Item 1. Business
ITEM 1. BUSINESS
CORPORATE HISTORY
Western Uranium & Vanadium Corp. (formerly known as
Western Uranium Corporation) was incorporated in December 2006 under the Ontario Business Corporations Act and was formerly a non-listed
reporting issuer subject to the rules and regulations of the Ontario Securities Commission. On November 20, 2014, the Company completed
a listing process on the Canadian Securities Exchange (“CSE”). As part of that process, the Company acquired 100% of
the issued and outstanding shares of Pinon Ridge Mining LLC (“PRM”), a Delaware limited liability company. The transaction
constituted a reverse takeover of Western by PRM. After obtaining appropriate shareholder approvals, the Company subsequently reconstituted
its Board of Directors and senior management team.
On August 18, 2014, the Company closed on the purchase of certain
mining properties in Colorado and Utah from Energy Fuels Holding Corp. Assets purchased included both owned and leased lands in
Utah and Colorado and all represent properties that have been previously mined for uranium to varying degrees in the past. The
acquisition included the purchase of the Sunday Mine Complex. The Sunday Mine Complex is located in western San Miguel County,
Colorado. The complex consists of the following five individual mines: the Sunday mine, the Carnation mine, the Saint Jude mine,
the West Sunday mine and the Topaz mine. The operation of each of these mines requires a separate permit and all such permits have
been obtained by Western and are currently valid. In addition, each of the mines has good access to a paved highway, electric power
to existing mine workings, office/storage/shop and change buildings, and extensive underground haulage development with multiple
vent shafts complete with exhaust fans. After the completion of the 2019/2020 project, the Sunday Mine Complex was advanced such
that it is operationally ready to re-start mining operations.
On September 16, 2015, Western completed its acquisition of
Black Range, an Australian company that was listed on the Australian Securities Exchange until the acquisition was completed. The
acquisition terms were pursuant to a definitive Merger Implementation Agreement entered into between Western and Black Range. Pursuant
to the agreement, Western acquired all of the issued shares of Black Range by way of Scheme of Arrangement (“the Scheme”)
under the Australian Corporation Act 2001 (Cth) (the “Black Range Transaction”), with Black Range shareholders being
issued common shares of Western on a 1 for 750 basis. On August 25, 2015, the Scheme was approved by the shareholders of Black
Range and on September 4, 2015, Black Range received approval by the Federal Court of Australia. In addition, Western issued to
certain employees, directors and consultants options to purchase Western common shares. Such stock options were intended to replace
Black Range stock options outstanding prior to the Black Range Transaction on the same 1 for 750 basis.
In connection with the Black Range Transaction, Western acquired
the net assets of Black Range. These net assets consist principally of interests in a large uranium resource located in Colorado
(the “Hansen-Taylor Complex”) and a 100% interest in a 25 year license for Kinetic Separation (“Kinetic Separation”,
formerly known as “Ablation”) and related patents from Ablation Technologies, LLC. The Hansen-Taylor Complex is principally
a sandstone-hosted deposit that was discovered in 1977.
Furthermore, related to Kinetic Separation in connection with
the acquisition of Black Range Minerals Ltd. (“Black Range”), the Company assumed a call option agreement between Black
Range and Mr. George Glasier. Prior to the Black Range Transaction, George Glasier, the Company’s CEO, who is also a director
(“Seller”), transferred his interest in a former joint venture with Ablation Technologies, LLC to Black Range. In connection
with the transfer, Black Range issued 25 million shares of Black Range common stock to Seller and committed to pay $500,000 AUD
($392,086USD as of December 31, 2020) to Seller within 60 days of the first commercial application of the Kinetic Separation. Western
assumed this contingent payment obligation in connection with the Black Range Transaction.
