Uranium Mining in Wyoming

Rich history, rich deposits

To truly understand Wyoming's potential as a producer of uranium, one must first examine its history.

The metal was first discovered in Wyoming in the tailings of an abandoned silver mine in 1918, but at the time, there was no market for the material.

It wasn't until three decades later that the market finally arrived. At that time, the US Atomic Energy Commission — an agency founded in 1946 to oversee the development of atomic science and technology — issued a series of proclamations around procurement, pricing, discovery and incentives around uranium mining.

During the ensuing uranium rush, prospector Neil McNeice found abundant stores of the mineral in the Gas Hills region of Central Wyoming, and commercial mining of uranium in Wyoming began in the 1950s. For the next decade, Wyoming's uranium production was almost entirely centered in the Gas Hills region and the nearby Shirley Basin. Then, in the 1970s, massive deposits of the mineral were discovered — almost fittingly — in the Powder River Basin, at that time the heart of the state's coal production.

Over the course of its history, Wyoming's uranium mining has produced the equivalent of 5.9 billion barrels of oil in energy.

It wasn't all smooth sailing for Wyoming's uranium sector, though. Just as the state's coal industry is now being hammered by the shift to green energy, uranium production saw a large downturn in 1980 due to uranium's massive drop in price. Jeffrey City, at the time a uranium-mining boom town, even lost 95 percent of its population in just three years.

The uranium market in Wyoming has never fully recovered from that plummet in price. However, experts remain optimistic about Wyoming's future as a uranium producer — and not solely because of the rallying spot price.

"I think Wyoming will stand to regain its leading position in uranium production going forward and I think all that's going to take is a little bit (of) improvement in uranium price," Scott Melbye explained in a 2022 interview. Melbye is the executive vice president of Uranium Energy (NYSEAMERICAN:UEC) and president of the Uranium Producers of America.

The price of uranium has risen over the last few years, even topping US$63 per pound in April 2022.

The right infrastructure, the right place, the right time

There's another factor that plays just as much of a part in the region's potential. Given that much of Wyoming's uranium can be found in and around the sites of former coal mines, uranium projects have access to readily available infrastructure, reducing construction costs and time. Projects such as TerraPower's plant will only further drive investment into Wyoming's uranium sector.

Currently, Wyoming is home to a number of major uranium operations including Ur-Energy’s (NYSEAMERICAN:URG,TSX:URE) Lost Creek in-situ recovery (ISR) facility and Cameco's (TSX:CCO,NYSE:CCJ) Smith-Ranch Highland operation, although the latter is currently on care and maintenance. Energy Fuels (TSX:EFR,NYSEAMERICAN:UUUU) owns both Nichols Ranch, a mine and plant that are on standby in Wyoming's Powder River Basin, and Sheep Mountain, a fully permitted project that will encompass a mine and plant in Wyoming's Green Mountain/Crooks Gap.

Uranium Energy has its Wyoming Asset Hub and Spoke ISR project, which is made up of assets it acquired from Uranium One in 2021. The assets acquired include the Irigaray, Christensen Ranch, Moore Ranch, Reno Creek, Ludeman, Allemand-Ross, Barge and the Jab/West Jab project areas. Total measured and indicated resources across all of these assets total 66.2 million pounds of U3O8.

There are a number of other significant deposits and projects in various stages of discovery and development throughout the state as well.

GTI Energy (ASX:GTR,OTC Pink:GTRIF) is one of the major players in that regard. Its Great Divide Basin prospects, including its Thor project, have a combined area of 22,000 acres and an inferred mineral resource of 1.66 million pounds of U3O8. GTI's 12,000 acre Lo Herma project, meanwhile, is on track for a maiden resource estimate in early Q3 2023. GTI also acquired 13,800 additional acres of claims at Green Mountain, adjacent to its existing Great Divide Basin projects. The Green Mountain project contains a number of uranium-mineralised roll fronts hosted in the Battle Springs Formation. It lies close to several major deposits held by Energy Fuels and Uranium Energy.

Peninsula Energy (ASX:PEN,OTCQB:PENMF) could be another promising investment opportunity. The company is uniquely placed in that it owns the Lance uranium project, which includes a major ISR production facility that commenced operations in 2015. The company is currently transitioning the facility to restart production using a new ISR method, an initiative slated to be completed by mid-year 2023.

In-situ recovery

The majority, if not all, current operable and licensed uranium projects in Wyoming employ the ISR method, and for good reason. ISR is a proven approach — in fact, it was first used in the Gas Hills and Shirley Basin uranium districts in the early 1960s.

ISR mining results in minimal waste, as the typically alkaline solution used is non-toxic. It also has a minimal carbon footprint. More importantly, ISR requires a considerably lower upfront capital investment — the technology utilised in ISR mining costs significantly less than even a modest open-pit operation.

ISR is a method in which either an alkaline or acidic solution is injected into the deposit being mined. In Wyoming, the solution is most commonly alkaline. Once the solution has leached the uranium out of the surrounding rock, it’s pumped to the surface. This method is significantly cleaner and has a lower environmental impact when compared to both open-pit and underground mining.

GTI's Thor uranium project is Wyoming’s newest potential ISR project. The company has drilled approximately 15,000 metres at Thor to date, aimed at confirming the grade and tenor of uranium mineralisation and ultimately supporting the future definition of an economic ISR uranium resource.

Results announced in late March 2022 from the drill program exceeded expectations for economic ISR uranium recovery. Commenting on the drill results, GTI executive director Bruce Lane said, "I'm excited by the fact that this first, wide spaced, drill program covered less than 20 percent of GTI's total land holding in the Great Divide Basin with most of our ground still to be tested."

Takeaway

ISR mining is a more cost-effective, environmentally friendly option for uranium production, and Wyoming may well be the perfect region for the technique. The state's mining-friendly government, extensive pre-existing infrastructure and massive uranium deposits make it a promising investment target. And together, they may secure the state's position in a nuclear energy-focused future.

This INNSpired article is sponsored by GTI Energy (ASX:GTR, OTC Pink:GTRIF). This INNSpired article provides information which was sourced by the Investing News Network (INN) and approved by GTI Energy in order to help investors learn more about the company. GTI Energyis a client of INN. The company’s campaign fees pay for INN to create and update this INNSpired article.

This INNSpired article was written according to INN editorial standards to educate investors.

INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.

The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with GTI Energyand seek advice from a qualified investment advisor.