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A race for production for Strathmore Minerals Corp.

Last updated: 15:00 10 Nov 2007 AEDT, First published: 16:00 10 Nov 2007 AEDT

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After four years of steady climbs the price of uranium has fallen dramatically. Simply put, the companies that are in the position to produce quickest have an opportunity to come up with the shortfall in demand. Strathmore Mineral has the properties and the partners and could produce uranium in two years.

 

It wasn’t so long ago that the very thought of a drop in uranium prices was unthinkable as the resource surged to pushing $140.00/llb. Four years of steady increases had many investors thinking, “The only way was up.” However, life and investments have a habit of throwing a curved ball and the rumor that the U.S. had five million pounds of uranium going spare to sell and possibly more supply coming into the market has sent the price down around 46 percent to $75.00/llb and it could conceivably, go lower. Yes, there is a gap in supply and demand and, yes there are a lot of companies, particularly juniors, in the uranium finding business. However, it’s probably now a race to production with the first past the post standing to reap the rewards and the rest may be on a hide-into-nothing.

 

Strathmore Mineral Corp. formed in 1996 and headquartered in Kelowna, BC, states that it wants to become a leading uranium producer in the U.S. The company, which has two U.S. subsidiaries, Peruran, S.A. and Strathmore Resources (U.S.) Ltd.,   made strategic acquisitions when uranium was pegged between $7.00-$15.00 per lb so there is plenty room at the current price or lower to make some money. Mr. Dev Randhawa, an experienced businessman that founded the company is Strathmore Mineral’s CEO, president, and chairman and leads an experienced mining and financial team. In February 2007, Strathmore Minerals began to push its Sky and Gas Hills uranium projects in Wyoming to the mine permit development stage.

 

On July 19, 2007, Strathmore Minerals announced that it was spinning off its Canadian and Peruvian mineral properties to Fission Energy Corp.; a company created by Strathmore Minerals. Company spokesperson, Bob Hemmerling said that the focus was now on achieving production, particularly at Strathmore Mineral’s Sky property in Wyoming and one of the company’s core properties, Roca Honda in New Mexico. Another New Mexico property, Church Rock, has hit a snag in that it may be located in “Indian Country” and subject to additional regulations.

 

Hemmerling suggested that The Sky property, a joint venture with Yellowcake Mining Inc., could be in production as early as 2010. The Sky property’s 800 acres was originally discovered by Exxon Minerals in the 1970s; a 43-101 is under preparation. The property has a historical demonstrated resource of 350,000 tons of ore at 0.11% U3O8 or 822,000 lbs U308.

 

Now that the Church Rock property is held up, Strathmore Minerals is focused on its Roca Honda property in New Mexico. Roca Honda is situated in an area, which has historically mined 300m lbs of uranium. The property has the potential for 17,512,000 lbs at an average grade of 0.23% U3O8 measured and indicated and another 15,832 lbs U3O8 inferred at an average grade of 0.17% U3O8. Of course, for a project that size it’s going to take a lot of money to get going or a substantial joint venture partner, possibly both.  In July, 2007, Strathmore Minerals announced a joint venture agreement to develop the Roca Honda property with Sumitomo Corp of Japan ("Sumitomo").  Randhawa, Chairman and CEO of Strathmore Minerals said, “The combination of an internationally recognized credible financial partner and our strong technical team provides the resources necessary to advance the Roca Honda project to production.” Hemmerling said that the company was looking at production, possibly, in 2012. The potential for the property got better on September 6, 2007 when Strathmore Minerals announced that it had discovered new high-grade uranium mineralization at Roca Honda with intercepts ranging from 3.2 U3O8/ton to 11.2 U3O8/ton. John DeJoia P.G., Vice President of Technical Affairs said, “The results validate our evaluation of the great potential to expand the Roca Honda resource. The team is particularly excited by the fact that this borehole is located in an area that has not been previously explored." 

 

With the market as it is. What the price of uranium will be three to four years down the line is a bit of a lottery. However, Strathmore Minerals stand to gain better than some by getting into production early. Hemmerling confirmed that the company had around $20m in the bank and stated that he knew of no company plans to diversify into other resources. It’s Uranium all the way.     

 

 

 

 

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