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