Weak uranium prices have prompted World Wide Minerals (WS-T) to place the Dornod project in Mongolia on hold.
The project is owned by World Wide’s 58%-owned subsidiary, Central Asia Uranium Company (CAUC), which had planned to expand, modernize and reduce costs at the mining complex. Wallace Mays, World Wide’s president, says the decision to suspend operations “is important” to the effort being made to reduce ongoing costs.
In order to reduce costs when the Dornod project is reactivated, the company intends to house employees at a mine site camp, rather than in the nearby town of Mardai.
World Wide had intended to begin producing this year at the annual rate of 800,000 lbs. U3O8, rising to at least 2.6 million lbs. per year by 1999-2000. Mays says several factors led to the decision to place the project on hold, including uncertainty over the marketing of uranium under the Russian agreement and negative market effects from additional uranium inventories in the U.S. He adds that the continuing depressed prices “cannot support the construction and operation of any new uranium mine at any location.”
Despite the weak markets, World Wide intends to continue its focus on uranium elsewhere in the world. Earlier this year, the Toronto-based company entered into a joint venture to exploit in-situ-leachable uranium deposits in southern Texas. This project is held 75% by World Wide and 25% by a Texan partner.
About the same time, World Wide filed a lawsuit in the U.S. against the government of Kazakstan in which it is seeking damages of at least US$250 million related to a derailed uranium project in the country.
After spending millions on the project, World Wide says the government refused to issue promised uranium export licences, and then illegally cancelled the company’s management and option agreement.
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