The Kinetic Separation process is dramatically different from
conventional mining techniques. Subject to regulatory approvals for the use of Kinetic Separation, the benefits of Kinetic Separation
are as follows:
● Mining, crushing, and separation of waste from minerals (uranium and vanadium), used most effectively, occurs underground (inside
the mine). Under this approach the costs of moving material to the surface are less as 85%-90% of the mined material remains underground
and is never brought outside the mine.
● Less radiometric exposure throughout the process due to reduced waste rock on the surface and after the milling process less
tailings. Overall surface waste material is reduced and the time duration of material handling is reduced.
● Lower costs for transportation of post-kinetically separated material because 85-90% of the mined material would not need to
be transported.
● Once the kinetically separated material reaches the mill, the acid consumption at the mill and power is much less due to the
lower quantity and more concentrated material moving through the milling process.
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Kinetic Separation can be used on legacy uranium stockpiles
in the western United States. WUC would kinetically separate these stockpiles, removing 85-90% of the uranium. This is an application
through which Kinetic Separation could positively contribute to the ‘greening of the environment’. According to a study there are
approximately 4,225 legacy uranium mines from the 1940-1970 period throughout the Western United States, most of which have waste
stockpiles.
In the estimation of management, Kinetic Separation mining allows
the cost of production of uranium to be reduced by 44-53%.
Our common shares are listed on the Canadian Securities Exchange,
also known as the “CSE,” under the symbol “WUC”, and are also quoted in the United States on the OTCQX
Best Market under the symbol “WSTRF.” We are headquartered in Ontario, Canada with mining operations in the two U.S.
states of Utah and Colorado. The mailing address of our headquarters is 330 Bay Street, Suite 1400, Toronto, Ontario, M5H2S8, Canada,
and the telephone number is (970) 864-2125. Our corporate website is located at http://www.western-uranium.com/.
We are an “emerging growth company” as that term
is defined in the Jumpstart Our Business Startups Act (the “JOBS Act”). The JOBS Act defines an “emerging growth
company” as one that had total annual gross revenues of less than $1,000,000,000 during the last fiscal year. Section 102(b)
(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards
until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not
have a class of securities registered under the Securities Exchange Act) are required to comply with the new or revised financial
accounting standard. The JOBS Act also provides that a company can elect to opt out of the extended transition period provided
by Section 102(b)(1) of the JOBS Act and comply with the requirements that apply to non-emerging growth companies but any such
election to opt out is irrevocable.
Our wholly-owned subsidiaries are Western Uranium Corp., Pinon
Ridge Mining LLC, Black Range Minerals Limited, Black Range Copper Inc., Ranger Resources Inc., Black Range Minerals Inc., Black
Range Minerals Colorado LLC, Black Range Minerals Wyoming LLC, Haggerty Resources LLC, Ranger Alaska LLC, Black Range Minerals
Utah LLC, Black Range Minerals Ablation Holdings Inc. and Black Range Development Utah LLC.
OUR COMPANY
Western is in the business of exploring, developing, mining
and production of its uranium and vanadium resource properties.
Western is an exploration stage company for purposes of Industry
Guide 7 of the U.S. Securities and Exchange Commission (“SEC”). Industry Guide 7 states that mining companies like
ours can be classified into three stages: exploration, development, or production. Exploration stage includes all companies engaged
in the search for mineral deposits, which are not in either the development or production stage. In order to be classified as a
development or production stage company, the Company must have already established reserves. The Company has not established reserves
for purposes of Industry Guide 7.
