Coles Hill deposit is focus of the review
A $1.4 million study of the potential environmental impacts from mining the massive uranium resource in southwestern Virginia is being conducted by the National Academy of Sciences (NAS). The group of experts held its first public meeting in Washington, DC, the last week of October. The 13 member panel will issue as report on its findings concerning the 119 million pound Coles Hill deposit in December 2011.
Virginia has had a ban on uranium mining since the mid-1980s. If the NAS report is favorable in terms of its recommendations, the state legislature may consider lifting the ban. For many years there was no controversy over the ban since the price of uranium was so low. In recent weeks, the price has risen to $52/lb making the deposit worth about $6.2 billion.
Jennifer Walsh, a spokesperson for the NAS, said the two day meeting will involve a series of presentations by federal agencies including the U.S. Geological Survey, Department of Energy, and Environmental Protection Agency.
Environmental groups in Virginia have attacked the membership of the panel charging that several of its members are too close to the uranium mining industry. Also the green groups claim the body doesn't have the right mix of expertise.
Walsh said the panel will consider conflict of interest issues in a closed door session on day two. Also, she said the group is planning to take a look at potential gaps in expertise and make recommendations to close them.
Jack Dunavent, chairman of the Southside Concerned Citizens, which is opposed to the mine, said in an interview earlier this year he feels the NAS study is "tainted" because of conflicts of interest. He added he sees "no benefit" from the study.
Meanwhile, the Virginia Health Physics Society said in a statement in September the Virginia mining operation can be operated safely and will not be a threat to the environment. Carter Ficklen, President of the state chapter, told FCW via a spokesman that "mining in Virginia should be pursued."
"The proposed mining endeavors can be carried out with minimal impact."
He added that the Coles Hill site was studied in 1984 with the results showing there are no serious risks to the environment.
Robert Seal, with the US Geological Survey, told the panel the agency will work to educate decision makers on potential risks and solutions.
Scope of the resource
The NAS study is being paid for by Virginia Energy Resources Inc. (CVE:VAE) which has a 24% equity interest in the property located six miles northeast of Chatham, VA. Coles Hill comprises two adjacent mineralized bodies with an NI 43-101 compliant, measured and indicated resource of 98.7 million tons grading 0.060% U3O8 at a cut-off grade of 0.025%, for a total of 119 million pounds U3O8 according to a NI 43-101 technical report completed on April 29, 2009.
The company released a preliminary economic assessment on Oct 18 that documented a potential 35-year operating life for the mine and an adjacent mill. The assessment said the preferred method of development will be underground mining and that the site will be economically viable when the price of uranium hits $65/lb. It hit $60/lb last week.
The firm said preliminary estimates are that it could mine uranium for under $40/lb. It did not provide an estimate for the cost of a mill. There are no uranium mill sites in Virginia nor for that matter anywhere along the east coast. In Colorado, Energy Fuels is estimating the cost of a 500 ton/day hard rock mill in Montrose County in the range of $140 million.
The NAS panel will hold its next public meeting in Danville, VA, in December. Walsh told FCW the final report is a "consensus report," which means there are no minority opinions."
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