Uranium Market from a Global Perspective or Secondary Supplies: The Gift that keeps on Giving

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1 Uranium Market from a Global Perspective or Secondary Supplies: The Gift that keeps on Giving NUKEM GmbH Klaus Lohrey, Managing Director INAC 2013 Recife, November 2013

2 Slide 2 Caution about Forward-looking Information This presentation includes forward-looking information and statements within the meaning of applicable Canadian and US securities laws. Actual results and events may be significantly different from what we currently expect. These statements are based upon a number of material assumptions, which may prove to be incorrect are subject to a number of material risks that could cause actual results to vary materially. We will not update this information unless required to by law.

meaning of applicable Canadian and US securities laws.

3 Slide 3 Overview About NUKEM Perspectives of the International Uranium Market Fundamentals on Supply and Demand Demand & Primary Supplies (WNA Reference Scenario) Breakdown of Secondaries Global Picture on Supply and Demand Uranium Spot and Term Market

4 Slide 4 NUKEM Group at a Glance Over 50 Years Experience in the Nuclear Sector Headquarters: Nukem GmbH, Alzenau (Germany) & Nukem Inc., Danbury (USA) Representative Offices: Moscow Tashkent (Uzbekistan) Ust Kamenogorsk (Kazakhstan) *) Full time equivalents

5 Slide 5 About NUKEM NUKEM is one of the world s largest global traders of uranium, conversion, and enrichment services One of the top five providers of uranium to nuclear power plants worldwide: Delivering around 11 million pounds of U 3 O 8 annually Trading in the spot and long-term markets (U3O8, UF6, Conversion, EUP, SWU) Purchase and marketing of uranium feed (UF6) under the high-enriched uranium (HEU) deal with Russia Partnership with major uranium mining enterprises within Kazakhstan and Uzbekistan Special projects: Recovery/recycling of EUP from fuel elements and scraps

providers of uranium to nuclear power plants worldwide: Delivering around 11 million pounds of U 3 O 8 annually Trading in the spot and long-term

6 Slide 6 Components and Services in the Fuel Cycle Service Suppliers Producers Governments Intermediaries Funds Utilities Buyers Utilities Producers Intermediaries Funds Products / Services Natural Uranium (U 3 O 8, UF 6 ) Conversion Enrichment (< 5%) Residue Recovery NUKEM Type of Transactions Sales Purchases (Spot / Long-term) Uranium Loans Sale-Buy-Back Buy and Hold Swaps Logistics Transport Storage Swaps Finance Foreign Exchange Transactions Inventory Financing Forfaiting Supplier Credits

Buyers Utilities Producers Intermediaries Funds Products / Services Natural Uranium (U 3 O 8, UF 6 ) Conversion Enrichment (<

7 Slide 7 Overview - 2nd Part About NUKEM Perspectives of the International Uranium Market Fundamentals on supply & demand Demand & primary supplies (WNA Reference Scenario) Secondary supplies with breakdown Global picture on supply & demand Uranium Spot and Term Market

8 Slide 8 Demand & Supply Fundamentals at a Glance Major elements Demand 430 operating nuclear reactors worldwide in 2013 (~390 GWe) 69 reactors currently under construction (~70 Gwe) Major new-builds in China, Russia, India and South Africa Reactor retirements expected in Russia, Germany, Japan and Canada 510 GWe generating capacity expected by 2022 Supply Down-blending of Russian HEU ending 2013; Secondary supplies continuing beyond 2013, but on a much lower level than before 2013 New big uranium projects suspended or postponed, in part indefinitely Source: Cameco/WNA 2013

currently under construction (~70 Gwe) Major new-builds in China, Russia, India and South Africa Reactor retirements expected in Russia, Germany,

9 Slide 9 World Uranium Demand and Supply (1) WNA Demand Scenarios tonnes U WNA Tails Assay for all Reactors: 0.22% Upper Scenario Reference Scenario Lower Scenario Year Source: WNA Market Report Sep 2013

WNA 2013 140.000 120.000 100.000 Tails Assay for all Reactors: 0.

