Geo Sciences

James Finch

Good times in the mining sector, eh? The Gold and Silver Index (XAU) is holding steady above 120, having reached a high above 156 in January, a level it had not seen since September 18, 1987. The spot uranium price is higher than it’s been since January 1980. Crude oil? Filling up your gas tank should remind you that oil prices are still painfully high. So all of this must mean mining companies are thrilled with their good fortune? WRONG! There’s a snowballing crisis in the mining sector, which has been kept off the typical investor’s radar screen. This new emergency could drive commodity prices to even higher levels over the coming months, and possibly until the end of the decade.

The two-decade long bear market drove many geologists, and other qualified technicians, out of the mining sector. Drilling companies went bankrupt. Even with the recent explosion of activity in the mining sector, exploration in the sector is less than one-third of its peak in 1981, when more than 5,500 drill rigs were running.

The mining sector’s labor and drill rig shortage has gone past the “we’re in a crisis” stage. Without qualified geological staff and drill rigs for exploration and development programs, companies may fail to get their projects online fast enough to satisfy the worldwide demand for their metals, whether it is gold, silver, copper, or uranium. The Baker Hughes North American rotary rig count is a good barometer of how strongly the commodities boom has impacted the sector. In 1999, the U.S. and Canadian drill rig count reached its nadir of 488. On March 17th, the number stood at 1546 and climbing. Over the past seven years, the count jumped 316 percent. Compared to a year ago, the North American Rotary Rig Count is up by nearly 20 percent. Internationally, the same rig count rose almost 60 percent.

During the course of our three-month investigation, we found the labor and equipment shortage applied not only to uranium but also to coal, oil and gas, coal bed methane and precious metals exploration. Ed Calvert, who runs Nucor Drilling Inc in Wyoming, exclaimed, “There just aren’t any rigs available in the U.S. You may find one, but it’s a problem finding the right rig at the right time.” His company began searching for a drill rig in September for drilling scheduled to commence June 1st. Calvert explained that the big oil companies had signed up rig contracts so they wouldn’t get caught short, adding, “Whether the rigs are being used daily or not, they are paying the fees to hold them.”

Vancouver-based Max Resources announced in early January of this year they had received permits to drill on their Thomas Mountain uranium prospect in Utah. They hoped to drill in late January, depending upon drill rig availability. We interviewed the company’s uranium geologist Clancy Wendt, who complained in early February, “I thought I had a rig lined up. Now we have no idea when we will get a rig.” Max Resources recently announced it planned to start drilling on or about the middle of March. Norman Burmeister planned more wisely, announcing in mid January Kilgore Minerals would drill the company’s Idaho gold property in July. But Burmeister got stumped in moving his uranium property’s permitting process forward, “I am still trying to find an archaeologist for my Nevada property. They just aren’t available.” Until he finishes that step of the permitting process, Burmeister can’t lock up a drill contractor to help delineate his uranium prospect.

The drill rig shortage pales when compared to the frighteningly tight labor market in the mining sector. According to the February 2006 Employment Situation Summary, published by the U.S. Department of Labor, “Mining continued its upward trend in February, adding 5,000 jobs.” Cynthia Pomeroy, Director of Wyoming’s Department of Employment confirmed the crisis, “There is definitely a labor shortage.”

Matt Grant, assistant director of the Wyoming Mining Association adamantly announced, “There are 800 direct job openings in the mining business that could be filled today.” He quickly noted another 2400 indirect jobs to service the mining industry remain empty, begging for bodies to satisfy those positions. Starting geologists make between $35,000 and $50,000 annually. Top geologists command $200,000 and higher. Mining consultants get $800-1000/day. Even day helpers on drill rigs can charge $22/hour or more. Wyoming state and county development associations have attended job fairs in Michigan earnestly trying to fill the growing job vacancy by recruiting laid-off auto workers.

