Ur-Energy Inc (URG) 2007 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to Ur-Energy Q4 2007 project results webcast. At this time all participants are in a listen-only mode, but following the presentation we will conduct a question-and-answer session. (OPERATOR INSTRUCTIONS). As a reminder, know that today's conference is being recorded. It is now my pleasure to introduce Dani Wright, Investor Relations.

Thank you. Good morning, everyone, and thank you for tuning in to our Q4 2007 project results webcast. I'm going to begin by reading a disclaimer. Statements contained in this presentation which are not historical facts are forward-looking statements that involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements.

Factors that could cause such differences without limiting the generality of the following include -- risk inherent to exploration activities; volatility and sensitivity to market prices for uranium; volatility and sensitivity (technical difficulty) market fluctuations; the impact of exploration competition; the ability to raise funds through private or public equity financing; imprecision in resource and reserve estimates; environmental and safety risk including increased regulatory burden; unexpected geological or hydrological conditions; a possible deterioration in political support for nuclear energy; changes in government regulations and policy including trade laws and policies; demand for nuclear power; failure to obtain necessary permits and approval from government authorities; weather and other natural phenomenon and other exploration, development, operating, financial market and regulatory risk.

Although Ur-Energy Inc. believes that the assumptions inherent in the forward-looking statements are reasonable, undue reliance should not be placed on these statements which only apply as of the date of this release. Ur-Energy Inc. disclaims any intention or obligation to update or revise any forward-looking statement whether as a result of new information, future events or otherwise.

United States investors are advised that while the term "inferred resources" is recognized and required by Canadian regulations, the SEC does not recognize that term. Investors are cautioned not to assume that all or any part of mineral deposits in this category will ever be converted into reserves. Thank you. Now I turn the mic over to Jeff Klenda, our Board Chairman.

Thank you, Dani. And again welcome, everyone, to our end of year webcast. We have a lot of exciting information to impart to you today, so we're going to get started straightaway. But I'd also like to introduce the other members on our webcast this morning in addition to myself. Of course I am joined this morning by Ur-Energy's President and Chief Executive Officer, Bill Boberg.

Also in the conference room with us today are Harold Backer, our Senior Vice President and Head of U.S. Operations, as well as Roger Smith, Ur-Energy's Chief Financial Officer. We are also joined by Wayne Heili this morning, the Head of our Casper office and our engineering team as we move forward toward production.

As I mentioned, we have a lot of information to pass along to you today, so we're going to get right to it. I'm going to start now, I'm going to move on to slide number 3, Bill, if you would, please. And what this is -- this slide will serve something of a format, if you will. These are the primary takeaway points that we would like to share with you today and we're going to begin right off.

Our first takeaway point from the PowerPoint today is that we do not believe that the market fundamentals have changed significantly. Despite the fact that spot price has been somewhat soft lately. And for most of you that are ongoing observers of the uranium space you have seen the spot price drop down, whether you're watching UXE or TradeTech, to $78 per pound. But despite that, the fact is that the term prices actually remain quite strong at $95 per pound and we see improving fundamentals.

In fact, although many of us tend to fixate on the spot price, the fact is that spot constitutes less than 10% of the aggregate trading in uranium on an annual basis, so it should probably be deemphasized somewhat.

In addition to that we always also want to emphasize the fact that Ur-Energy is a real company. If you are an observer of the uranium space, you know that once you get outside of the first tier of producers in the uranium space you have probably on a good day maybe a dozen companies that purport to be near-term producers. In actuality the vast majority of those companies are a little more than a half a dozen guys working out of their basements.

Ur-Energy now has grown to be a significant corporate entity. We have in excess of 30 employees in our Denver office and have now grown to 12 in our Casper office as that office ramps up toward production and that's where we see our growth in the years ahead, by the way.

Also in addition to that, we expect to be a producer in 2009. We have of course filed our applications with the regulatory agencies and we expect those permits to be granted mid next year and we expect to do that under a very low-cost production profile.

