The Anderson Project is an Advanced stage conventional uranium project, covering 8,268 acres, and is located in Yavapai County, west-central Arizona, approximately 75 miles northwest of Phoenix and 43 miles northwest of Wickenburg. The Anderson Project is 100% owned by UEC Concentric Merge Corp., a wholly owned subsidiary of Uranium Energy Corp. (“UEC”).
The information below regarding project milestones and recent developments for the Anderson Project has been summarized from the Anderson Technical Report(1), a copy of which is available under UEC's profile on SEDAR (www.sedar.com), and from UEC's public disclosure.
The Anderson Project was in production between 1955 and 1959, when production was stopped due to the termination of a purchasing program by the Atomic Energy Commission. The Anderson Technical Report(1) further discloses that between 1967 and 1980, the Anderson Project was explored by several companies, including Getty Oil Company, Urangesellschaft USA, Inc. and Minerals Exploration Company, including the completion of over 1,289 rotary drill holes and 117 core holes during the period. The Anderson Technical Report(1) further disclosed that the project was re-staked in 2001 by Concentric Energy Corp., which completed 25 confirmation drill holes in 2006 to confirm the reproducibility of the project's historical exploration database.
In May 2011, UEC acquired the Anderson Property through its merger with Concentric Energy Corp. In May 2012, UEC completed a resource estimate for the Anderson Project.
In July of 2014, UEC completed the Anderson Technical Report(1), which included a preliminary economic assessment and updated resource estimate for the Anderson Project.
The mineral resource estimated disclosed in the Anderson Technical Report(1) segregated resources into two types, being those potentially amenable to open pit extraction methods versus deeper resources that would be exploited through underground methods. Such mineral resource estimate included:
(a) an open pit resource consisting of an indicated resource of 15.50 mmlb U3O8 (25.42 million tonnes at grade of 0.028% U3O8) and inferred resource of 2.50 mmlb U3O8 (4.63 million tonnes at a grade of 0.024% U3O8); and
(b) an underground resource consisting of an indicated resource of 1.50 mmlb U3O8 (1.43 million tonnes at a grade of 0.048% U3O8) and an inferred resource of 9.50 mmlb U3O8 (8.36 million tonnes at a grade of 0.052% U3O8).
The preliminary economic assessment disclosed a pre-tax project internal rate of return of 63% and a net present value of US$142.2 million at a discount rate of 10% with a post-tax internal rate of return of 50% and a net present value of US$101.1 million, based on a uranium price of US$65.00 per pound and an average life of mine operating cost of US$30.68 per contained pound of U3O8.
The foregoing preliminary economic assessment is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that such preliminary economic assessment will be realized.
In each of its annual reports on Form 10-K for its fiscal years following the Anderson Technical Report(1), UEC disclosed that expenses at the Anderson Project were mainly comprised of permitting and property maintenance.
(1) Technical Report and PEA on the Anderson Uranium Project, Yavapai County, Arizona, USA, with an effective date of July 6, 2014, prepared for UEC and authored by Douglas Beahm, PE, PG, Terence P. McNulty, D. Sc., P.E., Bruce Davis, FAusIMM, and Robert Sim, P.Geo.