National Instrument 43-101 – Standards of Disclosure for Mineral
Projects (“NI 43-101”) is a rule of the Canadian Securities Administrators that establishes standards for all public disclosure
a Canadian issuer makes of scientific and technical information concerning mineral projects. All historical mineral resource estimates
contained in this annual report have been prepared in accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum
classification system. These standards differ from the mineral property disclosure requirements of Industry Guide 7, which, until December
31, 2020, applied to most SEC reporting issuers. However, on October 31, 2018, the SEC adopted changes to modernize the mineral property
disclosure requirements applicable to SEC registrants. New subpart 1300 of Regulation S-K (the “SEC Modernization Rules”)
became effective on February 25, 2019 and, for fiscal years beginning on or after January 1, 2021, replaces Industry Guide 7’s disclosure
requirements. Under the SEC Modernization Rules, consistent with global standards as embodied by the Committee for Reserves International
Reporting Standards (“CRIRSCO”), SEC registrants will be required to disclose specified information concerning mineral resources
that have been identified on their mineral properties. Consistent with CRIRSCO standards, the SEC Modernization Rules have also added
definitions to recognize measured mineral resources, indicated mineral resources and inferred mineral resources. Thus, although the SEC
Modernization Rules are not identical to Canada’s NI 43-101 standards, they are intended to be more consistent with those standards.
Our mineral properties are located in western Colorado and eastern
Utah and adjacent areas of the western United States. Our primary focus is bringing the fully permitted Sunday Mine Complex into
production, permitting the San Rafael Project and the commercialization of Kinetic Separation.
The Sunday Mine Complex is located in western San Miguel County,
Colorado. The complex consists of the following five individual mines: the Sunday mine, the Carnation mine, the Saint Jude mine,
the West Sunday mine and the Topaz mine. The operation of each of these mines requires a separate permit and all such permits have
been obtained by Western and are currently valid. In addition, each of the mines has good access to a paved highway, electric power
to existing mine workings, office/storage/shop and change buildings, and extensive underground haulage development with multiple
vent shafts complete with exhaust fans.
We have acquired a license for Kinetic Separation, which provides
a low cost, purely physical, method of separating uranium and vanadium mineralization from waste. No chemicals are added in the
process, yet very high mineral recoveries can be achieved with considerable mass reduction; facilitating the separation of a high-value,
high-grade ore product from a coarse-grained barren “clean sand” product.
Application of Kinetic Separation is expected to have a very
positive effect on the development of not only our Sunday Mine Complex, but also most of our and others’ deposits, because
it significantly reduces both capital and operating costs. Extensive test work has shown that from amenable sandstone-hosted ore
types, typically more than 90% of the mineralization can be separated into 10-20% of the initial sample mass.
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OUR STRATEGY
Our vision is to become a leading uranium and vanadium developer and
producer. Our strategy is to build value for stockholders by advancing our projects towards scaled-up production. The increase in vanadium
price levels during 2017/2018 increased the relative importance of this resource to the Company. Hence, Western is increasingly able to
baseload mine production with vanadium as a co-product. As a result, during 2019 Western implemented a mine re-opening project at the
Sunday Mine Complex to identify high-grade vanadium ore, followed by bulk sampling and development drilling. Active mining was conducted
and the extracted ore was stockpiled underground in the mines. The project has continued in 2020 as multiple surface infrastructure projects
were completed to meet Colorado Division of Reclamation, Mining and Safety (CDRMS) requirements. Completion of the CDRMS prerequisites
has enabled the newly mined and stockpiled underground ore to be brought to the surface. Ore pad construction, the last of the surface
projects, was completed; however, its final inspection approvals were delayed until May 2020 due to the COVID-19 outbreak. The Company
holds an exclusive 25-year license to use Kinetic Separation, a proven technology that we anticipate will improve the efficiency of the
mining from Western’s sandstone-hosted ore. The license agreement was entered into on March 17, 2015 and expires on March 16, 2040.
There are no remaining license fee obligations and there are no future royalties due under the agreement. The Company has the right to
sub-license the technology to third parties. The Company may not sell or assign the Kinetic Separation license; however, it could be transferred
in the sale of Western or the subsidiary holding the license.
At any time we may have acquisition or partnering opportunities
in various stages of active review, including, for example, our engagement of consultants and advisors to analyze particular opportunities,
analysis of technical, financial and other confidential information, submission of indications of interest, participation in preliminary
discussions and negotiations and involvement as a bidder in competitive processes.
