) drawings must be done periodically to support the grade control program. The mine plan will show the exact location (X, Y, and Z) of all underground workings. All development and production headings will be surveyed and measured. Particularly, the following minimum work should be completed as part of the Standard Operating Procedure for grade control:
Sill elevations must be obtained and recorded.
Advance maps must be kept up to date, showing each round with at least five probe readings.
Before drilling of a blast round, vertical and rib holes will be drilled, sampled, and probed. The purpose is to determine if the rock surrounding a face contains any significant uranium mineralization. This information must be recorded.
Prior to the design of access drifts, 100 ft to 300 ft long holes must be drilled and probed in advance of work. If no parallel trends or mineralized material extensions are identified, then the access drifts should be planned at the given cut-off grade.
If the stope pillars are mined, pillars will be drilled, sampled, and probed prior to blasting.
All geological characteristics, including rock type, formation member, sand horizon (A, B, C, or D sand) discontinuities (faults, folds) identified and mapped, alteration, organic content, estimated amount of moisture content, mineralization direction, grade and waste contacts, and potential disequilibrium values., must be accurately recorded.
Channel samples should be taken on five-foot centers with a differentiation of lithologies and rock unit colors.
Radioactivity measurements will be recorded either electronically with the probe and/or recorded in a mineralized material control technician's field book. Once the grade control technician returns to the office, the data will be transferred to the grade control databases for storage and future retrieval.
16.4.2 Disequilibrium
Disequilibrium can be an issue in sandstone-hosted uranium deposits within a dynamic hydrologic regime, where mobilization of the uranium into and out of the deposition site results in an overestimation or underestimation of the uranium content, based on radiometric measurements. Information gathered to date indicates that Roca Honda should not experience a negative disequilibrium problem.
16.5 Geotechnical Parameters
Geotechnical criteria for underground mining include providing estimates of maximum spans, maximum back area, types and use of ground support, mining orientation relative to stress loading, and maximum rib heights for large openings. These criteria consider the following mining requirements:
The mineralized material is concentrated in pods whose mined area will range in width from 200 ft to 500 ft and extend from 200 ft to 2,000 ft in length. The height of the mining seam is expected to vary from 6 ft to 21 ft. In the Southwest mining area, the lenses range in depth from 1,800 ft to 2,100 ft below ground northwest to southeast. In the Northeast mining area, depths of the zones range from 2,100 ft to 2,500 ft.
The pod-shaped mineralized material zones plunge at an average of 3° to southeast (125° bearing) perpendicular to the San Mateo and Ambrosia fault zones. Locally, plunges range from flat to 15°.
Mine access will be via shafts located on Sections 16 and 17 with most of the mineralized material structures to the north (Southwest mineralized zone) and northeast (Northeast mineralized zone) of the access shafts.
The mineralized structures are located in the Westwater Canyon Member of the Morrison Formation in sequential sand units, referred to as (from top to bottom) A, B1, B2, C, and D sands. The vertical extent of the mineralized structures will determine access, either bottom-up or top-down, from the sides of the mineralized structures. Minimum grade cut-off requirements in the variable grade mineralized material zones will result in low-grade unmined blocks of ground within mineralized structures that will remain after mining as pillars.
Historical mining is more than two miles from the mineralized structures being considered for current mining. There are no current plans to connect new mining to old historical workings. Therefore, new mining does not need to consider the proximity of the historical workings.
A preliminary conceptual design was based on room-and-pillar mining methods used in the nearby historical mines (Fitch, 2010). The mining concept included stopes consisting of developing primary rooms and pillars extending transversely across the full-mineralized structure height for an equivalent 85% extraction ratio. Stope access was via drill/sampling/drainage galleries beneath the mineralized material structure, but above the Recapture Formation. The resource model and underlying data have not changed, however, EFR has reported Mineral Resources at a higher cut-off grade, consistent with the production scenario proposed in the 2016 NI 43-101 technical report prepared by RPA.
16.6 Hydrogeology
16.6.1 Summary of Previous Permitting and Regulatory Documentation
The SLR QP reviewed several historical permitting and regulatory documents as part of this study. These documents are described below.
The permit granted by the New Mexico State Engineer's office in 2014 for Sections 16, 10, and 9 allows EFR to dewater at a rate of 4,500 gpm. As confirmed by the New Mexico State Engineer's Office, the hydrogeology of the Mine site has been adequately characterized to meet the permit requirements of the State and its agencies (Intera, 2017).
A Draft Environmental Impact Statement (DEIS) for the Roca Honda Mine was distributed to the public in compliance with the National Environmental Policy Act (NEPA) by the USDA in February 2013 (USDA, 2013).
16.6.2 Overview
Roca Honda is located in the southeastern part of the San Juan structural basin, within the southeast part of the Ambrosia Lake uranium subdistrict. Uranium mining and associated dewatering activities occurred in this area from the 1960s through the 1980s. The proposed Mine is located approximately 22 mi northeast of Grants and 2.5 mi northwest of San Mateo, New Mexico. Mine workings will be developed at depths between 2,100 ft and 2,800 ft below the ground surface within the Westwater Canyon Member of the Jurassic Morrison Formation (Westwater) (Figure 16-2). It is anticipated that mine workings will consist of production shafts, declines, stopes, and associated underground workings.
Hydrogeologic characterizations have been performed in the Roca Honda and surrounding areas because of recoverable uranium deposits and groundwater resources. Multiple rounds of hydrogeological studies have generated data, including water quality data, aquifer properties, historical pumping rates, etc. (Kelley et al., 1963; Steinhaus, 2014; Brod and Stone, 1981; Frenzel and Lyford, 1982; Stone et al., 1983; Craigg et al., 1989; Dam et al., 1990; Dam, 1995; and Craigg, 2001 ). In. In addition, the USGS has developed a regional-scale steady-state multi-aquifer groundwater flow model of the San Juan Basin as a segment of the Regional Aquifer System Analysis program (Kernodle, 1996).
As part of historical permitting efforts, RHR developed a comprehensive numerical model (MODFLOW) of the groundwater flow system in the southern portion of the San Juan Basin that includes Sections 9, 10, and 16 of T13N, R8W (Intera, 2012). The groundwater model was used to estimate groundwater inflow and drawdown based on the mine plan developed in 2012, which was approved by the New Mexico State Engineer's Office in 2013. Permit B-1706 PODS 12 through 31 was granted in 2014, which permitted RHR to conduct dewatering at the Mine.
In 2016, after Section 17 was added to the mine project boundary and a new mine plan was developed, the groundwater model was updated to reflect the new mine plan. Groundwater inflow rates calculated in the 2016 groundwater models were similar to those calculated in the 2012 model (Intera, 2017). These groundwater modeling calculations used site-specific hydraulic properties acquired through aquifer testing (USFS, 2011), a summary of which is presented in Table 16-2.
Table 16-2: Summary of Hydraulic Parameters for the Westwater Canyon Member
Energy Fuels Inc. - Roca Honda Project
Hydraulic Parameters |
Kernodle Median Value1 |
RHR Pump Test2 |
Intera Numerical Model3, 4 |
Units |
Hydraulic Conductivity |
|
|
0.15 - 0.9 |
m/day |
Transmissivity |
14.4 |
6.0 - 11.6 |
|
m2/day |
Specific Storage |
|
|
3.94E-06 - 9.84E-06 |
m-1 |
Storage Coefficient |
2.0E-04 |
2.4E-04 |
|
unitless |
Thickness of Westwater |
76.2 |
Approximately |
|
m |
Notes:
1. Kernodel, 1996
2. Hydroscience Associates Inc., 2011
3. Intera, 2017
4. The hydraulic conductivity range represents the mine workings and surrounding areas.
Source: Kernodle, 1996
Figure 16-2: Generalized Hydrogeologic Section of the San Juan Basin showing Major Aquifers
16.6.3 Site Hydrogeology
The SLR QP requested from EFR basic hydrogeologic information such as water level surveys, pumping tests, flow rates, and any secondary documentation, such as numerical modeling and reports. EFR provided relevant reports and documents prepared to support permit applications. The SLR QP used these documents and others available in the public domain to highlight the following main findings.
To understand the hydrogeology of the site, RHR compiled the relevant published and unpublished information near the permit area and completed aquifer testing. This effort included an inventory of wells previously identified in published and unpublished reports as being present near the Roca Honda permit area. The inventory of 149 records includes location, completion date, well depth, producing formation, measured water levels, and availability of chemical data for each well. The wells were field checked by RHR personnel. Selected wells from the inventory were sampled. In addition, RHR drilled three monitoring wells within Section 16 of the permit area in 2007 and subsequently sampled them. RHR incorporated a subset of the selected inventory wells and all three monitoring wells into an ongoing water quality sampling program, termed the Regional Groundwater Sampling Program (USDA, 2013).
A generalized stratigraphic column in the vicinity of the permit area is presented in Figure 7-2. General descriptions of these impacted aquifers follow.
Westwater Canyon Member of the Morrison Formation. This is the target horizon for the proposed mining activities and the unit for which dewatering pumping is anticipated to be by far the greatest, hence the unit of greatest potential impact from such pumping. Uranium is generally confined to the sandstone units in this formation. There are minimal other uses of the aquifer in the area that could be affected by dewatering activities. Total dissolved solids (TDS) content of the water from the three permit area wells was low, ranging from 425 milligrams per liter (mg/L) to 532 mg/L in the 15 samples analyzed. Five Westwater Canyon wells approximately 5.5 mi west of the permit area had much higher TDS, ranging from 1,980 mg/L to 3,440 mg/L (excluding an apparent outlier value). Much of the higher TDS was in the form of sulfate, ranging from 1,188 mg/L to 2,150 mg/L. That level of sulfate is far above the Federal Safe Drinking Water Act (SDWA) Secondary Standard of 250 mg/L and would not be considered potable. Some of the high TDS wells also exceeded standards for a few metals and radionuclides. As presented in Table 16-3, wells S-1 and S-3 on site naturally exceed standards for radionuclides, along with other Westwater Canyon Wells.
Table 16-3: Radionuclide Data from Permit Area Water Monitoring Wells
Energy Fuels Inc. - Roca Honda Project
Well |
Parameter |
Gross Beta |
Gross Alpha |
Radium-226 |
S-1 |
|
50.1 to 178 |
135 to 418 |
27 to 69 |
S-3 |
|
Not exceeded |
17.8 to 35.2 |
Not exceeded |
Source: USDA, 2013
Notes:
1. Standard is 4 millirem/year, approximately 50 pCi/L, depending on radionuclide
2. Standard is 5 pCi/L for Radium-226 and Radium-228 combined
Dakota Sandstone. The Dakota Sandstone has an average thickness of approximately 50 ft within the permit area. The top of the Dakota is about 5,600 ft ASL to 5,400 ft ASL. Dewatering of the Dakota will occur during shaft construction, and it is the aquifer most directly impacted by pumping of the Westwater Canyon. Brod and Stone (1981) and Kelley et al. (1980) report that water in the Dakota is typical of the sodium-sulfate type, with TDS in the range of 600 mg/L to 1,400 mg/L.
Gallup Sandstone. The Gallup Sandstone comprises two sandstone units with a total thickness approximating 85 ft. They are separated by the Pescado Tongue of the Mancos Shale, approximately 20 ft thick. The Gallup provides a source of municipal supply to the towns of Gallup and Crownpoint to the northwest and the community of Marquez to the east. The Gallup water is of potable quality, with a TDS range of 530 mg/L to 669 mg/L. No primary SDWA standards were exceeded in the parameters analyzed. The Gallup water is a sodium-bicarbonate type.
Point Lookout Sandstone. This unit is found near the permit area's land surface. Although it was found to be dry during the "first water" drilling, it is known to be the source of a small spring (Bridge Spring) discussed subsequently. Nineteen wells completed in the Point Lookout area were identified in the well inventory, most of them near the community of San Mateo southeast of the permit area. In this area, fractures and faults are believed to have enhanced the permeability of the Point Lookout; within the permit area, it is described as "dense, with low primary permeability." TDS ranged from 192 mg/L to 695 mg/L, with at least one sample each from six different wells exceeding the SDWA Secondary Standard for TDS. Iron and fluoride also exceed SDWA Secondary Standards (2.0 mg/L).
Menefee Formation. This unit is found near the permit area's land surface. Although it was found to be dry within the area during the "first water" drilling, it is known.to be the source of small springs discussed subsequently. The Menefee Formation comprises shales interbedded with thin to thick sandstones and minor coal seams. Except for the southeast corner of Section 10 beneath colluvium, the Menefee Formation has been removed from the permit area. The western part of the San Mateo Creek valley by erosion North of San Mateo Creek, the Menefee extends only to the central part of Section 21, T13N, R8W; south of San Mateo Creek, the Menefee extends farther west, to near the western boundary of Section 29, T13N, R8W (McCraw et al. 2009). Menefee water is of the sodium-bicarbonate type with some sulfate. Quality is quite variable, with TDS ranging from 169 mg/L to 2,299 mg/L in the 23 wells. Secondary Standards for sulfate, iron, manganese, and aluminum also were exceeded in one or more of the 23 Menefee wells. SDWA Primary Standards were exceeded for lead (seven wells), arsenic (four wells), and combined radium (one well).
Alluvium. This unit contains groundwater along the more extensive valleys such as San Mateo Creek.
Drilling by RHR to find "first water" for the State's groundwater discharge plan process found the shallowest saturated zone to be in the Gallup. The primary confining beds are the shales above each aquifer: the Brushy Basin Member of the Morrison above the Westwater Canyon and two units of the Mancos shale above the Dakota and Gallup. The Recapture Member of the Morrison provides a degree of hydraulic isolation between the Westwater Canyon and deeper aquifers such as the San Andres limestone.
Table 16-4 summarizes the available information from various sources on the thickness, hydraulic conductivity, transmissivity (product of thickness times horizontal hydraulic conductivity), yield, summary water quality, and storage properties of each water-yielding interval (USDA, 2013).
Table 16-4: Summary of Aquifer Characteristics in the Vicinity of the Roca Honda Permit Area (Modified after USDA, 2013)
Energy Fuels Inc. - Roca Honda Project
Aquifer |
Thickness |
Probable |
Transmissivity |
Hydraulic |
Hydraulic |
Yield |
TDS |
Storativity |
|
(ft) |
(ft) |
(ft2/day) |
(ft/day) |
(ft/day) |
(gpm) |
(mg/L) |
Specific |
Storativity |
|
Alluvium |
10-80 |
0 |
700-1,450 |
27 |
|
<20 |
590-14,000 |
0.1-0.25 |
NA |
Menefee |
400-1,000 |
<100 |
10-100 |
0.05-0.01 |
0.00001 |
<20 |
200-1,400 |
0.10 |
0.0001 |
Point Lookout Sandstone |
40-415 |
<120 |
<1-240 |
0.002-0.02 |
0.0002 - 0.002 |
To >50 |
200-700 |
|
0.000041 |
Dalton Sandstone |
80-180 |
>100 |
10-<50 |
10-80 |
0.0001 |
|
4,500 |
0.09 |
0.0001 |
Gallup Sandstone |
90-700 |
85 |
15-390 |
0.10-1.0 |
0.002 |
1-645 |
1,200-2,200 |
0.09 |
0.000002- 0.000033 |
Lower Mancos Shale Sandstones |
125 |
125 |
134 |
0.05 |
0.002 |
0.0-2,000 |
2,500-9,000 |
0.10 |
0.0001 |
Dakota Sandstone |
50-350 |
50-60 |
44-134 |
0.25-1.5 |
0.002 |
1-200 |
600-1,400 |
0.10 |
0.0001 |
Westwater Canyon |
100-250 |
100-250 |
50-500 |
0.10 |
0.001 |
1-401 |
360-2,200 |
0.10 |
0.0002- 0.00002 |
16.6.3.1 Mine Dewatering and Timeline Summary
In the mine plan developed in 2017, it was anticipated that construction and operation of the Mine and the required dewatering activities would proceed in several phases. On Section 17, an incomplete 14 ft diameter shaft has been developed to a depth of 1,478 ft (RPA, 2015). Renovation and completion of the existing production shaft in Section 17 and construction of the underground workings and stopes in Sections 17 are expected to take approximately 13 years (RPA, 2015; Intera, 2017).
Construction of the production shaft in Section 16 and underground working in Sections 9, 10, and 16 are projected to take three and ten years, respectively. Work in Sections 17 and 16 will proceed simultaneously, and mining activities necessitating dewatering will last a total of 13 years under the revised mine plan (Intera, 2017). The Section 16 production shaft will pass through three aquifer units: the Gallup Sandstone, Dakota Sandstone, and Westwater Canyon Member. All other underground mine workings in Sections 9, 10, 16, and 17 will be developed in the Westwater Canyon Member (Intera, 2017). Hydrostratigraphic units are well defined in the San Juan Basin (Stone et al., 1983; Steinhaus, 2014).
16.7 Production Schedule
The LOM schedule is shown in Table 16-5 and averages 1,050 stpd of mineralized material with a total tonnage of 4.02 million tons at a diluted grade of 0.36% U3O8 containing 28.995 Mlb of U3O8. This total includes Measured, Indicated and Inferred Mineral Resources.
Initial activities include development of primary mine access components including shaft sinking and preliminary station development, blind boring of the exhaust and emergency escape way boreholes and construction of the backfill/aggregate raises. This is followed by the sequential development and stope mining schedules for the mining levels; the mine schedule continues production to the end of the mine life.
Table 16-5: Production Schedule
Energy Fuels Inc. - Roca Honda Project
|
|
|
Pre-Prod |
Operations |
||||||||||
Category |
Units |
Total |
YR -1 |
YR 0 |
YR 1 |
YR 2 |
YR 3 |
YR 4 |
YR 5 |
YR 6 |
YR 7 |
YR 8 |
YR 9 |
YR 10 |
Planned Production - Section 17 |
tons |
587,680 |
- |
225,000 |
327,680 |
35,000 |
|
|
|
|
|
|
|
|
Planned Production - Section 16 |
tons |
430,589 |
- |
5,607 |
78,206 |
166,335 |
180,441 |
|
|
|
|
|
|
|
Planned Production - Section 9 |
tons |
947,687 |
- |
|
13,857 |
120,140 |
135,275 |
224,914 |
200,123 |
158,094 |
95,284 |
|
|
|
Planned Production - Section 10 |
tons |
2,054,219 |
- |
|
|
86,174 |
86,296 |
155,946 |
182,329 |
244,289 |
308,881 |
418,464 |
396,938 |
174,902 |
Total Planned Production |
tons |
4,020,175 |
- |
230,607 |
419,743 |
407,649 |
402,012 |
380,860 |
382,452 |
402,383 |
404,165 |
418,464 |
396,938 |
174,902 |
Contained U3O8 - Section 17 |
lb |
4,230,000 |
- |
1,619,504 |
2,358,573 |
251,923 |
|
|
|
|
|
|
|
|
Contained U3O8 - Section 16 |
lb |
1,802,697 |
- |
23,474 |
327,416 |
696,375 |
755,431 |
|
|
|
|
|
|
|
Contained U3O8 - Section 9 |
lb |
5,958,142 |
- |
|
87,119 |
755,324 |
850,479 |
1,414,042 |
1,258,180 |
993,943 |
599,054 |
|
|
|
Contained U3O8 - Section 10 |
lb |
17,003,740 |
- |
- |
- |
713,303 |
714,313 |
1,290,839 |
1,509,223 |
2,022,095 |
2,556,754 |
3,463,824 |
3,285,643 |
1,447,746 |
Total U3O8 Contained |
lb |
28,994,579 |
- |
1,642,978 |
2,773,108 |
2,416,925 |
2,320,223 |
2,704,881 |
2,767,404 |
3,016,038 |
3,155,808 |
3,463,824 |
3,285,643 |
1,447,746 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Waste Produced from Development |
tons |
884,457 |
54,800 |
168,090 |
205,919 |
136,760 |
94,157 |
48,346 |
57,826 |
54,399 |
26,693 |
27,100 |
10,367 |
|
Daily Production |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ore |
tons/ |
|
- |
659 |
1,199 |
1,165 |
1,149 |
1,088 |
1,093 |
1,150 |
1,155 |
1,196 |
1,134 |
500 |
Waste |
tons/ |
|
157 |
480 |
588 |
391 |
269 |
138 |
165 |
155 |
76 |
77 |
30 |
- |
Total |
tons/ |
|
157 |
1,139 |
1,787 |
1,555 |
1,418 |
1,226 |
1,258 |
1,305 |
1,231 |
1,273 |
1,164 |
500 |
16.7.1 Scheduling Assumptions and Risks
As indicated in previous sections of this Technical Report, development and stope mining productivities used for scheduling purposes have been calculated based on average ground conditions and substantial depressurization and reduction of the volumes of local groundwater inflow. Based on current rock strength testing information, it is estimated that 40% of the ground will be very weak, 40% average and 20% stronger than average. It can be expected, therefore, that, in some instances, ground conditions or water flows will be better than the average, but more often, will be significantly worse than average. Whenever higher than expected groundwater inflows or weaker rocks are encountered, productivities will be significantly reduced and the ability to meet the development and production targets included in this schedule will be challenging.
In the Southwest mineralized zones, dedicated definition drilling and dewatering drifts will be located below the mineralized horizons. The scheduled elapsed time between the definition and dewatering of a specific stoping block and the subsequent development of stope accesses followed by the initiation of mining has been maximized. This approach should result in improved ground and water inflow conditions, enhancing the probability of meeting schedule targets. In the Northeast mineralized zones, due to the proximity of the mineralized horizons to the Recapture Zone, definition drilling and dewatering is undertaken sequentially, and the dewatering efficiency will therefore be reduced.
16.8 Underground Mobile Equipment
A fleet of mobile equipment, suitable for the proposed heading sizes and mining methods, has been selected and quantified. Budget quotes were obtained from equipment suppliers for the production equipment. Service equipment cost estimates were obtained from other recent SLR studies. Equipment needs for development and stoping are almost identical and, as development requirements diminish over time, the equipment is transferred to stoping. This eliminates the need to procure additional mobile equipment as the number of active stopes increases. Mobile equipment requirements are shown in Table 16-6.
Table 16-6: Mine Equipment Summary
Energy Fuels Inc. - Roca Honda Project
Mobile Equipment |
hp |
Quantity |
Total hp |
Jumbo - 1 boom (development) |
80 |
4 |
320 |
LHD 3-yd (development) |
130 |
4 |
520 |
Materials Handler with man-basket (development) |
101 |
2 |
202 |
Roofbolter (development) |
80 |
4 |
320 |
Shotcreter (development) |
148 |
2 |
296 |
Remix Transporter (development) |
200 |
2 |
400 |
Jumbo - 1 boom (stoping) |
80 |
5 |
400 |
LHD 1.75-yd (stoping) |
75 |
3 |
225 |
LHD 3-yd (stoping) |
130 |
2 |
260 |
Roofbolter (stoping) |
80 |
5 |
400 |
Mobile Equipment |
hp |
Quantity |
Total hp |
LHD 1.75-yd Backfill Rammer (stoping) |
75 |
2 |
150 |
LHD 3-yd Backfill Rammer (stoping) |
130 |
2 |
260 |
Materials Handler with man-basket (stoping) |
101 |
3 |
303 |
Truck 16-ton ejector box (development and stoping) |
210 |
8 |
1,680 |
LHD 3 yd (shaft station transfer to skip pocket) |
130 |
2 |
260 |
Jumbo - 1 boom (spare) |
80 |
1 |
80 |
LHD 3-yd (spare) |
130 |
1 |
130 |
LHD 1.75-yd Backfill Rammer (spare) |
75 |
1 |
75 |
LHD 3-yd Backfill Rammer (spare) |
130 |
1 |
130 |
Roofbolter (spare) |
80 |
1 |
80 |
Truck 16 ton ejector box (spare) |
210 |
1 |
210 |
U/G Longhole Drill |
73 |
2 |
146 |
Materials Handler with boom |
101 |
2 |
202 |
Boom Truck |
148 |
2 |
296 |
Caterpillar 272C (Skid Steer Loader) |
90 |
2 |
180 |
Maintenance Utility Vehicle |
148 |
2 |
296 |
Pump Crew Utility Vehicle |
148 |
1 |
148 |
Electrical Utility Vehicle |
74 |
2 |
148 |
Supervision and General Utility Vehicle |
22 |
3 |
66 |
Engineering/Geology Utility Vehicle |
22 |
3 |
66 |
Surveyor Utility Vehicle |
74 |
1 |
74 |
Personnel Transport Vehicle |
148 |
2 |
296 |
Grader |
110 |
1 |
110 |
Total Mobile Equipment |
|
79 |
8,729 |
The Load Haul Dumps (LHDs), trucks, and jumbos will be required for the mine development and will be utilized by contractors for the preproduction period. In operations, these units are expected to experience relatively low utilization, but the fleet size is considered necessary to provide the back-up for this remote site operation.
Equipment will be selected based upon price and support and it is planned to purchase as many units as possible from one supplier to minimize the number of suppliers and to increase the level of common spares.
16.9 Health and Safety
The mine will operate in accordance with all applicable health and safety regulations and guidelines.
17.0 RECOVERY METHODS
17.1 Introduction
The material produced from Roca Honda will be milled at the EFR-owned White Mesa Mill (the Mill), located near Blanding, Utah. The Mill was originally built in 1980. Since construction, the Mill has processed approximately five million tons of uranium and vanadium containing ores from Arizona, Colorado, and Utah. The Mill is currently operated on a campaign basis to produce yellowcake (U3O8). It can also process alternate feed materials.
Capable of processing 2,000 stpd, the Mill will process mineralized materials from the Mine, other EFR uranium mines, potential toll milling ores for other producers in the region, and alternate feed material. This Technical Report only addresses the costs and revenues of the Roca Honda Project, including project specific costs at the Mill. The location of the Mill is shown in Figure 17-1. The site features of the Mill are shown in Figure 17-2.
The Mill process is described in the following sections and the flowsheet is shown in Figure 17-3.
17.2 Ore Receiving
Material will be hauled from the Mine to the Mill in 24-ton highway haul trucks. When trucks arrive at the Mill, they are weighed and probed prior to stockpiling. Samples are collected to measure the dry weight, and to perform amenability testing for process control. Trucks are washed in a contained area and scanned for gamma radiation prior to leaving the Mill site.
17.3 Grinding
A front-end loader will transfer the mineralized material from the stockpiles to the Mill through the 20 in. stationary grizzly and into the ore-receiving hopper. The ore is then transferred to the 6 ft by 18 ft diameter semi-autogenous grinding (SAG) mill via a 54 in. wide conveyor belt. Water is added with the ore into the SAG mill where the grinding is accomplished. The SAG mill is operated in closed circuit with vibrating screens. The coarse material, P80 +28 mesh (28 openings per linear inch) is returned to the SAG mill for additional grinding and the P80 -28 mesh portion is pumped to the pulp (wet) storage tanks.
The pulp storage tanks are three 35 ft diameter by 35 ft high mechanically agitated tanks. These tanks serve two basic purposes. First, they provide storage capacity for the ore prior to chemical processing; and second, they provide a facility for blending the various types of ore prior to processing.
17.4 Leaching
From the pulp storage tanks, pre-leach and leaching are employed to dissolve the uranium. A hot, strong acid treatment is utilized in the second stage in order to obtain adequate recoveries. This results in high concentrations of free acid in solution. Therefore, a first stage "acid kill" is employed, which is referred to as pre-leach. Ore from the pulp storage tanks is metered into the pre-leach tanks at the desired flow rate. The slurried ore from the pulp storage tanks will usually be about 50% solids mixed with 50% water. This slurry is mixed in the pre-leach tanks with a strong acid solution from the CCD circuit resulting in a density of approximately 22% solids. This step is employed to neutralize the excess acid from the second stage leach with raw ore. By doing this, not only is the excess acid partially neutralized, but also some leaching occurs in the pre-leach circuit, and less acid is needed in the second stage leach. The pre-leach ore flows by gravity to the pre-leach thickener. Here, flocculent is added and the solids are separated from the liquid. The underflow solids are pumped into the second-stage leach circuit where acid, heat, and an oxidant (sodium chlorate) are added. About three hours retention time is expected to be needed in the seven second-stage leach tanks. Each tank has an agitator to keep the solids in suspension. The discharge from the leach circuit is a slurry consisting of solids and a sulfuric acid solution with dissolved uranium and vanadium. The leach slurry is then pumped to the CCD circuit for washing and solid liquid separation. The liquid or solution from the pre-leach thickener overflow is pumped first to the clarifier and then the SX feed tank.
Figure 17-1: White Mesa Mill Location and Haulage Route
Figure 17-2: White Mesa Mill Facility Layout
Figure 17-3: White Mesa Mill Flowsheet
17.5 Counter Current Decantation
The CCD circuit consists of a series of thickeners in which the pulp (underflow) goes in one direction, while the uranium/vanadium bearing solution (overflow) goes in a counter current direction. The solids settle to the bottom of the first thickener tank and flocculent is added to each thickener feed to increase the settling rate of the solids. As the pulp is pumped from one thickener to the next, it is gradually depleted of its uranium and vanadium. When the pulp leaves the last thickener, it is essentially barren waste that is disposed of in the tailings cells.
Eight thickeners are utilized in the CCD circuit to wash the acidic uranium bearing liquids from the leached solids. Water or barren solutions are added to the No. 8 thickener and flow counter-current to the solids. As the solution advances toward the No. 1 thickener, it carries the dissolved uranium. Conversely, the solids become washed of the uranium as they advance toward the last thickener. By the time, the solids are washed through the seven stages of thickening they are 99% free of soluble uranium and may be pumped to the Tailings Cells. The clear overflow solution from No. 1 CCD thickener advances through the pre-leach circuit and pre-leach thickener as previously explained, and to the clarifier, which is an additional thickener giving one more step in order to settle any suspended solids prior to advancing the solution to the SX circuit.
17.6 Solvent Extraction
The primary purpose of the uranium solvent extraction (SX) circuit is to concentrate the uranium. This circuit has two functions. First, the uranium is transferred from the aqueous acid solution to an immiscible organic liquid by ion exchange. Alamine 336 is a long chain tertiary amine that is used to extract the uranium compound. Then a reverse ion exchange process strips the uranium from the solvent, using aqueous sodium carbonate. As previously noted, the SX circuit is utilized to selectively remove the dissolved uranium from the clarified leach solution. Dissolved uranium is loaded on kerosene advancing counter currently to the leach solution. The uranium-loaded kerosene and leach solution are allowed to settle where the loaded kerosene floats to the top allowing for separation. The uranium barren leach solution is pumped back to the CCD circuit to be used as wash water. The loaded organic is transferred to the stripping circuit where acidified brine (stripping solution) is added and strips the uranium from the kerosene. Within the SX circuit, the uranium concentrations increase by a factor of four when loading on the kerosene and again by a factor of ten when removed by the stripping solution. The barren kerosene is returned to the start of the SX circuit. The loaded strip solution is transferred to the precipitation circuit.
With respect to impurities removal, the SX circuit of the Mill is highly selective to uranium and consistently produces yellowcake in the 98% to 99% purity range. This includes ores that contain vanadium, arsenic, and selenium, which have shown to be problematic with other uranium recovery methods. The Mill has a vanadium recovery circuit, but it is only operated when the head grades are greater than 2 g/L vanadium. This high of a head grade is only expected when the vanadium to uranium ratio is greater than 3:1. Vanadium recovery is not anticipated from the Roca Honda mineralized material based on the low vanadium content.
17.7 Precipitation, Drying and Packaging
In the precipitation circuit the uranium, which up to this point has been in solution, is caused to precipitate or actually "fall out" of the solution. The addition of ammonia, air, and heat to the precipitation circuit causes the uranium to become insoluble in the acid strip solution. During precipitation, the uranium solution is continuously agitated to keep the solid particles of uranium in suspension. Leaving the precipitation circuit, the uranium, now a solid particle in suspension, rather than in solution, is pumped to a two-stage thickener circuit where the solid uranium particles are allowed to settle to the bottom of the tank. From the bottom of the thickener tank the precipitated uranium in the form of a slurry, about 50% solids, is pumped to an acid re-dissolve tank and then mixed with wash water again. The solution is then precipitated again with ammonia and allowed to settle in the second thickener. The slurry from the second thickener is de-watered in a centrifuge. From this centrifuge, the solid uranium product is pumped to the multiple hearth dryer. In the dryer, the product is dried at approximately 1,200°F, which dewaters the uranium oxide further and burns off additional impurities. From the dryer, the uranium oxide (U3O8), concentrated to +95%, is stored in a surge bin and packaged in 55 gallon drums. These drums are then labeled and readied for shipment.
17.8 Mill Upgrades
The Mill was refurbished in 2008, and it does not require any mill-related upgrades to process the Roca Honda ore. Additional tailings capacity will be required to facilitate permanent storage of the tailings sands and barren solutions. There are additional, permitted areas available for future tailings storage beyond the current capacity of 3.5 Mt.
The processing parameters obtained from historical production of the Grants uranium district ores and from the Kerr-McGee metallurgical test work have been shown to be similar to the ores milled in 2009 and 2010 at the Mill from EFR's Tony M mine.
17.9 Process Design Criteria
The principal design criteria selected are tabulated below in Table 17-1. The process operation parameters will be finalized following testing of site-specific metallurgical samples. Current power and water requirements at the Mill are discussed in Sections 18.3 and 18.6. No increase in power or water supply is envisioned to be required for future operations. Anticipated personnel requirements are presented in Section 21.2.8.
Table 17-1: Principal Process Operation Criteria
Energy Fuels Inc. - Roca Honda Project
General |
Criteria |
Processing Rate |
547,500 stpa (1,800 stpd) |
Feed Grade |
0.365% U3O8 |
Uranium Circuit |
|
Final Grind |
80% passing 28 mesh |
Typical Sulfuric Acid Consumption |
150 lb/ton (137 lb/ton actual) |
Final Concentrate Mass |
122 lb/ft3 |
Product Assay |
97% U3O8 |
Recovery to Final Concentrate |
95% Uranium in Feed |
18.0 PROJECT INFRASTRUCTURE
18.1 Introduction
Infrastructure at the Roca Honda Mine has been designed to accommodate all mining and transportation requirements. This includes offices, mine dry, warehousing, stockpiles, standby generators, fueling station, rapid response services, equipment utilities, and workshops.
All ore produced at the Mine will be trucked 272 mi to Energy Fuel's processing facility, the White Mesa Mill (the Mill), in Blanding, Utah.
The project area is an undeveloped site with gravel road access and no site facilities. The Mine layout is shown in Figure 18-1. The Mill is an operating uranium facility six miles from Blanding, Utah, with good paved-road access on US Highway 191 from the Mine site.
In the late 1980s, Kerr-McGee sank a shaft to a depth of approximately 1,478 ft on Section 17, referred to as the Lee mine. Excavation of the shaft stopped in the Westwater Formation at the top of the first planned production station, and the mine closed down in the mid-1980s. No ore was ever mined from the Lee Mine. Future studies are planned to evaluate the rehabilitation and the deepening of this Lee shaft on Section 17, which will initiate the development of the project.
18.2 Access Roads
The two-mile long gravel access road from the site to Highway 605 will be improved during haul road construction. All other roads are paved and in place.
Site roads will be required to access the following locations from the mine complex:
Mine shaft
Dewatering wells
Water treatment plant
Mine fresh air raises, two escape way raises, and mine air heater
Four secondary mine exhaust raises
Water reclaim area
Site roads will be low-speed, two-lane, and single-lane roads with turnouts to permit vehicles to meet. A parking area for employee and company vehicles will be provided beside the mine offices.
18.3 Power
Electrical power will be supplied to the mine by existing power lines that transverse the Mine area. Backup generated power will be supplied by a 5 MW diesel power station located at the site. The power will be generated and distributed about the site at 600 V and 4,160 V. The feed to the mine will be by 4,160 V power cables installed in the shaft feeding load centers with 4,160 V:600 V transformers. When the ventilation raise is in place, an additional line may be installed in the raise to provide a loop for power distribution. As an alternative, bore holes may be used as conduit for power lines to the underground mine to provide multiple feeds and to reduce the line loss with the shorter supply cables.
Electrical power will be required at the mobile load centers to provide power for jumbos and fans in the development and production areas. An electrical power supply to the main surface fan locations will also be required.
A new transmission tap substation at or near Continental Divide Electric Cooperative's existing Gulf Minerals substation would reduce the transmission level voltage to 25 kV for distribution to the mine site and water treatment plant at Section 16. The distribution line will be run overhead on poles along existing right of way to the water treatment plant site. The existing cable is not sized properly for the expected load, so it would need to be upgraded. After the distribution line reaches the mine site the overhead distribution will be dropped off at one or more locations as required to service the mine, ventilation fans and de-watering wells.
Power distribution on the mine site includes main shaft, de-watering pumps, ventilation shafts, and escape shafts. It will be distributed as 25 kV on overhead lines with taps and individual transformers for each location. The main shaft area will have two transformers. One transformer will reduce voltage from 25 kV to 4.16 kV to service the hoist and power for the mine. The other transformer will reduce the voltage from 4.16 kV to 480 V for the other surface loads around the shaft.
The underground loads include some at 4.16 kV and the remainder will be reduced to 480 V or 120/208 V for the other loads as required. All low voltage motors will be started and controlled through standard Motor Control Centers. Medium voltage (MV) motors will be started and controlled with their MV starters.
The site electrical utilization is three phase, 60 Hz, 480 V for all motors 200 hp or less; all motors larger than 200 hp will be 4,160 V. Surface grounding will be per National Electric Code (NEC) requirements and Institute of Electrical and Electronic Engineers (IEEE) 142 standards. Underground grounding will be per Mine Safety and Health Administration (MSHA) requirements.
The estimated power consumption for the underground mining, including ventilation is 1.6 MW as presented in Table 18-1.
Table 18-1: Roca Honda Mine Estimated Electrical Load
Energy Fuels Inc. - Roca Honda Project
Load Description |
No. Units |
Unit hp |
Connected |
Load Factor |
Load hp |
Lighting |
1 |
10 |
10 |
90% |
9 |
Shops |
1 |
20 |
20 |
50% |
10 |
Portable Welder |
1 |
25 |
25 |
80% |
20 |
Underground |
|||||
Shaft Pumps |
8 |
250 |
2,000 |
40% |
800 |
Pumps |
12 |
150 |
1,800 |
78% |
1,401 |
Secondary Fans |
8 |
50 |
400 |
100% |
400 |
Underground Shops |
2 |
100 |
200 |
23% |
46 |
Longhole Drill |
1 |
75 |
75 |
43% |
32 |
Backfill/Aggregate Mixing Plant |
2 |
100 |
200 |
12% |
24 |
Cement Mixing Tank |
2 |
50 |
100 |
12% |
12 |
Electrohydraulic Drill Jumbo |
8 |
75 |
600 |
24% |
144 |
Rockbolter |
8 |
75 |
600 |
24% |
144 |
Shotcreter |
1 |
75 |
75 |
24% |
18 |
Lunch Rooms |
2 |
20 |
40 |
8% |
3 |
Underground Lighting |
1 |
30 |
30 |
58% |
17 |
Subtotal |
|
|
8,850 |
|
5,191 |
Contingency |
|
|
10% |
|
10% |
Total (hp) |
|
|
9,735 |
|
5,710 |
Power is supplied to the Mill by Rocky Mountain Power through their regional grid. Total online power for the Mill is presented in Table 18-2 and Table 18-3. Electrical loads were inventoried from existing equipment. The majority of electrical components installed are low voltage 460 V. Medium voltage, 4,160 V, is used for the SAG mill.
Table 18-2: White Mesa Mill Connected Load Rating
Energy Fuels Inc. - Roca Honda Project
Connected Load Rating |
hp |
kW |
kVA |
SAG Mill |
700 |
567 |
651 |
All Pumps |
604 |
489 |
615 |
Conveyors/Feeders/Screens |
94 |
76 |
95 |
Agitators/Settlers/Mixers |
550 |
446 |
512 |
CCD |
200 |
162 |
186 |
Presses/Flocculant |
22 |
18 |
23 |
Fans/Scrubbers/Cranes |
45 |
36 |
42 |
Connected Load Rating |
hp |
kW |
kVA |
Bag House/Miscellaneous |
91 |
65 |
81 |
Totals |
2,306 |
1,859 |
2,205 |
Table 18-3: White Mesa Mill Operating Load Rating
Energy Fuels Inc. - Roca Honda Project
Operating Load Rating |
hp |
kW |
kVA |
SAG Mill |
581 |
471 |
540 |
All Pumps |
451 |
358 |
449 |
Conveyors/Feeders/Screens |
71 |
55 |
68 |
Agitators/Settlers/Mixers |
457 |
370 |
425 |
CCD |
166 |
134 |
154 |
Presses/Flocculant |
17 |
14 |
18 |
Fans/Scrubbers/Cranes |
37 |
30 |
35 |
Bag House/Miscellaneous |
58 |
48 |
60 |
Total |
1,838 |
1,480 |
1,749 |
18.4 Diesel, Gasoline, and Propane
Fuel will be loaded at Grants, New Mexico, for transport to the mine. A bermed fuel storage area, containing diesel fuel tank(s), will be provided along the main haul access road at the mine and mill areas. This area will include a fuel load out from tankers and dispensing station for vehicles. Fuel dispensing will be monitored to provide documentation of use and environmental compliance. The storage areas will be lined with an impermeable liner and the berm will be large enough to contain the required quantity of fuel based upon storage regulations.
18.5 Communications
Most areas of the mine will have access to an underground radio communications system. The system will be installed in the shafts, permanent pump stations, maintenance shops, refuge stations, and muck handling facilities at the shaft bottom. Antenna cables will be installed as part of the normal water, air, and power lines. Handheld radios will be able to communicate through this line up to 1,250 ft away. The radios have digital and analog capability and can transmit emergency contact and instructions on their display. Separate channels are provided for geology, engineering, contractors, mine production, management, and surface departments. Ninety radios are included in the estimate.
Emergency hard wired phones are installed in the shaft bottom, emergency escape raises, and refuge chambers to provide a redundant communications path. All communications will have battery backup.
The communication system at the Mill includes telephone, wireless internet and computer network system.
18.6 Water Supply
Potable water for the underground mine will be provided in specific containers that will be resupplied regularly from the site potable water supply. Sanitary facilities in the mine will be approved self-contained units. Water for mine operations will be provided by mine dewatering operations.
The fresh water for processing operations at the Mill is provided by 2,000 ft deep water wells. Water can also be reclaimed and/or recycled from the Recapture Reservoir located on-site. Nominal water usage during uranium ore processing is approximately 250 gpm.
18.7 Mine Support Facilities
Offices for site management personnel will be located within the operations complex at the Mine. These will include administration, management, mine, process, and maintenance personnel. Mine personnel will have offices in the mine administration building.
18.7.1 Existing Section 17 Infrastructure
Construction of the Lee Ranch vertical shaft started in late 1980 to early 1981. The conventional (drill, blast, load, hoist) construction was halted above the first development station in April 1982. This shaft is approximately 1,478 ft deep, with no headframe or hoist, and is concrete- lined. The diameter is 14 ft. The current condition of this shaft is unknown, however, 10 gpm of water from the shaft is used by the Lee Ranch. The water level is 852 ft below the shaft collar. Other infrastructure on Section 17 includes:
A 25 kVA power line that provides power to the ranch infrastructure currently on the site
A Gallup well that is used by the ranch for watering horses and cattle
A well-maintained gravel two lane road from the paved Highway 605 to the ranch facilities on Section 17. It is known as the old Kerr-McGee haul road.
Two-track dirt roads providing access to most of Section 17
Phone lines going to the ranch facilities
Existing buildings, which were the Kerr-McGee surface facilities (Hoist House and Maintenance Shop). These are currently being used by the Lee Ranch for ranching operations.
A double-wide trailer on site that is used as a residence by the ranch supervisor
An approximate one-acre pond that Kerr-McGee used to hold water during shaft sinking. Strathmore rehabilitated the pond and lined it for use in a water pump test.
Various cattle watering ponds and impoundments
Figure 18-1: Surface Infrastructure Map
18.7.2 Mine Infrastructure
18.7.2.1 Underground Conveyance
Historically, in the Ambrosia Lake mining subdistrict, the size of the mineralized material supplied from the mine to the process Mill has not required a crushing circuit. Mineralized material will be dumped into a single dump point feeding the ore pass requiring a grizzly and rock breaker.
18.7.2.2 Ventilation
One of the major operating costs associated with underground mining is the electrical cost associated with operating a mine's primary and auxiliary ventilation circuit. In this regard, the SLR QP, in planning Roca Honda's primary ventilation, has taken steps to minimize the impact that the raise boring development will have on the mine's development and operating costs.
Roca Honda's primary ventilation system consists of:
Two Production Shafts (completion of the Section 17 shaft and development of the Section 16 Shaft)
Three (9 ft finished diameter) Emergency Egress Raises (one each in of Section 10, 16 and 17)
Nine (9 ft finished diameter) Ventilation Raises
The Section 16 Shaft will have an 18 ft finished inside diameter, in which two skips and a man cage will operate, while the Section 17 shaft will have a 14 ft inside diameter with the same furnishings.
The three emergency egress raises will be steel-lined, 9 ft finished diameter raises with rope guides for the egress capsules. For each emergency egress raise, the egress capsule will be located outside the raise in either the respective emergency egress hoists' head frames, or immediately below the raise which will reduce impeding airflow.
The remaining ventilation raises will be 9 ft in diameter and steel-lined raises. While the steel-lining was initially installed for ground control issues, the lining system also appreciably reduces the system's air resistance.
It is assumed that the presence of radon and thoron gas from the rock will not be an issue with the correct installation of the proposed ventilation system, and that these contaminants will be appropriately diluted and exhausted with the mine air. Procedures for closing unused areas and for checking areas prior to reopening unventilated areas will be established to ensure that areas are suitably ventilated and that there are no noxious gases present before work commences in a new area or an area which has been closed for some time.
The mine ventilation air flow was based upon the mine equipment fleet, with an estimate of equipment utilization and an additional allowance for losses and additional needs, and the dilution of any deleterious gases such as radon. The mine ventilation requirements, per mining phase, vary from 35,000 cfm during shaft sinking to approximately 1,200,000 cfm for peak steady-state mine production.
18.7.2.3 Mine Air Heating Intake
Considering seasonally sub-zero temperatures at or near the surface at Roca Honda and the need to prevent freezing of water lines and ice buildup, the mine air will be heated as conditions dictate, using direct fired mine air heaters located at the mine air intake. The coldest mean monthly low temperature on record at nearby weather stations was 14.4°F. In sizing the Section 16 Shaft Heating Plant, SLR utilized a 30°F temperature rise to determine the Mill's maximum heating capacity. The mine area heating requirements should be minimal, because of the expected rock and water temperatures of the mine. The main shafts will be intake shafts for ventilation; therefore, cold air will be drawn into the mine at these points.
18.7.2.4 Dewatering
The mine is expected to be a "wet" mine and groundwater inflows are expected to be moderate to high with a maximum estimated 5,920 gpm of groundwater inflow initially into the mine. The estimate of groundwater inflow has been based upon the observations of the numerous core drill programs and observations from historical mine and public reports previously developed in the Ambrosia Lake subdistrict, as discussed in Section 16.6.
The18-8stimateed water inflow is:
Groundwater 4,700 gpm
Drilling - 2 gpm per boom - 10 gpm
Diamond drilling 10 gpm
Mine dust suppression - carried on rock
All water will be diverted to the base of the decline either along the decline or by boreholes specifically installed for mine drainage.
The main mine dewatering pumps will be designed to operate by automatic controls. The low head pumps at the sump will operate on automatic controls such that high levels in the sump activate the operation of the pumps.
18.7.2.5 Backfill
In the case of the SRP mining method, backfill is designed to supplement the carrying capacity of the unmined pillars during the mining process. In this regard, a low strength backfill is sufficient. With the DF mining method, backfilling of the stope headings is primarily designed to replace pillars and fully support the back of the stope during the mining process. In this context, the backfill needs to be consistently of high quality and high strength.
CRF is the backfill method recommended for use with both of these mining methods. High strength or low strength CRF can be mixed underground then transported, dumped, and jammed into place, increasing density through mechanical compaction. Truck, LHD, and jammer placement provide for operational flexibility.
Over the mine life, a total of 2.24 million tons of backfill will be needed with the high strength variety comprising 75% of the total. Of this total, 387,000 ton of underground development waste will be directly placed into stopes. The surface development waste stockpile will contribute 516,000 ton, which includes hoisted waste, surface excavations, main shaft, and other mine surface structure excavations. The remaining 1.34 million tons will be generated from a surface quarry.
The primary source of high strength backfill material will be quarried and screened (concrete quality) surface rock. RHR has communicated that an agreement with a local landowner may be possible. The location of the quarry has not yet been specifically identified, nor has there been any test work to confirm that surface rock from the site will be suitable for high strength backfill.
