.

2017 SECOND QUARTER REPORT

2017 SECOND QUARTER REPORT

FOR THE THREE AND SIX MONTHS ENDED

AUGUST 31, 2016

TABLE OF CONTENTS MANAGEMENT’S DISCUSSION & ANALYSIS 2 ABOUT URANIUM PARTICIPATION CORPORATION 2 OVERALL PERFORMANCE 3 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS 8 INTERIM CONSOLIDATED FINANCIAL STATEMENTS 9

This Manasubsidiary compares October 6,statements The unaudReporting preparationFinancial RMD&A for tnoted. All to the net a ABOUT The Corpo(“U3O8”) orappreciatio“Manager”)services to(“TSX”) un Migration At Februarowned subRepublic othrough wh UPCL migrwas registe(“UPBL”). liabilities wuranium.

URANI Current M Uranium preaching arange by mquarter at Uand currenin the rang(despite nemarket. Outility contrThe low levof utility rearrival of a balance, atimes requprices has The broadnear term uand an addresulted in

agement’s Dis(collectively, wits financial co 2016 and sho

s and related no

dited interim cStandards (“IFn of the interiReporting. Reathe year endeduranium prices

asset value (“N

T URANIUoration invests r uranium hexaon in the value), under the do the Corporatder the symbo

of Subsidiary

ry 29, 2016, thbsidiary, Uraniuof Cyprus on Shich the operat

rated to Bermuered by the ReImmediately fo

were transferreThe migration

IUM INDUarket Conditio

prices continue high of USD$

mid-July 2016. USD$25.25 pe

ntly resides at Uge of USD$70egative price s

On the demand racting have favel of current cactor requiremperiod of sign

nd potentially ired for new mnot incentivize

er fundamentauranium price wditional 168 una net gain of a

scussion and with UPC, the “ondition and reould be read iotes for the thr

consolidated finFRS”) as issued

m financial staders are also d February 29, s are based on

NAV”), please re

UM PARTsubstantially aafluoride (“UF6e of its uraniumdirection of UPtion. The coml “U”.

y

he majority of um ParticipatioSeptember 10ions of UPCL w

uda on March 1egistrar of Comollowing the med to UPBL. to Bermuda is

USTRY ons

ed to be unde32.15 per pou During the s

er pound U3O8. USD$22.50 po0.00 per poundsignals) and eside of the eq

iled to provide contracting vol

ments remain uificant unfilled rinto a sustaine

mine productioned the required

als of the nucleweakness. Prenits firmly plannalmost 5,000 M

Analysis (“MD“Corporation”)

esults of operatn conjunction ree and six mon

nancial statemd by the Interntatements, inclencouraged to2016. All dolla

n prices publishefer to the “Non

TICIPATIOll of its assets ”) (collectively

m holdings throPC’s Board of mmon shares o

the Corporatioon Cyprus Lim, 2006. In Augwere conducted

11, 2016, uponpanies in Berm

migration, the bUPBL’s activiexpected to re

er downward pnd U3O8 on Maecond quarter, Since the begunds per U3O8d U3O8. Analexcess secondquation, the slo

the conditionsumes, howeve

uncommitted inrequirements s

ed period of sh are extremelyinvestment ne

ear energy maesently, 447 reaned or ordered

Mwe of installed

2

D&A”) of Uranprovides a dettions to those with the Corponths ended Au

ments are prepational Accounluding Internato consult the aar amounts arehed by Ux Consn-IFRS Financ

ON CORPin uranium, eit“uranium”), wi

ough increasesDirectors, pro

of UPC are lis

on's uranium wmited ("UPCL").

gust 2007, UPd.

n receipt of appmuda under thebranch office ties continue

educe the Corp

pressure over arch 1, 2016 a, the price flucginning of 20168. Uranium pricysts point to c

dary supplies aow pace of reas for a sustaineer, is expected future years.

should rapidly bhortfall. The poy long in the uraeeded to advan

arket continue actors are operd. The ten newd nuclear capac

M

nium Participatailed analysis of the previousoration’s unaudgust 31, 2016.

pared in accornting Standardtional Accountaudited consolie expressed in sulting Compa

cial Performanc

PORATIOther in the formith the primarys in the uraniuovides generasted and trade

was held direc. UPCL was in

PCL establishe

proval from thee name of Uranin Luxembourto consist of

poration’s opera

the course ofand then droppctuated in a na6, the spot pricces in 2011, pcontinued incras the reason

actor restarts ined rally in price

to become a p The contractibring the suppl

otential for shoranium sector,

nce new project

to be positive rable around thw reactors concity – which rep

Management’s D

tion Corporatiof the Corpor

s year. This Mdited interim c

rdance with Ins Board (“IASBting Standardsidated financiaCanadian dolla

any LLC (“UxC”ce Measures” s

ON m of uranium oy investment oum price. Denal administratioe on the Toron

ctly or indirectncorporated uned a branch o

e Bermuda Monnium Participatrg was closed directly invest

ating costs.

f the reportingping to USD$25arrow trading rce of uranium hrior to the Fuk

reases in prims for persisten

n Japan and res off of levels npositive driver ng cycle that uly and demandrtfall exists in tand that an exts.

and stand in he world with 5nnected to the presents the h

Discussion & An

on ("UPC") aation’s businesMD&A is datedconsolidated fin

ternational FinB”), applicable s (“IAS”) 34, Il statements aars, unless oth”). For all refersection.

oxide in concenbjective of ach

nison Mines Incon and managnto Stock Exc

ly through its nder the laws

office in Luxem

netary Authorittion Bermuda L

and all assetting in, and ho

g period, with 5.00 per poundange and end

has fallen nearlushima eventsary mine prodnt oversupply elatively low levnot seen sinceas substantial usually preced

d conditions bacthe fact that thxtended period

stark contrast 59 under constrgrid globally inighest annual g

nalysis

and its ss and d as of nancial

nancial to the

Interim nd the erwise rences

ntrates hieving c. (the

gement change

wholly of the

mbourg

ty, and Limited ts and olding,

prices d U3O8 ed the y 35%

s, were duction

in the vels of

e 2005. levels es the ck into e lead of low

to the ruction n 2015 growth

in capacitieKorea andKingdom is2016 with environmeincreasinglnatural gasvalued in tpercent ea