Finally, we believe that we have a strong pipeline of projects that we can look forward to. We've realized that the Street wants to see and expects to see organic growth from our company. And as a result of that we are focusing on that as well and we believe that we can have a new project ready for production roughly every two to three years.

Moving forward to the next slide, dealing specifically with demand, the next two sides actually cover what we consider to be macroeconomic issues. We will not spend a lot of time on them. However, on this slide what you can see is we believe graphic illustration of the fact that while the demand is expected to remain quite strong; the fact is that supply will continue to lag demand.

And even under the WNA forecast the requirements for the reactor build are expected to grow tremendously. We have seen in the past delays for new project coming into the marketplace, but in addition to that we have also seen disruption of existing projects and we believe that that will continue to be the norm.

Moving forward to slide number 5, I think this is a slide that most observers of this space are well familiar with. And we have chosen to lay it out under plants under construction and planned and proposed. And what you can see here from the graph is that while plants in operation have actually dropped very slightly, there is an absolute explosion of those reactors that are now either proposed, planned or actually in construction. And in fact, we are now expecting more than 30 plants to be proposed or are currently planned in the United States alone.

Moving forward to slide number 6, we believe that we accomplished a number of things in the fourth quarter. We actually had a very big quarter in terms of achieving our milestones as a company, and here is just a brief list of those. We have completed a very strong drill program, this is a very large drill program and particularly for a company of our size and stage of development. We actually drilled in excess of 250 additional holes at Lost Creek.

In addition to that, in October of this year we filed our application for permits to mine with the Nuclear Regulatory Commission and followed that up by a submission of our application with the Wyoming Department of Environmental Quality. Finally, we have completed our in-house economic analysis for Lost Creek; I will not go into any detail on that at this time. Bill Boberg will provide more details for that in his segment coming up in a few minutes. But finally, we have continued under Wayne Heili's efforts to build our engineering and production staff in Wyoming and we've done a great job there and pulled on some terrific people.

Moving forward, to give you a summary of our current capital and cash position, we find ourselves at the present time with a little in excess of 92 million shares outstanding. And as you can see on a fully diluted basis, just a bit over 100 million shares total outstanding. We trade a bit in excess of 500,000 shares a day. We have always felt that our stock is characterized by excellent liquidity and we follow that with the current cash position for the Company, as you can see. We have a little over 76 million shares in cash in the Company and another 23 million shares that is potentially to come into the Company from the exercise of outstanding options.

And before we go into the distribution profile I would like to mention that that cash position is a tremendous advantage to this company. As many of you are well aware these days, things have changed, it's a much different environment out there in the -- not only in the uranium space, but in the natural resources in general.

And we believe that our financing last spring puts us in a position where we have eliminated affectively the financing risk and the increased dilution that will characterize many of our competitors in this space over the course of the next six to 12 months. Our distribution profile continues to be excellent, we have in excess of 10,000 individual shareholders, that grows monthly, and we have very good distribution across the United States, Canada and Europe.

Moving on I will not spend a lot of time -- many of you on this call are well acquainted with our executive and management staff. However, Bill Boberg and myself continue to be the executive officers of this company and expect to be moving forward. James Franklin is our Chief Scientist. Of course, many of you know that Jim was former Chief Geoscientist at the Canadian geological survey. We followed them up with Paul Macdonell, Bob Boaz and Tom Parker, our independent directors.

And one thing that I would note here is that we have now gone independent on all of our subcommittees, the nominating, audit and compensation committees. Not only in anticipation of complying with TSX rules and guidelines, but also of Amex rules and guidelines. That brings us to Roger Smith, our Chief Financial Officer. Roger joined us mid-year last year. And not only as our Chief Financial Officer, but he heads our efforts to gain acceptance onto the American Stock Exchange.

