One of the reasons ISR operations have become more popular is because their capital and operating costs are significantly lower than those for conventional mining. Less money required to start up; less labor intensive to operate an ISR facility. There are some industry insiders who believe the all-in expense of an underground mining operation could reach $60/pound, while others argue properties with higher grades, and with less complication operations, could mine at $40/pound or lower. How does Froneman feel his companys Green Mountain properties would fare? Will the Jackpot deposit come in for less than $60/pound? Certainly, we believe it will, he quickly responded. Our models indicate that. But he qualified his projections by saying, That is something that we will confirm through the due diligence. Part of the production decision will include how to approach the underground mining of the Jackpot deposit. Mechanized mining is obviously very efficient from a productivity point of view, but it is very expensive, warned Froneman. Were not afraid of using labor-intensive mining methods if thats the right cost-efficient way. These are the challenges were going to have to address in the United States. He added, If your mine can only sustain a cost profile of $20-$30/pound, you have to find a mining method that works. Another problem we brought to his attention, after our interview, were comments made by Rick Chancellor, Administrator of the Land Quality Division for Wyomings Department of Environmental Quality (DEQ). Chancellor would have to sign-off on SXR Uranium Ones permits before the company could begin mining uranium at Green Mountain. Chancellor told us that Wyoming DEQ would have to approve the previous permit held by Rio Tinto. I doubt the current permit will be acceptable, he told us. The permit may require extensive revisions. Chancellor estimated transferring the permit from Rio Tinto to SXR could take up to a year and a half. We talked with Chancellor about Fronemans target of mining uranium in Wyoming by 2009. If they come in right away, its doable, he responded. But, there may be problems. Theres a lot of water at Green Mountain, Chancellor told us. They (Rio Tinto) found a lot more water than they thought they would. No surprise, the uranium mineralization is found in fluvial stream deposits in the Battle Spring Formation below the mountain. Chancellor explained there are a large number of springs on the mountain for the wildlife. According to the Bureau of Land Managements Lander office, the area is popular for bicyclists who like cycling the roads among the abundant aspen, pine and spruce where they often encounter antelope, deer, elk and wild horses. We talked with three uranium miners who had previously worked at Green Mountain. One miner who asked to remain anonymous told us, Theres about 2500 feet of water on that mountain. Chancellor expressed his concern, Uranium mining will dry up the springs. They will need to find a way to mitigate the water problem. Rick Chancellor asked that we relay his message to SXR, We need to talk right away. We emailed those concerns to Neal Froneman, who quickly responded, telling us he would contact the Wyoming DEQ this week. Another indication we encountered of Froneman acting decisively and without hesitation. |
