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Energy Ventures Ltd.

Finding Aurora

Western Australian firm Energy Ventures Ltd. (ASX: EVE) has found itself heading across the Pacific Ocean to focus on its projects in the western United States, where it is making the most of uranium mining opportunities.

Perth-based Energy Ventures has shifted its focus to America as it looks to utilise its interests in U.S. uranium exploration and project development.

Though its 100 per cent owned U.S. subsidiary, Oregon Energy, the ASX-listed firm owns four advanced uranium projects in the western side of the nation—the most significant of which is the Aurora uranium deposit in the Pacific Northwest state of Oregon.

“All of these projects have been subject to significant historical exploration and have either current or historical resources,” says Managing Director Lachlan Reynolds.

Oregon Energy is currently advancing feasibility studies at Aurora while actively evaluating other uranium opportunities in the region.

In keeping with its history of targeting sites in countries that provide excellent geological prospectively and low risk, Energy Ventures also owns 51 per cent of Swedish uranium exploration firm Norrsken Energy, a 50 per cent stake in Wayland Copper (which owns a copper-gold-uranium project in northern Sweden), a 3.7 per cent interest in ASX-listed African Energy Resources and a 29.8 per cent interest in U.K. based gold explorer Agricola Resources. Reynolds says that these interests are used to fund the company’s U.S.-focused exploration activities.

Stateside success

Expanding on the various opportunities housed within the group to date, Reynolds says that Energy Ventures has virtually been utilised as a seed capital company that provides money to support a number of projects at relatively early exploration stages, with the geological potential to ultimately become mines.

In the case of Aurora, the play came into the company portfolio when Oregon Energy acquired the deposit from Uranium One Inc. for US$2 million in cash.

“We bought it because we saw this asset, as well as a few other opportunities in the western U.S., as being fantastic opportunities for the company,” says Reynolds.

“In regards to the return for its investment, Aurora offered amazing possibilities and consequently all of our efforts for the past couple of years have turned towards the U.S.”

Discovered in the late 1970s, Aurora had previously been intensively drilled, before production ceased when the uranium price crashed in the early 1980s.

“The previous company walked away from the deposit and virtually no work has been done on it since,” says Reynolds.

“We were left in a situation where we had the opportunity to buy into what was basically an untouched resource that came with the entire historical data set of all drilling, environmental work and metallurgical work that had been done previously.

“In effect we found a shortcut to what could potentially be quite a major mine development in the U.S.”

The next phase

Oregon Energy recently finished the first phase of the Aurora project where it has collected information on grade and the grade continuity across the deposit, as well as chemical assays and metallurgical testing.

Reynolds says that although the Aurora deposit itself is likely to lead to the development of a manageable shallow, open-pit mine, the site is far from any of the existing uranium process plants in the U.S., and instead of contemplating trucking ore, the team is weighing up other options.

“The construction of a process plant would be important for the development of the Aurora deposit, and would also potentially unlock some exploration value elsewhere in the region where there are known uranium occurrences,” he remarks.

The company aims to move the project to pre-feasibility by the middle of 2012, and despite the adverse effects the uranium industry has suffered following the Fukushima accident, this plan remains on schedule.

“We have deferred some of our activities and slowed some down in order to preserve the cash position of the company, but we still think that the deposit has real potential to be a viable mine, even under current economic conditions,” says Reynolds. 

“We’re the kind of company that looks for opportunities typically when the market is depressed, because that’s when you can get access to quality assets more cheaply.

“We’ve certainly been impacted since Fukushima, both in terms of our share price and general interest in the uranium sector,” he adds. “But we have maintained a positive outlook and still think that all the ingredients are there for an increasing deficit in terms of supply of uranium to the world market.”

Triple tactics

In order to make the most of the opportunities it has taken aboard, Energy Ventures is following a three-part strategy to increase its value, according to Reynolds.

“The first is to increase our resources by increasing targets at our Aurora project as well as other exploration targets at other sites in the western U.S. in Colorado, and one just over the border in Nevada,” he notes.

“The second part is we want to be able to show our investors that we are advancing our projects technically and that’s where the feasibility studies of Aurora are particularly important at the moment.

“The third part of the strategy concerns the permitting and being able to show that we are advancing a framework that will get our operating permits and get a mining development underway,” he adds.

With ambitious plans in place, strong leadership and promising projects, Energy Ventures is right on track towards the mid-2012 pre-feasibility stage goal, and well placed to advance Aurora on to become a future operation. 


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