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