Item 8.01 Other Events.
Alta Mesa Technical Report
On August 2, 2016, Energy Fuels
Inc. (the
Company
or
Energy Fuels
) announced the filing of a
technical report (the
Alta Mesa Technical Report
) entitled Alta Mesa
Uranium Project, Alta Mesa And Mesteña Grande Mineral Resources And Exploration
Target, Technical Report National Instrument 43-101 prepared by Douglas L.
Beahm, P.E., P.G. and dated July 19, 2016 with an effective date of July 19,
2016 containing a current mineral resource estimate for its 100% Alta Mesa ISR
project located in Brooks and Jon Hogg Counties, Texas, including the Alta Mesa
and Mesteña Grande deposits and exploration targets (
Alta Mesa
), in
accordance with National Instrument 43-101. According to the Alta Mesa Technical
Report, Alta Mesa is estimated to hold a total of 1.6 million tons of measured
and indicated mineral resources with an average grade of 0.111%
U
3
O
8
containing 3.6 million pounds of uranium, along
with 7.0 million tons of inferred mineral resources with an average grade of
0.121% U
3
O
8
containing 16.8 million pounds of
uranium. In addition, the Alta Mesa Technical Report identifies certain
exploration targets at Alta Mesa that includes 2.6 million tons of mineralized
material with an average grade of 0.08% - 0.123% U
3
O
8
containing 4.1 to 6.6 million pounds of uranium. The tonnages, grades and
contained pounds of uranium for the exploration targets should not be construed
to reflect a calculated mineral resource estimate (measured, indicated or
inferred). The potential quantities and grades for exploration targets are
conceptual in nature, and there has not been sufficient work completed to date
to define an NI 43-101 compliant resource. Furthermore, it is uncertain if
additional exploration will result in any of the exploration targets being
delineated as a mineral resource estimate in the future.
Key assumptions and parameters
utilized in determining the mineral resource estimate contained in the Alta Mesa
Technical Report include the following: (i) a minimum grade cut-off of
0.02% U
3
O
8
and a minimum grade x thickness (GT)
of 0.30, which is considered reasonable for economic extraction utilizing ISR
methods; (ii) a bulk density factor of 17 ft3 /ton was utilized which is
considered conservative for ISR extraction; (iii) drill data for 10,744 drill
holes was analyzed, including about 3,000 drill holes within existing
wellfields; (iv) prompt-fission-neutron (PFN) log data was available for 92.8%
of the 10,744 drill holes, which is considered reasonably equivalent to chemical
assays; (v) where possible, width and GT parameters were determined from
specific drill data, and where this was not possible, trend width was determined
from data available from two existing wellfields; and (vi) the contained pounds
of uranium were calculated from the GT value applied to the respective area of
mineralization with the application of the appropriate bulk density.
The Alta Mesa project does not
have known reserves under SEC Industry Guide 7, and is therefore considered
under SEC Industry Guide 7 definitions to be exploratory in nature.
Drilling Results at the Nichols Ranch Project
On August 15, 2016, the Company
announced drilling results at the Nichols Ranch Project in Wyoming, USA
consisting of intercepts of several large and high-grade areas of mineralization
in the wellfield associated with Header House 9. On August 1, 2016, the Company
began delineation drilling and the installation of the wellfield to be
associated with Header House 9 at the Nichols Ranch Project. As of August 15,
2016, 52 holes in this new wellfield had been drilled. Of the 52 holes, 46
encountered mineralization which is above the grade % x thickness (
GT
)
cut-off of 0.3. This includes one hole which encountered 5.0 feet of
mineralization with an average grade of 2.40% eU
3
O
8
.
In addition, many of the holes have encountered multiple intercepts above the GT
cutoff. It is anticipated that a total of 120 wells will be incorporated
into Header House 9.
The Nichols Ranch Project does
not have known reserves under SEC Industry Guide 7, and is therefore considered
under SEC Industry Guide 7 definitions to be exploratory in nature.
Drilling Results at the Canyon Mine
On August 18, 2016, the Company
announced drilling results at its Canyon Mine (the
Canyon Mine
) in
northern Arizona, USA consisting of intercepts of several large and high-grade
areas of mineralization. The Company is currently pursuing an underground
delineation core drilling program from a station located at a depth of approximately 1,000 feet below the surface. As of September 13,
2016, 15 core holes had been drilled, and most have encountered uranium
mineralization in multiple levels throughout the deposit, including 8.5 -feet of
mineralization with an average grade of 6.88% eU
3
O
8
,
48.0 -feet of mineralization with an average grade of 1.02%
eU
3
O
8
, and 35-feet of mineralization with an average
grade of 1.39% eU
3
O
8
. The drilling program is expected to
be followed up by additional delineation drilling from a second station
later this year. In addition to the delineation drilling, the Company is also
continuing to sink an 8-foot by 20-foot mine shaft, which will be used to access
the deposit. The shaft is currently at a depth of approximately 1,200 feet.
The Canyon Mine does not have
known reserves, and is therefore considered under SEC Industry Guide 7
definitions to be exploratory in nature.
