Western Uranium & Vanadium (CSE: WUC) - I Can See All Obstacles in My Way (Transcript)

March 10 2020, 16:54 GMT

Candid interview with George Glasier, President & CEO of Uranium developer, Western Uranium & Vanadium (CSE: WUC).

Western Uranium & Vanadium is a relatively small junior miner, even amongst the few Uranium juniors it would be considered small. But it does have a very vocal and outspoken CEO at the helm in the shape of George Glasier. Glasier was one of the founders of US Uranium producer Energy Fuels back in the day. His new company, WUC, is focussed mainly on getting the Sunday Mine Complex back into production. They have 5 other projects of less consequence and certainly not in focus. We discuss how he hopes to do this in the current environment. And he talks openly in places about some of the challenges he is facing.

We don't envy any of the Uranium CEOs at the moment. It's a tough market. However, we expect them to do as they say and say as they do. All too many say what it takes. It's important for shareholders to hold them to account.

The Sunday Complex, made up of 5 underground mines, is in Colorado. Previously owned and operated by Union Carbide and Denison Mines. WUC has been engaged in discussions since sept 2019 with the Colorado Division of Reclamation, Mining and Safety (CDRMS) over the renewal of the mining permits. Currently all permits are considered inactive. WUC believes it has now met the conditions set by the CDRMS and is set to attend a hearing on the 24th April 2020 to present its case. Glasier gives us his view on how that will go.

We also discuss their proprietary ablation technology, now called Kinetic Separation Technology. A lot of supporters of WUC see this revolutionary for the Uranium space, so we dig down in the commercial reality of what it is, if and when it can contribute revenue and what it is worth on the balance sheet. Again WUC is waiting on a decision about how this is categorised by CDRMS and what type of licence it will required. For now it is parked up.

We ask how he can calculate the economics with only a NI43-101, and more importantly how he hope to get funded to get the mines in to production. Glasier also gives us his view on how he thinks that works.

A big part of the economics will depend on the ability of WUC to process their ore. Glasier says that Energy Fuels White Mesa Mill is perfectly positioned to process the WUC ore and the companies have spoken. We wait to see the outcome of those discussions.

And finally we ask Glasier what he meant in an interview recently about the US Government buying Uranium ore from WUC.

Interview highlights:

  • 2:51 - PDAC Conference Observations
  • 3:42 - Company Overview
  • 4:47 - Licensing all 5 Mines: An Update. What Have They Been Spending Money On?
  • 11:35 - Colorado as a Mining Jurisdiction: Problems with Locals?
  • 14:22 - Studies Done and Further Plan of Actions: What's to Come from Western Uranium?
  • 19:14, 52:48 - Getting Funded: What Can They Demonstrate to Potential Investors?
  • 29:42 - Market Dynamics: What Price do They Need to be Profitable?
  • 34:46 - The Mill: Promising Discussions with Energy Fuels and Other Companies?
  • 41:42 - Opinions on Timings & Talks with Utilities for Contracts
  • 47:52 - Vanadium and Uranium Cycles: How Will They Insert Themselves Meaningfully?
  • 55:47 - Kinetic Separation Technology: What is it? Looking at Costs & Testing Results
  • 1:11:08 - Drop in Share Price: What Can They do About it?
  • 1:14:51 - Large Shareholding by Management and Remuneration Principles

Click here to watch the interview.

MatthewGordon: Fantastic. So you're in PDAC at the moment, pounding the streets and manningthe stand are you?

GeorgeGlasier: Oh, that's right. You know, I'vebeen at PDAC for a few days it is, you know, one of the big conferences. Ofcourse, you've been here before, so you know.

MatthewGordon: I don't miss it, George, I have to say. It's quite a big one: there's upto 30,000 people. I mean, what's the turnout been like? Obviously with thisCorona virus? I've heard a few reports.

GeorgeGlasier: It's a bit lower. I think maybethe virus has kept a few people away. The companies are here, but maybe notquite the investor group. That's what we're seeing. We had a booth here and therewas not quite the traffic as in past years.

MatthewGordon:  I'm hearing that resoundingmessage. But George, it’s the first time we've spoken to you guys, so thank youvery much for that first of all. This is a story new to our investors, so Iwonder if you can give us that 1-minute overview of the company and then we'llpick it up from there?

GeorgeGlasier: Well, a quick overview of the company: of course, we're a US resourceholder with Uranium and Vanadium in the States of Utah and Colorado. Mine'sready to go into production. The Sunday Mine complex was opened this lastsummer, it is virtually ready to go. Ore was stockpiled in the mines. Last week,we finished building three ore pads; got them at the complex so that we cantake the ore and move it to the outside and then truck it off site when themarket is right. So, we have a fairly large resource holding:  43-101s or JORC standards on a number of ourresources. Investors can get onto our website and look at that. So, there's aquick overview of the company.

MatthewGordon: Beautiful. Beautiful. Actually, you touched upon something there, whichwas the ore pads; because I think there was a little bit of kerfuffle in themarket at the beginning of the year when I think that the Colorado Departmentfor Reclamation, Mining and Safety were talking to you about the licenses onall 5 mines under the Sunday Mine complex. So, what's happened with that? Iknow there's been a couple of press releases, but if you don't mind running usthrough that?

GeorgeGlasier: If I can give you a background of what happened; and this started withthe mine that we own called the Van 4 mine. The Van 4 we also… a mine we acquiredfrom Energy Fuels when we acquired the Sunday mine complex, and at that time,the Van 4 was in the first of a 5-year temporary cessations, which was grantedby the Department of the State. So, several years later, that first 5-yearsexpired, we went in to extend it under the regulations of the State. You hadtwo five-year temporary cessations, and if you didn't go into miningactivities, then you would have to reclaim the mine. So, we went in and appliedfor, and were granted this second 5-year extension by the board. What happened?The ‘antis’ sued the board, and at the District Court in Colorado that theboard won, the District Court said, you have followed your regulations and thecompany, which was in this case, Western, had a right to apply for and begranted a second 5-year extension.

Well,the ‘antis’ took that to the Colorado Court of Appeal, and the Court of Appealreversed that decision and said, we believe that the state statute really meansthat you have to have physical activity. Now, the Van 4 probably wasn'toperated until maybe in the last operation in 2000. So clearly it didn't havephysical activity - virtually anything. We did some maintenance on the surface,but we didn't do anything leading towards mining at the Van 4. So thatdecision, you know, basically the District Court was reversed, and the DistrictCourt ordered they, the board to revoke the operating license of the Van 4 and putit into reclamation. So that was done…that was about a year, year and a halfago. So, knowing that other mines in the state of Colorado, not just the Sundaycomplex, are on temporary cessation, then the Sunday Mine is in that samestatus; we basically said, okay, we're going to have physical activity, we'regoing to go into the mining mode.

Weopened the mine last Summer and we operated it and we actually produced ore becausethat satisfied it clearly in our mines, that 10-year period. The mine was lastoperated by Denison Mines in 2009 to 2010, and then it went into this period oftemporary cessation. So, we meet the physical test, okay? But again, because ofthe decision of the courts, the Division now is looking at all mines that arein this temporary cessation status to decide if they have to, you know,basically go into reclamation.

Soagain, we're probably the first test case where the Sunday Mine will have ahearing in April to determine what we've done and whether we're in ‘activestatus’. And we believe we've done everything to comply with what they say isactive status.

Now,they're actually going through a rule-making to determine going forward whatactive status means. They don't have good standards right now. Active statuscould be just about anything based on the current interpretation. So, they aregoing through a rulemaking to set that down and say this is active status, andthat probably won't be finished for a year. But that doesn't apply. We contendthis doesn't apply to us. We can't wait a year. I mean they're going to do thehearing now. We are active under the standards as they've applied it in thepast, and we will be actively pursuing that at this hearing in April. So, webelieve the mines will be declared active.