Harold Backer is our Executive Vice President of U.S. operations. Paul Pitman heads Canadian operations. Paul Goss joined us last year as our General Counsel. And of course, last but not least, I consider to be our most significant acquisition last year Wayne Heili who is now building out our production staff in our Casper office.

Moving forward, just a summary there of our technical and professional staff. I know this is one of Bill's favorite slides in here. We like to brag on the experience of our staff. We believe that we have one of the most experienced staffs in North America. But I would direct your retention particularly to the third bullet point. I think that we have done an excellent job throughout 2007, and by we I mean Wayne Heili, in building out our production staff as we prepare to bring Lost Creek into production. He has brought in top drawer people and they have demonstrated over and over again their value to this company in the brief time that they've been with us.

Moving forward to slide number 10 -- many of you have seen this slide. This comes to us courtesy of our friends over at Nuken, Jim Cornell and his staff. This is a good slide from the standpoint that it demonstrates where we see lost Creek and Lost Soldier coming into production in the larger scheme of things.

But the takeaway from this slide is that the United States continues to be the largest consumer of uranium in the world, but yet produces only approximately 8% of the total amount of uranium that it consumes. This is our nitch in the marketplace. We expect to be a near-term producer here in the United States and a domestic provider of uranium to the U.S. utilities.

So with that I will go ahead and turn this over to [uranium's] President and Chief Executive Officer, Bill Boberg, and he's going to give you the details of our progress for 2007. Bill?

Thanks a lot, Jeff, and thank you to everybody who's listening in. We appreciate your interest in the company and we will just move on through here to give you a better idea of what it is that we're doing. Our property positions through the end of the last quarter or 2007 have expanded a fair bit from what they were at the beginning of 2007 where we particularly added extra properties around our existing properties and to the point where we have a significantly larger piece of ground primarily in the Great Divide Basin where our chief operations are than we had previously.

And going on to slide 12, our process of mining, I think as you all are aware, is the in situ process. I will not dwell on that. I think that most of you by now are pretty well aware of what that is. We have submitted our permits for our Lost Creek operations and we have completed our in-house economic analysis to move that forward. Going on to Lost Creek itself, we have completed a large amount of drilling out there last year as well as completing a significant amount of engineering on the project.

And going on to slide 14 which will define the drilling that we completed last year, this shows how we completed the additional 58 pump test and monitor wells. and these are wells that will be with this project right until final restoration of the project after the mining. They're ones that are necessary to be able to have completed our applications that we completed last year.

We completed 195 delineation holes in the deposit to better delineate the mine unit one area that we will be developing as well as looking at some additional areas in the project area, plus the two additional water wells that we completed. As you can see, we completed a large number of drill holes with very significant footage that we completed throughout the year and much of that was wrapped up during the fourth quarter.

Going on to slide 15 -- as far as our testing results this actually falls in three separate categories and those categories are ones with the pump testing that we did. We were able to operate our pumps at levels of about 43 gallons per minute, 24 observation wells on our pump test at number two. I call this number two because number one was completed the year previously when we had installed the first batch of pump test and monitor wells at that location and it came up with very good flowrates as well.

Of that we had nine wells in the production zone, two in the overlying aquifer, three in the underlying and pump test three which was completed in October and we just really wrapped the analysis of that toward the end of the year; we operated at a level of about 37 gallons per minute with 36 observation wells. And I think the key thing I want to stress on that is the amount of work that's necessary to understand what we will be doing as far as being able to operate within this aquifer to control the fluid flow and to be able to know that we have a pumping rate that is something that we can sustain in a production operation.

The third set of leach test results were the leach testing that were completed last year as well in which we did seven uniform splits of the sealed core. And by sealed core I mean core that the instant it came out of the core barrel at the drilling operation it was inserted into a plastic sleeve to eliminate any possible oxygen getting out and causing preoxidation of the uranium minerals before we would test it with the leach solution.

