Vancouver miners are rushing into the wilderness in search of the world’s next source of nuclear fuel, but they won’t be sinking shovels into the ground in this province any time soon.
That’s because Victoria banned uranium exploration and mining two years ago, causing some miners to look to the courts for answers while others have set their sights abroad.
“It was a stupid, crass political move when it was made and it remains a stupid decision that reflects poorly on B.C. as a jurisdiction,” commented Pierre Gratton, president and CEO of the Mining Association of BC “It’s closing the door on, potentially, millions of dollars of exploration and huge opportunities.”
The ban on uranium, which is used to fuel nuclear power plants, continues amid a price spike that’s seen the commodity’s spot valuation jump 37.6% in the last year to US$62.50 per pound.
The hubbub is directly related to nuclear power, which governments around the world see as a cheap, emission-free electricity source.
In November, China’s National Development and Reform Commission’s Energy Research Institute said it was considering doubling its target for nuclear power generation to 80 gigawatts by 2020.
As well, the International Atomic Energy Agency expects world nuclear capacity to grow to between 500 and 750 gigawatts by 2035, fuelling demand for new uranium sources.
“Among all the commodities, we’re most bullish on uranium,” said Siddharth Rajeev, an analyst with Vancouver’s Fundamental Research Corp.
Those sentiments have caused miners to strap on their prospecting boots and head into the bush in search of the next big find.
The buzz has also created a stir on Howe Street in recent months, where mining companies have stepped up announcements and deal- making.
On December 1, Vancouver-based Hathor Exploration Ltd. (TSX-V:HAT) announced a new resource estimate for its Roughrider deposit in Saskatchewan’s Athabasca Basin, which is one of the world’s premier uranium districts.
The project is now estimated to contain 28 million pounds of high-grade uranium in indicated and inferred categories.
Those are still early drill results, but Saskatchewan produces 20% of the world’s uranium, and Hathor COO Mike Gunning believes he has a world-class project on his hands.
“They’re really among the richest drill holes ever drilled in uranium [exploration],” Gunning said.
On December 15, Vancouver’s Uranium One (TSX:UUU) teamed up with Russian mining giant JSC Atomredmetzoloto (ARMZ) to acquire Mantra Resources (TSX:MRL) for A$1.2 billion. The deal would give Uranium One the Mkuju River project in Tanzania, increasing its measured and indicated uranium resources by 68%.
Then on December 17, Australia’s Paladin Energy Ltd. (TSX:PDN) agreed to buy Vancouver-based Fronteer Gold’s (TSX:FRG) Labrador uranium assets for $261 million. Hathor’s Gunning believes the demand for uranium, which is used to make yellowcake for nuclear plants, will continue for the next several years.
“We have to double our yellowcake production over the next 15 or 20 years if we want to really keep up with the nuclear renaissance,” he said.
While the upturn in the market has created positive developments for some companies, at least one other remains mired in litigation.
Two years ago, Vancouver’s Boss Power (TSX-V:BPU) filed a lawsuit in B.C. Supreme Court against the province alleging the uranium ban effectively expropriated its Blizzard project near Kelowna.
Boss claims the province’s actions are a misfeasance in public offence, and the company is seeking $42 million to $59 million in compensation.
The province couldn’t be reached in regard to its ongoing uranium ban, but MiningWatch Canada spokesman Ramsey Hart believes it should continue because the radioactivity associated with uranium poses a significant threat to the environment.
Both Nova Scotia and the Labrador Inuit have similar bans, and Hart also doesn’t buy into the recent market frenzy, pointing to uranium prices that soared above US$130 per pound in 2007.
Said Hart: “I would argue that it’s largely speculative, that it’s not based on a real increase in demand but a perceived increase in demand.”
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Sources: Stockwatch, TSX, globe investor