Now,other mines in Colorado may not be; there's a number of them that have not beenphysically active, not that we own them and those are subject, potentially tothe same treatment of the Van 4.

MatthewGordon: Right. Okay, so you're claiming you're active because you're physicallydoing things in and around the mine and underground in terms of stockpilingore?

GeorgeGlasier: We were prepared to take the minesout and ship ore. What happened is, we were just going to take it directly fromthe loaders, put it into the trucks and haul it off site. Well, the mine permitbasically said, before you take ore out of the mines, you have to have ore pads,even if you don't use them. So, they said, don't take the ore out until youbuild the ore pads.

MatthewGordon: Which you have just done?

GeorgeGlasier:  - So we are not prepared to take the ore out.But again, we've complied with their requirements right to the letter.

MatthewGordon: Well let's finish off on those, George. I mean, they asked you to do acouple of other things and I noticed in the press release, you say you havedone those things. Well, run through what you have done, what you've spentmoney on.

GeorgeGlasier: What we had to do, there werethree things, requirements: one, we want us to cover the low-grade stockpile, andthat was done even before we opened the mine. So, we did that and they signedoff on it – a great job. We opened the mine, we were mining ore, and they said,there's two other things we want you to do: we want you to, you know, thingswent well - the upgrading of the storm drainage system, there was already astorm drainage system there, but it needed some upgrading and some repairs. Sothat was one of the requirements. We finished that about two months ago andannounced that and they signed off on that. And the third requirement was theconstruction of the ore pads to the design that was already approved. So thatwas done by an independent contractor, certified by an independent engineer.That report was submitted last week to the State and they should sign off onthat shortly and say, fine; the ore pads are constructed according to the designthat's been approved and in the permit.

MatthewGordon: Right. So that answers the questions which they raised last Septemberto you. So, you spent time when you received that letter in September, throughuntil recently getting that done?

GeorgeGlasier: Right. And clearly what we didfirst, we did the storm drainage; that took a while and then under the license,or the permit procedure, you couldn't build the ore pad if there was too muchmoisture or the ground was soaked. So, we were basically waiting for the rightconditions, weather conditions, which we had this February to construct thoseore pads. That's why we didn't do that first: simply because we didn't have theright conditions. But now that is all finished.

MatthewGordon: Okay, so you feel that you have done what they've asked, you're walking,or confidently walking into this meeting in April expecting to be able to arguethe case that you are an active mine again, on that basis. Yes? Okay. Now youmentioned the phrase, ‘antis’; what do you mean the ‘antis’? These are peoplewho are anti-mining in Colorado. What are they doing?

GeorgeGlasier: Yes, we're actively mining andwe're removing ore, we put ore in the mine, and we stockpiled it in the minebecause it wouldn't let us take it out. So there was actually ore that was minedstockpiled in the mine and waiting for the conditions to be satisfied. So,we've done a lot of things: we went in there, we did drilling, we did all kindsof activities, but we actually mined ore; if that's not active, I'm not sureany mine would ever be active.

MatthewGordon: Right. No. So I wasn't saying active, I was referring to a phrase youused earlier, which was the ‘antis’ have been petitioning and affecting thebehaviour of the Colorado Mining Division. So, you know, are you being affectedby these anti-mining petitions? Is that what you were talking about?

GeorgeGlasier: Well, you know, they'll beprobably somebody at that hearing that will contest whether we were active - andthat's the point. And I'm not sure what their arguments will be under theexisting rules and the way they've administered those, you know, I'm not surewhat their argument would be. They may say, well, wait until the new rules comeout. But we're basically saying, you have to operate under your existing rules.And this is a hearing before the new rules, if whatever they are, are out. Soagain, we believe, and we believe the new rules also will be pretty broad.There'll be a number of activities that constitute active mining, not justmining ore, because when you're developing a mine, when you're doing that,that's certainly active. And that's why I think they have to have a broaddefinition and we'll see what comes out. And that's what they've had in thepast.

MatthewGordon: Right. Okay. So they're anti-mining but they're using the argument thatyou have been inactive for that 10-year period. Therefore, that’s what they'rehanging their coat on, right?

GeorgeGlasier: When Energy Fuels bought themine, they actually put in monitor wells. And so, there was activity there. Itdidn't produce any ore, but they did things there more than just maintaining.And that's the other argument that was done in 2012 and 2013 after Energy Fuelsacquired the mines from Dennison. So there was activity during that 10-yearperiod, and certainly activity during 2019.

MatthewGordon: Okay. You're feeling confident. You will continue to spend moneybetween now and that hearing in April? Keeping the mine active. So, what arethe things that you're going to be doing between now and then and how much areyou going to be spending doing those things?

GeorgeGlasier: Again? You know, we are probablyalready active without taking that ore and putting it on the ore pad. Butagain, that may be something we do: open up the mines and take the ore and putit on the ore pad. We do have some places that we could ship samples of thatore; if you recall, one of the reasons we opened this mine was because of thevery high-grade Vanadium. Vanadium prices, you know, a year and a half ago weresky-high. So, we had planned to do this and pull the samples of that very high-gradeVanadium ore to ship to various potential processing plants. Well, as you know,the Vanadium price has fallen considerably and there's still a few of them,let's say shipping samples. But you know, with these conditions, there's notquite the demand for Vanadium. But we're assessing what to do; ship thesamples, take a little bit of ore out, ship the samples off site. But rightnow, as you know, there's really no place to go. The Uranium price is not highenough, and probably the Vanadium price is not going to justify shipping theorder to a processing plant, either in the US or off-shore.

MatthewGordon: Well, explain something to me George, because I just want to understandthe process, because we've not talked to many companies who've gone intoformerly producing mines and started them up. So just help me - so what studieshave you done? Have you got a PEA?

GeorgeGlasier: We basically opened the minebecause we knew what was in there and we wanted to confirm what was in the mine;that's why we opened it this summer. And we spent 3, 3.5-months in there, youknow, with our geologists, with our production people assessing the mine andsaying, okay, this mine is ready for production. You know, a little bit ofrepair work was done, but mostly it was some development drilling, removingwaste and ore production.

MatthewGordon: So, all right. So, tell me, what do you now know about the mines? Soobviously there's a 43-101 which exists, this was told to you, I guess someinformation, there's some historic data too. But what do you know today aboutwhat you've got under the ground?

GeorgeGlasier: Of course, the 43-101 that wasdone on the Sunday Mine complex was done on a small drill-out that Dennison minescompleted back in 2009, just to determine, you know, a small drill-out. So,most of the Sunday Mine complex has never been explored. So that 43-101 whichyou can basically see on our website, you know, it shows that there's about 3Mlbsof Uranium in that small drill-out. Well that's why we knew that based on thehistoric operation, that when Union Carbide started this mine, it basicallybypassed and did not take all the high-grade Vanadium ore where the grades ofthe Uranium were lower. And that's why we went in primarily, because that isnot part of that 43-101; that was not even assessed when Dennison did itbecause it was lower-grade Uranium but very high-grade Vanadium, and wereported that on press releases and then the market could go and look at that.But the grades of Vanadium are very high and that is the first ore we wouldstart to mine. And that has still got Uranium but it's not as high-grade as thedrill-out and the potential for the rest of them.

MatthewGordon: So let's come back to these studies, just so I can understand theprocess, because I'm learning here. So the 43-101 one is old: it's 2009. Wouldyou look to upgrade that, or would you move straight to PEA? What is thesequence of events that you think you've got to go through?