And this is something that very commonly happens, that the oxygen in the atmosphere can immediately start leaching the uranium minerals and cause faulty leach results to occur. And this is one of the things that we had to avoid. But we were able to demonstrate that the leach results that we had got on earlier tests were still quite high and we feel very good that the leach results we got on that.

As far as the layout of the project that we have in the well field layout is generally as shown on slide 16. And this is the preliminary in situ recovery mine that has been prepared by our engineering department that shows the basic six well field that would be the initial six well fields that would be based on the resources as they exists today. And these are ones that would be operating at a level of producing about 1 million pounds from each of the well fields that we would be having.

And they would be, as have been indicated on the slide, there would be five spot well patterns with about -- we're able to put in about 12 to 15 patterns per month with a total of 150 to 180 patterns making up an individual well field. And we had planned to have the plant built by the end of the third quarter in 2009 and to be able to start production very quickly after the plant would be built in the initial portion of the well field would be in in the early part of the fourth quarter of 2009.

So on to slide 17 -- this demonstrates the location of the processing plant area. We're only about 3 miles north of the Kennecott Rio Tinto Sweetwater Mill which is already a nuclear regulatory commissioned licensed facility that's been on standby since the early 1980s. We're building our processing plant -- we will be building our processing plant to produce up to 2 million pounds per year.

And as we've indicated before, we'll be doing that in two phases -- the first phase to produce a yellow cake slurry and then we'll be permitting the plant for adding the dry and packaging facility and we'll be drying and packaging our own yellow cake after that point in time. As you can see from the slide that our area has no population problem as far as what we've been dealing with in the area there.

On slide 18 -- this gives the preliminary operational schedule that has been defined by our engineering team in how the first six well fields or mine units would be mined and mined sequentially which would be the first field ramping up and as it would start to decline in its production the second well field would be ramping up to maintain production levels at close to 1 million pounds per year in full production that we'd be going forward with. And our operation will be a continuous operation moving from production to restoration of each well field continuously as we go.

Moving on to slide 19 -- this slide just demonstrates our road toward production at Lost Creek that, as we've been saying all along and we're continuing to do it, has been the matter of holding quarterly meetings with the Nuclear Regulatory Commission and the Wyoming Department of Environmental Quality. We've been having regular inspections by those groups, checking our operations as we're moving forward with those.

We did all of our environmental baseline studies early in 2007, completed our applications and got them turned in in the fourth quarter of last year. Currently Tetra Tech Engineering is completing evaluation and permit applications for Class 1 deep disposal well sites in the vicinity of Lost Creek which are necessary for the disposal of what amounts of water that we need to dispose of in the area.

We did complete the 255 additional drill holes in 2007 for a total of 156,422 feet. We completed our in-house economic analysis in early January and it's a very conservative exhaustive advanced study which is the blueprint for our future development. We view this as a working document that will be evolving as we move forward. It is something that we'll be adding to consistently throughout the next year and a half as we keep developing our additional engineering work.

And our in-house staff that has been developed in Casper by Wayne Heili has really more in situ recovery mining experience than any contractors available to us today and we feel very, very good about the work that was done on this. It was done as a conservative minimum base case with a variety of sensitivity analysis and we feel that what we've seen on that is it has come out being very much in line with the sort of things that we were able to -- we mentioned before that we felt would be the sort of operational and capital cost that we would be getting and it's very much in line with that and we're very pleased with the study that was completed.

It did not make it on this particular slide, but a press release just went out this morning just prior to the webcast that we have contracted Lyntek Engineers here in Denver, Colorado and they will be completing a 42101 economic analysis on our project, utilizing much of the data in our in-house economic analysis and we would expect that somewhere in the time frame of about 45 days we will be able to release that 43101 report publicly.

On to slide 20 -- slide 20 just demonstrates that we've got our applications in to both the NRC and the WDEQ and you can see by just the number of volumes that are present in the photographs on that one the amount of material that went forward in putting these together. They are very extensive, very detailed, very complete documents for each of these agencies.

