New owners for Coles Hill uranium deposit

There’s a new owner of a large uranium deposit in Pittsylvania County, but they’re no closer to mining the valuable mineral.

Consolidated Uranium and Virginia Energy Resources have reached an agreement where Consolidated will acquire all of the shares of Virginia Energy.  Virginia Energy owns 100% of the Coles Hill Uranium Project, east of Chatham.  It is the largest undeveloped uranium deposit in the U.S. and among the largest projects by total uranium resources in the world. The Project is held through a subsidiary of Virginia Energy, Virginia Uranium, Inc., which controls the mineral rights, certain surface rights, and leasehold development and operating rights at Coles Hill.

CUR also gets the mineral rights, surface rights, and operating rights at Coles Hill. 

In 2019, the Supreme Court upheld Virginia's uranium ban, ruling 6-to-3 that the federal Atomic Energy Act does not supersede the state law. The mineral reserve beneath Coles Hill is worth an estimated $6 billion. Virginia Uranium re-launched efforts to mine the site 15 years ago.

Despite the stalemate, CUR company leaders are optimistic about eventually being able to tap into the deposit.  In a statement to shareholders, CUR noted that Virginia currently has four nuclear reactors in operation providing 14% of the annual electricity generated in the state. On Oct. 3, Governor Glenn Youngkin, released the “2022 Energy Plan.” Central to this plan was Youngkin’s assertion that the state should go “all-in” on nuclear innovation.

“This level of support for nuclear energy at the state level, combined with the local support for Coles Hill, gives CUR confidence that the moratorium on developing uranium projects in the State may ultimately be overcome and the risk/return profile of the Transaction is extremely compelling,” said Philip Williams, Chairman and CEO of CUR.

“We are very excited to enter into this agreement to acquire Virginia Energy. The acquisition of Coles Hill complements our existing U.S. portfolio of assets, while significantly increasing our uranium exposure globally. We believe the future does not have to mirror the past particularly for a large uranium resource in the U.S. where increasingly, the need for new sources of domestic supply is becoming a critical issue for utilities and politicians alike,” Williams added.

Walter Coles Sr., Chairman and CEO of Virginia Energy, said, “We see this transaction as a tremendous outcome for Virginia Energy shareholders who will receive an immediate and substantial premium to the Virginia Energy share price. Importantly, the transaction will preserve our shareholders’ exposure to the Coles Hill project. We feel very confident that, over time, our vision for Coles Hill to become an important source of U.S. uranium production for the domestic nuclear industry will come to fruition.”