GeorgeGlasier: We could obviously do a PEA onthat particular drill-out. We could do a PEA now that we've opened the mine. Wecould do a PEA on the ore that was not included in that 43-101. So, the bigissue is, okay, where are we going to process it? Mining costs are prettysimple. We could go through a PEA and tell you what it costs to pull the mine,the ore out of that mine. The issue is, you're probably going to ask me iswhere are we going to process? Okay, and what is the processing cost? So,there's really no way to complete a PEA and say we can get yellow cake in the Xprice, because it's unknown. First of all, the only processing plant that'sreally available is the Energy Fuels plant, it's shut down now, they're goingto start up. There are going to be other ones starting up so what's going,what's going to be the status? So, if you did a PEA trying to do it on the fullproduction cost, you would be stuck with the unknown of the process.

MatthewGordon: I wasn't really coming at it from…eventually we would have got on toasking you about that: where do you process it and so forth. And I think, youknow, that's a topic worth discussing. But just coming back to the studycomponent, like as an ex-banker, I'm trying to understand, you know,  what do we know about, what do you know aboutwhat you've got today, which would allow me, if I was financing this thing, tobe able to get it financed?  And usually,I'm a conventional banker, I would be looking at those studies, those economicstudies to try and understand it. And traditionally that's PEA, Pre-FeasibilityStudy (PFS), Definitive Feasibility Study (DFS). But you're re-entering an oldmine and I just want to know what's going on in your head because you've got aplan here. Clearly, you've been doing this a long time. I just want you to kindof share with me or all of these viewers, what is that go forward plan ifsomeone like me, in my old profession of banking, doesn't have a measure bywhich I can say, hey George, I totally get what you're doing. Here's the money.So, you know, what, what is the go forward plan to get funding?

GeorgeGlasier: Okay, well this is a simplemine, we opened the mine with the same contractor that Denison had in therewhen Denison was producing, and that contractor was charging Denison so muchper time to take the order and put it outside the mall. And of course, then youhad to haul it to the mill and Denison was hauling it to the White Mesa Milland processing it. So, the contractor cost, and while we weren't producing ore,we were paying the contractor a fixed fee each month because we were doing alot more than just producing ore. But if it goes into the ore production stageof this thing and it's producing ore, then there'll be a cost per ton, okay?  And that basically is our, almost our fullcost. There are some administrative costs, there are a few of the supplies thatwe put into the mine, roof bolts, matting, things like that.

So,then we take that per ton cost of production and the cost that we will pay, andwe've got a cost per ton of putting that ore outside of the mine. And that orewill have a certain amount of Uranium, a certain amount of Vanadium, okay? So,the content, mineral content of that ore will give you the value that you havein a ton of rock, and we know the cost of that.

Nowwe know that if we transport it to the White Mesa Mill, we know how far it isand we can get a bid from a trucker and tell you how much it costs to truck itthere, which we already have pretty much that knowledge. So, then we could haveto say, okay, what's going on? What's the arrangement to process it at the WhiteMesa Mill? And of course, you've interviewed Mark and talked to Mark Chalmers,and again, that White Mesa Mill is ready to go, but it doesn't have enough ore,and there's no doubt about it.

MatthewGordon: It’s a big mill. It’s a big mill.

GeorgeGlasier: I was with the company thatbuilt that mill, and when we started that mill, we had 1Mt of ore stockpiled atthe site. That processing plant takes at least 700,000t of ore, and so theydon't have the capacity to produce that in their current developed andpermitted mines. So, what's Mark going to do? You know, and again, you know hehesitates to say, because I don't think his plans are firm, but again, I thinkwhat he's going to do is say I'll take ore from the independents, the othercompanies, because that helps them. It helps the independents and helps us. Butit certainly gives him cash flow to fill up that mill. That mill is costingthem a lot of money to sit there. And I'll tell you, I think for the good oftheir shareholders, and I'm still a shareholder of Energy Fuels, they need toput that mill into full operation as soon as they can. And again, it's going tobe dependent on the price of both Uranium and Vanadium, but maybe that's comingsoon with the action of the US Government.

So,the key to determining the total cost and the value of the Sunday Mine orecoming out of there, is what kind of transaction can we make with Energy Fuels?And that's the short term.

MatthewGordon: Okay. Okay. So, I hear you on that one. Just let me come back; I wantto do these steps to kind of really make sure I get it. Okay? So just comingback to how you guys get funding, I think in September you had USD$2.7M, you'respending or thereabouts, you're spending, I don't know, you were spending USD$700,USD$750 per quarter up until then. So how much money have you got today and whenare you going to need to go out and raise some capital?

GeorgeGlasier: We have in US, $1.5M in the bank,you can see our burn rate without operating the mines, is a little over USD$100,000a month. So that's, you know, we don't need money right now. Now, if we open upthe mine again, that takes cash. Obviously, we spent cash last summer with thecontractor and that, we spent about USD$100,000 on the ore pads, and we had acontractor build those and those are not complete. Now we've got some costs,you know, that we're going to, you know, a small amount of cost. We're going tobasically contest, or we're going to go into this state with all of our gunsjust to say, this is an active mine. We've got a top litigating attorney on ourside plus we've got consultants; that costs a little bit. So, we are spending alittle bit outside of our normal expenditures of holding properties and thegeneral and administrative. So, but unless we are operating the mines, we won'tneed additional cash for some time. Now, if the market turns all of a sudden, we'regoing to open those mines and it's going to take some cash.

MatthewGordon: Right. Okay. So, you're moving forward but trying to conserve yourmoney. I appreciate lawyers and so forth and this hearing on the 8th April isgoing to take a lot of time, effort and a bit more money. But if it's found inyour favour, you would then look to move to properly being active and openingup the mine – is that what you're telling me?

GeorgeGlasier: You know, we could get that kindof ruling soon, or it could be maybe when the Government starts buying afterthat new budget comes out, you've read the same thing. It's uncertain whensomething might happen, but it could happen very soon, or it could be a littlebit longer. But you know President Trump has something in mine to help the USindustry, and we're prepared. That's why we've got those mines ready to go, sothat we can be one of the suppliers to whatever need is out there.

MatthewGordon: Okay. You are taking care of business, as far as the administrativeside of things: you've got to get the permissions to be able to get back inthere. Okay, so let's kind of park that if we may, I just need to get thisanswer to the original question which was, how does a company at your stage,without going through the process of economic studies, get financing? Whenyou're ready to switch on, who's going to step in and finance you, even if it'sfor USD$5M? Not necessarily to get into production, clearly, but to allow youto get things set up and ready to put yourself in the best position to get intoproduction, should the Government ever give clarity on what's happening withtheir Uranium and nuclear plants?

GeorgeGlasier: It doesn't cost you anythingreally to get the mine going. Well, I've turned the metres back on; theelectric meters, deposits of about USD$20,000, but again, it's not much. Soagain, when we start to turn the mine on for production, we'll have some kindof offtake contract at a price and we'll basically debt finance that possibly;whether we'll do a placement, you know, an equity placement. But again, we'llhave the economics laid out because we'll know what we're going to do with theore. We'll know what the price is. Now, Energy Fuels has talked, you know,through the market; they just told me today, they want USD$60 to USD$65.

MatthewGordon: Yes, I've heard that.

GeorgeGlasier: It’s a pretty nice price. TheSunday Mine certainly can make money at that price. Now is the Government goingto step up and buy at USD$60 or USD$65? We don't know, but if they do, you canapply the economics and so can we and so can financial plan for investors togive us the money, which is not a lot of money, depends on what kind ofarrangement we have with the mill. If it's simply as Mark Chalmers has said,they might just buy ore, you know in the first Energy Fuels, which I was partof, we bought a lot of ore from the independents. We’d ship a truckload of oreand you get paid 30 days down the road. So that is not much financing for thatbecause you just have to mine each day and ship ore and then you get paid.

MatthewGordon: So, you think on the basis of the old 43-101, you can convince peoplethat you know the scale of the ore available to you underground. You're sayingthat that's going to be good enough for financiers to say, okay, we understandhow much ore they're going to be able to mine?

