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Western Uranium - Near-term Uranium Production in the United States

Western Uranium – Near-term Uranium Production in the United States

Overview

Western Uranium Corporation (CSNX:WUC) (OTCQX:WSTRF) is a near-term uranium and vanadium producer focused on advancing toward production at its Sunday Mine Complex located in western Colorado.

Over the last few years, Western Uranium has acquired a significant portfolio of uranium and vanadium mineral assets in Colorado and Utah from both Energy Fuels and Black Range Minerals along with the Hansen/Taylor Ranch Project located in south central Colorado—one of the largest uranium resources in the United States.

Today, Western Uranium is the second largest uranium resource holder in the United States behind Energy Fuels with 100 million pounds of uranium resources and 34 million pounds of vanadium resources. These assets include seven permitted mines, of which five are near-production stage.

Western Uranium plans to use its Ablation Mining Technology to drastically reduce operation costs. This industry-changing technology is catching the attention of major uranium miners. Currently, the company is working to test uranium ore for a major miner with a large deposit in Africa to determine if the ablation process can improve the project’s economics.

Western Uranium’s experienced management team is led by George Glasier, founder and former CEO of Energy Fuels and was significantly involved in the building of the White Mesa Mill in Utah.

Investment Highlights

  • Second largest in-situ holder of uranium resources in the United States
  • Uranium off-take agreement with top 5 energy utility
  • Exclusive rights to process ore at fully permitted Piñon Ridge Mill
  • Tolling agreement with Energy Fuels at White Mesa Mill
  • 25-year license for disruptive ablation mining technology
  • Ablation mining technology ideal for usage with sandstone -hosted minerals
  • 2016 OTCQX listing
  • Production at Sunday Mine Complex targeted for Q4 2016

United States: A key market for uranium

The United States is by far the world’s leading nuclear energy producer, and not surprisingly, the world’s biggest uranium consumer. In 2014, US uranium consumption totaled 53 million pounds of U3O8; however US production in that same year only totaled 4.9 million pounds U3O8. The fact that well over 90 percent of US uranium consumption comes from foreign sources poses serious energy and economic security issues for a country that depends upon nuclear energy for nearly 20 percent of its energy needs.

Western Uranium is well-positioned to be the next domestic supplier of uranium resources to the US nuclear utilities market.

Flagship Project: Sunday Mine Complex

The Sunday Mine Complex is located in San Miguel County, Colorado and covers 1,517 hectares within the southern third of the Uravan Mineral Belt—a region with significant historical uranium and vanadium mining. The complex consists of five interconnected underground past-producing mines. Production at Sunday has been on and off since the 1950s, with most recent production occurring between 2007 and 2009.

Western Uranium - Near-term Uranium Production in the United States

Uranium-vanadium mineralization at the Sunday Mine Complex is hosted mainly in fluvial sandstone beds. According to a 2015 Technical Report on the property, the complex holds an estimated Measured and Indicated resource of 1,007,830 pounds U3O8 and 6,047,000 pounds V2O5, as well as 1,906,081 pounds of U3O8 and 11,436,484 pounds V2O5 calculated in accordance with NI 43-101 standards.

The property also has the potential to host in excess of 3 million pounds of uranium-vanadium resources suitable for underground mining, according to the 2015 report. The vanadium co-credits will reduce cash costs once the mine complex is in production.

Western Uranium is targeting the fourth quarter of 2016 for a return to production at the Sunday Mine Complex. The company is planning for a 1,000 tpd operation.

Ablation Mining Technology: Improving efficiencies, reducing costs

Once mining begins at the Sunday Mine Complex, Western Uranium plans to employ its Ablation Mining Technology (AMT) to separate waste rock on-site, reducing its operation costs by nearly half. The company acquired the rights to the industry disruptive technology under its takeover agreement with Black Range Minerals.

Ablation is a mechanical process which uses kinetic energy and water to remove the outer coating around individual grains in mineralized host rock. Western Uranium has demonstrated that the process is significantly improves the efficiencies in the mining of sandstone-hosted uranium deposits. The low-cost, environmentally-friendly process uses little energy consumption and no chemicals to separate waste rock from uranium resulting in a high-grade, high-value ore. Being a wet process, ablation prevents the circulation of radon gas and the cleaned sands can be used for backfill.

