Canada Uranium update
Published by MAC on 2007-11-15
Canada Uranium update
15th November 2007
Uranium One shares have fallen drastically, from what analysts and investors suggest is the company's aggressiveness, amid an unprecedented boom in uranium prices. Uranium One is planning to open five uranium mines in Australia, South Africa and Kazakhstan - although health hazards of uranium mining and processing are becoming better known.
Last week, Canadian newspapers covered the results of a new health study that found some residents of Port Hope, Ontario, had been contaminated with radioactive chemicals generated from a uranium processing facility operated by Cameco. The residents were forced to take matters into their own hands after the Canadian government refused to do its own comprehensive health study.
MINING: URANIUM ONE CEO REGRETS OVERPROMISING
He'll fix the company, but first, the monkeys
by ANDY HOFFMAN, Mining Reporter, Toronto Glove and Mail
15th November 2007
TORONTO -- When Neal Froneman dials into his company's conference call this morning, the head of Uranium One Inc. knows he will be in for a rough ride.
Shares in his upstart mining venture, which once billed itself as a looming rival to industry giant Cameco Corp., have been in freefall since the company drastically reduced its production forecasts two weeks ago.
Trading at more than $18 each on the Toronto Stock Exchange in April, Uranium One stock is now worth less than half that, having plunged nearly 20 per cent over the past week alone.
In an interview, Mr. Froneman conceded Uranium One should have "qualified the risks" more than it did and has plenty of work ahead to restore credibility with investors. He said the forecast reduction, which will slash 2008 production by 38 per cent to 4.6 million pounds of uranium from a previous estimate of 7.4 million pounds, is a worst-case scenario.
"We understand you probably only get one chance to revise your forecast. We also understand the issue of underpromise and overdeliver," the president and chief executive officer said.
Uranium One, analysts and industry investors suggest, simply promised too much, too soon, amid an unprecedented boom in uranium prices.
Based in Toronto, the company is building or starting production at no less than five uranium mines spread from Australia, to South Africa, to Kazakhstan.
The aggressive miner acquired the bulk of its assets through a pair of recent all-stock acquisitions worth more than $5.5-billion in total. Yet with production or startup problems afflicting nearly all of its operations, Uranium One's market value has shrunk to roughly $3-billion.
The selloff comes despite the support of buying from index funds. Just six days before the forecast revision, it was announced that Uranium One would be added to the S&P TSX 60 index.
Versant Partners analyst Ian Parkinson said Uranium One was likely too aggressive with its production ramp-up schedule. Startup problems are par for the course at nearly all mining operations, particularly uranium mines, the analyst said, but Uranium One's issues have been compounded because the company is trying to start so many mines at once.
"Have they been punished too severely for that? Absolutely. We've seen this thing fall off a cliff over the last two months," said Mr. Parkinson, who rates the stock a "strong buy."
Mr. Froneman, however, insists Uranium One has not bitten off more than it can chew.
"We've got a gorilla to manage. We've broken that gorilla down into monkeys. Each monkey has got a very good management team looking after it," the burly South African said.
These days, the most troublesome monkey for Uranium One is in Kazakhstan.
Operations in the former Soviet country are at the heart of the dramatic production cut. At issue, is a severe lack of sulphuric acid, a key component in the in-situ leaching process that is used to extract uranium from the ground.
Mr. Froneman said efforts to find and procure alternative supplies of acid in the region have begun and the company is also asking acid producers to increase output. There are, however, logistical and regulatory problems in getting the acid into Kazakhstan, he warned.
State mining firm Kazatomprom, which is Uranium One's partner and the operator of the Kazakhstan mines, is building its own sulphuric acid plant slated to be completed by 2010. Mr. Froneman said the acid shortage issue will be solved well before that.
He also dismissed concerns that the Kazakhstan operations could be put at risk by a new mining law and said companies' contracts are legally secure. "We have received assurances from out partners in Kazakhstan that we are not exposed," he said.
Still a major shareholder, Mr. Froneman said he "feels investors' pain" and isn't about to abandon his goal of building one of the world's top five uranium producers, even if it takes longer than expected.
"We've acquired the assets we need. We're now developing them. We've battened down the hatches and we're now focusing on delivery. It's delivery, delivery, delivery," he said.
Town's residents test positive for uranium contamination
by MARTIN MITTELSTAEDT, Toronto Globe and Mai
13th November 2007
The result of testing conducted on a small group of residents of Port Hope has found contamination by uranium of military or industrial origin.
Four of nine people tested had unusual types of uranium in their bodies, including one who carried measurable quantities of depleted uranium, which is used to make armour-piercing weapons, and another who had uranium at levels about three times higher than average concentrations of the element.
Port Hope, a community of 16,000 located about 100 kilometres east of Toronto on the shores of Lake Ontario, is the site of the world's oldest uranium-processing facility, which produced uranium used in the Manhattan Project that developed the first nuclear bombs. It is also the scene of one of the largest radioactive soil cleanups in Canada, with an estimated 3.5 million cubic metres of contaminated dirt buried around the town from dumping between the 1930s and 1950s.
The testing was done by a local group, the Port Hope Community Health Concerns Committee, which plans to formally announce the findings today.
The analysis for uranium was done on urine samples at a leading radioisotope laboratory in Germany.
