Uranium mining operations have cooled: Texas' only active mine has scaled back production despite less opposition to nuclear power

By Asher Price

AMERICAN-STATESMAN STAFF

Friday, October 09, 2009

ENCINO — Even as the nuclear energy industry aims to expand, its momentum appears to have slowed for the moment.

About two years ago, when the price of uranium was at $136 a pound, the scrubby, sandy pastures where Mesteña Uranium LLC operates would have been filled with trucks, drills and hard hats. But now, with uranium selling in the low-$40s, only a few crews are operating here, with enough time on their hands to elbow one another into action when the boss' SUV — known as the Black Angus — shows up. (emphasis mine...SB)

With the price of uranium down, privately held Mesteña has cut its payroll, from 225 employees, including contractors, at the beginning of the year, to about 135 today.

Uranium is the fuel for the nuclear plants, and Mesteña's Alta Mesa operation, about a dozen miles west of Encino in South Texas, is the only active mine in the state.

In an effort to cut back capital costs, production has been throttled back from about 850,000 pounds a year to 650,000 pounds, said Paul Goranson, vice president of Mesteña and overseer of day-to-day operations, and the driver of the Black Angus, a Ford Expedition.

The company had hoped to mine uranium in another part of the ranch — owned by the shareholders of Mesteña — but that expansion was cut after the price of uranium dropped.

"The global nuclear renaissance has been put on hold," Goranson said. "We ramped up (on employees), but we've had to cut them back fast."

Although more than 90 percent of the nation's uranium is imported, with about half the imports in the form of stockpiled Soviet nuclear weapons, domestic uranium production had revived several years ago as utilities said they wanted to expand nuclear power plants. The notion was backed by some environmentalists who said the energy would be much cleaner than coal, and by policymakers, for whom the fading memories of Three Mile Island are making the technology more politically palatable.

The price shot up from less than $10 a pound in 2002 to a high of $136 in summer of 2007.

The revival of nuclear power also renewed the kind of opposition to nuclear power that had lain dormant since the late 1970s, when the last new plant began construction. Some environmentalists and landowners say uranium mining threatens groundwater and uses large amounts of water.

"We want to put a stop to uranium mining until we have better protections in place," Cyrus Reed, conservation director of the Lone Star Chapter of the Sierra Club, said last year.

But the economic crisis and changes in supply appear to have had a lot more to do with the drop in uranium prices than protests by environmental groups.

Goranson said that hedge funds that had bought the uranium with plans to hold on to the commodity found themselves needing to raise money, fast, and willing to sell "at whatever price they could get."

Meanwhile, the market upheaval made it hard for utilities to secure the loans they needed to build nuclear plants that cost hundreds of millions, if not billions, of dollars.

Across the globe, other sources of supply, such as one in Kazakhstan, were found to be more robust than expected years ago, said Jeff Combs, president of Ux Consulting Co., which publishes nuclear fuel prices and tracks the uranium market.

There are no miners' lamps or carts headed underground at the Mesteña operation, called the Alta Mesa facility. Known as in-situ recovery, the process involves pumping oxidized water into the ground, which loosens and dissolves the uranium. Then the uranium-bearing water is pumped to the surface and into a recovery plant, where the uranium is separated from the water. The water, now free of the uranium, is pumped back underground to capture more uranium.

The recovered uranium, meanwhile, is filtered, dried and packaged as a yellowcake powder for shipping. Each drum of yellowcake has the energy equivalent of 10,000 tons of coal, or enough to fill a 100-car train. The drums are sent by 18-wheeler to Illinois, where they are converted to a uranium gas, then to Kentucky or Ohio for enrichment as fuel in nuclear reactors.

Operations here are likely to rebound. The imported Soviet nuclear weapons program is scheduled to wind down in 2013, and 20 more reactors have been proposed nationally. (The U.S. has 104 reactors, producing about 20 percent of the nation's electricity.)

"Going forward you're going to need lots of uranium supply," Combs said.

Internationally, concerns about climate change and the huge demand for electric power in China and India, among other places, have put dozens of new nuclear plants on drawing boards.

Among the plants hoping to expand is the South Texas Project in Matagorda County. Austin, which gets more than a quarter of its electricity from the South Texas Project, declined to invest in the expansion, but San Antonio is still considering it.

The Lower Colorado River Authority, which provides power to more than a million Central Texans, has not ruled out buying into the expansion and could buy power from the nuclear plant. At its August meeting, the LCRA board invited Dale Klein, a member of the Nuclear Regulatory Commission, and the husband of LCRA board chairwoman Becky Klein, to give a briefing.

"The future of nuclear power is a glass 'half full,' " Dale Klein, echoing the position of many politicians and the nuclear industry, told the LCRA board. "Public confidence in a safe and secure future for nuclear power is well-grounded."

http://www.statesman.com/news/content/news/stories/local/2009/10/09/1009uranium.html

Officials seek to put lid on uranium sales

by DUSTIN BLEIZEFFER

Casper Star-Tribune

Posted: Friday, October 9, 2009

CASPER - (e Wyoming officials are asking the U.S. Department of Energy to rethink a plan to sell excess government uranium. The sale would likely sink the price of uranium and snuff plans to launch several new uranium mining operations in Wyoming and across the West, according to Gov. Dave Freudenthal. (emphasis mine...SB)

Freudenthal and Wyoming's congressional delegation issued requests this week to DOE Secretary Steven Chu on the matter.

"Planned expansions and future operations that will provide long-term, high-paying jobs to Wyoming miners will be postponed or lost if the department continues to drive down the price of uranium through the releases that have been announced," Freudenthal wrote.

The federal government controls about 153 million pounds of uranium derived from the decommissioning of the nation's nuclear weapons program.

In December 2008, the DOE approved the Excess Uranium Inventory Management Plan. The plan sets out a schedule to gradually introduce portions of the uranium stockpile into the nuclear energy market in a manner that would soften the impact on pricing.

But in July the DOE announced its intention to release an additional $150 million to $200 million worth of uranium to fund the cleanup of pollution at a Cold War-era plant in Piketon, Ohio.

That effort, according to one industry official, is likely a politically driven attempt to save hundreds of jobs in Ohio that were jeopardized when the DOE turned down a loan application by U.S. Enrichment Corp. to build a centrifuge uranium enrichment facility in Ohio.

Scott Melby, president of Cameco Inc., said he suspects that the order for the additional uranium stockpile release came directly from President Barack Obama's White House staff.

"It appears to be a political decision that came down from the White House to address the jobs issue in Ohio without consideration of the collateral jobs impact in other states," Melby said. "I'm sure they (DOE and White House officials) didn't even think about any collateral impacts. But obviously there are."

