Between 1953 and 1988, many companies explored, developed, and produced uranium in the Gas Hills uranium district, 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. A competitor company owns mineral claims bordering enCore’s Gas Hills property on the western, northeastern and southern margins. The competitor 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.
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.
NI 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.
The Gas Hills Project contains estimated ISR amenable Measured and Indicated uranium resources of 7.7 million pounds U3O8 (3.8 million tons at an average grade of 0.101% eU3O8) and estimated Inferred uranium resources of 0.43 million pounds U3O8 (0.41 million tons at an average grade of 0.052% eU3O8) at a 0.10 GT cut-off.
In addition, the Gas Hills Project contains estimated non-ISR amenable Indicated uranium resources of 3.1 million pounds U3O8 (3.2 million tons at an average grade of 0.048% eU3O8) and estimated Inferred uranium resources of 0.06 million pounds U3O8 (0.11 million tons at an average grade of 0.030% eU3O8) at a 0.10 GT cut-off.
The uranium mineralization is contained in roll-front deposits hosted by arkosic sandstone beds of the Eocene Wind River Formation. Based on areas with limited wide-spaced historical drilling together with adjacent areas of past mine production, the author’s of the NI 43-101 Technical Report conclude there is sufficient geological evidence to indicate that significant additional potential for mineralization may extend from areas of current identified mineral resources along identified mineralized trends.
The resource estimate was established and supported by numerous hydrology studies confirming that the resources located below the water table are amenable for ISR mining techniques.
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.