South Dakota

Dewey-Burdock Project

Project Highlights

A high-grade In-Situ Recovery deposit with established Preliminary Economic Assessment and NI 43-101 Resource Estimate
Approximately 12,613 surface acres and 16,962 mineral acres
Source and Byproduct Materials License issued from the Nuclear Regulatory Commission. Environmental Protection Agency (“EPA”) issued final Class III and Class V Underground Injection Control (“UIC”) permits, and associated aquifer exemption
Other required federal and stage ISR permits in progress

Project Details

The Dewey-Burdock Project is an advanced-stage uranium exploration project located in South Dakota and owned 100% by enCore Energy Corp.  The Project is in southwest South Dakota and situated on the southwestern flank of the Black Hills Uplift, forming a part of the northwestern extension of the Edgemont Uranium Mining District.   The nearest population center is Edgemont, South Dakota (population 900) located about 16 miles from the Project.

The project is divided into two mineral resource areas; Dewey and Burdock, consisting of approximately 73 surface acres and 93 surface acres respectively of wellfields where mineral extraction will occur. A central processing facility will be located at Burdock and a satellite facility will be installed at Dewey.  Uranium mineralization is comprised of “roll-front” type uranium mineralization hosted in several sandstone stratigraphic horizons within the Inyan Kara Formation that are isolated from adjacent aquifers and therefore amenable to In-Situ Recovery technology. 

The Project includes federal claims, private mineral rights and private surface rights covering a 10,580-acre project license boundary as well as surrounding areas.  In total, enCore Energy controls approximately 16,962 acres of mineral rights and 12,613 acres of surface rights.

The Project was granted a Source and Byproduct Materials License by the U.S. Nuclear Regulatory Agency in April 2014, and Underground Injection Control Class III and V permits were issued by the U.S. Environmental Protection Agency, Region 8 in October 2020.   Additional approvals necessary for construction and operation of the Project have been applied for including those from the State of South Dakota and Bureau of Land Management.

The project is within an area of low population density characterized by an agriculture-based economy with little other types of commercial and industrial activity. The project is expected to bring a significant economic benefit to the local area in terms of tax revenue, new jobs, and commercial activity supporting the project. Previously, a uranium mill was located at the town of Edgemont. Uranium was first produced in the vicinity of the Dewey-Burdock Project in 1954.  

Estimated initial capital costs for the first two years of the Project life are approximately $31.7 million with sustaining capital costs of approximately $157.7 million spread over the next 17 years of operation.   Project life is estimated at 21 years including reclamation and groundwater restoration with approximately $149.2 million in direct operating expenditures. Overall potential yellowcake production is estimated to be 14.3 million pounds.[1] 

Next Steps

 

 

Upon receipt of all approvals, the project would be expected to undergo initial wellfield development and facility construction over a period of approximately 18 months preceding the commencement of production.

 [1] NI 43-101 Technical Report, Preliminary Economic Assessment. Dewey-Burdock Uranium ISR Project, South Dakota, USA, completed by Woodard & Curran and Rough Stock Mining Services (effective 3 December 2019)

Preliminary Economic Assessment and NI 43-101 Mineral Resources

In December 2020, the enCore’s wholly subsidiary Azarga Uranium Corp.  filed an amended and restated NI 43-101 compliant independent Technical Report and Preliminary Economic Assessment (“PEA”) for the Dewey-Burdock Project prepared by Woodard & Curran and Rough Stock Mining Services (the “Dewey-Burdock PEA”) with an effective date of December 3, 2019. 

The Dewey-Burdock PEA states the Project contains estimated ISR amenable Measured and Indicated uranium resources of 17.12 million pounds U3O8 (7.38 million tons at an average grade of 0.116% eU3O8) and estimated Inferred uranium resources of 0.71 million pounds U3O8 (0.65 million tons at an average grade of 0.055% eU3O8) at a 0.20 GT cut-off. The mineral resource estimate was made using information from a database of over 4,000 drill holes.

The Dewey-Burdock PEA resulted in a pre-income tax NPV of $171.3 million at a discount rate of 8% and an IRR of 55% compared to a post-income tax NPV of $147.5 million at a discount rate of 8% and an IRR of 50%. The Dewey-Burdock PEA post-income tax calculations do not include a corporate level assessment of income tax liabilities; taxes have only been calculated at the Dewey-Burdock Project level. The estimate of income tax at the corporate level is subject to a number of additional considerations that have not been factored in when calculating income taxes at the project level, including, but not limited to, the capital structure to finance the Dewey-Burdock Project, which has not yet been determined and any loss carry forwards available at the corporate level.

The Dewey-Burdock PEA estimated uranium market prices of $55/lb U3O8, direct cash operating costs of $10.46 per pound of production and royalties and local taxes (excluding property tax) of $5.15 per pound of production. The total pre-income tax cost of uranium production is estimated to be $28.88 per pound of production. Income taxes are estimated to be $3.39 per pound of production.

