PRESS RELEASES ENERGY FUELS ACQUIRES 50% INTEREST IN THE HIGH-GRADE WATE URANIUM PROJECT IN ARIZONA
February 17, 2015 Energy Fuels Inc. (NYSE MKT:UUUU; TSX:EFR) (“Energy Fuels” or the “Company”) is pleased to announce that, through its wholly-owned subsidiary EFR Arizona Strip LLC, the Company has acquired a 50% interest in the high-grade Wate uranium deposit (the “Wate Project”) from VANE Minerals (US) LLC (“VANE”). The Wate Project is held in the Wate Mining Company, LLC joint venture (the “LLC”). The other 50% of the LLC continues to be owned by Uranium One Americas, Inc. (“U1”).
Northern Arizona, where the Wate Project is located, contains the highest-grade uranium deposits in the United States, and some of the highest-grade uranium deposits in the World (outside of Canada’s Athabasca Basin). The Wate Project is a “breccia pipe” deposit like the Company’s Pinenut, Canyon, and Arizona 1 mines. The Company is currently producing ore at the Pinenut mine, and recently announced that it is preparing to resume development at the Canyon mine. It is anticipated that future production from the Wate Project would be processed at Energy Fuels’ White Mesa uranium mill in Utah, which is currently the only operating uranium mill in the U.S. Energy Fuels will also assume VANE’s role as Manager of the LLC, which provides the Company with control over LLC activities, including programs and budgets.
As consideration for the 50% interest in the LLC, Energy Fuels paid US$250,000 cash to VANE at closing, along with a US$500,000 non-interest-bearing promissory note, payable in two equal installments of US$250,000 on each of the first and second anniversaries of the note, and a 2% production royalty on the 50% LLC interest being acquired. The royalty can be purchased by Energy Fuels upon payment to VANE of an additional US$750,000, less any royalties previously paid. In addition, upon the LLC meeting certain permitting milestones and other conditions, the amounts due under the note will be accelerated, and the Company will pay an additional $250,000 cash to VANE. If Energy Fuels elects not to make the payments under the note, it will be required to transfer its interest in the LLC back to VANE.
The Wate Project is located on land owned by the State of Arizona, and is therefore not subject to the U.S. government’s withdrawal of certain lands in Arizona from new mineral location. Primary permitting authority for the project lies with the State. The LLC has submitted an application to the State to convert the previous exploration permit into a state mineral lease, which will confer the right to mine and ship ores and to conduct all support operations, similar to a mining permit in other jurisdictions. The Company expects the mineral lease to be granted in 2015. Once the lease is granted, the Company expects to move forward to acquire the additional State aquifer protection and air quality permits and other approvals required to commence development and mining. There is an existing historical estimate from 2011 which shows that the Wate Project contains 1.1 million pounds of U3O8 with an average grade of 0.79% eU3O8 contained in 71,000 tons of inferred mineral resources. A qualified person has not done sufficient work to classify this estimate as a current estimate of mineral resources or mineral reserves, and as such the Company is not treating it as a current estimate of mineral resources or mineral reserves. However, the Company believes the estimate is relevant and reliable, as it was prepared recently by a reputable mining consultant. In order to upgrade and verify this historical estimate as a current mineral resource, the Company needs to perform further evaluations of the estimate and confirm that its underlying assumptions continue to be reasonable and that the report is complete and current. The Company expects to perform this evaluation and update it to a NI 43-101 compliant technical report, which would be filed on SEDAR.
Stephen P. Antony, President and CEO of Energy Fuels commented: “We are extremely pleased to acquire VANE’s interest in the Wate Project. Wate is a well-known, high-grade breccia pipe deposit that fits nicely into our existing uranium portfolio. Due to their high-grades, these deposits generally represent the lowest-cost sources of uranium production in our portfolio. We have a wealth of experience mining similar deposits in Arizona, and I am proud of our Company’s commitment to the safety of our workers, the community, and the environment, as we bring uranium to the marketplace for the production of emission-free, carbon-free electricity.”
Stephen P. Antony, P.E., President & CEO of Energy Fuels, is a Qualified Person as defined by National Instrument 43-101 and has reviewed and approved the technical disclosure contained in this news release. |