Uranium’s Lingering Glow |
Alberta has untapped wealth in the radioactive mineral, but the road to opening the first mine is a long and bumpy one
by Chris Welner
Peter Dasler’s job is a bit like combing a beach with a metal detector looking for buried treasure. But Dasler’s metal detector flies, and he’s looking for more than quarters and earrings in the sand.
As president and CEO of CanAlaska Uranium Ltd., Dasler spearheads a $1-million-per-month aerial exploration program that’s in the hunt to commercialize Alberta’s first radioactive mother lode on the shores of Lake Athabasca. CanAlaska is one of several junior miners looking for uranium in Alberta.
“We haven’t found the big one yet, but we have indications uranium is there. There are more giant deposits in the Athabasca than anywhere else in the world,” Dasler says from his Vancouver office, citing numbers like 200 million pounds of recoverable reserves from the region. “We’re focused on high-grade uranium finds because of the profit ratios.”
The world’s highest grades of uranium, up to 20% (20 parts per million), are found under and around Lake Athabasca, a massive body of water that reaches into Alberta and Saskatchewan. But all of the current uranium mining happens in Saskatchewan, which singularly supplies about a quarter of the world’s nuclear fuel. Uranium is dug out of mines or pumped out of deep shale using technology similar to in situ oilsands operations. The rock and sedimentary formations shaped by a billion years of geology don’t stop where the Alberta-Saskatchewan boundary was drawn a century ago. Therein lies opportunity.
While there is no uranium mining in Alberta yet, several developments in the past five years have spurred interest here in the world’s most powerful fuel. Commodity prices spiked in 2007 after 30 years of flatline prices; a geological report pinpointing areas of Alberta where uranium could be found was released; and technology to find and recover uranium improved significantly.
In 2007, as concerns grew over global warming and crude oil prices began a climb to US$145, nuclear energy was gaining attention as one of the best ways to produce emission-free power. Speculators drove up the spot price of uranium to an all-time high of US$136 per pound from about $7 – a price point that had held steady for almost three decades following nuclear plant accidents at Three Mile Island in Pennsylvania and Chernobyl, Ukraine, that effectively stalled the nuclear industry’s expansion.
The rapid rise in price coincided with a report from the Alberta Geological Survey that identified great swaths of land rich in uranium in northeast and southern Alberta. Prospectors rushed to stake their claims near Lake Athabasca and in territory that stretched from Calgary to the American border.
While spot prices pique the interest of investors, the nuclear business requires years of planning. The timeline for exploration, testing, permitting, mine approvals, and ultimately, reactor construction can take 10 to 15 years. When the switch is finally flipped, nuclear fuel purchased years earlier on long-term contracts must be ready to feed the reactor. Long-term uranium contracts are the norm for fuel purchases and after a quick retreat from $136 uranium, long-term contracts seem to have settled near the US$65 mark, with spot prices in the $40s this year.
CanAlaska, Dumont Nickel Inc., Northern Tiger Resources Inc., North American Gem Inc., Fission Energy Corp., International Ranger Corp. and Red Dragon Resources Corp. are some of the companies with uranium exploration programs in Alberta. They are literally taking a high-level look at uranium mining in the province, with airborne surveys that can map radioactivity and subsurface geologic formations. Water testing and core sampling are also key pieces of the exploration equation.
Technology’s role cannot be overlooked on how it affects prospectors’ optimism. Dasler says the turning point for CanAlaska came when the company hitched its wagon to advancing technology that employs bigger aircraft packed with computers that perform more sophisticated aerial radiometric and magnetic surveys that look deeper underground than ever before over great swaths of land. With the help of its Japanese and Korean investors, Dasler is confident the right mining opportunity can be developed.
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