Bay Street Week Ahead - Uranium Explorers Stake out Canada
Date: 01-Aug-05
Country: CANADA
Author: Nicole Mordant
There's been a 44 percent surge in the uranium price this year, and Canada's exploration industry has fanned out across almost every province and territory in search of new deposits of the heavy metal, which is fairly abundant in the Earth's crust.
Uranium is popular again as the world hunts for new and cheaper sources of energy to generate electricity and as coal-fired power plants get a bad rap from those worried about carbon dioxide emissions and global warming.
From British Columbia in the west to Nunavut in the north and Labrador in the east, some 60 junior mining firms are hunting for the next big lode of uranium, which is mostly used to produce electricity in nuclear power stations.
"The recent news of a new discovery in the Athabasca Basin by partners UEX Corp. and Cogema appears to have the market buzzing again about junior uranium explorers," said National Bank Financial analyst Brian Christie.
The Athabasca Basin in northern Saskatchewan is already the world's biggest uranium-producing region, where world No. 1 miner Cameco Corp. each year unearths millions of pounds of the dense, silvery-white metal.
UEX and Cogema's discovery comes at a time when spot uranium prices, most recently at $29.50 a pound, are at their highest levels since the 1970s because of industry estimates of a 35 to 45 million pound shortage of mined material a year.
Although the deficit is still being met out of above-ground stockpiles, for many years a millstone on prices, these could run out in a few years. There are 440 nuclear reactors worldwide needing uranium and energy-hungry China alone is planning to build another 30 over the next 15 years.
Christie's research shows that the number of active uranium-seeking junior miners listed on Toronto's two stock exchanges has more than tripled to 60 in only four months.
With just about every inch of land in the Athabasca staked, new explorers such as Firestone Ventures Inc. have headed to less geologically-tested areas like southern Alberta.
"The appeal to a junior explorer like us is to go out and find an area. What we like about southern Alberta is that it could be a whole new district. The uranium potential is unknown," said Lori Walton, Firestone's president.
"Alberta has a history of being an energy rich province with oil, gas and coal. I think we would have a really good reception to being a uranium producer too," she told Reuters.
Less certain about their reception are explorers in neighboring British Columbia, which imposed a moratorium on uranium exploration and mining between 1980 and 1987 after a commission concluded that the health risks for the people who extract the radioactive metal were too great.
At least three junior companies, Aldershot Resources Ltd. , Sparton Resources and Santoy Resources Ltd.
are busy trying to acquire uranium claims in the Okanagan area in south-central British Columbia.
According to Geoff Freer, BC's assistant deputy minister of mining and minerals, there is nothing today to stop companies from applying to the West Coast province's government for a uranium exploration permit. But no one has yet.
He added though that nuclear energy "is not in BC's future". And any suggestion of a uranium industry in the environmentally conscious province has already angered some green movement activists.
They point to its use in making nuclear bombs, the problem of where to store radioactive waste and to the Chernobyl nuclear power plant explosion in 1986 that killed 30 people and forced 200,000 to flee a cloud of radioactive debris as it drifted over the then Soviet Union and Eastern Europe.
BC's Green Party, which has some clout in the politics of the province, has called for the moratorium to be reimposed.
Asked if the potential opposition even before the company had started to explore made it worth the bother, Santoy Resources spokesman Rupert Allan had few doubts. "The potentia