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DOING SOME DIGGING – What’s a drill hole worth?

ANSWER: $26.5 million. At least that's the amount UEX CORPORATION is raising on the strength of its drill hole assa...


ANSWER: $26.5 million. At least that’s the amount UEX CORPORATION is raising on the strength of its drill hole assays announced last week. Our readers will remember that UEX reported it had an 8.8-m intersection grading 27.4% U3O8, including a 3.5-m length that ran 58.42% U3O8, at its Shea Creek project in northern Saskatchewan. UEX has an option to earn a 49% interest in the project from owner-operator COGEMA RESOURCES.

On Monday, July 18, UEX announced that it is making a private placement of 10 million common shares at $2.65/share. Completion of the deal will boost the company’s cash position to over $52 million, giving it a nice bankroll with which to continue exploration at Shea Creek and its other properties in the Athabasca Basin.

The price of uranium oxide has tripled in the past five years and now sits at about US$29/lb. Nuclear power is getting a new look as governments attempt to decrease the use of fossil fuels to generate electricity. World mine production, about 40,000 tonnes, falls far short of the current level of demand, 65,000 tonnes/year. Analysts are predicting demand will continue to rise by 1,000 to 2,000 tonnes/year, reaching 100,000 tonnes/year in the next 15 or 20 years. The foundation is in place to support a uranium oxide price of US$50/lb or higher.

With the promise of long-term profits and existing mines running at capacity, the hunt is on for new uranium mines not only in Canada but around the world. Much of the exploration effort in Canada is concentrated in the Athabasca Basin, which is home to a third of the world’s uranium production, but it is not limited to northern Saskatchewan. There are programs underway in Ontario, Quebec, Newfoundland, Nunavut and the Northwest Territories.

The world’s second-largest uranium producer is Australia, which contributes about 20% of total global mine output. CMJ learned today (July 20) that a man was killed yesterday in an explosion at the Olympic Dam uranium/copper/gold mine in South Australia. BHP BILLITON has closed the mine while it determines the cause of the accident. It was the first fatality since 1998 at Australia’s largest underground mine.


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