ARMZ Uranium Holding Co.
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Transcript of ARMZ Uranium Holding Co.
ARMZ Uranium Holding Co.:
An emerging Asia leader in uranium mining
Dmitry Shulga, Director, External Affairs & Investor Relations
Asia Mining Congress 2009, March 2009
ARMZ in Russian Nuclear Industry
ARMZ
• Uranium mining and supply
• Worldwide mining and exploration
• World’s №2 in uranium resources
• World’s №5 in uranium production
TENEX
• Uranium enrichment, export sales
• 40% of world’s uranium
enrichment capacity
Energoatom
• Nuclear power plant
operation, generation
and sales
ROSATOM
Full nuclear fuel cycle,
NPP construction, power generation
TVEL
• Nuclear fuel fabrication, export sales
• 17% or world’s nuclear fuel market (every 6th reactor)
ARMZ Today
• 2nd in uranium resources
• 5th in uranium production
• Russia’ s only uranium mining
company
• ARMZ owns Priargunsky - the world’s
largest mine as for aggregated
historical U production - over 130
thousand tons of uranium
• Highly diversified by mining
technology and geography
– Russian miners use all known
uranium mining methods
– Exploration and mining projects
in 3 continents
• 14 thousand employees in production
sites and service companies
BHP Billiton
33%
ARMZ
538
11%
2nd place
AREVA
10%
Rio
Tinto
9%
Cameco
7%
Kazatomprom
7%
Uranium One
4%
Navoi
3%
VostGOK
3%
Paladin Energy
2%
Others
11%
Rio Tinto
18%
CAMECO
16%
AREVA
16%
Kazatomprom
11%
ARMZ
3687
8%
5th place
BHP
Billiton
8%Navoi
5%
Uranium One
3%
Paladin
Energy
2%
Others
13%
2008 Uranium resources, thou. tons (in-situ)
2008 Uranium production, tons
ARMZ Global Presence
1
2
3
4
5
Operational and under
construction facilities
1. Priargunsky
2. Khiagda
3. Dalur
4. Akbastau (Karatau)
5. Zarechnoe
8
7
6
Planned facilities
6. Elkon
7. Gornoe
8. Olovskaya
9
10
11
12
13
Exploration ventures and prospective projects
9. Mongolia
10. Canada
11. Russia
12. Namibia
13. Armenia
14. Ukraine
14
Growth Results 2006-2008
• Number of subsidiaries and projects increased
from 4 to 18
• 16% growth of uranium output in two years
• 4-fold growth of uranium resources
• 16 uranium deposits licensed
• New joint ventures set up to mine, drill and
explore for uranium in Russia and abroad, new
management and service companies in operation
Khiagda
Istochnoe
KolichikanKoretkonde
Namaru
DybrynVershinnoe
Teyrahskoe
Khiagda Ore Field:
Baunt Region, Buryatia, Russia
190 km from the city of Chita
Deposits Type – “sandstone” in
paleochannels
Include 8 uranium ore deposits
U Reserves: 32 215 t (C1+C2)
U Resources: 15 325 t (P1)
U Resources Expansion Potential:
100 thou. tU
Ore grade: 0,05 %
Mining method: acid ISL
Planned U mine capacity 2000 tU/y
Cost of production: under $40 p/lb
Vitim Uranium Ore District
Elkon: World’s Largest New Planned Uranium
Production Center
Interesnaya
Elkon Plateau
Elkon
Severnaya
Neprohodimoe
Druzhnoe
Kurung
Lunnoe
1 - Mesozoic intrusions; 2 - Cambrian platform carbonate formations;
3 - Pre-Cambrian metamorphites and granitoids; 4 – Blastomylonites
5 - Revived old fractures; 6 - Mesozoic tectonic zones; 7 - Uranium
Deposits
Elkon Uranium Field
Recoverable uranium resources in Elkon district amount to
5.3% of world known uranium resources, which makes it
second biggest U deposit
• Elkon district
• Deposits - Elkon Ore Field
• In-Situ U resources - 344 thou. t
• Au Reserves – 140 t
• Ore grade - 0,146% U, 0,84 g/t
Au
• Mining Method – Underground
• Current status - Projected
Plant capacity• Initially 2.2 Mtpa, processing ore
from Elkon Plateau and Kurung,
• Potential to expand to 4.5 Mtpa to
process ore from all 5 mines
Plant recovery• Uranium 89.6%
• Gold 43.4%
• Silver 35.8%
• Molybdenum 38.9% (from
Druzhnoye mine
•Pre-feasibility study by SRK Consulting to be
complete in late April, 2009
•3D modeling complete
•DCF modeling complete
•Expertise of Russian and international research
consultancies fully employed
• New technical solutions developed to lower
cost of production to less than $100 per kilo U
•Resource classification to JORC and Normative
N43-101 to be complete by end of spring 2009
Preliminary estimates indicate
definite benefits for potential
investors
1=Elkon mine
2=Elkon Plateau mine
3=Kurung mine
4=Neprokhodimoye mine
5=Druzhnoye mine
6=Processing plant
Elkon: Current Status
World economic & financial crunch:
How U miners are affected
Uranium prices U Miners Share Price
World economic & financial crunch:
How U miners are affected (cont.)
