Drill results from Laramide Resources (LAM-T) La Jara Mesa uranium property in New Mexico at the end of March, provided another shot in the arm to the share price of the Toronto-based company.
After beginning the year with a private placement which raised $23 million at a share price of $7.50, Laramide has seen its shares soar over 100% and were trading at $15.38 at press time.
Even in an environment where surging uranium prices are lifting uranium companies with little in their asset portfolio, Laramides growth has stood out as impressive.
While much of the companys identity on the Street continues to be tied its Westmoreland Project in Queensland, Australia, it has managed to further distinguish itself with strong results from New Mexico and the announcement of a gold property acquisition which it plans to spin-off with other gold assets into a gold pure-play.
By jettisoning gold projects, Laramide will solidify itself as solely a uranium company, and one with a flagship property Westmoreland that has an indicated resource of 15.6 million lbs of uranium contained in 8 million tonnes grading of 0.088% U3O8, and an additional inferred resource of 32.9 million lbs of uranium contained in 16 million tonnes grading of 0.093% U3O8.
The project, however, has been held up by a moratorium on uranium mining in the country. But that might soon be changing. Recent reports out of Queensland that the states premier had reversed his position and was now in favour of mining uranium had companies with assets in the state beaming. And while the premier has since backed off on his comments, the prospect for mining uranium is still believed to be improving.
As for its La Jara Mesa property, the company says it believes New Mexico is due for a major revival in its uranium production.
It cites a June 2004 report from the US Energy Information Administration (EIA) which estimated reserves in the state to be 341 million lbs U3O8 assuming forward costs of up to $50 per pound of U3O8.
In mid-February Laramide finished a 2,000 metre, nine hole drill program at La Jara Mesa. Results from 7 of the 9 holes have been reported with highlights including 4 metres of 0.719% U3O8 from one hole and 4.4 metres of 0.513% U3O8 from another.
A 0.05% U3O8 cutoff was used.
Drilling was focused on what is known as the Dena deposit the largest of five deposits delineated by drilling in the 1980s.
Laramide acquired the property from Homestake Mining a subsidiary of Barrick Gold (ABX-T, ABX-N) — when it bought Homestakes entire uranium portfolio in 2005 for US$3.75 million. Laramide must pay a royalty of US$0.25 per lb of uranium to Barrick.
As part of the purchase Laramide also acquired the Los Ochos, Melrich and La Sal properties — all of which are in either New Mexico or Utah.
La Jara Mesa is described as roughly 763 metres long and 460 metres wide and is confined primarily to the lower two sands of the Poison Canyon member of the Morison formations of the Jurassic Age.
The deposit dips to the south southeast with the base of the Poison Canyon sand lying at a depth of 200 metres below the surface at the north end of the resource area and at 210 metres at the south end.
Laramide says drill hole locations were not done to twin previously drilled holes but rather were positioned to confirm the general trend of previously identified resource zones.
La Jara Mesa has a measured and indicated resource of 7.2 million lbs of uranium contained in 1.5 million tonnes grading of 0.23% U3O8, and an additional inferred resource of 3.2 million lbs of uranium contained in 793,161 tonnes grading 0.2% U3O8.
Laramides vice president of exploration Peter Mullens has said the company is exploring the possibility of a new, regional mill facility in the Grant’s District.
We believe the potential of New Mexico may be underappreciated by the market given that from 1959 through 1981 conventional production in New Mexico ranged from 9 to 19 million pounds of uranium per year, averaging nearly 13 million pounds per year, Mullens said in a prepared statement.
Laramide has roughly 54 million shares outstanding.
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