A Canadian company has dramatically increased the estimated amount of uranium it may be able extract from its proposed mine near Edgemont in southwest South Dakota.
The new estimates, contained in an 85-page technical report dated Dec. 21, include a 234 percent increase in the project’s measured resource, from 4.12 million pounds to 13.78 million pounds of the uranium compound known as triuranium octoxide, and a 97 percent increase in the indicated resource, from 8.58 million pounds to 16.94 million pounds.
The terms “measured” and “indicated” represent levels of geological confidence. Measured resources have a higher degree of confidence than indicated resources.
“We are extremely pleased with the exceptional results of this resource update,” said a written statement from Blake Steele, CEO and president of Azarga Uranium Corp. The corporation's stock is publicly traded in Canada.
Azarga retained Montana-based geologist Steve Cutler, of Roughstock Mining Services, to prepare the updated technical report.
Cutler told the Journal in a phone interview that his estimates are an indication of the amount of uranium that might be recoverable, rather than an estimate of the total amount of uranium underground at the project site. He said the increases in the measurable and indicated resources since the previous resource estimate in 2015 are based partly on production information from other existing mines.
“It’s really an advance of technology that has allowed them to extract more from the same process, more or less,” Cutler said.
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The process is “in situ” mining, which uses well fields to inject a solution deep underground, dissolve the uranium and bring it to the surface. Unlike traditional uranium mining from decades past — which left unreclaimed eyesores on the landscape in the Edgemont area — the in situ method does not involve open pits or tunnels.
Lilias Jarding, of the Clean Water Alliance in Rapid City, questioned the validity of Azarga's new estimates.
"Using smoke, mirrors and an inflated estimate of speculative uranium, they have again tried to draw investors to a project that has floundered for years — and for good reason," Jarding said in a written statement. "This is not a good place to mine uranium. The geology is wrong. Water resources could not be protected. Cultural resources would be destroyed. And the people of the Black Hills don't want to re-open the door to an industry that has done enough damage to our area already."
Azarga’s subsidiary, Powertech, applied for a license from the U.S. Nuclear Regulatory Commission in 2009. The license was granted in 2014 but has since been tied up in a dispute with the Oglala Sioux Tribe and other intervenors over the proposed methodology for a cultural resources survey in the project area. The company also needs several additional permits from local, state and federal agencies.
The proposed site of the well fields is in the Dewey-Burdock area 13 miles northwest of Edgemont, near the abandoned community of Burdock and the hamlet of Dewey along the southwest edge of the Black Hills. The uranium would be processed and transported elsewhere for use as fuel in nuclear power plants.
Azarga said it will now prepare an updated economic assessment for the project, which Steele said will "likely improve the Dewey Burdock Project economics."
A previous economic assessment in 2015 anticipated production of 9.688 million pounds of uranium to be sold for $65 per pound, for gross revenue of nearly $630 million. The current price of uranium is about $29 per pound. To achieve $630 million of gross revenue at that price, production would have to increase to more than 21 million pounds.