| The U.S. Department of Energy's record-keeping arm | | | | from Colorado and Texas. Wyoming, New Mexico, |
| issued very encouraging data this week, which should | | | | and Nebraska showed modest increases in |
| give a boost to many of the companies developing | | | | employment numbers. |
| their uranium properties in the United States. | | | | Exploration activity was also up. The number of drill |
| Front-runners, with the more solid outlook, include | | | | holes exploring for uranium, in 2005, grew by 47 |
| Strathmore Minerals (TSX: STM; Other OTC: STHJF), | | | | percent over 2004. Land expenses nearly doubles |
| UR-Energy (TSX: URE), Uranerz Energy (OTC BB: | | | | since 2003. These were expenditures for land |
| URNZ) and Energy Metals (TSX: EMC). The U.S. | | | | acquisitions, geological research, geochemical, |
| government's uranium annual report should also help | | | | geophysical surveys, and costs incurred by field |
| bolster the aspirations of the more speculative uranium | | | | personnel in the course of exploration, reclamation and |
| explorers and developers we have previously written | | | | restoration work (plus overhead and administrative |
| about, including Kilgore Minerals (TSX: KAU), Max | | | | costs associated with supervising and supporting field |
| Resources (TSX: MAX; OTC BB: MXROF), and | | | | activities). |
| Northwestern Minerals Ventures (TSX: NWT; OTC | | | | The largest percentage and dollar increase came from |
| BB: NWTF), which also plan to explore their U.S. | | | | production expenditures, which include mining, milling, |
| uranium-mineralized assets. | | | | uranium processing and running the facilities. The |
| The Energy Information Administration (EIA) released | | | | estimated expenditure more than doubled in 2005, |
| its Annual Domestic Uranium Production Report on | | | | compared to the previous year. This jump in expenses |
| Monday, showing the U.S. uranium production industry's | | | | confirms that uranium exploration, development and |
| turnaround continued through 2005. Drilling, mining, | | | | production companies are preparing for a banner year |
| concentrate production, employment and expenditures | | | | in 2006 and beyond. |
| all increased over 2003 and 2004. U.S. uranium mine | | | | While production was modest compared to the world's |
| production was the highest since the year 2000, but | | | | powerhouse producers, such as Athabasca and |
| remains below the period of 1995-1999. Sustained | | | | Australia, the EIA report reminded us of the production |
| growth in this sector appears likely based upon the | | | | capacity of the various U.S. facilities. While U.S. utilities |
| soaring spot uranium price, which has increased more | | | | require between 50 and 60 million pounds of uranium |
| than 500 percent since then. | | | | to fuel reactors, the domestic uranium industry is |
| U.S. uranium mined produced an estimated 3 million | | | | producing but a fraction of what is needed. Total |
| pounds of uranium oxide (U3O8), 24 percent more | | | | "existing" production capacity from permitted In Situ |
| than in 2004. Estimated U.S. uranium concentrate | | | | uranium recovery stands at 8.8 million pounds annually. |
| (yellowcake) production in 2005 was 2.7 million pounds | | | | U.S. utilities need to begin looking beyond next year's |
| U3O8, 18 percent more than 2004. Domestic | | | | annual report. The time is now to foster and |
| production mills and in-situ recovery facilities shipped an | | | | encourage the small domestic uranium industry before |
| estimated 2.7 million pounds of uranium concentrate, | | | | everyone but the United States has available uranium |
| this past year. | | | | supplies to power their nuclear fleets. |
| In 2005, employment in the uranium industry increased | | | | An interesting EIA report, issued last Thursday, |
| by 52 percent, over the previous year. Drilling for | | | | confirms what we've been writing about. For 2006, U.S. |
| uranium, production, land and other expenditures | | | | utilities have contracted for more than 60 million pounds |
| jumped by 54 percent, in 2005 compared to 2004. | | | | of uranium to fuel the country's nuclear fleet. Looking |
| Companies spent an estimated $16.4 million in 2005, the | | | | forward to 2007, they have only contracted for 45 |
| most since 1997 - 1998. Surface drilling as measured in | | | | million pounds. By 2008, the contracted number dives |
| millions of feet was 1.7 million feet, the most since 1999. | | | | below 30 million pounds. For the period of 2009 - 2010, |
| Employment in person-years was estimated at 638, | | | | U.S. utilities have contracted for about 10 million pounds |
| the largest employment figure since 1999, but far | | | | per year, averaged over those two years. That is far |
| below the four-digit employment numbers of 1995 - | | | | below the minimum uranium requirements necessary |
| 1998. The greatest employment percentage increase | | | | to fuel the country's nuclear reactors. This should again |
| came from Arizona, Utah and Washington State, but | | | | confirm that the U.S. uranium bull market has barely |
| the largest employment number in person-years came | | | | begun. |