Friday 30th September 2016

Resource Clips


Fuelling controversy

While Quebec ponders a uranium ban and Virginia’s is challenged, explorers prepare for Japanese restarts

by Greg Klein

The company has just launched a lawsuit challenging the state of Virginia’s ban on uranium mining, but Virginia Energy Resources TSXV:VUI has also been impacted by the Quebec moratorium. Last January the company settled a debt by transferring its interest in an idled Quebec uranium project to Anthem Resources. That company, meanwhile, has launched its own action against British Columbia’s uranium ban. Since then Anthem’s been taken over by Boss Power, winner of an out-of-court settlement resulting from the same ban. Now the former Boss and Anthem, under their new name of Eros Resources TSXV:ERC, find themselves joint venturing with Denison Mines TSX:DML in Saskatchewan’s Athabasca Basin.

Virginia Energy’s August 5 court filing claims the state’s 1982 ban on uranium mining is “pre-empted by federal law” and therefore unconstitutional.

While Quebec ponders a uranium ban and Virginia’s is challenged, explorers prepare for Japanese restarts

The suit argues that Virginia’s “refusal to develop uranium mining regulations is grounded in environmental and radiological safety concerns over the processing of uranium ore and, in particular, the long-term storage and management of uranium mill tailings. Pursuant to the federal Atomic Energy Act, the regulatory oversight and management of the uranium mill and the resulting tailings are under the clear and exclusive jurisdiction of the Nuclear Regulatory Commission.”

The company’s co-plaintiffs consist of its subsidiary Virginia Uranium Inc and two part-owners of Virginia Energy, Coles Hill LLC and Bowen Minerals LLC.

“We do not come to this point lightly,” said Virginia Uranium president/CEO Walter Coles Sr. “For almost eight years, and at great expense, we have worked in good faith with our community, our local government and the General Assembly, as well as myriad state agencies…. We had hoped that our steady progress and good faith co-operation with Commonwealth legislators and officials would continue under Governor [Terry] McAuliffe’s administration. But that was not to be.”

Within days of his November 2013 election, McAuliffe promised to veto any legislation that would end the ban. That left Virginia Energy unable to develop Coles Hill, which the company calls “the largest undeveloped uranium deposit in the U.S.A. and one of the largest in the world.”

A 2012 resource gave the project 132.93 million pounds indicated and 30.41 million pounds inferred, although at low grades of 0.056% and 0.042% eU3O8 respectively.

The U.S. relies on nuclear energy for 19% of its electricity but imports 90% of its uranium, according to World Nuclear Association figures. As for Virginia, the World Nuclear News attributes to the state “four operating reactors at two nuclear power plants, numerous nuclear companies and government nuclear-related facilities.”

Virginia Energy’s lawsuit comes as Quebec ponders whether to lift its moratorium or proclaim an outright ban on uranium activity. Last month a committee appointed by the province’s former Parti Québécois government released a negative report on uranium mining. The current Liberal government must now consider its recommendations before making a decision.

Last December, even while Quebec’s BAPE (Bureau d’audiences publiques sur l’environnement) uranium inquiry was taking place, Strateco Resources filed a nearly $190-million lawsuit against the provincial government for losses incurred during the moratorium. The company has since delisted from the TSX.

Like the rationale behind the Virginia ban, the BAPE report emphasized concern about radioactive waste, which can pose problems for thousands of years but “the most recent confinement technique recommended in Canada has been in use for only 30 years.”

That helped provoke a strong response from the Canadian Nuclear Safety Commission, which said BAPE implied Canada’s nuclear regulator and the province of Saskatchewan “have been irresponsible in their approval and oversight of the uranium mines of Canada for the last 30 years.”

The CNSC slammed BAPE for “conclusions and recommendations that lack scientific basis and rigour.”

B.C.’s 2009 ban remains solidly in place, but at considerable cost to taxpayers. In a 2011 out-of-court settlement, the province agreed to compensate Boss Power with $30.35 million. Anthem, itself a renamed version of a previous incarnation of Virginia Energy, launched its own lawsuit against B.C. last year.

Then late last month, the same day Boss closed its takeover of Anthem, the companies’ new persona of Eros Resources announced “a brand new discovery” at its Murphy Lake project, where one of four holes found 0.2% eU3O8 over 6.9 metres. Eros has a 41.06% stake in the eastern Basin project, with operator Denison holding the rest.

Operating under what the CNSC maintains is a highly effective regulatory framework covering all aspects of mining, Saskatchewan explorers continue the quest for new discoveries.

These developments take place while Japan’s on the brink of its first post-Fukushima nuclear restart.


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