South Boston News & Record
and Mecklenburg Sun
09/18/14 - 5:39 am
09/18/14 - 5:39 am
Courtney Garrett, whose grandfather lives in Halifax County, is first runner-up
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In the 1920s and 1930s, if you lived in Franklin County, most likely you were in involved in the county’s biggest industry — making illegal whiskey or moonshine.
09/17/14 - 12:39 pm
Recently, a group of twelve local runners took on the challenge of participating in the Blue Ridge Relay. A grueling, two hundred plus mile relay spanning two days, mountainous terrain,…
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Tough times for Virginia Uranium
SoVaNow.com / February 03, 2014
By BRITTANY HUGHES
Danville Register & Bee staff
Reprinted with permission
A continued drop in the projected long-term price of uranium — combined with Gov. Terry McAuliffe’s recent statements affirming his opposition to uranium mining — has been a one-two punch to uranium mining efforts in Virginia.
Virginia Uranium Inc. recently announced it would not pursue legislation in the 2014 General Assembly that would have drafted regulations for uranium mining in the state. While Virginia’s moratorium on the practice would have remained in place, the move would have been a huge step toward the company’s goal of mining a 119 million-pound uranium ore deposit on Coles Hill in Pittsylvania County.
Shortly after McAuliffe’s election, the new governor announced he planned to veto any such legislation that might pass the General Assembly. The move prompted VUI to stall legislative efforts and “re-evaluate [their] options” moving forward.
But legislative hurdles aren’t the only concern facing the company. According to the most recent data, declines in the global price of uranium may also affect the mining conglomerate’s future plans.
Uranium prices are calculated in two ways: the “spot price” — or the price the uranium can be sold at any given moment — and long-term price. Like many companies across multiple industries, VUI’s project summary is based on the assumed long-term price of uranium.
According to Cameco Resources, the largest uranium producer in the country, uranium’s long-term price is currently projected to be $50 per pound.
But the most recent preliminary economic assessment of the Coles Hill project bases the site’s entire economic potential on an assumed $64-per-pound uranium value — well below current predictions.
“There is no guarantee the proposed operation would be economically viable given the uncertainty of future uranium prices in combination with permitting risk related to the current moratorium on uranium mining,” the report adds.
The assessment was included in a quarterly management analysis released in November by Virginia Energy Resources, VUI’s parent company.
Virginia Uranium Inc. President Walter Coles Sr. said while he accepts the current long-term value of uranium is around $50, he fully expects the price of uranium to rebound.
“It’s very well-known that the long-term price of uranium will [rise],” he said. “The long-term outlook is very positive.”
Coles said his prediction is based on a resurgence of national interest in nuclear power, which he said is the cheapest and cleanest form of energy currently available. He also pointed to the launch of new nuclear power plants in countries like Russia as indicators that nuclear power is being globally embraced.
When Virginia Uranium Inc. was founded in 2006, uranium prices were on the rise — reaching as high as $95 per pound throughout 2007. But the price of uranium began dropping steadily in April 2011, one month after an earthquake and subsequent tsunami triggered a major disaster at the Fukushima I Nuclear Power Plant in Japan.
The price has hovered around $50 per pound since September, and has remained below VUI’s desired price of at least $60 since October 2012.
Coles said while he believes the industry will bounce back, that largely depends on the continued response in Japan.
According to the economic assessment report, a $5-per-pound price change could result in a $110 million fluctuation in the Coles Hill project’s net present value, which is estimated at $427 million under the current project plan of $64-per-pound.
But Coles said the drop in uranium prices isn’t the primary cause for the company’s decision not to pursue legislation in this year’s General Assembly, blaming that move on McAuliffe’s vow to veto the bill.
“What you have to remember is that even if the moratorium were lifted today, there would still be a five or six year period to get the permits,” Coles said, explaining he believes that’s easily enough time for the industry market to bounce back.
“We were very positive that we would have gotten legislation through this year [to draft regulations] if the governor had been more positive,” he added.
In the meantime, the company’s only revenue at the Coles Hill site currently stems from interest on cash and land rental, according to the management analysis report.
But the economic assessment doesn’t paint an entirely positive picture of VUI’s future, stating the “company’s ability to continue … is dependent on [its] ability to raise additional equity financing and the ultimate attainment of profitable operations.”
The report also states the “company believes it has sufficient resources in combination with cost-cutting measures, to fund its planned activities for the next twelve months.”
In addition, the report acknowledges the “possibility of lifting the uranium mining moratorium will be a significant challenge” during McAuliffe’s four-year term.
To help cut down costs, Coles said VUI has made big cuts to its previous operations.
“We’ve ceased to do the technical work on the baseline studies for water and the environment, and any future [exploratory] drilling would not take place,” Coles explained, adding, “We expect to move forward.”
Hughes reports for the Danville Register & Bee.
Comments"resurgence of national interest in nuclear power" That's due to the Japanese nuclear facility with the two backup safety systems moron. Tell us again how safe it is. http://www.turnerradionetwork.com/news/251-mjt
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