In recent years uranium companies have bought up thousands of mineral lease acres in Western states and invested hundreds of millions of dollars to launch more than 30 new uranium mining projects. About two-thirds of those projects are in Wyoming.

Wyoming's political leaders, along with the uranium industry, say it's counterintuitive to fund a short-term cleanup project in Ohio at the expense of expanding the nation's domestic uranium industry and its long-term jobs.

The trade association Uranium Producers of America has suggested that the federal government could instead fund the Portsmouth cleanup project with stimulus funds or through a separate appropriation.

"We're hoping cooler heads prevail. But it is Washington, D.C.," Melby said.

http://billingsgazette.com/news/state-and-regional/wyoming/article_7fcaf13e-b48c-11de-b1ba-001cc4c002e0.html

Virginia Energy Closes Final Tranche of Private Placement Financing

Tuesday, August 11, 2009 Virginia Energy Closes Final Tranche of Private Placement Financing News Release: 09-16 Virginia Energy Resources Inc. (TSX.V: VAE) is pleased to announce completion of the final tranche of it's previously announced non-brokered private placement financing announced May 14, 2009. Each Unit will comprise one common share at a price of 50 cents per share, and one-half of one share purchase warrant. Each whole warrant is exercisable at 60 cents per share for a five-year period. The warrants will have an acceleration clause whereby if the Company's shares trade at or greater than $2.00 for 10 consecutive days, the remaining exercise period may be reduced, at the election of the Company and upon notice to the warrant holders, to 25 days. A total of 4,155,600 common shares and 2,077,800 warrants were issued under this placement, for a gross consideration of $2,077,800 and will be subject to a hold period of 4 months and 1 day. Finder's fee and commissions will be payable to qualified third party agents. A portion of this proposed financing will be applied to increasing the Company's equity position in VA Uranium Holdings Inc., which initial transaction was announced in a Company new release dated Dec. 22, 2008 wherein Santoy and a private corporation, Virginia Uranium Ltd. agreed to a business combination by way of a Plan of Arrangement, which closed July 21, 2009. The amalgamated corporation is Virginia Energy Resources Inc. Virginia Uranium Ltd. owns an interest in the Coles Hill uranium deposit located in southern Virginia. Coles Hill, considered to be one of the largest undeveloped uranium deposits in the United States, had been advanced through to the feasibility stage in 1982 and has now been investigated by 220 drill holes. It has an estimated measured and indicated resource of 119 million pounds of U3O8 (at a cut-off grade of 0.025 per cent U3O8) based on a National Instru-ment 43-101 technical report on the Coles Hill property prepared for Santoy Resources by Behre Dolbear and Company Ltd., Marshall Miller and Associates Inc., and PAC Geological Consultant Inc. (Dr. Peter Christopher, P.Eng.) dated Feb. 2, 2009, and revised April 29, 2009. This report is available on SEDAR and on Virginia Energy Resources' website. On Behalf of the Board of Directors Virginia Energy Resources Inc. "Norm Reynolds" Norm Reynolds, President & CEO ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Santoy Resources Ltd. is pleased to announce the closure of their merger with Virginia Uranium Limited. Our new company will be called Virginia Energy Resources Inc. and will trade under the ticker symbol VAE effective Friday July 24. We are currently in the process of transitioning Santoy's website to the newly formed Virginia Energy Resources Inc. website. The company is focused on discovering and developing high-grade uranium deposits and on exploration for coal throughout North America. The company has an experienced management team which is supported by a veteran Board of Directors who have been directly involved with the discovery and development of three major gold discoveries in Canada that have subsequently been put into production (Eskay Creek, Snip and Brewery Creek mines); of coal and coalbed methane projects in Western Canada; of producing "green power" projects throughout Canada; of conventional oil & gas discoveries throughout North and South America; and of taking uranium discoveries through to feasibility study. The Company files its continuous disclosure documents on www.sedar.com and provides a link to SEDAR under the "INVESTORS" tab.

Santoy Becomes Virginia Energy Resources Inc., Revises Board & Management

Thu Jul 23, 2009

News Release: 09-15

Santoy Resources Ltd. (TSX.V: SAN) is pleased to announce that Pursuant to a Plan of Arrangement, (originally announced in a Company news release dated December 22, 2008, and approved by both company's shareholder votes announced May 22, 2009) Santoy Resources Limited ("the Company") has now completed its business combination with privately held Virginia Uranium Ltd. Post-closing, the Company has changed its name to Virginia Energy Resources Inc. ("Virginia Energy"), has consolidated its issued share capital to approximately 54,377,279 common shares outstanding, and will have its trading symbol changed from SAN to VAE on the TSX Venture Exchange.

Virginia Energy currently holds a 20.8 per cent equity interest (in the process of increasing to 22.2 percent) in the Coles Hill uranium deposit, located in southern Virginia. Coles Hill, considered to be one of the largest undeveloped uranium deposits in the United States, had been advanced through to the feasibility stage in 1982. It has an estimated measured and indicated resource of 119 million pounds of U₃O₈ (at a cut-off grade of 0.025 per cent U₃O₈) based on a National Instrument 43-101 technical report on the Coles Hill property prepared for Santoy Resources by Behre Dolbear and Co. Ltd., Marshall Miller and Associates Inc., and PAC Geological Consultant Inc. (Dr. Peter Christopher, PEng) dated Feb. 2, 2009, and revised on April 29, 2009. This report is available on SEDAR and on Santoy Resources' website.

Excerpt from Table 1.1 Resource Estimates -- June 4, 2008 (Millions of Tons and Pounds In-Place)
Cutoff %U3O8		Measured1					Indicated1			Total1
		Tons2		% U3O83	Pounds U3O8		Tons2	% U3O83	Pounds U3O8	Tons2	% U3O83	Pounds U3O8
Project Total (South and North Coles Hill Deposits)
0.100	0.755		0.228		3.45	6.27		0.215	26.9	7.03	0.216	30.4
0.075	1.35		0.164		4.44	24.0		0.116	55.9	25.4	0.119	60.4
0.050	2.28		0.124		5.65	35.4		0.101	71.7	37.7	0.103	77.4
0.025	6.62		0.064		8.42	92.1		0.060	111	98.7	0.060	119
1Total tonnage above cutoff grade and average weight % U3O8 of that tonnage 2Short tons based on a rock density of 2.56 g/cc 3Weight %

1. The "Qualified Persons" (as defined in NI 43-101) who prepared the resource estimate were Betty L. Gibbs for Behre Dolbear and K. Scott Keim for Marshall Miller and Associates, Inc.
2. Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, marketing, or other relevant issues.

