Wyoming is arguably the most important uranium producing state in the US. It has led the country in uranium mining for 30 years and since the first uranium mines started operating in 1951, the state has produced more than 238 million pounds of U₃O₈ concentrate (yellowcake).
In January 2024, a report published by the Wyoming State Geological Survey noted that after decades of low production, optimism is growing among domestic uranium producers, particularly in Wyoming.
“Increasing support for nuclear energy, strengthening uranium prices, and geopolitical events are driving renewed interest in American uranium. Over the past year, Wyoming’s uranium industry has been the first to react by reviving activity at existing mines, increasing staff, and pursuing further exploration and development,” the report said.
Wyoming hosts the largest-known economic uranium ore reserves in the US, which are located across the Powder River Basin, Great Divide Basin, Shirley Basin, and Gas Hills.
Emerging uranium miner GTI Energy (ASX:GTR) is progressing its flagship Lo Herma ISR Uranium Project, which is located in Converse County, Powder River Basin in Wyoming, some 15 miles north of the town of Glenrock and within 60 miles of five permitted in-situ recovery (ISR) production facilities.
Facilities include Uranium Energy Corporation’s (NYSE:UEC) Willow Creek (Irigaray and Christensen Ranch) and Reno Creek ISR plants, Cameco’s (NYSE:CCJ) Smith Ranch-Highland ISR facilities, and Energy Fuels’ (TSX:EFR) Nichols Ranch ISR plant.
As GTI Energy Executive Director Bruce Lane explains to Mining.com.au, the main players in the Wyoming uranium space include Cameco, Uranium Energy Corporation, Ur-Energy, and Energy Fuels, which are GTI Energy’s closest neighbours, as well as enCore (TSX-V:EU) – and now GTI Energy.
Why Wyoming?
The Powder River Basin, within which the company’s Lo Herma project is situated, has extensive production history with numerous ISR uranium resources, central processing plants, and satellite deposits.
Lane tells Mining.com.au that GTI Energy has the right project at the perfect location in arguably the best uranium jurisdiction in the US.
“Wyoming is the second least populous US state and the second largest energy producing US state and one of only four ‘agreement states in the US that handle uranium mine permitting at the state level – hence there are seven permitted facilities and numerous deposits within 110 miles of our projects – the most of any state,” he says.
In Wyoming there are significant resources in the ground with potential for significantly more and the largest uranium companies in the US are quite active in the landlocked state. Lane notes it will however take time and a sustained improved uranium price environment for historical uranium resources to be updated and mines to be brought online.
GTI Energy anticipates mineral resource estimate (MRE) and exploration target updates for Lo Herma to be delivered by year-end. A decision will then be made on starting an interim Scoping Study for the project, as reported by Mining.com.au.
Lane tells this news service “the study will be an order of magnitude technical and economic study of the potential economic viability of GTI’s mineral resources at Lo Herma”.
It would include appropriate assessments of realistically assumed modifying factors (assumptions) together with any other relevant operational factors that are necessary to demonstrate at the time of reporting that progress to a Prefeasibility Study can be reasonably justified, the exec says.
“A positive Scoping Study would logically be followed, subject to funding being available, by further drilling in the second half of 2025 after which a Prefeasibility Study may be conducted.”
The study will include assumptions and estimates for annual production rates, life of mine, capital costs, operating costs, uranium price and cost of capital. The permitting process could also be started during this period.
Should GTI Energy decide to proceed with the study the company anticipates it will be completed in the H1 2025, possibly in the first quarter.
There is scope for GTI Energy to expedite Feasibility Studies given its neighbour Ur-Energy proceeded to construct its Shirley Basin satellite ISR project based on a recently updated NI-43 101 Preliminary Economic Assessment (PEA) study, which is equivalent to a JORC interim Scoping Study.
“Especially in the case of a sandstone hosted ISR amenable uranium deposit in Wyoming which is demonstrated to be amenable to alkaline leach, there are numerous analogous projects with very similar characteristics in the immediate vicinity,” Lane explains.
“So long as the deposit is well understood, there is generally a high degree of certainty regarding the above ground operational capex and opex without the need for extensive investment in processing experimentation or a pilot plant.”