SUMM

Uranium relaNet loss for Net loss per

NAV(1) per sU3O8 spot prUF6 spot pricForeign exc

Uranium relaNet gain (losNet gain (los

NAV(1) per sU3O8 spot prUF6 spot pricForeign exch

(1) The NeFinanc

The net losthat are recchanges influctuate si OVERA (in thousand

UnrealizedIncome froOperating

Net (loss) gNet (loss) g– basic and

es in the past 2d Russia, howes advancing mfour more cu

ntal concerns y towards nucs prices, the nthe global enech year for the

ARY OF

ated loss (in thous

the period (in tho

r common share

share – basic anrice (US$) ce (US$) hange noon-rate

ated gain (loss) (ss) for the periodss) per common

share – basic anrice (US$) ce (US$) hange noon-rate

et Asset Value oial Performance

ss or gain of thcognized in then the spot pricignificantly betw

ALL PER

ds, except per sh

(losses) gainsm lending and/expenses

gain for the pergain per commd diluted

25 years. This ever, the moreajor new nuclerrently under around carbo

lear energy. Eneed for grid-s

ergy mix. Withe next decade a

QUARTE

sands) ousands) – basic and dilut

nd diluted

e (US$ to CAD$)

(in thousands) d (in thousands) share – basic an

nd diluted

e (US$ to CAD$)

or “NAV” is calcMeasures” secti

e Corporation e period. Unrece of uranium ween periods.

FORMAN

hare amounts)

s on investmen/or relocation o

riod mon share

growth is beine traditional, deear power projeconstruction. on emissions, Even with signistabilizing, bash global nucleaand beyond, the

ERLY FINA

ted

nd diluted

culated as the von below.

is primarily drivealized net lossand the U.S.

NCE

ts in uranium of uranium

3

g driven largeleveloped markects on multiple

The need forand crisis le

ificant competise load, nucleaar energy capae long term out

ANCIAL IAugust 31,

2016

$ (35,717) $ (37,232) $ (0.32)

$ 4.31 $ 25.25 $ 72.25

1.3124

August 31, 2015

$ 68,190 $ 66,694 $ 0.57

$ 6.24 $ 36.75 $ 101.00

1.3223

value of total ass

ven by unrealizses or gains ondollar to Cana

Three MoAugust 31

2016 $ (35,75$ 3$ (1,51

$ (37,23

$ (0.3

M

y by the emergkets are also e sites and ther large amounevel air pollutition from heavar power shouacities expectetlook for the ur

INFORMAMay 31,

2016

$ (112,744 $ (114,107 $ (0.99

$ 4.63 $ 27.25

$ 77.00 1.3100

May 31, 2015

$ (67,101 $ (68,371 $ (0.59

$ 5.67 $ 35.00

$ 98.50 1.2465

sets less the va

zed net losses n investments iadian dollar ex

onths Ended 1, August 3

2015

52) $ 68,0335 $ 155) $ (1,49

32) $ 66,69

32) $ 0.5

Management’s D

ging markets obuilding new re U.S. added onts of reliable tion, are drivinvily subsidized uld continue toed to grow betranium market

ATION February 2

2016

4) $ (62,2) $ (63,4

9) $ (0

3 $ 55 $ 320 $ 900 1.3

February 22015

1) $ 36,1) $ 34,9) $ 0

7 $ 60 $ 380 $ 1075 1.2

alue of total liab

or gains on invin uranium arexchange rate –

Six 1, August 3

2016

39 $ (149,051 $ 6

96) $ (2,8

94 $ (151,3

57 $ (1.

Discussion & An

of China, India, reactors. The one unit to its fbaseload elec

ng decision mrenewables an

o be recognizetween two andremains positiv

29, Novembe2015

263) $ (8467) $ (9

0.55) $ (

5.62 $ 2.15 $ 0.00 $

3523 1

28, Novembe2014

,178 $ 17,807 $ 170.30 $

6.26 $ 8.75 $ 7.00 $ 12508 1

ilities. See “No

vestments in ure generally a re– both of whic

Months Ended31, August 6 2015

081) $ 620 $

878) $ (2

339) $ (1

.31) $ (

nalysis

South United fleet in ctricity, makers nd low

ed and d three ve.

er 30, 5

8,563) 9,928) (0.09)

6.16 36.00 99.00 .3333

er 30, 4

8,992 77,395

1.52

5.96 40.00 12.50 .1427

on-IFRS

ranium esult of ch can

d 31,

5

978 251

,766)

,677)

0.01)

Total AsseTotal LiabilNAV(1)

(1) The NeFinanc

The net losin uranium31, 2015 wexpenses o The net losof $149,08mainly due$978,000. Unrealizedcaused by Unrealizedincrease innet gains oU.S. dollar UPC’s NAVto $498,14of the decr The Corpothat the Codeductible Operatin Operating administrat Storage feFacility”) to2016, respcosts incur Managemerespectiveldecrease i2016, manmigration o Operating for the thre Operating for the six m

ts lities

et Asset Value oial Performance

ss for the three of $35,752,00was due to unof $1,496,000.

ss for the six m1,000 and ope

e to operating e

net losses ondecreases in t

net gains on in the spot priceon investments

to Canadian d

V per share dec40,000 at Augurease in the fair

oration had an orporation’s avtemporary diffe

ng Expense

expenses are tive expenses.

es, excluding o other storagepectively (Augurred as a result

ent fees werey (August 31, n the NAV, on

nagement fees of the Corporat

expenses of $ee months ende

expenses of $months ended

or “NAV” is calcMeasures” secti

e months ende00 and operatinnrealized net g

months ended Aerating expenseexpenses of $2

n investments he spot prices

investments in es, along with in uranium du

dollar exchange

creased to $4.3st 31, 2016, fror value of inves

effective tax ravailable tax attrerence – for wh

es

comprised of s

the costs incu facilities, were

ust 31, 2015 - t of transferring

e $501,000 an2015 - $555,which the manincluded a on

ion’s subsidiary

$1,515,000, pared August 31, 2

2,878,000, parAugust 31, 20

culated as the von below.

