~58.3 square mile (~37,300 acre) heavy mineral
sand position has potential to feed the Company's White Mesa Mill
with rare earth element and uranium bearing natural monazite sand
for decades
LAKEWOOD, Colo., May 19, 2022
/PRNewswire/ - Energy Fuels Inc. (NYSE American: UUUU)
(TSX: EFR) ("Energy Fuels" or the "Company") is
pleased to announce that it has entered into binding agreements
(the "Purchase Agreements") to acquire seventeen (17)
mineral concessions (the "Transaction") between the towns of
Prado and Caravelas in the State of Bahia, Brazil totaling 15,089.71 hectares
(approximately 37,300 acres or 58.3 square miles) (the
"Bahia Project").
Based on significant historical drilling performed to date, it
is believed that the Bahia Project holds significant quantities of
heavy minerals, including monazite, that will feed Energy Fuels'
quickly emerging U.S.-based rare earth element ("REE")
supply chain. The Bahia Project has seen no previous mining, but
several of the concessions have valid exploration and mining
permits with the Government of Brazil. Therefore, the Company believes there
is a clear path to moving the Bahia Project to production.
The Bahia Project is a well-known heavy mineral sand
("HMS") deposit with over 3,300 vertical historic
exploration auger holes drilled to date, indicating significant
concentrations of titanium (ilmenite and rutile), zirconium
(zircon), and rare earth elements (monazite). Importantly, the
mineralization is at or near the surface, meaning the material is
expected to be relatively easy to recover using standard, low-cost
sand mining techniques, including the use of front-end loaders,
excavators and/or dredges. Due to the drilling method used
historically, drilling performed to date only averages 5.86 meters
deep, or the average depth of the water table in the region. There
is no reason to believe that mineralization stops at the water
table. Therefore, the Company believes mineralization is open at
depth. Energy Fuels' primary interest is in the monazite which
contains both rare earth elements and uranium. Preliminary assay
data indicates the monazite sand contained in the HMS concentrate
ranges between 0.62% and 12.82%1, and the uranium
contained in the monazite is expected to be comparable to typical
Colorado Plateau uranium deposits.
Energy Fuels plans to perform extensive exploration work over
the next six months to further define and quantify the HMS resource
at the Bahia Project. This is expected to include a comprehensive
sonic drilling and geophysical mapping program to define the HMS
grades and depths for the various mineral products, including the
REE resources associated with the Bahia Project. The Company plans
to engage industry leaders in mineral processing to complete a
Preliminary Economic Assessment under NI 43-101 (Canada) and an Initial Assessment under
SK-1300 (US) during late Q1 or early Q2 2023.
Based on preliminary, historical resource estimates, the Company
believes the Bahia Project has the potential to supply
approximately 3,000 – 10,000 tonnes per year of monazite sand
concentrate to the Mill (depending on production rates), containing
approximately 1,500 – 5,000 tonnes of total rare earth oxides
("TREO") per year, potentially for decades. The Company
expects to mine and produce an HMS concentrate at the site, which
contains all the valuable minerals, including monazite. This HMS
concentrate would then be shipped to an existing HMS facility for
further refinement and separation of the monazite into a product
Energy Fuels can process at the Mill. The Company is evaluating
whether this further refinement and separation step could
potentially be performed in Brazil. However at this time, the Company
plans to ship lower concentrations of monazite sand for
concentration at a U.S. facility. Preliminary internal projections
indicate this latter option can be very cost-effective, despite the
larger shipping quantities, as the less concentrated material will
not require the more expensive Class 7 designation applicable to
higher concentrated materials, and it can be shipped in bulk.
Mark S. Chalmers, President and
CEO of Energy Fuels stated: "This is another very significant step
in Energy Fuels' development as a major global rare earth element
producer based in the United
States. We are aggressively seeking to expand our monazite
sand feeds. With guidance from our heavy mineral sand experts, the
Company has been evaluating the acquisition of monazite-bearing
projects. The Bahia deposit is well-known throughout the HMS
industry as having excellent potential to produce high-quality
ilmenite, rutile, and zircon products, in addition to monazite. We
are very pleased to have secured this project, as it has the
potential to provide Energy Fuels with our own low-cost source of
monazite feed that we fully control. The Company expects to
supplement its monazite supply in the future with open market
purchases, arrangements with existing monazite producers, and/or
additional acquisitions. Energy Fuels is in advanced discussions
with other current and future monazite producers around the world
to provide creative options on how to best build upon our momentum
and add further scale.