David Michaud, president of TheJobPit.com, finds jobs for geologists, metallurgists and others in the mining sector. A mining engineer and consulting metallurgist, having graduated from Queens University in Kingston, Ontario, and until recently the operations manager for Corriente Resources in Ecuador, he began his internet employment agency for the mining sector because the demand was overwhelming. “Headhunters who have been around for twenty years say they’ve never seen a market like this,” Michaud stressed. “For the last ten years, the mining industry fed mining graduates to the wolves. Now they need them. All are busy with no takers to those far away places.” Michaud lambasted the mining companies for their lack of foresight, “Mining companies have to expect the demand for professionals, such as production geologists, will go up with the price of metals. There were no jobs for the past eight years.” He added, “It takes two to five years to train them.”

For example, Michaud is desperately trying to fill a South American mining company’s job opening for an experienced metallurgist. “Free housing, two cars, four weeks off annually, two plane tickets, basically no living expenses, and a salary starting at US$150, 000,” Michaud sadly explained because no one has jumped at the offer. “In the field of metallurgy, including mill managers, metallurgical engineers, techs and operators, about 150 new jobs are offered each month.” Only about one-half will be filled. Michaud warned the copper mining companies were in especially dire straits to fill new job openings.

Uranium Sector Struggling to Keep with Demand

The U.S. Energy Information Administration announced in its most recently published annual report, “The U.S. uranium production industry initiated a turnaround in 2004. All U.S. uranium drilling, mining, production, and employment activities increased for the first time since 1998. More companies conducted exploration and development drilling than in the prior 2 years. Employment in the U.S. uranium production industry totaled 420 person-years, an increase of 31 percent from the 2003 total. Wyoming accounted for 33 percent of the total 2004 employment, while Colorado and Texas employment almost tripled since 2003. Overall, $86.9 million went to drilling, production, land, exploration, reclamation and restoration activities in 2004.” And that was in 2004. Imagine what the employment snapshot looks like today?

While the spot uranium price continues rising, exploration companies may find it harder to recruit veteran uranium geologists, to sign contracts for drill rigs, and to operate those rigs. Nucor’s Calvert laughed, “Finding and keeping employees is definitely a problem.” Michaud explained, “Finding a metallurgist is hard enough. Finding one with uranium experience is almost impossible.” David Miller, president of Strathmore Minerals, lamented, “Expertise in the uranium industry started with geologists who made discoveries in the late 1940s through the late 1970s. They trained the next generation, which coincided with the 1970s uranium boom. That boom was short lived and fizzled out by 1981. A very small number of professionals continued in the uranium industry, during the twenty-year bear market. Now that the number of uranium companies has skyrocketed to more than 420, there is a potentially catastrophic shortage of uranium expertise.” The generation gap has come to haunt the industry.

What’s the solution? Many, such as Michaud, believe, “Retired baby boomers are coming out of retirement to fill the generational gap and ride their last metal rush into the sunset.”

Bloomberg News ran a story on December 8th discussing developments in the oil sector, “U.S. producers and contractors such as Ryder Scott, which assesses drilling projects and oil and natural-gas reserves, are working harder to keep their oldest employees and recruit college graduates because there aren’t enough new engineers to go around. Engineers who help find petroleum deposits are in demand…”

UR-Energy Chief Executive William Boberg showed off the company’s recent hire, Dawn Schippe, during our tour of his offices, “She’s an engineering graduate of the Colorado School of Mines,” he said. “Her experience in uranium is now two weeks.” Others in his company have decades of uranium experience, but are three times Dawn’s age.

Aging talent has found its way back into the uranium sector. Aging geologists such as Dr. Boen Tan, who helped discover two of the Key Lake uranium deposits in Canada’s uranium-rich Athabasca Basin in the early 1970s, is now helping Forum Development explore for new uranium deposits at its Costigan Lake, Key Lake Road and Maurice Point projects in Athabasca. Uranerz Energy’s entire advisory board consists of former Uranerz professionals, including top geologists, Dr. Franz Dahlkamp and Dr. Gerhard Ruhrmann. Respectively, they have 45 and nearly 30 years experience in the sector. Strathmore Minerals geological team includes former Pathfinder Mines employees, a subsidiary of Cogema, including board member Dieter Krewedl, President David Miller, and vice president of technical services, John DeJoia. Some of these companies bring more than 200 years of experience, collectively, to their new ventures. But without sufficient new mining school graduates to mentor under them, future exploration and development may become stalled. Michaud announced a chilling observation, “Annually, Canadian universities produce less than 10 new metallurgical engineers.”

