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Colorado regulators: "Quite clearly the project was abandoned by Powertech"

Division of Reclamation, Mining and Safety terminates consideration of Centennial baseline plan after no communications from the Canadian company for nearly five years

Posted February 3, 2014


Colorado mining regulators have shut down Powertech's efforts to establish a baseline groundwater characterization plan for the now defunct Centennial uranium project.  In a January 7 letter to Powertech Vice President Richard Blubaugh, the Colorado Division of Reclamation, Mining and Safety informed Powertech that the file for the project has been terminated due to the expiration of regulatory time limitations and the fact that there has been no correspondence related to the plan between Powertech and the Division since April 17, 2009.

Powertech stopped all permitting work on the Centennial project in 2011, and last year announced a deal to sell 60% of the project to Hong Kong investment firm Azarga Resources Limited.

Richard Blubaugh, Vice President of Health, Safety and Environmental Resources, Powertech (USA) Inc.

The "Site Characterization Plan" was submitted to the DRMS on April 8, 2009 by Powertech consultant R2 Incorporated.  Report author George Robinson notes in the introduction that the plan was prepared to comply with requirements of Colorado House Bill 08-1161.  HB 08-1161 was adopted by the Colorado General Assembly and the governor in 2008 in response to concerns over the Centennial project.

Because implementing regulations for HB 08-1161 were in the process of being developed when the plan was submitted, it did not undergo technical review by the state.

On November 18, 2009, the Western Mining Action Project submitted a comment letter to the DRMS on behalf of Coloradoans Against Resource Destruction, Environment Colorado, and Information Network for Responsible Mining.  Senior Attorney Jeffrey Parsons, writing for the three organizations, detailed how Powertech's efforts did not comply with the Colorado Mined Land Reclamation Act due to the lack of a "scientifically defensible ground water, surface water, and environmental baseline characterization and monitoring plan for the proposed mining operation."

Powertech never responded to Parsons' comments.  After over four years of inactivity on the plan, the DRMS terminated the file this month, noting that "Quite clearly the project was abandoned by Powertech."

It is doubtful that the plan would have been much help to Azarga, the new majority owner of the Centennial project.  The sale to Azarga closed on December 20, 2013.  The Hong Kong firm purchased the 60% interest for $1.5 million, and has paid two-thirds of that to Powertech.  Upon payment of the remaining $500,000, the two companies will form a joint venture and Azarga will act as the operator.

While Azarga will gain control of any project data held by Powertech, the data may be of limited use to the Chinese company. Powertech's efforts to collect geologic and hydrologic data were focused on the in-situ leach mining method.  Azarga appears to have little interest in ISL, preferring instead the untested technologies of hydraulic borehole mining and ablation.  

If Azarga, a company that has never mined uranium, decides to pursue the new technologies for Centennial, it will be breaking new ground.  The federal and Colorado regulatory schemes for hydraulic borehole mining and ablation have yet to be determined, and it will be months or years before the appropriate agencies decide how to regulate these new technologies.



Letter from Colorado Division of Mining, Reclamation and Safety to Powertech (USA) Inc. regarding termination of NOI File P-2009-012, Site Characterization Plan for Centennial Project - January 7, 2014 (PDF 49 KB, 1 page)

Site Characterization Plan - Centennial Project Weld County Colorado - Prepared for Powertech USA Inc. by R Squared Incorporated - April 2009, with April 2, 2009 transmittal letter from George Robinson (PDF 2,044 KB, 41 pages)

Comments on Powertech (USA) Inc. Baseline Characterization File No. P-2009-012 from Western Mining Action Project on behalf of Coloradoans Against Resource Destruction (CARD), Environment Colorado, Clean Water Action, and Information Network for Responsible Mining (INFORM) - November 18, 2009 (PDF 132 KB, 4 pages)

Comments on Powertech's proposed Baseline Plan from Richard J. Abitz, PhD, Geochemical Consulting Services, LLC - October 31, 2009 (PDF 787 KB, 6 pages)

Curriculum vitae - Richard J. Abitz

Powertech sells 60% of Centennial project to Hong Kong investment firm; inexperienced Chinese company becomes largest Powertech shareholder - Powertech agrees to sell controlling interest in dormant Colorado uranium project to recently-formed Azarga Resources; 38-year-old Australian CEO Alex Molyneux makes deal to buy out Toronto hedge fund's shares, and is likely to propose new mining and processing methods for project - Posted October 13, 2013

Summary report on December 19, 2013 public meeting between U.S. Nuclear Regulatory Commission staff and Mineral Ablation LLC, a joint venture between Black Range Minerals Limited and Ablation Technologies LLC, to discuss pilot project in Wyoming and legal and regulatory aspects of commercial use of ablation technology on uranium ore - January 27, 2014 (PDF 79 KB, 9 pages)