Neutron Energy, Inc.

Neutron Energy, Inc.

March 30, 2009 19:01 ET

Neutron Energy Inc. Receives Drilling Permit for Marquez Canyon

ALBUQUERQUE, NEW MEXICO--(Marketwire - March 30, 2009) - Neutron Energy Inc. ("Neutron"), a privately-held mineral exploration and development company, is pleased to announce that the Mining and Minerals Division (MMD) of the New Mexico Energy Minerals and Natural Resources Department has issued a permit to conduct drilling on the Marquez uranium deposit. The deposit is situated on the Juan Tafoya Land Corporation's Spanish Land Grant property in the eastern end of the Grants Uranium Belt in McKinley County, New Mexico.

"We are delighted to have received this permit and we appreciate all the efforts and hard work that the Director and the staff of the MMD undertook in the thorough evaluation and issuance of the permit which ensures protection of the environment and public health and welfare. We are also extremely gratified by the overwhelmingly strong community support for our project which was expressed at the public hearing in the City of Grants. This permit represents one of the first steps for heirs of the Land Grant to receive the financial benefits and employment opportunities from the development of their resources," stated Dr. Gary C. Huber, President of Neutron.

The permit represents the first major uranium drilling permit (Part 4) issued by MMD since the adoption of the New Mexico Mining Act of 1993. As part of our careful planning process, Neutron conducted extensive environmental baseline studies in order to identify avoidance areas or to minimize and mitigate the impact of our activities on the natural environment. These studies included surveys for threatened and endangered wildlife (mammals and reptiles), songbirds and raptors, and vegetation species, archeology and cultural resources. In addition, Neutron conducted background radiological surveys and surface and ground water sampling. Multiple state agencies reviewed the application under the umbrella of the MMD permitting process, local Indian tribes were consulted and over 200 people attended a public hearing on the permit application in November, 2008.

More than 570 drill holes were drilled on the Juan Tafoya project during the 1970s and this newly issued permit allows drilling up to 44 holes to confirm and potentially increase the resources of the Marquez uranium deposit. The permit also provides for the conversion of selected drill holes into monitor water wells in order to monitor the ground water status within the project area in anticipation of a future mine permit application.

Neutron is leasing the land from the Juan Tafoya Land Corporation, which is owned and controlled by the heirs of the Spanish Land Grant that covered this portion of the State. As part of Neutron's support to the land grant community the Company provides $30,000 annually for educational scholarships to descendents of the Land Grant heirs, and since 2007 a total of 20 grants have been awarded. In addition to a sliding scale royalty that will be paid to the Juan Tafoya Land Corporation from the production of minerals from any mine on the property, Neutron has committed in its lease agreement to an annual payment of 1% of the net profits from any mine developed on the project to be used for social services or community projects on the Juan Tafoya lands. Development of the Marquez deposit will provide many new employment opportunities for both the heirs of Juan Tafoya and individuals from the surrounding region. This development will also create the opportunity for employees to learn new and valuable job skills, and will provide a significant new source of tax revenue for county and state governments, benefiting not only the citizens of west-central New Mexico, but the state as a whole.

The project is located in the eastern end of the Grants Uranium Belt. The original development of the uranium deposits at Juan Tafoya occurred in the mid 1970s by a New Mexico based mining company which was funded by a New York based utility company. The utility funded approximately $65 million of exploration, mine and mill development costs prior to cessation of the project due to the collapse of the uranium market in the early 1980s. This cessation occurred before the conventional underground mine was fully developed and before any uranium was produced from the project. The original development work included sinking a 14-foot diameter production shaft to a depth of 1,840 feet, drilling of a ventilation shaft to approximately 2,100 feet and construction and licensing of a 2,200 ton per day uranium mill. Subsequently, the mill and the head frame above the shaft were dismantled and removed from the property. The production and ventilation shafts remain intact as well as substantial mining related infrastructure related to the original development.

New Mexico is uniquely positioned to be the United States leader in alternative energy with the fueling of zero carbon emission nuclear power generation. Greenhouse gas emissions from hydrocarbon-based electrical power plants are a major concern for global warming, and nuclear electrical power generation does not generate any carbon emissions such as CO2 gas. PNM, New Mexico's electrical utility, obtains over 25% of its electrical generation from clean-air nuclear power produced at the Palo Verde plant in neighboring Arizona. The State of New Mexico is recognized worldwide for its role in nuclear research with the Los Alamos and Sandia National Laboratories. The state also hosts the Waste Isolation Pilot Plant facility which is an international model for a deep geologic repository of radioactive material. With the impending startup of the LES National Enrichment Facility for processing uranium fuel, and coupled with future reactivation of mining in the Grants Uranium Belt, New Mexico would become a leader in the field of alternative clean-air energy production. From 1950 to 1978, during the last period of strong uranium mining and production, the Grants Uranium Belt yielded approximately 40% of the entire total United States uranium-ore production. This belt is the largest uranium resource in the United States.

Neutron is a privately-held natural resource company and this press release is for informational purposes only and does not constitute an offer to sell or a solicitation to purchase any securities. Statements made which are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and involve a number of risks and uncertainties that could cause actual results to differ materially from those projected, anticipated, expected or implied. These risks and uncertainties include, but are not limited to, metals price volatility, volatility of metals production and costs, exploration risks and results, political risks, project development risks, labor issues and ability to raise financing.

Contact Information

  • Neutron Energy Inc.
    Rick Karlson
    Manager Project Development
    (505) 344-8368
    Neutron Energy Inc.
    Gary C. Huber
    (303) 531-0470