GeorgeGlasier: Oh, of course. In fact, we canopen up the mine and take a bit of ore and show them. That's one thing, youknow, they can go right in there and they can talk to the geologists, and see whatdevelopment drilling we did. So, they can see that. And obviously we're notgoing to go into full production just yet. You know, if the Government decidesto buy 2Mlbs, you know, that's going to be split, spread across a number ofproducers. So, we could probably produce half of that the first year, but we'renot going to, I don't think we're going to get that much. So, we're going to goin and do some limited production to start with because I don't think, ifthat's the program we're counting on, it's USD$150M, that only buys you about 2Mlbs.So that's not a lot of Uranium. We could easily produce a third or fourth ofthat.

MatthewGordon: How much equipment, how much did you inherit when you bought the mine?I mean are you going to have to go out and buy a whole bunch of, spend a bunchof money on the capex here?

GeorgeGlasier: We will use the contractor, he'salready available to us. The contractor has all the equipment, so we don't buyanything. We've got a little bit of mining equipment ourselves, but he willbring the equipment. He was mining for Dennison and he's sitting there withnothing to do. He's already committed to do the mine for us. So, there is nocapital cost in the way of equipment.

MatthewGordon: Okay. You need a good idea of what you're going to be able to sell atto be able to work out what the contract looks like with him, because he is obviouslygoing to make a margin. Right? Otherwise he takes it all. potentially. What doyou think your number needs to be? Are you saying USD$60 – USD$65 as well?

"We speculate, we know by rumour what might be in there, but we don't know for sure. And what, which ones are those many recommendations are they going to initiate it? We don't know. Nobody knows."

GeorgeGlasier: I think the Sunday Mine,certainly, you know, if you've got $65 Uranium and even current prices of USD$80,it makes sense at that, maybe even a lower price. The Sunday Mine has got veryhigh-grade Vanadium, it's probably the best Vanadium mine in North America.Maybe in the world it's got 2% or 3% Vanadium, and the White Mesa Mill recoversVanadium, so it's got that additional value that drives the cost of Uraniumdown. I'm not going to give you a number yet, but again, I'd like to see if EnergyFuels can do USD$60 or USD$65 at that mine, I'd shut the market -why would Iwant to sell at USD$40 if the market, if their production, which they are goingto be the biggest producer of this, there's no doubt about it. And they're goingto set the price and they make, it's no secret; they want USD$60 or USD$65.That's what the US needs to survive. Some people say it is for the best, butyou really need a price that can keep this industry alive.

MatthewGordon: But you're talking about a bifurcated market there, with the US sellingat one price and the rest of the world selling at another. Right. And you thinkthat's realistic?

GeorgeGlasier: Yes, I think so. We're waiting tosee what the Government program is, if that's the program we're going toproduce to. And nobody knows; I've even made a suggestion that they could simply stockpile ore.They don't need to process it. The Government would be better off buying raw ore,stockpiling it. The Government doesn't need yellow cake. It's easy to turn theore into yellow cake, you just have to have them know. If there was anemergency where the US needed it, they could do that and have a mill, a newmill built within a year. The US Government could do things like that. So maybeyou can mine both U308, as well as ore, and they can get a lot more for theirmoney by stockpiling ore.

MatthewGordon: Well, I heard an interview you did with Scott at Proactive, where yousuggested that that's what the US Government might do - is start stockpiling ore.I mean, I assume he did mean ore, and not yellow cake? Would you just help meto understand it? Why would the Government take the risk on the recoverycomponent? Do you think it's just all about security? So therefore, it'sirrelevant what the delta on the risk is? Why would they do that?

GeorgeGlasier: Risk is that the Government said,we've got to process ore; they could turn around and build a processing plantor you know, get Energy Fuels to process it. It's not the issue that they haveto have yellow cake in the can. We're not out of Uranium in the US. The problemis the mines are going to shut down if we don't get some relief. And if the minesshut down, then it's going to take years and huge amounts of money to bringthem back. So, what they're going to do is, they're even going to invest now tokeep the mining possibility there.

Youknow, the processing plants, you can build a new processing plant that's just astructure with tanks and pumps and things like that. You know, obviously you'vegot to get permits, but the US Government, they declare an emergency, theywould just do it, you know, I mean we'd done that before in an emergency.

I'm not saying they would buy just ore,but it could be a combination: stockpiling ore as well as buying yellow cake, but they could get a lot more for their money right now,obviously then… when they needed to spend the money down the road. And thatway, give the miners what they need, you've acquired the ore and turned it intoyellow cake when you need it, but you haven't spent the full cost of acquiringyellow cake.

MatthewGordon: Okay. But I agree that it potentially could be a saving if they'reprepared to take the risk on the recovery for it. So I think there's somethingthere. But you don't know anything that we don't with regards to the Government'splan to buy ore versus U308?

GeorgeGlasier: I don't know anything. It's just a possibility. Nobodyknows anything about what the plan will be. And the first thing isthere's only a proposed budget. There are no real dollars there yet. If there'sreal dollars in one of the agencies, maybe the department of energy will setout the forum, the department of energy in the past bought all of the Uraniumfor the US - that's how they got it there. They were good at it in the past.They haven't done it for a long time, but it wouldn't take long for the Departmentof Energy to develop a program to buy this material in whatever form it is, butthey've got to have basically the money to do that. They say, okay, we've gotthe USD$150 million or whatever, right now it's a proposed budget and there'sno cash there for the department to do it.

MatthewGordon: Yes, I mean it's really quite vague at the moment. And I'm looking forwardto, hopefully, this week's announcement from the department of energy, but canI talk about two more things? You mentioned one of them, which is the mill; youtalked about doing deals there, which obviously makes sense. So where are youin that? Have you had discussions with, you've mentioned Energy Fuels, who wehave spoken to, are there others that you've spoken to? How do you process whatyou've got?  I guess, and I know you saidyou're not quite sure what the cost will be, but how do you go about findingout?

GeorgeGlasier: We're constantly talking with EnergyFuels, here at PDAC, and again, I think once their plans firm up, then they cantalk to us seriously about what they can do with our ore. But again, they're inthe same position; they don't have a contract, they don't have an off-take. Sothat Mill's sitting there virtually ready to go, but without any ore to fill.And they produced a little, and now it's down to their La Salle project. Ithink they moved 6,000t or 8,000t. That's what? A few days of processing? And theyare not going to run the mill for that period of time. They need to run that fora period of time. It's expensive to start up and shut down. So, what happens?They're going to have their plan. They're going to wait until they get theircontract and off-take, I suppose, that would be the logical thing to do.

They'regoing to be one of the suppliers if the Government buys, or if the Governmentdoes something else, whatevermight be announced in the next few days. I don't know what that is. Youknow, if they're going to announce they've got current funds to do something,maybe they do, they can pull it from other budgets. So maybe they could do something and say we'regoing to contract for deliveries right away. You know, who knows what they'regoing to do? You know, the working group had a lot of suggestions, a lotof recommendations. We haven't seen that yet, but when that's made public,those are the suggestions as to how to save this industry that went to the President,but you know, wespeculate, we know by rumour what might be in there, but we don't know forsure. And what,which ones are those many recommendations are they going to initiate it? Wedon't know. Nobody knows.

MatthewGordon: Yes, I agree with you. I don't think anyone knows. And the language hasbeen beautifully politick and unclear. But going back to the mill component, I getthat both sides are going to have a different view of this one. You're of theview: I've got ore, you’ve got a mill which is under-utilised. I can supply it intoyou, or not, because you have other options. Are there other options in the US?Where do you ship it to, for instance, I mean there's a couple of other mills,I think?

