Page Five Before examining these three sources, a little history of uranium mining is in order. Uranium mining is an industry born out of wedlock in the early 1950's, its arrival on the scene unsanctified by the normal laws of supply and demand. Conceived by the necessity to obtain a U. S. source of uranium for the production of nuclear weapons, nurtured by a combination of economic incentives -- government purchase contracts, rapid amortization of facilities, depletion allowances, and multiple pricing based on estimated costs of production for individual properties --it grew so fast that by 1961 it was larger than all other non-ferrous metals except copper. It was also a source of embarrassment to its sire, the government. By 1959 the government discontinued granting new purchase contracts, and exploration for new uranium deposits stopped in its tracks and few discoveries of any note have been reported since that time. The government was committed to the existing producers through 1966, but the life expectancy for the industry was later extended through 1970 for some producers under the government's stretch-out program. Meanwhile the progress made in developing competitive nuclear reactors gives promise of a uranium demand by the late 1970's that will substantially exceed the peak government procurement. Let's examine the supply side of the fraction. The known reserves remaining after 1970 are stated at 96, 000 tons "available from $5 to $10 a pound", a spread so broad as to be meaningless. Remember, these reserves were brought into being without the factor of price being allowed to exert its usual discipline in balancing supply and demand. Early procurement paid an average price of $12 per pound for uranium, and from 1959-62 contracts ranged from $7.46 to $10.70 with the promise of an $8 price after 1962.