| StockInterview: What makes you respect the | | | | Generally speaking, the difference is that the deposits |
| Kazakhs with regards to ISL mining in their | | | | in Kazakhstan are much bigger. They are much more |
| country?Fletcher Newton: First of all, they have a | | | | uniform. As a result of that, your recoveries are a lot |
| tremendous amount of experience with this. | | | | better.StockInterview: Reportedly, you can get |
| Kazakhstan and Uzbekistan have been doing ISL | | | | 80-percent recovery in Kazakhstan, compared to |
| mining of uranium longer than anybody in the world. | | | | 70-percent or less in the United States.Fletcher |
| The Kazakhs, in particular KazAtomProm, have over | | | | Newton: You have to be careful when you talk about |
| the last 30 years, maybe more, developed an | | | | the 80-percent recovery. The reason is you never |
| incredible amount of expertise in how to recover | | | | know exactly how much uranium is down there to |
| uranium effectively, inexpensively. They are extremely | | | | begin with. When you measure uranium with a logging |
| environmentally sensitive. Kazakhstan, to my | | | | truck, you don't actually measure the uranium directly. |
| knowledge, has had none of the environmental issues | | | | What you measure is the concentration of |
| with ISL recovery of uranium that, for example, we've | | | | bismuth-214, which is a daughter product of uranium. |
| had in this country. They have gone to great lengths to | | | | You can then extrapolate back from that to calculate |
| be sensitive to the interests of people in local | | | | how much uranium is there. There can be problems |
| communities, who are obviously always concerned | | | | with something called disequilibrium. One of the results |
| about groundwater. But, the bottom line is they are | | | | of that is your calculations can then be off. Your |
| extremely competent in their ability to mine uranium. | | | | geologists will come up with what they think is a |
| They are among the very best, if not the | | | | reasonable amount of uranium there. Sometimes, you'll |
| best.StockInterview: Why do you call them among the | | | | recover 80 percent of that. Sometimes you'll recover |
| very best?Fletcher Newton: I think it's a couple of | | | | 120 percent or 50 percent. The great thing about the |
| things. They have an extremely well educated work | | | | uranium in Kazakhstan, at least in our experience is |
| force. These are guys with PhDs in hydrology, ground | | | | that it is readily leachable. It's just right there in the |
| water chemistry and metallurgy. This is a legacy of the | | | | sand.StockInterview: How would you describe the |
| old Soviet educational system. You have got a lot of | | | | environmental climate toward uranium mining in |
| very bright people. Moukhtar Dzhakishev is a PhD in | | | | Kazakhstan?Fletcher Newton: They have a very |
| physics, the head of KazAtomProm. Every one of his | | | | favorable and understanding regulatory environment. |
| people have advanced degrees in science and | | | | They have a government that supports uranium mining. |
| engineering, finance or business. They all speak two or | | | | At the same time, they are very sensitive to social |
| three languages. They are urbane. They travel. That's | | | | issues, and to making sure they pursue sustainable |
| the current generation.StockInterview: What makes the | | | | development in everything they do. They understand |
| Kazakh ISL activities among the best?Fletcher | | | | that people are naturally afraid of radioactivity. They |
| Newton: The Soviet system was incredibly thorough. | | | | understand that people are afraid of anybody who |
| When they went out and drilled an exploration well, | | | | says 'I'm going to do something with ground water.' |
| they logged the entire hole, top to bottom. And they've | | | | Even if it's ground water you could never drink or do |
| kept all that data. They spent a lot of time and money | | | | something with. They go to a lot of efforts to educate |
| in uranium production in Central Asia. And in the course | | | | people, to explain what they are doing, to protect |
| of doing it, they learned how to do it better than just | | | | people, and to make absolutely certain that there is |
| about anyone else in the world.StockInterview: If the | | | | never a threat to health and public safety. And they go |
| Kazakhs are among the best, why do they need | | | | a very good job of this.StockInterview: During your |
| Cameco?Fletcher Newton: When we went over there | | | | presentation at the Platts Nuclear Fuel Strategies |
| to invest, what they needed was not so much our | | | | Conference in Washington, D.C. you had talked about |
| expertise, but our support. They've got plenty of their | | | | the 'challenging' part of mining uranium in |
| own expertise. And that's an important point to make. | | | | Kazakhstan.Fletcher Newton: No. When I said |
| This was in the late 1990s and the price of uranium | | | | 'challenging,' I didn't mean that in a pejorative sense. We |
| was near an all-time low. The country of Kazakhstan | | | | have the same challenges in the United States: |
| was just broken off from the Soviet Union. Was it | | | | regulatory, infrastructure, human resources. I think you |
| going to be independent? It wasn't clear yet, and there | | | | would have them in any country. Remember this |
| was absolutely no interest in uranium mining. And so, | | | | industry has been on its back for twenty-five years. |
| we were able to meet that need, as was Cogema, at | | | | Suddenly, in the space of four years, the price has |
| a time when they needed to attract foreign | | | | gone from $7 to $54. Well, that makes it a challenge |
| investment. It was very much a question of fortuitous | | | | for everybody. Not just Kazakhstan.StockInterview: |
| timing.StockInterview: So Kazakhstan needed the | | | | How do you compare doing business in Kazakhstan |
| money then, but now they don't?Fletcher Newton: I do | | | | with your operations in the United States?Fletcher |
| not think they need the money now. That's true. They | | | | Newton: My experience is limited to just the uranium |
| certainly needed it then. We brought maybe different | | | | business. We are exceptionally pleased with our |
| ideas about how to mine uranium. Not better, but just | | | | partner, with the relations we have with our partner |
| different. One of the things I admire about the Kazakhs | | | | KazAtomProm and with our experience there. They |
| so much is they are willing to learn, willing to look at a | | | | are an excellent partner. They are extremely |
| different system and say, 'Hmmm, ok let's try that.' | | | | technically capable and sophisticated. We learned a |
| Whereas in the United States, for example, I can tell | | | | tremendous amount from them. They've taught us a |
| you that getting people to change is very difficult. | | | | lot, and it's been a very good relationship. We do not |
| Again, this is one of the reasons why Kazakhstan has | | | | have the horror stories you've heard from other |
| been so impressive. They are willing to embrace | | | | people. We have not experienced that at |
| change. Moukhtar is a guy who is more than willing to | | | | all.COPYRIGHT (C) 2006 by |
| say, 'Hey, if you show me that something like this can | | | | StockInterview.comJames Finch contributes to and |
| be better, you bet, we'll try it.'StockInterview: Why is ISL | | | | other publications. Visit to find about "Investing in the |
| mining different in Kazakhstan aside from the use of | | | | Great Uranium Bull Market: A Practical Investor's Guide |
| sulphuric acid?Fletcher Newton: You generally use all | | | | to Uranium Stocks. |
| the same equipment: the same pumps, pipes, all of that. | | | | |