“[Uranium] producers were for the most part out of business, meaning their deposits were closed and mines were on care and maintenance for the greater part of 10 years,” John Ciampaglia, CEO of Sprott Asset Management, told The Northern Miner in an August interview. “And in the last three years, the industry is basically trying to create a supply response in reaction to the price and demand signals that it’s seeing. So that’s really positive.”
Though the U.S. imports the majority of the uranium it consumes, this return of uranium activity to the states where the industry began after the Second World War represents efforts to align domestic supply with rising demand for nuclear. Those efforts are supported by tailwinds pushing the uranium sector in the U.S. including higher spot prices, government support for nuclear energy and uranium mining and increasing data centre demand for atomic power .
Renewed Southwest exploration
Among the most recent developments in the Southwest is Global Uranium and Enrichment’s (ASX: GUE; US-OTC: GUELF) initial resource for its Maybell project in Colorado in July. Uranium was mined intermittently near Maybell from the 1950s until the 1980s.
The company’s Maybell estimate is the second largest initial hard rock uranium resource in the Southwest and the most significant uranium development in Colorado since Denison Mines’ (TSX: DML; NYSE: DNN) Topaz operation closed in 2009.
The (Australian rules) JORC resource outlines 3.2 million inferred tonnes grading 849 parts per million (ppm) uranium oxide (U3O8) for about 6 million lb. U3O8.
“[The resource] confirms that the Maybell uranium project remains a substantial uranium district in the United States,” Managing Director Andrew Ferrier said in a release. “These results not only validate our exploration target but also highlight the significant potential to substantially increase upon this maiden resource.”
Global’s resource is based on a 25-hole, 3,200-metre drill program done last year. It confirms high-grade mineralization in the sands of the productive Browns Park Formation. In the past, the district yielded about 5.3 million lb. U3O8 at an average grade of 1,300 ppm.
Global Uranium’s exploration target at Maybell ranges between 4.3 million lb. and 13.3 million lb. U3O8, at grades between 587 ppm and 1,137 ppm, derived from a historic database of more than 3,000 drill holes.
Hard rock peers
Energy Fuels‘ (TSX: EFR; NYSE-A: UUUU) Bullfrog project in Utah follows Maybell in regional size with 10.5 million lb. U3O8. while its La Sal complex in Utah hosts 4.2 million lb. U3O8.
By grade, Maybell is in third place, behind Energy Fuels’ Pinyon Plain mine in Arizona with 8,100 U3O8 ppm and Bullfrog with 3,700 ppm U3O8, but above La Sal’s 400 ppm U3O8.
Speaking generally, Ciampaglia said the uranium industry is focused on discoveries that were made more than a decade ago but low uranium prices gave miners little reason to develop them.
“Now companies are finally submitting environmental reviews, permits, permit processes, and they’re raising capital in anticipation of building mines,” he said.
Return of production
Domestic production of uranium exceeded 10 million lb. U3O8 annually from the 1950s until well into the 1980s, peaking at 43.7 million lb. U3O8 in 1980, according to the U.S. Energy Information Administration (EIA). But imports from other countries like Canada, Kazakhstan and Australia began to overtake domestic output in 1990, until American production declined to a low of 174,000 lb. U3O8 in 2019.
Output has been slowly rising since then, increasing to 200,000 lb. U3O8 in 2022 then down to 50,000 lb. U3O8 in 2023, and then shooting up to 700,000 lb. U3O8 last year.
In-situ recovery (ISR) mining in Wyoming has accounted for most U.S. production over the last several years, but since last year’s first quarter, output has shifted to sites in the Southwest, EIA data show.
That production has been filled by EnCore Energy’s (Nasdaq, TSXV: EU) Alta Mesa and Rosita ISR facilities in Texas, which had both been idled for more than a decade, and Energy Fuels’ White Mesa Mill in Utah. Energy Fuels’ La Sal Complex mines in Utah, which were put into care and maintenance in 2019, restarted in 2023 and its Pinyon Plain underground mine in Arizona started fresh production around the same time.
After the three mines ramped up output in 2024, they produced 151,000 lb. U3O8 in this year’s first quarter and surged to 665,000 lb. U3O8 in the second quarter, with Pinyon Plain dominating.
The Rosita plant restarted in November 2023 after it was idled since 2008 due to low uranium prices, and Alta Mesa restarted in June 2024.
Permit pluses
Meanwhile, the Trump administration’s efforts to accelerate development permitting have given traction to uranium projects in the region.
Most recently, Laramide Resources’ (TSX: LAM) Crownpoint-Churchrock and La Jara Mesa projects in New Mexico were granted FAST-41 covered status by the U.S. Permitting Council in late May. Also in New Mexico, private developer Grants Energy’s Precision ISR project also joined the fast track.
Earlier in May, the United States Department of the Interior approved Anfield Energy’s (TSXV: AEC; US-OTC: ANLDF) Velvet-Wood uranium and vanadium mine in Utah, making it the first project to be greenlit under an accelerated 14-day environmental review timeline. The site, where those metals were mined from 1979 until 1984, was recognized due to its existing infrastructure which would create less of an environmental footprint than new construction.
While the permitting boosts are spurring exploration and development, Ciampaglia noted that most of the U.S’ key deposits have already been mined, and it could be challenging to bring new discoveries to market.
“With uranium mining, the permitting process is very long, you’re dealing with a radioactive material. There are more complexities than other types of mines,” he said. “But the will is there, the government incentives are there. We have clarity around policy. This is a really good opportunity for production in the U.S. to revive itself, but it’s going to take time.”
- With files from Henry Lazenby
