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First Utah uranium mine in 30 years permitted

Australian junior, White Canyon Uranium, has succeeded in gaining a permit to mine uranium from its Daneros project in Utah and is commencing site construction immediately.

Author: Andrew McCrea
Posted: Wednesday , 27 May 2009

LONDON (Proactive Investors) -

Junior emerging uranium miner White Canyon Uranium (ASX: WCU) has now received a permit to mine uranium from its 100 per cent owned Daneros Mine in the State of Utah, USA.

Believed to be the first permit bestowed by the state in 30 years, WCU was granted approval from the Bureau of Land Management in Utah - just 15 months from the company's listing on the Australian Stock Exchange in March 2008.

WCU will start site preparation immediately with construction of surface facilities and placement of the mine's decline portals. Its US operations Manager Mike Shumway is well known in uranium circles, particularly in Utah and provides experienced operational ballast for this Aussie based company.

What makes this deal different and interesting is that WCU believes first ore could be shipped from Daneros by September 2009. Shipped to where, you may ask? White Canyon is currently in negotiation with Denison Mines Corp (TSX: DML; AMEX: DNN) regarding treatment of ore at Denison's White Mesa Uranium Mill at Blanding, 100 kilometres from the Daneros Mine.

However, Denison Mines has had its share of well publicised issues recently - from bulging debt to placing four mines on care and maintenance in the US to a changing of the guard at the top. It is understood that the White Mesa Mill at Blanding, while temporarily ceasing operations, will continue to buy and stockpile ore to meet contracts.

Interestingly, Denison has wrapped up financing from Korea Electric Power Corp (KEPCO) (in return for 20% of the company) and now offered equity on a bought deal basis to raise another C$82 million.

It is thus possible that White Canyon Uranium may still be able to negotiate a tolling agreement with Denison and hence derive a better price.

For WCU shareholders, the granting of a mining permit in Utah is a coup. For a mining junior and its MD, John Hasleby it is like winning Wimbledon or winning the World Series. It is one of few global emerging mining aspirants which could actually move into production in 2009 - capturing the anticipated uptick in uranium prices in 2010.