"At Energy Fuels, we have proven our ability to process natural
monazite sand concentrate into a high purity mixed rare earth
carbonate, containing about 32% - 34% neodymium/praseodymium
(NdPr). Our clear current priorities are to continue to build our
book of monazite feed to a world scale and to leverage our existing
solvent extraction experience and infrastructure at the Mill to
produce both separated 'light' and 'heavy' rare earth oxides, and
other products, by adding commercial separation capabilities to the
Mill. To achieve these ambitious goals, we have assembled a team of
rare earth heavy-weights, including Neo Performance Materials,
Carester SAS, and other heavy mineral sand and rare earth experts,
that we believe is unmatched anywhere in the world.
"In my view, this acquisition will provide significant
credibility to investors, other monazite suppliers, and clean
energy manufacturers, as we will clearly demonstrate that Energy
Fuels is well on its way to becoming a large-scale producer of
advanced rare earth materials in the U.S. We have already proven
our processing capabilities. Now, we are proving that upon
successful completion of this acquisition, we will own and control
'the elements' to supply EV, renewable energy and other technology
manufacturers."
Under the Transaction, Energy Fuels has entered into Purchase
Agreements with private mineral rights holders in Brazil to acquire seventeen (17) heavy mineral
sand concessions comprising the Bahia Project, subject to a 90-day
due diligence period. The total consideration for this acquisition
is $27,500,000 in cash, with
non-refundable deposits totaling $2,750,000 cash due on signing, and additional
non-refundable deposits totaling $2,850,000 cash due at various benchmarks during
the due diligence period, and the remaining $21,900,000 due at closing. Closing is expected
to follow the 90-day due diligence period and is subject to Energy
Fuels being satisfied with its due diligence investigations. The
Purchase Agreements contain other customary terms and conditions
for a transaction of this nature.
ABOUT ENERGY FUELS
Energy Fuels is a leading U.S.-based uranium mining company,
supplying U3O8 to major nuclear
utilities. Energy Fuels also produces vanadium from certain of its
projects, as market conditions warrant, and is ramping up
commercial-scale production of REE carbonate. Its corporate offices
are in Lakewood, Colorado,
near Denver, and all its assets and employees are in the
United States. Energy Fuels holds
three of America's key uranium production centers: the White Mesa
Mill in Utah, the Nichols Ranch in-situ recovery
("ISR") Project in Wyoming, and the Alta Mesa ISR
Project in Texas. The White Mesa Mill is the only conventional
uranium mill operating in the U.S. today, has a licensed capacity
of over 8 million pounds of U3O8 per year,
has the ability to produce vanadium when market conditions warrant,
as well as REE carbonate from various uranium-bearing ores. The
Nichols Ranch ISR Project is on standby and has a licensed capacity
of 2 million pounds of U3O8 per year.
The Alta Mesa ISR Project is also on standby and has a licensed
capacity of 1.5 million pounds of U3O8 per
year. In addition to the above production facilities, Energy Fuels
also has one of the largest NI 43-101 compliant uranium resource
portfolios in the U.S. and several uranium and uranium/vanadium
mining projects on standby and in various stages of permitting and
development. The primary trading market for Energy Fuels' common
shares is the NYSE American under the trading symbol "UUUU," and
the Company's common shares are also listed on the Toronto Stock
Exchange under the trading symbol "EFR." Energy Fuels' website
is www.energyfuels.com.
Daniel Kapostasy, P.G.,
Director of Technical Services for Energy Fuels, is a
Qualified Person as defined by Canadian National Instrument 43-101
and has reviewed and approved the technical disclosure contained in
this news release, including sampling, analytical, and test data
underlying such disclosure.
