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« The Uranium Futures Market | Main | Gold Drivers Competition: Update 10 May 07 »

Uranium: Quote of the Week

An interesting snippet may have gone un-noticed yesterday when Peter Farmer President and CEO of Denison Mines was interviewed on ROBtv, now BNN.

Peter Farmer President of Denison Mines

During the interview Peter Farmer said: “that they had Drill Crew issues and that Drill Crews were relatively incompetent from what they were in previous years”

This raises a big question in our minds: If a uranium mining company of Denison’s status can’t attract competent drill crews then who can? Now if we consider the neglect that this industry has suffered for the past few decades then it should come as no surprise to us that competent drill crews are hard to find. So what can companies do? The heat is on to produce and the opportunity to make money is sitting there right on the table waiting to be exploited. I’ll tell you what they do, they employ anyone who can walk and wants the job.

We have seen this before back in the oil boom of the 1970s, construction companies in the oil industry would bid for projects on a cost plus basis only. There was too much work with too few to do it, so fixed price or hard money contracts were not entertained. Once a project was awarded the contractor had to scramble to employ people with even the remotest experience. The development of the North Sea Oil fields in Britain was a wonderful learning experience for many people including myself. Once you had twelve months experience in the ‘oil industry’ you were an expert, my hourly rate doubled in one year. This is where we are with Uranium now, scrambling for bodies who boldly give it a go only to come up short.

In our estimation this throws into jeopardy every schedule about production coming on stream that is trotted out by optimistic company officials. Why because a few drill crews can’t get their act together? No! Its because this hiccup with the drill crews will apply right across the board. All the professional people along with all the craft people are going to do there very best, but they have little or no experience so they too will come up short. This lack of experience will compound delays to programmes and revised ‘End Dates’ will become the order of the day.

In the short term the supply side will be aggravated thus prices will be pushed higher which we see as good news for investors and adds to our confidence in terms of our long standing prediction that uranium will hit $200/lb.

Finally if you are young and in a dead end job please give this besieged sector some consideration, the opportunities for smart young people to get ahead are staring you in the face.

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