Sandstone deposits in the Western Cordillera region comprise the key uranium provinces in the United States. Wyoming, the Colorado Plateau (New Mexico-Utah-Arizona) and south Texas's Gulf Coast Plain are the three areas of interest. The Cordillera is a series of mountain ranges, stretching from Alaska to South America. In the United States, some of those mountain ranges include the Rocky Mountains, the Sierra Nevada and the Cascades. In South America, these become the Andes.
We mention these mountains because the Cordillera is the eastern half of the "Pacific Ring of Fire." This is a large zone of earthquakes and volcanic eruptions, stretching from New Zealand across Indonesia, the eastern parts of Asia, across the northern Pacific Ocean – from Japan to Alaska, and down the western coast of North and South America. About 90 percent of the world's earthquakes occur in this zone. The Ring of Fire behaves this way because of movement and collisions in the earth's crustal plates. The upheavals can also lead to mineral deposits. Most geologists first study plate tectonics to understand where they may discover a deposit.
Because of the massive exploration efforts by the United States government, through the 1940s and 1950s, to identify uranium deposits for military use, much of the grassroots work has been done. During the energy crisis of the 1970s, as American utilities were expanding the nuclear energy program, major oil companies further drilled and delineated uranium deposits in the key uranium provinces. More than fifty years of initial exploration and hundreds of millions of dollars in drilling and delineation drilling have minimized the risk for known uranium projects in the United States.
Here is why this is important. After all of this exploration work was done, and uranium resources were more clearly understood, the bottom fell out of the uranium market. Oil companies abandoned these projects, after having invested tens of millions of dollars. Three Mile Island brought U.S. nuclear energy expansion to a grinding halt. During the bottom of the depression in the uranium market, a small number of publicly traded companies snapped up these properties. Some acquired the drilling databases, which accompanied these properties. All the basic work had been done. Consequently, this provides an excellent opportunity for many uranium development companies to advance their projects to the operational stage.
Let's look at the three main areas for uranium development in the United States in the sections that follow: Wyoming, New Mexico and Texas. In a fourth quarter 2005 report by the Energy Information Administration (EIA), there were four operational ISL plants in the United States. Two were owned by Cameco: Crow Butte Resources (Nebraska) and Smith Ranch-Highland (Wyoming). Their operating capacities stood at one million and two million pounds, respectively. Two companies in Texas, Mestena Uranium LLC (a private company) and Uranium Resources, a publicly traded company, also have ISL operations, which produce uranium.
James Finch contributes to StockInterview.com and other publications. Visit www.stockinterview.com to download your free copy of "Investing in the Great Uranium Bull Market: A Practical Investor's Guide to Uranium Stocks." You can always write to James Finch at jfinch@stockinterview.com
