Mining uranium press releases for useful news
Parts of this blog post were previously published in Fuel Cycle Week, V8N319 for March 18, 2008 by International Nuclear Associates, Washington, DC
The closing stock prices for the informal collection of uranium firms tracked here continue to fall. In the past month only one of the firms, Uranium Energy (AMEX:UEC) saw an increase in its stock price due to a joint venture announcement in the Grants Mining district in New Mexico.
Penny for your thoughts or your company?
However, at these prices no CEO is going to come to the market to sell shares to raise investment funds since they'd essentially be giving the company away. The stock chart is being discontinued due to the fact that it has gotten too hard to scrape the bottom of the barrel every two weeks to find the price data. This is a metaphor about price data and not a value judgement about the companies noted in this blog post. Most uranium companies are grossly undervalued given their assets in the ground and the brightening future for nuclear energy. Get it? Got it? Good.
U3O8 price plunge continues
The every present threat of hostile takeovers has been mitigated by the falling spot price of uranium. Ux Consulting reported a spot price of $43.50/lb down more than $10/lb from a six month high of $55/lb last December. As long as uranium prices continue to fall, investors will likely seek other industries for a more attractive return on their capital.
The plunging price of uranium triggered several responses to previously inked mining deals. South Korea's state-run electricity company cancelled a deal signed in May 2008 with Yellowcake mining (OTC:YCKM) to jointly explore the Beck uranium mine in western Colorado. The Beck property has 12 known deposits which have been subject to varying amounts of drilling in the past. Beck is in the Uravan historic uranium district with a history of profitable mines.
Bluerock folds U.S. operations
Another compelling picture of what these numbers are doing to the industry is painted by the recent actions of Bluerock Resources (CVE:BRD). Once one of the most promising of the uranium juniors doing business in western Colorado, the firm has ended its toll milling agreement with Denison's White Mesa Mill.
The settlement includes a payment of stock in lieu of cash worth approximately $500,000 which is more than half of its total market capitalization as of March 13. In the past few months the firm shutdown the Whirlwind and J-Bird mines laying off all employees at these operations. Clearly, it makes no sense for firms to deplete their resources in the ground when uranium prices fall below the break even point.
Denison to suspend operations at White Mesa Mill
The firm will temporarily suspend production at its Sunday and Rim mines. and will likely temporarily shut its White Mesa mill in May, once it produces the 500,000 pounds of uranium the company is under contract to produce in 2009. The mill is be expected to restart in 2010.
It is the only operating uranium mill of its kind in the Uranvan mining district spanning Colorado and Utah. Two other projects to build new mills in the region, Mancos in Green River, UT, and Energy Fuels in Montrose, CO, are expected to be impacted due to falls prices of uranium.
Reuters reported Denison’s announcement focused on a steep loss of $56.8 million, or $0.30/share, due to non-cash write-downs of $59 million brought on by falling commodity prices.
Speaking on a conference call, Denison Chief Executive Peter Farmer said the company was in danger of violating a debt covenant tied to its profitability, and that the company was reviewing "strategic opportunities" to keep that from happening.
Options could include: "entering into contracts with utility companies... asset sales, purchases and joint ventures, investments by private equity investors and potential corporate transactions with other uranium producers," Farmer said.
In a press statement, Denison said, significant events in the fourth quarter include:
- Denison sold 400,000 pounds U3O8 during the quarter from U.S. production at an average price of $61.50/lb and 177,000 pounds U3O8 from its Canadian production under the existing long-term contract at an average price of $52.28 per pound.
- Denison and its joint venture partners, AREVA Resources Canada Inc. ("ARC") and OURD Canada Co. Ltd. announced the postponement of the development of the Midwest deposit.
- Denison announced the suspension of mining at the Tony M mine located in Ticaboo, Utah.
- Denison opened the Beaver mine on the Colorado Plateau. The Beaver mine is capable of producing ore containing over 200,000 U3O8 and 600,000 lbs. of V2O5 in 2009 and will be one of Denison's lower cost mines in the region. This may be the only new ore that reaches the White Mesa Mill.
Uranium Energy advances in Texas
Uranium Energy (AMEX:UEC) continues to make progress with permitting a new ISL mine in Texas. The company’s Nichols Project has an NI 43-101-qualified inferred uranium resource of 1.3 million pounds U3O8.
