Uranium Price Spike Accelerates Regional Mining Activity
Thousands of Claims Filed in San Miguel County Alone
By Douglas McDaniel
Published on April 20, 2007
With the price of uranium worldwide reaching $113 per pound, more than doubling what were considered to be record prices a year ago, the mining industry is tripping over itself in a speculative game of capture the flag in southwestern Colorado.
“Yep, this is a new boom,” surmised San Miguel County Commissioner Art Goodtimes. “It’s a speculative shark attack.”
A variety of factors have set off a chain reaction in the uranium industry. With 440 nuclear power plants operating globally that need to be fed, and the 100 or more that are being planned or built, including 30 new plants in China, buyers, anticipating shortages, are driving up the uranium market prices by purchasing excess uranium.
Market experts are predicting prices to continue to rise. For example, Neal Froneman, president and CEO of SXR Uranium One, recently predicted prices will rise to $150 per pound by the end of the year.
Last summer, when prices reached $45 per pound, at the time an all-time high, it had already revived interest in uranium mines in the Four Corners area. The big target: the Uravan Mining Belt, the oldest uranium mining area in the U.S., which extends from Polar Mesa in Utah, southeast into Colorado, and then bends to the south, terminating along the southern boundary of San Miguel County.
This month Uranium Energy Corporation announced that it’s acquiring 5,000 acres in the Uravan Mineral Belt. The purchase adds to the company’s pre-existing properties in this uranium and vanadium producing region, many of which are in close proximity to the U.S. Department of Energy’s uranium reserve.
Goodtimes said the uranium industry, through the support of the Bush administration, is looking into both previously untapped mining claims and reviving old mines. There was a proposal floating around, he said, that all of the reserves for the old Atomic Energy Commission reserves, including all 26 areas that had been restored through remediation, be re-opened to meet the demand.
“The word I’ve gotten is they are opening them all up, even those that are closed,” Goodtimes said.
For example, Energy Fuels Inc., a Toronto-based exploration and development company, is making serious moves toward reviving once-forgotten uranium mines in the region. Last month the company received permit approval from the Colorado Division of Reclamation, Mining and Safety, as well as the Bureau of Land Management, for drilling exploration for seven large claim groups in San Miguel County.
Two properties on Calamity Mesa and Hop Creek, both historic mining claims producing uranium and vanadium, consist of 114 lode mining claims covering 2,300 acres. One mine retired in the 1980s as the price of uranium fell, the New Verde Mine, produced in excess of 1.5 million pounds of uranium and 5.0 million pounds of vanadium.
This month Energy Fuels announced the acquisition of another 157 mining uranium lode claims covering 3,200 acres near its Whirlwind Mine claims near Gateway in Mesa County. The Whirlwind Mine, according to the company’s Web site, “has underground workings and infrastructure in place and environmental permitting is at an advanced stage.”
In all, Energy Fuels claims it has 30,000 acres of highly promising uranium and vanadium property in the Four Corners Region.
“We are in three states right now, Colorado, Utah, and Arizona,” said George Glasier, president and CEO of Ontario-based Energy Fuels Inc. “We have our first mine refurbished, production coming out this year from Whirlwind mine in Colorado. A second mine will be in Utah, the Energy Queen mine. Tenderfoot Mesa is due to come out early 2008.”
Since, according to Glasier, uranium needs to be approximately $30 per pound for exploitation to be profitable, the current $113 per-pound price creates a considerable amount of “wriggle room” for a company moving fast toward milling production by as early as next year.
“We are still acquiring properties, have a number under negotiation,” he said. “We have the database for virtually all properties in Colorado, Arizona, and Utah. So with the database we judge which properties have merit and we pick up properties which can be put into production fairly quickly, within the next two to three years.”
In the past two years, U.S. Energy Corporation and Energy Power Corporation have entered into joint exploration ventures at Burro Canyon, in the old Slick Rock Mining District in southwestern San Miguel County.
Another big speculator in the region is Colorado Cotter, a subsidiary of Valley Floor owner Neal Blue’s General Atomics. According to its web site, Cotter controls 15 mines in the Uravan Mining Belt, adding that “presently, all the western Colorado operations are on standby status.”
For a global marketplace on the verge of a possible paradigm shift in terms of how it addresses energy demands in the future, what’s in store for San Miguel County for the rest of the century might remind some of the region’s earliest economic engines, still others of its environmentally hazardous manmade footprint.
Uranium, sought for radium content in the late 19th century by the likes of Madam Curie, was originally discovered in southwestern Colorado in 1898 in the sandstone of the Upper Jurassic Morrison Formation. For the next century the town of Uravan became a center of uranium and vanadium mining activity as the Cold War caused a uranium prospecting and mining boom. But that slowed after the Three Mile Island and Chernobyl disasters, as well as with the reduction of nuclear weapons stockpiles in the late 1980s.
But there is a significant boom in the works until supplies begin to meet demand, and we will feel it here.
Goodtimes estimated 2,000 mining claims have been filed in San Miguel County in the past two years.
Whether mining will begin on a large scale will depend on the marketplace demand, and whether this is just another, as Goodtimes put it, “dot-com bust” style speculative cycle, or something more long-term.
“The impact, who knows?” Goodtimes said. “If it happens, it could be devastating.”
telluridewatch.com |
