June 21, 2011 / 8:43 PM / 8 years ago

Denison says Grand Canyon mining ban "frustrating"

* Denison has 4 projects in region, 3 unaffected by ban

* Impact of ban extension on EZ Complex still unclear

* Shrs up 4.22 pct at C$1.73 in Toronto after fall Monday

TORONTO, June 21 (Reuters) - The head of Denison Mines (DML.TO) said on Tuesday he is frustrated by the U.S. government’s move to extend a ban on mining on 1 million acres of federal lands near the Grand Canyon, though the impact of the ban on his company remains unclear.

In an interview with Reuters, Chief Executive Ron Hochstein said that while three of its Arizona Strip projects are unaffected, Denison is still looking into whether the six-month extension announced on Monday will have an impact on the development of its EZ Complex uranium deposits in Arizona. [ID:nN1E75J1QF]

“If for some reason this withdrawal impacts our development of EZ, that is something that will definitely impact our production, probably within the next 5-10 years,” Hochstein said.

Denison produces some 200,000 to 300,000 pounds of uranium a year from its Arizona 1 mine in the Grand Canyon region.

Construction is underway at the nearby Pinenut deposit, with first ore expected in 2012. A third project, Canyon, has a historical plan of operations and will not be affected by the ban, Hochstein said.

In 2009, the U.S. Department of the Interior declared a two-year time-out on new mining claims in the area around the Grand Canyon as it studied its options.

Its decision to extend that ban could lead to a long-term moratorium on mining in the area and was prompted by concerns that uranium mining near the Grand Canyon could hurt water quality and tourism.

Hochstein argued that an environmental study conducted by the Interior Department had shown no significant current or future negative impact from mining in the area.

“What is extremely frustrating for me is they’ve actually gone through the process and still say ‘no’,” he said. “It’s purely pandering to the environmental and popular vote.”

Hochstein noted that because the mines are underground, the surface impact during production is minimal.

“The total area is less than 20 acres. It’s very small,” he said. “A Wal-Mart parking lot is about two or three times the size of what our total mining disturbance is.”

Shares of Denison dropped more than 7 percent on Monday on the Toronto Stock Exchange after the ban extension was announced. Shares closed up 4.22 percent at C$1.73 on Tuesday.

The company owns uranium projects in the United States, Canada, Mongolia and Zambia.

$1=$0.97 Canadian Reporting by Julie Gordon; editing by Peter Galloway

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