The backfill rock will be transported from the backfill raise to the backfill mixing facilities located at each of the shaft stations. The backfill material and cement slurry will be mixed in a 27 in. diameter by 8.5 ft long "pug" mill prior to loading into 17 ton ejector box dump trucks (such as the MTI DT-1604 model truck). The truck will then travel to the stope requiring backfill. The telescopic dump box allows for dumping in heights as low as nine feet. In mining zones with heights of nine feet or greater, the truck will dump backfill directly into the stope drift being filled. In lower stope height areas, the truck will dump in the stope access or sill drift and the backfill will then be transported to the backfill area by LHD.
18.7.2.6 Maintenance Facilities
Two shops will be constructed underground in the vicinity of the Section 16 and Section 17 shaft bottoms. The shops include 700 lineal feet of concrete floors with oil collection and separation facilities. The area also contains parts storage, compressors, diesel fuel, hydraulic hoses, communication, lighting, and nearby refuge chambers.
The work stations in the shop include areas for welding, vehicle repair, tire repair, and tire storage. It is anticipated that all equipment repairs and rebuilds will be done in these locations. Major equipment repairs, such as engine replacement, will be completed by installing a re-built component overhauled elsewhere and brought into the mine using the main hoist. The larger maintenance work on the mine equipment will be competed in surface heavy equipment shops located adjacent to the Mill complex. This work will include all major repairs and major services. The surface shop will be used for the surface and underground mobile equipment at the site.
18.7.2.7 Materials and Consumables Storage
Material storage will be built underground for short-term storage of mine supplies such as rock bolts, mesh and ventilation duct and spare fans. These bays will be located near the service area and will be accessed by mobile equipment such as the forklift and tool handler.
18.7.2.8 Explosives Storage
Detonators, primers, and stick and bulk powder will be stored in separate approved explosives magazines. All of these explosives will be stored either in the underground magazines and/or the surface explosives magazines.
The main explosive planned for use at the Mine is ammonium-nitrate fuel oil (ANFO), which will be supplied in 50-lb bags or in larger capacity tote bags as required. There will however still be a requirement for packaged slurry explosives and "stick" powder for wet holes or for boosting the ANFO in some applications. These are easily provided by the explosives manufacturer in containers, which will be stored and inventoried. It is assumed that the stopes will be sufficiently dewatered to allow for ANFO to be used as the primary blasting agent, however this requires further study.
An average powder factor of 1.34 lb/ton was used for costing purposes. An allowance of 10% of the total explosives for stick powder and package slurry is recommended for purchase and storage on site. A non-electric detonation system will be used with in-the-hole delays on all detonators. A range of delay periods will be required and approximately 45,000 are required for a year of operation. Costs have been based upon the use of Nonel detonators, however, it is recommended that EFR investigate and consider the electronic initiation systems that are now available as this may provide better fragmentation and ground control.
18.7.2.9 Underground Roadway Maintenance
A grader will be included in the equipment fleet for the maintenance of underground roadways.
18.7.3 Surface Infrastructure
18.7.3.1 Warehouse Facilities
A central warehouse located on surface will be established at the mine site. The heated indoor storage will be supplemented with an organized container storage yard and some outdoor lay down area. The warehouse area will be manned by a purchasing agent and an assistant.
18.7.3.2 Maintenance Facilities
The surface maintenance shop will be used for maintenance of all surface equipment and limited, small underground equipment at the mine site. The underground fleet and part of the surface fleet will see service through the year.
The planned underground shop will have service bays for heavy equipment as well as space for light equipment. The shop will be equipped with an overhead crane for servicing equipment.
A machine shop with milling tools, a lathe, saws, and work benches will be installed to provide emergency replacement of parts, if necessary. There will be a welding bay for the repair of boxes and buckets and other welding jobs.
18.7.3.3 Mine Development Rock Stockpile Area
The mine development rock stockpile has been sized at 11 acres. No special handling is required for the mine waste rock. Mine waste will be placed directly on the ground after the topsoil stripping and grubbing has been completed. The mine waste rock will be hauled from the mine to the stockpile, placed, and spread. This size waste stockpile will accommodate a total of 0.35 million yd3 of mine waste. Mine development waste will only be stockpiled during initial development and the stockpile is sized assuming that most development waste will be used as backfill during mining operations.
The storage area at the mine will require space for fuel storage and some bulk materials storage. The yards will be designed to divert surface drainage away from roads and storage yards and appropriate spill response plans will be developed for the various products that are to be handled in the area.
Mine development material will be either be hoisted to the surface and either used for surface construction or stockpiled in storage areas for backfill and reclamation, in temporary locations for run of mine (ROM) mineralized material, or used as backfill in underground excavated areas. The stockpiles of ROM material will subsequently be used as plant feed.
18.7.3.4 Surface Infrastructure Space Requirements
Space requirements for the surface mine infrastructure were determined based on the staffing requirements, production rate, type of mining method, and equipment. The mine surface requirements are summarized in Table 18-4.
Table 18-4: Mine Surface Infrastructure Space Requirements - Buildings
Energy Fuels Inc. - Roca Honda Project
Area Description |
Est. Square Feet |
Comments |
Mine Dry and Office Building |
30,572 |
2 Floors |
Office and Dry |
19,528 |
1st & 2nd floor |
Maintenance and Shop |
8,160 |
1st & 2nd floor |
Indoor Warehouse |
4,080 |
1st & 2nd floor |
Emergency Services Building |
3,784 |
|
Entrance, Guard Shack and Scale House |
1,542 |
|
Assay Laboratory Building |
320 |
Trailer |
Outdoor Warehouse |
9,800 |
Cold Warehouse is in corner of yard |
Cold Warehouse (Not Insulated or heated) |
3,200 |
|
Explosives Magazine No 1 |
160 |
|
Detonators, Caps and Fuse Magazine No. 2 |
36 |
|
Tank Farm Containment Area |
800 |
20,000 gal |
Batch Plant Area |
900 |
|
Stockpile (At the headframe) |
2,500 |
|
Waste Stockpile (At the headframe) |
2,500 |
|
18.7.3.5 Medical Facility
The proposed medical facility at the mine will consist of an appropriately supplied first aid station, and there will be appropriately qualified first aid personnel on site and on call at all times. First aid rooms will be located in the mine offices.
An ambulance will be available on site for the transport of injured personnel to the first aid stations and or site helipad. Seriously injured personnel will be evacuated from the mine site by helicopter to Albuquerque, New Mexico. A helipad will be constructed at the mine site.
A fire truck will be available on site to respond to surface fire incidents. The surface fire brigade will be a combination of personnel from the site.
Mine rescue gear will be purchased and located within a mine rescue training area in the office complex. Mine rescue personnel will be selected and trained as required under the Mine Safety and Health Administration Rules.
18.7.3.6 Graywater and Sewage
The graywater and sewage from the mine will be sent to separate sewage treatment facilities (Biodisk or equivalent) after which the water will be discharged. Solids in the sewage treatment units will be removed on an annual basis and disposed at the appropriate municipal treatment facility
18.8 Roca Honda Surface Equipment
Site services at the Mine will include the surface equipment fleet presented in Table 18-5.
Table 18-5: Surface Equipment Fleet
Energy Fuels Inc. - Roca Honda Project
Area |
Units |
Primary Uses |
Forklift |
1 |
Freight Handling, Pipelines, General |
Bobcat |
1 |
Mine Clean Up |
HDPE Pipe Welder |
1 |
Water Supply/Dewatering |
Fuel Truck |
1 |
Fuel Haul |
Container Trailer |
1 |
Container Moves |
Pick-up Truck |
4 |
Garbage/Maintenance/Inspection |
Vans (for Crew) |
4 |
Crew Transportation |
Ambulance |
1 |
Emergency Rescue |
Fire Truck |
1 |
Fire Fighting |
Spill Response |
1 |
Spill Clean Up |
18.9 White Mesa Mill
18.9.1 Administration Buildings and Offices
There is office space for the administration, technical, mill and maintenance personnel in a central office location at the White Mesa Mill facility, as shown in Figure 17-2. Mill support facilities also include warehousing for maintenance spares, reagents, and operating supplies.
18.9.2 Tailings Disposal
The Mill and Tailings Cells are located approximately six miles south of Blanding, Utah, on US Highway 191.
The Mill currently operates on a campaign basis to produce yellowcake, which results in tailings production and deposition on a similar campaign basis. While the Mill is capable of processing 2,000 stpd, ore is typically stockpiled until the mill can operate at a nominal rate for a reasonable period of time. When tailings are generated, whole tailings are typically pumped in a slurry to the designated Tailings Cell, at approximately 60% solids (by weight).
The location of the Tailings Cells is shown on Figure 17-2.
18.9.2.1 Tailings Facility Description
The Tailings Cells at the White Mesa Mill currently consist of five cells: Cells 1, 2, 3, 4A, and 4B.
Typically, two of the Cells are used for solution management and two Tailings Cells are used for tailings storage. Currently, Cells 1 and 4B are used for solution management and Tailings Cells 3 and 4A are used for tailings storage.
Three stormwater diversion channels were designed and constructed to divert surface water around the Mill and Tailings Cells.
18.9.2.2 Design and Construction
The tailings dams are either excavated in cut or constructed from compacted fill in a downstream manner. The Tailings Cells were built and are operated and maintained to follow the Discharge Minimization Technology (DMT) and Best Available Technology (BAT) standards noted below.
• Cell 1 was designed by D'Appolonia in 1979 and construction was completed in 1981. The cell has a crest elevation of approximately 5,620 ft, with a crushed nominal 6 in. thick sandstone sub-base underlay, a 30 mil Polyvinyl Chloride (PVC) flexible membrane liner (FML), and a 12 in. to 18 in. thick protective soil cover.
Cell 2 is downgradient of Cell 1. It was designed by D'Appolonia in 1979, and construction was completed in 1980. It was built to a crest elevation of approximately 5,615 ft, and constructed with a crushed nominal 6 in. thick sandstone sub-base underlay, a 30 mil PVC FML, and a 12 in. thick protective soil cover. Tailings Cell 2 was used for the storage of tailings, but is at capacity and has been partially reclaimed.
Cell 3 is downgradient of Cell 2. It was designed by D'Appolonia in 1981 and construction was completed in 1982. It was constructed to a crest elevation of approximately 5,610 ft, and constructed with a crushed nominal 6 in. thick sandstone sub-base underlay, a 30 mil PVC FML, and a 12 in. to 18 in. thick protective soil cover. Tailings Cell 3 is used for the storage of tailings and process solutions, but is nearing capacity and has been partially reclaimed in select areas.
Foundation conditions generally consist of loess and eolian deposits over Dakota Sandstone.
EFR has submitted the design for Cells 5A and 5B, which will be constructed adjacent to, and downstream from, Cell 4, should additional storage capacity be required. Cell 5A was designed with a maximum dam height of approximately 30 ft and sized to contain approximately 2.1 million yd3 of tailings. Cell 5B was designed with a maximum dam height of approximately 40 ft and sized to contain approximately 2.2 million yd3. The liner system was designed to meet the Best Available Technology requirements of the UAC R317-6.
EFR acts as the Engineer of Record (EOR) for the Tailings Cells, wherein they coordinate the design (i.e., volumetrics, stability analysis, water balances, hydrology, seepage cut-off design, etc.), construction and construction monitoring, inspections, and instrumentation monitoring and data review to verify that the Tailings Cells are being operated to meet all applicable regulations, guidelines, and standards.
18.9.2.3 Audits
No independent audits have been performed on the facility.
As part of the design approval process for Cells 4A and 4B, completeness reviews were performed by URS Corporation.
18.9.2.4 Inspections
Various inspections are performed and documented in daily, weekly, monthly, quarterly and/or annual basis. The reporting requirements follow those presented in the Tailings Management (Energy Fuels, 2017) as required under RML No. UT1900479, and Discharge Minimization Technology (DMT) Monitoring Plans (Energy Fuels, 2016) as specified throughout Parts I.D, I.E and I.F of the White Mesa Mill's Groundwater Discharge Permit (GWDP) Number 370004.
Daily and weekly inspection reports are performed by EFR staff and are kept onsite, with any deficiencies and corrective actions noted, and regulatory agencies notified accordingly. The quarterly and annual inspection reports are submitted to UDEQ, in which select daily reports are included, as well as monthly and quarterly inspection reports.
18.9.2.5 Conclusions
EFR has been operating the White Mesa tailings cells since 1981, which is currently operating under the requirements of the UDEQ RML.
While this Technical Report has been prepared for a Preliminary Economic Assessment, the existing Tailings Storage Facility (TSF) at the White Mesa Mill can be used for tailings management.
18.10 Security
In view of the remote nature of the mine site, there is little risk to the general public and little risk of public access to the site. There will be occasional visitors in summer, who will come to the site by passenger vehicles. Such visitors will be met with signs and personnel who will explain that this is a private mine and mill site, and visitors are not allowed on site and there are no services available. There will be manned security stations at entrance locations on the mine and mill sites.
Where necessary, fencing will be installed to keep wildlife out of areas such as the reagent storage. The use of containers for storage will minimize the requirement for such fencing.
18.11 Landfill
Garbage from the mine will be collected periodically and shipped to the appropriate municipal landfill. Recyclable materials will be collected separately and shipped out annually for processing. A waste management site will be established for the long-term storage of waste materials. All waste generated at the Mill is disposed of in dedicated areas of the tailing cells.
19.0 MARKET STUDIES AND CONTRACTS
19.1 Markets
The majority of uranium is traded via long-term supply contracts, negotiated privately without disclosing prices and terms. Spot prices are generally driven by current inventories and speculative short-term buying. Monthly long-term industry average uranium prices based on the month-end prices are published by Ux Consulting, LLC, and Trade Tech, LLC. An accepted mining industry practice is to use "Consensus Forecast Prices" obtained by collating commodity price forecasts from credible sources.
19.1.1 Supply
According to the World Nuclear Association (World Nuclear, 2021), world uranium requirements totaled more than 47,700 t U in 2020, with the global pandemic accelerating a trend of slowly-decreasing production:
• 2016 - 63,207 t U
• 2017 - 60,514 t U
• 2018 - 54,154 t U
• 2019 - 54,742 t U
• 2020 - 47,731 t U
The top five producing countries (Kazakhstan, Australia, Namibia, Canada, and Uzbekistan) accounted for over 80% of world production in 2020.
The share of uranium produced by in situ recovery (ISR) mining has steadily increased mainly due to the addition of ISR operations in Kazakhstan, and now accounts for over 50% of production.
Over half of uranium mine production is from state-owned mining companies, some of which prioritise secure supply over market considerations.
19.1.2 Demand
Demand is primarily as a source for nuclear power plants. The use of nuclear power generation plants has become increasingly acceptable politically. Both China and India have indicated an intention to increase the percentage of power generated by nuclear plants. The largest increase in demand will come from those two countries.
Demand for uranium fuel is more predictable than for most other mineral commodities, due to the cost structure of nuclear power generation, with high capital and low fuel costs. Once reactors are built, it is very cost-effective to keep them running at high capacity and for utilities to make any adjustments to load trends by cutting back on fossil fuel use. Demand forecasts for uranium thus depend largely on installed and operable capacity, regardless of economic fluctuations.
The World Nuclear Association website notes that mineral price fluctuations are related to demand and perceptions of scarcity. The price cannot indefinitely stay below the cost of production, nor can it remain at a very high price for longer than it takes for new producers to enter the market and for supply anxiety to subside.
19.1.3 Price
The key to understanding any mineral market is knowing how the mineral price is determined. There are generally considered to be two prices in the uranium market: 1) long term contract prices, and 2) spot prices. These are published by companies that provide marketing support to the industry with UxC being the most commonly followed price report. Over the long term price follows the classic market force of supply demand balance with a "speculative" investment market that creates price volatility.
Figure 19-1 provides a Long Term Uranium Price Forecast through 2035 from TradeTech LLC (TradeTech) from the third quarter of 2021. The Forward Availability Model (FAM 1 and 2) forecast differ in assumptions as to how future uranium supply enters the market. "FAM 1 represents a good progression of planned uranium projects incorporating some delays to schedules, while FAM 2 assumes restricted project development because of an unsupportive economic environment." (TradeTech, 2021). Currently most US producers are in a mode of care and maintenance and numerous facilities globally are also slowing or shutting in production at least on a temporary basis. At this time in the US, no new projects are being constructed, and very few are moving forward with permitting and/or licensing. This condition aligns more with the FAM 2 projections.
Figure 19-1: Long Term Uranium Price Forecast
Consensus forecasts collected by the SLR QP are in line with the FAM2 - Spot prices in Figure 19-1, with long-term averages of approximately $55.00/lb. General industry practice is to use a consensus long-term forecast price for estimating Mineral Reserves, and 10% to 20% higher prices for estimating Mineral Resources.
For Mineral Resource estimation and cash flow projections, EFR selected a U3O8 price of $65.00/lb, on a Cost, Insurance, and Freight (CIF) basis to customer facility, based on independent forecasts. The SLR QP considers this price to be reasonable and consistent with industry practice based on independent long-term forecasts and a mark-up for use with Mineral Resource estimation.
The SLR QP has reviewed the market studies and analysis reports and is of the opinion they support the findings of this Technical Report and disclosure of the Mineral Resource estimates.
19.2 Contracts
At this time, EFR has not entered into any long term agreements for the provision of materials, supplies or labor for the Project. The construction and operations will require negotiation and execution of a number of contracts for the supply of materials, services, and supplies.
20.0 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT
20.1 Roca Honda Mine
The Roca Honda Mine is at an advanced stage of permitting with no production to-date. A mine permit application was submitted in October 2009, revised in 2011, and deemed administratively complete. A DEIS was completed by the USFS in February 2013. In March 2015 the USFS initiated the scoping process for a new mine dewatering alternative to be addressed in a Supplement to the DEIS. In September 2016, an additional scoping process to incorporate Section 17 and development drilling into the mine plan was initiated by the USFS. This Supplement to the DEIS is expected to be completed in late 2022 or early 2023 with a Final EIS and Record of Decision (RoD) expected in 2023.
20.1.1 Environmental Studies
Extensive environmental baseline studies have been completed for the Mine in support of its permitting applications.
20.1.1.1 Baseline Studies
Environmental baseline studies for the Mine site began in 2006. Methods and results of work to date were documented in the Baseline Data Report and Sampling and Analysis Plan submitted to the New Mexico Mining and Minerals Division (MMD) and the USFS (Cibola National Forest) in October 2009 and revised in 2011. Since that time the report has been supplemented as needed to better describe climatology, vegetation, wildlife, soils, geology, surface water, groundwater, cultural resources, land use and radiological baseline information within the Mine area and the proposed discharge pipeline routes. Details of all baseline activities are documented in the Baseline Data Report, and continually updated as needed.
Additional studies and designs for proposed facilities in Section 17 were completed in 2015 and 2016 and submitted to the USFS in 2017.
Strathmore had previously planned to construct a new mill to process mill feed from the mine on property owned by RHR about 15 mi north of the Mine site. Extensive environmental characterization studies were completed to support permit applications, but a source material license application was never submitted to the U.S. Nuclear Regulatory Commission, the federal agency charged with permitting uranium processing facilities. Although EFR now intends to transport uranium mill feed to its wholly-owned White Mesa Mill in Blanding, Utah, the baseline studies completed at the proposed mill site would be valuable for future permitting purposes if market conditions eventually justified a "local" mill.
20.1.1.2 Prior Mining Activities
There were prior mining operations located near the Mine site, which may have affected the Mine area. A 1,478 ft deep vertical shaft in the NW ¼ NE ¼ Section 17, Township 13 North, Range 8 West of the New Mexico Principal Meridian, named the Lee Ranch Shaft, was constructed by Kerr-McGee in the late 1970s. The shaft reached the Westwater Canyon Member of the Morrison Formation, however, it did not penetrate to the mineralized zone, so no mineralized material has been mined in Section 17.
More than 1,450 historical exploration boreholes were drilled from the late 1960s to the early 1980s in various locations throughout the Mine area. Additionally, some of the property immediately surrounding the Mine area contains drillholes to varying degrees. Field inspections of these areas conducted in conjunction with other field activities revealed occasional pipe and other markers that may identify possible drillhole locations but cannot be confirmed as such. In addition to the drillholes, the USFS mapped a network of drill roads, mainly in Sections 9 and 10, that accessed the drill sites. Most of these roads have naturally re-vegetated.
20.1.1.3 Hydrogeology
The Mine area is located in the southeastern part of the San Juan Structural Basin, within the southeast part of the Ambrosia Lake uranium subdistrict, which was the site of previous uranium mining and associated mine dewatering activities from the 1960s through the 1980s. The Mine area lies within the Bluewater Underground Water Basin as extended by the New Mexico Office of the State Engineer on May 14, 1976.
Large amounts of data on groundwater exist for the San Juan Basin because the area contains deposits of recoverable uranium and valuable groundwater resources. The USGS, the New Mexico Bureau of Geology and Mineral Resources, and the New Mexico State Engineer cooperated in several hydrogeological studies of the San Juan Basin, which have described area aquifers and compiled and analyzed groundwater quality data and estimates of hydraulic parameter values (Kelley et al., 1963; Steinhaus, 2011; Brod and Stone, 1981; Frenzel and Lyford, 1982; Stone et al., 1983; Craigg et al., 1989; Dam et al., 1990; Dam, 1995; and Craigg, 2001). Moreover, as part of the Regional Aquifer System Analysis program, the USGS developed a steady-state multi-aquifer groundwater flow model of the San Juan Basin (Kernodle, 1996). Strathmore developed a comprehensive and accurate model of groundwater occurrences in the southern portion of the San Juan Basin in support of mine permitting efforts. The model was accepted by the New Mexico State Engineer's Office in 2013 as part of the mine dewatering permit process.
The Mine area is approximately three miles northwest of the Mount Taylor uranium mine, formerly operated by Gulf Mineral Resources Company and others. The mine is now owned by Rio Grande Resources Corporation (General Atomics). This mine was dewatered during the 1970s and early 1980s. Groundwater quality data and hydraulic parameter estimates were collected both at the Mount Taylor mine and at various mines west of the Mine area in the Ambrosia Lake subdistrict (NMEI, 1974; GMRC, 1979; and Kelley et al., 1980). The groundwater quality and hydraulic characteristics of the Westwater Canyon Member of the Morrison Formation were re-evaluated more recently during site licensing in the Crownpoint and Church Rock areas.
Historical exploratory drilling, conducted by others, and more recent drilling, conducted by RHR, determined that the strata beneath the Mine area represent the same sequence of rocks found in the San Juan Structural Basin. Potentiometric data collected from wells in and near the Mine area indicate that groundwater moves continuously through the Mine area in the same aquifers found to the west. The aquifers and aquitards encountered in the Mine area likely have hydraulic characteristics similar to those found in the same units elsewhere in the San Juan Structural Basin. The hydraulic characteristics are discussed in Section 16.6.
In general, the hydraulically significant structural features of the southeastern San Juan Basin have been previously identified, and the groundwater quality and hydraulic characteristics of the aquifers in the Mine area are expected to lie within the ranges identified in previous studies. Strathmore compiled the relevant published and unpublished groundwater information near the Mine area. This effort included an inventory of wells previously identified in published and unpublished reports as being present within a 10 mi radius of the Mine area. The inventory includes location, completion dates, well depth, producing formation, measured water levels, and availability of chemical data for each well. The wells were field-checked and RHR incorporated some of them, along with three wells drilled by RHR within the Mine area, into a quarterly water quality sampling program that has been completed. The well data inventory, earlier studies, recent drilling by RHR, and the water quality sampling program provide a great deal of baseline information for the groundwater in and adjacent to the Mine area. RHR conducted an onsite pump test in May 2010. In total, RHR collected four years of water quality data and contracted Intera Geosciences and Engineering (Intera) to complete a groundwater model.
20.1.1.4 Surface Hydrology
Watercourses in the vicinity of the Project area are identified as ephemeral, intermittent, or perennial. The southern portion of the Mine area drains to San Mateo Creek, which is part of the Rio Grande drainage basin as a tributary of the Rio San Jose. The Rio San Jose joins the Rio Puerco west of the city of Las Lunas, and the Rio Puerco confluences with the Rio Grande near the community of Bernardo, south of the town of Belen, New Mexico.
The headwaters of San Mateo Creek are on the north flank of Mount Taylor. The head of one branch is in San Mateo Canyon above the community of San Mateo and drains down San Mateo Canyon, while the other drains the San Mateo arch/Jesus Mesa area via Marquez and Maruca canyons. Within the San Mateo Canyon branch, springs maintain a small perennial flow that is captured in the San Mateo Reservoir, located above the community of San Mateo. Field investigations conducted by RHR during 2009 and 2010 have determined that San Mateo Creek is an intermittent stream that has flow when water is being diverted from the reservoir for irrigation purposes and during high rainfall events from the San Mateo downstream to a pond on the Lee Ranch. Downstream of the pond, San Mateo Creek is ephemeral.
The northern portion of the Mine area drains to an unnamed ephemeral wash.
20.1.1.5 Site Monitoring
There are currently no environmental obligations for the Mine. It is anticipated that mineralized and non-mineralized rock will be stored in permitted stockpile areas. As the Project will be limited to mining only, no process (mill) tailings will be generated at the Project site. During development and mine operations, it is expected that water produced during dewatering activities and other sources, such as storm water, will be stored in one or more permitted holding ponds prior to treatment and discharge. Site monitoring activities will be subject to the requirements of various local, state, and federal requirements and permit conditions, which are currently in progress.
20.1.2 Project Permitting
20.1.2.1 Federal
The Roca Honda Mine is at an advanced stage of permitting. A DEIS was completed by the USFS in February 2013. In March 2015 the USFS initiated the scoping process for a new mine dewatering alternative to be addressed in a Supplement to the DEIS. In September 2016, an additional scoping process to incorporate Section 17 (the Adjacent Properties) and development drilling into the mine plan was initiated by the USFS. The Supplement to the DEIS is expected to be completed in late 2022 or early 2023 with a Final EIS and RoD scheduled to be completed in 2023.
Other federal permits required for the Project include a Multi-sector General permit under the National Pollutant Discharge Elimination System (NPDES) for the discharge of stormwater issued by the EPA and a discharge permit for the discharge of treated effluent issued by the EPA and U.S. Army Corp of Engineers (USACE). An application for the USACE permit has been submitted and the permit is expected prior to issuance of the Permit to Mine in 2023. An application for the EPA permit has also been submitted, however, the previous application is expected to be withdrawn and a new application submitted during 2022. Permit approvals from the USACE and the EPA are also required for discharge of treated mine water associated with mine activities. An application for the USACE permit has been submitted and the permit is expected prior to issuance of the Permit to Mine in 2023. An application for the EPA permit has also been submitted, however, the previous application is expected to be withdrawn and a new application submitted during 2022. The EPA permit for discharge of treated mine water is expected prior to issuance of the Permit to Mine in 2023. EPA approval under the Clean Air Act National Emissions Standard for Hazardous Air Pollutants will also be required prior to mining.
20.1.2.2 State and County
Other major state and county permits required for the Project include:
Permit to Mine to be issued by the New Mexico MMD
Discharge Permit issued by the NMED
Public water supply system permit issued by the NMED
Mine Dewatering Permit issued by the New Mexico State Engineer's Office
Building permits issued by McKinley County
Septic system approval issued by McKinley County
The Mine Dewatering Permit was approved in December 2013 but was appealed by the Acoma Pueblo in January 2014. RHR subsequently proposed a new alternative for discharging treated mine water that would benefit a number of downstream users including the Acoma Pueblo. The Acoma Pueblo agreed to withdraw the dewatering permit appeal in March 2015. The dewatering permit will need to be revised to reflect a higher dewatering rate with the addition of Section 17 to the mine plan.
The Discharge Permit is expected to be issued in 2023, and the Permit to Mine is expected to be issued in 2023 following approval of the Final EIS and the issuance of the RoD by the USFS.
20.1.3 Social or Community Requirements
The construction, operation, and reclamation of Roca Honda would potentially create beneficial impacts of moderate magnitude due to the creation of jobs, labor income, and tax revenues. The proposed Mine would support over a billion dollars in economic activity including over 2,000 jobs with salaries worth approximately $350 million. Approximately $81 million in local and state of New Mexico revenue would be generated during the life of the Mine. As a result, this Project represents a significantly beneficial cumulative economic impact for the local community.
20.1.4 Mine Closure Requirements
20.1.4.1 Mine Closure Plan
There are no mine closure requirements currently for the Mine. A reclamation plan including a cost estimate was provided in the permit application to the New Mexico MMD and the USFS PoO. The reclamation plan consists of two phases including contemporaneous reclamation to be performed during operations and final reclamation to be performed at cessation of operations. Final reclamation is designed to remove surface facilities, plug the mine shafts, recontour the disturbed area, replace stockpiled soil, and establish vegetation suitable for the post-mining land use of grazing.
20.1.4.2 Reclamation Cost Estimate and Bonds
Reclamation cost estimates and financial assurance requirements will be completed during the final phase of permitting and prior to the commencement of development and mining activities. As the New Mexico MMD regulations allow for phased bonding, an initial bond amount of approximately $1,000,000 is expected to cover the cost of Phase 1 dewatering wells abandonment, removing the associated piping, and reclaiming the access roads, water treatment plant, and storm water retention pond.
A reclamation cost estimate associated with the proposed mine closure plan was provided in the USFS PoO submitted in 2013. The cost estimate was approximately US$7 million.
20.2 White Mesa Mill
The material produced from the Roca Honda Mine will be milled at EFR's White Mesa Mill located near Blanding, Utah. The Mill was originally built in 1980. Since construction, the Mill has processed approximately five million tons of uranium and vanadium containing ores from Arizona, Colorado, and Utah. The Mill is currently operated on a campaign basis to produce yellowcake (U3O8). It can also process alternate feed materials.
Prior to EFR taking ownership of the Mill in August 2012, it was operated by Denison from December 2006 to August 2012. Proceeding Denison, the facility was operated by International Uranium (USA) Corporation.
The Mill operation is comprised of the following main facilities:
Ore stockpiles (containerized and stockpiles)
Mill
Cells 1, 2, 3, 4A, and 4B
Infrastructure such as administration building, maintenance buildings, etc.
Potable water source including treatment plant
20.2.1 Environmental Studies
Extensive environmental studies have been completed and are ongoing for the White Mesa Mill. These studies have been conducted to support the permitting of the mill and associated facilities (tailings cells) including groundwater quality. These baseline studies resulted in the permitting of the White Mesa Mill. Future baseline studies may be conducted to support future permitting effort.
20.2.1.1 Environmental Baseline Studies
EFR conducted monitoring to detail baseline environmental conditions at the Mill site to support permitting efforts including groundwater, surface water, air quality, and waste. Baseline studies are routinely performed on an as needed basis for the installation of new monitoring locations or new facilities.
20.2.1.2 Hydrogeology
Prior to EFR's acquisition of the Mill, chloroform in the shallow aquifer at the Mill site was discovered. The chloroform appears to have resulted from the operation of a temporary laboratory facility that was located at the site prior to and during the construction of the Mill, and from septic drain fields that were used for laboratory and sanitary wastes prior to construction of the Mill's tailings cells. In April 2003, an interim remedial program commenced consisting of pumping the chloroform affected water from the groundwater to the Mill's tailings system. This action enabled EFR to begin cleanup of the affected areas and to progress towards resolution of this outstanding issue. Pumping from the wells continued through 2015. On September 14, 2015, the State of Utah approved a long-term Corrective Action Plan (CAP) for cleanup of the chloroform, which involves continued pumping of the affected water to the Mill's tailings system.
Prior to EFR's acquisition of the Mill, elevated concentrations of nitrate and chloride were observed in some of the monitoring wells at the Mill site in 2008, a number of which are upgradient of the Mill's tailings cells. Pursuant to a Stipulated Consent Agreement with UDEQ, an independent professional engineering firm was retained to investigate these elevated concentrations and to prepare a Contamination Investigation Report for submittal to UDEQ. The investigation was completed in 2009, and the Contamination Investigation Report was submitted to UDEQ in January 2010. The Report concluded that: (1) the nitrate and chloride are co-extensive and appear to originally come from the same source; and (2) the source is upgradient of the Mill property and is not the result of Mill activities. UDEQ reviewed the Report and concluded that further investigations were required before it could determine the source of the contamination and the responsibility for cleanup. Such investigations were performed in 2010 and 2011 but were considered inconclusive by UDEQ. As a result, after the investigations, it was determined that there are site conditions that make it difficult to ascertain the source(s) of contamination at the site, and that it was not possible at that time to determine the source(s), causes(s), attribution, magnitude(s) of contribution, and proportion(s) of the local nitrate and chloride in groundwater. For those reasons, UDEQ decided that it could not eliminate Mill activities as a potential cause, either in full or in part, of the contamination. The Company and UDEQ have therefore agreed that resources are better spent in developing a CAP, rather than continuing with further investigations as to the source(s) and attribution of the groundwater contamination. Pursuant to a revised Stipulated Consent Agreement, a draft CAP for remediation of the contamination was submitted to UDEQ in November 2011. The CAP proposed a program of pumping the nitrate contaminated groundwater to the Mill's tailings cells, similar to the chloroform remedial program. UDEQ approved the CAP on December 12, 2012. In accordance with the CAP, in 2013 the Company commenced pumping nitrate/chloride contaminated water from four monitoring wells for use in Mill processing or discharge into the Mill's process or tailings cells. In December 2017 the Mill filed its first Corrective Action Comprehensive Monitoring Evaluation, required under the CAP every five years. By letter dated June 22, 2018, the Utah Division of Waste Management and Radiation Control (DWMRC) requested the implementation of Phase III actions specified in the CAP. Phase III actions include modeling, and study of plume dynamics and assessment of future actions if any. The Phase III report was submitted to DWMRC in December 2018 and is currently under review by DWMRC.
During 2011, 2012, and 2013, the Mill reported consecutive exceedances of groundwater compliance limits (GWCLs) under the Mill's GWDP for several constituents in several wells, and there are decreasing trends in pH in a number of wells across the site that have caused the pH in a number of compliance monitoring wells to have dropped below their GWCLs. These exceedances and pH trends include wells that are up-gradient of the Mill facilities, far down-gradient of the Mill site and at the site itself. Source Assessment Reports were submitted in 2012 and 2013 addressing each exceedance and the decreasing trends in pH at the site. UDEQ has accepted the Source Assessment Reports and has concluded that such exceedances and decreasing trends in pH are due to natural background influences at the site. The renewed GWDP, issued on January 19, 2018, has revised GWCLs which are intended to account for these background influences and put those constituents, including pH at the site, back into compliance.
20.2.1.3 Air Quality
Air quality monitoring is conducted in accordance with Air Quality Approval Order DAQE-AN112050024-21 and the Radioactive Materials License. The air quality approval order monitoring and reporting includes meteorological conditions; air quality monitoring including radon-222, radon flux, thorium-232, and airborne particulates; and surface water. Monitoring is conducted at various frequencies from weekly to annually based on the sample location and parameter. Monitoring and reporting have been conducted since 2009 and are ongoing.
20.2.1.4 Water Management
20.2.1.4.1 Surface Hydrology
The White Mesa Mill is a zero surface water discharge facility. All contact stormwater is contained at the site and there are no permitted outfalls associated with the White Mesa Mill. Surface water monitoring is conducted at various frequencies in accordance with the GWDP. Monitoring and reporting are ongoing.
20.2.1.4.2 Potable Water
The White Mesa Mill provides potable water to the site as permitted by the Utah Division of Drinking Water. Monitoring is conducted in accordance with the White Mesa Mill Water System Number 19025 permit and includes quarterly water quality sampling and monthly water usage. Monitoring and reporting are ongoing.
20.2.2 Tailings Disposal
The tailings storage facilities are described in Section 18.9.2.
The tailings cells at the White Mesa Mill are inspected daily, weekly, monthly, and quarterly. Inspections include tailings slurry transportation system, operation systems such as tailings beach, liner condition, water level, dust control, leak detection, and dikes and embankments for erosion and seepage.
20.2.3 Operating Permits and Status
No permitting is required to start milling the Roca Honda Project material at the White Mesa Mill. The White Mesa Mill is fully permitted with the State of Utah and has all the necessary operating licenses for a conventional uranium mill. The White Mesa Mill holds a Radioactive Materials License through the State of Utah. Uranium milling in the U.S. is primarily regulated by the NRC pursuant to the Atomic Energy Act of 1954, as amended. The NRC's primary function is to ensure the protection of employees, the public and the environment from radioactive materials, and it also regulates most aspects of the uranium recovery process. The NRC regulations pertaining to uranium recovery facilities are codified in Title 10 of the Code of Federal Regulations.
On August 16, 2004, the State of Utah became an Agreement State for the regulation of uranium mills. This means that the primary regulator for the Mill is the UDEQ rather than the NRC. At that time, the Source Material License, which was previously issued and regulated by the NRC, was transferred to the State and became a Radioactive Materials License. The State of Utah incorporates, through its own regulations or by reference, all aspects of Title 10 pertaining to uranium recovery facilities. The Mill License was due for renewal on March 31, 2007. An application for the Mill License renewal was timely submitted on February 28, 2007. The renewed Mill License was issued by UDEQ on January 19, 2018, then reissued on February 16, 2018 for a period of ten years (with a number of Amendments issued since), after which another application for renewal will need to be submitted. During the review period for each application for renewal, the Mill can continue to operate under its then existing Mill License until such time as the renewed Mill License is issued. The Mill License was initially issued in 1980 and was also renewed in 1987 and 1997.
When the State of Utah became an Agreement State, it required that a GWDP be put in place for the Mill. The GWDP is required for all similar facilities in the State of Utah, and effects the State groundwater regulations to the Mill site. The State of Utah requires that every operating uranium mill have a GWDP, regardless of whether the facility discharges to groundwater. The GWDP for the Mill was finalized and implemented in March 2005. The GWDP required that the Mill add over 40 additional monitoring parameters and 15 additional monitoring wells at the site. The GWDP came up for renewal in 2010, at which time an application for renewal was timely submitted. The renewed GWDP was issued by UDEQ on January 19, 2018 for a period of five years, after which another application for renewal will need to be submitted. During the review period for each application for renewal, the Mill can continue to operate under its then existing GWDP until such time as the renewed GWDP is issued. The Mill also maintains a permit for air emissions with the UDEQ, Division of Air Quality.
The White Mesa Mill operates with applicable State of Utah permitting requirements. Table 201 presents a list of primary active permits including the approving authority and status. The list of approved legal permits for the White Mesa Mill provided to the SLR QP by EFR addresses the following aspects:
• Air Emissions
• Groundwater Discharge
• Radioactive Material Handling
• Dam Safety
• Reclamation Planning
Table 20-1:OBJ Environmental Permits for the White Mesa Mill Operation
Energy Fuels Inc. - Roca Honda Project
Authority |
Obligation/License |
Status |
Utah Department of Environmental Quality |
Air Quality Approval Order DAQE-AN112050024-211 |
Active |
UDEQ |
Groundwater Discharge Permit No. UGW370004 |
Active |
Utah Department of Waste Management and Radiation Control |
Radioactive Materials License No. UT1900479, Amendment 10 |
Active |
There are no violations or regulatory matters of any significance or that are not being addressed under normal regulatory procedures.
20.2.3.1 Tailings Cells 5A and 5B Amendment Request
As additional tailings storage capacity may eventually be required at the Mill over the life of the mine, an Amendment to the White Mesa Mill's Radioactive Materials License issued by DWMRC will be required in due course to construct additional tailing cells, if and when required. In July 2018, EFRs submitted permit amendment requests for the GWDP and the Radioactive Materials License for the construction of tailings cells 5A and 5B. EFR anticipates the permit amendment requests will be approved in 2022. The construction of tailings cells 5A and 5B are not currently critical to the operations of the Mill.
20.2.4 Social or Community Requirements
EFR is committed to the operation of its facilities in a manner that puts the safety of its workers, contractors and community, the protection of the environment and the principles of sustainable development above all else. On September 16, 2021, the Company announced its establishment of the San Juan County Clean Energy Foundation, a fund specifically designed to contribute to the communities surrounding the Mill in Southeastern, Utah. The Foundation will focus on supporting education, the environment, health/wellness, and economic advancement in the City of Blanding, San Juan County, the White Mesa Ute Community, the Navajo Nation and other area communities. The Company made an initial deposit of $1 million into the Foundation and anticipates providing ongoing annual funding equal to 1% of the Mill's future revenues, providing funding to support the local economy and local priorities.
20.2.5 Closure Plans and Bonds
20.2.5.1 Closure Plan
A reclamation plan is in place that presents EFR's plans and estimated costs for the reclamation of cells 1, 2, 3, 4A, and 4B, and the decommissioning of the Mill and Mill site. The uranium and vanadium processing areas of the Mill, including all equipment, structures and support facilities will be decommissioned and disposed of in tailings or buried at the Mill site as appropriate. As with the equipment for disposal, any contaminated soils from the Mill and surrounding areas and any ore or feed materials on the Mill site will be disposed of in the tailings cells. All equipment (including tankage and piping, agitation, process control instrumentation and switchgears, and contaminated structures) will be cut up, removed, and buried in tailings prior to final cover placement. Concrete structures and foundations will be demolished and removed for disposal in tailings or covered in place with soil as appropriate. The sequence of demolition will proceed so as to allow the maximum use of support areas of the facility, such as the office and shop areas. Any uncontaminated or decontaminated equipment to be considered for salvage will be released in accordance with NRC guidance and in compliance with the conditions of the State of Utah Radioactive Materials License No. UT1900479.
20.2.5.2 Reclamation Cost Estimate and Bonds
The Mill is subject to decommissioning liabilities. EFR, as part of the Mill License, is required to annually review its estimate for the decommissioning of the Mill site and submit it to UDEQ for approval. The estimate of closure costs for the Mill is $20.8 million as of December 31, 2021, and financial assurances are in place for the total amount.
21.0 CAPITAL AND OPERATING COSTS
EFR forecasted capital and operating cost estimates are derived from mainly factoring other operations, judgement, and analogy. According to the American Association of Cost Engineers (AACE) International, these estimates would be classified as Class 4 with an accuracy range between -15% to -30% (low-end) to +20% to +50% (high-end).
21.1 Capital Cost
The base case capital cost estimate summarized in Table 21-1 covers the life of the Project and includes initial capital costs, expansion capital, and end-of-mine-life recovery of working capital in Q1 2021 US dollar basis. The capital costs are based on the estimates from the NI 43-101 technical report on the Project completed by RPA in 2016, which were estimated in Q1 2015 US dollars. The SLR QP has escalated these costs for this Technical Report to Q1 2021 US dollar basis using subscription-based Mining Cost Services (MCS) cost indexes (Infomine, 2021). In the SLR QP's opinion, Q1 2021 indices are the most appropriate inflationary indices to use as the inflationary indices since Q1 2021 have been too volatile to apply against a long lived asset. The effect of escalation on capital costs is estimated to be 16.3%, which is a $67.4 million increase since the 2015 estimates.
Table 21-1: Capital Cost Estimate
Energy Fuels Inc. - Roca Honda Project
Capital Cost Area |
Units |
Project Capital |
Preproduction |
Production |
UG Mine |
US$ (000) |
(261,884) |
198,806 |
63,078 |
Surf. Infra. |
US$ (000) |
(62,812) |
59,087 |
3,726 |
Indirect Costs |
US$ (000) |
(35,223) |
17,242 |
18,481 |
Contingency |
US$ (000) |
54,118 |
41,238 |
12,880 |
Subtotal Development Capital |
US$ (000) |
414,038 |
316,373 |
97,665 |
Working Capital |
US$ (000) |
- |
16,622 |
(16,622) |
Exploration |
US$ (000) |
2,926 |
2,926 |
- |
Sustaining Capital |
US$ (000) |
61,403 |
- |
61,403 |
Closure & Reclamation |
US$ (000) |
3,952 |
- |
3,952 |
2021 Escalated1 Grand Total |
US$ (000) |
482,319 |
335,921 |
146,399 |
Notes:
1. Capital cost estimate escalated to Q1 2021 US dollars.
Working capital costs, composed of accounts receivable (45 days outstanding), accounts payable (14 days labor and 30 days supplies outstanding), and consumable inventories (2% of capital expenditures), are included in in the Project cash flow and net to zero over LOM. Sustaining capital includes an additional allowance for underground infill/exploration drilling, underground development, dewatering wells, and mobile equipment. The closure and reclamation cost consists of the cumulative bond purchases during the LOM and incurred in the first year after closure of the Mine. Closure and reclamation cost for the Mill is not included In this estimate as it is assumed the Mill will still be operating with other sources of mill feed after the Mine is closed and reclaimed.
21.1.1 Capital Cost Exclusions
Capital costs do not include those capital costs associated with milling, as EFR's White Mesa Mill will be used for processing Roca Honda mineralized material.
Additional capital cost exclusions:
Costs to obtain permits
Project financing and interest charges
Escalation during construction
Sales and use taxes
Import duties and custom fees
Costs of fluctuations in currency exchanges
Sunk costs
Pilot Plant and other test work
Corporate administration costs in Lakewood, Colorado
Exploration activities
Salvage value of assets
21.1.2 Mine and Surface Capital Cost Estimate
It is proposed that mine equipment will be purchased through the preproduction period. Mine development includes activities prior to mine stope development. Ventilation and escapeway raise development costs include conventional raise boring and contractor costs.
21.1.3 Surface Infrastructure and Equipment
Surface equipment is estimated using new equipment. Used equipment is estimated for low use equipment such as the grader and cranes.
Infrastructure includes roads, yards, power, and supplies storage needs for the Roca Honda Project, including the materials handling requirements at the Mill.
21.1.4 Surface Indirect Costs and Total Indirect Costs
The surface infrastructure indirect costs exclude embedded indirect costs allocated to the underground mine construction contracts and surface installation construction contracts. Engineering for the facilities and operations will be carried out through the permitting and the construction phases. Engineering costs for the completion of the feasibility engineering are included in this estimate.
Procurement for the Project is forecast to extend over a three-year period with a crew of three working on purchasing, expediting, payables, and some level of freight handling. The construction management at Roca Honda is forecast to include a staff of four to five management personnel for a two-year period. After construction, most of the personnel will continue with operations. Supervisor salary rates for this period reflect the overtime in a remote construction effort.
The construction support crew includes operators for cranes, forklifts, and trucks, as well as laborers to support the construction efforts. The cost estimate includes construction support items that would be rented or provided by subcontractors in a less remote location.
The Owner's Costs include an Owner's team of eight staff for two years prior to the commencement of development and operations, including operating personnel brought to site in advance of the "start-up". The estimate is based upon a staff and crew of 160 at full operation and includes recruitment. Freight costs for the Mill are carried in those individual capital estimates. The environmental bond is estimated to be $11.9 million for the combined Roca Honda Mine and White Mesa Mill sites (for the Roca Honda mineralized material only).
The cost estimate includes a contingency allowance of 15%. The SLR QP considers this a minimum level of contingency for the Project at the current state of planning and development.
21.1.5 Capital Cost Escalation Methodology
In this Technical Report, the SLR QP escalated the original 2015 capital cost estimate costs from its previous 2016 NI 43-101 technical report on the project to Q1 2021 US dollar basis using subscription-based Mining Cost Services (MCS) cost indexes dated July 2021 (Infomine, 2021). In the SLR QP's opinion, inflationary indices since Q1 2021 are too volatile to apply against a long lived asset. The capital cost escalation factors are presented in Table 21-2. The escalation effect on capital costs during this five year period is estimated to be 16.3% or $67.4 million for the Project.
Table 21-2: 2021 SLR Capital Cost Escalation Factors
Energy Fuels Inc. - Roca Honda Project
Capital Cost Area |
MCS Source |
2015 |
March 2021 |
Factor |
Underground Mine |
Table 5 UG Mine |
101.0 |
117.4 |
1.162 |
Mill |
Table 5 Mill |
95.7 |
116.2 |
1.214 |
Surface Infrastructure |
Table 5 UG Mine |
101.0 |
117.4 |
1.162 |
Surface Mine, Water Treatment Plant, Powerline Indirect Costs |
Table 5 UG Mine |
101.0 |
117.4 |
1.162 |
Exploration |
Table 5 UG Mine |
101.0 |
117.4 |
1.162 |
Sustaining Capital |
Table 5 UG Mine |
101.0 |
117.4 |
1.162 |
Closure & Reclamation |
Table 5 UG Mine |
101.0 |
117.4 |
1.162 |
Additional Capex |
US$ (000) |
67,447 |
|
|
Escalation Factor |
% |
16.3 |
|
|
21.2 Operating Cost
The average base case LOM operating costs and unit rates are shown in Table 21-3 in Q1 2021 US dollar basis. The LOM average operating cost includes mining, mill feed hauling to and processing at the Mill located near Blanding, Utah, general and administration, freight of the product to a point of sale (White Mesa Mill), and various royalties and severance taxes. The Project operating costs were estimated in 2015 US dollars basis for the NI 43-101 technical report completed by RPA in 2016. The SLR QP has escalated these costs for this Technical Report to Q1 2021 US dollar basis using subscription-based Mining Cost Services (MCS) cost indexes (Infomine, 2021). In the SLR QP's opinion, inflationary indices since Q1 2021 are too volatile to apply against a long lived asset. The effect of escalation on operating costs is estimated to be 10.3%, or $89.0 million, for an increase of $21.77/ton milled over 2015 estimates. The methodology is presented later in this section.
