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Letter to Ms. Stephanie Mitchell <br /> August 31,2017 <br /> Page 2 <br /> The existing financial warranty amount of$375,078 remains adequate to cover the reclamation liability. <br /> First, the surface reclamation component of$148,372 is based on the disturbance that will occur at the <br /> end of the mine life when the waste rock area is expanded to its maximum size. The existing financial <br /> warranty is, therefore, more than adequate to guarantee reclamation of the current disturbed area, which <br /> is significantly smaller than the maximum "end of mine life" disturbance area. Second, the Whirlwind <br /> Mine has not completed the secondary escape through the Packrat Portal, and construction of the Packrat <br /> Contingency Bulkhead Seal (estimated at $115,256) is not needed at this time. Therefore, the existing <br /> financial warranty is adequate to cover construction of bulkheads, which is limited to the Whirlwind <br /> Bulkhead Seal at this time. <br /> (b) explanation as to why the Operator has not recommenced operations or begun <br /> reclamation; <br /> EFRI Response: <br /> The Whirlwind Mine, located in Mesa County near Gateway, Colorado, is an underground uranium and <br /> vanadium mine that is largely situated on areas that were previously impacted by older mine operations. <br /> The Mine straddles the Colorado/Utah state line and is authorized under new mine and reclamation <br /> permits issued by state and federal regulators in 2008, including a 112(d)permit that was approved by <br /> DRMS on September 10, 2008 (see Attachment Q. <br /> After receiving the necessary permit authorizations, mine development commenced and continued until <br /> November 2008 when the Mine was placed on standby status due to continued negotiations with <br /> Denison Mines (USA) Corp. on a contract for processing of ore at the White Mesa Mill and unfavorable <br /> uranium and vanadium market conditions. The DRMS was notified of this action by letter dated <br /> November 24, 2008 (see Attachment D). The Mine was subsequently approved for Intermittent status on <br /> June 5, 2009 (see Attachment E) and later, following the suspension of mine dewatering operations and <br /> the removal of surface and underground equipment, approved for TC status by the MLRB on May 7, <br /> 2013 (see Attachment F). <br /> While EFRI has since acquired the assets of Denison Mines (USA) Corp. and is now the owner/operator <br /> of the White Mesa Mill for processing of ores, to-date, uranium markets have remained unfavorable to <br /> recommence operations at the Mine. The mid- to long-term market for uranium continues to be positive, <br /> however, such that EFRI anticipates the potential to resume operations within the next five-year period. <br /> Regarding the vanadium market, the mid-range price is currently around$10.00 per pound, which is the <br /> highest market price since 2008. As vanadium is a co-product of uranium production at the Mine, <br /> sustained high vanadium prices could justify restarting the Mine even without a full recovery in uranium <br /> prices. <br /> (c) demonstration of continued commitment to conduct mining operations at the site by <br /> the end of second five year period;and <br /> EFRI Response: <br /> EFRI's commitment to resume operations at the Mine is demonstrated by its continued commitment to <br /> maintain all of its permits in good standing, meet or exceed all regulatory obligations and maintain the <br />