Initial capital expenditures are estimated at $31.7 million. The Dewey- Burdock Project is forecast to produce 14.3 million pounds of U3O8 over its 16 year production life and the projected cash flows of the Dewey-Burdock Project are expected to be positive in the second year of production, two years after the commencement of construction.

This Preliminary Economic Assessment is preliminary in nature, that it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the Preliminary Economic Assessment will be realized.

 

Summary of Amenability for ISR Mining

Investigations have been conducted to determine the ISR amenability of the Dewey Burdock deposit, including both ground water conditions and leachability of the mineralization. Analysis of the Fall River and Lakota hydro-stratigraphic unit, host for the mineralization indicates that a range of ISR well pumping rates is suitable within the hydro-stratigraphic unit’s potential, and the unit’s transmissivity provide favorable conditions for ISR mining techniques.

For more information, visit www.deweyburdock.info

Frequently Asked Questions

Uranium is already in the undergound aquifer, which is why the Environmental Protection Agency has deemed it contaminated and not suitable for drinking water for humans or animals, it is mineralized with uranium. enCore will be removing much of this contaminate. Commercial scale In-Situ Recovery (ISR) uranium extraction has operated in the US for almost 50 years, replacing conventional mining when necessary conditions are found. In these 50 years, no groundwater that has been  designated as drinking water quality has been left in a contaminated state after final closure of the uranium extraction operations.  Following completion of uranium recovery, these operations have restored the underground aquifer to the same Federal use category it had before extraction began. 

The United States Environmental Protection Agency (EPA) reviews every new ISR operation and only authorizes ISR operations in a very specific portion of underground aquifers, which the EPA classifies as contaminated for drinking purposes.  Absolutely no activities are allowed outside of this small, designated area.  United States Nuclear Regulation Committee (NRC) and State regulations require the company to return the water quality within this area to the same use standards for which it previously qualitied.  Unlike most water wells, ISR operation wells are cased in heavy duty PVC piping and once extraction is complete are filled with cement, to prevent fluid from entering any other water source or ground. All operations are monitored with electronic and staffed controls as required by regulatory agencies which review the data monthly or quarterly.  Any exception must be reported by the operator to these agencies immediately and corrective action immediately implemented.

The United States is the largest consumer of nuclear energy in the world and at present 60% of this uranium comes through Russia. Uranium produced at Dewey Burdock would only be sold to US utilities and will replace foreign sources of energy and foreign control of our energy use. Dewey Burdock will be part of the vital domestic energy supply fueling the future. A domestic supply of nuclear energy protects our national security which Russia and China have diligently worked to undermine the economic viability of US producers by selling uranium at prices well below their production costs and production costs for US producers.

This is not the cold war era of the 1950s and 1960s when environmental cleanup and employee safety at conventional uranium mines were afterthoughts. Licensing of Dewey Burdock requires firm plans for not only development and operations, but also for total reclamation and restoration of both the site and the affected groundwater.  enCore will be required to secure and post a total of approximately $15 million in bonds with the Environmental Protection Agency and Nuclear Regulatory Commission (NRC) to ensure sound reclamation.  Only when the cleanup is approved, by both the State of South Dakota and the NRC, will the bonds be returned to enCore.

The Nuclear energy industry is the singularly most highly regulated industry in the United States which includes everything from uranium mining to the x-ray in the local hospital.  There are no exceptions.

enCore has 100% US management and control. There is no Russian or Chinese ownership, records on all shareholders holding at least 5% ownership are publicly available. enCore is also only legally allowed to utilize access to the contaminated unground aquifer (containing the uranium) for the purposes permitted by the State of South Dakota.  No water will be sold.

You may have seen that Rosatom, the Russian Federation’s nuclear power company once owned Uranium One and its American subsidiary.  While Russia sold Uranium One Americas to a different US company in late 2021, enCore was never part of Uranium One and Uranium One never had any interest in the Dewey Burdock project or enCore Energy.

No, enCore does not use harsh chemicals in the uranium extraction process and we only extract uranium from the aquifer the Environmental Protection Agency has deemed contaminated and cannot be used for drinking water by humans or animals.  We will use only liquid oxygen and, at time, carbon dioxide.  This is the equivalent of adding oxygen and baking soda to the contaminated underground aquifer, never touching drinking water.  In the contaminated aquifer, the oxygen combined with water acts to dissolve the uranium minerals which exist as coatings on sand grains.  We recover this uranium carbonate in our water treatment plant (similar to a home water softener only much larger).  The water from the aquifer is then recycled with additional oxygen and carbon dioxide.  Unlike conventional uranium mills, we do not use any acid to dissolve the uranium as they do in foreign countries. The United States has very high environmental standards.