At the same time, shareholders will gain diversification and will benefit from Santoy's exploration properties. The business combination complements Santoy's portfolio of uranium exploration properties in the Athabasca Basin of Saskatchewan, the Otish Mountains in Quebec and the Central Mineral Belt of Labrador. The Company is also the largest shareholder of Boss Power Corp. which owns the Blizzard uranium deposit in British Columbia.

Messrs Bill James and Pat Barry have resigned from the Company's Board of Directors. Their very significant contributions during the past several years have been much appreciated. Their positions have been filed by the appointment of Walter Coles, Sr., Norm Reynolds and Harvey Roberts, all resident in Virginia. The new Board will now consist of Walter Coles, Sr., Norm Reynolds, Harvey Roberts, Ron Netolitzky, Ron Hochstein, Robert Matthews, and Robert Ingram. Walter Coles, Sr. has been appointed Chairman of the Board. The Management Team will now consist of Norm Reynolds - President & CEO, Walter Coles, Jr. - Executive Vice-President, Karen Allan - Chief Financial Officer, and Mike Cathro -- Vice President, Exploration. Ron Netolitzky will remain very active in the company's direction as we continue to explore our exploration properties and advance the Coles Hill uranium deposit.

On Behalf of the Board of Directors
SANTOY RESOURCES LTD.

"Ron Netolitzky"

R. K. Netolitzky, President & CEO

http://www.santoy.ca/s/NewsReleases.asp?ReportID=356910&_Type=News-Releases&_Title=Santoy-Becomes-Virginia-Energy-Resources-Inc.-Revises-Board-Management

Santoy Resources and Virginia Uranium Complete Business Combination

VANCOUVER, BRITISH COLUMBIA - (Marketwire - July 21, 2009) -

Santoy Resources Ltd. (TSX VENTURE:SAN) (the "Company" or "Santoy") is pleased to announce that the Plan of Arrangement (the "Arrangement") pursuant to which Santoy will complete a business combination with Virginia Uranium Ltd. ("Virginia") is expected to close today, July 21, 2009 (the "Effective Date"). Post closing, the Company will have approximately 54,377,279 common shares outstanding, will have changed its name to Virginia Energy Resources Inc. and will hold a 20.8% interest in VA Uranium Holdings, Inc. The outstanding common shares include the closing of the first tranche of the subscription receipts from the private placement financing dated July 17, 2009. The new company will trade on the TSX-V under the symbol VAE.

Procedural Information Respecting the Plan of Arrangement

The following information is a summary of certain features of the Plan of Arrangement. Immediately following the closing of the Arrangement, the Company will consolidate its shares on a one new for each five old basis. All share figures and exercise and other share prices given below are on a pre-consolidated basis.

Distribution of Santoy Incentive Warrants to Santoy Shareholders

Holders of Santoy common shares (excluding certain Small Lot Holders described below) will be entitled pursuant to the Arrangement to receive one (1) Santoy Incentive Warrant for every four (4) Santoy common shares held. Each one (1) Santoy Incentive Warrant will be exercisable to acquire one (1) Santoy common share at a price of CDN$0.12 for a period of 12 months following the closing of Arrangement. The Santoy Incentive Warrants are expected to be listed for trading on the TSX Venture Exchange.

For settlement reasons in connection with any trades of Santoy common shares during this period, the Company understands that the last day to purchase Santoy common shares that will be entitled to participate in the distribution of Santoy Incentive Warrants is July 23, 2009. Santoy common shares purchased on or after July 24, 2009 will not participate in the distribution of Santoy Incentive Warrants. The most recent private placement is not included and will not participate in the distribution of the Incentive warrants. These dates are subject to change and in such event, the Company will issue a news release announcing any such change.

Computershare Investor Services Inc. (the "Depositary") will forward to each Santoy shareholder who is entitled to receive Santoy Incentive Warrants, certificates representing their allotted number of such Warrants in accordance with the Arrangement.

Santoy Small Lot Holders (a "Small Lot" being less than 500 Santoy shares)

Registered Small Lot Holders will have their Santoy common shares cancelled as of the Effective Date and will not be entitled to receive any Santoy Incentive Warrants unless they have elected, by duly completing and returning to the Depositary an Election Form prior to the Effective Date, to retain their Santoy common shares and to receive a certificate representing Santoy Incentive Warrants.

If the election was not made, the registered Small Lot Holder will be entitled to receive only $0.10 per Santoy common share owned. To receive this cash payment in exchange for a Small Lot, the registered Small Lot Holder must complete the Election Form and deliver the Election Form together with the certificate(s) representing the Small Lot within six years of the Effective Date to the Depositary at the address provided in the Election Form. Santoy will deposit funds with the Depositary sufficient to pay the cash payments to registered Small Lot Holders, which funds will be held in a trust account to be used to pay the cash payments. Upon expiry of six (6) years from the Effective Date, all unused funds will be returned to Santoy. Due to the administrative costs of effecting exchanges, if a cash payment payable to a Small Lot Holder would be less than $10, such payment will not be made.

Registered Small Lot Shareholders should refer to the Election Form and the plan of arrangement attached to the joint information circular mailed to shareholders in connection with the Santoy meeting and available on SEDAR under Santoy's profile for additional information.

Exchange of Common Shares for shares in Virginia Energy Resources Inc. Pursuant to the Arrangement, each of the issued Virginia Uranium Ltd. common shares will be exchanged for 1.2 shares in Virginia Energy Resources Inc. and each of the Santoy common shares will be exchanged at the ratio of five for one common share of Virginia Energy Resources Inc. As a result of this exchange, the new company will have post closing, approximately 54,377,279 common shares outstanding.

In order to receive the Virginia Energy Resources Inc. common shares for their Virginia Uranium Ltd. common shares, a registered Virginia Uranium Ltd. shareholder must complete and sign the Letter of Transmittal and deliver it, together with certificates representing their Virginia Uranium Ltd. common shares (in the case of registered Virginia Uranium Ltd. shareholders) and the other required documents, to the Depositary in accordance with the instructions contained in the Letter of Transmittal. The Letter of Transmittal was mailed to Virginia Uranium Ltd. shareholders in connection with special meeting of Virginia Uranium Ltd. shareholders held on May 21, 2009 and is available from the Depositary upon request. Virginia Uranium Ltd. shareholders who are not registered shareholders because they hold their Virginia Uranium Ltd. common shares through their broker or other intermediary should contact their broker or other intermediary. Any Virginia Uranium Ltd. common share certificate which has not been duly surrendered, with all other documents required by the Depositary, on or before the sixth anniversary of the Effective Date, will cease to represent any claim against or interest of any kind or nature in Virginia Uranium Ltd., Santoy or the Depositary and shall be deemed to have been surrendered to Santoy and cancelled.

