(The document referred to follows:)

THE CASE FOR A URANIUM-PROCESSING PLANT IN THE FOUR-STATE AREA OF NORTH DAKOTA, SOUTH DAKOTA, MONTANA, AND WYOMING FOR LIGNITE ORES

With particular reference to the proposal of International Resources Corp. (A South Dakota Corporation) by Donald Bennett, president, Four States Uranium Association

GENERAL STATEMENT

Four State Uranium Association is an association of persons interested in the development of uranium-bearing lignite ore in North Dakota, South Dakota, Montana, and Wyoming. The area covered is similar to the Williston Basin area for oil development.

The association was formed in Dickinson, N. Dak., in January 1955. After small associations were being formed in the individual areas where the lignites were being found, it was felt there should be one group representing the entire

area.

Since very few mines have had the opportunity to be commercially productive there has been no attempt to raise large funds of money and members of the association, the directors and officers have expended considerable sums out of their own pockets in hopes of making the four-State area one of the most productive uranium fields in the country.

HISTORY OF THE AREA

In as much as I have been connected in some compacity or another with the promotion of the "uraniferous lignites", since the beginning, a great deal of this history may be personal, but it is intended to set out the history as it affects the entire area.

The first claim staked under the general mining law for uranium in the northwestern part of South Dakota, was filed by J. F. Quinn, a retired cattle buyer, and his son, Robert, of Piedmont, S. Dak., in the Cedar Pass area of the Slim Buttes in Harding County, S. Dak. These claims were filed in the first part of May 1954, or nearly 4 years ago. They were not lignite in character, but were more in the nature of carnotite, similar to those in the Edgemont, S. Dak., area. The veins were somewhat thin and the only shipment made did not qualify commercially under the standards set up by Circular 5 of the Atomic Energy Commission.

Considerable work had been done by the United States Geological Survey in the lignites in Custer National Forest, which includes areas commonly referred to as the Slim Buttes, Cave Hills, Short Pines, and Long Pines, located in Harding County, S. Dak., and Carter County, Mont. The reports issued by the men of the Survey stated there were vast quantities of uranium-bearing lignite, but that the content was very low and would fall below the minimum standards set up for purchase by the Atomic Energy Commission. Be that as it may, in July of 1954, Ivan Ellis, Clarence Feigen, and others, operating under the partnership name of Cave Hills Mining Co., staked out claims on lignites in the North Cave Hills area. These lignites were very close to the surface, and in some cases actually exposed on the surface. At this time the firm of Jenkins & Hand, consulting geologists, of Casper, Wyo., were obtaining air anomalies on the lignite area, but trusting in the United States Geological Survey reports, hereinbefore referred to, they continued their search in the sandstone. Those persons of less knowledge of geology, but with a heartbeat that quickened at the sign of the needle rising on the Gieger counter, immediately started going in and staking the lignites and in short time the areas of the Cave Hills and Slim Buttes were enveloped by mining claims. These claims, moving like a flow of lava, soon reached out into the Short Pines areas, Long Pines areas, and on to many points where the Government still held the mineral rights outside of the forest reserve. In Harding County there is an excess of 70,000 acres of public domain, primarily the area consists of the Custer National Forest. I would assume that over 95 percent of this area has been staked for mining claims. In addition thereto, there have been many fee leases, and land located for mining purposes under the State laws, where the State of South Dakota held title to the minerals. Because of our system of endices and our accepted fact that prospectors are not very good surveyors, it would be impossible at this time to accurately plat the complete area covered.

Since, at that time, the Government was actively encouraging the people to prospect for uranium with new stories of bonuses, such as the possible $10,000 bonus, and the "uraniumaire" stories of rags to riches, i. e., Vernon Pick, Happy Jack, etc., the supposedly daily exchanges made in the LaCourt Hotel in Grand Junction, and the natural fever that mining has always produced, people were soon probing into all of the hills in the area and the people of North Dakota were bringing their samples down to compare with those in South Dakota. Since North Dakota has very little land in the public domain in the Williston Basin area, private-fee leases and Government leases for minerals that had been obtained under the land utilization program were being negotiated and an area in acreage far surpassing that of Harding County, S. Dak., was becoming part of the new field.

By October of 1954 shipments were being made to the purchasing agent at Edgemont, S. Dak. These shipments proved to be of a very good quality ore and compared considerably above the average shipments of the Colorado Plateau area. I was personally interested in one shipment made that was assayed at 0.83 of 1 percent UзOs. I personally made a call to the agent of the American Smelting & Refining Co. in charge of the purchasing program in Edgemont, S. Dak., in regard to their ability to purchase such ore and was informed that they would purchase any and all lignite-type ores and the miner would be paid for them on the basis of the Circular 5 prices. Trusting in this oral commitment, my partner and I, together with others immediately prepared to go into a mining program that would produce sufficient money to enter a larger exploration program. The enthusiasm was high, the Atomic Energy Commission opened a field office in Buffalo, S. Dak., and started their own drilling program. Drills were being moved in and negotiations were made for claims and such corporations as Ohio Oil Co., Peter Kiewit Sons' Construction Co., Homestake Mining Co., General Minerals, of Dallas, Tex., and others began entering the area. But as quickly as the small miner obtained rental on bulldozer equipment, the purchasing agent in Edgemont informed us that purchasing of such ores was temporarily suspended. My talks with Grand Junction brought me the information that legal status of the claims would have to be cleared.