Capital Raising
On April 16, 2019, the Company completed a private placement
of 3,914,632 units at a price of CAD $0.98 (USD $0.73) per unit for net proceeds of CAD $3,836,340 (USD $2,856,356). Each unit
consisted of one common share and a warrant to purchase one-half of one common share. Each warrant is exercisable at a price of
CAD $1.70 and expires three years from the date of issuance.
On June 17, 2019, the Company completed a private placement
of 192,278 units at a price of CAD $0.98 (USD $0.73) per unit for gross proceeds of CAD $188,432 (USD $140,555). Each unit consisted
of one common share and a warrant to purchase one-half of one common share. Each warrant is exercisable at a price of CAD $1.70
and expires three years from the date of issuance.
During the year ended December 31, 2019, the Company issued
an aggregate of 4,106,910 common shares in connection with these private placements.
On February 16, 2021, the Company closed
on a non-brokered private placement (the “Private Placement”) of 3,250,000 units (the “Units”) at a price
of CAD $0.80 per Unit. The aggregate gross proceeds raised in this Private Placement amount to CAD $2,600,000.
Each Unit consists of one common share
of Western (a “Share”) plus one common share purchase warrant of Western (a “Warrant”). Each warrant entitled
the holder to purchase one Share at a price of CAD $1.20 per Share for a period of three years following the closing date of the
Private Placement. A total of 3,250,000 Shares and 3,250,000 Warrants were issued in the Private Placement.
On March 1, 2021, the Company closed on
a non-brokered private placement (the “Private Placement”) of 3,125,000 units (the “Units”) at a price
of CAD $0.80 per Unit. The aggregate gross proceeds raised in this Private Placement amount to CAD $2,500,000.
Each Unit consists of one common share
of Western (a “Share”) plus one common share purchase warrant of Western (a “Warrant”). Each warrant entitled
the holder to purchase one Share at a price of CAD $1.20 per Share for a period of three years following the closing date of the
Private Placement. A total of 3,125,000 Shares and 3,125,000 Warrants were issued in the Private Placement.
Uranium/Vanadium Production
Western historically positioned itself for operational flexibility
with the goal of beginning production as expeditiously as possible once market conditions for uranium and/or vanadium were favorable.
The 2018 vanadium price rally brought about those conditions for a period, thus catalyzing the Sunday Mine Complex project. Western
reinitiated active mining operations at the Sunday Mine Complex project with its infrastructure and exploratory projects, which
culminated in the commencement of production with the mining and stockpiling of the extracted uranium/vanadium ore. The well maintained
existing infrastructure from years of previous production allowed the Company to quickly advance the mine to a production ready
status. As the mining team refocused on surface infrastructure projects required by the CDRMS, the mines were shut; mining operations
and transporting extracted ore to the surface were delayed pending the inspection of the newly constructed ore pads and the completion
of a COVID-19 delayed permit hearing. The impact of COVID-19 delayed a re-start beyond 180 days, thus in October 2020 each of the
five Sunday mines were put back into Temporary Cessation. With the decline in vanadium prices during calendar year 2019, the economics
of the Sunday Mine Complex have shifted from an emphasis on vanadium production back toward co-production of uranium/vanadium.
The recent rally in uranium prices has become an increasingly important driver for scaled up production.
Western believes that its mineral resources have a reasonable
prospect for economic extraction. However, the Company has not yet completed a Preliminary Economic Assessment (“PEA”).
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URANIUM MARKET OUTLOOK
World demand for clean, reliable, and affordable electricity is growing.
Given the expected construction of nuclear reactors and the expected growth of nuclear energy, we believe that the future for uranium
is positive. Further, 2020 production cuts in response to COVID-19 at peak sidelined approximately 50% of annual global uranium production.
In the U.S. implementation of the U.S. Uranium Reserve program and the Biden administration’s emphasis on climate change have the
potential to increase U.S. domestic uranium demand and create economic pricing levels for U.S. domestic producers. We believe these factors
will provide the price levels needed to support the additional production that will be required. Currently, excess (secondary)
inventory supplies are being drawn down, and additional primary production is forecast to be needed to fulfill the nuclear fuel requirements
of the growing global nuclear reactor fleet.
Once prices rise, it may be difficult for most suppliers to respond
in a timely manner, as it requires many years of permitting and development to bring new mines into production. These lead times will
put further upward pressure on prices. Thus, Western has a competitive advantage, as our mining properties are permitted and ready to
scale-up production on short notice.
As uranium prices have been depressed for about a decade due to overproduction
and reactor shutdowns subsequent to the impact of the 2011 Fukushima earthquake, investors are positioning in response to early signs
of a market recovery; the spot uranium price began 2020 at ~$24 and finished the year at ~$30, but had rebounded to a short-term ~$34
high in response to COVID-19 production cuts. Japanese utilities have nuclear reactors in the process of restarting (according to the
World Nuclear Association (“WNA”)). According to data from the WNA, Chinese utilities continue to aggressively build new reactors
and buy uranium, with the goal of becoming the world leader in nuclear electricity generation. In total, according to the WNA, there are
about 50 new reactors under construction in 13 countries and in all there are about 160 reactors on order or being planned, and over 300
more are proposed. It is projected that ~15 new nuclear reactors will be placed into service in 2021.
During the Trump administration, the U.S. government focused
on market distortions caused by foreign state-owned enterprises and the economic and geopolitical influence lost by allowing Russia
and China to take the lead in nuclear power. In support of the world’s largest nuclear reactor fleet, the U.S. has begun
implementing the recommendations of the Nuclear Fuel Working Group and has extended the Russian Suspension Agreement. The national
strategic uranium reserve was signed into law to stabilize the U.S. nuclear fuel cycle by supporting front-end domestic uranium
mining. The U.S. Department of Energy is establishing program guidelines to initiate 2021 purchases of $75 million of domestic
uranium. The U.S. government pursued the goals of energy independence, solidifying critical minerals supply chains and national
security. In September 2020, President Trump issued an Executive Order on Addressing the Threat to the Domestic Supply Chain from
Reliance on Critical Minerals from Foreign Adversaries. Both uranium and vanadium are among the 35 critical minerals identified
as essential to the economic and national security of the United States. This order mandated that multiple government agencies
undertake studies to develop solutions.
The Biden Administration’s “Plan to Build a Modern Sustainable
Infrastructure and an Equitable Clean Energy Future” emphasizes climate change solutions. Upon taking office, the Biden team immediately
rejoined the Paris Climate Accord and continued its pursuit of campaign promises of investments in clean energy, creating jobs producing
clean electric power, and achieving carbon-pollution free energy in electricity generation by 2035. Since taking office, Biden has reversed
a number of Trump’s pro-fossil fuel energy policies, which is expected to continue as the new administration has given all agencies
climate change initiatives and has already started a climate change working group. The existing U.S. nuclear reactor fleet currently produces
in excess of 50% of U.S. clean energy, and new advanced nuclear technologies promise to generate additional clean energy; thus, the expectation
is that the post-pandemic infrastructure spending will provide a major boost to clean energy and the nuclear industry will be a beneficiary.
A global supply/demand uranium imbalance is coming to the forefront
as the world continues to deplete the formerly excess inventories. There are many market and governmental catalysts propelling
investor expectations whose capital is flowing into the sector. Investors have taken note of constrained global uranium supplies,
improved uranium demand fundamentals, the pace of innovations in nuclear technology, and a global push for climate change solutions.
