The Company’s 100% owned Gas Hills Project is one of the Company’s development priorities following the focus on production in South Texas. The Project consists of approximately 1,280 surface acres and 12,960 net mineral acres of unpatented lode mining claims, a State of Wyoming mineral lease, and private mineral leases, within a brownfield site which has experienced extensive development including mine and mill site production.
enCore views its Gas Hills Project as an advanced ISR project which has established scale and grade of ISR amenable uranium resources that have the potential to be highly competitive. The Company has begun the permit process for ISR operation and is continuing analysis of the project.
Between 1953 and 1988, many companies explored, developed, and produced uranium in the Gas Hills uranium district, located in the historic Gas Hills uranium district situated 45 miles east of Riverton, Wyoming., including on lands now controlled by enCore. Three uranium mills operated in the district and two other nearby mills were also fed by ore mined from the Gas Hills district. Cumulative production from the district is in excess of 100 million pounds of U3O8, mainly from open pit, but also from underground and ISR mining. An adjacent project has undertaken sufficient testing for ISR of uranium deposits on their property, received all permits and licenses to operate, and in 2014 received authorization for the company to proceed with development of their project using ISR technology. Startup of the ISR project was deferred because of a downturn in the uranium market price.
N1 43-101 Estimated Mineral Resources
Mineral resource estimates for enCore’s Gas Hills Project were made using information from a total of 4,841 drill holes (i.e. gamma logs from 4,569 drill holes and PFN logs from 272 drill holes.
In August 2021, the Company filed an initial NI 43-101 compliant independent Technical Report and PEA for the Gas Hills Project prepared by WWC Engineering and Rough Stock Mining Services (the “Gas Hills PEA”) with an effective date of June 28, 2021. Importantly, an ISR resource estimate was established and supported by numerous hydrology studies confirming that the resources located below the water table are ideally suited for ISR mining techniques.
|
Resource |
Million |
Grade eU3O8% |
Attributable U3O8 (M lbs.*) |
|
Measured & Indicated mineral resource (ISR) |
3.83 |
0.101 |
7.71 |
|
Inferred mineral resource (ISR) |
0.41 |
0.052 |
0.43 |
|
Measured & Indicated mineral resource (non-ISR) |
3.20 |
0.048 |
3.06 |
|
Inferred mineral resource (non-ISR) |
0.12 |
0.030 |
0.06 |
Gas Hills Project Technical Report
NI 43-101 Technical Report, Preliminary Economic Assessment, Gas Hills Uranium Project, Fremont and Natrona Counties, Wyoming, USA, completed by WWC Engineering and Rough Stock Mining Services (effective 28 June 2021) (“Gas Hills Technical Report and PEA”).
The Gas Hills PEA is preliminary in nature; 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. There is no certainty that the Gas Hills PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
The PEA indicates a pre-tax NPV of $120.9 million at an 8 percent discount rate with an IRR of 116 percent compared to an after-tax NPV of $102.6 million at an 8 percent discount rate with an IRR of 101 percent. The mine plan and economic analysis are based on the following assumptions:
- NI 43-101 compliant estimate of Mineral Resources and a recovery factor of 80 percent,
- A U3O8 sales price of $55.00/lb,
- A mine life of 11 years,
- A pre-income tax cost including royalties, state and local taxes, operating costs, and capital costs of $28.20/lb, and
- Initial capital costs of $26.0 million.
Costs for the Project are based on economic analyses for similar ISR uranium projects in the Wyoming region as well as WWC’s in house experience with mining and construction costs. All costs are in U.S. dollars (USD). To date, no detailed design work has been completed for the wellfields or the satellite plant.
The uranium mineralization is contained in roll-front deposits hosted by arkosic sandstone beds of the Eocene Wind River Formation. Based on areas of wide-spaced limited historical drilling and areas of past mine production, the Company believes that there is sufficient geological evidence to interpret that mineralization may extend from current mineral resource areas along identified trends. The Company is now focused on commencing the permitting process and growing the ISR-amenable resources at the Gas Hills Project.
