The corporation that wants to mine for uranium in southwest South Dakota has strengthened itself with a merger agreement, according to a Monday news release.
Azarga Uranium Corp., through its subsidiary, Powertech (USA) Inc., is seeking regulatory approval to mine in the Dewey-Burdock area near Edgemont, at the southwest edge of the Black Hills.
Azarga’s merger agreement is with URZ Energy Corp., which has been studying the uranium potential of the Gas Hills area between Riverton and Casper in central Wyoming.
The CEO of URZ, Glenn Catchpole, will be appointed chairman of the merged corporation’s board, and Azarga’s president and CEO, Blake Steele, will continue in his current role.
Steele said in the news release that the merger will position Azarga “to continue to advance development of Dewey Burdock for the benefit of all shareholders.”
Azarga and URZ are each publicly traded in Canada. Azarga has corporate offices in Colorado and Hong Kong, plus a Powertech office in Edgemont. URZ Energy’s head office is in Vancouver, Canada, and Catchpole’s office is in Casper, Wyo.
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If shareholders of the corporations approve the merger at meetings next month, Azarga will acquire all of the issued and outstanding shares of URZ for consideration of two Azarga shares per each URZ share, the news release said.
An Azarga $1.8 million loan (in U.S. currency) that is payable to shareholders will be converted into shares at 25 cents per share (in Canadian currency). Also, URZ has agreed to advance Azarga $465,000 in U.S. currency by way of a secured loan.
Powertech’s effort to mine the Dewey-Burdock area dates to at least 2005, when the company began acquiring mineral claims there. But the effort has been mired in the regulatory approval process ever since. Various permits from federal, state and local agencies are still under consideration.
The project has also faced opposition from groups and individuals who fear potential water pollution from mining. And Native Americans have expressed concerns about the potential damage to cultural and historical sites in the mining area. Besides being on land that was formerly part of the Great Sioux Reservation, the mining project would be adjacent to the Black Hills, which is an area of traditional spiritual significance for many tribes.
Historically, the Edgemont area was mined for uranium from the 1950s through the 1970s. Uranium mining boomed throughout the West during that period as the U.S. government rushed to enrich uranium for a Cold War buildup of nuclear weapons. The uranium was extracted from ore that was dug up or blasted out of tunnels and open pits.
Today, uranium is mined primarily for use in nuclear power plants. The proposed mining near Edgemont would be conducted by a newer method known as “in situ,” which is a Latin phrase meaning “in its original place.” Underground water at the mine site would be enriched with oxygen and carbon dioxide, and the resulting solution would be pumped underground to dissolve uranium from ore. The uranium would be pumped to the surface for processing. After mining, the water-based solution would be treated and pumped into underground disposal wells.