The Dewey-Burdock Project is one of the Company’s initial development priorities following the focus on production in South Texas. The Company’s 100% owned Dewey-Burdock Project is an ISR uranium project located in the Edgemont uranium district, in South Dakota. Through property purchase agreements, mining leases and/or mining claims, the Dewey-Burdock Project is comprised of approximately 12,613 surface acres and 16,962 net mineral acres. In December 2020, the Company filed an amended and restated NI 43-101 compliant independent Technical Report and 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.
Mineral Resources
The amended and restated report presents the following resources for the Dewey-Burdock Project.
2019 Mineral Resource Estimate Summary
|
||||
|
ISR Resources |
Measured |
Indicated |
M & I |
Inferred |
|
Pounds |
14,285,988 |
2,836,159 |
17,122,147 |
712,624 |
|
Tons |
5,419,779 |
1,968,443 |
7,388,222 |
645,546 |
|
Avg. GT |
0.733 |
0.413 |
0.655 |
0.324 |
|
Avg. Grade (% U3O8) |
0.132% |
0.072% |
0.116% |
0.055% |
|
Avg. Thickness (ft) |
5.56 |
5.74 |
5.65 |
5.87 |
Dewey-Burdock Uranium Project Technical Report
Note: Resource pounds and grades of U3O8 were calculated by individual grade-thickness contours. Tonnages were estimated using average thickness of resource zones multiplied by the total area of those zones.
The Company’s Dewey-Burdock Project received its Source and Byproduct Materials License SUA-1600 on April 8, 2014 from the NRC, covering 10,580 acres. The Company controls the mineral and surface rights for the area pertaining to the NRC license.
An average uranium price of $55 per pound of U3O8 based on an average of recent market forecasts by various professional entities was determined to be an acceptable price for the PEA. Contracts for yellowcake transportation, handling and sales will be developed prior to commencement of commercial production. The estimated payback is in Quarter 4 of Year 2 with the commencement of design/procurement activities in Quarter 2 of Year -1 and construction beginning Quarter 4 of Year -1. The Project is estimated to generate net earnings over the life of the Project of $372.7 million (pre-U.S. federal income tax). It is estimated that the project has an internal rate of return (IRR) of 55% and a NPV of $171.3 million (pre-U.S. federal income tax) applying an 8% discount rate.
The estimated initial capital costs for the first two years of the Project life (Years -1 and 1) are approximately $31.7 million with sustaining capital costs of approximately $157.7 million spread over the next 17 years (Years 2 through 18) of operation. Direct cash operating costs are approximately $10.46 per pound of U3O8 produced excluding royalties and severance and conservation taxes. The total capital and operating costs average approximately $28.88 per pound (pre-U.S. federal income tax) U3O8 produced. Both the capital and operating costs are current as of the end of 2019. The predicted level of accuracy of the cost estimate is +/- 25%.
The PEA provides the results of the analyses for pre-U.S. federal income tax. All other sales, property, use, severance and conservations taxes as well as royalties are included. The PEA assumes no escalation, no debt, no debt interest and no capital repayment. There is no State of South Dakota corporate income tax.
The Company submitted applications to the Department of Agriculture and Natural Resources (DANR) in 2012 for its Groundwater Discharge Plan (“GDP”), Water Rights (“WR”) and Large Scale Mine Plan (“LSM”) permits. All permit applications have been deemed complete and have been recommended for conditional approval by the DANR staff, but any advancement is pending the outcome of the appeal process on the EPA permits. In November 2020, the EPA issued the Company their final Class III and Class V UIC permits, and associated aquifer exemption, for the Dewey-Burdock Project. After the permits being issued, the Class III and Class V UIC permits were appealed to the Environmental Appeals Board (the “EAB”). The aquifer exemption was appealed to the United States Court of Appeals for the Eighth Circuit (the “Eighth Circuit”). The EAB and the Eighth Circuit proceedings were stayed until such time as the DC Circuit Court challenge to the NRC license became final. In December 2020, a petition for review of contentions previously resolved in favor of the Company and the NRC staff was filed by certain petitioners with the United States Court of Appeals for the District of Columbia Circuit (the “DC Circuit Court”). On August 9, 2022, the Company announced that the DC Circuit Court issued an opinion that deemed that the actions taken by NRC in its licensing of the Dewey- Burdock Project were lawful and denied the petitioners request for further review. On March 20, 2023, following the denial of an “en banc” review by the DC Circuit Court, the Company announced that the petitioners had decided to not advance the appeal to a review by the Supreme Court of the United States, and therefore the NRC license is now final and effective.
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.
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.
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.
For more information, visit www.deweyburdock.info