Table 21-3: Operating Cost Estimate
Energy Fuels Inc. - Roca Honda Project
Operating Cost Summary |
US$ (000) |
$/ton milled |
Mining |
445,896 |
$110.91 |
Mill Feed Transport |
207,660 |
$51.65 |
Processing |
250,642 |
$62.35 |
Surface Facility Maintenance |
5,353 |
$1.33 |
G & A |
36,360 |
$9.04 |
Total Site Operating Costs |
945,877 |
$235.28 |
Product Transport to Market |
9,401 |
2.34 |
Total Production Costs |
955,278 |
237.62 |
Royalties |
25,993 |
6.47 |
Severance Taxes |
30,877 |
7.68 |
2021 Escalated1 Grand Total |
1,012,148 |
251.77 |
Notes:
1. Operating cost estimate escalated to Q1 2021 US dollars.
21.2.1 Operating Cost Assumptions
21.2.1.1 Operating Cost Exclusions
The 2015 operating cost estimate excluded:
Any provision for changes in exchange rates
Sales and use taxes
Preproduction period expenditures
Corporate administration and head office costs in Lakewood, Colorado
Site exploration costs or surface infill drilling or development for conversion of additional resources to Mineral Resources
Severance cost for employees at the cessation of operations
21.2.1.2 Salary and Labor Rates
Salary and wage rates are based on prevailing regional wage and salary surveys in the Project area. Federal Insurance Contributions Act (FICA) tax is estimated at 7.65% tax on the wage and salary costs.
Wages have not been adjusted either downward or upward given the nature of the work and the location. The SLR QP does consider this element to be a cost risk. Skilled operators, maintenance, and technical personnel live in the surrounding area of Grants, New Mexico.
An allowance for workman's compensation, health insurance, bonuses, FICA, and other benefits are included in the labor rates.
21.2.1.3 Fuel Price and Taxes
Operating costs are based upon a diesel fuel price of $3.20/gal Free on Board (FOB) mine site. The freight costs are from Grants, New Mexico, to the Roca Honda site.
Propane has been included at a cost of $0.51/therm. Natural gas is an option but requires pipeline construction to the mine site. The SLR QP considers this to be a cost risk as natural gas or propane prices vary over a wide range. EFR may benefit from purchasing an annual supply in the summer months.
21.2.1.4 Mine Power
Power for the Roca Honda site will be generated from commercially supplied line power with diesel units as emergency backup for shaft hoist, dewatering pumps, water treatment, and mill critical pumps and essential equipment. The operating costs are based on the price of $0.06/kWh of electrical power, and the installation of power factor management facilities to run a power factor near unity. The annual fuel requirement for electrical power generation at Roca Honda is considered to be inconsequential.
21.2.2 Operating Cost Escalation Methodology
In this Technical Report, the SLR QP escalated the original 2015 US dollar basis operating cost estimate costs to Q1 2021 US dollar basis using subscription-based Mining Cost Services (MCS) cost indexes dated July 2021 (Infomine, 2021). The March 2021 index value was selected as it was the last finalized data point in the July 2021 MCS guide at the time of this Technical Report. The operating cost escalation factors are presented in Table 21-4. The escalation effect on direct operating cash costs during this five year period is estimated to be 10.3% or $89.0 million for the Project.
Table 21-4: 2021 SLR Operating Cost Escalation Factors
Energy Fuels Inc. - Roca Honda Project
Operating Cost Area |
MCS Source |
2015 |
March 2021 |
Raw Factor |
Adj. Factor |
% Change |
% Labor Cost of Total |
UG Mine |
Table 5 UG Mine |
100.0 |
108.6 |
1.086 |
1.034 |
(4.8%) |
45% |
Mill Feed Transport |
Table 2 - "S" |
143.5 |
170.4 |
1.187 |
1.187 |
0% |
NA |
Operating Cost Area |
MCS Source |
2015 |
March 2021 |
Raw Factor |
Adj. Factor |
% Change |
% Labor Cost of Total |
Mill |
Table 5 Mill |
95.7 |
116.2 |
1.214 |
1.186 |
(2.3%) |
22% |
Surface Facility Maintenance (mainly labor) |
Table 2 - "A" |
26.65 |
28.59 |
1.073 |
1.017 |
(5.2%) |
80% |
G&A (mainly labor) |
Table 2 - "A" |
26.65 |
28.59 |
1.073 |
1.017 |
(5.2%) |
80% |
Sales and Marketing (U308 Freight to Customer) |
Table 2 - "S" |
143.5 |
170.4 |
1.187 |
1.187 |
0% |
NA |
Additional Operating Costs |
US$ (000) |
|
88,974 |
|
|
|
|
Escalation Factor |
% |
|
10.3 |
|
|
|
|
Except for trucking costs, each factor's labor cost index value was adjusted -10.5% for assumed lower labor cost escalation in New Mexico and Utah compared to the more active Nevada mining industry from which Infomine draws much of its information for its cost index guidance.
21.2.3 Mining
Mine costs include all underground mining costs except for haulage of material from the mine to the crusher, which is included in the Mill operating costs estimate. The costs are summarized in Table 21-5 in Q1 2021 US dollar basis.
Table 21-5: Underground Mine Operating Cost Summary
Energy Fuels Inc. - Roca Honda Project
Area |
Cost |
LOM |
LOM |
Labor |
49.91 |
200.7 |
45% |
Ground Support |
17.75 |
71.3 |
16% |
Electrical |
5.55 |
22.3 |
5% |
Drilling |
2.22 |
8.9 |
2% |
Blasting |
4.44 |
17.8 |
4% |
Ventilation |
3.33 |
13.4 |
3% |
Services, Roads, and Propane |
5.55 |
22.3 |
5% |
Water Treatment (W/O Electricity) |
2.22 |
8.9 |
2% |
Definition Drilling |
1.11 |
4.5 |
1% |
Maintenance |
17.75 |
71.3 |
16% |
Mine Operating Totals |
110.91 |
445.9 |
100% |
Major mine supplies are electricity, explosives, ground support, fuel, and propane to heat the mine air in the winter months. Mine power costs are included in the overall power cost estimate for the site.
An average powder factor of 1.34 lb/ton was used for costing purposes. Given the uncertain level of groundwater drainage in the development headings, explosives costs have been based on the use of hand loaded emulsion cartridges (Orica Senatel Magnafrac small diameter detonator sensitive emulsion). Explosives costs could be reduced (from $1.82/lb to $0.60/lb) by replacing the cartridges with a bulk loading system and ANFO.
Mobile equipment costs are estimated on annual operating hours and equipment utilization.
Salary and wages are included as single line items and are not allocated to the various activities in the mine.
Backfill placement is included in the mine costs at a cement addition rate of 4.5% for low strength backfill and 8% for high strength backfill. The cost of obtaining the quarried and screened rock component of the high strength backfill is estimated at $9.00/ton FOB site. The annual cement requirement is estimated at 17,600 ton.
21.2.4 Mill Feed Transportation
Trucking costs for transporting mill feed 290 miles from the Mine to Mill are included in the cost estimate at $51.65/t mill feed in Q1 2021 dollar basis.
21.2.5 Processing
Mill operating costs are summarized in Table 21-6 in Q1 2021 dollar basis. The Mill operating costs are based on the listed line items identified to the level of detail available for the PEA study. The operating personnel costs are based on the actual number of operating, maintenance, overhead personnel required to operate the facility using experienced workers, and on salaries provided by EFR.
Table 21-6: Mill Operating Cost Summary
Energy Fuels Inc. - Roca Honda Project
Mill Operating Cost by Area | Cost (US$/ton milled) |
Cost (US$ millions) |
LOM (% of Budget) |
Mill Administration | 2.26 | 9.1 | 4% |
Legal | 0.92 | 3.7 | 2% |
Taxes, Bonding, & Insurance | 3.23 | 13.0 | 6% |
Lab/Mill Technical | 1.51 | 6.1 | 3% |
Safety/Environmental/Rad. | 2.26 | 9.1 | 4% |
Compliance | 1.18 | 4.8 | 2% |
Ore Receiving | 0.86 | 3.5 | 2% |
Warehouse | 0.81 | 3.2 | 2% |
Grinding | 2.64 | 10.6 | 5% |
Leach | 22.51 | 90.5 | 42% |
Mill Operating Cost by Area | Cost (US$/ton milled) |
Cost (US$ millions) |
LOM (% of Budget) |
CCD |
2.53 |
10.2 |
5% |
Uranium SX |
8.08 |
32.5 |
15% |
Uranium Precipitation |
1.02 |
4.1 |
2% |
Uranium Drying and Packaging |
1.78 |
7.1 |
3% |
Tailings |
2.26 |
9.1 |
4% |
Subtotal Mill Operating Cost |
53.85 |
216.5 |
100.0% |
Tailings Replacement and Reclamation Costs |
8.50 |
34.2 |
|
Grand Total Mill Operating Cost |
62.35 |
250.6 |
|
Reagent costs shown in Table 21-7 are considered as element costs in Q1 2021 US dollar basis.
Table 21-7: Mill Operating Reagent Usage Details
Energy Fuels Inc. - Roca Honda Project
Reagents |
Typical |
US$/Usage |
Typical Usage |
Cost |
Kerosene |
gal |
6.030 |
7.322 |
0.55 |
Soda Ash |
lb |
0.159 |
0.193 |
4.50 |
International Barrels |
bbl |
66.000 |
80.138 |
0.01 |
Grinding Media/Liners |
lb |
0.589 |
0.715 |
0.80 |
Chlorate |
lb |
0.657 |
0.798 |
3.50 |
Flocculent |
lb |
3.728 |
4.527 |
0.32 |
Salt |
lb |
0.070 |
0.085 |
0.90 |
Amines |
lb |
3.505 |
4.256 |
0.20 |
Caustic Soda |
lb |
0.351 |
0.426 |
1.50 |
Iso-decanol |
lb |
1.740 |
2.113 |
0.15 |
Ammonium Sulfate |
lb |
0.346 |
0.420 |
0.20 |
Sulfuric Acid |
lb |
0.100 |
0.121 |
137.00 |
Anhydrous Ammonia |
lb |
0.446 |
0.542 |
0.05 |
Propane |
gal |
1.288 |
1.564 |
0.00 |
LNG |
gal |
0.258 |
0.313 |
9.00 |
The reagent and comminution media costs, based on fourth quarter 2015 budget pricing obtained from suppliers, include an operating period freight cost and escalated to Q1 2021 US dollar basis. The reagent costs are based on average mid-range consumptions provided by EFR for the Mill. The minimum and maximum ranges provided in the PEA imply that the reagent cost is appropriately noted. The major reagent cost is the cost of sulfuric acid at $200/ton. Power is based on electrical power cost of $0.06/kWh for the Mill and Mine sites. These power costs are based on actual power rates for the Mill and published power rates for the Mine.
21.2.6 Mine Surface Maintenance
These costs include the operation and maintenance of the surface facilities at the Roca Honda site, well maintenance, and the operation of the surface equipment for the maintenance of roads and movement of materials and supplies. Surface maintenance costs are $1.33/ton milled in Q1 2021 US dollar basis.
21.2.7 Mine General and Administration
The General and Administrative (G&A) costs for the Roca Honda site cover the mine site administration on the basis that the operation is a stand-alone site with site management, purchasing, payroll and accounts payable handled by site personnel. Health and safety and environment are also included in the mine administration. The administrative costs are summarized in Table 21-8 and total $9.04/t milled in Q1 2021 US dollar basis.
Table 21-8: Mine G&A Costs
Energy Fuels Inc. - Roca Honda Project
Administration Cost Summary |
Typical Cost per |
Cost (US$ Millions) |
LOM (% of Budget) |
Direct Labor |
2.48 |
9.8 |
27% |
General and Administration Operating |
5.15 |
20.7 |
57% |
Site Services |
1.40 |
5.8 |
16% |
Total |
9.04 |
36.3 |
100.0% |
Crew transportation costs are included for the transportation of employees to the Mine from Grants, New Mexico.
21.2.8 Manpower
Table 21-9 summarizes the staffing requirements for the Mine and Mill operations during the peak production period.
Table 21-9: Staff Requirements
Energy Fuels Inc. - Roca Honda Project
Department |
Number of Employees |
||
Staff |
Hourly |
Total |
|
Mine |
|
|
|
Administration |
6 |
1 |
7 |
Department |
Number of Employees |
||
Staff |
Hourly |
Total |
|
Operations |
28 |
219 |
247 |
Maintenance |
3 |
0 |
3 |
Subtotal Mine Operations |
37 |
220 |
257 |
Mill |
|
|
|
Administration |
2 |
1 |
3 |
Operations |
6 |
32 |
38 |
Maintenance |
4 |
12 |
16 |
Metallurgical Lab |
3 |
6 |
9 |
Radiation/ESG/Safety |
4 |
5 |
9 |
Subtotal Mill Operations |
19 |
56 |
75 |
Total All Operations |
56 |
276 |
332 |
This study assumed a typical schedule at the Mine of 4 crews, 7 days per week, 3 shifts per day, and 8 hours per shift. The Mill schedule assumed 4 crews, 7 days per week, 2 shifts per day, and 12 hours per shift. The schedule for most administration would be Monday through Friday, 8 am to 5 pm.
22.0 ECONOMIC ANALYSIS
An economic analysis was performed by the SLR QP using the assumptions presented in this Technical Report. The Roca Honda base case cash flow is based on Measured, Indicated, and Inferred Mineral Resources. An alternate case based on only Measured and Indicated Mineral Resources was analyzed as well.
It is important to note that, unlike Mineral Reserves, Mineral Resources do not have demonstrated economic viability. This PEA is preliminary in nature, it includes Inferred Mineral Resources that are considered too speculative geologically to have modifying factors applied to them that would enable them to be categorized as Mineral Reserves and there is no certainty that this economic assessment would be realized.
22.1 Base Case (Measured, Indicated, and Inferred Mineral Resources)
22.1.1 Economic Criteria
An after-tax cash flow projection for the base case has been generated from the LOM schedule and capital and operating cost estimates, and is summarized in the Section 19.2. A summary of the key criteria is provided below.
22.1.1.1 Revenue
Total mill feed processed: 4.020 million tons
Percent of Inferred Mineral Resource tonnage in LOM: 45%
Average processing rate: 1,150 stpd
U3O8 head grade: 0.36%
Average mill recovery: 95%
Recovered U3O8: 27,545 thousand lb
Avg annual U3O8 sales: 2,504 thousand lb/y
Metal price: US$65.00/lb U3O8
Concentrate shipping cost from the Mill to customer: $683/ton U3O8 or $0.34/lb U3O8.
22.1.1.2 Capital and Operating Costs
Preproduction period of 54 months
Mine life of eleven years
LOM capital costs of $482.3 million on Q1 2021 US dollar basis
LOM operating cost (excluding product transport to market costs, royalties, and severance taxes) of $945.9 million or $235.28/ton milled on Q1 2021 US dollar basis
22.1.1.3 Royalties and Severance Taxes
New Mexico mining and private royalties on the value of special minerals extracted were applied as shown below:
Section 9 Gross Royalty (1%)
Section 16 New Mexico State Lease Royalty (5% of gross less transportation and milling costs)
New Mexico mining severance tax of 3.5% payable on the "value" of mineral production for New Mexico state leases. The severance tax is currently 3.5% of 50% (net 1.75%) of the taxable value of U3O8 produced. The taxable value is based upon the operating cash flow less a development allowance, depreciation, and a processing allowance.
22.1.1.4 Income Taxes
The economic analysis includes the following assumptions for corporate income taxes (CIT):
Unit of Production depreciation method was used with total allowance of $475.4 million taken during LOM
Percentage depletion method was used with total allowance of $136.5 million taken during LOM
Loss Carry Forwards - Income tax losses may be carried forward indefinitely but may not be used for prior tax years
Federal tax rate of 21%
State tax rate of 5.9% (4.66% after federal benefit)
LOM income tax payable totaling $42 million.
22.1.2 Cash Flow Analysis
It is important to note that, unlike Mineral Reserves, Mineral Resources do not have demonstrated economic viability. The economic analysis for the base case contained in this Technical Report is based, in part, on Inferred Resources, and is preliminary in nature. Inferred Resources are considered too geologically speculative to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no certainty that economic forecasts on which this Preliminary Economic Assessment is based will be realized. It is important to note that with the future exploration drilling planned at the Roca Honda Project, it would be reasonable to expect a significant amount of Inferred Mineral Resources would be converted into the Indicated category.
The Project production schedule as currently envisioned, comprised of 45% Inferred Mineral Resources and 55% combined Measured and Indicated Mineral Resources, is presented in Figure 22-1 and Figure 22-2, and the resulting after-tax free cash flow profile is shown in Figure 22-3.
Figure 22-1: Base Case Annual Mine Production by Area
Figure 22-2: Base Case Annual U3O8 Production by Area
Figure 22-3: Base Case Project After-Tax Metrics Summary
Table 22-1 presents a summary of the Roca Honda base case economics at an U3O8 price of $65.00/lb. The full annual cash flow model is presented in Appendix 1.
On a pre-tax basis, the undiscounted cash flow totals $295.9 million over the mine life. The pre-tax Net Present Value (NPV) at a 5% discount rate is $81.2 million and the Internal Rate of Return (IRR) is 8.7% with simple payback (PB) from start of commercial production (CP) occurring in 7.8 years.
On an after-tax basis, the undiscounted cash flow totals $253.7 million over the mine life. The after-tax NPV at 5% discount rate is $55.9 million and the IRR is 7.6%, with simple PB from start of CP occurring in 8.1 years.
Table 22-1: Base Case After-Tax Cash Flow Summary
Energy Fuels Inc. - Roca Honda Project
The average annual U3O8 sales for the base case during the 11 years of operation are 2.50 Mlb per year at an average AISC of $39.12/lb U3O8, as shown in Table 22-2.
Table 22-2: Base Case All-in Sustaining Costs Composition
Energy Fuels Inc. - Roca Honda Project
Item |
US$ M |
US$/lb U3O8 |
Mining |
446 |
16.2 |
Mill Feed Transport |
208 |
7.5 |
Process |
251 |
9.1 |
Maintenance |
5 |
0.2 |
G & A |
36 |
1.3 |
Subtotal Site Costs |
946 |
34.3 |
Offsite Treatment |
9 |
0.34 |
Total Direct Cash Costs |
955 |
34.7 |
NSR Royalty |
26 |
0.9 |
Severance Tax |
31 |
1.1 |
Total Cash Costs |
1,012 |
36.7 |
Sustaining Capex |
61 |
2.2 |
Closure/Reclamation Capital |
4 |
0.1 |
Subtotal Sustaining Costs |
65 |
2.4 |
Total All-in Sustaining Costs |
1,078 |
39.12 |
U3O8 Sales (Mlb) |
|
27.5 |
Average U3O8 Sales per Year (Mlb) |
|
2.50 |
Figure 22-4 shows the annual AISC trend during the base case mine operations against an overall average AISC of $39.12 over the 11-year LOM. The AISC variations are mainly due to changes in grades and mine schedule. The AISC metric can range from $32/lb to $56/lb U3O8 through the Project life.
Figure 22-4: Base Case Annual AISC Curve Profile
22.1.3 Sensitivity Analysis
Project risks can be identified in both economic and non-economic terms. Key economic risks were examined by running cash flow sensitivities calculated over a range of variations based on realistic fluctuations within the listed factors:
U3O8 price: $10/lb increments between $45/lb and $85/lb
Head grade: -/+ 20%
Recovery: -20%/+5% (95% is base case already)
Operating cost per ton milled: -15% to -30%/+20% to 50% (AACE Class 4 range)
Capital cost: -15% to -30%/+20% to 50% (AACE Class 4 range)
The after-tax cash flow sensitivities for the base case are shown in Table 22-3, Figure 22-5, and Figure 22-6. The Project is most sensitive to head grade, uranium price, and recovery, and only slightly less sensitive to operating cost and capital cost at a Class 4 accuracy level. The sensitivities to metallurgical recovery, head grade, pounds of U3O8 and metal price are nearly identical.
Table 22-3: Base Case After-tax Sensitivity Analysis
Energy Fuels Inc. - Roca Honda Project
Factor Change |
U3O8 Price |
NPV at 5% |
IRR |
0.69 |
45.00 |
(282) |
(11.4) |
0.85 |
55.00 |
(113) |
(0.7) |
1.00 |
65.00 |
56 |
7.6 |
1.15 |
75.00 |
225 |
14.7 |
1.31 |
85.00 |
394 |
21.1 |
Factor Change |
Head Grade |
NPV at 5% |
IRR |
0.80 |
0.29 |
(164) |
(3.6) |
0.90 |
0.32 |
(54) |
2.4 |
1.00 |
0.36 |
56 |
7.6 |
1.10 |
0.40 |
166 |
12.3 |
1.20 |
0.43 |
276 |
16.7 |
Factor Change |
Recovery |
NPV at 5% |
IRR |
0.80 |
76.0 |
(164) |
(3.6) |
0.90 |
85.5 |
(54) |
2.4 |
1.00 |
95.0 |
56 |
7.6 |
1.03 |
97.5 |
84 |
8.8 |
1.05 |
100.0 |
114 |
10.1 |
Factor Change |
Operating Costs |
NPV at 5% |
IRR |
0.70 |
164.70 |
233 |
15.1 |
0.85 |
200.00 |
144 |
11.5 |
1.00 |
235.29 |
56 |
7.6 |
1.25 |
294.12 |
(91) |
0.5 |
1.50 |
352.94 |
(239) |
(7.5) |
Factor Change |
Capital Costs |
NPV at 5% |
IRR |
0.70 |
338 |
170 |
14.9 |
0.85 |
410 |
113 |
10.8 |
1.00 |
482 |
56 |
7.6 |
1.25 |
603 |
(39) |
3.4 |
1.50 |
723 |
(134) |
0.3 |
Figure 22-5: Base Case After-tax NPV 5% Sensitivity Analysis
Figure 22-6: Base Case After-tax IRR Sensitivity Analysis
22.2 Alternate Case (Measured and Indicated Mineral Resources Only)
The SLR QP also completed a high level analysis of a scenario (the alternate case) with a production schedule that included only Measured and Indicated Mineral Resources, i.e., excluding Inferred Mineral Resources, which comprised 45% of the tons in the base case. It is important to note that while the alternate case does not contain Inferred Mineral Resources, Measured and Indicated Mineral Resources do not have demonstrated economic viability. There is no certainty that economic forecasts on which this Preliminary Economic Assessment is based will be realized.
Using the same mining and processing assumptions and operating cost parameters as the base case, the alternate case production schedule has 1.79 million tons at 0.41% U3O8 generating 14.0 Mlb U3O8 over the same 11 year mine life but at a milling rate of 490 tpd compared to 1,150 tpd rate in the base case, as shown in Figure 22-7.
Figure 22-7: Alternate Case Annual U3O8 Production by Area
As part of the alternate case analysis, it was necessary to scale the 1,150 tpd base case total capital cost estimate of $482 million to better reflect the 490 tpd rate used in the alternate case. The SLR QP used the 0.6 capital cost rule as follows:
Alternate Case capital cost=$482 M*(490/1,150)^0.6
Thus, the alternate case capital cost estimate at a milling rate of 490 tpd is $289 million, a reduction of $193 million, or 40%, compared to the base case capital cost estimate.
Table 22-4 presents a summary of the Roca Honda alternate case economics at an U3O8 price of $65.00/lb. On a pre-tax basis, the undiscounted cash flow totals $170 million over the mine life. The pre-tax NPV at a 5% discount rate is $46.0 million with pre-tax IRR of 8.6%. On an after-tax basis, the undiscounted cash flow totals $130 million over the mine life. The after-tax NPV at 5% discount rate is $22.0 million with after-tax IRR of 6.8%. The undiscounted payback period from start of production is just over eight years on both pre-tax and after-tax basis.
Table 22-4: Alternate Case After-Tax Cash Flow Summary
Energy Fuels Inc. - Roca Honda Project
Table 22-5 shows the average annual U3O8 sales for the alternate case during the 11 years of operation are 1.275 Mlb per year at an average AISC of $35.07/lb U3O8.
Table 22-5: Alternate Case All-in Sustaining Costs Composition
Energy Fuels Inc. - Roca Honda Project
Item |
US$ M |
US$/lb U3O8 |
Mining |
198 |
14.1 |
Mill Feed Transport |
92 |
6.6 |
Process |
111 |
7.9 |
Maintenance |
2 |
0.2 |
G & A |
16 |
1.2 |
Subtotal Site Costs |
421 |
30.0 |
Offsite Treatment |
5 |
0.34 |
Total Direct Cash Costs |
425 |
30.3 |
NSR Royalty |
12 |
0.8 |
Severance Tax |
16 |
1.1 |
Total Cash Costs |
453 |
32.3 |
Sustaining Capex |
37 |
2.6 |
Closure/Reclamation Capital |
2 |
0.2 |
Subtotal Sustaining Costs |
39 |
2.8 |
Total All-in Sustaining Costs |
492 |
35.07 |
U3O8 Sales (Mlb) |
|
14.0 |
Average U3O8 Sales per Year (Mlb) |
|
1.275 |
The after-tax cash flow sensitivities for the alternate case are shown in Figure 22-8 and Figure 22-9, and are similar in magnitude to the base case with the Project being most sensitive to head grade, uranium price and recovery, and only slightly less sensitive to operating cost and capital cost at a Class 4 accuracy level.
Figure 22-8: Alternate Case After-tax NPV 5% Sensitivity Analysis
Figure 22-9: Alternate Case After-tax IRR Sensitivity Analysis
23.0 ADJACENT PROPERTIES
23.1 Historical Production from Adjacent Properties
By the end of 1982, Kerr-McGee reported total production from seven of its nearby mines in the Ambrosia Lake subdistrict of 17.9 million tons grading 0.217% U3O8 containing 77.3 Mlb U3O8 (Malone, 1980 and 1982).
• The Mount Taylor underground uranium mine, located approximately 3.5 mi southeast of the Roca Honda Project area, is now owned by Rio Grande Resources Corporation (RGR), a subsidiary of General Atomics Corporation. Uranium was discovered in the Mount Taylor area (about 60 mi west of Albuquerque) in 1968 and exploratory drilling identified an ore deposit extending nearly six miles. Chevron Corporation began commercial production at Mount Taylor in 1986, initially shipping the ore to Chevron's Panna Maria mill in south Texas for processing. More than eight million pounds of uranium were produced from the Mount Taylor mine before the mine was placed on standby in 1989 (online records and reports). The Mount Taylor uranium mine project is a conventional underground mine that contains an in situ resource of over 100 Mlb of uranium - the largest uranium resource in the United States. Rio Grande Resources informed the New Mexico Energy, Mineral and Natural Resources Department on December 3, 2019, that it would cease mining operations at Mount Taylor and begin closure activity (Mining Connection, 2020).
• The Johnny M mine is located one mile west of the Project area, on Section 7 and the east half of Section 18 (T13N, R08W). Approximately five million pounds of U3O8 were mined from the Westwater Canyon Member sandstone units from 1976 to 1982 (Fitch, 2010).
• Approximately four miles southwest of the Project area is the San Mateo underground uranium mine. This mine has not been in operation for many years, however, approximately 2.8 Mlb U3O8 were mined from 1959 to 1970 (McLemore et al., 2002).
The SLR QP has been unable to verify this information on adjacent properties. This information on adjacent properties is not necessarily indicative of the mineralization at the Roca Honda property.
24.0 OTHER RELEVANT DATA AND INFORMATION
No additional information or explanation is necessary to make this Technical Report understandable and not misleading.
25.0 INTERPRETATION AND CONCLUSIONS
The SLR QPs offers the following interpretations and conclusions regarding the Roca Honda Project:
25.1 Geology and Mineral Resources
• The Roca Honda Mine is a significant high grade uranium deposit.
• Drilling to date has intersected localized, high-grade mineralized zones contained within five sandstone units of the Westwater Canyon Member of the Morrison Formation.
• The sampling, sample preparation, and sample analysis programs are appropriate and to industry standards for the style of mineralization.
• Although continuity of mineralization is variable, drilling to date confirms that local continuity exists within individual sandstone units.
• No significant discrepancies were identified with the survey location, lithology, and electric and gamma log interpretations data in historical holes.
• No significant discrepancies were identified with the lithology and electric and gamma log data interpretations in RHR holes.
• Descriptions of recent drilling programs, logging, and sampling procedures have been well documented by RHR, with no significant discrepancies identified.
• There is a low risk of depletion of chemical uranium compared to radiometrically determined uranium in the Roca Honda deposit.
• The sample security, analytical procedures, and QA/QC procedures used by EFR meet industry best practices and are adequate to estimate Mineral Resources.
• The resource database is valid and suitable for Mineral Resource estimation under S-K 1300 standards.
• The assumptions, parameters, and methodology used for the Roca Honda Mineral Resource estimate is appropriate for the style of mineralization and mining methods.
• The SLR QP is not aware of any environmental, permitting, legal, title, taxation, socioeconomic, marketing, political, or other relevant factors that could materially affect the current resource estimate.
25.2 Mining
• The proposed Mine is currently in the planning and permitting stages.
• The mineralization is relatively flat-lying, and will be mined with a combination of step room-and-pillar (SRP) and drift-and-fill (DF) extraction methods.
• In the development of the Mineral Resource estimate for this PEA, the SLR QP used a diluted cut-off grade of 0.110% U3O8, a minimum mining thickness of six feet, and the historical mining recovery of 85% for the SRP mining method and 90% recovery for the DF mining method.
• The PEA is based on mining a total of 4.02 million tons of mineralized material, at a grade of 0.36% U3O8, containing 28.994 million pounds (Mlb) of U3O8.
• The Mine will be accessed from two shafts, one located in Section 16, and the other located in Section 17, the latter which has been partially developed.
• Mining is partially dependent upon the use of a suitable backfill, assumed to be backfill with cement added as a binder. Initial test work to demonstrate that a suitable cemented backfill can be produced with development rock and rock from surface at Roca Honda must be determined prior to mine production.
25.3 Hydrogeology
• The 2016 groundwater model results demonstrate that, over the projected 11 year mine life, the average annual inflow rates of all the mine workings will range from approximately 2,170 gpm to approximately 5,920 gpm with an average of nearly 4,700 gpm. Steinhaus (2014) has estimated the median flow rate extracted from the Wastewater Canyon Formation near the proposed Mine to range from 9 m3/min (2,380 gpm) to 19 m3/min (5,020 gpm) using an analytical model (Theis equation's Copper Jacob straight-line approximation method).
• The permit granted by the New Mexico State Engineer's office to RHR in 2012 for Sections 16, 10, and 9 allows dewatering at a rate of 4,500 gpm. This permit does not include Section 17.
• Dewatering from the underground mine will cause declines (depressurizing) within the confined aquifer systems of the Westwater Canyon Member (Westwater) of the Morrison Formation, where the mine workings will be developed. The New Mexico Office of the State Engineer determined that the dewatering of the Westwater Canyon Member would impact some domestic wells (RPA, 2015). The maximum drawdown of 10 ft in the Gallup Sandstone is not expected to extend past site boundaries. A 10 ft drawdown in the Dakota Sandstone may occur within a 2,000 ft radius around the shaft. Aquifers overlying and/or underlying the Westwater may be affected insignificantly due to confining units that separate the aquifers. The groundwater flow model simulated that the impact of depressurizing on area streams would be negligible (RPA, 2015).
• Per the court settlement reached between Pueblo of Acoma and RHR, the treated mine water will be piped to the community of Milan to assist in recharging the Rio San Jose. The water produced from depressurizing activities will be treated to state and federal water discharge standards. An influx of this quantity of water into the overlying soil/alluvium found in the irrigated area will likely raise the water table; however, no adverse impact on the water quality of the underlying alluvial Westwater Canyon Member of the Morrison Formation aquifer is expected.
• Because Mine water will be piped to Milan, treated, and used for aquifer recharge, local shallow aquifers will not be affected. Such aquifers that could otherwise be vulnerable to potential accidental impacts from facility activity or discharged water, include the alluvium, the Point Lookout Sandstone, and the Dalton Sandstone Member of the Crevasse Canyon Formation.
25.4 Mineral Processing
• The Mill has been in operation since 1981 and is equipped with the required equipment using a proven process for the production of uranium oxide (U3O8) product, called "yellowcake". In addition, although it is not part of the production schedule for Roca Honda mineralized material, the Mill also has the capacity to produce vanadium pentoxide (V2O5).
• Mill operations can receive run-of-mine (ROM) material from the Roca Honda Mine and various other mines (toll milling). Material will be dumped from trucks at the White Mesa Mill on an ore pad and stockpiled by type to be blended as needed. Material will be weighed, sampled, and probed for uranium grade. The ore pad area has an approximate capacity of 450,000 tons.
• The Mill utilizes agitated hot acid leach and solvent extraction to recover uranium. Historical metallurgical tests from similar ores in the region and Mill production records confirm this processing method will recover 95% of the contained uranium.
• The Mill is currently on a reduced operating schedule processing feed materials as they become available.
25.5 Infrastructure
• The Roca Honda Mine and White Mesa Mill are in historically important, uranium-producing regions of central New Mexico and southeastern Utah. All the regional infrastructure necessary to mine and process commercial quantities of U3O8 is in place.
• EFR has been operating the White Mesa tailings cells since 1981, which is currently operating under the requirements of the UDEQ RML.
25.6 Environment
• Extensive baseline studies have been completed for the Roca Honda Mine site area.
• Rock characterization studies indicate that waste rock from the Mine will not be acid generating.
• The DEIS for the Mine was published by the USFS in February 2013. A Supplement to the DEIS is expected to be completed in late 2022 or early 2023 with an expected RoD and Final EIS anticipated in 2023. A mine permit is expected to be issued following the RoD and Final EIS.
• Environmental considerations are typical of underground mining and processing facilities and are being addressed in a manner that is reasonable and appropriate for the stage of the Project.
• All required permits for the White Mesa Mill to operate are in place.
• There are no violations or regulatory matters of any significance or that are not being addressed under normal regulatory procedures.
• The EFR QP is not aware of any environmental, permitting, legal, title, taxation, socioeconomic, marketing, political, or other relevant factors that could materially affect the current resource estimate.
26.0 RECOMMENDATIONS
The SLR QPs offer the following recommendations by area:
26.1 Geology and Mineral Resources
The SLR QP makes the following recommendations regarding advancing the Project forward in a non-phased and independent approach. The proposed work (Table 26-1) would be completed during the four years of preproduction, followed by a final investment decision from Energy Fuels.
Table 26-1: Roca Honda Four-Year Estimated Budget
Energy Fuels Inc. - Roca Honda Project
Item |
Cost |
Drilling to increase measured and indicated resources (208 Holes) |
$7,930,000 |
Geophysical Logging and Assay |
$218,000 |
Updated Pre-Feasibility Study |
$300,000 |
Total |
$8,448,000 |
In addition, the SLR QPs recommend the following which are independent of the proposed budget:
1. Although there is a relatively low risk in assuming that density of mineralized zones is similar to that reported in mining operations east and west of the Roca Honda property, conduct additional density determinations, particularly in the mineralized zones, to confirm and support future resource estimates.
2. Although there is a low risk of depletion of chemical uranium compared to radiometrically determined uranium in the Roca Honda mineralization, complete additional sampling and analyses to supplement results of the limited disequilibrium testing to date.
3. Modify the sample analysis QA/QC protocol to include the regular submission of blanks and standards for future drill programs.
4. Prepare fault modeling once additional data have been obtained to support future mine design work.
5. Digitize historical drilling logs for Sections 9, 10, and 16 at 0.5 ft intervals, similar to the work completed on Section 17 for any future Mineral Resource estimates.
6. Complete additional confirmation drilling at the earliest opportunity to confirm historical drillhole data on all zones.
7. Use a secondary alternative estimation method (ID2, ID3, or Ordinary Kriging) as an additional check for the block model validation.
26.2 Mining and Mineral Reserves
1. Implement a program of additional sampling and laboratory testing concurrently with the definition drilling program to support the geotechnical designs which are based on a limited number of core samples. Boreholes should be located on the centerline of the various proposed ventilation shafts. The cores from these holes will define the different lithologies to be encountered and provide samples for rock strength testing and other needed geotechnical design information. The geotechnical study on the proposed Section 16 shaft core hole was completed in 2012. More detailed geotechnical designs and cost estimates for shaft construction should be completed.
2. Continue to evaluate the feasibility of starting access to the mine operations in Section 17 by way of the existing 1,478 ft deep (14 ft diameter) shaft.
3. Investigate more thoroughly the applicability of using roadheaders, and other selective mining methods that may reduce dilution for development and stope mining. This will reduce the tonnage and increase the grade of mineralized material shipped and processed at the Mill.
26.3 Hydrogeology
1. Consistent with state and federal regulations requirements, implement environmental monitoring and analysis programs to collect water level and water quality data when the mine site becomes fully operational.
2. Update on an annual basis the numerical groundwater model based on mine inflows and drawdowns in monitoring wells.
3. Expand the well distribution to confirm the predicted cone of depression.
4. Develop specific plans for future monitoring of springs, both flow and quality, similar to previous monitoring programs completed on site.
26.4 Mineral Processing
1. Continue the White Mesa Mill intermittent operations with maintenance program.
2. Evaluate historical operating data to determine possible flowsheet improvements or modifications to improve production rate/economics and make these changes before commencing production.
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RPA, 2012. Technical Report on the Roca Honda Project, McKinley County, New Mexico, U.S.A., prepared by Nakai-Lajoie, P., Michaud, R., Collins, S.E., Smith, R.C., for Roca Honda Resources, LLC, August 6, 2012.
RPA, 2015. Technical Report on the Roca Honda Project, McKinley County, New Mexico, U.S.A., prepared by Stine, B., Michaud, R., Collins, S.E., Mathisen, M.B., and Roberts, H.R., for Roca Honda Resources, LLC, February 27, 2015.
Sandefur, R.L., and D.C. Grant, 1976. Preliminary evaluation of uranium deposits, A geostatistical study of drilling density in Wyoming solution fronts, in Exploration for uranium deposits, International Atomic Energy Agency, Vienna, p. 695 - 714.
Santos, E.S., 1966a. Geologic Map of the San Mateo Quadrangle, McKinley and Valencia Counties, New Mexico, U.S. Geological Survey Map GQ-517, scale 1:24,000.
Santos, E.S., 1966b. Geologic Map of the San Lucas Dam Quadrangle, McKinley County, New Mexico, U.S. Geological Survey Map GQ-516, scale 1:24,000.
Santos, E.S., 1970. Stratigraphy of the Morrison Formation and Structure of the Ambrosia Lake District, New Mexico, U.S. Geological Survey Bulletin 1272-E, 1970.
Sheppard, P.R., A.C. Comrie, G.D. Packin, K. Angersbach, M.K. and Hughes, 1999. The Climate of the Southwest, Institute for the Study of Planet Earth, CLIMAS Report Series CL1-99.
Smouse, D.E., 1995, Rio Algom Mining Corp., Annual uranium resource report, dated January 1, 1995.
Smouse, D.E., 1995, Rio Algom Mining Corp., Property summaries report, dated September 21, 1995.
Squyres, J.B., 1970. Origin and depositional environment of uranium deposits of the Grants region, New Mexico, PhD thesis, Stanford University, 228 p.
State of New Mexico County of McKinley Eleventh Judicial District Court (NM-MEJDC), 2015. Joint Motion to Dismiss Action With Prejudice. Steinhaus, K., 2014. Water Resources Impacts of Uranium Mining in the San Juan Basin, New Mexico. M.S. Thesis, University of New Mexico, Albuquerque, NM, May 2014.
Stone, W.J., F.P. Lyford, P.F. Frenzel, N.H. Mizell, and E.T. Padgett, 1983. Hydrogeology and water resources of San Juan Basin, New Mexico: Socorro, New Mexico Bureau of Mines and Mineral Resources Hydrologic Report 6.
Strathmore Minerals Corp., 2008. Preliminary Assessment of the Roca Honda Project, December 17, 2007
Strathmore Resources, 2008. Report prepared by Standard Operating Procedure 004: Lithologic Logging of Cuttings and Core Revision 0, Prepared by Strathmore Resources, April 2008.
Strathmore Resources, 2008. Report prepared by Standard Operating Procedure 006: Sample, Handling, Packaging, Shipping, and Chain of Custody Revision 0, Prepared by Strathmore Resources, April 2008.
Strathmore Resources, 2009. Internal correspondence, ELI laboratory audit results, March 2009.
Surveying Control Inc., 2008. Memo sent to Strathmore Minerals Re: Photo Control Coordinates and Elevations - San Mateo, N.M.
The Mineral Lab Inc., 2007. Letter to Mr. Tim Hollens of Energy Laboratories Inc, October 1, 2007
URI, 2007. J.S. Nelson Internal correspondence, Ore Reserves, February 2007
USDA, 2013. Draft environmental impact statement for Roca Honda Mine: Sections 9, 10 and 16, Township 13 North, Range 8 West, New Mexico Principal Meridian, Cibola National Forest, McKinley and Cibola Counties, New Mexico. MB-R3: 03-25. [Albuquerque, N.M.]: United States Department of Agriculture, Forest Service, Southwestern Region, 2013.
USFS, 2011. Baseline data report for the Roca Honda Mine: RHR report submitted to New Mexico Mining and Minerals Division and U.S. Forest Service. Technical report, Cibola National Forest, 2011
US NRC NUREG-1748, Environmental Review Guidance for Licensing Actions Associated with NMSS Programs 2003.
US Securities and Exchange Commission, 2018: Regulation S-K, Subpart 229.1300, Item 1300 Disclosure by Registrants Engaged in Mining Operations and Item 601 (b)(96) Technical Report Summary.
Wentworth, D.W, 1982. Uranium Geology Potential of the Roca Honda Area, McKinley
and Valencia Counties, New Mexico. Continental Oil Company Report.
World Nuclear, 2021. Uranium Production Figures, 2011-2020. Updated September 2021. Retrieved December 2021 from World Nuclear Association: https://www.world-nuclear.org/information-library/facts-and-figures/uranium-production-figures.aspx
28.0 DATE AND SIGNATURE PAGE
This report titled "Technical Report on the Roca Honda Project, McKinley County, New Mexico, USA" with an effective date of December 31, 2021, was prepared and signed by the following authors:
(Signed & Sealed) Grant A. Malensek | |
Dated at Lakewood, CO | Grant A. Malensek, M.Eng., P.Eng. |
February 22, 2022 | Senior Principal Mining Engineer, SLR |
(Signed & Sealed) Mark B. Mathisen | |
Dated at Lakewood, CO | Mark B. Mathisen, C.P.G. |
February 22, 2022 | Principal Geologist, SLR |
(Signed & Sealed) David M. Robson | |
Dated at Toronto, ON | David M. Robson, P.Eng., MBA |
February 22, 2022 | Principal Mining Engineer, SLR |
(Signed & Sealed) Jeffrey L. Woods | |
Dated at Sparks, NV | Jeffrey L. Woods, MMSA QP |
February 22, 2022 | Principal Consulting Metallurgist, Woods Process Services |
(Signed & Sealed) Phillip E. Brown | |
Dated at Evergreen, CO | Phillip E. Brown, C.P.G., R.P.G. |
February 22, 2022 | Principal Consulting Hydrogeologist, Consultants in Hydrogeology |
(Signed & Sealed) Daniel D. Kapostasy | |
Dated at Lakewood, CO | Daniel D. Kapostasy, P.G. |
February 22, 2022 | Director of Technical Services, EFR |
29.0 CERTIFICATE OF QUALIFIED PERSON
29.1 Grant A. Malensek
I, Grant A. Malensek, M.Eng., P.Eng., as an author of this report entitled "Technical Report on the Roca Honda Project, McKinley County, New Mexico, USA" with an effective date of December 31, 2021 prepared for Energy Fuels Inc., do hereby certify that:
1. I am a Senior Principal Mining Engineer with SLR International Corporation, of Suite 100, 1658 Cole Boulevard, Lakewood, CO, USA 80401.
2. I am a graduate of the University of British Columbia, Canada, in 1987 with a B.Sc. degree in Geological Sciences and Colorado School of Mines, USA in 1997 with a M.Eng. degree in Geological Engineering.
3. I am registered as a Professional Engineer/Geoscientist in the Province of British Columbia (Reg.# 23905). I have worked as a mining engineer for a total of 25 years since my graduation. My relevant experience for the purpose of the Technical Report is:
• Feasibility, Prefeasibility, and scoping studies
• Fatal flaw, due diligence, and Independent Engineer reviews for equity and project financings
• Financial and technical-economic modelling, analysis, budgeting, and forecasting
• Property and project valuations
• Capital cost estimates and reviews
• Mine strategy reviews
• Options analysis and project evaluations in connection with mergers and acquisitions
4. I have read the definition of "qualified person" set out in National Instrument 43-101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101.
5. I visited the Roca Honda Project on October 19, 2021, and the White Mesa Mill on November 11, 2021.
6. I am responsible for Sections 1.2, 1.3.11, 1.3.13, 19, 21, 22, and 30, and contributions to Section 27 of the Technical Report.
7. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43-101.
8. I have had no prior involvement with the property that is the subject of the Technical Report.
9. I have read NI 43-101, and the Technical Report has been prepared in compliance with NI 43-101 and Form 43-101F1.
10. At the effective date of the Technical Report, to the best of my knowledge, information, and belief, Sections 1.2, 1.3.11, 1.3.13, 19, 21, 22, and 30 of the Technical Report for which I am responsible contain all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
Dated this 22nd day of February, 2022
(Signed & Sealed) Grant A. Malensek
Grant A. Malensek, M.Eng., P.Eng.
29.2 Mark B. Mathisen
I, Mark B. Mathisen, C.P.G., as an author of this report entitled "Technical Report on the Roca Honda Project, McKinley County, New Mexico, USA" with an effective date of December 31, 2021 (the Technical Report), prepared for Energy Fuels, Inc., do hereby certify that:
1. I am Principal Geologist with SLR International Corporation, of Suite 100, 1658 Cole Boulevard, Lakewood, CO, USA 80401.
2. I am a graduate of Colorado School of Mines in 1984 with a B.Sc. degree in Geophysical Engineering.
3. I am a Registered Professional Geologist in the State of Wyoming (No. PG-2821), a Certified Professional Geologist with the American Institute of Professional Geologists (No. CPG-11648), and a Registered Member of SME (RM #04156896). I have worked as a geologist for a total of 23 years since my graduation. My relevant experience for the purpose of the Technical Report is:
• Mineral Resource estimation and preparation of NI 43-101 Technical Reports.
• Director, Project Resources, with Denison Mines Corp., responsible for resource evaluation and reporting for uranium projects in the USA, Canada, Africa, and Mongolia.
• Project Geologist with Energy Fuels Nuclear, Inc., responsible for planning and direction of field activities and project development for an in situ leach uranium project in the USA. Cost analysis software development.
• Design and direction of geophysical programs for US and international base metal and gold exploration joint venture programs.
4. I have read the definition of "qualified person" set out in National Instrument 43-101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101.
5. I visited the Roca Honda Project on October 19, 2021.
6. I am responsible for Sections 1.1.1.1, 1.1.2.1, 1.3.1, 1.3.2, 1.3.4 to 1.3.8, 2, 3, 4.1, 4.2, 4.4, 4.5, 5.1 to 5.6, 6 to 12, 14, 15, 23, 24, 25.1, and 26.1, and contributions to Section 27 of the Technical Report.
7. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43-101.
8. I have had no prior involvement with the property that is the subject of the Technical Report.
9. I have read NI 43-101, and the Technical Report has been prepared in compliance with NI 43-101 and Form 43-101F1.
10. At the effective date of the Technical Report, to the best of my knowledge, information, and belief, Sections 1.1.1.1, 1.1.2.1, 1.3.1, 1.3.2, 1.3.4 to 1.3.8, 2, 3, 4.1, 4.2, 4.4 to 4.5, 5.1 to 5.6, 6 to 12, 14, 15, 23, 24, 25.1, and 26.1 of the Technical Report for which I am responsible contain all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
Dated this 22nd day of February 2022
(Signed & Sealed) Mark B. Mathisen
Mark B. Mathisen, C.P.G.
29.3 David M. Robson
I, David M. Robson, MBA, P.Eng., as an author of this report entitled "Technical Report on the Roca Honda Project, McKinley County, New Mexico, USA" with an effective date of December 31, 2021, prepared for Energy Fuels Inc., do hereby certify that:
1. I am Consultant Mining Engineer with SLR Consulting (Canada) Ltd, of Suite 501, 55 University Ave., Toronto, ON M5J 2H7.
2. I am a graduate of Queen's University in 2005 with a B.Sc. (Honours) in Mining Engineering and Schulich School of Business, York University, in 2014 with an MBA degree.
