This blog post is an edited version of content published in Fuel Cycle Week for 01/13/10 V9:N359 by International Nuclear Associates, Washington, DC.
Strathmore gets better offer for Reno Creek. Bayswater matches it.
The Reno Creek property in Wyoming was briefly the object of a bidding war between Bayswater Uranium Corp. (CVE:BYU), which last August offered to buy it, and an unnamed third firm, which offered a sweeter deal to the owner, Strathmore Minerals (CVE:STM).
Having accepted the third-party offer, Strathmore give Bayswater a week to match the terms—and on Jan. 7 Bayswater and Strathmore struck a new deal.
Strathmore CEO Dave Miller told FCW the new terms are “a substantial improvement over the last deal. We get $17.5 million in cash and $2.5 million in stock, and in 90 days.” The previous agreement had stretched out payments of $26 million in cash over a two-year period.
Miller said the proceeds from the sale would help develop Strathmore’s Roca Honda property in New Mexico and the Gas Hills properties in Wyoming. Strathmore “has restarted its work on a uranium mill in New Mexico” as part of its joint venture with Japanese conglomerate Sumitomo as well, he added.
The Strathmore board has directed Miller to sell “dozens of other properties” and concentrate company resources on just those two projects.
John Gomez, who leads Bayswater’s investor relations office, told FCW the property is attractive because, “it is in an advanced stage of development as an ISR mine [and] has one of the best potential operations in the U.S.” Bayswater sees a production potential of 20 million pounds of uranium over a decade.
It would take four to five years to permit the site and bring the site to production, he added, but he could not say when the firm would apply for a mining permit from the NRC. He added that the firm is open to partnerships to develop the property.
To gain investor confidence Bayswater executed a 1:10 stock consolidation effective Jan. 5. It reduces outstanding shares from 154 million to 15.4 million without reducing market capitalization. The action would “facilitate investment in the firm because there is much less dilution of shareholder interests with new investors coming to the table,” Gomez said. Bayswater will now be traded on the TSX Venture Exchange under the symbol “BYU.”
In an unrelated action, Bayswater completed an NI 43-101 technical report for Ur-Energy’s (AMEX:URG) wholly owned subsidiary Hauber Project LLC. Ur-Energy and Bayswater completed a venture agreement last December through which Bayswater may earn a 75% interest in the Crook County, Wyoming project by spending $1 million in eligible exploration expenses over a four-year period.
The resource estimate concluded the Hauber Project properties hold about 1.45 million pounds of U3O8 in the Indicated Resources category, in 423,000 tons at an average grade of 0.17% U3O8.
Neutron Energy plans New Mexico mill
Colorado-based Neutron Energy LLC now has until April 12 to raise $11 million to acquire Uranium Energy’s 49% stake in Cibola Resources LLC, according to a Jan. 5 statement by Uranium Energy (AMEX:UEC). UEC Chief Executive Amir Adnani told FCW the firm is selling the stake in the 6,700-acre property in New Mexico to concentrate its resources on its Texas uranium operations.
If the deal goes through Neutron will gain 100% ownership of the property. Company executives told FCW they plan to erect a 2,000-ton/day mill at a site adjacent to the Jackpile Paguate mine, which was operated in the 1970s. Mike Neumann, vice president for environment at Neutron, said the company has filed a letter of intent with the Nuclear Regulatory Commission to submit a license in the first quarter of 2011.
George Byers, Neutron’s vice president for investor relations, would not reveal the mill’s price tag but said the firm was confident it could raise the sum. It could sidestep some costs because a permitted 2,200-ton/day mill once occupied the site. That mill was dismantled in 2001.
But a 2007 company press release notes that much infrastructure remains, including electric power, 1,800 acre-feet of industrial use water rights, a 1,842-foot shaft and a fully permitted, partially completed tailings disposal site.
Neutron would feed the mill with ore from its Marquez Canyon project on the Juan Tafoya property in the Grants uranium district. Both the mine and the mill site are on private property and linked by an access road in McKinley County.
Byers told FCW the company planned to drill “44 confirming holes as twins” in a selected group of 600 drill holes sunk in the 1980s. The New Mexico authorities issued a drilling permit last March, and the firm has engaged an independent consultant to prepare an NI 43-101 compliant report for the site. There is no historical production data, because the mine was never operated. He would not provide an estimate of production.
Neutron, which is privately held, expects to attract capital from the growing number of investors who are interested in uranium again, due to EPA’s designation of carbon dioxide as a hazardous pollutant. “There will be much greater growth for nuclear energy as a result,” he said, “And that means more demand for uranium.”
“There’s lots of cash in New York looking to invest in uranium mining,” Byers added.
Asked about the regulatory and political environment for uranium operations in New Mexico, he said prospects for mining on private land have improved due to the successful permitting and construction of the Urenco uranium-enrichment plant in Eunice.
In an unrelated action, Neutron acquired the 50% share of the Grant-Uranium joint venture from Primary Corp (TSX:PYC) by issuing 3.5 million shares of stock. The deal gives Neutron a 100% stake in a private site on the west side of Mt. Taylor near Strathmore’s Roca Honda mine in New Mexico. Primary now holds a 24.5% stake in Neutron with 14.3 million shares.
Energy Fuels application for new mill docketed by State of Colorado
The State of Colorado has docketed the application by Energy Fuels (TSE:EFR) for a new 500 ton/day uranium mill on the western slope to be administratively complete. The action starts a 14-month clock ticking during which time there will be two public hearings and completion of the technical review of the application.
Frank Filas , Environmental manager at Energy Fuels, told FCW the review by the State of Colorado involves a ” lengthy and technically rigorous process.” He added the state agencies involved in the permit review will submit requests for information starting in early February.
The first of two public hearings associated with the permit application will take place Jan 21 in Nucla, Colo. Filas said the hearing is just to take public testimony and no decision will take place immediately following it.
The Sheep Mountain Alliance, an environmental group, continues to pursue legal action seeking to overturn a decision by the Montrose County Commissioners granting Energy Fuels a special use permit for the Pinion Ridge Mill. George Glasier, CEO at Energy Fuels, told FCW through a spokesman that “the firm believes the lawsuit is without merit.” He added, “I am confident the courts will uphold the decision process of the county.”
NRC accepts Powertech’s application for Dewey-Burdock
The U.S. Nuclear Regulatory Commission has docketed the application by Powertech (TSE:PWE) for the Dewey-Burdock mine in Fall River and Custer counties, South Dakota, and has begun the formal technical review of the application. The NRC set a deadline of March 8th for requests for a public hearing. South Dakota is not an agreement state so applications for new ISR mines go t the Federal government. The notice appeared in the Jan 5, 2010, Federal Register.
The application was originally submitted by Powertech in February 2009, but was pulled to provide the NRC with additional information. It was resubmitted in August 2009.
White Canyon delivers first ore from Daneros to Denison
White Canyon Uranium (ASX:WCU) reported it has delivered the first shipment of ore to Denison Mines’ mill at Blanding, Utah. The Daneros mine is about 60 miles by road from the mill. The mine is the first new uranium operation to start operations in Utah in three decades.
# # #