Energy Fuels Inc (TSE:EFR, NYSE:UUUU) told investors that it plans to resume vanadium recovery from pond solutions at its White Mesa mill in Utah this year, kick starting a process of generating potentially more than 4mln pounds of recoverable vanadium (as V2O5).
The price of the commodity has risen by over 400% in the last 24 months to around US$15 per pound.
READ THE BIG PIC - Energy Fuels nudges higher as it outlines opportunities to lift uranium output
White Mesa has a 38-year history of conventional vanadium recovery, and most recently generated 1.5mln pounds of the metal in 2013.
Overall, it has produced more than 45mln pounds of vanadium - or over US$500mln worth at today's prices.
Mark Chalmers, president at Energy Fuels, noted that White Mesa was the only operating facility in the United States with the near-term capability to resume production.
"Due to recent vanadium price strength and bullish market sentiment, we are evaluating a number of opportunities to resume cash-flow-positive and sustainable vanadium recovery, including today's announcement of our campaign to recover vanadium from the mill's pond solutions," he said.
"If this campaign is successful, Energy Fuels would expect to become a commercial-scale vanadium producer for the next few years, just from pond solutions."
The company boss added that for longer-term alternatives, the group was evaluating other vanadium production opportunities, including the processing of previously mined uranium/vanadium stockpiles in the vicinity of the mill.
It is also considering processing other vanadium-bearing streams, and, with improved uranium prices, the reinitiation of conventional uranium/vanadium mine production from certain mines that contain large, high-grade vanadium resources, including the La Sal and Whirlwind mines which are currently on standby.
Energy noted that based on repeatable, bench-scale lab analysis performed to date, it believes dissolved vanadium in the ponds can be recovered using existing equipment and process streams at the mill, in a fashion similar to how the mill has been recovering dissolved uranium from the ponds.
WATCH - Energy Fuels Inc seeks 'several paths' to increase uranium output, limit imports
If full-scale costs and recoveries are similar to the bench-scale analysis performed to date, the company would expect to recover around 500,000 pounds of vanadium in 2018, which, based on current vanadium prices, would be expected to generate positive net cash flow this year.
The firm will then evaluate its actual 2018 costs and recoveries, and given favourable results, and depending on prevailing vanadium market conditions, would expect to continue vanadium production from pond returns in 2019 and 2020.
Based on laboratory analysis, the company has identified significant concentrations of dissolved vanadium in pond solutions at the mill, ranging between 1.4 and 2 grams per litre.
Energy Fuels holds three of America's key uranium production centres - the White Mesa mill in Utah, the Nichols Ranch processing facility in Wyoming and the Alta Mesa project in Texas.
Shares in Canada added 0.84% to C$2.39.