The Virginia company that wants to mine an estimated 60,000 tons of uranium from rolling farmland in Pittsylvania County has a new business partner: Santoy Resources Ltd., based in British Columbia, Canada.
Virginia Uranium Inc. and Santoy Resources announced their intention to merge late Monday, with a proposed exchange of stocks, cash and future interests.
If the merger is completed early next year, with approvals by company boards and regulators, the new hybrid will have more money, investment clout and expertise to pursue what geologists describe as one of the largest untapped uranium deposits in the United States - at Coles Hill, near the historic town of Chatham, about three hours west of Norfolk.
"It's really a way for us to raise money, for the future and long term of the project," said Walter Coles Sr., whose family farm sits atop the Southside uranium deposit, estimated to be worth $10 billion.
Santoy is considered a junior mineral exploration company that has been acquiring interests in uranium deposits across Canada, as well as the rights to oil, gas, methane and gold resources.
Coles and his allies still need a favorable study to be concluded on the potential environmental, public health and social implications of mining so much radioactive material from the ground.
Then they would need the votes to overturn a 25-year-old ban on uranium mining in Virginia.
And after that, state regulations would have to be written, permits obtained and infrastructure built before any uranium could be extracted and converted to fuel for nuclear power plants.
Environmentalists and the city of Virginia Beach are among the opponents. Virginia Beach is especially worried that uranium wastes could leach into streams that feed Lake Gaston, the city's primary drinking water supply.
Todd Benson, with the Piedmont Environmental Council, said the proposed merger illustrates an increasingly complex web of companies and interests in Virginia that poses a fundamental question:
"Who ultimately is responsible for cleaning up an accident or spill?" Benson asked. "Is it Walter Coles and Virginia Uranium? A Canadian company? Or someone else that we may or may not know about?"
He noted that there are at least three companies mixed into the Santoy merger: Virginia Uranium Inc., Virginia Uranium Ltd. and Virginia Uranium Holdings.
In a statement, Virginia Uranium said it "welcomes the pending strategic merger," that VU Ltd. currently owns a 12 percent stake in VU Holdings, and that as a result of the deal, Santoy's interests in VU Holdings will jump to 20 percent from 12 percent.
Scott Harper, (757) 446-2340, scott.harper@pilotonline.com
http://hamptonroads.com/2008/12/virginia-uranium-company-teams-canadians
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