Labrador Inuit pass moratorium on uranium mining

It was a close one, but a bill imposing a three-year moratorium on uranium mining on Labrador Inuit Lands was passed by the Nunatsiavut assembly yesterday with a vote of 8 to 7.

Companies exploring Labrador’s Central Mineral Belt (CMB), which lies partially on Labrador Inuit Lands (LIL), reacted with sharply dipping stock prices.

Aurora Energy Resources (AXU-T), whose Michelin project is the most advanced uranium project on the CMB, lost $1.77 or nearly 34% to close at $3.50 on a trading volume of 3.4 million shares. The stock hit a high of $20.09 last May, but traded at a new 52-week low of $3.26 on the news.

Today, the stock rebounded by 38, or almost 11% to $3.88.

Crosshair Exploration & Mining (CXX-V) lost 11 or 12.79% to close at 75 yesterday on volume of 621,200, while Silver Spruce Resources (SSE-V) lost 10.26% or 4 to close at 35 on 242,900 shares of volume.

Other CMB juniors lost less than 10% of their share price values, including Mega Uranium (MGA-T) and Bayswater Uranium (BAY-V).

The stock prices of companies exploring the CMB had already been hard hit by the uncertainty around the legislation, which was introduced by the Nunatsiavut government’s Minister of Lands and Resources William Barbour in October.

Statements released by Barbour and those by CMB companies responding to the development all emphasized that the moratorium does not affect exploration for uranium.

“We are prepared to work with any company wanting to conduct exploration within our territory,” Barbour said in a statement.

Barbour said the government was responding to the environmental and safety concerns of its constituents, and that it needs more time to make informed decisions about uranium development.

“We are a new government, established on Dec. 1, 2005, and we do not yet have the necessary tools for evaluating the impacts of large-scale development projects on our lands, nor for protecting the environment in light of these projects,” he said.

The government plans to have a land use plan in place by the time the moratorium ends at the end of March, 2011. At that time, the assembly will revisit the issue.

In the meantime, Aurora says its prefeasibility study on Michelin will go ahead this year as planned.

“The Nunatsiavut government has indicated that it is supportive of natural resource development and open to evaluating ongoing project information, but needs additional time to prepare for significant developments like the Michelin project,” said Aurora president and CEO Mark O’Dea in a statement.

He pointed out there are no plans for uranium mining during the three-year timeframe of the moratorium.

Michelin contains a measured and indicated resource 83.9 million lbs. uranium oxide, plus 49.8 million inferred lbs. in two main deposits, plus six satellite deposits.

The bill applies only to Labrador Inuit Lands – consisting of 15,800 sq. km of land along coastal Labrador.

The news had juniors with properties that fall outside — or largely outside — these boundaries issuing press releases clarifying their situations.

Bayswater Uranium said its priority targets lie outside of LIL territory, and that exploratory drilling for the year would start in May as planned.

Crosshair Exploration, meanwhile, said that 92% of its property, including its principal assets, such as the C Zone, are outside of LIL territory.