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

Sunday Mine Complex

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.

Matthew Gordon: Fantastic. So you’re in PDAC at the moment, pounding the streets and manning the stand are you?

George Glasier: Oh, that’s right. You know, I’ve been at PDAC for a few days it is, you know, one of the big conferences. Of course, you’ve been here before, so you know.

Matthew Gordon: I don’t miss it, George, I have to say. It’s quite a big one: there’s up to 30,000 people. I mean, what’s the turnout been like? Obviously with this Corona virus? I’ve heard a few reports.

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

Matthew Gordon:  I’m hearing that resounding message. But George, it’s the first time we’ve spoken to you guys, so thank you very much for that first of all. This is a story new to our investors, so I wonder if you can give us that 1-minute overview of the company and then we’ll pick it up from there?

George Glasier: Well, a quick overview of the company: of course, we’re a US resource holder with Uranium and Vanadium in the States of Utah and Colorado. Mine’s ready to go into production. The Sunday Mine complex was opened this last summer, 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 can take the ore and move it to the outside and then truck it off site when the market is right. So, we have a fairly large resource holding:  43-101s or JORC standards on a number of our resources. Investors can get onto our website and look at that. So, there’s a quick overview of the company.

Matthew Gordon: Beautiful. Beautiful. Actually, you touched upon something there, which was the ore pads; because I think there was a little bit of kerfuffle in the market at the beginning of the year when I think that the Colorado Department for Reclamation, Mining and Safety were talking to you about the licenses on all 5 mines under the Sunday Mine complex. So, what’s happened with that? I know there’s been a couple of press releases, but if you don’t mind running us through that?

George Glasier: If I can give you a background of what happened; and this started with the mine that we own called the Van 4 mine. The Van 4 we also… a mine we acquired from 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 granted by the Department of the State. So, several years later, that first 5-years expired, we went in to extend it under the regulations of the State. You had two five-year temporary cessations, and if you didn’t go into mining activities, then you would have to reclaim the mine. So, we went in and applied for, 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 the board won, the District Court said, you have followed your regulations and the company, which was in this case, Western, had a right to apply for and be granted a second 5-year extension.

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

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

So again, we’re probably the first test case where the Sunday Mine will have a hearing in April to determine what we’ve done and whether we’re in ‘active status’. And we believe we’ve done everything to comply with what they say is active status.

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

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

Matthew Gordon: Right. Okay, so you’re claiming you’re active because you’re physically doing things in and around the mine and underground in terms of stockpiling ore?

George Glasier: We were prepared to take the mines out and ship ore. What happened is, we were just going to take it directly from the loaders, put it into the trucks and haul it off site. Well, the mine permit basically 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 you build the ore pads.

Matthew Gordon: Which you have just done?

George Glasier:  – So we are not prepared to take the ore out. But again, we’ve complied with their requirements right to the letter.

Matthew Gordon: Well let’s finish off on those, George. I mean, they asked you to do a couple of other things and I noticed in the press release, you say you have done those things. Well, run through what you have done, what you’ve spent money on.

George Glasier: What we had to do, there were three things, requirements: one, we want us to cover the low-grade stockpile, and that was done even before we opened the mine. So, we did that and they signed off 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, things went well – the upgrading of the storm drainage system, there was already a storm drainage system there, but it needed some upgrading and some repairs. So that was one of the requirements. We finished that about two months ago and announced that and they signed off on that. And the third requirement was the construction of the ore pads to the design that was already approved. So that was done by an independent contractor, certified by an independent engineer. That report was submitted last week to the State and they should sign off on that shortly and say, fine; the ore pads are constructed according to the design that’s been approved and in the permit.

Matthew Gordon: Right. So that answers the questions which they raised last September to you. So, you spent time when you received that letter in September, through until recently getting that done?

George Glasier: Right. And clearly what we did first, 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 much moisture or the ground was soaked. So, we were basically waiting for the right conditions, weather conditions, which we had this February to construct those ore pads. That’s why we didn’t do that first: simply because we didn’t have the right conditions. But now that is all finished.

Matthew Gordon: 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 argue the case that you are an active mine again, on that basis. Yes? Okay. Now you mentioned the phrase, ‘antis’; what do you mean the ‘antis’? These are people who are anti-mining in Colorado. What are they doing?

George Glasier: Yes, we’re actively mining and we’re removing ore, we put ore in the mine, and we stockpiled it in the mine because it wouldn’t let us take it out. So there was actually ore that was mined stockpiled 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 kinds of activities, but we actually mined ore; if that’s not active, I’m not sure any mine would ever be active.

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

George Glasier: Well, you know, they’ll be probably somebody at that hearing that will contest whether we were active – and that’s the point. And I’m not sure what their arguments will be under the existing rules and the way they’ve administered those, you know, I’m not sure what their argument would be. They may say, well, wait until the new rules come out. 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. So again, 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 just mining 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 broad definition and we’ll see what comes out. And that’s what they’ve had in the past.

