enCore Energy Corp (TSX-V:EU, NYSE-A:EU) told investors that the challengers to the Nuclear Regulatory Commission's (NRC) granting of a Source Materials License to its Powertech (USA) Inc wholly-owned subsidiary have declined to seek review by the US Supreme Court, with the NRC license now final and fully effective.
In a filing before the Environmental Protection Agency's (EPA) Environmental Appeals Board, enCore Energy noted that the Oglala Sioux, which had challenged the NRC license, stated that "the Oglala Sioux does not oppose the lifting of the stay in this matter given the conclusion of the proceedings in the US Court of Appeals for the DC Circuit". As a result, it said the Oglala Sioux thereby confirmed its decision not to seek a Supreme Court review of the NRC license.
The company said confirmation of the NRC license clears the way for the resumption of proceedings in two additional legal challenges to the Dewey-Burdock project final EPA Class III and V Underground well permits and aquifer exemption. Those challenges are based on some of the same issues decided in the NRC case, it added.
The Dewey Burdock Project
enCore explained that its 100%-owned Dewey Burdock project is an in-situ recovery uranium project located in the Edgemont uranium district of South Dakota and is comprised of 12,613 surface acres and 16,962 net mineral acres.
The company said in December 2020 it filed an amended and restated NI 43-101 compliant independent Technical Report and Preliminary Economic Assessment (PEA) that indicated that the project has compelling economic potential at current market prices for triuranium octoxide (U308).
Initial capital expenditures are estimated at $31.7 million. The project is forecast to produce 14.3 million pounds (lbs) of U3O8 over its 16 years of production and the projected cash flows are expected to be positive in the second year of production, two years after the commencement of construction, enCore said.
The Dewey Burdock PEA resulted in a pre-income tax net present value (NPV) of $171.3 million at a discount rate of 8% and an internal rate of return (IRR) of 55% compared to a post-income tax NPV of $147.5 million at a discount rate of 8% and an IRR of 50%.
The company noted that the Dewey Burdock PEA post-income tax calculations do not include a corporate-level assessment of income tax liabilities; taxes have only been calculated at the Dewey Burdock project level.
The estimate of income tax at the corporate level is subject to several additional considerations that have not been factored in when calculating income taxes at the project level, including, but not limited to, the capital structure to finance the Dewey Burdock project, which has not yet been determined, and loss carryforwards available at the corporate level.
The Dewey Burdock PEA estimated uranium prices of $55/lb U3O8, direct cash operating costs of $10.46 per pound of production and royalties and local taxes (excluding property tax) of $5.15 per pound of production. The total pre-income tax cost of uranium production is estimated to be $28.88 per pound of production. Income taxes are estimated to be $3.39 per pound of production, enCore added.
enCore Energy is the most diversified In-Situ Recovery (ISR) uranium development company in the United States and is focused on becoming the next uranium producer in 2023 from its licensed and past-producing South Texas Rosita Processing Plant.
Contact the author at stephen.gunnion@proactiveinvestors.com