On Behalf of the Board of Directors

SANTOY RESOURCES LTD.

R. K. Netolitzky, President & CEO

This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. All statements other than statements of historical fact included in this release, including, without limitation, statements regarding future plans and objectives of the Company are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future results, events and objectives could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations include exploration and other risks detailed from time to time in the filings made by the Company with securities regulators.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. www.santoy.ca

http://newsblaze.com/story/2009072107140200002.cc/topstory.html

Santoy Amends Private Placement Financing Terms

Thu. July 16, 2009

VANCOUVER, BRITISH COLUMBIA, Jul 16, 2009 (Marketwire via COMTEX) -- SANRF | Quote | Chart | News | PowerRating --

Santoy Resources Ltd. (TSX VENTURE:SAN) is announcing, in the context of the market, a re-pricing of the proposed non-brokered private placement financing announced May 14, 2009, subject to regulatory approval. Each Unit will comprise one common share at a price of 10 cents per share, and one-half of one share purchase warrant. Each whole warrant is exercisable at 12 cents per share for a five-year period.

The warrants will have an acceleration clause whereby if the Company's shares trade at or greater than 40 cents for 10 consecutive days, the remaining exercise period may be reduced, at the election of the Company and upon notice to the warrant holders, to 25 days. The securities issued under this placement will be free trading as a consequence of an Exchange exemption due to the prospective level disclosure in the Company's Information Circular dated April 24, 2009 setting out the Plan of Arrangement with Virginia Uranium Ltd. This private placement will be completed by close of business on July 16, 2009.

A portion of this proposed financing will be applied to increasing the Company's equity position in VA Uranium Holdings Inc., which initial transaction was announced in a Company news release dated Dec. 22, 2008 wherein Santoy and a private corporation, Virginia Uranium Ltd. have agreed to a business combination by way of a Plan of Arrangement, now scheduled to close July 21, 2009. Virginia Uranium Ltd. owns an interest in the Coles Hill uranium deposit located in southern Virginia.

Coles Hill, considered to be one of the largest undeveloped uranium deposits in the United States, had been advanced through to the feasibility stage in 1982 and has now been investigated by 220 drill holes. It has an estimated measured and indicated resource of 119 million pounds of U3O8 (at a cut-off grade of 0.025 per cent U3O8) based on a National Instrument 43-101 technical report on the Coles Hill property prepared for Santoy Resources by Behre Dolbear and Company Ltd., Marshall Miller and Associates Inc., and PAC Geological Consultant Inc. (Dr. Peter Christopher, P.Eng.) dated Feb. 2, 2009, and revised April 29, 2009. This report is available on SEDAR and on Santoy Resources' website at www.santoy.ca.

On Behalf of the Board of Directors

SANTOY RESOURCES LTD.

R. K. Netolitzky, President & CEO

SOURCE: Santoy Resources Ltd.

Santoy Resources Ltd.
Ron Netolitzky
President
(604) 669-4799
Santoy Resources Ltd.
Tony Perri
Investor Relations, Manager
(604) 669-4799
(604) 669-2543 (FAX)
www.santoy.ca

For full details on Banco Santander Chile (SAN) click here. Banco Santander Chile (SAN) has Short Term PowerRatings of 4. Details on Banco Santander Chile (SAN) Short Term PowerRatings is available at This Link.

http://www.tradingmarkets.com/.site/news/Stock%20News/2425465/

Permit delay worries uranium hopefuls

Remember that old saying when we were all kids in high school..."Gee, I'm so sorry my heart bleeds purple kool-aid for you"? Well, here's a crowd that's eliciting that sentiment. U prices are way down, the NRC just might be responding to the ground-swell of citizen protest, investors losing patience...all of these things make my heart bleed purple Kool-Aid.


By DUSTIN BLEIZEFFER
Casper Star-Tribune

Several proposed uranium mining projects in Wyoming and across the West will be delayed due the U.S. Nuclear Regulatory Commission's recent decision requiring a more thorough site-specific analysis for each project.

The NRC will require a supplemental environmental impact statement for each mining project rather than a more simplified environmental assessment, which the agency had considered.

Some officials in the uranium industry claim the NRC overreacted to a groundswell of public concern that they say comes from either ignorance of the in-situ leach mining process or a desire to block uranium mining.

Industry officials have also told the Star-Tribune they worry that investors are losing patience.

However, those who scrutinize the emerging next generation of uranium mining say both the industry and government regulators have a history that deserves skepticism. Shannon Anderson, community organizer for the Powder River Basin Resource Council, said she has researched dozens upon dozens of spills and excursions documented by the Wyoming Department of Environmental Quality.

The Star-Tribune has also reviewed DEQ documentation describing dozens of violations related to in-situ recovery of uranium in the state.

Most recently, a 2007 DEQ investigation documented yearslong, regular violations at Cameco Corp.'s Smith Ranch-Highland in-situ uranium mine in Converse County. It resulted in a $1 million settlement, although Cameco and DEQ insist no one was injured as a result of the violations, and there was no long-lasting environmental damage.

"Asking questions isn't necessarily opposition to these projects. We are citizens of Wyoming, and we want to promote development that is beneficial to the state. But we also want to protect citizens and the environment," Anderson said.

Industry officials counter that there have been at least 15 commercial-scale in-situ uranium well-fields successfully restored in Wyoming, and not one documented case of damage to human health or contamination of drinking water.

NRC's caution

Uranium One controls more than 100 million pounds of historically identified uranium resources in Wyoming, and says it has 61 potential mine projects in the state.

The predecessors of Uranium One first filed applications with the NRC and DEQ in October 2007 for the proposed Moore Ranch in-situ mine and processing plant near the Pumpkin Buttes in Campbell County. Company officials said the NRC's decision to require a more thorough environmental analysis means production will begin in 2011 rather than 2010.

"We have been told various firm dates by the NRC, yet every time we get close to ending the process, something changes," said Donna Wichers, senior vice president of Uranium One, Americas.

In moving to the supplemental environmental impact statement requirement, NRC reportedly told some in the uranium industry that the extra analysis makes the new mining projects less susceptible to lawsuits and legal delays.

Wayne Heili, president of mining for UR Energy, said he's obviously disappointed with the delay. However, he said it's hard to blame the NRC for doing its best to satisfy the requirements of the National Environmental Policy Act.

Heili said he believes the NRC's move toward a supplemental environmental impact statement has more to do with public comments insisting on more public involvement in the licensing process, and less about the industry's past track record.

