January 27, 2009
On September 23, 2008, Energy Fuels (‘EFR’) was notified that the Company had been randomly selected by the Ontario Securities Commission (‘OSC’) for an issue oriented review of its continuous disclosure record. At the request of the OSC, the Company has amended and re-filed the five NI 43-101 Technical Reports filed by Energy Fuels in 2008 addressing the classification of resources at the Whirlwind, Energy Queen, Willhunt, Torbyn, and Farmer Girl properties.
The principal impact of the changes to these Technical Reports is a reduction of the total “Inferred Resource” category for all five properties combined to 2.34 million pounds U3O8 and 7.88 million pounds V2O5 contained in tonnages and at grades detailed in the table below:
This is a reduction of about 1.2 million lbs. of inferred U3O8 resource and about 5.4 million lbs. of inferred V2O5 resource from the values originally reported. The Measured and Indicated Resources originally reported remain unchanged.
Drilling recommended in the original 43-101 technical reports and completed in 2008, will result in an overall increase in the measured and indicated resource. Much of that increase will come in areas originally classed as “Inferred Resource” by EFR, but removed from the Inferred category in the amended reports after the OSC’s review of EFR’s disclosure compliance with 43-101 and CIM resource definitions.
Specific disclosure issues raised by OSC and addressed by Energy Fuels’ amendments included:
1.) “Diluted to Mining Thickness”
There was confusion regarding dilution at our properties. OSC interpreted the Technical Reports to mean that EFR would be extracting a full seven feet of material in all of our mining and had therefore significantly understated mine dilution.
The uranium deposits in the Salt Wash Member of the Morrison Formation in the Uravan Mineral Belt are typically thin (1 to 4 ft. thick mineralized layers). Each report was amended to include a discussion of the “split-shooting” or “resuing” mining method which is necessary and customary in Uravan Mineral Belt uranium mines (both historic and current). In this expanded explanation, EFR corrected and clarified the original statement “…7.0 feet, the assumed minimum mining thickness” by discussing 7.0 feet as theminimum stope height necessary to advance the stope. This, coupled with the description of split-shooting (blasting and hauling ore and waste from the same face with two, separate operations), clarifies the one foot of waste incorporated in the phrase “diluted to mining thickness” in the resource estimates.
2.) “Cut-Off Grade”
OSC requested justification for the various cut-off grades used in the reports.
Language has been added to each report, especially as footnotes in the resource estimate tables (Tables 17-1, 17-2, etc.) to help clarify the U3O8 cut-off used. The U3O8 cut-off grade is subjective. It varies from mine to mine and can even vary within the same mine for several reasons, including: a.) the greater than average thickness of some lower-grade blocks; b.) the location of a lower-grade resource block- relative to planned development drifts accessing higher-grade blocks, or the resulting lower mining costs for accessing lower-grade individual blocks in certain locations; and c.) blocks where the known V2O5 grades are much higher than the average, historic district V2O5:U3O8 ratio.
3.) “Grade/Thickness Cut-Off”
OSC requested clarification on our method for selecting polygons that meet minimum cut-off grades and when they applied a uniform 7 foot mining thickness, they felt that many of EFR’s resource blocks would not meet cut-off.
EFR does not use a Grade/Thickness (GT) cut-off for the same reasons discussed in Item 2. above. The fact that EFR resource estimates include two metals instead of just uranium is most significant. A possible method to address this issue in future reports could be a “net smelter return” per block based on recovered values of both metals.
4.) “Geologically Inferred Resource”
OSC pointed out that this term is prohibited under 43-101 and 2005 CIM standards, and further indicated skepticism as to the validity of much of the inferred resource reported by EFR in the original Technical Reports.
EFR and the Qualified Persons (‘QP’s’) examined each report and have reworded and expanded the individual reports concerning Inferred Resource estimates vs. Exploration Targets. Each amendment focused on evaluating each previously defined Inferred area to see if the methodology was correct and if terminology required a change to meet the CIM Standards and definitions, or, if the available data was not sufficient to meet the CIM definition of “Inferred”. Additional information (mention of known mineralized holes, expanded discussions of sandstone channels, trends, and favorable characteristics and estimated tons and grades) was added to the reports for the areas believed to qualify as Inferred Resources. Where this type of validating information was too sparse, the QP agreed with the OSC and changed the areas to Exploration Targets. These evaluations and changes (and subsequent discussions of draft versions of the amended reports with OSC) have resulted in the individual amended technical reports.
5.) Other Terminology and Presentation Issues
OSC requested clarification of the nature of the resource estimate at Willhunt (historic vs. current), the use of proper CIM resource categories, the presentation of resource summaries in tabular rather than text form, and specifically instructed that EFR refrain from referring to potential mine production as “ore” because of the economic feasibility implication attached to that term. EFR amended all the Technical Reports to comply accordingly.
Stephen P. Antony, P.E., a Qualified Person as defined by National Instrument 43-101, has reviewed and approved the content of this press release.
Energy Fuels Inc. is a Toronto-based uranium and vanadium mineral development company actively rehabilitating and developing formerly producing mines. With more than 40,000 acres of highly prospective uranium and vanadium property located in the states of Colorado, Utah and Arizona, the Company has a full pipeline of additional development prospects. Energy Fuels, through its wholly-owned Colorado subsidiary, Energy Fuels Resources Corporation, has assembled this property portfolio along with a first class management team, including highly skilled technical mining and milling professionals based in Lakewood and Nucla, Colorado and Kanab, Utah.
This news release contains certain “Forward-Looking Statements” within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended and “Forward Looking Information” within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein are forward-looking statements and forward looking information that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company’s expectations are disclosed in the Company’s documents filed from time to time with the British Columbia, Alberta and Ontario Securities Commissions.
‘GEORGE E.L. GLASIER’
President & CEO
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