Global Mining Research - Swiss Resource Capital · Source: BMO Capital Markets, Priced as of 24...

Global Mining Research

Uranium Review October 26, 2012

This report was prepared by an analyst(s) employed by BMO Capital Markets Ltd., authorized and regulated by the Financial Services Authority in the UK. The analyst(s) is (are) not registered as a research analyst(s) under FINRA rules. For disclosure statements, including the Analyst's Certification, please refer to pages 43 to 44.

Uranium Sector Update

Market Perform Low Uranium Price Adds to Supply Pressures

BMO Research maintains an outlook of uranium supply remaining broadly in balance through 2017 before entering a sustained deficit. Cameco and Uranium One remain BMO Research's top picks in the uranium space.

1. The outlook for nuclear power has been trimmed over previous expectations and biased toward 2020, but it is still expected to grow an average of 4% per annum through 2025 from current levels.

2. Supply remains the area of greatest risk to forecasts; low uranium prices and cost inflation have pushed ~25% of global production into loss-making territory and a number of projects have been postponed.

3. Reflecting current weakness, BMO has reduced the uranium price forecasts for Q4/12 and 2013 but increased forecasts for 2015 and beyond to US$70/lb to reflect increasing production costs.

Current Producers

CCO Outperform Price: C$18.41 Target Price: C$29.00

ERA Market Perform Price: A$1.37 Target Price: A$1.50

PDN Market Perform Price: C$1.21 Target Price: C$1.50

UUU Outperform Price: C$2.15 Target Price: C$4.50

Exploration & Development Companies

BKY RestrictedPrice: A$0.43 Target Price: na

BMN Market Perform (S)Price: A$0.09 Target Price: na

DML Market Perform (S)Price: C$1.29 Target Price: C$1.80

Prices as of close: October 24, 2012

Fig 1: Uranium Supply/Demand Outlook (Mlb U3O8)

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350

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nium

(M

lb U

3O8e

)

Existing Production New Production and Expansions

Secondary Supply and Inventories BMO Demand Forecast Inc. BIB*

Higher Uranium Prices Needed to Stimulate Supply

Source: BMO Capital Markets, *BIB = Buffer Inventory Build

Edward Sterck +44 20 7246 5421 [email protected] Associate: Venkat Nandyal +44 20 7246 5434 [email protected] Associate: Kodees Waran +44 20 7246 5431 [email protected]

Fig 2: Estimated New Production Incentive Price (US$/lb)

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90

2011 2012 2013 2014 2015 2016

For

ecas

t Mar

gina

l Cos

t of

Pro

duct

ion

(US

$/lb

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8)

14% ROCE

Interest

SG&A

Exploration

Cash Cost +Depreciation +Royalties

Old Incentive PriceForecast

Source: BMO Capital Markets



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1. Supply Under Pressure

BMO Research maintains an outlook of uranium supply failing to meet demand in the mid to longer term.

Demand has been trimmed slightly over previous expectations but it is still expected to grow an average of 4% per annum through 2025 from current levels, albeit with growth biased toward the end of the current decade.

Supply remains the area of greatest risk to BMO's forecasts; current uranium prices and cost inflation have pushed 25% of global production into loss-making territory and a number of new projects have been postponed.

Reflecting current weakness, BMO has reduced the uranium price forecasts for Q4/12 and 2013 but increased forecasts for 2015 and beyond to US$70/lb U3O8 (from US$60/lb) to reflect increasing production costs.

Whilst BMO Research sees higher uranium prices as necessary to ensure that production meets requirements, several years of oversupply and excess inventories may result in utilities being price selective.

This makes the timing of an increase in prices very difficult to determine; prices could begin to improve tomorrow or remain depressed for months or even years.

However, the longer that prices remain depressed, the less certain the supply outlook and the bigger the potential shortfall later in the current decade.

Fig 3: U Price Forecast (US$/lb)

45

50

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Q1/

12A

Q3/

12A

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13E

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13E

2014

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Spo

t U

Pric

e (U

S$/

lb U

3O8)

Old Forecast

New Forecast

Source: BMO Capital Markets On this basis, another price spike as seen in 2007 and 2010 could materialise at some point in the next several years. On balance, BMO remains cautiously optimistic regarding mid-term price improvement.

CCO and UUU top picks.

Cameco and Uranium One Remain Top Picks

Cameco and Uranium One remain attractive for their low cost production and strong balance sheets. Cameco is trading below its historical market valuation multiples and offers earnings upside potential, whilst Uranium One appears underpriced versus peers and offers the strongest production growth profile of the group.

Leveraged plays could come under pressure unless uranium prices improve.

Whilst Cameco and Uranium One show appeal, leveraged plays such as Paladin, Bannerman and Denison could come under pressure if uranium prices remain depressed. Although Paladin has recapitalised and operational improvement is expected, sensitivity analysis shows that the company could run short of funds again by 2015.

Fig 4: BMO Research Uranium Universe Summary Table

Company RatingShare Price

Shares O/S (M)

Market Cap (US$M)

EV (US$M)

NPV/ShareP/NPV

(X)2013E P/E (X)

2013E EV/EBITDA (X)

2012E EPS Growth

Target Price

Total Return

Bannerman Market Perform (S) A$0.09 275 26 24 A$0.56 0.2 n/a n/a n/a n/a n/a

Berkeley Restricted A$0.43 174 80 R R R R R R R R

Cameco Outperform C$18.41 395 7572 7871 C$14.51 1.3 16.1 9.9 -3% C$29.00 58%

Denison Market Perform (S) C$1.29 389 522 469 C$1.35 1.0 na n/a 54% C$1.80 40%

ERA Market Perform A$1.37 518 758 156 A$5.16 0.3 na -14.1 6% A$1.50 9%

Paladin Market Perform C$1.21 836 1052 1778 C$1.23 1.0 na 12.1 69 C$1.50 24%

Uranium One Outperform C$2.15 957 2140 2473 C$3.75 0.6 22.7 6.3 -24% C$4.50 109%

Sector Totals/Averages 12149 12772 1.0 17.6 7.4

Source: BMO Capital Markets, Priced as of 24 October, 2012



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2. Recommendation Summary

Given the uncertain timing of any improvement in the uranium price, BMO Research continues to prefer well-capitalized, low cost producers. Cameco and Uranium One remain BMO Research’s top picks in the uranium space.

BMO Research has left ratings unchanged, but some target prices have been adjusted to reflect market sentiment.

Cameco (CCO) Outperform – C$29.00

Based upon a historical fair value multiple of 20-22x one year forward earnings, Cameco, currently trading at 16x 2013E earnings, appears underpriced. The NUKEM acquisition is expected to result in a lift to earnings; a factor possibly not yet absorbed by the market and so a potential positive catalyst once the transaction closes and the company issues guidance. BMO maintains an Outperform recommendation and C$29 target price.

Uranium One (UUU) Outperform – C$4.50

Uranium One offers the most attractive forecast production growth profile as well as a forecast cash generation sufficient for the company to achieve an EV/EBITDA of 6.3x in 2013. BMO maintains an Outperform rating and a C$4.50 target price.

Energy Resources Australia (ERA) Market Perform – A$1.50

ERA appears attractive at 0.3x NPV versus a producer average of 1x NPV. However, the company’s valuation is predicated on exploration and development success for the Ranger 3 Deeps exploration decline. Positive news flow regarding the Ranger 3 Deeps program is likely to be slow in coming and, together with potential production disruptions from the approaching wet season, could overhang the stock. Market Perform and A$1.50 target price maintained.

Paladin Energy (PDN) Market Perform – C$1.50

Paladin is demonstrating strong operational improvements at Langer Heinrich and Kayelekera and has resolved near-term balance sheet concerns through refinancing debt and a forward sales agreement. However, the company remains highly leveraged to uranium prices and on BMO Research’s estimates could run short of funds again by 2015 if prices remain at current levels. Although Paladin’s leverage means it will likely outperform in an environment of increasing uranium prices, current market conditions result in BMO maintaining a Market Perform rating and C$1.50 target price.

Denison Mines (DML) Market Perform (S) – C$1.50

Denison’s sale of its producing US assets has returned the company to being an exploration play. Its key projects of Wheeler River and Mutanga appear prospective but lack critical resource mass and need additional exploration. Depending on exploration success and/or an improved uranium market outlook Denison could be a target for M&A. Market Perform (Speculative) and C$1.50 target price maintained.

Bannerman (BMN) Market Perform (S) – na

Bannerman remains highly leveraged to the uranium price due to the low grade nature of the Etango deposit. Rating maintained at Market Perform (Speculative) with no target price.