3. I am registered as a Professional Engineer in the Province of Saskatchewan (Reg. #13601). I have worked as a mining engineer for 14 years since my graduation. My relevant experience for the purpose of the Technical Report is:
• Review and report as a consultant on mining operations and projects around the world for due diligence and regulatory requirements
• Mine design and scheduling at uranium, industrial minerals, and base metal operations in Canada and Europe.
• Financial analysis, cost estimation, and budgeting.
• Experienced user of Vulcan, VentSim, AutoCAD, and Deswik.
4. I have read the definition of "qualified person" set out in National Instrument 43-101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101.
5. I have not visited the Roca Honda Project.
6. I am responsible for the preparation of Sections 1.1.1.2, 1.1.2.2, 1.3.9, 16.1 to 16.5, 16.7 to 16.10, 25.2, and 26.2, and contributions to Section 27 of the Technical Report.
7. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43-101.
8. I have had no prior involvement with the property that is the subject of the Technical Report.
9. I have read NI 43-101, and the Technical Report has been prepared in compliance with NI 43-101 and Form 43-101F1.
10. At the effective date of the Technical Report, to the best of my knowledge, information, and belief, Sections 1.1.1.2, 1.1.2.2, 1.3.9, 16.1 to 16.5, 16.7 to 16.10, 25.2, and 26.2 of the Technical Report for which I am responsible contain all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
Dated this 22nd day of February, 2022.
(Signed & Sealed) David M. Robson
David M. Robson, MBA, P.Eng.
29.4 Jeffrey L. Woods
I, Jeffrey L. Woods, MMSA QP, as an author of this report entitled "Technical Report on the Roca Honda Project, McKinley County, New Mexico, USA" with an effective date of December 31, 2021, prepared for Energy Fuels Inc., do hereby certify that:
1. I am Principal Consulting Metallurgist with Woods Process Services, of 1112 Fuggles Drive, Sparks, Nevada 89441
2. I am a graduate of Mackay School of Mines, University of Nevada, Reno, Nevada, U.S.A., in 1988 with a B.S. degree in Metallurgical Engineering.
3. I am a member in good standing of Society for Mining, Metallurgy and Exploration, membership #4018591. I have practiced my profession continuously for 34 years since graduation. My relevant experience for the purpose of the Technical Report is:
• Review and report as a consultant on numerous exploration, development, and production mining projects around the world for due diligence and regulatory requirements
• Metallurgical engineering, test work review and development, process operations and metallurgical process analyses, involving copper, gold, silver, nickel, cobalt, uranium, and base metals located in the United States, Canada, Mexico, Honduras, Nicaragua, Chile, Turkey, Cameroon, Peru, Argentina, and Colombia
• Senior Process Engineer for a number of mining-related companies
• Manager and Business Development for a small, privately owned metallurgical testing laboratory in Plano, Texas, USA
• Vice President Process Engineering for at a large copper mining company in Sonora, Mexico
• Global Director Metallurgy and Processing Engineering for a mid-tier international mining company
4. I have read the definition of "qualified person" set out in National Instrument 43-101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101.
1. I visited White Mesa Mill on November 11, 2021.
2. I am responsible for Sections 1.1.1.4, 1.1.1.5, 1.1.2.4, 1.3.3, 1.3.10, 5.5, 13, 17, 18.1 to 18.8, 18.9.1, 18.10, 18.11, 25.4, 25.5, and 26.4, contributions to Section 27 of the Technical Report.
3. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43-101.
4. I have had prior involvement with the property that is the subject of the Technical Report. This involvement includes authoring previous technical reports as a QP
5. I have read NI 43-101, and the Technical Report has been prepared in compliance with NI 43-101 and Form 43-101F1.
6. At the effective date of the Technical Report, to the best of my knowledge, information, and belief, Sections 1.1.1.4, 1.1.1.5, 1.1.2.4, 1.3.3, 1.3.10, 5.5, 13, 17, 18.1 to 18.8, 18.9.1, 18.10, 18.11, 25.4, 25.5, and 26.4 of the Technical Report for which I am responsible contain all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
Dated 22nd day February, 2022.
(Signed & Sealed) Jeffrey L. Woods
Jeffrey L. Woods, MMSA QP
29.5 Phillip E. Brown
I, Phillip E. Brown, C.P.G., R.P.G., as an author of this report entitled "Technical Report on the Roca Honda Project, McKinley County, New Mexico, USA" with an effective date of December 31, 2021, prepared for Energy Fuels Inc., do hereby certify that:
1. I am Principal Consulting Hydrogeologist with Consultants in Hydrogeology, of 26241 Wolverine Trail, Evergreen, Colorado 80439.
2. I am a graduate of Virginia Tech in 1972 with a B.S. Geology and M.S. in Civil Engineering.
3. I am registered as a Certified Professional Geologist Reg# CPG-6209 and as Professional Engineer/Geologist in the State of Alaska Reg#560. I have worked as a mining hydrogeologist for a total of 45 years since my graduation. My relevant experience for the purpose of the Technical Report is:
• Review Consultant on the Jackpile Uranium Mine.
• Performed a hydrogeologic investigation for Power Tech's Centennial In-situ Uranium Project in Weld County, Colorado.
• Former Senior Hydrogeologist for Peabody Coal Company.
• Performed numerous hydrogeologic evaluations dewatering studies on mines throughout the Western United States and the World. Mines have included Nevada Copper's, Pumpkin Hollow Mine in Nevada, B2 Gold, Santa Pancha Mine, Nicaragua, New Market Gold's Cosmo Howley Gold Mine in the Northern Territory, Australia, Entrée Gold's Ann Mason Copper Project in Nevada, improved underground dewatering system at the Palmarejo Gold Mine in Chihuahua, Mexico and numerous others.
4. I have read the definition of "qualified person" set out in National Instrument 43-101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101.
5. I am responsible for Sections 1.1.1.3, 1.1.2.3, 16.6, 25.3, and 26.3, and contributions to Section 27, of the Technical Report.
6. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43-101.
7. I have had no prior involvement with the property that is the subject of the Technical Report.
8. I have read NI 43-101, and the Technical Report has been prepared in compliance with NI 43-101 and Form 43-101F1.
9. At the effective date of the Technical Report, to the best of my knowledge, information, and belief, Sections 1.1.1.3, 1.1.2.3, 16.6, 25.3, and 26.3 of the Technical Report for which I am responsible contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
Dated 22nd day of February, 2022
(Signed & Sealed) Phillip E. Brown
Phillip E. Brown, C.P.G., R.P.G.
29.6 Daniel D. Kapostasy
I, Daniel D. Kapostasy, P.G., as an author of this report entitled "Technical Report on the Roca Honda Project, McKinley County, New Mexico, USA" with an effective date of December 31, 2021, prepared for Energy Fuels Inc., do hereby certify that:
1. I am currently employed as the Director of Technical Services with Energy Fuels Resources (USA) Inc., 225 Union Blvd. Suite 600, Lakewood, Colorado, 80228.
2. I graduated with a Bachelor of Sciences degree in Geology in May 2003 from the University of Dayton in Dayton, Ohio.
3. I graduated with a Master of Science Degree in December 2005 from The Ohio State University in Columbus, Ohio.
4. I am a Registered Professional Geologist in the State of Wyoming (PG-3778), a Registered Professional Geologist in the State of Utah (10110615-2250), and a Registered Member of SME (RM#04172231). I have worked as a geologist for a total of 16 years since my graduation. My relevant experience for the purpose of this Technical Report is:
• Senior Geologist, Chief Geologist, Manager of Technical Resources, and Director of Technical Resources with Energy Fuels Resources (USA) Inc. since 2013, working on all aspects of developing their uranium assets, including resource evaluation and estimation, drill hole planning, underground mine geology, permitting, and economic evaluation.
• Directly involved with compliance issues at the White Mesa Mill, including water well drilling and installation, core/chip sampling, and tailings cell dewatering monitoring.
• Geologist and Senior Geologist with Strathmore Resources between 2008 and 2013 working on drill programs, resource evaluation and permitting the Roca Honda uranium project and Pena Ranch uranium mill.
• Geologist with Apogen Resources between 2006 and 2013, working as a consultant geologist on the Roca Honda uranium project.
5. I have read the definition of "qualified person" set out in National Instrument 43-101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101.
6. As I am currently employed by Energy Fuels (USA) Inc. I do not meet the definition of being independent of the issuer as described in section 1.5 of NI 43-101.
7. I visited the Roca Honda Project on October 19, 2021, and the White Mesa Mill on September 16 and 17, 2021.
8. I am responsible for Sections 1.1.1.6, 1.3.12, 4.3, 18.9.2, 20 (all), and 25.6 of this Technical Report
9. I have read NI 43-101, and the Technical Report has been prepared in compliance with NI 43-101 and Form 43-101F1.
10. At the effective date of the Technical Report, to the best of my knowledge, information, and belief, Sections 1.1.1.6, 1.3.12, 4.3, 18.9.2, 20, and 25.6 of the Technical Report for which I am responsible contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
Dated 22nd day of February, 2022
(Signed & Sealed) Daniel D. Kapostasy
Daniel D. Kapostasy, SME Registered Member
30.0 APPENDIX 1
Table 30-1: Base Case Annual Cash Flow Model
Energy Fuels Inc. - Roca Honda Project
Table 30-2: Alternate Case Annual Cash Flow Model
Energy Fuels Inc. - Roca Honda Project
Preliminary Feasibility Study for the Sheep
Mountain Project, Fremont County, Wyoming,
USA
US SEC Subpart 1300 Regulation S-K Compliant Report
National Instrument 43-101-Standards of Disclosure for Mineral Projects
Prepared by the following Qualified Persons:
Dan Kapostasy, P.G, SME R.M
Douglas Beahm, PE, PG SME R.M.
Terence P. McNulty, PE, PHD
Effective Date: December 31, 2021
Date and Signature Page
Energy Fuels Personnel:
Dan Kapostasy, P.G, SME R.M
The Technical Report titled "Preliminary Feasibility Study for the Sheep Mountain Project, Fremont County, Wyoming, USA" has an effective date of December 31, 2021. I am a co-author of the report.
Dated this January 19, 2022
"Original signed and sealed"
/s/ Dan Kapostasy
Dan Kapostasy, P.G, SME R.M
Third Party Consultants:
Douglas L. Beahm:
The Technical Report titled "Preliminary Feasibility Study for the Sheep Mountain Project, Fremont County, Wyoming, USA" has an effective date of December 31, 2021. I am a co-author of the report.
Dated this January 19, 2022
"Original signed and sealed"
/s/ Douglas L. Beahm
Douglas L. Beahm, PE, PG, SME Registered Member
Dr. Terence P. McNulty:
The Technical Report titled "Preliminary Feasibility Study for the Sheep Mountain Project, Fremont County, Wyoming, USA" has an effective date of December 31, 2021. I am a co-author of the report.
Dated this January 19, 2022
"Original signed and sealed"
/s/ Terence P. McNulty
Terence P. McNulty, D. Sc., P. E., SME Registered Member
TOC i |
December 31, 2021 |
Contents
1.0 EXECUTIVE SUMMARY | 1 |
1.1 Project Overview | 1 |
1.2 Project Description and Ownership | 2 |
1.3 Development Status | 4 |
1.4 Regulatory Status | 4 |
1.5 Geology and Mineralization | 4 |
1.6 Exploration and Drilling Status | 5 |
1.7 Mineral Resources and Reserves | 5 |
1.8 Capital and Operating Costs | 6 |
1.9 Economic Analysis | 8 |
1.10 Interpretations and Conclusions | 8 |
1.11 Recommendations | 9 |
1.12 Risks | 9 |
2.0 INTRODUCTION | 11 |
2.1 Introduction | 11 |
2.2 Registrant of Filing | 12 |
2.3 Terms of Reference | 12 |
2.4 Sources of Information | 12 |
2.5 Site Visit | 13 |
2.6 Purpose of Report | 13 |
2.7 Update of a Previously Filed Technical Report | 13 |
2.8 Effective Date | 13 |
2.9 List of Abbreviations | 13 |
3.0 RELIANCE ON OTHER EXPERTS | 15 |
4.0 PROPERTY DESCRIPTION AND LOCATION | 16 |
4.1 Introduction | 16 |
4.2 Land Tenure | 16 |
4.3 Royalties | 17 |
4.4 Permits | 20 |
4.5 Surface Rights | 21 |
4.6 Taxes | 21 |
4.7 Encumbrances and Risks | 21 |
5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY | 22 |
5.1 Introduction | 22 |
5.2 Physiography | 22 |
5.2.1 Topography and Elevation | 22 |
5.2.2 Vegetation | 22 |
5.2.3 Climate | 22 |
5.3 Access | 23 |
5.4 Infrastructure | 23 |
5.5 Personnel | 23 |
6.0 HISTORY | 24 |
6.1 Introduction | 24 |
6.2 Ownership History | 24 |
TOC ii |
December 31, 2021 |
6.3 Historical Resource Estimates | 24 |
6.4 Historical Production | 25 |
7.0 GEOLOGICAL SETTING AND MINERALIZATION | 26 |
7.1 Regional Geology | 26 |
7.2 Local and Property Geology | 26 |
7.2.1 Quaternary Alluvium and Colluvium | 26 |
7.2.2 Crooks Gap Conglomerate | 26 |
7.2.3 Tertiary Battle Spring Formation | 29 |
7.2.4 Tertiary Fort Union Formation | 29 |
7.2.5 Cretaceous Cody Shale | 29 |
7.2.6 Structural Geology | 29 |
7.3 Hydrogeology | 29 |
7.4 Geotechnical | 30 |
8.0 DEPOSIT TYPES | 31 |
8.1 Mineralization and Deposit Types | 31 |
9.0 EXPLORATION | 33 |
10.0 DRILLING | 34 |
10.1 Drilling | 34 |
10.1.1 Pre-1988 Drilling | 34 |
10.1.2 Titan Drill Program | 34 |
11.0 SAMPLE PREPARATION, ANALYSIS, AND SECURITY | 37 |
11.1 Introduction | 37 |
11.2 Gamma Logging | 37 |
11.2.1 Disequilibrium | 38 |
11.3 Core Sampling | 38 |
11.3.1 Sample Preparation | 38 |
11.3.2 Assaying and Analytical Procedure | 38 |
11.3.3 Density Analyses | 39 |
11.4 Opinion of Author | 39 |
12.0 DATA VERIFICATION | 40 |
12.1 Congo | 40 |
12.2 Sheep Underground | 40 |
12.3 Radiometric Equilibrium | 41 |
12.4 Opinions of Author | 43 |
13.0 MINERAL PROCESSING AND METALLURGICAL TESTING | 44 |
13.1 Historic Mineral Processing | 44 |
13.2 Pre-Feasibility Metallurgical Studies | 44 |
13.3 Column Leach Studies | 45 |
13.4 Supplemental Laboratory Experiments | 46 |
13.5 Current Metallurgical Background and Industry Practice: | 47 |
13.6 Opinion of Author | 48 |
14.0 MINERAL RESOURCE ESTIMATES | 49 |
14.1 General Statement | 49 |
14.2 Drill Hole Database | 50 |
14.2.1 Congo Open Pit | 50 |
14.2.2 Sheep Underground | 52 |
TOC iii |
December 31, 2021 |
14.3 Statistical Analysis | 54 |
14.3.1 Grade Capping | 54 |
14.4 Resource Estimation Methods | 56 |
14.4.1 Geologic Model | 56 |
14.4.2 GT Contour Method | 56 |
14.5 Past Production | 93 |
14.5.1 Congo Open Pit Mine | 93 |
14.5.2 Sheep Underground Mine | 93 |
14.6 Classification | 93 |
15.0 MINERAL RESERVE ESTIMATE | 95 |
15.1 General Statement | 95 |
15.2 Congo Pit Conversion of Resources to Reserves | 95 |
15.3 Sheep Underground Conversion of Resources to Reserves | 95 |
15.4 Cut-off Grade | 96 |
15.4.1 Mining and Mineral Processing Recovery Parameters and Sensitivity | 96 |
16.0 MINING METHODS | 98 |
16.1 Introduction | 98 |
16.2 Mine Productivity and Scheduling | 98 |
16.3 Congo Open Pit | 98 |
16.4 Sheep Underground | 115 |
17.0 RECOVERY METHODS | 130 |
17.1 Introduction | 130 |
17.2 Site Layout and Construction | 132 |
18.0 INFRASTRUCTURE | 138 |
18.1 Introduction | 138 |
18.2 Rights of Way | 138 |
18.3 Power and Utilities | 138 |
18.4 Process Water | 138 |
18.5 Site Access | 138 |
18.6 Mine Support Facilities | 138 |
18.7 Public Safety and Facility Maintenance | 138 |
19.0 MARKET STUDIES | 141 |
19.1 Uranium Market and Price | 141 |
20.0 ENVIRONMENTAL STUDIES, PERMITTING, AND PLANS, NEGOTIATIONS, OR AGREEMENTS WITH LOCAL INDIVIDUALS OR GROUPS | 143 |
20.1 Introduction | 143 |
20.1 Environmental Studies | 143 |
20.2 Land Use | 144 |
20.3 Cultural Resource Surveys | 144 |
20.4 Meteorology and Air Monitoring | 144 |
20.5 Geology | 144 |
20.6 Hydrology | 144 |
20.7 Soils and Vegetation | 146 |
20.8 Wildlife | 146 |
20.9 Radiology | 146 |
20.10 Operating Plans | 146 |
20.11 Permitting Requirements | 146 |
TOC iv |
December 31, 2021 |
20.11.1 Fremont County | 146 |
20.11.2 Wyoming Land Quality Division | 146 |
20.11.3 Wyoming Air Quality Division | 146 |
20.11.4 Wyoming Water Quality Division | 146 |
20.11.5 Wyoming State Engineers Office | 146 |
20.11.6 U.S. Bureau of Land Management | 146 |
20.11.7 U.S. Nuclear Regulatory Commission (Wyoming Agreement State) | 146 |
20.11.8 U.S. Environmental Protection Agency | 147 |
20.12 Social and Community Relations | 147 |
20.13 Closure and Reclamation Plans | 147 |
20.13.1 Congo Pit and Sheep Underground | 147 |
20.13.2 Heap Leach and Processing Plant | 148 |
20.14 Opinion of Author | 148 |
21.0 CAPITAL AND OPERATING COSTS | 149 |
21.1 Introduction | 149 |
21.2 Cost Assumptions | 149 |
21.3 Production Profile | 150 |
21.4 Capital Costs | 152 |
21.5 Operating Costs | 152 |
21.6 Reclamation and Closure Costs | 153 |
21.7 Additional Costs | 153 |
21.8 Personnel | 155 |
22.0 ECONOMIC ANALYSIS | 156 |
22.1 Sensitivity to Price | 156 |
22.2 Sensitivity to Other Factors | 157 |
22.3 Payback Period | 157 |
22.4 Breakeven Price | 157 |
22.5 Cash Flow | 157 |
23.0 ADJACENT PROPERTIES | 160 |
24.0 OTHER RELEVANT DATA AND INFORMATION | 161 |
24.1 Ground Water Conditions | 161 |
25.0 INTERPRETATION AND CONCLUSIONS | 162 |
26.0 RECOMMENDATIONS | 163 |
27.0 REFERENCES | 164 |
28.0 CERTIFICATE OF AUTHORS | 166 |
TOC v |
December 31, 2021 |
Tables
Table 1-1 Sheep Mountain Mineral Resources Inclusive of Mineral Reserves - April 9, 2019 | 5 |
Table 1-2 Sheep Mountain Mineral Reserves - April 13, 2012 | 6 |
Table 1-3 Sheep Mountain Mineral Resources Exclusive of Mineral Reserves - April 9, 2019 | 6 |
Table 1-4 Sheep Mountain Capital Costs | 6 |
Table 1-5 Sheep Mountain Operating Costs | 7 |
Table 1-6 Sheep Mountain Recommended Work Program | 9 |
Table 2-1 List of Abbreviations | 14 |
Table 4-1. List of Claims held by EFR | 16 |
Table 5-1 Jeffrey City, Wyoming, Monthly Climate Summary1 | 22 |
Table 12-1 Comparison of 2009 Drilling to Historic Drilling | 40 |
Table 12-2 Comparison of Radiometric Equilibrium based on Gamma and USAT Logging | 42 |
Table 13-1 Summary of Column Leach Results | 46 |
Table 14-1 Sheep Mountain Mineral Resources Inclusive of Mineral Reserves - April 9, 2019 | 50 |
Table 14-2 Sheep Mountain Mineral Resources Exclusive of Mineral Reserves - April 9, 2019 | 50 |
Table 14-3. Congo Pit Area General Statistics (Raw Data) | 52 |
Table 14-4. Congo Pit Area General Statistics (Composited Data) | 53 |
Table 14-5 Congo Pit Area Statistics by Mineralized Zone | 53 |
Table 14-6 Sheep Underground Area General Statistics (1 of 2) | 54 |
Table 14-7 Sheep Underground Area General Statistics (2 of 2) | 54 |
Table 14-8 Sheep Underground Area Statistics by Mineralized Zone | 54 |
Table 15-1 Sheep Mountain Mineral Reserves- April 13, 2012 | 95 |
Table 15-2 Breakeven Cut-off Grade | 96 |
Table 16-1 Open Pit Mining Equipment List | 115 |
Table 16-2 Underground Mining Equipment List | 128 |
Table 21-1 Underground and Open pit Production Profile | 151 |
Table 21-2 Sheep Mountain Capital Cost Summary | 152 |
Table 21-3 Sheep Mountain Operating Costs** | 154 |
Table 22-1 Sheep Mountain Internal Rate of Return and Net Present Value | 156 |
Table 22-2 Pre-tax Sensitivity Summary | 156 |
Table 22-3 Pre-tax Sensitivity Summary | 157 |
Table 22-4 Cash Flow | 158 |
Table 22-5 Cash Flow (Continued) | 159 |
Table 26-1 Recommended Work Program | 163 |
TOC vi |
December 31, 2021 |
Figures
Figure 1-1 Sheep Mountain Existing Conditions | 3 |
Figure 4-1. Sheep Mountain Location Map | 18 |
Figure 4-2. Sheep Mountain Land Tenure Map | 19 |
Figure 7-1. Stratigraphy of the Crooks Gap Area (modified from Stephens, 1964) | 27 |
Figure 7-2. Geologic Map of the Sheep Mountain Area | 28 |
Figure 7-3. Geologic Cross-Section (See Figure 7-2 for Location) | 29 |
Figure 8-1 Uranium Roll Front in Golden Goose Mine | 31 |
Figure 8-2 Little Sheep Decline | 32 |
Figure 10-1. Drill Hole Location Map | 36 |
Figure 14-1. GT Histogram for Congo Pit (12,070 Samples) | 52 |
Figure 14-2. GT Histogram for Sheep Underground (3,222 Samples) | 55 |
Figure 14-3. Congo Pit GT Contours - Sand 94 | 58 |
Figure 14-4. Congo Pit GT Contours - Sand 89 | 59 |
Figure 14-5. Congo Pit GT Contours - Sand 86 | 60 |
Figure 14-6. Congo Pit GT Contours - Sand 83 | 61 |
Figure 14-7. Congo Pit GT Contours - Sand 79 | 62 |
Figure 14-8. Congo Pit GT Contours - Sand 75 | 63 |
Figure 14-9. Congo Pit GT Contours - Sand 72 | 64 |
Figure 14-10. Congo Pit GT Contours - Sand 67 | 65 |
Figure 14-11. Congo Pit GT Contours - Sand 66 | 66 |
Figure 14-12. Congo Pit GT Contours - Sand 63 | 67 |
Figure 14-13. Congo Pit GT Contours - Sand 59 | 68 |
Figure 14-14. Congo Pit GT Contours - Sand 54-56 | 69 |
Figure 14-15. Congo Pit GT Contours - Sand 52 | 70 |
Figure 14-16. Congo Pit GT Contours - Sand 48 | 71 |
Figure 14-17. Congo Pit GT Contours - Sand 4 | 72 |
Figure 14-18. Congo Pit GT Contours - Sand 41 | 73 |
Figure 14-19. Congo Pit GT Contours - Sand 41A | 74 |
Figure 14-20. Sheep Underground GT Contours - Zone 01 | 76 |
Figure 14-21. Sheep Underground GT Contours - Zone 02U | 77 |
Figure 14-22. Sheep Underground GT Contours - Zone 02L | 78 |
Figure 14-23. Sheep Underground GT Contours - Zone 03 | 79 |
Figure 14-24. Sheep Underground GT Contours - Zone 04 | 80 |
Figure 14-25. Sheep Underground GT Contours - Zone 05 | 81 |
Figure 14-26. Sheep Underground GT Contours - Zone 06 | 82 |
Figure 14-27. Sheep Underground GT Contours - Zone 07 | 83 |
Figure 14-28. Sheep Underground GT Contours - Zone 08 | 84 |
Figure 14-29. Sheep Underground GT Contours - Zone 09 | 85 |
Figure 14-30. Sheep Underground GT Contours - Zone 10 | 86 |
Figure 14-31. Sheep Underground GT Contours - Zone 11 | 87 |
Figure 14-32. Sheep Underground GT Contours - Zone 12 | 88 |
Figure 14-33. Sheep Underground GT Contours - Zone 13 | 89 |
Figure 14-34. Sheep Underground GT Contours - Zone 14 | 90 |
TOC vii |
December 31, 2021 |
TOC viii |
December 31, 2021 |
1.0 EXECUTIVE SUMMARY
This Technical Report has been prepared for Energy Fuels Inc. (Energy Fuels), the parent company of Energy Fuels Resources (USA) Inc. (EFR) by Dan Kapostasy, Douglas Beahm and Dr. Terry McNulty (collectively, the authors), on the Sheep Mountain Project (the Project), located in Fremont County, Wyoming, USA. and is based on a 2020 Canadian NI 43-101 compliant preliminary feasibility report by independent mining consultant Douglas Beahm, PE, Principal Engineer for BRS Engineering (BRS).
Mr. Kapostasy is the Director of Technical Services of Energy Fuels Resources (USA) Inc. ("EFR"), while Mr. Beahm is an independent consultant and Principal Engineer of BRS and Dr. McNulty is President of T.P. McNulty and Associates Inc. This report is a technical report summary and preliminary feasibility study that conforms to the US Securities and Exchange Commission (SEC) Regulation S-K subpart 1300 disclosure requirements and policies for mining properties (S-K 1300) and a technical report and preliminary feasibility study that meets the requirements of the Canadian Securities Administrators National Instrument 43-101 -Standards of Disclosure for Mineral Projects ("NI 43-101") and the Canadian Institute of Mining (CIM) Best Practice Guidelines for the Estimation of Mineral Resources and Mineral Reserves ("CIM Standards").
EFR's parent company, Energy Fuels, is incorporated in Ontario, Canada and is a wholly US-based uranium and vanadium mining company with projects located in Colorado, Utah, Arizona, Wyoming, Texas and New Mexico. EFR acts as the operator to this project, including the White Mesa Mill in Blanding Utah, the only conventional uranium mill operating in the U.S. today with a licensed capacity of over eight million pounds of U3O8 per year. Energy Fuels is listed on the NYSE American Stock Exchange (symbol UUUU), and the Toronto Stock Exchange (symbol EFR).
In February 2012, EFR and Titan Uranium Inc. ("TUI") announced that a Certificate of Arrangement giving effect to the Plan of Arrangement between the two companies was entered into on February 29, 2012, whereby EFR acquired TUI, thereby making its subsidiary, Titan Uranium USA Inc. ("Titan) a wholly owned subsidiary of Energy Fuels which is now named Energy Fuels Wyoming Inc.
1.1 Project Overview
The Sheep Mountain Project includes the Congo Pit, a proposed open pit development, and the re-opening of the existing Sheep Underground mine. While several processing alternatives have been considered, the recommended uranium recovery utilizes the processing of mined materials via an on-site heap leach facility. Figure 1.1 shows the overall project layout.
Permitting and licensing of the project is well advanced. A Plan of Operations ("POO") was approved by the Bureau of Land Management ("BLM") on January 6, 2017, through issuance of a Record of Decision ("RoD") and supporting Final Environmental Impact Statement ("FEIS"). In addition, a Major Revision to Mine Permit 381C was approved by the Wyoming Department of Environmental Quality, Land Quality Division ("WDEQ/LQD") on July 8, 2015 and remains in good standing. Other major permits that have been approved include an Air Quality Permit that was approved by the WDEQ, Air Quality Division ("AQD") on July 6, 2015, and a Water Discharge Permit that was approved by WDEQ, Water Quality Division ("WQD") on October 5, 2015.
Mining methods include a combination of underground and open pit methods. Mined product from the underground and open pit mine operations will be commingled at the stockpile site located near the underground portal in close proximity to the pit. At the stockpile the mine product will be sized, if needed, blended, and then conveyed via a covered overland conveyor system to the heap leach pad where it will be stacked on a double lined pad for leaching. The primary lixiviant will be sulfuric acid. Concentrated leach solution will be collected by gravity in a triple-lined collection pond and then transferred to the mineral processing facility for extraction and drying. The final product produced will be a uranium oxide, commonly referred to as "yellowcake."
The current open pit life of mine plan is 12 years, with an additional four years allotted for mine closure and reclamation. Similarly, the underground life of mine is planned for 12 years including one year for development of the primary decline. The heap leach facility is designed to accommodate the mined material from both open pit and underground mine operations over an operating life compatible with the open pit operations.
Estimated production rates vary from a low of 270,000 tons processed with approximately 640,000 pounds of uranium produced per year during the start of operations of the open pit and heap leach, to a high of 780,000 tons per year processed with approximately 2,000,000 pounds of uranium produced per year at peak production with both the open pit and underground mines in operation. On average the open pit is expected to produce 330,000 tons per year containing 760,000 pounds of uranium. Similarly, the underground is expected to produce an average of 290,000 tons per year containing 770,000 pounds of uranium. Average production from the heap leach and processing facility is estimated to be 1.4 million pounds of uranium recovered per year.
An economic analysis is presented in Section 22.0.
1.2 Project Description and Ownership
The Sheep Mountain Project is located in portions of Sections 15, 16, 17, 20, 21, 22, 27, 28, 29, 32, and 33, Township 28 North, Range 92 West at approximate Latitude 42º 24' North and Longitude 107º 49' West, within the Wyoming Basin physiographic province in the Great Divide Basin at the northern edge of the Great Divide Basin. The project is approximately eight miles south of Jeffrey City, Wyoming (see Figure 4-1. Sheep Mountain Location Map).
The mineral properties at the Sheep Mountain Project are comprised of 218 unpatented mining claims on land administered by the BLM, and approximately 640 acres within a State of Wyoming lease. The combination of the mineral holdings comprises approximately 5,055 acres.
In February 2012, EFR purchased 320 acres of private surface overlaying some of the federal minerals covered by 18 of the claims. The purchased parcel includes the SW¼ Section 28 and SE¼, E½ SW¼, and NW¼ SW¼ Section 29, T28N, R92W. A final payment of $5,000 was made in January 2016 for the purchased parcel. The combination of land holdings gives EFR mineral rights to resources as defined in the Congo Pit and the Sheep Underground areas. After the 2012 Technical Report, EFR increased the Sheep Mountain property size by 26 unpatented mining claims (approximately 520 acres) through the acquisition of Strathmore Resources (US) Ltd. ("Strathmore"). These contiguous claims form a larger buffer, with potential for additional uranium resources, along the west side of the Project.
To maintain these mineral rights, EFR must comply with the lease provisions, including annual payments with respect to the State of Wyoming leases; BLM and Fremont County, as well as Wyoming filing and/or annual payment requirements to maintain the validity of the unpatented mining lode claims as follows. Mining claims are subject to annual filing requirements and payment of a fee of $155 per claim. Unpatented mining claims expire annually but are subject to indefinite annual renewal by filing appropriate documents and paying the fees described above. ML 0-15536 will expire on January 1, 2024. Annual payments to maintain ML 0-15536 are $2,560 per year.
The original claims owned by Western Nuclear in the Sheep Mountain Project are subject to an overall sliding scale royalty of 1% to 4% due to Western Nuclear, based on the Nuclear Exchange Corporation Exchange ("NUEXCO") Value. Claims which were not included in the agreement are not subject to this royalty. Under Wyoming State Lease ML 0-15536, there is a royalty of 5% of the quantity or gross realization value of the U3O8, based on the total arms-length consideration received for uranium products sold.
Uranium mining in Wyoming is subject to both a gross products (County) and mineral severance tax (State). At the Federal level, aggregate corporate profit from mining ventures is taxable at corporate income tax rates, i.e., individual mining projects are not assessed Federal income tax but rather the corporate entity is assessed as a whole. For mineral properties, depletion tax credits are available on a cost or percentage basis, whichever is greater. The percentage depletion tax credit for uranium is 22%, among the highest for mineral commodities (IRS Pub. 535).
Figure 1-1 Sheep Mountain Existing Conditions
1.3 Development Status
This preliminary feasibility study for the project includes the preliminary design and sequencing of the open pit and underground mine operations in addition to the heap leach mineral processing facility. Designs and sequencing include pre-production, production, and decommissioning and reclamation phases. Capital and operating costs estimates ("CAPEX" and "OPEX") have been completed and are in 2021 U.S. dollars.
Telephone, electric and natural gas service has been established to the proposed plant site. In addition, electric service and a waterline have been extended via a Right of Way ("ROW") issued by the BLM in 2011 to the Sheep I and II shafts. Water rights held are adequate for planned operations. Publicly maintained access roads exist to within one mile of the project and private access roads from past operations are established throughout the project area.
1.4 Regulatory Status
The Sheep Mountain Project includes the proposed Congo Open Pit, the re-opening of the existing Sheep Underground Mine and the proposed Heap Leach processing of the mined product to produce yellowcake.
Permitting and licensing of the project is well advanced including:
Baseline environmental studies have been completed for the requisite time frames required and/or recommended by state and federal regulatory guidance.
A Major Revision to Mine Permit 381C has been approved by the WDEQ/LQD.
An Air Quality Permit has been approved by the WDEQ/AQD.
A Water Discharge Permit has been approved by the WDEQ/AQD.
A PoO has been approved by the BLM.
A draft Nuclear Regulatory Commission ("NRC") Source Material License application has been prepared including the Environmental Report ("ER") and Technical Report ("TR").
A pre-application audit with the NRC has been completed and technical comments received.
Wyoming is now an Agreement State and will issue and administer the Source Material License through the Wyoming Department of Environmental Quality (WDEQ).
Previous work and submittals to the NRC will be applicable for submission to WDEQ.
1.5 Geology and Mineralization
Within the Sheep Mountain Project area, uranium mineralization is contained in the lower to middle Eocene Battle Spring Formation. The Battle Spring Formation, consisting of upper and lower members (designated the "A" for the lower and "B" for the upper), is a fluvial deposit. Mineralization is hosted by the Battle Spring Formation and has been described extensively since the 1960s and has been termed a "Wyoming Roll Front System." These deposits are often organic-rich, fine-grained lenses in tabular, or "roll front," configurations. The uranium mineralization occurs primarily in the lower member of the Battle Spring Formation (Stephens, 1964).
1.6 Exploration and Drilling Status
While mineralization was originally discovered by aerial and ground radiometric surveys completed in the early 1950s, exploration since that time has been dominantly by drilling. Drill data from approximately 4,000 drill holes were utilized in this study. EFR has the original geophysical and lithologic logs for the majority of the drill holes. This data was reviewed, reinterpreted and verified. In addition, 159 new drill holes have been completed on the project since 2005 to confirm and extend known mineralization and to delineate areas for mine planning.
Mineral Resource and Reserve estimates for the Sheep Mountain Project are based on radiometric data. Disequilibrium conditions were evaluated during drilling programs in 2006 and 2009 including the testing of 223 discrete samples taken in 2006 and the testing of 45 mineralized intervals in 2009. As discussed in this report, available data indicates that variations in radiometric equilibrium are local in their effect, which impacts the mining grade control program but does not appreciably affect the overall Mineral Resources or Reserves. Overall, a slight enrichment in uranium values with respect to radiometric equivalent values was noted.
1.7 Mineral Resources and Reserves
Based on the drill density, the apparent continuity of the mineralization along trends, geologic correlation and modeling of the deposit, a review of historic mining with respect to current resource projections, and verification drilling, the Mineral Resource estimate herein meets NI 43-101 and S-K 1300 criteria as an Indicated Mineral Resource. . Detailed information relative to Mineral Resources is provided in Section 14.0 of this report.
A summary of total Mineral Resources inclusive of Mineral reserves is provided in Table 1-1. A summary of the total Mineral Reserve estimate, fully exclusive and are not additive to the total Mineral Resources, is provided in Table 1.2. A summary of total Mineral Resources exclusive of Mineral reserves is provided in Table 1-3.
Table 1-1 Sheep Mountain Mineral Resources Inclusive of Mineral Reserves - April 9, 2019
Classification |
Zone |
G.T. |
Tons |
Grade % |
Pounds |
Indicated |
Sheep Underground |
0.30 |
5,546 |
0.118% |
13,034 |
Indicated |
Congo Pit Area |
0.10 |
6,116 |
0.122% |
14,903 |
Total Indicated |
|
11,663 |
0.120% |
27,935 |
Notes:
1: NI 43-101 and S-K 1300 definitions were followed for Mineral Resources
2: Mineral Resource are estimated at GT cut-off of 0.10 (2 ft. of 0.05% eU3O8) for open pit and 0.30 (6 ft. of 0.05% eU3O8) for underground
3: Mineral Resources are estimated using a long-term Uranium price of US$65 per pound
4: Bulk density is 0.0625 tons/ft3 (16 ft3/ton)
5: Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability
6: Numbers may not add due to rounding
Mineral resources that are not Mineral Reserves do not have demonstrated economic viability.
The following Mineral Reserves are fully exclusive and are not additive to the total Mineral Resources, Table 1-1. The Probable Mineral Reserves for the Sheep Mountain Project, including both open pit and underground projected mining areas, is that portion of the indicated mineral resource that is included in current mine designs and is considered economic under current costs and a forward-looking commodity price of $65 per pound of uranium oxide. The Mineral Reserve estimates presented herein have been completed in accordance with NI 43-101 and S-K 1300 standards. A summary of the total Mineral Reserve estimate is provided in Table 1.2.
Detailed information relative to Probable Mineral Reserves is provided in Section 15.0 of this report.
Table 1-2 Sheep Mountain Mineral Reserves - December 31, 2021
Classification |
Zone |
G.T. |
Tons |
Grade % |
Pounds |
Probable |
Sheep Underground |
0.45 |
3,498 |
0.132 |
9,248 |
Probable |
Congo Pit Area |
0.10 |
3,955 |
0.115 |
9,117 |
Total Probable |
|
7,453 |
0.123% |
18,365 |
Notes:
1: NI 43-101 and S-K 1300 definitions were followed for Mineral Reserve
2: Mineral Reserves are estimated at GT cut-off of 0.10 (2 ft. of 0.05% eU3O8) for open pit and 0.45 (6 ft. of 0.075% eU3O8) for underground
3: Mineral Reserves are estimated using a long-term Uranium price of US$60 per pound
4: Bulk density is 0.0625 tons/ft3 (16 ft3/ton)
5: Numbers may not add due to rounding
A summary of total Mineral Resources exclusive of Mineral reserves is provided in Table 1-3.
Table 1-3 Sheep Mountain Mineral Resources Exclusive of Mineral Reserves - April 9, 2019
Classification |
Zone |
G.T. |
Tons |
Grade % |
Pounds |
Indicated |
Sheep Underground |
0.30 |
2,048 |
0.09% |
3,786 |
Indicated |
Congo Pit Area |
0.10 |
2,161 |
0.13% |
5,786 |
Total Indicated |
|
4,210 |
0.11% |
9,570 |
Notes:
1: NI 43-101 and S-K 1300 definitions were followed for Mineral Resources
2: Mineral Resource are estimated at GT cut-off of 0.10 (2 ft. of 0.05% eU3O8) for open pit and 0.30 (6 ft. of 0.05% eU3O8) for underground
3: Mineral Resources are estimated using a long-term Uranium price of US$65 per pound
4: Bulk density is 0.0625 tons/ft3 (16 ft3/ton)
5: Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability
6: Numbers may not add due to rounding
1.8 Capital and Operating Costs
The plan for development of the Sheep Mountain Project is an open pit and underground conventional mine operation with on-site mineral processing featuring an acid heap leach and solvent extraction recovery facility.
Estimated operating and capital costs are summarized in Tables 1-3 and 1-4 that follow.
Table 1-4 Sheep Mountain Capital Costs
Capital Expenditures: * |
Contingency |
Initial Capital* |
Years 4-12 |
Life of Mine |
Permitting (WDEQ) |
----- |
$3,000 |
$1,000 |
$4,000 |
Pre-Development Mine Design |
----- |
$1,200 |
--------- |
$1,200 |
OP Mine Equipment |
15% |
$21,141 |
$3,200 |
$24,341 |
UG Mine Equipment |
15-30% |
$51,504 |
$13,000 |
$64,504 |
Office, Shop, Dry, and support |
15% |
$3,234 |
----- |
$3,234 |
Mineral Processing |
25% |
$32,086 |
$6,461 |
$38,546 |
TOTAL CAPITAL EXPENDITURES |
|
$112,165 |
$23,661 |
$135,826 |
COST PER POUND RECOVERED |
|
|
|
$8.05 |
All costs in 2021 US dollars x 1,000
*Initial Capital includes year 0 to year 3. Does not include working capital and initial warehouse inventory.
Table 1-5 Sheep Mountain Operating Costs
Operating Costs - OPEN PIT AND UNDERGROUND MINING |
Open Pit and UG (US$000s) |
Cost Per Ton Mined (US$) |
Cost Per lb Mined (US$) |
Cost Per lb Recovered (US$) |
||||||||
Open Pit | ||||||||||||
Strip | $ | 80,331 | $ | 20.31 | $ | 8.81 | ||||||
Mining | $ | 18,625 | $ | 4.71 | $ | 2.04 | ||||||
Support | $ | 15,834 | $ | 4.00 | $ | 1.74 | ||||||
Staff | $ | 23,485 | $ | 5.94 | $ | 2.58 | ||||||
Contingency | $ | 11,062 | $ | 2.80 | $ | 1.21 | ||||||
Total Surface Mine (3,955,000 tons, 9,117,000 lbs) | $ | 149,336 | $ | 37.76 | $ | 16.38 | ||||||
Underground Mine | ||||||||||||
Production | $ | 169,217 | $ | 48.38 | $ | 18.30 | ||||||
Development | $ | 53,166 | $ | 15.20 | $ | 5.75 | ||||||
Support | $ | 44,913 | $ | 12.84 | $ | 4.86 | ||||||
Staff | $ | 18,825 | $ | 5.38 | $ | 2.04 | ||||||
Contingency | $ | 22,890 | $ | 6.54 | $ | 2.48 | ||||||
Total Underground Mine (3,498,000 tons, 9,248,000 lbs) |
$ | 309,011 | $ | 88.35 | $ | 33.42 | ||||||
Blended Mining Costs* (7,435,000 tons, 18,365,000 lbs) |
$ | 458,347 | $ | 61.50 | $ | 24.96 | $ | 27.16 | ||||
Reclamation and Closure | ||||||||||||
Wyoming Agreement State Annual Inspection Fees | $ | 1,800 | $ | 0.24 | $ | 0.10 | ||||||
Final Grading and Revegetation | $ | 2,180 | $ | 0.29 | $ | 0.12 | ||||||
Plant Decommissioning and Reclamation | $ | 11,166 | $ | 1.50 | $ | 0.61 | ||||||
Total Reclamation and Closure | $ | 15,146 | $ | 2.03 | $ | 0.83 | $ | 0.91 | ||||
Heap Leach | ||||||||||||
Cost per ton | $ | 143,585 | $ | 19.27 | $ | 7.82 | ||||||
Total Heap Leach | $ | 143,585 | $ | 19.27 | $ | 7.82 | $ | 8.51 | ||||
Reclamation Bond Mine and Heap | $ | 6,120 | $ | 0.82 | $ | 0.33 | $ | 0.36 | ||||
Taxes & Royalties | ||||||||||||
Gross Products tax per/lb | $ | 39,702 | $ | 5.33 | $ | 2.16 | ||||||
Severance Tax per/lb | $ | 21,965 | $ | 2.95 | $ | 1.20 | ||||||
State lease (pit) | $ | 26,966 | $ | 3.62 | $ | 1.47 | ||||||
Claim royalties (UG) | $ | 21,640 | $ | 2.90 | $ | 1.18 | ||||||
Total Taxes and Royalties | $ | 110,273 | $ | 14.80 | $ | 6.00 | $ | 6.53 | ||||
TOTAL DIRECT COSTS | $ | 733,471 | $ | 98.42 | $ | 39.94 | $ | 43.47 | ||||
*Blended mine cost represents the weighted average of open pit and underground mines and include open pit backfill.
Open pit and underground mine costs, itemized separately above, are not additive but are included in the blended mine costs.
**All costs 2021 US dollars x 1,000
1.9 Economic Analysis
The financial evaluation assumes constant U.S. dollars (2021) and an average sales price of US$65.00 per pound of uranium oxide. All costs are forward looking and do not include any previous project expenditures or sunk costs. Table 1-5 provides the Internal Rate of Return ("IRR") for the and the calculated Net Present Value ("NPV") at a range of discount rates before and after federal income tax (US$ x 1,000).
Table 1-6 Sheep Mountain Internal Rate of Return and Net Present Value ($000)
|
Before Federal |
After Federal |
IRR |
28% |
26% |
NPV 5% |
$141,749 |
$120,725 |
NPV 7% |
$116,412 |
$98,492 |
NPV 10% |
$85,627 |
$71,381 |
1.10 Interpretations and Conclusions
The planned development of the Sheep Mountain Project is as an open pit and underground mine operation with an acid heap leach and solvent extraction recovery facility. The open pit and underground mine operations would be concurrent with a mine life of approximately 12 years.
The Sheep Mountain Project is profitable under the base case scenario and US$65 per pound selling price; the project is estimated to generate an IRR of 28% before taxes and has an NPV of approximately US$141.7 million at a 7% discount rate. The breakeven price of $51.00 per pound of uranium oxide for the project is based on the foregoing assumptions and preliminary mine limits. The technical risks related to the project are low as the mining and recovery methods are proven. The mining methods recommended have been employed successfully at the Project in the past. Successful uranium recovery from the mineralized material at Sheep Mountain and similar project such as the Gas Hills has been demonstrated via both conventional milling and heap leach recovery.
Risks are discussed below in Section 1.12.
1.11 Recommendations
As the Sheep Mountain Project (the Project) is sensitive to mining factors including resource recovery, dilution, and grade, and mineral processing factors related to the performance of the heap leach, it is recommended that a bulk sampling program and pilot scale heap leach testing be completed. Mineralization is shallow (less than 40 feet) in the northern portions of the Congo pit. A small test mine could be developed under the existing WDEQ Mine Permit and BLM Plan of Operations. This would allow access to examine and test the mineralization with respect to mining parameters and to collect a bulk sample for pilot scale heap leach testing. It is recommended that a bulk sample of approximately 2,000 tons be collected and transported to Energy Fuels Resources (USA) Inc. White Mesa Mill. At the Mill and under the Mill's Source Materials License, the mineralized material could be stacked at various heights in the range of 15 to 30 feet. The test plots would be lined and could be cribbed on two sides with an open face stacked at the angle of repose. Using 20 x 20-foot pads, four pilot tests could be completed. The testing would determine the geotechnical behavior of the material with respect to consolidation, slope stability, and the leaching characteristics with respect to acid consumption and mineral recovery. Flow and/or percolation rates retained moisture and other characteristics at various stacking heights could also be determined.
Table 1-6 summarizes the recommended work program to further develop the Project.
Table 1-6 Sheep Mountain Recommended Work Program
Scope of Work |
Est. Cost US$ |
Test mine approximately ½ acre, 40,000 cy excavation at $150/cy |
$60,000 |
Testing the mineralization and collection of a bulk sample |
$40,000 |
Transportation of 2,000 tons, 500 miles at $0.17/ton mile |
$170,000 |
Heap pilot testing |
$200,000 |
Reclamation of test pit |
$60,000 |
Revise Preliminary Feasibility Study |
$100,000 |
Total |
$630,000 |
1.12 Risks
The technical risks related to the project are low as the mining and recovery methods are proven. The mining methods recommended have been employed successfully at the project in the past. Successful uranium recovery from the mineralized material at Sheep Mountain and similar project such as the Gas Hills has been demonstrated via both conventional milling and heap leach recovery.
Risks related to permitting and licensing the project are also low as the WDEQ Mine Permit and BLM Plan of Operations have been approved. The only major remaining permit needed for operations is the Source Materials License which would be issued through the WDEQ as Wyoming is an agreement state with the NRC.
