Saturday, April 26, 2008

Western Lands Uranium Gopher for April 26 2008

Mining uranium exploration press releases for useful stuff
(A monthly column of money and mining news items)

The rise of nuclear energy, a second act if ever there was one, has given the price of uranium a shot in the arm. In western states in the U.S. interest in uranium mining is growing and with it comes another growth industry - the production of press releases about the uranium mining industry.

In an effort to separate the really interesting from the merely informational, I'm posting my running notes on uranium mining in western states. The choices of the subjects are a combination of what I find in the press release pile and what looks interesting to me and for readers.

I'm focusing mostly on western states that are "west" of the 100th meridian, but this isn't hard and fast. The states of interest are WY, CO, UT, TX, NM, AZ, & NV. For this reason I'm calling this series, which will appear monthly, the "western lands uranium gopher." These are news notes and the content is not to be considered investment advice.

Uranium Bill Moves to Colorado Senate

HB 1161, the survivor of a two pronged legislative attack on uranium mining in the Colorado House, moved to the Colorado Senate where it passed April 16 in a unanimous bipartisan vote of 7-0 in the Senate Local Affairs Committee. The legislation would require uranium miners to prove they can return groundwater to pre-mine conditions. In instances involving an ISR mine, where the groundwater is already “contaminated” with uranium, that’s not much of a stretch. Water testing under the new law would have to be completed by a third-party contractor rather than the mining company, which is a major shift in state law.

The legislation was originally introduced to cover all mining in Colorado, but after protests from the mining industry, was watered down to solely target ISR uranium mines. The legislation was introduced in the House earlier this year by two Democratic state representatives from the Ft. Collins area who responded to vitriolic public criticism of a proposed ISR mine to be located near Nunn, CO, about 15 miles northeast of Ft. Collins. Powertech, a Canadian firm, is the developer of the mine. It is the only proposed ISR mine in the state so far.

Powertech said in testimony about the legislation that the firm does not oppose the initiative. However, Dick Brown, a spokesman for the firm, told the Ft. Collins newspaper he wants the definition of “uncertainty” in the bill tightened up so that it can be calculated by scientific measurement and not by public opinion.

“What we have worked for is amendments to make it more workable and more pragmatic for mining interests in Colorado,” he said.

Civic concerns aired in Weld County

While the most vocal opposition and the legislative proposals have come from Larimer County, the mine site is actually located next door in Weld County. Two days before the vote in the Colorado State Senate, the Greeley city council passed a resolution against the ISR mine saying there were too many unanswered questions about it. The vote was not unanimous. The Greeley Tribune reported that Mayor Ed Clark and Councilman voted against the measure.

On April 10 the Greeley Tribune published an editorial cautioning the city council not to pass a resolution against the mine before all the facts are in. The editors wrote, “We’re skeptical of Citizens Against Resource Destruction.” And the editors wrote, “We’re not ready to dismiss uranium mining just yet. Powertech’s proposal is tempting with claims of up to $3 million in tax revenue and $25-30 million brought into our local economy, including hundreds of well paying jobs.”

The editorial also pointed out Powertech has not yet applied for a permit for the mine which is located in Weld County north of Greeley. The editors wrote, “By the time Powertech brings the proposal before Weld County Commissioners, the company should have a detailed analysis.”

Uranium mining along Utah Arizona border draws fire

Opposition to uranium mine exploration along the rim of the Grand Canyon has created a rift between communities on either side of the Utah Arizona state line. The ‘Arizona Strip’ which is just south of Kanab, UT, includes Kane County which this week pulled out of a cross-border economic development association because of opposition in Arizona to uranium mining. On the Arizona side the Coconino County Commissioners voted to oppose Vane Uranium’s exploratory drilling near the rim of the Grand Canyon. The resolution urged Congress to enact legislation that would ban all uranium mining on federal lands around the rim of the canyon in order to promote tourism. The Vane drilling site is inside the boundaries of the Kaibab National Forest seven miles from the rim of the Grand Canyon.

Kane County Commissioner Daniel Hulet told the Salt Lake City Tribune on April 6 the county is at odds with its counterpart in Arizona because uranium mining, and timber, generate more jobs and economic benefits than tourism. Utah State Rep. Mike Noel, who represents the area, told the newspaper the resumption of uranium mining is in the best interests of the county and the nuclear industry as well as promoting generation of electricity without greenhouse gases.

Noel also introduced a resolution in the Utah Public Utilities & Technology Interim Committee, which he co-chairs, aimed at preventing the U.S. Forest Service and Bureau of Land Management from stopping uranium mining and oil & gas development. While the resolution has no legal standing relative to federal environmental laws, Scott Florence, a BLM spokesman, said environmental impact assessments done 20 years ago still are valid for mining projects. He added that two other uranium mining operations are getting ready to do exploratory drilling despite the troubles with the Vane project.

Noel’s interest in uranium mining isn’t entirely provincial. He is teaming with Utah Rep. Aaron Tilton to try to develop a merchant nuclear reactor in Utah to fill in the power gap created by the cancellation of a 900 MWe coal fired plant last year. The plant was to be built with funding from the city of Los Angeles, but it pulled out citing the effects of greenhouse gases on global warming. However, California still has a 30-year ban in place against new nuclear power plants. How future baseload demand will be met in Utah and California is anybody’s guess regardless of whether uranium is mined in Arizona or not.