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OVERVIEW OF THE URANIUM INDUSTRY
Spot prices rose from $21 per pound in January 2005 to a high
of $136 per pound in June 2007 in anticipation of sharply higher projected demand as a result of a resurgence in nuclear power
and the depletion of secondary supplies. Secondary supplies are inventories of uranium not publicly available for sale, they are
primarily held by utility companies and governments. The sharp price increase was driven in part by high levels of buying by utility
companies, which resulted in most utilities covering their requirements through 2009. A decrease in near-term utility demand coupled
with rising levels of supplies from producers and traders have led to downward pressure on uranium prices since the third quarter
of 2007. A rebound in uranium prices in conjunction with a recovery in commodities in 2010 was curtailed by the Fukushima disaster
in Japan.
Since the Fukushima disaster in 2011, uranium spot prices entered a
steady decline until June 2014, when they rebounded slightly and peaked again in March 2015 at $39 per pound. After that peak, prices
again began to fall steadily reaching their lowest point of $18 per pound in November 2016. In May 2020, spot prices hit a $34 per pound
price before declining to close the year at $30 per pound.
The only significant commercial use for uranium is as a fuel
for nuclear power plants for the generation of electricity. According to the WNA, at the end of June 2020, there were 440 nuclear
reactors operable worldwide, with annual requirements of about 143.3 million pounds of uranium.
From the reports of leading investment banks, the macroeconomic conditions
driving uranium prices are as follows:
● Advanced nuclear power reactors,
small modular reactors, microreactors, a versatile test reactor, accidental tolerant fuels, and byproduct production of hydrogen were
all extended by the Nuclear Regulatory Commission and Department of Energy,
● Decrease in primary supply due to global producers shutting down mining
operations that weren’t profitable at current pricing levels, depleted mines closing, and large COVID-19 related production shutdowns,
● Lowest uranium production in over
a decade, creating a global supply deficit where production was only about two-thirds of consumption,
● WNA reports there are about 50
large-scale nuclear reactors under construction with 15 projected to be put into service in 2021,
● The announced infrastructure plan
by the Biden Administration will provide a major boost to clean energy and the nuclear industry will be a beneficiary.
Across the ten banks and analysts most active in the sector, a term
structure of rising uranium spot prices which are significantly above today’s prices are forecast almost across the board from 2020
to 2024. These projected increases are primarily due to the projected supply / demand imbalance. There has been a uranium supply reduction
from both low prices, closures, and COVID-19. Nuclear energy is a growth industry, fueled primarily by new plants with the greatest number
located in China, Russia, and India over the next 5 years. Further, small modular reactors and advanced reactors are expected to begin
coming online during the next decade. This should lead to additional demand, causing a contracting shortage, in the coming years, as historical
contracts roll-off. Recently, due to mine closures in response to COVID-19, the market price of uranium has increased sharply, in contrast
to other commodities.
Based upon these pricing factors specific to the uranium industry,
we believe that uranium prices will improve over the coming years for Western to initiate full-scale production in its best properties.
Vanadium
With the exception of the Hansen/Taylor Deposit, most of the
Company’s mining assets, including the Sunday Mine Complex, contain vanadium either as a stand-alone product or a co-product
to uranium.
Conventional and new vanadium applications include steelmaking,
aerospace, stationary energy storage, batteries, and chemicals.
When a very small amount of vanadium is added to steel the hardening
effect greatly increases its strength. And while steelmaking accounts for roughly 90% of all vanadium currently consumed, it’s
estimated that vanadium is only used in about 9% of all steels today.
In a research report, BMO Capital Markets identified a structural
change in the vanadium markets. China, the largest vanadium producer in the world, has seen supply disrupted by environmental monitoring
and rules while domestic demand was increasing. During 2017, BMO observed ferrovanadium exports falling by 30% year over year and
projected that China would become a net importer of ferrovanadium. In 2018, this forecast was validated as China which had been
a net vanadium exporter became a net vanadium importer. On the demand side, China announced a new high strength rebar standard
to increase earthquake resistance in February 2018 that became effective on November 1, 2018. On the supply side in its efforts
to fight pollution, Chinese environmental inspections resulted in the closing of dirty processes in which vanadium was recovered
as a byproduct. These policy changes were very positive for vanadium prices. As a result of these structural changes, vanadium
demand exceeded vanadium supply putting the market into a deficit and pushing the prices to all-time highs during the fourth quarter
of 2018.
