“We have to move quickly toward energy independence from foreign oil, and that means, among other things, going back to nuclear power,” US Senator John McCain (R-AZ) recently told Fox News. US Senator Pete Domenici (R-NM) invited Louisiana Enrichment Services (LES) to build a gas centrifugal uranium enrichment facility near Hobbs, New Mexico. The facility is currently in the permitting process. Annette Aguayo of the Southwest Research and Information Center told us that the group planned to start working to stop that project. Some environmentalists are lagging behind the times.
Other environmentalists, who led before, are leading again. James Lovelock, the spiritual guru of the global environmental movement, sometimes called the “Father of the Green Revolution” because of his research and widely accepted warnings about DDT and CFCs, wrote in Reader’s Digest, (March 2005), “The figures show that many people’s fears of nuclear power are unreasonable.” Dr. Lovelock also said that “the Greens are totally wrong to oppose it.” In May 2004, Lovelock wrote: “Nuclear power is the only green solution.”
New Mexico is poised for a uranium renaissance, not with conventional mining, but with ISL operations. The in situ leaching method, also known as solution mining, is environmentally friendly. Because it is inexpensive and does not pollute the environment like uranium mining did in the 1950s, many uranium companies plan to use this safer method to mine uranium in New Mexico.
In a conversation late last year with Barbara Hahn, an employee of the Grants Chamber of Commerce and Mining Museum, deep resentment rang out in her voice when she spoke about the collapse of the uranium mining business in the 1980s. Grants (NM) was a booming city during the uranium boom of the 1970s, when uranium spot prices rose and hovered above $ 40 per pound. “The grants replaced the mining jobs lost by opening jails,” he told us. “Now others bring their prisoners to us.” Ms. Hahn believed that only 35 percent of the uranium had been mined from the Grants Mineral Belt. “Most of it is still there.” According to a geological report by McLemore and Chenoweth, a resource of 558 million pounds (279,000 short tons) could still be extracted. The issue in the 1980s, as it is today, revolves around the spot price of uranium.
The higher the spot price for uranium, the cheaper it can be to extract it. As the price of uranium increases, the quantity of an economic resource increases. At $ 30 / pound, the US Energy Information Administrated reported that the state of New Mexico had 84 million pounds of uranium oxide, grading 0.28 / ton, as of December 31, 2003. However, at $ 50 / pound of uranium, that amount would increase. to 341 million pounds. The spread on the gross value of uranium assets between those price levels is almost $ 15 billion! As the spot price increases, the economic reserves grow.
Said William Sheriff, Director of Corporate Development for Energetic Metals (TSX: EMC), “Our big, big long-term projects will be in New Mexico. In the long term, we believe New Mexico will be very valuable to us.” His company’s plans are to first develop production centers in Texas and Wyoming, before developing ISL’s operations in The Enchanted State. The sheriff added: “Nothing in New Mexico in terms of the first five years, but that does not mean that we are going to sit idly by. We are going to aggressively pursue them. The only thing we are going to pursue is ISL production.” Based on the company’s extensive acquisitions in Wyoming, New Mexico and elsewhere, Sheriff launched the gauntlet at Cameco and Cogema, whose Wyoming ISL operations contribute the majority of US uranium production, “We have the intention of becoming the largest ISL producer in the United States. “
David Miller, President and COO of Strathmore Minerals, (TSX: STM; Other OTC: STHJF), believes that “ISL’s production method will continue to grow in the United States, but we will also see a return to conventional mining and milling. in the western states. ” In addition to its Wyoming uranium properties, Strathmore expects to advance its Church Rock uranium property immediately following the Uranium Resources (OTC BB: URRE) Section 17 permits, held by its subsidiary HRI. Basically, the three companies are friendly neighbors in the area. There is evidence that they frequently talk to each other, comparing notes. The three uranium juniors appear to be the current major players in New Mexico for ISL’s uranium mining.
Ron Driscoll, one of the co-founders of Quincy Energy, which has been acquired by Energy Metals, said: “It will get interesting when the oil companies get involved again.” It is probably early for the oil giants to return to uranium. In the last uranium boom, many of the major oil companies were leaders in uranium exploration and extraction. Kerr-McGee Nuclear was the world’s leading private sector uranium producer. Other major oil companies involved in uranium mining and exploration were Mobil, Phillips, Conoco, Exxon, Chevron, Amoco, and others. Another newcomer uranium youth, Max Resources (TSX: MXR) also plans to drill at the other end of New Mexico, in Socorro County (about 100 miles south of Albuquerque). The MXR property was once drilled by OxyMin, a subsidiary of Occidental Petroleum, during the 1980s, before the price of uranium fell off a cliff.
Perhaps a major company will emerge in New Mexico, consolidating the others, or some of the others. “There are a lot of small uranium deposits on the North American market that need critical mass,” Neal Froneman, CEO of Uranium One (TSE: SXR) recently told a South African newspaper. “Consolidation will boost our business in the US and Canada, where we think it’s tactically smart to be.” Uranium One was itself a consolidation between Toronto-based Southern Cross and South Africa-based Aflease. Froneman concluded: “It makes sense to have a significant presence in North America to supply the (US) utilities that will need to be built.”
“The geology of this area, relative to ISL’s uranium operations, could help make New Mexico a major US utility provider, possibly before the end of this decade,” agreed David Miller of Strathmore. “It wouldn’t surprise me at all if there was more uranium in New Mexico than is currently estimated. That’s why companies have exploration programs.” From a state that has produced more than 300 million pounds of uranium, and which may have an additional 300 million to 600 million pounds of uranium, New Mexico will be a prime target for uranium companies as the price of uranium continues to rise. Will uranium crash and burn, as it did in the 1980s? After accurately predicting that the uranium spot price would double in a StockInterview feature in June 2004, Miller recently told StockInterview: “I wouldn’t be surprised to see the price double again.”
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