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In an amazing turn of events, county commissioners in two key New Mexico counties have taken giant political steps to revive the Nuclear Renaissance in this state. Concerns about the energy crisis, dependence upon foreign oil and global warming have recently led many politicians to suggest alternatives, namely nuclear energy. The record uranium price also helps bring big dollars into their local economies. Both counties are blessed with abundant uranium resources, which they are now encouraging to be mined.

What was once the world’s top producing uranium area, the Grants Uranium District has largely slumbered through the emerging uranium boom of the past three years. Stock analysts and investors discounted efforts by those uranium mining companies which have been moving their flagship projects forward, primarily Uranium Resources (URRE) and Strathmore Minerals (STHJF). In light of these developments, their opinions could soon change.

This past September, Cibola County passed a resolution supporting and encouraging uranium mining. The county clearly believes the renewal of uranium mining would provide a strong economic boost for its residents. This resolution did not surprise us. We first reported on the pro-uranium pulse of Grants (New Mexico) and Cibola County in late June 2005. The county’s head of economic development told us, “We will greet them (uranium miners) with open arms.” And then they did in both county and city resolutions which followed three months later.

What DID surprise us was the nearly identical resolution passed by McKinley County Commissioners. Having traveled through this county and interviewed various personalities, the county-wide resolution amounts to nothing short of a miracle. That’s because the adjacent Navajo Nation, in the four corners area (New Mexico, Utah, Colorado and Arizona), banned uranium mining in 2005. The city of Gallup is McKinley’s county seat. Gallup’s Wal Mart is reportedly where the Navajos do most of their shopping. More than 36 percent of Gallup’s residents are Navajo.

Even more amazing is the fact that McKinley County Commissioner Ernest C. Becenti, Jr, the gentleman who introduced McKinley County Resolution Number DEC-06-088 for consideration by the County Commission, is a Navajo. One of the primary reasons cited in the resolution was to replace the economic loss the county will suffer when the Pittsburgh & Midway coal mine shuts down in 2008. This resolution is likely to have a broad impact within the Navajo community in Gallup because it will help replace those lost mining jobs.

We talked with Mark Pelizza, vice president of environmental affairs for Uranium Resources, who told us, “We are pleased the principals of McKinley County understand the economic benefits of uranium mining.” How big is it? “The potential impact is huge,” Pelizza said, “At $100/pound and 10 million pounds U3O8 produced annually, it could bring $1 billion in uranium sales to the local economy.”

Strathmore Minerals’ vice president of environmental affairs Juan Velasquez wrote in an email, “We have enjoyed a lot of grass roots support from the folks in the Grants area, and we are heartened that McKinley County is favorable to our activities.” The resolutions should impact both companies in 2007 because they were the first to commence the required activities to obtain uranium mining licenses.

Uranium Resources has been actively involved in New Mexico since 1986, according to Pelizza, and obtained its NRC approval in the mid 1990s (recently reaffirmed by the NRC). Strathmore Minerals opened its environmental permitting office in 2005 and has been progressing through the state and federal permissions activities for two of its New Mexico uranium properties.

Over the past year, several other uranium companies became more active in the Grants Uranium District, such as Urex Energy (OTC BB: URXE), Laramide (LMRXF) and Western Uranium (WURNF). Another advanced stage junior uranium mining company, Energy Metals Corp (EMU) also holds properties in New Mexico, but decided to first develop its projects in Texas and Wyoming.

This past June, New Mexico State Senator Joseph A. Fidel, who represents one of the counties in the Grants Uranium District, told StockInterview, “The community will be very supportive of uranium mining. People will be cooperative and will react positively, when the time comes.” In June, the U.S. Nuclear Regulatory Commission issued LES a draft license to build and operate the first U.S. uranium enrichment facility in more than thirty years. It appears New Mexico’s time has come, and this state is back on track to revive its formerly world-class uranium mining industry.

COPYRIGHT © 2007 by StockInterview, Inc. ALL RIGHTS RESERVED

Guess what? Our recent investigation shows the uranium to be enriched in the LES/Urenco proposed enrichment facility in Lea County, New Mexico may come neither from uranium properties in New Mexico nor anywhere else in the United States. Just as New Mexico’s nuclear/uranium mining renaissance was ready to get underway, a deal may have already been cut to enrich uranium mined in a foreign country. Louisiana Energy Services (LES), through the consortium's general partner Urenco Ltd., may have struck a deal with Canadian-based Cameco Corp. Will this uranium come from Canada or Kazakhstan?

