Colorado-based uranium miner Ur-Energy Inc. URG said Wednesday it will build out its Shirley Basin mine in Wyoming, making it the latest company to move projects forward as the price of the nuclear fuel soars.

The development will nearly double the company's permitted mine production capacity to 2.2 million pounds. The project is wholly owned by the company and fully permitted and licensed in Carbon County, Wyoming.

"This decision was based on our growing uranium sales contract book, a strong uranium market price and an expectation of growing demand for uranium as nations increasingly move toward clean nuclear power," the company said.

At Shirley Basin, Ur-Energy plans to build a plant capable of producing up to 1 million pounds a year of uranium ore concentrate, also known as yellowcake, uranium oxide or U3O8. It will also develop a wellfield for its fluid-based uranium extraction process.

Operating Costs Would Give Ur-Energy Substantial Margin

Initial facility capital costs will be about $24.4 million and wellfield development costs will be $16.3 million. The company expects sustaining capital expenditures to be $9.2 million over the life of the project.

That works out to operating expenditures before taxes and royalties of $24.40 per pound, the company said. That would give Ur-Energy substantial margin at the current uranium price of around $90 a pound.

The miner says the design finalization, materials purchases and construction will take about two years, and work has already started on items that take a long time to procure. 

Also Read: Energy Fuels Ramps Up: Colorado And Wyoming Mines To Skyrocket Uranium Production

Ur-Energy, which already operates another uranium facility in Wyoming, acquired the Shirley Basin project from a French nuclear company now known as Orano in 2013. At that time uranium prices were on the decline after a power plant disaster in Japan soured the world's appetite for nuclear energy.

Since the accident, there has been relatively little invested in building uranium production capacity, but that dynamic has shifted drastically over the past year as prices have shot to their highest point since 2007.

Prices for the radioactive metal have been surging on expectations of a global nuclear power renaissance to aid in the shift from fossil fuels. Expectations of market disruptions if the U.S. decides to ban Russian uranium in response to its invasion of Ukraine have also contributed.

Lower production than expected from Kazakhstan-based Kazatomprom NATKY and Canada-headquarted Cameco Corp CCJ have also contributed to rising uranium prices. 

Miners Look To Boost Capacity

Amid the uranium price ascent, companies have been scrambling to increase production capacity.

Cameco is studying expanding the annual output its McArthur River and Key Lake operations in Canada from 18 million pounds of U3O8 to 25 million pounds. 

Meanwhile, Energy Fuels Inc UUUU in December said it had restarted production at three of its mines in Arizona and Utah and is preparing additional mines in Colorado and Wyoming.

In January, Denison Mines Corp. DNN said it and a joint venture partner would restart a uranium mine idled since 2008. The same month, Uranium Energy Corp. UEC said it had approved restarting uranium production at operations in Wyoming and was advancing restart plans in Texas. 

Last month, IsoEnergy Ltd ISENF announced it would reopen underground access to a uranium mine in Utah during the first half of this year with the goal of restarting production next year. 

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