100mil lbs?

Hi everybody. I haven't posted here for a long time nor owned any pen for a long time either, but still try to keep in touch, as uranium has a bright future and would hate to miss out on a good thing. The reason I am posting now is to address an assertion that has been made on a number of occasions recently and over the last couple years that pen is going to sooner or later have a jorc resource of 100million lbs of u3o8 in Wyoming.

This is just an assertion at this time and the best way to test whether it might become a fact is to look at what the other miners are doing in Wyoming and especially in the Powder River Basin. I travelled through the area last year and the picture posted at the bottom of this page will probably be meaningful to the old timers here.

There are only a few companies operating in this area with some history and available data eg. Cameco, Uranium One, Bayswater & Uranerz. These companies are involved in or proposing isl mining and as you know it is best avoid comparing with conventional open pit mining here.

The first company we will look at is Bayswater with their Reno/Elkhorn properties. After something like 300 drill holes it has an est. 15mil lb U total and the company don't expect to mine until 2015 and that is after a $50mil capital cost. They are well into the permitting stage.

By the way, all the u3o8 figures I use here include the reserves, resources and the probable, the latter is not strictly speaking jorc but it might be best to include the guesstimates as well. These are published figures except as noted and I am erring on the generous side and trying not to get bogged down in terminology. Also, I prefer isl to isr for some reason. The terms are interchangeable. Uranium One uses isl in its 2006 feasibility study for Honeymoon and there are many other examples.

Uranium One is rehabilitating the Christensen Ranch and Irigaray mines; and this will be developed as a satellite operation with a few other small properties. Production here from 1989-2000 was approx 4.7mil lbs total over the 11 year period. There is no information about what they expect in the future, but they paid Areva only $35mil for the mines, permits, processing plant and infrastructure.

The big operator in the area is Cameco with 8 proposed and operating isl operations. The largest of these is the Gas Hills-Peach and the North Butte properties with 20mil & 8mil lbs respectively. The smallest properties have a total of 1.5mil lbs each (Reynolds & Ruth). The total published hopeful content of uranium in the 8 properties is 45mil lbs. This company has a deep understanding of the uranium industry and has been operating in Wyoming for many years. They are not in the game of under/over estimating their prospects. For example, they have something like 150mil lb+ in Kazakhstan and 500mil+ lbs in Canada.

Areva don't seem to be serious operators in this region and are selling some of their current holdings.

Uranerz have a few plays in the area with Nichols Ranch and Doughstick (3mil lbs & 1mil lbs respectively) and are developing the mines as a satellite arrangement with some other small properties and plan to install a 2mil lb per annum processing plant.

Wildhorse Energy has a jorc estimate of 2.3mil lbs at Bison Basin further south in Wyoming.

Anyway, you should get the idea by now. The 100mil+ lb isl mines common in Kazakhstan don't exist in Wyoming. The total published isl uranium resources/reserves of all of Wyoming probably doesn't come to 100mil lbs. These figures indicate to me that the odds are that it will be a long long time (if ever) before pen has a 100mil lb reserve.

This is not to say that the projected 10mil lbs at Ross and 5mil lbs at Barber are small potatoes. It is more realistic for the time being to focus on these figures and leave the hollywood numbers for the fanatical.