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European Uranium Forum May 25 June 1,
2009 Frankfurt, Zurich, Geneva, Paris, Amsterdam
and London Marino G. Pieterse Editor
Uraniumletter International

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• History of financial crises Dow Jones
• 1973 1974 Oil crash 2-year fall 40
• October 19, 1979 (Black Monday)
  - 22.6
• 3 week fall -
  34(blamed on the rise of computerized hedging
  strategies)
• 1997 1998 Asian CrisisOctober 1997
  - 11(Russian debt default in
  1998)
• 2008 to date Financial crisis
  - 20
• (including 20 from credibility crisis October 3
  10, 2008)

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Gold does not run its own course as a safe haven
(1)
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Gold does not run its own course as a safe haven
(2)
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15 year price graph
2 year price graph
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• Why Uranium ?
• Uranium is the most cost effective and
  environmental friendly large scale alternative
  for electricity generating as the only viable
  alternative to fossil fuels
• Climate change
• Kyoto protocol paves the way for nuclear
  renaissance
• Growing public concern over global warming will
  lead to increasing dependence on nuclear-fuelled
  power plants as power utilities and governments
  strive to reduce greenhouse gas emissions of C02
  from fossil fuel power stations.
• Nuclear power is one of the cleanest methods of
  producing electricity because it doesnt produce
  greenhouse gas.
• 1000 tonnes of uranium produces the same amount
  of electricity as 16 million tonnes of
  coal, which generates 33 million tonnes of
  carbon dioxide the principal greenhouse gas.
• On global terms nuclear power per kWh cost
  approximately US 1.76, compared to coal-fired
  US 2.47 and gas-fired US 6.28.

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Positive change in sentiment on nuclear
power European Union has decided cutting
emissions of greenhouse gas by at least 20 from
1990 levels by 2020 in an attempt to prevent
irreversible and possibly catastrophic climate
change The US will cut its dependence on foreign
oil significantly and diversify its energy
supply, including safe nuclear power. A growing
number of countries, including Russia, China and
India, is supporting nuclear power as means of
moving away from fossil fuels Chinas Renewable
Energy Law (in effect January 2006) ordered a
degree on 20 of total energy consumption to come
from renewable sources by 2020 Restrictive policy
on developing Uranium Industry in Australia
changing During the Partys annual conference in
April 2007, Labor ended its 25-year old No New
Mines policy on uranium, meaning the development
of new uranium mines now has by-partisan support
at the federal level. While South Australia and
Northern Territory already allowed uranium mining
earlier, the ban in Western Australia has been
lifted in 2008 with Queensland still to follow,
since recent elections left the anti-uranium
mining Labour Party still in power with a small
majority.
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Nuclear Power provides 16 of the worlds total
electricity and 34 of the European Unions
needs France receives 78 of its electricity
from nuclear, Belgium almost 56, Sweden close to
50, South Korea 40, Switzerland 40, Japan 25
and the United States 20.
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Shortage in supply is expected to keep uranium
oxyde price (U3O8) rising PRODUCTION Primary
supply International Nuclears most recent
Scheduled Uranium production Forecast shows
world-wide uranium production increasing from
current levels of approximately 107 million
pounds U3O8 to as much as 115 million pounds per
year by 2010-2011, before declining as some mines
reach reserve depletion.Secundary supply
Growing demand temporarily met by secondary
supply, particularly from down-blending of
Russian weapons highly enriched uranium into
commercial grade fueling being consumed in the
United States (quota of 19 million pounds in 2008
20 million pounds from 2009 to 2013).Russia
will not renew the HEU contract after 2013. New
agreement between Russias Fenex with US
utilities firm Fuelco, worth a reported 1
billion. The deal will allow Fenex to supply
uranium to US companies from 2014 to 2020.
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Future of uranium demand

• Globally 436 reactors in operation
  todayannually consuming some 168 million pounds
  of uranium to produce 16 of the worlds
  electricity
• 43 reactors are under construction plus a further
  266 more reactors proposedadding only those
  being built or planned would yield a dramatic 35
  increase in the number of plants worldwide

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Looming Uranium shortage

• All uranium consumed today goes into electricity
  generating
• - Uranium demand utility-like in nature and only
  modestly impacted by economic weakness
• Nuclear power is competitive economically- High
  capital costs of 4 billion (2-3 times as high
  as coal-fired and 5-6 times as high as
  gas-fired) are offset by low ongoing fuel,
  operating and maintenance costs
• Unlike the alternatives, nuclear plans are fairly
  insensitive to feedstock pricing, as
• the costs of uranium accounts for less than10 of
  the cost of producing electricity
• As China and India continue to industrialize,
  their need for low-cost base load electricity
  will only grow.Combined, the two acount for 40
  of the 43 reactors currently under construction
  worldwide

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China

• China plans to quadruple its nuclear output by
  2020 and to triple or quadruple output again by
  2030
• China currently produces 8GWe through nuclear
  power (11 reactors) and
• Expects to produce 50-60 GWe by 2020 (35 reactors
  under construction and planned) and 120 to 160
  GWe by 2030 (86 reactors proposed)

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Chinas power supply- total 360 gigawatt per
annum -

• Coal 74,0 70 transported by rail
  
• Oil 14,0 - 24 of global rail traffic
• Domestic Hydro-Power 8,2 - 6 of
  world rail tracks
• Nuclear energy 1,1
• Natural gas 0,3 Bottle necks in transport
  network will be
• Others (solar, windpower) 2,4 followed
  by regional power shortages
• 100,0 ?
• China has committed US 248 billion to
  rail expansion over the next 15 years
• Environmental pollution problems
• ?
• Call for a diversification away from coal
• ?
• Plans to reduce coals contribution to
• the power supply to around 60 by 2020