The authors are not aware of any other specific risks or uncertainties that might significantly affect the Mineral Resource and Reserve estimates or the consequent economic analysis. Estimation of costs and uranium price for the purposes of the economic analysis over the life of mine is by its nature forward-looking and subject to various risks and uncertainties. No forward-looking statement can be guaranteed, and actual future results may vary materially.
Readers are cautioned that it would be unreasonable to rely on any such forward-looking statements and information as creating any legal rights, and that the statements and information are not guarantees and may involve known and unknown risks and uncertainties, and that actual results are likely to differ (and may differ materially) and objectives and strategies may differ or change from those expressed or implied in the forward-looking statements or information as a result of various factors. Such risks and uncertainties include risks generally encountered in the exploration, development, operation, and closure of mineral properties and processing facilities. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation:
risks associated with mineral reserve and resource estimates, including the risk of errors in assumptions or methodologies;
risks associated with estimating mineral extraction and recovery, forecasting future price levels necessary to support mineral extraction and recovery, and EFR's ability to increase mineral extraction and recovery in response to any increases in commodity prices or other market conditions;
uncertainties and liabilities inherent to conventional mineral extraction and recovery;
geological, technical and processing problems, including unanticipated metallurgical difficulties, less than expected recoveries, ground control problems, process upsets, and equipment malfunctions;
risks associated with labor costs, labor disturbances, and unavailability of skilled labor;
risks associated with the availability and/or fluctuations in the costs of raw materials and consumables used in the production processes;
risks associated with environmental compliance and permitting, including those created by changes in environmental legislation and regulation, and delays in obtaining permits and licenses that could impact expected mineral extraction and recovery levels and costs;
actions taken by regulatory authorities with respect to mineral extraction and recovery activities;
mineral tenure consists primarily of unpatented mining lode claims based on US laws dating to the Mining Act of 1872 and a change in the Act could affect the mineral tenure; and
risks associated with the EFR's dependence on third parties in the provision of transportation and other critical services.
2.0 INTRODUCTION
2.1 Introduction
This Preliminary Feasibility Study (PFS has been prepared by the authors for Energy Fuels on the Sheep Mountain underground and open pit project (the Project), located in Fremont County, Wyoming, USA to satisfy the US Securities and Exchange Commission (SEC) disclosure requirements under S-K 1300 and policies for mining properties and the requirements of NI 43-101. This report supersedes the previous NI 43-101 report, "Updated Preliminary Feasibility Study, National Instrument 43-101, Technical Report, Amended and Restated" by Douglas L. Beahm of BRS and dated February 28, 2020.
The Sheep Mountain Project is located eight miles south of the Jeffrey City, Wyoming in portions of Sections 15, 16, 17, 20, 21, 22, 27, 28, 29, 32, and 33, Township 28 North, Range 92 West at approximate Latitude 42º 24' North and Longitude 107º 49' West, within the Wyoming Basin physiographic province in the Great Divide Basin at the northern edge of the Great Divide Basin. The mineral properties at the Sheep Mountain Project are comprised of 218 unpatented mining claims on land administered by the Bureau of Land Management (BLM), and approximately 640 acres within a State of Wyoming lease. The combination of the mineral holdings comprises approximately 5,055 acres.
Uranium was first discovered in the Crooks Gap district, which includes the Sheep Mountain area, in 1953 (Bendix, 1982). While the original discoveries were aided by aerial and ground radiometric surveys, exploration activities were primarily related to drilling and exploratory trenching. Three companies dominated the district by the mid-1950s: Western Nuclear Corporation (WNC), Phelps Dodge (PD) and Continental Uranium Corporation (CUC). WNC built the Split Rock Mill at Jeffrey City in 1957 and initiated production from the Paydirt pit in 1961, Golden Goose 1 in 1966 and Golden Goose 2 in 1970. PD was the principal shareholder and operator of the Green Mountain Uranium Corporation's Ravine Mine which began production in 1956. CUC developed the Seismic Pit in 1956, the Seismic Mine in 1957, the Reserve Mine in 1961 and the Congo Decline in 1968. In 1967 CUC acquired the PD properties and in 1972 WNC acquired all of CUC's Crooks Gap holdings. During the mid-1970s PD acquired an interest in WNC which began work on Sheep Mountain I in 1974, the McIntosh Pit in 1975, and Sheep Mountain II in 1976. WNC ceased production from the area in 1982.
Subsequent to closure of the Sheep Mountain I by WNC, during April to September 1987, Pathfinder Mines Corp. ("PMC") mined a reported 12,959 tons, containing 39,898 pounds of uranium at an average grade of 0.154% U3O8 from Sheep Mountain I, (PMC, 1987). U.S. Energy-Crested Corp. ("USECC") acquired the properties from WNC in 1988 and during May to October 1988 USECC mined 23,000 tons from Sheep Mountain I, recovering 100,000 lbs. of uranium for a mill head grade of 0.216% U3O8 (WGM, 1999). The material was treated at PMC's Shirley Basin mill, 130 miles east of the mine.
In December 2004, Uranium Power Corp. ("UPC") (then known as Bell Coast Capital) entered into a Purchase and Sales Agreement with USECC to acquire a 50% interest in the Sheep Mountain property. The acquisition was completed in late 2007 with aggregate payments to USECC of $7.05 million and the issuance of four million common shares to USECC. USECC sold all of its uranium assets, including its 50% interest in Sheep Mountain, to Uranium 1 (U1) in April 2007. Titan Uranium Inc. (Titan) acquired a 50% interest in the property when it acquired Uranium Power Corp (UPC) by a Plan of Arrangement in July 2009. The ownership was subsequently transferred to Titan wholly-owned subsidiary, Titan. The remaining 50% interest was purchased from U1 on October 1, 2009. Subsequently Energy Fuels Inc. and Titan announced that a Certificate of Arrangement giving effect to the Plan of Arrangement between Energy Fuels was issued on February 29, 2012, making, Titan a wholly-owned subsidiary of Energy Fuels which is now named Energy Fuels Wyoming Inc.
Historic reports by Pathfinder Mines, Western Nuclear, and others show that properties within the current Sheep Mountain project boundary were operated as underground and open pit mines at various times in the 1970s and 1980s. There were 5,063,813 tons of material mined and milled, yielding 17,385,116 pounds of uranium at an average grade of 0.17% U3O8. Mining was suspended in 1988.
2.2 Registrant of Filing
This PFS report was prepared for Energy Fuels which is incorporated in Ontario, Canada. Energy Fuel's subsidiary, Energy Fuels Resources (USA) Inc., is a US-based uranium and vanadium exploration and mine development company with projects located in the states of Colorado, Utah, Arizona, Wyoming, Texas, and New Mexico. Energy Fuels is listed on the NYSE American Stock Exchange (symbol: UUUU) and the Toronto Stock Exchange (symbol: EFR).
2.3 Terms of Reference
This work is based on an updated preliminary feasibility study conforming to Canadian NI 43-101 Standards of Disclosure for Mineral Projects completed by BRS on the Sheep Mountain Project in February, 2020 and is available on the Canadian Securities Administrators (CSA) filing system ("SEDAR", https://www.sedar.com/homepage_en.htm).
As the project continues on care and maintenance since the effective date of BRS's 2020 updated preliminary feasibility study, there has been no material change in the project.
The purpose of this report is to declare Mineral Resources and Mineral Reserves, and to constitute the inaugural S-K 1300 compliant technical report summary for the Project.
2.4 Sources of Information
This Technical Report is based on an original independent Technical Report conforming to Canadian NI 43-101 Standards of Disclosure for Mineral Projects completed by BRS on the project in 2020.
EFR QP's and the sections they are responsible for are:
Dan Kapostasy (P.G), Director of Technical Services: Sections 4, 5, 6, 7, 8, 9, 10, 11, 12, 18, 19 20 and relevant portions of Sections 1 and 2. Mr. Kapostasy is a registered Professional Geologist in the States of Wyoming and Utah and is a Registered Member of SME with 16 years of experience in the Uranium mining industry with Strathmore Resources and EFR. Mr. Kapostasy last visited the project on April 8, 2014. Since that time, no material changes have taken place at the Sheep Mountain Property.
Third Party QP's are:
Douglas L. Beahm, PE, PG and SME Registered Member. Mr. Beahm is independent of EFR and has no financial interest in the project. Mr. Beahm is experienced with uranium exploration, development, and mining including past employment with Homestake Mining Company, Union Carbide Mining and Metals Division, AGIP Mining USA and as a consultant. Mr. Beahm's professional experience dates to 1974. Mr. Beahm has worked previously on the project and was at the site 9 days in 2009, 23 days in 2010, and 19 days in 2011 assisting in the planning and execution of the drilling programs in 2009, 2010, and 2011. Mr. Beahm has been on site periodically since 2011 Mr. Beahm is responsible for Sections 3, 14, 15, 16, 22, 23, 24, 25, 26, 27and relevant portions of Sections 1, 2, and 21, specifically the mining capital and operating costs
Terrence P. McNulty, P.E., D.Sc.: Dr. McNulty is a Professional Engineer and Registered Member of the US Society of Mining, Metallurgy, and Exploration Inc. (SME Inc.). Dr. McNulty's experience in uranium dates to the 1960s when Dr. McNulty was involved in laboratory testing and process development for uranium resources being evaluated at Anaconda's exploration department, as well as providing technical services to the uranium operations. Dr. McNulty assisted in the planning and execution of the column leach testing and other metallurgical program for the project circa 2010 through 2012. Dr. McNulty is familiar with the extractive metallurgy of sandstone-hosted uranium deposits and is professionally qualified to address the requirements related to Section 17 of this report. Mr. McNulty is responsible for Sections 13, 17, and relevant portions of Section 21, specifically the mineral processing and heap leach facility capital and operating costs..
The documentation reviewed and other sources of information utilized in this report are listed in Section 27.0 (References).
Sources of information and data contained in this technical report or used in its preparation are from publicly available sources in addition to private information owned by EFR, including that of past property owners.
2.5 Site Visit
Mr. Kapostasy last visited the project site on April 8, 2014 while Mr. Beahm visited it on the 16th of September of 2021 and Dr. McNulty last visited the site in August of 2010.
2.6 Purpose of Report
The authors have prepared this study on the Sheep Mountain project in accordance with NI 43-101 and S-K 1300 requirements for preliminary feasibility studies.
2.7 Update of a Previously Filed Technical Report
This SEC compliant report is not an update of a previous technical report summary on the property, as it is the first S-K 1300 compliant technical report summary with respect to the Project. .
2.8 Effective Date
The effective date of this report is December 31, 2021. The effective date of the mineral resource estimate is April 9, 2019. The effective date of the mineral reserve and cost estimate is December 31, 2021.
2.9 List of Abbreviations
Units of measurement used in this report conform to the metric system. All currency in this report is US dollars (US$) unless otherwise noted.
Table 2-1 shows the abbreviations used in this report.
Table 2-1 List of Abbreviations
3.0 RELIANCE ON OTHER EXPERTS
3.1 Reliance Upon Information Provided by the Registrant
The Authors have relied upon Energy Fuels through Mr. Curtis Moore, Energy Fuel's V.P. Marketing and Corporate Development for uranium pricing in Section 19.0 (Market Studies and Contracts) to the extent such information constitutes macroeconomic trends, data and assumptions. In this role Mr. Moore is in regular contact with uranium trade associations and utilities and has a detailed understanding of uranium markets in general. Mr. Kapostasy has reviewed Mr. Moore's recommendations for commodity pricing and is of the opinion that it is reasonable for the purposes of this report.
4.0 PROPERTY DESCRIPTION AND LOCATION
4.1 Introduction
The Sheep Mountain Project (the Project) is located in portions of Sections 15, 16, 17, 20, 21, 22, 27, 28, 29, 32, and 33, Township 28 North, Range 92 West at approximate Latitude 42º 24' North and Longitude 107º 49' West, approximately, eight miles south of Jeffrey City, Wyoming. (Figure 4-1). The Project is located the Wyoming Basin physiographic province in the Great Divide Basin at the northern edge of the Great Divide Basin.
4.2 Land Tenure
Figure 4-2 represents the approximate location of unpatented mining lode claims and the state lease held by EFR. The mineral properties at the Sheep Mountain Project comprise approximately 5,195 acres consisting of:
Table 4-1. List of Claims held by EFR
Claim Block |
Claim Numbers |
No. of |
PLSS Location |
Royalty (Y/N) |
Christie |
4E |
1 |
T28N R92W; Sec. 27 |
Y |
Cindy |
1D |
1 |
T28N R92W; Sec. 29 |
Y |
Golden Goose |
1D, 2, 3C, 4D |
4 |
T28N R92W; Sec. 21 |
Y |
Highland |
4D, 5D, 6D, 7D |
4 |
T28N R92W; Sec. 21, 22 |
Y |
Key |
1D, 2D, 3D, 4D, 5C, 6D, 7D, 8D |
8 |
T28N R92W; Sec. 21, 22, 27,28 |
Y |
Louise |
1D |
1 |
T28N R92W; Sec. 21 |
Y |
Mike |
A |
1 |
T28N R92W; Sec. 21 |
Y |
NH |
1D ,2D, 3D, 4D |
4 |
T28N R92W; Sec. 21, 22 |
Y |
Paydirt |
6, 7, 12D, 13C |
4 |
T28N R92W; Sec. 21 |
Y |
Poorboy |
1D (amended) |
1 |
T28N R92W; Sec. 21, 22 |
Y |
Snoball |
1D-4D, 5C, 6C (amended), 7D, 8C (amended) |
8 |
T28N R92W; Sec. 28, 29 |
Y |
Sun |
3C, 4C, 5D |
3 |
T28N R92W; Sec. 28 |
Y |
Sundog |
2D, 17C-22C |
7 |
T28N R92W; Sec. 21, 28 |
Y |
Susan James |
4D |
1 |
T28N R92W; Sec. 28 |
Y |
Trey |
1D, 2D |
2 |
T28N R92W; Sec. 28, 29 |
Y |
Trey Jr. |
1D |
1 |
T28N R92W; Sec. 29 |
Y |
Zeb |
1C, 2C-4C, 5D, 6D |
6 |
T28N R92W; Sec.28 |
Y |
Carrie |
1-6 |
6 |
T28N R92W; Sec. 29, 32 |
N |
Jamie |
1-46 |
46 |
T28N R92W; Sec. 21, 22, 27, 28, |
N |
New Sheep |
1, 2 |
2 |
T28N R92W; Sec. 28 |
N |
Last Chance |
1D |
1 |
T28N R92W; Sec. 22 |
N |
JK |
3, 9, 15, 18 |
4 |
T28N R92W; Sec. 8, 9 |
N |
Frankie |
1, 2, 3 |
3 |
T28N R92W; Sec. 8, 29 |
N |
SM |
1-8, 8A, 9-28 |
29 |
T28N R92W; Sec. 20, 21, 29 |
N |
Bev |
1-33, 33A, 34, 34A, 35-42 |
44 |
T28N R92W; Sec. 8, 9 |
N |
SMN |
1-20, 22, 24, 26, 28, 30, 32 |
26 |
T28N R92W; Sec. 17, 20 |
N |
Total w/ Royalty |
57 |
|||
Total w/o Royalty |
161 |
|||
Grand Total |
218 |
In February 2012, EFR purchased 320 acres of private surface overlaying some of the federal minerals covered by 18 of the claims. The purchased parcel includes the SW¼ Section 28 and SE¼, E½ SW¼, and NW¼ SW¼ Section 29, T28N, R92W. A final payment of $5,000 was made in January 2016 for the purchased parcel.
A mineral title opinion was completed for the project on behalf of Titan prior to the acquisition by EFR and is the basis of the information summarized herein up to that time (Harris & Thompson, 2011). No material changes have occurred since that time.
To maintain these mineral rights, EFR must comply with the lease provisions, including annual payments with respect to the State of Wyoming leases; private leases; BLM and Fremont County, as well as Wyoming filing and/or annual payment requirements to maintain the validity of the unpatented mining lode claims as follows. Mining claims are subject to annual filing requirements and payment of a fee of $165 per claim. Unpatented mining claims expire annually but are subject to indefinite annual renewal by filing appropriate documents and paying the fees described above. ML 0-15536 will expire on 1/1/2024. Annual Payments to maintain ML 0-15536 are $2,560 per year.
4.3 Royalties
The Sheep Mountain Project is subject to an overall sliding scale royalty of 1% to 4% due to Western Nuclear, based on the NUEXCO value. The Western Nuclear claims included additional royalties to private parties. These royalties vary from $0.50 per pound to 5% Gross Royalty depending on the claim. The total burden could reach 9%. These additional royalties are summarized in Appendix F of RPA, 2006. Claims which were not included in the agreement are not subject to this royalty. Federal mineral claims subject to the Western Nuclear royalty are located in sections 21, 22, 26, 28, and 29, T28N R92W.
Under Wyoming State Lease ML 0-15536 (Sec. 16, T28N R92W), there is a royalty of 4% of the quantity or gross realization value of the U3O8, based on the total arms-length consideration received for uranium products sold.
Approximately 90% of the Congo pit mineable resource is located under the Wyoming State lease and 10% is located under the federal claims. The remainder of the mineral resource, Sheep Underground, is located under the federal claims.
Land purchased from Ellen Fox on February 12, 2012, carries a 4% production royalty for any uranium from the property, based on the price for which the products are sold. However, no Mineral Resources are known to exist on this property.
Figure 4-1. Sheep Mountain Location Map
Figure 4-2. Sheep Mountain Land Tenure Map
4.4 Permits
In June 2010, baseline environmental studies commenced to support an application to the US Nuclear Regulatory Commission (NRC) for a Source Material and By-product Material License (the "License") for operation of a heap leach facility. Work was also initiated on a revision to the existing Wyoming Department of Environmental Quality (WDEQ) Mine Permit, as well as a Plan of Operation (PO) for the BLM. Baseline studies included wildlife and vegetation surveys, air quality and meteorological monitoring, ground and surface water monitoring, radiological monitoring, and cultural resource surveys.
Submission of the PO to the BLM was made in June 2011. The PO was accepted as complete by the BLM, and an environmental impact statement (EIS) was initiated in August 2011. EFR revised the PO in July 2012, consistent with the modified plan presented in the Sheep Mountain Technical Report. In July 2013, the PO was again revised to reflect a new waste rock disposal layout for the open pit mine and an improved and more economical heap leach and processing facility. The revised PO also included the option of transporting mineralized material off-site for processing. The Final Environmental Impact Study (FEIS) was completed in August of 2016. On January 6, 2017, the BLM issued its Record of Decision (RoD) and approved the PO.
In October 2011, a draft revision was submitted to the existing Mine Permit 381C to WDEQ. WDEQ then provided review comments as part of its "courtesy review." The proposed permit amendment was revised and resubmitted in January 2014. In July 2015, the revision was approved by WDEQ. The revision includes expansion of surface and underground mining operations and an updated reclamation plan consistent with current reclamation practices.
Development of an application to the NRC for a license to construct and operate the uranium recovery facility was taken to an advanced stage of preparation. This license would allow EFR to process the mineralized material into yellowcake at the Sheep Mountain Project site. The draft application to NRC for a Source Material License was reviewed in detail by the NRC in October 2011. The NRC audit report identified areas where additional information should be provided. During September 2018, the State of Wyoming became an NRC Agreement State for licensing of uranium milling activities, including heap leach facilities. Previous data, designs, and related applications prepared for NRC will now be referred to and reviewed by the State of Wyoming WDEQ as an Agreement State with the NRC with respect to Source Materials licensing. The review and approval process for the license by the State of Wyoming is anticipated to take approximately three to four years from the date submitted. Submittal of the license application to the State of Wyoming is on hold pending the Company's evaluation of off-site processing options for this project, and whether or not to proceed with an on-site uranium recovery facility, pending improvements in uranium market conditions.
The heap leach facility has been permitted through the BLM, yet still requires Source Material and Byproduct Material licensing through the State of Wyoming. The permitted capacity is 4 million tons of mineralized material which is 53% of the estimated Mineral Reserves. An expansion to the heap leach facility (including permitting) will be required in the future to process the remaining 47% of the estimated Mineral Reserves. Costs for the permitting, construction, and closure of the heap expansion are accounted for in the PFS. Mining could commence at this time under the existing PO and Mine Permit, but the mined material would need to be processed at a licensed off-site processing facility under a toll-milling or other arrangement. Costs to permit the expansion of the heap leach facility are accounted for in the first two years of the project's cash flow.
EFR is subject to liabilities for existing mine disturbances at the Sheep Mountain Project. The Company maintains a reclamation bond with the State of Wyoming in the total amount of US$950,000 as security for these liabilities. The company files annual reports with the State of Wyoming, and the amount of the bonds may be adjusted annually to endure sufficient surety is in place to cover the full cost of reclamation.
4.5 Surface Rights
EFR has federal surface rights to approximately 127 unpatented mining claims (2,624 acres). The remainder surface rights are split estate with state and private surface ownership.
EFR owns the surface of following described lands acquired under a transaction with Ellen Fox on February 22, 2012 (ref. examination of the described documents):
Township 28 North, Range 92 West, 6th P.M.:
Section 28: SW¼SW¼
Section 29: SE¼, E½SW¼, NW¼SW¼
This parcel was originally purchased by Titan for a processing facility and shop.
Under the terms of the State Lease, ML 0-15536, the lessee is given the exclusive right and privilege to prospect, mine, extract, and remove any deposits, together with the right to construct and maintain all works, buildings, plants, waterways, roads, communication lines, power lines, tipples, hoists, or other structures and appurtenances necessary for the full enjoyment thereof. A detailed description of the allowable workings is included in the state Lease, including both underground and surface extraction (see examination of the State Lease).
No other surface rights are needed for the planned operations. EFR is not aware of any other specific risks affecting the mineral title for the property.
4.6 Taxes
Uranium mining in Wyoming is subject to both a gross products (county) and mineral severance tax (state). At the federal level: aggregate corporate profit from mining ventures is taxable at corporate income tax rates, i.e., individual mining projects are not assessed federal income tax but rather the corporate entity is assessed as a whole. For mineral properties: depletion tax credits are available on a cost or percentage basis whichever is greater. The percentage depletion tax credit for uranium is 22%, among the highest for mineral commodities (IRS Pub. 535).
4.7 Encumbrances and Risks
To the authors knowledge there are no other significant factors or risks that may affect access, title, or the right or ability to perform work on the property, if the aforementioned requirements, payments, and notifications are met.
5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY
5.1 Introduction
The Sheep Mountain Project (the Project) is located at approximate Latitude 42º 24' North and Longitude 107º 49' West, within the Wyoming Basin physiographic province at the northern edge of the Great Divide Basin. The Project is approximately 8 miles south of Jeffrey City, Wyoming the nearest population center. The nearest commercial airport is located in Riverton, Wyoming approximately 56 miles from Jeffrey City on a paved, two-lane, state highway. The Project is accessible via 2-wheel drive on existing county and two-track roads, as follows: Proceed south from Jeffrey City on the Crooks Gap/Wamsutter Road, County Road 23, towards Crooks Gap, approximately 7.2 miles; then proceed easterly on EFR's private road approximately 1 mile to the site.
5.2 Physiography
5.2.1 Topography and Elevation
The topography consists of rounded hills with moderate to steep slopes. Elevations range from 6,600 feet to 8,000 feet above sea level. The ground is sparsely vegetated with sage and grasses and occasional small to medium sized pine trees at higher elevations. Year-round operations are contemplated for the Project.
5.2.2 Vegetation
The ground at the Project is sparsely vegetated with sage and grasses and occasional small to medium sized pine trees at higher elevations.
5.2.3 Climate
The Project falls within the inter-mountain semi-desert weather province, with average maximum temperatures ranging from 31.1 °F (January and December) to 84.9 °F (July), average minimum temperatures ranging from 9.1 °F (January) to 49.2 °F (July), and average total monthly precipitation ranging from 0.36 inches (January) to 2.04 inches (May).
Historic climate records were available through a National Weather Service cooperative station until 2005. The Project falls within the intermountain semi-desert weather province. Table 5-1 is a summary of the climatic conditions.
Table 5-1 Jeffrey City, Wyoming, Monthly Climate Summary1
|
Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
Annual |
Avg. Max Temp. (F) |
31.1 |
34.0 |
43.5 |
54.7 |
64.5 |
75.1 |
84.9 |
82.8 |
71.8 |
59.4 |
40.1 |
31.1 |
56.1 |
Avg. Min Temp. (F) |
9.1 |
10.3 |
18.5 |
26.4 |
34.8 |
42.5 |
49.2 |
48.1 |
38.2 |
28.7 |
16.6 |
9.5 |
27.7 |
Avg. Total Precip. (in) |
0.36 |
0.42 |
0.79 |
1.28 |
2.04 |
1.07 |
0.89 |
0.64 |
0.78 |
0.83 |
0.62 |
0.40 |
10.12 |
Avg. Total Snowfall (in) |
5.1 |
6.6 |
8.3 |
9.7 |
4.0 |
0.3 |
0.0 |
0.0 |
1.1 |
5.4 |
9.7 |
6.2 |
56.5 |
Avg. Snow Depth (in) |
2 |
2 |
1 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
1 |
2 |
1 |
Notes: 1Period of Record: April 10, 1964, to December 31, 2005
Past mining and mineral processing operations at the site and within the general area were conducted on a year-round basis. Current planning includes year-round operations.
5.3 Access
The project is located approximately 8 miles south of Jeffrey City, Wyoming the nearest population center. The nearest commercial airport is located in Riverton, Wyoming approximately 56 miles from Jeffrey City on a paved, two-lane, state highway. The project is accessible via 2-wheel drive on existing county and two-track roads, as follows: Proceed south from Jeffrey City on the Crooks Gap/Wamsutter Road, County Road 23, towards Crooks Gap, approximately 7.2 miles; then proceed easterly on EFR's private road approximately 1 mile to the site.
5.4 Infrastructure
Telephone, electric and natural gas service adequate for planned mine and mineral processing operations has been established to the proposed plant site. In addition, electric service and a waterline have been extended via a ROW issued by the BLM in 2011 to both the Sheep I and II shafts. Adequate water rights are held by EFR for planned mining and mineral processing operations but need to be updated with the Wyoming State Engineer with respect to type of industrial use, points of diversion, and points of use.
All planned mining, mineral processing, and related activities are located within the existing Mine Permit 381C. These lands are adequate for all planned mining operations including the disposal of mine wastes, but not heap leaching. The heap leach facility, including a triple lined pad, has adequate capacity to process 53% of the Mineral Resource with the remaining capacity planned to be permitted in the first two years of project development. The mineral processing waste or tailings will be decommissioned and reclaimed in place. EFR owns the land surface where the heap leach and ultimate disposal tailings will occur. As for the operational phases of the project, the mineral processing facility has been designed to accommodate the volume of waste and/or tailings generated by the operation over the planned mine life.
Personnel requirements for the planned operation are addressed in Section 21 of this report. The majority of the personnel can be recruited locally with some skilled and staff positions recruited regionally.
5.5 Personnel
At full production, the Project will require approximately 176 employees. Roughly, 56 employees will be required for operation of the open pit, heap leach, and mineral processing plant with the remainder required for the underground mine. Personnel for the open pit mine operation can be readily recruited locally as can the majority of the personnel needed for the heap leach and mineral processing plant. Some skilled positions and staff positions will need to be recruited regionally. Recruitment of underground mine personnel may pose a greater challenge. As a result, cost allowances for recruiting and training of underground miners were included in the cost estimate.
6.0 HISTORY
6.1 Introduction
Uranium was first discovered in the Crooks Gap district, which includes the Sheep Mountain area, in 1953 (Bendix, 1982). While the original discoveries were aided by aerial and ground radiometric surveys exploration activities were primarily related to drilling and exploratory trenching.
6.2 Ownership History
Three companies dominated the district by the mid-1950s: Western Nuclear Corporation (WNC), Phelps Dodge (PD) and Continental Uranium Corporation (CUC). WNC built the Split Rock Mill at Jeffrey City in 1957 and initiated production from the Paydirt pit in 1961, Golden Goose 1 in 1966 and Golden Goose 2 in 1970. PD was the principal shareholder and operator of the Green Mountain Uranium Corporation's Ravine Mine, which began production in 1956. CUC developed the Seismic Pit in 1956, the Seismic Mine in 1957, the Reserve Mine in 1961 and the Congo Decline in 1968. In 1967, CUC acquired the PD properties and in 1972, WNC acquired all of CUC's Crooks Gap holdings. During the mid-1970s, PD acquired an interest in WNC, which began work on Sheep Mountain I in 1974, the McIntosh Pit in 1975, and Sheep Mountain II in 1976. WNC ceased production from the area in 1982.
Subsequent to closure of the Sheep Mountain I by WNC, during April to September 1987, Pathfinder Mines Corp. (PMC) mined a reported 12,959 tons, containing 39,898 pounds of uranium at an average grade of 0.154% U3O8 from Sheep Mountain I, (PMC, 1987). U.S. Energy-Crested Corp. (USECC) acquired the properties from WNC in 1988 and during May to October 1988 USECC mined 23,000 tons from Sheep Mountain I, recovering 100,000 lbs. of uranium for a mill head grade of 0.216% U3O8 (WGM, 1999). The material was treated at PMC's Shirley Basin mill, 130 miles east of the mine.
In December 2004, Uranium Power Corp. (UPC), then known as Bell Coast Capital, entered into a Purchase and Sales Agreement with USECC to acquire a 50% interest in the Sheep Mountain property. The acquisition was completed in late 2007 with aggregate payments to USECC of $7.05 million and the issuance of four million common shares to USECC. USECC sold all of its uranium assets, including its 50% interest in Sheep Mountain, to Uranium One Inc. (U1) in April 2007. Titan Uranium Inc. acquired a 50% interest in the property when it acquired Uranium Power Corp (UPC) by a Plan of Arrangement in July 2009. The ownership was subsequently transferred to Titan Uranium Inc.'s wholly owned subsidiary, Titan Uranium USA (referred herein to as Titan). The remaining 50% interest was purchased from U1 on October 1, 2009. Subsequently Energy Fuels Inc. and Titan Uranium Inc. announced that a Certificate of Arrangement giving effect to the Plan of Arrangement between Energy Fuels was issued on February 29, 2012, making, Titan a wholly owned subsidiary of Energy Fuels which is now named Energy Fuels Wyoming Inc.
6.3 Historical Resource Estimates
Historical Mineral Resource and Reserves can be found publicly in previous technical reports completed to Canadian NI 43-101 standards, including:
"Technical Report on the Sheep Mountain Uranium Project, Wyoming, Prepared for the Uranium Power Corp., NI 43-101 Report", Scott Wilson Roscoe Postle Associates, Inc., October 10, 2006.
"Sheep Mountain Mines, Fremont County WY, USA, Pre-Feasibility Study, Prepared for Titan Uranium USA", BRS Engineering, April 8, 2010
"Sheep Mountain Uranium Project, Fremont County, Wyoming USA, 43-101 Mineral Reserve and Resource Report, Prepared for Titan Uranium USA", BRS Engineering, March 20, 2012
Historical mineral Resource/Reserve estimates were prepared in accordance with Canada's NI 43-101 standards which were in effect at the time the report was issued and do not necessarily meet current standards. The reader should not rely on the historical Mineral Resource or Mineral Reserve estimates as they are superseded by the Mineral Resource estimate presented in Section 14.0 (Mineral Resource Estimates) and Section 15.0 (Mineral Reserve Estimate) of this report.
6.4 Historical Production
Historic reports by Pathfinder Mines, Western Nuclear, and others show that properties within the current Sheep Mountain project boundary were operated as underground and open pit mines at various times in the 1970s and 1980s. There were 5,063,813 tons of material mined and milled, yielding 17,385,116 pounds of uranium at an average grade of 0.17% U3O8. Mining was suspended in 1988.
7.0 GEOLOGICAL SETTING AND MINERALIZATION
7.1 Regional Geology
The host of uranium mineralization for the Sheep Mountain Project (the Project) is the Eocene Battle Spring Formation. Prior to deposition of the Battle Spring Formation and subsequent younger Tertiary formations, including the White River and Split Rock Formations, underlying Paleocene, Cretaceous, and older formations were deformed during the Laramide Orogeny. During the Laramide Orogeny, faults, including the Emigrant Thrust Fault at the northern end of the project area, were active and displaced sediments by over 20,000 feet (Rackely, 1975). Coincident with this mountain building event Paleocene and older formations were folded in a series of en echelon anticlines and synclines, generally trending from southeast to northwest.
The Battle Spring Formation was deposited unconformably on an erosional landscape influenced by these pre-depositional features. Initial stream channels transporting clastic sediments from the Granite Mountains formed in the synclinal valleys. With continued erosion of the Granite Mountains and deposition of sediments into the surrounding basins, the pre-tertiary surface was buried successively by the Battle Spring, White River, and Split Rock formations. The formations once blanketed the entire area. Subsequently, the Granite Mountains collapsed forming a series of normal faults including the Kirk Normal Fault at the northern end of the project.
The nature of the folding and faulting in the Battle Spring suggests that it was either contemporaneous with deposition of the sediments or occurred shortly after deposition. Post-Miocene erosion has exhumed portions of the Granite Mountains regionally and has exposed the Battle Spring Formation at the project.
The geologic setting of the project is important in that it controlled uranium mineralization by focusing the movement of the groundwater, which emplaced the uranium into the stream channels, which had developed on the pre-tertiary landscape. In a similar manner, the geologic setting influences the present groundwater system. Groundwater flow is from the north-northeast to the south-southwest. Groundwater flow in the Battle Spring at the site is isolated in the subsurface from the local surface drainages, Crooks Creek to the west, and Sheep Creek to the east. In addition, the recharge area for the groundwater system is limited, which will in turn limit dewatering requirements.
7.2 Local and Property Geology
Surface geology within the Project area includes Quaternary alluvium and colluvium, the Tertiary Crooks Gap Conglomerate, Battle Spring Formation, and Fort Union Formations and the Cretaceous Cody Shale. Descriptions of each of the units are below and are taken from the Geologic Map of the Bairoil 30'x60' Quadrangle, Carbon, Sweetwater, Fremont, and Natrona Counties, Wyoming (Jones, et al, 2001). Figure 7.1 shows local stratigraphy. Local geology is shown in plan on Figure 7.2 and in cross-section of Figure 7.3.
7.2.1 Quaternary Alluvium and Colluvium
Gravel, sand, silt, clay, weathered bedrock, and soil, deposited along recent and older flood plains; includes slop wash, weathered bedrock, and smaller alluvial fan deposits that coalesce with alluvium
7.2.2 Crooks Gap Conglomerate
Very large, subrounded granitic boulders, up to 40 feet across in a pink and gray siltstone and arkosic sandstone matric; abundant iron oxide-stained rinds on most boulders; occurs largely as remnants of fan deposits shed by the Granite Mountains. Thickness up to 1,500 feet. Historically the Crooks Gap Conglomerate is referred to as Member B of the Battle Spring Formation
Figure 7-1. Stratigraphy of the Crooks Gap Area (modified from Stephens, 1964)
Figure 7-2. Geologic Map of the Sheep Mountain Area
Figure 7-3. Geologic Cross-Section (See Figure 7-2 for Location)
7.2.3 Tertiary Battle Spring Formation
Light-gray, brown, yellowish-tan, medium-grained to very coarse grained, pebbly arkosic sandstone and conglomerate, with local greenish-gray, sandy mudstone; brownish, carbonaceous mudstone and claystone; yellowish-gray conglomerate interbedded with very coarse conglomerate' poorly indurated, with local well-indurated lenses and paleo-channels, cemented with calcite cement' scattered cobbles and boulders over one foot in diameter with some boulders up to several feet across which may be remnants of Crooks Gap Conglomerate; numerous iron-rich irregular and spheroidal concretions. Thickness varies considerably but generally increases basinward from approximately 1,000 to 3,500 feet. At the Project, the Battle Spring Formation is subdivided into an upper (Member B - Crooks Gap Conglomerate) and lower (Member A) unit.
7.2.4 Tertiary Fort Union Formation
Complexly interbedded, commonly lenticular or discontinuous sequence of beds; sandstone, light-brown to gray, argillaceous, very fine to medium-grained, commonly contains ferruginous concretions; siltstone, light-brown to orange, commonly ferruginous and argillaceous; shale, light- to dark-gray, locally maroon, locally contains numerous vertebrate and common invertebrate fossils, and plant fossils; coal beds are generally thin and discontinuous with lenticular thickenings to as much as 9 feet. Thickness approximately 1,500 feet.
7.2.5 Cretaceous Cody Shale
Marine shale, soft, gray to olive-gray, numerous bentonitic shales and siltstones, partly sandy, with limestone concretions; sandstone, very fine to fine-grained, gray to orangish-gray, glauconitic, thin-bedded, with trace fossils; lower part of Cody Formation is equivalent to the Niobara Formation (not present); shale gray to dark-gray, laminated, and calcareous; fossil-rich chalk beds near top, light-tan to buff, and laminated. Formation thickness ranges from 4,000-6,000 feet.
7.2.6 Structural Geology
Within the Project area, only limited faulting has been observed within the Battle Spring Formation, and where present, displacement is minor. The largest reported displacement from the historic mining is four feet. The Battle Spring is folded with a series of southeast plunging anticline/syncline features. Folding is reported to be more extensive in the lower Battle Spring or A Member than in the upper or B Member.
7.3 Hydrogeology
Groundwater within the Mine Permit boundary exists within the synclinal fold of the Battle Spring Formation and Fort Union Formation and is bounded by the Cody Shale, which acts as a local aquiclude to vertical groundwater migration. Groundwater in the uppermost aquifer, hosted predominantly by the Battle Spring Formation, has been well characterized over more than 20 years spanning active mining, a long post-mining period and current annual monitoring.
The Crooks Gap area regional hydrology, as determined by the Platte River Basin Water Plan, includes two separate formations or groups of formations that qualify as potentially productive for groundwater. The Quaternary aquifer system has both an alluvial and non-alluvial division. This is considered to be a discontinuous but major aquifer in the State of Wyoming. It is undetermined at this time whether this surface aquifer exists in the project area.
The second aquifer in the Crooks Gap area is the Tertiary Aquifer System. The System in the Crooks Gap region is comprised of the Fort Union and Battle Spring Formations. The Platte River Basin Water Plan describes the aquifer as comprised of complex inter-tonguing fluvial and lacustrine sediments. This is also classified as a major aquifer for the State of Wyoming.
Mining will occur in the Battle Spring Formation. Historic data indicates that sustained dewatering of the Sheep Underground mines required approximately 200 gpm, but that the cone of depression is limited in area and will not impact surface water sources in the area. In addition, dewatering of the Congo Open pit requires an estimated 150 gpm beginning in year seven and extending to the end of mining. Thus, approximately 350 gpm of water will be produced by the mines.
Despite a history of both open pit and underground mining on the project, no formal hydrologic study nor model was completed and utilized for the underground or surface mine design in this report. Mine design work is based on past water inflows, which were handled with pumping systems during past mining operations.
Future work is recommended to complete a detailed geotechnical study of both underground and surface mining.
7.4 Geotechnical
Despite a history of both open pit and underground mining on the project, no formal geotechnical on open pit slope stability nor underground drift and stope ground support was completed. Mine design work is based on past slope angles and stope dimensions which proved feasible during mine operations.
Future work is recommended to complete a detailed geotechnical study of both underground and surface mining.
8.0 DEPOSIT TYPES
8.1 Mineralization and Deposit Types
The host of uranium mineralization for the Project is the Battle Spring Formation. Most of the mineralization in the Crooks Gap district occurs in roll-front deposits (Bendix, 1982). Roll fronts have an erratic linear distribution but are usually concordant with the bedding. Deposits have been discovered from the surface down to a depth of 1,500 feet (Stephens, 1964). The two major uranium minerals are uranophane and autunite. Exploration drilling indicates that the deeper roll-type deposits are concentrated in synclinal troughs in the lower Battle Spring Formation. Three possible sources for uranium have been suggested: post-Eocene tuffaceous sediments, leached Battle Spring arkoses, and Precambrian granites (Granite Mountains).
Structural controls of uranium occurrences along roll fronts include carbonaceous siltstone beds that provide a local reducing environment for precipitation of uranium-bearing minerals, and abrupt changes in permeability along faults, where impermeable gouge is in contact with permeable sandstones (Stephens, 1964). Uranium has also been localized along the edges of stream channels and at contacts with carbonaceous shales (Bendix, 1982).
Further documentation of the type of mineralization can be found in the literature as with this historic photo (Figure 8.1) of a uranium roll front in the Golden Goose Mine (Bailey, 1969).
Figure 8-1 Uranium Roll Front in Golden Goose Mine
The following photo (Figure 8-2) shows alteration in the rib of the Little Sheep decline with remnant uranium mineralization concentrated around a clast of carbonaceous clay near the center of the photo. This exposure is typical of the geochemical alteration that occurs within the altered zone in advance of roll fronts.
Figure 8-2 Little Sheep Decline
9.0 EXPLORATION
To the author's knowledge, no relevant exploration work, other than drilling, as described in Section 10: Drilling, of this report has been conducted on the property in recent years. The Project is located within a brownfield site which has experienced past mine production and extensive exploration and development drilling. The initial discovery was based on aerial and ground radiometric surveys in the 1953 (Stephens, 1964), but since that time exploratory work on the site has been primarily drilling.
During the National Uranium Resource Evaluation ("NURE") program conducted by the U.S. Department of Energy ("DOE") in the late 1970s and early 1980s, the project area and vicinity were evaluated. This evaluation included aerial gamma, magnetic, and gravimetric surveys; soil and surface water geochemical surveys and sampling; and geologic studies and classification of environments favorable for uranium mineralization (Bendix, 1982). No specific data analysis of the aerial surveys was completed and the report, however, it is stated in the report that anomalous radioactivity was observed related to the Battle Spring Formation at the Crooks Gap mining district (Bendix, 1982), herein referred to as Sheep Mountain.
Since Energy Fuels Resources (USA) Inc. acquired the Sheep Mountain Project in 2012, no exploration work has been conducted. All drilling is considered historical in nature and is summarized in Section 10.0 of this report
10.0 DRILLING
10.1 Drilling
All drilling and drill data associated with the Project is considered historical in nature, as it was completed prior to EFR acquiring the Project in February 2012. The extent of drilling is shown for both the Congo Pit and Sheep underground areas in Figure 10.1.
10.1.1 Pre-1988 Drilling
Drilling in the mineral resource areas investigated as part of this report includes approximately 4,000 drill holes, most of which were open-hole rotary drilling, reliant upon down-hole geophysical logging to determine uranium grade. Some core drilling for chemical analyses was also completed; however, no physical samples are available for inspection or sampling. Pre-1988 drill maps show drill hole locations at the surface and downhole drift, the thickness and radiometric grade of uranium measured in weight percent eU3O8, elevation to the bottom of mineralized intercept, collar elevation, and elevation of the bottom of the hole. Also available are half foot and composite intercept data in paper printouts from Western Nuclear's 1979 and 1980 preliminary feasibility study and geostatistical resource modeling.
10.1.2 Titan Drill Program
In 2005, a drilling program consisting of 19 drill holes totaling 12,072 feet was completed. Coring was attempted in one hole, but recoveries were poor. Two of the 19 holes were located in Section 28 with the purpose of confirming mineralization within the Sheep Underground mine area. The remaining seventeen drill holes were completed in the planned Congo Pit area to test both shallow mineralization within the Congo Pit and to explore a deeper mineralized horizon, the 58 sand, which was shown in two historic drill holes. (RPA, 2006). Consultants Roscoe Postle Associates Inc. (RPA) were present during the 2005 drilling program and concluded in their report of October 10, 2005, that drilling has confirmed the presence of mineralization with the shallow horizons in the Congo Pit area and has identified and extended roll front mineralization in the 58 sands along strike. Further, RPA concluded that drilling in the Sheep Mountain area (referred to herein as the Sheep underground) has validated the presence of mineralization at depth.
In consideration of both the recommendations included in RPA's 2006 report and identified data needs for the continued development of the project, five holes were drilled in the Congo Pit in 2009 for a total of 1,700 feet. The five drill holes were planned and completed to serve multiple purposes including:
The goals of the 2009 drilling program were met. The drill holes were completed by rotary air drilling to depths exceeding 300 feet using a top drive rotary drilling rig. Drill cuttings were collected continuously during the drilling process, in two-foot increments near anticipated mineralized horizons and in five-foot increments for overburden sampling. Over 500 pounds of mineralized material for metallurgical testing was collected in addition to the collection of representative samples for overburden analysis and characterization in accordance with WDEQ guidelines. In situ mineral grades for 2009 drilling were determined by geophysical logging including both conventional radiometric logging and the state-of-the-art USAT (BRS, 2010). Each drill hole was first logged using a conventional logging tool that provided a suite of gamma ray, Spontaneous Potential (SP), resistivity, and deviation. The best-mineralized zones were chosen for USAT logging. Both geophysical logging tools were provided commercially by Century Wireline Services (Century).
The 2010 and 2011 drilling programs were primarily designed to delineate the Congo Pit. The drilling was exclusively vertical rotary in 2010, while in 2011 the drilling included vertical rotary and reverse circulation. The drill holes generally ranged from 200 to slightly over 400 feet in depth, although some were designed to test deeper horizons at slightly greater than 600 feet. Geophysical logging was completed for all drill holes and was provided commercially by Century who delivered both hard copy geophysical logs and electronic files including LAS files. Estimations of equivalent uranium grades in weight percent were reported in half-foot intervals.
In 2010, an additional 62 exploratory drill holes and five monitor wells were completed in the Congo Pit Area with the intention of defining the pit limits. All of these drill holes encountered mineralization extending the pit limits, however, drilling extended mineralization and did not completely define the pit limits. Of the 62 drill holes completed in 2010 within the Congo Pit Area:
In 2011, an additional 73 exploratory drill holes and five monitor wells were completed in the Congo Pit Area to define the pit limits and confirm mineralization and the absence of underground mining in select areas. These objectives were met, and the pit limits and Mineral Reserves were expanded as detailed in this report. No additional holes have been drilled on the property since August 11, 2011.
Of the 73 drill holes completed in 2011 within the Congo Pit Area:
Figure 10-1. Drill Hole Location Map
11.0 SAMPLE PREPARATION, ANALYSIS, AND SECURITY
11.1 Introduction
Most of the sample data available for the evaluation of resources for the Sheep Mountain Project (the Project) is radiometric geophysical log data. Radiometric geophysical logs are completed following the drilling of a hole and provide a reading of equivalent U3O8 in percent (%eU3O8) at depth down hole. The practice of collecting geophysical logs as opposed to drill cuttings or core is common for uranium deposits in the United States.
11.2 Gamma Logging
The radiometric or gamma probe measures gamma radiation which is emitted during the natural radioactive decay of uranium (U) and variations in the natural radioactivity originating from changes in concentrations of the trace element thorium (Th) as well as changes in concentration of the major rock forming element potassium (K).
Potassium decays into two stable isotopes (argon and calcium) which are no longer radioactive and emits gamma rays with energies of 1.46 mega electron-volts (MeV). Uranium and thorium, however, decay into daughter products which are unstable (i.e., radioactive). The decay of uranium forms a series of about a dozen radioactive elements in nature that finally decay to a stable isotope of lead. The decay of thorium forms a similar series of radioelements. As each radioelement in the series decays, it is accompanied by emissions of alpha or beta particles, or gamma rays. The gamma rays have specific energies associated with the decaying radionuclide. The most prominent of the gamma rays in the uranium series originate from decay of 214Bi (bismuth 214), and in the thorium series from decay of 208Tl (thallium 208).
The natural gamma measurement is made when a detector emits a pulse of light when struck by a gamma ray. This pulse of light is amplified by a photomultiplier tube, which outputs a current pulse that is accumulated and reported as counts per second (cps). The gamma probe is lowered to the bottom of a drillhole, and data are recorded as the tool travels to the bottom and then is pulled back up to the surface. The current pulse is carried up a conductive cable and processed by a logging system computer that stores the raw gamma cps data.
The basis of the indirect uranium grade calculation (referred to as "eU3O8" for "equivalent U3O8") is the sensitivity of the detector used in the probe, which is the ratio of cps to known uranium grade and is referred to as the probe calibration factor. Each detector's sensitivity is measured when it is first manufactured and is also periodically checked throughout the operating life of each probe against a known set of standard "test pits," with various known grades of uranium mineralization or through empirical calculations. Application of the calibration factor, along with other probe correction factors, allows for immediate grade estimation in the field as each drillhole is logged.
Downhole total gamma data are subjected to a complex set of mathematical equations, taking into account the specific parameters of the probe used, speed of logging, size of bore hole, drilling fluids, and presence or absence of any type of drillhole casing. The result is an indirect measurement of uranium content within the sphere of measurement of the gamma detector.
The conversion coefficients for conversion of probe counts per second to %eU3O8 equivalent uranium grades are based on the calibration results obtained at the United States Department of Energy Uranium Calibration Pits.