What the Future Holds

What is troubling about the uranium market, in particular, is that the soaring spot uranium price shows no signs of abating. The crisis comes at a time when President Bush announced his nuclear initiative, as more U.S. utilities plan to add to the country’s nuclear fleet, and as China and India clamor for a reliable source of uranium to fuel their aggressive nuclear energy programs. Without uranium for those reactors, the power plants won’t produce the electricity required to meet their demand. As an aside, uranium mining is the stage in the nuclear fuel cycle where the environmentalist fanatics are baring their teeth. This past November, an office manager at Albuquerque’s Southwest Research and Information Center, an anti-nuclear activist group reportedly funded by Mott’s Applesauce and Ben & Jerry’s ice cream, told us when we went undercover, “We want to stop the front end of the nuclear fuel cycle, which is uranium mining.”

Don’t say the warnings weren’t made well in advance. At the World Nuclear Association (WNA) Symposium in 2004, Dr Moukhtar Dzhakishev, a Russian physicist and a former deputy minister of energy and mineral resources, presented his conclusions, “Firstly, natural uranium mining capacities cannot satisfy reactor requirements. Secondly, accumulated uranium inventories will be exhausted sooner or later. Thirdly, the spot price does not reflect the actual problems and, on the contrary, is capable of misleading all of us about the urgency of investments to be made in the development of new mining facilities.”

In his speech, Dr. Dzhakishev emphasized to the WNA, “Judging by these facts, the conclusion is evident: one day nuclear power plants will face a natural uranium shortage and it is not necessary to be a prophet to foresee this. It is clear today that the key to the solution of the major problems of the uranium market lies with the development of the potential of the uranium producers.”

This past August, Angela Jameson reported in the online version of The London Times, “A GLOBAL shortage of uranium could jeopardise plans to build a new generation of nuclear power stations in Britain… a recent report by the Asia Pacific Foundation of Canada said that there was likely to be a 45,000-tonne shortage of uranium in the next decade, largely because of growing Chinese demand for the metal.”

The upward spiral of the commodities boom is racing ahead at full speed. Depending upon whom you talk to, the labor and drill rig shortage is either very bad or worse than you can possibly imagine. If there are commodity inventory shortages right now, what happens by the end of this year, or later this decade, if current exploration efforts get grounded because companies lack the trained personnel, the proper equipment and the expertise to explore and/or develop their properties? You can’t run a drill rig if you can’t get your hands on one. You can’t drill the property if you can’t find drillers to run the rig. While commodities prices soar to levels not seen in twenty or thirty years, the tight labor and equipment market could ratchet prices to much higher levels. And junior uranium development companies, with proven pounds-in-the-ground assets, should become sought-after acquisition targets by those who have the staff and drill rigs to bring the projects online.

For investors, the labor and drill rig shortage has a silver lining. As inventories dwindle lower, commodity prices will continue rising. For junior uranium investors, this might someday be realized as the “hidden reason” why spot uranium prices continued rising past $40/pound. If you don’t drill for the commodity, you can’t find it and develop it. This strengthens the case for $50/pound uranium in the near future. Now we understand why Strathmore Minerals’ David Miller warned us in November, “I wouldn’t be surprised to see uranium prices double again.”

COPYRIGHT © 2007 by StockInterview, Inc. ALL RIGHTS RESERVED.

James Finch contributes to StockInterview.com and other publications. StockInterview’s “Investing in the Great Uranium Bull Market” has become the most popular book ever published for uranium mining stock investors. Visit http://www.stockinterview.com

Article Source: Rising Commodity Prices Causing New Turmoil through the Mining Sector

Josveek Huligar

The allusion that seems to be made, that natural stone installed in your home is dangerous to your health is raised repeatedly on the website and in a recent local Houston TV news program.

It’s interesting to note that the two major contributors of this non-profit organization are manufacturers of engineered stone. One of those contributing manufacturers has a marketing executive on the board of directors of this particular organization.

From what may be perceived on the surface as perhaps another “going green” ad campaign, seems to be a different slant on the ongoing battle of the engineered stone manufacturers against natural stone.