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10 countries account for 92 of global uranium
production

• Canada, Australia, Kazakhstan, Russia, Niger,
  Namibia, Uzbekistan
• and the United States.
• UxC Consulting forecasts that world uranium
  production has grown
  13 to 46,850 tonnes in 2008
• Growth leaders
• Kazakhstan - forecasts production to surge by
  more than 40 to 9,400 tonnes
• and plans to mine
  15,000 tonnes of uranium by 2010 and 27,000
  tonnes by 2015-16
• Russia - expected production 3,700
  tonnes and 4,000 tonnes in 2008 and 2009,
  respectively seeking to boost output to 20,000
  tonnes by 2024
• Namibia - expects to increase production by
  about a third, thanks to the
• development of the
  Paladins Langer Heinrich Deposit
• Niger - Arevas Imouran Project will almost
  double the countrys uranium output to
  5,000 tonnes U per year

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Top-10 company producers account for 87 of
global uranium production
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Market valuation of the worlds major uranium
producers(as per May 31, 2009)
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Canadas uranium mines

• Produces about one-third of the worlds uranium
  output from three mines, all three located in
  the Athabasca Basin SaskatchewanTotal
  production 2008 10.617 tonnes U3O8 (2007 11,180
  tonnes)
• McArthur River (69.8 Cameco 30.2
  Areva)production 2008 7,528 tonnes U3O8
  (2007 8,492 tonnes)reserves
  166,835 tonnes U3O8
• Rabbit Lake (Cameco 100)production 2008 1,613
  tonnes U3O8 (2007 1,821 tonnes)reserves
  8,690 tonnes U3O8
• McClean Lake Areva 70 (operator) Denison
  Mines 22.5 - OURD 7.5production 2008 1,476
  tonnes U3O8 (2007 867 tonnes)reserves
  22,500 tonnes U3O8

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Future mines Canada

• Cigar Lake Cameco 50 (manager) Areva 37 -
  Idemitsu 8Project set beyond 2001 (major
  flood)estimated production 8,200 tonnes
  U3O8life 30 40
  yearsreserves 176,700 tonnes U3O8 at over 24
  grade
• Midwest Areva 69.16 (manager) Denison Mines
  25.17 - OURD 5.67 In December 2007, decision
  to proceed with development at a cost of Cdn 435
  million and production expected from 2011.In
  November 2008, the project was stalled due to
  several factor, including 50 rise in capital
  costs.reserves 18,900 tonnes U3O8

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Australias uranium mines

• Ranger Energy Resources of Australia (ERA)
  68 Rio TintoProduction 2008 5,330 tonnes
  U3O8 2009E ... tonnes U3O8Reserves
  43,996 tonnes U3O8
• Olympic Dam BHP Billiton 100 Production 2008
  3,943 tonnes U3O8Expansion
  plan over 11 years 19,000 tonnes
  U3O8Reserves 284,700 tonnes
  U3O8
• Beverley Heathgate 100 (affiliate of General
  Atomics of USA)Production 2008 659
  tonnes U3O8 2009E 1,500 tonnes
  U3O8Reserves 21,000 tonnes U3O8

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United States uranium producers

• Uranium production in the United States is from
  one mill (White Mesa, Utah) and 6 ISR (in situ
  recovery) operations
• In 2008, production fell 15 to 1,780 tonnes U3O8
  or 3.9 million pounds U3O8
• Cameco Resources (formerly Power Resources)
  operates the Smith Ranch Highland Mine in
  Wyoming and Crow Butte Mine in Nebraska, both of
  them ISL operations, from total reserves of
  15,000 tonnes U3O8.Cameco Resources is aiming
  to increase production from these mines and
  adjacent properties to 2,090 tonnes U3O8 per year
  by 2011.
• Denison Mines produced 791,000 tonnes U3O8 in
  2008 through its 200 t/day White Mesa mill in
  southern Utah from its own and purchased ore, as
  well as doing some toll milling.
• In 2007, 4 operating mines in the Colorado
  Plateau area Topaz, Pandora, West Sunday and
  Sunday/St.Jude.
• Two further old mines reopened in 2008 (Rim
  Canyon, Beaver Shaft)
• A third mine (Van 4) in production early 2009.

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Namibia uranium producers

• Namibia has two significant uranium mines capable
  of providing 10 of world
• mining output. Its first uranium mine began
  operating in 1976.
• Langer Heinrich Paladin 100 production
  2008 919 tonnes Uestimated 2009 1,430
  tonnes U 2010
  2,300 tonnes UReserves 25,000
  tonnes U (JORC and NI 43-101 compliant)Measured
  Indicated resources 32,800 tU
• Rössing Uranium Rio Tinto 68.6, Iran 15,
  Industrial Development Corp. of South
  Africa 10, Namibian Government 3In 2008,
  production was 2,370 t/U and is on target for
  3,800 t/U for 2012 onwardsReserves 37,900
  tonnes U (0.028 ore)Resources Measured
  Indicated Resources 71,088 tonnes U (0.025/0.042
  ore)

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Namibia advanced exploration projects

• Namibia has two significant uranium mines capable
  of providing 10 of world
• mining output. Its first uranium mine began
  operating in 1976.
• Reptile Project Deep YellowIndicated
  resources 3,087 tonnes U3O8
  (0.034)Inferred resources 2009 17,620
  tonnes U3O8 (0.028)
• Rössing South Extract Resources Inferred
  resources 2009 41,600 tU (0.0365)
  JORC or NI 43-101 compliant
• Trekkopje Areva Production expected to begin
  at the end of 2009, ramping up to 3,500 tU per
  year in 2011Resources 45,000 tU
• Valencia Forsys Metals Resources 27,000 tU
  (including reserves 20,000 tU at 0.136)