"To the NRC's credit, they're being cautious and making sure these licenses are being issued on solid legal grounding," Heili said.

Anderson said the Powder River Basin Resource Council's membership is pleased with the NRC's decision. However, the group remains concerned that neither the federal nor state government has addressed the "legacy" issues of the industry's past, nor have they addressed the cumulative impacts of possibly dozens of new mines.

Although the in-situ recovery process is supposed to be contained within uranium ore-bearing aquifers that never have been sources of drinking water, individual landowners still deserve to know details about what's taking place underground, Anderson said. There's still no estimate of how much groundwater might be consumed cumulatively.

"(In-situ uranium recovery) can reduce aquifer pressure and affect artesian wells, and it can create draw-down in areas already impacted by coal-bed methane or other industrial development," Anderson said.

Fletcher Newton, executive vice president for marketing and strategic affairs for Uranium One, said the uranium industry is much more sophisticated than it was in the 1970s and 1980s.

"(The industry) certainly learned a lot about safe practices and protecting the environment. There's a big difference between today and the way things were 25 years ago," Newton said. "Nobody wants to go back and repeat the mistakes of the past."

White House uncertainty

Some uranium mining officials say they feel the Obama administration isn't as supportive of domestic uranium development as the previous administration. As evidence, they say the U.S. Department of Energy hasn't made good on loan guarantees promised to the industry under the Bush administration.

While there were 19 applications made to the DOE under the Bush administration, so far the DOE under the Obama administration has issued only $18.5 billion in loan guarantees to four companies that plan to build new nuclear reactors for electrical generation.

"I think this administration is moving very carefully," Newton said. "If they impose a carbon tax on utilities, then that would be an indirect way of supporting nuclear power because, suddenly, nuclear power becomes much more cost competitive."

Last week, the DOE announced it will provide $2.9 million in scholarships and fellowships to 86 U.S. nuclear science and engineering students, and will offer $6 million in grants to 29 U.S. universities for nuclear research infrastructure. None of the grant money was allocated to the University of Wyoming, according to a DOE press release.

According to the Nuclear Energy Institute, about half of the nuclear industry's work force will be eligible to retire during the next 10 years.

Energy reporter Dustin Bleizeffer can be reached at (307) 577-6069 or dustin.bleizeffer@trib.com. Check out Dustin's blog at tribtown.trib.com/DustinBleizeffer/blog.

* The energy derived from 1 pound of uranium is equivalent to 20,000 pounds of coal.

Source: Wyoming Mining Association

* More than 200 million pounds of uranium has been mined in Wyoming since 1954. More than 300 million pounds of "historic" reserves remain.

Source: Uranium One

About in-situ mining

The conventional method of uranium mining involves carving large pits into the earth to recover ore-bearing material. In-situ recovery involves a series of wells to flush oxygen and carbon dioxide (and sometimes sodium bicarbonate) into a uranium ore-bearing aquifer, which breaks down the uranium ore.

The solution is brought to the surface through production wells where the uranium is recovered. From there, the uranium is isolated through a drying process and trucked to market in secure containers.

This ongoing circulation between injection wells and production wells takes place for two to three years in order to produce about 85 percent of the uranium resource. Monitor wells surround the production zone -- in the formations above and below -- to detect any leaks.

After production is complete, a yearslong remediation process begins. Using the same injection and production wells, the water is circulated through an ion-exchange facility

-- Dustin Bleizeffer

Uranium boom

The price for uranium neared $140 per pound in 2007, sparking renewed interest in the mining industry. The Nuclear Regulator Commission received notice of more than 20 in-situ uranium mine proposals across the West, mostly in Wyoming.

In response, the NRC launched a "generic" environmental impact statement to provide analysis of the in-situ leach mining process. A final version of the document was issued in May.

Today, uranium is selling for about $52 per pound, but companies are still planning many new mining operations.

-- Dustin Bleizeffer

http://www.casperstartribune.net/articles/2009/06/21/news/wyoming/50d1a9a79c1f0a19872575db005f0300.txt

Lehman Sitting on Bomb’s Worth of Uranium Cake as Prices Slump

By Linda Sandler, Yuriy Humber and Christopher Scinta

April 14 (Bloomberg) -- Lehman Brothers Holdings Inc. is sitting on enough uranium cake to make a nuclear bomb as it waits for prices of the commodity to rebound, according to traders and nuclear experts.

The bankrupt bank, in the throes of paying off creditors, acquired uranium cake “under a matured commodities contract” and plans to sell it when the market improves “to realize the best prices,” Chief Executive Officer Bryan Marsal said.

Lehman, once the fourth-largest investment bank, has an estimated $200 billion in unsecured liabilities left to pay. The uranium, which may be as much as 500,000 pounds, might fetch $20 million at today’s prices of about $40 per pound, said traders who asked not to be named because of the confidential nature of the data. Marsal said the traders’ estimate of Lehman’s uranium holding is “reasonable,” while declining to be more specific.

Uranium has dropped for five straight months from $55 a pound on Dec. 1 on concerns that countries including China and India would delay nuclear power projects because of the global economic crisis, and because Lehman might dump its radioactive material on the market, the traders said.

More than 43 million pounds of uranium-oxide concentrate, or yellowcake equivalent sold on the spot market last year, more than doubling the 2007 trading volume, according to Roswell, Georgia-based Ux Consulting Co.

The oversupply in an illiquid market pushed prices down about 30 percent between September and November, spurring sales by speculative investors, such as hedge funds, said John Wong, a fund manager in London at CQS UK LLP, which has $6 billion under management including shares of funds that own uranium.

Not Liquid Market

“What people found out is that this is not like playing copper where it’s a liquid and deep market,” Wong said. “A lot of the funds playing this market have blown up.”

Uranium typically trades through broker-dealers, including MF Global Ltd. and Tullett Prebon Plc, or in direct sales between mining companies and nuclear utilities. Utilities buy processed ore known as yellowcake, which is later converted, enriched and fabricated into fuel rods. The New York Stock Exchange also supports trading in futures contracts, which are not linked to physical delivery.

The market is regulated by governments, who control transport of radioactive material and limit the number of buyers and sellers by requiring them to obtain licenses. Utilities and producers are key buyers and sellers. Lehman got its license just a month before its bankruptcy, one of the traders said.

A supply of 500,000 pounds of yellowcake is just “slightly” less than the amount needed to make one bomb, or fuel one nuclear power reactor for a year, if the latest enrichment technologies are used, said Gennady Pshakin, an Obninsk, Russia-based nonproliferation expert.