Primary Uranium Producers
• Ramping up uranium production
• Expanding existing mines and mills, acquisition of new facilities
• Acquisition of exploration companies with attractive projects
• Establishing joint ventures in exploration for and mining of uranium
Planned and Junior Uranium Producers
• Maintaining or scaling down uranium production plans
• Lack of financial resources for project development/ Raising capital becoming increasingly difficult
• Plans to build new mines delayed or abandoned
ARMZ Weathering the Crisis
Uranium Production
Acquisitions
Expanding Resource Base
In the face of the world economic and financial crisis,
ARMZ has expanded its plans rather than curtailing them
•Supported by Ministry of Natural Resources
and Federal Agency of Resources & Mining,
ARMZ implements a program for Russia’s
uranium resource base expansion
•Exploration and resource base expansion at
operational mines and facilities under
construction in Russia and Kazakhstan:
Priargunsky, Dalur, Khiagda, Akbastau, and
Karatau
•Exploration for uranium within existing
tenements of planned facilities, as per license
agreements: Elkon, Gornoe, Olovskaya
•Exploration for uranium deposits in Africa:
«SWA Uranium Mines» Joint Venture, NamibiaARMZ purchased assets from Effective
Energy N.V. (Netherlands) to become world’s
second largest uranium miner in terms of
uranium reserves
ARMZ Competitive Advantages in Times of Crisis
ARMZ
Advantages
Demand for uranium
guaranteed by State-
owned Rosatom
Direct financial aid
from the State
budget
Debt financing
completely
backed up by
assets
ARMZ Crisis Management
• Slashing production and management expenditure at mining facilities
• Increasing production efficiency through use of advanced machinery, materials,
and technologies, deployment of modern mining equipment
• Cutting production costs, bringing up product competitiveness
Asia and the Pacific: Uranium Market
• 109 out of world’s 439 operating nuclear reactors
• Overall capacity of 79,6 GWe
• Overall nuclear capacity to increase to 190,4 GWe by 2030 (IAEA)
Power Generation by Nuclear
•Current: 15 thou tU in 2008
•Forecast: increase to 40 thou tU in 2030Uranium Requirements
•Current: 900 tU in 2008
•Forecast: increase to 2 000 tU in 2030
Uranium Production Volume
Uranium required in 2008:
15 thou tU
Uranium required in 2030 (F):
40 thou tU
Asia and the Pacific: U Demand & Supply
Huge misbalance – to reach 95% in
the foreseeable future - between
demand for U by nuclear reactors
and supply of locally produced
uranium
Locally sourced 900 tU Locally sourced 2000 tU
Russian Nuclear in Asia and the Pacific
•Building 2 nuclear reactors of 1000 MWe each
•Agreement to build 4 additional NPRs at Kudankulam nuclear power station
•Agreement to build nuclear power stations of Russian design at new sites
•Protocol to supply nuclear fuel to nuclear power stations in India (2 thou tU over 5 years for $780 million)
•Tianwan Phase 1 constructed by Russia in commercial operation
•Tianwan Phase 2 construction planned
•Construction of Uranium Enrichment Facility Phase 4, deliveries of Russian enriched uranium product worth $1,5 billion
•Negotiations re. agreement on cooperation in peaceful nuclear energy
•Atomic energy deal between Atomenergoprom and Toshiba Corp. re construction of joint uranium enrichment plants in Japan and other Asian countries
Why Asia Mining?
• ARMZ introductions to Asia and the Pacific mining
business community
• Sharing info re. ARMZ uranium projects
• Highlighting importance of nuclear and uranium
for Asia and the Pacific
• Getting in contact with potential partners in
uranium mining and exploration: miners,
consultants, fund managers, investors
THANK YOU