Yellowcake PLC

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Yellowcake PLC
Robert Wallace Have the low-hanging fruit been
picked. or is the best still to come? Mining
Energy 07 17 September2007
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A late summer storm1

• The Spot Price of Uranium is down
• The prices of Uranium shares are down
• Is this the end of the great uranium boom?

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Denison Mines- April-September 2007
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Laramide Resources- April-September 2007
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All news from UEX in July and August 2007

• 2 UEX Begins 2007 Drilling Program at Northern
  Athabasca Projects and Announces 2007 Winter
  Exploration Results from Riou Lake and Northern
  Athabasca Uranium Projects CNW, August 27, 2007
  0309 PM 3 UEX Extends Uranium Mineralization
  at Black Lake Hole BL-140 Intersects 0.67
  U(3)O(8) over 3.0 metres, Including 1.58
  U(3)O(8) over 1.0 metres CNW, August 21, 2007
  1259 PM 4 UEX Reports Best Hole Ever from
  West Bear Deposit Hole UEX-206 Intersects
  High-Grade Mineralization Grading 6.03 U(3)O(8)
  over 10.67 metres, Including 25.22 U(3)O(8) over
  1.76 metres 2007 Winter Sonic Drilling Program
  Extends Uranium Mineralization to the East New
  N.I. 43-101 Compliant Resource Estimate Underway
  CNW, July 23, 2007 1225 PM 5 UEX/AREVA
  Drilling Extends Mineralization at Kianna
  Deposit SHE-115-15A Intersects 7.11 U(3)O(8)
  Over 6.5 metres, Including 31.95 U(3)O(8) over
  1.2 metres Hosted in Basement Rock CNW,
  July 12, 2007 0933 AM 6 UEX Commences
  Summer/Fall 2007 Drilling Programs at the Raven
  and Horseshoe Deposits Horseshoe Resource
  Definition Drilling on Schedule CNW,
  July 11, 2007 0856 AM 7 UEX Vests to 36.75
  Interest in AREVA's Western Athabasca Uranium
  Projects CNW, July 5, 2007 0255 PM

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UEX- March-September 2007
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A late summer storm2

• Uranium shares were hit dramatically in July and
  August 07, due to
• Buyers strike reduced the Spot Price
• Sale from USA Government stockpile
• The sub-prime flight to liquidity
• Speculative investors selling
• Adds up to a great buying opportunity!

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Back to the fundamentals1
World Demand for U3O8 (uranium oxide) 2007 175m
lbs 2015 Low 212, High 231.5m lbs World Supply
of mined uranium 2005 108m lbs 2006
103m lbs 2007 112m lbs 2015 213m
lbs Source Ux Consulting Market Outlook, July
2007
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Back to the fundamentals1
We are in the third uranium price boom. The first
two booms ended in slumps due to diminution of
demand. Its not going to happen this time
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Fundamentals2 Electricity demand
                                                
                          Source OECD/IEA World
Energy Outlook 2004

Source OECD/EA World Energy Outlook 2004
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Fundamentals2 Electricity generation
                                                
                                              
Source OECD/IEA World Energy Outlook 2004

Source OECD/IEA World Energy Outlook 2004
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Fundamentals3 A renaissance

• Energy generation is responsible for about 40
  of global greenhouse gas emissions
• No new reactors built for 20 years between
  1986-2006- Nuclear Winter
• Nuclear waste a containable factor
• Nuclear reactor stations produce zero emissions.
  Already avoid about 2 billion tonnes of carbon
  dioxide around the world each year
• By contrast, A coal-fired station produces 7
  million tons of pollution pa
• Kyoto implemented 2006. Paris 2007 Global
  warming is a fact
• Pollution carbon credits
• Upcoming Canadian tar sands. Desalination. New
  needs for energy
• Only real threats are a major nuclear station
  accident or new technology

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Fundamentals3 A renaissance

• James Moore Nuclear power is the only
  non-greenhouse gas-emitting power source
  that can effectively replace fossil fuels and
  satisfy global demand
• Bill Borchardt, director of the US Nuclear
  Regulatory Commission's newly created Office of
  New Reactors, on expecting fast-tracked
  applications for as many as 29 reactors at 20
  sites over the next three years. "We have never
  had to do this many reviews at one time in
  parallel with an office that has only existed for
  less than 12 months

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Fundamentals 3 A renaissance

• George W Bush in Sydney to meet John Howard on
  9th September
• "Now, I know some say, well, since he's against
  Kyoto he doesn't care about the climate change.
  That's urban legend, that is preposterous," Mr
  Bush said.
• "If you believe that greenhouse gases are a
  priority then you should be supportive of
  nuclear power. After all, nuclear power enables
  you to generate electricity without any
  greenhouse gases," he said.

