About two dozen property owners in remote northwestern Fremont County neighborhoods are fighting an Australian company that wants to explore known uranium deposits beneath their land.
The residents fear contamination of their water wells, a concern bolstered by the Fremont Conservation District’s recommendation to deny a county conditional use permit because of the potential contamination of Tallahassee Creek, which flows into the Arkansas River about 8 miles northwest of Cañon City. The 10-year permit was approved by Fremont County commissioners in October.
Some residents also are worried about the impact drill rigs, water trucks and other related traffic will have on their one-way-in-and-out road and the abundant wildlife in areas off Fremont County Road 2 west of Colorado 9.
And it created a rift in the community as residents learned that some neighbors, former area landowners and the South T Bar Property Owners Association paved the way for Australia-based Okapi Resources by selling it mineral rights and leasing surface rights for access to drill sites within its gated community. The company expects to drill about 20 exploratory wells annually for five years, according to its permit application.
The fight comes as Okapi is trying to position itself as “a new leader in North American carbon-free nuclear energy.” It has mining interests in Canada and Utah as well as in Colorado. In October, the company said it expects to seek a permit in the first quarter of 2024 for exploration of the Maybell uranium project, northeast of Maybell in Moffat County.
It also is investing in new uranium enrichment technology as global interest in the mineral increases, the United States works to shift from fossil fuels to cleaner energy technologies and the price of uranium has risen above $90 a pound.
As part of its bipartisan infrastructure law, the Biden administration created the $6 billion Civil Nuclear Credit Program to support the continued operation of existing nuclear power plants.
The Energy Department last year certified the first small modular reactor design, although that program was set back later in the year when the company, Portland, Oregon-based NuScale Power canceled its project because of costs, according to the New York Times.
However, about 20 companies are working on such advanced designs of smaller reactors, and the Energy Department this month issued a request for proposals to establish a domestic supply chain of the high-assay, low-enriched uranium (HALEU) needed to fuel them.
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Whether all the heightened interest and new technologies translate into more uranium exploration and mining in Colorado remains to be seen. But Okapi’s moves on the South T Bar Ranch properties have people on edge and worried their owners association isn’t acting in their interest.
The South T Bar Property Owners Association did not respond to a message seeking comment sent through its website contact page.
“It is very disheartening that this information was not openly provided through our POA Board, not to mention that the POA board proceeded without the best interests of our community in mind,” South T Bar property owners Corey and Katie Magstadt wrote in a Dec. 28 letter to the Colorado Division of Reclamation, Mining and Safety, or DRMS, supporting an appeal of an exploration permit the state agency granted in November.
That appeal, filed by South T Bar property owner Skip Blades, will be heard Wednesday in Denver by the agency board. Blades’ argument is that because of significant past exploration and mining in the area, Okapi has enough data to determine whether mining is feasible.
Okapi representative Tim Brown responded in an email that he did not have time for an interview before the appeals hearing.
“Under Colorado law there’s a point where you have to get a mining permit because you know that commercial quantities exist,” Blades said. “They just want to stay busy prospecting and attracting investors, waiting for the price (of uranium) to go up more.”
If that sounds familiar, it’s because it is. In 2015, the DMRS told Australia-based Black Range Minerals it was time to quit exploration drilling in the Tallahassee Creek area and get a mining permit because more than 1,400 exploratory holes had been drilled. It dropped the project.
The Tallahassee Area Community group that formed to fight Black Range Minerals disbanded after the win, and many of those residents moved away. But the uranium remains attractive to mining companies, especially as interest grows in increasing domestic production and the price rises.
Mining history
Uranium was discovered in the Tallahassee Creek area in 1954 after the Atomic Energy Commission urged prospectors in the Western United States to find and mine the mineral that was needed for nuclear energy and Cold War weapons. More than a dozen small, open-pit mines were developed in the Tallahassee area, but eventually abandoned.
Interest in uranium remained over the years, but fell whenever an accident or incident scared off investors. Overall, production in the United States stalled, including in Colorado. Still, known uranium deposits throughout the West weren’t forgotten.
In the 1970s, Cyprus Mine Corp. drilled thousands of exploratory holes and had a permit to mine the Hansen deposit that Okapi is now interested in, according to a 2013 article in The Mountain Mail. But the project died when uranium prices collapsed after the partial meltdown of a Three Mile Island nuclear reactor in March 1979 in Pennsylvania.
Eventually, large ranches in the so-called mountain district of Fremont County were subdivided into 35- to 40-acre parcels where people built homes and cabins above several uranium deposits, including two known as Hansen and Picnic Tree.
But in the mid-2000s, uranium prospectors were back. By late 2006, Australia-based Black Range Minerals had the rights to explore more than 9,500 acres in the Taylor Ranch uranium project, according to company information.
When it tried to expand exploration in the nearby Hansen and Picnic Tree deposits, it was halted by the Tallahassee Area Community group. But Black Range, which already had 49% of the mineral rights on those deposits, had an option to buy the remaining 51% from South T Bar Minerals LLC.
Western Uranium & Vanadium Corp. acquired Black Range and the option on the minerals, but decided prior to a July 28, 2019, deadline not to exercise the option, according to a 2020 annual report filed with the Securities and Exchange Commission.
In April 2022, Okapi struck its own deal with South T Bar Minerals for that 51% interest and closed three months later. Okapi, now part of Australia-based Global Uranium and Enrichment and with a U.S. branch called Tallahassee Resources LLC, now wants to do its own exploration of the Hansen and Picnic Tree deposits.
