BAIROIL - Seven rigs are perforating UR Energy's 2-mile-long Lost Creek uranium field this summer with about 400 new holes, delineating a uranium ore deposit in the Battle Spring formation.

Here in the Lost Creek field, the Battle Spring formation resides about 400 to 600 feet down. A few miles to the north, it rises to the surface to form Green Mountain - a dark wedge surrounded by sagebrush desert.

There are two highly visible cuts on the south face of Green Mountain. The largest cut, on the bottom, west side, is the Big Eagle pit: a vestige of an open-pit uranium mine from the 1970s. The smaller cut in the center of the mountain is a vestige of the Jackpot Mine, where the Green Mountain Mining Venture tried, but gave up, digging its way to a known uranium treasure beneath the mountain.

Today's uranium hunt is different than the one that left two white scars on Green Mountain's south side.

"This is a historic mining area," said Wayne Heili, UR Energy's vice president of mining. "But we don't leave the legacy landmarks that open-pit mining does. We're able to reclaim the area to its original state and leave it for unrestricted use when we're done."

Today's rush to mine uranium relies on drill bits rather than shovels. The Nuclear Regulatory Commission expects some 22 proposals to expand, restart or launch new in-situ leach uranium mines across the West in coming years, 19 of them in Wyoming, according to the agency.

The Nuclear Regulatory Commission expects to publish a draft "generic environmental impact statement" for in-situ uranium mining proposals within weeks, which will start a 60-day public comment period.

Rather than carving large pits into the earth to recover ore-bearing material, in-situ mining involves a series of wells that flush a sodium bicarbonate solution through a formation, dissolving the uranium. The uranium-impregnated solution is then pumped to the surface. From there, the uranium is isolated through a drying process and trucked to market in secure containers.

Each production field is ringed by water monitoring wells, which allows operators to make sure the flow of water between injection and production wells remains in balance. Once a majority of the uranium is removed, the production aquifer is restored through a filtration process.

Uranium companies maintain that the water that resides in formations containing ore-bearing material never was and never will be considered good enough to drink. Water monitoring wells ensure the activity doesn't artificially move ore-bearing material out of the production zone or into another geologic zone.

"It's a less costly way to recover the uranium, and it's certainly less of an impact to the environment than a conventional open pit or underground operation," said Marion Loomis, executive director of the Wyoming Mining Association.

The price for uranium neared $140 per pound last year, but has settled to what many in the industry consider to be a more realistic $60 per pound. Commercial viability is expected to be around $30 per pound, which makes in-situ leach mining a good long-term strategy, according to producers.

In-situ leach uranium mining is expected to add hundreds of jobs in Wyoming, but still far fewer than would be associated with conventional open-pit mining of the uranium industry's past. Start-ups that had five geologists on staff last year have tripled in size. Dozens of small water-well rigs with crews of three to four will drill thousands of shallow wells in coming years.

Loomis said the energy derived from 1 pound of uranium is equivalent to 20,000 pounds of coal. The manpower to extract the estimated 11 million pounds of uranium oxide at UR Energy's Lost Creek in-situ mine pales when compared to the approximately 400 workers needed to maintain an annual 30 million tons of production at a typical Wyoming coal mine.

"I'm not sure you'll see much social economic impact from a greatly expanded uranium industry," Loomis said. "But we've added seven or eight companies (as members) in the last two years, and there's been some consolidation already."

Wake-up call

An internal report last year by the Wyoming Department of Environmental Quality revealed several yearslong regulatory violations at the state's only operational in-situ uranium mine.

Cameco Corp.'s Smith Ranch-Highland mine north of Douglas was accused of, among other things, long delays to restore groundwater in several production fields. This summer, Cameco settled a "notice of violation" with DEQ for $1 million. The company will pay an additional $400,000 if it doesn't maintain its agreed-upon restoration schedule, according to DEQ.

Several leaders in the uranium mining industry have expressed frustration at DEQ over the case because the violations were mostly in documentation which remained "in full view" of DEQ the whole time.

"I think industry has a valid point. If they are going to issue violations, they should do it as they occur. But the fact is violations did still occur," said Pam Viviano, who lives outside of Hulett in Crook County.

