Interviewer:
Before we talk about the potential of uranium shortages and the steep price rise in that energy source, could you explain how you got started with this idea, and what is the philosophy behind Strathmores acquisition program of uranium properties?

Dev Randhawa:
Several years ago, Strathmore Minerals started with the idea of acquiring properties out of the money at very cheap prices in the belief that the uranium prices would recover so that our assets would be worth more. No one was paying attention to the commodity we chose: uranium. Strathmore Minerals is basically a call on the price of uranium. Thats how we started the company. This strategy is similar to what Lumina Copper (AMEX: LCC) used and what Silver Standard used. For example, the chairman of Silver Standard Resources (NASDAQ: SSRI) is on our board of directors. Our first step was to buy every pound we could for as cheaply as possible. The second step is to buy property that we think we can put into production. We are actively looking for those.

Interviewer:
But uranium has a powerful environmental stigma. Why, then, are you enthusiastic about this type of energy source?

Dev Randhawa:
As with most people, when I began investigating uranium, I thought this was bad stuff. I thought of Three Mile Island and everything else. The more homework I did on this, the more I realized that nuclear power is clean and safe. That is primarily what uranium is used for now. It should be known that no one ever died at Three Mile Island. No one actually died at Chernobyl. Yes, people got sick. Compare that to coal or the oil spills in the fossil fuel sector, and the damage it has done to the environment. The problem is no one is championing nuclear energy. Frankly, the greenies have done a great job of burying the story. As I did homework, I found out France relies on nuclear power for about 78 to 80 percent of its electricity needs. I realized that somebody did a great job lobbying and built a very unhealthy picture toward uranium, when really its needed. We dont talk about the cost of coal. We dont talk about global warming. But, look at what coal has done. Global warming is a function of fossil fuels. That is why you are seeing a growing positive response to nuclear power. For example, one company has applied to put a new nuclear reactor into the US.

Interviewer:
To what do you attribute the recent, steep price rise in uranium?

Dev Randhawa:
Since last year, the price of uranium (U3O8) has climbed back steeply back up. At one point, the price was moving up about $1/pound per month. Uraniums price is more in line with the price of oil as opposed to other commodities. For a long time, weve only produced on the average about 90 million pounds, when we needed 140 (million pounds). Theres been an imbalance for a number of years. This extra came from foreign sources, or from internal US inventories. Since the 1980s, weve been using more uranium than we have been producing in the western world. As a result, the extra that weve needed has come from Russia, the US government or inventory that utilities had.

Interviewer:
But most investors, let alone the consumer, dont know that uraniums spot price has nearly tripled, since bottoming three years ago. Why is that?

Dev Randhawa:
Uranium only makes up one percent of the cost of running a nuclear reactor. The biggest factor in why uranium prices can go up, even more rapidly than gold, is that uranium is insensitive to its use. Uranium prices can go much higher. In casual conversations with a few Toronto analysts, some believe it can go up to $80 or $100/pound. For example, if the price of gold tomorrow went to $800/ounce, it will affect someones purchasing decision. The guy might say, I was going to buy this ring and now its up 70 percent because the price of gold is up. Maybe I will buy a silver ring instead. The same occurs with other commodities. People may change their purchasing decision based on a commodity price doubling.

If the price of uranium went to $44/pound, the average consumers electricity bill might go up a few dollars. It is not going to force someone to turn off their power. However, if the price of oil doubled tomorrow, many of us would be driving smaller vehicles. It would make a fundamental difference in how we behave. Thats not going to happen with the price of uranium. Its like buying pencils for your office. Its not going to change the way you do business. Even if no nuclear reactors come onboard for the next few years, the ones already there will need the pounds (of uranium). We have a shortage coming up.

Interviewer:
Why do you believe a uranium shortage is in the cards?

Dev Randhawa:
Bottom line is: the nuclear reactors are going to run out of fuel. You have to know that permitting takes a long time in the uranium industry. Its not like finding a gold property tomorrow and maybe two years from now you are pouring gold. Typically, the permit takes at least three years out. Because nuclear reactors need it, thats what is causing the price rise. Demand has kept going higher, but production has fallen off the chart. In this industry there are only about half a dozen companies exploring for uranium. At one time, back in the late 1970s and early 1980s, there were almost 150 uranium companies. There hasnt been any underground mining since the early 1990s. And that doesnt even include a wild card: there has been talk that by 2020, 90 percent of the nuclear reactors coming onboard will be for China.