ed August 31, 2ng expenses ogains on invest

August 31, 201es of $2,878,002,766,000, par

in uranium duand overall de

uranium durinan increase inring the six mo

e rate, partly of

31 at August 3om $649,479,0stments in uran

ate of nil for thributes and coshich the Corpo

storage costs,

rred to transfee $578,000 and$650,000 and

g holdings of ur

nd $927,000 000 and $1,10

nagement feese-time fee of $y.

rtially offset by2016, represen

rtially offset by 16, represents

4

value of total ass

2016 was due of $1,515,000. tments in uran

16 was due to 00. The net losrtly offset by un

uring the threeecrease in the U

ng the three mon the U.S. dollaonths ended Auffset by the dec

31, 2016, from $000 at Februarnium.

he six months est basis relatedration does not

management f

er UF6 held witd $1,080,000 d$1,200,000).

ranium to other

during the thr08,000). The are based. D$100,000 (Aug

y income from nts approximate

income from lapproximately

M

$ $ $

sets less the va

primarily to unThe net gain f

nium of $68,03

unrealized netss for the six mnrealized net g

e and six monU.S. dollar to C

onths ended Aar to Canadianugust 31, 2015crease in spot p

$5.62 at Februry 29, 2016. Th

ended August d to its investmt recognize def

fees, public co

th the United Sduring the three

The decreaser storage facilit

ree and six mdecrease in m

During the threegust 31, 2015 -

lending and/orely 0.2% of the

ending and/or y 0.3% of the N

Management’s D

At August 312016

$ 500,03$ 1,89$ 498,14

alue of total liab

nrealized net lofor the three m39,000, offset

t losses on invmonths ended Agains on invest

nths ended AuCanadian dollar

August 31, 2015n dollar exchan5 were caused prices.

uary 29, 2016. he decrease wa

31, 2016, primments in uraniuferred tax asse

ompany expens

States Enrichme and six monte in storage feeies.

months endedmanagement fe and six mont- $nil) for work

r relocation of e NAV at Febru

relocation of uNAV at Februar

Discussion & An

1, At August 2015

39 $ 72999 $ 240 $ 727

ilities. See “No

osses on investmonths ended A

in part by ope

vestments in urAugust 31, 201tments in uran

ugust 31, 2016r exchange rate

5 were causednge rate. Unreby an increase

The NAV decras mainly as a

marily due to thum give rise toets.

ses and gener

ment Facility (“hs ended Augues was due to

d August 31, fees was due hs ended Augu

k associated w

uranium of $3uary 29, 2016.

uranium of $62ry 29, 2016.

nalysis

31,

9,608 2,226 7,382

on-IFRS

tments August erating

ranium 15 was ium of

6 were e.

by an ealized e in the

reased a result

he fact o a net

ral and

“USEC ust 31,

o lower

2016, to the

ust 31, with the

35,000,

20,000,

Uranium UPC’s uran

(in thousand

InvestmenU3O8 UF6

U3O8 averaIn CanIn Unit

UF6 averagIn CanIn Unit

The fair vareflect the fair value aat August $120,000. Transfer of During the the USEC transfer redbefore adju Following tUF6 held wamounted nil. Uranium Le In March 2party with calculated end of eac In March 2As a result2016 and t Uranium R In July 20700,000 Kgin three seKgU for thinitial 12 mto the origistatement In July 201

m Investmen

nium investme

ds, except quanti

nts in Uranium

age cost and fanadian dollars ted States dolla

ge cost and fairnadian dollars ted States dolla

alue of UF6 holrisks associateadjustment was

31, 2016, the

f UF6 held with

six months enFacility to ano

duced the Corpustments, as at

the end of the with the USECto US$94,000.

ending Arrange

2015, the Corpoa return date iquarterly baseh month, for th

2016, the Corpt of the early tethe related ban

Relocation Agre

16, the CorpogU as UF6 to a

eparate tranchee initial 12 mo

month period. Tnal storage facof comprehens

6, the Corpora

nt Portfolio

nt portfolio con

ty amounts)

m:

air value per po

ars

r value per KgU

ars

dings reporteded with the Cors reduced to ree remaining fa

the USEC Fac

nded August 3other storage fporation’s UF6 t August 31, 20

quarter, on SeC Facility to a The transfer r

ement

oration enteredn April 2017.

ed on the averae previous thre

oration and boermination, thek guarantee w

eement

oration enteredan alternate stoes, and will be onths of each tThe term of thecility in May 20sive (loss) gain

ation completed

nsists of the foll

Q

9,471,90

ound:

U:

d at February 2rporation’s mateflect the reducair value adjus

cility to another

1, 2016, the Cfacility. The coholdings with t016.

eptember 30, 2another storagereduced the Co

d into an agreeThe loan was

age of the U3Oee months. A b

orrower agreede Corporation ras cancelled a

d into an agreorage facility. T

completed in ransfer and USe agreement re020. The fee re.

d the first of the

5

lowing at perio

Quantity

70,024 lbs 03,471 KgU

29, 2016 includerial held with ction in the remstment recorde

r storage facility

Corporation tranost associated he USEC Faci

2016, the Corpe facility. The orporation’s rem

ement to loan 1subject to a lo

O8 spot price pebank guarantee

d to terminate treceived cash nd returned to

eement with anThe transfers aexchange for aS$0.50 per Kgequires the retueceived is reco

e three tranche

M

d end:

Cost

$ 454 $ 311

$ 766

$ 4 $ 4

$ 16 $ 15

ded a fair valuethe USEC Fac

maining materied against the

ty

nsferred a totawith the trans

lity to 31,276 K

poration transfecosts associa

maining holding

,300,000 pounoan fee of 1.0%er pound, as dee was provided

the loan one yconsideration the borrower.

