TORONTO (miningweekly.com) – Uranium hopeful Strateco Resources has signed confidentiality agreements with five potential partners at its Quebec Matoush project, including a Chinese nuclear power utility, and CEO Guy Hébert said on Wednesday the Japanese nuclear disaster’s impact on the nuclear sector would blow over within a month.
“I think that will be settled pretty fast. If nothing worse happens, within a month that’s it,” he told Mining Weekly Online in an interview.
Hébert added that governments that overreacted to the nuclear crisis could lose votes in the future.
“A lot of politicians will lose credibility because they panicked. I don’t think in the medium-term it [the situation at the crippled Fukushima nuclear plant] will have an impact,” he said when asked how it might affect companies like Strateco looking to raise money to develop uranium mines.
Strateco is hoping to receive final government approval by August to build the C$292-million project, set to start producing in the second-half of 2014.
On receiving the licence, the company would need to either raise debt and equity to start building the planned 2,6-million pound a year operation, or bring in a strategic partner.
“We have five confidentiality agreements signed with different potential partners,” Hébert said.
“One is a very large Chinese company, they’re very serious and the president of that company is coming in April.”
Strateco has been in discussions with possible partners since the middle of last year, and it has around C$16-million in the bank, which will last the company up until the licence is awarded.
The radiation leaks at the Fukushima plant and Japan’s frantic efforts to avoid a nuclear meltdown caused a stampede out of uranium stocks early last week, with some juniors losing more than half of their market capitalisations.
The spot price of the fuel plunged to $53/lb, from the $66/lb before the disaster, though it rebounded to $60/lb this week, according to consultancy TradeTech.
“A period of uncertainty and resulting price volatility is inevitable. Ultimately, if the actions of regulators in the aftermath of the accident result in additional plant delays or cancellations, both the spot and long-term markets for uranium will be adversely affected,” TradeTech president Treva Klingbiel said earlier this week.
Rosatom's ARMZ this week lowered its bid for Tanzania-focused uranium junior Mantra by 12% as a result of the Japanese situation.
Reuters reported on Wednesday that China Guongdong Nuclear Power might follow suit and trim its bid for London’s Kalahari, though a Kalahari spokesperson last week assured Mining Weekly Online that the bid was still intact.
In an earlier presentation, Hébert said his company had received much help from Cameco, the world’s second-biggest uranium miner, in developing community relations at the Matoush project, located 1 000 km north of Montreal and 100 km south of Stornoway Diamond’s Renard project.
Cameco owns the property directly south of Matoush, part of which it is exploring in a joint-venture with France’s Areva.
“They support us a lot,” commented Hébert.
He said his company also had a good relationship with Paladin Energy, which owns the Langer Heinrich mine in Namibia and in December bought a uranium project in Labrador.
According to Hébert, Matoush would break even at a uranium price of around $42/lb, including capital costs.
He pegged the mine’s production costs at $23,66/lb.
Strateco closed down 1,3% at C$0,72 a share on Wednesday, giving the company a market capitalisation of C$100-million.
Prior to the Japanese tremblor, the stock hit a high of $1,34.