Uranium companies are exploring ore deposits just miles away from Viviano's property. She said landowners are scrambling to test their water wells so they have baseline water quality information. Landowners worry about possible cross-communication between aquifers due to extensive exploratory drilling performed in the 1970s.

Viviano said she's concerned that regulators might not have the staff or expertise to properly monitor the number of in-situ leach operations being proposed across the state.

"In a perfect world, these might all work. But things go wrong: Pumps quit working, things break. Are they (regulators) going to notice it right away? Do they have well-trained personnel?" Viviano said.

Wyoming DEQ officials said they are shifting personnel within the agency to manage the influx of permitting work, and will gradually staff up to monitor the industry as it grows.

The Nuclear Regulatory Commission said it is making the same type of adjustments. Bill von Till, branch chief of NRC's uranium recovery licensing branch, said a letter was recently issued to the Smith Ranch-Highland mine reminding mine officials that restoration of production zone aquifers must occur according to schedule.

"This is our largest producer, so we put extra staff on this mine," von Till said. "We want to make sure it is run in a safe manner."

Companies such as UR Energy said their proposed in-situ operations will perform at standards higher than required by today's set of mining regulations. UR Energy president and CEO Bill Boberg said regulatory agencies are stepping up their oversight.

"Our staff is seeing a request for more inspections by the various agencies, and we welcome the interaction - which has always been an integral part of the industry," Boberg said.

Boberg noted that DEQ did not allege any danger to human health and the environment in the recent Smith Ranch-Highland case.

"The permitting and the bonding, apparently, both needed updating from their previously approved status, and the parties responsible for that both (Cameco) and (DEQ) are now focused with a plan to proceed," Boberg said.

Lost Creek project

The ore-bearing formation 400 to 600 feet below the surface here is believed to have come from the Granite Mountains 20 miles to the northeast, which includes Independence Rock. Over millions of years, sediment washed into the Great Divide Basin, amassing 6,000 feet of "fill sediment" in one of the rare areas in North America that neither drains to the Atlantic nor Pacific basins.

About a half-dozen companies are seeking out uranium plays here. UR Energy is sizing up two fields, the Lost Soldier and Lost Creek fields. The company estimates the Lost Creek field contains about 11 million pounds of uranium in a formation stacked with about five or six layers. Each layer will be targeted with a separate set of wells.

The deposit was discovered in the mid-1970s but was never developed because the price of yellowcake didn't make it a commercial endeavor then.

To prepare the field for permitting and production, crews had to locate about 500 historic wells and plug them, according to the company. Last year, UR Energy began delineating the ore-bearing formations by drilling 225 wells. This summer there are seven rigs working to drill 400 more test holes to develop a production strategy for this 2-mile-long field.

"We're getting about a year away from construction," UR Energy's Heili said.

Once permits are obtained, UR Energy can begin drilling a series of production fields, or "units," each made up of a mix of 300 to 400 production and injection wells. Each unit is produced independently of the other.

Energy reporter Dustin Bleizeffer can be reached at (307) 577-6069 or dustin.bleizeffer@trib.com.

Fact

The energy derived from 1 pound of uranium is equivalent to 20,000 pounds of coal.

Source: Wyoming Mining Association

NEWS TRACKER

Last we knew: Several uranium companies notified state and federal officials of their intent to apply for in-situ leach uranium mine permits.

The latest: Wyoming DEQ and the Nuclear Regulatory Commission are tracking some 22 in-situ uranium mine proposals across the West, mostly in Wyoming.

What's next: Within weeks, the Nuclear Regulatory Commission expects to publish a draft "generic environmental impact statement" for in-situ uranium mining proposals.

Uranium players

Uranerz Energy Corp.

Main Wyoming properties: Powder River Basin.

Mine type: In-situ.

Projected number of employees: Between 65 and 80.

Permit applications are being processed for Uranerz's Nichols Ranch and Hank units near the Pumpkin Buttes in the Powder River Basin. President and CEO Glenn Catchpole said production could begin in 2010.

"We're looking to build a main processing plant at Nichols Ranch," Catchpole said. "In addition, we have ongoing exploration in central Powder River Basin, with five rigs running."

The company estimates there's about 2.5 million pounds of uranium in the Nichols Ranch unit, and 1.9 million pounds in the Hank unit, according to Catchpole.

