blr front runner in the race for u production

A great article to show the potential of BLR and that the BOYER deposit DOES show high grade zones running 1200 PPM so for those who continue to banter and talk this stock down, you may just miss out on the big move in BLR this year.....im picking BLR will be re rated once the scoping studies are revealed and also the best type of mining strategy exposed o the investment community.....Price of Uranium will not stay down for too long and I expect an average price of $95/lb for 2008....purely based on the supply demand ratio........Enjoy reading the article below as it gives a few clues as to how significant BLR,S results are to date..........cheers Jam

The Uranium Sector in Perspective
Everyone seems to have forgotten the uranium
sector for the time being. Maybe there is a belief
that the speculative bubble has burst and the easy
money has gone. Certainly the hot money has
gone – that money which chases the sizzle rather
than the sausage – but the smart money should be
out there picking up fundamental value.
The uranium price, at greater than US$90/lb,
offers stunning levels of profitability for those
able to deliver yellowcake to the market.
Rewards will go to those who recognise this and
take positions. Go for the front-runners who have
resources and a reasonable chance of production
within 2-4 years.
USA is a Preferred Country
The USA uranium production industry is only a
shadow of its former self. Many mines have shut
down in times of lower prices but there are plenty
of orebodies in States such as Colorado, Nevada,
New Mexico and Wyoming. Good geological
records exist that have enabled rapid calculation
of JORC resources. There are quite a few
projects in the hands of Australian companies
that offer potential for production levels of 200-
600 tpa of U3O8, at cash costs of US$25-$35/lb.
Three companies that come to mind are Black
Range, Peninsular, Uranium King (currently
merging with Monaro Mining) and Wild Horse
Energy.
Permitting on mines may be a bit slower in the
USA than in some of the more exotic countries
around the world, with a two year time frame
generally accepted as the standard for a mine.
Permitting for a mill or an ISL mine is thought to
be more complicated and time consuming, but
there is no logical reason for this. The USA
probably still suffers from the same paranoia and
the misinformation that has paralysed the
uranium sector in most of Australia.
Political Processes Will Intervene
The world is facing a critical energy shortage.
Blind Freddy can see that nuclear power is the
answer to the power shortage and the future of
clean energy and global warming. The
strategically critical value of uranium has already
been identified by Russians as they seek to build
on their power in the energy sector based on oil
and gas. The Chinese are scouring the world for
uranium resources. The USA is going to be
forced to go head-to-head if it is not going to be
at the mercy of imports, just as it is with oil. It
will be forced to reduce the number of
bureaucratic obstacles to the development of
mines and processing plants.
Black Range Is Well Positioned
BLR has done well over the past year, growing
from a small uranium position with uncertain
economics to be in a position where we can
reasonably predict that it will be able to earn very
strong profits. When we first looked at it we
thought it was overpriced in the market. At its
high of 34¢ it had a market capitalisation of
about $250m. At the current price of 13.5¢, the
capitalisation is $81m (but $90m on dilution for
options). Is it good value though?
Taylor Ranch Uranium Project - Upgrade
On 29/11/07, BLR announced a global resource
of 36,000 t U3O8 at a grade of 270 ppm. Given
the nature of the orebodies, flat-lying sandstone
structures often at depths of 200m, this is of
academic interest only.
However, there are obvious high grade zones
running 1,200 ppm containing approximately
10,000 t U3O8. This represents a serious 131%
increase in the high grade section. Much of this
comes from the Boyer deposit to the SE of the
original orebodies at Taylor Ranch. This now
accounts for approximately half of the high grade
material (inferred).
There is still a considerable amount of drilling to
be done as the drill spacing at Boyer is wide at
100 to 250m spacing, whilst at Taylor and Noah
it is 30m and 100m respectively, but there seems
to be good continuity so far.

BLR started drilling in April 2007, and has had
four rigs operating since then to complete 65
holes for 25,000m.
Project Economic Look Good
Although a scoping study wont be ready for 2-3
months, it doesn’t take a rocket scientist to work
out some order of magnitude numbers. We have
been helped by the extrapolation of the numbers
from the Rio Puerco mine belonging to Uranium
King, which as a fully developed, room and pillar
underground mine awaiting recommissioning in
New Mexico.
BLR believes it is looking at a room and pillar
mine that will be accessed via either a shaft or a
decline. Back in the late 1970s, Kerr McGhee
spent US$17m developing a 500,000 tpa mine at
Rio Puerco. It would be reasonable to assume
that a similar size mine would cost BLR twice
this amount i.e. $35m.
There may be the opportunity for BLR to truck
the ore 30 km to the 500,000 tpa acid leach plant
owned by Cotter Corporation, which was
operating up until 20 months ago, at which time
it closed down due to the need for modification
to handle high vanadium values in the uranium
ore. If it could use this mill, on a toll payment
basis, it may be the key to fast tracking
production i.e. inside of three years.
If it trucked high grade ore of 1,200 ppm, and
achieved recoveries of 90%, it could produce a
tad over 500 tpa U3O8. A reasonable cash
operating figure of US$35/lb is possible provided
the owners of the mill play ball.
At US$90/lb, it could be generating a cash profit
margin of 157% or US$55/lb. Annual cash
generation could be $70m p.a. or 11.6¢ a share
(pre-dilution for options or financing). This is
certainly very impressive.
The Bottom Line
There is obviously more work required to firmup
numbers, but we know enough now to say that
the numbers are cheap. There is nothing that
suggests that additional information will do
anything other than improve the scenario. A
balanced uranium portfolio should really have
some BLR share in it, and shareholders should be
prepared to sit and watch the company grow from
here.
The cash position is approximately $14m.
Far East Capital was sufficiently impressed with
the prospects for the company that it acquired a
modest holding in anticipation of a re-rating.