Interviewer:
And what would reverse uraniums steep price rise?

Dev Randhawa:
The only thing that could kill this market would be if Russia discovered it had a lot more pounds to sell. Or the US government, through USEG, came up with more pounds. When we first entered the market, eight years ago uranium rose to around $17-$18/pound. Then it fell. What happened was the U.S. government sold their uranium to a private group, who turned around and dumped it into the market, from then until last year. In October of last year, the Russians were also dumping uranium onto the market for their hard cash.

Interviewer:
If replacement value for uranium comes in the form of exploration costs to find and mine this energy source, what would that cost be?

Dev Randhawa:
Realistically, it would be $20 to $22/pound. I know some are going to say they can do it for less. By the time you take your exploration costs, development costs, and so on, you really need to get $22 to $25 for most properties to go into production and still make money. Thats why most of what you see in the market are ISL (in situ leach) projects. On one property we discovered, it would cost between $16 and $17/ pound to pull it out of the ground. But on others, it might take $20 – 22/pound to pull it out of the ground, after labor costs and sell it on a forward contract. Canada is producing the most uranium because of the grades. Some say Canada has the lowest cost, but thats not quite accurate. What they mean to say is that the cash costs are the lowest. People forget that it costs up to $2 billion to put some of these into production. Cameco (NYSE: CCJ) was a creature of the government at one time. They were treated that way.

Interviewer:
Earlier you noted that investing in Strathmore Minerals was basically a call on the price of uranium. Can you clarify what you meant by that?

Dev Randhawa:
As uranium prices, the share price of Strathmore Minerals should rise. If you look at Bema (Amex:BGO), when gold prices were at $265/ounce, what was it worth? As the price of gold moved up, it had value. Has it gone into production yet? No. Silver Standard (NASDAQ:SSRI) is similar, but it has had to tell its story because people are so focused on gold. The key for investors is not to go where the crowds go, but to go where you can find value. If you believe that nuclear power is the place to be, and the shortage is real, you have got to own uranium stocks.

Interviewer:
What sets Strathmore Minerals apart from any other exploration companies in this sector?

Dev Randhawa:
I challenge any junior exploration company to show an individual who has actually put an ISL (in situ leach) uranium mine into production, including Cameco. They just arent around because the industry has been dead since the early 1980s. There arent many experts left in this business. The last standing geologist, which Cogema had, was David Miller, who is now working with Strathmore Minerals, as our head consultant. He is the one who has put the Strathmore strategy together. Weve been looking in southern and eastern Africa. Strathmore is going wherever there are pounds that others have overlooked. Our competitive edge is a database we acquired from Kerr McGee (NYSE: KMD), which used to be number one in the uranium industry. Recently, we announced properties in Wyoming that could be satellite ISLs. We have enough pounds there that we could throw one of them into production. But we still need higher prices. We are still in the acquisition stage.

Strathmore is going to be very aggressive in picking up properties that we think have pounds in the ground or smaller properties that we think can be ISL-able in the US. Everything were looking at in the US is for ISL. In Canada, we have over 700,000 hectares in the Athabascan region. Thats a major asset for us. Its one of the richest areas in the world for uranium. Some of our targets are near existing mines. In Quebec, weve got a large property that was drilled by Uranerz. Robert Quartermain has certainly been a part of that strategy. Thats what he did with Silver Standard, and thats what were doing here. We are aggressively going after properties. When sophisticated investors meet our team, they see the story weve got and they see our management. Youll see why we were able to millions of dollars in financings. Our strategy has been to buy the has-been properties, the low fruit in all the trees. And thats what weve been doing.
Devinder Randhawa

Mr. Randhawa founded Strathmore Minerals Corp. in 1996 and is currently the Company’s CEO. Mr. Randhawa also founded and is currently the President of RD Capital Inc., a privately held consulting firm providing venture capital and corporate finance services to emerging companies in the resources and non-resource sectors both in Canada and the US. Prior to founding RD Capital Inc., Mr. Randhawa was in the brokerage industry for 6 years as an investment advisor and corporate finance analyst. Mr. Randhawa was formerly the President of Lariat Capital Inc. which merged with Medicure in November 1999 and the was the founder and former President and CEO of Royal County Minerals Corp. which was taken over by Canadian Gold Hunter (formerly International Curator) in July 2003. Mr. Randhawa also founded Predator Capital Inc., which became Predator Exploration. Mr. Randhawa received a Bachelors Degree in Business Administration with Honors from Trinity Western College of Langley, British Columbia in 1983 and received his Masters in Business Administration from the University of British Columbia in 1985.

