Labrador Inuit Lands uranium mining ban has immediate chilling effect on exploration
mineweb.co.za
A narrowly split vote of the Nunatsiavut Assembly to ban uranium mining, but not uranium exploration, for three years, had an immediate impact on uranium exploration programs in northern Labrador’s Central Mineral Belt in Canada.
Author: Dorothy Kosich
Posted: Thursday , 10 Apr 2008
RENO, NV -
By a narrow 8-7 vote this week, the members of the Nunatsiavut Assembly representing the Labrador Inuit have halted uranium mining activity for three years, sending Canadian junior explorers scrambling.
Nunatsiavut represents Labrador's 5,000 Inuit, helping to manage a 72,520 square-kilometre land claim settlement in northern Labrador of which 15,800 square kilometers are fully owned by the Inuit people.
Paradoxically, the moratorium, effective immediately until March 31, 2011, does not ban uranium exploration on the settlement lands. As Nunatsiavut Government Lands and Resources Minister William Barbour said following the vote, "We are prepared to work with any company wanting to conduct exploration within our territory. During the course of the next three years we will build our human resources capacity to effectively govern our land and resources and effectively participate in environmental protection and management together with industry and other governments."
However, Keith Russell, who represents Upper Lake Melville in the assembly, told CBC News that the moratorium was an "utter disappointment. ...In my opinion, I think that it comes from a complete misunderstanding of the risks at this point. We've created a perception to the world out there that we're not going to be the easiest to work with."
However, Health Minister Greg Flowers said he hopes the moratorium on uranium mine development will give the government enough time to develop a land-use plan and environmental legislation. He told the CBC, "We waited 30 years for a land claim and if somebody [must] wait now for us, then so be it."
Barbour said the government does plan to work with mining companies who may want to explore their lands for uranium. "The reasoning for the amendment were concerns from the Inuit people over the negative environmental and public health effects that often come with uranium mines."
Vancouver-based Aurora Energy Resources probably experienced the most immediate impacts of the moratorium on mine development with its Michelin uranium project hoping to begin production in about five years. Michelin In a statement Mark O'Dea, President and CEO of Aurora, said, "Currently there is no uranium mining on Labrador Inuit Lands and there are no plans for uranium mining operations for the next three years."
"We are committed to continue working closely with the Nunatsiavut Government, Inuit Community Government members and beneficiaries on such things as tailings management and environmentally safe mine closure plans. We strongly believe that we can demonstrate to the Nunatsiavut Government that uranium mining can be safely carried out with the utmost care for the integrity of the environment," O'Dea declared.
Reuters reported that although Aurora stock plunged more than 33% when the decision was announced Tuesday, the stock recovered about a third of those losses on Wednesday. Shares of Fronteer Development Group, Aurora's controlling shareholder (holding a 42.3% interest) dropped 8.3% on Tuesday, but bounced back by 6.5% on Wednesday.
Patrick Donnelly, an analyst with Salman Partners, told the Canadian Press that the situation hurts Aurora's ability to raise money.
Analyst George Topping of Blackmont Capital told Reuters the weakness in Fronteer's shares could attract the interest of bigger mining companies, such as Teck Cominco, "that can better withstand the lengthy permitting process."
Smaller exploration companies have been quick to distance themselves from the potential impacts of the moratorium.
Bridgewater, Nova Scotia-based Silver Spruce Resources (TSX-V: SSE) is primarily focused on uranium in the Central Mineral Belt of Labrador. The company holds more than 12,500 claims totaling approximately 3,100 square kilometers in Labrador, claiming to be "the second largest landholder in one of the world's premier emerging uranium districts."
Labrador Inuit Lands controlled by the Nunatsiavut Government comprise 16% of Silver Spruce's properties in Labrador and 18% of the CMB/Seal Lake JV properties, co-owned with Universal Uranium. Silver Spruce's Mount Benedict property, at the eastern end of the Central Mineral Belt, is partially covered by Labrador Inuit Lands. "However excellent targets are noted on that portion of the property lying outside of the LI lands boundary," according to Silver Spruce.
In a news release, Silver Spruce said it will be adapting its exploration program "to take into account the moratorium areas where exploration will be reduced until further information is available."
In a statement released Wednesday, Universal Uranium (TSX-V: UUL) said the legislation does not affect the company's principal asset, the Two Time Zone, and the majority of our other high priority targets lie outside Inuit lands and are therefore open for exploration and development. The company feels confident going forward as Aurora, Crosshair and Bayswater, as noted in their most recent news release, will continue with 2008 exploration plans and continue proposed drilling."
Bayswater Uranium (TSX-V: BAY) said the moratorium "does not affect the company's exploration plans in the Central Mineral Belt as all of Bayswater's priority uranium targets are located outside of LIL lands that are subject to the moratorium." The company added that it will be taking a "business as usual" approach to the 2008 field season, budgeting in excess of Cdn$6 million for the Labrador Central Mineral Belt program.
Fellow Vancouver-based uranium explorer Crosshair Exploration & Mining, (AMEX: CXZ, TSX-V: CXX) said Wednesday that the moratorium does not affect Crosshair's principal assets. "Although the moratorium does not apply to exploration activities, all of Crosshair's future efforts will be directed at continuing to advance the 92% of Crosshair's property that does not fall within LIL. Drilling and exploration activities currently proposed will continue as planned."
However, 8% of Crosshair's property does fall within Labrador Inuit Lands primarily on mineral claims that do not require any material work for the next four years. "Crosshair will not actively explore within the 8% of the property that falls within LIL while the moratorium continues." |
