Virginia Energy Resources Inc. (TSX.V: VAE)(OTCQX: VAERF) is pleased to report a new state-sponsored economic study by Chmura Economics & Analytics indicates that the Coles Hill uranium project would bring much needed jobs, tax revenue and investment to an area of Virginia that remains economically depressed. The study says that the mining operation Virginia Uranium Inc. has proposed for Coles Hill would support a total of more than 1,000 direct and indirect jobs and have an annual net positive economic impact of approximately $135 million. The study predicts that over the 35-year life of the operation, the Coles Hill site could generate almost $5 billion in net accumulated economic revenue for Virginia firms.
Based on the current tax code, Pittsylvania County is expected to receive an annual average of $1.1 million in tax revenues from the operation, while the state government is expected to collect $2.1 million per year. Cumulative state and local tax revenues during the life of the mine would reach $112.9 million. However, Chmura notes that Virginia law allows localities to levy a severance tax on natural resources extraction, based on the gross receipt of the mining business. Adopting a 3 percent severance tax for uranium would yield as much as an additional $3.6 million of average taxes per year for local coffers, or an additional $126.0 million of taxes over the life of the mine.
Moreover, "Chmura judges that the Coles Hill site will not adversely affect the image of the region nor erode the quality of life for the residents of Pittsylvania County.... the added economic benefit will likely improve the quality of life via increased economic opportunities." Given the most likely operating scenario, Chmura deems tourism, the agricultural sector, and private schools in the area unlikely to experience any decline at all due to a uranium operation at Coles Hill.
Chmura's favorable conclusions are predicated on the assumption that the project will be continuously operated and ultimately decommissioned within established federal guidelines, which, by law, reduce environmental and public health risks to the surrounding communities to near negligible levels.
The report states that any additional costs to the Commonwealth of Virginia to regulate uranium mining would be relatively minimal. Current federal law stipulates that the Nuclear Regulatory Commission (NRC) would manage and regulate the milling portion of the Coles Hills site. Chmura comments that the Virginia Department of Mines, Minerals, and Energy (DMME) has adequate resources and the technical expertise to manage the mining portion of the uranium operation. In fact, the Virginia DMME has longstanding experience in successfully supervising a variety of underground mining operations in terms of ensuring mine worker safety, environmental protections, and public health.
In 2010, Virginia's Coal and Energy Commission unanimously selected Chmura to weigh the potential economic benefits and socioeconomic costs of uranium mining in Virginia. Funded by a grant from Virginia's Tobacco Commission, Chmura's report "provides a framework for Virginia legislators to assess and balance the health and environmental risks against the economic rewards inherent to this industry" as they consider lifting the moratorium imposed on uranium mining in Virginia in the 1980s.
Walter Coles Jr., President and CEO of Virginia Energy commented, "It is gratifying that this extensive study shows decisively that the development of the Coles Hill uranium deposit has the potential for boosting the quality of life in Southside Virginia and creating a powerful new source of tax revenue for the locality as well as the state. This information should reinforce investor confidence in a promising project and reassure the residents of Southside, who stand to gain a great deal from a safe uranium-mining operation. We hope this information will be carefully considered by legislators as they consider removing the current moratorium on uranium mining."
The National Academy of Sciences (NAS) is expected to release its study on the safety of a modern uranium mining industry in the state of Virginia in early December 2011. Pending a positive outcome from the NAS study, the Virginia state legislature would then be in a position to consider lifting the moratorium on uranium mining in Virginia during the January 2012 legislative session.
About Virginia Energy Resources Inc.
Virginia Energy Resources Inc. is a uranium development and exploration company. The Company holds a 29.4% stake in the advanced stage Coles Hill uranium project in Virginia. Additionally, the Company is pursuing active exploration programs in the Athabasca Basin on its Murphy Lake and Hatchet Lake uranium properties, which are held in a 50-50 Joint Venture with Denison Mines Ltd., and its 100% owned uranium properties in the Otish Basin of Quebec. The Company is also a 37% shareholder of Boss Power Corporation. Virginia Energy Resources Inc. trades on the TSX Venture Exchange under the symbol VAE and on the OTCQX under the symbol VAERF.
On Behalf of the Board of Directors
VIRGINIA ENERGY RESOURCES INC.
Walter Coles Jr., President & CEO
Neither TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.
This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. All statements other than statements of historical fact included in this release, including, without limitation, statements regarding future plans and objectives of the Company are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future results, events and objectives could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations include exploration and other risks detailed from time to time in the filings made by the Company with securities regulators.