Mexico’s proposed higher mining royalties could block nearly $7bn in investments
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The companies making up the 2021 top ten list of US-based mid-tiers and juniors, excluding coal and precious metals, have seen some of the most dramatic increases in valuations as their market caps surged over the course of the last year. This ranking is based on the companies’ market capitalizations as of July 7, as compiled by MiningIntelligence.
Market capitalization: $773 million
The runaway success story of the last year has been Energy Fuels (TSX: EFR; NYSE: UUUU), which did not make the ranking in 2020 but has surged to the top position with a market cap of $773 million, thanks to the renewed interest in nuclear energy and rare earth elements (REEs).
The Colorado-based company is now the leading producer of uranium in the U.S., as well as a major producer of vanadium and an emerging producer of REEs. It has assets in Utah, Wyoming, Texas, Arizona, Colorado, and New Mexico. These include its key uranium production centres: the White Mesa mill in Utah, the Nichols Ranch in-situ recovery project in Wyoming, the Alta Mesa in-situ recovery project in Texas and the Pinyon Plain mine in Arizona.
Located in southeastern Utah, White Mesa is the only conventional uranium mill currently operating in the U.S., with a licensed capacity of over 8 million lbs. of U3O8 per year. It also has the ability to produce vanadium when market conditions warrant, as well as REE carbonate from various uranium-bearing ores.
In early July, the company sent the first shipment of mixed rare earth carbonate concentrate to Neo Performance Materials’ (TSX: NEO) Silmet rare earth separation facility in Estonia, where it will be separated into rare earth oxides and other rare earth products. The 20 tonnes of concentrate were produced at Energy Fuels’ White Mesa mill and is the first of an expected 15 shipments to be sent to Neo’s facility, creating a new rare earth supply chain linking the U.S. to Europe. The two companies also signed a definitive supply agreement under which Energy Fuels can send all or a portion of its rare earth carbonate concentrate to Neo’s Silmet processing facility for a minimum period of three years.
Market capitalization: $546 million
Uranium Energy (NYSE-AM: UEC) maintains its number two spot on the top ten list, but the Texas-based company has seen its market cap almost triple from $186 million in late-July 2020 to $546 million this year.
The uranium exploration and mining company’s operations are focused around its Hobson in-situ recovery uranium processing facility, located about 100 km northwest of the Texas city of Corpus Christi. The plant is central to the company’s other assets in the southern part of the state, including the Palangana in-situ recovery mine and the fully permitted Burke Hollow and Goliad in-situ recovery projects. Uranium Energy also has assets in Wyoming, New Mexico, Arizona, Colorado, Saskatchewan and Paraguay.
The company’s Palangana mine began production in late 2010. The measured and indicated resource estimate for Palangana is 357,000 tonnes grading 0.135% U3O8 for 1.06 million lbs. U3O8, with inferred resources of an additional 298,000 tonnes grading 0.176% U3O8 for 1.2 million lbs. U3O8.
In May, the company announced it had increased its physical and equity uranium holdings, including the acquisition of 200,000 lbs. of warehoused uranium. Uranium Energy now has 2.3 million lbs. of warehoused uranium in the U.S. at a volume weighted average price of about $30 per lb. with various delivery dates out to June 2023 that can be processed through its Hobson facility.
Market capitalization: $416 million
Denver-based Intrepid Potash (NYSE: IPI) has risen from its fifth position in 2020 to take the number three spot this year. Intrepid is a supplier of high-quality potassium, magnesium, sulfur, salt and water products used in agriculture, animal feed and the oil and gas industry. The company is the only US producer of muriate of potash, which is used in several industrial applications and as an ingredient in animal feed. It currently supplies about 3.5% of the country’s annual consumption of muriate of potash.
Intrepid’s mineral production comes from three solar solution facilities at Carlsbad, New Mexico, and Moab and Wendover in Utah. It also has a conventional underground mine, also located at Carlsbad. The Carlsbad mine hosts one of the largest known reserves of langbeinite, a naturally occurring fertilizer that the company markets under the brand name Trio. Trio is a specialty fertilizer, which delivers potassium, magnesium and sulfate in a single particle.
The company saw strong domestic sales volume for potash and its Trio fertilizer in the last quarter of 2020, as favourable weather, rising commodity prices and compelling farm economics drove early season fertilizer demand that continues into 2021.
Intrepid also serves the oil and gas, de-icing and dust control industries. Its Carlsbad location produces premium 10 lb. brine used by fracking operations in the US, while its Wendover facility produces liquid magnesium chloride, a critical compound for de-icing and dust control.
Market capitalization: $266 million
NioCorp Developments (TSX: NB; US-OTC: NIOBF) is focused on developing a superalloy materials project in southeastern Nebraska. The Colorado-based company plans to produce three commercial critical mineral products at its proposed Elk Creek mine: niobium, scandium and titanium. NioCorp is also considering the production of several magnetic rare earth products at the site.
