Uranium Deals Continue: Uranerz Energy Thinks More Uranium Be in Thar Hills

We have been monitoring uranium production and acquisitions since our piece last month pointing to higher expected uranium prices for 2007 and beyond.  After today’s close there was another Uranium acquisition from a Canadian company in Wyoming.  This won’t have any impact for Uranium in general, but Uranerz (URZ) has a mere $147 million market cap.  It also is a low priced-stock that sees occasional pops in the volume to levels that interest some traders.

Uranerz Energy Corporation (URZ-AMEX) made several small acquisitions for potential Uranium producing properties in the Powder River Basin area.  Uranerz signed a binding Letter of Intent to acquire three separate uranium projects in N.E. Wyoming named West Flank, North Rolling Pin and C-line. The locations of these three properties are nearby mining claims already owned by Uranerz Energy. The surface area covered by these acquisitions is on land already covered by Uranerz Energy’s surface use agreement with the rancher, so this means that they are buying rights on dirt they have already been working.  There is only reason I can think of that someone would do that, and that is that they feel there is more Uranium there in thar hills.

The company said these were originally staked in the late 1960s and exploration was performed on them during the late 1970s and early 1980s by Cleveland-Cliffs Inc. Uranerz Energy has much of this data which it believes significant value is present on these properties and Uranerz said that uranium mineralization is present in at least four different stratagraphic zones on the West Flank property.  Geologic study will be initiated immediately on these properties and confirmation drilling may commence during the late 2007 drilling season.

The total purchase price for the acquisition of the three projects will be $3,120,000 payable after a 35-day due diligence period. Uranerz Energy may elect, at its sole discretion, to cancel the Letter of Intent and not close on the transaction if the Company is not satisfied with the results of the due diligence, although these usually are closed.  We’ll see if this actually closes or not, but it looks like this company still believes Uranium prices are going to remain elevated.

URZ closed up 5% at $4.30 on 326,000 shares today.

Jon C. Ogg
January 3, 2007