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Fundamentals4 Safety

• Nuclear Power generation plants have a
  remarkable safety record
• Three Mile Island 1979, partial meltdown.
  Chernobyl 1986.
• Coal plant deaths 6,400
• Hydro 3,500
• Natural Gas plant deaths 1,400
• Nuclear plant deaths 31 (all at Chernobyl) in
  12,700 reactor-years
• Source Australian Uranium Association,
  Melbourne 2007

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12,700 reactor-years one fatal accident
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Source A Case for Nuclear-Generated
Electricity by Scott W. Heaberlin
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Source A Case for Nuclear-Generated
Electricity by Scott W. Heaberlin
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Fundamentals 5 Nuclear growth

• World Nuclear Association figures
• Total additional stations are 250 (Jan 07) and
  338 (Aug 07). Up 35

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Fundamentals 5 Nuclear Growth

• Projected nuclear power stations have increased
  35 in 2007 so far, to
• 439 reactors operating now in 30 countries
• - USA 104, France 59, Japan 55, Russia 31,
  South Korea 20,
• UK 19, Canada 18, Germany 17,
  China 11, India 17, Ukraine 15,
• 34 new reactors under construction in 12
  countries
• Russia 7 India 6, China 5, South Korea 3, Japan 2
• 81 new reactors on order or planned, with
  funding in 17 countries
• China 26, Japan 11, Russia 7, USA 7, South Korea
  5, India 4
• 223 new reactors proposed, in 25 countries, 5
  new
• China 88, S Africa 24, USA 25, Ukraine 20, Russia
  18, India 15

Source World Nuclear Association 30 August 07
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Fundamentals 6 Supply Security

• Russia. No more HEU after 2012. US25 billion in
  new stations. US10 billion new stations JV
  with Kazakhstan. Plus deal with Australia, 2007.
• China. Total stations predicted 130. Deal with
  Australia, 2006
• India. Technology transfer agreement nearly
  signed with the USA
• The USA. 103 stations now. Dependent on Middle
  East. 2005 Energy Act
• Theres already a global competition for secure
  oil supplies. Uranium is becoming a factor
  in the nascent global competition for energy
• Political security of supply factors
• Over 75 of oil and gas emanates from the Middle
  East, Russia and the FSU
• In 2006, Canada produced 17 of global total
  uranium supply, Australia 13 and Africa 11
  .Total safe regions 41. By 2015, Canada is
  estimated to produce 23, Australia 19 and
  Africa 19. Total 61.

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Supply Threats

• Primary Supply
• 2001 Olympic Dam. Fire in the solvent
  extraction line. Lost 6.5m lbs
• April 03 MacArthur River. Flooded due to
  rockfall. Lost 3.5m lbs.
• October 06 Cigar Lake. Flooded due to rockfall.
  Lost 17m lbs pa for 3 yrs?
• March 07 Ranger. Flooded due to tropical storm.
  Could lose 4m lbs or more
• Enriched supply
• November 03 Tenex reneged on supply contract to
  GNSS. GNSS declared Force Majeure. Tenex
  supplied direct, but inventories were increased.
• December 2003 Converdyn JV. Radioactive gas
  leak. Lost 8-10m kgU UF6
• August 2007. Camecos Mt Hope enrichment plant
  suspended due to leak
• Other supply threats
• Geopolitical, First Nation and Regulatory risks
• Permitting, water and financial risks

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Mergers and Acquisitions activity

• 2006. Mega Uranium acquired Hindmarsh and
  Redport in Australia
• 2006. Paladin Resources bought Valhalla Uranium
  in Queensland Australia
• 2006. Denison Mines and International Uranium
  Corporation, operating in Canada and the USA,
  merged
• 2006. Denison Mines offers to acquire Omega with
  operations in Africa
• 2007. Uranium One acquired Urasia Energy
• 2007. Paladin Resources acquired Summit
  Resources in Queensland
• 2007. Uranium One acquired US Energy and Crested
  Corp- mill and U3O8
• 2007. Cash Minerals acquired Signet Minerals
• 2007. Uranium One acquired Energy Metals
• 2007. UraMin bought by Areva
• 2007. Cameco- Strategic Alliance with Western
  Mining announced
• 29 August. Cameco paid 21m for 10 of
  Western which now has
• 50m for future exploration.

Russia China
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Western Uranium June- September 07
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The United Kingdom
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The United Kingdom
Government White paper, 2003 Nuclear power is
an unattractive option Chancellor of the
Exchequer Gordon Brown, The Times, June
2006 "In Britain over the coming weeks and
months we will demonstrate our enhanced
flexibility with further reforms in planning,
skills and labour markets, and in energy policy,
including new nuclear... The Government Energy
Report, July 2006 New nuclear stations would
make a significant contribution to meeting our
energy policy goals Prime Minister Gordon
Brown, Commons questions, 4 July 2007 "That is
why we have made the decision to continue with
nuclear power, and why the security of our energy
supply is best safeguarded by building a new
generation of nuclear power stations."
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Summary

• The investment case for uranium remains
  compelling because
• Fundamentals 1 Current mined production is half
  of world demand
• Fundamentals 2 Electricity demand is inexorable
• Fundamentals 3 Theres a world-wide nuclear
  renaissance
• Fundamentals 4 Nuclear has an unparalleled
  safety record
• Fundamentals 5 The arrival of new nuclear
  stations is quickening
• Fundamentals 6 Politico-economic Security of
  supply
• Plus Threats to supply
• Plus Mergers and Acquisitions activity
• Plus The United Kingdom effect
• ..and my conclusion is

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Yellowcake PLC
Robert Wallace The rest of the fruit is still to
be picked! Mining Energy 07 17 September 2007
2007