The Project consists of four resource areas that contain ISR amenable resources designated as the West Unit, Central Unit, South Black Mountain, and Jeep. There is an additional non-ISR amenable resource area at the Project named the Rock Hill Unit, as well as other shallow deposits with resources located above the water table that were not considered in the economic assessment portion of this PEA. For the purposes of this PEA, uranium recovery was estimated at 6,507,000 pounds U3O8 at a production rate of 1.0 million pounds U3O8 per year, with a long-term uranium price of USD $55.00/pound using a low pH lixiviant.
Frequently Asked Questions
Uranium is already in the underground aquifer, which is why the Environmental Protection Agency has deemed it contaminated and not suitable for drinking water for humans or animals. This groundwater flows through sediments 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 conditions are appropriate. 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. Historically, 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 water quality use standards for which it was previously designated. Unlike most water wells, ISR operation wells are cased in heavy duty PVC piping, and once mining operations are complete, are filled with cement, to prevent fluid from entering any other water source or ground interval. During mining operations, groundwater is 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 Gas Hills ISR projects 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 Wyoming 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 part of the aquifer designated by the Environmental Protection Agency as contaminated and that cannot be used for drinking water by humans or animals. We will use only gaseous oxygen and a bicarbonate. This is the equivalent of adding oxygen and baking soda to the contaminated underground aquifer, never touching drinking water. In the contaminated aquifer, the gaseous oxygen and bicarbonate within with water disolves the uranium minerals which exist as coatings on sand grains. We recover this groundwater, along with the dissolved uranium minerals, to our water treatment plant (similar to a home water softener only much larger) where the uranium is removed. Once the uranium is removed, the remaining water is then recycled and returned to the aquifer. 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 uranium ISR projects in the United States, with enCore Directors having worked on 10 of these 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 both Texas and Wyoming.
It is also important to understand that, typically, the reclamation of ISR projects is a continual yet finite process. As enCore works to extract uranium, it builds wellfields in specific patterns and then moves along the uranium resources over time as extraction proceeds. The Company then removes (from production) and reclaims exhausted wellfields as it completes the ongoing extraction process, thereby moving 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 apply not only to on-site facilities but also extend to the transportation of the natural uranium product (yellowcake). Yellowcake is a dry powder. It is sealed in steel containers for transport to a conversion facility where it is transformed 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 extremely stringent requirements. Yellowcake shipments require advance written notification to the Nuclear Regulatory Commission (NRC) of the planned shipment including the content, quantity, and route to be followed. In addition, only a small number of trucking companies are certified to handle and transport yellowcake.
enCore is a North American company and all benefits stay within the United States. All uranium produced in Gas Hills will be sold only to domestic US power companies who use uranium to generate electricity which powers your home and business.
It is expected that 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 to enCore that we provide opportunities for our youth to benefit from the extraction activities through jobs, education and training, thereby allowing our communities and families to grow and prosper.
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 that it was prior to enCore’s involvement. It is important that enCore conserve and recycle water, and it is vital to the operations to maintain constant water levels for successful extraction of the uranium. It is imperative that 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.
In-situ recovery is not fracking. Fracking utilizes a totally different process than ISR. Fracking opens up preferential “fractures” in the subsurface using extreme pressure in order to provide conduits to extract hydrocarbons. Fracking is not a viable practice for ISR. ISR is designed specifically to avoid opening “cracks” and works by flowing water through existing sediments within an aquifer. Uranium minerals suitable for ISR extraction are deposited as coatings 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 injection and extraction flows slowly and consistently through the aquifer in order to contact and dissolve the uranium minerals.
Prior to any extraction activity, enCore is required by law to install a series of water wells within the proposed extraction area – in the contaminated aquifer and within any adjacent aquifers. 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. Pre-extraction levels are established by independent experts, and in reclamation, these independent experts will also verify that pre-extraction level are returned to the aquifer.
For more information, visit www.gashills.info