Keep in mind that granite as does most natural components found in building material, allows vapors to pass through them that might contain trace amounts of radon. There are very small amounts of uranium found in trace minerals such as biotite in some natural stones. When quarried if a large cluster of biotite is exposed the result initially would be a radon reading. However, once a piece of granite or natural stone exposed to a large amount of uranium rich mineral in the ground is removed from the source and exposed to the air, the radon vapor transmission would weaken drastically and then dissipate. Simply put, think of natural stone as a very dense sponge that allows water, air and yes radon to pass through the stone. Once the stone is removed from the source of radon (the earth) the stone has no radon to filter through it.

We do endorse Radon testing but to allude that natural stone is a main contributor seems ludicrous.

Here are some facts about Radon:

WHERE DOES RADON COME FROM?

“Radon comes from the natural radioactive decay of radium and uranium found in the soil beneath the house. The amount of radon in the soil depends on complex soil chemistry, which varies from one house to the next. Radon levels in the soil range from a few hundred to several thousands of pCi/L. The amount of radon that escapes from the soil to enter the house depends on the weather, soil porosity, soil moisture, and the suction within the house”.

HOW DOES RADON GET INTO THE HOUSE?

“Houses act like large chimneys. As the air in the house warms, it rises to leak out the attic openings and around the upper floor windows. This creates a small suction at the lowest level of the house, pulling the radon out of the soil and into the house. (Just as natural stone filters radon emission as mentioned before.) You can test this on a cold day by opening a top floor window an inch. You will notice warm air from the house rushing out that opening; yet, if you open a basement window an inch, you will feel the cold outside air rushing in. This suction is what pulls the radon out of the soil and into the house. You might think caulking the cracks and the openings in the basement floor will stop the radon from entering the house. However, scientific studies show, it only takes enough unsealed cracks or pin holes in the caulking to equal a hole 1/2″ in diameter to let all the radon in. It is unlikely that caulking the accessible cracks and joints will permanently seal the openings radon needs to enter the house. The radon levels will still likely remain unchanged.

Fortunately, there are other extremely effective means of keeping radon out of your home. Throughout the country, several million people have already tested for radon. Some houses tested as high as 2,000-3,000 pCi/L; yet, there hasn’t been one house that could not mitigate to an acceptable level. The difference in reference to natural stone is that one the stone slab is removed from the source and exposed to the atmosphere the radon is vented in the same way ventilation of a house mitigates the radon emissions in the soil.

Levels of radiation from granite products, which technically are measurable, are in fact, small fractional values of established thresholds for environmental safety. The truth of the matter is that granite is a safe product. It’s been used for thousands of years and the relationship between granite and radon has been studied for years and years. How safe is granite? There have been mathematical models developed that show that one could live in an all-granite home or building, including sleeping on granite, for an entire year and still be within very safe levels of exposure.

Calculations show that, if an average countertop, traps an average uranium concentration of four ppm (parts per million), the concentration of radon that is given off by the countertop into the household air would be 270,000 times less than the level of radon in the outside air. The maximum contact level that you would receive over one year if you were to sit on a countertop all of the time would be about one quarter of the annual radiation from all sources. If you were just a few inches away from the granite (such as when doing the dishes), the dose would be too low to measure.

To Quote Donald Langmuir, PhD, Professor Emeritus of Geochemistry, Colorado School of Mines, & President, Hydrochem Systems Corp.

“To show how laughable are the concerns of radon emitted from natural stone, the typical granite countertop in our example will release 7.4 x 10 -7 pCi/L of air. This corresponds to 2.7 x 10 -8 atom decays per second (dps). This represents 0.85 decays per year. In other words, less than one atom of radon is produced by the countertop in one year. This is hardly worth getting excited about. I would suggest that a good way to reduce our exposure to the radon present in outdoor air would be to build an air-tight house out of granite countertops! There are certain properties of rocks that can increase their radon emanation efficiency, or in other words increase the release of radon from a given weight of rock. These are rock properties that maximize the exposure of internal or external rock surfaces to water or air, allowing any radon gas to escape. The author of ‘Granite and Radon’ argues that such properties, which include rock porosity, fissuring and mylonitization, will increase radon releases. This is probably true, however, a granite with such properties would be too brittle to make into a countertop, and too open to take a polish, and so would not be marketable as a countertop – unless the rock pores were first filled with a chemical sealant. Such sealing would also eliminate any possible radon release problems.”