According to New Mexico State Senator Carroll H. Leavell, the uranium ore to be enriched at the facility near Eunice, New Mexico facility would be coming from outside the United States. Senator Leavell told StockInterview, “The uranium ore will be coming out of Saskatchewan.” When we asked if the uranium to be enriched in New Mexico would come from the Athabasca Basin, an area hosting the world’s richest grades of uranium and which is also located in northern Saskatchewan, Senator Leavell claimed he wasn’t sure where the Athabasca Basin was. But he told us that Urenco Ltd informed him the uranium was coming from that western Canadian province.

We can only speculate the uranium producer might be Cameco Corp. On July 22, 2002, Cameco signed a Memorandum of Agreement with LES, along with Urenco Ltd, Westinghouse Electric Company, Fluor Daniel and the affiliates of U.S. utilities: Exelon, Duke and Entergy. In an email response to our inquiry, earlier this week, Netherlands-based Urenco Ltd Communications Coordinator April Wildegose-Mistry informed us, “Cameco Corp was part of the original LES project. They pulled out around March 2003 as they needed to focus on other business issues.”

We have also asked to interview Urenco’s CEO. Perhaps he may clarify this matter for us. One industry insider told us Cameco stated its continued support for the LES initiative after it withdrew as a partner. However, the recent joint venture company, Enrichment Technology Company, formed by Areva and Urenco may open the possibility the uranium could also come from Areva’s uranium interests in Athabasca. AREVA is a Paris-based company offering technological solutions for nuclear power generation, and electricity transmission and distribution.

This development could further irritate at least one New Mexico legislator. State representative John A. Heaton from Carlsbad, New Mexico, and who also sits on New Mexico’s Energy and Natural Resource Committee, was adamant about U.S. independence from foreign energy sources. He told StockInterview, “We need to use the assets we have and not be dependent upon foreign countries. I worry a lot about the dependence we have on other countries.”

In this instance, Heaton might be getting a double-whammy of foreign dependence. Not only is Urenco Ltd a foreign-owned and controlled company (a Dutch/ British/German consortium), but the uranium its New Mexico facility would be enriching could come from at least one foreign source, Canada. Because the uranium ore might be sourced from Cameco, yet another country’s uranium could be supplying the New Mexico enrichment facility: Kazakhstan.

Cameco plans to boost uranium mining in this former Soviet country to a level which might approach its uranium production in the Athabasca Basin. Kazakhstan recently joined the “Putin Alliance” of uranium-producing countries. On June 22nd, Kazakhstan signed a contract worth $1 billion to supply Russia’s Tekhsnabexport to supply Russians with uranium through the year 2020. The Economist Magazine’s Economic Intelligence Unit recently issued a caution on this country.

We asked our uranium industry analyst, David Miller, about this new twist in the LES/Urenco story. Miller is a third-term Wyoming legislator, who is an original member of the Wyoming Energy Commission and a past member of the National Council of State Legislator’s (NCSL) Energy Committee., now serving on a NCSL-related committee. Miller is also president of Strathmore Minerals, a company which is now advancing its properties through the permitting process in New Mexico. Miller told us, “The State of New Mexico may miss out on the hundreds of millions of dollars of tax revenues from potential severance, ad valorem, sales and other taxes the domestic industry would pay the state to mine uranium in New Mexico. Instead, the foreign uranium pays zero taxes to enter the state for enrichment.” In other words, Cameco or another may be getting a free ride on taxes.

Ominously, Miller asks these questions, “The real question for New Mexico is this: What happens to the part of the uranium that does not go onto the fabrication plant? Does it stay in New Mexico? Is it shipped back to Russia, Kazakhstan or Saskatchewan?” This gave us pause for thought. After it leaves New Mexico, how do we know it would be used for civilian energy purposes? Could it be transported elsewhere and be more highly enriched? That’s just speculation.

Miller recommended that New Mexico legislators demand the LES plant be fed uranium mined in New Mexico, not in Canada or Kazakhstan. “If this were to happen,” Miller wrote in an email to us, “thousands of new mining jobs would be created in areas of New Mexico which need the most economic development.” Once the world’s leading uranium producer, New Mexico’s Grants Uranium Belt is again being explored by more than a dozen companies. Some hope to permit and operate new uranium production centers in New Mexico. We trust this latest wrinkle will awaken New Mexico’s legislators and help them protect uranium mining developments in their states. Perhaps their voters, who might be looking for higher paying jobs, would appreciate that.

COPYRIGHT © 2007 by StockInterview, Inc. ALL RIGHTS RESERVED.