This blog post is an edited version of a column published in Fuel Cycle Week 02/11/10 V9:N363 by International Nuclear Associates, Washington, DC.
Colorado uranium miners may face new rules for ISR operations
Two bills passed by the legislature last year aimed at uranium miners have resulted in draft implementation rules from the Colorado Division of Reclamation, Mining, and Safety. The draft rules, based on H.1161 and S.228, cover a broad swath of activities including uranium mining, permit fees, and disclosure of prospecting information to the public.
David Berry, Director of the state agency told FCW the two areas in the draft rule that have attracted the most public interest are baseline characterization of groundwater conditions and access to timely information about prospecting activities. He said the process of writing the drafts, "… had extensive public stakeholder input last year." Public comments are due to the agency March 1st.
The draft regulations require a baseline study on water quality, documentation about the technology used by the ISR operation to extract the uranium, notice of prospecting activities to nearby landowners, and reclamation of the site once the mining operation is complete.
The agency's activities are governed by the Colorado Mined Land Reclamation Board which will hold a hearing on the draft rules on April 6.
Berry said, after the hearing the record will remain open for comment, "which is a process that could go on for months. "
"I don't have an estimate of when the regulations will be issued in final form."
"The board may mark up the draft themselves, insert new language, or return the draft to the agency with comments and tell us to do it."
The primary driver for the new laws came from two Ft. Collins area legislators responding to concerns about a planned ISR mine near Nunn, Colo, which is about 15 miles to the east. Powertech (TSE:PWE) is planning its Centennial ISR mine at this site. The firm will apply for state permits to operate the mine It will need approval from the Reclamation Division and the Department of Health for radiation control.
Richard Clement, Powertech CEO, told FCW the new law is very restrictive in terms reclamation requirements. He said it is unusual for ISR mining to require "baseline or better" conditions when the usual requirement is "consistent" with prior conditions.
However, Clement said he is "… not overly concerned about the new regulations."
"What we've seen so far matches what's in the law."
He add that the requirements for notice of prospecting activities are more likely to impact hard rock miners who sample outcrops than ISR miners who must secure a land position in order to do drilling. The reason is hard rock miners are in a very competitive position with each other especially if they haven't yet secured leases for the areas they are exploring.
Powertech has not yet submitted a permit application to the State of Colorado for the Centennial mine. Clement said the state has asked the firm to hold off until the draft regulations are final. He said, "the firm would like to see a quick process so that we can move ahead with the permit."
Diana Orf, a spokesperson for the Colorado Mining Association agreed with Clement about the reclamation requirements which she says are now among the strictest in the nation.. She told FCW the association's primary concern is, "…the statute and implementing regulations not be used to prohibit this kind (ISR) of mine."
What's new Orf said is the requirement for prospecting filings with the state agency being available to the public.
"Our concern is that proprietary information isn't served up to public inspection. The vulnerability is that specific information on mineral deposits be kept confidential."
Cotter Mill problems spark new legislative drive
While cleanup work is continuing at the Cotter uranium mill in Canon City, three Colorado state legislators say they want more laws on the books to prevent a repeat of contamination problems in the state.
Rep. Buffie McFadyen (D-Pueblo), Sen. Ken Lester (R-Las Animas), and Sen. Bob Bacon (D-Ft. Collins) are working on the Uranium Accountability Act.
The bill would increase the financial bond a uranium mill is required to establish to insure cleanup. It would also require mills to notify area landowners of any subsurface contamination resulting from mill operations. Environmental Groups in south central Colorado are pushing for the new laws because of contamination of drinking water wells from the Cotter mill.
The legislators said their interest in the bill came after Cotter said it planned to reopen a mill at the Canon City site in 2014.
Black Range minerals (ASX:BLR) is developing an underground uranium mine in Fremont County, Colo., which is within haul distance of the Cotter Mill. The mine could enter operations within the next few years. The Taylor Ranch project is part of a series of uranium mining projects being developed in the region. (Photo courtesy of BLR shows drilling at one it the firm’s sites in Colorado.)
Impact on Energy Fuels mill ?
The legislators drafting the bill said it would also apply to a new mill being planned by Energy Fuels Corp. (TSE:EFR) in Montrose County on the western slope.
Two Utah conservation groups have announced their opposition to the Energy Fuels mill. Moab-based Red Rocks Forests and Living Rivers are challenging the company's application to pump water from the Dolores River, a 250-mile long tributary of the Colorado River.
