Beahm reported in April of 2012 that this Technical Report was prepared for Titan Uranium USA Inc. (Titan), a wholly owned indirect subsidiary of Energy Fuels Inc. (EFR), in compliance with National Instrument 43-101, Standards of Disclosure for Mineral Projects (NI- 43-101) and in accordance with Canadian Institute Mining (CIM) Best Practice Guidelines for the Estimation of Mineral Resources and Mineral Reserves (CIM standards).
Note that EFR is in the process of changing the name of Titan Uranium USA Inc. to Energy Fuels Wyoming Inc. As such any reference to Titan in this report or the associated drawings, figures, tables, and conclusions also applies to the entity Energy Fuels Wyoming Inc. This report references and updates the “SHEEP MOUNTAIN URANIUM PROJECT, Fremont County, Wyoming, USA, 43-101 MINERAL RESERVE AND RESOURCE REPORT”, dated April 8, 2010, the
“SHEEP MOUNTAIN MINES, Fremont County, Wyoming, USA, PRE-FEASIBILITY STUDY, dated April 8, 2010, BRS Inc., and the “SHEEP MOUNTAIN URANIUM PROJECT, Fremont County, Wyoming, USA, 43-101 MINERALRESOURCE REPORT UPDATE”, dated March 1, 2011. These reports were prepared by BRS Inc., of Riverton, Wyoming, on behalf of Titan.
Project Overview
The Sheep Mountain Project includes the Congo Pit, a proposed open-pit development, and the reopening of the existing Sheep Underground mine. Although alternatives were considered, the recommended uranium recovery method includes the processing of mined materials via an on-site heap leach facility.
Permitting and licensing of the project is well advanced. A Plan of Operations was submitted to the Bureau of Land Management (BLM) in June 2011, and the BLM is currently preparing an Environmental Impact Statement (EIS) for the project. There is an existing mine permit for the Sheep Mountain Project held by Titan USA, Mine Permit 381C, which is in good standing with the State of Wyoming, Department of Environmental Quality, Land Quality Division (WDEQ/LQD). Revisions to the Mine Permit and a Source Material License application are being developed and will be submitted to the WDEQ/LQD and the U.S. Nuclear Regulatory Commission (NRC), respectively.
Mining will be completed by both 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 and 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 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.
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 15 years with an additional 5 years allotted for mine closure
and reclamation . The currently planned mine life of the underground in 11 years. 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.
Three production alternatives were considered for detailed financial evaluation reflecting variations in overall project scheduling as follows;
- Alternative 1: Open pit and underground mine development with concurrent start of mining.
- Alternative 2: Open pit and underground mine development with concurrent end of mining.
- Alternative 3: Open pit mine development only.
Based on the economic analysis presented in Section 22, each of the mine development alternatives are economically viable. Alternative 1 provides the highest internal rate of return (IRR), the highest net present value (NPV), and the highest average and annual uranium production level. However,
Alternative 1 also requires the highest level of initial capital. Alternative 3 has the lowest overall capital requirement but has the lowest average annual and total uranium production and the lowest IRR and the NPV.
Alternative 2, or some variation thereof which delays the start of the underground operations with respect to the open pit mine and heap leach facility, is the preferred alternative in that, it has the same lower initial capital requirement as Alternative 3 and the higher average annual and total uranium production as Alternative 1. In addition, Alternative 2 has the practical advantage of staggering some of
the initial startup challenges and demands, for example, personnel recruitment and training.
Depending on the development alternative, production varies from a low of 180,000 tons processed with 366,000 pounds of uranium produced per year during the start of operations of the open pit and heap leach, to a high of 660,000 tons per year processed with approximately 1,500,000 pounds of uranium produced per year at peak production with both the open pit and underground mines in operation. On average the open pit produces 264,000 tons per year containing 608,000 pounds of uranium. Similarly the underground produces an average of 318,000 tons per year containing 841,000 pounds of uranium.
Average production from the heap leach and processing facility is estimated to be 1,224,000 pounds of uranium per year. The subsequent figures are 3D renderings of the project depicting:
- Figure 1.1 – Sheep Mountain Existing Conditions. The site is a brownfield site with areas of
existing mine disturbances some of which have been reclaimed as depicted in the figure. Efforts
were made in the mine planning process to reduce areas of new disturbance and return previously
disturbed lands to their pre-mining land use. - Figure 1.2 – Sheep Mountain During Production. This figure depicts the site at the peak of mine
and mineral processing operations. - Figure 1.3 – Sheep Mountain Mine Reclamation. This figure depicts the site following cessation
of mine and mineral processing operations and completion of site reclamation which returns the
lands to pre-mining land use.
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