Cautionary Note Regarding Forward-Looking Statements:
Certain information contained in this Current Report on Form 8-K,
including any information relating to: the potential quantities and grades for
exploration targets;
expectations regarding shaft sinking and delineation
drilling at the Canyon Mine, including any expectations regarding potential
increases in mineralization, resources; and any other statements regarding
Energy Fuels future expectations, beliefs, goals or prospects; constitute
forward-looking information within the meaning of applicable securities
legislation (collectively, "forward-looking statements"). All statements in this
Current Report on Form 8-K that are not statements of historical fact (including
statements containing the words "expects", "does not expect", "plans",
"anticipates", "does not anticipate", "believes", "intends", "estimates",
"projects", "potential", "scheduled", "forecast", "budget" and similar
expressions) should be considered forward-looking statements. All such
forward-looking statements are subject to important risk factors and
uncertainties, many of which are beyond Energy Fuels ability to control or
predict. A number of important factors could cause actual results or events to
differ materially from those indicated or implied by such forward-looking
statements, including without limitation factors relating to: expectations
regarding shaft sinking and delineation drilling at the Canyon Mine, including
any expectations regarding potential increases in mineralization, resources;
expected costs of production at the Canyon Mine and other facilities;
expectations regarding future wellfield and other capital costs at the Companys
facilities; expected advancement of permits; risks associated with mineral
reserve and resource estimates, including the risk of errors in assumptions or
methodologies; risks associated with estimating mineral extraction and recovery,
forecasting future price levels necessary to support mineral extraction and
recovery, and the Companys ability to increase mineral extraction and recovery
in response to any increases in commodity prices or other market conditions;
uncertainties and liabilities inherent to conventional mineral extraction and
recovery and/or in-situ uranium recovery operations; geological, technical and
processing problems, including unanticipated metallurgical difficulties, less
than expected recoveries, ground control problems, process upsets, and equipment
malfunctions; risks associated with labor costs, labor disturbances, and
unavailability of skilled labor; risks associated with the availability and/or
fluctuations in the costs of raw materials and consumables used in the Company's
production processes; risks associated with environmental compliance and
permitting, including those created by changes in environmental legislation and
regulation, and delays in obtaining permits and licenses that could impact
expected mineral extraction and recovery levels and costs; actions taken by
regulatory authorities with respect to mineral extraction and recovery
activities; risks associated with the ability of the Company to extend or renew
land tenure, including mineral leases and surface use agreements, on favorable
terms or at all; risks associated with the ability of the Company to negotiate
access rights on certain properties on favorable terms or at all; failure to
obtain industry partner, government, and other third party consents and
approvals, when required; risks associated with the Companys relationships with
its business and joint venture partners; the potential for, and outcome of,
litigation and other legal proceedings, including potential injunctions pending
the outcome of such litigation and proceedings; competition for, among other
things, capital, mineral properties, and skilled personnel; risks inherent in
the Companys and industry analysts forecasts or predictions of future uranium
and vanadium price levels; fluctuations in the market prices of uranium and
vanadium, which are cyclical and subject to substantial price fluctuations;
failure to obtain suitable uranium sales terms, including spot and term sale
contracts; risks associated with asset impairment as a result of market
conditions; risks associated with lack of access to markets and the ability to
access capital; public resistance to nuclear energy or uranium extraction and
recovery; uranium industry competition and international trade restrictions;
risks related to higher than expected costs related to our Nichols Ranch Project
and Canyon Project; risks related to recent market events; and risks related to
defects in title to our mineral properties.
Energy Fuels assumes no obligation to update the information
in this communication, except as otherwise required by law. Additional
information identifying risks and uncertainties is contained in Energy Fuels
filings with the various securities commissions which are available online at
www.sec.gov and www.sedar.com. Forward-looking
statements are provided for the purpose of providing
information about the current expectations, beliefs and plans of the management
of Energy Fuels relating to the future. Readers are cautioned that such
statements may not be appropriate for other purposes. Readers are also cautioned
not to place undue reliance on these forward-looking statements, that speak only
as of the date hereof.
Cautionary Note to United States Investors Concerning
Estimates of Measured, Indicated and Inferred Resources:
This Current
Report on Form 8-K contains certain disclosure that has been prepared in
accordance with the requirements of Canadian securities laws, which differ from
the requirements of U.S. securities laws. Unless otherwise indicated, all
reserve and resource estimates included in this Current Report on Form 8-K have
been prepared in accordance with Canadian National Instrument 43-101 Standards
of Disclosure for Mineral Projects (NI 43-101) and the Canadian Institute of
Mining, Metallurgy and Petroleum (CIM) classification system. Canadian
standards, including NI 43-101, differ significantly from the requirements of
U.S. securities laws, and reserve and resource information contained in this
Current Report on Form 8-K may not be comparable to similar information
disclosed by companies reporting only under U.S. standards. In particular, the
term resource does not equate to the term reserve under SEC Industry Guide
7.
United States investors are cautioned not to assume that all or any
of Measured or Indicated Mineral Resources will ever be converted into mineral
reserves. Investors are cautioned not to assume that all or any part of an
Inferred Mineral Resource exists or is economically or legally minable. Energy
Fuels does not hold any Reserves as that term is defined by SEC Industry Guide
7. Please refer to the section entitled Cautionary Note to United States
Investors Concerning Disclosure of Mineral Resources in the Companys Annual
Report on Form 10-K dated March 15, 2016 for further details.