Azarga Uranium Corp. [AZZ-TSX; AZZUF-OTCQB] shares rallied in active trading Friday December 13 after the company said it has achieved a key milestone on route towards the planned development of its flagship Dewey Burdock uranium project in South Dakota.
The company said the Atomic Safety and Licensing Board (ASLB) has issued its final initial decision and resolved the final remaining contention for the Dewey Burdock Project Nuclear Regulatory Commission (NRC) licence in favour of the company and NRC staff.
The final Dewey Burdock Project NRC licence contention pertained to the identification and protection of historic and cultural resources for the purposes of compliance with the National Environmental Policy Act.
“We are extremely pleased with ASLB’s decision, which removes the last contention from the company’s flagship Dewey Burdock Project NRC license,” said Azarga President and CEO Blake Steele. “Resolution of the last remaining contention comes more than four years after ASLB issued its partial initial decision for the Dewey Burdock Project and marks a monumental achievement for the company,” he said. “The ASLB proceeding is now terminated and the Dewey Burdock Project NRC license is contention free for the first time since this proceeding commenced.”
Steele said the decision represents a key risk-reduction event and a significant step towards realizing the full value of the Dewey Burdock Project.
Azarga shares rallied on the news, rising 16.2% or $0.025 to 18 cents on active volume of 1.9 million. The shares are currently trading in a 52-week range of 10.5 cents and 28 cents.
Azarga is positioning itself to be America’s next uranium developer. In keeping with that plan, the company has been working to gain the approvals it needs to commence construction at its flagship Dewey Burdock Project, using low-cost in-situ recovery, (aka solution mining) methods.
Dewey Burdock is one of five U.S. uranium projects in the company’s asset portfolio. It also owns a 70% stake in the Kyzyl Ompul Project, which ranks as the largest known uranium deposit in the Kyrgyz Republic.
The 100%-owned Dewey Burdock Project is located in the Edgemont uranium mining district of South Dakota. It covers 12,500 surface acres and is divided into two resource areas known as Dewey and Burdock.
In December 2018, the company filed an updated NI 43-101-compliant resource estimate for the project, which is estimated to host 16.9 million pounds of uranium in the Measured and Indicated category and 818,000 pounds in the Inferred category.
In-situ recovery involves processing the uranium while it is still in the ground through the injection of catalyzing agents into the ore.
In situ-recovery is only possible in porous geological formations (like sandstone) which are amenable to such a technique. On average, the capital spend needed to put an ISR uranium project into production is less than 15% of the cost to build a conventional hard-rock uranium mine.
A Preliminary Economic Assessment for the project foresees annual production of 14.2 million pounds of uranium production over 16 years and steady state production of one million pounds annually. The initial capital cost is estimated at US$31.7 million pounds.
However, the company has said its immediate priority is to obtain the necessary permits and licenses it needs to advance the project to the construction phase.
With the NRC licence in good standing and now contention free, the company remains focused on working with the Environmental Protection Agency (EPA) to obtain the final Class 111 and Class V underground injection control permits in the near term.
In August, 2019, the EPA issued revised draft permits that addressed the majority of the comments submitted by the company. The comment period for the revised draft EPA permits is now closed.