TRER CEO Says Uranium Agreement “Big Plus” for Company
Investment analysts have cited Texas Rare Earth Resources’ agreement with the world’s leading nuclear-energy company as a sign of viability for the com- pany’s Hudspeth County project, and TRER’s CEO said last week that the arrange- ment could turn a “nuisance” for the mining operation into a “profit center.”
TRER announced April 6 that it had a signed a contract with Areva to provide the French multinational with uranium, if TRER succeeds in developing a mine at Round Top Mountain west of Sierra Blanca.
TRER’s primary target at Round Top is the heavy metals known as rare earth elements. But TRER says that uranium concentrate would be a byproduct of processing ore. “Stabilizing” the radioactive substance, so that it could be mixed back into waste ore at the site, could be difficult and involve significant regulatory hurdles, and storing it could be expensive, TRER CEO Dan Gorski said in an inter- view April 9.
“This enables us to get rid of something as a product that we were going to have to dispose of one way or another,” Gorski said. “Storing it is the lease attrac- tive of the options, and the best thing to do is to sell [byproducts]. With the contract with Areva, the uranium byproduct has gone from being a nuisance to a profit center.”
While Areva is bound by the contract to purchase uranium from TRER, under a “pricing formula” that was not disclosed, the multinational is not putting money up to develop a mine at Round Top – and essentially has nothing to lose by signing the contract. But Gorski said that “for a company of the stature of Areva to acknowledge us is a real plus.” Areva operates its own uranium mines at points around the world and secures fuel for nuclear power plants in Europe and else- where.
Uranium is one of several byproducts TRER believes it could sell from
a Round Top mine. Others include beryllium and lithium. Lithium is critical for electric-car batteries, and Gorski noted that the electric-car manufacturer Tesla is on the hunt for sources of lithium other than the South American mines that currently provide the element.
If it can secure funding to move forward, TRER plans to develop an opera- tion at Round Top Mountain in which rock quarried from the mountain would be soaked or “leached” on-site in sulfuric acid and then run through an “ion-exchange” process. That process would produce concentrated amounts of rare earths and other elements. Ion exchange has been used in other types of mining – but TRER hopes, in collaboration with a chemical company called K-Tech, to be the first to deploy the technique for rare earth elements.
Uranium is not the only radioactive byproduct a Round Top mine would produce. Gorski said thorium would be a byproduct, and that radium could be as well.
Gorski said that while thorium could become an important source in nuclear-energy production in the future, at present there is no market for the sub- stance. Pending the construction of thorium reactors, TRER would “have to put [the thorium] in a barrel, label it and put it in a building and store it.”
TRER’s project in Hudspeth County has been stalled since a round of exploratory drilling in 2011 and 2012. But Gorksi said the arrangement with Areva, and other off-take agreements for byproducts, could initiate “improvements in the company’s market position” and allow TRER to move ahead. Gorski said the “holy grail” for the company would be to demonstrate it can produce a “gram-sized” quantity of the rare earths yttrium and dysprosium. He said the company may achieve that goal by mid-summer, in which case it would become the first of a slate of emerging rare-earth companies to demonstrate that capacity.
Gorski said a processing plant at Round Top could likely be contained in a 24,000-square-foot building, with 20- to 30-foot high ceilings. He said the company is developing a “pre-feasibility” document – that would lay out the capital and operating costs and the staffing needs for the plant.
Like the Js Group and Geovic Mining at Wind Mountain, northwest of Dell City, TRER is seeking to mine at Round Top for rare earth elements – heavy metals used in a range of modern technologies from consumer electronics to night- vision goggles. Gorski said TRER is positioning itself to be “more as a defense contractor than anything else.”