EnCore Energy wins court challenge to South Dakota uranium project 

EnCore Energy (TSXV: EU; OTCQB: ENCUF) has won a court challenge to its US$32 million Dewey-Burdock uranium project in South Dakota.  

The Oglala Sioux Tribe and watchdog group Aligning for Responsible Mining wanted a United States appeals court to review its decision in August approving the Nuclear Regulatory Commission’s (NRC) licence for enCore to mine uranium at the project about 150 km southwest of Rapid City, SD.   

The court denied the request on Thursday, but the project’s opponents can appeal to the U.S. Supreme Court.  

Jeffrey C. Parsons, a lawyer based in Lyons, CO with the Western Mining Action Project who argued for the Indigenous group, didn’t immediately reply to a phone call Friday morning seeking comment.  

A spokesperson for Corpus Christi, Texas-based enCore said by phone the company may provide comment on the court’s decision.  

The Dewey-Burdock in-situ recovery project is among several enCore is pursuing with others in Texas, Wyoming and New Mexico as the company plugs in to a renewed interest in nuclear power by governments for producing energy without harmful gas emissions. Several countries have rolled back attempts to retire nuclear plants in the face of a European energy crisis and calls to fight climate change.  

A 2020 report shows Dewey-Burdock has 5.4 million tonnes grading 0.132% uranium oxide for contained metal of 14.4 million lb. over a 16-year mine life. EnCore estimated construction costs at US$31.7 million, a post-income tax net present value of US$147.5 million at a discount rate of 8% and an internal rate of return of 50%. The calculations used a uranium price of $55 per lb., an operating cost of US$10.46 per lb. and royalties and local taxes of $5.15 per lb. of production. 

According to court documents, the project’s opponents objected to how the NRC conducted environmental impact studies from 2009-19 on the property and the proposed in-situ recovery process. In-situ recovery involves pumping a solution into underground ore beds to dissolve uranium, then pumping it to the surface where the uranium is recovered for processing into fuel. 

A decade of negotiations between enCore and local Indigenous groups found some on side with the company while the Oglala Sioux Tribe at times sought greater compensation for participation and at one point proposed a study process that would have cost another US$2 million but was eventually dropped. 

EnCore and the NRC argued successfully in court to support the agency’s environmental review process, although there had been some flaws in consultations with locals. 

Last month, enCore bought the past-producing Alta Mesa uranium project in Texas from Energy Fuels (TSX: EFR) for US$120 million. The deal gives enCore three of only 11 licenced production facilities in the United States.  

The acquisition lifts enCore’s total production capacity including the Rosita and Kingsville Dome plants in Texas by about 70% to 3.6 million lb. a year with the goal of starting production at Rosita next year, it said. 

Shares in enCore Energy fell 1.5% on Friday in Toronto to $3.22 apiece, within a 52-week range of $2.84 and $5.91, valuing the company at $347 million. 

The U.S. Court of Appeals case is 20-1489 Oglala Sioux Tribe and Aligning v. NRC, et al “Per Curiam Order Filed (Merits Panel).”