n independentare expected toa fee payable

gU for each suurn and transfeorded as incom

es, for a transfe

Management’s D

4,486 $ 1,862 $

6,348 $

47.99 $ 43.97 $

63.84 $ 51.62 $

e adjustment locility. During thal held with th

e Corporation’s

al of 347,290 Ksfer amounted KgU, with a fair

erred the remaated with transgs of UF6 with

nds of U3O8 to % per annum, efined and pubd as collateral f

year before theof $559,000 (U

t third party too be made oveto the Corporabsequent yearer of the 700,0

me from relocat

er of 300,000 K

Discussion & An

Fair Value

313,819 180,369

494,188

33.14 25.25

94.76 72.20

oss of $1,276,he current perioe USEC Facilits UF6 holding

KgU as UF6 heto $1,304,000

r value of $2,96

ining 31,276 Ksferring the mthe USEC Fac

an independenwith payments

blished by UxC for the loan.

e original returnUS$435,000) i

o relocate a toer the next two ation of US$1.0r after the end 00 KgU as UFtion of uranium

KgU as UF6.

nalysis

000 to od, the ty. As s was

ld with 0. The 66,000

KgU as material cility to

nt third s to be at the

n date. n April

otal of years, 00 per of the

F6 back m in the

LIQUIDIT Cash and The decreinvesting atransfers o The workin The Corponormally fuin, or set arequired mcircumstanto facilitatearrangeme On Octoberegulatory shares or wto be deteroffering am2016, the C In JanuaryCorporatiocommencinpurchase o RELATE Manageme A new threUnder the a base feeannum of 0.2% per afor on-goinacquisitionU3O8 or UF The followi

(in thousand Fees incur

ManagemTotal fees Managemework assoc As at AugManager w

TY AND CA

cash equivalenase of $3,406

activities of $1f UF6 held with

ng capital as at

oration’s capitaunded through aside for, future

minimum amounnces, the Corpoe the purchaseents.

er 31, 2014, theauthorities in ewarrants or anrmined based omount of up to Corporation ha

y 2016, the Con to purchaseng January 18of its outstandin

ED PARTY T

ent Services A

ee year agreemnew managem

e of $400,000 the Corporatio

annum of the Cng monitoring of or sale of U

F6, or gross inte

ing outlines the

ds)

red with the Mament fees incurred with

ent fees duringciated with the

ust 31, 2016, with respect to t

APITAL RES

nts were $5,566,000 was prim,304,000. Ca

h the USEC Fac

August 31, 20

al structure cocommon sharee purchases ont of 85% of itoration can entes of uranium

e Corporation feach of the proy combination on market cond$200,000,000

s not issued an

orporation filede up to 10,198, 2016 and eng shares unde

TRANSACTI

Agreement wit

ment was entement services a

per annum, paon’s total assetCorporation’s to

or work assoU3O8 or UF6); aerest fees paya

e fees paid to th

anager:

h the Manager

g the three andmigration of th

trade and oththe fees indicat

SOURCES

62,000 at Augumarily due to nsh used by incility to anothe

016 was $3,952

onsists of shae offerings withf uranium. At ts aggregate gter into short-te. To date, th

filed the Short ovinces of Canof such securi

ditions at the ti0 during the 25ny Securities p

d a normal co92,641 of the

ending on Januer the 2016 NC

IONS

th the Manage

ered into betwgreement, the

ayable in equats in excess ofotal assets in eociated with aand d) a commable to the Corp

he Manager fo

d six months ehe Corporation’

her payables ited above.

6

ust 31, 2016, cnet cash usednvesting activitir storage facilit

2,000.

re capital andh at least 85%

August 31, 20ross proceeds

erm borrowing ae Corporation

Form Base Shnada, other thaities as units (“ime of sale and5 month periodursuant to the

ourse issuer be Corporation’suary 17, 2017

CIB.

er

ween the CorpoManager will r

al quarterly instf $100,000,000excess of $500

transaction omission of 1.0%poration in con

r the periods e

Three

August 32016

$ $

nded August 3s subsidiary.

ncluded $223,

M

compared with in operationsies are relatedty.

d contributed of the gross pr

016, the Corpos of share offerarrangements has not ente

helf Prospectusan Québec. Th“Securities”), ind as set forth id ending NoveProspectus.

id (“2016 NCIs common sh

7. To date, th

oration and thereceive the follotallments; b) a0 and up to an0,000,000; c) a or arrangemen

% of the gross vnnection with an

nded:

Months Ended

31, August 2015

501 $ 501 $

31, 2016 includ

,000 (February

Management’s D

$8,968,000 ats of $2,102,00d to the costs

surplus. Uranroceeds of shaoration has invrings in uraniufor up to 15% red into any s

s (“Prospectushe Corporationn amounts, at n the Prospect

ember 30, 2016

B”) with the Thares during he Corporation

e Manager effowing fees from

a variable fee end including $5fee, at the dis

nt (other than value of any pny uranium loa

d Six

31, 5

August

2016

555 $ 555 $

ded a one-time

y 29, 2016: $2

Discussion & An

t February 29, 0 and cash uassociated w

nium purchaseare offerings invvested more thm. In strictly of its net assetshort-term borr

s”) with the secn may issue coprices, and ontus, for an agg6. As at Augu

TSX, authorizina 12 month

n has not mad

fective April 1, m the Corporatequal to (i) 0.3500,000,000, ascretion of the B

a financing, purchases or saan arrangement

Months Ended

31, 6

August 2015

927 $ 1927 $ 1

e fee of $100,0

260,000) due

nalysis

2016. sed in ith the

es are vested an the limited t value rowing

curities ommon terms regate

ust 31,

ng the period

de any

2016. tion: a) 3% per and (ii) Board, or the ales of ts.

d

31, 5

1,108 1,108

000 for

to the

Key Mana Key manacontrolling the membe The followperiods en

(in thousand

Directors’ fTotal key m

expense OUTSTA At Octoberother instru CONTRO The Corpocontrol ovehas inhereassurance There has three and sthe Corpor NON-IFR This MD&Aperformancat NAV peDiluted NAoutstandingIFRS and comparablquantitativeNAV per sinformationCorporatio ADDITIO Additional Annual Info

gement Perso

agement persothe activities o

ers of its Board

ing outlines thding:

ds)

fees & expensemanagement e reimburseme

ANDING SHA

r 6, 2016, thereuments issued

OLS AND P

oration’s manaer financial repoent limitations.

