Today’s vanadium prices are such that with this shift, the energy firm could generate significant cash flow.
In mid-November, Energy Fuels Inc. (EFR:TSX; UUUU:NYSE.American) intends to begin a new undertaking, producing vanadium from the pond solutions at its White Mesa mill, where 4 million pounds of the element are estimated to be recoverable.
With this endeavor, Energy Fuels will become North America’s only primary vanadium producer, according to the company, and because it owns the only mill that can process conventionally mined vanadium ore, it likely will maintain that status for some time.
“This position brings the potential for the company to generate significant cash flow in today’s strong vanadium price environment, especially with the steel industry recovering in the U.S.,” said President and CEO Mark Chalmers in a news release.
The median vanadium price as of Sept. 23, 2018, was $22.63 per pound, according to Metal Bulletin, whereas it was $9 a pound about a year earlier. This reflects a 150% price increase over that period.
To prepare for the production launch, Energy Fuels retrofitted and upgraded the mill’s vanadium recovery circuit. “While the mill has never to date attempted to commercially recover vanadium dissolved in the ponds, extensive on-site test work indicates that the project has a high probability for success,” noted the release.
Once the enterprise reaches a steady state, Energy Fuels hopes to produce around 200,000–225,000 pounds of V205 per month for 16–20 months. If the mill can put out a high-purity vanadium product, as it did in the past, this could translate into higher returns. Another benefit of the mill-based project is it can be stopped and started quickly if need be, due to changing market conditions.
Along with the ponds, Energy Fuels plans to start limited vanadium production at its La Sal complex of uranium-vanadium mines in Utah. In advance, it will carry out test mining to include using XRF technology to pinpoint areas of high-grade vanadium. The objectives of the program, which is expected to take about six months to complete, are to boost productivity and mined grades and decrease vanadium and uranium mining costs. “If the program is successful and vanadium prices remain strong, the company may continue mining beyond the planned campaign,” Chalmers added.
Also at La Sal, Energy Fuels plans further exploration and infill drilling to potentially add to the known vanadium resources there.
Chalmers concluded, “Over the longer-term, we are hopeful that today’s real-time mining technologies will provide for a possible paradigm shift that has the potential to improve the economics of future vanadium and uranium mining in this well-known and prolific high-grade district.”
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