There was unusual bullish trading activity today in Laramide Resources (LAM.TO).  I checked everywhere but could not find any news.  However, I did find a letter to shareholders on the front page of their website.  The CEO must have gotten quite a few calls before writing this letter:

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Dear Laramide Shareholders:

This letter is intended to be the first in a continuing open dialogue with shareholders. It seems a particularly opportune time for an update as I have received many calls recently from shareholders concerned that the weakness in our share price is signaling either some fundamental adverse corporate development, that the uranium bull market is over, or worse that the bull market may have been a mirage to begin with.

The uranium bull market has thus (until now) been a torrid love affair between the hedge fund community and the uranium companies who have multiplied prodigiously to the point where there are now 500 of us, all presumably trying to fix the imbalance in supply and demand in uranium that caused the price to run up from $7 to $140 per pound virtually without interruption.

At Laramide, our oft expressed view was that there are not 500 projects in the world worth investing in, but perhaps 20 or so larger companies and projects that have development stage assets in reasonable jurisdictions. It is these "pounds in the ground" that are likely to be developed in the next three to five years. That is the timeframe that most forecasters believe is required to return the uranium market to balance, and it is this longer term view of things drives our strategic overview. Consequently the price performance of the spot market (where a long overdue correction is finally underway) is not as important as the price in the term market, holding steady at $95 per pound. It would represent a tremendously profitable future for the Company if we are able to secure long term sales contracts at anything like that price.

Industry players also seem to support this view, and recent corporate transactions would indicate uranium contract prices will be at high levels for a long time. The consolidation amongst those companies that have the near term "pounds in the ground" continues unabated. It includes Uramin's takeover by Areva, Summit's acquisition by Paladin, and just in the last few weeks, Toro Energy bidding for Nova Energy in Australia, a deal worth more than AUD $350 million. As a point of reference, after the severe correction we have just experienced, that is now more than Laramide's market cap. The Summit transaction for the Valhalla project - at well more than a billion Australian dollars - also would seem to be a useful comparable as the deposits in question have similar annualized production potential, are at a comparable stage of development, and most importantly, are both located in the State of Queensland.

Some investors continue to be concerned about the lack of permitting clarity in Queensland, but the repudiation of the Three Mines Policy in April was a huge step forward. It was not even in contemplation when Laramide shares last traded around US $5. We continue to believe that Australia will become the world's largest player in uranium production, but that any further clarity on the question of permitting in individual states like Queensland and Western Australia is off the table until after the federal election this fall.

In the meantime, we are pushing ahead with our development plan according to schedule. The large scale drilling campaign announced in June is well underway and is supported by several rigs and a permanent year round camp that can accommodate 45 people. It will allow us to continue working well into the onset of the wet season. This drilling plan is fully funded and Laramide is presently in the best financial position in the Company's history with $26.7 million in cash and money market instruments, all of which are bank deposits or bank guaranteed investment certificates. We also reported a profit of $1.9 million in the six months ended June 30, 2007 attributable mainly to the sale of securities, so our cash position has actually improved since year end.

All of this information can be found in our most recent quarterly financial filings on SEDAR or on our website, where you can also find other important information such as the GRD Minproc scoping study on Westmoreland that was released in April. That study, which used a $50 per pound uranium price assumption, showed the project to be very robust financially and provided the core asset backing in the Company.

Everything we see in the medium to long term front says nuclear power is likely to have a growing market share of a rapidly growing global demand for electricity. Meanwhile, worldwide, uranium production is down in 2007 (...again..) due to floods, technical challenges and other issues, so even the current price weakness in the spot market may prove very short lived.

To summarize, there are a number of factors that have coalesced to create a perfect storm environment for uranium equities, but Laramide's story remains the same and should improve once we can tell you about additional results from Westmoreland later this year. The fundamentals of the uranium industry are very strong. The better companies will emerge in a stronger position once this correction runs its course. Laramide remains in an excellent financial position to realize its goals, and we intend to emerge as one of the stronger players.

I look forward to updating you on our progress on a periodic basis going forward.

Marc C. Henderson
President & CEO