by Vic Kolenc of the El Paso Times
originally published 4/24/2015 at The El Paso Times
Texas Rare Earth Resources Corp., a rare earth-minerals mining startup in Sierra Blanca, has made an agreement to sell millions of dollars worth of uranium to a U.S. subsidiary of the French nuclear energy conglomerate AREVA, the Sierra Blanca company announced this month.
Uranium will be one of the by-products of Texas Rare Earth's proposal to mine billions of dollars of rare earth minerals from the almost mile-high Round Top Mountain, located eight miles northwest of Sierra Blanca and about 85 miles southeast of El Paso.
Federal agencies have deemed rare earth minerals critical to make clean-energy products and high-tech weapons.
First and foremost, the prize is rare earth minerals. However, we have significant by-products (from the proposed mine), one of which is uranium and the other is lithium," said Anthony Marchese, a New Jersey investment banker and chairman of the Texas Rare Earth board.
"This (agreement) makes it easier to go out and get partners" and investors for the proposed rare earth mining operation, Marchese said.
This gives us credibility with potential partners" because UG USA Inc., the U.S. uranium trading subsidiary of AREVA, is a major player in the uranium trading space in the United States, Marchese said.
Officials with AREVA Inc. North America did not immediately respond Thursday to emailed requests for comments about the uranium sales agreement.
The five-year agreement is to begin in 2018, and calls for Texas Rare Earth to supply UG USA with 300,000 pounds of uranium a year, Texas Rare Earth officials reported in an April 6 news release.
At today's uranium price, that would bring in about $12 million a year to Texas Rare Earth, Marchese said. It would cost the company about $13 per pound, or almost $4 million a year, to mine the uranium, he said.
Texas Rare Earth must secure state licenses to mine and sell the uranium, and those licenses are needed before the company could construct its proposed open-pit mining facilities, Marchese said. That's why the sales won't begin until 2018, he said.
The Round Top Mountain has an estimated 96.4 million pounds of uranium, Marchese said.
Jack Lifton, a Texas Rare Earth board member and rare earth minerals industry consultant, said in a statement that the company was able to get the uranium sales agreement because the company has made progress in its tests of a mineral-separation technology commonly used in the uranium mining industry.
Texas Rare Earth holds two state leases to explore and develop a 950-acre rare-earth minerals deposit in the Round Top Mountain.
The minerals are called rare, not because they are hard to find, but because they are found in small concentrations that are difficult and often costly to extract from the ground.
Marchese said the company has spent about $29 million so far to develop its plans — money that has come through the Over-the-Counter, or penny, stock market, he said. It had a deficit of $30.8 million at the end of February, according to its second quarter report filed last week.
The company's stock, which trades under the TRER symbol, was trading at 31 cents per share Thursday.
