White Canyon Uranium to commence uranium mining in Utah, first in 30 years
by Andrew McCrea
Junior emerging uranium miner White Canyon Uranium (ASX: WCU) has struck pay dirt with the company receiving a permit to mine uranium from its 100 per cent owned Daneros Mine in the State of Utah, USA.
Believed to be the first permit bestowed by the state in 30 years, WCU was granted approval from the Bureau of Land Management in Utah - just 15 months from WCU's listing on the Australian Stock Exchange in March 2008.
In what is believed to be another first, WCU may well be the first Australian miner to receive a uranium mining permit in the Utah, beating out other hopefuls like Wildhorse Energy (ASX: WHE) and Peninsula Minerals (ASX: PEN). The latter companies exploring for uranium in Wyoming.
WCU will start site preparations immediately with construction of surface facilities and placement of the mine's decline portals. Its US operations Manager Mike Shumway is well known in uranium circles, particularly in Utah and provides experienced operational ballast for this Aussie based company.
What makes this deal different interesting is that WCU believes first ore could be shipped from Daneros by September 2009. Shipped to where, you may ask? White Canyon is currently in negotiation with Denison Mines Corp (TSX: DML; AMEX: DNN) regarding treatment of ore at Denison’s White Mesa Uranium Mill at Blanding, 100 kilometres from the Daneros Mine. To digress temporaily if you will.
Denison Mines has had its share of well publicised issues recently - from bulging debt to placing four mines on care and maintenance in the US to a changing of the guard at the top. It is understood that the White Mesa Mill at Blanding, while temporarily ceasing operations, will continue to buy and stockpile ore to meet contracts.
Interestingly, Denison has wrapped up financing from Korea Electric Power Corp (KEPCO) (in return for 20% of the company) and now offered equity on a bought deal basis to raise another C$82 million.
However, it is possible that White Canyon Uranium may still be able to negotiate a tolling agreement and hence derive a better price. This would enable WCU to ship the ore to Blanding, less than 100 kilometres away. Capital expenditure would be likely to be minimal for WCU.
For WCU shareholders, the granting of a mining permit in Utah is a coup. For a mining junior and its MD, John Hasleby it is like winning Wimbledon or winning the World Series. With a huge advantage of being one of few global emerging mining aspirants to actually move into production in 2009 - capturing the uptick in uranium prices in 2010.
For investors able to run a few sums it is possible to calculate future cash flows for WCU and its deposits. That must certainly be intriguing to larger investors contemplating how to pick the next winner in the uranium market.