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

George Glasier: When Energy Fuels bought the mine, they actually put in monitor wells. And so, there was activity there. It didn’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 Fuels acquired the mines from Dennison. So there was activity during that 10-year period, and certainly activity during 2019.

Matthew Gordon: Okay. You’re feeling confident. You will continue to spend money between now and that hearing in April? Keeping the mine active. So, what are the things that you’re going to be doing between now and then and how much are you going to be spending doing those things?

George Glasier: Again? You know, we are probably already active without taking that ore and putting it on the ore pad. But again, that may be something we do: open up the mines and take the ore and put it on the ore pad. We do have some places that we could ship samples of that ore; if you recall, one of the reasons we opened this mine was because of the very high-grade Vanadium. Vanadium prices, you know, a year and a half ago were sky-high. So, we had planned to do this and pull the samples of that very high-grade Vanadium 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 not quite the demand for Vanadium. But we’re assessing what to do; ship the samples, take a little bit of ore out, ship the samples off site. But right now, as you know, there’s really no place to go. The Uranium price is not high enough, and probably the Vanadium price is not going to justify shipping the order to a processing plant, either in the US or off-shore.

Matthew Gordon: Well, explain something to me George, because I just want to understand the process, because we’ve not talked to many companies who’ve gone into formerly producing mines and started them up. So just help me – so what studies have you done? Have you got a PEA?

George Glasier: We basically opened the mine because 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, you know, with our geologists, with our production people assessing the mine and saying, okay, this mine is ready for production. You know, a little bit of repair work was done, but mostly it was some development drilling, removing waste and ore production.

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

George Glasier: Of course, the 43-101 that was done on the Sunday Mine complex was done on a small drill-out that Dennison mines completed 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 which you can basically see on our website, you know, it shows that there’s about 3Mlbs of Uranium in that small drill-out. Well that’s why we knew that based on the historic operation, that when Union Carbide started this mine, it basically bypassed and did not take all the high-grade Vanadium ore where the grades of the Uranium were lower. And that’s why we went in primarily, because that is not part of that 43-101; that was not even assessed when Dennison did it because it was lower-grade Uranium but very high-grade Vanadium, and we reported 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 would start to mine. And that has still got Uranium but it’s not as high-grade as the drill-out and the potential for the rest of them.

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

George Glasier: We could obviously do a PEA on that particular drill-out. We could do a PEA now that we’ve opened the mine. We could do a PEA on the ore that was not included in that 43-101. So, the big issue is, okay, where are we going to process it? Mining costs are pretty simple. 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 is where 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 X price, because it’s unknown. First of all, the only processing plant that’s really available is the Energy Fuels plant, it’s shut down now, they’re going to 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 full production cost, you would be stuck with the unknown of the process.

Matthew Gordon: I wasn’t really coming at it from…eventually we would have got on to asking you about that: where do you process it and so forth. And I think, you know, that’s a topic worth discussing. But just coming back to the study component, like as an ex-banker, I’m trying to understand, you know,  what do we know about, what do you know about what you’ve got today, which would allow me, if I was financing this thing, to be able to get it financed?  And usually, I’m a conventional banker, I would be looking at those studies, those economic studies to try and understand it. And traditionally that’s PEA, Pre-Feasibility Study (PFS), Definitive Feasibility Study (DFS). But you’re re-entering an old mine and I just want to know what’s going on in your head because you’ve got a plan here. Clearly, you’ve been doing this a long time. I just want you to kind of share with me or all of these viewers, what is that go forward plan if someone like me, in my old profession of banking, doesn’t have a measure by which 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?

George Glasier: Okay, well this is a simple mine, we opened the mine with the same contractor that Denison had in there when Denison was producing, and that contractor was charging Denison so much per time to take the order and put it outside the mall. And of course, then you had to haul it to the mill and Denison was hauling it to the White Mesa Mill and 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 a lot more than just producing ore. But if it goes into the ore production stage of this thing and it’s producing ore, then there’ll be a cost per ton, okay?  And that basically is our, almost our full cost. There are some administrative costs, there are a few of the supplies that we 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, and we’ve got a cost per ton of putting that ore outside of the mine. And that ore will 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 have in a ton of rock, and we know the cost of that.

Now we know that if we transport it to the White Mesa Mill, we know how far it is and we can get a bid from a trucker and tell you how much it costs to truck it there, which we already have pretty much that knowledge. So, then we could have to say, okay, what’s going on? What’s the arrangement to process it at the White Mesa 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.

Matthew Gordon: It’s a big mill. It’s a big mill.