The discovery of unusual levels of radioactive compounds in people is likely to increase the unease among some residents about the large nuclear facilities located in their community.
Cameco Corp., the world's largest uranium producer, operates a processing plant in Port Hope that makes fuel for nuclear power reactors.
Earlier this year, the company abruptly shut its uranium hexafluoride processing facility after discovering uranium and related chemicals in the soil underneath the plant.
Although the results of the human testing have not been published in a scientific journal, a study based on them has been peer-reviewed and was presented at a scientific symposium last month in Europe.
"Our results suggest long-term contamination and possible adverse effects on the body burden of the current population of Port Hope," according to the abstract of the study presented at the conference by the European Association for Nuclear Medicine. The abstract referred to the results as "preliminary" and recommended that additional research on uranium exposures be conducted.
Of those tested, three had a type of uranium normally found in spent reactor fuel. Five of those tested didn't have measurable amounts of uranium from military or industrial sources.
"The study calls into question the federal guidelines and standards used by Natural Resources Canada, Health Canada, the [Canadian Nuclear Safety Commission] and Cameco to monitor radiation exposure and protect workers and the community," the health concerns committee contended in a statement issued yesterday.
Uranium is a concern because radiation from it can cause cancer, and some residents have complained that there has been an elevated incidence of brain cancers, among other ailments, in the community.
But Health Canada has previously issued studies that have found cancer incidence and mortality around Port Hope to be similar to the general provincial population.
Mining town's residents test positive for radioactive materials, group says
The Canadian Press
13th November 2007
TORONTO - Radioactive chemicals from decades of uranium refining operations in a town just east of Toronto -- the site of the largest cleanup of radioactive soil in North American history -- are making their way into humans, a new medical study commissioned by frustrated area residents has found.
According to the Port Hope Community Health Concerns Committee, urine samples collected from participants in the small Ontario town and analyzed at a radioisotope lab in Germany were found to contain radioactive substances the government and the companies involved have "never admitted even exist in Port Hope."
Details of the study will be released Tuesday.
Fearing increased rates of cancer and other ailments, the community group teamed up with the Uranium Medical Research Centre, an independent clinical research group, to conduct medical tests on area residents.
Residents had to take matters into their own hands because the federal government has refused to do its own comprehensive health study, said spokesman John Miller.
"All the people who live there really want to know, 'Is our community safe,' and the assurances that 'It's probably safe,' are just not convincing to us," said Miller, whose lived in the community for 12 years.
"Port Hope has been exposed to radioactivity for about 70 years --longer than almost anyone in the world -- from man-made ceramized, insoluble uranium and for there never to have been health tests in all that time is ludicrous."
Port Hope is currently home to the Cameco uranium refinery, which processes uranium hexafluoride for U.S. nuclear reactors.
Radioactive results positive, Port Hope group says
THE CANADIAN PRESS
12th November 2007
A new health study shows some residents of Port Hope have been contaminated with radioactive chemicals.
Fearing increased rates of cancer and other ailments, the Port Hope community health concerns committee hired an independent clinical research group to look into the matter.
Spokesman John Miller said today that residents were forced to take matters into their own hands after the federal government refused to do its own comprehensive health study.
According to the group, which will release its full findings tomorrow, urine samples collected from participants tested positive for a variety of radioactive substances.
The town just east of Toronto is the site of the largest cleanup of radioactive soil in North American history.
Uranium refinery operations are believed to be responsible for contaminating some 3.5 million cubic meters of soil.
Uranium Plant Sparks Community Concerns Over Radioactive Poisoning
City News
12th November 2007
Cameco is the world's largest producer of uranium, and their logo looms large on the side of buildings which cast shadows on the waterfront in Port Hope, Ont.
But in those shadows, throughout the quiet area an hour and a half east of Toronto, concerns are mounting about the conversion plant, where locals fear radioactive particles are mounting in the soil they live on.
"The children, the adults, breath in those particles every day," said Faye Moore with the Port Hope Community Health Concerns Committee.
A federal estimate suggests there are 3.5 million cubic metres of low-level contamination hidden underground in Port Hope, and Ottawa has earmarked money to help clean it up. Still, the residents want the feds to conduct official health tests, something they waited years for and eventually decided to take on themselves.
What those urine tests reportedly found was some contamination in certain residents.
"There is contamination in people's bodies in Port Hope that we're very concerned about," said another Committee member and Ryerson University journalism professor John Miller. "We only had enough money to test a certain number, we want to be able to test a certain number. We want to be able to make sure our community is safe, that's all we're asking."
The tests were conducted by the Committee, alongside the Uranium Medical Research Centre, which fundraised to cover the costs.
CityNews tried to contact Cameco officials, who understandably wouldn't speak without seeing the results of the tests for themselves. The company provides quarterly environmental reports for the city. In July, one of their Port Hope plants was closed because of a uranium leak.
Moore said she understands the economic impact of Cameco for the roughly 15,000 residents of Port Hope, but insists the health tests raise essential questions about the regulation of radioactive materials.
"What is important is the truth and to understand the truth," Moore said.
The results of the Health Concerns Committee's tests will be officially released at a news conference on Tuesday. Cameco representatives say they're still waiting for their copy.