On to slide 21 -- this one defines basically the sort of work that is going to be required to complete at Lost Creek to get ourselves to production, whether it's regulatory tasks, the geologic tasks, or the engineering task. As you can see by this, we still have a lot of work to do and we've got the team in place to be able to move these forward. And many of these things will be completed during this year, some of them will be completed early in 2009 prior to the acquisition of the actual permit to start mining. So these are things that will be completed sometime within the next 12 to probably 14 months -- all of these tasks we would expect to have completed.

Moving on to slide 22 -- as far as the exploration drilling in the Great Divide Basin, we didn't get quite as much done last year as we'd hoped to do, but we were focusing our efforts on Lost Creek and to make sure that we had everything ready from an engineering standpoint for being able to move our Lost Creek project forward. And as a result some of our exploration work suffered from that and the inability to get drill rigs as quickly as we'd like to have on that. We had three to four drill rigs working for the better part of eight months last year on drilling Lost Creek and in getting what time we could in on our other projects.

At Lost Creek North we were very happy with some of these things that we were able to see there that we were able to define through some of our historic database that there were a number of occurrences of anomalous uranium that appeared to be quite similar to the results that we were seeing at Lost Creek. We planned a 50 drill hole program and have only completed 30 of those for 29,600 feet, and it was very wide spaced drilling so we weren't able to define actual resources on this.

But the wide space drilling did confirm mineralizations similar to Lost Creek in the similar to rises of Lost Creek -- the Lost Creek deposit is located in and we feel very good about that. Where seven of the holes that were completed there did contain economic grade thickness, the GT product that is how we defined it at Lost Creek itself. And so even though there are wide space drilling that we still got some very good results in that.

In our Eagles Nest at our [Ian] project we had planned to follow-up with old oil test hole that had deep gamma shows in it that indicated that it could possibly be of economic concentrations. And we planned two to four holes, we did drill three holes for a total of 8,605 feet on that and confirmed the mineralization that was present in the oil test but not in economic grades and thicknesses that the grades would be economic but the thickness would not and the depth would preclude it at this point in time.

But the one thing that it did do is it identified zones of mineralization and oxidation that we had not expected to see in that hole and that areas within our [plane] block we feel now have significant potential for additional development and we intend on doing more work during 2008 to follow-up with positive indicators in this particular project.

At our RS project we had planned 20 holes but we only completed six on that before we were shut down by bad weather in December. But we did identify a potential new mineralized area north of the mineralized area that we have already identified from the historic work. And we do need to do significant additional work on this project during 2008 to move things in this area farther forward.

Moving on to Lost Soldier, Lost Soldier did not get an awful lot of work during the year and because of the major effort going into moving Lost Creek forward. The primary thing that we did during the year was engage in Hancock Allen Holt to do a study which is currently under review to evaluate internally, but it was a study that was geared very specifically with the idea of looking at mineralization that would not be available to us through in situ mining, that would be just immediately at or just below the water table and above the water table to determine if we would have the potential to open pit mine that and what sort of economic considerations that we put into that. And we're currently evaluating the results of that study right now.

One other thing that is not mentioned on this slide is that we had already made the decision that we will be moving the permitting process on Lost Soldier forward. Lost Soldier was turned over from our exploration department to our development department late this year, this past year, and the engineering department will be progressing with obtaining and submitting the permit on Lost Soldier later this year as well as doing the necessary engineering work for moving that project forward.

In Canada -- we did not get all of the work done in Canada that we would have liked to this year. But we did complete work on our Bugs project which was very positive.

Let's move on to slide 25 to define the work that we had. Our primary project areas in the Thelon basin and the Baker Lake basin with some work also done on a joint venture in the Athabasca Basin this past year. But the work that we completed at the Bugs project, it has more than 30 bedrock and near source bolder occurrences with three styles of uranium mineralization, each of which has got potential for new discovery on them.