Fig 5: Uranium Producers – Changes to Forecasts

Old New Old New Old New Old New Old New Old New Old New Old New Old NewCCO C$12.11 C$14.51 C$1.26 C$1.24 C$1.21 C$1.14 15.0 15.2 15.6 16.5 10.6 10.7 9.6 10.1 -C$0.19 -C$0.20 C$0.34 -C$0.81ERA A$4.18 A$5.16 -A$0.22 -A$0.22 -A$0.30 -A$0.30 na na na na 1.9 1.9 na na -A$0.15 -A$0.15 -A$0.12 -A$0.13PDN* C$0.81 C$1.23 -US$0.03 -US$0.03 -US$0.02 -US$0.04 na na na na ->100.0->100.0 17.5 23.3 -US$0.23 -US$0.23 US$0.02 US$0.00UUU C$2.96 C$3.75 US$0.08 US$0.07 US$0.12 US$0.10 29.2 31.9 18.1 22.8 8.3 8.7 5.6 6.3 -US$0.13 -US$0.19 US$1.66 US$1.41

NPV Change2012E 2013E

EPS2013E2012E

FCF/SharePrice to Earning (x)2012E 2013E

EV/EBITDA (x)2012E 2013E




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3. Market Valuation Multiples

Uranium Stocks Trading at a Premium to Base Metals & Bulks

Uranium stocks are trading at a premium to base metals and bulks (excluding Aluminum).

However, uranium stocks have traded at higher multiples in the past; on relative basis, BMO Research sees upside to selective quality stocks in the current spot uranium prices.

Fig 6: Uranium Universe vs. Other Commodities, Average P/NPV, 2013E P/E and 2012E EV/EBITDA (x)

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ds

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ifieds

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rCoa

lZinc

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Source: BMO Capital Markets, N.B. Multiples are Weighted by Market Cap

P/NPV Vs. Market Cap

On a peer group basis, Uranium One, ERA and Cameco stand out as being underpriced on a P/NPV versus market cap analysis.

However, ERA has more risks associated with its outlook as its valuation is dependent on exploration success and an extension of the mining licence.

UUU and CCO appear to be underpriced compared to peers on a P/NPV versus market capitalisation.

Fig 7: P/NPV vs. Market Cap (x, US$M)

Uranium OnePaladin

ERA

Denison

Cameco

Bannerman

10

100

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0.0 0.5 1.0 1.5P/NPV 10% (X)

Mar

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ap (

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$M)

Cheap

Expensive




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Historical P/NPV

All of the uranium stocks are trading below their peak P/NPV multiples. ERA and Uranium One stand out as being at the greatest current discount to its peak valuation.

Fig 8: Historical P/NPV for Selected Uranium Stocks (x)

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Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12

P/N

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(X

)

CCO

ERA

PDN

UUU

PDN

CCO

ERA

UUU


EV/EBITDA Multiples

Uranium One and Paladin are forecast to demonstrate the greatest improvement in cash generation of the group. Cameco’s EV/EBITDA multiple is expected to remain relatively stable.

However, as noted in the following section, Paladin’s EBITDA generation does not reflect the cost of servicing its highly geared balance sheet.

UUU forecast to demonstrate the greatest improvement in EV/EBITDA.

Fig 9: Uranium Universe Calendarised EV/EBITDA (x)

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Cameco ERA Paladin Uranium One

EV

/EB

ITD

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X)

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2013E

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2015E


Implied Uranium Prices

The implied uranium price is the flat uranium price needed forever for a company’s NPV to equal its share price using a 10% discount rate.

Excluding ERA all of the stocks are trading at a premium to the current spot uranium price of US$43.50/lb U3O8.



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Among the significant producers, Uranium One appears the most attractive relative to its peers on this metric.

On a risk-adjusted basis, UUU appears attractive on an implied uranium price analysis versus peers.

Fig 10: Implied Uranium Price (US$/lb)

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ERA UUU PDN BMN CCO

Impl

ied

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niu

m P

rice

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U3O

8) Cheaper

Source: BMO Capital Markets.

Stocks are trading below mid-2010 levels despite higher uranium prices.

Share Prices vs. Uranium

As shown in the following charts, most of the uranium stocks are trading below mid-2010 levels despite though the current uranium price being slightly higher at US$43.50/lb versus US$40/lb U3O8 in mid 2010.

Fig 11: CCO Price vs. U3O8 (C$)

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Jun-10Dec-10Jun-11Dec-11Jun-12

Sha

re P

rice

(C$)

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$75U

xC S

pot Uranium

(US

$/lb)

CCO (lhs) U3O8 (rhs)


Fig 12: ERA Price vs. U3O8 (A$)

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ranium (U

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ERA (lhs) U3O8 (rhs)


Fig 13: PDN Price vs. U3O8 (C$)

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Jun-10 Dec-10 Jun-11 Dec-11 Jun-12

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Fig 14: UUU Price vs. U3O8 (C$)

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Fig 15: BMN Price vs. U3O8 (A$)

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Fig 16: DML Price vs. U3O8 (C$)

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ranium (U

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DML (lhs) U3O8 (rhs)




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4. Sensitivity to Current Conditions

Cameco and Uranium One in a Strong Position at Spot Prices

Given the current market weakness, BMO Research has assessed the earnings, cash flow and year-end cash balance outlook for the uranium stocks at current spot uranium and oil prices as well as exchange rates.

CCO and UUU appear the best insulated against low uranium prices.

Cameco and Uranium One continue to demonstrate positive earnings and ERA returns to profit in 2016 when underground mining is forecast to commence and closure costs for the open pit are fully ammortised. However, Paladin’s earnings are at risk at uranium prices below US$55/lb.

Fig 17: EPS at Spot Commodity and Currency

2012E 2013E 2014E 2015E 2016ECCO C$/share 1.25 0.82 0.63 0.68 0.66ERA A$/Share -0.22 -0.33 -0.26 -0.29 0.20PDN US$/Share -0.03 -0.06 -0.05 -0.06 -0.05UUU US$/Share 0.06 0.01 0.01 0.03 0.06

EPS

Source: BMO Capital Markets, N.B. PDN – June fiscal year end

Fig 18: OCF at Spot Commodity and Currency

2012E 2013E 2014E 2015E 2016ECCO C$/share 2.04 1.74 1.51 1.58 1.41ERA A$/Share 0.35 0.29 0.21 0.04 0.34PDN US$/Share -0.15 0.01 0.04 0.04 0.00UUU US$/Share 0.21 0.21 0.23 0.29 0.33

Operating Cash Flow


All the uranium stocks in BMO Universe have positive operating cash flow at current prices but free cash flow shows a different story.

Whilst Uranium One is forecast to remain in positive territory, Cameco, ERA and Paladin exhibit negative free cash flows in 2013, reflecting capital commitments in excess of operating cash flows. However, free cash flow for this group increases in outer years as capital projects are completed.

Turning to year-end cash balances, Uranium One and ERA are expected to remain in positive territory.

Cameco exhibits a negative cash balance by 2015, due to forecast capital commitments of C$2.2B, C$640M of dividend payments and C$430M of debt repayment between 2013 and 2016.

CCO has balance sheet flexibility beyond what is shown here.

However, the company has ample balance sheet flexibility to take on additional debt or issue equity, or even defer some capital expenditure to maintain cash balance if a very low spot uranium environment persists.

PDN is the most constrained producer at current uranium prices.

Paladin is scheduled to repay debt of US$470M by 2015. Even on BMO Research’s price forecasts, Paladin is expected to need to raise ~US$360M to repay its debt commitment and fund its working capital. If current spot prices are maintained, Paladin’s refinancing requirements increase even further.

Fig 19: FCF at Spot Commodity and Currency

2012E 2013E 2014E 2015E 2016ECCO C$/share -0.19 -1.13 0.00 0.58 0.67ERA A$/Share -0.14 -0.15 0.05 -0.14 0.25PDN US$/Share -0.23 -0.02 0.02 0.01 0.02UUU US$/Share -0.03 0.06 0.08 0.12 0.19

Free Cash Flow


Fig 20: Cash Balance at Spot Commodity and Currency

2012E 2013E 2014E 2015E 2016ECCO C$M 666 270 65 -295 -238ERA ASM 558 480 504 430 516PDN US$M 112 102 46 -11 -59UUU US$M 440 499 572 431 149

Cash Balance




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5. U3O8 Supply/Demand Summary

BMO Research has reviewed its uranium supply/demand forecasts and pushed out the forecast period from 2020 to 2025. Demand has been reassessed on a reactor-by-reactor basis, whilst supply has been reassessed on a mine-by-mine basis, both in terms of production and costs.

Key Takeaways

Uranium demand forecast to continue to grow, albeit at a slightly slower rate.

1. Demand has been trimmed slightly over previous expectations but it is still expected to grow an average of 4% per annum through 2025 from current levels. The global economic slowdown has reduced electricity demand, delaying construction decisions, and the scale and pace of Japanese reactors restarts has proved slower than expected. However, China remains broadly on track, although the 2020 forecast of 80GWe of installed capacity by 2020 has been reduced to 67GWe.

However, supply is under pressure from increasing costs and a lower uranium price.