The coal was reserved to the United States under various acts of Congress prior to World War I and was now subject to the general leasing acts for soft minerals of 1920, as amended, and while the uranium had been released under the multipurpose mining act of 1954, commonly referred to as Public Law 585, the impossibility of removing uranium without destroying the leasing act coal, created some doubt in the minds of their legal staffs and those for the Bureau of Land Management as to the individual's right to so take the uranium under the general mining law. With the formation of the Four States Uranium Association as a group representing the entire area, I became actively interested in the passage of such an act, and, with the help of the congressional delegation from the four States involved. and in particular Senator Francis Case and Representative E. Y. Berry, a bill was introduced in the Senate and in the House. It was my privilege to work with Mr. Clarence R. Bradshaw, now Assistant Solicitor for Branch of Minerals, Division of Public Lands, Department of Interior; Mr. George Abbott, of the staff for the Subcommittee on Mines and Mining of the Interior of the Insular Affairs Committee of the House of Representatives, and to testify in behalf of the passing of a bill placing the lignite-containing uranium under the general mining law, and, on August 11, 1955, Public Law 357 was enacted. This was to have been the solution. This was to have been the answer to our problem. Extraction of the ores was to be purely elementary.

Through the winter of 1954-55 and through the summer of 1955, larger organizations expended large sums, as shall be later shown, in blocking their areas. Many companies began making plans for construction of a processing plant. Each town was bitterly fighting for a location of such plant or plants as there might be. But by this time we were informed that the Government was under no obligation to purchase such ore since Circular 5 applied only to carnotite and roscolite type ores. Since there was no means of economical extraction, we would have to wait until one could be developed. The small miner was in despair. Assessment work was due.

It was true that those that had leased to the larger organizations, and the larger organizations on their own claims, were carrying out a program of exploration and development. But in the summer of 1954 the area had been blessed with a very dry year, and 1955 had been worse, and the prospects for 1956 for the agriculture area were not good. Some of the ranchers and farmers had

been overexuberant and staked too many claims. If they had staked as many as 20 claims, they were going to have to expend $2,000 on such development, development for something that may never develop. So, a day or two before the time of completion of the annual assessment, Public Law 636 was passed extending for 1 year the time in which to do such assessment work on the uranium lignite. As time rolled on, with very little work being done by the small claimants. The larger organizations were losing interest. New fields were opening up. And, with no market, again the small miners of the area appealed to Congress for one more extension of time in which to do their assessment works. Through the able help of persons within the Department of Interior, and Mr. Jesse Johnson, Director of the Division of Raw Materials for the Atomic Energy Commission, the congressional delegations of the areas concerned, once more obtained an extension of time.

It appeared that we were down to two companies that might possibly develop a process that would pay the company to pay the miner. One, commonly referred to as the Ohio Oil Co. organization, being an association of such company and Arthur E. Pew, Jr., of Philadelphia, Pa., seemed to be making an all-out effort to develop their own process. The other, being International Resources Co., under the technical leadership of Mr. H. L. Hazen, was just as determined to come up with a process and a contract for the sale of uranium oxide. The Atomic Energy Commission, itself, was apparently expending a considerable sum of money for the development and study of a process at the Grand Junction Operations Office. There appeared to be a direct commitment by the Commission to the Ohio Oil Co. group to contract for a figure of $10.50 per pound for the concentrate, and it was thusly inferred that this would be considered an economic process if a company could meet this figure.

In the fall of 1957, Ohio's group dropped from the picture. But, before the end of the year, International Resources submitted a bid which was below what the layman considered was the economical figure ($10.50). But, after the fight of the miners through legislative acts, doing work asked of them by the Commission, as their hope, like the head of one drowning, arose from the water for the third time and, apparently, what was to be the helping hand of the Atomic Energy Commission in saving us from our "drowning," it was not a hand at all but a foot firmly placed on the head to resubmerge our program for the third and final time; they would not award contracts for any more plants. But, in the hopes that the Commission has a "respirator" standing by, we are submitting not a brief but a story of what has been done in the area and what we feel is a moral obligation by the Government of the people to its people.