Western Uranium - Near-term Uranium Production in the United States

“Ablation technology offers Western Uranium a huge cost advantage,” explains George Glasier, President and CEO of Western Uranium. “It can be used underground to remove 90 percent of the waste rock at the mine site, cutting transportation and milling costs. Milling costs are directly related to the tonnes you put in the mill. If you can cut the tonnage down and not cut the mineral content down, you can cut the cost of milling per pound of uranium drastically.” Efficiency improvements at the mill include smaller tanks and equipment needed for comparable output as well as lower energy consumption, increased mill output and up to 90 percent less tailings to dispose.

Western Uranium is currently working to increase the capacity of its AMT Unit design from 5tph to 20tph as well as building a second AMT unit. The company expects operations at the Sunday Mine Complex to require at least three AMT units to meet the targeted output of 1 million pounds of uranium and 5 million pounds of vanadium per annum.

Piñon Ridge Mill: production-ready in 2017

Initially, ore mined from the Sunday Mill Complex may be trucked to Energy Fuels’ White Mesa Mill for milling under a tolling agreement.

Ultimately, Western Uranium plans to mill ore mined from its portfolio of properties at the Piñon Ridge Mill. The 500 tpd mill is located on 880 acres of private land in Montrose County, Colorado and is the only mill permitted for construction in the United States. Piñon Ridge was acquired from Energy Fuels by a private company with ties to Western Uranium.

“We expect construction on the mill to start in the second half of 2016,” said Glasier. “The mill is being funded mostly through debt financing outside of Western Uranium. The idea is to ensure the mill can withstand the debt load before it is integrated into the Western Uranium asset portfolio. We expect the Piñon Ridge high-efficiency design will not only be capable of handling Western Uranium ore but also ore from other projects in the four corners region.”

Construction of the mill is expected to take an estimated 9 months and the company is eyeing 2017 for first production. Once in production, Piñon Ridge will be only one of two operational uranium mills in the United States.

Offtake agreement secured

In November 2015, Western Uranium signed its first off-take contract with a top 5 US utility for delivery of uranium beginning in 2018 and continuing through 2022. The company continues to work with additional U.S. utilities to add supply contracts.

Hansen/Taylor Ranch Complex

The Hansen/Taylor Ranch uranium complex is located 30 kilometers northwest of Canon City, Colorado in the historic Tallahassee Creek uranium district. The geology consists of a series of large sandstone-hosted deposits spread over six miles of strike.

western uranium2

The property hosts a 2012 JORC-compliant Indicated and Inferred resource of approximately 90.4 million pounds U308 at a grade of 0.06 percent U308 making it one of the largest uranium projects in the United States.

The main deposit is the Hansen deposit which was once formerly permitted for open pit mining in 1981. The mine design for Hansen recommends an annual production rate of 2 million pounds U308.

Upcoming Catalysts

  • Permit and implement the ablation mining technology into the Sunday Complex mine plan—targeting May 2016
  • Start production at the Sunday Mine Complex—targeting Q4 2016
  • Begin construction of Piñon Ridge Mill—targeting 2H 2016
  • Production startup at Piñon Ridge Mill—targeting 1H 2017
  • Construct additional AMT Units to increase Sunday Complex production—targeting 2H 2017

Western Uranium also plans to permit and bring the Hansen uranium deposit into production in the near future. Long-term goals for the company include bringing its other near-term mines into production as well as participating in regional mine consolidation opportunities.

Management

George Glasier, J.D.— President, CEO and Director

George Glasier is the founder of Western Uranium Corporation. He has over thirty years of experience in the uranium industry in the United States, with extensive experience in sales and marketing; project development and permitting uranium processing facilities. He is the founder of Energy Fuels (Volcanic Metals Exploration) and served as its CEO and President from January 2006 to March 2010. He was responsible for assembling a first-class management team, acquiring a portfolio of uranium projects, and leading the successful permitting process that culminated in the licensing of the Piñon Ridge uranium mill; planned for construction in Western Montrose County, Colorado. He began his career in the uranium industry in the late 1970’s with Energy Fuels Nuclear, which built and operated the White Mesa Mill near Blanding, Utah, becoming the largest uranium producer in the United States.