There's the high-grade uranium and sedimentary and tuffaceous strata; there's uranium with hydrothermal [bretches] and then low grade potentially high-volume uranium in intrusives which may be somewhat similar to the rosin type deposits in Namibia. And so we feel very good about what we've seen at Buggs and we'll be doing additional work on those throughout -- through this year and we would hope to get a drill rig on that this year.

In the Athabasca Basin we did a joint venture with Titan Uranium on their Rook R-7 project, tighten drilled that with 14 holes for 3,188 meters. We don't have the final results back from the laboratory on that at this point in time so we have nothing to report on that.

As far as Screech Lake, that we had a disappointment midyear this year when the minister of Indian and Northern affairs recommended that -- accepted the recommendation of the McKenzie Valley Environmental Impact Review Board that our license application be denied. But the one thing that has seven since then is that there have been significant changes in the first nation land withdrawals that have been released by the ministry and accepted by the first nation's, do not include this Screech Lake area and we have significant encouragement to proceed at this point in time and we will be re submitting our land use permit or getting a drilling permit on the Screech Lake as soon as we can. So that will be moving forward as well.

One of the things that I'd like to stress that Jeff had mentioned earlier is that we consider our long-term production strategy. We feel that we do have a pipeline that will be moving projects from exploration into development and into production over the years. And we fully intend on maintaining this process throughout.

Going on to slide 27, which is the slide on stock and that's something that we are continually involved in and trying to do things to improve the value of our stock to our investors. We will be having our 43101 economic analysis on the Lost Creek production facility that will be coming out later this quarter. We will be having a toll drying arrangement signed with a licensed plant operator this quarter.

We will be completing the installation of the mine unit one monitor well process and testing that will be done during the third quarter of this year which is a necessary requirement for moving our first mine unit into application in getting the permit on that. And this is all working closely with the Wyoming DEQ for completing those.

We're always looking for potential property acquisitions and strategic alliances and data transactions that we can get into and we will be actively drilling probably starting late March, more like probably April this year. And we will be actively drilling for much of the year from that point on and we'll be reporting our drilling results as we have results to announce.

And we have, as you can see by the earlier slide on Lost Creek with all of the regulatory work that needs to be completed, we will be submitting a wide variety of various permit applications and the very significant permit applications that will be submitted, those will be announced at the same time. And as always, we will intend on maintaining this quarterly webcast to bring you up to date and to give you the opportunity to ask questions. And with that I would open it up to -- to those that have joined us on this webcast to see if you have any questions for us.

(OPERATOR INSTRUCTIONS). Adam Schatzker, RBC Capital Markets.

Thank you for the update, very useful. I just have two questions. The first one is during your review for your scoping study I was wondering how much work you did on looking at the CapEx and the OpEx. Given the quite significant increases we've seen across the mining industry whether your previous estimates -- I think the CapEx was about $35 million -- whether that's still in tact. And the second question is -- as you are moving towards production what are you guys doing with respect to contracting?

Thanks, Adam. Good to hear from you. Wayne, would you handle that, please?

Sure. Hello, Adam. In regard to the scoping study we've put a significant effort into identifying all the capital expenditures and going out and getting price quotations, preliminary price quotations. So we feel very confident and comfortable with our capital expenditure estimate that is in that study, and that's also the same for the operating expenses. We're pretty familiar with the range of operating costs and the materials required for operating. So we have extensive detail on those items in that study.

And do those line up well with what you had previously forecast?

I think we're going to have to wait to share those results. But yes, as Bill indicated, the economic analysis that we have completed are in line with the previously discussed figures.

Okay, thanks very much, Wayne.

Peter [Gallanos], Carlton Asset Management.

Good afternoon. Thanks for taking my question. Could you talk a little bit about the uranium sector and the potential for acquisitions out there in terms of companies as well as individual properties? And with more focus on the last couple of months and have you seen anything coming up or -- I know you can't probably talk about individual names, but can you give us an idea of what you're seeing out there in the marketplace?