There are 24 reclaimed projects in the United States, with enCore Directors having worked on 10 of the projects. enCore leadership co-invented ISR and has worked in the field for over 40 years building, operating and reclaiming in situ recovery uranium projects in Texas and Wyoming.

It is also important to understand that, typically, reclamation of ISR projects is a continual yet finite process. As enCore works to extract uranium it builds wellfields in specific patterns then moves along the uranium resources over time. The company then removes and reclaims exhausted wellfields as it completes extraction , then moves from one area to the next.

The nuclear energy industry is extremely regulated with safety and health regulations in place (including worker safety, air quality, radiation, water quality, spill management and more) that applies to on-site facilities but also extend to transportation of the natural uranium product (yellowcake).  Yellowcake is a dry powder, the dried uranium, which is sealed in steel containers for transport to a conversion facility where it is converted into an energy source for domestic and commercial use in the electric grid. It is shipped by tractor-trailer and regulated by the US Department of Transportation with stringent requirement for yellowcake shipments  (as apply to propane and other energy sources) including advance written notification of the Nuclear Regulatory Commission  (NRC) of the planned shipment including the route to be followed. In addition, only a small number of trucking companies are certified to handle and transport yellowcake.   

At site, containment facilities, protective gear, electronic monitoring and a strict regulated work place maintain worker safety.

enCore is a North American company and all benefits stay within the United States.  Uranium produced at Dewey Burdock will be sold only to domestic (U.S.) power companies who use uranium to generate power for the electric which powers your home and business.  Locally, up to 80 jobs are needed for construction and operations with people living and spending money in the County. Using a base case PER YEAR (without applying the usual 3 to 4 times multiplier benefit of money circulating in local communities) benefits include:

  • $9,000,000 annually in payroll from enCore and contractors
  • $1,000,000 annually to the County
  • $200,000 annually in city taxes to the communities of Hot Springs and Edgemont (each)
  • $3,500,000 annually in severance taxes (State taxes for removing uranium)

Reference  NI43-101 Technical Report – Preliminary Economic Assessment Dewey-Burdock Project, Woodard & Corran Dec 22, 2020.

It is expected activity from development, operations and reclamation will last approximately 20 years and will fuel our economy while creating jobs and strengthen local businesses. It is important we provide opportunities for our youth to benefit from extraction activities through jobs, education and training, allowing our communities and families to grow and prosper.

This is not possible.  The contaminated aquifer containing the uranium (and vanadium in this case)  is situated in a geological structure that is contained in a unique, isolated location that allows for In-Situ Recovery extraction of uranium.   The mineralized, contaminated aquifer is in no way connected to either the Cheyenne River or the drinking water supply for Hot Springs & Edgemont.  These geological and hydrological facts can be verified by professors at the South Dakota School of Mines and the University of South Dakota. Clean water is vital to our collective lives, whether we are ranchers, miners, teachers or hospital workers, we all need it to survive.

During uranium extraction operations, large quantities of water from the contaminated underground aquifer circulate through the aquifer to dissolve uranium in the water.  The uranium is then recovered in a water treatment plant and the water is reinjected into the ground.  Consumptive use of ground water is limited to approximately 1% of the circulated water which typically averages between 50 to 100 gallons per minute.  Once extraction is complete, the recirculated water is cleaned, 99% returned to the aquifer and again suitable for all the same uses it was prior to enCore’s involvement.  It is important that enCore conserve and recycle water, it is vital to the operations to maintain water levels for successful extraction of the uranium. It is vital we conduct ourselves as good corporate citizens and contribute in a positive way to the communities in which we work. We must leave a positive legacy which includes valuable infrastructure, water wells, power lines, clean drinking water and vibrant communities with high paying jobs and transferable skills for our youth.

Fracking is totally different than ISR and is a prohibited activity nor a viable practice for ISR.  Fracking opens up preferential “cracks” in the subsurface to extract hydro carbons while ISR is designed specifically to avoid opening “cracks”.  Uranium minerals suitable for ISR extraction are deposited as coating on sand grains and spread across both vertical and horizontal areas of the contaminated underground aquifer.  ISR wells are designed to ensure that the water used in extraction is spread out slowly and consistently to contact and dissolve the uranium minerals.  Fracking would be totally counterproductive as most, if not all, the uranium would be bypassed by water moving in these “cracks”.

Prior to any extraction activity, enCore is required by law to install a series of water wells in the proposed extraction area – in the contaminated aquifer and any adjacent aquifers (groundwater).  The water quality in each of these wells is tested by an independent 3rd party (a licensed laboratory) which establishes the baseline water quality and use category of these groundwaters prior to extraction. This establishes the use category enCore will be required meet in reclamation, using pre-extraction levels established by independent experts and in reclamation these independent experts will also verify the work.