Grandich's Blog

Uranium Spot Price on the Rise

The uranium spot price has risen for its fifth week in a row.  Now sitting at $51.00/lb, as reported by UxC on Monday, May 11, the question becomes, “Is this a sign of the uranium market finally making a come-back, or will the price once again retreat?”  It is possible that the short-term spot price could continue to be somewhat volatile over the next few months, but based on the increase in activity from both utilities as well as China’s initiative to begin stockpiling, I anticipate that the gap between the spot price and the long-term price can begin closing significantly.  In the medium to long-term, you can anticipate to see a true comeback in the uranium price as demand continues to out-strip supply.  As uranium prices continue to rise, stocks should react in kind and based on Crosshair’s recent activity and their price reaching above $0.35 on Wednesday, we may already be beginning to see this affect take place.

The Wait is Almost Over

Since successfully completing the business combination with Target Exploration and Mining on March 31, 2009, Crosshair’s (CXX-TSX) team has been working on compiling data from over 600,000 feet of drilling in order to complete an NI 43-101 resource estimate for the Bootheel Uranium Project.  I’m happy to say I’m told that this highly anticipated report is nearly complete and should be released soon!  Although the project has a historic resource of nearly 11 million pounds, the company has only completed confirmation drilling on about 60% of the area resulting in an anticipated potential inferred resource of 4 to 6 million pounds.  Not only is this potential well above the minimum mining threshold for this part of the world but the company also believes that with additional drilling that they can not only capture the remaining 5 to 7 million pounds of the historic resource but also plan to expand upon it.  With a project like Bootheel that has near-term production potential and could be mined using in-situ recovery methods, Crosshair’s plans to advance this project towards production are beginning to take shape.

For more details on the Bootheel project, please visit the project page on Crosshair’s website: http://www.crosshairexploration.com/s/Shirley.asp

Making Some Progress in Labrador

Just over a year ago, the Nunatsiavut Government placed a three year moratorium on uranium mining within the Nunatsiavut’s self-governed Labrador Inuit Land (LIL) in the Central Mineral Belt of Labrador.   The moratorium is scheduled to be lifted in March of 2011 and I’m told the Nunatsiavut Government is on track in establishing a lands administration system, developing an Environmental Assessment Act and developing environmental protection legislation.  One of the main concerns that the Nunatsiavut Government had was in regards to the tailings study and the time has come for some good news out of Labrador.   Aurora Energy Resources Inc., now a subsidiary of Fronteer Development Group, recently announced that it plans to hold a series of community information sessions on the tailings management options for its Michelin Project.  The goal is simple – choose a tailings management option with helpful feedback from the community that will satisfy the company’s need to store the tailings in a safe manner with minimal environmental impact.  This appears to be also great news for Crosshair since this was the main reason the moratorium was established in the first place.  This should be one giant step forward in having the moratorium lifted.

Golden Promise – Moving Forward

In addition to the good news on its uranium projects, Crosshair recently completed the acquisition of a 60% interest in the Golden Promise Gold Project in Central Newfoundland, with an option to acquire up to a 70% interest.  This gold project is host to a composite vein system of gold deposits and is highlighted by the Jaclyn Main Zone, which contains a preliminary NI 43-101 resource estimate of 89,000 contained ounces of gold at a 1 g/t Au cutoff.  This zone, which is open for expansion, has only been intersected over a minimum strike length of 800 m and to a depth of 265 m so far, which explains why one of the company’s top priorities for the project includes additional diamond drilling to extend and further delineate the zone with the objective of increasing the current NI 43-101 gold resource.  Also included in the company’s plans to advance this gold project is a bulk sampling program in order to determine a more representative gold grade for the Jaclyn resource.
For more details on the Golden Promise project, please visit the project page on Crosshair’s website: http://www.crosshairexploration.com/s/GoldenDiv.asp

Bottom Line

With a newly acquired near-term uranium project in Wyoming and signs that things in Labrador may finally be making some good progress, the upturn in the uranium market could not have better timing.  Once the company completes the NI 43-101 resource estimate on the Bootheel project, they’ll be in a good position to begin permitting this summer.  With the addition of a great gold project, not only does Crosshair have a number of great projects moving forward, but they also have enough cash to last well into next year.