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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (17447)	4/9/2008 12:25:19 PM
From: LoneClone	Read Replies (1) \| Respond to of 194001

Strathmore Minerals Plays the Long Game On Its American Uranium Assets By Rob Davies minesite.com Most people involved in the mining industry know that developing mines can take a long time. In the uranium sector though, things take even longer. David Miller, chief executive of Strathmore Minerals, told Minews that the company opened an office in 2005 to deal specifically with regulatory issues on the view that it would be needed for the next six years. As of now Mr Miller thinks the company is on track to make it to production by 2011, although 2010 remains a possibility. He says that companies talking about getting into production in a couple of years are not in the real world. And he should know. Together with other members of the board he can access over 100 years of uranium mining experience in the Gas Hills area of Wyoming and the Grants District of New Mexico. In total this group of old hands has produced over 100 million pounds of uranium between them, so there isn’t much they don’t know about the industry. The attractive feature of Strathmore is that there is no exploration risk. In the two areas where it’s working there are 100m pounds of uranium in resource, 25 per cent of which is attributable to Strathmore. The resource number is mostly based on historical data from previous miners who worked the property, like Kerr McGee, and little of it is up to NI 43-101 standard. But there ought to be more information out there. The company is chasing data on historic drill holes for its prime property, the George-Ver in the Gas Hills of Wyoming, with a view to expanding the pit design to allow the recovery of 4 million pounds of uranium rather than the originally projected 3 million. If the data cannot be located then some additional drilling will be required. And even then, before any mining takes place though Strathmore needs to get all its permits and that is what really takes the time. Because the area has been mined before the state of Wyoming only requires six months of base line data for such things as water analysis. Nevertheless, all the boxes must be ticked, and squared with the NRC, the Nuclear Regulatory Commission. Unlike Cameco, which will use in-situ leaching for its proposed mines in the area, Strathmore will use conventional open pit mining to extract the uranium. That means a mill is needed to process the ore and, luckily enough, one is for sale at Sweetwater about 60 miles away. Mr Miller declined to comment if he was bidding for it, though he did say Strathmore would be an obvious customer for whoever did end up owning it. In terms of infrastructure the Gas Hills could not be better placed, with a sealed highway, gas and all services on hand. Indeed, Mr Miller says Strathmore is only a backhoe away from production. If it goes for toll treatment and uses contractors to strip the overburden he estimates that only US$3m would be required to purchase a small mining fleet of used small capacity plant. The plan is to get production first from the George-Ver pit at the rate of 3 million pounds a year and then add production from the New Mexico properties. Here the company is in joint venture with Sumitomo where it can earn 40 per cent on the Roca-Honda property if it commits US$50m on a positive production decision. There is certainly a lot going on for such a small company, capitalised at just US$100m. However, Strathmore had the foresight to pick up these properties when the uranium price was still below US$15 per pound, a long way off the current long term price of $95 per pound. Playing the long game has certainly paid off for Mr Miller and his men.