with respect to

not been any six months endration’s internal

RS FINANCI

A contains refce measures. r share, the NA

AV per share g, adjusted for therefore may

e IFRS finance reconciliationshare and dilun useful to its sn’s business re

ONAL INFOR

information regormation Form

onnel

onnel are thosof the Corporatd of Directors.

e compensatio

es personnel coments

ARE DATA

e were 115,648and outstandin

ROCEDURE

agement is resorting. Any sy Therefore, ev

o the financial s

change in the ded August 31l control over fi

IAL PERFO

ferences to “NThe NAV is ca

AV is then diviis calculated dilutive instrum

y not be comial measure prn for such non-uted NAV per shareholders ielative to that o

RMATION

garding UPC, , are available

se persons hation, directly or

on and expens

mpensation &

8,713 commonng.

ES

sponsible for eystem of internaven those sysstatement prep

Corporation’s , 2016 that hanancial reporti

RMANCE M

et Asset Valuealculated as theded by the totaby dividing thements. The teparable to simresented in UP-IFRS financia

share consisn understandin

of its peers.

including the Cunder the Corp

7

aving authorityr indirectly. Th

se reimbursem

Three M

August 2016

$

& $

n shares issued

establishing anal control over

stems determinparation and pre

internal contros materially affng.

MEASURES

e” or “NAV” ae value of total al number of ce NAV by therm NAV does

milar measuresPC’s consolidal performance tently for manng UPC’s perfo

Corporation's pporation's profi

M

y and responshe Corporation

ments paid to k

Months Ended

t 31, 6

Augus201

72 $

72 $

d and outstand

nd maintainingfinancial repor

ned to be effeesentation.

ol over financiafected, or is re

and “diluted NA assets less th

common sharese weighted avenot have any ss presented bated financial smeasure. The

ny years and ormance and m

press releasesle at www.seda

Management’s D

sibility for plann’s key manage

key manageme

Six

t 31, 5

Augus

201

55 $

55 $

ding. There are

g an adequaterting, no mattective can prov

l reporting thateasonably likely

AV”, which arehe value of totas outstanding aerage numberstandardized m

by other compstatements ande Corporation believes these

may assist in t

s, quarterly andar.com.

Discussion & An

nning, directinement personn

ent personnel f

Months Ended

t 31, 6

Augu20

135 $

135 $

e no stock opti

e system of inr how well des

vide only reaso

t occurred duriy to materially

e non-IFRS final liabilities. Toas at a specificr of common smeaning accordanies. There d thus no apphas calculatede measures pthe evaluation

d annual repor

nalysis

g and nel are

for the

d

st 31, 15

113

113

ons or

nternal signed, onable

ng the affect,

nancial o arrive c date. shares ding to

is no licable

d NAV, provide

of the

rts and

CAUTIO Certain infforward loo“may”, “wilor variation By their vefactors, maexpectationplease refeavailable u These andthese forwestimates, future perfowhere reqinformation

NARY STAT

ormation contaoking informatil”, “expect”, “inns thereon or s

ery nature, forwany of which ns expressed ier to the “RISnder the Corpo

d other factors ward looking s

unusual and uormance may uired under a

n.

TEMENT RE

ained or incorpon. These statend”, “estimatimilar terminolo

ward looking stare beyond th

in the forward SK FACTORS”oration's profile

should be contatements. A

unanticipated ediffer materiallypplicable secu

EGARDING

porated by refeatements can bte”, “anticipate”ogy.

atements involhe control of looking statem section in the

e on SEDAR at

nsidered carefuAlthough manaevents may occy from those eurities legislatio

8

FORWARD

erence in this be identified by”, “plan”, “shou

lve numerous fUPC, may ca

ments. For a lise Corporation't www.sedar.co

ully, and readeagement reviewcur which rendxpressed or imon, UPC does

M

D-LOOKING

MD&A constituy the use of fold”, “believe” o

factors, assumause actual rest of the princis annual inforom.

ers are cautionws the reasonder them inaccmplied by the fos not undertak

Management’s D

G STATEME

utes forward loorward looking or “continue” or

mptions and estesults to differ ipal risks of anrmation form d

ned not to placnableness of icurate. Under orward lookingke to update

Discussion & An

NTS

ooking statemeterminology su

r the negative t

timates. A varmaterially fro

n investment indated May 11,

ce undue reliants assumptionsuch circumsta statements. Eany forward lo

nalysis

ents or uch as thereof

riety of om the n UPC, , 2016

nce on ns and ances, Except ooking

CONS

(Expressed

ASSETS Current Cash and cTrade and

Non-CurreInvestmentTotal asset

LIABILITIECurrent Trade and Total liabili

EQUITY Share capiContributedDeficit Total equityTotal liabili

Common sIssued

The a

OLIDATE

in thousands of C

cash equivalenother receivab

ent ts in uranium (nts

ES

other payablesties

ital (note 6) d surplus

y ties and equity

shares d and outstand

accompanying

ED STATE

Canadian dollars

nts bles

note 4)

s

y

ing (note 6)

notes are an in

EMENTS

s except for shar

ntegral part of

9

OF FINA

re amounts)

these unaudite

Interim

ANCIAL P

At

$

$

$

$

ed interim cons

m Consolidated

OSITION

August 31, 2016

5,562 289 5,851

494,188 500,039

1,899 1,899

822,343 6,762 (330,965) 498,140 500,039

115,648,713

solidated financ

d Financial State

At February2016

$ 8

9

642 $ 651

$ 2 2

822 6 (179 649 $ 651

115,648

cial statements

ements

y 29,

8,968 469

9,437

2,113 1,550

2,071 2,071

2,343 6,762 ,626) 9,479 1,550

8,713

s.