It appears that environmental groups are taking a multi-pronged approach to stopping uranium mining by also trying to stop the mills. The groups have also attempt to block operations of the Daneros Mine in Utah which began shipping ore to Dension's mill in Blanding last month. They failed and the mine is shipping ore to the mill.
Uranium One to open Christensen Ranch ISR mine in 2011
Uranium One (TSE:UUU) is planning to open the Christensen Ranch ISR mine in 2011 to feed the refurbished Irigaray plant in Wyoming. The target level of production from that facility is will be 1.3 million pounds a year at an "all in cost" of $30/lb.
Chris Satler, VP at Uranium One, told FCW "We expect to make money even at the current spot price of $43/lb."
Uranium One acquired the mine and the plant for $35 million from Areva. Satler said the Irigaray plant will take a feed from the Moore Ranch property in 2012 which he expects to produce roughly 500,000 lbs of uranium a year. The Moore ranch is current in the process of getting a permit from the NRC.
"Right now, "Satler said, "we will have enough work from the Christensen Ranch site to keep us busy in 2011. We're expanding the Irigaray plant with a new dryer on the back end. When we're done it should be able to have enough production long-term from a number of satellite sites to meet the production limit of our NRC license which is 2.5 million pounds a year."
Wyoming isn’t the only place the company is busy. It is retaining interests in properties even as it sells them to other firms.
Satler said Uranium One sold its South Texas Mining Venture to Uranium Energy Corp (AMEX:UEC). for 2.5 million shares of stock. Satler told FCW the firm plans to keep the stock as an asset even though Uranium One is carrying the risk in terms of stock valuation. At market close Feb 5 the stock was trading at $3.15/share making the investment worth $7.9 million.
In Colorado, Uranium One sold its Coyote Basin uranium mine in Moffat County in the northwest part of the state to Vane Minerals (LON:VML). Under the terms of the deal, Uranium One retains a 2% gross royalty on federal lode claims and a 1% royalty on state leases claims. Satler said Uranium One also holds the right to convert the royalties into a 10-35% interest in the property prior to feasibility.
Uranium One and Vane are also involved a joint venture in northern Arizona. Steve Van Nort, Vane CEO, said in a statement the project has the potential to produce 50 million pounds of uranium. Satler told FCW that while an NI 43-101 reports was due soon, it has not yet been published so he couldn't confirm the figure.
VANE now has an interest in about 160 projects in the Arizona Strip breccia pipe district, outside the Grand Canyon National Park boundary on lands open for mining. According to a statement on Vane's web site, SRK Consulting completed a NI 43-101 report in 2007 verifying VANE’s breccia pipe holdings in Arizona. This report is being updated to include the significant property additions.
Uranerz reports NI 43-101 for Doughstick property
The report estimates a "measured and indicated" mineral resource of approximately 967,883 pounds of uranium (eU3O8) at an average grade of 0.082% and an "inferred" mineral resource of approximately 87,981 pounds at an average grade of 0.055%.
The properties comprising the Doughstick Project include the company's wholly-owned Doughstick properties and the Doughstick and North Jane properties held by the Arkose Mining Venture. Arkose is a joint venture operated by the company (81%) and United Nuclear, LLC (19%).
NRC extends public comment period on three uranium EIS
The Nuclear Regulatory Commission is extending until March 3 the public comment period on the draft supplemental environmental impact statements (SEIS) for three proposed uranium ISR mines. The draft reports are the first to be published under the agency's Generic Environmental Impact Statement for In-Situ Leach Uranium Milling Facilities.
The three draft SEISs cover license applications for the Moore Ranch Project, proposed by Uranium One in Campbell County; the Lost Creek Project, proposed by Lost Creek ISR, LLC, for Sweetwater County; and the Nichols Ranch Project, proposed by Uranerz Energy Corp. in Campbell and Johnson counties.
The GEIS analyzed environmental impacts common to in situ recovery operations in four regions of the western United States. The SEIS for each facility incorporates relevant discussions and conclusions from the GEIS and examines site-specific impacts unique to that proposed facility and its location. All three draft SEIS preliminary recommendations are that, unless safety issues mandate otherwise, there are no environmental impacts that would preclude granting licenses for the proposed facilities.
David McIntyre, a spokesperson for the NRC, told FCW the extension of time for the public comment is "routine." He said, "We extend comment periods frequently and I wouldn't read too much into it."
Several environmental groups, including NRDC, asked for more time to review the documents.
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