A clearly-defined regulatory framework for uranium exploration
U3O8 Corp. was founded on the premise that the Roraima Basin in Guyana, South America is a geological look-alike to Canada’s Athabasca Basin that contains about one third of the world’s uranium reserves. The largest part of the Roraima Basin lies in Venezuela, extends eastward into Guyana, and a small part lies to the south into Brazil. Of the governing regulations in these three jurisdictions, Guyana offered a clearly-defined and secure permitting process for uranium exploration.
Led by the Prime Minister, the Guyana Geology and Mines Commission (GGMC) is responsible for granting exploration and mining licenses. Each step of the regulatory process is subject to a public review period. To maintain permits and licenses in good standing, a company must meet well-defined conditions including quarterly reporting of expenditures, exploration activities and results, compliance with socio-environmental standards, work commitment, financial requirements and monitoring visits by the GGMC.
A mine development requires a feasibility study that contains a detailed mine plan , an environmental impact study and environmental management plan pursuant to an Environmental Permit.
Any exploration and mining on Amerindian lands must be approved by that local community in concert with the Ministry of Amerindian Affairs in a tripartite system that provides for open communication and transparent negotiations.
U3O8 Corp. also complies with strict standards of corporate disclosure and transparency as a publicly-listed company on the TSX Venture Exchange.
Guyana’s regulatory regime allows for three types of large scale licenses:
1. Reconnaissance Permit
2. Prospecting License
3. Mining License
Reconnaissance Permit
The first regulatory step is application for a Reconnaissance Permit (specifically called Permission for Geophysical and Geological Survey), which grants permission to explore for a specific mineral(s) over a typically large land area. As required by law, a Notice of Intention is first published in the Official Gazette of Guyana for a statutory 21 days, announcing the GGMC’s intention to grant such permission. U3O8 Corp. was granted permission to explore for uranium over a total of approximately one million hectares, covered under two permits. Reconnaissance Permits are typically valid for three years and the entity that holds the permit must comply with certain conditions. Given U3O8 Corp’s continued commitment and significant exploration funding in the permit areas, the Guyana Government granted further extensions on the company’s two Reconnaissance Permits, which are now valid until November 2010 and May 2012 respectively.
Prospecting License
The second regulatory step is the application for Prospecting Licenses. Prospecting Licenses are applied for prior to the expiry of the Reconnaissance Permit , subject to a 21-day publication period and reviewed by the GGMC Board of Directors before ministry approval can be granted. A Prospecting License provides for exploration on specific areas of interest, up to a maximum size per license, within U3O8 Corp’s original larger reconnaissance permit area. Prospecting Licenses are valid for three years and may be extended for another two years subject to maintaining good standing with the Guyana Government, as dictated by certain clearly defined conditions.
As detailed in its Reconnaissance Permits, U3O8 Corp. may apply for a set number of Prospecting Licenses to continue its exploration over specific areas that it considers to have good potential for uranium. If all of its Prospecting Licenses are granted, U3O8 Corp’s exploration would continue in about 15% of its one million hectare reconnaissance area or around 155,000 hectares. In 2007, we started applying for Prospecting Licenses over priority areas of interest. We have received five Prospecting Licenses to date.
Mining License
If an economically viable uranium deposit is discovered, an application is made for a Mining License, valid up to 20 years, with possible renewals beyond that limit. The application is subject to a public review period and must be supported by a Positive Feasibility Study, Mine Plan, Environmental Impact Study and an Environmental Management Plan pursuant to an Environmental Permit to be granted by the Environmental Protection Agency of Guyana.
While U3O8 Corp. has achieved a major milestone in reporting an initial uranium resource in Guyana, further and ongoing exploration is required to prove whether we have found a potentially economically viable uranium deposit. Only thereafter, the commercial and environmental assessments could be undertaken that are required to apply for a Mining License to develop a mine.
Should U3O8 Corp. achieve its objective of an economic size uranium deposit in Guyana, a prospective mine could cover about a 2,000 hectare area or well under 1% of the original land surface covered by its Reconnaissance Permits.
Exploration on Amerindian Lands
Exploration and development on Amerindian lands in Guyana requires prior written agreement by that local community, the Ministry of Amerindian Affairs and the company. Only thereafter, can an application for the necessary permit or license to explore or mine be submitted to the GGMC.
Before exploration can commence on lands owned by indigenous peoples, a preliminary meeting is held between the exploration company and the community. If the Amerindian community is interested in pursuing discussions, the community makes a written petition to the Ministry of Amerindian Affairs who may, at its discretion, provide written authorization to the exploration company to continue dialogue with that Amerindian community. Only then do official negotiations commence between the exploration company and the Amerindian community, which are always carried out in the presence of a member of the Ministry of Amerindian Affairs and the GGMC. This tripartite system provides for an open forum and transparent negotiations.