Unloading Everything

Lehman, before filing for bankruptcy protection in September, actively traded commodities in the broker-dealer market and on exchanges such as the London Metal Exchange and the New York Mercantile Exchange. After filing, it began unloading holdings of everything, including greenhouse-gas credits, traders said. Uncertainty about the bank’s plans for its uranium is helping to depress prices, Wong said.

“Everyone knows there’s still an overhang,” he said. If Lehman sold its remaining stockpile, “there’d be a tightness in the market immediately.”

Lehman “tested” the uranium market after its bankruptcy filing in an effort to raise cash, pulling back after it did because “everyone was low balling,” Marsal said. With $10 billion in the till today from other asset sales, Lehman isn’t in a hurry any longer to sell uranium, he said.

“We plan on gradually selling this material over the next two years,” he said. “We are not dumping this on the market and have no fire-sale mentality.”

Forced to Liquidate

Lehman’s bankruptcy forced it to liquidate assets to pay creditors. Some $400 billion out of $639 billion in assets were offset by matching liabilities, Marsal said.

The bank raised a quick $1.75 billion in September by selling its North American brokerage and real estate to Barclays Plc. It later got the London-based bank to return thousands of Lehman-logoed knickknacks that also will be sold to pay creditors, the bank said. They include tote bags, umbrellas, stress balls, Tiffany paperweights and other items now stored in closets and warehouses from New York to Chicago.

Lehman’s radioactive material is partly stored in Canada, Marsal said. One trader, who declined to specify a date, said he was offered 450,000 pounds of Lehman uranium stored in facilities owned by Canada’s Cameco Corp. and France’s Areva SA.

“When Lehman first approached the market to sell the material, they had a flawed market strategy,” said Kevin Smith, head of uranium trading and marketing at commodities brokerage Traxys SA. “They were trying to sell it all as a block and part of it was at a less desirable location. It was a take-it-or- leave-it offer, so everyone left it.”

The bankruptcy case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

http://www.bloomberg.com/apps/news?pid=20601103&sid=aVgwamEW_98I&refer=news

Sluggish Uranium Prices Leave Cameco Vulnerable

Cameco operates one of the few U mines in the US that's still active...Butte Crow in Nebraska.

Posted: April 06, 2009, 11:15 AM by David Pett

Uranium, Mining, Cameco

The much anticipated rally in uranium prices hasn't happened yet, leaving Cameco Corp. earnings vulnerable, says Blackmont analyst George Topping.

"While we are bullish on uranium, we are wary of Cameco as we get closer to the Q1 release due May 1," he said in a note to clients. "Cameco has a history of disappointing."

Mr. Topping noted that his biggest concern is the lingering effect of the financial crisis on uranium prices. Despite a favourable supply/demand environment, the spot uranium price hit an average of US$44 per pound in the first quarter versus the US$69 per pound for the term price.

The Blackmont analyst said the weak Q1 has forced him to reduce his 2009 price from US$70 per pound to US$60. He also reduced his future years forecast by US$10., with 2010 prices now expected to average US$70.

Regarding Cameco, he noted additional concerns, including the major recession in Ontario and the effect that will have on Bruce Power. He also doesn't like the lack of control over Centerra Gold's cash flow. Cameco owns a majority position in Centerra, which operates the Kumtor mine in Kyrgyz Republic.

The sum of these concerns will lower Cameco's cash flow this year, but due to improved investor sentiment, Mr. Topping maintained his "hold" rating and $26 price target.

http://network.nationalpost.com/np/blogs/tradingdesk/archive/2009/04/06/sluggish-uranium-prices-leave-cameco-vulnerable.aspx

Santoy Takes Over 'Uncle Walter And His Homegrown Uranium Patch'

What an accurate caption, analogy and article!

Wednesday, March 25, 2009 9:27 AM EDT

Chatham Star-Tribune

Opinion

In November 2007, when Walter Coles announced the formation of Virginia Uraniun Inc., uranium mining in Pittsylvania County was promoted as a "hometown industry," just a few local folks trying to make a little pocket money and intending, as Coles himself put it, "to create a glorious new era for Southside Virginia."

It all sounded so wonderful, so promising, so clean.

Uranium would replace tobacco and textiles as the economic base for Southside, and we would all live happily ever after in the glow emanating from Coles Hill.

Now, two years later, VUI has merged with a Canadian mining conglomerate, Santoy Resourses Ltd., a move that many believe VUI had planned all along, in order to get the big boys on their side.

And so they have. Santoy has big plans for Southside.

No longer is it kindly Uncle Walter and his homegrown uranium patch. Uranium mining in Pittsylvania County has moved into the real world of dog-eat-dog corporate business.

And business means one thing to Santoy: making money. That is exactly why they are here, ready to set up and start digging.

And make no mistake about it, Santoy has little regard for what happens to the people of Southside, or for the land on which many of us have lived for generations.

They are profit driven, and anyone who thinks otherwise is simply naive.

What Santoy sees in Pittsylvania County is not the beautiful place where almost 70,000 people live and work, but a spot on the map where there is uranium to be had, profits to be made, and a place to establish themselves in order to begin mining the other numerous uranium deposits in Virginia.

Some members of the Pittsylvania Board of Supervisors have done everything they could to accommodate VUI's agenda. They seem not to have noticed that Santoy has been added to the picture.

Chairman Coy Harville, after two and a half years, is still claiming that he does not know enough about the uranium issue to make any kind of decision.

William Pritchett, who represents the district where the uranium mine would be located, is also willing to sit by and let someone else make his decisions for him.

They innocently believe that the legislature in Richmond is going to make a decision for them that will be in the best interest of the people of Pittsylvania County, based on a "study" paid for and set up by VUI and the Coal and Energy Commission, who, by the way, have overseen the pollution and destruction of much of Southwest Virginia by the coal mining industry, just as Santoy plans to do with Southside.

Now, my question to the people of Southside is this: Are you willing to sit by and let a foreign corporation, known for its aggressive pursuit of uranium in Canada, come into Pittsylvania County and ruin our land, our water, our air, and our heritage for all time?

If you are willing to let this happen, then call Walter Coles and sign up for that activity. He certainly needs all the help he can get.

But if you believe that the ruination of your home solely for the profit of that foreign corporation and a few local investors is a bad idea, then here is what you can do to help yourself:

Go to every supervisors' meeting, sign up to speak, and demand that they ban uranium mining in Pittsylvania County and in Virginia once and for all.

As voters, you have a right to stand up and tell the supervisors what you want. You have a right to control your own destiny.

You do not have to live with decisions made by people who don't even live here, or decisions made by local politicians who are, as they readily admit, not informed enough about uranium mining to make any decision at all.