CAUTIONARY STATEMENTS REGARDING
FORWARD LOOKING STATEMENTS
This news release contains "forward-looking information"
within the meaning of applicable securities laws in the United States and Canada. Forward-looking information may relate
to future events or future performance of Energy Fuels. All
statements in this release, other than statements of historical
facts, with respect to Energy Fuels' objectives and goals, as well
as statements with respect to its beliefs, plans, objectives,
expectations, anticipations, estimates, and intentions, are
forward-looking information. Specific forward-looking statements in
this discussion include, but are not limited to, the following:;
any expectation that the Transaction will close and that the
Company will acquire the Bahia Project on the terms disclosed or at
all; any expectation as to the concentrations or quantities of
heavy minerals, including monazite contained in the Bahia Project;
any expectation as to the potential annual supply of monazite sands
from the Bahia Project to the Mill, the contained tonnes of TREO
per year, or the number of years or decades of such potential
supply; any expectation that monazite sands from the Bahia Project
may be a low-cost source of monazite feed; any expectation that
there may be a clear path to moving the Bahia Project into
production; any expectation that the mineralization does not stop
at the water table and is open at depth; any expectation as to the
exploration or development work the Company plans to perform on the
Bahia Project; any expectation that a Preliminary Economic
Assessment under NI 43-101 or an Initial Assessment under SK-1300
will be performed and the timing of completion of any such
assessments; any expectation as to how the Bahia Project may be
mined, or the manner or location of any further refinement and
separation of mined material; any expectation as to the
cost-effectiveness of transporting various forms of HMS from the
mine to a concentration facility; any expectation that the Company
may become a major global rare earth element producer based in
the United States; any expectation
that the Company may be successful in expanding its monazite sand
feeds; any expectation that the Company will or will continue to
successfully process monazite sand concentrates into a high purity
mixed rare earth carbonate; any expectation that the Company may be
successful at developing a full scale separations facility at the
Mill; and any expectation that the Company will continue to be a
leading U.S. based uranium mining company. Often, but not always,
forward-looking information can be identified by the use of words
such as "plans", "expects", "is expected", "budget", "scheduled",
"estimates", "continues", "forecasts", "projects", "predicts",
"intends", "anticipates" or "believes", or variations of, or the
negatives of, such words and phrases, or state that certain
actions, events or results "may", "could", "would", "should",
"might" or "will" be taken, occur or be achieved. This information
involves known and unknown risks, uncertainties and other factors
that may cause actual results or events to differ materially from
those anticipated in such forward-looking information.
Factors that could cause actual results to differ materially
from those anticipated in these forward-looking statements include
risks associated with: technical difficulties; mining or processing
difficulties and upsets; licensing, permitting and
regulatory delays; litigation risks; competition from others;
political actions or instability in foreign countries; and market
factors, including future demand for and prices realized from the
sale of uranium, vanadium and REEs. Forward-looking statements
contained herein are made as of the date of this news release, and
Energy Fuels disclaims, other than as required by law, any
obligation to update any forward-looking statements whether as a
result of new information, results, future events, circumstances,
or if management's estimates or opinions should change, or
otherwise. There can be no assurance that forward-looking
statements will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
statements. Accordingly, the reader is cautioned not to place undue
reliance on forward-looking statements. Energy Fuels assumes no
obligation to update the information in this communication, except
as otherwise required by law.
____________________________
1 This information comes from 16 different
Exploration Reports filed with the Brazilian Government's National
Agency of Minerals (ANM) over several years (2011-2019). These
grades should be considered conceptual in nature since there has
been insufficient exploration to define a mineral resource and it
is uncertain if further exploration will result in the target being
delineated as a mineral resource. The data was obtained by sampling
1-meter intervals from a hand auger hole, separating out the heavy
mineral fraction using heavy liquids, separating the heavy minerals
by magnetic strength and then point counting the minerals under a
microscope. Energy Fuels plans to initiate a sonic drill program to
better define the exploration target and use industry best
practices to determine an estimate of all the heavy minerals found
within the project area. A qualified person has not done sufficient
work to classify this historical estimate as current and Energy
Fuels is not treating this historical estimate as current.
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SOURCE Energy Fuels Inc.