Peter, this is Jeff Klenda. I'll take the first portion of that, I'll let Bill comment on what properties may or may not be available or what kind of opportunities we're seeing as a company from that standpoint. But with respect to other entities in the marketplace, I think that we've tried to be very clear. First and foremost, we are the subject of rumors on an ongoing basis, that we cannot control as to somebody else's intentions to acquire or not acquire this company. That we've been told that we are an attractive target, beyond that we don't have much control over that.

The only thing that Bill has constantly said, which I happen to agree with, is that we don't mind getting married, we'd simply like to choose our partner. But with respect to be prospect of other acquisitions let me say this. I have stated constantly over the last three to six months that we believe that there are some very interesting situations developing in the marketplace. And not to put too fine a point on it, I believe that a lot of those situations are developing because for whatever reason I think that there are some fairly decent companies out there that we know have quality staffs and projects that have a real shot at going into production which, by the way, they are few.

And we believe that in order for us to consolidate with any of those type of entities we have simply said that they would have to look an awful lot like us -- real projects, real databases backing them up, advancement of those projects, definite potential for organic growth within the organization.

So we think that one of the things that's a real factor here is the realization that for whatever reason over the last year a lot of these uranium companies did not take advantage of the opportunities they had in the marketplace to finance themselves. And for the first time the term "financing risk" has definitely worked its way back into the deal speak.

And my feeling is that many of these companies are going to find out very soon whether or not the market is very conducive to additional tranches of funding. That would be my comments with respect to any potential consolidation activity. I would leave it to Bill to comment on the prospect for property acquisitions.

Thanks, Jeff. From a property standpoint we did see late last year a number of things coming from a variety of companies asking if we would be interested in joint venturing with them and this sort of thing. Most of them were on properties that we really could see no interest in. And I'd say that it's probably still a little bit early for seeing some of the better potential things that might be -- that could be available for someone who's well financed, like ourselves, to get involved it.

We're keeping our eyes open and looking for things that could come about that way. And we feel that in time it probably will as particularly as some groups the bank accounts are starting to reduce more, that we may see some of these things come available to us.

Thanks. Could you briefly also touch on potential timelines with respect to Lost Soldier? I know you talked a little bit about it, but if you'd give us a little bit more background information on Lost Soldier and how we can essentially try to model that out in the future?

Sure. Lost Soldier, as I mentioned, we're working -- the engineering department is going to be putting a fair bit of effort into Lost Soldier this year and that will be two things. One will be for moving the permit mined Lost Soldier in. And the second will be to do to additional engineering work on Lost Soldier, just as we had to with Lost Creek, to better define the engineering characteristics that we would need to be able to move the project forward.

Our environmental permitting was completed actually in early 2007 and the need of completing some of the engineering requirements to be able to do that during this year. And with the stuff that we couldn't complete last year because of our total effort in getting these things completed for Lost Creek. But we would expect somewhere toward the end of this year, maybe early 2009 we would be in a position of submitting the application for Lost Soldier.

And Peter, Jeff Klenda once again. I would emphasize just something that Bill said during the presentation and that is that if you believe that we will go ahead and if you understand that we're going to go ahead and submit the Lost Soldier application and conceivably before the end of '08 or right at the beginning of '09.

That is an acceleration of that time schedule. We have always said that we would submit that somewhere around the time of our approval from the NRC on loss Greek so moving it up -- that does represent an acceleration of that timetable by about six months. And we have now come to the conclusion that since the scoping study is behind us we believe that we're in a position to accelerate that project.

Great, thank you. Thanks for taking my question.

Adam Schatzker.

Hi again, guys. Sorry, I didn't get an answer on where you are with contracting or what you're doing with respect to future uranium sales?

