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