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Wyoming's Uranium Mining Frenzy

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



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