North Dakota has first uranium land lease in three decades

By JAMES MacPHERSON Associated Press Writer
The Associated Press - Monday, March 31, 2008

BISMARCK, N.D.

A California uranium exploration company has leased more than 1,000 acres of land in Slope County, in southwestern North Dakota.

It is the first such lease in the state in about 30 years, said Ed Murphy, the state geologist.

La Jolla, Calif.-based Prospect Uranium Inc. said it has reached a deal on three, 10-year leases from private landowners near Amidon, in what the company is calling the Conners Uranium Project.

President Jeff Janda said Monday the company acquired the leases after studying test holes that had been drilled in the region decades ago.

The company said in a statement that it is leasing 1,026 acres at $10 an acre, and that it already has prepaid more than $90,000 in rental fees to the landowners, who were not identified.

"It looks pretty promising," Janda told The Associated Press.

Royalties also will be paid on any uranium found, the company said.

Prospect Uranium is the majority partner in Secure Energy LLC, which acquired the leases. Prospect is a subsidiary of Tonogold Resources Inc., which also is based in La Jolla, Ca.

Janda said the lease area could be expanded in time.

"We think the deposit extends into neighboring property," Janda said.

Secure Energy spokesman Galen Andersen of Bismarck said the sites leased by his company are about seven miles south of Amidon. High levels of radon and uranium in groundwater have been found in the region, "which leads us to believe there is a source," he said.

A uranium mine could create 50 or more jobs in the region, but establishing such a facility could be years away, Andersen said.

"This is just the beginning," he said. "You have regulations from here to Washington, D.C. And it takes years to determine what you have and whether it can be mined or not."

Uranium was mined from at least nine sites in southwestern North Dakota, Murphy said. North Dakota's mines produced about 592,000 pounds of uranium oxide while they were in operation between 1962 and 1967.

In the 1970s, some 2,000 test holes were drilled in southwestern North Dakota in anticipation of more mining activity, Murphy said. But nuclear energy fell out of favor with Americans after the Three Mile Island reactor accident in 1979.

"After Three Mile Island that was it - nobody pursued uranium exploration in North Dakota after that, Murphy said.

Pushed by worldwide demand for nuclear power, uranium prices have increased from about $7 a pound in 2002 to about $135 by last summer. The price now has "settled out at between $70 to $80 a pound," Murphy said Monday.

Janda said he did not know when his company would seek a state permit for permission to mine. "We're still doing geologic work on it," he said.

The state has issued no permits to mine uranium for three decades, but Murphy said he expects companies to begin applying for them this year.

"Given the level of interest, we anticipate there will be some," Murphy said.