That the company has destroyed a lot of investor equity over the years is a matter of record. That its persistent pursuit of permits to start its water-based in situ uranium recovery venture in the Black Hills has been the basis for the company's claims of better times ahead is obvious. That some believe the effort is really a calculated manuever to do nothing more than drive up the price of Powertech stock is a reasonable conclusion. This company lives in the "penny stocks" world, which is so loaded with disclaimers and warnings that most serious investors shun them. NASDAQ itself issues a rather stern and unequivocal warning about these companies, which include stocks like Powertech, that can't even be bought through conventional means. Ask your brokers about the much-disdained "pink sheet" list of stocks.
And why does the conclusion that Powertech's main goal is to drive up the price of its stock by blowing smoke about the company's expectations seem reasonable? Well, you have to look at the global market for uranium itself, which collapsed after the Fukushima nuclear power plant disaster a few years ago. The price has fallen by more than half, which dealt a sharp blow to Powertech's prospects. One local analyst (sorry, no names, no genders) tells me that the price of uranium is below the cost of mining it in the Black Hills. If correct, then Powertech's reason to exist is all about getting some sort of a bounce in the price of its stock, which calls for a full frontal public relations assault by the company's touts. Dr. Lilias Jarding of Rapid City, South Dakota, has been so incensed by the company's efforts at doing so that she just fired off this letter to Canada's Securities Commission, complaining about the company's misstatements, which she believes are intended to mislead both the general public and potential investors in Powertech stock. I think her concerns have merit, and I hope Canadian regulators look into this:
P.O. Box 591
Rapid City, South Dakota 57709 USA
May 8, 2014
4th Floor, 300 – 5th Avenue S.W.
Calgary, Alberta, Canada T2P 3C4
RE: Powertech Uranium Corp./Azarga Uranium Corp.
Stock Exchange: TSX
Stock Symbol: PWE
CUSIP Number: 739369
Dear Securities Commission:
I am writing in regards to a pattern of misstatements made by Alexander Molyneux, the Chairman of Azarga Resources, which is in the process of merging with Powertech Uranium Corp. to form Azarga Uranium Corp. Powertech is organized in British Columbia. Mr. Molyneux has made these statements about its proposed Dewey-Burdock uranium mining project, which would be located in Custer and Fall River Counties in South Dakota, USA. His misstatements include:
1. Statement at the Mines and Money 2014 conference in Hong Kong, China, which took place March 24-28 – http://vimeo.91522838 at 7 minutes and 23 seconds. Mr. Molyneux says that Powertech’s Dewey-Burdock uranium mine project is the first to be permitted in the United States and says that the company’s customers are utilities.
The reality is that neither Powertech nor Azarga has any uranium customers at this time, as they have no contracts to sell uranium. In addition, the Dewey-Burdock project has not been permitted. At the time this statement was posted, the project had received no permits. Since then, it has received its license from the Nuclear Regulatory Commission (NRC), but it has not received other necessary permits, including 4 state permits, 2 permits from the Environmental Protection Agency (EPA), a potential permit from the Army Corps of Engineers, and permits from one of the counties in which its project would be located. In addition, the NRC license is under a stay, and there will be hearings on it, beginning on August 18, 2014. It could be argued that the company has only a provisional license at this time.
2. Statement in an interview with Peter Epstein at miningfeeds.com – www.miningfeeds.com/2014/04/01/powertech-uraniumazarga-resources-is-compelling-uranium-platform/ Mr. Molyneux, again talking about the Dewey-Burdock project, says, “All the State hearings have been held and the State basically came back saying they would conclude their finding when the NRC is locked in, i.e., basically a conditional approval.”
The reality is, first, that only one week of State hearings has been held by each of the Boards that sit on the company’s permit applications. These are the Water Management Board and the Board of Minerals and Environment. The Boards postponed further hearings until if and when the company received all its federal permits. Given the facts that only a few witnesses were heard at each of these hearings and that each Board schedules hearings during only one week per month, the hearings processes are likely to go on for some time – again, if and when all federal permits are received. Second, the hearings will resume not just after the NRC “is locked in,” but also after the EPA has given permits. And third, the State boards did not say that they were giving the project “conditional approval,” but only that they were postponing the hearings.
3. Statement in a press release issued on February 28, 2014, from Blumont Group Ltd., mentioning Molyneux as Blumont’s Chairman-designate, saying “Powertech’s Dewey Burdock project is the next In Situ Recovery (ISR) mine to be built in the USA which has the highest ore grade. It is due for permitting in the next 90 days”
The reality, as explained above, is that State hearings will not even resume until if and when all federal approvals are received. And the State hearings will take a number of months – probably three to five. As of today, it is still unknown when a decision might be made on the EPA permits. Before that happens, there will be a public input period. The NRC license, as explained above, goes to hearings in August. Also to state in February that the mine would be built is a stretch, as none of the numerous permits had been received.
4. Statement posted on February 26, 2014, by Tommy Humphreys titled “A New Uranium Junior to Watch” – http://ceo.ca/2014/02/26/a-new-uranium-junior-to-watch which quotes Molyneux. He is quoted, similarly to item 3, as saying that “Dewey Burdock is the next ISR mine to be built in the USA. It has the highest grade of all potential projects, and is due for permitting in the next 90 days.” My comments on item 3 cover this item, as well.
I request that you begin an immediate investigation into these misstatements and into Powertech/Azarga’s stock dealings. The statements are clearly intended to mislead the public and particularly potential stock purchasers.
If you have any questions, please feel free to contact me.
Lilias Jarding, Ph.D.