GeorgeGlasier: Other options; obviously thereare a couple of other mills in the United States. They're not in the samecondition Canyon Mill and Wyoming, and there's the Shootering Mill in Utah,which neither one of them are quite ready for production but could be, when youtake a look at it. If Energy Fuels wouldn't take ore from the other, andthere's not just Western, there's other companies who can produce ore. So, theother companies could do, you know, Enfield owns the mill, and I know they'vegot some mines that they want to put into production. So, there are otheroptions. Now, I think that the quickest and the least costly is Energy Fuels,right? If they say, no, we're not going to process anybody else's ore, then ifthe economics are right, it will be done.

MatthewGordon: It's going to come down to, do both sides make money, clearly. And soyou have spoken with them this week at PDAC, it's probably too early to havediscussions on, you know, what's happening with the Nuclear Fuel Working Groupanyway, but you think that they're open to doing a deal with you if you can, ifboth sides can get the economics agreed?

GeorgeGlasier: I think if the right deal comesdown, I think it's good for both Western and Energy Fuels to make some kind ofarrangement, whether it's selling more or whether it's toll milling. I think itmakes sense from both companies standpoint economically to do something rightnow because you've got to take advantage of the price when it’s there, and EnergyFuels, if they're going to bid on, you know, a 1.5Mlbs, they're going to haveto deliver it fairly soon, and where are they going to get it? They don't havethat production capacity right now. Now, given time, they can bring otherprojects on and they just did it and updated their PEA on Sheep Mountain Now,as you see that Sheep Mountain is in Wyoming and it's almost fully permitted,maybe it's fully permitted, but it's not ready for production and I see the marketcap to bring that into production is like on USD$150M.

"I think it's good for both Western and Energy Fuels to make some kind of arrangement, whether it's selling more or whether it's toll milling. I think it makes sense from both companies standpoint economically to do something right now."

Youdon't bring them on if you've got a contract, you know for a million pounds,you do things that are right now and you buy ore, or you let others process atthe mill, and you make money off of that. Energy Fuels can make a nice profitup from buying more ore - there's no doubt about it. We did it in the past. Youknow, Dennison was buying ore when they were running the mill because theycouldn't fill it with their own. So, it just makes economic sense to open thatmill to other people. But Energy Fuels makes money and everybody else does. Andif Energy Fuels believes that they don't want anybody else make money, it'shurting their shareholders as much as it's hurting mine or Enfield’s or anybodyelse's. So, you know, at some point, you have got to look after theshareholders; that's the key. You know, don't worry about the competition.

There'sreally not a competition in this industry. We all need about the same price. Weall produce the same product. It's not like we're trying to compete. There isno market for any of us now, you know; USD$$25 nobody's selling, right? So, Idon't think we're competing against each other, even we're not competingagainst the world, except the fact is we're not selling Uranium at USD$25. Andyou know, you take a look at Cameco; Cameco is not selling Uranium at USD$25.So, you know, we don't have to worry about the competition, we have to worryabout the world market. The competition now is, is the Russians or the Kazakhsthat are keeping that price down, and the oversupply in the market; that's gotto work itself out and then the price will go up. I think the Governmentaction, no matter what the US Government does, it's only temporary. We've gotto have a world price that supports mining around the world: in Canada andAustralia, the US.

MatthewGordon:  Yes, I agree. I agree with that.I think your competition in the US is also Natural Gas, not just other Uraniumpeer groups. Can we talk about like, thanks for that. Like, I guess there's awhole bunch of unknowns in there. You know, you're saying to me, if you can'tget some agreement with Energy Fuels, you've got options, you feel, right?  And you feel that the market is going to needto see a price of USD$60, USD$65 in the US, for people to be encouraged andincentivised to get back into production. If the market takes time to recoverthat, that, whether it be spot price, getting up to whatever it needs to do oryour ability to put contracts in place, which typically get a slightly higherprice than spot, and actually we haven't really talked about that, have we? Whatdoes a company like you, which is re-entering old mines, need to do to be ableto go and talk to utility companies? Because I think you mentioned one agreementfrom 2015 with the utility company, is that still an existence? What does thathold?

GeorgeGlasier: Well, it’s on track and still inexistence and we have not delivered against it, you know, because they'vedeferred to delivery, simply because we said, Hey, at these prices we're notgoing to open the mine. We could go out and buy the Uranium, but there would beprobably very little margin, if any in it. So they've agreed they didn't needthe Uranium. They contracted with us. They are small quantities, and you know,we can't give you the details of the contract as it is confidential, but wehaven't delivered into it or you would have seen that in our financialstatements. And again, under the current market conditions, they're probablyout buying in the spot market. You know, there's a lot of Uranium so they don'tneed that Uranium we contracted for. So, and again, we're not signing newcontracts, we're not even looking at new contracts because the US utilities arenot prepared to pay the higher price. And I understand where they're comingfrom. You know, when you can buy at USD$25, why sign a USD$60 contract? Soagain, I think long-term contracting will come, but we're going to have to seethat price move up. What is the term price is maybe in the low thirties now,but that's still not enough for producers to sign term contracts?

MatthewGordon: Forties I'm hearing; forties that's the rumour. Who knows? Okay. So,then you're early stage, right? You're really kind of early days so you're notin a position to be talking about signing contracts, even if the price was USD$60today, you've got to move this project further along here; you've got to workout how much you can actually mine and get to surface first, so that that's theprocess you're going through at the moment. Is that correct?

GeorgeGlasier: Right, right, and until we havethe economics there, you know, there's no reason to talk to the utilities. Imean, at this point, we talked to them, we talked to the buyers, but again, thetime is not right. You know, the prices are not right, and then maybe theywon't be in the next 2-years. But eventually they will be, you look at all theanalysts out there and they said that there should be, there's going to be acrossover between the supply and demand. When that happens, you're going to seeUranium prices go up. How much they go up depends on… but the longer we wait,the higher that price has got to go because nobody's doing anything. Nobody canget any money. You know, I've been here, talked to all the Uranium companies,juniors right here at this conference and everybody is just holding on.

They'regetting enough money, raising enough money to keep their assets, but they'renot developing, there's not much exploration going on. I mean it's just holding.Explorations are going on a little bit in Canada, obviously, you know, in Athabasca,they're still doing exploration, because they've got special tax laws up herein Canada where they can get this flow-through money, and we don't have that inthe US, so we're at a disadvantage, but we don't need to explore - we've gotplenty of resources already, you know, declined in US so, but you know, withoutcompanies developing, and we'll take a look if you want to develop them, youknow, the Sheep Mountain, look at their PEA: USD$150 million – Energy Fuelsisn’t going to spend that unless they've got a contract and or insurance,you're going to make a money on that. And so nothing is happening.

MatthewGordon: No, I agree. I agree with you.  Ilike this bit of the discussion because you're being realistic, and sayinglike, potentially, if the US Government don't actually firm up on exactly whatthey're going to do for us, this industry, this Uranium industry, as part ofthe bigger nuclear picture, if they don't firm up on that and give us theprices towards USD$60, USD$65, maybe there'll be price discovery in the marketand maybe it doesn't matter, but it's going to take a couple of years for thatprocess to run its course. You guys, you junior Uranium guys are running onvapour right now; all of you, because there's no revenues, obviously. Buthunkering down is the smartest thing to do - that's what you're telling me,right?

GeorgeGlasier: Yes. Well that's right. And youknow, I think the companies will hold on, they'll have to cut their costs justlike Energy Fuels did a major layoff, 60 days ago they took some steps, cut thecost, you know, companies are cutting their costs or trying to live off of theinvestments that they can get. But maybe they can last two years, buteverybody's going to have to cut back. And right now, there wasn't muchinterest in the Uranium sector at this conference. You know, Gold -that was thebig thing. But you know, if you went out to raise money, now there've been somesmall capital raises by the small companies, but nothing major. So again, thisindustry is holding on, barely, not just in the US but around the world, youknow? And so again, we need to have a higher world price and I think that willcome. Whether it goes to USD$60, I don't know, it depends on where theproduction comes in to fill the demand and at what price? And again, Cameco;probably the best producer in the world, is going to take the majority of thecontracts at whatever price they're willing to do. And then the next year of productionwill come whether there's some in Australia, some in the US, but again, if theKazakhs and the Russians could put Uranium into the market at USD$25 for the next20-years, it's going to stay at $25.

