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FEBRUARY 6-19, 2017 / VOL. 103 ISSUE 3 / WWW.NORTHERNMINER.COM

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In some circles, George Glasier — founder of Energy Fuels (TSX: EFR; NYSE-MKT: UUUU) and more recently, Western Ura-

nium (US-OTC: WSTRF) — is thought of as an industry rock star.

During his first year as president and CEO of the wildly successful Energy Fuels — a

company Glasier set up in 2006 that is now the largest uranium producer in the U.S. — the stock price surged 4,500%.

And in the two years since he set up Western Uranium, Glasier has acquired seven past-producing mines, some from Energy Fuels, and all within a 330 km radius in Utah and Colorado. They contain 100 million lb. uranium and 36 million lb. vanadium.

“George is the Bono of uranium,” says a former fund manager and longtime friend, likening Glasier’s stature to that of the Irish

lead singer for rock band U2. “No one in the industry has his uranium experience. No one.”

The four years Glasier spent at Energy Fuels were heady ones, with the uranium oxide price marching steadily higher from US$20 per lb. to US$135 per lb., before crashing back down.

“We were in an up-market and it was ex-citing,” Glasier recalls in an interview. “We went out to raise US$10 million and we got US$50 million. We’d give presentations and in the first 10 minutes they’d say: ‘Here, we want to sign up.’”

Western Uranium’s keys to success at Sunday complex

COLORADO | Glasier-led junior sees ablation technology, vanadium credits as big plusses

BY TRISH SAYWELLtsaywell@northernminer.com

Energy Fuels’ Race Fisher (left) and Western Uranium’s vice-president of operations Michael Rutter at a Sunday Complex uranium project in Colorado. WESTERN URANIUM

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Glasier left Energy Fuels in 2010 to pursue other business interests, but returned to the industry in 2014 to start Western Uranium. The junior’s flagship asset is the Sunday ura-nium mine complex, in western San Miguel County, Colorado. The complex consists of five permitted mines and was most recently owned and operated in 2009 by Denison Mines (TSX: DML; NYSE-MKT: DNN).

“It’s in great shape. There’s nothing that needs to be refurbished,” Glasier says of Sunday. “The contractor said they could be producing there in 30 days … so five of our seven mines could be put back into production within 30 days, the other two, probably in 90 to 120 days.”

Building Western Uranium has been just as exhilarating as his early days at Energy Fuels, Glasier says, but he admits that acquiring uranium assets in a down-market has been an advantage.

“I was buying property at Energy Fuels for sky-high prices,” he says, adding that Western

Uranium “is a case of building a big asset base with the expectation of prices going up, so it’s equally exciting, but in a different way.

“It took Energy Fuels 10 years to get over 100 million lb. uranium, and we did it (at Western Uranium) in two years,” he adds. “We’re working on other acquisitions and right now companies can’t get any money, so they’re interested in deals. We just raised $1 million in a bad market and at a bad time of year, so with a little bit of money, we can do a lot of stuff.”

What is perhaps most exciting for Glasier this time around, however, is a new patented technology that can be used on sandstone-hosted uranium-vanadium deposits called “ablation,” which Western Uranium has the exclusive licence to use for the next 25 years.

The technology, developed by scientists in Casper, Wyo., dramatically lowers transpor-tation and milling costs because it removes between 80% and 90% of the waste rock through

a process that uses kinetic energy rather than chemicals.

With ablation, particles in a slurry are force-fully driven against each other, which loosens and separates the uranium and vanadium coating from the sand.

The process is quite simple. First, the sand-stone rock is crushed into half the size of a fingernail. Then a slurry is formed, 20% of which is composed of the sand crushed from the rock, and 80% of which is water. The slurry is then ejected from pipes (imagine garden hoses with nozzles) that face each other — about 10 cm apart — that smash the particles in a central collision zone.

Glasier estimates that by lowering the cost of transportation and milling and tailings, ablation technology could drive down the cost of producing a pound of uranium by as much as 50%.

Eliminating so much of the waste rock and leaving it at the mine site, for example, would

A five ton-per-hour ablation processing plant which, which Western Uranium has exclusive licence to use for 25 years. WESTERN URANIUM

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send transportation costs down from US$25 per tonne to US$2.50 per tonne, while milling expenses could fall from US$120 per tonne down to US$25 per tonne. Altogether, Glasier says, Western Uranium could process a tonne of rock containing 5 lb. recovered uranium oxide and 20 lb. recovered vanadium oxide for US$133 per tonne, including mining costs.

The savings on transportation and milling costs also enable Western Uranium to mine lower-grade material.

Glasier says the company has already re-ceived inquiries about the technology from other uranium companies in Africa, Australia and North America. So far, Western Uranium has tested ore from three companies in Africa, including GoviEx Uranium (CVE: GXU). “They’ve just announced we tested their ore but we haven’t done a deal,” Glaser says.