George Glasier: I was with the company that built that mill, and when we started that mill, we had 1Mt of ore stockpiled at the site. That processing plant takes at least 700,000t of ore, and so they don’t have the capacity to produce that in their current developed and permitted mines. So, what’s Mark going to do? You know, and again, you know he hesitates to say, because I don’t think his plans are firm, but again, I think what he’s going to do is say I’ll take ore from the independents, the other companies, because that helps them. It helps the independents and helps us. But it certainly gives him cash flow to fill up that mill. That mill is costing them a lot of money to sit there. And I’ll tell you, I think for the good of their shareholders, and I’m still a shareholder of Energy Fuels, they need to put that mill into full operation as soon as they can. And again, it’s going to be dependent on the price of both Uranium and Vanadium, but maybe that’s coming soon with the action of the US Government.

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

Matthew Gordon: Okay. Okay. So, I hear you on that one. Just let me come back; I want to do these steps to kind of really make sure I get it. Okay? So just coming back to how you guys get funding, I think in September you had USD$2.7M, you’re spending 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 when are you going to need to go out and raise some capital?

George Glasier: We have in US, $1.5M in the bank, you can see our burn rate without operating the mines, is a little over USD$100,000 a month. So that’s, you know, we don’t need money right now. Now, if we open up the mine again, that takes cash. Obviously, we spent cash last summer with the contractor and that, we spent about USD$100,000 on the ore pads, and we had a contractor 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 to basically contest, or we’re going to go into this state with all of our guns just to say, this is an active mine. We’ve got a top litigating attorney on our side plus we’ve got consultants; that costs a little bit. So, we are spending a little bit outside of our normal expenditures of holding properties and the general and administrative. So, but unless we are operating the mines, we won’t need additional cash for some time. Now, if the market turns all of a sudden, we’re going to open those mines and it’s going to take some cash.

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

George Glasier: You know, we could get that kind of ruling soon, or it could be maybe when the Government starts buying after that new budget comes out, you’ve read the same thing. It’s uncertain when something might happen, but it could happen very soon, or it could be a little bit longer. But you know President Trump has something in mine to help the US industry, and we’re prepared. That’s why we’ve got those mines ready to go, so that we can be one of the suppliers to whatever need is out there.

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

George Glasier: It doesn’t cost you anything really to get the mine going. Well, I’ve turned the metres back on; the electric meters, deposits of about USD$20,000, but again, it’s not much. So again, when we start to turn the mine on for production, we’ll have some kind of 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’ll have the economics laid out because we’ll know what we’re going to do with the ore. 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.

Matthew Gordon: Yes, I’ve heard that.

George Glasier: It’s a pretty nice price. The Sunday Mine certainly can make money at that price. Now is the Government going to step up and buy at USD$60 or USD$65? We don’t know, but if they do, you can apply the economics and so can we and so can financial plan for investors to give us the money, which is not a lot of money, depends on what kind of arrangement 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 part of, we bought a lot of ore from the independents. We’d ship a truckload of ore and you get paid 30 days down the road. So that is not much financing for that because you just have to mine each day and ship ore and then you get paid.

Matthew Gordon: So, you think on the basis of the old 43-101, you can convince people that you know the scale of the ore available to you underground. You’re saying that that’s going to be good enough for financiers to say, okay, we understand how much ore they’re going to be able to mine?

George Glasier: Oh, of course. In fact, we can open up the mine and take a bit of ore and show them. That’s one thing, you know, they can go right in there and they can talk to the geologists, and see what development drilling we did. So, they can see that. And obviously we’re not going to go into full production just yet. You know, if the Government decides to buy 2Mlbs, you know, that’s going to be split, spread across a number of producers. So, we could probably produce half of that the first year, but we’re not going to, I don’t think we’re going to get that much. So, we’re going to go in and do some limited production to start with because I don’t think, if that’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 of that.

Matthew Gordon: 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 bunch of money on the capex here?

George Glasier: We will use the contractor, he’s already available to us. The contractor has all the equipment, so we don’t buy anything. We’ve got a little bit of mining equipment ourselves, but he will bring the equipment. He was mining for Dennison and he’s sitting there with nothing to do. He’s already committed to do the mine for us. So, there is no capital cost in the way of equipment.

Matthew Gordon: Okay. You need a good idea of what you’re going to be able to sell at to be able to work out what the contract looks like with him, because he is obviously going to make a margin. Right? Otherwise he takes it all. potentially. What do you 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.”

George Glasier: 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 very high-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 recovers Vanadium, so it’s got that additional value that drives the cost of Uranium down. I’m not going to give you a number yet, but again, I’d like to see if Energy Fuels can do USD$60 or USD$65 at that mine, I’d shut the market -why would I want to sell at USD$40 if the market, if their production, which they are going to be the biggest producer of this, there’s no doubt about it. And they’re going to 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, but you really need a price that can keep this industry alive.

