| "Staking activity is up significantly," said Lynne | | | | fiduciaries that we will enjoy operations on these |
| Boomgaarden, Wyoming's Director for the Office of | | | | leases that result in royalty returns." And it appears her |
| State Lands and Investments, referring to the number | | | | wish may soon be granted. |
| of claims filed for uranium development in her state. | | | | Uranium ISL's May First Start in |
| "We have really seen a significant increase since | | | | Wyoming's Powder River Basin |
| about June 2004. We took one lease application to the | | | | Of the six companies we interviewed, five expressed |
| board in April 2004. In June 2004, we had 30 or so | | | | their initial ISL operation would be established in |
| applications. That's when we really saw the increase." | | | | Wyoming's Powder River Basin. The most prolific coal- |
| In June 2004, David Miller of Strathmore Minerals (TSX: | | | | and uranium-producing areas in the United States, the |
| STM; Other OTC: STHJF) quickly filed 10 minerals | | | | tri-state Powder River Basin lies between Wyoming's |
| claims for uranium. On his heels, William Sheriff began | | | | Laramie Mountains, the Big Horn Mountains of Montana |
| filing claims as well. Since then, pages and pages of | | | | and Wyoming, and the Black Hills of South Dakota. |
| claims covering tens of thousands of acreage have | | | | According to the U.S. Geological Survey published in |
| been filed by Miller, Sheriff, their associates and their | | | | 2002, the Powder River Basin was estimated to have |
| respective companies. | | | | a mean of 16.5 trillion cubic feet of undiscovered |
| Subsequently, others jumped into the rush for | | | | natural gas, 1.5 billion barrels of undiscovered oil and |
| Wyoming's state uranium claims. From Crook, | | | | 86.5 million barrels of undiscovered natural gas liquids. It |
| Campbell and Converse counties to Carbon, | | | | has been geologically prolific for uranium because the |
| Sweetwater and Fremont, most of the available state | | | | host formation is the Eocene age Wasatch Formation, |
| trust lands, where uranium rollfront deposits had been | | | | which occurs under the entire area. |
| previously identified by drilling during the previous two | | | | At the southern part of the Power River Basin, |
| uranium booms, were snapped up. From Wyoming's | | | | Cameco's (NYSE: CCJ) wholly owned subsidiary, |
| Powder River Basin, where most of America's | | | | Power Resources, has been steadily producing |
| uranium and coal is produced, to the Great Divide | | | | uranium oxide (U3O8) at their Smith-Highland Ranch. In |
| Basin, which has seen uranium mining, any serious | | | | 2005, Cameco reported production of 1.3 million |
| players, who wanted to quickly establish an in situ | | | | pounds. The property has published proven and |
| leach (ISL) mining operation in Wyoming, marked their | | | | probable reserves of 16.1 million pounds of U3O8. (In |
| territory. | | | | Part Five of the Wyoming Series, will discuss the tour |
| "Most of the activity we've seen in leasing has been | | | | of the ISL operation at Smith Ranch and feature an |
| speculative activity," explained Boomgaarden. "We | | | | interview with Pat Drummond, superintendent of the |
| don't have new mines and new operations right now." | | | | mining operation. During our interview, Mr. Drummond |
| As noted in Part 2 of this series, permitting a property | | | | announced the expansion of uranium production on the |
| to put into place an ISL uranium operation may take | | | | PRI properties and the additional hiring of personnel.) |
| two or more years. She added, "When I first came | | | | Capacity could run up to 2 million pounds annually at |
| here in the spring of 2003, there was nothing." A few | | | | each of their two processing facilities. |
| changes have taken place, which Boomgaarden and | | | | Three of the six uranium development companies we |
| many others have noticed. Through the first half of | | | | interviewed also stated they intended to fast-track |
| 2003, spot uranium prices stagnated around the $11 | | | | their ISL operation by creating a "satellite facility." Such |
| pound level. On March 3rd, spot uranium traded at | | | | a facility would eliminate the need for a Nuclear |
| $39.25/pound, according to TradeTech LLC, which | | | | Regulatory Commission (NRC) license. The uranium |
| keeps track of weekly and monthly spot uranium | | | | development company plans to "attach" its mining |
| sales. | | | | operation to an established producer. Under such a |
| Holding costs on Wyoming's state trust lands are | | | | circumstance, the company would solution mine (also |
| affordable to speculators, when the underlying | | | | known as in situ leach mining) uranium on its property. |
| commodity in question has had a 500 percent increase | | | | The uranium would then be shipped to an established |
| in the past 62 months. Applicants file a lease | | | | producer for processing. Because the spot uranium |
| application and pay an annual lease fee of $1/acre for | | | | price is rising, and may hold around these levels (or |
| each of the first five years of the lease. The | | | | soar higher), a profit-sharing arrangement negotiated |
| application is presented to the Wyoming Board of | | | | by the newly producing uranium company and the |
| Land Commissioners, which meets every other month. | | | | more established company would probably make |
| "Our royalty revenues from uranium have been pretty | | | | sense. |
| flat," said Boomgaarden. "We can only hope as | | | | |