New Mexico: Who Are The Serious Players?

Summary: Uranium prices continue to soar, and now uranium mining is making a comeback in the state of New Mexico. There may be four serious players hoping to develop their properties in this state. Who are they?

Several uranium development companies have set their sights on New Mexico. Two are actively involved in permitting their properties for production. One was the first to be issued a drilling permit in about a decade; another awaits a permit in order to drill the company's property. Another is an 800-pound gorilla in the nuclear fuel cycle. Three others have properties or continue to assemble a land package in New Mexico. The following is a brief review of the projects of these uranium development or exploration companies, currently holding property or moving forward. The front runners include Uranium Resources, Strathmore Minerals and General Atomics. Companies moving forward include Laramide Resources and Western Uranium. Companies to also watch include Energy Metals, Max Resource Corp and Powertech Uranium. Each has various plans to advance their projects and should be reviewed on their merits. Uranium Resources Inc. Uranium Resources is the top front runner in New Mexico. The company has devoted a great deal of time and money to permit its Church Rock property. In an interview with Craig Bartels, president of HRI (a wholly owned subsidiary of Uranium Resources), he told us, "We hope we can begin construction at the property in 2007." The company has cleared numerous hurdles, posed by local environmentalists, having successfully won every legal battle to date. Its parent company produces about 1 million pounds annually in Texas. Earlier this year, Uranium Resources announced a proposed joint venture on the company's Church Rock property with Japanese conglomerate, Itochu Corporation. Phillips Petroleum made the Church Rock uranium discovery in the 1950s, and later sold the project to United Nuclear (UNC). UNC constructed a mill and mine to the northeast. One HRI property, at Crownpoint, was developed by Mobil Oil as an In Situ Recovery (ISR) project. Earlier work at Crownpoint was done by Westinghouse and Conoco. Phillips developed HRI's uranium property at Nose Rock; Kerr-McGee did the original uranium drilling at Roca Honda. Uranium Resources holds about 185,000 acres in the southern San Juan Basin of New Mexico. Through the uranium depression, Uranium Resources was the "lone man" in New Mexico. Now times have changed. "It is great having other companies coming in here now," said Bartels. "There is so much uranium, and the national attitude has changed so dramatically over the last year, that there is an actual excitement as to what can be done now." Bartels looks forward to the success of the company's first uranium projects in New Mexico, on the western end of the Grants Uranium Belt. He explained, "Using a pretty typical recovery rate of 75 percent for ISR, recovery would be about 4.9 million pounds on Section 8, and 6.3 million pounds recovered at Sec 17." Bartels told us he has been advertising for employees in the northwestern New Mexico newspapers. Strathmore Minerals Corp Strathmore Minerals Corp controls a number of advanced uranium properties in New Mexico. The company's most advanced efforts have been proceeding with the permitting phase on its Church Rock property. To date, the National Instrument 43-101 resource calculations on two properties, the Church Rock and Roca Honda deposits, total nearly 50 million pounds in measured indicated, and inferred categories. Historical uranium calculations on other Strathmore properties in New Mexico, which are non-compliant by National Instrument 43-101 standards, indicate there may a similar amount in addition to what has been reported. Strathmore Minerals President and Chief Operating Officer David Miller told us via email, "It is Strathmore's intent to become the premier uranium producer in New Mexico." The company has approximately C$40 million in the bank to advance its projects. The company has followed the lead of Uranium Resources in the Church Rock area. Miller told us, "There are two ISR projects in various stages of permitting in the Church Rock area, which Strathmore started a year ago." The company has issued news releases updating investors on its permitting progress in New Mexico. In February, the company announced it was on schedule and under budget in permitting its Church Rock uranium property. A mid-April update announced Strathmore was developing its mandatory corporate programs in the permitting process and was advancing toward the licensing phase of its In Situ Recovery process. Dependent upon when Uranium Resources receives its final approval to commence its nearby ISR project, Strathmore Minerals should quickly follow with its project. Please see final section of this article about the company's Roca Honda project. General Atomics Meet the 800-pound gorilla. Not only is General Atomics in the front end of the nuclear cycle with a uranium mining subsidiary, it is a privately held company whose interests are widespread across the nuclear fuel cycle. GA is its acronym, and the one used in this industry. Founded in 1955 as a division of General Dynamics, GA has over 20 locations worldwide, manufacturing a variety of high technology products for commercial and government applications. For example, its aeronautical affiliate manufactures unmanned aircraft, surveillance and radar imaging systems. GA covers a good part of the nuclear fuel cycle. In Australia, through Heathgate Resources, the company owns and operates the Beverly ISL mine. Its ConverDyn affiliate converts U3O8 into UF6 (uranium hexafluoride), which is the step preceding uranium enrichment. Another affiliate, the Cotter Corporation, holds various uranium properties and a licensed mill near Canon City, Colorado. General Atomics also owns the largest uranium resource in the United States through its affiliate, Rio Grande Resources Corporation. The crown jewel of the company's uranium holdings are found in the Mt. Taylor deposit. Before the project was placed on standby in 1989, more than 8 million pounds of U3O8 were produced. The deposit occurs at 3000 feet below the surface with ore grades ranging between 0.15 percent and 2 percent U3O8. During the mine's production, grades average 0.5 percent. Mt. Taylor reportedly contains an in-place resource of more than 100 million pounds of U3O8. GA is reportedly evaluating the deposit for an ISR operation. Laramide Resources Laramide Resources has made a strong footprint in Australia, but it also moving forward with its New Mexico uranium property. The company's La Jara Mesa deposit is located about 12 miles outside Grants, within the San Mateo Mountains, near Mt. Taylor. Homestake had previously operated a mill in the district. Work was first commenced in the La Jara Mesa area in the 1950s. Homestake drilled 86 holes between 1967 and 1971 and abandoned the property after only a few high grade intersections. After the property changed hands in the 1970s and 1980s, a discovery hole was drilled in 1980. Power Resources (now a Cameco Corp subsidiary) drilled more than 500 holes. Homestake again re-entered the project in 1983 and completed metallurgical tests on the drill core. Homestake also completed a mining plan and feasibility study on the Dena Rich deposit, but stopped all work after the uranium price crashed. In a conversation with Laramide Resources Chief Executive Marc Henderson, he told us, "The La Jara Mesa property may be the key piece of the puzzle," referring to the Ambrosia Lake district. "It has the easiest production scenario and the easiest access," Henderson said. The company's website reports the project has a resource of approximately 7 million pounds of U308 (not compliant with National Instrument 43-101). The U.S. Forest Service is now awaiting public comments on the proposal by Laramide to drill ten test holes, about 600 feet deep, to confirm exploration findings from the 1980s.