Our Audio Interview with Uranerz Energy (NYSEMKT:URZ) chief executive Glenn Catchpole revealed the company plans a pre-feasibility study on two properties this summer. He told StockInterview, “The hydrological environment is favorable and the grade of the ore and the thickness of the ore is such that it can support a profitable mining operation.”
Catchpole also said:
Realistically, we are probably looking at the end of 2010 so our production in 2010 will probably be rather small—250,000 to 350,000 pounds.” Catchpole explained Uranerz Energy would be in full production by 2012. He added, “With that model in mind, our plan is to some day, in Wyoming, be to a production level of 1.5 million pounds to 2 million pounds per year.
StockInterview: Glenn, what steps is your company taking to bring your uranium projects into production?
Glenn Catchpole: We decided to focus in Wyoming and, particularly, in the Powder River Basin. We have acquired properties with the idea that they have known mineralization and that they have a good potential for being produced using the in situ recovery mining method. With that data and with our experience in that district to start the environmental permitting process, we started that last year. We began our serious mine planning on those properties. All those things are coming together both from the permitting side and from our technical planning side to develop these first two properties, in situ recovery production units, and we will do a pre-feasibility study on those two properties this summer.
StockInterview: Glenn, why does it take so long to bring a uranium mine into production?
Glenn Catchpole: Wyoming has an excellent environmental regulatory process in place that was put there clear back in 1973. It’s fairly clear cut and an applicant knows what has to be done but there are just timelines built into that process that are difficult to short circuit or to expedite. It takes at least a year’s worth of baseline data on some of your studies that you have to do - there’s no way to get around that and you have to have at least a year’s worth of data in that application. It takes you about that long to get all the information gathered up and properly prepared and drawings made and data analyzed to get that application ready for submittal. And then, the regulatory agencies have certain timelines they must fulfill statutorily in reviewing that application. So that process can take a year to two years or even longer in Wyoming to get through it. Now you are talking as much as three years before you actually have those permits and licenses in hand. In the case of an in situ recovery mine, it’s at least a year, maybe a year and a half to construct the facilities to the point where you can start up the first well field and be producing uranium.
StockInterview: How much production do you believe you’ll have by 2010 and how many years do you believe Uranerz Energy will be producing in Wyoming?
Glenn Catchpole: That's our goal is to be in production in the year 2010. That assumes that the licensing process, the time it takes to get our permits will go reasonably smoothly and there won’t be any glitches or issues that come up which would substantially extend that period of time necessary to get the permit. Realistically, we are probably looking towards the end of 2010 so our production in 2010 will probably be rather small—250,000 to 350,000 pounds is probably the best case. We will target our production from our first two properties total to 750,000 pounds per year. That’s our target. Even in 2011, assuming we get started in 2010, probably year 2011 we will not yet have reached that full annual production rate of 750,000 pounds. By 2012, we should be at full capacity under the current planning of 750,000 pounds per year of U308. Our business model or our corporate goals are to be a mid-term producer of uranium in the U.S. using in situ recovery method. With that model in mind, our plan is to some day, in Wyoming, be to a production level of 1.5 million pounds to 2 million pounds per year. StockInterview: What are your biggest worries in bringing your first uranium project into production?
Glenn Catchpole: Our foremost and biggest worry is that the licensing process goes smoothly. It’s been a while since a brand new project has gone through the licensing process in Wyoming for uranium and, for that matter, on the federal level with the Nuclear Regulatory Commission. We are on a little bit of uncharted water here as to exactly what the timeframes will be or what the real issues turn out to be as we go down this road. Other issues that might crop up is the availability of an experienced workforce and of drilling equipment to drill the wells that we are going to need for a commercial in situ recovery mine.
StockInterview: Why should investors look at Uranerz Energy as a way to make profits from the uranium bull market, as opposed to another company?
Glenn Catchpole: We are focused in Wyoming and in a particular part of Wyoming that has a proven track record in terms of being able to support uranium mining projects using the ISR mining method. An example of that is that even during the bust years back in 90’s and 2000’s, the only uranium mines in the U.S. that remained in production were in the Powder River Basin of Wyoming and perhaps there was one or two in Texas. The hydrological environment is favorable and the grade of the ore and the thickness of the ore is such that it can support a profitable mining operation. We are in the right area, we’ve got properties with historical resources on them in an area we have previous experience. Because of our management team that we have put together is the other reason I think that investors should look very seriously at investing in our company. Our team has actually put, in total, some seven in situ recovery mines into operation and our Chief Operating Officer, George Hartman, has actually put two ISR mines in production in the Powder River Basin very close to where we have our properties. We have the right management team, the experienced team that knows that they are doing that can make these things work and run profitably.
Note: James Finch and Julie Ickes conducted the Audio Interview with Glenn Catchpole.