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Mining firm stakes out Weld uranium Print

By Steve Porter
Northern Colorado Business Report
April 25, 2008

WELD COUNTY - Another mining company is staking claim to thousands of acres of mineral lease rights in northeastern Weld County in preparation for possible uranium extraction around the ghost town of Keota.

Geovic Mining Corp., a Grand Junction-based company, has leased mineral rights on more than 15,000 acres in the Keota area through about 100 lease agreements signed through 2007, according to documents filed with the Weld County recorder.

Geovic, once based in Vancouver, B.C., Canada, is focused on cobalt, nickel and manganese mining in Cameroon, Africa, but also is acquiring rights to mine uranium in Weld County and Goshen County, Wyo.

The company, which is listed on the Canadian stock exchange, reported in its 2007 earnings report released April 4 that it spent $2.8 million the during the year on acquiring U.S. mineral properties and other exploration costs.

Andy Hoffman, Geovic's vice president of investor relations, said the acquired properties "are known to host sandstone deposits containing uranium" from exploratory activities conducted by companies in the 1970s, including Union Oil of California.

Hoffman said some of Geovic's executives are former Unocal employees and therefore aware of the deposits previously identified in Weld County.

"Clearly, things have been found in Weld County and we wanted to diversify from our primary product in Africa," Hoffman said.

Powertech Uranium Corp., another Vancouver-based company with a satellite office in Centennial, has leased mineral rights on about 5,700 acres in western Weld County near Nunn, where it plans to file for a mining permit later this year.

Hoffman said Geovic intends to do extensive test drilling on the leased properties later this year but could not say what kind of production timeline the company was expecting to carry out.

"They are historical reserves, and I think our goal is to re-establish what's there," he said. "I think it's a reasonable assumption that we'd like to do something, but first we need all the political approvals."

Hoffman said that like Powertech, Geovic is inclined to do "in-situ" leach mining to remove the uranium deposits, which involves injecting a special solution into the ground to remove the uranium from the formation containing it, rather than open-pit mining.

"My guess is that's what they'd like to do," he said. "It's the least environmentally damaging (method of extraction)."

Will move quickly

Hoffman said Geovic intends to move as quickly as it can to take advantage of recent high uranium prices that have rekindled a boom in the industry not seen since the late 1970s.

"Production is so far beyond what's planned right now," he said. "Our goal is to move as fast as possible."

The company registered Pawnee Drilling LLC with the Colorado Secretary of State on March 29, 2007.

In its 2007 report to investors, Geovic said it has "targeted and (is) acquiring fee mineral leases over the known uranium deposits in the Denver-Cheyenne Basin of northeastern Colorado and southwestern Wyoming. These 15-year mineral leases cover large portions of the six main known uranium deposits in Weld County, Colorado and Goshen County, Wyoming."

The report further states that "through the leases it now holds, Geovic Energy has control over much of the known mineralized area in eastern Weld County, Colorado and Goshen County, Wyoming."

Geovic Energy Corp. is a wholly-owned subsidiary of Geovic Mining Corp., according to the 2007 earnings report.

Lilias Jarding, a spokeswoman for Citizens Against Resource Destruction formed to oppose Powertech, said CARD was aware of Geovic's presence in Weld County.

"We knew Geovic was active in the area," she said. "I talked to someone who said they'd seen drilling rigs around the (Keota) area."

Jarding said the addition of Geovic to the landscape in Weld County emphasizes the need to pass state legislation to track mining company activities and make sure they will restore groundwater to its pre-mining condition.

"We've been talking all along how this is a statewide issue," she said.

Jarding said keeping track of Colorado uranium prospecting is nearly impossible because of current laws that keep it confidential. "It's real difficult with the secrecy and the exploration laws to know what's going on," she said. "I think we're still the only state in the West where these things are secret."

Ron Cattaney, director of the Colorado Division of Reclamation, Mining and Safety, said by current statute everything related to prospecting is confidential. He said Colorado "has had the most stringent confidentiality requirements" of any state since the law was adopted by the Legislature in the 1970s.

That hasn't been of much interest until recently, when several mining companies have begun re-exploring areas where uranium deposits were found or indicated in the 1970s just before the market collapsed. In April alone at least four companies - Bluerock Resources Ltd., New Horizon Uranium Corp., Yellowcake Mining Inc. and Portal Resources Ltd. - have announced plans to drill for uranium in Colorado, mostly in the western and southwestern parts of the state.

According to a March 25 report from the Division of Reclamation, Mining and Safety, there are currently 32 permitted uranium mining projects in the state but only three are actively producing uranium. Those mines, in San Miguel County, are owned by Denison Mines (USA) Corp.

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