LAKEWOOD, CO, Dec. 23, 2016 /PRNewswire/ - Energy Fuels Inc.
(NYSE MKT:UUUU; TSX:EFR) ("Energy Fuels" or the
"Company"), a leading producer of uranium in the United States, is pleased to announce
that today the Company expects to file an updated Preliminary
Economic Assessment (the "PEA"), which has been prepared in
accordance with National Instrument 43-101 – Standards of
Disclosure for Mineral Projects ("NI 43-101"), for its
100%-owned Roca Honda Project ("Roca Honda"). All references
to dollars in this press release are references to US dollars.
Roca Honda is one of the largest and highest grade uranium
projects in the U.S. It is located in northwest New Mexico, adjacent to the Mount Taylor Mine,
which is a large, developed, high-grade uranium mine held by a
wholly-owned subsidiary of San
Diego-based General Atomics. The Company is currently
in the process of permitting Roca Honda, so that it can be ready
for development in improved market conditions. Due to Roca
Honda's proximity to the Company's 100%-owned White Mesa Mill, the
uranium to be mined at the project is expected to be trucked to the
Company's mill to be processed and concentrated into finished
uranium product that will be sold into the global nuclear energy
market. The White Mesa Mill is the only fully-licensed and
operating conventional uranium mill in the U.S. today.
The new PEA primarily reflects an update to Roca Honda's
ownership status based on: (i) the Company's acquisition of
4,580-acres of adjacent properties in August of 2015, and (ii) the
Company's acquisition of the 40% ownership interest of the
Company's former joint venture partner in May of 2016, thereby
increasing the Company's ownership in the Project to
100%.
The PEA is entitled "Technical Report on the Roca Honda Project,
McKinley County, State of New Mexico, USA" and is dated
October 27, 2016. The qualified
persons who authored the Technical Report are Stuart E. Collins,
P.E., Robert L. Michaud, P.Eng.,
Mark B. Mathisen, C.P.G., each of
Roscoe Postle Associates Inc., and Harold R. Roberts, P.E.,
Executive VP of the Company. The Technical Report will be
filed on SEDAR and will be available under the Company's profile at
www.sedar.com.
In comparing the new PEA with the previous one dated
February 27, 2015, the project
economics have improved, including estimated operating costs
dropping by 11% to $33.27 per pound
of uranium. The PEA also demonstrates that Roca Honda is
expected to have a 9-year production life with an average annual
production rate of 2.6 million pounds of uranium per year.
The first year of production is expected to total 1.4 million
pounds of uranium, followed by an average rate of production of 2.8
million pounds of uranium per year thereafter. Life-of-mine
capital costs (including upfront capital, sustaining capital, and
closure & reclamation) are expected to total $13.88 per pound of uranium.
The mineral resource estimate for the project is unchanged from
the previous February 27, 2015
report, including 1.51 million tons of Measured and Indicated
Mineral Resources with an average grade of 0.48%
eU3O8 containing 14.6 million pounds of
uranium. Roca Honda is also estimated to contain 1.20 million
tons of Inferred Mineral Resources with an average grade of 0.47%
eU3O8 containing 11.2 million pounds of
uranium.
As previously disclosed in the Company's May 28, 2015 news release, there is an existing,
partially-sunk mine shaft located on the project which was
constructed by Kerr-McGee in 1982 to a depth of 1,478-feet.
The Company expects to evaluate whether this shaft can be
utilized. In addition, the PEA describes a significant
historical uranium estimate for the project that is not included in
the current NI 43-101-compliant resource estimates described
above. Because the Company continues to pursue significant
cost-saving initiatives in today's low uranium price environment,
the additional work to convert these historical estimates into
current NI 43-101-compliant mineral resources has not been
completed. These historical estimates are not equivalent to
current mineral resources or mineral reserves as defined in NI
43-101. The historical estimates should not be relied upon,
but are considered relevant as strong potential exists to add
resources to the project, and if confirmed, such resources could be
important in the early stages of the project life and cash
flow.