That proposed exploration of an area that’s already been drilled and its deposits defined, is the crux of Blades’ appeal. Precedent was set on that issue by a 2015 state mining board ruling that Black Range needed a mining permit to continue, said Jeff Parsons, Blades’ attorney.
Parsons previously represented the Tallahassee Area Community group in the case against Black Range Minerals through the nonprofit Western Mining Action Project.
“It is frustrating,” Parsons said. “The board has already ruled on this exact issue on this exact project.”
He said the company is arguing that it needs to do its own exploration because of Australia’s investor rules, but pointed out that some of Okapi’s employees were key players in Black Range Minerals. So, it’s essentially the same people.
Okapi argues that it must conduct its own activity to sell stock, he said. “But stock exchange rules in Australia or Canada or anyplace else should not define Colorado law.”
Residents caught unaware
Marijane and David Sisson are quickly trying to learn about Colorado’s mining laws. They are in the process of moving from Louisiana to the home they bought in the South T Bar subdivision in June.
Their home is within 500 feet of where a drilling rig would stand if the exploration permit goes forward.
“We knew that there had been mining in the past — there were uranium monitoring wells out there,” Marijane Sisson said. “We had no idea that there was anything brewing on the horizon.
“It’s uranium,” she said. “So of course it sends up red flags.”
Blades said many property owners were unaware of the proposed exploration — either their property wasn’t close enough for them to be notified or they were contacted at out-of-state addresses.
The South T Bar Property Owners Association website had no mining information on it until recently, he said.
After learning about the issue in October, Marijane quickly formed the Save Tallahassee CO group and David helped create a Facebook page to disseminate information.
About 20 residents and the adjacent J Bar Property Owners Association sent a letter to DMRS in support of the appeal. Many voiced concerns about potential water contamination and the lack of a well-maintained road into the subdivisions that would have added truck traffic if drilling was approved.
They also talked about the impact on wildlife and how mining activity was incompatible with the quiet, rural life most had sought by moving to the area.
What’s driving speculation
The renewed interest in Colorado uranium deposits may be driven in part by a Department of Energy push to increase domestic production. Those concerns grew after Russia’s invasion of Ukraine because about 12% of uranium used in U.S. nuclear power plants comes from Russia.
While sanctions against Russia halted imports of other fuels, uranium was not included.
As part of its plan to reduce dependence on fossil fuels, the U.S. Department of Energy is working to increase the use of nuclear energy.
Okapi made it clear in its June 30, 2023, annual report that it wants to be a player in the U.S. uranium industry.
“Okapi’s progress comes amid a nuclear energy renaissance as the uranium market continues to gain momentum as the globe continues to accelerate on a path to net zero. The USA continues to represent the greatest nuclear growth potential. As geopolitical tensions continue to play out in the uranium market, it is now more important than ever that the USA looks for surety in uranium supply through domestic production.
“Okapi transformed into a significant player in the U.S. uranium market with the acquisition of a 51% interest in the Hansen uranium deposit in Colorado in July 2022,” the chairman’s letter says.
Today, about 20% of electricity in the United States comes from 93 nuclear reactors at 54 power plants scattered across 28 states, but those are fueled almost completely by imported uranium, according to the U.S. Energy Information Administration. In 2022, the U.S. imported 27% of the uranium used to generate electricity from Canada, 25% from Kazakhstan and 12% from Russia, according to EIA.
There are no active uranium mines or mills in Colorado, and the White Mesa Uranium Mill in Blanding, Utah, is the only operational mill in the United States. The last uranium was produced in Colorado around 2005 in Montrose County, according to the Colorado Geological Survey.
The price of uranium also leapt up from below $50 a pound to more than $90 a pound in 2023, according to Investing News. The price rose to a 16-year high of $104 per pound on Monday after one of the world’s largest uranium miners announced it was unlikely to meet its 2024 production goals.
Still, many believe it’s unlikely that uranium mining will happen in Fremont County. Parsons said Colorado uranium is low grade compared to the ore mined in Canada and Australia, two countries friendly with the U.S.
“Every few years the price of uranium goes up and small companies come in,” he said. “The track record of these companies is that they make a lot of noise and then go away, but you have to take them seriously.”
The potential risk to groundwater if mining does occur is real, he said.
Which is why his client, Blades, is fighting to get the state to require a mining permit instead of an exploration permit. A mining permit involves more safeguards and importantly, more public input, Parsons said.
The state already is littered with abandoned mines and Superfund sites, including the still contaminated Cotter Uranium Mill/Lincoln Park Superfund site south of Cañon City, and the public has a right to demand that new mining is done properly, he said.
Jennifer Thurston, director of the Information Network for Responsible Mining, agreed that the likelihood of uranium mining in Colorado was slim.
“The uranium deposits in Colorado have a difficult time stacking up to western Canada and Wyoming,” she said. “The price of uranium has to stay sky-high and be sustained over a long period of time” for uranium production to be economically feasible in Colorado.
“This exploration is a disruption to a lot of people and to the county for very little return.”
But when speculation over uranium, fed by government investments to stimulate mining, occurs, she said, “every single deposit is going to get sniffed over. They’re out there looking at everything.
“This is an industry with a business model of attracting investment by exploring deposits,” she continued. “The hope is always that they’re going to discover more uranium.”