In a more recent study that was conducted by L. L. Chyi, a Ph.D. and professor of Geochemistry and Environmental Geology at The University of Akron, Akron, Ohio. Dr. Chyi studied 13 of the most popular granites used throughout the United States as determined by an industry-wide survey. Due to their popularity these 13 granites, are believed to represent up to 85% of the granite countertop market in recent years. The granite types are as follows:

1. New Venetian Gold, Brazil; medium grained, yellow-beige gneiss with many dark red garnets
2. Uba Tuba, Brazil; A medium- to coarse grained, olive-green granite
3. Santa Cecilia, Brazil; A coarse-grained, yellow-grey gneiss with up to pie-sized, red garnets
4. Tropic Brown, Saudi Arabia; medium-grained, brown granite
5. Absolute Black, India; black basalt
6. Tan Brown, India; A black-brown igneous rock with big, shapeless, brown-red feldspar crystals
7. Giallo Ornamental, Brazil; coarse-grained, brown-yellow granulite with some brown-red garnets
8. Crema Bordeaux, Brazil; Juparana Crema Bordeaux (Brunello). A coarse- to very coarse-grained, pink to red granite with areas of quartz, alkali feldspar and quite a lot of ore
9. Baltic Brown, Finland; brown-black granite
10. Giallo Veneziano, Brazil; medium- to coarse-grained, ochre-yellow to golden-brown, also light pink, gneiss
11. Dakota Mahogany, USA; medium- to coarse-grained, brown-red granite
12. China Black, China, a fine-grained plutonic rock
13. Yellow Star, China, a medium-grained yellow to pink granite

The testing methodology was designed to measure the amount of radon which each granite type would add to the interior of a 2,000 square foot, normally ventilated home with 8 ft ceilings. The results show that Crema Bordeaux (the most active in terms of radon emissions) would contribute a concentration component of less than 0.28 pCi/L, or less than 7% of the EPA’s recommended actionable level of 4.0 pCi/L. This radon amount is well below a level which might cause health concerns. Tropic Brown and Baltic Brown, second and third in radon emanation based upon Dr. Chyi’s testing, amounted to only 1% of this action level. The other granites tested added almost immeasurable amounts of radon to the house. Radon atoms in pore spaces and fractures are of minimal concern in the case of granite countertops

Dr. Chyi’s test results show that the granites that are currently found in the United States’ market place are insignificant contributors to radon levels in the home. “Based on the testing results and EPA standards, we can conclude that the most popular granites used as countertop surfaces pose no health threat to homeowners. If proper resealing is applied once a year or at other frequencies determined by the industry, the radon emanation can be further reduced”.

Daniel J. Steck, Ph.D. also ran a test on interior radon and granite, and this is what he had to say.

“The average radionuclide contents of your building material samples are similar to other average granite samples and other common earth-derived building materials such as brick and soil. Thus, the amount of gamma radiation emitted from similar masses of these building materials will be approximately the same;

There is little sample-to-sample variation in the radon family radionuclide concentrations; the radon flux is somewhat larger for the counter-top squares than for the smaller samples. This indicates that the effective diffusion length is only on the order of the thickness of the counter-top samples, i.e. several centimeters. Thus, material thicker than 5 cm (2″) most likely will not emit more than the counter-top samples.

While we feel that health safety is a great concern especially in our homes, for an industry to attempt to gain financially by “scare tactics” or under the auspices of “Eco friendly” is reprehensible. We urge the consumer to not be taken in by these alarmist tactics. www.nsraweb.com

Article Source: Radon From Granite Causes Cancer

Dean Iggo

Whether you want to get a degree or update your engineering knowledge, you might want to look at taking your engineering courses online. Whether you are a traditional college student or a busy professional, online learning has significant benefits over traditional brick-and-mortar college learning. This is especially true for a discipline like engineering, where electronic learning is the norm rather than the exception.