CONS

(Expressed for share an

URANIUMUnrealized

uraniumIncome froIncome froRealized lo

compon

OPERATINManagemeStorage feePublic comGeneral offLegal and Interest incForeign ex

Net (loss)

gain fo Net (loss) Basic Weighted

shares Basic

The a

OLIDATE

in thousands of Cd per share amo

RELATED (LO (losses) gains

m (note 4) m lending of um relocation of

oss on sale of cnents

NG EXPENSESent fees (note 7es (note 4)

mpany expensefice and misceother professio

come xchange loss

gain and comor the period

gain per comand diluted

average numb outstanding and diluted

accompanying

ED STATE

Canadian dollarsounts)

OSS) GAIN s on investmen

ranium (note 5f uranium (noteconversion

S 7)

es llaneous

onal fees

mprehensive (l

mon share

ber of commo

notes are an in

EMENTS

s except A

ts in $

) e 5)

oss) $

$

on

1

ntegral part of

10

OF COM

Three MontAugust 31,

2016

$ (35,752)

- 35

-

(35,717)

(501) (726) (181) (54) (55) 14 (12)

(1,515)

(37,232)

(0.32)

15,648,713

these unaudite

Interim

MPREHEN

ths Ended August 31,

2015

$ 68,039

151

68,190

(555 (650

(162 (78 (29 54 (76

(1,496

$ 66,694

$ 0.57

116,516,413

ed interim cons

m Consolidated

NSIVE (LO

Six MAugust 3

2016

9 $ (149,0

1 5- -

0 (148,4

5) (90) (1,22) (38) (19) (4

6) (16) (2,8

4 $ (151,3

7 $ (1.

3 115,648,7

solidated financ

d Financial State

OSS) GAI

Months Ended 31, August

2015

081) $

585 35

-

461) 1

927) (1228) (1355) 95)

(97) 30 06)

878) (2

339) $ (1

.31) $ (

713 116,547

cial statements

ements

N

t 31, 5

978

251 -

(140)

1,089

,108) ,200) (310) (155) (47) 100 (46) ,766)

,677)

0.01)

7,572

s.

CONS

(Expressed

Balance aCommon Net loss fBalance a

Balance aNet loss fBalance

CONS

(Expressed

OperatingNet loss foAdjustmen

UnreaRealizCosts

Changes inChangChang

Net cash u

Investing ACosts assoSale of conNet cash (

FinancingCommon sNet cash u

Decrease iCash and cCash and

The a

OLIDATE

d in thousands o

at February 28shares purcha

for the period at August 31, 2

at February 29for the period at August 31,

OLIDATE

in thousands of C

Activities r the period t for: lized losses (g

zed loss on saleassociated wit

n non-cash woge in trade and ge in trade and used in operat

Activities ociated with tranversion compo(used) generat

Activities shares purchasused in financ

in cash and cascash equivalencash equivale

accompanying

ED STATE

of Canadian dolla

, 2015 ased

2015

, 2016

2016

ED STATE

Canadian dollars

ains) on investe of conversionth transfer of ur

rking capital: other receivabother payables

ting activities

nsfer of uraniuonents ted by investi

sed, including trcing activities

sh equivalents nts – beginningents – end of t

notes are an in

EMENTS

ars)

EMENTS

s)

tments in uranin components ranium (note 4)

bles s

m (note 4)

ng activities

ransaction cos

of the period the period

ntegral part of

11

OF CHAN

Share Capital

$ 831,048 (2,535) -

$ 828,513

$ 822,343 -

$ 822,343

OF CASH

um (note 4)

)

ts

these unaudite

Interim

NGES IN

Contributed Surplus

$ 4,564 536

- $ 5,100

$ 6,762 - $ 6,762

H FLOWS

A

$

$

ed interim cons

m Consolidated

EQUITY

Deficit

$ (104,554 (1,677 $ (106,231

$ (179,626 (151,339 $ (330,965

S

Six MontAugust 31,

2016

(151,339)

149,081 -

148

180 (172) (2,102)

(1,304)-

(1,304)

- -

(3,406) 8,968

5,562

solidated financ

d Financial State

Total Equ

4) $ 731 - (1,

7) (1,1) $ 727

6) $ 6499) (151,5) $ 498

hs Ended

August 32015

) $ (1

(- 8

0 ) ) (2

) - )

- (1- (1

) (38 172 $ 13

cial statements

ements

uity

,058 ,999) ,677) 7,382

9,479 ,339) 8,140

31,

,677)

(978) 140

-

(21) (129) ,665)

- 891

891

,999) ,999)

,773) 7,753 3,980

s.

NOTESFOR THE (Expressed 1. URAN

UraniuMarchCanadcompa The Chexaflvalue the diCorposymbo

2. BASIS

TheseInterna(“IASBStandain conj All dol All ura These

3. SIGNI

The siconsisended

4. INVES

The in (in thou

Balanc

UU

Balan

S TO THESIX MONTHS in Canadian dol

NIUM PARTICI

um Participatioh 15, 2005. Theda, M5J 1T1. any's sole and

Corporation invuoride (“UF6“) of its uranium rection of UPCration. The co

ol “U”.

S OF PRESEN

e interim consoational FinanciB”), applicable ard (“IAS”) 34, junction with th

lar amounts ar

anium prices ar

e financial state

FICANT ACCO

gnificant accoustent with those February 29, 2

STMENTS IN U

nvestments con

usands)

ce at February

nrealized net loF6 fair value adce at August 3

E CONSOENDED AUGU

lars, unless othe

PATION CORP

on Corporation e address of its Uranium Pawholly-owned

vests substantia(collectively “uholdings througC’s Board of Dommon shares

TATION

olidated financal Reporting S

to the prepaInterim Financ

he audited annu

re expressed in

re based on pri

ements were ap

OUNTING POL

unting policies e applied in the2016.

