The Slick Rock Project is an Advanced stage conventional uranium and vanadium project located in San Miguel County, Colorado, approximately 24 miles north of the town of Dove Creek. The project consists of 315 contiguous mineral lode claims and covers approximately 5,333 acres bordering the Sunday/Carnation/Topaz/Saint Jude mine complex, formerly owned by each of Energy Fuels Inc. and Denison Mines Corp.
The information below regarding project milestones and recent developments for the Slick Rock Project has been summarized from the Slick Rock Technical Report(1), a copy of which is available under the profile of Uranium Energy Corp. ("UEC") on SEDAR (www.sedar.com), and from UEC's public disclosure.
Shallow uranium and vanadium mineralization has been known in the area of the Slick Rock Project since the early 20th century, with the region being first mined for uranium until 1923. The area remained active from the 1930's through to the early 1980's. However, exploration activity ceased between 1983 and 2006 as a result of uranium pricing declines. Between 2006 and 2008, the Slick Rock Project and the region were the subject of various exploration activities by several operators.
UEC acquired its initial interest in the Slick Rock Project in 2010 by staking 88 mineral load claims that had lapsed and acquiring additional mineral load claims from individuals in consideration for a 1% royalty interest. Since then, UEC has further expanded the project through additional staking.
In April 2014, UEC filed the Slick Rock Technical Report(1), which included a preliminary economic assessment and mineral resource estimate for the Slick Rock Project. The report disclosed an estimated inferred mineral resource of 11.6 mmlb of U3O8 (2.55 million short tons or 2.31 million tonnes at a grade of 0.228% eU3O8).
The Slick Rock Technical Report(1), included a resource estimate for the project and a preliminary economic assessment, disclosing a base economic case based on annual production of 100,000 tons of mined material per year. For this base case, with a uranium price of US$60.00 per pound and a vanadium price of US$10.00 per pound, the project would generate an estimated pre-tax internal rate of return of 33% and a post-tax internal rate of return of 29% and would have an estimated pre-tax net present value of US$43.8 million dollars (constant dollars) before income tax and a post-tax net present value of US$31.9 million collars (constant dollars), each utilizing a 10% discount rate. 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 Slick Rock Technical Report(1), UEC disclosed that expenses at the Slick Rock Project were mainly comprised of permitting and property maintenance.
(1) Technical Report Preliminary Economic Assessment, Slick Rock Project Uranium / Vanadium Deposit, San Miguel County, Southwest Colorado, USA with an effective date of April 8, 2014, prepared for UEC and authored by Douglas Beahm, PE, PG, Bruce Davis, FAusIMM, and Robert Sim, P. Geo.