Powertech stock dropping like a rock
Canadian shares down 48% in 45 days; German shares close at under one euro
Posted December 17, 2007
As opposition to uranium mining in northern Colorado steadily grows, the stock of Powertech Uranium Corp. is accelerating its slide into penny stock territory. From a high of $4.45 CAD on March 23 of this year, the company's shares listed on the Toronto stock exchange have fallen 68% to close at $1.41 CAD today. The stock has seen a precipitous 48% decline in the last 45 days.
Powertech shares listed on the Frankfurt exchange broke through one euro today to close at 0.98 euros. Both PWE.TO (Toronto) and P8A.F (Frankfurt) are rapidly approaching their 52-week lows.
Whether opposition to the Centennial/Indian Springs project has contributed to the decline is only speculation. One thing is certain - there has been an increasing drumbeat of opposition from public officials, medical doctors, and residents of not only the mining area but of the heavily-populated communities that are in close proximity to the proposed in-situ and open pit mines.
Recent events do not bode well for Powertech:
- July 15, 2007 - The Larimer County Medical Society board approves a resolution opposing in-situ and open pit uranium mining in northern Colorado.
- August 15, 2007 - 200 people attend a public meeting in Ault, Colorado sponsored by project opponents.
- August 17, 2007 - The spot price for uranium drops to $90 per pound after reaching a record $138 in June (current price is $92).
- August 18, 2007 - Powertech Chairman Wallace Mays sells 1.76 million shares of Powertech stock.
- September 25, 2007 - Over 200 people attend a public meeting in Fort Collins, Colorado sponsored by project opponents.
- October 13, 2007 - U.S. Congresswoman Marilyn Musgrave announces her opposition to the project before a crowd of 300 residents, landowners, and Powertech officials in Nunn, Colorado. Musgrave cites population density, potential groundwater contamination, and declining property values.
- October 14, 2007 - Citizens rally at the state capitol in Denver and hear Democrat and Republican legislators announce plans to introduce tough new laws to prevent groundwater contamination by in-situ mining.
- October 17, 2007 - Project Manager W. Lane Douglas accuses opponents of spreading lies in a local newspaper column. Three weeks later he is no longer employed by Powertech. Powertech is silent on Douglas' termination, and no replacement has been announced two months later.
- November 9, 2007 - U.S. Senator Ken Salazar sends letter to Robbie Roberts, Region 8 Administrator for the U.S. Environmental Protection Agency, urging him to expand the scope of any review of permit applications from Powertech to include the larger Denver Basin aquifer system and requesting information on the EPA's experience with clean up of aquifer "excursions" and other types of site contamination caused by in-situ leach mining.
- November 14, 2007 - Powertech issues second quarter financial statements showing cumulative losses of $17.2 million and no revenue from mining. Related disclosures filed with securities regulators fail to disclose negative and potentially-material facts such as public opposition by Representative Musgrave and the termination of project manager Lane Douglas.
- November 16, 2007 - The Colorado Medical Society board votes unanimously to approve a resolution against the issuance of mining permits to Powertech based on "the potential risks it poses to the health of residents".
- November 19, 2007 - The New York Times and the International Herald Tribune publish a story contrasting the image of Fort Collins as a city dedicated to renewable energy, recycling, and conservation with the potential for uranium mining just outside the city limits.
- December 4, 2007 - The Fort Collins City Council votes 7-0 to oppose the issuance of any mining permits to Powertech, stating the project "may well be injurious to the health, safety, and/or welfare of the residents in the area and do irreparable harm to the economic and environmental well-being of the City of Fort Collins".
Powertech shareholders and potential investors should exercise caution when making decisions to hold or purchase shares of the company. The question is: Can Powertech survive the overwhelming opposition to the Centennial/Indian Springs project and hold on long enough to secure the numerous federal, state, and local permits needed to mine uranium in Weld County, or will the company become mired in a multi-year battle with opponents and government officials which will eventually end in defeat for the company and the loss of millions of dollars of investors' money?
Uranium price correction may hurt prospects for new discoveries - A “precipitous drop” in uranium spot prices may have hurt the ability of uranium explorationists and producers to raise critical capital - Dorothy Kosich