Key assumptions and parameters used in the economic analysis
contained in the PEA include the following: mining at an
average rate of 1,090 tons per day, utilizing the Company's White
Mesa Mill for processing (which the PEA notes is a viable uranium
mill and has all the necessary impoundment structures), a sales
price of $65 per pound, a
$45 million (16%) capital cost
contingency, and no mining of historical resources. These key
assumptions and parameters used in the economic analysis are
considered reasonable for economic extraction of the resources for
Roca Honda. Readers should note that the Mineral Resources
disclosed above are not Mineral Reserves, and therefore do not have
demonstrated economic viability. In addition, this PEA is
preliminary in nature; it includes Inferred Mineral Resources that
are considered too speculative geologically to have economic
considerations applied to them that would enable them to be
categorized as Mineral Reserves; and there is no certainty that the
economic analysis will be realized.
Key assumptions and parameters used in determining the
Mineral Resources contained in the PEA, include the
following: a minimum grade cut-off of 0.19%
U3O8, a minimum mining thickness of six feet,
$241 per ton of operating cost, 95%
recovery at the White Mesa Mill, and no environmental, permitting,
legal, title, taxation, socioeconomic, marketing, political, or
other relevant factors that could materially affect the Mineral
Resource estimate. Data verification for the Mineral Resources
estimate was completed by RPA (2010-2011, and 2016) and by Fitch
(2004). The data verification performed by RPA in 2010-2011,
included a site visit, review of historical plans and sections,
review of geological reports, review of historical and more recent
drill hole logs, review of survey records, review of core logging
and sampling procedures, spot checks of property boundary markers
and drill hole collar locations, independent checks of counts per
second (cps) of selected drill core samples, comparisons of the
drill hole data base to historical records, and a discussion with
Fitch (author of the 2006, 2008, and 2010 Technical Reports). No
significant discrepancies were encountered.
The Company is also pleased to announce that it has filed a
prospectus supplement to its effective U.S. registration statement
on Form S-3 in order to reestablish its 'at-the-market' program
("ATM"). Concurrently, the Company has entered into a sales
agreement with Cantor Fitzgerald & Co. pursuant to which the
Company may, at its discretion from time to time, sell up to
$20 million of common shares, with
sales only being made on the NYSE MKT at then-prevailing market
prices. The ATM is substantially similar to the one the
Company utilized to raise $3.39
million of cash from September 29,
2015 to March 15, 2016.
The prospectus supplement and the accompanying base prospectus
relating to this offering have been filed with the U.S. Securities
and Exchange Commission ("SEC") and is available on the SEC's
website at www.sec.gov. Copies of the prospectus supplement
and the accompanying base prospectus relating to this offering,
when available, may be obtained from Cantor Fitzgerald &
Co., Attention: Equity Capital Markets, 110 East
59th Street, New York, New
York, 10022, telephone: (212) 829-7122.
In the event the ATM is utilized, the Company intends to use the
net proceeds to provide the Company with additional financial
flexibility and enhanced options with respect to any or all of the
following: (i) to continue to finance the evaluation of the
high-grade uranium and copper mineralization and the previously
announced shaft-sinking at the Company's Canyon mine project in
Arizona; (ii) to fund wellfield
construction at the Company's Nichols Ranch ISR Project in
Wyoming, as market conditions
warrant; (iii) to continue permitting of the Company's projects,
including Roca Honda and Jane Dough; (iv) to repay principal on
outstanding indebtedness; and/or (v) for general corporate needs
and working capital requirements.
About Energy Fuels: Energy Fuels is a
leading integrated US-based uranium mining company, supplying
U3O8 to major nuclear utilities. Energy
Fuels holds three of America's key uranium production centers, the
White Mesa Mill in Utah, the
Nichols Ranch Processing Facility in Wyoming, and the Alta Mesa Project in
Texas. The White Mesa Mill is the only conventional uranium
mill operating in the U.S. today and has a licensed capacity of
over 8 million pounds of U3O8 per year.
The Nichols Ranch Processing Facility is an ISR production center
with a licensed capacity of 2 million pounds of
U3O8 per year. Alta Mesa is an ISR production center currently
on care and maintenance. Energy Fuels also has the largest NI
43-101 compliant uranium resource portfolio in the U.S. among
producers, and uranium mining projects located in a number of
Western U.S. states, including one producing ISR project, mines on
standby, and mineral properties in various stages of permitting and
development. The Company also produces vanadium as a
co-product of its uranium production from certain of its mines on
the Colorado Plateau, as market conditions warrant. The
Company's common shares are listed on the NYSE MKT under the
trading symbol "UUUU", and on the Toronto Stock Exchange under the
trading symbol "EFR".
