News

Southern MO Targeted for Uranium Drilling

February 2, 2009

The Associated Press

In Mississippi County, where nearly a fourth of the residents
live in poverty, farmers have a long history of making a living off what springs from the flat, fertile lowlands - soybeans, corn, timber.

But now a geologist has come to the area armed with decades-old
charts, promises of millions of dollars in jobs and benefits and a
theory about what may be tucked deep inside the crevices under the
Mississippi River Valley and the New Madrid Seismic Zone.

It could be one of the "biggest deposits of undiscovered uranium
in the U.S.," says John Gustavson, a geologist whose former consulting
firm analyzed data about the county in the 1980s. That data was
collected for the National Uranium Resource Evaluation program, which
was started by the federal government in the 1970s to locate U.S.
uranium.

"We are now past 30 years where uranium was of no interest," says
Gustavson, 76. "Now with the need for clean energy ... the future
market for uranium is there."

While the money uranium mining could bring southeast Missouri
appeals to some, others raise concerns about mining in the farm-rich
Mississippi River Valley and below its massive aquifer, a major source
of water for irrigation and drinking.

Gustavson, who has been coordinating new uranium testing in
southeast Missouri, is part of a recent push for uranium spurred by
rising prices and some renewed global interest in nuclear power, which
is fueled by uranium.
The number of mining claims within five miles of the Grand Canyon
alone went from about 10 in 2003 to more than 1,100 in 2008, most of
it for uranium, according to Dusty Horwitt, senior analyst for the
Washington, D.C.- based Environmental Working Group.

While uranium mining in the western U.S. has a long and
controversy-filled history, it would be new to Missouri. Gustavson has
also made initial moves toward testing in southeast Kansas and hopes
to acquire forest lands along the eastern side of the Mississippi
River for testing.

In Mississippi County, levels of uranium - which has been linked
to cancer and kidney damage after long-term exposure at elevated
levels - were below the federal standard of 30 parts per billion for drinking water
when tested 30 years ago. But Gustavson says he believes higher levels
could be deeper underground if the uranium became trapped in the New
Madrid Seismic Zone, an area of frequent small earthquakes that runs
along the lower Mississippi Valley and includes areas of Missouri,
Arkansas, Illinois and Kentucky.

"It would be like finding a gold mine," he said.

Gustavson has about 20,000 acres in the county signed up for
testing.  Results on several wells are expected in February.

Gustavson, who retired from his Colorado-based firm a year ago,
said he would spend about $1 million in Mississippi County the first
year of testing and $4 million the next year, depending on the
results.

If uranium is found, he says it would be mined and shipped to a
facility in Kentucky for processing into fuel for nuclear power
plants.
Landowners would receive a percentage of the haul, Gustavson said.

The prospect of jobs and money is important for Mississippi
County, where towns rely on agriculture, unemployment hovers around 7
percent, and according to the U.S. Census, about 23 percent of the
residents live below the poverty level.

"What he's planned sounds like a great opportunity for the people
of Mississippi County," said county Commissioner Martin Lucas. "But
it's speculative."

But Bob Criss, professor of earth and planetary sciences at
Washington University-St. Louis, said uranium mining could pose risks
to the area's aquifers. About 15 percent of the state's groundwater,
or 75 trillion gallons, is found in this southeastern corner.

"We know that aquifer is huge, it's utilized, and it's incredibly
important," he said. "And to risk its integrity would be very
serious."

While uranium mining in the western U.S. has led to claims of
cancer and land and water contamination, industry officials say new
regulations make such concerns outdated.

"You have the onset of major environmental laws like the Clean
Water Act and the Resource Conservation and Recovery Act ... which
simply didn't exist before," said Luke Popovich, spokesman for the
National Mining Association.

Gustavson too dismisses concerns about negative effects of
uranium mining. He said if uranium is found and a company becomes
involved, it would use in situ mining, which involves injecting a
mixture such as oxygen and sodium bicarbonate into the site to draw
the uranium out. He says it would not disturb land or water.

But a 2007 report prepared by the U.S. Geological Survey for the
U.S. Nuclear Regulatory Commission said while in situ mining operations
were considered "more environmentally benign" than traditional mining,
"they still tend to contaminate the groundwater."

Gustavson said he considers a uranium operation in southwest
Texas as a model for Mississippi County. A different uranium
development operation, however, has encountered opposition from Goliad
County, Texas, which filed a federal lawsuit in 2008 against Uranium
Energy Corp., claiming groundwater contamination.

The company denies allegations of groundwater violations in
Goliad County, said Lindsay Christianson, with UEC's investor
relations.

Art Dohmann, president of the Goliad County Groundwater
Conservation District, advised Mississippi County residents to become
educated about the process.

Mississippi County farmer Martin Stallings said it took some
convincing for him to sign over about 460 acres for exploration.

"I thought they were going to ruin the land," said Stallings.
"We have highly productive farmland, and we have taken good care of it for a
long time. ... Why destroy something that works?"

He stands to make $5 an acre for testing, and if uranium is found
on his land, Stallings would receive between 4 percent and 6 percent
of the price of the uranium withdrawn, Gustavson said. The higher the
price for uranium, the higher the payout.

Lucas said many farmers find those numbers tough to turn down.

"At current (uranium) prices they're told they could get $300,000
a year on a 40-acre well field," he said. "You won't want to farm that
land."

Gustavson would not detail how much money he and his investors
stand to make.

"I'm not in it for the money," he said. "I'm a geologist."