Go to them and tell them that you do not want uranium mining in Pittsylvania County.

The supervisors are supposed to be working for you and in your best interest, not in the interest of a Canadian mining company.

Pittsylvania County is being invaded in order to profit at the expense of your health and your wellbeing.

If a thug broke into your home, would you just sit there and let him take your valuables and do harm to you and your family? Probably not. This situation is no different from that.

But you must be willing to defend yourself.

You must tell the supervisors that you will not tolerate being violated by a foreign mining conglomerate or by local mining speculators.

Every voice counts. Stand up and protect yourself. No one else will.

Jesse Pyrant Andrews

Halifax
http://www.wpcva.com/articles/2009/03/25/chatham/opinion/opinion02.txt

Study of Uranium Mining in Virginia Approved

Oh, cute...courtesy of Mick Mastilovic, a new word is born. Mining opponents are now being called "the mobocracy"! Clever, Mick. Inaccurate but clever.

Wednesday, March 25, 2009 3:56 AM

(Source: Richmond Times-Dispatch)By Jeff E. Schapiro, Richmond Times-Dispatch, Va.

Mar. 25--A Virginia panel is giving the go-ahead to a study on opening the state to uranium mining and likely bankrolled by the industry -- raising fears that the research will be weighted in favor of proponents.

A subcommittee of the Coal and Energy Commission yesterday approved a tentative outline of the study by the National Academy of Science, which would focus on safety, environmental and health concerns. A separate examination of the financial and economic impact of mining also is planned.

Uranium mining has been illegal in Virginia since 1982, but with the push for alternatives to oil and coal, two Southside families want to extract in rural Pittsylvania County the nation's largest untapped lode of uranium. Five lobbying firms are pressing the General Assembly to lift the ban.

Because lawmakers from the largely agricultural region blocked a statefinanced study in 2008, fearing it as a first step toward ending the moratorium, the two families' firm, Virginia Uranium Inc., is offering to pay upward of $1 million for the inquiry.

Opponents are refusing to contribute to the cost of the study.

The green light for the study comes as the uranium industry is buffeted by an uncertain economy that is pushing down prices and drying up financing for the construction of nuclear plants powered by the ore.

Walter Coles Sr., Virginia Uranium's chairman, said in an interview that company financing of the 1 1/2 - to two-year study is potential ammunition for mine foes, described by Mick Mastilovic, company vice president, as "the mobocracy."

Coles, whose company has raised $19 million for the project from a Canadian energy firm, hedge funds and local investors, said of the study, "You're damned if you do and damned if you don't."

Joseph R. Stanley III, an environmental analyst for the Virginia Interfaith Center, which is helping to organize resistance to a Pittsylvania mine, said allowing industry to pay for the study means "the perception that [it] would be skewed would exist."

But Michael E. Karmis, director of Virginia Tech's coal and energy research center and the state panel's liaison to the National Academy of Science, said the academy is "totally independent" and its work is "based solely on technical science."

Chartered by Congress in 1863 on the urging of President Abraham Lincoln, the academy largely conducts research for federal agencies, though it also does work for states, foundations and private industry.

On its Web site, the academy says it provides "independent advice," and that its "external sponsors have no control over the conduct of a study" once the budget and outline for research are finalized. ------

Contact Jeff E. Schapiro at (804) 649-6814 or jschapiro@timesdispatch.com.

http://www.istockanalyst.com/article/viewiStockNews/articleid/3145385

Mining Issues in TX

We continue to get interesting information from Mark Krueger in Texas. Yesterday I got an email that talked about abandoned tailings ponds and abandoned mines. Open pit mining, like that which would be used at Coles Hill has not been used in TX for a number of years...they're now using "in situ" or "leach" mining because the uranium there is much closer to the surface than at Coles Hill. Mark told me this sad story too:

"Open pit mining in Texas hasn’t been used in a long time. When it was used, especially right when the uranium market fell, they abandoned the pits and mounds of radioactive tailings around Karnes County and Live Oak County , as well as some others. Today, those wastelands are still there. You can’t find a blade of grass, a bird, not even a bug around those sites. The federal government is still cleaning up those sites 30 years later. Also, I’ve heard of water collecting in the pits to form what looks like a blue swimming hole. Again, no bugs, no fish, no birds. Anyway, I’ve been in contact with the Health Inspector of Bee County, who told me that his son and some friends had stumbled upon and swam in one of these “beautiful” swimming holes. One of these young people has since died from cancer."

Mark also sent this informational chart to show how many mines had been stopped, plugged, ignored, etc. over the past several years. Texas has a mess. Virginia doesn't want this kind of mess.

TEXAS ENVIRONMENTAL PROFILES

URANIUM MINING

The mineral uranium is primarily used by the nuclear power industry to produce energy, although it can also be used to make nuclear weapons. In Texas, uranium has been mined for decades. Uranium used to be strip-mined, much as coal is mined. This mining process results in tailings. These tailing materials are placed in ponds, which often have neither natural or synthetic liners. Some ponds have leaked, contaminating soils and subsurface aquifers, as well as emitting radioactive gases into the atmosphere. There are currently no above ground uranium mining sites in Texas, and all mines have or are undergoing reclamation and clean-up activities. In addition, four tailings and waste sites—where the uranium was milled and extracted from the ore—in Karnes and Live Oak counties are being closed and covered to prevent further contamination of subsurface aquifers or radioactive waste emissions.


During the operation of mill sites, the tailings ponds are used as receptacles for the by-products of the ore process. During closure, the mill site and other facilities are decontaminated and any material is placed in the tailing ponds. The tailing pond is then dewatered and the impoundment is surrounded by a clay cap and radon barrier. Three of the tailing sites—run by Chevron, Exxon, and Conoco—are being supervised by the Texas Department of Health with support from the TCEQ.

The Department of Energy supervised cleanup of a fourth tailing pond in Falls City, Karnes County, an area that produced and processed uranium for the defense industry.
The Department of Energy site has cost about $35 million, 90 percent of which has been covered by the federal government. The tailings pond sites have resulted in groundwater contamination, including one confirmed case at the Chevron facility in 1996.

In 1997 the Texas legislature transferred the jurisdiction to regulate the recovery and processing of uranium and thorium, as well as the disposal of uranium by-products, from the TCEQ to the Texas Department of Health. Since 1975, 38 sites that use injection wells, rather than a strip mining operation, have been permitted to mine uranium (In several instances these permits have been combined, meaning the total number of sites is less). The injection process does not result in tailings. However, only two of these sites—one in Kleberg County and another in Duval County owned by Uranium Resources Inc.—were mining as of November 1997, and none were mining by September of 2003.

