Uranium Mine Jobs Boom

Residents in Wyoming’s Jeffrey City may be getting some new neighbors in the near future, thanks in large part to plans for a new uranium mine.

Based in Lakewood, Colorado, Energy Fuels (TSX:EFR) has plans to begin construction of a new uranium mine, called Sheep Mount, by 2015, according to the Energy Business Review. The company is hoping to revive a property that has proven in the past to be very much worth the attention. 

Energy Fuels has acquired the necessary rights to the mining area from Titan Uranium, according to the Star Tribune. 

At the moment, much of the work being done is in regards to securing the necessary permits to begin building. It could be late 2015 before construction can begin, depending upon how the permit process goes.

Energy Fuels expects the mine will operate for a period of approximately 15 years, producing 1.5 million pounds of uranium annually. After the lifespan of the mine comes to an end, the site can be used for processing for at least 35 years.

It’s expected that Energy Fuels will require $60 million in start-up funds in order to get off the ground, and it will likely spend this same amount over time to keep the mine operating effectively.

But the company says it’s more than worthwhile, as it will not only end up producing a great deal of uranium, but it will bring an influx of new jobs to the area; and this is something Jeffrey City residents seem to be excited about across the board.

New Residents

One of the major positive effects of the opening of Sheep Mount is the fact that it will be bringing a great deal of new jobs to the local economy. The company plans to hire at least 170 permanent employees—not including the jobs that will be created in order to actually construct the site. The mine is located eight miles outside of the town.

Because of the mine’s proximity to Jeffrey City, it should stand to reason that the 170 new jobs will bring a great deal more residents to the area. Many are excited about what this will do for the local economy, stating that Jeffrey City could use a stimulus such as this. Operation at the site would begin in 2016 if everything goes as planned.

Energy Fuels has a strong track record in terms of uranium production, having operated a number of uranium mines in the Colorado Plateau and Arizona Strip. The new venture in Jeffrey City will be on an entirely different scale than what the company is used to, however, and this could be extremely successful for the company if its predictions end up becoming fact.

An Odd Time for Uranium

It’s quite an interesting time for uranium. At the moment, prices are relatively low due to a lack of interest in the resource.

According to Uranium Investing News, only two transactions have occurred this week as of yesterday morning, which put spot prices at $40.90 per pound. Lower prices have not seemed to be enough to get investors interested in jumping on board as of yet, however.

One thing that could change all of this is the fact that uranium mining seems to be on the uptick. Energy Fuels is not the only company pushing towards the opening of a new mine to increase production; Energy Resources of Australia (ASX:ERA) has plans to expand its operations as well.

A number of other mining companies are also working towards expansion, which could potentially have a very strong impact on the price of uranium in the future.

It’s a bit too early to tell where uranium will go from here, but companies such as Energy Fuels are certainly putting a lot of work into bringing the resource back to the forefront. 

Investors would do well to pay close attention to the price of uranium over the course of the next few years as Kazakhstan (the world’s leading producer) intends to ramp up production of the resource in the coming years. As supply increases, it wouldn’t be out of line to predict a shift in spot pricing; only time will tell where things end up in the next few years.

If you liked this article, you may also enjoy:

• Grab This Bottom in Uranium
• Uranium Catalyst