Published on Wednesday November 24 2010
Fremont County commissioners on Tuesday narrowly passed a resolution approving expanded uranium exploration in the Tallahassee Creek area, putting into place stringent guidelines aimed at protecting water.
The commission voted 2-1 to allow Australia-based Black Range Minerals' request to expand exploration on an additional 2,220 acres of property known as the Hansen Deposit, which is believed to be the largest uranium deposit in the district.
Black Range initially received permission from the Fremont County Commission in 2008 to explore for uranium in the Taylor Ranch area west of Canon City. The company is working to determine whether or not it would be economically viable to commercially mine for the ore both on the Taylor Ranch site and the Hansen Deposit to the south of it.
In passing the resolution, commissioners also put into place 34 conditions the company must abide by to continue exploration. Commissioner Mike Stiehl cast the one dissenting vote, saying the commission has, "Gone beyond the conditions crafted the first time around and I think done a better job of protecting our water."
Black Range Explorations Manager Ben Vallerine asked the commission to consider changing one of the conditions from twice-a-year water well monitoring to once a year.
"We would like some degree of flexibility in that," Vallerine said.
"We didn't agree with that and wanted twice-a-year monitoring because of the wet and dry times," Stiehl said.
Vallerine also requested the proposed water sampling take place twice a year on wells within a half-mile of exploration areas and only once a year for wells outside of the half-mile range. Again, the commission denied that request.
"The applicant continually is resistant to monitoring and I am not able to understand why they are resistant," Stiehl said.
"Our discussions centered around the water issues in general and we feel strongly about being protective of the water," Commissioner Larry Lasha said.
Commission Chairman Ed Norden said the stringent conditions may be unprecedented for prospecting and exploration.
"If something like this had been in place during the 1970s uranium exploration by Cypress, it would have served us well," Norden said.
The Company intends finalizing Definitive Agreements
as soon as practicable. Pre-feasibility studies into the development of the combined Taylor Ranch/Hansen Uranium Project will commence shortly thereafter.
as soon as practicable. Pre-feasibility studies into the development of the combined Taylor Ranch/Hansen Uranium Project will commence shortly thereafter.
Letter Of Intent
Key components of the Letter of Intent are:
Black Range has paid STB US$500,000 for the exclusive right to acquire an option over STB's mineral interest in the Hansen Uranium Deposit and immediate surrounds. STB and Black Range will work towards finalising and executing Definitive Agreements by August 2010.
On execution of Definitive Agreements Black Range shall pay STB US$1.0 million and issue STB US$2.5 million worth of shares in Black Range (based on Black Range's 5-day VWAP for the period immediately preceding the issue of these shares). 50% of the shares shall be escrowed for six months from the date of their issue.
On execution of Definitive Agreements, STB shall grant Black Range an option to acquire STB's mineral interest in the Hansen Uranium Deposit at any time until August 6, 2013 (the "Option Period").
During the Option Period Black Range shall undertake feasibility studies into the development of a commercial scale mining operation at the Taylor Ranch/Hansen Uranium Project, evaluating all potential mining methods.
In order to exercise its option to acquire STB's mineral interest, Black Range shall pay STB a further US$2.0 million and issue STB US$7.5 million worth of shares in Black Range (based on Black Range's 5-day VWAP for the period immediately preceding the issue of these shares) within the Option Period. 50% of the shares shall be escrowed for six months from the date of their issue.
Once Black Range exercises its option to acquire STB's mineral interest, Black Range shall also concurrently purchase the surface rights covering certain parcels of land that will be directly affected by a mining operation, under terms and conditions already agreed between STB and the surface owners.
If, as a result of the current quiet title action initiated to resolve historic ownership of the Hansen Uranium Deposit, it is found that STB rather than NZ Minerals LLC ("NZ Minerals") holds the disputed 49% interest in the Hansen Deposit, Black Range shall pay additional consideration to STB that shall comprise (i) US$1.0 million together with US$1.0 million in shares on resolution of the quiet title action and (ii) US$2.0 million and US$2.0 million in shares on commencement of mining the same consideration that Black Range has previously agreed to pay NZ Minerals for its mineral interest in the Hansen Deposit.
By executing the Letter of Intent, Black Range in no way disparages or takes a position regarding NZ Minerals' or STB's claim to the disputed 49% mineral interest.
Once Black Range exercises its option to acquire STB's mineral interest, STB will be entitled to a 1.5% royalty on production from the Hansen Uranium Deposit. The royalty may increase slightly in the event of certain provisions pertaining to possible dilution of Black Range's share capital during the Option Period.
Looking forward to a very upbeat year ahead in 2011
Looking forward to a very upbeat year ahead in 2011
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