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StockInterview.com has this article about how Energy Resources is declaring a "force majeure" (called "Act of God" in the old days before the French term was imported) on its uranium contracts. Q1 production will fall 20% to 30% below the prior year due to massive rainfall at the Ranger mine, Australia's highest producing mine which produces 11% of the world's total production. More utilities are going to be scrambling for uranium whever they can get it at a time when it's getting very hard to get. Watch the spot price.

Heavy rains in the past month halted mining on Feb 27, 2007 until today. Processing is delayed until next week. During 2007, they've received 63 inches of rain! More than 2 feet of that was during a 72-hour period. That's pretty damn majeure.

So now the mine is fairly flooded, though obviously not as seriously as Cigar Lake. Also, production will be impacted during the second half of 2007.

More info here and here.

First quarter production is estimated to be 20-30% lower than in the corresponding period last year. The impact of the water level in the operating pit is still being assessed, however production will be impacted in the second half of 2007.

This takes roughly 188,000 pounds of uranium out of production this year not counting the slowdown in the second half.

The bureau is also monitoring a second cyclone, Jacob, which has developed to the southeast of Christmas Island.

All of this is good news for Strathmore Minerals and other uranium mining companies.

UPDATE same day:
And now Forbes has an article about uranium investing. I'm thinking this indicates the next phase of the uranium bull market.

UPDATE Friday March 9, 2007:
StockInterview.Com has photos and more details/rumors:

How bad can it get? TradeTech roughly estimates that 2007 production – relying only on stockpiled ore at historically low, but acceptable head grades – could reach as low as 7.5 million pounds U3O8. According to Clark, “This could represent a loss in production of up to 4 million pounds U3O8, compared to an average year for Ranger.” This amount represents about four percent of worldwide uranium production in 2006. At the recent spot price, the production loss could be valued at US$340 million.

Read the comments further down the page to get a sense for how bad this really is.

We showed the photos of the Ranger open pit mine flooding to several mining experts, who asked to remain anonymous for this article, but who have all been involved in open pit and/or underground uranium mining. Feedback ranged from “This is a nightmare!” to “They have big problems: It will take lots of time and lots of money to fix this.”

And also read the part about the low grade stockpiled ore that isn't going to do much good without higher grade ore coming from the mine, which is now flooded. These guys are saying 2nd half production could drop by two thirds.

An expert, with twelve years experience in U.S. mining reclamation told us, “They might have to re-apply for permitting and overcome regulatory hurdles. The water in the pits may have to be pumped, tested and treated before it can be allowed downstream.” He explained the company may have to use barium chloride to precipitate out the radionuclides. All of the experts agreed ERA would probably have to re-build the retention pond in order to treat the radioactive water in the pit. Perhaps a new retention pond might need to be constructed.

And there's also this:

A mining engineer with more than 30 years of mining experience – including open pit uranium mining, some of which included de-watering – warned, “ERA will need multiple pumps on a large barge with high pressure pumps.” He added, “Any solids in the water could destroy the pumps so they will have to change the pumps frequently, possibly as often as every 24 hours.” He believed it would take at least two to three months to dewater the open pit. Others speculated the entire cleanup could take six months or longer.

There's a lot of worse things that are also considered in the article, such as the potential loss of equipment with very long lead times.

And it's probably worth mentioning that, as a rule, I avoid mining stocks. When I'm done with Strathmore and uranium, I'm extremely unlikely to move to the next big thing in mining such as molybdneum. The whole thing with uranium is one of those extremely rare massive supply/demand imbalances. And even those are easy to get wrong. Level 3 Communications was supposed to be a bandwidth supply/demand imbalance, but it hasn't happened yet after 5 years of waiting. Warren Buffett was betting on a silver supply/demand imbalance years ago and I think he gave up. Uranium just happens to have very inelastic supply (except over very long time periods) and very inelastic demand and it just happens to have an enormous imbalance and increasing demand in many countries due to many factors and mother nature just keeps throwing in things like this.

UPDATE Sunday March 11, 2007:
According to this updated article and this article, TradeTech reports the spot price of uranium is now at $90 following the Ranger mine flood.

Long-term market demand remains strong and is “strengthening even further,” according to Klingbiel. She forecast several utilities would enter the market to secure long-term uranium supply in the coming weeks. Nineteen utilities are either seeking, or evaluating offers for, more than 55 million pounds of U3O8 equivalent.

And more ominously, this:

TradeTech’s Nuclear Market Review asked, “How can this lost production be reasonably accommodated?” Active demand for U3O8 equivalent overwhelms active supply by 220 percent. TradeTech defines active supply as ‘uranium that could be offered for sale in the coming month’ and active demand to include those ‘currently seeking uranium in the market.’

Klingbiel warned, “Doubling the active demand from the addition of ERA’s customers would obviously have an impact on uranium prices.” The magazine reported, “It seems clear the market is rapidly headed to the triple-digit level.” An evident conclusion was also asserted in this week’s magazine, “The uranium market must learn to deal for a while with the uncertainty of production schedules for Ranger.”

Emphasis added.

A blogger who attended the recent 75th Annual Prospector’s & Developer’s Conference noticed an absolute mania surrounding uranium.

I was standing in line at the airport to check my luggage and to receive my boarding pass. The gentleman in front of me was obviously with a Uranium exploration company, judging by the nature of the conversation he was conducting on his cell phone. No sooner had he concluded his call than people ahead of him in line began shouting at him. They had apparently overheard his cell phone conversation and were now demanding to know his ticker symbol and the nature of any recent drill results. I have never seen anything so manic in my life. But if the tech bubble of the late 1990’s is any measure of performance, I say we have not yet seen the end of this mania. The madness of crowds can run harder, faster and longer than we all expect. Eventually though, the madness will subside with many retail investors getting hurt. But until I see evidence of that happening, I will be following a number of Uranium exploration stories with an eye to making trading profits.

[update 3/17/07] Same story carried here.

Seems crazy. I'm wondering if we'll see a bubble and it will break at some totally unpredictable time (a week? a month? a year?) followed by a lot of malaise and then the real bull market will take place.

yellowcake shows up in a pawnshop! Heh.