A 'Call' On The Price of Uranium?

Interviewer:

Before we talk about the potential of uranium shortages and the steep price rise in that energy source, could you explain how you got started with this idea, and what is the doctrine behind Strathmore's acquisition program of uranium properties?

Nuclear Reactor

Dev Randhawa:

Several years ago, Strathmore Minerals started with the idea of acquiring properties "out of the money" at very cheap prices in the confidence that the uranium prices would recover so that our assets would be worth more. No one was paying attention to the commodity we chose: uranium. Strathmore Minerals is basically a call on the price of uranium. That's how we started the company. This strategy is similar to what Lumina Copper (Amex: Lcc) used and what Silver proper used. For example, the chairman of Silver proper Resources (Nasdaq: Ssri) is on our board of directors. Our first step was to buy every pound we could for as cheaply as possible. The second step is to buy asset that we think we can put into production. We are actively seeing for those.

Interviewer:

But uranium has a noteworthy environmental stigma. Why, then, are you enthusiastic about this type of energy source?

Dev Randhawa:

As with most people, when I began investigating uranium, I understanding this was bad stuff. I understanding of Three Mile Island and all things else. The more homework I did on this, the more I realized that nuclear power is clean and safe. That is primarily what uranium is used for now. It should be known that no one ever died at Three Mile Island. No one authentically died at Chernobyl. Yes, habitancy got sick. Compare that to coal or the oil spills in the fossil fuel sector, and the damage it has done to the environment. The problem is no one is championing nuclear energy. Frankly, the "greenies" have done a great job of burying the story. As I did homework, I found out France relies on nuclear power for about 78 to 80 percent of its electricity needs. I realized that somebody did a great job lobbying and built a very unhealthy photo toward uranium, when authentically it's needed. We don't talk about the cost of coal. We don't talk about global warming. But, look at what coal has done. Global warming is a function of fossil fuels. That is why you are seeing a growing unavoidable response to nuclear power. For example, one firm has applied to put a new nuclear reactor into the Us.

Interviewer:

To what do you attribute the recent, steep price rise in uranium?

Dev Randhawa:

Since last year, the price of uranium (U3O8) has climbed back steeply back up. At one point, the price was entertaining up about /pound per month. Uranium's price is more in line with the price of oil as opposed to other commodities. For a long time, we've only produced on the mean about 90 million pounds, when we needed 140 (million pounds). There's been an imbalance for a amount of years. This extra came from foreign sources, or from internal Us inventories. Since the 1980s, we've been using more uranium than we have been producing in the western world. As a result, the extra that we've needed has come from Russia, the Us government or list that utilities had.

Interviewer:

But most investors, let alone the consumer, don't know that uranium's spot price has nearly tripled, since bottoming three years ago. Why is that?

Dev Randhawa:

Uranium only makes up one percent of the cost of running a nuclear reactor. The biggest factor in why uranium prices can go up, even more rapidly than gold, is that uranium is insensitive to its use. Uranium prices can go much higher. In casual conversations with a few Toronto analysts, some believe it can go up to or 0/pound. For example, if the price of gold tomorrow went to 0/ounce, it will sway someone's purchasing decision. The guy might say, "I was going to buy this ring and now it's up 70 percent because the price of gold is up. Maybe I will buy a silver ring instead." The same occurs with other commodities. habitancy may convert their purchasing decision based on a commodity price doubling.

If the price of uranium went to /pound, the mean consumer's electricity bill might go up a few dollars. It is not going to force person to turn off their power. However, if the price of oil doubled tomorrow, many of us would be driving smaller vehicles. It would make a fundamental variation in how we behave. That's not going to happen with the price of uranium. It's like buying pencils for your office. It's not going to convert the way you do business. Even if no nuclear reactors come onboard for the next few years, the ones already there will need the pounds (of uranium). We have a shortage advent up.

Interviewer:

Why do you believe a uranium shortage is in the cards?

Dev Randhawa:

Bottom line is: the nuclear reactors are going to run out of fuel. You have to know that permitting takes a long time in the uranium industry. It's not like seeing a gold asset tomorrow and maybe two years from now you are pouring gold. Typically, the permit takes at least three years out. Because nuclear reactors need it, that's what is causing the price rise. Inquire has kept going higher, but production has fallen off the chart. In this business there are only about half a dozen clubs exploring for uranium. At one time, back in the late 1970s and early 1980s, there were approximately 150 uranium companies. There hasn't been any incommunicable mining since the early 1990s. And that doesn't even comprise a wild card: there has been talk that by 2020, 90 percent of the nuclear reactors advent onboard will be for China.