Most of the sample data available for the evaluation of resources for the Sheep Mountain Project is radiometric geophysical log data. EFR possesses the complete hard copy data set which was passed through the chain of property title from WNC; through USECC; through the joint venture between UPC and U1; to Titan through its acquisition of UPC and acquisition of U1's share of the property; and ultimately to EFR, though its acquisition of Titan.
For the Congo Pit and Sheep Underground, the majority of the hard copy logs were reviewed both for data verification and for geologic interpretation. The majority of the Sheep Underground logs were also available as scanned images and were reviewed for both data verification and for geologic interpretation. In addition, the data includes an extensive collection of detailed mine and drill maps, both surface and underground. The underground maps show the extent of mining by date and include rib and longhole data. All pertinent maps with respect to mine design, extent of mining, drill maps, and mapping related to the mine permit have been scanned and rectified digitally.
Mineral Resource and Reserve estimates for the Sheep Mountain Project are based on radiometric data.
11.2.1 Disequilibrium
Disequilibrium in uranium deposits is the difference between equivalent (eU3O8) grades and assayed U3O8 grades. Disequilibrium can be either positive, where the assayed grade is greater than the equivalent grades, or negative, where the assayed grade is less than the equivalent grade. A uranium deposit is in equilibrium when the daughter products of uranium decay accurately represent the uranium present. Equilibrium occurs after the uranium is deposited and has not been added to or removed by fluids after approximately one million years. Disequilibrium is determined during drilling when a piece of core is taken and measured by two different methods, a counting method (closed-can) and chemical assay. If a positive or negative disequilibrium is determined, a disequilibrium factor can be applied to eU3O8 grades to account for this issue.
Chemical assays for verification of radiometric equilibrium are discussed in Section 12, Radiometric Equilibrium. As discussed in this report, available data indicates that variations in radiometric equilibrium are local in their effect which impacts the mining grade control program but does not appreciably affect the overall Mineral Resources or Reserves.
11.3 Core Sampling
Confirmatory drilling in accordance with Canadian NI 43-101 standards began in 2005. As part of this drilling program, drill core was collected for assay confirmation and overburden and metallurgical testing. A review by an EFR Consultant of the geologic and geophysical log data concluded that the data was collected in accordance with current industry practice and to be reliable. This data confirms historical drilling results and is current and applicable to this Preliminary Feasibility Study.
11.3.1 Sample Preparation
With respect to the 2009 drilling program, drill samples were collected for overburden testing per WDEQ regulations and for metallurgical testing. Drill samples for overburden testing were split with a standard rifling splitter with half of the sample sent to Energy Laboratories Inc. of Casper, Wyoming, an independent certified commercial analytical laboratory, for testing in accordance with WDEQ guidelines and the remainder was sealed in plastic bags and is currently stored in an on-site warehouse facility. Drill samples for metallurgical testing were stored and sealed in new 5-gallon plastic buckets. Samples within the mineralized zones as determined by radiometric and USAT logging were delivered to Lyntek's facility in Denver, Colorado for further assay and testing by BRS personnel. A chain of custody was established. Representative sample splits were prepared for chemical assay and were delivered to Energy Laboratories Inc. of Casper, Wyoming, an independent certified commercial analytical laboratory, for assay utilizing standard protocol and adhering to a chain of custody.
11.3.2 Assaying and Analytical Procedure
Assays from the 2009 drilling program were used in the selection of samples for metallurgical testing. In addition to the samples from the Congo Pit drilling, mineralized stockpiles from mine material at the Sheep I shaft was sampled, assayed, and utilized for metallurgical testing. Seven samples of the Sheep I stockpile were collected ranging in grade from 0.022% to 0.067% U3O8 and averaging 0.045% U3O8. Bottle roll leach tests have been completed for composite samples selected to represent mineralization at both the Congo Pit and Sheep Underground. The remaining samples, with the exception of reserves sample splits, were utilized in the column leach testing for heap leach amenability. Assays of blind duplicates of select samples and check assays, at Hazen Research, a separate and independent commercial laboratory were completed. The results of the assays compared favorably. The assay data was generally not used to verify the radiometric data as this had already been done using the USAT data. A general comparison of assay data to USAT data was completed and the results were comparable. Radiometric equilibrium determinations and verification of assay data is discussed in Section 12.
No samples were collected during the 2010 drilling program. Drill cuttings were logged in the field. All holes were logged by a commercial geophysical logging company. Geophysical log data was provided in both hard copy and electronic format with the down-hole count data converted to ½ foot equivalent % U3O8 grades. The author was present during the 2010 drilling program.
In 2011 both rotary and reverse circulation drilling was completed. Bulk samples from the reverse circulation drilling have been retained in sealed containers stored at the site for further metallurgical testing but no chemical assays have been completed as of the effective date of this report.
The reader should note that it is common industry practice for the exploration and evaluation of uranium mineralization in the United States to rely upon downhole radiometric geophysical log data for the determination of the thickness and grade of mineralization. The sampling and assay methods described herein were for the purposes of developing bulk composite samples for metallurgical testing and environmental testing.
Downhole radiometric geophysical log data was converted to equivalent uranium assays in half-foot increments for geophysical logs with digital data. Geophysical logs with only analog data were interpreted using standard methods set out originally by the Atomic Energy Commission ("AEC"). The primary method employed for this project is referred to as the half amplitude method. In the case of the half amplitude method the sample thickness is determined by the log signature and while interpreted to the nearest half foot the thickness of the sample varies.
11.3.3 Density Analyses
A unit weight of 16 cubic feet per ton or 2.439 tonnes/m3 was assumed for all Mineral Resource and Reserve calculations. This assumption was based on data from feasibility studies prepared by previous operators on the mining and production history of the mines within the Sheep Mountain Project but was not independently confirmed. Some previous estimates used a density of 15 cubic feet per ton. The use of 16 cubic feet per ton is recommended the Authors as a conservative value.
In summary, the data utilized in this report is considered accurate and reliable for the purposes of this report.
11.4 Opinion of Author
In the opinion the Authors, the sample preparation, security and analytical procedures are reliable and adequate for the purposes of this report
12.0 DATA VERIFICATION
12.1 Congo
Historic drill data for each drillhole consisting of radiometric data was posted on drill maps including collar elevation, elevation to the bottom of the mineralized intercept, thickness of mineralization, grade of mineralization, and elevation of the bottom of the hole. Half foot and composite intercept data in paper printouts were available from Western Nuclear's 1979 and 1980 Preliminary Feasibility Study geostatistical model. Data entry was checked and confirmed including a review of the original drill geophysical and lithologic logs. Drillhole locations were digitized from the drill maps to create a coordinate listing and then plotted. The resultant drill maps were then checked and confirmed by overlaying with the original maps.
Titan drilled 5 exploration holes for a total of 1,700 feet in 2009. The purpose of this program was to take samples for overburden classification and also to take bulk mineralized samples for heap leach testing. Overburden samples were gathered every five feet down hole until water was added for lifting cuttings. The depth where the holes either started making water or water was added was approximately 330 to 360 feet. Sampling stopped at that point in each hole if it was drilled deep enough to encounter that zone. Bulk samples were gathered every two feet through known mineralized zones. The drill locations were picked by "twinning" historic drill holes.
The following table provides a comparison of the 2009 drilling to adjacent or twinned historic drill holes.
Table 12-1 Comparison of 2009 Drilling to Historic Drilling
Drill hole |
Twinned |
Offset |
Results |
Congo 1 |
S16-96 |
3' |
Good correlation, marginally higher radiometric grades encountered |
Congo 2 |
S16-291 |
3' |
Good correlation, slightly lower radiometric grades in some zones with higher in others |
Congo 3 |
GG1-36 |
24' |
Radiometric zones correlated |
Congo 3 |
GG1-37 |
35' |
Radiometric zones correlated |
Congo 4 |
S16-253 |
24' |
Acceptable correlation, slightly lower radiometric grades in some zones with higher in others |
Congo 5 |
S16-146 |
21' |
Good correlation, marginally higher radiometric grades encountered |
Drilling completed within the Congo Pit area in 2010 and 2011 helped to confirm and extend the mineralization as projected in the Congo Pit Area. The 2010 and 2011 drill data were compared to historic drilling by collating the geophysical logs and comparing the GT of the 2010 and 2011 drilling to historic drilling by individual sands.
12.2 Sheep Underground
Historic drill data for each drill hole consisting of radiometric data was posted on drill maps including collar elevation, elevation to the bottom of the mineralized intercept, thickness of mineralization, grade of mineralization, and elevation of the bottom of the hole. Data entry was checked and confirmed including a review of the original drill geophysical and lithologic logs. Drill hole locations were digitized from the drill maps to create a coordinate listing and then plotted. The resultant drill maps were then checked and confirmed by overlaying the original maps.
Once the database had been developed and data entry confirmed, each mineralized intercept within an individual drill hole was evaluated on a hole by hole basis and combined into the corresponding zone to represent a probable mining thickness appropriate for underground mining methods (minimum of six feet). This process eliminated some thin and/or isolated mineralized intercepts. The resultant data was then utilized to develop the Grade Thickness ("GT") map, GT and Thickness (T) Contours. The GT map was then compared to mine plans available from previous studies to verify the data and geologic interpretation.
A confirmatory drilling program in 2005 was completed consisting of 19 drill holes totaling 12,072 feet. Two of the 19 holes completed by UPC were located in Section 28 with the purpose of confirming mineralization within the Sheep underground mine area. Previous report concluded that the confirmatory drilling did verify historic drilling. The author reviewed the drilling and found that the data did reasonably correlate with respect to the geologic sand units and the general thickness and tenor of mineralization.
12.3 Radiometric Equilibrium
Radiometric equilibrium studies completed in 2006 evaluated data including some 223 samples for which there was gamma equivalent closed can analyses and chemical assays and concluded "Although the data exhibit high variability, there does not appear to be a significant bias and Scott Wilson RPA is of the opinion that the eU3O8 values are appropriate for use in the resource estimate," (RPA, 2006).
This data was reviewed by the Authors; however, the samples had not been preserved so no confirmatory analysis could be completed. At the consultant's recommendation, during the 2009 drilling program, USAT was employed to further examine radiometric equilibrium conditions (BRS, 2010). This technique was used since past drill programs had reported difficulty in sample recovery from coring and this method would ensure a direct comparison of gamma equivalent values and direct uranium measurements via the USAT from downhole logging.
Table 12-2 provides a direct comparison of the equivalent gamma and direct USAT measurement of in situ uranium values for the five drillholes completed in the Congo Pit in 2009. For the 2009 drilling program downhole logging of the drillholes was completed using standard gamma technology as well as a USAT, operated by Century Wireline Services of Tulsa OK. The USAT method measures the gamma intensity of Pa234, the short lived (t½ = 6.7 hr.) second daughter product of U238. U238 reaches secular equilibrium with Pa234 within approximately 4 months thus USAT gives a nearly direct measurement of uranium content and therefore allows determination of the equilibrium state of the uranium mineralization intersected in the hole. Note that the measurements reflected various mineralized zones vary in depth from 24.5 to 464 feet from the surface. The table displays the depth in feet of the top and bottom of the mineralized zone (from and to), the thickness of the mineralized zone ("THK") in feet, the grade of equivalent uranium in weight percent and GT determined by downhole gamma, and the grade of uranium in weight percent and GT determined by downhole USAT logging.
The disequilibrium factor (DEF) was calculated for each mineralized intercept and summarized for each drillhole. A DEF factor of 1 indicates that radiometric equilibrium exists. DEF factors less than 1 indicate a depletion of uranium with respect to gamma equivalent measurements and a DEF factor greater than 1 indicates an enrichment of uranium values with respect to gamma equivalent values. The DEF from 45 mineralized intercepts from the 2009 drilling ranged from a low factor of 0.73 to a high factor of 2.07 with an average value of 1.05. Although this data indicates the potential for radiometric enrichment, a conservative DEF of 1was used in the resource calculations.
Table 12-2 Comparison of Radiometric Equilibrium based on Gamma and USAT Logging
Drill Hole |
From |
To |
Thick |
% eU3O8 (gamma) |
GT Gamma |
% U3O8 (USAT) |
GT USAT |
DEF |
Congo 1 |
24.5 |
26.5 |
2 |
0.063 |
0.126 |
0.054 |
0.108 |
0.857 |
|
58 |
60 |
2 |
0.05 |
0.1 |
0.061 |
0.122 |
1.220 |
|
68 |
71 |
3 |
0.087 |
0.261 |
0.078 |
0.234 |
0.897 |
|
71 |
77 |
6 |
0.031 |
0.186 |
4ft @ .096 |
0.384 |
2.065 |
|
79.5 |
81 |
1.5 |
0.046 |
0.069 |
0.059 |
0.0885 |
1.283 |
|
115 |
119 |
4 |
0.049 |
0.196 |
Not run |
N/A |
N/A |
sum/average |
|
|
|
|
0.742 |
|
0.9365 |
1.262 |
Congo 2 |
56.5 |
58.5 |
2 |
0.271 |
0.542 |
0.264 |
0.528 |
0.974 |
|
74.5 |
76.5 |
2 |
0.183 |
0.366 |
4' @ .137 |
0.548 |
1.497 |
|
95 |
98 |
3 |
0.06 |
0.18 |
0.048 |
0.144 |
0.800 |
|
118.5 |
120.5 |
2 |
0.103 |
0.206 |
Not run |
N/A |
N/A |
|
213 |
216 |
3 |
0.09 |
0.27 |
0.066 |
0.198 |
0.733 |
|
219.5 |
222.5 |
3 |
0.183 |
0.549 |
0.169 |
0.507 |
0.923 |
|
236 |
239 |
3 |
0.114 |
0.342 |
0.111 |
0.333 |
0.974 |
|
464 |
466.5 |
2.5 |
0.035 |
0.0875 |
0.035 |
0.0875 |
1.000 |
sum/average |
|
|
|
|
2.3365 |
|
2.3455 |
1.004 |
Congo 3 |
52 |
65 |
13 |
0.073 |
0.949 |
0.071 |
0.923 |
0.973 |
|
79 |
81 |
2 |
0.028 |
0.056 |
Not run |
N/A |
N/A |
|
90 |
94.5 |
4.5 |
0.097 |
0.4365 |
3' @ .115 |
0.345 |
0.790 |
|
96 |
101 |
5 |
0.107 |
0.535 |
0.117 |
0.585 |
1.093 |
|
117.5 |
121.5 |
4 |
0.08 |
0.32 |
6' @ .05 |
0.3 |
0.938 |
|
124 |
126.5 |
2.5 |
0.027 |
0.0675 |
0.031 |
0.0775 |
1.148 |
|
154 |
156.5 |
2.5 |
0.134 |
0.335 |
0.131 |
0.3275 |
0.978 |
|
172.5 |
178 |
5.5 |
0.044 |
0.242 |
0.04 |
0.22 |
0.909 |
sum/average |
|
|
|
|
2.885 |
|
2.778 |
0.963 |
Congo 4 |
49 |
52.5 |
3.5 |
0.028 |
0.098 |
0.023 |
0.0805 |
0.821 |
|
88 |
89.5 |
1.5 |
0.023 |
0.035 |
Not run |
N/A |
N/A |
|
91 |
94 |
3 |
0.05 |
0.150 |
Not run |
N/A |
N/A |
|
100 |
101.5 |
1.5 |
0.029 |
0.044 |
Not run |
N/A |
N/A |
|
104.5 |
109 |
4.5 |
0.134 |
0.603 |
0.149 |
0.6705 |
1.112 |
|
113 |
114.5 |
1.5 |
0.028 |
0.042 |
Not run |
N/A |
N/A |
|
132.5 |
136 |
3.5 |
0.072 |
0.252 |
0.073 |
0.2555 |
1.014 |
|
166.5 |
169.5 |
3 |
0.088 |
0.264 |
0.099 |
0.297 |
1.125 |
|
207.5 |
214 |
6.5 |
0.061 |
0.3965 |
0.054 |
0.351 |
0.885 |
sum/average |
|
|
|
|
1.6135 |
|
1.6545 |
1.025 |
Congo 5 |
131.5 |
133.5 |
2 |
0.054 |
0.108 |
0.041 |
0.082 |
0.759 |
|
143 |
146 |
3 |
0.025 |
0.075 |
Not run |
N/A |
N/A |
|
153 |
158.5 |
5 |
0.076 |
0.38 |
0.07 |
0.35 |
0.921 |
|
160 |
167 |
7 |
0.151 |
1.057 |
0.162 |
1.134 |
1.073 |
|
172.5 |
179 |
6.5 |
0.07 |
0.455 |
0.066 |
0.429 |
0.943 |
|
199.5 |
206.5 |
7 |
0.047 |
0.329 |
0.041 |
0.287 |
0.872 |
|
219 |
222.5 |
3.5 |
0.027 |
0.095 |
Not run |
N/A |
N/A |
|
267.5 |
272 |
4.5 |
0.051 |
0.2295 |
0.043 |
0.1935 |
0.843 |
|
293.5 |
297 |
3.5 |
0.062 |
0.217 |
0.071 |
0.2485 |
1.145 |
|
303.5 |
305.5 |
2 |
0.075 |
0.15 |
.5'@ .062 |
0.31 |
2.067 |
|
311 |
316.5 |
5.5 |
0.056 |
0.308 |
0.076 |
0.418 |
1.357 |
|
325 |
335 |
10 |
0.126 |
1.26 |
7.5'@.143 |
1.0725 |
0.851 |
sum/average |
|
|
|
|
4.4935 |
|
4.5245 |
1.007 |
12.4 Opinions of Author
In the opinion the Authors, the data verification are reliable and adequate for the purposes of this report
13.0 MINERAL PROCESSING AND METALLURGICAL TESTING
13.1 Historic Mineral Processing
Western Nuclear Corporation (WNC) processed feed from Sheep Mountain over a 30-year period from the early 1950s through the mid-1980s at their Split Rock Mill, which was located north of Jeffrey City, WY, along the haul road to the Gas Hills. WNC also processed Gas Hills ores at its mill and operated a commercial heap leach, as did Union Carbide Corp. (UCC). Historical and published data indicate an acid consumption of 50 pounds per ton H2SO4 and a loss during heap leaching of 0.008% U3O8 (Woolery, 1978). Recent metallurgical laboratory test results, are consistent with or better than historic heap leach experience, indicating potentially higher uranium recovery and lower acid consumption.
Early Heap Leaching by Western Nuclear Inc.
In 1961, Western Nuclear began heap leaching of low-grade uranium bearing material from the Gas Hills region in central Wyoming1 . Mineralized material was crushed to 90 percent minus 1-inch and hauled with 15-ton dump trucks. The mineralized material averaged 0.05-0.06% U3O8 and the overall consumption of sulfuric acid averaged 50.6 pounds per ton of ore. Uranium extraction into the pregnant leach solution averaged 75 percent, corresponding to a leached residue assay of approximately 0.013% U3O8. It is possible that the heap preparation and leaching practices that were employed by Western Nuclear impaired leaching performance, since large column tests (4-feet diameter x 17-foot depth) using the same parameters obtained 88.3 percent uranium extraction, leaving a residue assaying 0.006% U3O8 from mineralized material assaying 0.051% U3O8.
Early Heap Leaching by Union Carbide Corp.
Following a comprehensive laboratory and pilot-scale program, Union Carbide began construction in 1973 of a 225,000-ton heap2 . Low-grade stockpiled material that was mostly unconsolidated (and therefore not crushed) was added to the heap to a depth of 20 feet over a compacted clay liner. With a sulfuric acid addition of approximately 40 pounds per ton of ore, leach residues assayed 0.008% U3O8. Union Carbide elected to avoid winter operation and only operated the heap from May 1 until October 1.
It is important to point out that the leaching heaps operated by Western Nuclear and Union Carbide did not benefit from the vast amount of design and operating experience that has been accumulated since the early-1980s from hundreds of heaps treated globally for extraction of gold and copper from low-grade oxidized ores. Given this collection of evolutionary improvements, is quite likely that heap leaching of the same uranium ores now would result in significantly higher extractions.
13.2 Pre-Feasibility Metallurgical Studies
In late-2009, drill cuttings and stockpile grab samples were obtained from the Congo Pit, the same resource that provided the feed for the Union Carbide heap leaching program. The drill cuttings were collected during mineral resource validation drilling and consisted of several wide-spaced holes The stockpiles had been left by UECC near the Sheep 1 Shaft. Bottle roll leach tests were conducted using both acid and alkaline lixiviants. Acid leaching was preferred on the basis of higher uranium extraction and lower reagent costs. Also, alkaline leaching caused swelling of clay minerals, which could reduce solution percolation in a heap leaching configuration. (This effect is commonly encountered with alkaline leaching and is usually the result of sodium ion.) These tests resulted in acid consumptions below 20 lb H2SO4 per ton of feed with residues assaying 0.009% U3O8 or less.
For the PFS, a constant residue of 0.010% U3O8, including soluble uranium losses in subsequent solution processing, was assumed. This assumption was conservative with respect to test results, but representative of historic heap leaching experience with similar mineralized material. The soluble uranium loss in the rinsed heap residue and the impurity bleed to the evaporation pond will likely be on the order of two percent, suggesting a heap extraction of about 91.8 percent. This initial laboratory work was followed by large-scale column leaching tests, as described in Section 13.3.
________________________________
1 Mashbir, D. S., "Heap Leaching of Low-Grade Uranium Ore", Mining Congress Journal, December 1964, pages 50-54.
2 Woolery, R. G., et al., "Heap Leaching of Uranium: A Case History", Mining Engineering, March 1978, pages 285-290.
In late 2009, drill cuttings were obtained from the Congo Pit during mineral resource validation drilling consisting of several wide spaced holes and from existing mineralized stockpiles left by USECC near the Sheep I Shaft. Bottle roll leach tests were conducted using both acid and alkaline lixiviants. Acid leaching was preferred based on recovery and cost of lixiviant. In addition, the alkaline leach tests showed some swelling of clay minerals, which could impede flow in the heap. Acid consumption was less than 20lbs./ton with losses of 0.009% U3O8 or less.
13.3 Column Leach Studies
Three laboratory-scale column leaching studies designed to mimic commercial heap performance were completed in mid-2010 to support the Sheep Mountain Project PFS. Mineralized material tested in the studies was obtained from existing stockpiles left in the 1980s and fresher mineralized rock collected during the 2010 exploration drilling program. The leaching chemistry that was selected was based on a combination of industry experience and results of the previous bottle roll tests. The lixiviant contained sulfuric acid, supplemented by sodium chlorate, NaClO3, which is traditionally used to oxidize insoluble tetravalent uranium to the soluble hexavalent state. Typically, bottle rolls will establish maximum estimates of both uranium extraction and acid consumption. The tests were conducted in Sheridan, WY, at Intermountain Laboratories, Inc., and were supervised by R. A. Garling of R&D Enterprises, Inc. Technical advice and support were provided by Lyntek, Inc., Dr. Terry McNulty, and Doug Beahm (author of the NI43-101 reports for Sheep Mountain).
The first two columns, Tests 1 and 2, were loaded with stockpile material which, due to 20-plus years of exposure to weathering, were believed to be fully oxidized. Two nearly identical columns were loaded with 70 kg (dry basis) of mineralized material assaying 0.075% U3O8. The columns were constructed of clear plastic with 6 inches inside diameter and a total height of 14 feet. The bottoms consisted of a supporting grid covered by canvas to minimize loss of fines into the pregnant leach solution (PLS). The initial charge height was 12 feet. The columns were operated in a downward flow mode to simulate heap leaching practice and the solution flowrate was 0.005 gallons per minute per square foot of charge surface, the industry standard for solution application rate. Following recommendations of the consultants, the lixiviant contained approximately 10 grams of sulfuric acid per liter (gpl H2SO4) and the equivalent of 3 lb/ton of sodium chlorate. After 22 days of leaching and a rinse and drain period of over one month, residue assays of 0.0001% U3O8 equated to about 99.9 percent extraction of the uranium.
Subsequently, a third column, Test 3, was conducted from November 12 through December 20, 2010. A single column was loaded with 80.5 kg of drill cuttings from the recent drilling program that assayed 0.104% U3O8. This test was designed to demonstrate the effectiveness of the leaching conditions on unoxidized material with a uranium grade approximately equivalent to the anticipated life-of-mine grade. The same lixiviant chemistry used in the first two columns extracted 97.5 percent of the uranium, leaving a residue assaying 0.0029% U3O8. Unlike the first test, in which over 95 percent of the uranium in the column was extracted by the first pore volume (PV) of lixiviant, the fresh mineralized material exhibited more traditional leaching behavior and required approximately 2 PV to achieve similar uranium extraction. The overall acid consumption in Test 3 was approximately 4 lb/ton, compared with about 1.7 lb/ton in Tests 1 and 2. Very little oxidation was required in any of the three tests, as the initial sodium chlorate addition was sufficient to maintain an Oxidation/Reduction Potential (ORP) of +450 mv.
In addition to demonstrating uranium leaching efficiency, the three tests provided information relevant to heap and process plant design criteria, as well as supporting a Source Materials license application. Information regarding slump of the column charge, pooling of solution on the column surface, and maximum allowable solution application rates was obtained from the tests. Data related to future health physics (radiological and chemical) issues likely to be encountered during licensing activities were also collected. Table 13-1 summarizes results from the three column tests.
Table 13-1 Summary of Column Leach Results
Column # |
1 |
2 |
3 |
Density (g/cm3) |
1.50 |
1.36 |
1.46 |
Uranium Moisture (%) |
8.5 |
8.5 |
4.3 |
Sulfuric Acid Consumed (lb/st) |
1.68 |
1.62 |
3.90 |
Lixiviate [H2SO4] (g/L) |
10 |
10 |
10 |
Sodium Chlorate Addition Rate (lb/st) |
3 |
3 |
3 |
Uranium Grade Assayed (%U3O8) |
0.077 |
0.077 |
0.1039 |
Tails Grade Assayed (%U3O8) |
0.0001 |
0.0001 |
0.0029 |
Tails Moisture (%) |
13.7 |
14.7 |
17.0 |
Uranium Grade (%U3O8) |
0.0763 |
0.0729 |
0.1128 |
Uranium Recovery (%) |
99.87 |
99.86 |
97.47 |
(RDE, 2011)
13.4 Supplemental Laboratory Experiments
Supplemental duplicates of samples prepared by Lyntek were analyzed by Energy Labs and Hazen Research, Inc., and then delivered to J. E. Litz and Associates in Golden, CO, for additional agitation leach tests, also with dilute aqueous sulfuric acid, but using flasks with internal agitator, rather than bottle rolls3 . The tests were conducted with minus 28-mesh material in a 33 percent solids slurry with samples taken at 4, 8, 24, and 48 hours; tests were terminated at 48 hours. These sampling intervals provided kinetic data. Acidity was maintained at pH 1.1-1.6 with acid additions as needed, and the oxidation potential was kept above +450 mv (standard platinum vs. calomel electrodes) with sodium chlorate additions that varied between 0 and 5 lb/ton for different samples. Final free acid concentrations were not titrated, so true acid consumptions could not be calculated, but total acid additions were only in the range of 5.6 to 20.7 pounds per ton.
The samples tested by Litz were somewhat acidic in the range pH 2.90 to 6.55 prior to the addition of sulfuric acid, so there was evidence of moderate oxidation prior to sample collection. This was probably due to natural weathering, possibly accelerated by the action of bacteria. Doug Beahm commented4 that "fresh" mineralized material was actually highly oxidized during Union Carbide's 1980s mining period, frequently resulting in the presence of dissolved uranium in surface and underground water. Mining of the Sheep Mountain deposit will eliminate this potential source of groundwater contamination by uranium.
The 48-hour uranium extractions obtained by Litz ranged from 86.6 to 93.6 percent, but residue assays were proportional to head assays, rather than being constant. Three samples with head assays averaging 0.067% U3O8 yielded residues averaging 0.0087% U3O8, whereas two samples with heads averaging 0.123% U3O8 produced residues averaging 0.019% U3O8. Examination of the laboratory worksheets did not reveal a satisfactory resolution, but it is possible that the residues were not adequately rinsed to remove soluble uranium. The important lesson from the Litz test series was that a different leaching technique confirmed high extractability of the uranium with reasonable acid consumptions and low oxidant demand.
Key points with respect to project economics and operational efficiencies:
________________________________
3 Litz, J. E., "Preliminary Tests of Titan Drill Cuttings", February 26, 2010.
4 Personal communication on February 10, 2010.
The very high uranium extractions observed in the column leach studies, if experienced on a production scale, would also significantly reduce operating costs per pound of uranium. Although the column tests yielded very high uranium extractions, as summarized in Table 13-1, the PFS conservatively used an overall uranium recovery of 91.7 percent, based on the average sample grade and a constant residue assay of 0.010 % U3O8, assuming soluble uranium losses of 2 percent (McNulty 2012).
The relatively short leach cycles (2-3 pore volumes of lixiviant) and realistic application rates, if experienced on a production scale, will reflect favorably on operating costs and efficiencies.
The behavior of the column charges during leaching and the observed geotechnical properties indicate that the material could be placed directly on the leach pads without a gravel drain layer, thereby reducing capital costs. However, the PFS conservatively included the cost of a gravel drain.
The samples for column testing were collected spatially from within the mineral deposit in order to produce a composite representative of production during the mine life, however, only a relatively small amount of material was actually tested. Analysis of solutions produced during testing did not reveal any deleterious elements that could have a significant effect on process performance or yellowcake marketability (RDE 2011). Additional tests on future samples of the resource could yield results that vary either positively or negatively from those obtained for the PFS. Conservative assumptions based on available test results, as summarized in Table 13-1, were incorporated in the cost estimates and financial evaluations. Heap leaching and solution processing are discussed in Section 17.
13.5 Current Metallurgical Background and Industry Practice:
Sulfuric acid consumption has two components: (1) The uranium minerals themselves require acid for dissolution and complexing of the uranium as uranyl sulfate. At Sheep Mountain, the dominant uranium minerals are uranophane, Ca(UO2)2(SiO2)2(OH)2•5H2O, and autunite, Ca(UO2)2(PO4)2•10-12H2O. Dissolving these minerals will form hydrated calcium sulfate (gypsum), silicic acid, and phosphoric acid, but the total acid consumption with a low-grade mineralized material is minor; (2) Other minerals in the mineralized material are host rock constituents and will consume acid as they are dissolved. At Sheep Mountain, the principal acid consumer in this category is probably calcite, calcium carbonate, which reacts to form gypsum. The known geology does not suggest that other common acid consuming minerals such as orthoclase, a potassium aluminum silicate, are present. Therefore, it is not surprising that the laboratory tests and column tests on samples from Sheep Mountain have revealed low acid consumptions.
When the PEA was submitted in 2010, there was no recent industry experience in heap leaching of uranium mineralization. Few examples existed, but they were confined to the 1960s and 1970s; however, since then, there have been 40 years of accumulated experience in heap leaching of low-grade oxidized gold ores. This experience has vastly improved our understanding of variables such as crushing, agglomeration, and heap construction of copper ores, as well as gold ores. Now, over half of domestic copper production derives from heap leaching. Also, about 30 percent of domestic gold production is extracted from heaps.
Furthermore, commercial production of uranium from heap leaching operations began in Brazil in 2010 (Gomeiro and Morais, 2010) and is now being practiced in Africa at Somair and Imouraren in Niger and Trekkopje in Namibia (Dunne, et. al., 2019). Most uranium heap leaching employs sulfuric acid as the dissolving and complexing agent. However, Trekkopje was unique when it began operations in 2019 because it employs alkaline heap leaching to accommodate the calcareous host rock which would require excessive sulfuric acid consumption. These heap leaching operations all employ heap heights in the range 20-30 feet with low mineralized material grades in the range 0.02-0.05% U3O8.
Although heap leaching is simple in principle, it is fairly complex in practice and judgment is required in designing and operating a heap to maximize contact of the rock fragments with leaching solution and to avoid solution loss. The uranium-bearing rock must be crushed to a small size to ensure adequate and rapid contact of the uranium minerals with the leaching solution. However, excessive crushing wastes energy and produces fines that can impede solution movement in the heap. The optimum top-size typically is in the range 0.75-2.0 inch but crushing to this product size will inevitably create fine particles that will migrate, collect, and create relatively impervious lenses which will block the downward percolation of leaching solution, thereby reducing uranium extraction.
The harmful effect of fines can be very effectively minimized by agglomeration, which binds the fine particles to coarser rock fragments. Whereas agglomeration ahead of the leaching of gold with alkaline cyanide solution is usually done with Portland cement, agglomeration of copper mineralized material is accomplished simply by addition of dilute aqueous sulfuric acid. The agglomeration mechanism is complex, but its effectiveness is partially due to the formation of gypsum, which acts as a cementing agent. The same technique can be applied to agglomeration of uranium-bearing material, and the method of acid addition as discussed in Section 17 of this report.
Another threat to heap permeability can occur during loading of mineralized material onto a pad while forming the heap. For a number of years, heaps that were leached for recovery of gold or copper were constructed by driving haul trucks onto the heap and dumping in piles that could be levelled with a tracked dozer. Eventually, the industry learned that this practice was also leading to impaired heap permeability resulting from compaction caused by ground pressure exerted by the trucks. Initial attempts to remedy compaction consisted of ripping the upper surface of the heap with a dozer tooth, but this generally proved to be ineffective.
Ultimately, the preferred solution was to construct the heap with a traversing conveyor that built the heap in a series of overlapping windrows. Various combinations of equipment were tried until the stacker was developed. This is a moveable conveyor with very high-speed belt that slings the mineralized material stream a distance of 50 to 100 feet, allowing construction of semi-circular rows of mineralized material that are uncompacted and uniformly permeable. The stacker is supplied with mineralized material by one or more conventional conveyors that can be moved to remain near the feed hopper for the mobile stacker. As discussed in Section 17, this is the heap construction method that is envisioned for the Sheep Mountain Project.
13.6 Opinion of Author
In the opinion of the Authors, the data are reliable and adequate for the purposes of this report.
14.0 MINERAL RESOURCE ESTIMATES
14.1 General Statement
The mineral resource estimation and geological interpretation methods methodology described herein have been employed by similar operating uranium mines in the Gas Hills. The mining methods and factors recommended have been employed successfully at the Sheep Mountain Project (the Project) in the past. Successful uranium recovery from the mineralized material at Sheep Mountain and similar areas such as the Gas Hills has been demonstrated via both conventional milling and heap leach recovery. The Project is a brown-field development located in the State of Wyoming, which tends to favor mining and industrial development. The Project has been well received locally and will also provide substantial revenues to both Fremont County and the State of Wyoming in addition to providing long-term employment for the region. Wyoming ranks 16th among 83 mining jurisdictions surveyed by the Fraser Institute in with respect to favourability for mining ventures. The Authors are not aware of any factors including environmental, permitting, taxation, socio-economic, marketing, political, or other factors, which would materially affect the mineral resource estimate, herein.
The estimates of Mineral Resources were completed for the Sheep Underground and Congo Pit areas. Within these areas preliminary mine designs were completed. Preliminary mine designs focused on the areas with the strongest and most continuous mineralization and were not optimized for maximum mineral resource extraction. Mineral Resources were estimated adjacent to both the Congo pit and Sheep underground, which have reasonable prospects for economic extraction. These areas would be accessible for mining from the pit highwalls by conventional drift mining or using modern highwall mining systems and through the underground with additional stopping and/or raises.
Those portions of the Mineral Resources not readily accessible from either the Congo pit or Sheep underground mine were excluded from the mineral resource estimation as they do not currently meet the criteria for reasonable prospects of economic extraction. Additional areas of mineralization are known within the project area, which have not been fully evaluated and/or do not meet reasonable prospects for eventual economic extraction based on currently available data. These areas have also been excluded in the mineral resource estimate.
Minimum cut-off grades, based on direct operating costs, are 0.05% eU3O8 for open pit mining and 0.075% eU3O8 for underground mining (Table 14-1). Mineral resource estimates were estimated using GT cut-offs of 0.1 for open pit mine areas and 0.3 for underground mine areas. Cut-off grades are discussed in Section 15.4.
The mineral resource estimates presented herein have been completed in accordance with NI 43-101 and S-K 1300 standards and represent the estimated in situ Mineral Resources. Based on the drill density, the apparent continuity of the mineralization along trends, geologic correlation and modeling of the deposit, a review of historic mining with respect to current resource projections, and verification drilling, the Mineral Resource estimate herein meets NI 43-101 and S-K 1300 criteria as an Indicated Mineral Resource. A summary of total mineral resource is provided in Table 14-1.
A summary of total Mineral Resources inclusive of Mineral reserves is provided in Table 14-1. Mineral Reserve estimate is discussed in Section 15. A summary of the Mineral Resource estimate, fully exclusive and are not additive to the total Mineral Resources, is provided in Table 15-1. A summary of total Mineral Resources exclusive of Mineral reserves is provided in Table 14-2.
A discussion of individual resource areas follows.
Table 14-1 Sheep Mountain Mineral Resources Inclusive of Mineral Reserves - April 9, 2019
Classification |
Zone |
G.T. |
Tons |
Grade % |
Pounds |
Indicated |
Sheep Underground |
0.30 |
5,546 |
0.118% |
13,034 |
Indicated |
Congo Pit Area |
0.10 |
6,116 |
0.122% |
14,903 |
Total Indicated |
|
11,663 |
0.120% |
27,935 |
Notes:
1: NI 43-101 and S-K 1300 definitions were followed for Mineral Resources
2: In Situ Mineral Resource are estimated at GT cut-off of 0.10 (2 ft. of 0.05% eU3O8) for open pit and 0.30 (6 ft. of 0.05% eU3O8) for underground
3: Mineral Resources are estimated using a long-term Uranium price of US$65 per pound
4: Bulk density is 0.0625 tons/ft3 (16 ft3/ton)
5: Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability
6: Numbers may not add due to rounding
A summary of total Mineral Resources exclusive of Mineral reserves is provided in Table 1-3.
Table 14-2 Sheep Mountain Mineral Resources Exclusive of Mineral Reserves - April 9, 2019
Classification |
Zone |
G.T. |
Tons |
Grade % |
Pounds |
Indicated |
Sheep Underground |
0.30 |
2,048 |
0.09% |
3,786 |
Indicated |
Congo Pit Area |
0.10 |
2,161 |
0.13% |
5,786 |
Total Indicated |
|
4,210 |
0.11% |
9,570 |
Notes:
1: NI 43-101 and S-K 1300 definitions were followed for Mineral Resources
2: Mineral Resource are estimated at GT cut-off of 0.10 (2 ft. of 0.05% eU3O8) for open pit and 0.30 (6 ft. of 0.05% eU3O8) for underground
3: Mineral Resources are estimated using a long-term Uranium price of US$65 per pound
4: Bulk density is 0.0625 tons/ft3 (16 ft3/ton)
5: Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability
6: Numbers may not add due to rounding
14.2 Drill Hole Database
The current drill hole database consists of:
Congo Open Pit Area
Sheep Underground Area
The uranium quantities and grades are reported as %eU3O8, as measured by downhole gamma logging. The industry standard protocol for reporting uranium in sandstone-hosted deposits in the U.S. has been validated for the Sheep Mountain Project by test drilling at the deposit, as well as by correlation with previous mining activities.
14.2.1 Congo Open Pit
The Congo data set is composed of 2,780 drill holes of which 107 are barren and the remaining 2,673 drill holes contain mineralization. Within the 2,673 mineralized drill holes, 12,070 individual intercepts were present. A portion of the historic data consisted of ½-foot data from the Century Geophysical Compulog™ system. For this data, a minimum cut-off thickness and grade of 2 feet of 0.03% eU3O8 was applied resulting in 2,667 composite intercepts. The remaining 2,462 intercepts did not have ½ foot data but consisted of composite intercepts interpreted using the half amplitude convention for geophysical log interpretation. Log interpretation and intercepts from the historic database were spot checked especially with regards to higher-grade mineralized intercepts. Correlation of the mineralized sand units was available from historic reports. This historic naming convention for the sand units was maintained. The following table summarizes the mineralized intercepts in the Congo database by sand unit. A summary of mineralization reflected in the drill holes follows.
Page 51 |
December 31, 2021 |
Table 14-3. Congo Pit Area General Statistics (Raw Data)
|
No Cut-Off (12,070 samples) |
0.1 GT Cut-Off (9,454 samples) |
||||
|
Grade |
Thickness |
Grade x |
Grade |
Thickness |
Grade x |
Min. |
0.01 |
0.09 |
0.02 |
0.01 |
0.10 |
0.10 |
Lower. Quart. |
0.05 |
2.00 |
0.11 |
0.07 |
2.00 |
0.18 |
Median |
0.08 |
2.50 |
0.24 |
0.10 |
3.00 |
0.32 |
Upper Quart. |
0.15 |
4.50 |
0.51 |
0.18 |
5.00 |
0.63 |
Max. |
5.43 |
35.00 |
46.17 |
5.43 |
35.00 |
46.17 |
Avg. |
0.13 |
3.71 |
0.49 |
0.15 |
4.13 |
0.61 |
Std. Deviation |
0.18 |
3.09 |
0.98 |
0.19 |
3.33 |
1.07 |
Figure 14-1. GT Histogram for Congo Pit (12,070 Samples)
Table 14-4. Congo Pit Area General Statistics (Composited Data)
Table 14-5 Congo Pit Area Statistics by Mineralized Zone
Zone |
# Of Composite |
Avg. |
Avg. Grade |
Avg. GT (Grade |
Avg. Depth to Bottom |
41A |
213 |
4.4 |
0.176 |
0.77 |
266 |
41 |
228 |
3.7 |
0.168 |
0.62 |
298 |
45 |
404 |
4.4 |
0.167 |
0.73 |
279 |
48 |
435 |
4.2 |
0.152 |
0.63 |
255 |
52 |
556 |
4.1 |
0.139 |
0.57 |
268 |
54/56 |
407 |
4.2 |
0.149 |
0.63 |
243 |
59 |
375 |
3.9 |
0.106 |
0.41 |
196 |
63 |
436 |
4.1 |
0.117 |
0.48 |
170 |
66 |
456 |
4.3 |
0.134 |
0.57 |
202 |
67 |
242 |
3.8 |
0.149 |
0.57 |
209 |
72 |
271 |
4.1 |
0.130 |
0.53 |
232 |
75 |
233 |
4.0 |
0.129 |
0.52 |
195 |
79 |
133 |
3.7 |
0.178 |
0.67 |
204 |
83 |
122 |
4.8 |
0.169 |
0.81 |
204 |
86 |
50 |
3.5 |
0.131 |
0.46 |
253 |
89 |
27 |
4.1 |
0.099 |
0.41 |
176 |
94 |
28 |
3.1 |
0.176 |
0.30 |
207 |
Total |
4,616 |
4.0 |
0.143 |
0.57 |
189 |
14.2.2 Sheep Underground
The Sheep Underground data set is composed of 485 drill holes based on data from 483 historic drill holes and 2 confirmatory drill holes completed in 2005. Of those 485 drill holes only 33 were barren and 452 of the drill holes contained mineralization of at least 0.5 feet of 0.05% eU3O8. Within the 452 mineralized drill holes, 3,222 individual intercepts were present. Using the cut-off thickness and grade of 6 feet of 0.05% eU3O8, 549 composites diluted to a minimum thickness of 6 feet were created from the 3,222 individual intercepts. These 549 composited intercepts were then correlated into one of the 17 different mineralized zones based on geologic interpretations. If the composite could not be correlated within a zone it was designated as isolated and its influence in subsequent mineral resource estimation limited. Data summaries follow in Tables 14.5 through Table 14.7.
Table 14-6 Sheep Underground Area General Statistics (1 of 2)
|
0.02 GT Cut-off (3,222 Samples) |
0.3 GT Cut-Off (704 samples) |
||||
|
Grade |
Thickness |
Grade x |
Grade |
Thickness |
Grade x |
Min. |
0.03 |
0.50 |
0.02 |
0.05 |
1.00 |
0.30 |
Lower. Quart. |
0.06 |
1.00 |
0.08 |
0.11 |
2.50 |
0.39 |
Median |
0.08 |
1.50 |
0.13 |
0.16 |
4.00 |
0.53 |
Upper Quart. |
0.13 |
2.50 |
0.27 |
0.25 |
6.00 |
0.86 |
Max. |
2.19 |
19.0 |
9.86 |
2.19 |
19.0 |
9.86 |
Avg. |
0.13 |
2.15 |
0.27 |
0.18 |
4.44 |
0.81 |
Std. Deviation |
0.11 |
1.89 |
0.50 |
0.18 |
2.70 |
0.87 |
Table 14-7 Sheep Underground Area General Statistics (2 of 2)
Table 14-8 Sheep Underground Area Statistics by Mineralized Zone
Zone |
# Of Composite |
Avg. |
Avg. Grade |
Avg. GT (Grade |
Avg. Depth to Bottom |
1 |
8 |
6.6 |
0.07 |
0.46 |
758 |
2U |
6 |
6.0 |
0.07 |
0.39 |
1,040 |
2L |
11 |
6.4 |
0.10 |
0.66 |
878 |
3 |
24 |
6.6 |
0.11 |
0.73 |
838 |
4 |
50 |
6.8 |
0.12 |
0.82 |
1,010 |
5 |
37 |
7.8 |
0.14 |
1.09 |
1,039 |
6 |
35 |
7.3 |
0.15 |
1.12 |
1,016 |
7 |
40 |
8.2 |
0.20 |
1.62 |
997 |
8 |
51 |
7.0 |
0.11 |
0.79 |
1,038 |
9 |
47 |
7.4 |
0.16 |
1.19 |
957 |
10 |
38 |
8.2 |
0.14 |
1.19 |
1,151 |
11 |
36 |
7.7 |
0.14 |
1.09 |
1,173 |
12 |
28 |
8.5 |
0.13 |
1.07 |
1,214 |
13 |
30 |
6.6 |
0.13 |
0.85 |
1,313 |
14 |
31 |
7.4 |
0.11 |
0.83 |
1,349 |
15 |
12 |
7.3 |
0.15 |
1.08 |
1,354 |
16 |
11 |
6.3 |
0.13 |
0.79 |
1,252 |
Isolated |
54 |
6.5 |
0.11 |
0.69 |
1,123 |
Total |
549 |
7.1 |
0.13 |
0.91 |
1,089 |
Figure 14-2. GT Histogram for Sheep Underground (3,222 Samples)
Sheep Underground mineralized thickness ranges from 0.5 feet to 19.0 feet. Grade varies from the minimum grade cut-off of 0.03% eU3O8 to a maximum reported grade of 2.19% eU3O8.
Estimated trend width and length were based on the geologic model and actual mine workings as follows. The Sheep typical trend width is approximately 100 feet. The mine maps available for the Sheep area show development drifts, ready for extraction, with widths greater than 100 feet. In the limited areas where full extraction occurred, mined out rooms were 50 feet to 100 feet or in some cases wider. The Sheep trend length varies from a few hundred feet to a maximum length of about 5,500 feet based on correlation of geophysical logs.
14.3 Statistical Analysis
14.3.1 Grade Capping
The GT contour method naturally limits the extent of high-grade samples by containing its area of influence within a contour. In addition, high-grade samples tend to be thin, and the GT method again limits the extent by a thin high-grade zone having a similar GT to a thick lower-grade zone. No grade capping was done for either the Congo Open Pit Mineral Resource or the Sheep Underground Mineral Resource
14.4 Resource Estimation Methods
14.4.1 Geologic Model
Geologic interpretation of the mineralized host sands was used, along with the intercepts that met the cut-off grade and thickness, to develop a geologic model, which was used in estimating the mineral resources at the Project. The three-dimensional locations along the drill hole of all mineralized intercepts were plotted in AutoCAD™. Each intercept was evaluated based on its geophysical log expression and location relative to adjacent intercepts. Whenever possible, geophysical logs were used to correlate and project intercepts between drill holes. Intercepts that met the minimum grade cut-off but were isolated above or below the host sand horizons; where data sets were incomplete and/or did not fully penetrate the host sand, were excluded from the mineralized envelope. The mineralized envelope was created by using the top and bottom of each intercept that was within the geologic host sands. The intercepts that were used to make this envelope were then used in the resource estimate GT method.
Drill spacing within the Project is not uniform due in part to the steep and irregular surface terrain and in part to random drill hole deviation. Drill spacing in the Congo (open pit areas) range from roughly 50-foot centers to greater than 100-foot centers. Drill spacing at Sheep Underground area varies from roughly 200-foot centers to over 400-foot centers. Drilling depths at Congo are typically less than 400 feet in the northern portions of the area to generally over 600 feet to the south. Drilling depths at Sheep exceed 1,000 feet but are typically less than 1,500 feet.
In developing the initial geologic envelope, both surface drill data and data from underground mine maps was reviewed. In the case of the Sheep Underground and other underground mines nearby (the Seismic and Reserve mines) and partially within the limits of the planned Congo Pit, the underground development and crosscut drifts were typically on 100-foot centers. Mining within the development drifts and crosscuts was completed by random room and pillar methods, extracting the mineralized material meeting the mine cut-off applicable at the time and leaving the lower grade material as pillars. In most cases entire 100x100 foot or larger blocks were mined and/or, in the case of the Sheep Underground, delineated by face sampling and longhole drilling but not mined.
