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- UTS Energy Corp. and Teck Cominco Ltd. have taken the first step in an ambitious plan to build two oil sands mines, a multibillion-dollar proposal that will face myriad risks in a region dominated by big oil companies.

The two companies, already minority partners in Petro-Canada's proposed $15-billion Fort Hills oil sands project, are striking out on their own after successful drilling on undeveloped land near Fort McMurray. The 50-50 partners have filed a preliminary public disclosure, the first volley of regulatory documents for the Frontier and Equinox mines, which together could produce more than 200,000 barrels daily of partly upgraded bitumen.

If approved, Equinox, the smaller mine, could be in business in 2014, with Frontier following as early as the next year.

Vancouver-based mining giant Teck and Calgary-based junior UTS are still oil sands rookies, with no projects under official development, even though they have some relevant experience.

Environmental standards in the oil sands are escalating rapidly and there is growing skepticism in Alberta and across Canada about the unrestrained building boom around Fort McMurray. Competition for construction workers remains hypercompetitive. And for UTS, financing its ambitious plans will also be a hurdle to clear.

But to Will Roach, chief executive officer of UTS, the scrappy firm has overcome as many challenges in four years as it has lined up for the years ahead. In 2004, it traded at less than $1 a share as it took full control of the languishing Fort Hills lease. It subsequently flipped majority control to Petrocan in 2005 and the once near-dead project is now on the verge of construction.

Riding this momentum, Mr. Roach said, makes the development of the new mines a savvy move. "If you look at where we are now compared with four years ago, it's a remarkable transformation," he added. The company's market value is now $2.3-billion, roughly 600 per cent higher than March, 2004.

While UTS has no production, it has developed an expertise in early-stage project development. Teck, worth $18-billion, is an oil sands outsider but an experienced miner of cooper, zinc and coal. "These are things we know how to do," said Doug Horswill, a senior vice-president at Teck.

The environmental challenge may be the toughest one, with pending federal legislation demanding the capture of carbon dioxide emissions or the equivalent for projects starting after 2012 and scrutiny of the greenhouse gas-belching oil sands intensifying domestically and internationally.

"Clearly, there are some particular issues. They'll be addressed, fully and completely," Mr. Horswill said.

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