Russell Fryer—Director

Russel Fryer has 25 years of experience investing in developed and developing markets with a focus on mining and natural resources. With a background in engineering, Fryer has advised mining companies in pre-production and production stages of mineral output. He is a director of Ecometals Limited. Previously, Fryer was a Managing Director at Macquarie Bank. Before Macquarie, he managed investor capital in the natural resources sector at Baobab Asset Management and North Sound Capital. Throughout his career, Fryer has also worked with investment banking firms such as Robert Fleming, HSBC and Deutsche Bank. He holds a Bachelor of Business Administration degree from Newport University in Johannesburg, South Africa along with an Advance Degree in International Taxation from Rand Afrikaans University, also in Johannesburg, South Africa.

Patrick Siglin—Vice President of Development

Patrick Siglin served as a geologist for Black Range Minerals beginning in 2011. He was involved in the development of Ablation Mining Technology as well as the development of exploration and permitting activities at the Hansen/Taylor Ranch Project. Between 2007 and 2011, Siglin worked as an Environmental Geologist at an environmental consulting firm. He is a graduate of the University of Iowa in 2006.

Michael Rutter—Vice President of Operations

Mr. Rutter has specific experience in the oversight of the construction, mechanics, PLCs electrical and operation of the Ablation production units. Previously, Mr. Rutter was superintendent for Energy Fuels’ Utah, Colorado and Arizona uranium production.

Robert Klein—CFO

Mr. Klein holds the CFA Chartered Financial Analysis designation and has been a key member of the financial team providing support to Mr. Wilder, Western and its predecessor company, Pinon Ridge Mining, LLC since its 2014 formation. In his former capacity as Vice President-Finance, he had a leading role in the completion of quarterly financials, accounting, taxation, implementation of acquisition transactions, and the public listing of the stock on both the CSE and OTCQX exchanges. As a result, Mr. Klein has both a historical perspective and is intimately familiar with all financial and business aspects of the Company.

Michael Skutezky— Independent Chairman and Director

After a career at Royal Bank as Assistant General Counsel, Michael Skutezky experienced the management side of the business as Senior Vice-President of National Trust Company and as Senior Vice-President and General Counsel of the Romanian subsidiary of Telesysteme International Wireless Corporation. Skutezky was General Counsel & Corporate Secretary of Century Iron Mines Corporation, a company listed on the TSX. He is currently a lawyer practicing in Toronto, Ontario. He is Chairman of Rhodes Capital Corporation, a private merchant bank providing services to the resource and technology sector. Skutezky graduated from Bishop’s University, Lennoxville (Québec) in 1969 with a Bachelor’s degree in History and Business and from Dalhousie University Law School, Halifax (Nova Scotia) in 1972 with a Bachelor’s degree in law (LLB). He is member of the Law Society of Upper Canada and the Nova Scotia Barristers’ Society, the International Bar Association and the Canadian Bar Association.

Andrew Wilder—Director

Andrew Wilder is the Founder and Chief Executive Officer of the Cross River Group, a firm that provides capital, strategic business development and operations to alternative asset managers and operating companies. Prior to founding Cross River, Wilder co-founded and was the Chief Operating Officer for Kiski Group, an advisory firm organized in 2009 to help institutions develop their alternative manager platforms by helping vet managers and offer infrastructure solutions in areas of investment and business risk management. In 2001, he co-founded and served as Chief Operating Officer and Chief Financial Officer of North Sound Capital LLC, a long/short equity hedge fund manager.

North Sound launched with $15 million in July of 2001 and reached $3 billion AUM and 65 employees within 5 years. Wilder was responsible for building and overseeing all aspects of the business ex-research. In 2003, he also co-founded Columbus Avenue Consulting, an independent fund administration business with 90 clients and $7 billion in AUA when it was subsequently sold in 2012. His prior career included heading operations for C. Blair Asset Management, a $500 million long/short equity hedge fund, and serving as a Manager in audit of Deloitte & Touche (in their Cayman Islands and Toronto practices). He received the Chartered Accountant (Canada) designation, holds the CFA designation, and received an MBA from the University of Toronto and a BA from the University of Western Ontario.

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