Elk Creek would be North America’s only niobium/scandium/titanium project and include an advanced materials manufacturing facility located by the proposed underground mine. The superalloy metals found at the Elk Creek project include the highest-grade niobium on the continent, and one of the largest prospective sources of scandium in the world.
The company released a feasibility study in April 2019 that estimated average annual production at Elk Creek of 7,220 tonnes ferroniobium, 95 tonnes scandium trioxide and 11,642 tonnes titanium dioxide. The mine’s expected lifespan is 36 years. The study pegged initial total net capex for Elk Creek at $1.14 billion, with gross revenue of $20.8 billion over the life of the mine.
In April, NioCorp announced it had purchased a key land parcel associated with Elk Creek, giving the company ownership of the mineral rights to more than 90% of the project’s mineral resources and mineral reserves. In June, NioCorp initiated testing of mineralized material from Elk Creek, using high-pressure grinding rolls (HPGR) technology. HPGR technology is an energy efficient and low-emission alternative for reducing the size of the ore to enable the recovery of niobium, scandium, titanium and potential rare earth products. The testing involves taking about three tonnes of drill core from the site and reducing it to the one-millimetre size required for hydrometallurgical assessment.
Market capitalization: $241 million
Ur-Energy (TSX: URE; NYSE-AM: URG) has a number of uranium projects in Wyoming, the most important being its Lost Creek in-situ recovery facility. Other assets include the Shirley Basin and Lost Soldier projects, and the Lucky Mc Mine site, all located in the state, as well as the Excel project, the company’s first gold exploration venture located in west-central Nevada.
The Lost Creek property is composed of six individual contiguous projects about 61 km from the city of Casper in south-central Wyoming. The company began uranium production activities at its fully licensed Lost Creek project in August, 2013, with the first sales of yellowcake from the site made in December of that year. The other five projects at the property were acquired as exploration targets to provide supplemental resources.
An amended preliminary economic assessment issued in 2016 for the Lost Creek project was based on a resource estimate of 14.6 million lbs. U3O8 in the measured and indicated categories, with 6.44 million lbs. U3O8 in the inferred category. The company currently estimates the remaining life of the mine is between 12-15 years.
Since production began, Lost Creek has produced 2.7 million lbs. of U3O8 from the first two mine units at the property. The company now has nine licensed mine units, with six additional units added to the Lost Creek license in early 2021. This recent license amendment also increased the limit for annual plant production to 2.2 million lbs. U3O8, which includes wellfield production of up to 1.2 million lbs. U3O8 and toll processing up to another 1 million lbs. U3O8.
Market capitalization: $139 million
Another company making its first appearance on the top-ten list is Westwater Resources (NYSE-AM: WWR). The exploration and development company has seen its valuation increase because of its focus on U.S.-sourced mineral resources for clean energy production, especially from Westwater’s flagship Coosa advanced battery graphite project in Alabama.
Coosa is located about 80 km southeast of Birmingham and comprises 17,000 hectares within the historic, past-producing Alabama graphite belt, which was home to significant production from the late 1800s until the 1950s. Westwater acquired the mineral rights to the project in 2018 and Coosa is now the most advanced graphite project in the lower 48 states of the U.S., the company says.
A preliminary economic assessment for Coosa was completed in late 2015 and was based on an indicated resource of 71.2 million tonnes grading 2.39% graphitic carbon at a 1% cut-off grade, for 1.7 million tonnes contained/in-situ graphite, the largest graphite indicated resource in the U.S., according to the company. Inferred resources are 72 million tonnes grading 2.56% graphitic carbon at a 1% cut-off grade for 1.85 million tonnes contained/in-situ graphite.
The company has applied for a U.S. patent for a new, environmentally sustainable proprietary process for purifying graphite. Westwater initiated a pilot program at Coosa in late 2020 that has purified 16,675 kg of graphite material needed for battery production, including 1,700 kg of spherical purified graphite.
A definitive feasibility study is underway and scheduled for completion in the third quarter of this year. The company expects full scale production of battery-grade graphite from purchased feedstock to begin in 2022, with mining expected to commence at the Coosa deposit starting in 2028.
Market capitalization: $128 million
Mineral exploration company Texas Mineral Resources (US-OTC: TMRC) slips from the third position it held last year but continues to maintain a strong presence by targeting heavy rare earth elements (REEs), technology metals and industrial minerals at its Round Top Mountain deposit.
The Round Top project is situated about 135 km southeast of El Paso, near Sierra Blanca in the Texas county of Hudspeth. The main Round Top site is 385 hectares and Texas Mineral’s holds renewable leases from the state for the property. It also holds prospecting permits on areas adjacent to the main Round Top site covering an additional 3,785 hectares. Though Round Top’s unique geology was first recognized about 25 years ago, it has only been the recent need to establish domestic sources of REEs in the U.S. that has created more interest in the project.