2. Supply remains the area of greatest risk to BMO's forecasts; current uranium prices and cost inflation have pushed 25% of global production into negative cash flow before taking into account top company or financing costs. Furthermore, the estimated incentive price for new production of US$70/lb U3O8 is 38% above current market prices.

Supply is forecast to remain broadly in balance through 2018, although tight in some years.

3. Supply and demand is forecast to remain broadly in balance through 2017, albeit rather tight. Utilities with excess inventories may elect to be price selective and keep prices depressed. However, this will likely result in a lack of supply stimulus, an eventual supply shortfall and a positive price response. In should be noted that excess inventories make the timing of this is very difficult to determine.

The estimated incentive price for new production has increased to US$70/lb U3O8 from US$60/lb previously. Reflecting this, BMO has increased its long-term spot uranium price to US$70/lb from 2016 onwards (increased from US$60/lb previously).

Fig 21: Changes to Uranium Price Forecast (Mlb U3O8)

Q1/12A Q2/12A Q3/12A Q4/12E Q1/13E Q2/13E Q3/13E Q4/13E 2014E 2015E 2016E

New Forecast 52 51 49 48 50 53 55 60 70 70 70

Old Forecast 52 51 49 50 55 55 60 60 70 60 60


Fig 22: Uranium Supply/Demand Balance (Mlb U3O8)

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blance (%)

Demand vs. Base Case Production Including BIB* (lhs)Imbalance as a Percentage of Demand (rhs)Imbalance as a Percentage of Demand Ex-BIB* (rhs)

Shortfall


Fig 23: Marginal Cost of Production (US$/lb U3O8)

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rgin

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ost

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Cash Costs Total Costs




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6. Nuclear Power & U3O8 Demand

Demand Outlook Trimmed…

BMO Research has reviewed its reactor-by-reactor forecasts in terms of construction, completion, demand and buffer inventories.

The scale and pace of reactor restarts in Japan remains the area of key uncertainty, but with a new regulator in place, further restarts are expected. Restarts in Japan still

uncertain and China outlook slightly reduced. China is progressing faster than anticipated with reactors under construction

at the time of Fukushima, although delays to new reactor licences result in BMO Research’s forecast for 2020 nuclear capacity being reduced from 80GWe to 67GWe.

Growth in the Middle East is more robust than anticipated, but developments in Russia are slower than forecast.

BMO Research forecasts global installed nuclear capacity reaching 473GWe by 2020, down from 508GWe previously but a 37% increase from today’s capacity of 345GWe.

Installed nuclear capacity expected to continue to grow, but with growth biased toward 2020 and beyond.

Fig 24: Current versus Old Installed Nuclear Capacity Forecast (GWe)

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600

2009A 2011A 2013E 2015E 2017E 2019E 2021E 2023E 2025E

Nuc

lea

r G

ene

ratin

g C

apac

ity (

GW

e)

Americas Europe Asia China

India Russia Other Old Forecast


…With a Corresponding Decrease to Uranium Requirements

BMO Research has applied greater precision in forecasting the average annual uranium requirements for reactors in different countries. This has resulted in increased demand forecasts for some countries, and reduced for others, that are more in keeping with their historical requirements.

Given a reduction in the forecast growth rate of nuclear, overall uranium demand expectations are reduced from previous estimates. Uranium demand outlook

reduced near term. Including initial core loads and buffer inventory building, BMO Research forecasts uranium demand increasing from 185Mlb U3O8 today to 278Mlb by 2020 and 304Mlb by 2025.

The increase in demand in the year 2020 versus previous estimates reflects the initial core loads and buffer inventory requirements of reactors delayed until later in the current decade. Overall requirements between now and then are reduced.



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Excluding buffer inventory building, absolute uranium requirements are expected to grow from 167Mlb today to 292Mlb in 2030.

Forecast uranium demand reduced.

Fig 25: Current versus Previous Uranium Demand Forecasts (Mlb U3O8)

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2009A 2011A 2013E 2015E 2017E 2019E 2021E 2023E 2025E

Ura

nium

Dem

and

(Mlb

U3

O8

)

Americas Europe Asia India

Other Russia China Old Forecast

Delayed demand growth


Changes to Country Level Forecasts

Japan Restarts Delayed

Government vacillations on policy, an upcoming election, economic slowdown, energy efficiencies and the absence of a new regulatory body have resulted in the pace of restarts in Japan proceeding at a slower than anticipated pace.

However, the lack of a clear political direction appears to be an acknowledgement that, whilst deeply unpopular with the electorate, Japan has no choice in the near term but to restart at least some of its nuclear fleet.

In BMO’s view, Japan has little choice but to restart reactors if the economy picks up. The incumbent ruling party has proposed phasing out nuclear power by 2040

but the Cabinet refused to endorse this policy into law, leaving the way open for nuclear power to remain a component of Japan's energy policy.

Energy Security Drove Japan to Rely on Nuclear Power

Japan is poor in natural energy resources, both in terms of renewables and fossil fuels. Whilst Japan is likely to move toward natural gas at the expense of nuclear, this leaves it beholden to Russia for supplies (pending the construction of LNG export terminals on the west coast of North America).

Even though gas-fired power stations are quicker, cheaper and easier to build than other forms of electrical generation, they still cannot be built overnight. BMO Research estimates that planning, design and construction of a 1GWe gas fired plant would take at least five years before even getting into the support infrastructure.

Japan cannot replace 47GWe of installed capacity quickly.

Furthermore, to completely phase out nuclear power would require the construction of 47GWe of power generating capacity, likely a blend of renewables and gas. The cost of this would need to be passed onto the consumer leaving a real danger that the competitive nature of Japan's manufacturing industry will be eroded and that jobs may be lost to replacement factories in China and elsewhere in South East Asia.



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In short, BMO Research maintains its forecast of reactors being restarted, followed by a gradual closing of reactors as their licences come up for renewal. A new regulator has now been formed and this should clear the way for further reactor restarts in 2013, probably ahead of the summer season of peak demand.

BMO continues to forecasts Japan restarting around two-thirds of its reactor fleet, but has removed reactors under construction at the time of Fukushima from estimates. This is a conservative outlook given that work is reportedly continuing on unfished reactors. This takes Japan from 47GWe of installed nuclear capacity pre-Fukushima, down to 34GWe.

Demand for new uranium for Japanese reactors expected to be reduced by consumption of excess inventories.

Fig 26: Japan Installed Nuclear Capacity and U3O8e Requirements (GWe, Mlb)

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10

15

20

25

30 Ura

nium

Re

quire

me

nt (M

lb)

Nuclear Capacity (rhs) Uranium Requirement (lhs)

Assumed consumption of excess inventories


China Remains on Track, but 2020 Target Trimmed

On reviewing the status of reactors under construction in China, BMO Research had anticipated discovering delays to construction schedules as a result of the post Fukushima safety reviews. On the contrary, construction is generally on track and in some cases ahead of expectations.

China has 28GWe of capacity under construction.

China has 13GWe of nuclear capacity currently providing power to the grid and 28GWe currently under construction, with all of these reactors expected to be online by 2015.

Looking ahead, licencing of new reactors was suspended post Fukushima although state media recently reported that this is expected to resume in Q4/12.

However, despite licencing being suspended, Chinese utilities have continued to sign contracts for new reactors and in some cases site preparation has begun.

Licencing to resume shortly. The Chinese Premier announced this week that China would remain committed to nuclear power and that new licences would be issued shortly.

However, no further inland reactors will be built in the near term and only generation III reactors will be built on the coasts.

BMO Research expects that construction on a number of projects could potentially be progressed swiftly, but that the changes highlighted above will result in China having 67GWe of installed nuclear capacity by 2020, down from 80GWe previously.

2020 forecast reduced from 80GWe to 67GWe, increasing to 106GWe by 2025. Beyond 2020, current plans suggest that China is forecast to reach 106GWe

of installed capacity by 2025.



of 44

Russian Expansion Slower Than Forecast

Russia's ambitious plans to expand its nuclear power generation has run at a slightly slower pace than previously forecast due to lower-than-expected electricity demand growth and planning delays.

However, overall plans remain on track and BMO Research is now forecasting installed nuclear capacity to reach 50GWe by 2020 (down from 55GWe previously), and 71GWe by 2025.

Construction started on four reactors in the UAE.

United Arab Emirates Starts Construction

The UAE has started construction of four 1.4GWe reactors which are expected to be commissioned between 2017 and 2020 with the reactors being provided by KEPCO. The start of construction is ahead of BMO's forecast of 2015 and the completion dates have been moved forward accordingly.

The UAE has expressed an interest in building additional reactors and also to be involved at a financial level should KEPCO succeed in winning the bid for Turkey's fifth through eighth nuclear reactors.

Saudi Arabia Pushing Ahead, Timing Slightly Uncertain

Saudi Arabia plans to build 16 to 20 reactors by 2030. The push for nuclear is being driven by electricity demand growth of 9% per annum in a country which current generates the majority of its electricity through burning oil; oil that could otherwise be profitably exported.