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Perhaps the White House flap as to whether or not Saddam Husseins government tried to buy uranium ore from the country of Niger was the best publicity Niger has had about its uranium production for more than two decades. How many geologists know that the Republic of Niger ranks fourth, behind Canada, Australia and Kazakhstan, in terms of the quantity of uranium annually produced worldwide?

Named after the river which runs through it, Niger produces nearly four times the uranium currently mined in the United States. More uranium is mined in Niger than in Russia, South Africa, India, China, Brazil, Ukraine Namibia or Uzbekistan. In fact, if you added up the total amount of uranium mined in South Africa, China, India, Brazil, Czech Republic and the Ukraine for 2004, Niger would trump the combined production of those six countries. Until Dr. Jon North came along, uranium mining was pretty much monopolized by Cogema and a consortium that includes Spanish and Japanese interests.

This is the fourth largest uranium producer in the world, raved an excited Dr. North into his cell phone during our taped interview. Niger has never had an entrepreneurial and nimble junior mining company ever explore for uranium. And this is the first one. North was talking about Northwestern Mineral Ventures (TSX: NWT; OTC BB: NWTMF). Imagine if Australia, Canada and Kazakhstan having never had a junior company looking for uranium. Its absolutely absurd to even consider the concept.

The Republic of Niger supplies about 9 percent of the worlds annual production to meet the growing need for uranium to fuel the worlds nuclear reactors. According to the IAEA-NEA Red Book of 2003, the sub-Saharan Niger ranked #4 behind Australia, Kazakhstan and Canada for total uranium reserves. In the 2005 update, it fell to seventh place. It may be that this country is under-explored. In 1981, Niger produced a peak of 4366 tonnes of uranium. As with others, mining production plummeted with the spot price of uranium during the 1980s and 1990s. The slump hit the country hard because Niger depends upon uranium for more than 30 percent of its exports, more than $100 million. Five percent of the countrys tax revenues come from uranium mining.

Dr. North discussed how he came to obtain concessions for both his company, North Atlantic Resources (TSX: NAC) and Northwestern Mineral Ventures, in which he serves as a director and helps guide geological colleague and president Marek Kreczmer. I traveled around the Sahara Desert twice on field trips with a local Niger geologist before I decided to apply for permits. When I did this in 2004 with the minister of mines, he said to me, You know, youre the first person to ever do this, and the only people who have done this are energy companies or governments. So, I told him I would like to apply for two permits. North obtained two for Northwestern Mineral Ventures and another for North Atlantic Resources.

Salt Tectonics the Key to Uranium in Niger

North explained, We selected the projects based on the geologic ingredients that we felt were important in the control and distribution in the uranium, such as, but not limited to, northwest trending fault corridors, northeast trending fault corridors, and inliers of stratigraphy that are popping up through younger parts of the stratigraphy. According to North, the salt structures are the key to finding uranium in the Republic of Niger. The northeast and northwest faults, and the inliers there, are all salt-related structures, North remarked. An inliers is an area or formation of older rocks completely surrounded by younger layers. For decades, the oilfield people have understood, emphasized and completed research on salt, the deposition and then the movement of salt through stratigraphic sequences, North pointed out.

Salt is very common but it doesnt last very long in stratigraphy and it escapes, North explained. When it escapes, it forms walls and diapirs (an anticlinal fold where the salt has pierced through the more brittle overlying rock). Oil exploration geologists pay attention to these because they tend to form permeability barriers to oil and gas deposits. North is interested in them for a different reason, We noticed that the salt diapirs, where they escaped through the sequence in Niger, coincided with the distribution of uranium deposits.

Uranium in the Republic of Niger is mined by open pit because of the sandstones. These are redox deposits, North noted. They tend to be associated with reduced layers and structures, such as the former salt diapirs and faults in the stratigraphy. At the time, we didnt really understand why we were doing that. We just knew there was an association with uranium deposits and these structures in Niger.