High potential for Lo Herma
GTI recently completed the first phase of a staking program to secure additional ground along trend at Lo Herma. Phase one has increased Lo Herma’s footprint by 300 acres to the north of Section 4 and phase two, to be completed in December, is expected to add 143 acres to the south of Section 4. Staking is estimated to extend the mineralised trends at Lo Herma by circa 1 mile (1.6km).
The final phase of its 2024 drilling campaign is expected to be completed during December with construction of three hydrogeologic and water monitoring wells.
Lo Herma drill core samples have been logged and split for chemical assay and metallurgical testing. Samples for assays have now been submitted to the lab. Upon receipt, composites will be prepared for metallurgical testing under alkaline leach conditions.
Analysis will also include a comparison of chemical assays to gamma probe field assays. Results are expected in early 2025.
During Q3 2024, GTI Energy had all permits, bonds and access arrangements approved and put in place to begin 17,000m of mud rotary drilling at the Lo Herma ISR project.
GTI’s 2024 drilling program permit at Lo Herma comprised up to 76 drillhole locations including up to five hydrogeologic and groundwater monitoring wells. This exploration drilling focused on expanding the resource areas and where possible, upgrading the current mineral resource classification.
Collection of important data including, hydrogeologic parameters of the mineralised aquifers and collection of rock core samples for metallurgical testing will be also prioritised.
The Lo Herma in-situ recovery uranium project has so far delivered inferred resources of 5.71 million pounds U₃O₈ which, as mentioned, lies within 110 miles of seven permitted ISR uranium production facilities.
GTI Energy is focused on defining economically viable ISR amenable uranium resources in Wyoming. ISR recovery is considered the lowest cost and least environmentally damaging form of uranium mining especially when an alkaline leach and ion exchange (IX) processes are utilised.
Low environmental impact ISR mining, also called in-situ leach (ISL) or solution mining, uses an alkaline or acid ‘lixiviant’ solution, injected and extracted using a series of wells to leach subterranean ores.
After the lixiviant is injected into the subterranean orebody (within an aquifer), the uranium-bearing solution is eventually pumped to the surface and then uranium is recovered in a processing plant. Uranium pregnant solution from production wells is pumped or trucked to the treatment plant where uranium is recovered typically using resin/polymer ion exchange (IX) or solvent extraction (SX). Clean water is reinjected into the aquifer.
Lane says the defining characteristics of ISR uranium projects, which provide about 60% of the world’s uranium – and why these types of assets are attractive from both a mining and investment perspective – comes down to complexity and costs.
Alkaline (rather than acid) leach chemistry ISR projects, are usually not metallurgically complex which, combined with eliminating the need to excavate the ore, usually indicates very low environmental impact, modest capex and lowest quartile opex, the exec says.
“ISR projects are also generally fast to construct,” Lane adds.
Electrified road ahead
This is a particularly attractive mining and investment proposition for GTI Energy given the current serious uranium supply shortage and a sharp increase in future uranium demand is on the horizon.
As Lane explains to Mining.com.au, the future for uranium will be electrified.
“Future demand for nuclear energy, driven by the net zero agenda, the electrification of everything, China, India and the global race to win the AI revolution will drive a sharp increase in future uranium demand,” he says.
“The uranium price, like other commodities, is ultimately driven by supply demand dynamics. Current annual global primary uranium mine production of around 145Mlbs is insufficient to meet the current (and rapidly rising) annual global uranium demand of circa 185Mlbs.
“The US for example requires 50Mlbs annually and is planning to triple that requirement based on their COP 29 pledge, along with 31 other countries, to triple nuclear – as an aside the US historically produced a peak of 44Mlbs in the 1980s but currently produces less than 5% of its annual uranium needs.
“So there is currently a significant supply shortage and new supply will not emerge unless term contract uranium prices increase beyond the industry incentive price.”