URANIUM

ntinuity summa

29, 2016

osses on invesdjustment 31, 2016

OLIDATEDUST 31, 2016 A

erwise noted)

PORATION

(“UPC”) was s registered herticipation Bersubsidiary.

ally all of its aranium”) with tgh increases inDirectors, provof UPC are list

cial statementstandards (“IFRaration of intecial Reporting. ual consolidate

n Canadian dol

ces published

pproved by UP

LICIES

used in the pree Corporation’s

ry is as follows

stments in uran

12

D FINANCAND 2015

established unead office is 40 rmuda Limited

assets in uranihe primary inven the uranium pvides general ated and trade o

s of the CorpoRS”) as issued erim financial These interim

ed financial stat

lars, unless oth

by Ux Consulti

C’s Board of D

eparation of ths audited annu

s:

$

nium

$

Interim

CIAL STA

nder the Busin University Ave (together wit

ium oxide in cestment objectprice. Denisonadministration on the Toronto

oration have bby the Internastatements, iconsolidated ftements for the

herwise noted.

ing Company L

Directors on Oc

hese interim coual consolidate

Cost

766,348 $

- -

766,348 $

m Consolidated

ATEMENT

ness Corporatioenue, Suite 110th UPC, the "

concentrates (“tive of achievinn Mines Inc. (thand managemStock Exchan

been prepared tional Accountincluding Interfinancial stateme year ended F

LLC (“UxC”).

ctober 6, 2016.

onsolidated finaed financial sta

Fair Value Adjustment

(124,235

(149,0811,15

(272,160

d Financial State

TS

ons Act (Ontar00, Toronto, O"Corporation")

“U3O8“) and urng appreciationhe “Manager”), ment services ge (“TSX”) und

in accordancing Standards rnational Accoments should bFebruary 29, 20

ancial statemenatements for th

FairValu

5) $ 64

1) (1456 0) $ 49

ements

rio) on Ontario,

is the

ranium n in the under to the

der the

ce with Board

ounting e read

016.

nts are e year

r ue

42,113

9,081) 1,156

94,188

The ba (in thou

U3O8 UF6 Balan Investreflectthe for The fato refl(“USEreductadjust Transf Duringwith thof whiremainThe tr$2,966

5. URAN Lendin In Marthird pto be cUxC abank movem In Mardate. Ain Aprreceiv Reloca In July700,00years,US$1.the enKgU areloca In July

alance of inves

usands, except q

ce at August 3

ments in uranit spot prices pureign exchange

air value of UF6ect the risks aC Facility”). Dtion in the remament recorded

fer of UF6 held

g the six monthhe USEC Faciliich $1,156,000ning $148,000 ransfer reduced6,000 before ad

NIUM ARRANG

ng Agreement

rch 2015, the Cparty with a retucalculated qua

at the end of eaguarantee, waments in the ur

rch 2016, the As a result of thril 2016 and thed was recorde

ation Agreeme

y 2016, the Co00 KgU as UF6 in three sepa00 per KgU fo

nd of the initial as UF6 back totion of uranium

y 2016, the Cor

stments in uran

quantity amounts

31, 2016

um are categoublished by Uxe noon-rate of 1

6 holdings repoassociated with

During the curreaining material against the Co

with the USEC

hs ended Auguty to another s

0 was applied was recorded

d the Corporatdjustments, as

GEMENTS

Corporation enurn date in Apriarterly based onach month for thas provided inanium price.

Corporation anhe early termine related banked as income f

nt

orporation ente6 to an alterna

arate tranches,r the initial 12 m12 month perioo the original s

m in the stateme

rporation comp

nium consists o

) Qu

9,470,1,903,4

orized in Level 2xC of US$25.251.3124.

orted at Februah the Corporatent period, the held with the orporation’s UF

C Facility to ano

ust 31, 2016, tstorage facility.

against the orto storage fee

ion’s UF6 holdiat August 31,

tered into an ail 2017. The lon the average he previous thr the amount

nd borrower agnation, the Corpk guarantee wafrom lending of

ered into an agte storage faci and will be comonths of eachod. The term ostorage facilityent of compreh

pleted the first o

13

of:

antity

024 lbs $ 471 KgU

$

2 of the fair va5 per pound U3

ary 29, 2016 inction’s material fair value adjuUSEC Facility.

F6 holdings was

other storage fa

he Corporation The cost assoriginal fair values in the consoings with the U2016.

agreement to looan was subjec

of the U3O8 spree months. Cof US$56,000

greed to terminporation receivas cancelled af uranium in the

greement with ility. The transompleted in exh transfer and of the agreemey in May 2020.hensive (loss) g

of the three tran

Interim

Cost

454,486 $ 311,862 766,348 $

alue hierarchy. 3O8 and US$72

cluded a fair vaheld with the stment was re. As at Augusts $120,000.

facility

n transferred aociated with theue adjustment olidated statemUSEC Facility t

oan 1,300,000 ct to a loan fee pot price per po

Collateral for the0,000, which a

nate the loan oved cash considand returned toe statement of

an independesfers are expecxchange for a US$0.50 per K

ent requires the. The fee recgain.

nches, for a tra

m Consolidated

Fair Value Adjustment

(140,667 (131,493 (272,160

Fair values as2.25 per KgU a

alue adjustmenUnited States

duced by $1,1t 31, 2016, the

a total of 347,2e transfer amoloss as descr

ment of compreto 31,276 KgU

pounds of U3Oof 1.0% per anound, as define loan, in the foallowed for adj

one year beforderation of $55o the borrowercomprehensive

ent third party tcted to be madfee payable t

KgU for each se return and traceived is recor

ansfer of 300,0

d Financial State

Fair t Value

7) $ 3133) 1800) $ 494

s at August 31as UF6, transla

nt loss of $1,27s Enrichment F56,000, to refle

e remaining fair

290 KgU as UFunted to $1,30ribed above anehensive (loss

U, with a fair va

O8 to an indepennum, with payed and publishorm of an irrevojustments bas

re the original 59,000 (US$43r. The considee (loss) gain.

to relocate a tde over the neo the Corporaubsequent yea

ansfer of the 70ded as income

000 KgU as UF

ements

e

3,819 0,369 4,188

, 2016 ated at

76,000 Facility ect the r value

F6 held 04,000, nd the ) gain. alue of

endent yments hed by ocable

sed on

return 5,000) eration

total of ext two tion of

ar after 00,000 e from

6.

