Canada Uranium update

Canada Uranium update

15th November 2007

The Nunatsiavut government is mulling a uranium moratorium.

The Northern Miner

Just as uranium exploration in Labrador's Central Mineral Belt is reaching a fever pitch, the Labrador Inuit government is looking to pour cold water on the scene - or at least slow it down long enough to decide whether to allow uranium mining at all.

A motion introduced in October by the Nunatsiavut government's minister of land and resources, William Barbour, proposes a moratorium on uranium mining and milling on Inuit land, and could be passed by the end of the year.

With the Central Mineral Belt a hot area for uranium exploration, the government - which was established in December 2005 and governs 15,800 sq. km in the northeastern part of Labrador -- recognized the need for a policy on uranium development.

"The assembly felt it was time to at least have a starting point in terms of a policy," Barbour says.

And for now, that starting point is one of caution.

"What we're hearing as Nunatsiavut assembly members is that we don't know enough (about uranium). We don't want to go into a development without having the necessary information to make. . . the most informed decision."

Uranium exploration in Labrador has exploded in recent years as the price of the mineral has soared. Uranium recently fetched US$92 per lb., after seeing a low of under US$7 per lb. in 2000, and worldwide production continues to fall well short of demand, according to the Ux Consulting Co.

The Nunatsiavut government has established a special committee to study the issue that will hear from uranium experts from industry, non-governmental organizations and government in late November. It will also travel to each Nunatsiavut community to hear local concerns. The committee is to report back to the assembly by Dec. 15, when the fall sitting ends. A decision on uranium development could be made then, or Barbour may request an extension from the assembly.

The development discussion is a timely one, as Aurora Energy Resources (AXU-T) is already at work on a prefeasibility study for its Michelin uranium project and, assuming a positive feasibility and the receipt of all approvals, is targeting production by 2013. The company's Michelin and Jacques Lake deposits, which host 97 million lbs. uranium and would both see open-pit and underground development over 10 years, sit on Inuit land, 140 km north of Happy Valley-Goose Bay.

Barbour says the government motion was not intended to ban uranium development altogether, but to place a moratorium on it until industry can prove that uranium can be mined safely. Communities have questions about tailings disposal, in particular.

"The single biggest concern we hear is that it's an environmental issue, that we are dealing with a product that could be there for thousands and thousands of years," Barbour says.

Residents of the coastal communities of Postville, 40 km northeast of Michelin, and Makkovik, 80 km northeast, are especially concerned.

Aurora spokesperson Andrea Marshall says that the company sees the government's motion as the beginning of a debate about uranium â¤"- and not the end of Michelin.

"We're pleased that they have initiated a formal process to examine uranium mining," she says. "They're going to have a debate. . . but we are comfortable and confident that the outcome of that will be a better framework for us to be able to move forward."

Marshall says that the company has been invited to give a presentation on the project, and plans to highlight the environmental protection, management and stewardship that Aurora will provide.

"We want to demonstrate that there's many other examples around the world where similar uranium mining is taking place very safely."

Although as a junior, the company can't point to any of its own operations as examples, Marshall says Aurora's management team is "quite competent and experienced to move the project forward."

The company is also using highly skilled, experienced contractors.

Aurora has been consulting with communities near its project and Marshall says that while there are questions about the environment and local involvement in the regulatory process, locals are also interested in the opportunities that a new mine would create.

"There's a lot of people who are interested in knowing about the project and the timeline and the opportunities that might be there for people in nearby communities, both from an employment and training perspective as well as from a procurement of services and materials perspective," Marshall says.

But safety is really the bottom line, Barbour says, and the government has placed the onus on industry to convince the Labrador Inuit that uranium mining is safe and that any tailings plan would not pose any environmental or health risks.

"It's not my job to go out there and prove what's safe and not safe â¤"- we are not the proponent."

Aurora is planning to file to start the environmental assessment process before the end of the year, which Marshall says will take at least three years and address concerns, such as the tailings plan, in detail.