White Canyon Uranium (ASX: WCU) has concluded a June 2009 quarter, achieving a significant milestone.
The US federal Bureau of Land Management (“BLM”) delivered the final approvals for the Company’s Mine Permit for the development of the Daneros Mine in Utah, USA in May 2009.
This was the first new uranium mine permit issued in Utah for 30 years and culminated 15 months of work by White Canyon Uranium since listing on the ASX in March 2008.
The Daneros uranium deposit is located in close proximity to major past producing uranium mines of the Red Canyon mining area, near Blanding, Utah. The deposit is 100 km by established roads from the White Mesa Uranium Mill owned by Denison Mines (TSX: DML) at Blanding.
Underground development commenced immediately on receipt of the BLM approvals. Site earthworks were commenced prior to the transport of infrastructure and the decline portals were surveyed and mining commenced within a week of receiving the approvals.
Mining Progress
To date, the portals were completed and the declines had advanced 30m. Daneros will utilise a twin decline development with an access decline and a ventilation decline. Ventilation fans and generator are in place and operational ahead of requirement.
The site office is in place and the workshops and utility buildings are available awaiting the construction of pads for their erection. The water bore was completed and the infrastructure for water storage is in place.
This progress is within the company's budgeted schedule and the expectation is that the declines will be completed at the end of the following quarter.
WCU has re-iterated that underground development and mine production will be achieved within current cash reserves, which at the end of the quarter stood at $4.5 million.
Processing Options
There are solid options for WCU for sale of output from the Daneros Mine. Given proximity to Denison's White Mesa Uranium Mill, WCU can sell production into the Denison Ore Buying Schedule already in operation and open to third parties at the White Mesa Mill in nearby Blanding.
A toll treatment agreement with Denison is another option. This would enable WCU to pay a contract rate to have Denison process ore from the Daneros Mine and WCU would receive the U3O8 produced at the end of the process.
WCU could then negotiate an offtake agreement or long term contract for the sale of product to achieve higher returns for shareholders.
WCU has indicated Denison has agreed to draw up a Toll Treating Agreement. The Company is in contact with Denison and the arrangement is progressing.
Toronto Stock Exchange listing
A listing on the TSX Venture Exchange is also progressing. A new non-executive director Greg Burns, based in Vancouver, has been appointed effective 1 August 2009. He will assist with the listing in Toronto.
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