Report: Johnson County May Back Uranerz Energy's $20 Million Bond Application
Johnson County's Commissioners, at their Tuesday meeting, heard a presentation from Dave Spencer with the Wyoming Business Council and Glen Catchpole from Uranerz Energy Corp. to ask the commission to sponsor an Industrial Revenue Bond application with the Wyoming Business Council through a Wyoming State Treasurer's program.
The $20 million bonds, if sponsored by the county and approved by the state, will be used to finish the company's ISR, or In-Situ Recovery mine at Nicholls Ranch in the Pumpkin Buttes area of southern Johnson County.
According to information provided to the commissioners by Uranerz, they are in the mid-stages of constructing their mine, with dirt work completed, buildings up, equipment being installed and the nearby well field nearly complete.
The $20 million in bonds will be used to complete the construction and get the facility operational.
Uranerz currently has 38 employees with 10 in the Casper Office and 28 at the mine site. Once operational, according to their information, they will make significant contributions to the state and to Johnson County through severance and ad valoram taxes, property taxes and sales tax. There will be a well-paid workforce contributing to local economies as well. The expected mine life is between 10 and 20 years.
The commissioners chose to hold a hearing to gain public opinion on the matter, which will be scheduled soon.
Thanks for posting this update on the $20 Million bond issue.
Wow! Obama was right. Government does build it. The funds are not for infrastructure like roads but "The $20 million in bonds will be used to complete the construction and get the facility operational." With 38 employees working 10 years divided into $20 million equals $52,631,58 each employee will need pay to the state over the next 10 years. That equals $5,261.16 a year that each employee needs to contribute each year. And they expect to get that from the employees who will "make significant contributions to the state and to Johnson County through severance and ad valoram taxes, property taxes and sales tax. (I haven't considered issues special to the bonds).
Question: Why would Johnson County agree to such a bond? Is URZ going to stop the mine if they don't get the bond passed?
The answers are "Johnson County Should Not Bond URZ even though they will probably grant it, and URZ will finish the mine even without the bond.
First, Johnson County isn't "bonding" Uranerz. The funds are provided by the State of Wyoming, which has a huge budget surplus. Besides education, this is one of the ways they use their surplus, providing financing for small local companies to expand. The money isn't a grant, it's an interest bearing loan, so the state actually turns a profit on the transaction.
Almost all of Nicholls Ranch was finished when I visited, but drilling two 10,000 foot disposal wells is going to cost at least $10 million, thus the need for the state loan. I have reason to believe Uranerz has another source of money, but at a higher interest rate, so they're pursuing the state bonds so they can complete the deep water disposal wells as economically as possible.