British Columbia bans uranium mining

The Canadian province of British Columbia has placed an official moratorium on uranium mining and exploration. Anti-nuclear groups had previously placed a ban in uranium mining in 1980, but it lapsed in 1987. The low price of uranium at the time made the ban moot. The rising price of uranium has re-awakened interest in the metal.

The government’s decision came as a surprise to mining companies. Boss Power Inc. told the Globe & Mail newspaper that it had a deposit potentially worth $1 billion which they now cannot mine. There is no other uranium mining in the province. Saskatchewan produces one-third of the world’s uranium.

Bluerock updates Utah project progress

Bluerock Resources reported that it has signed off on a toll milling and ore purchase agreement with Denison Mines. The agreement secures for Bluerock the capacity to process 60,000 tons of ore in 2008 and 100,000 tons of ore in 2009 and 2010. Assuming an average yield of four pounds per ton of ore, the total output of U3O8 for the three year period will be 1.04 million pounds. At $75/b the output has a potential value of $78 million. The agreement comes to an end in 2010 because Bluerock expects to have its own mill in operation in 2011.

Bluerock Resources announced that it has purchased a 100% interest in the Mancos Uranium Mill Project near Green River, Utah via the acquisition of Mancos Resources Inc. The mill site is expected to use streamlined permitting processes in Utah with a forecast three to four year development timeline for a new standalone 1,200 ton per day milling complex.

The proposed 1,200 ton per day uranium mill will be located on a property six miles northwest of the town of Green River covering an area of approximately 640 acres of land. Key MRI employees have joined Bluerock to ensure the mill permitting and construction processes are successful.

The Mancos Uranium Mill Project is in the permitting/design phase with an estimated start-up date of mid-2011. Public consultation, baseline environmental, and geotechnical assessments have begun, and MRI has also commenced the selection process for design/build engineering firms. The mill is located near Bluerock's uranium projects in the San Rafael Swell, Orange Cliffs and Uravan uranium districts.

Under the terms of the agreement Bluerock will acquire 100% of MRI by fulfilling the following terms; payment of $286,514 (200% of expenses incurred by MRI to date), and 1,500,000 shares of Bluerock. Bluerock stock at market close on April 18 was $0.72/share compared to a 52-week high of $0.90 last month. At the market close price the 1.5 million share of stock would be worth $1.08 million.

Strathmore acquires new Gas Hills uranium deposits

Strathmore Minerals Corporation announces that it has acquired an additional 2.1 million pounds of historical near-surface uranium resources (not NI 43-101 compliant), by staking lode mining claims in the Gas Hills Uranium District, Wyoming.

The Company now holds over 33,000 acres with several historically-defined uranium deposits in the Gas Hills, many of which were planned and fully permitted for open-pit mining in the early 1980's. Strathmore controls 100% of the Gas Hills projects, which now make up the Company's core uranium land holdings in Wyoming.

The newly staked uranium properties, known as the Amazon and Sunset deposits, were previously defined by Federal American Partners (FAP) in 1984. The newly acquired properties complement Strathmore's existing Gas Hills deposits. Production, subject to obtaining the necessary permits and regulatory approvals is planned for 2010.

New Horizon completes acquisition of two mines

New Horizon Uranium Corp. announced that it has acquired the Buck and the Wild Horse uranium properties by staking Federal mining claims. The Buck property in Montrose County, Colorado and San Juan County, Utah is an area of earlier underground uranium mining in the 1950’s at the northwest end of the Paradox Valley. The Wild Horse Property in Humboldt County, Nevada is in an area of previous uranium exploration by Exxon Corporation and adjacent to historic gold and mercury mining. Both properties have no drilling on them and mapping and additional prospecting work is planned for the summer of 2008.

Bill Wilson, President and COO of New Horizon said, “The Buck property is less than twenty miles from the Pinon Ridge Uranium Mill now being developed by Energy Fuels Corporation near Naturita, Colorado."

Tecton gains Swiss investors for Utah mine

Tecton Corp. announced it has entered into a twelve-month financing agreement with Swissalis Group AG of Zurich, Switzerland. Tecton is a US-based exploration company focused on the acquisition and development of a portfolio of uranium properties in the USA and Canada, while Swissalis is a company that specializes in financing junior resource companies by way of private placement.

The agreement between Tecton and Swissalis calls for Swissalis to contribute $1,500,000 in financing to support Tecton’s business plan. Tecton’s business plan is currently centered on advancing two important uranium projects: the Firefly project in south central Utah.

Tecton Corporation also announced it has expanded its land holdings at the Firefly Project in Utah. Tecton holds an option to acquire 100% interest in approximately 4,000 acres as 207 unpatented federal mining claims within the La Sal uranium trend. The claims cover both the Firefly Project and the Grey Daun Mine holdings. Tecton plans an aggressive exploration program with the goal of discovering new uranium deposits.

Firefly is located in San Juan County, Utah, which is approximately 25 air miles southeast of Moab, Utah. The Firefly mine was discovered in 1952 as an extension of the Grey Daun Mine. Production records are incomplete; however, it's likely the two mines together yielded up to 100,000 lbs of U3O8 and 500,000 lbs of V2O5 up through the 1970's. The average grade of the known production was .41% U3O8 and 1.8% V2O5.

No comments: