| Summary: Sprott Asset Management uranium expert | | | | production. I think people are going to wake up and |
| Kevin Bambrough talked with us about the "second | | | | start giving them more credit. I think that positive |
| leg" of the current uranium bull market. Bambrough | | | | permitting developments will continue to occur in |
| names his favorite uranium companies, where he | | | | places like New Mexico. Obviously, the friendly |
| believes there is still room for growth.StockInterview: | | | | environment in Wyoming for bringing on production |
| How does the major nuclear energy build up you | | | | will make Energy Metals perform very well going |
| envision impact uranium mining?Kevin Bambrough: | | | | forward. It's going to be fantastic for shareholders if |
| I think, with the passage of time, all types of mining | | | | it can duplicate the move that Paladin has over the |
| will again be done again in the United States. They're | | | | last year or so.StockInterview: You said earlier |
| going to need the supply. There is no alternative. If | | | | "common sense would prevail" in New Mexico. How |
| you look at Energy Metals Corporation (TSX: EMC), | | | | does that impact Energy Metals?Kevin Bambrough: |
| part of their plan is to start with some ISL | | | | New Mexico is more in the back burner for now, but |
| operations, some of which will come at a facility | | | | I think the stock (Energy Metals) will continue to |
| that's already fully permitted. Then eventually, they're | | | | perform well as the regulatory environment continues |
| going to try to move into places like New Mexico, | | | | to improve in the area. I should touch on Strathmore |
| where I think with the passage of time, common | | | | Minerals (TSX: STM). We've been pleased to see |
| sense will prevail and people will become more | | | | they've been bringing out their (National Instrument) |
| pro-mining for uranium.StockInterview: We now have | | | | 43-101's on a couple of their (New Mexico) properties |
| about ten times the number of uranium companies, | | | | and show an increase in reserves. I believe they're |
| some purporting to be a "uranium company," than | | | | doing some work right now on their Dieter Lake |
| when we first started covering this sector. How is | | | | project up in Quebec that could be interesting. |
| this sector going to play out?Kevin Bambrough: | | | | They've got some good resources and reserves. I |
| It's been very difficult to try and follow what | | | | think at some point, someone is going to want to cut |
| everyone is doing in this space. Right now, the | | | | some deals with them, or they're going to just keep |
| uranium story is looking so good. It's still relatively | | | | chugging along and bringing things |
| early that anyone seems to be able to raise some | | | | forward.StockInterview: You were excited about |
| money, tell a story and perform well. It's unbelievable | | | | Tournigan (TSX: TVC) the last time we talked. How |
| how the sector has performed this year. With the | | | | is that one turning out?Kevin Bambrough: |
| passage of time, the guys with the real resources, | | | | Tournigan is really developing into a great story. |
| who can also develop them and produce, are going | | | | Originally, when we first got into this, it looked |
| to do well. The other guys are going to have to | | | | reasonably valued and interesting on its gold |
| keep coming back to the market, raising capital, | | | | prospects. When they picked up deposits in Slovakia, |
| raising capital and diluting their shareholders in order to | | | | we got in deeper. I think the story just keeps |
| try to drill and find something. Of course, there is | | | | getting better as we look more into what they |
| going to be the odd one here and there that actually | | | | actually may have in these properties. They've also |
| strikes something big. It'll give people hope but, that's | | | | brought on a new hire, who was the head of the |
| not the way we want to invest.StockInterview: Have | | | | Slovakia uranium program years ago. He's joined the |
| the uranium stocks gotten out of control? Are we | | | | team and he's basically said that the Jahodna district) |
| looking like another train crash like the internet stocks | | | | is probably not just a 3km strike length but probably |
| of a few years ago?Kevin Bambrough: | | | | more of a 7km potential. The current resource |
| The majority of stocks in the uranium space, we will | | | | estimates are only based on 500 meters of the zone. |
| not own. We only own a really select few, probably | | | | They're going to start stepping out and drilling |
| just over a dozen. We have some explorers, we | | | | it.We're hoping it could get much bigger. It's open at |
| have some producers and we have some, what we | | | | depth as well. There is also reasonable chance this |
| believe to be emerging producers and we're sticking | | | | could become a large uranium district. They've found |
| with that mix.StockInterview: So which companies do | | | | out there were a lot of other targets in the area, in |
| you like?Kevin Bambrough: | | | | the past. They are going to try to work these |
| Obviously, there is a lot of mud slinging that goes on | | | | targets as well. Slovakia is a major past producing |
| in all sectors of the mining business. You talk to | | | | country. A lot of its power currently comes from |
| different people, and they say, "Oh this is going to | | | | nuclear. They have two other properties in Slovakia |
| be higher cost, that is going to be higher cost, and | | | | with resources. They're going to drill and are hopefully |
| our properties are better than their properties." From | | | | going to show better grades and larger resources, |
| where I sit, Energy Metals (TSX: EMC) was one of | | | | with time. Of course, you're always hopeful, no |
| the companies to get in there early, and pick up a lot | | | | guarantees, but our experience is that in the uranium |
| of known resources and databases. I think they've | | | | business: As you go and drill old properties, redo old |
| done a great job of doing exactly what they said | | | | drill holes with larger cores, you get better recoveries |
| they were going to do. We started funding them in | | | | and can show higher grades. That seems to have |
| the early days. Those are the (types of) companies I | | | | been the case for both Tournigan and Western |
| want to stick with.StockInterview: What do you like | | | | Prospector (TSX: WNP). I should also mention that on |
| about Energy Metals?Kevin Bambrough: | | | | the Jahodna property, it's interesting that, not only |
| I'm happy to say that we're a very large | | | | did the uranium grade jump but also the molybdenum |
| shareholder of Energy Metals, and I continue to love | | | | grade jumped up substantially to where this is now |
| the story. The most recent presentation they gave | | | | some very valuable rock.StockInterview: Any final |
| shows what the company will look like after they | | | | recommendations?Kevin Bambrough: |
| fully complete the Standard Uranium and Quincy | | | | SXR Uranium One (TSX: SXR), I think it's a great |
| Energy mergers. The combined entity in their | | | | story. There's no doubt that the uranium is there, but |
| presentation shows to have about 236 million pounds | | | | some people debate about how difficult the mining is |
| of uranium resources, I believe, and a market cap of | | | | going to be and what the cost will ultimately be. But |
| around C$360 million with $60 million in cash. We're still | | | | they've got a good gold credit in there to help bring |
| a shareholder of Paladin (TSX: PDN). I think we're up | | | | down the overall cost. Again, we believe the uranium |
| about 40 or 50 times on the first shares we bought. | | | | price is going to be much higher than most people |
| If you compare the two, you've got a market cap | | | | believe for a lot longer. We love investing in |
| of close to C$2 billion on Paladin with around 180 | | | | companies with huge resources and plenty of |
| million pounds. If you look, you'll notice the real big | | | | leverage to both uranium and gold.StockInterview: Do |
| move in market cap occurred, when Paladin started | | | | you still see some of your uranium holdings, certain |
| to get close to production and they signed | | | | ones as cheap, still in play, and to be looked at?Kevin |
| contracts.Now Energy Metals has about one-fifth of | | | | Bambrough: |
| the market cap and a fully permitted ISL facility | | | | Most definitely, and we'll be helping to finance some |
| down in Texas. They're at the point where they're | | | | all the way to production.James Finch contributes to |
| going to sign the contracts and move forward into | | | | and other publications. |