According to Strateco Resource's (RSC:TSX) CEO, Guy Hébert, a group of the company's US shareholders intend to challenge Quebec's recent resistance to uranium exploration and mining. In March, Quebec environment minister, Yves-Francois Blanchet announced a moratorium on all uranium exploration and mining until the government had the opportunity to review and submit an environmental report on the potential impacts. This development included Strateco's Matoush uranium project. Matoush hosts 7.8 million pounds of Indicated uranium resources and another 19.2 million pounds in Inferred.
Although the company has received federal authorizations as well as a Canadian Nuclear Safety Commission permit for exploration, the company has been waiting over 2 years to obtain a certificate of authorization from the province of Quebec in order to start underground exploration work. In June, Mr. Blanchet informed the company he would be rejecting their exploration permit due to a "lack of sufficient social acceptability".
The Grand Chief of the Grand Council of the Cree Nation said: “We don’t want uranium. They have not answered the environmental questions. And I think we’ve come to a point where we’re saying ‘Just scrap it. We don’t need it.”
The level of misunderstanding of uranium exploration and mining is shocking. Uranium exploration is no different than any other mineral exploration. However, given the recent Japanese catastrophe, it appears uninformed individuals with political power have grabbed onto these headlines in an attempt to gain the votes of the anti-nuclear crowd. There is no correlation between the potential disasters associated with nuclear power plants and the exploration and exploitation of uranium ore other than uranium is an input for nuclear energy.
Another uranium explorer which was hit hard from this resistance in Quebec to uranium exploration is Uracan Resources (URC:TSXV). Uracan owns the North Shore project in Quebec which hosts nearly 7 million pounds of U308 in the Indicated category and another 37 million pounds of uranium in Inferred. The project was developing well, with much exploration success focusing on near-surface bulk tonnage uranium zones. However, once the anti-nuclear crowd got involved, the project lost steam as did the stock price.
Uracan has the most impressive board for a company with a $1.5 million market cap with Clive Johnson, Gregg Sedun and Gordon Keep on the board (to name a few) of this micro-cap explorer. After battling with misinformed politicians and activists in Quebec, the company has moved to a more mining friendly jurisdiction in Saskatchewan. They are focused on recently acquired assets in the highly prospective Athabasca Basin and under the leadership of the impressive board and new President & CEO, my friend, Marc Simpson, I have no doubt the downside in this micro-cap is limited. The market is giving URC very little in the way of a 'management premium' especially when you compare the premium offered to Newmarket Gold which is currently valued at $25 million yet only has $4 million in cash, no assets but a board that includes Randall Oliphant and Lukas Lundin.
It will be interesting to see how successful these shareholders of Strateco are. Although the names of the shareholders taking legal action are unknown, some of their larger shareholders include Sentient Group and Goodman & Co. In late 2012, Lone Pine Resources (LPR:TSX) filed a claim under Chapter 11 of NAFTA seeking $250 million in damages from the Canadian government following Quebec's decision to cancel their oil and gas exploration permits.