Cautionary Note Regarding Forward-Looking
Statements: Certain information contained in this
news release, including any information relating to: the
Company being a leading producer of uranium in the U.S.; the
expected filing of the PEA; Roca Honda being one of the largest and
highest-grade uranium projects in the U.S.; the status of
permitting at Roca Honda and the expectation that the Roca Honda
Project can be ready for development if market conditions improve;
any expectations about improvements in market conditions; the
expected processing of resources mined at Roca Honda at the White
Mesa Mill; the results of the resource estimate and economic
analysis in the PEA including its conclusions and assumptions; the
successful utilization of the ATM; the use of proceeds for the
ATM; and any other statements regarding Energy Fuels' future
expectations, beliefs, goals or prospects; constitute
forward-looking information within the meaning of applicable
securities legislation (collectively, "forward-looking
statements"). All statements in this news release that are
not statements of historical fact (including statements containing
the words "expects", "does not expect", "plans", "anticipates",
"does not anticipate", "believes", "intends", "estimates",
"projects", "potential", "scheduled", "forecast", "budget" and
similar expressions) should be considered forward-looking
statements. All such forward-looking statements are subject
to important risk factors and uncertainties, many of which are
beyond Energy Fuels' ability to control or predict. A number
of important factors could cause actual results or events to differ
materially from those indicated or implied by such forward-looking
statements, including without limitation factors relating to: the
Company being a leading producer of uranium in the U.S.; the
expected filing of the PEA; Roca Honda being one of the largest and
highest-grade uranium projects in the U.S.; the status of
permitting at Roca Honda and the expectation that the Roca Honda
Project can be ready for development if market conditions improve;
any expectations about improvements in market conditions; the
expected processing of resources mined at Roca Honda at the White
Mesa Mill; the results of the resource estimate and economic
analysis in the PEA including its conclusions and assumptions; the
successful utilization of the ATM; the use of proceeds for the
ATM; and other risk factors as described in Energy Fuels'
most recent annual report on Form 10-K and quarterly financial
reports. Energy Fuels assumes no obligation to update
the information in this communication, except as otherwise required
by law. Additional information identifying risks and
uncertainties is contained in Energy Fuels' filings with the
various securities commissions which are available online at
www.sec.gov and www.sedar.com. Forward-looking statements are
provided for the purpose of providing information about the current
expectations, beliefs and plans of the management of Energy Fuels
relating to the future. Readers are cautioned that such
statements may not be appropriate for other purposes. Readers
are also cautioned not to place undue reliance on these
forward-looking statements, that speak only as of the date
hereof.
Cautionary note to United
States investors concerning estimates of measured, indicated
and inferred resources. This news release contains
certain disclosure that has been prepared in accordance with the
requirements of Canadian securities laws, which differ from the
requirements of U.S. securities laws. Unless otherwise
indicated, all reserve and resource estimates included in this news
release have been prepared in accordance with NI 43-101 and the
Canadian Institute of Mining, Metallurgy and Petroleum ("CIM")
classification system. Canadian standards, including NI
43-101, differ significantly from the requirements of U.S.
securities laws, and reserve and resource information contained in
this news release may not be comparable to similar information
disclosed by companies reporting only under U.S. standards.
In particular, the term "resource" does not equate to the term
"reserve" under SEC Industry Guide 7. United States investors are cautioned not to
assume that all or any of Measured or Indicated Mineral Resources
will ever be converted into mineral reserves. Investors are
cautioned not to assume that all or any part of an "Inferred
Mineral Resource" exists or is economically or legally
minable. Energy Fuels does not hold any Reserves as that term
is defined by SEC Industry Guide 7. Please refer to the
section entitled "Cautionary Note to United States Investors
Concerning Disclosure of Mineral Resources" in the Company's Annual
Report on Form 10-K dated March 15,
2016 for further details.
SOURCE Energy Fuels Inc.