Energy Fuels Inc. (TSX:EFR) ("Energy Fuels" or the "Company") is
pleased to announce that it has completed an update to the
Preliminary Feasibility Study (PFS), originally reported by the
Company's wholly owned subsidiary Titan Uranium on April 12, 2010,
for Energy Fuels' 100% owned Sheep Mountain uranium project in
Fremont County, Wyoming. All currency amounts reported in this
release are quoted in US dollars.
Under the updated PFS, the scenario with the best economics for
the Sheep Mountain Project is the concurrent development of both
the underground and open pit deposits. This option generates a
pre-tax Internal Rate of Return (IRR) of 42%, with a Net Present
Value (NPV) of $201 million at a 7% discount rate, and an NPV of
$146 million at a 10% discount rate. Initial CAPEX for this option
is $109 million.
Capital considerations could result in Energy Fuels modifying
the plan that produces the highest IRR in favor of an alternative
that initially develops the open pit only, and delays producing the
underground deposit until the 5th year of operations. This
alternative would require a much reduced initial capital investment
of $61 million while still providing positive cash flow; and would
generate a pre-tax IRR of 35%, with NPV's of $174 million at a 7%
discount rate and $118 million at a 10% discount rate.
The update to the study was prepared by a group of consultants
led by BRS Inc., an independent engineering consulting firm based
in Riverton, Wyoming, in collaboration with Western States Mining
Consultants and Lyntek Inc. This group also prepared the original
PFS.
Steve Antony, President and CEO of Energy Fuels stated, "The
results of this updated PFS confirm our view that Sheep Mountain
can be a highly productive and profitable project. These economic
results are compelling, even in today's uranium marketplace, and
validate the assessment that led to Energy Fuels' acquisition of
Titan Uranium. We are prepared to continue the Sheep Mountain
permitting effort to bring the project online as a producing,
conventional uranium mine as quickly as possible to monetize these
returns for our shareholders."
Highlights for the most favorable scenario include:
- PFS estimates are based on estimated capital and operating
costs for a uranium mine, utilizing both conventional open pit and
underground mining methods and heap leach recovery, with a maximum
annual capacity of 1.5 million lbs. U3O8
- The financial model is based on a long term uranium price of
$65.00/lb. based on historical average prices over the last three
years, and supported by published reports of securities
analysts.
- Updated Probable Mineral Reserve of 7,453,000 tons at an
average grade of 0.123% eU3O8, containing 18,365,000 lbs. eU3O8,
compared to the originally reported (April 12, 2010) 6,393,000 tons
at an average grade of 0.111% eU3O8, containing 14,186,000 lbs.
eU3O8; an increase of 29.6% in Probable Mineral Reserve over the
previous PFS.
- Initial mine life: 15 years, compared to the originally
reported 11 years.
- Open pit stripping ratio: 8.1 Bank Cubic Yards per pound
mined.
- Estimated capital cost: $109 million including allowances for
contingency and risk, compared to the originally reported $118
million;
- Estimated operating cost: $32.31 per pound recovered, as
compared to the originally reported $28.67 per pound recovered;
- Estimated pre-tax Net Present Value (NPV) at a 7% discount
rate: $201 million, as compared to the originally reported $101
million;
- Estimated pre-tax Internal Rate of Return (IRR): 42%, as
compared to the originally reported 25%
- Estimated pre-tax payback period: 3 years, at a discount rate
of 5%, as compared to the originally reported 5 years at the same
discount rate
Pre-tax NPV and IRR Sensitivities:
--------------------------------------------------------------------
Alternative 1 - Open Pit and Underground
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Common Start
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Selling Price (USD/pound)
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Discount Rate $60 $65 $70
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NPV 5% (Million $) $ 202 $ 249 $ 296
--------------------------------------------------------------------
NPV 7% (Million $) $ 161 $ 201 $ 240
--------------------------------------------------------------------
NPV 10% (Million $) $ 115 $ 146 $ 176
--------------------------------------------------------------------
Pre-Tax IRR 36% 42% 48%
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In summary, the primary changes in the updated PFS resulting in
these much improved economics are:
-- Use of a $65/lb. selling price rather than the $60/lb. price used
originally
-- Open pit pounds nearly doubled, based on the increased Probable Mineral
Reserve
-- Mine life was extended by 4 years with the expanded Probable Mineral
Reserve
-- Average grade for the project increased by 11%, from 0.111% to 0.123%
These results update an original Preliminary Feasibility Study
prepared by BRS, Inc. on April 8, 2010. An updated Preliminary
Feasibility Study supporting these results will be filed on SEDAR
within 45 days of this release.
Douglas L. Beahm, PE, PG and Registered Member of the SME,
Principal Engineer of BRS, Inc. is an independent Qualified Person
as defined by National Instrument 43-101 and has reviewed and
approved the content of this press release.
About Energy Fuels: Energy Fuels Inc. is a uranium and vanadium
mineral development company. The Company recently acquired Titan
Uranium Inc., including the Sheep Mountain Project in the Crooks
Gap District of Wyoming. The Company also received a Final
Radioactive Materials License from the State of Colorado for the
proposed Pinon Ridge Uranium and Vanadium Mill in March 2011. The
mill will be the first uranium mill constructed in the United
States in over 30 years.
With about 61,000 acres of highly prospective uranium and
vanadium properties located in the states of Colorado, Utah,
Arizona, Wyoming, and New Mexico, and exploration properties in
Saskatchewan's Athabasca Basin totaling approximately 32,000
additional acres, the Company has a full pipeline of additional
development prospects. Energy Fuels, through its wholly-owned
subsidiaries, Energy Fuels Resources Corporation, Titan Uranium
Inc., and Magnum Uranium Corp., has assembled this property
portfolio along with a first class management team, including
highly skilled technical mining and milling professionals based in
Lakewood and Naturita, Colorado and Kanab, Utah.
This news release contains certain "Forward-Looking Statements"
within the meaning of Section 21E of the United States Securities
Exchange Act of 1934, as amended and "Forward Looking Information"
within the meaning of applicable Canadian securities legislation.
All statements, other than statements of historical fact, included
herein are forward-looking statements and forward-looking
information that involve various risks and uncertainties. There can
be no assurance that such statements will prove to be accurate, and
actual results and future events could differ materially from those
anticipated in such statements. Important factors that could cause
actual results to differ materially from the Company's expectations
are disclosed in the Company's documents filed from time-to-time
with the British Columbia, Alberta and Ontario Securities
Commissions.
Contacts: Energy Fuels Inc. Gary Steele Investor Relations (303)
974-2140 or Toll free: 1-888-864-2125 Energy Fuels Inc. Curtis
Moore Corporate Communications (303) 974-2140 or Toll Free:
1-888-864-2125investorinfo@energyfuels.com www.energyfuels.com
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