Earlier this year on March 11th, while the price of uranium was making a resurgence, Japan experienced the worst earthquake disaster in its modern history. The earthquake, a 9.0 on the richter scale, was followed by a deadly tsunami that resulted in near complete destruction of the infrastructure in northern parts of Japan and served a serious blow to the uranium market.
With tax-loss selling in full effect and the equity markets experiencing extreme volatility as the end of 2011 draws near, we connected with Stewart Wallis of Crosshair Energy for an exclusive interview to find out what’s in store for the company in 2012.
Crosshair is a diversified mining and exploration company focused on uranium, vanadium and gold. After a difficult 2011 for the uranium sector, what is on the horizon in 2012 for your uranium projects?
In 2012 we will be focusing on our Wyoming uranium projects, Bootheel and Juniper Ridge. Both projects will have 43-101 resource updates released early in January, followed by scoping studies to be completed in the first quarter. Based on these reports, the 2012 programs will focus on permitting and additional drilling designed to aggressively advance these projects towards development.
Your Canadian uranium projects are located in the CMB Labrador and Crosshair spent $3.8 million on drilling in 2011 – what is the timeline for updating the company’s uranium resource estimates?
Crosshair maintains multiple and expandable uranium resources in Labrador. 2011 drill programs were conducted on both the CMB Uranium/Vanadium Project and the CMB Joint Venture Project, with a goal of increasing the uranium and vanadium resources as well as testing new targets outlined from earlier exploration programs. We anticipate updated resource estimates in 2012 on the CMB C-Zone/Armstrong corridor and the Joint Venture Two Time Zone.
How important is vanadium to the economics of the company’s CMB uranium/vanadium project?
We have not completed a scoping study on the CMB project so we cannot predict the actual cash benefit of the vanadium as a by-product. However, the vanadium mineralization occurs in the hanging wall of any open pit which might be developed on the uranium mineralization and we do know that the vanadium recoveries range from 13.4% to 93.6% based on our metallurgical test work in 2010. Typical recoveries range between 45-85%, and based on our metallurgical test reports a reasonable vanadium recovery of 85% was selected in our resource estimate.
Comparatively speaking there are quite a few uranium companies that are trading at or near 52 week lows – in your opinion, is the market effectively “throwing the baby out with the bath water” at these valuations?
Since Fukushima, all uranium companies are trading at approximately 60% of their pre Fukushima values. Once the world realizes that there are no other “green” options for base load power, the valuations of uranium explorers and developers should increase.
CXX has been trading at a discount to its peers since the Labrador Mining Moratorium was announced in April 2008. One could expect that our share price should improve when this Moratorium is removed. The INUIT government is reviewing the lifting of the Moratorium and a vote is expected to be held on or about the week of December 12th, 2011.
With Rio Tinto’s proposed acquisition of Hathor Exploration many people are wondering what’s next for the uranium sector. Is M&A something the management team is considering at this juncture?
Crosshair is constantly looking at both property and company acquisitions. Earlier this year we announced that we were looking at acquiring the US assets of AusAmerican Mining, an Australian Company. Upon completion of our due diligence and based on the current market situation we declined to proceed with the transaction. That being said we continue to evaluate other situations in the uranium sector.
Your Gold project is located in the Newfoundland and Crosshair completed a Bulk Sample in late 2010 – what is the status of this project?
The company has spent approximately $1.9 million since April 2008 on its 60% owned Golden Promise Property in central Newfoundland. This Joint Venture project with Paragon Minerals contains a NI 43-101 Inferred Resource of approximately 89,500 ounces contained in 921,000 tonnes at a grade of 3.02g/t that is open and expandable. Our 2,174 tonne Bulk Sample, done with a goal of better determining grade and recoverability rates, produced approximately $430,000 in gold and silver earlier this year.
Crosshair recently completed a name change from Crosshair Exploration to Crosshair Energy – is it safe to assume that, at some point, you intend to spin-out your gold project to focus on energy?
Crosshair is currently evaluating its strategic options for its gold assets and these options may include a sale, spin-out or option agreement.