Five drilling rigs worked the site as we walked around. When ground conditions are right, those rigs can drill 800 feet per day. To be fair, when the ground conditions are wrong, those drills grind much slower. But the point is, the company is using the information from the hundreds and hundreds of holes it has drilled to come up with a new resource estimate.

The new estimate will probably confirm the 5.2 million pounds the company previously estimated it had earlier, and all the new info will likely result in a resource that is better than the “inferred” category. The company may be sitting on as much as 15 million pounds of uranium at Goliad, but that remains to be seen.

Lets stick with 5.2 million pounds. On average, a typical ISR operation will recover at least 75% of that, but Uranium Energy recently announced extraction efficiency of 86% to 89%. Mr. Anthony said he expected the project’s Capex to be around $18 million and operating costs would run in the neighborhood of $25 per pound. The company also pays a royalty on the uranium it mines. The royalty is variable, but we can figure that at around 6.5%. So, that’s about $382 million worth of uranium at the Goliad site alone at current prices, and there’s no telling where the price will be in 2009 when the company expects to start production. But I expect the price of the metal will be much higher down the road, just as I expect Uranium Energy will likely triple its known resource at Goliad.

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