Opinion ID: 6316351
Heading Depth: 4
Heading Rank: 3

Heading: The Forest Service’s VER Determination

Text: The Forest Service issued its VER Determination in April 2012. The Forest Service concluded that “a discovery of a valuable mineral deposit existed” on July 21, 2009 (the date of the Secretary’s segregated withdrawal). It also concluded that, under the economic conditions as of January 11, 2012 (the date of the mineral exam), “the uranium deposit on the claims could be mined, removed, transported, milled and marketed at a profit.” Two Forest Service certified mineral examiners conducted the analysis for the VER Determination and their findings were approved by a Forest Service locatable minerals specialist. The mineral examiners conducted their examination over several months, making multiple trips to Canyon Mine as well as Energy Fuels’s offices, its Arizona One Mine, and its White Mesa Mill. Their work included verifying claim boundaries, documenting development activities, observing drill core samples, and reviewing various documents provided by Energy Fuels and the United States. They also conducted an economic analysis that considered the 1 Although the Forest Service did not have to prepare a VER Determination, such a determination was relevant to whether the Forest Service would contest the mining claim before DOI. See Forest Service Manual §§ 2814.11, 2819.1–2. See also 43 C.F.R. § 4.451 (DOI regulations providing for the government to contest decisions). The Forest Service’s determination would have been relevant, even if not binding, to DOI’s own decision. See Havasupai Tribe v. Provencio, 906 F.3d at 1162–63 (holding that the VER Determination was “final agency action” for APA review). GRAND CANYON TRUST V. PROVENCIO 9 tonnage and grade of uranium, the capital and operating costs, commodity pricing, and a cash flow feasibility analysis. The economic analysis treated costs incurred prior to 1992 (when operations were suspended) to develop the surface structures and sink the first fifty feet of shaft as “‘sunk’ costs since they were previously completed for mine development and are fixed assets on the claims.” As such, these costs were not incorporated into its calculation of Canyon Mine’s “net sum of cash flows.” The discounted cash flow feasibility analysis showed that, at a uranium price of $56 per pound, Canyon Mine would have a net sum of cash flows of $29,350,736. The report describes this number as “the stream of income generated by the project as a function of time. The sum of cash flows shows whether the proposed mining operation would result in a profit or a loss.” In addition to the VER Determination, the Forest Service conducted a “Mine Review,” dated June 25, 2012. The review was conducted by a thirteen-person interdisciplinary team, which evaluated the 1984 plan of operations as well as environmental, historical, and religious issues related to continued operation of Canyon Mine. The Forest Service concluded that “no modification or amendment to the existing Plan of Operation [was] necessary” and “no new federal action subject to further NEPA analysis [was] required.”