VANCOUVER — A new resource estimate and several mining permits are positioning Energy Fuels (EFR-T, EFRFF-O) to become the next uranium producer.
Energy Fuels owns the Whirlwind project, a 17.4-sq.-km property straddling the Colorado-Utah border, near Gateway, Colo. The sandstone-hosted deposit is a flatlying body that sits at a depth of roughly 160 metres.
An updated estimate following a 28-hole, 5,700-metre drill program has boosted Whirlwind’s indicated uranium resources by 31% and its vanadium stocks by 34%. Using a 0.06% U3O8cutoff grade, the deposit hosts 185,086 indicated tonnes grading 0.21% U3O8 and 0.71% V2O5, for 860,386 contained pounds U3O8 and 2.9 million lbs. V2O5.
Based on investigation of outcrops, some drill data, and historic maps, the property also hosts roughly 2.2 million lbs. U3O8 and 6.8 million lbs. V2O5 in inferred resources. The report states that the “potential to further increase this resource is quite reasonable.”
The uranium and vanadiumbearing minerals occur as finegrained coatings on detrital grains, fill pore spaces between sand grains, and replace carbonaceous material. The main uranium mineral is uraninite, or pitchblende, with minor amounts of coffinite. Montroseite is the primary vanadium mineral, along with vanadium clays and hydromica.
Pioneer Uravan, now a wholly owned subsidiary of Pioneer Natural Resources (PXD-N), drilled and developed the Whirlwind mine between 1976 and 1981, when it was known as the Urantah claims. Pioneer developed a 1,070-metre-long rock decline but abandoned the project shortly afterwards, with only minor production.
Since then, the project has been through several hands before Energy Fuels picked it up. The property encompasses several old mines — operations within 1 mile of the property’s borders produced more than 7 million lbs. uranium and 24 million lbs. vanadium, most of it in the 1970s. Uranium mining in the area ceased in 1990 because of falling metal prices.
Energy Fuels plans to connect the Whirlwind mine with the nearby Packrat mine, 210 metres north, to create the required secondary escape route as well as ventilation.
Once operational, Whirlwind will process 200 tons per day. Energy Fuels is still waiting for one more permit for Whirlwind: the Colorado Bureau of Land Management still has to approve the mine’s plan of operations.
In March, Energy Fuels received the mine permit for its Energy Queen mine, formerly known under Denison Mines (DML-T, DNN-X) as the Hecla Shaft mine. Mine refurbishment activities have already begun, aimed at initial production in 2009. Recoverable uranium grades at Energy Queen average 0.25% U3O8 and 1% V2O5.
Shares of Energy Fuels fell on news of the resource estimate, closing down 5 at $1.40. The company has a 52-week trading range of 77-$5.48 and 52.4 million shares issued.
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