The United States Environmental Protection Agency (EPA) issued the final permits for Azarga Uranium’s (TSX: AZZ) Class III and Class V underground injection control activities at the Dewey Burdock in-situ recovery uranium project in South Dakota.
In a press release, the miner said that the issuance of the permits marks a “critical milestone” that significantly de-risks the asset, as it follows the agency’s extensive review of the project.
According to Azarga’s president and CEO, Blake Steele, the EPA’s greenlight reaffirms the findings of the United States Nuclear Regulatory Commission that the project is both technically and environmentally sound.
Steele said that now that federal permits are in place, the company can focus on the required state permitting process before the South Dakota Department of Environment and Natural Resources.
“At a time when the uranium market remains in a structural deficit and the United States government has shown historic bi-partisan support for the uranium sector, as evidenced by the Senate Committee on Appropriations draft fiscal year 2021 funding measures and subcommittee allocations’ inclusion of $150 million for a United States uranium reserve, Azarga Uranium continues to unlock the value of one of the preeminent undeveloped in-situ recovery uranium projects in the USA,” Steele said.
Dewey Burdock is an in-situ recovery uranium project located in the Edgemont uranium district, where the radioactive metal occurs in the sandstones as classic roll front deposits favourable to ISR mining methods.
The mine is forecast to produce 14.3 million pounds of U3O8 over its 16 years of production. Initial capital expenditures are estimated at $31.7 million and projected cash flows of the project are expected to be positive in the second year of production, two years after the commencement of construction.
Those estimations were based on $55 per pound sales price, but current uranium spot price is sitting below $30 per pound and analysts at RBC Capital Markets recently lowered their long-term expected price from $65/pound to $50/pound.
About 90% of the uranium fuel used today in US reactors is imported, official figures show. Last year, the country produced around 174,000 pounds of uranium, the lowest annual total in more than 70 years.
Last week, the Senate released drafts of 2021 funding that allocate $150 million for the US Uranium Reserve. If passed, the measure would enable the Department of Energy to invest in the sector and so stimulate domestic industry growth.