Labrador Inuit bar uranium development

In a narrow 8-7 vote, the Labrador Inuit government has passed a three-year moratorium on uranium mining — spelling out continued uncertainty for the area’s juniors.

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

But in a statement released after the vote on April 8, the Nunatsiavut government’s Minister of Lands and Resources, William Barbour, 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.

He 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,” Barbour explained.

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

In the meantime, Aurora Energy Resources (AXU-T, AUEGF-O) — whose Michelin uranium project is the most advanced in the CMB — 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.

Hepointed outno companies had planned to mine uranium in the area during the three-year time-frame 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 induced juniors with properties that fall outside — or largely outside — those boundaries to clarify their situations.

Bayswater Uranium (BAY-V, BAYFF-O) said its priority targets lie outside of LIL territory, and that exploratory drilling for the year will start in May as planned.

Crosshair Exploration & Mining (CXX-V, CXZ-X), meanwhile, said that 92% of its property, including its principal assets, such as its C Zone, are outside of LIL territory.

The stock prices of companies exploring the CMB had already been hit by uncertainty around the legislation, introduced by Barbour in October, as well as the price of uranium oxide — which has fallen to around US$71 per lb. from a high of more than US$140 per lb. last summer. The announcement sent stocks tumbling further.

Aurora Energy lost $1.77 or nearly 34% on the news 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 announcement.

At presstime, the stock had rebounded to more than $4.

Crosshair Exploration lost 11 or nearly 13% to close at 75 on the news on volume of 621,200, while Silver Spruce Resources (SSE-V, SSEBF-O) lost more than 10% or 4 to close at 35 on 242,900 shares of volume; both stocks had recovered at presstime.