Saudi Arabia wants to free up oil for export.

BMO Research takes a cautious view of Saudi Arabia’s plans and includes only two reactors in forecasts. This takes the country to 2.6GWe of installed capacity by 2025.

India Outlook Remains Conservative

India is planning to expand its current nuclear generating capacity from 4.3GWe today to 63GWe by 2032.

BMO remains cautious on the outlook for India.

BMO Research remains cautious on India's ability to deliver to this target due to the extended planning process, legal challenges from local populations and bureaucracy.

Consequently, BMO maintains its forecast of 10GWe of installed nuclear capacity by 2020 and looks for 22GWe of installed capacity by 2025.

Nonetheless, the headwinds seen for construction do not preclude India from building an inventory of uranium in anticipation of reactors being completed; however, this would represent an upside scenario.

Low gas prices the biggest threat to new nuclear power in the USA.

Rest of the World

The USA has 4GWe currently under construction, advanced site works underway at a further 6 further projects, and licences lodged for a further 22 reactors. However, the granting of new licences has been suspended pending a solution for the longer-term storage of nuclear waste, which is expected to be announced in September 2014. Whilst the granting of licences has been suspended, reviews of licence applications are proceeding.

BMO Research forecasts a modest increase from 101GWe of installed capacity today to 107GWe by 2020 with a further expansion to 120GWe by 2025 representing an additional 10 reactors.



of 44

South Korea has four reactors under construction and firm plans for six more. BMO Research forecasts South Korea installed nuclear capacity to expand from 21GWe today to 36GWe by 2025.

Facing an impending energy shortage, the U.K. remains committed to nuclear power and is seeking eventually build 32GWe of new nuclear capacity, 18GWe of which is replacement capacity.

The U.K. is facing some development headwinds.

EDF's plans for the first four reactors are on-track and site works have started. However, a consortium of German utilities have put their licenced nuclear sites up for sale, citing uncertain returns and the cost of decommissioning reactors they were forced to close early in Germany. Two groups are understood to have submitted tenders before the October deadline. BMO forecast 11Gwe of installed capacity by 2025, down from 13GWe today.



of 44

7. Uranium Supply & Costs

Supply outlook uncertain.

Reduced Margins Threaten Demand Outlook

In BMO Research's view, the outlook for uranium supply is more uncertain than the demand outlook. Production costs have increased by an average of 9% per annum worldwide since 2007; with the recent decline in uranium prices, BMO calculates that 25% of the cost curve is currently in negative territory.

Spot price ~40% below the uranium incentive price.

Analysis suggests that existing supply will likely fall short of demand requirements by 2018. However, the current spot uranium price of US$43.50/lb U3O8 is estimated to be in the order of 40% below the incentive price for new production.

Projects delayed. As a consequence, a number of projects have been postponed, in some cases indefinitely. The most significant project to be delayed is BHP Billiton's Olympic Dam expansion, which would have added 33Mlb U3O8of incremental supply. AREVA has also delayed Trekkopje (6.6Mlb) indefinitely and pushed back Imouraren (11Mlb) by a further two years to 2014.

Production included in current forecasts is now expected to peak at 218Mlb in 2020 and then decline to 182Mlb by 2025.

Including uranium from inventories and other secondary sources, total supply is expected to reach 245Mlb in 2020 and 208Mlb in 2025.

Supply/Demand Balance Broadly in Balance Through 2017

As such, supply is expected to be broadly in balance through 2017, and expected to be tight in some years, before falling short of requirements from 2018 onwards.

Importantly, this outlook is predicated on continued production at existing operations and several new projects coming into production.

However, with the current spot uranium price below the incentive level for new production, the risk to forecasts is that supply falls short of expectations.

Supply broadly in balance through 2017, followed by undersupply.

Fig 27: Uranium Supply/Demand Balance (U3O8)

-120

-100

-80

-60

-40

-20

0

20

40

60

2010

A

2012

E

2014

E

2016

E

2018

E

2020

E

2022

E

2024

E

Ma

rket

Imb

alan

ce (

Mlb

U3O

8)

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Imblan

ce a

s a Perce

pnta

ge of D

ema

nd (%

)

Demand vs. Base Case Production Including BIB* (lhs)Demand vs. Base Case Production Ex-BIB* (lhs)Imbalance as a Percentage of Demand (rhs)Imbalance as a Percentage of Demand Ex-BIB* (rhs)

Surplus

Shortfall




of 44

Cost Inflation and Production Forecasts

Cost Inflation Running at an Average of 9% Per Annum

BMO Research estimates that the average total cost of production (cash costs, plus depreciation, royalties and SG&A) has increased by 9% per annum since 2008.

Costs increasing by 9% p.a. The impact of increasing production costs can be seen change to global resources extractable at different uranium prices that countries report to the IAEA.

Whilst total known resources have expanded, resources extractable for US$15/lb or less and US$30/lb or less fell dramatically between 2003 and 2011 (n.b. the IAEA does not use a recognised standard for resource classification).

There is certainly no shortage of uranium worldwide; however, there is a declining volume of uranium extractable at current uranium prices.

It is also worth noting that the IAEA data is submitted by national government geological organisations, groups whose estimates typically lag true project economics.

Fig 28: W.Avg Total Production Costs (US$/lb U3O8)

-10

0

10

20

30

40

50

2007

A

2008

A

2009

A

2010

A

2011

A

2012

E

2013

E

2014

E

2015

E

2016

E

Pro

duct

ion

Cos

t (U

S$/

lb)

-5%

0%

5%

10%

15%

20%

25%

YoY

Cost C

hange (%)

Production Cost (lhs) YoY Change (rhs)

Forecast


Fig 29: IAEA Resources at Different Uranium Prices (Mlb)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2003 2005 2007 2009 2011

IAE

A C

lass

ifica

tion

Res

ourc

es

(Mlb

U3O

8)

US$15/lb US$30/lb US$50/lb US$100/lb

Source: BMO Capital Markets, IAEA

Cost Curve Analysis Shows Negative Returns for 25% of Production

BMO estimates that at the current uranium spot price of US$43.50/lb U3O8, ~25% of global production is in negative territory on a total cost basis – defined as cash costs plus depreciation (as a measure of capex), SG&A and royalties.

25% of the total cost curve is above the current spot uranium price.

Furthermore, ~20% of global production has a cash cost of production above the current spot uranium price.

Importantly, Rio Tinto’s Rössing and Ranger operations globally fall into this category and AREVA’s substantial operations in Niger are also in the upper third of the cost curve.



of 44

Only a few key mines need to be suspended to tip the balance toward a supply shortfall.

Fig 30: Rössing Uranium Cash Costs and Realised Uranium Price (US$/lb U3O8)

0

10

20

30

40

50

60

70

80

2001A 2003A 2005A 2007A 2009A 2011A 2013E 2015E 2017E 2019E

Rös

sing

Cos

ts &

Rea

lised

Pric

es (

US

$/lb

)Cash costs (US$/lb) Realised Prices (US$/lb)


Collectively these mines account for 18% of global uranium production and a decision to halt or suspend production by only two operators could have a significant impact on global supply.

It should be noted, however, that a structural problem with the uranium market in a time of weak prices is the long-term offtake agreements that compel operators to continue to produce even when losing money.

Looking ahead, under BMO Research’s forecasts, the marginal cost of production is expected to increase even further.

Fig 31: Marginal Cost of Production – Total Costs (US$/lb U3O8)

2011

2012

2013

2014 2015

2016

20

30

40

50

60

70

80

90

0 20 40 60 80 100 120 140 160 180 200Cumulative Primary Production (Mlb U3O8)

Tot

al P

rodu

ctio

n C

osts

(U

S$

/lb U

3O8)

2016E

2015E

2014E

2013E

2012E

2011E

Supply Requirements




of 44

Fig 32: 2009 Total Cost C (US$/lb)


Fig 33: 2012E Total Cost C (US$/lb)


Fig 34: 2015E Total Cost C (US$/lb)


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Cum

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of 44

Fig 35: 2009 Cash Cost C (US$/lb)


Fig 36: 2012E Cash Cost C (US$/lb)


Fig 37: 2015E Cash Cost C (US$/lb)


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of 44

Project Delays

Aside from existing production, a number of projects have been delayed or postponed indefinitely, the most significant of which are as follows:

The enormous capex required for the Olympic Dam expansion has resulted in BHP Billiton postponing the project whilst it examines alternative processing route.

The Olympic Dam Expansion, Imouraren and Trekkopje have been delayed.

In BMO’s view, the technical and environmental studies required for what would likely be a 35Mt of ore per annum heap leach operation with an enormous environmental footprint effectively result in an indefinite postponement. The Olympic Dam Expansion has been removed from BMO’s forecasts.

AREVA has postponed Trekkopje indefinitely, indicating that a uranium price in excess of US$75/lb U3O8 is needed for the project to proceed. In BMO Research’s view, this may be underestimating the true cost of production and the project has been removed from forecasts.