Most in situ mining facilities have been closed down and cleaned up and are awaiting a final inspection survey from the Texas Department of Health before being decommissioned by the Nuclear Regulatory Commission, while others have never been built and have had their permits canceled. In fact, there are only a handful of permitted uranium mines that could still mine uranium if market conditions allow it in the future.

These in situ or "solution" mines are considered by state agency regulators to present fewer environmental problems than strip-mines because liquids are pumped underground to dislodge uranium, which is then pumped out through wells. Temporary settling ponds that store water, sand and precipitate, and drilling liquids must be lined but do not have to be covered.

However, spills, accidents, and leaks can still occur at such facilities. Waste generated by in situ uranium facilities can be sent to authorized disposal facilities or to tailing sites. Previously, uranium mining operations in Texas were sending their waste to Envirocare of Utah or to one of several tailing impoundments in Utah and Wyoming that are still open to receive by-product waste.

LIST OF URANIUM MILLING AND MINING RADIOACTIVE MATERIAL RECOVERY

LICENSEES AND APPLICATIONS, 2003

http://www.texasep.org/html/wst/wst_6ird_mnng.html

(link to list of closed, abandoned, plugged, etc. TX mines)

Mines and Plants Hit by Low Prices, High Costs

March 20 (Reuters) -

The global financial crisis and sharp falls in metals prices have forced several companies to abandon or put on hold their plans to bring new mines onstream.

Some existing producers also have shut down or curtailed output at mines and plants as high costs and low prices bite.

Below are details of major projects and facilities affected in recent months, as well as other related news.

March 20 - South African ferrochrome producer Hernic said it shut all its four furnaces at the start of this year.

March 19 - European Goldfields said further ramp up of output at its Stratoni lead-zinc mine in Greece would be delayed.

March 19 - Uranium miner Denison Mines will temporarily suspend production at its Sunday and Rim mines in the western United States and will likely shut its White Mesa mill in May.

March 19 - Norsk Hydro affiliate Alumina Partners of Jamaica (Alpart) said it plans to shut its 1.65 million tonnes a year alumina refinery for a year from May 15.

Read the rest of this article which includes a reverse chronology re: uranium mine and/or nuclear power slow-downs, cut-backs, stoppages, and other negative indicators back to Jan, 27, 2009 here: http://www.forbes.com/feeds/afx/2009/03/20/afx6192957.html

More on Santoy/VUI

Thomson Financial Mergers & Acquisitions

Title:	Santoy Resources Ltd acquires Coles Hill Uranium Deposit,VA (pending)
Price:	$36.00
Publication Date:	Feb 05, 2009
Abstract:	US - Santoy Resources Ltd planned to acquire Coles Hill uranium deposit, located in Virginia, a uranium mining property.
Acquirer:	Santoy Resources Ltd
Acquirer Business Discription:	Uranium mining co
Acquirer SIC Code:	1094 - Uranium-radium-vanadium ores
Target Name:	Coles Hill Uranium Deposit,VA
Target Business Description:	Uranium mining ppty
Target SIC Code:	1094 - Uranium-radium-vanadium ores
Please Note:	Target Financials are not included in this report. Transaction Statistics are not included in this report.
Format:	Adobe Acrobat
Free Sample:	Click Here to Download http://www.alacrastore.com/storecontent/Thomson_M&A/Santoy_Resources_Ltd_acquires_Coles_Hill_Uranium_Deposit_VA-2048553020

Lawrence Partners Fund Manager Given Second Chance

In his letter, Mr. Sood said his firm "significantly reduced the value" of several positions in December after reviewing the fund's illiquid investments with its auditor, KPMG LLP.

"Our holdings in Athabasca Oil Sands, Canadian Bioenergy Corp., MagMinerals and Virginia Uranium were written down and represented the bulk of the reduction in net asset value," he wrote.

SHIRLEY WON

FUNDS REPORTER

February 3, 2009

Shareholders of Lawrence Partners Fund yesterday voted to let its manager, Ravi Sood, have another crack at reinvesting some of the struggling hedge fund's assets.

Toronto-based Lawrence Asset Management Inc. had been proposing a restructuring for its flagship fund, which lost 81 per cent last year amid the market turmoil. The fund had assets of $43-million at the end of December, compared with $202.5-million a year ago.

More than 90 per cent of shareholders agreed to creating two classes of investments - reinvest and windup shares, said Brian Viveiros, sales manager at Lawrence Asset Management.

He would not disclose the breakdown of the share choices, but sources said about two-thirds of shareholders had opted for the reinvest alternative.

Proceeds from the sales of investments would be redeployed in the fund for those who have chosen the reinvest shares. Those who elect the windup shares will eventually be paid in cash. Shareholders could also elect to get part of their capital back as investments are sold and leave the rest in the fund.

In his recent letter to shareholders, Mr. Sood, president of Lawrence, said the firm and its principals would vote in favour of two share classes and choose the reinvest option.

The reinvest shares will be subject to restrictions. They will not be able to use leverage, but will be able to be sold short. Eligible securities in the fund must be publicly traded on a Canadian stock exchange and have a market capitalization of at least $100-million.

According to the information circular for the shareholder meeting, the Lawrence Partners Fund currently has illiquid holdings in Russian companies. It owns shares in Russo-Forest Corp., set up in 2007 to exploit timber leases in Russia. The fund also lent money to two Russian companies to acquire and develop oil leases.

The management fee will be reduced to 1 per cent on the existing portfolio, but will return to 1.5 per cent on capital that is reinvested. There will be no performance fee on the reinvest shares.

Lawrence Partners Fund suspended redemptions in early November to present alternatives to investors because the fund was left with private investments not easily sold.

In his letter, Mr. Sood said his firm "significantly reduced the value" of several positions in December after reviewing the fund's illiquid investments with its auditor, KPMG LLP.

"Our holdings in Athabasca Oil Sands, Canadian Bioenergy Corp., MagMinerals and Virginia Uranium were written down and represented the bulk of the reduction in net asset value," he wrote.

"We do not expect the market to provide much return to investors in and of itself in 2009, but the current situation has provided an opportunity to buy great companies at great prices."

http://www.theglobeandmail.com/servlet/story/LAC.20090203.RLAWRENCE03/TPStory/Business

Uranium Santoy Down 12% -- Go, Santoy!

Oh, Walter...dude...bummer!

Santoy Resources Ltd (TSX Venture Exchange)

sector: Basic Materials . industry: Precious Metals & Minerals ·

As of 23 Jan 2009

0.11CAD Price Change -0.01 Percent Change -12.00%