The Round Top deposit contains 16 of 17 rare earths, including all 11 heavy REEs and five light REEs, most importantly all five REEs required to make permanent magnets. A 2019 preliminary economic assessment forecast annual production at the Round Top project of 2,213 tonnes of REEs, of which over 1,900 tonnes are heavy REEs. The life of the open pit mine is estimated at 20 years, but that is based on mining only 14% of the existing mineral resource.
In 2019, Texas Minerals signed a development agreement with privately held USA Rare Earths. Then, in late May of this year, USA Rare Earths exercised its option to acquire 80% of the Round Top project, with Texas Minerals retaining 20% ownership through its subsidiary, Round Top Mountain Development LLC. USA Rare Earths also completed a $50 million Series C funding round and is now funded through completion of a definitive feasibility study for the project. The definitive feasibility study will include findings from a pilot plant that will be built at Round Top later this year.
Market capitalization: $54 million
Based in Nevada, Scandium International Mining (TSX: SCY; US-OTC: SCYYF) is working towards developing the world’s first primary scandium mine, its 100%-owned Nyngan project in New South Wales, Australia. The company also has two other assets, the 100%-owned Honeybugle exploration project, which is adjacent to Nyngan, and the Kiviniemi exploration project in Finland. All are focused on scandium.
Nyngan, located about 500 km northwest of Sydney, is the company’s flagship project, and Scandium International is focused on advancing it to construction, and then producing scandium that will used for advanced aluminum alloys.
Scandium’s primary asset is a 2,925-hectare property located 25 km from its namesake town of Nyngan. It consists of two exploration licenses and the company has been developing the project since 2010. A feasibility study in May 2016 estimated average annual production of 38,000 kg of scandium oxide at grades of 98-99.9% scandium oxide. The study envisioned a 20-year life of mine generating an after-tax cumulative cash flow of $629 million, with a post-tax net present value at a 10% discount rate of US$177 million.
In late April, the company received two separate patents in the U.S. related to its work developing applications of scandium in lithium-ion batteries. One is for the recovery of scandium from copper raffinate solutions via ion exchange techniques and the second for the manufacture of aluminum-scandium master alloys via these defined techniques. Both patents are applicable to the company’s intent to produce scandium products for use in both aluminum alloys and other technical applications.
Market capitalization: $51 million
Azarga Uranium (TSX: AZZ; US-OTC: AZZUF) maintains the same spot on the top ten list from last year, but has seen its market cap almost double as interest in domestically sourced uranium in the U.S. has increased.
The company is focused on developing low-cost in-situ uranium recovery operations in the U.S., with its initial development priority being the Dewey Burdock project. Azarga’s 100%-owned Dewey Burdock is an in-situ uranium recovery project located in the southwestern part of South Dakota, in the Edgemont uranium district, and is comprised of about 5,100 hectares.
In December 2020, the company released an amended preliminary economic assessment for Dewey Burdock, based on measured and indicated resources of 6.7 million tonnes grading 0.116% U3O8 for 17.1 million lbs. U3O8. The inferred resource stands at 586,000 tonnes grading 0.055% U3O8 for 712,624 lbs. U3O8.
Azarga is completing its regulatory permitting. The company has been issued a federal Nuclear Regulatory Commission license, as well as its final class III and class V underground injection control permits from the U.S. Environmental Protection Agency.
Market capitalization: $50 million
Montana-based United States Antimony (NYSE-AM: UAMY) is focused on the strategic metal antimony and is the only significant producer of antimony oxide, antimony metal and antimony tri-sulfide in the U.S., with most of its raw materials sourced in North America. Antimony is one of 35 federally designated critical minerals in the U.S. because of its use in national defense, technology and green energy. Australia, Canada and the European Union also classify antimony as a critical mineral.
United States Antimony began operations in Montana in 1969, and is now a fully integrated mining, transportation, milling, and smelting company with operations in the U.S. and Mexico. Its Thompson Falls facility is in the Burns mining district of western Montana, about 24 km from the city of Thompson Falls. It has a smelter and precious metal refinery, with a capacity to produce 15 million lbs. of antimony oxide per year, as well as antimony metal and antimony tri-sulfide.
In Mexico, the company has production facilities at Madero in the northern state of Coahuila, Puerto Blanco in the central state of Guanjuato, and Wadley in the central state of San Luis Potosi. Four Mexican mines are the primary source for its production facilities: Wadley (in the state of San Luis Potosi), Los Juarez (Queretaro state), Sierra Guadalupe (Zacatecas state) and Soyatal (also in Queretaro state).
In early May, the company signed a collaboration agreement with Perpetua Resources (TSX: PPTA; NASDAQ: PPTA) to study the feasibility of processing Perpetua’s antimony concentrates at United States Antimony’s facilities. Perpetua is in the permitting process for a major antimony and gold resource in Idaho, and the potential partnership would represent the only domestically mined and refined antimony products in the U.S.
(This article first appeared in The Northern Miner)