“So there is currently a significant supply shortage and new supply will not emerge unless term contract uranium prices increase beyond the industry incentive price”
The current uranium price spot price of US$78/lb (term price $81) is still below the incentive price for new build projects, according to Lane. The lower cost, brownfields restart projects, including ISR mines, with sunk capital costs are restarting based on current long term contract uranium pricing however most greenfield developments are yet to commence construction.
Earlier this year, the uranium spot price surged just over US$100/lb, reaching a high not seen for 16 years, as reported by this news service.
Lane adds that the current price does not yet reflect the true costs of exploration to establish new mines because current production is often from deposits that were drilled many decades ago and changed hands at heavily discounted prices during the decades post Fukushima.
“I believe that the term contract price required, in order to incentivise significant new mine production to emerge, is significantly higher than that currently reported $80 to $82 per pound,” the exec says.
As Lane explains, a historical glut of above ground ‘mobile’ uranium inventory is now exhausted, which has led to increasing uranium pricing over the last few years without any discernible corresponding supply response.
“New supply is required now and is exceptionally slow to come on line in any meaningful volume,” he adds.
Since drilling started at the Lo Herma project in July 2024 the company has received positive indications of Lo Herma’s potential to be a significant supplier of uranium in this electrified future.
The drill program was designed to further expand the mineral resource, upgrade the classification of the current inferred mineral resource, and collect additional geochemical and hydrogeologic data necessary to advance the potential Scoping Study.
Uranium assay values were obtained by probing the drillholes with a wireline geophysical sonde which includes a calibrated gamma detector, spontaneous potential, resistivity, and downhole drift detectors. The gamma detector senses natural gamma radiation emanations from the rock formations intercepted by the drill hole. The gamma levels are recorded on the geophysical logs.
Using calibration, correction, and conversion factors, the measured gamma radiation is converted to an equivalent uranium ore grade (eU3O8) and compiled into uranium intercepts based on a minimum cutoff grade of 200ppm eU3O8 in half-foot intervals. This is the industry standard method for uranium exploration in the US.
In addition to the eU3O8 assay data, GTI has collected rock cores from the mineralised interval in multiple drillholes. This material has now been reviewed, sampled for assay, and is being utilised for radiometric equilibrium studies.
According to the January 2024 report published by the Wyoming State Geological Survey both Wyoming and total US production peaked in 1980 at 12.1 million pounds and 43.7Mlb of yellowcake, respectively.
In 2014, national domestic production reached a modern-day high of only 4.9Mlb of yellowcake, which was produced from 10 mines – five ISR mines in Wyoming (comprising 69% of domestic production), two ISR mines in Texas, one ISR mine in Nebraska, and two underground mines in Arizona. Mr Lane noted that Ur-Energy, UEC & Encore Energy are all back in production with Peninsula due to restart in late 2024 and Energy Fuels to follow suit in 2025.
“As a result of the promising national and global outlook for uranium demand and resultant successful contracting, one ISR mine in Wyoming restarted commercial operations in 2023, and two others are making preparations in anticipation of ramping up production in the next couple of years,” the report said.
Twenty-four other projects in Wyoming are in various stages of exploration or planning, with a significant increase in activity over the past few years, including GTI Energy’s Lo Herma.
Geophysical surveys were reportedly conducted for at least four sites, and drilling programs were carried out for at least eight projects in the state. Many projects in Wyoming are building off of a catalogue of historic exploration data to reaffirm previous assessments, delineate known mineralisation, and increase resource estimates while keeping expenditures low.
“While factors such as cost and reliable supply chains remain obstacles to expansion of nuclear power and the deployment of smaller-scale advanced reactors, the strength of Wyoming’s uranium industry is heavily reliant on the price of uranium, which is driven by demand from nuclear power. As local and global demand grows, so will Wyoming’s uranium industry,” the Wyoming State Geological Survey report notes.
As GTI Energy Executive Director Bruce Lane reiterates, there are significant resources in the ground in Wyoming with potential for much more and the largest uranium mining companies in the US are already active in the Mountain West subregion state of the western US.
“It will however take time and sustained improved uranium pricing for historical uranium resources to be updated and brought into production,” Lane adds.
Write to Adam Orlando at Mining.com.au
Images: GTI Energy & Rochelle Padua
