Cameco & UEX For the record, I'm long on UEX and have made mad money so far. That said, a bit of skepticism is good in any investing mindset. Here's some comments from my buddy who's on the ground with an environmental firm in the Athabasca basin:
About this West Bear project, here's my take on it. UEX is clearly serious about proving up the deposit with their sonic drilling program this year. I expect the largest reason is that they are
interested in showing Cameco and Cogema (i.e. the 2 big players) that the reserves are of sufficient quantity and grade to take seriously. If their information, which you included herein, is legit, then the grade of ore is quite good (it's feasible for Cameco to mill 0.125% grade due to high spot prices, and West Bear is 1.385%) but not great (Cigar Lake deposits are >10%). However, here's the downside to all this. UEX is clearly not going
to develop a mine on their own and are relying on Cameco or Cogema to
partner up and provide milling capacity at Rabbit, McClean, or both. And this may be possible, as both operations are upgrading their mills to accommodate larger quantities of ore to be provided by Cigar Lake. Cigar Lake is currently in development stage and is slated for active production by winter 2006, with potential reserves to last 20-25 years. So, if Cameco and Cogema are operating their respective mines, milling their ore, plus the high grade ore of their joint venture Cigar mine, will they be interested, within the next 15 years, in developing a lower grade open pit mine? Not
likely. And even at that, it took Cigar lake almost 20 years from the time of the find to actually acquire approval to operate. West Bear is unlikely to produce an ounce of yellowcake before 2015. On top of things, Cameco is running an intensive diamond drill program on their Rabbit Lake holding this year and are likely to find new ore to develop.