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NI 43-101 compliant resources that include 10.96 million pounds U3O8 Measured and Indicated and 4.73 million pounds U3O8 Inferred. |
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Additional historical resources of approximately 8.41 million pounds U3O8*. |
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Amenable to In-Situ Recovery (ISR). |
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One of the best undeveloped major uranium deposits in the western U.S. |
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Pre-Feasibility Study demonstrated excellent technical and economic feasibility with a 5 year timeline to production. |
| *Not NI 43-101 compliant and not to be relied upon. | |
In April 2010, Bayswater acquired the Reno Creek uranium project in Wyoming . Reno Creek is an advanced, near-surface project at the permitting/feasibility stage. The property boasts NI 43-101 compliant resources of approximately 15.6 million pounds U3O8, with an additional historical resource 8.41 million pounds U3O8 (not NI 43-101 compliant and not to be relied upon), plus significant potential to increase these resources through low-risk exploration. As part of the acquisition, Bayswater will also acquire an extensive database, deep well injection permit and a disposal well. The property is highly amenable to ISR production, is close to main infrastructure, and located within a highly favourable political jurisdiction for uranium mining. These factors allow for a fairly predictable 5 year development timeline. At the end of September, 2009, the Company received a positive Pre-Feasibility Study (PFS) report from TREC, Inc. that demonstrates the excellent technical and economic feasibility of the Reno Creek project.
Location
The Reno Creek property consists of approximately 17,500 acres of claims and leases in the Powder River Basin of northeastern Wyoming, a region known for hosting roll-front uranium deposits. The property is located in close proximity to major infrastructure, power and other ISR facilities, such as Cameco's producing Smith Ranch ISR facility 30 miles to the south, and Areva's idled Christiansen Ranch ISR operation 25 miles to the northwest.
Geology & ISR Amenability
The Reno Creek deposits average about 320 feet deep, ranging from 170 feet to 450 feet in depth, are below the water table and are considered to be highly 
amenable to In-Situ Recovery (ISR) of uranium. Extensive metallurgical and engineering studies and a pilot plant operation during the 1980s and 1990s projected recoveries of up to 76%. The deposits have excellent ISR characteristics including compact shape, good strike and lateral continuity, average thickness of about 12 feet (3.66 m) and excellent permeability, porosity and transmissivity. The terrain of the Project area and underlying stratigraphy are both relatively flat which also provides for ideal conditions for permitting and ISR mining of uranium.
Resources
The Reno Creek project consists of NI 43-101 compliant resources of 10.96 million pounds of U3O8 at an average grade of 0.066% U3O8 Measured and Indicated, and 4.73 million pounds of U3O8 at an average grade of 0.063% U3O8 Inferred. These calculations are based on separate reports on the Reno Creek and Southwest Reno Creek Uranium Properties dated January 30, 2009 by Charles D. Snow, P.G. In addition, the project contains approximately 8.41 million pounds of U3O8 in historical resources grading 0.083% U3O8 in the adjoining Pine Tree Trend as documented by Pathfinder Resources Ltd. in a 1980 report and Rocky Mountain Energy in a report dated April 1986. This estimate is not NI 43-101 compliant and should not be relied upon. The Company believes there is good potential for converting the historical resources to NI 43-101 compliant resources and for additional resources in the immediate vicinity of the known deposits within the property.
Exploration & Development
The Reno Creek and Pine Tree Trend deposits were drilled extensively in the 1970s and 1980s by Utah International (a predecessor of Areva) and Rocky Mountain Energy (RME) with its partners Mono Power and Halliburton. RME and partners also conducted extensive metallurgical testing, demonstrating recoveries up to 76% using a bicarbonate leaching solution or lixiviant. During the early 1980s, RME and its partners licensed, through the Nuclear Regulatory Commission (NRC) and the Wyoming Department of Environmental Quality (WDEQ), and then constructed and operated an ISR pilot plant to demonstrate the technical and economic feasibility of the project. At the conclusion of the demonstration, the aquifer was successfully restored in accordance with NRC and WDEQ regulations and the project was decommissioned and the license terminated. RME also prepared a feasibility study at the time, showing that the project was economical using a 71% recovery rate and uranium prices at $22 per pound of U3O8.
In 1992, Energy Fuels acquired the property from RME & partners and during the late 1990s, Energy Fuels merged with International Uranium Corporation who prepared a confirmatory feasibility study and advanced the project close to full licensing, but abandoned the effort due to very low uranium prices. Prior feasibility studies by RME and Energy Fuels, although useful, do not indicate current economic viability of the Project. In 2001, IUC sold the property to Rio Algom who in turn sold it to Power Resources, a wholly owned subsidiary of Cameco Corporation. Cameco dropped the property in 2003 due to low uranium prices and Strathmore subsequently staked the current claims covering the deposits. Strathmore entered into a joint venture with American Uranium on the project in 2007. American Uranium then acquired a data base and deep well injection permit from Cameco on the Reno Creek deposit.
In September 2009, Bayswater announced that it had commissioned TREC Inc., an engineering firm, to prepare a Pre-Feasibility Study (PFS) to independently evaluate the development of the Reno Creek Uranium Project. The report demonstrated that the project has excellent technical and economic feasibility for development. The analysis showed the following:
- Expected start of production no later than the beginning of 2015, subject to approval by State and Federal government authorities.
- Recovery of approximately 7.6 million pounds, based on a 70% recovery factor.
- Production would take place over six years.
- Capital cost: US$48.2 million.
- Cash operating costs: US$13.72 million per pound U3O8.
- Operating costs (Includes all-in operating and capital costs): US$26.39 per pound U3O8.
- Operating cash flow: US$311 million, or US$41.18 per pound U3O8, based on average product price of US$67.57.
- Internal Rate of Return (IRR): 79%
- Net Present Value (NPR): US$164 million using an 8% discount rate.
Bayswater plans detailed scoping sessions with the regulatory agencies in preparation for completing baseline environmental, hydrological, and engineering activities during 2010 and 2011. Environmental baseline studies that have been previously started and will be completed by the Company include flora and fauna, soils, archaeological and cultural resources, surface and ground water hydrology, wetlands, water and air quality and meteorology. The Project has already received a permit to install baseline ground water monitoring wells which will be used for both hydrologic and water quality studies, including any necessary pump tests. Additional mine and plant facility engineering required for licensing will be completed during the time period. The Company plans to submit its applications for permits and licenses by the end of 2011. The Project should advance to the feasibility stage during 2014 with construction to follow and production to commence in 2015.
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Last updated April 9, 2010
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