Casper, Wyoming-based Uranerz Energy (TSX: URZ) announced Tuesday that it has commenced uranium mining at its Nicholas Ranch ISR Uranium Project in the Powder River Basin in Wyoming after receiving final clearance from the Nuclear Regulatory Commission.
The in-situ recovery (ISR) operation will produce a uranium-loaded resin which will be transported to Cameco Resources’ Smith Ranch uranium processing facilities for final processing into dried and drummed uranium concentrates pursuant to a toll processing agreement between the two companies. Uranerz will make arrangements for shipments of its uranium from Smith Ranch to a conversion facility where ownership will be transferred to its nuclear-utility customers.
The company has signed three off-take agreements with two major U.S.-based nuclear operators including Exelon, which operates the largest nuclear fleet in the United States and the third largest fleet in the world. All the agreements are long-term contracts with deliveries over four to five years periods for a portion of planned production.
Nicholas Ranch is licensed for a maximum annual production of 2 million pounds of U308 with a direct operating cost estimate of US$24 per pound or $35/lb with taxes and royalties.
The company is continuing its ISR wellfield expansion and is working to develop satellite deposits to increase and extend the production pipeline. The company currently reports an indicated resource of 2,949,546 pounds of uranium at Nichols Ranch.
Wyoming’s Powder River Basin hosts the largest producing U.S. uranium mine, along with 81% of the country’s uranium production. Nicholas Ranch will serve as a platform for the potential future development of Uranerz’s other Powder River Basin properties “with possible enhanced economics for adjacent and satellite projects”.