10 Slide 10 World Uranium Supply & Demand (2) Primary Supplies - WNA Reference Scenario t U equiv Primary Uranium Prospective Production Planned Mines Mines under Development (UD) Mines in Operation Demand Reference Case Major assumptions: Trekkopje/Areva; Bakouma/Areva; Yeelirrie, Kentyre/Cameco suspended or postponed; Imouraren start 2015 Sources: WNA Market Report Sep 2013

000 Primary Uranium Prospective Production Planned Mines Mines under Development (UD) Mines in Operation 60.

11 World Uranium Supply & Demand (3) Global Supply/Demand WNA Reference Scenario t U equiv. Secondaries Mainly China/Japan Inventory Build-up Russian LEU/HEU; US DOE Uranium; ERU/MOX; Tails; underfeeding Primary Uranium Other Supplies *) Prospective Production Planned Mines Mines under Development (UD) Mines in Operation Major assumptions: Trekkopje/Areva; Bakouma/Areva; Yeelirrie, Kintyre/Cameco suspended or postponed; Imouraren start 2015 Demand Reference Case Sources: WNA Market Report Sep 2013 *) Uncategorized Primary & Secondary Supplies

Planned Mines Mines under Development (UD) Mines in Operation 0 2013 2015 2017 2019 2021 2023 2025 Major assumptions: Trekkopje/Areva; Bakouma/Areva; Yeelirrie,

12 Slide 12 World Uranium Supply & Demand (4) Uranium from Secondary Supplies - WNA Reference Scenario t U equiv Additional Russian secondary supplies (50% of annual 5,000 tu gap) USDOE stocks ~ 2,500 t U/a Russian underfeeding & tails stripping Western enrichers underfeeding Russian LEU from HEU ERU & MOX WNA Market Report Reference Scenario

000 t U equiv. 20.000 Additional Russian secondary supplies (50% of annual 5,000 tu gap) 15.000 10.000 5.

13 Slide 13 World Uranium Supply & Demand (5) Russian Supply/Demand Analysis Additional Material Needs t U equiv ~ 5,000 tu needed beyond 2013; 50% or 2,500 tu as secondary supplies assumed Total (net) demand Known and expected supply sources (primary production & secondary supplies)

Needs 40.000 t U equiv. 35.000 30.000 25.

14 Slide 14 World Uranium Supply & Demand (6) Conclusion and Outlook Important message to take home: Secondary supplies, the gift that keeps on giving Near-term: The build-up of inventories in nuclear emerging countries, particularly in China, reduces the obvious oversupply to an acceptable level Medium-/Long-term: Good balance between supply & demand through 2025 within the assumptions made Additional secondary supplies possible, due to Re-directed inventories; and Uncertainties around the US high-assay tails availability for re-enrichment

keeps on giving Near-term: The build-up of inventories in nuclear emerging countries, particularly in China, reduces the obvious

15 Slide 15 Overview 3rd Part About NUKEM Perspectives of the International Uranium Market Fundamentals on Supply and Demand Demand & Primary Supplies (WNA Reference Scenario) Secondary Supplies Global Picture on Supply and Demand Uranium Spot and Term Market

16 Slide 16 Uranium Market Near-term and in the Long-term Main Influences A Simplified View Build-up of stocks, primarily at Japanese (involuntarily) and Chinese utilities Growing demand (China, India, Russia, UAE) + First-Core-Effect New Players : Banks, hedge-funds Demand Supply Uranium Market New Players : Banks, hedge-funds Drawdown of utilities excess inventories Delays and suspension of new production; uncertainties on the medium-/long-term End of the HEU Deal; but substantial secondary supply volumes still there

(involuntarily) and Chinese utilities Growing demand (China, India, Russia, UAE) + First-Core-Effect New Players : Banks, hedge-funds

17 Slide 17 Current Spot Market Fundamentals at a Glance Key Factors Demand Few have-to-have utility buyers; most utilities in a wait and see mode After several years of high activity, investment/hedge funds & speculators now largely absent from the market China purchased & purchases uranium for buildup of its inventories Major market uncertainty: Level of medium/long term demand after the Fukushima accident Supply Most primary producers committed for the near and medium-term (2016/2017) Major market uncertainty: Inventory drawdown and deferral of deliveries, and Level of secondary supplies after expiration of the HEU deal in 2013

years of high activity, investment/hedge funds & speculators now largely absent from the market China purchased & purchases uranium for buildup of its

18 UMP Nov Slide 18 Uranium Base Prices for New Long-Term Contracts US$/lb U 3 O Base Prices Charged under New Long-Term Contracts 1) Spot Market Prices Source: UxC Weekly Reports 1) Base prices are given for the month of contract conclusion

8 135 120 105 90 Base Prices Charged under New Long-Term Contracts 1) 75

Uranium Market Outlook 2008

Mining Indaba Uranium Market Outlook 2008 Jeff Combs, President February 4, 2008 The Ux Consulting Company, LLC Roswell, Georgia www.uxc.com UxC The Ux Consulting Company Founded in March 1994 Provides