Part Five:Two Uranium Exploration Companies Slug It Out in Utah's Lisbon Valley

Will Steen's Son Follow in His Father's Footsteps?



The area is right, and it may be ripe for a discovery. Early exploration drilling for both companies is now being assayed in Canadian laboratories. Both companies are scheduling more drilling in the very near future. Unlike most promotionally oriented junior uranium exploration companies, the geologists were very tight-lipped. We talked with Foster Wilson, a professional geologist and a director of Mesa Uranium, who refused to even acknowledge optimism on the recent drilling.



Mesa's Thompson said, "We're evaluating the results from the last holes. We are awaiting drill crews to come back from an oil well they are drilling." He hopes to start drilling again in early August. "When we drill a hole, we lower a gamma-sensing probe and we know what's there immediately," Thompson told us and then clammed up. "Anything we encounter in terms of mineralization would have to come out in a press release." Neither Thompson nor Wilson would provide any hint as to the results, other than remarking that their drill campaign was scheduled to re-commence in a few weeks.



Universal Uranium's Richard Dorman was interviewed in the evening so he could fit us into his schedule, saying, "I'm working 14 hour days out in the field." He was doing further exploration work, awaiting assays, and plans more drilling. Dorman was in the process of picking out drill sites when we briefly spoke to him Monday afternoon. He also hopes to continue his drilling campaign in August. Both companies are using Bob Beemon drilling, which considered the best drill contractor in the region.



An interesting parallel emerges. It was Mark Steen, the youngest son of Charlie Steen, who helped stake the property claims for Universal Uranium on the other side of the fault. It was the western side of the fault which made his father a world-class rags-to-riches success story. Both Steen and Dorman went to the Mackey School of Mines in Nevada. It was also Steen who reportedly brought Dorman into the project.



"Mark has toured all the historic mines, and talked to everyone who mined uranium in the district," said Dorman. It may explain why Dorman chuckled during our phone call as we compared the geological models of Mesa and Universal Uranium. "We think the displacement on the east side of the fault is different," said Dorman. He referred us back to his earlier comment about the stream was bending in "ox bows and winding all over the place." His interpretation suggests they suspect their claims are covering Moss Back where the uranium deposition would be most favorable.



Explorations models for both Mesa and Universal Uranium are conceptual. Drilling alone will determine whether either of those concepts will find sufficient uranium mineralization to comprise an economic orebody. Shortly, we'll discover whether both, neither or either exploration models hits the mark and finds uraninite, the type of uranium deposited in the Lisbon Valley, also known as pitchblende.



Utah has remained below the radar screen. Although close to the Four Corners area, where the Navajo Nation has banned uranium mining on reservation lands, there appears to be little noise from the environmentalists. The Lisbon Valley is zoned as an industrial area. More than 50, and as many as 100, producing natural gas wells have operated on the western flank of the Lisbon Fault. On the eastern side, there may be three producing gas wells. We were told another two are being drilled. EnCana has a processing plant on the western flank.



Gas projects in the Lisbon Valley are drilled to depths of 3000 feet or lower into the Paradox Formation. Since April, Constellation Copper has begun mining copper to the south on the eastern side of the fault, at its Sentinel pits. The company is forecast to produce about 60 million pounds over the next ten years. The company has commissioned a solvent extraction and electrowinning processing plant in the Valley. Oil, copper and gas are in full swing.



While the Lisbon Valley may be a bit crowded with other drilling and production, uranium exploration has yet to catch on. Perhaps in the fourth quarter, should either Mesa or Universal Uranium or both pull up drill results on the order of what Charlie Steen found 54 years ago…. Well, that remains to be seen. Mark Steen will be eager to see if he can follow in his father's footsteps. In either event, a discovery by either junior exploration company would benefit both. It might even create another uranium boom in the area, one which the area hasn't had since the end of the previous bull market. We're sure of one thing: Uranium King Charlie Steen will be grinning ear to ear, from up above wishing, he were again in the thick of it roaming about the Valley he made world famous.



James Finch contributes to StockInterview.com and other publications. Visit http://www.stockinterview.com to download your free copy of "Investing in the Great Uranium Bull Market: A Practical Investor's Guide to Uranium Stocks." You can always write to James Finch at jfinch@stockinterview.com