Uranerz Energy: Developing Uranium Projects in Wyoming

Relatively speaking, it's not saying much, butthe freight for a potential discovery. As with
Wyoming's Powder River Basin is presently thethree similar Wyoming-based uranium companies
largest uranium producing area in the Unitedwe've been tracking - Strathmore Minerals,
States. Cameco's (NYSE: CCJ) Smith RanchUR-Energy and Energy Metals, Uranerz is moving
produces over one million pounds of uraniumquickly toward commercially mining uranium.
oxide, more than one-third of U.S. uraniumOthers are still looking for a deposit, and many
production. Because the spot uranium price hasinvestors don't realize the last major uranium
now surpassed $50/pound, more uraniumdiscovery was about 20 years ago. That one
development companies expect to profitablyshould go into production next year.
produce uranium in Wyoming. Uranerz EnergyTrying to shake further data out of Glenn
(Amex: URZ) has initiated environmental licensingCatchpole borders upon frustration. He is "old
and mine planning on two properties, which couldschool" uranium, which means he just goes ahead
make the company one of the leading juniorwith his mining project and talks very little about
uranium producers in this state. It would also bringit. In an August telephone conversation, Uranerz
more attention to uranium companies bringingchairman Dennis Higgs laughed about how little
their U.S. projects online.Catchpole will tell even him about the company's
Investors generally miss the boat when evaluatingproperties. Having worked as a senior executive
the junior uranium companies. While many acceptwith Uranerz Exploration, before it was acquired
the fact that only a handful of companies shouldby Cameco, Catchpole was once general manager
be producing uranium by 2010, very fewof Cameco's Inkai solution mining project in
understand U.S. and foreign utilities have beenKazakhstan. He brought with him many of the
negotiating to buy this uranium from companiessenior executives and technical team from the old
which have not yet permitted those properties toUranerz. For example, the company's chief
be mined. Of course, after these announcementsoperating officer, George Hartman, was the mines
are made, the stocks would likely soar if the spotmanager for Westinghouse's Wyoming Mineral
uranium price is sustained above $50/pound. ManyCorporation and has spent more than 35 years in
of these uranium development projects arethe uranium and minerals sector.
reportedly economic at sub-$40/pound uranium.If one is looking for chatty, Uranerz is the wrong
Last week, CIBC World Market set a price targetplace to look. We hounded Catchpole for a
of $70/pound on spot uranium for 2008, whichnumber of months with emails and phone calls for
should help boost the sector.some sort of update on his project. At first, he
Uranerz Energy is an excellent benchmark fortold us he was developing something in Wyoming.
other uranium companies. When we met with theAs we got to know him better, he told us it was
company's Chief Executive Glenn Catchpole insomewhere in the Powder River Basin. We
Cheyenne this past February, he explained hisdiscovered, as did everyone else, how valuable his
company would be building a "Chevrolet" sort of inprojects might become in an early August news
situ operation, not a Cadillac. In other words, herelease. The company's website is just as
would construct an inexpensive, but functional,secretive. This sentence describes the company's
solution mining facility. These facilities, called in situWyoming projects: "Based on Uranerz
leach (ISL) mining or more correctly in situmanagement's in-situ recovery mining experience
recovery (ISR) operations, are basically waterin the Powder River Basin, the Company feels
treatment plants. Oxygenated water is pumpedthat it has sufficient critical mass in terms of
through the sandstone to dislodge the trappedmineable uranium resources to begin commercial
uranium. The uranium is recovered and thenenvironmental permitting and mine development
processed in a nearby facility. Catchpole believesplanning."
his company can build an ISR plant for about $10Why would anyone put up with this? Our
million, possibly less.conversations around the uranium sector
He told us in August his company has an indicatedconfirmed what we suspected about Uranerz
uranium resource on the Hank and Nichols RanchEnergy. Glenn Catchpole is credible. He may be
properties in excess of 13 million pounds ofquiet, but he knows how to bring a project into
uranium oxide. Both properties are located incommercial operation. We got the nod from
Wyoming's Powder River Basin. Drilling this pastWyoming's Department of Environmental Quality
summer confirmed the historically known uraniumland manager that Catchpole gets the job done
resource along about 8,500 feet of strike length.right. With a $10 to $30 profit spread per pound
The drilling apparently found an additionalof uranium, Uranerz Energy could very well deliver
uranium-mineralized horizon. Before Uranerz issuedpromising future earnings.
its news release in August, the company stakedAccording to Catchpole, Uranerz hopes to begin
another 54 federal mining claims in the immediatecommercial operations sometime in 2008. That
area. After thirteen holes were drilled on its Hankmay be subject to change, but that is probably
property, of which nine encountered uraniumthe same ballpark date UR-Energy has been
mineralization, Uranerz staked or leased anothertalking about. Strathmore Minerals may start
840 acres near this property. Again, this drillingaround the same timeframe. Energy Metals is
confirmed historical data. Developments on bothconcentrating their primary efforts in Texas, but
properties bode well for the company's prospects.the company did establish an office in Casper,
Investors should separate the junior uraniumWyoming's largest city, which is also near the
exploration companies, of which there are aboutPowder River Basin.
three hundred worldwide, from those which areWhat all of this adds up to is this: Uranerz and its
developing uranium projects in the United States.Wyoming competitors could uplift U.S. uranium
During the last uranium boom, in the 1970s, majorproduction. At this writing, U.S. utility consumption
U.S. oil companies spent hundreds of millions ofof uranium outpaces U.S. uranium production by a
dollars in exploration drilling and delineating uraniumfactor of more than 20 to 1. While we hear the
deposits. After Three Mile Island, the sector wentmantra of breaking U.S. dependence on foreign oil,
into a 25-year depression and the oil companiesU.S. utilities are at the mercy of foreign-mined
got out of the business. A few industry insiders,uranium. At this time, about one-half of this
such as Catchpole, picked up those nearlyuranium comes from dismantled Russian nuclear
developed uranium properties for a song.warheads. This ends in 2013 when the US-Russian
A global nuclear renaissance has revived theHEU (highly enriched uranium)
hopes for many juniors, which means there areswords-for-plowshares deal is terminated. U.S.
too many with too little. We focused on thoseutilities will be scrambling to fill the gap. And
developing resources, which were in the planningcompanies such as Uranerz Energy should be
stages before the drought arrived. Quietly,producing sufficient uranium to help make up
Uranerz Energy assembled its U.S. portfolio,some of that difference.
farming out its Canadian and Mongolian uraniumCOPYRIGHT © 2007 by StockInterview, Inc.
exploration prospects to others, who would payALL RIGHTS RESERVED.