In yesterday’s conversation with Dr. Robert Rich, we determined he had the credentials and industry knowledge to provide Yellowcake Mining (YCKM) with credibility in the uranium space. But, what about the geology? Many juniors have skated onto the radar by using a ‘big name’ to attract investors. Too often, the property’s geology is lacking the factors which would lead to actual uranium mining. Often, the industry-celebrity name is barely familiar with the company’s property.

To our surprise, Dr. Rich was intimately familiar with Yellowcake Mining’s Juniper Ridge property in southern Wyoming. “I had looked at Juniper Ridge in the late 1970s and early 1980s when it was owned by Urangesellschaft (UG), a German company,” he told us. “At the time there were still fresh open cuts from previous open pit mining there. There was a bit of uranium produced during the last market cycle of uranium, but I was impressed with the potential for it to become a much bigger operation. And then I didn’t hear anything about it for over twenty years.”

Juniper Ridge Bigger Than We Thought

He explained some of the production costs and geology, describing Juniper Ridge. “I think there was a feasibility study that gave favorable results when the market was around $40/pound,” Dr. Rich said. “Its mineralization is in pods. When I was there before, it looked like I was in a giant prairie dog village.”

What kind of mining would take place at Juniper Ridge, then? “I think that’s one of the reasons why people hope it will be ISR-amenable,” Rich answered. “Maybe you put a well field on each of the pods and get out what you can at a low production and low processing cost.” Because of the property’s history, Dr. Rich wouldn’t rule out conventional mining. “We have 2,000 drill holes which need to be re-analyzed.”

So we spoke with David Frank, the Strathmore Minerals geologist who has been analyzing about one-half of those drill holes on behalf of joint-venture partner Yellowcake Mining. “We’re getting above average, reasonably good grades,” Frank told us. “I’m not disappointed.” Frank scrolled through data during our telephone interview, citing some of the exceptional holes: 0.2, 0.3 and 0.5.

“Some are in the percents,” Strathmore Minerals (STHJF) president David Miller told us. “According to the industry, Juniper Ridge was the best discovery made in southern Wyoming. It was the only one with significant uranium mineralization in the Browns Park Formation.” The formation encompasses northeastern Utah, northwestern Colorado, and south-central Wyoming. “It is a slightly younger formation than the Wind River or Wasatch formations,” said Miller, who was recently announced as director of Yellowcake Mining. “This is another tertiary age sandstone formation in Wyoming which contains substantial uranium mineralization.”

Miller rated this formation third in the state. He explained the Wind Rivers formation, with Gas Hills and Shirley Basin, was Wyoming’s most prolific uranium producer, followed by the Wasatch formation, which includes Powder River and the Red Desert.

Historically, Juniper Ridge was the site of 12 small open pit mines. UG nearly brought the property into production in the early 1980s. There were pit designs and it was reportedly permitted. Machinery was ready to break ground. UG had given the project the green light, when the bottom fell out of the uranium market. Later, the Italian company, AGIP bought, hoping for a turnaround in the uranium price. The uranium price drought lasted longer than expected, and it passed through to other hands.

As the uranium price appeared to be heading higher, Strathmore Minerals acquired the property. In mid March, Yellowcake Mining optioned an 80-percent interest in the property, which it will earn by spending $8 million over a five-year period to develop Juniper Ridge. As part of the transaction, Yellowcake issued nine million shares to Strathmore.

Strathmore corporate secretary Bob Hemmerling told us, “This is part of our corporate strategy to monetize our non-core assets so that we can advance our flagship projects.” Others we spoke with confirmed this was likely to become an economic uranium mining operation.

“We are too early days, but I would feel pretty confident in a $60 to $70 (uranium price) market of not having any problem bringing it on-line and making money,” Dr. Rich informed us. “I think it has potential to become a medium-size producer – maybe a couple million pounds a year. The mineralization is not all that deep.”

Juniper Ridge is a near surface deposit with uranium mineralization starting at the surface and running a few hundred feet to depth. “The deposit was discovered by picking up surface rocks with a Geiger counter,” said David Frank. It might be mined by a combination of open pit for the shallow mineralization and ISR for uranium at depth. “Possibly by heap leaching piles of ore, “Rich said. “Or if you went underground, you could heap leach and inflate – like heap leaching ‘in place.’ This was done once at New Lake Mines in Canada’s Elliot Lake region.”

Miller pointed out, “We expect to drill the property, for permitting purposes, in 2007. It was under development to become an open-pit mine, before it was put on ‘stand by’ by UG.” Data compilation is ongoing to analyze more than 2,000 holes previously drilled.

Near-Term Uranium Production in Wyoming’s Gas Hills

“It’s a real action property,” Strathmore’s John DeJoia told us from the company’s Santa Fe, New Mexico permitting office. “Developing it will bring a lot of new applications to the ISR (in situ recovery) uranium industry.” DeJoia is intimately familiar with the prospects at Sky because he had evaluated the property’s potential during the last uranium cycle. “It’s a fairly straightforward ISR mining project,” DeJoia added. “Sky will be easy drilling because of the formation.”

Located in Fremont County near Lander and Riverton, Wyoming (near Strathmore’s U.S. headquarters), the Sky property is a relatively small uranium deposit – about one million pounds U3O8. Why bother with something this small? “It’s an ideal ISR property to introduce new technologies,” DeJoia said. Uranium mined at Sky would be processed through a small, inexpensive plant. “It would be modular and portable with new technologies,” he added. DeJoia explained this could become a new development for existing remote ion exchange technology. (http://www.stockinterview.com/News/03192007/ISR-Uranium-Remote-Ion-Exchange.html )

This may signal a bigger property development. “I think it will be developed in conjunction with other properties in the area,” DeJoia speculated. An April 10th news release announced it would be the first of Strathmore’s properties to begin data collection for permitting purposes. Strathmore has several other Wyoming projects listed on the company’s website.

At first we thought the Sky property was a throwaway, like other properties tossed like doggie biscuits by the higher market cap uranium juniors to barking new uranium junior entrants. We talked permeability with David Miller about Sky. “The Sky property has about eight-fold the permeability of Christensen Ranch,” Miller confided. He would know, because he was chief geologist at this ISR uranium operation for four years. “Christensen Ranch had 300 millidarcy; Sky has 2500 millidarcy,” Miller said.

Millidarcy is used to measure the permeability of a uranium roll front deposit. The higher the darcy (1.0 or greater shows good promise), the more permeable the deposit. This unit of measurement is widely used in petroleum engineering and geology. We discussed the importance of permeability in our basic ISR series (http://www.stockinterview.com/isr-2.html ).

This may explain why both companies are excited by joint developments in Wyoming. Geologically, both Strathmore Minerals property assets have greater prospectivity than we first thought. These present the significant opportunity Dr. Robert Rich explained to us in Part One of this series.

And what about the hundreds of pesky juniors which have sprung up to rape the uninformed investor? “I think that probably half the juniors are just opportunistic,” Dr. Rich told us. “That’s the nature of entrepreneurial activity—looking for the next horse to ride, like the pony express.” Rich further explained, “You wear out one, you get on the other. I think there are so many companies that probably had gold in their name prior to them having uranium in their name. When the next thing comes along, whether it’s nickel or whatever, they’ll change the company name and do something different.”