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

To: LoneClone who wrote (34227)	3/16/2009 9:58:08 PM
From: LoneClone	Read Replies (1) \| Respond to of 193893

Laramide Has The Funding To Take Its Westmoreland Uranium Project Through Feasibility By Charles Wyatt minesite.com The first thing with Canadian listed Laramide Resources is to get the politics out of the way. Laramide owns 100 per cent of the Westmoreland uranium project in Queensland, Australia. This project is very close to the border with Northern Territory and if it could be moved less than 50 kilometres it would be in a uranium mining friendly state. As it is, the state government of Queensland, though Labour like the Federal government, clings to an anti-uranium stance. The good news is that this may not last much longer. There is due to be a state election in the next couple of weeks and the latest opinion poll puts the Conservatives ahead. Not by much, it has to be said, but if Labour survives it will have got the fright of its life. The Premier, Mrs Anna Bligh, has never had a job outside the public sector and nor has her husband. She took over as Premier when Peter Beattie resigned in September 2007 and appears very proud of her ‘green’ credentials. Even if she stays in power, she may have to give way on the uranium issue as the Federal government will demand a quid pro quo for any help it gives in this election, and it ceased to oppose uranium mining more than a year ago. This will be good news for Laramide as it holds the 506 square mile Westmoreland project which was dropped by Rio Tinto in 2000. Rio Tinto’s reasons for so doing were the low price of uranium at the time, and the opposition of the Australian government to uranium mining. The uranium price now looks like going higher, especially as Cameco’s Cigar Lake mine in Canada has persistent flooding problems and may not ever get into production. Before Rio Tinto dropped the project, it completed an in-house pre-feasibility study on the back of 87,600 metres of exploration drilling. Rio also conducted metallurgical studies and resource calculations. The pre-feasibility study concluded that there is potential for both open cut and underground mining, and that the metallurgy is simple, with potential for high recoveries and low acid consumption. When it took over at Westmoreland, Laramide wasted little time in getting an independent 43-101 resource estimate done on the property. This eight million tonnes in the indicated category at a grade of 0.088% U3O8, giving 15.6 million pounds, and a further 16 million tonnes of inferred resource at an average grade of 0.094%, giving 32.9 million pounds U3O8. In principle Minesite does not agree with valuing in-ground deposits until a feasibility study has been carried out, but if we side-step those objections by allowing the Rio Tinto study tom come back into the picture, Westmoreland could be valued at US$ 2.1 billion based on the current weekly spot price of US$43.75 per pound, and without discounts. Further to this, GRD Minproc has completed a scoping study on Westmoreland. This looked pretty robust, based as it was on annual production of around three million pounds U3O8 at a cash cost of US$20 per pound. Certainly, it’s not bad when you take into consideration the current price of uranium, though costs will have varied a bit over the past two years or so. GRD Minproc set the initial mine life at 11 years, although the consultant reckoned there might be scope to get that up to 15 years with further drilling. The direct and indirect capital required for the project came in on GRD Minproc’s numbers at US$214 million. Under this plan, mining will be open pit, and processing by an acid leach. These are both methods which are not technically challenging. At current uranium prices the project therefore has the potential to generate a substantial cash flow per year. Since the scoping study came in, Laramide has been carrying out a major drilling programme aimed at increasing the resource estimate. The last results came out in January, and wrapped up the 39 hole programme in the Redtree project area of Westmoreland. These included one hole which intersected five metres at 0.43% U3O8 from 4 metres depth. There were plenty more like this and some even better, which showed grades at over 0.6% U3O8. The next resource estimate - due during this quarter - should show a significant increase. The drilling focussed on the Jack lens, which is very close to surface and could be open pit mined with a low strip ratio. Marc Henderson, chief executive of Laramide, says: “all the data we are accumulating points to the fact that this is a very robust project and it should be the making of Laramide”. That is clearly a view shared by the syndicate of underwriters, co-led by GMP Securities and Dundee Securities, which last month agreed to purchase five million units in Laramide at C$1.75 each to raise C$8.75 million for the company. Most of this money is earmarked for Westmoreland and Marc Henderson explains that the money will take Laramide through to 2011 with all its options open. But Laramide has other uranium assets in the States including La Jara Mesa in Grants, New Mexico and La Sal in the Lisbon Valley district of Utah. Its portfolio also includes joint venture, strategic equity positions and royalty participation in uranium development and exploration companies. All these provide additional geographic diversification and uranium exposure for shareholders. Westmoreland, however, is one of the biggest uranium projects around that’s under the control of a junior mining company, so shareholders will follow the Queensland election with interest.