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 September 20, 2016
Uranium Mining in the United States
    Publisher: U3O8.biz
    Author: Jocelyn Aspa

 

Uranium in the United States is used primarily for nuclear power. However, uranium mining originally had its roots in the production of uranium-bearing ore in 1898. At that time, sandstone material on the Colorado Plateau in Colorado and Utah was mined for its vanadium content.

In the 1950s, the US permitted a great deal of uranium mining. This was promoted by federal subsidies and rising global demand largely driven by nuclear weapons procurement programs. The trend lasted until the early 1980s, when changing geopolitical circumstances as well as safety, environmental, and economic concerns over nuclear power plants reduced demand.

Peak production levels reached a climax in 1980 with over 250 mines in operation producing 16,800 tonnes of uranium. But within four years, this abruptly dropped to 50 mines producing 5,700 tonnes, leading to a steady decline. By 2003 there were only two small operations producing a total of under 1,000 tonnes, or about 5 percent of the uranium consumed by US nuclear plants.

Mining operations are currently undertaken by few companies on a relatively small scale. However, exploration is being conducted by many companies, often going over areas that were mined in the 1950s-80s.

More recent developments

The US ranks ninth in the world for known uranium resources with 207,400 tonnes of uranium, behind Australia, Kazakhstan, Canada, Russia, South Africa, Namibia, Brazil and Niger. The global nuclear renaissance has prompted a revival in exploration and plans to reopen old mines. Exploration projects have increased in quantity and scope and there are now operating mines in Wyoming, New Mexico, Arizona, southern Utah, Colorado and Texas.

The US has been steadily increasing its domestic uranium output in recent years, though the country saw a draw in production last year. It came in ninth place in the top uranium-producing countries of 2015, producing 1,256 tonnes of uranium. Still, the increase in production in recent years makes sense considering the US is the world's largest generator and consumer of nuclear power.

Most production in the United States has been from Wyoming and New Mexico with known resources estimated to total 167,000 tonnes in Wyoming and 155,000 tonnes in New Mexico. Arizona, Utah and Colorado each have around 50,000 tonnes and Texas has about 2,000 tonnes of uranium resources. With that in mind, here's a look at a number of uranium companies operating in the US.

Uranium mining in the United States

Cameco (TSX:CCO,NYSE:CCJ)

Cameco is the US's largest uranium producer. It has two uranium mines in operation: the Smith Ranch-Highland mine in Wyoming's Powder River basin and the Crow Butte mine in Nebraska, both of which are in-situ recovery mines. In 2014, the annual production at the Smith Ranch-Highland mine, which is the largest US producer, was 2.1 million pounds of U3O8; during the same period, Crow Butte produced 600,000 pounds of U3O8. 

However, times have been tough for the powerhouse uranium producer: in July, the companyreported its worst quarterly performance since 2005.

Uranium Resources (NASDAQ:URRE)

Despite being focused on its Turkish properties following a 205 merger with Anatolia Energy,  Uranium Resources also holds about 212,000 acres of uranium mineral holdings in Texas and New Mexico. In Texas, there are the Kingsville Dome and Rosita projects; the company had a third mine called Vasquez, which produced 590,200 pounds of uranium from 2004 to 2008 until the deposit was depleted.

Uranium Resources also has five exploration projects in South Texas---Alta Mesa Este, Sejita Dome, Butler Ranch, Jack Pump and Nell. In New Mexico, the company has multiple properties including Churchrock/Mancos, Crowpoint, Nose Rock, West Largo/Ambrosia Lake, Cebolleta (Cibola project) and Juan Tafoya (Cibola project).

In addition to its uranium projects and properties, Uranium Resources announced in August that it had acquired its first lithium property in Nevada.

Uranium Energy (NYSEMKT:UEC)

Uranium Energy is also focused on Texas, with its Palangana mine operating in the state since 2010. The company also holds the Burke Hollow ISR project as well as the fully operational Hobson processing plant.

In May 2015, the company received permits for the planned expansion at Palangana and made further advancements in the development of Burke Hollow. The company also owns the right to quite a few other operations in Texas including the Goliad ISR project, the Salvo project, and the Nichols and Longhorn projects.

Energy Fuels (TSX:EFR)

Energy Fuels is the largest supplier of uranium in the US and the owner of the White Mesa Mill, the only fully-licensed and operating conventional uranium mill located in the US. The company has various uranium properties in the US, including the Roca Honda project in New Mexico, Sheep Mountain in Wyoming, the Wate project, and the Canyon Mine in Arizona, and Henry Mountains, La Sal and Daneros, all located in Utah.

The company also acquired Uranerz and all its assets in June 2015, including the Nichols Ranch ISR mine and plant in Wyoming. The company increased its output at Nichols Ranch a month later, boosting total uranium production there by 25 percent after commencing production at the fifth header house at the facility.

On June 17, 2016, Energy Fuels announced the completed acquisition of Mesteña Uranium, which effectively added the third US production centre to its portfolio. At full capacity, Mesteña is capable of producing 1.5 million pounds of uranium per year.

In September, the company announced its operational update and production guidance for 2017, with a goal to become the largest uranium producer in the United States.

Western Uranium (TSXV:WUC)

With a tolling agreement in place with Energy Fuels' White Mesa mill, Western Uranium is a near-term uranium and vanadium producer. Through acquisition of a significant portfolio of uranium projects in Utah and Colorado from both Energy Fuels and Black Range Minerals, the company holds the second largest uranium resource in the US after Energy Fuels with 100 million pounds of compliant uranium resources.

That said, Western Uranium is advancing the Sunday Mine Complex located in Western Colorado. Western Uranium is targeting production in Q4 2016 and will also starting construction of the Piñon Ridge Mill during the latter half of the year.

Ur-Energy (TSX:URE)

Ur-Energy holds uranium projects in the Wyoming, Lost Creek and Shirley Basin.

In May 2015, the company announced a new and increased mineral estimate for Lost Creek, adding 2.308 million pounds of uranium, averaging 0.058 percent U3O8 which represented a 95 percent increase. The Lost Creek project, which has been producing since 2013, hit a major milestone recently when it shipped out its one millionth pound of uranium in the second quarter.

In January, the company provided an update to their preliminary economic assessment, in which it highlighted that the mine life for the Lost Creek project has been extended to 2031.  And, then in June, the company announced that the Lost Creek project is projected to produce between 600,000 and 700,000 pounds of uranium in 2016. Ur-Energy has term contracts committing roughly 3.1 million pounds between 2016 and 2021, averaging $49.81 per pound.

Ur-Energy also owns the rights to two other uranium projects in Wyoming, the Lost Soldier project and the Lucky Mc mine site.

Peninsula Energy (ASX:PEN)

One of the more recent uranium producers to the US uranium space is an Australian-based company that owns the Lance projects in Wyoming. The Lance projects, which have a current resource of 53.7 million pounds of U3O8 with the potential for more, started producing uranium in December 2015.

Peninsula currently has five sales contracts set up, which were made for prices higher than the current uranium spot price. The company has 7.9 million pounds of uranium slated for delivery to major utilities in the United States. According to a March 2016 press release, projected revenue for the long-term contracts now exceeds $440 million.

As of July 12, 2016, uranium production at Peninsula's Lance Projects is steadily increasing. During the quarter ending June 30, 2016, 28,858 pounds of uranium were extracted from the project, which is an increase of roughly 20,000 pounds extracted during the previous quarter.

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This article is an update to an article previously published September 7, 2015.

Securities Disclosure: I, Kristen Moran, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure:  Energy Fuels and Western Uranium are clients of the Investing News Network. This article is not paid for content.

 
 

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