MatthewGordon: No, I don't believe they want to do that either. What can you tell me,where do you think you get into this? How do you insert yourself into thecycle? Because like you say, you've talked in other interviews about being ableto get ore to surface and let's assume you can come up with some productionagreement with Energy Fuels or another you think you can get into productionquite soon, and you're telling me in this interview, you think that you can putthe numbers together in a way – it feels a kind of, a bit like, you know, back ofan envelope; I'm going to do some quick numbers for you here - here's what wethink we can get. So, can you give me some money? It’s simpler. It's simpler.Is that what you're telling me?

GeorgeGlasier: Our mine is a two-commodity mine:Uranium and Vanadium; so, it's not just dependent on Uranium.  To get the Vanadium price up into the USD$8to $10, then we've got a Vanadium mine. So again, we're not totally dependenton the price of Uranium, unlike virtually everybody else. Now, Energy Fuels hassome Uranium and Vanadium. But take a look at the rest of the United States, therest of the world, they're dependent on Uranium. Maybe a few that have a littlebit of Vanadium, but not high-grade Vanadium. So, we basically could be drivenby the Vanadium market, which is a spot market, not a long-term market. We metwith some of the analysts that cover some of them Vanadium and do some of thereports and get some idea of what they think's going to happen with it. Soagain, we’ve got to be ready. Maybe it's not your Uranium; maybe we turn this minearound to produce Vanadium.

"Nobody can get any money. You know, I've been here, talked to all the Uranium companies, juniors right here at this conference and everybody is just holding on."

MatthewGordon: But Vanadium has been traditionally quite volatile. And I see 90% ofthe Steel industry, and people talking about VRFB batteries and it's coming.But you know, we saw the spike 18-months ago; back down to USD$3, whereas USD$7today. It bounces around and it has been volatile. I mean, can you base abusiness solely off of that? Even with high-grade?

GeorgeGlasier: Well, you know, again, since wedon't have a large capital cost, if we basically said, okay, we could sell forward,even for 6-months or so, we could start to mine. Obviously, you have got to processsome, there's processing plants offshore, they can handle this. Okay, andthat's when the Uranium, or the Vanadium price went up. That's why they allcame to us. We could get them high grade Vanadium ore to be processed offshore.Of course, that was when the price was USD$20 or higher. If it doesn't go wayup, maybe that's still not an option. Maybe, but we're looking, we're alwaystalking to people. There's a possibility of building a Vanadium processingplant in the United States which should recover Vanadium from these ores.

MatthewGordon: Do you know what the scale of the operation could be? How much ore Vanadiumhave you got?

GeorgeGlasier: Well, you know, again, if youtake a look at the small drill-out that was done, the resource of Uranium, the Vanadiumresources is based on historic ratio of Uranium/Vanadium in the Sunday mine,which is about 6:1. So if you have got 3Mlbs of Uranium, you have got 18Mlbs ofVanadium. But again, we went in and when we looked at the mine, the Vanadium isactually higher than the 6:1 that Union Carbide historically produced. Butagain, we don't report that, and we would just use that historic, which, youknow, we have to be careful what we report to the market. Bear in mind, we'realso an SEC reporting company, not just in Canada. The Canadian rules are alittle looser, the US rules are very tight. And so, what we report in the wayof resources and that, have to be qualified.

Andthat question came up in our presentation, we call these historic resources,even though they're compliant with Canadian and Australian standards, in the USyou can't say that. So again, we call them historic because apparently that'swhat the US security law required. I can't tell you that there's 100Mlbs in theSunday mine, but a lot of that mine hasn't been mined and it hasn't beenexplored. And again, how many pounds you need to start a new Vanadium plant?You know, this Sunday Mine's not the only Vanadium/Uranium property; there'sother properties owned by other companies. There's a lot of it in the area, andsome are owned by Energy Fuels, some of them by Enfield, some owned by privatecompanies. So, you know, it's an area that there's a lot of resources produceda lot in the past, and it can, at the right prices, produce a lot in the future:both Uranium and Vanadium.

MatthewGordon: I guess it comes back to that question I asked earlier, which was, howdo you get to the point where you can say, I think we can mine, you said USD$8to USD$9 just now; if Vanadium gets to USD$8 to USD$ 9, that could beinteresting for you. But how do you get that financed? I mean, whatconversations do you need to have with either an investment bank, like I waspart of, or a fund, or whoever? Strategic, I mean, what are the options on thetable for you, really?

GeorgeGlasier: Some of the customers of the Vanadiumfinanced the thing themselves, and I can't give you the details, but if there'sa shortage of Vanadium, and actually, you know what the ones that cover thisindustry, they say there is not going to be any new production unless it getsup. Vanadium isn't going to come into production anywhere near USD$8 or $10 or$12. It's high cost, and it's not going to come into production. So, you know,you've got Largo in South America, they can step up some production, but youdon't. And of course, then the by-product reduction of Vanadium, you know, fromslags and so on, but that's somewhat limited; how much more it's tied to steelproduction. So again, where are you going to get, even if the demand for Vanadiumjust goes up, graduated like it has, without the battery, you know, addinganything to it. There's got to be some shortages of Vanadium, maybe not in thenext couple of years, but you know, there's just not new production coming on.Because the prices are high. It's not nearly the case as it is with Uranium.

MatthewGordon: What's the price you think it needs to get to, George? I mean, again,I'm trying; you've got high-grade Vanadium, which is great, but what price doyou think it needs to get to before you can have discussions about even likefunding something like that?

GeorgeGlasier: I think if we can get up intothe USD$9 to $10, it looks very attractive from a plant and you know, theSunday Mine standpoint of what, you know, when you look at the grades of the Vanadium,you know, 2% to 3% Vanadium; that starts to look pretty attractive at thatprice.

MatthewGordon: You think you can make money at that point?

GeorgeGlasier: We can do an economic analysis, andwe can do that if we need to do that. But again, financing may not be dependenton announcing an independent finance, we might be able to do it with the off takecustomer. But again, all those things are just possible. They're not in place yet. Idon't want to represent that they are. But again, this is why, you know, we areholding ready for the Uranium or Vanadium, or one or the other, to move to aplace where the mine makes economic sense.

MatthewGordon: So I think that's been clear: you are in position with both Uranium andVanadium, waiting on price recovery, or discovery in the market to get tocertain point. You know, you're suggesting something USD$60, $65 Uranium; USD$9to $10 for Vanadium, at which point you will do an economic study on either, orboth to enable you to get financed. That makes sense. Okay. Thank you. One lastthing, George, one last thing: this kind of got me excited because we havespoken to one other company about something similar and I was trying tounderstand it, which is the, it used to be called ablation, it's now calledkinetic separation technology - sounds much fancier. So, can you tell us whatis it and what does it do?

GeorgeGlasier: The technology ablation, which wehave kind of renamed kinetic separation because that kind of describes it;ablation is a medical term. The developers, or the people that developed thistechnology called it ablation. We acquired the technology, we went with that term,but you know, to better explain it, we just changed the name to kinetics.  And what this is, it's a process for sandstonehosted minerals; that doesn't mean that it is Uranium, Vanadium, it could beother minerals, they coat the sand. Okay? It's very hard coating. And the wayyou remove that, you mine it, you dissolve it in an acid, okay? That dissolves allof the metals off of the sand. Well, kinetic separation takes this and does itwithout any chemicals. It does it with kinetic energy; by driving particles ofthe sand against each other at a very high velocity it releases that coating.And then what you simply do is, you screen off that sand, right? Like you wouldin a, you know, sand and gravel operation, and then the mineral is allcontained in the fines and you basically have clean sand without mineral, thatyou can just leave at the mine site.

