By: Liezel Hill
11th May 2010
TORONTO (miningweekly.com) – Uranium One has finally sold its Dominion project in South Africa, the company announced on Monday, bringing an end to what CEO Jean Nortier called a “sad chapter” for the miner.
“But we had to close that chapter, we certainly weren’t going to try and bring Dominion back into production,” he said in an interview at the company’s Vancouver head office.
“It certainly was going to require too much capital, and we found better opportunities elsewhere.
“So yes, it’s a sad chapter, but it’s closed and we are glad that it’s behind us,” he said.
Uranium One, which currently produces all its uranium from mines in Kazakhstan, said on Monday that it sold the Dominion asset to an undisclosed party for $37,3-million in cash.
Was Nortier happy with the price he got?
“You know, we lost a lot of money on Dominion. So you never feel good about any price if you lose a lot of money,” he commented.
The Dominion mine was put on care and maintenance in late 2008.
Uranium One owns 70% of the Akdala and South Inkai mines in Kazakhstan, as well as 30% of the Kharasan mine, also in Kazakhstan. It also recently bought 50% of a fourth Kazakh operation, Karatau.
The miner has forecast production of eight-million pounds next year, up from an estimated 6,8-million pounds in 2010.
Part of the increase will come from the US, where the company plans to start operations next year, after acquiring the Christensen Ranch and Irigaray plants and uranium deposits, in Wyoming, earlier this year from Areva.
Plant refurbishment will take place this year, to allow for first production in 2011.
Beyond that, there are a number of deposits in the region that the company to develop to sustain production.
The next one on the table is the Moore Ranch deposit for which Uranium One “fully expects” to receive licensing approval this year.
In Kazakhstan, the South Inkai operation is ramping up well, and the addition of the stake in Karatau helped boost production in the first quarter.
BULLISH ON URANIUM
Nortier says he remains positive on the uranium price in the medium to long term.
“The short term is extremely difficult to forecast because it’s such a small market, but in the medium to long term we remain extremely bullish on the uranium price.”
Mine supply only covers about 60% of global demand for the nuclear fuel, and above-ground stocks are coming to an end, he commented.
He pointed to the growing number of nuclear reactors either being built or in the planning stage around the world.
“We still don’t produce enough uranium and by the end of this decade we need to see significantly more uranium produced from primary sources.
“And in our opinion, at $40/lb uranium we will still be short uranium,” Nortier said.
Edited by: Liezel Hill