Monday, April 29, 2013

Laramide Resources Becomes Newest Uranium Play On The ASX

Published on Monday April 29 2013 (AEST)  

 Laramide Resources (ASX: LAM, TSX: LAM) is already listed on the Toronto Stock Exchange in 2006, and has now been admitted to the ASX, and is the newest uranium stock to be traded on the local bourse.

 Laramide will hit the ASX boards at 12.00pm EST on Tuesday 30th April 2013, and will have 73.3 million Chess Depositary Interests (CDI) on issue, at a ratio of 1 CDI representing 1 fully paid ordinary share. The recent prospectus offered up to 12 million CDI's at $0.85 to raise up to $10.2 million. 

The Canadian company is engaged in the exploration and development of uranium assets based in Australia and the U.S., which includes its main asset of the wholly-owned Westmoreland Project, which is a sandstone-hosted conventional, open-cut deposit located in north-west Queensland near the Northern Territory border. 

Laramide has spent over $30 million on Westmoreland since acquiring the project in 2005, which has expanded the work carried out by its former owner and advancing the project through a series of drilling campaigns, updated resource estimates, environmental studies and metallurgical studies. Westmoreland currently has a JORC Indicated Resource of 36 million pounds of uranium (U3O8) contained in 18.7 million tonnes at 0.089% U3O8, and a further Inferred Resource of 15.9 million pounds of U3O8 contained in 9.0 million tonnes at 0.083% U3O8. 

A benefit for the project is that recent metallurgical test work demonstrated a uranium recovery rate of over 90% utilising conventional technologies. Other Australian interests for the company include being in three Northern Territory joint ventures that border Queensland. 

These include the Murphy Tenement Farm-in and Joint Venture with Rio Tinto Exploration Pty Ltd on a number of tenements, situated geologically within the Murphy Uranium Province and along strike from Westmoreland. United States exposure Laramide's interests in the U.S. include La Jara Mesa in Grants, New Mexico and La Sal in the Lisbon Valley district of Utah, and are both at the permitting stage and exploration and development activities have included metallurgical testing, mine infrastructure and resource estimates. 

The La Sal project is expected to be the first of the U.S. tenements to enter into commercial production, with the company recently entering into a toll milling agreement with Energy Fuels Inc. for the processing of ore at the White Mesa Mill.

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Monday, April 22, 2013

Megatons To Megawatts Program Concludes

Published on Monday April 22 2013 (AEST)  
Over the past two years, there has been considerable confusion, misinformation and speculation regarding the end of the Megatons-to-Megawatts Program. This piece will set the record straight. (However, I make the qualification that these arrangements could change in the future.)  

The Basics 

The program was entered into by the USA and Russia in 1993 for the purpose of both countries dismantling nuclear warheads and converting the fissile material into reactor-grade materials, for its ultimate use in civilian nuclear reactors. The Russian party to the contract is Techsnabexport, or TENEX for short. This is the nuclear fuel export subsidiary of Rosatom, the government-owned nuclear authority. The US party is United States Enrichment Corp, or USEC, which was the commercial enrichment division of the US government, which was privatized in 1993, and taken public in 1998. 

Warheads typically used two types of fissile material: plutonium-239 and; Highly-Enriched Uranium, or HEU. HEU is fabricated by concentrating the small amounts of the fissile isotope U-235 present in naturally-occurring uranium-238 isotope. Plutonium is typically the waste by-product of reactors. Uranium-238 is bombarded with a slow neutron to transmute up to plutonium-239. The French company, Areva, is building a reprocessing facility for the USA in South Carolina, which will convert plutonium-239 from American weapons into a form that can be used to make fuel for reactors. 

The Russians, on the other hand, have developed the process for “blending down” HEU from the weapons – a kind of reverse concentration process – into Low-Enriched Uranium, or LEU. LEU is defined as U-238 with 2% to 20% U-235 content. Reactor fuel typically uses LEU that is about 4% U-235. During the 20 years since the program began, the Russians have dismantled thousands of weapons, and generated hundreds of millions of pounds of natural uranium equivalent in the form of 4% LEU, which has been delivered to electric utilities, mostly in the USA, for use in commercial nuclear reactors. For several years, the LEU deliveries have been equivalent to approximately 24 million pounds of mined uranium.  