We have not contracted anything. We have entered into very preliminary discussions with a number of groups and are just getting a feel for what sort of things it would take to do it and how we would do it. But no, we have not entered into any contracts at this point in time. We generally felt that we would like to see that we're a fair bit closer to production before we'd be doing that. I would anticipate it will probably be the latter half of this year before we would be seriously entertaining entering into a contract.

Just curious, when you do have the conversations with them we've seen for a number of near-term producers that the counterparties are not offering shall we say the normal market terms. Are you seeing that? That they're throwing a discount to account for the fact you're not in production?

I would just -- we have not seen that there's much of a discount out there. In our preliminary discussions, first of all as you know with these contracts, there are a number of moving parts in terms of floor, ceiling, spot, term so first of all, it's a complex negotiation. But I think that what we're seeing is that we simply feel that we would like to be further down the road with the NRC and our application and know that we have reached certain progress points you might say in that application process and that review process before we enter into this.

I think that if we were to -- I don't think that there would be any difficulty in entering into an off-take arrangement or a forward sale arrangement at this point in time, but we just feel that it would be a bit premature and we would like to be further down align.

I can absolutely understand that. Thanks very much, guys. Appreciate it.

Wes Mitchell, [Seda Coding].

In regards to domestic supply, you said that 8% of the uranium is produced in the United States. What percentage of the world's uranium is actually consumed by the states in North America, maybe Canada included, just looking toward secured domestic supply?

It's a little bit of a moving target. What's the projection this year, Bill?

Currently I think projection for actual U.S. burn up of uranium is somewhere -- and it varies, like Jeff said, probably between 45 million and 60 million pounds per year that are actually used by U.S. utilities.

In fact, I think the closest range that I saw was 56 to 58 million pounds projected this year.

Yes. But it varies annually and based on what their requirements are. And where the U.S. production right now is actually around 4 million pounds per year.

Aggregately (multiple speakers) that would be about a third of the total demand worldwide.

What is the worldwide production right now?

I don't know what 2007 was, we haven't seen those figures yet. But 2006 was about 104 million pounds of production with -- it's somewhere in the range of 150 million pounds of requirements.

And who is the main producer right now percentage wise?

Probably the largest producer is Camoco followed by Rio Tinto from their to their two operations that they would have.

And where is their primary production coming from?

Camoco is -- their primary production is out of the Athabasca Basin and they're producing a very significant amount out of their deposits there. And then they also have their operation in Nebraska and in Wyoming which are producing something in the range probably of about 2.5, maybe pushing 3 million pounds this past year. And then Rio Tinto gets most of its production out of Namibia and Australian.

What percentage of the world's supply would come from Canada overall, would you know?

It's about a quarter, somewhere around 25%.

Okay, excellent. Thanks for your time.

(OPERATOR INSTRUCTIONS). Currently, sir, we have no other questions registered.

Okay, that's fine. Thank you very much.

Wonderful. Ladies and gentlemen, at this point then we'll go ahead and conclude our webcast. Thank you very much for attending and, as always, Bill and I are always available for conference calls, that means we don't have to get on an airplane so we love doing that from our offices and you can continue to expect this level of transparency I'll say with respect to these webcasts.

The fact is I don't know of another uranium entity outside of the first tier that holds themselves up to this level of scrutiny. We will continue to do that. We're very confident in our ability and in our staff and the viability of our projects. So this is a level of transparency that we will continue to bring to the marketplace.

And as I have said on (technical difficulty) occasions, knowing virtually every other legitimate uranium player in the space, if there's somebody doing it better or more efficiently than we are with better projects I frankly do not know who that would be. With that we will sign off. Anything to add, Bill?

No, nothing to add. Thank you all for joining us.

Wonderful. That concludes our webcast. Until next quarter thank you very much. Have a great day.

Thank you. Ladies and gentlemen, this does conclude your webcast for today. Once again thank you for participating and at this time we ask that you please disconnect your lines. Have yourselves a great day.