The mining executive notes that a lot of uranium companies with projects in Africa would need a uranium oxide price of at least US$70 per lb. to be economic, and ablation technology would help them get into produc-tion at a lower uranium price.

Western Uranium is looking at a much lower threshold to get into production, given the cost-reducing ablation and its vanadium credits. Moreover, prices for vanadium — an infrastructure metal used as a key alloy to strengthen steel — have been on a tear over the last six months, and now sit at US$5 per pound.

“We’re still waiting for the uranium price to recover a bit before we put it into production,” Glasier says of the Sunday complex. “Assuming the ablation technology and with vanadium a key component at US$5 to US$6 per lb., you’re probably looking at US$35 per lb. uranium.

“We have a number at mid-US$20 per lb. uranium for all-in sustaining costs, so at US$30 per lb. uranium you’re making money, at US$40 per lb. uranium you’re making more and at US$50 per lb. you’re making a lot.

“We haven’t done a PEA on the Sunday mine, we’re just using numbers common in the area and standard production costs, and this is what comes out of it — the ablation technology reduces the mass we ship to the mill by that much!”

Christopher Ecclestone, an analyst at Hall-garten & Co., a boutique investment firm in the U.K., says that with vanadium as a second arrow in its quiver, the Western Uranium story becomes even more compelling.

“With the tailwind of soaring vanadium prices — combined with vanadium being a prime ‘infrastructure metal’ in Trumplandia and the prospect of ‘onshore’ vanadium pro-duction in the U.S. — make the story so much more than just a uranium prospect,” he wrote in a recent research note. (Vanadium may also play a bigger role in battery manufacturing.)

In addition, China, Russia and South Af-rica account for 90% of the global supply of vanadium, and Ecclestone says that “some estimates” suggest demand for vanadium “might grow at 7% per annum from 2010 to 2025, based on the steel applications alone.”

Romeo D’Angela, a Toronto-based former fund manager and now a shareholder in the company, first bought stock in the spring of 2016 and added to his position in December. “You can treat it as a uranium company with a significant vanadium credit, or vice versa, and the cherry on top is the ablation process. And from everything I’ve read about it, it’s a simple process.”

D’Angela says he was impressed because the company has “multiple” catalysts. Not only does it have proven pounds of both uranium and vanadium in the U.S., he says, but when he did the math and valued it relative to other uranium companies, he found that it is “the cheapest by far — by about half — of the better-known names in the sector.”

Companies like Uranium Energy (NYSE-

MKT: UEC) , Cameco (TSX: CCO; NYSE: CCJ), Ur-Energy (TSX: URE), Energy Fuels (TSX: EFR; NYSE-MKT: UUUU), Berkeley Energia (LSE: BKY), Dension Mines (TSX: DML; NYSE-MKT: DNN) , Blue Sky Ura-nium (TSXV: BSK), Fission Uranium (TSXV: FCU; US-OTC: FSSIF), Mega Uranium (TSX: MGA), Nexgen Energy (TSX: NXE; US-OTC: NXGEF) and Uranium Resources (NASDAQ: UREE), for instance, trade above US$1 per lb. in situ, while Western Uranium, which has the second-largest uranium package in the U.S., trades at a multiple of US25¢ per lb. in situ. Its market capitalization is just $30 million.

Other catalysts for the company could in-clude licensing out the ablation technology to other uranium companies for a fee or royalty. The technology could also be used by the U.S. Department of Energy to clean up old uranium waste dumps across the United States.

And like Ecclestone, D’Angela says that a Donald J. Trump presidency would likely heighten demand for both vanadium and uranium, while throttling back on regulation.

“I’m not necessarily a fan of everything he does … but what I like about it from a resource investor perspective is that he’s going to sig-nificantly tie the hands of the Environmental Protection Agency to reduce unnecessary regulation, or over-regulation, so a lot of regulations in the nuclear-uranium business could be curtailed so that the company can function easier and cheaper.”

Western Uranium already has passed several milestones. It signed its first uranium off-take contract with a U.S. utility in November 2015, and is in discussions with other utilities for more.

It also has an agreement with Energy Fuels to use that company’s White Mesa mill on a toll-milling basis, while Glasier has permitted a yet-to-be-built uranium mill called Pinon Ridge in Colorado — the first uranium mill permitted in the U.S. in a quarter century. (Glasier owns the permit and project, and has signed a letter of intent with Western Uranium to access the facility, once it is built.)

Says Glasier: “If we start to get a recovery in uranium, investors are going to see the opportunity.” TNM

“IT TOOK ENERGY FUELS 10 YEARS TO GET OVER 100 MILLION LB. URANIUM, AND WE DID IT IN TWO YEARS.”GEORGE GLASIERPRESIDENT AND CEO, WESTERN URANIUM