The Termination of the Contract 

This program is due to expire at the end of 2013. The American government has been very active over the past few years in attempting to extend the contract – all without success. The current Russian powers view former President Yeltsin’s submission to the M2M program as a betrayal of Russian sensibilities, and of her national security. To the best of anyone’s knowledge, the program will expire, and will not be renewed in anything resembling its existing form. A new contract has been devised and entered into, between TENEX and USEC. 

Announced in March 2011, by USEC, the so-called “Transitional Supply Contract” stipulates that USEC may purchase from TENEX a quantity of LEU, which is roughly half of the amount that was being delivered through M2M. However, this material has one very important difference: it is expressly stated in the contract that the uranium may NOT be derived from the Russian military or government stockpile. Furthermore, USEC must provide TENEX with sufficient natural uranium to replace any Russian mine supply used to produce this LEU. Hence, the Americans must source all the uranium that is used to supply all their own LEU. 

This contract is effectively nothing more than a purchase agreement for Russian enrichment capacity. The problematic bit for Americans is that total domestic uranium production has been less than 4 million pounds per year for several years. 

Given the enormously daunting requirements in the US for permitting new uranium mines, this level of production is not likely to rise to the 24 million pounds which is being displaced by the expiry of M2M any time in the foreseeable future. Americans are now almost entirely dependent on their own fast-dwindling stockpiles, and foreign uranium supplies.

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Monday, April 8, 2013

Uranium Explorer Toro Energy In Talks With Seven Possible Asia Partners

Published on Monday April 08 2013 (AEST)

Toro Energy Ltd. (TOE), uranium explorer planning a A$269 million ($279 million) project in Western Australia, said it’s in talks with seven potential partners in Japan, China and South Korea. Toro plans to bring in a company to help develop the Wiluna uranium mine before reaching an investment decision to go ahead with the project by the end of 2013, Managing Director Vanessa Guthrie said by phone today from Perth.

Toro, whose project won Australian government approval last week, expects to offer a stake ranging from about 30 percent to more than 50 percent of the mine as part of a supply agreement, she said. Wiluna, the first new Australian uranium mine to receive state and federal approval in about four years, is expected to start production by the end of 2015, in time to benefit from a looming supply deficit, the Adelaide-based company said April 2.

Toro’s uranium project, located about 1,000 kilometers (620 miles) northeast of Perth, has drawn interest from Asian trading companies and nuclear utilities, Guthrie said. “We’re seeing a supply shortfall from 2016 onwards starting to drive potential partners and customers to look to secure supply,” she said, declining to identify any possible partners by name.

“For new uranium projects, there are very few that are going to start in that window.” Lower prices have slowed development of some projects. BHP Billiton Ltd. (BHP) last year deferred a decision to expand the Olympic Dam uranium and copper mine in Australia.

Cameco Corp. (CCO) earlier this year reported a C$168 million ($165 million) writedown on its Kintyre project in Australia, reiterating that it wouldn’t be viable without a uranium price of about $67 a pound.

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Tuesday, April 2, 2013

Toro Energy's Flagship Uranium Project Receives Fed Approval

Published on Tuesday April 02 2013 (AEST)  
 The federal government has approved a $280 million uranium mine for Western Australia. Toro Energy's flagship project, 30km south of Wiluna township about 700km east of Geraldton, has been signed off with 36 strict conditions. 

Environment Minister Tony Burke said he was satisfied it could proceed without unacceptable impacts on the environment, both during mining operations and beyond the 14-year life of the mine. "My decision comes after a rigorous environmental assessment," he said in a statement on Tuesday. The 36 conditions relate to risks to groundwater and surface water, and from radiation. 

They include precautions to ensure once the mine is closed, the site will be made safe for humans and animals and will be non-polluting. Toro Energy is now required to provide Mr Burke with a detailed environmental management plan before substantial works can begin. 

"The plan must describe how compliance with conditions will be achieved, and what action will be taken if conservative thresholds are exceeded," Mr Burke said. First uranium sales from the mine are expected in 2014.

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