AREVA has also pushed back commissioning of Imouraren. BMO estimates that Imouraren would have total production costs in the region of US$63/lb U3O8 due to the high strip ratio and thus it is included in forecasts, starting in 2014 and ramping up to 11Mlb per annum by 2019.

Significant New Projects Maintained in Forecasts

BMO Research continues to include CGNP’s Husab (15Mlb per annum at full production) and Uranium One’s Mkuju River (7Mlb) in forecasts. However, with both operations having been the subject of M&A in the recent past and permitting and local interests still to be resolved, the start dates have been pushed back to 2017.

China Guangdong Nuclear Power (CGNP), the new owner of Husab, may be less sensitive to uranium prices and hence proceed with development regardless of market conditions. However, development of Mkuju River is likely to be more market dependent, not least of which because Uranium One needs a solid economic argument to convince minority shareholders of the merits of executing its option to acquire the balancing interest from ARMZ.

Secondary Supply Forecast Is Unchanged

BMO Research has left its forecast for "secondary" supplies unchanged - supplies from inventory, re-enriched tails, mixed oxide fuels and downblended Russian weapons grade uranium (HEU).

Since BMO's last uranium update the U.S. Government has increased the rate at which it is disposing of surplus uranium inventories. However, given previous changes in policy out of the U.S., BMO had foreseen this and was already forecasting a higher rate of disposals.

Similarly, BMO research maintains a forecast of no further downblending of Russian HEU beyond 2013, removing 23Mlb U3O8e of supply from the market. This outlook is supported by the contracting out of Russian enrichment capacity to USEC from 2014 onwards; downblending HEU utilises enrichment capacity.



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Forecast supplies from inventories and other secondary sources are unchanged.

Fig 38: Supplies from Inventories and Other Secondary Sources (Mlb U3O8)

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Source: BMO Capital Markets, WNA, DOE

Supply/Demand Balance and Incentive Price

The reduced demand outlook is matched by a reduction in supply from postponed projects. BMO continues to see a shortfall in supply from 2018 onwards (2017 previously).

The uranium price needs to meet incentive price levels to stimulate supply growth for the period post 2018.

Uranium mines currently under consideration will likely take a minimum of five years to reach production once a go ahead decision is made.

Fig 39: Uranium Supply/Demand Forecast (Mlb U3O8e)

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Secondary Supply and Inventories BMO Demand Forecast Inc. BIB*

Higher Uranium Prices Needed to Stimulate Supply


For the supply gap to be filled, uranium prices need to increase to incentivise new production. Importantly, the lead time to put new mines in to production means that the incentive price needs to be reflected in the market by the second half of 2013, otherwise production may well fall short of requirements.

BMO's previous estimate of the incentive price for the marginal pound of production was US$60/lb U3O8. Given cost inflation, this has increased to between US$70/lb and US$80/lb.

The calculated incentive price includes cash costs, depreciation as a proxy for capex, exploration costs, SG&A, top company costs and a 14% return on capital employed to reflect the incentive factor.



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US$80/lb U3O8 needed to incentivise longer term supply expansion.

Fig 40: New Production Incentive Price (Mlb U3O8)

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Uranium Price Forecast

Although higher prices are required to stimulate supply beyond 2018, excess inventories from recent oversupply are expected to dampen prices.

As such, BMO has reduced near-term price expectations but increase long-term prices for 2015 onwards from US$60/lb U3O8 to US$70/lb.

Near-term price uranium forecasts reduced…

…but long-term prices increased to US$70/lb U3O8. As discussed in the following section, US$70/lb is also the marginal cost of

production on a reduced demand scenario of Japan restarting no further reactors, and China’s growth being slower than forecast.

Fig 41: Changes to Uranium Price Forecast (Mlb U3O8)

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New Forecast 52 51 49 48 50 53 55 60 70 70 70

Old Forecast 49 50 55 55 60 60 70 60 60




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8. Downside Risk Assessment

What if Japan restarts no further reactors and growth in China is slower than forecast?

BMO Research has also assessed the potential impact of Japan restarting no further reactors and a slower than expected pace of reactor builds in China. Under this scenario, China only reaches 57GWe of installed capacity by 2020.

No more restarts in Japan and slower China growth negatively impact demand…

…but the supply outlook is also reduced as projects are put on care and maintenance or postponed indefinitely.

Fig 42: Uranium Supply/Demand Forecast (Mlb U3O8e)

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Source: BMO Capital Markets, WNA, *BIB = Buffer Inventory Build

Japanese Excess Inventories Suppress Demand

The biggest impact to supply and demand would be the liquidation of excess uranium inventories by Japanese utilities, estimated at ~100Mlb U3O8.

Disposal of Japanese inventories would reduce demand requirements.

The uranium market is too small to absorb this amount of material, BMO assumes that it is either disposed of over a number of years, or is sold directly to utilities continuing to build reactors (e.g., in China and India) and used to offset buffer inventory requirements.

The approximate net impact is a 10Mlb U3O8 increase in annual supply or a 10Mlb reduction in demand.

Near-Term Price Weakness Impacts Production Outlook

Under this scenario, near-term uranium prices would likely remain depressed, resulting in higher cost operations being put on care and maintenance with producers either claiming force majeure on offtake agreements, or meeting commitments through spot purchases.

Furthermore, new projects such as Imouraren, Husab and Mkuju River would likely only be developed later in the decade.

Existing production continues to face cost inflation pressures, but under this scenario, reduced demand results in the marginal cost of production falling from around US$80/lb to US$60/lb.

In turn, the long-term uranium price would likely still be relatively close to BMO’s base case forecasts of US$70/lb.



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The marginal cost of production would be US$60/lb U3O8 to US$70/lb versus BMO’s base case forecast of US$70/lb to US$80/lb.

Fig 43: New Production Incentive Price (Mlb U3O8)

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Near-Term Impact to Stocks

Assuming uranium prices remain depressed for longer, BMO’s uranium stock preferences would be broadly unchanged.

Among the companies covered by BMO, Cameco and Uranium One would be expected to stay cash flow positive and would remain BMO’s preferred stocks for retaining exposure to the uranium space. However, they would potentially show less investment appeal than the producers of other commodities.

Uranium stock preferences would be unchanged, but other sectors may show greater investment appeal.

Turning to the other producers: ERA would likely not proceed with development of Ranger 3 Deeps and could potentially return cash on the balance sheet to shareholders.

However, Paladin would potentially need to place Kayelekera on care and maintenance and its balance sheet could become stretched. Under this scenario, Paladin’s reduced cash generation outlook could impede its ability to refinance its debts.

Beyond the producers, the exploration and development companies would likely scale back on exploration activities in order to preserve cash, hibernating until a period of higher demand later in the decade. Investment and M&A appeal would likely be reduced.



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8. Cameco (CCO) Rated: Outperform Price Target: C$29

Cameco is one of the world’s largest producers of uranium concentrate. It has mines in Canada, the U.S. and Kazakhstan, with exploration properties in Australia and Niger. Cameco owns uranium refining and conversion facilities in Ontario and has a 31.6% stake in the Bruce Power Partnership, which generates nuclear power in Ontario.

In addition to current operations, Cameco recently announced the planned acquisitions of NUKEM, a nuclear fuels trading company, and the Yeelirrie uranium project in Australia. The transactions are expected to close in Q4/12 or Q1/13.

Key Takeaways

1. Trading at historically low valuation multiples 2. Contract book offers downside protection and upside participation 3. Estimated >10% earnings upside potential from NUKEM acquisition

Recommendation – Preferred Uranium Producer

BMO views Cameco as a valuation play versus its own history. Cameco is trading on a one-year forward P/E multiple of 15x, below its historical trading range of 20-22x and its peak of 36x earnings.

NUKEM could increase earnings by 8%.

Company guidance on the NUKEM acquisition could provide a positive catalyst. Captured in BMO’s one-year forward earnings estimates is an 8% uplift to earnings from the NUKEM acquisition. However, Cameco has not provided guidance on NUKEM to the market.

Cameco has a strong balance sheet and operational flexibility. The company’s offtake agreements provide an element of earnings protection against lower uranium prices, whilst providing for some upside participation.

Should interest in the uranium space pick up, Cameco is the ‘go to’ stock for generalist funds and its share price can demonstrate a strong response.

Cameco remains one of BMO Research’s preferred uranium stocks. Outperform and C$29 target price maintained (2xNPV).

Recent Acquisitions – NUKEM & Yeelirrie Project

Cameco has agreed to purchase NUKEM, a uranium and nuclear fuel services trading company, for US$136M in cash and taking on debt of US$164M.

Cameco also agreed to acquire the Yeelirrie uranium project, located in Western Australia, from BHP Billiton for US$430M. A tax of US$22M will be payable upon the completion of the transaction, taking the total acquisition cost to US$452M.

Yeelirrie is an advanced project that could be progressed to production within relatively short time frame, providing flexibility in meeting production requirements.