Interviewer:

And what would reverse uranium's steep price rise?

Dev Randhawa:

The only thing that could kill this shop would be if Russia discovered it had a lot more pounds to sell. Or the Us government, straight through Useg, came up with more pounds. When we first entered the market, eight years ago uranium rose to nearby -/pound. Then it fell. What happened was the U.S. Government sold their uranium to a incommunicable group, who turned nearby and dumped it into the market, from then until last year. In October of last year, the Russians were also dumping uranium onto the shop for their hard cash.

Interviewer:

If change value for uranium comes in the form of exploration costs to find and mine this energy source, what would that cost be?

Dev Randhawa:

Realistically, it would be to /pound. I know some are going to say they can do it for less. By the time you take your exploration costs, improvement costs, and so on, you authentically need to get to for most properties to go into production and still make money. That's why most of what you see in the shop are Isl (in situ leach) projects. On one asset we discovered, it would cost between and / pound to pull it out of the ground. But on others, it might take - 22/pound to pull it out of the ground, after labor costs and sell it on a transmit contract. Canada is producing the most uranium because of the grades. Some say Canada has the lowest cost, but that's not quite accurate. What they mean to say is that the cash costs are the lowest. habitancy forget that it costs up to billion to put some of these into production. Cameco (Nyse: Ccj) was a beast of the government at one time. They were treated that way.

Interviewer:

Earlier you noted that investing in Strathmore Minerals was "basically a call on the price of uranium." Can you explain what you meant by that?

Dev Randhawa:

As uranium prices, the share price of Strathmore Minerals should rise. If you look at Bema (Amex:Bgo), when gold prices were at 5/ounce, what was it worth? As the price of gold moved up, it had value. Has it gone into production yet? No. Silver proper (Nasdaq:Ssri) is similar, but it has had to tell its story because habitancy are so focused on gold. The key for investors is not to go where the crowds go, but to go where you can find value. If you believe that nuclear power is the place to be, and the shortage is real, you have got to own uranium stocks.

Interviewer:

What sets Strathmore Minerals apart from any other exploration clubs in this sector?

Dev Randhawa:

I challenge any junior exploration firm to show an individual who has authentically put an Isl (in situ leach) uranium mine into production, along with Cameco. They just aren't nearby because the business has been dead since the early 1980s. There aren't many experts left in this business. The last standing geologist, which Cogema had, was David Miller, who is now working with Strathmore Minerals, as our head consultant. He is the one who has put the Strathmore strategy together. We've been seeing in southern and eastern Africa. Strathmore is going wherever there are pounds that others have overlooked. Our contentious edge is a database we acquired from Kerr McGee (Nyse: Kmd), which used to be amount one in the uranium industry. Recently, we announced properties in Wyoming that could be satellite Isls. We have enough pounds there that we could throw one of them into production. But we still need higher prices. We are still in the acquisition stage.

Strathmore is going to be very aggressive in picking up properties that we think have pounds in the ground or smaller properties that we think can be Isl-able in the Us. all things we're seeing at in the Us is for Isl. In Canada, we have over 700,000 hectares in the Athabascan region. That's a major asset for us. It's one of the richest areas in the world for uranium. Some of our targets are near existing mines. In Quebec, we've got a large asset that was drilled by Uranerz. Robert Quartermain has authentically been a part of that strategy. That's what he did with Silver Standard, and that's what we're doing here. We are aggressively going after properties. When sophisticated investors meet our team, they see the story we've got and they see our management. You'll see why we were able to millions of dollars in financings. Our strategy has been to buy the has-been properties, the low fruit in all the trees. And that's what we've been doing.

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Devinder Randhawa

Mr. Randhawa founded Strathmore Minerals Corp. In 1996 and is currently the Company's Ceo. Mr. Randhawa also founded and is currently the President of Rd Capital Inc., a conspiratorially held consulting firm providing venture capital and corporate finance services to emerging clubs in the resources and non-resource sectors both in Canada and the Us. Prior to founding Rd Capital Inc., Mr. Randhawa was in the brokerage business for 6 years as an venture counselor and corporate finance analyst. Mr. Randhawa was at one time the President of Lariat Capital Inc. Which merged with Medicure in November 1999 and the was the founder and former President and Ceo of Royal County Minerals Corp. Which was taken over by Canadian Gold Hunter (formerly International Curator) in July 2003. Mr. Randhawa also founded Predator Capital Inc., which became Predator Exploration. Mr. Randhawa received a Bachelors Degree in firm management with Honors from Trinity Western College of Langley, British Columbia in 1983 and received his Masters in firm management from the University of British Columbia in 1985.

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A 'Call' On The Price of Uranium?