Matthew Gordon: But you’re talking about a bifurcated market there, with the US selling at one price and the rest of the world selling at another. Right. And you think that’s realistic?

George Glasier: Yes, I think so. We’re waiting to see what the Government program is, if that’s the program we’re going to produce 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 the ore into yellow cake, you just have to have them know. If there was an emergency where the US needed it, they could do that and have a mill, a new mill built within a year. The US Government could do things like that. So maybe you can mine both U308, as well as ore, and they can get a lot more for their money by stockpiling ore.

Matthew Gordon: Well, I heard an interview you did with Scott at Proactive, where you suggested 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 me to understand it? Why would the Government take the risk on the recovery component? Do you think it’s just all about security? So therefore, it’s irrelevant what the delta on the risk is? Why would they do that?

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

You know, the processing plants, you can build a new processing plant that’s just a structure with tanks and pumps and things like that. You know, obviously you’ve got to get permits, but the US Government, they declare an emergency, they would 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 that way, give the miners what they need, you’ve acquired the ore and turned it into yellow cake when you need it, but you haven’t spent the full cost of acquiring yellow cake.

Matthew Gordon: Okay. But I agree that it potentially could be a saving if they’re prepared to take the risk on the recovery for it. So I think there’s something there. But you don’t know anything that we don’t with regards to the Government’s plan to buy ore versus U308?

George Glasier: I don’t know anything. It’s just a possibility. Nobody knows anything about what the plan will be. And the first thing is there’s only a proposed budget. There are no real dollars there yet. If there’s real dollars in one of the agencies, maybe the department of energy will set out the forum, the department of energy in the past bought all of the Uranium for 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 Department of Energy to develop a program to buy this material in whatever form it is, but they’ve got to have basically the money to do that. They say, okay, we’ve got the USD$150 million or whatever, right now it’s a proposed budget and there’s no cash there for the department to do it.

Matthew Gordon: Yes, I mean it’s really quite vague at the moment. And I’m looking forward to, hopefully, this week’s announcement from the department of energy, but can I talk about two more things? You mentioned one of them, which is the mill; you talked about doing deals there, which obviously makes sense. So where are you in that? Have you had discussions with, you’ve mentioned Energy Fuels, who we have spoken to, are there others that you’ve spoken to? How do you process what you’ve got?  I guess, and I know you said you’re not quite sure what the cost will be, but how do you go about finding out?

George Glasier: We’re constantly talking with Energy Fuels, here at PDAC, and again, I think once their plans firm up, then they can talk to us seriously about what they can do with our ore. But again, they’re in the same position; they don’t have a contract, they don’t have an off-take. So that 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. I think they moved 6,000t or 8,000t. That’s what? A few days of processing? And they are not going to run the mill for that period of time. They need to run that for a 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 their contract and off-take, I suppose, that would be the logical thing to do.

They’re going to be one of the suppliers if the Government buys, or if the Government does something else, whatever might be announced in the next few days. I don’t know what that is. You know, 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’re going to contract for deliveries right away. You know, who knows what they’re going to do? You know, the working group had a lot of suggestions, a lot of 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, 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.

Matthew Gordon: Yes, I agree with you. I don’t think anyone knows. And the language has been beautifully politick and unclear. But going back to the mill component, I get that both sides are going to have a different view of this one. You’re of the view: I’ve got ore, you’ve got a mill which is under-utilised. I can supply it into you, 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?

George Glasier: Other options; obviously there are a couple of other mills in the United States. They’re not in the same condition 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 you take a look at it. If Energy Fuels wouldn’t take ore from the other, and there’s not just Western, there’s other companies who can produce ore. So, the other companies could do, you know, Enfield owns the mill, and I know they’ve got some mines that they want to put into production. So, there are other options. 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 if the economics are right, it will be done.

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

George Glasier: I think if the right deal comes down, 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 because you’ve got to take advantage of the price when it’s there, and Energy Fuels, if they’re going to bid on, you know, a 1.5Mlbs, they’re going to have to deliver it fairly soon, and where are they going to get it? They don’t have that production capacity right now. Now, given time, they can bring other projects 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 market cap 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.”

You don’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 at the mill, and you make money off of that. Energy Fuels can make a nice profit up from buying more ore – there’s no doubt about it. We did it in the past. You know, Dennison was buying ore when they were running the mill because they couldn’t fill it with their own. So, it just makes economic sense to open that mill to other people. But Energy Fuels makes money and everybody else does. And if Energy Fuels believes that they don’t want anybody else make money, it’s hurting their shareholders as much as it’s hurting mine or Enfield’s or anybody else’s. So, you know, at some point, you have got to look after the shareholders; that’s the key. You know, don’t worry about the competition.

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

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

George Glasier: Well, it’s on track and still in existence and we have not delivered against it, you know, because they’ve deferred to delivery, simply because we said, Hey, at these prices we’re not going to open the mine. We could go out and buy the Uranium, but there would be probably very little margin, if any in it. So they’ve agreed they didn’t need the 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 we haven’t delivered into it or you would have seen that in our financial statements. And again, under the current market conditions, they’re probably out buying in the spot market. You know, there’s a lot of Uranium so they don’t need that Uranium we contracted for. So, and again, we’re not signing new contracts, we’re not even looking at new contracts because the US utilities are not prepared to pay the higher price. And I understand where they’re coming from. You know, when you can buy at USD$25, why sign a USD$60 contract? So again, I think long-term contracting will come, but we’re going to have to see that 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?

Matthew Gordon: 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 not in a position to be talking about signing contracts, even if the price was USD$60 today, you’ve got to move this project further along here; you’ve got to work out how much you can actually mine and get to surface first, so that that’s the process you’re going through at the moment. Is that correct?

George Glasier: Right, right, and until we have the economics there, you know, there’s no reason to talk to the utilities. I mean, at this point, we talked to them, we talked to the buyers, but again, the time is not right. You know, the prices are not right, and then maybe they won’t be in the next 2-years. But eventually they will be, you look at all the analysts out there and they said that there should be, there’s going to be a crossover between the supply and demand. When that happens, you’re going to see Uranium 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 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.

They’re getting enough money, raising enough money to keep their assets, but they’re not 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 here in Canada where they can get this flow-through money, and we don’t have that in the US, so we’re at a disadvantage, but we don’t need to explore – we’ve got plenty of resources already, you know, declined in US so, but you know, without companies developing, and we’ll take a look if you want to develop them, you know, the Sheep Mountain, look at their PEA: USD$150 million – Energy Fuels isn’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.

Matthew Gordon: No, I agree. I agree with you.  I like this bit of the discussion because you’re being realistic, and saying like, potentially, if the US Government don’t actually firm up on exactly what they’re going to do for us, this industry, this Uranium industry, as part of the bigger nuclear picture, if they don’t firm up on that and give us the prices towards USD$60, USD$65, maybe there’ll be price discovery in the market and maybe it doesn’t matter, but it’s going to take a couple of years for that process to run its course. You guys, you junior Uranium guys are running on vapour right now; all of you, because there’s no revenues, obviously. But hunkering down is the smartest thing to do – that’s what you’re telling me, right?

George Glasier: Yes. Well that’s right. And you know, I think the companies will hold on, they’ll have to cut their costs just like Energy Fuels did a major layoff, 60 days ago they took some steps, cut the cost, you know, companies are cutting their costs or trying to live off of the investments that they can get. But maybe they can last two years, but everybody’s going to have to cut back. And right now, there wasn’t much interest in the Uranium sector at this conference. You know, Gold -that was the big thing. But you know, if you went out to raise money, now there’ve been some small capital raises by the small companies, but nothing major. So again, this industry is holding on, barely, not just in the US but around the world, you know? And so again, we need to have a higher world price and I think that will come. Whether it goes to USD$60, I don’t know, it depends on where the production 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 the contracts at whatever price they’re willing to do. And then the next year of production will come whether there’s some in Australia, some in the US, but again, if the Kazakhs and the Russians could put Uranium into the market at USD$25 for the next 20-years, it’s going to stay at $25.

Matthew Gordon: 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 the cycle? Because like you say, you’ve talked in other interviews about being able to get ore to surface and let’s assume you can come up with some production agreement with Energy Fuels or another you think you can get into production quite soon, and you’re telling me in this interview, you think that you can put the numbers together in a way – it feels a kind of, a bit like, you know, back of an envelope; I’m going to do some quick numbers for you here – here’s what we think we can get. So, can you give me some money? It’s simpler. It’s simpler. Is that what you’re telling me?

George Glasier: 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$8 to $10, then we’ve got a Vanadium mine. So again, we’re not totally dependent on the price of Uranium, unlike virtually everybody else. Now, Energy Fuels has some Uranium and Vanadium. But take a look at the rest of the United States, the rest of the world, they’re dependent on Uranium. Maybe a few that have a little bit of Vanadium, but not high-grade Vanadium. So, we basically could be driven by the Vanadium market, which is a spot market, not a long-term market. We met with some of the analysts that cover some of them Vanadium and do some of the reports and get some idea of what they think’s going to happen with it. So again, we’ve got to be ready. Maybe it’s not your Uranium; maybe we turn this mine around 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.”

Matthew Gordon: But Vanadium has been traditionally quite volatile. And I see 90% of the 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$7 today. It bounces around and it has been volatile. I mean, can you base a business solely off of that? Even with high-grade?

George Glasier: Well, you know, again, since we don’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 process some, there’s processing plants offshore, they can handle this. Okay, and that’s when the Uranium, or the Vanadium price went up. That’s why they all came 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 way up, maybe that’s still not an option. Maybe, but we’re looking, we’re always talking to people. There’s a possibility of building a Vanadium processing plant in the United States which should recover Vanadium from these ores.

