Energy Fuels moves closer to production (March 28, 2008)

Vancouver – A new resource estimate and several mining permits are positioning Energy Fuels (EFR-T) to become the next uranium producer.

Energy Fuels owns the Whirlwind Mine project, a 4,300-acre property straddling the Colorado-Utah border near Gateway, Colorado. The sandstone-hosted deposit is a flat-lying 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 uranium indicated resources by 31% and its vanadium stocks by 34%. Using a 0.06% U₃O₈ cut-off grade, the deposit hosts 185,086 indicated tonnes grading 0.21% U₃O₈ and 0.71% V₂O₅, for 860,386 lbs. contained 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 vanadium-bearing minerals occur as fine-grained coatings on detrital grains, fill pore spaces between sand grains, and replace carbonaceous material. The main uranium mineral is uraninite, or pitchblend, 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.

The project has since been through several hands before Energy Fuels picked it up. The property encompasses several old mines operations within one mile of the property’s borders produced more than 7 million lbs. of uranium and 24 million lbs. of vanadium, most of it in the 1970s. Uranium mining in the area ceased in 1990 because of the failing metal prices.

Energy Fuels plans to connect the Whirlwind Mine with the nearby Packrat Mine, which sits 210 metres to the 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.

And in mid-March Energy Fuels received the mine permit for its Energy Queen Mine, which was formerly known under Denison Mines (DML-T) as the Hecla Shaft Mine. Mine refurbishment activities have already commenced, aimed at initial production in 2009. At full capacity the mine will be able to process 200 tons of ore daily. Recoverable uranium grades at Energy Queen average 0.25% U₃O₈ and 1% V₂O₅.

Energy Fuels fell on news of the resource estimate, closing down 5 at $1.40 in Mar 26 trading. The company has a 52-week trading range of 77 to $5.48 and has 52.4 million shares issued.