"Double U" strategy

Cameco has a stated aim of doubling production to ~40Mlb U3O8 by 2018, known as its “Double U” strategy.



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Recently, however, management has indicated that this will not be at any cost and that production increases must be supported by market conditions, providing some comfort regarding operational and fiscal discipline.

Whilst the full doubling of production is not included in forecasts (which top out at ~33Mlb per annum), BMO’s view is that Cameco has the flexibility within its asset base to deliver to Double U if conditions allow.

Balance Sheet

Cameco reported cash and short-term investments of C$895M and debt of C$918M at the end of Q2/12 and has purchase commitments totalling C$588M. Cameco has filed a mixed shelf prospectus for a C$1 billion fundraising. Cameco may choose to reserve its liquidity for the funding of internal growth, or it may look to undertake corporate activities (Refer to Update to Forecast & Use of Possible Capital Issue).

Key Risks

The HEU deal is set to end in 2013 and could reduce Cameco’s earnings. However, higher uranium prices and revenues from NUKEM could potentially offset this.

Cameco has embarked on strategy of acquisition with two deals signed year to date. Should these prove to be poor purchases, they could result in write-downs at a future date.

Fig 44: Uranium Production & Cash Cost (Mlb, US$/lb)

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Fig 45: Divisional EBIT (C$M)

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http://research-ca.bmocapitalmarkets.com/documents/094520A3-2825-46AB-8E99-7C8DA965F41B.PDF�



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Fig 48: Cameco Summary Block Model

Cameco Corp CCO:CCJ CASH FLOW ANALYSIS - C$MTSX:NYSE (Dec Year End) 2011A 2012E 2013E 2014E 2015E

As at 24-Oct-12

Recommendation: Outperform Edward Sterck Cash Flows From Operating ActivitiesBMO Capital Markets Receipts From Customers 2348.9 2321.4 3118.7 3248.9 3270.2

Payments To Suppliers (1159.9) (1231.1) (1912.2) (1930.8) (1896.7)Share Price (US$) $19.15 Share Price (C$) $18.41 Net Interest (55.6) (33.9) (32.4) (40.0) (23.1)

Other (401.8) (244.1) (355.5) (435.5) (456.7) Target Value (US$) $30.16 Target Value (C$) $29.00 NPV (US$) $15.09 NPV (C$) $14.51 Cash Flows From Investing Activities

Acq.of Property, Plant and Equip. (647.2) (892.5) (1141.1) (600.1) (397.5)Exploration Expenditure 0.0 (86.8) (102.4) (85.0) (85.0)

Ordinary Shares (M) 395.5 Other 119.2 0.0 380.0 200.0 0.0Options + Notes (M) 2.2

Cash Flows From Financing ActivitiesMarket Cap (US$M) $7,572 Market Cap (C$M) $7,281 Net Change in Borrowings (2.6) (167.5) (16.3) (112.6) (300.0)

Dividends Paid and Share Buy-Back (146.0) (159.1) (159.1) (159.1) (159.1)Share Issuance and 'Other (40.0) (47.3) (47.3) (47.3) (47.3)

PRICE ASSUMPTIONS Net Increase In Cash Held 15.0 (540.9) (267.6) 38.4 (95.2)(Dec Year End) 2011A 2012E 2013E 2014E 2015E Cash At End of Year 399.3 (141.6) (409.2) (370.9) (466.0)

Exchange Rate US$:C$ 1.014 1.00838 1.013 1.032 1.001Uranium - Spot US$/lb 57.00 49.99 54.38 70.00 70.00Realised Price US$/lb 47.71 46.72 53.05 60.91 62.45 BALANCE SHEET ANALYSIS - C$MRealised Price C$/lb 47.98 45.43 52.39 59.02 62.42 (Dec Year End) 2011A 2012E 2013E 2014E 2015E

Current AssetsCash and Liquids 1203.4 662.6 394.9 433.3 338.1Other 1381.9 1388.9 1395.9 1402.9 1409.9

Non-Current AssetsInvestments 504.0 504.0 504.0 504.0 504.0Fixed Assets 4532.1 5258.1 5820.8 6021.6 6217.8

FINANCIAL SUMMARY Other 180.3 185.3 190.3 195.3 200.3(Dec Year End) 2011A 2012E 2013E 2014E 2015E

Current LiabilitiesNPAT (Adj) (C$M) 474.8 485.8 462.6 498.3 538.4 Borrowings 106.6 89.8 88.2 76.9 46.9EPS (C$ps) 1.28 1.24 1.14 1.24 1.3 Creditors 457.3 467.3 477.3 487.3 497.3PER (x) 14.4 14.8 16.1 14.83 13.7 Other 144.2 144.6 145.0 145.4 145.8EPS Growth (%) 2.2 -2.9 -7.9 8.60 8.1EBITDA (C$M) 802.8 717.6 788.1 875.2 914.3 Non-Current LiabilitiesEBITDA per Share (C$ps) 2.02 1.80 2.0 2.20 2.3 Borrowings 932.3 781.5 766.9 665.5 395.5EV/EBITDA (x) 8.9 10.5 9.9 8.7 8.1 Other 1056.1 1056.1 1056.1 1056.1 1056.1Dividend (C$ps) 0.40 0.40 0.40 0.40 0.40 Minority Interest 0.0 0.0 0.0 0.0 0.0Yield (%) 2.2% 2.2% 2.2% 2.2% 2.2% SHAREHOLDERS FUNDS 5105.5 5459.7 5772.7 6126.1 6528.8

Net Debt/Equity % -3.2% 3.8% 8.0% 5.0% 1.6%

PROFIT AND LOSS STATEMENT - C$M DIVISIONAL EARNINGS (EBIT) - C$M(Dec Year End) 2011A 2012E 2013E 2014E 2015E (Dec Year End) 2011A 2012E 2013E 2014E 2015E

Sales Revenue 2350.5 2322.6 3118.7 3248.9 3270.2 Uranium 521.9 399.0 519.3 636.7 676.3Revenue Adjustments 1.6 1.2 0.0 0.0 0.0 Bruce Power 120.4 187.4 56.7 32.2 32.2Operating Costs 1159.9 1231.1 1912.2 1930.8 1896.7 Fuel Services 56.8 37.7 39.2 40.6 38.3Gross Operating Profit 1192.1 1092.6 1206.5 1318.1 1373.6 Centerra 0.0 0.0 0.0 0.0 0.0Depreciation 266.1 253.3 280.8 284.3 286.3 Corporate Adjustments -169.7 -167.9 -116.5 -127.2 -127.3Corporate/Royalties/Other 395.0 382.0 427.0 451.4 467.8EBIT (Subsidiaries & JV) 531.0 457.3 498.7 582.3 619.5 EBIT 529.4 456.1 498.7 582.3 619.5Less Net Interest Expense 49.1 22.8 5.2 14.9 7.1Pre-Tax Profits 481.9 434.5 493.5 567.4 612.3Tax 11.8 -51.2 30.9 69.1 74.0Less Minorities Plus Associates 4.7 1.4 0.0 0.0 0.0NPAT (pre-Abs) 474.8 487.0 462.6 498.3 538.4Net Abnormals -24.6 -24.4 0.0 0.0 0.0Reported Profit 450.3 461.5 462.6 498.3 538.4Dividends 157.8 158.2 158.2 158.2 158.2ADJUSTED PROFIT (ex FX & Deriv's) 468.9 471.4 452.3 498.3 538.4

DIVISIONAL VALUATION RESERVES AND RESOURCES ATTRIBUTABLE URANIUM SALES BY DIVISIONNPV C$M Attributable Contained Mine Percent 2011A 2012E 2013E 2014E 2015E

Purchased Uranium Sales 197 U3O8 Life OwnedMcArthur River 2922 (Mlb) (Years) Purchased U Sales 100% Mlb 11.17 8.61 10.33 7.94 6.31Rabbit Lake 79 McArthur River 70% Mlb 13.67 14.60 13.12 13.12 13.12US ISL 192 Reserves 1179 32 Rabbit Lake 100% Mlb 3.53 3.97 3.60 3.60 3.60Inkai 1172 Resources 1520 41 US ISL 100% Mlb 2.05 2.23 2.60 3.40 3.80Cigar Lake 1189 BMO Guesstimate 1316 36 Inkai 60% Mlb 2.48 2.18 3.27 3.25 3.26Exploration and Investments 1049 Cigar Lake 50% Mlb 0.00 0.00 0.00 1.88 5.52Bruce P and Fuel Services 230NUKEM 421 Total Attrib Uranium Mlb 32.9 31.6 32.9 33.2 29.3Corp, Net Cash and Options -1681TOTAL NPV (C$M) 5,771 U3O8 Cash Cost US$/lb 21.81 23.83 25.71 28.83 28.33NPV per Share (C$) Diluted $14.51




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9. Energy Resources Australia (ERA) Rated: Outperform Price Target: A$1.50

Energy Resources Australia (ERA) is based in Darwin, Australia, and is listed on the ASX. ERA operates the Ranger Mine in the Northern Territory, Australia, and also retains a 100% interest in the nearby Jabiluka deposit. Rio Tinto has a 68.39% interest in, and effectively manages, ERA.

