The Nunatsiavut Labrador Inuit government has unanimously voted to lift a moratorium on uranium mining that it narrowly approved in an 8-7 vote three years ago.
Instituted in April 2008, the moratorium came following a period of intense uranium exploration activity spurred by the booming uranium price - which spiked to a high of US$136 per lb. in 2007.
Uranium's fortunes have waned since then. The financial crisis of 2008, the Fukishima nuclear disaster in Japan in early 2011, and ongoing economic malaise have hammered the price down to US$52.50 per lb. at presstime.
But the news was still warmly received by at least two companies with significant uranium assets in the area -- Australian producer Paladin Energy (PDN-T), which announced it will resume exploration on its Central Mineral Belt (CMB) project in mid-2012, and junior Crosshair Energy (CXX-T, CXZ-X), which has its own project called CMB.
Nunatsiavut Minister of Lands and Natural Resources, Glen Sheppard, noted in a press release that the government held public consultations throughout Nunatsiavut, Upper Lake Melville and St. John's in its review of the moratorium, which was required to be conducted after the three-year period was up at the end of March 2011.
"The general consensus from beneficiaries and other stakeholders is that the moratorium should be lifted to allow any proposed development to proceed to environmental assessment," Sheppard said.
The decision wasn't totally unexpected, says Stewart Wallis, Crosshair Energy president and CEO.
"It was a surprise - a pleasant surprise - that it was a unanimous decision," he said.
Judging from Crosshair's local contacts and from the community consultation meetings the company's representatives attended over past two months, Wallis says employment was a big factor in the decision.
"I think that the primary message was that the local people wanted to see exploration and development move forward and I think primarily, they recognize the economic benefits that are going to flow to the communities as a whole."
Wallis says while Crosshair alone might have hired several tens of local people in years past, over the last couple of years that's dwindled to around five.
The dropoff in exploration was only partially due to the uranium price, Wallis says, noting that uranium exploration has continued in other jurisdictions. Paladin's announcement to resume exploration at CMB would appear to confirm that assessment.
Uranium exploration was not banned under the moratorium, and Crosshair's established resources lie outside of the area that was affected by the ban.
Crosshair conducted a 19-hole diamond drilling program this year totalling 3,138 metres at its Central Mineral Belt (CMB) uranium-vanadium project.
The company, which also has uranium projects in Wyoming and a gold project in Newfoundland, will spend the next couple of months analyzing results from the program. CMB contains indicated resources of 6.9 million tonnes grading 0.034% U3O8 for 5.19 million lbs. uranium and 14.7 million tonnes grading 0.152% V2O5 for 42.8 million lbs. vanadium. Inferred resources at similar grades add 5.8 million lbs. uranium oxide and 93.6 million lbs. vanadium.
The moratorium didn't stop Paladin from acquiring a project that did lie inside the prohibited area early this year.
Paladin had enough faith that the moratorium would be lifted that it bought Fronteer Gold subsidiary Aurora Energy Resources for its CMB project at the end of 2010. The company, a uranium producer with assets in Namibia, Malawi, Australia and elsewhere, completed the all-share, $261-million acquisition of Aurora in early 2011.
Paladin's CMB contains several deposits with total measured and indicated resources of 40.2 million tonnes grading 0.09% U3O8 for 83.8 million lbs. uranium oxide; plus 29 million inferred tonnes grading 0.08% U3O8 for 53 million lbs.
The moratorium can't officially be lifted until the Nunatsiavut Environmental Protection Act comes into force, in March, 2012.
When the Inuit government first imposed the moratorium on 15,800 sq km it controls along the coast of northern Labrador and parts of the CMB, it noted that it was a new government established in 2005, and needed time to develop a land-use plan and environmental regulations.
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