It is easy to say that the world is running out of clean energy sources and it’s another to do something about it. Finding a solution and being able to support it is the key. Those that can see the solution and make it happen are those that will profit well into the future.
Western Prospector Group Ltd., a Canadian uranium mining exploration and development company, is currently working to develop a large uranium mining lease located in Northern Mongolia. The location of the mining lease may appear to be a bit exotic but, by all accounts, is ready for mining development with the required infrastructure in place.
The 1,900 acres of the lease could hold a solid future for the company. Initial testing of the property indicates that 20 million pounds of Uranium are ready to be capitalized upon and that remaining portions of the lease should hold true to testing form. Continued testing and feasibility are funded, with a cash reserve of $30 million, so remaining in-ground status will be known in the near term.
With a frivolous lawsuit now dropped by an outside source, the company is ready to move forward. Expectations are that over the next 12-18 months, the company will begin to see results from the first phases of the project. There are certain governmental issues that surround working in Mongolia, but they are of a more positive nature. Current estimates indicate that the first phases of operation will employ approximately 500 people in a region that is in need of economic aide.
The Mongolian government is likely to be pleased with the addition of jobs in the region, but has yet to indicate what part of the project’s revenue it would be interested in. The government’s slow response to participation is not uncommon in this part of the world and should be viewed as a positive. In many respects, the government views the project as a step forward for the region, but is moving prudently and responsibly for the country’s best interests.
From a commodities and markets standpoint, the addition and timing of a sizable uranium find could not be better timed. As the world is now coming to terms with its energy issues, nuclear power is being reconsidered. Following the current use of this increasingly safe form of power, future need of uranium is expected to increase in the next 10 years. Full production at the company’s Mongolian mine should be just ahead of this timing, giving production and processing adequate time to progress.
To give a certain perspective of where future Uranium demand will be coming from, consider what is now in use and what is coming down the road. Building nuclear power reactors is no small task and takes a bit of time. This is not to indicate, however, that individual plants are not in or at certain points in their development as we speak.
As of August 2007, there are 439 (http://www.iaea.org/cgi-bin/db.page.pl/pris.oprconst.htm) nuclear power plants operating in the world with a very large number ready to begin construction, under permit or in the application phase, near term. For a review of the world nuclear power plant and uranium demand situation visit: http://www.uic.com.au/reactors.htm.
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