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Uranium-boom train pulls into NoCo Print

By Steve Porter
Northern Colorado Business Report
August 3, 2007

NUNN - Just a few miles west of this tiny Weld County town, crews are taking the first step that could ultimately lead to the first major uranium extraction operation in the region.

Job No. 1 is drilling wells to monitor the process.

At stake are huge potential profits for mining company Powertech Uranium Corp., and substantial economic benefits for the Northern Colorado region.

Also at stake, according to those opposed to the project, is the future quality of the region's groundwater and environment.

"There are a whole host of negative impacts that historically come from uranium mining, including water pollution, air pollution and environmental degradation," said Lilias Jarding of the local group Citizens Against Resource Destruction, or CARD. "We just don't think it's a good fit in our area."

But Richard Blubaugh, Powertech's vice president for health, safety and environmental resources, said the proposed in-situ water injection recovery process has a long track record of safety.

"It's very safe," he said. "There's a good, long history of the safety of (in-situ) operation for over 30 years now. It's a method people generally don't understand, and that's created some fears in Weld County."

About 350 people attended Powertech's first public meeting in Nunn on July 19, where many expressed concerns about the operation endangering underground water quality - and their health.

Powertech officials say the uranium mining business is strictly regulated, closely monitored and the company's Weld County operation - if permitted by the state - will pose no significant risk to groundwater supplies or human or animal health.

Who is Powertech?

Powertech Industries Inc. was founded in Vancouver, British Columbia, in the late 1980s. The Canadian company was a heating equipment manufacturer until last year, when it sold its heating equipment business and purchased Colorado-based Denver Uranium Co. Co-managers of DUC Richard Clement and Wallace Mays became president and CEO and board chairman, respectively, of the new company.

In June 2006, the company changed its name to Powertech Uranium Corp. and moved its headquarters from Vancouver to Centennial, just south of Denver. The company, which is publicly traded on the Toronto Stock Exchange under the symbol PWE, retains an administrative office in Vancouver and has an exploration office in Albuquerque, N.M.

Clement said Powertech was formed to target already-discovered uranium deposits and to extract them as quickly as possible to take advantage of a fast-growing market for uranium. Demand was light through the late 1970s, '80s and '90s, as nuclear power fell out of favor. As the world moves away from fossil fuels and more nuclear reactors are built, however, the price of uranium has skyrocketed, tripling since 2005.

Last year, Powertech purchased a number of uranium claims from Anadarko Petroleum Corp., a Houston-based oil and gas development company, including mineral rights in a 6,000-acre area in western Weld County.

Powertech claims there are an estimated 10 million pounds of uranium oxide or U3O8 within the boundaries of the Centennial Project, as the company refers to its local operation, based on historical drilling records and studies conducted by Rocky Mountain Energy Co. Rocky Moutnain Energy, a wholly owned subsidiary of Union Pacific Railroad, owned the mineral rights before selling them to Anadarko.

With the spot price of uranium now around $130 per pound, that could bring in more than $1.3 billion.

Clement said Powertech doesn't plan to sell any uranium to international buyers such as China or India.

"There's a tremendous demand for uranium in the United States, with 60 to 80 million pounds needed and about 4 million pounds being produced annually," he said. "I expect all of the uranium produced in the U.S. will stay in the U.S. because there is such a demand."

Not one pound mined

So far, Powertech has not mined one pound of uranium, a fact Richard Clement freely admits.

"Our company has been in existence just a little over a year, but we have several people on our team with extensive experience in uranium mining projects," he said.

They include:

  • Board chair Wallace Mays. Elected to the Uranium Hall of Fame in 1996, Mays was involved in a number of uranium mining projects, including the design of the first in-situ mine in the United States in 1974, while working as engineering manager for Atlantic Richfield Co.
  • Vice president for exploration Jim Bonner. Bonner was formerly employed by Rocky Mountain Energy, the company that made the original discovery of uranium deposits in Northern Colorado in 1969.
  • Health and safety vice president Blubaugh. He has more than 20 years of experience at several uranium projects, including the closure and remediation of the Atlas uranium mill site in Utah.
  • President and CEO Clement. A professional geologist and former operations manager for Mobil Oil's uranium exploration programs in the U.S. and Australia, Clement also was employed by Canadian company Uranium Resources.
Clement said if the state gives its go-ahead and grants Powertech a permit to start mining uranium in Northern Colorado - which he hopes will happen by 2010 - it could mean 75 to 100 jobs and about $2 million to the state in mineral severance taxes as well as about $700,000 in taxes into Weld County's budget.

 

Clement said the company would likely spend "somewhere between $20 million and $30 million" each year on its local operations for power, labor, supplies and materials. "There's some substantial benefits on the economic level," he said.

Environmental estimates

What about its potential effect on Northern Colorado's environment?

CARD spokeswoman Jarding predicts the proposed project would have a detrimental impact. "The uranium industry pollutes every community it goes into," she said. "I've been studying it since 1979 and I've yet to find one (project) that didn't result in pollution."

But William vonTill, chief of the federal Nuclear Regulatory Commission's uranium recovery licensing branch, said uranium mining has a good track record, especially the in-situ method that has become the industry standard since it was first introduced in the 1970s.

"Our experience is - because we have a large number of monitoring equipment at these facilities, and we inspect them, and because any groundwater that would start to get away can be immediately detected - with all these oversights we've had a good indication of a lack of impact from these facilities," he said.

The Douglas experience

Douglas, Wyoming, is a town of 5,500 about 50 miles east of Casper that has had uranium mining as part of its economy for more than 30 years. About 35 miles north of town is the Highlands mine, owned and operated by Power Resources, a subsidiary of Cameco, a Canadian company that is one of the industry's biggest players.

The Highlands mine started as an open pit but is now an in-situ operation. Ed Werner, Converse County commissioner and a consultant to CANDO, the Converse Area New Development Organization, said the mine has never had a groundwater pollution incident.

"Mining in general, and in Wyoming in particular, is probably one of the safest industries we have," said Werner, a fourth-generation Wyoming native. Werner said the uranium extracted from the mine - called yellowcake once it is processed - has an extremely low radioactivity until it is sent to an enrichment facility.

"The bottom line is we welcome it," he said of the 150 to 200 jobs provided by the mine. "But our local population is very concerned that they do it right and they know we're watching."

Powertech's Blubaugh said any mining operation runs the risk of some violation of its license, and there have been numerous violations recorded at uranium mining sites across the nation. But that doesn't mean they're unsafe to the public, he said.

"It's important to realize that every business out there has made mistakes that need to be corrected," he said. "We're required to report everything that happens. Generally, they're minor incidents that require only a little clean-up action."

Blubaugh said Northern Colorado residents shouldn't worry about having a uranium mining operation in their midst.

"Basically, they should trust Powertech to the extent they trust themselves to put the right people in office, because it's those people who will inspect us on a regular basis. And there's a multi-million dollar bond in place to ensure that things will be done right," he said.




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