Upheaval in Uranium prices and rules restricting foreign ownership aren’t deterring faith in the Michelin Project in Labrador, says Paladin Energy Ltd.
The company, which bought Aurora Energy Resources Ltd., is focused foremost on what will happen with the moratorium imposed in 2008 by the Nunatsiavut government, which can now be revisited.
But it’s not known if it will be on the agenda when the Nunatsiavut assembly meets in May.
A spokesman for the assembly said the moratorium could be addressed in May, the fall, or years from now.
And Andrea Marshall, spokeswoman for the Michelin Project, said Paladin hopes it will hear from the government soon on what actions it intends to take.
Paladin, the seventh largest uranium producer in the world, bought Aurora from Vancouver-based Fronteer Gold Inc.
The company estimates so far there are 130 million pounds of uranium at the proposed Labrador project site.
The Ux Consulting Co. listed uranium prices this week at a rebounded US$62.50 per pound.
After the March 11 Japanese earthquake and tsunami, uranium prices fell. It was nearly US$75 a pound in January.
The spot uranium price dropped to US $49 a pound immediately after the damage at the Fukushima nuclear plant.
Paladin is predicting a longterm price of US$73 a pound.
Also this week Mining Weekly Online noted Canada's non-resident ownership policy, implemented in 1987, limits foreign ownership to 49 per cent in a mine producing uranium in the country.
Paladin has a number of projects in the pipeline around the world and by the time it’s ready to proceed with Michelin, Marshall said the federal government may have adjusted the foreign ownership rules or worked out an exception.
There is no firm timeline for the project. Marshall said if the moratorium is lifted, the plan is to continue with exploration work to source additional uranium resource.
The project must also go through a regularity process before construction.
And it’s a long time down the road for uranium prices, as well.
The current price is no deterrent to getting started on the process of the Michelin Project, should the moratorium be lifted, Marshall said.
“The company feels very positive for the longterm prospects for uranium and the nuclear power sector,” she said.
Paladin wants to do more drilling because while 130 million pounds is significant on the world stage, there could be much more potential at the site.