6. COMM The Cand ou

(in thou Balan

On Ocregulacommand onfor an As at A In JanCorpocommpurcha

7. RELA

Manag The fo

(in thou

Fees iMana

Total f

Managfor wo As at Manag Key M Key mcontroare the The fothe pe

(in thou

DirectoTotal

co

MON SHARES

Corporation is autstanding com

usands, except c

ce at February

ctober 31, 2014atory authoritieon shares or wn terms to be daggregate offe

August 31, 201

nuary 2016, theration to purcencing Januarase of its outsta

ATED PARTY T

gement Servic

ollowing outline

usands)

ncurred with thagement fees fees incurred

gement fees durk associated w

August 31, 20ger with respec

Management P

management peolling the activite members of i

ollowing outlineeriods ending:

usands)

ors’ fees & expkey managemmpensation &

authorized to ismmon shares is

common share am

y 29, 2016 an

4, the Corporats in each of twarrants or anydetermined basering amount o16, the Corpora

e Corporation fhase up to 10

ry 18, 2016 ananding shares

TRANSACTION

ces Agreemen

es the fees paid

he Manager:

with the Mana

uring the threewith the migrat

16, trade and ct to the fees in

Personnel

ersonnel are tties of the Corpits Board of Dir

es the compen

penses ment personne& expense reim

ssue an unlimis as follows:

mounts)

d August 31,

tion filed a shothe provinces y combination sed on market cof up to $200,0ation has not is

filed a normal 0,192,641 of td ending on Junder the 2016

NS

nt with the Ma

d to the Manage

ager

e and six monthion of the Corp

other payablesndicated above

hose persons poration, directrectors.

nsation and exp

el mbursements

14

ited number of

2016

ort form base sof Canada, otof such securiconditions at th00,000 during

ssued any Secu

course issuer the Corporatioanuary 17, 206 NCIB.

nager

er for the perio

Three

August 32016

$ $

hs ended Auguporation’s subs

s included $22.

having authortly or indirectly

pense reimbur

Three M

August 2016

$

$

Interim

f common sha

N Com

1

shelf prospectuther than Quéities as units (“he time of salethe 25 month

urities pursuan

bid (“2016 NCon’s common s17. To date, t

ods ended:

e Months Ende

31, August 2015

501 $ 501 $

ust 31, 2016 inidiary.

23,000 (Februa

rity and respony. The Corpora

rsements paid

Months Ended

31,

August2015

72 $

72 $

m Consolidated

res without pa

Number of mmon Shares

15,648,713

s (“Prospectusébec. The Co“Securities”), in and as set forperiod ending t to the Prospe

CIB”) with the Tshares during the Corporatio

ed Six

31, 5

August

2016

555 $ 555 $

ncluded a one-t

ary 29, 2016: $

nsibility for plaation’s key ma

to key manag

Six

t 31, 5

Augus

201

55 $

55 $

d Financial State

ar value. The

Amoun

$ 822

s”) with the secorporation mayn amounts, at prth in the ProspNovember 30,

ectus.

TSX, authorizia 12 month

n has not mad

x Months Ende

31, 6

Augus201

927 $ 1927 $ 1

time fee of $10

$260,000) due

anning, directinnagement pers

gement person

Months Ended

t 31, 6

Augu20

135 $

135 $

ements

issued

nt

2,343

curities y issue prices,

pectus, 2016.

ng the period

de any

ed

st 31, 15

1,108 1,108

00,000

to the

ng and sonnel

nel for

d

st 31, 15

113

113

8. SUBS

Trans On Sealternatransfe

SEQUENT EVE

fer of UF6 held

eptember 30, 2ate storage facer reduced the

ENT

d with the USE

2016, the Corcility. The costsCorporation’s

EC Facility to

poration transfs associated wremaining hold

15

an alternate s

ferred 31,276 with transferringdings of UF6 wi

Interim

storage facility

KgU as UF6 hg the material ath the USEC F

m Consolidated

y

held with the amounted to U

Facility to nil.

d Financial State

USEC FacilityUS$94,000. Th

ements

y to an he final

BOARD OF DIRECTORS Paul J. Bennett President and Chief Executive Officer Energus Resources Ltd. Thomas Hayslett Independent Consultant; formerly Senior Consultant The Ux Consulting Company, LLC. Jeff Kennedy Chief Financial Officer, Managing Director of Equity Capital Markets Cormark Securities Inc. Garth A. C. MacRae Independent Financial Consultant Ganpat Mani Independent Consultant; formerly Chief Executive Officer and President, ConverDyn Corp. Richard H. McCoy Chairman of the Board Corporate Director; formerly Vice Chairman Investment Banking, TD Securities Inc. Dorothy Sanford President, MFDA Investor Protection Corporation OFFICERS David Cates President and Chief Executive Officer Mac McDonald Chief Financial Officer Scott Melbye Vice President, Commercial Amanda Willett Corporate Secretary MANAGER Denison Mines Inc. 40 University Avenue, Suite 1100 Toronto, Ontario M5J 1T1 www.denisonmines.com

OFFICE OF THE CORPORATION 40 University Avenue, Suite 1100 Toronto, Ontario M5J 1T1 Telephone: 416-979-1991 Facsimile: 416-979-5893 Website: www.uraniumparticipation.com AUDITORS PricewaterhouseCoopers LLP Toronto REGISTRAR AND TRANSFER AGENT Computershare Investor Services Inc. 100 University Avenue, 8th Floor Toronto, Ontario M5J 2Y1 Telephone: Canada and U.S.: 1-800-564-6253 Overseas: 1-514-982-7555 STOCK EXCHANGE LISTING The Toronto Stock Exchange Trading Symbol: U Website: www.tmx.com

Managed by:

40 University Avenue, Suite 1100, Toronto, Ontario M5J 1T1 www.denisonmines.com

Uranium Participation Corporation #1100—40 University Avenue Toronto ON M5J 1T1 T 416 979 1991 F 416 979 5893 www.uraniumparticipation.com TSX: U