Key Takeaways

1. Open pit to close end 2012 2. Earnings impacted by amortisation of non-cash closure costs 3. Ranger 3 Deeps offers upside, subject to approvals

Recommendation

BMO Research estimates ERA’s NPV at A$5.16/share, using a 10% nominal discount rate.

BMO Research maintains a Market Perform rating and a target price of A$1.50/share (0.4x NPV).

Ranger – Cornerstone Asset

ERA’s Ranger mine has historically produced~10Mlb U3O8 per annum. Open cut mining is due to end by late 2012 although low grade stockpiles would continue to be processed, which will allow uranium production for many years.

The company has approved development of Ranger 3 Deeps exploration decline (subject to obtaining necessary approvals). ERA recently reported that development of the box cut is on track.

Prospective production could begin in 2016 from Ranger 3 Deeps.

Subject to a positive evaluation, prospective production from the Ranger 3 Deeps underground operation could begin in late 2015 (BMO’s conservatively estimate production to begin in 2016).

High Grade Ore Mining to End by Q4/12

In its Q3/12 production results, ERA reported that the company was able to mine high grade ore from the bottom of the open pit after it was successfully dewatered.

Dewatering of Pit 3 allows high-grade mining.

Management remains cautious on near-term production guidance due to impending wet season.

The company expects to complete mining the Ranger 3 Pit by the end of 2012. However, ERA remains cautious that Q4/12 production will be largely dependent on rainfall levels as the start of the wet season approaches.

Unlevered balance sheet provides some financial flexibility.

Unlevered Balance Sheet

ERA reported A$563M cash at the end of H1/12. The company has no debt and cash outflow from operations was ~A27M in H1/12.

Mining licence expires in 2021.

Key Risks

Higher risk investment as a result of uncertainty over its future production. ERA’s mining lease expires in 2021 while production is forecast to continue until at least 2027. Renewal of the lease will require an act of the Federal Parliament. Failure to successfully engage stakeholders may result in the lease not being renewed.

ERA’s longer-term valuation is hinged on successful development of Ranger 3 Deeps project. Any delay could impact ERA’s earnings and valuation.



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Fig 49: Uranium Sales & Cash Cost (Mlb, US$/lb)

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Fig 53: ERA Summary Block Model

Energy Resources Australia Ltd ERA CASH FLOW ANALYSIS - A$MASX (Dec Year End) 2011A 2012E 2013E 2014E 2015E

As at 24-Oct-12

Recommendation: Market Perform Edward Sterck Cash Flows From Operating ActivitiesBMO Capital Markets Receipts From Customers 687.8 413.3 435.9 422.6 381.6

Payments To Suppliers (654.8) (186.5) (289.8) (289.8) (234.6)Share Price (US$) $1.46 Share Price (A$) $1.37 Net Interest 10.0 1.1 0.0 0.0 0.0

Other 11.9 (48.5) 13.6 (5.4) (28.3) Target Value (US$) $1.60 Target Value (A$) $1.50 NPV (US$) $5.51 NPV (A$) $5.16 Cash Flows From Investing Activities

Acq.of Property, Plant and Equip. (97.4) (190.8) (118.0) (20.5) (70.5)Exploration Expenditure 0.0 (64.5) (108.0) (66.0) (30.0)


Cash Flows From Financing ActivitiesMarket Cap (US$M) $758 Market Cap (A$M) $709 Net Change in Borrowings 0.0 0.0 0.0 0.0 0.0

Dividends Paid (0.0) (0.0) (0.0) (0.0) (0.0)Other incl Share Issue or Buy Back 487.4 (0.9) (0.9) (0.9) (0.9)

PRICE ASSUMPTIONS Net Increase In Cash Held 444.9 (76.8) (67.2) 40.0 17.3(Dec Year End) 2011A 2012E 2013E 2014E 2015E Cash At End of Year 632.6 555.8 488.6 528.6 545.9

Exchange Rate A$/US$ 1.027 1.0432 1.040 1.077 1.017Uranium - Spot US$/lb 57.00 49.99 54.38 70.00 70.00ERA Contract US$/lb 60.72 58.96 65.00 65.00 70.00 BALANCE SHEET ANALYSIS - A$M

(Dec Year End) 2011A 2012E 2013E 2014E 2015EPrice Realised US$/lb 60.18 58.12 61.81 66.50 70.00 Current AssetsPrice Realised A$/lb 58.63 55.71 59.45 61.75 68.86 Cash and Liquids 632.6 555.7 488.6 528.6 545.9

Other 197.3 198.8 200.3 201.8 203.3



Current LiabilitiesNPAT (Adj) (A$M) -54.2 -114.0 -157.2 -111.4 -53.2 Borrowings 0.0 0.0 0.0 0.0 0.0EPS (¢ps) -23.4 -22.0 -30.4 -21.5 -10.3 Creditors 80.2 48.2 50.9 49.3 44.5PER (x) na na na na na Other 37.0 37.4 37.8 38.2 38.6EPS Growth (%) ->100.0 5.8 -37.8 29.1 52.2EBITDA (A$M) 46.2 85.9 -15.6 13.7 65.9 Non-Current LiabilitiesEBITDA per Share (¢ps) 19.9 16.6 -3.0 2.6 12.7 Borrowings 0.0 0.0 0.0 0.0 0.0EV/EBITDA (x) -6.8 1.8 -14.1 13.2 2.5 Other 543.2 543.4 543.6 543.8 544.0Dividend (¢ps) 0.0 0.0 0.0 0.0 0.0 Minority Interest 0.0 0.0 0.0 0.0 0.0Yield (%) 0.0 0.0 0.0 0.0 0.0 SHAREHOLDERS FUNDS 1288.5 1277.3 1229.7 1193.4 1183.0Franking (%) 100.0 100.0 100.0 100.0 100.0 Net Debt/Equity % -49.1% -43.5% -39.7% -44.3% -46.1%

PROFIT AND LOSS STATEMENT - A$M DIVISIONAL EARNINGS (EBIT) - A$M(Dec Year End) 2011A 2012E 2013E 2014E 2015E (Dec Year End) 2011A 2012E 2013E 2014E 2015E

Sales Revenue 667.8 413.3 435.9 422.6 381.6 Ranger Uranium Mine (100%) -152 -137 -220 -152 -68Revenue Adjustments 0.0 15.2 0.0 0.0 0.0Operating Costs 407.5 186.5 289.8 289.8 234.6Gross Operating Profit 260.4 241.9 146.1 132.8 147.0 EBIT Total, before corporate costs -152 -137 -220 -152 -68Depreciation 125.9 222.6 204.6 165.3 133.8Exploration 12.0 64.5 108.0 66.0 30.0Corporate/Royalties/Other 202.2 91.6 53.8 53.1 51.1EBIT (Subsidiaries & JV) -79.8 -136.8 -220.3 -151.6 -68.0Less Net Interest and Financing Costs 27.1 20.3 4.3 7.5 8.1Pre-Tax Profits -106.9 -157.1 -224.5 -159.1 -76.1Tax -52.7 -43.1 -67.4 -47.7 -22.8Plus Associates less Divs 0.0 0.0 0.0 0.0 0.0Reported Profit -153.6 -122.4 -157.2 -111.4 -53.2Net Abnormals 99.4 8.4 0.0 0.0 0.0NPAT (pre-Abs) -54.2 -114.0 -157.2 -111.4 -53.2

DIVISIONAL VALUATION RESERVES AND RESOURCES URANIUM SALES BY DIVISIONNPV A$M Attributable Contained Mine 2011A 2012E 2013E 2014E 2015E

U3O8 LifeRanger Uranium Mine (100% 1,992 (Mlb) (Years) Uranium Produced Mlb 5.8 7.7 7.3 6.8 5.5Exploration 172 Uranium Sold Mlb 11.4 7.7 7.3 6.8 5.5Corporate -57 Reserves 179 3Options 0 Resources 421 22Cash/(Debt) 563 BMO Guesstimate 200 17TOTAL NPV (A$M) 2,669NPV per Share (A$) Diluted $5.16




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10. Paladin Energy (PDN) Rated: Market Perform Price Target: C$1.50

Paladin is based in Perth, Western Australia, and is listed on the ASX and the TSX. The company is producing uranium at Langer Heinrich in Namibia, and Kayelekera in Malawi.

Paladin also has exploration projects in Australia, the most developed of which are the Mt Isa (91%) deposits in Queensland, the Bigrlyi (42%) and Pamela/Angela joint ventures (50%) in the Northern Territory, and Manyingee in Western Australia.

