Here's a History lesson on the Hansen Uranium Project from 1978 - 1983
Underground uranium mining in Nucla, Montrose County, Colorado
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 firms 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.
Interesting times are ahead for Black Range Minerals.
Remaining 51% interest in the Hansen Uranium Project still pending