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Virginia's Coles Hill Uranium Deposit Faces Crucial Vote As Russia Takes Uranium One

Virginia Energy's roster of management and shareholders includes some of the most prominent names in the resource investment sector. Both Peter Grosskopf, CEO of Sprott (TSX:SII), which holds a 19.9-percent interest in the company through Sprott Resource (TSX:SCP), and Ron Hochstein, president and CEO of Denison Mines (TSX:DML,AMEX:DNN), are on its board of directors. Other shareholders include Lukas Lundin of Lundin Group and Lundin Mining (TSX:LUN), Energy Fuels (TSX:EFR) and Pinetree Capital (TSX:PNP).

Legislators to weigh economic upside with potential risks

Virginia Governor Bob McDonnell's Uranium Working Group is expected to release shortly a final study on uranium mining's potential socioeconomic impact on the state; that report will no doubt factor into lawmakers' decisions on the bill.

Supporters of ending the ban say that doing so would have a positive economic impact, pointing to a state-commissioned study by Chmura Economics & Analytics, which notes that a full-scale operation at Coles Hill could “support 1,000 jobs a year and generate nearly $5 billion in revenue for Virginia businesses over 35 years.”

Southside Virginia suffers from a high unemployment rate, and Virginia Energy has said that nearly all employees at the Coles Hill operation will come from the region. Production from the proposed Coles Hill mine would benefit the state's energy budget as well, since nuclear power provides more than 35 percent of Virginia's electricity supply and requires approximately 1.6 million pounds of U3O8 annually.

A diverse variety of organizations oppose the ban, including the NAACP, the Virginia Farm Bureau Federation and neighboring municipalities such as Virginia Beach. Five of the state's legislators — including Republican Senator Frank Ruff, a member of the Senate Agriculture, Conservation and Natural Resources committee — have submitted a letter to the General Assembly in support of the state's ban on uranium mining.

Those in favor of keeping the ban believe the potential upsides of uranium mining do not outweigh the unknown risks to the environment and nearby communities. Environmental groups have pointed out that the state's mining industry and regulators do not have experience mining uranium in the East Coast's wet climate and fear the risk of tailings contaminating the region's water supply. Virginia Energy Resources has said mining and milling at Coles Hill can be done safely and has noted that the company will store waste in below-ground containment units.

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