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The substantial appreciation in vanadium price during 2018 catalyzed
the Company to pursue the Sunday Mine Complex Vanadium Project during 2019.
After steelmaking, the second largest market for vanadium is
that of catalysts and chemical applications. Significant new sources of demand for vanadium are also expected to originate from
vanadium redox flow batteries (VRFB).
Section 232 National Security Investigation
of Imports of Vanadium investigation was undertaken by the U.S. Department of Commerce during 2020. After a 270 day study period
the investigation was concluded and a report submitted to President Biden on February 22, 2021. The President has 90 days to decide
if he concurs with the findings and recommendations and determine whether to take an action to mitigate the impairment of national
security.
The current vanadium market price is $7.10 per pound as of December 31,
2020 which is an increase from the December 31, 2019 price when the price was $6.10 per pound.
COMPETITION
There is global competition for uranium properties, capital,
customers and the employment and retention of qualified personnel. We compete with multiple exploration companies for both properties
as well as skilled personnel. In the production and marketing of uranium, there are a number of producing entities globally, some
of which are government controlled and several of which are significantly larger and better capitalized than we are. Several of
these organizations also have substantially greater financial, technical, manufacturing and distribution resources than we have.
Our future uranium production may also compete with uranium
from secondary supplies, including the sale of uranium inventory held by the U.S. Department of Energy. At the current time, DOE
uranium sales have been suspended. In addition, there are numerous entities in the market that compete with us for properties and
operate in situ recovery (“ISR”) facilities. If we are unable to successfully compete for properties, capital, customers
or employees or with alternative uranium sources, it could have a material adverse effect on our results of operations.
With respect to sales of uranium, the Company competes primarily
based on price. We will market uranium to utilities and commodity brokers. We are in direct competition with supplies available
from various sources worldwide. We believe we compete with multiple operating uranium companies.
With respect to sales of vanadium, the Company will compete
primarily based upon availability and secondarily on price. There will be direct competition with primary production, secondary
production, and co-production from various companies and processors worldwide as individual entities come online or increase production
to address the supply deficit.
ENVIRONMENTAL CONSIDERATIONS AND PERMITTING
United States
Uranium extraction is regulated by the federal government, states
and, in some cases, by Indian tribes. Compliance with such regulation has a material effect on the economics of our operations
and the timing of project development. Our primary regulatory costs have been related to obtaining licenses and permits from federal
and state agencies before the commencement of production activities. The environmental regulatory requirements for the ISR industry
are well established. Many ISR projects have gone a full life cycle without any significant environmental impact. However, the
process can make environmental permitting difficult and timing unpredictable. Western does not plan to utilize an ISR mining process
on its properties.
Mining Permits are disclosed on a per mine
basis in the “Properties” section, below.
Reclamation and Restoration Costs and
Bonding Requirements
At the conclusion of conventional mining, a site is decommissioned
and reclaimed. Reclamation involves removing evidence of surface disturbance. The reclamation liabilities of the US mines are subject
to legal and regulatory requirements. Estimates of the costs of reclamation are reviewed periodically by the applicable regulatory
authorities. The reclamation liability represents the Company’s best estimate of the present value of future reclamation
costs in connection with the mineral properties. The Company determined the gross reclamation liabilities at December 31, 2020
of the mineral properties to be approximately $906,811.
The Company is required by State regulatory agencies to obtain
financial surety relating to certain of its future restoration and reclamation obligations. The Company has provided performance
bonds issued for the benefit of the Company in the amount of $906,811 to satisfy such regulatory requirements.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.