EXPENDITURES MADE IN THE FOUR STATES AREA

In January of 1958, the Four States Uranium Association had a meeting in Bowman, N. Dak., and the peoples were asked to submit statements of expenditures that they had made in the development of their leaseholds or mining claims. The response was not as good as we had hoped for. Perhaps the discouragement has been too great and many people felt there was no use in answering. Even with this poor response, our figure quickly totaled to an amount in excess of $2 million. Now, many of these persons are ranchers and employees in the area who expended very small sums. The total undoubtedly reached such proportions because of the larger organizations. Ohio Oil Co. expended in the neighborhood of $850,000. Northgate Uranium Co., a group headed by Leo Rothe, of Fort Atkinsin, Wis., has expended $400,000. The Farmington Funding Co., of Colorado Springs, Colo., now in receivership with their sole assets existing in this lignite area, expended over $150,000. No figures were available from the General Minerals Corp., of Dallas, Tex., but their figure would be in excess of $50,000; International Resources Co., which has submitted a separate brief, has expended over $300,000; Peter Keiwit Sons' Co., has spent $130,000; Landis-Gress-McCann & Getting Uranium Association, of Dickinson, N. Dak., a local group, expended over $100,000.

William S. Haivala of Wichita, Kans., a native son of the area who returned to his home county for a visit, upon the encouragement of the Atomic Energy Commission that they would buy his ore, spent out of his own pocket $53,000, and in return was able to sell under experimental contract only 300 tons of ore. Many of the individuals such as Ernest W. Caywood of Bison, S. Dak., who owned a drill and was in the business of drilling primarily for water wells, expended $14,000; Uranco Mining & Exploration Co., Inc, of Mandan, N. Dak., a group of small-business men in the area ended up spending $30,000; Allen Burns and Bob Fleming of Bowman, N. Dak., sold their place of business and

spent $65,000. The Bryco Mining Co., an association of farmers, newspapermen, telephone operators, implement dealers, etc., found that they had spent over $34,000 before they finished. Gardner, Walch, and Schumacher, small-business men of a town of about 1,500 people of New England, N. Dak., spent over $19,000 acting in reliance that there would be a program. It is easy to pick out who the big companies are, many of the so-called corporations of which I am very familiar are composed of employees, small farmers and small-business men. It has been my privilege on two occasions to speak to some of the small companies from the town in eastern South Dakota. It is quite pleasing to view the interest the people have taken in the development of their State. People who have put in $100, $500, or $1,000 and have taken their time to go out into the hills and to hire airplanes, hire bulldozers, to take the operators of such equipment into partnerships. These are the things that have built the country. And talking to one of these organizations, there were about 50 men attending a meeting in Mobridge, S. Dak., a town of about 3 or 4 thousand people. They represented a complete cross-section of the economy such as you would find in any small community of the Midwestern Sttaes. Some donated money, some donated equipment, some donated work. I would like to quote from a letter from a farmer in Montana. This letter was addressed to Mike Mansfield, United States Senator, State of Montana.

MIKE MANSFIELD,

United States Senator, Montana,

CARLYLE, MONT., January 9, 1958.

Washington, D. C.

YOUR HONOR: Three or 4 years ago we done some prospecting for uranium in lignite coal. We found a great deal which has a very good uranium content and not too hard to get at. The AEC geologists spent a lot of time and helped us a great deal on this project.

For the past 3 or 4 years, we have hung on to these claims and worked them. About June 30 of the last 2 years the work program on the claims have been called off. No one dared wait until that date to delay their yearly assessment work since by law you have to have this completed by July 1 each year. Being our claims are in the Custer National Forest on the Montana side and not too great a distance from the lignite beds in the vicinity of Bulman, N. Dak., where a plant has been proposed, we take this opportunity to call it to your attention. It seems however, that the AEC does not like to adventure into a buying program in this area on the grounds that they have a lot of ore on hand. When we first started on this project, the AEC done everything possible to encourage us. There were two geologists with us and they insisted that we hang on to the claims in Custer National Forest and not work the minerals we held in the vicinity of Carlyle, Mont., since they could be held for an indefinite period. This we done and we spent a lot of money on our claims, somewhere between three and four thousand dollars. We are not the only ones. There are many others who spent a gerat deal more.

We have an opportunity now to get a plant. Before we get the plant we have to have a market for the concentrate or product of the plant. AEC is our only market. They helped us spend our money by encouraging us to keep digging and staking. Now they are beating around the bush about taking our ore. We are farmers and by that you know just about the condition of our pocketbooks, specially after a prospecting journey. A plant would work wonders at the present time. It would bring in a few more taxpayers. Put a few more dollars in the pocket of our farmers and businessmen. Even though the plant is across the line in North Dakota, its effects will be felt in a wide area in Montana.

Once we get started in this area with a plant, others are sure to follow. Coal is not limited to uranium alone, as a matter of fact some of our most critical elements can be taken out of our lignites of this area, but it seems we have to start with uranium. The fertilizer industry alone would perhaps be so big in time to come that it is beyond our comprehension at the present time. This is an opportunity to break the crust on the big lignite pond. A big opportunity to take some of the burden of our everlasting, irritating farm programs. We would like to have you do us a favor, speak to the AEC. Tell them we don't like to lose this money. We cannot hold on to these claims much longer. A word from you could mean prosperity in this immediate area.

Respectfully yours,

CLARENCE E. EVENSON,