The current geologic and resource model is in three dimensions based on geologic interpretation of 18 mineralized zones in the Congo area and 17 mineralized zones in the Sheep area.
Once the data were separated by zone an initial area of influence of 50 feet (maximum 25-foot radius or 50-foot diameter) was applied to each drill hole by zone at its drifted location to establish an initial geologic limit to the projection of mineralization. Refinement of the geologic limit and projection of mineralization along trend was then based on specific correlation and interpretation of geophysical logs on a hole-by-hole basis.
14.4.2 GT Contour Method
The mineral resource estimate was completed using the Grade x Thickness Contour Method (also known as the GT Method) on individual mineralized zones as defined in a full 3D geological model of the deposit. The GT Method is a well-established approach for estimating uranium resources and has been in use since the 1950s in the U.S. The technique is most useful in estimating tonnage and average grade of relatively planar bodies where lateral extent of the mineralized body is much greater than its thickness, as was observed in drilling of the Congo and Sheep deposits.
For tabular and roll front style deposits the GT Method provides a clear illustration of the distribution of the thickness and average grade of uranium mineralization. The GT Method is particularly applicable to the Congo and Sheep deposits as it can be effective in reducing the undue influence of high-grade or thick intersections as well as the effects of widely spaced, irregularly spaced, or clustered drill holes, all of which occur to some degree in the Congo and Sheep deposits. This method also makes it possible for the geologist to fit the contour pattern to the geologic interpretation of the deposit.
The GT Method is used as common practice for Mineral Reserve and Mineral Resource estimates for similar sandstone-hosted uranium projects ("Estimation of Mineral Resources and Mineral Reserves," adopted by CIM November 23, 2003, p. 51). It is the Authors' opinion that the GT Method, when properly constrained by geologic interpretation, provides an accurate estimation of contained pounds of uranium.
Congo Pit
Figures 14-3 thru 14-19 - Congo Open Pit, for GT contour maps which show the mineral resource areas and the areas of historic mining for each individual sand.
The 2011 mineral resource estimate grouped sands for the North Gap and South Congo areas in to the five major sand units and calculated the amount of resource removed by historic mining based on a deduction from past production records, BRS, 2011. For this report the North Gap, South Congo, and Congo mineralized zones were combined into a single unified mineral resource model and deletions of resources related to past mining were determined from underground mine maps.
The current mineral resource model includes 18 separate sand units for all areas and includes deletion of the portions of the mineral resource model that falls within the historic mine limits determined from mine maps, which equated to approximately 25% of the initial resource estimate. Historic mining limits were imported into the resource model by individual sand horizons in three dimensions. The extent of mining was taken to be the actual mapped underground mine limit or the GT boundary representing the historical mining cut-off (8 feet at 0.095 or a GT of 0.76), whichever was greatest. Although in many cases the mine maps showed remnant pillars, none of these areas were included in the Mineral Reserve estimate. Thus, the estimate of current Mineral Resources is conservative with respect to the exclusion of areas affected by historic mining.
The Congo sum GT, diluted to a minimum 2-foot mining thickness from the mineralized envelope for each drill hole, was plotted in AutoCAD. If the thickness exceeded 2 feet, no dilution was added. The diluted thickness of mineralization for each drill hole was also plotted. Resource estimates include deletion of the portions of the mineral resource model that fall within the historic mine limits as previously discussed.
Figure 14-3. Congo Pit GT Contours - Sand 94
Figure 14-4. Congo Pit GT Contours - Sand 89
Figure 14-5. Congo Pit GT Contours - Sand 86
Figure 14-6. Congo Pit GT Contours - Sand 83
Figure 14-7. Congo Pit GT Contours - Sand 79
Figure 14-8. Congo Pit GT Contours - Sand 75
Figure 14-9. Congo Pit GT Contours - Sand 72
Figure 14-10. Congo Pit GT Contours - Sand 67
Figure 14-11. Congo Pit GT Contours - Sand 66
Figure 14-12. Congo Pit GT Contours - Sand 63
Figure 14-13. Congo Pit GT Contours - Sand 59
Figure 14-14. Congo Pit GT Contours - Sand 54-56
Figure 14-15. Congo Pit GT Contours - Sand 52
Figure 14-16. Congo Pit GT Contours - Sand 48
Figure 14-17. Congo Pit GT Contours - Sand 4
Figure 14-18. Congo Pit GT Contours - Sand 41
Figure 14-19. Congo Pit GT Contours - Sand 41A
Sheep Underground
Figures 14-20 through Figure 14-36 show the GT contour maps for the Sheep Underground. They are separated into individual sand maps that show mineral resource areas and the areas of historic mining.
The GT, diluted to a minimum 6-foot mining thickness from the mineralized envelope for each drill hole and each horizon, was plotted in AutoCAD™. If the thickness exceeded 6 feet no dilution was added. The diluted thickness of mineralization for each drill hole was also plotted. Mineral resource estimates account for the deletion of mined areas within the resource model estimated from surface drilling. The total reported mined tonnage from the Sheep I underground mine was 275,000 tons containing 522,500 pounds of U3O8 and an average grade of 0.095% U3O8. However, the portions of the current mineral resource estimates which were within the defined previously mined area was only an estimated 62,618 tons of material containing 160,666 pounds of eU3O8 and an average grade of 0.128% eU3O8. From review of the Sheep, I and II as-built mine plans, it was apparent that little or no material was mined at Sheep II and that only development work was completed. Further, it was apparent at the Sheep I mine that many of the mined areas were located by underground delineation drilling rather than by surface drilling. The mine history clearly shows that underground development drilling and sampling expanded the resource as compared to that which could be projected from the surface drilling alone.
For mine planning purposes, a three-dimensional block model was created from the Sheep GT, geologic and mineralized envelope models. The modeling utilized an automated routine that assigned the thickness of mineralization, GT, and mineralized elevation reflected by their respective contours, to the centroids of a uniform 25 x 25-foot (25'x25') grid. From the thickness and GT contours, average grade, mineralized and waste tonnages, and contained pounds was calculated and assigned to each block. Each 25'x25' block was then evaluated based on its grade and thickness for mine planning and scheduling.
Figure 14-20. Sheep Underground GT Contours - Zone 01
Figure 14-21. Sheep Underground GT Contours - Zone 02U
Figure 14-22. Sheep Underground GT Contours - Zone 02L
Figure 14-23. Sheep Underground GT Contours - Zone 03
Figure 14-24. Sheep Underground GT Contours - Zone 04
Figure 14-25. Sheep Underground GT Contours - Zone 05
Figure 14-26. Sheep Underground GT Contours - Zone 06
Figure 14-27. Sheep Underground GT Contours - Zone 07
Figure 14-28. Sheep Underground GT Contours - Zone 08
Figure 14-29. Sheep Underground GT Contours - Zone 09
Figure 14-30. Sheep Underground GT Contours - Zone 10
Figure 14-31. Sheep Underground GT Contours - Zone 11
Figure 14-32. Sheep Underground GT Contours - Zone 12
Figure 14-33. Sheep Underground GT Contours - Zone 13
Figure 14-34. Sheep Underground GT Contours - Zone 14
Figure 14-35. Sheep Underground GT Contours - Zone 15
Figure 14-36. Sheep Underground GT Contours - Zone 16
14.5 Past Production
As the Project area was mined by both open pit and underground methods prior to 1988, removal of the resources from those past mining campaigns is necessary. Descriptions of how those resources were removed is detailed in the following sections.
14.5.1 Congo Open Pit Mine
This estimate includes deletion of the portions of the mineral resource model that falls within the historic mine limits that equated to approximately 25% of the initial resource estimate. Historic mining limits were imported into the resource model by individual sand horizons in three dimensions. The extent of mining was taken to be the actual mapped underground mine limit or the GT boundary representing the historical mining cut-off (8 feet at 0.095 or a GT of 0.76), whichever was greatest. Although in many cases the mine maps showed remnant pillars, none of these areas were included in the mineral resource estimate. Thus, the estimate of current Mineral Resources is conservative with respect to the exclusion of areas affected by historic mining. Estimated Mineral Resources for potential open pit areas were diluted to a minimum mining thickness of two feet.
EFR independently verified the removal of 25% of the resource by digitizing and triangulating the existing underground workings in 3D using Maptek's Vulcan mining software. Then, mineralized intercepts were flagged as being mined or not mined based on whether or not that intercept intersected the mine workings. Two polygonal resources were then calculated, one using all the drill holes and one that subtracted out the resource associated with the intercepts flagged as being mined. The result was as 26% reduction in resource, or essentially the same as the 25% reduction used in this report.
14.5.2 Sheep Underground Mine
This mineral resource accounts for the deletion of mined areas within our resource model estimated from surface drilling. The total reported mined tonnage from the Sheep I underground mine was 275,000 tons containing 522,500 pounds of U3O8 and an average grade of 0.095% U3O8. However, the portions of the current mineral resource estimates which were within the defined previously mined area was only an estimated 62,618 tons of material containing 160,666 pounds of U3O8 and an average grade of 0.128% U3O8.
From review of the Sheep I and II as-built mine plans, it was apparent that little or no material was mined at Sheep II and that only development work was completed. Further, it was apparent at the Sheep I mine that many of the mined areas were located by underground delineation drilling rather than by surface drilling.
14.6 Classification
Measured mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling. The level of geological certainty associated with a measured mineral resource is sufficient to allow a qualified person to apply modifying factors, as defined in this section, in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit. Because a measured mineral resource has a higher level of confidence than the level of confidence of either an indicated mineral resource or an inferred mineral resource, a measured mineral resource may be converted to a proven mineral reserve or to a probable mineral reserve.
Indicated mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling. The level of geological certainty associated with an indicated mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Because an indicated mineral resource has a lower level of confidence than the level of confidence of a measured mineral resource, an indicated mineral resource may only be converted to a probable mineral reserve.
Inferred mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of geological uncertainty associated with an inferred mineral resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Because an inferred mineral resource has the lowest level of geological confidence of all mineral resources, which prevents the application of the modifying factors in a manner useful for evaluation of economic viability, an inferred mineral resource may not be considered when assessing the economic viability of a mining project and may not be converted to a mineral reserve.
As is common with uranium deposits, the primary method of assay is by radiometric probe. The probe provides a continuous log of the gamma decay of the daughter products of uranium, which is used along with various calibration constants to calculate the equivalent uranium grade (%eU3O8). The majority of the data used in the estimation of mineral resources at Sheep Mountain is historical radiometric probe data. As the data was not collected by EFR, there may be a level of uncertainty regarding the quality of the radiometric probe data. It is expected that this level of uncertainty is very low. Determining equivalent uranium content by radiometric probe is an industry standard method and has been used by a number of companies over a number of years. Probes are regularly calibrated and operated properly, they are a very reliable method of assay. This is supported by the fact historical resources were based on radiometric probe grades during past mining operations at the project.
The estimation method of GT contours is an industry standard method for flat lying or slightly dipping uranium deposits and has been employed on a number of different uranium deposits across the U.S. The Author has direct knowledge of the Sheep Mountain deposit, having worked there in the past along with a number of other similar uranium mines/deposits in Wyoming. The inputs into the GT contour method are based on a working knowledge of these types of deposits. It is believed that the uncertainty associated with the estimation method is low.
The method of accounting for the previously mined resource beneath the proposed Congo Open Pit Mine poses a level of uncertainty. That level of uncertainty is low as the method used by the Author to calculate the mined out portion of the Mineral Resource are considered conservative. This method was also independently verified by EFR using a different method.
Based on the drill density, the apparent continuity of the mineralization along trends, geologic correlation and modeling of the deposit, a review of historic mining with respect to current resource projections, and verification drilling, the Mineral Resource estimate herein meets NI 43-101 and S-K 1300 criteria as an Indicated Mineral Resource.
15.0 MINERAL RESERVE ESTIMATE
15.1 General Statement
With respect to the open pit mineral reserves, open pit mine designs and sequencing was completed for all areas, and the resultant mineral reserve estimate reflects the current open pit mine designs and economic evaluations.
The following Mineral Reserves are fully excluded in the total and are additive to the Indicated Mineral Resources reported in Section 14.0, Table 14.1. The total Probable Mineral Reserve for the Sheep Mountain Project including both open pit and underground projected mining areas is tabulated below. The Mineral Reserve estimates presented herein have been completed in accordance with NI 43-101 and S-K 1300 standards.
The metal price used in calculating mineral reserves is $60 per pound, which is lower than the price used for mineral resources ($65), since mineral reserves have a higher prospect of economic extraction and can be exploited in the short term.
Table 15-1 Sheep Mountain Mineral Reserves- April 13, 2012
Classification |
Zone |
G.T. |
Tons |
Grade % |
Pounds |
Probable |
Sheep Underground |
0.45 |
3,498 |
0.132 |
9,248 |
Probable |
Congo Pit Area |
0.10 |
3,955 |
0.115 |
9,117 |
Total Indicated |
|
7,453 |
0.123% |
18,365 |
Notes:
1: NI 43-101 and S-K 1300 definitions were followed for Mineral Reserve
2: In situ Mineral Reserves are estimated at GT cut-off of 0.10 (2 ft. of 0.05% eU3O8) for open pit and 0.45 (6 ft. of 0.075% eU3O8) for underground
3: Mineral Reserves are estimated using a Uranium price of US$60 per pound
4: Bulk density is 0.0625 tons/ft3 (16 ft3/ton)
5: Numbers may not add due to rounding
15.2 Congo Pit Conversion of Resources to Reserves
The following Probable Mineral Reserves for the Congo Pit are fully included in the total Indicated Mineral Resources and are not additive to that total. The Probable Mineral Reserve is that portion of the Indicated Mineral Resource that is economic under reasonably foreseeable cost and pricing conditions ("modifying factors").
This estimate includes deletion of the portions of the mineral resource model that fall within the historic mine limits. Historic mining limits were imported into the resource model by individual sand horizons in three dimensions. The extent of mining was taken to be the actual mapped underground mine limit or the GT boundary representing the historical mining cut-off (8 feet at 0.095 or a GT of 0.76), whichever was greatest. Although in many cases the mine maps showed remnant pillars, none of these areas were included in the mineral reserve estimate, though the potential exists for these to be mined. Both the estimated mineral resources and mineral reserves were diluted to a minimum mining thickness of two feet. The reported Probable Mineral Reserve is that portion of the reported Indicated Mineral Resource that is within the current open pit design.
The cut-off grade of 0.05% eU3O8 at a minimum mining height of 2 feet equates to a 0.10 GT cut-off. Table 15.1 summarizes the portion of the Congo Pit that is economically mineable and meets the open pit cut-off criteria.
15.3 Sheep Underground Conversion of Resources to Reserves
The following Probable Mineral Reserves are fully included in the total Indicated Mineral Resources for the Sheep Underground. The Probable Mineral Reserve is that portion of the Indicated Mineral Resource that is economic under reasonably foreseeable cost and pricing conditions.
This estimate includes deletion of the portions of the mineral resource model which falls within the historic mine limits. Both the estimated Mineral Resources and Mineral Reserves were diluted to a minimum mining thickness of six feet. The reported Probable Mineral Reserve is that portion of the reported Indicated Mineral Resource that is within the current underground mine design.
The cut-off grade of 0.075% eU3O8 at a minimum mining height of 6 feet equals a 0.45 GT cut-off. Table 15.1 summarizes the portion of the Sheep I and II Underground Mine that is economically mineable and meets the cut-off criteria.
15.4 Cut-off Grade
As the operating cost per ton varies substantially between the open pit and underground it is appropriate to have separate cut-off grade for the two operations. Table 15-2 provides a calculation of breakeven cut-off grades for both the open pit and underground mines based on current cost forecasts and a forward-looking commodity price of $65 per pound of U3O8. Costs per ton reflect operating costs only and do not include capital write off. Note that staff and support costs are included in both open pit and underground mining costs. Incremental underground mining costs are solely related to underground mining and mineral processing costs.
Table 15-2 Breakeven Cut-off Grade
Operating Cost $/Ton1 |
Breakeven Grade %U3O8 at $65/lb. Price |
Approximate Value per Ton |
|
Open Pit Mine and Mineral Processing OPEX | $61.00 | 0.05% U3O8 | $65.00 |
Underground Mine and Mineral Processing OPEX | $102.37 | 0.075% U3O8 | $97.50 |
Notes:
1. Operating Costs include mining costs, support, staff, mineral processing, reclamation, taxes and royalties for open pit mining and underground mining, mineral processing, taxes and reclamation for underground mining.
From this evaluation, and other factors such as minimum mining thickness, the mine design cut-offs were set at or above the minimum breakeven cut-off grades at.
Based on these parameters, the average grade mined from a combined open pit and underground operation is estimated at 0.123% eU3O8. As mining proceeds, mineralized material encountered below the mine GT cut-off, which has to be excavated as part of the mine plan and would otherwise be disposed of as mine waste, could be salvaged at grades below calculated breakeven cut-off grades provided the grade would support haulage and mineral processing costs. The mineral reserve as stated herein does not include the potential mineralized material, which may be salvaged, which meets the breakeven grade cut-off but is less than the mine design GT cut-offs.
15.4.1 Mining and Mineral Processing Recovery Parameters and Sensitivity
Mineral reserves are that portion of the Indicated Mineral Resource, Section 14.0, which are economically recoverable under reasonably foreseeable cost and pricing conditions. The mineral resource model, the GT contour estimation methodology, and the geologic interpretations, as described in Section 14.0, also apply to the mineral reserve estimate. The key parameters in the conversion of mineral resource to mineral reserves include mine dilution and recovery.
As previously discussed in Sections 14.0 and 15.0, mineral resource and mineral reserve estimates account for mine dilution. Mine dilution is a function of the mineralized thickness and the mining method and selectivity. With respect to both the Congo Pit and Sheep Underground, selective mining methods and appropriate mining equipment were selected to minimize mine dilution. Mine dilution was assessed by diluting mineralized thicknesses to minimum mining thicknesses, 2 feet for open pit mining and 6 feet for underground mining. Thus, the dilution factor varies with the thickness of mineralization. The sensitivity of estimated costs with respect to mine dilution is further addressed in Section 22.0. A change of 10% in mine grade due to dilution is estimated to affect the Internal Rate of Return (IRR) by 6%. Mine recovery was assessed by the inclusion of only those mineralized zones with adequate thickness, grade, and continuity to be mined. Thin and/or low-grade mineralized zones were excluded from the mineral reserve through the application of dilution to minimum thickness and the subsequent application of GT cut-off. Isolated and/or discontinuous mineralization was excluded from the mineral reserve estimate through the mine planning process. For the Congo Pit an estimated 60% of the mineral resource was converted to a mineral reserve. For the Sheep Underground an estimated 70% of the mineral resource was converted to a mineral reserve. Preliminary mine designs focused on the areas with the strongest and most continuous mineralization and were not optimized for maximum mineral resource extraction. Mineral Resources were included in the mineral resource estimate in areas adjacent to both the Congo pit and Sheep underground, which have reasonable prospects for economic extraction. These areas would be accessible for mining from the open pit highwalls by conventional drift mining or using modern highwall mining systems and through the underground through additional stopping and/or raises. Those portions of the Mineral Resources not readily accessible from either the Congo pit or Sheep underground mine were excluded from the mineral resource estimation as they do not currently meet the criteria for reasonable prospects of eventual economic extraction.
Mineral processing recovery is discussed in Section 13.0. Due to the nature of the mineralization whereby the uranium minerals occur as interstitial material between the sand grains, mineral processing commonly results in a rather uniform residual uranium value that remains in the solid material. This loss or "tail" is consistent irrespective of the initial grade. This has been confirmed by column leach testing which showed a constant tail of less than 0.002% U3O8 (RDE, 2011). In addition, there are uranium losses related to the recovery of the uranium values from the leach solutions. These "liquid' losses are typically 0.002% U3O8 (Woolery, 1978). Thus, based on testing to date an overall loss of 0.004% U3O8 is indicated. However, to provide conservatism in the estimate and to account for potential variations in the mineralized material with respect to the materials tested and overall loss of 0.010% U3O8 was applied. Based on the estimated mine life grade of 0.123% eU3O8 this results in an overall mineral processing recovery factor of approximately 92%.
The mining and mineral processing methods and factors recommended in this report have previously been successfully employed at similar projects in the Sheep Mountain area. Successful uranium recovery from the mineralized material at Sheep Mountain and similar areas such as the Gas Hills has been demonstrated via both conventional milling and heap leach recovery. The project is a brown-field development located in a State, which tends to favor mining and industrial development. The project has been well received locally and will provide substantial revenues to both Fremont County and the State of Wyoming in addition to providing long-term employment for the region.
For these reasons, the Author believes that the Sheep Mountain reserves have a low probability of being affected by risk associated with the modifying factors, which include but are not limited to, mining; processing; metallurgical; infrastructure; economic; marketing; legal; environmental compliance; plans, negotiations or agreements with local individuals or groups; and governmental factors. The author is not aware of any factors including environmental, permitting, taxation, socio-economic, marketing, political, or other factors, which would materially affect the mineral resource estimate, herein.
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16.0 MINING METHODS
16.1 Introduction
The Sheep Mountain Project includes the Congo Pit, a proposed open pit development, and the re-opening of the existing Sheep Underground mine.
The open pit is phased in 12 smaller pits over a 12-year production life to facilitate internal backfilling in order to reduce longer haul distances to waste dumps. The average daily production rate of the open pit is 1300 mineralized material tons per day with a strip ratio over the life of mine of 33:1, or an average of 44000 tons per day of waste. The open pit uses backhoes to mine, on average, 4-foot thick mineralized material zones that are stacked in multiple sub-horizontal horizons. Mineralized material is loaded into trucks, while wheel tractor scrapers are used in waste stripping due to the weak nature of the waste rock. Past surface mining operations used this equipment and mining method in the Sheep Mountain and Gas Hills District.
Underground mining at Sheep Mountain averages 1300 mineralized material tons per day, also over a 12-year mine life, using a modified room and pillar mining method sequenced from bottom to top. A twin decline will be developed in the Paydirt open pit and end below the underground deposit. Mineralized material will be hauled using a 36-inch conveyor located in one of the declines to a surface stockpile shared with the open pit operations. An 8,500 foot long surface conveyor belt with take both surface and underground mineralized material to the processing facility.
Although other processing alternatives were considered, the recommended uranium recovery method includes the processing of mined materials via an on-site heap leach facility as discussed in Section 13.0 of this report.
Figure 16.1 depicts the overall project. Mining will be completed by both underground and open pit methods as subsequently described. Mined product from the underground and open pit mine operations will be commingled at the stockpile site located near the underground portal and in close proximity to the pit. At the stockpile, the mined product will be sized, if needed, blended, and then conveyed via a covered overland conveyor system to the heap leach pad where it will be stacked on a double lined pad for leaching. The primary lixiviant will be sulfuric acid. Concentrated leach solution will be collected by gravity in a double lined collection pond and then transferred to the mineral processing facility for extraction and drying. The final product produced will be a uranium oxide commonly referred to as yellowcake.
Personnel requirements are discussed in Sections 5.5 and 21.8
16.2 Mine Productivity and Scheduling
The project consists of two distinct and independent mining areas, the Congo Open Pit and the Sheep Underground, with common processing on mine material via a heap leach recovery facility. The currently planned mine life of the open pit is 12 years with an additional four years allotted for mine closure and reclamation. The currently planned mine life of the underground is 12 years which includes one year for development and 11 years mine production. The heap leach facility is designed to accommodate the mined material from both open pit and underground mine operations over an operating life compatible with the open pit operations. Referring to the mine production profile in Table 21-1, both the open pit and underground mines are scheduled to end at approximately the same time.
16.3 Congo Open Pit
The current mine design for the Congo Pit includes typical highwall heights in the range of 100 to 400 feet and reaches a maximum depth of 600 feet in localized areas in the southeast pit corner. The open pit design employs similar design parameters and mining equipment configurations to those used successfully in past Wyoming conventional mine operations. Highwall design is based upon the performance of past projects in the Sheep
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Figure 16-1 Project Overview
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Figure 16-2. McIntosh Pit Circa 2010
Mountain and Gas Hills districts and includes an average highwall slope of 0.7:1 (horizontal: vertical), which reflects the average of a 10-foot bench width and 50-foot highwall at a 0.5:1 slope.
As depicted in Figure 16.2, the open pit highwalls at the McIntosh pit, built to a similar design some 40 years ago, remain remarkably stable. However, moving forward, geotechnical studies are recommended for final determination of highwall design parameters.
Figure 16.3 displays the general mine sequence and annual limits of mining. Due to the nature and extent of mineralization, the Congo Pit is essentially a single open pit that will be developed sequentially to accommodate the desired mine production and allow for internal backfilling. This sequential schedule and internal backfilling reduces the amount of double-handling of mine waste material required to backfill and reclaim the mined pit during the life of the mine.
The host formation is exposed at the surface and dips between 9 and 16 degrees to the southeast. The initial pit construction will create access from the open pit mine area to the mine waste and stockpile areas. Subsequent pit extensions will utilize this access. Shallow mineralized areas exist along the north and northwest portions of the pit. As a result, the overall mine sequence begins in the areas where the mineralized zones have the least amount of cover and proceeds essentially along formational dip. The first 6 pits are constructed in a panel along the up-dip portion of the deposit and are the shallowest. During this time, the out of pit mine spoils areas will be developed. Subsequent pits will be completed in successive panels proceeding down and along dip, i.e., pits 7 through 10; 11 through 12 which reach the greatest depths. Beginning with pit 7, the great majority of the mine waste will be sequentially backfilled in previous pits.
Detailed Open Pit Mine Sequence drawings follow as Figure 16.4 to Figure 16.15. representing the annual open pit mining sequence for pits 1 through 12, respectively.
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Figure 16-3. Congo Pit - Annual Pit Sequence
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Figure 16-4. Congo Pit - Year 01
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Figure 16-5. Congo Pit - Year 02
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Figure 16-6. Congo Pit - Year 03
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Figure 16-7. Congo Pit - Year 04
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Figure 16-8. Congo Pit - Year 05
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Figure 16-9. Congo Pit - Year 06
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Figure 16-10. Congo Pit - Year 07
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Figure 16-11. Congo Pit - Year 08
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Figure 16-12. Congo Pit - Year 09
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Figure 16-13. Congo Pit - Year 10
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Figure 16-14. Congo Pit - Year 11
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Figure 16-15. Congo Pit - Year 12
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Historic underground mine workings will be encountered during open pit operations. In order to ensure the safety of surface mine personnel, underground workings will be identified prior to surface mining in a given area by the Engineering department, with access to the digital 3D modeling of the underground mines based on the historic underground mine mapping. Underground workings identified in this way will be uncovered during the pit excavation by the use of a mining crew using a medium sized excavator, medium sized dozer and in-pit drill, all overseen by a field engineer. The basic procedure for this process will be to locate shallow underground zones below the pit floor based upon the mine mapping and backfill waste into the mine voids. This may be achieved by over-excavating around the voids and dumping in-pit waste into them or using the in-pit drilling equipment to drill into the workings and blast overlying waste rock into the cavities. Additional assistance in location of the voids may be provided by shallow seismic testing.
Based upon site relief in the Congo area, surface water inflow can be kept out of the pit by ditching around the highwall crest and day-lighting the runoff to offsite drainages. In addition to controlling surface water runoff, the ditching will serve as a safety berm to prevent access to the highwall. All offsite drainage will meet the requirements of the WYPDES permit, including appropriate sediment control measures. Excess groundwater inflow in the pit will be used as a part of the daily operation of the pit for dust control on haul roads or consumed at the processing facility.
With respect to ground water, current data indicates that ground water flow will average less than 150 gpm and will not be encountered until pit 7.
Equipment cycle times have been estimated for both stripping and mining using the specific haulage profile for each pit. Based on these estimates, both the stripping and mining can be accomplished in a single 10-hour daily shift, 5 days per week. This is desirable to accommodate the mining of multiple dipping mineralized zones which will be encountered. The proposed primary stripping fleet consists of four 637 CAT twin engine scrapers paired with four 631 CAT single engine scrapers in a push-pull configuration. Both stripping and mining equipment will be supported by dozers and motor graders. The nominal capacity of this configuration is capable of excavation and placement of 11.0 million tons of waste and 330,000 tons of mineralized material on an annual basis over the open pit life of mine.
Surface mining will be completed in a selective manner with a 2-3 cubic-yard bucket on a medium-size excavator loading four articulated mine haul trucks. The mining crew is projected to have excess annual capacity and will thus be responsible for handling the majority of the internal mine waste and an additional 845,000 tons of material per year. This increases the annual stripping capacity. Table 16-1 summarizes the open pit mining fleet.
In-pit grade control will be a critical aspect of the project. This type of sandstone hosted uranium deposit may exhibit local variability in grade and thickness, and potentially variable radiometric equilibrium conditions. To address these conditions, minimize mine dilution, and maximize mine extraction: a tiered systematic grade control program is essential. The following describes the grade control program.
Tier 1, Radiometric Scanning: Field personnel equipped with calibrated hand-held gamma meters will be assigned to both the stripping and mining crews.
Tier 2, In-Pit Assay: A portable sample trailer equipped with a portable x-ray fluorescence ("XRF") assay instrument, and appropriate sample preparation equipment will be located in the pit. Mine trucks will be sampled with an auger system; the samples prepped and assayed; and trucks will then be directed to deliver the material to the stockpile or mine waste area depending on the results of the assay.
Tier 3, Quality Control: As each mine truck is sampled and tested, the field assay sample rejects will be collected and separated by grade ranges. The daily pit samples will be blended and split to provide representative samples which will in turn be assayed at the plant laboratory. The plant lab will assay both solid and liquid samples and will be subject to an outside and/or third-party quality control system.
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Table 16-1 Open Pit Mining Equipment List
Major Equipment* |
Number |
Capacity/ Load Factor |
336 Excavator |
1 |
2 to 3 cy |
345 Excavator |
1 |
4½ cy |
16M CAT Motor Grader |
1 |
16 ft blade |
140 CAT Motor Grader |
1 |
12 ft blade |
D-6 LGP dozer |
1 |
For Heap |
D-8T CAT Track Dozer |
1 |
12.9 ft blade |
D-9T CAT Track Dozer |
1 |
14.2 ft blade |
D-10T CAT Track Dozer |
1 |
17.3 ft blade |
A30D Volvo Articulated Truck |
4 |
32 tons/load |
980 CAT Wheel Loader |
1 |
6 cy |
637 CAT Twin Engine Scraper |
4 |
29 cy/load |
631G CAT Scraper |
4 |
29 cy/load |
Water truck 3,000 gallons |
1 |
3,000 gal |
Water truck 8,000 gallons |
1 |
8,000 gal |
Mine Support vehicles |
|
|
Fuel/lube truck |
1 |
|
Mechanical service truck |
1 |
|
Rubber tire backhoe CAT 414 |
1 |
|
Pickup trucks, 4WD, ¾-ton |
8 |
|
*Specific equipment as specified or equivalent.
16.4 Sheep Underground
The Sheep Underground mine has operated as a conventional underground mine on three separate occasions. No reports of adverse ground conditions, flooding, cave-ins or any other unusual mining conditions are known to EFR. The historic mining method was a modified room and pillar method using conventional techniques. Jacklegs were used to drill out the rounds and underground track haulage was used to transport the mined material to Shaft No. 1.
The mining method proposed going forward is also a conventional method using a modified room and pillar method but utilizing modern mining equipment such as jumbo drills and scooptrams for haulage. A new double entry decline will be constructed starting at the Paydirt Pit and ending below the deposit. Haulage from the mine will be accomplished via a 36-inch conveyor within one of the double declines. The existing shafts will be used for ventilation purposes only, with exhaust fans mounted at both locations. If the existing borehole ventilation shafts can be rehabilitated, they will be used as intake shafts. The deposit is comprised of 16 mineralized zones with a total thickness of approximately 350 feet. The deposit will be mined primarily from bottom to top.
Sheep Underground mining method summary:
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The planned location of the new decline in relation to the existing workings is shown on Figure 16.6. This figure is also an index map for the annual underground mine sequence maps that follow. Figures 16.17 through Figure 16.27 show the annual development and mining sequence for through eleven years of planned mining. Table 16-2 summarizes the underground mine fleet.
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Figure 16-16. Sheep Underground Overview Map
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Figure 16-17. Sheep Underground - Year 01
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Figure 16-18. Sheep Underground - Year 02
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Figure 16-19. Sheep Underground - Year 03
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Figure 16-20. Sheep Underground - Year 04
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Figure 16-21. Sheep Underground - Year 05
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Figure 16-22. Sheep Underground - Year 06
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Figure 16-23. Sheep Underground - Year 07
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Figure 16-24. Sheep Underground - Year 08
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Figure 16-25. Sheep Underground - Year 09
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Figure 16-26. Sheep Underground - Year 10
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Figure 16-27. Sheep Underground - Year 11
Table 16-2 Underground Mining Equipment List
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Major Equipment |
Number |
Capacity/ Load Factor |
Model Boomer S1L Face Drill |
4 |
74 HP-1xBOOM |
Model Boomer 104 Face Drill |
1 |
74 HP-1xBOOM |
Model Boomer S1D-DH Face Drill |
1 |
74 HP-1xBOOM |
Model Boltec SL Bolter |
7 |
40 HP-1xBOOM |
Model Boltec 235 Bolter |
2 |
97 HP-1xBOOM |
Model ST7LP Scooptram |
4 |
4 CY |
Model ST7 Scooptram |
2 |
4 CY |
Mine Support vehicles |
|
|
Powder Buggies |
2 |
129 HP |
Bobcat Skidsteer |
3 |
3,200 lb. Lift |
Utility Truck - Flatbed |
1 |
N/A |
Scissor Truck |
8 |
N/A |
Man trips |
6 |
N/A |
Pickup trucks, 4WD, ¾-ton |
8 |
N/A |
Fuel/lube truck |
1 |
N/A |
Mechanical service truck |
1 |
N/A |
Forklift |
1 |
N/A |
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17.0 RECOVERY METHODS
17.1 Introduction
The uranium recovery method at the Sheep Mountain Project (the Project) is conventional heap leaching, a process identical to that applied globally for the last five decades to the oxidized ores of copper and gold. This process embodies an oxidant to mobilize uranium minerals from the mined material stacked on the heap pad and dilute sulfuric acid to dissolve the uranium. The uranium-enriched solution is pumped to a recovery plant (mill) for purification and concentration of the uranium to a saleable product, using solvent extraction and precipitation systems. Over a 12 year mine life, the heaps will recover an average of 1.4 million pounds of U3O8 annually.
Uranium recovery at Sheep Mountain will include the following processes:
The uranium recovery or "milling" process equipment will be housed in several buildings within the proposed mill boundary. All solvent extraction processing and equipment will be located within the SX Plant to isolate potential fire hazards associated with the organic solutions. Yellowcake processing, including precipitation, washing, drying, packaging, storage, and loading will be located outside the Process Plant In separate buildings to minimize contamination. Reagent storage and distribution systems will be located within or near the process buildings. Ancillary buildings will be provided for gender-separate change rooms, for radiometric scanning of incoming and departing personnel, and for operations such as yellowcake drying and packaging that have an elevated potential, for exposure of personnel to radionuclides.
Processing, or "milling," begins as crushed uranium-bearing material that is stacked on the double-lined heap leach pad using covered belt conveyors and a covered radial arm stacking ("RAS") belt conveyor as depicted on Figure 17-1. The material is stacked to a height of 20 feet, forming a "lift." A protective layer of gravel is placed on top of the lift to mitigate fugitive dust and transport of radionuclide particulates from the heap. A drip irrigation system using conventional plastic piping is then installed on top of the completed lift, and the heap is ready for the application of an acidic leaching solution.
Figure 17.2 depicts the general flow of solutions and uranium within the heap and recovery plant. The process begins with pumping the leach solution from the Raffinate Pond to the top of the heap where it is applied using drip emitters. The leach solution consists of water, an oxidizing agent, such as sodium chlorate, to convert the uranium to a soluble U+6 valence state; and a complexing agent, sulfuric acid, to complex and solubilize the uranium. The heap leaching process yields a PLS containing a mixture of uranyl trisulfate ("UTS") and uranyl disulfate ("UDS"). PLS percolates through the stacked material via gravity drainage, is intercepted by the pad's liner system, and flows into a network of perforated pipes which drain by gravity into the collection pond. The PLS is then pumped from the collection pond into a clarifier tank where suspended particulates settle and are collected into a sludge that is pumped to a disposal pond. The clarified PLS is then filtered to remove the remaining very fine particulate matter and pumped to the solvent extraction ("SX") plant, where the uranium is recovered using organic ion exchange. The resulting uranium-depleted aqueous solution, called barren leach solution or "raffinate," flows by gravity from the SX Plant to the raffinate pond. This raffinate is fortified with acid, oxidant, and make-up water and is pumped back to the heap in a continuous cycle. From the SX Plant, uranium-rich strip
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Figure 17-1. Typical Heap Leach Schematic
solution is sent to the Process Plant for precipitation of yellowcake. The precipitated yellowcake is then washed, dried, and packaged into sealed 55-gallon drums for shipment. Yellowcake is shipped via truck to an enrichment facility in regular shipments approximately once every two weeks.
To prevent buildup of undesirable ionic species in the circulating leach solution, a bleed stream representing a small, calculated fraction of the total leach solution flow is removed from the circuit. The bleed stream is sent to the holding pond for interim storage and transfer to the disposal pond. The bleed stream and other liquid wastes are concentrated by evaporation to a sludge that either remains in the holding pond or is spread on spent portions of the heap leach pad.
The application, collection, stripping, and re-application of the leach solution is a continuous process. The mined material remains on the heap leach pad throughout primary leaching, resting of the mined material between leach solution applications, secondary leaching, potential rinsing, and final drain down prior to closure. Only after the mined material is drained does it become a waste product under current regulatory definitions.
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Figure 17-2. Heap Leach Process Block Flow Diagram
17.2 Site Layout and Construction
The general site layout and construction requirements for the heap leach and processing facility are shown on Figure 17-3. The construction costs related to the heap leach and processing facility are included in the capital cost estimate summarized in Section 21.
The initial heap leach pad area is approximately 40 acres, which is subdivided into cells that can be loaded with up to three lifts of approximately 20 feet in height or a total of 60 feet. Each lift will be separated with an interim liner and drainage system (Figure 17-3 and Figure 17.4). The stacking rate for individual lifts will depend on the variable mine production rates. The initial 40-acre heap leach pad has adequate space to accommodate approximately 1/2 of the total mined material. In year 6, an additional 40-acre pad will need to be constructed. This can be operated in the same manner as the initial heap pad or used to offload spent heap material from the initial heap pad to allow its continued use. The additional 40-acre expansion is proximate to the initial heap pad as shown on Figure 17.4.
Reclamation and decommissioning of the Sheep Mountain Project uranium recovery facility generally will consist of decommissioning the Process Plant, the SX Plant, ancillary facilities, and the holding pond, and placing the associated 11e. (2) byproduct material within the on-site disposal cell. The lined portions of the collection pond, raffinate pond, and heap leach pad will become the disposal cell for long-term isolation and stabilization of all liquid and solid 11e. (2) byproduct material associated with the planned operations. The proposed Source Materials License Area and other areas potentially affected by licensed operations will be assessed and remediated to meet appropriate release criteria, and the disposal cell will be capped with an approved cover to ensure compliance with the requirements of 10 CFR 40.
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After the heap leach pad area has been completely filled and leaching, potential rinsing and potential treatment and subsequent drainage have been completed, spent heap materials (now tailings) will be graded to their final configuration. Any 11e. (2) byproduct material, including material from plant decommissioning, liner from the Holding Pond, and any other 11e. (2) byproduct materials requiring disposal will be appropriately sized and placed within the lined disposal cell prior to completing the reclamation cover. The final cover will consist of a clay-based radon barrier, a gravel/cobble capillary break, bio intrusion and freeze/thaw protection layer, and a rip rap erosion protection layer. This final reclamation cover is designed to be a zero-water balance cover using vegetation as a planned component of the cover water balance. The final reclamation plans are shown on Figure 17.5 in plan view and in Figure 17.6 in cross sectional view.
Costs for decommissioning and reclamation of the heap and mineral processing facilities are incorporated into the operating costs estimate, Section 21.
Detailed estimates of capital and operating expenses were completed (Lyntek, 2012) and have been updated to.2021 costs The following is a summary of the operating requirements for energy, water, and consumable materials for the entire mineral processing facility. Process water and electrical power are currently available on site and are adequate to serve the planned operations.
Electrical Power - Operation of the heap leach, conveyor system, solution processing plant, yellowcake drying and packaging facility, and all related appurtenances is estimated to consume approximately 600 kilowatts per hour (kW/hr.) or approximately 5 million kW per year.
Water demand - At full capacity, the mineral processing facility will require an average flow rate of 360 gallons per minute (gpm). However, the majority of the flow is recirculated, resulting in an estimated net water demand of 135 gpm. Process water will be provided from dewatering of the underground mine.
The largest single consumable for mineral processing is sulfuric acid. Consumption of sulfuric acid is estimated at 30 pounds per ton. At the peak production of 660,000 tons per year this equates to approximately 10,000 tons of sulfuric acid per year. Sulfuric acid is available from an acid plant located in Riverton, Wyoming approximately 60 road miles from the site.
Personnel requirements are discussed in Sections 5.5 and 21.8.
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Figure 17-3. Heap Leach Initial Site Layout
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Figure 17-4. Heap Leach Year 08 Expansion
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Figure 17-5. Heap Leach Reclamation Cover
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Figure 17-6. Heap Leach Reclamation Cover Cross-Section (A-A')
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18.0 INFRASTRUCTURE
18.1 Introduction
All necessary utilities and general infrastructure for the planned project are either currently available on site or can readily be established. Existing infrastructure is depicted on Figure 18-1.
All planned mining, mineral processing, and related activities are located within the existing Mine Permit 381C which is held by EFR. These lands are adequate for all planned mining operations including the disposal of mine mineral processing wastes and/or tailings.
18.2 Rights of Way
Right of Way applications for an overhead power line and mine dewatering pipeline utility corridor from the heap facility area (located on private land) to the Sheep I and Sheep II shafts have been approved, and the right of ways have been granted under BLM Grants WYW168211 and WYW168212. The main water supply pipeline for the plant will be located on private lands from either the McIntosh Pit or Sheep underground to the plant site.
18.3 Power and Utilities
Telephone, electric and natural gas service are available at the site and were upgraded in 2011 to provide the required service for the planned project.
18.4 Process Water
With respect to mine and mineral processing operations, the mineral processing facility will operate at an average flow rate of 360 gpm. However, the majority of the flow is recirculated resulting in an estimate net water demand of 135 gpm. The largest consumptive use of water on the project will be for dust control for the open pit, hauls roads, stockpile areas, and the conveyor system. This use is estimated to average 150 gpm over a 9-month period or 100 gpm on an annual basis. Thus, the total water use is estimated at 235 gpm. Dewatering at the Sheep Underground mine produces approximately 200 gpm, based on past production records. In addition, dewatering of the Congo Open pit requires an estimated 150 gpm beginning in year seven and extending to the end of mining. Thus, approximately 350 gpm of water will be produced by the mines, which is adequate for the planned operations.
18.5 Site Access
Primary access to the site is provided via an existing county road. This road is designated as an industrial access corridor by the BLM in their current Resource Management Plan ("RMP"). The county road provides access to within one mile of the site from which there is an existing private gravel road to the site.
18.6 Mine Support Facilities
Mine support facilities will consist of an office, mine shop and warehouse, and a dry facility. In consideration of the remoteness of the site and the potential for hazardous winter driving conditions, emergency stores of non-perishable food and water will be kept on-site along with portable cots should it be necessary for personnel to remain on-site during such conditions.
18.7 Public Safety and Facility Maintenance
Access to the site will be controlled by fencing where appropriate at the Mine Permit 381C boundary and internally at the Radiation Control boundary. Initial public access to the mine and heap leach facility will be controlled through a single entrance with a guard shack manned during operating hours and gated at all other times. The mine facility will be regulated by MSHA and the State Mine Inspectors Office. Any persons wishing to enter the facility will be required to complete safety training as required by regulations and be equipped with appropriate Personal Protective Equipment (PPE) depending on which areas they wish to enter.
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The heap leach processing facility is internal to the mine permit and will be enclosed by additional fencing. As with the main entrance to the project, the entrance to the radiation control area will be protected by a guard shack manned during operating hours and gated at all other times. In addition to confirming safety training, all visitors accessing the radiation control area will be subject to radiometric scanning prior to entering the area and prior to leaving the area. All visitors and personnel will have to pass the scan out procedure prior to leaving the facility.
Fire and emergency services are available from Fremont County and Jeffery City. The site is registered with emergency services and emergency contact numbers are posted at the mine office.
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Figure 18-1 Existing Infrastructure Map
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19.0 MARKET STUDIES
19.1 Uranium Market and Price
Uranium does not trade on the open market, and many of the private sales contracts are not publicly disclosed since buyers and sellers negotiate contracts privately. Monthly long-term industry average uranium prices based on the month-end prices are published by Ux Consulting, LLC, and Trade Tech, LLC. As a result, an accepted mining industry practice is to use "Consensus Prices" obtained by collating publicly available commodity price forecasts from credible sources. EFR has not begun any negotiations of any contracts to develop the property, including those associated with uranium sales, which is appropriate for a project at this level of development.
Figure 19-1 and Figure 19-2 provides a Long Term Uranium Price Forecast through 2039 from TradeTech LLC ("TradeTech") from 2021. The Forward Availability Model (FAM 1 and 2) forecast differ in assumptions as to how future uranium supply enters the market. "FAM 1 represents a good progression of planned uranium projects incorporating some delays to schedules, while FAM 2 assumes restricted project development because of an unsupportive economic environment." Currently most US producers are in a mode of care and maintenance and numerous facilities globally are also slowing or shutting in production at least on a temporary basis. At this time in the US, no new projects are being constructed, and very few are moving forward with permitting and/or licensing. This condition aligns more with the FAM 2 projections.
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Figure 19-1 TradeTech Uranium Market Price Projections- FAM1 (Nominal US$)
Figure 19-2 TradeTech Uranium Market Price Projections- FAM1 (Nominal US$)
Term forecasts beginning 2025 or later and extending into the future are considered the most reasonable for purposes of this report, as they consider the effects of prices on future existing and new production. In addition, larger projects are typically supported by long-term contracts with investment-grade nuclear utilities. Therefore, term prices are most appropriate for purposes of this report.
Based on the foregoing, the planned production from the project is projected to occur when the price projections under the assumption of FAM 2 are generally in excess of $65 per pound uranium oxide. EFR recommends the use of a long-term uranium price of $65.00 per pound uranium oxide as a base case for the project with the inclusion of an economic analysis including a sensitivity analysis of commodity price in the range of $50 to $70 per pound as presented in Section 22.0. The breakeven price of uranium oxide for the project based on the foregoing assumptions and preliminary mine limits is $51.51 per pound.
By their nature, all commodity price assumptions are forward-looking. No forward-looking statement can be guaranteed, and actual future results may vary materially.
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20.0 ENVIRONMENTAL STUDIES, PERMITTING, AND PLANS, NEGOTIATIONS, OR AGREEMENTS WITH LOCAL INDIVIDUALS OR GROUPS
20.1 Introduction
Uranium mining at Sheep Mountain occurred from the mid-1950s through 1982, with only short periods of intermittent mining occurring since 1982. Both random room-and-pillar underground and open-pit surface mining methods were employed. In 1973, the State of Wyoming passed the Environmental Quality Act, which required mining operations to reclaim the land after the conclusion of mining. A substantial amount of reclamation has since been performed at the property by mining companies and by the WDEQ's Abandoned Mine Land Division ("AML"). WDEQ/AML is responsible for reclaiming mining activities that predate the implementation of the 1973 Act. Because of the intensive mining that has occurred over the years, most of the property has experienced surface disturbance and mining related impacts.
The Sheep Mountain Project is situated on a mixture of private fee land with federal mineral rights, federal land and minerals administered by the BLM, and State Trust lands with state-owned minerals administered by the WDEQ/LQD. The Sheep Mountain Project is permitted under an existing Mine Permit 381C, which is held by EFR and administered by the WDEQ/LQD. The original mine permit for the project was issued by the WDEQ/LQD in 1975 to Western Nuclear, Inc. The permit has been amended six times and remains active and in good standing. Initial environmental baseline studies for this Mine Permit were completed in the 1970s and early 1980s. Because of this mixture of land and mineral ownership, a number of state and federal agencies are involved in the permitting and licensing of this project. The WDEQ/LQD is the lead agency for the State, though other State agency approvals are necessary. The primary federal agencies involved include the BLM and U.S. Environmental Protection Agency ("EPA"). In addition, County approvals for construction are also required.
