StockInterview: When do you think conventional uranium mining will overtake the ISR method in the United States?

David Miller: The key is the four existing mills in the United States. They could all be up and running by 2012. Conventional mining and milling could pass ISR before 2012 with Blanding getting up to full speed. I won’t make a forecast as to when Strathmore’s proposed mill near our Roca Honda property would become operational until we have evaluated all the alternatives and issued a formal statement. Once we have a permit, production would likely follow within two years.

StockInterview: How many new jobs will the current uranium bull market create for the world’s mining industry?

David Miller: When annual uranium production reaches 20 million pounds U308 in the United States, the industry would create about 4,000 direct jobs in the mining industry and nearly 30,000 in support services. Because Canada and Australia have higher grades, there would be about 150 new mining jobs created for every one million pounds of newly recovered uranium. However, in Canada where is a tremendous amount of new exploration pushing the limits of geophysics and drilling contractors. I would guess this would create at least 2,000 new full-time exploration-related jobs.

StockInterview: In dollar terms, how large of an operating revenue stream would this bull market bring to the U.S. mining industry?

David Miller: In U.S. the new uranium mining production will be sold at prices in excess of $50 per pound. So the industry will be generating $500 million in cash flow per 10 million pounds produced. Over next 20 years it should spin off $20 billion in cash flow to US uranium producers.

StockInterview: Is it realistic to expect operating income of about $20/pound between ‘all in’ costs and revenue from the uranium sold to U.S. utilities?

David Miller: That sounds about right for the new production coming online. Operating costs automatically go up because companies try to extend the life of the orebodies being mined. I think the spread will be between 1.5 to 2 times cost when prices settle a little. At a mining cost of $30 per pound, a reasonable sales price of $45 to $60/pound will make a nice profit for an operating company.

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