So,what you do, you reduce the amount of material that has to be processed. And thetests that have been done with the machines that we have, basically show thatyou can remove up to 90% of the mass and keep about 95% of the mineral. So,what happens; instead of shipping a hundred tons to the mill, you take in your mine100t and you'll ship 10t for process. And that's where you are saving, and theenvironmental effect comes in, because the worst part of Uranium production isthe milling: that creates the toxic waste. And mining doesn't create toxicwaste because we don't use chemicals in the mine, but the mill uses chemicalsand that's why the milling process is expensive and the disposal of the wastefrom milling is expensive. So kinetic separation will reduce the amount ofmaterial you send to the mill, and that's the advantage of it.

Well,we've proven it works now. It's just the issue of getting it into production.And you know, you've read, there's issues with it: we ran the process on ourcommercial machine in Colorado and of course we had a press release out aboutthis and then the state of Colorado hired a guy said, well, we don't know whatthis is all about. So, they went through a whole number of public meetings totry to determine if the department of health should get involved in licensingthis lighter Uranium.

Well,after all these hearings, they couldn't decide what it was. So, they went tothe NRC, and the state of Colorado operates under the NRC rules. It's anagreement State, but they went to the NRC and there was a staff member at theNRC who made a real quick, and as our lawyers say, unfunded or unfoundedrecommendation, well just consider it know, and that's when the State came backand said, well we think, I guess it's milling. We think that's a faultydetermination by the NRC and others. We haven't gone back to the State becausethe State is relying on what the NRC says. So, what we've done is, it is nosecret, we went to the NRC, the commission direct. We've talked to the staff,but we're in front of the commission to decide what this process is. Is itmilling or is it mining? And there's a lot of precedents that say things thatare done at the mines or mining.

Nowthis is nothing; it's secondary blasting, and our position is, if you considerthis milling, you better start regulating all mining as milling because we allblast with dynamite and this is secondary blasting done with basically air, okay?And so, it's an interesting argument and it's in front of the NRC now, when they'llmake a ruling on it, we don't know. But again, we haven't pressed it becausethe market right now wouldn't justify it. So, as the price goes up, we'll becloser to, I think to going to the NRC and saying we need a decision on this. Theytake their time, but it is in the process. So right now, we're not doinganything. But there's other options: even if it's determined to need some kindof license, not necessarily a milling license. And I don't need to go into thedetails of milling versus no, but again, even if it's determined that you needa source material license, which is basically, to possess the Uranium, that'seasier to get. But we contend that's not even needed because this is a miningprocess, it's not a mill process.

MatthewGordon: You're just saying it's admin:  it's just a process you've got to go through.And even if it wasn't a mining license or mining permit required for that, it'sjust a process you've got to go through something that you feel you could get,but it's time and it's money, which you're not going to invest now in today'smarket, but at the right time you will step in. That's what I'm hearing.

GeorgeGlasier: We've already invested quite abit of money. The legal arguments have already been presented to the NRC on paper.A lengthy paper, a technical and a legal paper has been submitted to the NRC. So,we have spent the money through the attorneys in Washington DC, and the expertsto do it. So, it's already, most of the money has been spent on it, you know,so now it's just a matter of the NRC actually taking the action to make adecision. And it takes a while, we've met with them several times and we'llhave follow-up meetings, but we believe that it's a decision that doesn't haveto be made today but it should be made within the next year.

MatthewGordon: So, you did say there that the ratio would be like a 10:1: if you putin 100t of ore, you might get 10t out. Right?

GeorgeGlasier: We’ve tested ore, there's beenmore tested, not just in our mines, but other ores that have been testedextensively on this machine: ores from Africa and ores from around the UnitedStates. So, it's not just for our ores, it could be used around the world toreduce production costs and to reduce the environmental impact of Uraniumproduction. And most ore around the world are sandstone hosted ores.

MatthewGordon: So, has that been all been done quite recently? Has it?

GeorgeGlasier: Yes. Within the last year or so.I mean, we haven't touched anything more. We've had samples. We've actuallytested some Iron ore, interestingly enough, you know, on that process andthat's not your Uranium, so we can use it. We could test Zinc. We had a drum oflow-grade Iron ore out of Minnesota that we upgraded. Now again, there is a lotof light, low-grade iron ore in Minnesota. That's not commercial. But again, wedid a test on small quantity. Now, you know, iron ore is a huge quantity ofmaterial. Now whether it's economic for these guys, you know, we tested it toshow that this could work on upgrading low-grade iron ore. But again, you know,we've tested it on some Zinc. It works, which on other things, as long asthey're sandstone hosted. But again, we haven't done any Uranium testing,simply because it hasn't been necessary because we basically, we potentiallycould move the machines out of the State of Colorado; the State of Utah hasn’truled out what it is, neither has the State of Wyoming, but there's no reasonto do that yet. But the machines are in the State of Colorado. So the Coloradosaid, don't do it until we decide what this is. And now they've decided maybeit's milling and we're not going to black run milling licenses because we don'tagree with it.

MatthewGordon: So in your case, let me get this right; so this machine, thisproprietary technology of yours has been used in the past and tested onsandstone to remove whichever commodities that you were testing for, but not Uraniumyet and not anything in Colorado yet? Got it. Understood. Okay. Understood.

Andagain, once they make this ruling, is this kind of fairly cheap? In terms ofhow much cost it will add to your process, or are you going, well actually at a10:1 ratio, that's what, whatever it costs, it's going to be fine?

GeorgeGlasier: It's basically run byelectricity. It's a very small energy cost and it depends on how many machinesare operated by one operator. So, it's a couple of dollars a ton. It doesn'tcost very much. Now again, the machines that we have, that commercial machinewas built to go into Sunday Mine, a small mine. So, you'll need multiplemachines because you know, it actually goes right into the mine. You can buildthem bigger; it wouldn't fit into the mine. So, if you don't operate outsidethe mine, you build a bigger one. But the one that we built is the size to goactually into the mine, operate in the mine, and put the waste material backinto the mine. So, the cost of operation, if we build a bigger one would beless because one person can operate a small one or can operate a big one. Solabour is one of the major costs, but it's a matter of a few dollars per ton.

MatthewGordon: And again, I guess you're going to have to work at how many of thesemachines you'd need, where you locate them and how much ore you can put throughthem cause that's what appear to be, you know the long pole in the tent, right?

GeorgeGlasier: Fortunately, for a small miningoperation, you would need five of these. There's 5 mines there; you would need 5of them because you've got five different locations and you'd pick five smallerones, or maybe you would just build one big one and bring the material out. Butthe advantage, why bring it to the surface, if you can process it underground?You just save hauling all that ore out the portals and you just back fill inthe old stopes. Now, if you don't have a mine, if it's a newly developed mine,you don't have anywhere to operate in the mine to start with. So what happensis, Sunday mine has been mined, so it can operate in Sunday mine easily. Butyou know, they can also operate on the surface and you could either take thewaste back in to backfill the mine if you want to do it a little more cost oryou could dispose it when on the surface. Again, you can build these things anysize you want, but this one happens to be built to go in a mine the size of theSunday mine.

MatthewGordon: Okay, so this is your proprietary technology. Yes?