That appears to have made Dr. Norths job a walk in the park, or in this case, a walk in the desert. How do you inexpensively explore concessions of 2,000 square kilometers each? Thats about 24 miles and 30 miles each, both in the desert. If you do the target selection carefully, and you stick to the salt diapirs, those really narrow down the search, North revealed. When we do our first multi sensor mag and radiometric survey, which will happen in the next couple of months, we will map out those structures and features, and look for radiometric anomalies associated with them. When we have that data, well have at least 50 drill targets on those projects. There appear to be no scarcity of drill targets on the concessions.

Without that data, North believed he could have picked out ten high quality drill targets, just from the geology map. They show up as circular bulls eyes on geology maps, North noted excitedly. In the desert they show up as low hills. Theyre topographic anomalies where you have about maybe 50 meters of relief. Its just a low rise because the desert is flat as on a plate. North explained that you can drive anywhere by pointing your vehicle and stepping on the gas. The only things in your way are these very low hills, and those hills are related to either faults or inliers (exposed older rocks surrounded by younger rocks). Initial targeting comes straight from a topography map.

A Vote of Confidence on Current Progress

But what about the availability of drill rigs for this project? North conceded there is a global shortage. But he shot back, Theres a drilling company in West Africa called West African Drilling services and surprise! surprise! Ive been working with them for the past four years. North has already discussed moving a rig in with them. Quite honestly, its not a big issue, he said. Neither is labor or the cost of drilling. We pay an all-inclusive cost of approximately US$150/meter, North told us. Labor costs are very low, about one-third the cost of North America. We use all local people because thats what we do in Mali. There are lots of highly trained, skilled geologists in Niger.

Clearly, Northwest Mineral Ventures is excited. We are very pleased to be one of the first North American companies to acquire exploration permits in Niger a country that has not been explored using modern techniques and has, until now, been one of the world’s best-kept uranium secrets, Northwestern’s Chairman and CEO Kabir Ahmed told Reuters in wire service story published in March.

Northwestern Mineral President Marek Krezcmer, who has been a geologist for more than thirty years, seventeen of which were spent exploring in Africa, was also enthused about the companys prospects in Niger, We know there is uranium mineralization on the surface, based on the work which was done by Jon North. I think we can succeed. Were going to find uranium. Kreczmer is familiar with geology in Africa and doing business on this continent. Ive worked in Tanzania, Zambia, Swaziland, Ethiopia and Eritrea, said Kreczmer. He was optimistic about developing Northwestern Mineral Ventures uranium concessions, Our business plan there is to discover mineralization, and (have) probably someone like Cogema become a partner of choice.

At Cogemas seven open pit uranium mines which feed the Arlitt mill, the grades have run 0.3 percent with 2003 production at 1126 tonnes. At the two open pit uranium mines which feed the Akouta mill, grades have run at between 0.4 and 0.5 percent with 2003 production at 2017 tonnes. Krezcmer explained that Northwesterns exploration licenses are valid for a period of nine years, three-year licenses which are renewable three times. The countrys mining act, according to Krezcmer allows Northwestern to apply for a mining license, which can be granted for between 25 and 70 years.

We were concerned with any political situations, but both North and Kreczmer assured us the country is stable. When I first went to Niger in November 2004, and that was during the last election, it honestly looked like a lot of fun. Everybody had a little piece of rag tied around their wrist or tied to the antenna of their car to represent their political affiliation. Kreczmer added, My experience working in Africa is that because this country relies so heavily on foreign aid, the World Bank has great influence.

The Republic of Niger has Norths vote on confidence. He has worked for the past few years as Chief Executive of North Atlantic Resources, which hopes to develop its Kantela gold property in Mali. Niger and Mali and demographically and geographical identical, he told us. North feels Niger is going to become more aggressive in developing its uranium properties. He talked about how the President of Niger told his minister of mines, Get out there and advertise Niger as being open for business. We want people to come in here and invest. We want to give them mineral rights, and we want them to do what Mali is doing. From the looks of it, the first to jump on the Niger bandwagon were Northwestern Minerals and North Atlantic Resources, but they wont be the last.

My experience with Niger is that its a peaceful, democratic country with no civil unrest. Lets put it this way. They have less civil unrest than France. Ironically, French is one of the countrys official languages. You got to be fair, right? asked North. The French recently stormed the Bastille in France, and they didnt do anything like that in Niger.

Just how exhilarated is Dr. Jon North? The excitement in the market is we do the airborne survey, he enthused. We find some radiometric anomalies that correlated within inliers. We show the model. If that doesnt excite people, then I dont think their hearts are beating.

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