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This might have been posted, anyway it's worth a read.

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NZ ACQUIRES OLD CYPRUS HANSEN URANIUM PROPERTY; IS CONSIDERING IN SITU PRODUCTION

PAYDIRT

OCTOBER 1996

NZ acquires old Cyprus Hansen uranium property; is considering in situ production

New Mexico and Arizona Land Co. (NZ) has signed a contract for the purchase of a 10,000-acre ranch which contains a major deposit of uranium, the company reported.

Located in the Tallahassee Creek area, near Canon City, Colo. the uranium deposit was formerly known as the Hansen ore body. Previous studies by independent geologists have indicated Hansen contains up to 25 million pounds of uranium oxide equivalents, NZ said.

A major pert of this uranium mineralization occurs in two thick pods, which together cover only about 40 acres.

Bill Pope, NZ chief executive, said the planned acquisition will be a significant step toward augmenting NZ's traditional asset bases in uranium and rural lands, both of which are experiencing favorable trends.

He said the mineral rights would be purchased by NZU Inc., a wholly owned subsidiary, while most of the surface estate would remain with NZ for future development.

The initial focus would be on the potential for environmentally benign in situ leach mining, said J.D. Sphar, vice president of minerals for NZ. He noted that the deposit has several economically attractive characteristics for ISL mining.

These include good mineralized thicknesses at modest depth and in sediments saturated with water of such poor chemical quality as to be unsuitable for other uses.

Sphar said many technical reports and a considerable amount of technical and environmental data are available from prior plans for a large mine-mill complex at the property.

Cyprus, Westinghouse planned mine


The Hansen property has a long history with Cyprus Mines Corp, where it was known as Cyprus Hansen.

In 1978, Cyprus sold a 49 percent interest in the property to Wyoming Mineral Corp., a wholly owned subsidiary of Westinghouse Electric Corp.

Westinghouse, which at the time was a major supplier of nuclear reactors, was hungry for uranium. Westinghouse was then faced with 14 lawsuits filed by 20 utilities after it cancelled uranium fuel supply contracts in September 1975.

The suits sought delivery of 69 million to 85 million pounds of uranium at contract prices over the following two decades.

Westinghouse was suing, too. It had antitrust suits going against 29 foreign and domestic uranium producers and their agents, alleging price fixing and allocation of uranium markets.

Back in 1978, Cyprus estimated reserves at the site were about 30 million pounds.

Hansen was named for James G. Hansen, Cyprus' former senior vice president for mineral exploration.

Open-pit mine planned

Cyprus was to be operator for all exploration, development and production at Hansen. Funding for licensing, development and construction of the open-pit mine and 3,000 tpd mill was to be provided by the two firms on a pro rata basis.

When Westinghouse bought in in 1978, the furms were looking at production by 1983.

But by 1980, the price of uranium had began to flag. In the early '70s, uranium sold for around $6 per pound, a price that rose as high as $43 by mid-1979. A year later, however, it had dropped to $30, a five-year low, on its way down.

The reason was oversupply. In 1979, producers turned out 37 million pounds of uranium oxide, while utilities consumed only24.8 million pounds.

Rich Canadian competition


At the same time, rich new deposits were being discovered in Canada and Australia with up to 30 times the grade as domestic ore, which averaged only 2.2 pounds per ton in 1979, down from 4.2 pounds in 1969.

By that time, Amoco (Standard Oil Co. of Indiana) had acquired Cyprus and the new company soon decided to abandon the Hansen project, which had a price tag of $225 million.

The decision also came soon after the Three Mile Island reactor incident, which further eroded uranium's image and demand.

Amoco and Westinghouse planned to wait until the market for uranium became more stable -- a situation that wasn't to occur.

This isn't the only uranium action in the Canon City area. Earlier this year, Cotter Corp. said it was reopening its uranium mill there, which closed in 1987.

The company will be spending about $1.5 million to refurbish the operation, taking advantage of a price that has risen to $16 per pound.

The Cotter mill could be on line by late 1997 or early 1998, producing 1.5 million to 1.7 million ppy over three or four years.