The advantage of distance learning is the distance. Distance learning means that you can take classes without being physically present where the class is taught. This is even truer of online distance learning, where your classroom is wherever you can find a computer with an internet connection. In addition to being convenient, that means that you can learn from the best of the best, no matter where you are.

Learning from the Best

For example, say you want to learn a little bit about mining engineering, and your school doesn’t offer any mining classes. You can take engineering courses online at Colorado School of Mines or Montana School of Mining and Engineering, the two best mining engineering programs in the country. Those classes will transfer to your current school and count toward your degree.

Or maybe you are working on a computer engineering project, and you read a journal article about some work that MIT is doing in that area. You can take engineering courses online from MIT to learn the latest advancements in computer engineering. You can probably even take a class from the people who did the work you read about and pick their brains in the process.

Adult Learning

It goes without saying that online learning is easier to fit into your schedule than traditional classes, but there is another reason taking some engineering courses online might be better than taking them at a regular school: online learning is structured around adult learning, whereas traditional learning is structured around pedagogy, or child learning.

Adults learn differently than children do, and distance learning programs were developed for adult learners. Online learning starts with different assumptions about how students will learn than traditional learning does. The content of the classes may be identical, but the way learning is structured is not.

Adult learners are self-motivated, independent learners. They bring life experience and professional knowledge to class with them. They prefer hands-on learning and they don’t like learning irrelevant things. They want to be able to use what they are learning.

Taking some engineering courses online capitalizes on all of the advantages of online learning: portability, flexibility, learning from the best and learning the way you learn best.

Dean Iggo is the webmaster of a distance learning college website where you can find the best online learning programs and degrees to suit your needs including online real estate courses courses and more.

Article Source: Advantages Of Taking Engineering Courses Online

James Finch

Just when the uranium markets begin to look dull – like they did in the 1980s and 1990s – along comes bad news planting the seeds of renewed interest. In October 2006, it was Cigar Lake. In March 2007, flooding at the Ranger operations attracted more investors.

So when Cameco Corp announces bad news, this generally becomes good news for the spot uranium price.

According to Friday’s edition of Nuclear Market Review (NMR), “The spot price held steady this week, in large part, due to the uncertainty created by Cameco’s announcement late Friday that its Port Hope (Ontario) conversion facility will be shut down for a minimum of two months.” The weekly industry trade magazine left the TradeTech spot uranium price indicator unchanged at US$129/pound.

News announcing the facility’s closure for two months ‘is expected to place significant upward pressure on the spot price,’ according to NMR editor Treva Klingbiel. She estimated a ‘minimum loss of 2,000 tU of UF6 production’ during the shutdown.

Although Cameco reported the company has adequate inventory to meet its delivery commitments through the end of the year, Klingbiel pointed out, “The psychological impact on the market of this event can not be discounted, given historical experience with previous conversion disruptions.”

Soil within the perimeter walls of the plant was reportedly contaminated with uranium and production-related chemicals. Cameco’s conversion facility is located about 60 miles east of Toronto near the Port Hope (Ontario) harbor. Cameco Fuel Services, at 1 Eldorado Place, is about one-quarter mile from the shores of Lake Ontario.

During the previous three weeks, the spot uranium price slid because of weak demand and ample spot supplies. Klingbiel explained, “Sharply rising prices have led to budget constraints that have prohibited some utilities from participating in the spot market.”

More supply is coming into the market, but not in the overpowering quantity some feared, e.g. five million pounds from the U.S. government.

Nearly 200 metric tons of UF6 was offered earlier this week by the U.S. Department of Energy for delivery by September 21st. This sale represents slightly more than 10 percent of the sizeable amount bandied about in the media a few months ago.

And some buyers are still active. According to NMR, “One non-U.S. utility is expected to enter the market soon to secure approximately 200 thousand pounds U3O8.”

While the uranium market has been quiet, it is far from dead. A week ago, Klingbiel wrote that the underlying fundamentals of the long-term uranium market were instead very much alive.

And it’s no wonder considering the realistic length of time many of the newer uranium projects will take to actually become uranium mines.