However, environmental groups are contesting the air quality and mining permits as are local ranchers who have convinced the Texas Commission on Environmental Quality (TCEQ) that they have standing. Other parties granted standing to contest the permits include Goliad County, a volunteer fire department, and 43 other parties. The Alliance of Texans for Uranium Research & Action helped the parties with their filings at TCEQ. The hearing is expected to take place in mid-April.
Josh Leftwich, UEC's environmental manager, told the Victoria Advocate the firm expected the permits to be contested, but that TCEQ's executive director has already issued a recommendation to the commission that the permit should be issued and approved.
"We are confident that we can address these concerns and defend the application," he said.
Powertech files with NRC for Dewey-Burdock
There was some good news on a couple of fronts. Powertech (TSE:PWE) announced it had met several important milestones in the permitting of the Dewey-Burdock project in South Dakota. The most important is that the firm has submitted its license application for an ISL mine to the NRC. The firm received an underground injection control permit from EPA in January 2009.
Also in Colorado Black Range Minerals (ASX:BLR) reported it was continuing its exploratory drilling in the Tallahassee Creek mining district west of Canon City. Mike Hayes, managing director, told the Denver Post in February that the project could have 100 million pounds U3O8 making its potentially one of the largest uranium mines in the state. However, Hayes also noted that the effort by Black Range is the fifth attempt since 1954 to make money from uranium mining in the area. Volatile price swings have caused prior efforts to shut down before operations could turn a profit.
Strathmore publishes NI 43-101 for Nose Rock, Dalton Pass
Strathmore Minerals (CVE:STM) completed NI 43-101 Technical Reports for Portions of Nose Rock and Dalton Pass Uranium Properties.
Nose Rock measured & indicated resource at Section 1 Totals 2.6 million pounds U3O8; Dalton Pass measured & indicated resource at Section 32 Totals 3.07 million pounds
The Nose Rock NI 43-101 report covers Section 1, which comprises approximately 540 acres of the company's property. The historical resource for the remaining 4,520 acre property as reported by Phillips Uranium (1979) is 4,383,582 tons at an average grade of 0.163% U3O8 for a total of 14,303,085 pounds (not NI 43-101 compliant).
The Dalton Pass NI 43-101 report covers Section 32, which comprises approximately 640 acres of the 1,120 acre project. The previously reported historical resource prepared by Pathfinder (1980) examined Section 32 only. Updated mineral resource estimates for the remainder of both properties will be prepared, subject to the availability of historical databases.
Strathmore Minerals (CVE:STM) has signed a letter of intent with Great Bear Uranium (CNQ:GBR) granting Great Bear an option to acquire a 100% interest in the Chord Uranium Property located in South Dakota. Great Bear has until the end of September of this year to close on the transaction.
The Chord Property comprises 22 totaling 440 acres and is located approximately 15 miles north of the town of Edgemont, South Dakota.
Uranium was first discovered at Chord in the 1970s and extensive drilling by previous operators Tennessee Valley Authority and Union Carbide outlined a historical uranium resource estimate totaling 3.8 million lbs U3O8 at an average grade of 0.11%. These numbers are not compliant with NI 43-101 standards as they exist today.
PacMag digs for uranium, gets germanium in North Dakota
Formation Resources, the U.S. operation of Australia's PacMag Metals (ASX:PMH) is discovering that its exploratory drilling for uranium in North Dakota is turning up more valuable deposits of molybdenum and germanium. PacMag consultant Jim Guilinger told the Associated Press in Bismark on Feb 25 that last year the firm drilled 450 holes and the results are showing that it will be worthwhile to develop the uranium if there is enough germanium at least at current prices. While uranium has a spot price this week of $43/lb, the germanium is worth eleven times that amount because of rising demand for use the mineral in the manufacturing of solar panels.
The two minerals have been found in a coal seam that PacMag has targeted in a lease of 25,000 acres of private land. Ed Murphy, the North Dakota State Geologist, said it is currently the only permitted uranium exploration project in the state. There were numerous uranium mining claims being worked in the 1980s in North Dakota. PacMag has designated the area the Sentinel Project and plans to resume drilling in the Spring.
Gold miner acquires uranium property
Fisher-Watt Gold Company (OTC:FWGO) announced it has completed the acquisition of Tournigan USA (OTC:TVCFF), a subsidiary of Tournigan Energy (CVE:TVC). The focus of the deal is 55,000 acres of uranium claims in Wyoming, South Dakota, and Arizona. The transaction includes retention of a 30% interest in each of the existing properties and debt in the amount of $325,327.
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