Matthew Gordon: Do you know what the scale of the operation could be? How much ore Vanadium have you got?

George Glasier: Well, you know, again, if you take a look at the small drill-out that was done, the resource of Uranium, the Vanadium resources 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 of Vanadium. But again, we went in and when we looked at the mine, the Vanadium is actually higher than the 6:1 that Union Carbide historically produced. But again, we don’t report that, and we would just use that historic, which, you know, we have to be careful what we report to the market. Bear in mind, we’re also an SEC reporting company, not just in Canada. The Canadian rules are a little looser, the US rules are very tight. And so, what we report in the way of resources and that, have to be qualified.

And that question came up in our presentation, we call these historic resources, even though they’re compliant with Canadian and Australian standards, in the US you can’t say that. So again, we call them historic because apparently that’s what the US security law required. I can’t tell you that there’s 100Mlbs in the Sunday mine, but a lot of that mine hasn’t been mined and it hasn’t been explored. 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’s other properties owned by other companies. There’s a lot of it in the area, and some are owned by Energy Fuels, some of them by Enfield, some owned by private companies. So, you know, it’s an area that there’s a lot of resources produced a lot in the past, and it can, at the right prices, produce a lot in the future: both Uranium and Vanadium.

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

George Glasier: Some of the customers of the Vanadium financed the thing themselves, and I can’t give you the details, but if there’s a shortage of Vanadium, and actually, you know what the ones that cover this industry, they say there is not going to be any new production unless it gets up. 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 you don’t. And of course, then the by-product reduction of Vanadium, you know, from slags and so on, but that’s somewhat limited; how much more it’s tied to steel production. So again, where are you going to get, even if the demand for Vanadium just goes up, graduated like it has, without the battery, you know, adding anything to it. There’s got to be some shortages of Vanadium, maybe not in the next 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.

Matthew Gordon: 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 do you think it needs to get to before you can have discussions about even like funding something like that?

George Glasier: I think if we can get up into the USD$9 to $10, it looks very attractive from a plant and you know, the Sunday 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 that price.

Matthew Gordon: You think you can make money at that point?

George Glasier: We can do an economic analysis, and we can do that if we need to do that. But again, financing may not be dependent on announcing an independent finance, we might be able to do it with the off take customer. But again, all those things are just possible. They’re not in place yet. I don’t want to represent that they are. But again, this is why, you know, we are holding ready for the Uranium or Vanadium, or one or the other, to move to a place where the mine makes economic sense.

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

George Glasier: The technology ablation, which we have kind of renamed kinetic separation because that kind of describes it; ablation is a medical term. The developers, or the people that developed this technology 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 sandstone hosted minerals; that doesn’t mean that it is Uranium, Vanadium, it could be other minerals, they coat the sand. Okay? It’s very hard coating. And the way you remove that, you mine it, you dissolve it in an acid, okay? That dissolves all of the metals off of the sand. Well, kinetic separation takes this and does it without any chemicals. It does it with kinetic energy; by driving particles of the 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 would in a, you know, sand and gravel operation, and then the mineral is all contained in the fines and you basically have clean sand without mineral, that you can just leave at the mine site.

So, what you do, you reduce the amount of material that has to be processed. And the tests that have been done with the machines that we have, basically show that you 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 mine 100t and you’ll ship 10t for process. And that’s where you are saving, and the environmental effect comes in, because the worst part of Uranium production is the milling: that creates the toxic waste. And mining doesn’t create toxic waste because we don’t use chemicals in the mine, but the mill uses chemicals and that’s why the milling process is expensive and the disposal of the waste from milling is expensive. So kinetic separation will reduce the amount of material 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 our commercial machine in Colorado and of course we had a press release out about this and then the state of Colorado hired a guy said, well, we don’t know what this is all about. So, they went through a whole number of public meetings to try to determine if the department of health should get involved in licensing this lighter Uranium.

Well, after all these hearings, they couldn’t decide what it was. So, they went to the NRC, and the state of Colorado operates under the NRC rules. It’s an agreement State, but they went to the NRC and there was a staff member at the NRC who made a real quick, and as our lawyers say, unfunded or unfounded recommendation, well just consider it know, and that’s when the State came back and said, well we think, I guess it’s milling. We think that’s a faulty determination by the NRC and others. We haven’t gone back to the State because the State is relying on what the NRC says. So, what we’ve done is, it is no secret, 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 it milling or is it mining? And there’s a lot of precedents that say things that are done at the mines or mining.

