Agreement gives uranium mining in Greenland a boost

Yesterday's announcement by Australian PM Julia Gillard to consider lifting the ban on uranium sales to India is raising eyebrows at one of the country's largest iron ore producers. News.com.au reports Fortescue Metals (ASX:FMG) chief executive Neville Power questioning whether the proposed sales would benefit BHP's Olympic Dam uranium mine in South Australia: "You would wonder," Power said yesterday at Fortescue's Port Headlands wharf in Western Australia.

Uranium Resources, a Texas-based in-situ uranium miner, says that cost increased in 3Q due to challenging drilling conditions and higher equipment costs. "This resulted in fewer than desired drilled holes and about two additional months of exploration time,” said Don Ewigleben, President and CEO of Uranium Resources in a statement. Operating expenses were $133,753 for 3Q compared with $67,260 in 2010. The overall loss from operations was $2,827,097, down from $3,730,998 a year ago when the company had a $1.37 million provision for a legal settlement.

The Australian uranium mining industry has a sympathetic ear in Prime Minister Julia Gillard. Gillard announced she will push for the ALP to dump its ban on uranium sales to India, at its national conference next month, Adelaide Now reports: Ms Gillard will ask the ALP's national conference to overturn long-standing party policy that allows uranium to be sold only to nations who have signed up to the nuclear non-proliferation treaty.

Cameco (TSX:CCO) (NYSE:CCJ) announced today that it has increased its all-cash offer to acquire all of the outstanding shares of Hathor Exploration Limited to $4.50 per share, which values the fully diluted share capital of Hathor at approximately $625 million.1 Cameco's increased offer will expire at 12:01 a.m. (Vancouver time) on November 29, 2011, unless further extended or withdrawn. "Cameco's increased offer to Hathor shareholders provides an attractive premium over Rio Tinto's offer and makes sense for Cameco given our unique position in the Athabasca Basin," said Tim Gitzel, president and CEO of Cameco.

Business Times reports thousands of people face evacuation from greater Johannesburg in the Gauteng province – the economic heartland of South Africa – due to toxic sludge from abandoned gold mines laced with high radiation levels. Acid mine water, the result of groundwater flowing through underground shafts, is decanting from an old uranium mine and rising by half a metre a day beneath the city of 7 million people. Mass evacuation of informal settlements is one of several recommendations in a government-commissioned plan drafted in June to deal with 380 acid mine dumps – many of them radioactive – left over from more than century of underground mining. Uranium is often mined as a byproduct of gold in South Africa.

Cameco (TSE:CCO), the world's largest uranium producer, said Q3 earnings were 30% higher at $104 million or 26 cents a share compared to the same quarter last year. However, losses on foreign exchange derivatives have driven up costs for the year. Net earnings for the first nine months of 2011 were $186 million or 47 cents per share diluted. In 2010 net earnings were $311 million or 79 cents per share. The company also said that lower earnings and higher prices were weighing on all three sets of businesses: electricity business, uranium business and fuel services business. Cameco's stock opened on Monday 2.66% lower at $21.08 per share.

A proposed uranium mine in Virginia is attracting its share of proponents and detractors. The state has upheld a ban on uranium mining since 1982, but the ban is being reconsidered in light of a proposal by Virginia Uranium Mining to extract 119 million pounds of the nuclear fuel from what would be the world's seventh-largest uranium deposit. On Thursday a day-long forum was held to weigh arguments on either side of whether the private company should be allowed to (mostly underground) mine the Coles Hills deposit.

Uranium miner Denison Mines (TSE:DML) announced a $15 million profit or four cents a share for the three months ended September 30. During the same period last year the company had a net loss of $5.5 million. The company's stock was unchanged at $1.55 a share. The company is deferring uranium sales. "As a result of the events in Japan in March 2011, the uranium spot market demand has declined and the price has been trading in a range of $50.00 to $55.00 per pound. In response to these weaker market conditions, Denison has deferred uranium sales to later in the year," said the company in a statement.

Ripples of the Fukushima nuclear disaster are still being felt in the uranium sector. French nuclear power company Areva (AREVA:PA) said on Wednesday it is suspending a uranium project in the Central African Republic due to slumping uranium prices, which are down about 30% since the disaster in March. The accident at the Fukushima Daiichi plant following the Japanese earthquake and tsunami has taken the steam out of uranium mining and nuclear power which prior to the accident had been touted as a safe and economic alternative to fossil fuels.