GeorgeGlasier: Patented technology. It's under US patents. We have the rights tothat. And it's of course protected in countries that honour US patents: Canada,Australia. Yes. And it's right there. And not only the technology, but the wayyou operate this thing. And so that's so important because we've got the onlyoperating machines, I'm not saying it couldn't be duplicated. We shipped one ofthese to China. They could probably reverse engineer it and build one, no doubtabout it. But the way you operate these things, it's operated by computertechnology and you know, quite frankly, you put this material into this machineand there's a timing of these things; you've got to leave it in just the rightamount of time or it'll grind that sand to fines. And if you don't leave it inlong enough, it won't remove all of them. So, it's the operational issues alsothat are proprietary, and we've run it enough, so we understand it. And I'm notsaying somebody couldn't learn that, but you know, it's going to take sometime. And we've already done it. We've spent 5-years at this. We're willing to,you know, let others use it under license. There are a number of times we'vetested, it’s not ready to go because the economics are not there.

MatthewGordon: But no one's ready to go on Uranium. But you said it works for thingsother than Uranium. So, have you, are you looking at getting contracts oragreements in place with other miners, with other commodities, and start monetisingthis technology of yours?

GeorgeGlasier: No, I said we've tested otherminerals. Again, case with the iron ore you know, it's an issue that those arein massive quantities. Okay, and would take huge machines to do, and not theones that we have. And for the economics again, it goes up and down. So again,nobody's rushing in to say, I've got to have this machine because the economicsof iron ore go up and down. And some of the other minerals we've tested, it'sthe same thing; they're small mines, we’ve tested from different locations. Butnobody right now, the mineral market is not screaming for this because none ofthe commodities are high enough. You know, they go up and down. But again,you've got to find the right project. Some of the big mines you'd have to havegreat big equipment, but smaller mines, maybe it's more economical; it doesn’tcost very much to build a small one. You know, they are pumps and pipes. Basically,what this, and the special patent and nozzle design.

MatthewGordon: So, it sounds to me like you're waiting until the market recovers for Uranium.You're going to use it on your own project here. And I guess at that point, youmay or may not receive phone calls from other Uranium juniors.

GeorgeGlasier: If we use kinetic separation onthe Sunday Mine, you're going to produce ore that has probably 30% to 40% Vanadiumin it and 2% or 3% Uranium. And that is so high-grade; if you ship that to anexisting processing plant like the White Mesa Mill, they would have to reducethe capacity because the back end of the White Mesa Mill couldn't handle theoutput. So, I mean there's also the issue of maybe you should build a newprocessing plant for really high-grade material somewhere. But again, if we'vegot that high grade material, we don't have to build it in the US we build itanywhere in the world because transportation costs for a product of that value,is not the constraining issue; you could ship the material anywhere in theworld because it's such high value, once it's upgraded. The economics; ifyou've got, you know, 30% or 40% Vanadium and 2% or 3% Uranium - that's a lotof value and a ton of rock.

Butagain, you know, I'm not saying the White Mesa Mill couldn't process this stuff;they could adjust the operation to process it, but logically we'll probablyjust ship raw ore to the White Mesa Mill because that's what it is, rather thanthis high-grade that they would probably have to blend down with their low-gradestuff, any way to put it through.

Soagain, economically we're looking at just conventional mining, shipping theconventional work down the road. When the market goes back, kinetic separationis the way to go. And so that's why again, we're not pushing this through theNRC, because the decision can wait a while because the market is not there.And,  again, you would have to have along-term contract or somebody that's going to put in the money to say, I'mgoing to build this high-grade recovery plant.

MatthewGordon: With regards to the, just on the money side of things, potentially thiscould go along, this could go on for another couple of years and you've got tohunkering down, you're going to be fine hunkering down. I think you, like a lotof juniors, share price has been, you know, hit hard the last year. There's nottoo much you can do about it, isn't there?

GeorgeGlasier: Price goes up and down and it'sbased on, I suppose how the investors are feeling about the market at any onetime. We can come out with announcements, but we can't guarantee the price. Wecan't guarantee there's going to be a contract or production next year. Nowthat's the problem, you know, and the share prices: virtually everybody’s hasgone down. You know, they've recovered a little bit, but the Uranium sector isdown and yes, I wish, there was something I could do about it. You know, I'm abig shareholder of Western. I said on one interview, not long ago; if you wantto make money in the Uranium industry in the next 30-days, you shouldn't be inthis industry. This is the longer term in any company, not just ours. You'vegot to take a longer view of Uranium, you know, a year or two. If you invest inthis, expect profits and maybe nice profits with any of the companies, but it'sa year or two investment, not 30 days. Real profits are going to be made forthe investors that can stay in for a while. And the industry is at a low point,so maybe it's a good time to buy?

MatthewGordon:  I think that's been said by afew, I mean we've been talking to Uranium companies for about a year now,learning about the space. It's a quite an opaque space. You know, people havebeen sitting on the Uranium thesis for the last three years and you know, stillhaven't got it right, but they will be right one day; so, it's good, it's fine.But I'm always sort of intrigued by, you know, how companies react in a timelike this. You know, today, now it's Uranium and it was previously Gold, andyou know, there's lots of commodities go through their ups and downs. But foryou guys, I guess you're cutting back your G&A as much as you can. You'reonly spending what you need to - that's what you were telling me earlier?

GeorgeGlasier: We could cut back a little bit.We've got a lot of claims, a lot of properties, I suppose that's one of ourmajor costs: it's holding the properties. We could cut back some of the, notthe key assets and the we certainly wouldn't cut back the Sunday, but we couldcut that. We only got two and a half employees; the rest of the stuff we do withcontractors, you know, so that's the thing we don't have, we could lay off alltwo and a half employees. You can't do that. The two and a half employees thatwe have are the key people: myself, our CFO, Rob and a part-time operationsguy. Okay. To take care of and maintain all this stuff. So our G&A is very,very low. Our capital, our money of holding this company as a public company ishigh because we have two jurisdictions, you know, our auditors have to audit tothe US and the Canadian sides. They have to review our financials quarterlyunder US law, but Canadian, it's only yearly. We've got additional costsbecause we're a dual, you know, country, you know, reporting a company, and that'sa disadvantage. I don't know what we can do about that. I keep talking to ourattorneys and our accountants, but again, because we are under thisjurisdiction, it costs more and you'd be surprised of our burn, how much isbeing public company. But we have to, I mean, we don't have a choice. I don'tknow how we can cut that other than become a private company. If this companycould be taken private by a big cash investor and cash out to shareholders, youknow, like the right price and shareholders are probably willing to do that, butwe've got certain costs built into this thing a, little bit we can cut but alot of it; the property holding cost and the cost of being a public company arepretty much fixed.

MatthewGordon: I understand. And I noticed that you did mention that just there; youare a big shareholder. You're sitting on something, there's not that manyshares out for a start, but you're sitting on like…you're sitting on about USD$4.7M,or something like that. Is that right?

GeorgeGlasier: About 5M shares.

MatthewGordon: About 5M shares. So, yes, you're into this. Have you been buying in theopen market or is that what you did as part of the, when you did …rolling thisinto the shell originally? I mean, how have you done that? Acquired so much?

GeorgeGlasier: My shares, I got when we set upthe company, we were a private company when we first set this up. I owned 50%of it to start with. And of course, I've been diluted when we brought in publicshareholders and when we made acquisitions, like the black range acquisition,so you know, my ownership has gone down, obviously, simply because, you know,we've brought in, we became a public company, you know, we've issued, doneprivate placements and we bought black range in a share transaction.

MatthewGordon: And so obviously, that's still a big chunk, like 5M out of out of 30Mis significant, but that's the case of being diluted down from whatever sharesyou issued yourself originally. Okay. Understood. And does that mean, do youpay yourself?  I know there's only twoand a half of you, presumably you'd do salaries and so forth, don't you? Or doyou just, you know, do stock options? How do you remunerate yourself?

GeorgeGlasier: Yes, I've got a few stockoptions. But now and I get a salary out of the company; that’s all publicinformation, low as anybody in this industry with our resources. But I made aninterview and I said, anybody else that wants to do this job for the same pricewho has got the qualifications – you can have it.

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