Now this is nothing; it’s secondary blasting, and our position is, if you consider this milling, you better start regulating all mining as milling because we all blast 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’ll make a ruling on it, we don’t know. But again, we haven’t pressed it because the market right now wouldn’t justify it. So, as the price goes up, we’ll be closer to, I think to going to the NRC and saying we need a decision on this. They take their time, but it is in the process. So right now, we’re not doing anything. But there’s other options: even if it’s determined to need some kind of license, not necessarily a milling license. And I don’t need to go into the details of milling versus no, but again, even if it’s determined that you need a source material license, which is basically, to possess the Uranium, that’s easier to get. But we contend that’s not even needed because this is a mining process, it’s not a mill process.

Matthew Gordon: 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’s just 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’s market, but at the right time you will step in. That’s what I’m hearing.

George Glasier: We’ve already invested quite a bit 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 experts to 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 a decision. And it takes a while, we’ve met with them several times and we’ll have follow-up meetings, but we believe that it’s a decision that doesn’t have to be made today but it should be made within the next year.

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

George Glasier: We’ve tested ore, there’s been more tested, not just in our mines, but other ores that have been tested extensively on this machine: ores from Africa and ores from around the United States. So, it’s not just for our ores, it could be used around the world to reduce production costs and to reduce the environmental impact of Uranium production. And most ore around the world are sandstone hosted ores.

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

George Glasier: Yes. Within the last year or so. I mean, we haven’t touched anything more. We’ve had samples. We’ve actually tested some Iron ore, interestingly enough, you know, on that process and that’s not your Uranium, so we can use it. We could test Zinc. We had a drum of low-grade Iron ore out of Minnesota that we upgraded. Now again, there is a lot of light, low-grade iron ore in Minnesota. That’s not commercial. But again, we did a test on small quantity. Now, you know, iron ore is a huge quantity of material. Now whether it’s economic for these guys, you know, we tested it to show 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 as they’re sandstone hosted. But again, we haven’t done any Uranium testing, simply because it hasn’t been necessary because we basically, we potentially could move the machines out of the State of Colorado; the State of Utah hasn’t ruled out what it is, neither has the State of Wyoming, but there’s no reason to do that yet. But the machines are in the State of Colorado. So the Colorado said, don’t do it until we decide what this is. And now they’ve decided maybe it’s milling and we’re not going to black run milling licenses because we don’t agree with it.

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

And again, once they make this ruling, is this kind of fairly cheap? In terms of how much cost it will add to your process, or are you going, well actually at a 10:1 ratio, that’s what, whatever it costs, it’s going to be fine?

George Glasier: It’s basically run by electricity. It’s a very small energy cost and it depends on how many machines are operated by one operator. So, it’s a couple of dollars a ton. It doesn’t cost very much. Now again, the machines that we have, that commercial machine was built to go into Sunday Mine, a small mine. So, you’ll need multiple machines because you know, it actually goes right into the mine. You can build them bigger; it wouldn’t fit into the mine. So, if you don’t operate outside the mine, you build a bigger one. But the one that we built is the size to go actually into the mine, operate in the mine, and put the waste material back into the mine. So, the cost of operation, if we build a bigger one would be less because one person can operate a small one or can operate a big one. So labour is one of the major costs, but it’s a matter of a few dollars per ton.

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

George Glasier: Fortunately, for a small mining operation, you would need five of these. There’s 5 mines there; you would need 5 of them because you’ve got five different locations and you’d pick five smaller ones, or maybe you would just build one big one and bring the material out. But the 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 in the 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 happens is, Sunday mine has been mined, so it can operate in Sunday mine easily. But you know, they can also operate on the surface and you could either take the waste back in to backfill the mine if you want to do it a little more cost or you could dispose it when on the surface. Again, you can build these things any size you want, but this one happens to be built to go in a mine the size of the Sunday mine.

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

George Glasier: Patented technology. It’s under US patents. We have the rights to that. 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 way you operate this thing. And so that’s so important because we’ve got the only operating machines, I’m not saying it couldn’t be duplicated. We shipped one of these to China. They could probably reverse engineer it and build one, no doubt about it. But the way you operate these things, it’s operated by computer technology and you know, quite frankly, you put this material into this machine and there’s a timing of these things; you’ve got to leave it in just the right amount of time or it’ll grind that sand to fines. And if you don’t leave it in long enough, it won’t remove all of them. So, it’s the operational issues also that are proprietary, and we’ve run it enough, so we understand it. And I’m not saying somebody couldn’t learn that, but you know, it’s going to take some time. 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’ve tested, it’s not ready to go because the economics are not there.

Matthew Gordon: But no one’s ready to go on Uranium. But you said it works for things other than Uranium. So, have you, are you looking at getting contracts or agreements in place with other miners, with other commodities, and start monetising this technology of yours?