The Follies of Forecasting Future Uranium Supply

On Thursday, a local newspaper, Northumberland Today, reported rumors of something significant possibly taking place at Cameco Corp’s Port Hope conversion facility, and which could also impact local residents. Cameco communications spokesman Doug Prendergast told the reporter on July 18th, “There’s nothing major that’s imminent.”

The story’s headline: Cameco Quashes Rumors.

Prendergast also said, “If there’s anything to announce, we get it out immediately. Unless they (employees) know something I don’t.” Maybe they did, because…

On Friday afternoon, Cameco issued its third piece of bad news for the week, shutting down the Port Hope facility for at least two months. Earlier in the week, Cameco had announced another delay at the company’s Cigar Lake uranium project and lowered estimates on gold production on another property. As has been the case with Cameco in the recent past, at some future point we should be greeted with ‘further developments.’

Although uranium is abundant in many regions around the world, economically and expediently recovering uranium is not as easy as many ‘armchair quarterbacks’ suspect.

During this past week, we expanded our commentary about problematic uranium projects, present and future, in the world of uranium mining. Initially, we discussed several potentially ‘tainted’ major mining projects in key uranium-producing regions in our Uranium Outlook 2007-2008.

Our intent was to help educate many analysts and investors who have taken far too seriously the many forward-looking news releases and overly optimistic power point presentations by uranium mining company executives.

Take for example Citigroup’s Alan Heap. Our Australian colleagues at FNArena.com often have a few laughs at Mr. Heap’s expense, reporting on his seemingly misguided analysis of the uranium market. Out of pity, we sent Mr. Heap a complimentary copy of Investing in the Great Uranium Bull Market. We hoped he would more accurately analyze the commodity which his firm has charged him to accurately report upon.

Although Mr. Heap recently capitulated and upgraded his uranium price forecast – this time to US$100/pound for the next three years – in his early July ‘Mutation to Uranium Utopia’ commentary, his long-term analysis is lacking.

Hopefully, uranium miners will skip this next part to avoid uncontrollable chortling.

Mr. Heap wrote, “Barriers to entry for mine production are relatively low. Exploration and mine development are not particularly complex.” As a result of these deep thoughts, Mr. Heap forecast a long-term uranium price of US$25/pound, sometime after 2010.

In an article this past week we warned, “Too much water, too little water, politics, greenies, economics, indigenous tribes, desalination plants, NGOs, camel trails, regulators and rebels are but a few of the land mines analysts face when hoping to forecast long-term uranium price peaks.” We also cautioned, “The safest bet is seemingly against future uranium production.”

We wrote this because developing uranium mines can be especially complex in today’s regulatory climate. Having reviewed hundreds of presentations, filings, prefeasibility and more advanced studies and other documents, it is a tribute to the persistence of uranium miners that any uranium mining actually takes place.

Of the world’s large mines, where we anticipated problems this year and next, we included Rio Tinto’s Rossing in Namibia. In a news release this past week, the company announced Rossing’s production fell about 400 metric tons in the second quarter – down by 29 percent compared to the same period a year ago.

In 2006, Rossing ranked third, behind Cameco’s McArthur River and ERA’s Ranger, in terms of uranium producing mines. This quarterly production shortfall represents about 13 percent of the Rossing mine’s production last year and about one percent of the world’s total uranium mined for the year.

Progress is taking place in moving uranium projects forward, but they are not happening as fast as many analysts believe. Mr. Heap did highlight in the summary of his report, “Mine supply is not responding immediately.” No kidding, Mr. Heap.

In this past week’s coverage, we pointed out some of the reasons why mine supply is not coming online as rapidly as some once believed. There are more problems ahead, which have come across our radar, and we are following up on these. Please stay tuned.

COPYRIGHT © 2007 by StockInterview.com

James Finch contributes to StockInterview.com and other publications. He has contributed to the widely popular “Investing in the Great Uranium Bull Market,” and “Uranium Outlook 2007 – 2008.” His recent work, “Investing in China’s Energy Crisis,” is now available at http://bookstore.stockinterview.com/

Article Source: Cameco Corp News Stops Uranium Price Declines