Is Virginia Uranium Quickly Running Out of Money?

By Peter Galuszka

Just how financially viable is Virginia Uranium, which appears to be losing its battle to lift a 31-year-old ban on uranium mining in Virginia?

Corporate documents filed with Canadian securities regulators state that as of last September, Virginia Energy Resources Inc., Vancouver, British Columbia-based parent of Virginia Uranium that wants to mine a 119-million pound deposit of uranium near Chatham, was having serious problems with financial losses and cash flow.

According to documents obtained through Canada’s System for Electronic Document Analysis and Retrieval (SEDAR): “For the period ended September 30, 2012, the Company incurred an operating loss of $5,354,146, and has an accumulated deficit of $17,109,894, limited resources, no source of operating cash flow and no assurances that sufficient funding will continue to be available.”

For several years, Virginia Uranium has funneled cash and gifts to legislators to influence them to support ending the state’s uranium mining moratorium. The effort appeared to fall apart when State Senator John Watkins, R-Powhatan, withdrew a bill that would have ended the ban and started setting up the regulatory to allow mining. He did so before it was due before an unfriendly Senate committee that most likely would have killed it.

Lobbyists are now focusing on Republican Gov. Robert F. McDonnell to get the issue moving again before Tuesday, known as the “crossover” day or the last day in a General Assembly session that a bill in one chamber can move to the other. A bill similar to Watkins’ is in the House of Delegates but, so far, McDonnell seems to be avoiding taking a stand on uranium.

Despite having paid legislators to go on trips to France, including stopovers in Paris and Canada, to drum up support for uranium mining, there were hints that something was amiss financially. In 2011, Virginia Public Access Project records show that Virginia Uranium spent $120,000 on gifts – the most of any company in the state. This past year, that amount dropped to $107,000. With the exception of Democrat Richard Saslaw, most of the money went to Republicans.

So, big questions loom.  Would McDonnell kick start the move for Virginia Uranium as it struggles with money? Why would the General Assembly seriously consider spending millions in new expenses setting up as many as 30 new regulators to handle uranium mining?

Watkins and others have said that Virginia Uranium would pay for the cost so it won’t fall on taxpayers. But how could that happen if the firm itself seems to be running out of money?

3 Responses to Is Virginia Uranium Quickly Running Out of Money?

  1. Those are all perfectly legitimate questions to ask. However, from your description, it sounds like Virginia Uranium was established and capitalized for the sole purpose of opening up the Pittsylvania property for uranium mining. Once it obtained the needed regulatory permissions, the company would have no problem raising the money it needed to develop the property.

    What I’d like to know is who capitalized the company.

  2. I hear British Columbia is beautiful. Why don’t you get a plane ticket and check it out?

  3. Always incorporate a separate company to isolate the liability (financial and otherwise) to the subsidiary. All the more reason to understand how Virginia Uranium will pay for any clean up that may have to be done (in a “bad case” or “worst case” scenario).

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