George Glasier: No, I said we’ve tested other minerals. Again, case with the iron ore you know, it’s an issue that those are in massive quantities. Okay, and would take huge machines to do, and not the ones 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 economics of iron ore go up and down. And some of the other minerals we’ve tested, it’s the same thing; they’re small mines, we’ve tested from different locations. But nobody right now, the mineral market is not screaming for this because none of the 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 have great big equipment, but smaller mines, maybe it’s more economical; it doesn’t cost very much to build a small one. You know, they are pumps and pipes. Basically, what this, and the special patent and nozzle design.

Matthew Gordon: 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, you may or may not receive phone calls from other Uranium juniors.

George Glasier: If we use kinetic separation on the Sunday Mine, you’re going to produce ore that has probably 30% to 40% Vanadium in it and 2% or 3% Uranium. And that is so high-grade; if you ship that to an existing processing plant like the White Mesa Mill, they would have to reduce the capacity because the back end of the White Mesa Mill couldn’t handle the output. So, I mean there’s also the issue of maybe you should build a new processing plant for really high-grade material somewhere. But again, if we’ve got that high grade material, we don’t have to build it in the US we build it anywhere in the world because transportation costs for a product of that value, is not the constraining issue; you could ship the material anywhere in the world because it’s such high value, once it’s upgraded. The economics; if you’ve got, you know, 30% or 40% Vanadium and 2% or 3% Uranium – that’s a lot of value and a ton of rock.

But again, 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 probably just ship raw ore to the White Mesa Mill because that’s what it is, rather than this high-grade that they would probably have to blend down with their low-grade stuff, any way to put it through.

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

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

George Glasier: Price goes up and down and it’s based on, I suppose how the investors are feeling about the market at any one time. We can come out with announcements, but we can’t guarantee the price. We can’t guarantee there’s going to be a contract or production next year. Now that’s the problem, you know, and the share prices: virtually everybody’s has gone down. You know, they’ve recovered a little bit, but the Uranium sector is down and yes, I wish, there was something I could do about it. You know, I’m a big shareholder of Western. I said on one interview, not long ago; if you want to make money in the Uranium industry in the next 30-days, you shouldn’t be in this industry. This is the longer term in any company, not just ours. You’ve got to take a longer view of Uranium, you know, a year or two. If you invest in this, expect profits and maybe nice profits with any of the companies, but it’s a year or two investment, not 30 days. Real profits are going to be made for the 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?

Matthew Gordon:  I think that’s been said by a few, 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 have been sitting on the Uranium thesis for the last three years and you know, still haven’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 time like this. You know, today, now it’s Uranium and it was previously Gold, and you know, there’s lots of commodities go through their ups and downs. But for you guys, I guess you’re cutting back your G&A as much as you can. You’re only spending what you need to – that’s what you were telling me earlier?

George Glasier: We could cut back a little bit. We’ve got a lot of claims, a lot of properties, I suppose that’s one of our major costs: it’s holding the properties. We could cut back some of the, not the key assets and the we certainly wouldn’t cut back the Sunday, but we could cut that. We only got two and a half employees; the rest of the stuff we do with contractors, you know, so that’s the thing we don’t have, we could lay off all two and a half employees. You can’t do that. The two and a half employees that we have are the key people: myself, our CFO, Rob and a part-time operations guy. 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 is high because we have two jurisdictions, you know, our auditors have to audit to the US and the Canadian sides. They have to review our financials quarterly under US law, but Canadian, it’s only yearly. We’ve got additional costs because we’re a dual, you know, country, you know, reporting a company, and that’s a disadvantage. I don’t know what we can do about that. I keep talking to our attorneys and our accountants, but again, because we are under this jurisdiction, it costs more and you’d be surprised of our burn, how much is being public company. But we have to, I mean, we don’t have a choice. I don’t know how we can cut that other than become a private company. If this company could be taken private by a big cash investor and cash out to shareholders, you know, like the right price and shareholders are probably willing to do that, but we’ve got certain costs built into this thing a, little bit we can cut but a lot of it; the property holding cost and the cost of being a public company are pretty much fixed.

Matthew Gordon: I understand. And I noticed that you did mention that just there; you are a big shareholder. You’re sitting on something, there’s not that many shares 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?

George Glasier: About 5M shares.

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

George Glasier: My shares, I got when we set up the 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 public shareholders 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, done private placements and we bought black range in a share transaction.

Matthew Gordon: And so obviously, that’s still a big chunk, like 5M out of out of 30M is significant, but that’s the case of being diluted down from whatever shares you issued yourself originally. Okay. Understood. And does that mean, do you pay yourself?  I know there’s only two and a half of you, presumably you’d do salaries and so forth, don’t you? Or do you just, you know, do stock options? How do you remunerate yourself?

George Glasier: Yes, I’ve got a few stock options. But now and I get a salary out of the company; that’s all public information, low as anybody in this industry with our resources. But I made an interview and I said, anybody else that wants to do this job for the same price who has got the qualifications – you can have it.

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Sunday Mine Complex