June 08, 2010 08:14 PM UTC

Planned uranium mill raises questions

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• by: uranium2010

Starting today, Colorado Department of Public Health and Environment regulators will hold the first of three important public meetings in Telluride, Montrose and Ophir this week about a proposed uranium mill in canyon country on Colorado’s Western Slope.

Already, plans for Pinon Ridge Mill have generated strong opposition from local residents, who are worried it will jeopardize the area’s air, water, and important recreation and tourism industries.

But now those Western Slope residents may have even more reason to be alarmed about the proposed Pinon Ridge Mill, which could be the nation’s first new uranium mill built in decades.

A must-read story from David Williams of the Colorado Independent last week reveals that the company behind the proposed mill may be on the brink of financial collapse by early next year. That’s just about the time state regulators could decide whether to allow Energy Fuels Inc., a Toronto, Canada-based company, to go forward with its plans to build the mill:

“…Documents obtained by the Independent indicate Energy Fuels is spending between $250,000 and $285,000 a month and had cash reserves of a little more than $2.6 million as of March 31 – or about enough to last through January of 2011, which is when the state must wrap up its permit process for the Piñon Ridge Mill.”

William’s important story about Energy Fuel’s perilous financial condition raises significant questions about whether it can even pay its current bills, let alone come through on the lofty promises of jobs it has made to local communities:

“Energy Fuels Inc., a Toronto, Ontario-based company seeking state approval for the Piñon Ridge Mill in far western Colorado, admits in its own financial filings that ‘there is a significant doubt as to whether the company will be able to continue as a going concern and realize its assets and pay its liabilities as they fall due.

The company’s disturbing financial picture, which readers can find more details about through this Web site, also raises troubling questions about its ability to cleanup the mill site after the uranium has been processed. Decontamination of the site, along with the perpetual care and monitoring of radioactive waste, tailings, buildings and equipment used to process uranium ore at the mill, is likely to cost tens of millions of dollars.

Yet, the company is proposing it pay a $12 million “surety bond in the event of a worst-case cleanup scenario,” according to the Colorado Independent. As was pointed out in Williams’ story, that figure seems to be far out of line with the cost of decommissioning and decontaminating uranium mills in the past past.

As it stands today, Energy Fuel’s estimate is far below the expected cost for cleaning up the Cotter Uranium Mill near Cañon City – a Superfund site since the 1980s.

The Colorado Independent story reveals that “an April Site Reclamation Plan filed with the state, Cotter put the cleanup price at $23.2 million and the Colorado Department of Public Health and Environment (CDPHE) countered with $43.7 million.”

And still, those figures do not include the costs to clean up groundwater contaminated by radioactive and toxic materials from the Cotter facility.

While Energy Fuels hopes a CDPHE permit will help it climb out of its bleak and increasingly desperate financial condition, William’s story suggests that probably won’t happen:

“‘[Energy Fuels] suggested that they would be able to raise a lot more money and capital to work with once they got the county permit, and if I’m correct, the stock price has dropped by more than half in that amount of time, so their ability to raise money just by announcing a permit, if that’s what it is, that’s a pretty questionable goal,’ Stills said.

“Energy Fuels’ stock was trading at 16 cents a share on Tuesday, down from 40 cents a share a year ago.

Indeed, after Energy Fuels received a permit for its mill from  Montrose County last year – a permit that includes numerous limiting conditions  – the former CEO of Energy Fuels Link text said  he thought “the cash people will come to us over probably a four- to-six-month period if we get the county permit.”

“The permit is the key,” he said.

However, the cash never came. And it may never come – at least according to the company’s own financial documents.

“‘(Energy Fuels) wouldn’t be the first operation that made all of their money by mining investors instead of mining the resource,’ Stills added.”

Share your opinion about the Pinon Ridge Mill at three important public meetings this week. Below are meeting details:

• CDPHE Piñon Ridge Hearing, June 8th, 6-9pm Montrose Pavilion

• BOCC/CDPHE Piñon Ridge Meeting, June 9th, 4 – 7pm Telluride Fire Station, upstairs

• Ophir/CDPHE Piñon Ridge Meeting, June 10th, 10am – noon, Ophir Town Hall

uranium2010 is a diary account set up by the Sheep Mountain Alliance, a grassroots citizen organization dedicated to the preservation of the natural environment in the Telluride region and southwest Colorado.