January 26, 2012
I was asked to provide you feedback on the statement: “Nearly 40% of our nation’s uranium deposits are located in Forest Service and BLM lands in northern Arizona”. Up front, I can say that this statement is not accurate as stated; the 40% estimate is much too high a value. After conducting some research into the matter, I’m certain that the “40%” figure was derived by comparing two distinctly different types and categories of resource estimates; this was inappropriate, as I hopefully have outlined below. Let me explain….
The 40% value was based on comparing two resource assessments—(1) one conducted by the USGS that provided an estimate of the uranium resource endowment in the Grand Canyon region and (2) another compiled by the U.S. Energy Information Agency (EIA) for the estimated uranium reserve for the entire United States. In mineral resource terminology and application, the terms endowment andreserves have distinct and important differences. Endowment refers to the in-place mineral resource, some of which is discovered, and the remainder that is predicted to occur based on favorable geologic conditions; much of the endowment resource is not yet proven or discovered. Our uranium endowment included rock that contains as little as 0.01 percent uranium oxide (uranium-bearing rock). Not all of this endowment, whether discovered or not, will be economic at all times.
In contrast, reserves apply to ore-bearing rock that has been determined by a mining company or independent analyst as likely economic, given a multitude of factors (deposit form and grade, mining factors, economics, regulations, and many, many more considerations). The USGS does not calculate reserves. Each year the EIA receives uranium reserve estimates from the active, domestic uranium mining and exploration companies and related industries; these reserves are uranium deposits classified as economic resources within actively held properties. The reported reserves represent a small part of the uranium resource picture. Thus, the domestic uranium reserves reported by the EIA should in no way be inferred to represent the uranium resource endowment for the entire United States.
The USGS’ uranium resource endowment for the Grand Canyon region:
The estimate of an undiscovered uranium endowment in the breccia pipes is an estimate of uranium that may exist in orebodies in breccia pipes that have never been drilled and may only have limited indirect exploration by geophysics and surface geochemistry. The methodology used to make such projections is well vetted, but it still relies upon a projection that areas poorly explored or unexplored are similar to a reasonably well explored and understood “control” area; the control area that was applied in the USGS assessment included several of the 1980s breccia pipe mines. The uncertainty inherent in this approach is handled by suggesting that the endowment may vary from some number with a 95% certainty to another number with a 5% certainty. The uncertainty is also handled by delineating geographic areas of varying favorability that is based on the geologic criteria, then weighting them differently. The reported value for the Grand Canyon deposits—375 million pounds of uranium oxide—is the mean value of this range; hence, we use the term “mean undiscovered uranium endowment”. No economic consideration is given to the part of this uranium endowment that may actually be mineable, whether now or in the future.
The U.S. uranium reserves:
The uranium reserves of the U.S., as reported by the EIA (http://www.eia.gov/cneaf/nuclear/page/reserves/ures.html), are based on reported data from companies, other public sources, and expert judgment. Typically the numbers are comprised of values from ore deposits that have been drilled and estimates made of the “measured and indicated” resources, representing varying average grades and grade cutoffs. Publicly traded companies have an obligation to report such numbers to government regulatory agencies using an independent third-party analysis of their data. The EIA collects, compiles, and publishes the uranium reserves data that is provided by the companies.
The “40%” calculation:
In testimony before the Natural Resources Committee, one of the industry witnesses stated that the breccia pipe deposits of northern Arizona “comprise over 40% of the US domestic uranium reserves”. I queried this witness via email and was then able to put together the calculation of this statement. They used the USGS estimated resource endowment for the breccia pipe deposits of the Grand Canyon region, which is 375 million pounds of uranium oxide. And they used EIA’s reported 2003 uranium reserves estimate of 890 million pounds of uranium oxide for the entire U.S (the 2008 estimate was not available until late last year). Divide 375 million pounds (Grand Canyon endowment) by 890 million pounds (U.S. reserves) and you get 42%. This “about 40%” value has since developed a life of its own, although it mixes and compares endowment with reserves, which is inappropriate and misleading.
I hope that this helped. If you have any further questions, then just ask.
Brad
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Bradley S. Van Gosen
U.S. Geological Survey
Central Mineral Resources Team
M.S. 973, Box 25046
Denver, CO 80225
(303) 236-1566
(303) 236-1425 (fax)
bvangose@usgs.gov