The Uranerz Group was the world's third largest uranium producer when it was bought by Cameco in 1998. Uranerz recently hired Douglas C. Hirschman as head of land management.

Uranium One

Main Wyoming properties: Powder River Basin, Sheep Mountain, Shirley Basin, Greater Green River Basin.

Mine type: Mostly in-situ, and some conventional.

Projected number of employees: 200.

Uranium One is a Canadian-based international uranium company. Last year it acquired the Shootaring Canyon uranium mill in Utah, one of only a handful of existing facilities in the region. The company also purchased Energy Metals Corp., which held extensive uranium holdings throughout Wyoming, including acreage in the Shirley Basin, Greater and Green River Basin, and the Nine Mile property just north of Casper.

The company expects its Moore Ranch, Jab and Antelope properties in the Powder River Basin to come online first, possibly by 2013.

The company also issued letters of intent to begin permitting in 2009 for in-situ operations in the Ludeman and Allemand-Ross units, according to the Nuclear Regulatory Commission.

Strathmore Minerals Corp.

Main Wyoming properties: Powder River Basin, Gas Hills.

Type of mining: Conventional, in-situ.

Strathmore Minerals expects to launch in-situ operations in Wyoming by 2010, according to the company. It holds acreage in the Pine Tree project area south of Wright, and properties in the Gas Hills.

Next year, Strathmore expects to file application for an in-situ project in the Reno Creek area of the Powder River Basin, according to the Nuclear Regulatory Commission.

Strathmore has an office in Riverton. Last year, Strathmore officials said the company was among several potential suitors for Rio Tinto's Sweetwater uranium mill, which still remains on the selling block.

UR Energy Inc.

Main Wyoming properties: Powder River Basin, Great Divide Basin.

Type of mining: In-situ.

Employees: 20-plus now, 60-80 when fully operational.

President and CEO Bill Boberg said seven rigs are drilling in Lost Creek this summer, and will spend the rest of the year drilling delineation and monitoring wells for the first production unit. Production at Lost Soldier could come online sometime in 2009.

The company has several "major" properties in Wyoming; five are in the Great Divide Basin.

Cameco Corp.

Main Wyoming properties: Powder River Basin.

Type of mining: In-situ.

Employees: 140.

Cameco is the only company currently producing uranium in Wyoming. Last year, it produced a record 2 million pounds of uranium U308 from the Smith Ranch-Highland in-situ mine north of Douglas.

In July, the company submitted a plan to federal regulators to expand its permit boundary at the mine by 8,700 acres. Company officials say they will actually target only 325 acres for production, of which 120 acres are BLM-administered surface.

Cameco is the world's largest producer of uranium. It has four active mines in North America, including the Crow Butte mine in Nebraska.

Rio Tinto Energy America

Main Wyoming properties: The de-commissioned Sweetwater mill.

Last year, Rio Tinto backed out of talks to sell its Sweetwater mill north of Rawlins, the only existing conventional mill facility in the state. But now, Rio Tinto says the mill is up for sale.

"Exploration of the sale options for the mill and associated properties is still ongoing," Rio Tinto spokesman Bob Green said.

Green said the mill has been actively maintained in a "stand-by status." Maintenance includes regulator rotation of electric motors and activation of other moving parts of the mill on a periodic schedule. Green said Rio Tinto holds an active Nuclear Regulatory Commission license for the mill.

It is located in central Wyoming close other uranium players with resources that will be mined conventionally.

COGEMA Mining Co.

(Subsidiary of international uranium companies AREVA NP Inc. and Electricity de France)

Main Wyoming properties: Powder River Basin, Christensen Ranch mine.

Type of mining: In-situ.

Employees: 40.

During the coal-bed methane boom in the Powder River Basin, Cogema flirted with the idea of selling its 1,000 gallons per minute ion exchange water treatment plant at its Christensen Ranch in-situ mine near the Pumpkin Buttes. Instead, Cogema notified federal authorities it intended to restart production at the mine.

Some 5 million pounds of yellowcake was produced from five complete in-situ units at the company's Christensen Ranch mine until production stopped in 2001. The company expects that uranium produced at Christensen Ranch will be processed at the Irigaray mill several miles north. The facility had a capacity to process about 730,000 pounds of yellowcake annually.

- Dustin Bleizeffer, Star-Tribune