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A ban on uranium mining on Labrador Inuit land has been lifted by the Nunatsiavut Assembly after three years. Uranium exploration in Newfoundland and Labrador declined 93 percent during the moratorium, from approximately $58.1 million three years ago to $4.2 million last year.
By Dave Brown – Exclusive to Uranium Investing News
However, the amendment is not expected to be in effect before a Nunatsiavut Environmental Protection Act, scheduled for March 2012, is in place.
Exploration interest fell sharply
The news was welcomed by the mining industry which could benefit from the renewed ability for uranium exploration in the Canadian province. Uranium exploration in Newfoundland and Labrador declined 93 percent during the moratorium, from approximately $58.1 million three years ago to $4.2 million last year. Within a broader Canadian context uranium exploration budgets were also reduced over the same period of time; however, only by approximately 53 percent as a national weighted average. According to the most recent Fraser Institute’s annual survey of mining and exploration companies, Newfoundland and Labrador fell from ninth to twenty fifth position in the world in the category of “Current mineral potential assuming current regulations and land use restrictions,” since the uranium mining suspension was set in place.
Among the projects active in the region are Paladin Energy (TSX:PDN,ASX:PDN) via its wholly owned subsidiary Aurora Energy. Aurora originally identified a significant uranium deposit in 2006. The company halted exploration work in Labrador after the moratorium was put into effect. It will be planning an exploration program for the mid-2012, assuming no additional limitations from federal or provincial governments. Infill and extension drilling of the Michelin mineralization is expected to start in the third quarter of 2012. Last June, the company estimated that its Michelin project could generate as many as 700 construction jobs over three years. The existing mine plan could employ 400 individuals and operate for 17 years of mining and milling. Paladin indicated in its press release that it expects this to become “a highly attractive asset with significant uranium resources in a region available for potential development in what is expected will become the second most important uranium province in Canada and considered to be of worldwide significance.” Five of the company’s six uranium deposits in the Central Mineral Belt fall within the Labrador Inuit lands.
Investment opportunity for junior exploration companies
Some junior exploration companies may seek renewed investment interest following the news developments. As retail investors may be looking for interesting uranium junior exploration opportunities, there has also been a demonstrated appetite among senior companies in competition for the Athabasca regional Roughrider deposit over the last few months. A competitive environment is often favorable to careful investors with a keen eye for value, patience and risk threshold. The following companies are performing uranium exploration in Newfoundland and Labrador: Bayswater Uranium Corporation (TSXV:BYU), KirrinResources (TSXV:KYM), Altius Minerals (TSX:ALS), Commander Resources Ltd. (TSXV:CMD), Crosshair Energy Corp (TSX:CXX), Virginia Energy Resources (TSXV:VAE), Waseco Resources Inc. (TSXV:WRI), Silver Spruce Resources Inc. (TSXV:SSE), Ucore Rare Metals(TSXV:UCU), Belmont Resources Inc. (TSXV:BEA), International Montoro Resources Inc. (TSXV:IMT), Cornerstone Capital Resources Inc. (TSXV:CGP), Delta Uranium Inc. (TSX:DUR) and JNR Resources (TSXV:JNN).
Securities Disclosure: I, Dave Brown, hold no direct investment interest in any company mentioned in this article.