The latest uranium news from Energy Fuels came Tuesday when the company was granted final approvals for its Hank Unit ISR uranium project in Wyoming.
Energy Fuels (TSX:EFR,NYSEMKT:UUUU) has been making moves in the uranium space this month, last week receiving approval to make major revisions to the existing mining permit at its Sheep Mountain project. The latest uranium news from the company came Tuesday when it was granted final approvals for its Hank Unit in-situ recovery (ISR) uranium project in Wyoming.
Now that the US Bureau of Land Management has given Energy Fuels the nod of approval, it is allowed to move forward with developing mining facilities there, as well as related infrastructure in the future as market conditions warrant. The newly acquired project fits well with the company’s current producing mine, the Nichols Ranch ISR project, and it is licensed to be developed as a satellite operation to the Nichols Ranch processing plant.
That said, Energy Fuels said it will continue to evaluate other production options, including connecting the Hank Unit with Nichols Ranch via a pipeline; however, that will depend on the market, permitting and operating considerations.
“Final approval of the Hank ISR Uranium Project is a major achievement for Energy Fuels, as we continue to build more short-term scalability and optionality into our portfolio which can be brought into production as uranium market conditions improve. Indeed, this is the second major regulatory approval received by Energy Fuels in less than a week, as on July 16, 2015 we announced the receipt of the mine permit for our Sheep Mountain Project,” Stephen Antony, president and CEO of Energy Fuels, said in a press release. “I am extremely proud of our environmental permitting team and the track record of success they are building. I believe they are second-to-none in the U.S. uranium industry today.”
Analysts respond well
Cantor Fitzgerald’s Rob Chang found this latest uranium news to be very positive for both the company and investors.
“Following the previously granted approvals from the US Nuclear Regulatory Commission and the Wyoming Department of Environmental Quality, the issuance of the EA and the approval of the Plan of Operations represented the final major regulatory approval required for the Hank Unit. The approvals at the Hank Unit demonstrate the near term scalability of the Energy Fuels assets,” Chang said in a research note.
He added that the firm continues to forecast that production will begin at Hank Unit in 2017, with the mine producing over 275,000 pounds of U3O8 annually for six years. The site has a resource of 855,000 pounds U3O8 indicated and 803,000 pounds U3O8 inferred, both at ISR grades of 0.1 percent U3O8.
David Talbot of Dundee Capital Markets also sent a note regarding the news, reiterating his “buy” recommendation on Energy Fuels and increasing his price target on the company by $0.30, to C$9.60.
“This is positive news, and short of acceptable pump tests, allows full production from the Hank roll front uranium deposit, when prices warrant,” Talbot said in his note. “While permitting is important — maintaining timelines for its ISR projects in Wyoming takes on added importance. These deposits tend to be smaller, and permitting and development of each successive project must follow like clockwork, so that ISR production does not drop in the interim.”
However, he is predicting a longer timeline for Hank Unit to reach production, and does not expect it to kick off until four to six years down the road.
At end of day Tuesday, Energy Fuels’ share price was down 7.09 percent, trading at $5.24.
Securities Disclosure: I, Kristen Moran, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Energy Fuels is a client of the Investing News Network. This article is not paid-for content.
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