BLM and Wyoming have established a Memorandum of Understanding ("MOU") that allows WDEQ/LQD to issue the Mine Permit for both State and BLM lands while the BLM administers the National Environmental Policy Act ("NEPA") for activities and impacts to the federal lands based on a PoO prepared by the permittee. The BLM also comments on the mining, milling and reclamation activities proposed in the Mine Permit and Source and Byproduct Materials License applications.
This proposed mineral processing facility will consist of a heap leach operation and uranium processing facility that will produce a final product of yellow cake for shipment. The mineral processing facility will require a combined Source Materials and Byproduct Materials License through the State of Wyoming, which became an NRC Agreement State in September 2018.
This section provides a summary of the environmental studies conducted at the site, the proposed operating plans, state and federal permitting requirements for the project, potential social or community relations requirements, and the proposed mine closure and reclamation plans. With the exception of the combined Source and Byproduct Materials License through the State of Wyoming, all major permits have been obtained for the project and the risk in obtaining the remaining License for the heap leach facility is relatively low as the project has strong local support and there are no identified environmental issues that would materially affect project permitting.
No potential social or community related requirements, negotiations, and/or agreements are known to exist with local communities and/or agencies other than those discussed herein.
20.1 Environmental Studies
Initial environmental baseline studies for this Mine Permit were completed in the 1970s and early 1980s. EFR has conducted additional baseline studies from 2010 through the present time. Baseline studies include land use characterization, culture resource surveys, meteorology and air monitoring, geology, hydrology, soils, vegetation, wildlife, and radiology. These studies, which are summarized below, are being performed to the level of detail and quality typically required by state and federal agencies.
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20.2 Land Use
The Sheep Mountain Project is situated in steep terrain, ranging in elevation from 6,600 feet to 8,000 feet. Wildlife density and diversity is limited due to the sparse vegetation and lack of tree overstory over most of the property. The project is remote with only one residence located within 1.5 miles of the project boundary. Land use within the Mine Permit boundary is limited to the permitted mining and exploration activities, livestock grazing under BLM grazing leases and seasonal hunting. Livestock grazing and hunting access will be restricted within the Mine Permit boundary during the proposed project lifecycle. However, the area removed from hunting and grazing represents a minute fraction of the available hunting and grazing area within the region and is not anticipated to have a significant impact on either land use. No land use impacts outside the Mine Permit Boundary are anticipated.
20.3 Cultural Resource Surveys
Cultural resource surveys were conducted on the land within the mine permit boundary. The scope for each of these studies was developed in consultation with BLM archaeologists. No enrolled or eligible National Register of Historic Places ("NRHP") cultural properties were found within the permit boundary. The closest NRHP eligible sites to the project are the Crooks Gap Stage Station and the Rawlins-to-Fort Washakie Road located outside the Mine Permit area. BLM has determined that the visual setting is not a contributing factor to these NRHP sites. Therefore, the project is not expected to materially impact either of these NRHP sites.
20.4 Meteorology and Air Monitoring
The Sheep Mountain Project falls within the intermountain semi-desert weather province. EFR installed a 10-meter-tall meteorological station directly down-wind of the proposed mineral processing facility in August of 2010 and has operated this station continuously since that time in accordance with EPA and NRC/WDEQ guidance.
EFR has also installed nine air monitoring stations around the project area. These monitoring stations include high volume air samplers that collect radio-particulates, Track Etch cups that detect radon, and Thermoluminescent Dosimeters ("TLDs") that record direct gamma radiation. The meteorological and air quality data have been used to support air quality permitting and will be used to support licensing of the proposed mineral processing facility with the State of Wyoming.
20.5 Geology
The project sits within a southeast plunging synclinal fold with the Battle Springs Formation comprising the uppermost geologic unit. It is underlain sequentially by the Fort Union Formation and Cody Shale, which extend several thousand feet below the site. The Mineral Reserves and Resources are hosted by the Battle Springs Formation. The geologic conditions have been sufficiently characterized to support the proposed permitting activities.
20.6 Hydrology
Surface water within the Mine Permit area is comprised of ephemeral drainages that flow only in response to snow melt and seasonal, high-intensity rainfall events. These ephemeral drainages drain to the west from Sheep Mountain into Crooks Creek, a locally perennial creek that flows south to north and is located approximately ½ mile west of the mine permit boundary. In addition, non-flowing surface water is present on the site in the McIntosh Pit, and seasonally in permitted storm water retention structures. Both flowing and non-flowing surface water quality and quantity have been characterized through multiple years of regular sampling and flow gauging.
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Groundwater within the Mine Permit boundary exists within the synclinal fold of the Battle Spring Formation and Fort Union Formation and is bounded by the Cody Shale, which acts as a local aquiclude to vertical groundwater migration. Groundwater in the uppermost aquifer, hosted predominantly by the Battle Spring Formation, has been well characterized over more than 20 years spanning active mining, a long post-mining period and current annual monitoring. New monitoring wells have been installed in the areas proposed for mining and mineral processing. Collected groundwater quality data is representative of a full cycle of active mining and mine reclamation. No substantial changes to groundwater quality are anticipated from subsequent cycles of mining and reclamation.
20.7 Soils and Vegetation
Detailed soil and vegetation surveys were performed in 2010-2011 to update the 1980 data presented in the original Mine Permit. No Threatened and Endangered ("T&E") plant species were encountered on the study area during the 1980 field investigations or in the 2010-2011 surveys. One BLM-sensitive plant species, Pinus flexilus ("Limber Pine") is present within the affected area as well as the control area. Any mitigation measures associated with this species are expected to be minimal. Two wetlands were located and mapped during the 2010-2011 surveys within the project area. However, they are located in the southeast corner of the project area near an unnamed pond where no surface disturbance is proposed. These wetlands are isolated and are likely non-jurisdictional.
20.8 Wildlife
Wildlife surveys were performed in 2010 and 2011 to update the earlier studies presented in the existing Mine Permit. These studies include raptor surveys, Sage Grouse surveys, small and large mammal surveys, and fish surveys in local ponds. The proposed disturbances are outside the Sage Grouse Core Area designated by the State of Wyoming as well as crucial winter range for large game species. No T&E wildlife species were observed or are expected to occur within the permit area and no BLM sensitive species that warrant special attention were identified in site surveys. In summary, no wildlife management issues, or conflicts have been identified that would preclude the proposed mining and milling activities.
20.9 Radiology
Radiological surveys of the project area, as required by NRC Regulatory Guide 4.14, have been performed at the project site. These include gamma radiation surveys, soil radium-226 concentration mapping, ambient gamma dose rate and radon monitoring, air radio-particulate monitoring, radon flux measurements, as well as soil and sediment, groundwater, surface water, vegetation, and animal tissue sampling (cattle and fish) for radionuclides. The radiological survey results reflect the elevated baseline conditions present at the site due to natural mineralization and previous mining disturbances. The radiological surveys have been conducted in accordance with the precision, accuracy and quality assurance guidelines recommended by the NRC.
20.10 Operating Plans
The operating plans for the Congo Open Pit, Sheep Underground, and the heap leach and processing plant are described in detail in other sections of this report. Monitoring and reporting of air, ground water, surface water, reclamation and other mitigation measures will continue throughout the life of the project.
Health and safety at the mines will be primarily regulated through the Federal Mine Safety and Health Administration or MSHA.
20.11 Permitting Requirements
Permitting and licensing of the proposed mining and milling activities will involve county, state and federal agencies. Summaries of these permits and licenses follow.
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20.11.1 Fremont County
Construction permits for buildings and septic systems will be required by Fremont County. These permits applications will be developed and submitted prior to construction and once most substantive technical questions have been resolved with the State of Wyoming on the Source and Byproduct Materials License. The County permits are not anticipated to present technical or time critical issues in the development of this project.
20.11.2 Wyoming Land Quality Division
A major revision to Mine Permit 381C was approved by the WDEQ/LQD on July 8, 2015.
20.11.3 Wyoming Air Quality Division
The Wyoming AQD administers the provisions of the Clean Air Act as delegated to the state by EPA Region VIII. An Air Quality Construction Permit for the project was initially issued by AQD on July 6, 2015. The Air Quality Permit was re-issued on October 17, 2019. On September 9, 2021, authorization to construct was extended for an additional one-year period.
20.11.4 Wyoming Water Quality Division
Discharges to surface water, if needed as part of the mine dewatering and mine water management program, are permitted by the Wyoming WQD through the Wyoming Pollutant Discharge Elimination System ("WYPDES") program under authority delegated by EPA Region VIII. A Water Discharge Permit for the project was approved by WQD on October 5, 2015. The WYPDES permit was re-issued on September 21, 2020.
20.11.5 Wyoming State Engineers Office
The Wyoming State Engineers Office ("SEO") is responsible for permitting of wells and impoundments, and issuance and modification to water rights. Applications to relocate the point(s) of withdrawal for EFR's existing water rights have been approved by the Wyoming SEO for mine dewatering. In addition, future monitoring wells and impoundments will be permitted with the SEO once the combined Source and Byproduct Materials License application has passed completeness review and most substantive technical questions have been resolved. Approvals of the SEO permits are not anticipated to be time-critical approvals.
20.11.6 U.S. Bureau of Land Management
On January 6, 2017, the BLM approved the PoO for the project through issuance of a RoD and supporting FEIS. The permitted capacity of the heap leach facility is 4 million tons of mineralized material which is 53% of the estimated Mineral Reserves. An expansion to the heap leach facility (including permitting) will be required in the future to process the remaining 47% of the estimated Mineral Reserves.
20.11.7 U.S. Nuclear Regulatory Commission (Wyoming Agreement State)
Development of an application to the NRC for a license to construct and operate the uranium recovery facility has been taken to an advanced stage of preparation. This license would allow Energy Fuels to process the mineralized material into yellowcake at the Sheep Mountain Project site. The draft application to NRC for a Source Material License was reviewed in detail by the NRC in October 2011. The NRC audit report identified areas where additional information should be provided. During September 2018, the State of Wyoming became an NRC Agreement State for licensing of uranium milling activities, including heap leach facilities. Previous data, designs, and related applications prepared for NRC will now be referred to and reviewed by the State of Wyoming WDEQ as an Agreement State with the NRC with respect to Source Materials licensing. The review and approval process for the license by the State of Wyoming is anticipated to take approximately three to four years from the date submitted. Submittal of the license application to the State of Wyoming is on hold pending EFR's evaluation of off-site processing options for this project, and whether or not to proceed with an on-site uranium recovery facility, pending improvements in uranium market conditions.
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20.11.8 U.S. Environmental Protection Agency
The EPA oversees compliance with 40 CFR Part 61 Subpart B (underground mine venting of radon) and Subpart W (radon emissions from tailings). Prior to initiation of underground mine operations, EFR will submit construction plans to the EPA in which underground mine ventilation radon emissions will be modeled to demonstrate compliance with the requirements of Part 61, Subpart B. During underground operations, routine monitoring and annual modeling will be performed to verify regulatory compliance.
The project design currently includes control measures to minimize radon flux from the heap leach facility and to be consistent with the requirements of Part 61, Subpart W.
20.12 Social and Community Relations
The surrounding communities have a long history of working with and for the region's mining and mineral resource industry; and their support for this project has been strong.
The Fraser Institute Annual Survey of Mining Companies, 2020, ranks Wyoming as 2nd out of 77 jurisdictions using a Policy Perception Index, which indicates a very favorable perception by the mining industry towards Wyoming mining policies.
20.13 Closure and Reclamation Plans
The land encompassing the project area is currently used for livestock grazing, wildlife habitat, and recreation (primarily hunting). The reclamation plan will return the areas disturbed by the project to the same pre-mining uses, except for the approximately 100-acre, byproduct-material disposal cell that will be transferred to the DOE for long-term stewardship. Reclamation bonds will be in place prior to start up for both the mining and processing areas of the project in accordance with state and federal requirements. The amount of the reclamation bond for both the mine and mineral processing area is estimated at US$17 million. By current regulations the WDEQ requires the bond be posted based on reclamation of lands disturbed in the first year and then updated annually as part of the annual reporting process. Wyoming has become an agreement state with the NRC with jurisdiction for the mineral processing area and will require a bond for the full estimated closure and reclamation costs. The estimated closure and reclamation costs for the mine and mineral processing areas is approximately US$46 million projected to be spent over the life of mine under a concurrent reclamation scenario followed by an additional reclamation period of 4 years upon cessation of operations.
20.13.1 Congo Pit and Sheep Underground
Mine overburden and waste rock from the Congo Pit will be used to backfill the pit in a phased manner over the life of the open pit. Initially, the waste will be removed from the pit and stockpiled in areas adjacent to the pit limits. As the pit deepens to the south, concurrent backfilling will be performed with waste placed in the mined-out portions of the pit. Backfilling will be performed in a selective manner so that the more mineralized and radioactive material is covered with less mineralized subsoils and topsoil. The proposed plan is to backfill the pit to approximate original contours, returning the ground surface to essentially the pre-mining topographic contours.
Selective backfilling will remove and isolate much of the naturally occurring radioactive materials left in the mine area from historical activities. The reclaimed Paydirt Pit will also be partially backfilled to create a flow-through drainage system, as opposed to the current closed drainage.
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Underground operations will result in some additional waste rock being added to the open-pit overburden piles, as a result of the construction of vent shafts, declines, and the installation of additional mine buildings. At the conclusion of underground operations, the mine openings will be sealed, mine buildings demolished, and waste piles used as backfill or reclaimed.
20.13.2 Heap Leach and Processing Plant
Solid and liquid wastes from the processing of uranium ores will be managed on site. Upon closure, liquid wastes will either be: a) stabilized and placed in the spent heap leach pad, or b) evaporated on the heap leach pad surface prior to closure. Process buildings and equipment that cannot be released from the site, will be decommissioned, sized and placed in the spent heap according to WDEQ requirements. The heap leach pad and associated ponds will then be encapsulated within an engineered cover that is designed to minimize radon emissions and water infiltration. The disposal cell will then be monitored until the site meets DOE's requirements for long-term stewardship. Refer to Figure 17.5, McIntosh Heap Reclamation Cover for overall reclamation grading plan.
20.14 Opinion of Author
In the opinion of the Author, the current plans related to environmental compliance, permitting and social governance is reasonable.
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21.0 CAPITAL AND OPERATING COSTS
21.1 Introduction
Estimated capital expenditures ("CAPEX") and costs for operation and maintenance & repair ("OPEX") of facilities are for a conventional combination open pit and underground mining operation with on-site treatment of mined material by heap leaching. All cost estimates in this report have been updated or escalated to 2021, based on either the 2021 Mining Cost Service (Cost Indexes) or recent internal cost files. It is the opinion of the authors that escalation of costs from March 2021 to the present is a function of short-term supply- chain issues currently being experienced in all sectors of the economy and are not reflective of longer term economic conditions, which the metal price and project development is based on. These cost estimates reflect complete costs going forward, including the costs of preproduction, permitting, mining, and mineral processing from heap leaching through production of yellowcake, to eventual reclamation and closure. CAPEX estimates, however, do not include sunk costs or property acquisition costs.
Mining and mineral processing methods are described in Sections 16 and 17, respectively. The project consists of two distinct and independent mining areas, the Congo open pit and the Sheep underground mine, with common processing of mined material in a heap leaching facility. The currently planned operating life of the two mines is 12 years, with an additional 4 years allotted for closure and reclamation. The heap leaching facility is designed to accommodate material excavated from both mining operations over their entire aggregated life. Although other alternatives were considered, the base case for this PFS is concurrent operation of the open pit and underground mines over approximately 12-years.
21.2 Cost Assumptions
In all cases, the estimates are based on proven approaches and technologies and conservative assumptions were employed. A summary of key assumptions follows.
Capital Cost Estimates
Open pit equipment: 15% has been added to vendor quotations for all major equipment.
Underground equipment: 15-30% has been added, depending on the nature of current information.
Heap leaching and mineral processing equipment: 10-30% has been added, depending on whether the item is material, labor, or fees.
These adjustments in vendor quotations are specifically to account for ancillary costs of delivery and setup of the equipment at the Project and for initial specialty items tools, wear parts etc. typically not included in the vendor quotes. We have not applied contingencies to the capital cost estimates. There is a risk due to uncertainties in future availability of the specified equipment, purchase prices and changes in equipment size or design duty may affect the final equipment selection and corresponding capital cost.
Operating Cost Estimates
Heap Leach
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Open Pit
Open Pit Mine reclamation costs account for backfill to original contours. Wyoming regulations do not require complete backfill but return to "equal or better use." Regulations can be met with less complete backfill; however, the total backfill plan is conservative and can be readily permitted.
21.3 Production Profile
Table 21.1 provides the planned production profile for the Project. Annual production varies from a low of 270,000 tons processed to a high of 780,000 tons processed with an average annual production of approximately 680,000 tons, yielding 1.4 million pounds annually of U3O8 in yellowcake.
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Table 21-1 Underground and Open pit Production Profile
|
Total |
Production Year |
||||||||||||
0 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
||
Congo Pit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tons of Resource Mined (000s) |
3,955 |
|
269 |
467 |
217 |
400 |
333 |
516 |
198 |
382 |
413 |
334 |
286 |
140 |
Pounds Contained (000s) |
9,118 |
|
665 |
828 |
587 |
951 |
657 |
1,198 |
539 |
719 |
894 |
677 |
767 |
637 |
Mine Grade (%U3O8) |
0.115 |
|
0.124 |
0.089 |
0.135 |
0.119 |
0.099 |
0.116 |
0.136 |
0.094 |
0.108 |
0.101 |
0.134 |
0.228 |
Cu. Yd. Stripped |
78,096 |
|
7,062 |
6,660 |
6,460 |
6,493 |
7,576 |
6,275 |
6,500 |
6,500 |
6,754 |
6,618 |
6,349 |
4,847 |
-Tons Overburden (000s) |
131,981 |
|
11,934 |
11,255 |
10,918 |
10,974 |
12,803 |
10,606 |
10,985 |
10,985 |
11,414 |
11,185 |
10,730 |
8,192 |
-Strip Ratio (tons: tons) |
33 |
|
44 |
24 |
49 |
27 |
38 |
20 |
55 |
29 |
27 |
33 |
37 |
57 |
-Strip Ratio (cu. yd.:lb) |
9 |
|
11 |
8 |
11 |
7 |
12 |
5 |
12 |
9 |
8 |
10 |
8 |
8 |
Reclamation (cu. yd.) |
25,530 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sheep UG |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tons of Resource Mined (000s) |
3,498 |
|
----- |
100 |
223 |
431 |
386 |
367 |
351 |
386 |
315 |
299 |
416 |
224 |
Pounds Contained (000s) |
9,248 |
|
----- |
300 |
600 |
1,000 |
1,000 |
1,000 |
1,000 |
1,000 |
1,000 |
1,000 |
1,000 |
348 |
Mine Grade (%U3O8) |
0.132 |
|
----- |
0.151 |
0.134 |
0.116 |
0.130 |
0.136 |
0.142 |
0.130 |
0.159 |
0.167 |
0.120 |
0.077 |
Development Tons |
2,176 |
|
200 |
90 |
162 |
144 |
189 |
208 |
224 |
189 |
260 |
276 |
159 |
75 |
Totals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tons of Resource Mined (000s) |
7,453 |
|
269 |
567 |
441 |
831 |
719 |
883 |
549 |
767 |
728 |
633 |
703 |
364 |
Pounds Contained (000s) |
18,365 |
|
665 |
1,128 |
1,187 |
1,951 |
1,657 |
2,198 |
1,539 |
1,719 |
1,894 |
1,677 |
1,767 |
984 |
Mine Grade (%U3O8) |
0.123 |
|
0.122 |
0.099 |
0.134 |
0.117 |
0.115 |
0.124 |
0.139 |
0.112 |
0.129 |
0.132 |
0.125 |
0.134 |
Tons Processed (000s) |
7,453 |
|
270 |
540 |
480 |
780 |
780 |
780 |
630 |
750 |
720 |
660 |
630 |
433 |
Pounds Contained (000s) |
18,365 |
|
667 |
1,074 |
1,274 |
1,828 |
1,799 |
1,946 |
1,743 |
1,679 |
1,868 |
1,747 |
1,584 |
1,157 |
Plant Feed (%U3O8) |
0.123 |
|
0.122 |
0.099 |
0.131 |
0.117 |
0.115 |
0.124 |
0.137 |
0.111 |
0.129 |
0.132 |
0.125 |
0.132 |
Recovery Fraction (U3O8) |
0.919 |
|
0.919 |
0.899 |
0.925 |
0.915 |
0.913 |
0.920 |
0.928 |
0.911 |
0.923 |
0.924 |
0.920 |
0.925 |
Pounds Recovered (000s) |
16,875 |
|
613 |
966 |
1,178 |
1,672 |
1,643 |
1,790 |
1,617 |
1,529 |
1,724 |
1,615 |
1,458 |
1,070 |
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21.4 Capital Costs
Capital cost summaries follow for the Project. The additional capital in years two through twelve include major repair and/or replacement of mine equipment and cost related to interim liners for the heap leach and the permitting and construction of an addition heap pad area of approximately 20 acres in year eight. Capital costs for the Project are estimated at an AACE Class 3 accuracy range of -20% to +30% (AACE International 2005).
Table 21-2 Sheep Mountain Capital Cost Summary
Capital Expenditures: * |
Contingency |
Initial Capital* |
Years 4-12 |
Life of Mine |
Permitting (WDEQ) |
----- |
$3,000 |
$1,000 |
$4,000 |
Pre-Development Mine Design |
----- |
$1,200 |
----- |
$1,200 |
OP Mine Equipment |
15% |
$21,141 |
$3,200 |
$24,341 |
UG Mine Equipment |
15-30% |
$51,504 |
$13,000 |
$64,504 |
Office, Shop, Dry, and support |
15% |
$3,234 |
----- |
$3,234 |
Mineral Processing |
25% |
$32,086 |
$6,461 |
$38,546 |
TOTAL CAPITAL EXPENDITURES |
|
$112,165 |
$23,661 |
$135,826 |
COST PER POUND RECOVERED |
|
|
|
$8.05 |
All costs in 2021 US dollars x 1,000
*Initial Capital includes year 0 to year 3. Does not include working capital and initial warehouse inventory.
21.5 Operating Costs
Operating cost estimates are based on a conventional open pit and underground mine operation with on-site processing via a heap leach facility. Operating costs reflect a full and complete operation including all mine and mineral processing costs through the production of yellowcake and through final reclamation. In all cases the estimates are based on proven approaches and technologies.
Operating cost estimates were based on vendor quotations, published mine costing data, and contractor quotations. Such estimates were generally provided for budgetary purposes and were considered valid at the time the quotations were provided. In all cases, appropriate suppliers, manufacturers, tax authorities, smelters, and transportation companies should be consulted before substantial investments or commitments are made.
Open pit mine operating costs account for:
Underground mine operating costs account for:
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Mineral processing operating costs account for:
21.6 Reclamation and Closure Costs
Reclamation and closure costs relate primarily to the open pit and heap leach/plant.
The current cost model is based on complete backfill of the open pit including sub-grade disposal of the heap leach material and appurtenances including liners, piping, and other materials deemed to be regulated material with respect to the combined Source and Byproduct Materials license.
Bonding costs are included as a line item based on an annual rate of 2% and an estimated bond for the mine and processing facility of an estimated US$17 million.
21.7 Additional Costs
Additional costs include a gross products tax payable to Fremont County; mineral severance tax payable to the State of Wyoming; and various claim and state lease royalties.
Wyoming Severance Tax is currently assessed at a rate of 4% of the gross value after applying an industry factor which for uranium is currently 0.42 which thereby reduces the effect severance tax rate.
Wyoming state lease royalties apply only to the Congo Pit area located on State section 16. The royalty under the current lease is 5% of gross value.
Individual mining claim royalties vary slightly but do not exceed 4% of gross value.
Note that all state and local sales taxes are included in the capital cost estimate. Use taxes, such as taxes on supplies and consumables, are included in the operating cost estimate.
Table 21-3 summarizes operating cost for the Project, which includes an 8% contingency.
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Table 21-3 Sheep Mountain Operating Costs**
Operating Costs - OPEN PIT AND UNDERGROUND MINING |
Open Pit and UG (US$000s) |
Cost Per Ton Mined (US$) |
Cost Per lb Mined (US$) |
Cost Per lb Recovered (US$) |
||||||||
Open Pit | ||||||||||||
Strip | $ | 80,331 | $ | 20.31 | $ | 8.81 | ||||||
Mining | $ | 18,625 | $ | 4.71 | $ | 2.04 | ||||||
Support | $ | 15,834 | $ | 4.00 | $ | 1.74 | ||||||
Staff | $ | 23,485 | $ | 5.94 | $ | 2.58 | ||||||
Contingency | $ | 11,062 | $ | 2.80 | $ | 1.21 | ||||||
Total Surface Mine (3,955,000 tons, 9,117,000 lbs) |
$ | 149,336 | $ | 37.76 | $ | 16.38 | ||||||
Underground Mine | ||||||||||||
Production | $ | 169,217 | $ | 48.38 | $ | 18.30 | ||||||
Development | $ | 53,166 | $ | 15.20 | $ | 5.75 | ||||||
Support | $ | 44,913 | $ | 12.84 | $ | 4.86 | ||||||
Staff | $ | 18,825 | $ | 5.38 | $ | 2.04 | ||||||
Contingency | $ | 22,890 | $ | 6.54 | $ | 2.48 | ||||||
Total Underground Mine (3,498,000 tons, 9,248,000 lbs) |
$ | 309,011 | $ | 88.35 | $ | 33.42 | ||||||
Blended Mining Costs* (7,435,000 tons, 18,365,000 lbs) |
$ | 458,347 | $ | 61.50 | $ | 24.96 | $ | 27.16 | ||||
Reclamation and Closure | ||||||||||||
Wyoming Agreement State Annual Inspection Fees | $ | 1,800 | $ | 0.24 | $ | 0.10 | ||||||
Final Grading and Revegetation | $ | 2,180 | $ | 0.29 | $ | 0.12 | ||||||
Plant Decommissioning and Reclamation | $ | 11,166 | $ | 1.50 | $ | 0.61 | ||||||
Total Reclamation and Closure | $ | 15,146 | $ | 2.03 | $ | 0.83 | $ | 0.91 | ||||
Heap Leach | ||||||||||||
Cost per ton | $ | 143,585 | $ | 19.27 | $ | 7.82 | ||||||
Total Heap Leach | $ | 143,585 | $ | 19.27 | $ | 7.82 | $ | 8.51 | ||||
Reclamation Bond Mine and Heap | $ | 6,120 | $ | 0.82 | $ | 0.33 | $ | 0.36 | ||||
Taxes & Royalties | ||||||||||||
Gross Products tax per/lb | $ | 39,702 | $ | 5.33 | $ | 2.16 | ||||||
Severance Tax per/lb | $ | 21,965 | $ | 2.95 | $ | 1.20 | ||||||
State lease (pit) | $ | 26,966 | $ | 3.62 | $ | 1.47 | ||||||
Claim royalties (UG) | $ | 21,640 | $ | 2.90 | $ | 1.18 | ||||||
Total Taxes and Royalties | $ | 110,273 | $ | 14.80 | $ | 6.00 | $ | 6.53 | ||||
TOTAL DIRECT COSTS | $ | 733,471 | $ | 98.42 | $ | 39.94 | $ | 43.47 | ||||
*Blended mine cost represents the weighted average of open pit and underground mines and include open pit backfill.
Open pit and underground mine costs, itemized separately above, are not additive but are included in the blended mine costs.
**All costs 2021 US dollars x 1,000
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21.8 Personnel
At full production, the Sheep Mountain Project will require approximately 176 employees. Roughly, 56 employees will be required for operation of the open pit, heap leach, and mineral processing plant with the remainder required for the underground mine. Personnel for the open pit mine operation can be readily recruited locally as can the majority of the personnel needed for the heap leach and mineral processing plant. Some skilled positions and staff positions will need to be recruited regionally. Recruitment of underground mine personnel may pose a greater challenge. As a result, cost allowances for recruiting and training of underground miners were included in the cost estimate. Figure 21-1 illustrates general project organization chart, based on a total headcount of 176 employees.
Figure 21‑1. Project Organizational Chart
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22.0 ECONOMIC ANALYSIS
Financial evaluations for the project assume constant 2021 U.S. dollars and an average sales price of $65.00 per pound of uranium oxide. Section 21.0 discusses operating and capital costs in detail. Operating costs includes all direct taxes and royalties, as discussed in Section 21.0, but do not include U.S. Federal Income Tax. As previously stated, all costs are forward-looking and do not include any previous project expenditures or sunk costs. The NPV is calculated at a range of discount rates as shown both before and after U.S. Federal Income Tax in Table 22-1, which summarizes the estimated Internal Rate of Return (IRR) and Net Present Value (NPV) for the Project. Subsequent sensitivity analysis is provided as pre-tax but is applicable, in principle, to post-tax. A detailed Cash Flow analysis is provided at the end of this section in Table 22-4.
Table 22-1 Sheep Mountain Internal Rate of Return and Net Present Value
|
Before Federal |
After Federal |
IRR |
28% |
26% |
NPV 5% |
$141,749 |
$120,725 |
NPV 7% |
$116,412 |
$98,492 |
NPV 10% |
$85,627 |
$71,381 |
*2021 US dollars x 1000
22.1 Sensitivity to Price
The Sheep Mountain Project, like all similar projects, is quite sensitive to uranium price as shown in Table 22-2 and Table 22-3. A summary of sensitivity of the projected IRR and NPV with respect to key parameters other than price also follows. The project is roughly twice as sensitive to variances in mine recovery and/or dilution as it is to variance in operating and capital costs.
Higher heap recovery may be realized based on current metallurgical test work and historical production experience. An improvement in uranium loss from 0.10 to of 0.006% U3O8 loss would result in a 3% improvement in IRR and an improvement in NPV at 7% discount of $19 million. The sensitivity analysis shows that the project is not highly sensitive to changes in operating and/or capital costs. With respect to mine dilution affecting mined grade, the sensitivity is similar to that of uranium price in that much of the same costs are incurred, and any variance in mine recovery or dilution affects gross revenues either positively or negatively. The project is roughly twice as sensitive to variances in mine dilution as it is to variance in operating and capital costs. Mine dilution is highly dependent upon grade control and mining selectivity. The mine plan, equipment selection, and personnel allocations included in the cost estimate, for both the open pit and underground, provide for selective mining and tight grade control in recognition of this factor.
Table 22-2 Pre-tax Sensitivity Summary
|
Selling Price (USD/pound) |
||
Discount Rate |
$55 |
$65 |
$75 |
NPV 5% (Million $) |
$37 |
$142 |
$246 |
NPV 7% (Million $) |
$25 |
$116 |
$208 |
NPV 10% (Million $) |
$10 |
$87 |
$161 |
IRR |
13% |
28% |
42% |
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22.2 Sensitivity to Other Factors
Sensitivity of the projected IRR and NPV with respect to key parameters other than price, previously shown, is summarized in Table 22-3. The sensitivity analysis was performed with respect to the base case including $65 per pound uranium price, 8% operating cost contingency, and 0.01% U3O8 loss. As with the sensitivity analysis for price, the analysis in pre-tax, however, post-tax would be proportionate.
Higher heap recovery may be realized based on current metallurgical test work and historical production experience. An improvement in uranium loss from 0.10 to of 0.006% U3O8 loss would result in a 4% improvement in IRR and an improvement in NPV at 7% discount of $22 million. The sensitivity analysis shows that the project is not highly sensitive to changes in operating and/or capital costs. With respect to Mine dilution affecting mined grade, the sensitivity is similar to that of uranium price in that much of the same costs are incurred, and any variance in mine recovery or dilution affects gross revenues either positively or negatively. The project is roughly twice as sensitive to variances in mine dilution as it is to variance in operating and/or capital costs. Mine dilution is highly dependent upon grade control and mining selectivity. The mine plan, equipment selection, and personnel allocations included in the cost estimate, for both the open pit and underground, provide for selective mining and tight grade control in recognition of this factor.
Table 22-3 Pre-tax Sensitivity Summary
Parameter |
Change from Base |
Change in |
Change in NPV at 7% |
Grade |
10% |
11% |
$49 million |
Heap recovery |
0.006% U3O8 loss |
6% |
$40 million |
CAPEX |
10% |
3% |
$7 million |
OPEX |
10% |
5% |
$16 million |
22.3 Payback Period
The project shows positive cumulative cash flow in year five. Refer to the cash flow summaries that follow.
22.4 Breakeven Price
The breakeven price of uranium oxide for the project based on the foregoing assumptions and preliminary mine limits is approximately $51 per pound.
22.5 Cash Flow
Table 22-4 shows the pre and after tax for both underground and surface mines at Sheep Mountain.
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Table 22-4 Cash Flow
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Table 22-4 Cash Flow (Continued)
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23.0 ADJACENT PROPERTIES
The Sheep Mountain Project is within the Crooks Gap/Green Mountain Uranium District. Past production occurred at both Sheep Mountain by WNC and others, in addition to production at Green Mountain by Pathfinder Mines at their Big Eagle Mine. Rio Tinto Ltd., through its wholly owned subsidiary Kennecott Corp, USA, currently controls most of the known Mineral Resources in the Green Mountain area including the Big Eagle mine and the Sweetwater Mill 22 miles to the south, which is currently in reclamation. EFR has no interest in any adjacent properties to the Sheep Mountain Project.
The QPs have not been able to verify the information on the adjacent properties and the information is not necessarily indicative of the mineralization on the Project.
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24.0 OTHER RELEVANT DATA AND INFORMATION
24.1 Ground Water Conditions
The Crooks Gap area regional hydrology, as determined by the Platte River Basin Water Plan, includes two separate formations or groups of formations that qualify as potentially productive for groundwater. The Quaternary aquifer system has both an alluvial and non-alluvial division. This is considered to be a discontinuous but major aquifer in the State of Wyoming. It is undetermined at this time whether this surface aquifer exists in the project area.
The second aquifer in the Crooks Gap area is the Tertiary Aquifer System. The System in the Crooks Gap region is comprised of the Fort Union and Battle Spring Formations. The Platte River Basin Water Plan describes the aquifer as comprised of complex inter-tonguing fluvial and lacustrine sediments. This is also classified as a major aquifer for the State of Wyoming.
Mining will occur in the Battle Spring Formation. Historic data indicates that sustained dewatering of the Sheep underground mines required approximately 200 gpm, but that the cone of depression is limited in area and will not impact surface water sources in the area. In addition, dewatering of the Congo Open pit requires an estimated 150 gpm beginning in year seven and extending to the end of mining. Thus, approximately 350 gpm of water will be produced by the mines.
With respect to mine and mineral processing operations, the mineral processing facility will operate at an average flow rate of 360 gpm. However, the majority of the flow is recirculated resulting in an estimate net water demand of 135 gpm. The largest consumptive use of water on the project will be for dust control for the open pit, hauls roads, stockpile areas, and the conveyor system. This use is estimated to average 150 gpm over a nine-month period or 100 gpm on an annual basis. Thus, the total water use is estimated at 235 gpm. This is significant in that the water produced by the mine operations is adequate for the consumptive needs of the project and that no additional water sources will be required.
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25.0 INTERPRETATION AND CONCLUSIONS
The planned development of the Sheep Mountain Project is an open pit and underground conventional mine operation with on-site mineral processing featuring an acid heap leach and solvent extraction recovery facility. The open pit and underground mine operations would be concurrent with a mine life of approximately 12 years.
The Sheep Mountain Project if implemented would be profitable under the base case and US$65 per pound selling price the project is estimated to generate an IRR of 28% before taxes and has an NPV of approximately US$115 million at a 7% discount rate. An economic analysis including a sensitivity analysis of commodity price in the range of $50 to $70 per pound is presented in Section 22.0. The breakeven price of $51.00 per pound of uranium oxide for the project is based on the foregoing assumptions and preliminary mine limits. By their nature all commodity price assumptions are forward-looking. No forward-looking statement can be guaranteed, and actual future results may vary materially. The technical risks related to the project are low as the mining and recovery methods are proven. The mining methods recommended have been employed successfully at the project in the past. Successful uranium recovery from the mineralized material at Sheep Mountain and similar project such as the Gas Hills has been demonstrated via both conventional milling and heap leach recovery.
Risks related to permitting and licensing the project are also low as the WDEQ Mine Permit and BLM Plan of Operations have been approved. The major remaining permit needed to start operations is the combined Source and Byproduct Materials License which would be issued through the WDEQ as Wyoming is an agreement state with the NRC.
EFR is not aware of any other specific risks or uncertainties that might significantly affect the Mineral Resource and Mineral Reserve estimates or the resulting economic analysis. Estimation of costs and uranium price for the purposes of the economic analysis over the life of mine is by its nature forward-looking and subject to various risks and uncertainties. No forward-looking statement can be guaranteed, and actual future results may vary materially.
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26.0 RECOMMENDATIONS
As the Sheep Mountain Project (the Project) is sensitive to mining factors including resource recovery, dilution, and grade, and mineral processing factors related to the performance of the heap leach, it is recommended that a bulk sampling program and pilot scale heap leach testing be completed. Mineralization is shallow (less than 40 feet) in the northern portions of the Congo pit. A small test mine could be developed under the existing WDEQ Mine Permit and BLM Plan of Operations. This would allow access to examine and test the mineralization with respect to mining parameters and to collect a bulk sample for pilot scale heap leach testing. It is recommended that a bulk sample of approximately 2,000 tons be collected and transported to Energy Fuels Resources (USA) Inc. White Mesa Mill. At the Mill and under the Mill's Source Materials License, the mineralized material could be stacked at various heights in the range of 15 to 30 feet. The test plots would be lined and could be cribbed on two sides with an open face stacked at the angle of repose. Using 20 x 20-foot pads, four pilot tests could be completed. The testing would determine the geotechnical behavior of the material with respect to consolidation, slope stability, and the leaching characteristics with respect to acid consumption and mineral recovery. Flow and/or percolation rates retained moisture and other characteristics at various stacking heights could also be determined.
Table 26-1 summarizes the recommended work program to further develop the Project.
Table 26-1 Recommended Work Program
Scope of Work |
Est. Cost US$ |
Test mine approximately ½ acre, 40,000 cy excavation at $150/cy |
$60,000 |
Testing the mineralization and collection of a bulk sample |
$40,000 |
Transportation of 2,000 tons, 500 miles at $0.17/ton mile |
$170,000 |
Heap pilot testing |
$200,000 |
Reclamation of test pit |
$60,000 |
Revise Preliminary Feasibility Study |
$100,000 |
Total |
$630,000 |
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27.0 REFERENCES
Previous Reports:
Beahm, D. L., Sheep Mountain Uranium Project, Fremont County, Wyoming, USA, Updated Preliminary Feasibility Study, National Instrument 43-101 Technical Report, Amended and Restated, February 28, 2020.
Beahm, D. L., Sheep Mountain Uranium Project, Fremont County, Wyoming, USA, Updated Preliminary feasibility Study, National Instrument 43-101 technical Report, April 13, 2012.
Beahm, D. L., David H. Scriven, D. H., McNulty, T.P., Sheep Mountain Project 43-101 Mineral Resource and Reserve Report, April 8, 2010.
Bendix, National Uranium Resource Evaluation: Casper Quadrangle, Wyoming, September 1982.
BRS Inc. (BRS), Beahm, Sheep Mountain Project 43-101 Mineral Resource Update Report, March 1, 2011.
Harris & Thompson, Title Report on Sheep Mountain/Crooks Gap Properties, Fremont County, Wyoming, 1/20/2005 and as updated 12/02/2011.
Irwin, R., Evaluation of the ISL Potential of a Part of the Northern Crooks Gap District Freemont County WY: Internal Report 1998
Lyntek, Titan Uranium - Sheep Mtn. Heap Leach Project, Pre-Feasibility Study Report, Central Wyoming, USA, February 2012.
Pathfinder Mines Corporation (PMC), Sheep Mountain Evaluation, Internal Report, September 1987.
R and D Enterprises, Inc. (RDE), Sheep Mountain Uranium Project, Fremont County, WY, USA, Column Leach Studies, February 21, 2011.
Roscoe Postle Associates Inc. (RPA), Wallis, S. and D. Rennie, Technical Report on the Sheep Mountain Uranium Project, Wyoming, Prepared for Uranium Power Corporation (UPC), October 10, 2006.
Roscoe Postle Associates Inc. (RPA), Wallis, S., Technical Report on the Sheep Mountain Uranium Project, Wyoming, Prepared for Uranium Power Corporation (UPC), January 10, 2005.
US Energy Corp., Healey, C., Wilson, J., 2006 Resource Study Sheep Mountain Project, June 2, 2006.
U.S. Energy Corp and Crested Corp. (USE/CC), February 1990, Exhibit 4.
U.S. Energy Corp and Crested Corp. (USE/CC), Annual Reports Mine Permit 381C, 1990 through 2006.
Western Nuclear Inc., Douglas, S., Ore Reserve Estimates, 1981.
Western Nuclear Inc., Proposed Congo Pit and all Anticipated Extensions, 1981.
Watts Griffis & McQuat (WGM), Valuation of US Uranium Limited: Internal Report 1999
Western Nuclear Inc., Wyoming DEQ Permit to Mine # 381C, 1980.
Western Nuclear Inc., Oliver, D., Ore Reserve Estimates, 1985.
Wilson, J.C., 2005 Drilling Report Sheep Mountain Project Fremont County, Wyoming 2005
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Publications Cited:
AACE International, 2005, Cost Estimate Classification System – as Applied in Engineering, Procurement, and Construction for the Process Industries, TCM Framework: 7.3 – Cost Estimating and Budgeting, AACE International Recommended Practice No. 18R-97.
Boberg, W. W., Applied Exploration and Uranium Resources of Great Divide Basin, Wyoming, AAPG Bulletin, volume 63, 1979.
Dunne, R. C., Kawatra, K., and Young, C. A., Eds. 2019, Schnell, H., "Uranium". In SME Mineral Processing and Extractive Metallurgy Handbook, Vol. Two, Chapter 12.41.
Gomiero, L. A., Lima, H. A., and Morais, C. A. 2010, "Evaluation of a new milling process for the Caetite". In Uranium 2010: Proceedings of the 3rd International Conference in Uranium. Montreal, QC: Canadian Institute of Mining, Metallurgy and Petroleum.
Jones, N.R., Gregory, R.W., and McLaughlin, J.F., 2011, Geologic map of the Bairoil 30' x 60' quadrangle, Carbon, Fremont, Sweetwater, and Natrona counties, Wyoming: Wyoming State Geological Survey Map Series 86, scale 1:100,000.
Mining Cost Service, Cost Indexes and Metal Prices (October 2021). Pub. by InfoMine USA, Inc.
National Uranium Resources Evaluation (NURE), Casper Quadrangle, Wyoming, September 1982.
Rackley, Ruffin I., AAPG Bulletin 56, Environment of Wyoming Tertiary Uranium Deposits, 1972.
Stedman, Ashley, and Kenneth P. Green (2018). Fraser Institute Annual Survey of Mining Companies 2018. Fraser Institute.
Stephens, James G., Geology and Uranium Deposits at Crooks Gap, Fremont County Wyoming, Contributions to the Geology of Uranium, Geological Survey Bulletin 1147-F, 1964.
TradeTech, Uranium Market Study, 2019: Issue 4.
Woolery, R. G, et al, 1978, Heap Leaching of Uranium A Case Study, SME Mining Engineering Magazine, June 1978.
Wyoming Water Development Commission, Platte River Basin Water Plan, May 2006.
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28.0 CERTIFICATE OF AUTHORS
Section 28 is added to this report for compliance to Canadian NI 43-101 standards.
I, Daniel D. Kapostasy, P.G., do hereby certify that:
1. I am currently employed as the Director of Technical Services with Energy Fuels Resources (USA) Inc., 225 Union Blvd. Suite 600, Lakewood, Colorado, 80228.
2. I graduated with a Bachelor of Sciences degree in Geology in May 2003 from the University of Dayton in Dayton, Ohio.
3. I graduated with a Master of Science Degree in December 2005 from The Ohio State University in Columbus, Ohio.
4. I am a Registered Professional Geologist in the State of Wyoming (PG-3778), a Registered Professional Geologist in the State of Utah (10110615-2250), and a Registered Member of SME (RM#04172231). I have worked as a geologist for a total of 16 years since my graduation. My relevant experience for the purpose of this Technical Report is:
5. I have read the definition of "qualified person" set out in National Instrument 43-101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101.
6. As I am currently employed by Energy Fuels (USA) Inc. I do not meet the definition of being independent of the issuer as described in section 1.5
7. I visited the Sheep Mountain Project on April 8, 2014.
8. I am responsible for Sections 4 - 12 and 18 - 20 and relevant portions of Sections 1 and 2 of this Technical Report
9. I have read NI 43-101, and the Technical Report has been prepared in compliance with NI 43-101 and Form 43-101F1.
10. At the effective date of the Technical Report, to the best of my knowledge, information, and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
Dated this 11th day of February 2022
"Original signed and sealed"
/s/Daniel D. Kapostasy
Daniel D. Kapostasy, SME Registered Member
SHEEP MOUNTAIN PRELIMINARY FEASIBILITY STUDY |
NI 43-101 COMPLIANT, December 31, 2021 |
I, Douglas L. Beahm, P.E., P.G., do hereby certify that:
1. I am the Principal Engineer and President of BRS, Inc., 1130 Major Avenue, Riverton, Wyoming 82501.
2. I am a co-author of the report " Preliminary Feasibility Study for the Sheep Mountain Project, Fremont County, Wyoming, USA" Dated December 31, 2021.
3. I graduated with a Bachelor of Science degree in Geological Engineering from the Colorado School of Mines in 1974. I am a licensed Professional Engineer in Wyoming, Colorado, Utah, and Oregon; a licensed Professional Geologist in Wyoming; a Registered Member of the SME.
4. I have worked as an engineer and a geologist for over 48 years. My work experience includes uranium exploration, mine production, and mine/mill decommissioning and reclamation. Specifically, I have worked with numerous uranium projects hosted in sandstone environments in Wyoming.
5. I was last present at the site on the 16th of September 2021.
6. I am responsible for Sections 3, 14, 15, 16, and 22 - 27 and relevant portions of Section 1, 2, and 21 of the report.
7. I am independent of the issuer in accordance with the application of Section 1.5 of NI 43-101. I have no financial interest in the property and am fully independent of Energy Fuels Inc.. I hold no stock, options or have any other form of financial connection to EFR. EFR is but one of many clients for whom I consult.
8. I do have prior working experience on the property as stated in the report.
9. I have read the definition of "qualified person" set out in National Instrument 43-101 and certify that by reason of my education, professional registration, and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101.
10. I have read NI 43-101 and Form 43-101F1, and the Technical Report has been prepared in compliance with same.
11. As of the date of this report, to the best of my knowledge, information and belief, the parts of the Technical Report for which I am responsible contain all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
January 19, 2022
"Original signed and sealed"
/s/ Douglas L. Beahm
Douglas L. Beahm, SME Registered Member
SHEEP MOUNTAIN PRELIMINARY FEASIBILITY STUDY |
NI 43-101 COMPLIANT, December 31, 2021 |
I, Terence P. ("Terry") McNulty, D. Sc., P. E., do hereby certify that:
1. I am president of T. P. McNulty and Associates, Inc., located at 4321 N. Camino de Carrillo, Tucson, AZ 85750-6375.
2. I am the author of Sections 13 and 17 of the report entitled " Preliminary Feasibility Study for the Sheep Mountain Project, Fremont County, Wyoming, USA", dated January 19, 2022.
3. I graduated in 1960 from Stanford University with a Bachelor of Science degree in Chemical Engineering. In 1963, I earned a Master of Science degree in Metallurgical Engineering from the Montana School of Mines, and in 1966, I was awarded a Doctor of Science degree in Metallurgy from the Colorado School of Mines. I am a Registered Professional Engineer in Colorado with License No. 24789 and am a Registered Member of SME, No. 2152450R.
4. I have worked as a metallurgist in the minerals industry for over 55 years and have had extensive experience in uranium processing, as well as in cost estimation, process engineering, plant design, and plant operations in the recovery of many metals and minerals from their ores. I have contributed to approximately forty-five NI 43-101 compliant studies for projects intended to recover uranium, gold, silver, and copper.
5. I was last present on the site in August 2010.
6. I am responsible for Sections 13, 17, and portions of 21 of the Technical Report.
7. I am independent of Energy Fuels Inc.. and have no financial interest in the property to which this Technical Report applies.
8. I participated in a report on this property for another client in 2010.
9. Owing to my education, relevant industrial experience, and professional registration, I believe that I am a "qualified person" for the purposes of this Technical Report.
10. I have read NI 43-101 and Form 43-101F1, and the Technical Report has been prepared in compliance with same.
11. As of the date of this report, and to the best of my knowledge based on information that has been provided to me, this Technical Report contains all information that must be disclosed to prevent the Technical Report from being in any way incomplete or misleading.
January 19, 2022
"Original signed and sealed"
/s/ Terence P. McNulty
Terence P. McNulty, D. Sc., P. E
P.E Seal: Colorado # 24789