Key Takeaways

1. Demonstrating operational improvement 2. Near-term balance sheet pressures alleviated 3. Remains a leveraged producer

Near-term funding requirements alleviated but remains a leveraged producer.

Recommendation

Paladin is highly leveraged to uranium prices and would likely to result in it outperforming the peer group in the event that uranium prices begin to increase strongly. BMO Research estimates Paladin’s NPV to total C$2.13/share, using a 10% nominal discount rate.

BMO maintains a Market Perform rating and C$1.50 target price (1.9x NPV).

Production Expected to Reach Steady State in Fiscal 2013

BMO Research expects Paladin to reach steady state production of ~8.3Mlb U3O8 in the current fiscal year. The production increase is primarily driven by the Stage 3 expansion at Langer Heinrich.

Langer Heinrich Stage 4 Unlikely to Progress at Current Prices

BMO Research estimates that ~US$400M of capital would be required for the Stage 4 expansion at Langer Heinrich to increase the production to 8.7Mlbpa U3O8 from 5.2Mlbpa.

At current uranium spot price of ~US$44/lb, the expansion project appears only marginally economic on current uranium price forecasts and before funding costs. In addition, given Paladin’s highly geared balance sheet and the current credit market conditions, it is unlikely that Paladin would be able to secure project financing.

However, design advances made in the Stage 3 expansion could allow for above nameplate production.

Offtake Agreement Alleviates Near-Term Funding Requirements….

Paladin reported operating cash out flow of US$126M and free cash out flow of US$196M resulting in cash of US$112M cash and US$838M debt at the end of fiscal 2012.

Paladin signed a long-term off-take contract with EDF to deliver a total of 13.7Mlb U3O8 from 2019 to 2024 for a prepayment of US$200M. The company has received the first tranche of US$50M and expects to receive the balance in January 2013.

BMO Research estimates that the pre-payment could reduce the uranium price received on delivery by ~US$22/lb U3O8.



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The pre-payment is expected to be utilised to repay the outstanding balance of the March 2013 convertible note (US$134M) and the remainder used to bolster Paladin’s balance sheet.

…. However Long-Term Concerns Remain

The next debt re-payments of US$300M are due in November 2015 and US$274M in April 2017. Based on BMO’s long-term uranium assumptions, it is expected that Paladin would require refinancing of at least ~US$300M over this time period.

Is Paladin a Takeover Target?

Paladin’s highly geared balance sheet could make it a candidate for takeover. BMO Research forecasts fiscal 2013 production of 8.3Mlb U3O8 which is sizable; however, it comes at a relatively high cost of US$33/lb but with the potential for cost reduction.

Paladin’s production base could make it a takeover target…

…but high debt levels and the long-term offtake agreement may diminish its appeal.

However, other listed producers are unlikely to see Paladin as appealing, limiting potential counterparties to parastatal organisations with deep pockets such as Chinese utilities.

Key Risks

Paladin is highly leveraged to uranium prices. BMO Research estimates Paladin will be cash flow negative in the current fiscal year at uranium prices below US$50/lb.

Fig 54: Uranium Production & Cash Cost (Mlb, US$/lb)

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Fig 55: Divisional EBIT (US$M)

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Fig 58: Paladin Summary Block Model

Paladin Energy Ltd PDN CASH FLOW ANALYSIS - US$MTSX and ASX (June Year End) 10/11A 11/12A 12/13E 13/14E 14/15E

As at 24-Oct-12

Recommendation: Market Perform Edward Sterck Cash Flows From Operating ActivitiesBMO Capital Markets Receipts From Customers 281.0 313.9 419.3 575.0 589.3



Acq.of Property, Plant and Equip. (129.4) (70.1) (30.0) (24.9) (26.2)Exploration Expenditure (17.6) (12.1) (1.2) (1.2) (1.2)


Cash Flows From Financing ActivitiesMarket Cap (US$M) $1,052 Market Cap (C$M) $1,025 Net Change in Borrowings 6.9 146.8 (191.0) (57.0) (57.0)

Dividends Paid (0.0) 0.0 (0.0) (0.0) (0.0)Other (5.6) 54.7 200.0 (10.0) (10.0)

PRICE ASSUMPTIONS Net Increase In Cash Held (233.2) (6.5) 11.4 45.8 67.9(June Year End) 11/12A 12/13E 13/14E 14/15E 15/16E Cash At End of Year 117.4 112.1 123.5 169.3 237.2

Exchange Rate C$/US$ 1.00 1.02 1.02 1.02 0.98Exchange Rate A$/US$ 1.03 1.05 1.06 1.05 0.99Uranium - Spot US$/lb 51.98 49.74 63.75 70.00 70.00 BALANCE SHEET ANALYSIS - US$MPrice Realised US$/lb 54.41 50.45 65.38 70.00 70.00 (June Year End) 10/11A 11/12A 12/13E 13/14E 14/15E

Current AssetsCash and Liquids 117.4 112.1 123.5 169.3 237.2Other 212.0 279.5 296.9 337.3 345.5


FINANCIAL SUMMARY Other 117.9 217.4 217.4 217.4 217.4(June Year End) 11/12A 12/13E 13/14E 14/15E 15/16E

Current LiabilitiesNPAT (Adj) (US$M) -24.2 -31.8 51.0 68.5 81.3 Borrowings 43.9 183.4 57.0 57.0 357.0EPS (US$/sh) -0.03 -0.04 0.06 0.08 0.10 Creditors 69.7 67.1 77.1 87.1 97.1PER (x) na na 20.9 15.6 13.1 Other 5.3 3.4 3.8 4.2 4.6EPS Growth (%) 68.7 -30.3 +>100% 34.2 18.7EBITDA (US$M) -0.2 68.8 218.5 247.9 258.0 Non-Current LiabilitiesEBITDA per Share (US$/sh) 0.00 0.08 0.26 0.29 0.30 Borrowings 675.8 655.1 590.5 533.5 176.5EV/EBITDA (x) ->100.0 23.1 6.8 5.5 4.8 Other 253.8 243.9 243.9 243.9 243.9Dividend (US$/sh) 0.00 0.00 0.00 0.00 0.00 Minority Interest 0.0 0.0 0.0 0.0 0.0Yield (%) 0.0 0.0 0.0 0.0 0.0 SHAREHOLDERS FUNDS 1355.2 1194.8 1370.2 1450.0 1510.8Franking (%) 0.0 0.0 0.0 0.0 0.0 Net Debt/Equity % 44% 61% 38% 29% 20%

PROFIT AND LOSS STATEMENT - US$M DIVISIONAL EARNINGS (EBIT) - US$M(June Year End) 11/12A 12/13E 13/14E 14/15E 15/16E (June Year End) 10/11A 11/12A 12/13E 13/14E 14/15E

Sales Revenue 364.6 419.3 575.0 589.3 583.4 Langer Heinrich (100%) 44.9 60.4 68.5 125.4 143.7Revenue Adjustments 2.8 0.0 0.0 0.0 0.0 Kayelekera (85%) -37.4 -25.6 -9.9 69.0 69.8Operating Costs 253.5 273.3 273.6 258.1 242.2 Mt Isa (90.9%) -4.6 0.0 0.0 0.0 0.0Gross Operating Profit 113.9 146.0 301.4 331.3 341.2Depreciation 49.3 65.2 79.2 89.4 85.1Exploration and Royalties 11.8 15.7 21.5 22.0 21.8Corporate and Other 102.3 61.4 61.4 61.4 61.4EBIT -49.5 3.6 139.3 158.5 172.9Less Net Interest Expense 36.4 55.7 46.4 37.8 31.8Pre-Tax Profits -85.9 -52.1 92.9 120.7 141.1Less Tax -33.7 -19.3 34.4 44.7 52.2plus Minorities -28.0 -1.1 7.5 7.6 7.6Less Pref Dividends 4.0 4.0 4.0 4.0 4.0NPAT (pre-Abs) -24.2 -31.8 51.0 68.5 81.3Net Abnormals -148.6 0.0 0.0 0.0 0.0Reported Profit -172.8 -31.8 51.0 68.5 81.3

DIVISIONAL VALUATION RESERVES AND RESOURCES URANIUM SALES BY DIVISIONNPV US$M Attributable Contained Mine Percent 10/11A 11/12A 12/13E 13/14E 14/15E

U3O8 Life OwnedLanger Heinrich (100%) 1,076 (Mlb) (Years) Langer Heinrich (100%100% Mlb 3.2 4.7 5.3 5.0 4.9Kayelekera (85%) 396 U3O8 Reserves 150 17 Kayelekera (85%) 85% Mlb 1.7 2.0 3.0 3.8 3.5Mt Isa (90.9%) 137 U3O8 Resources 537 40 Mt Isa (90.9%) 91% Mlb 0.0 0.0 0.0 0.0 0.0Exploration (Inc. Aurora) 302 BMO Estimate 358 40Deep Yellow 11 Total Attrib Uranium Mlb 4.9 6.7 8.3 8.8 8.4Corporate and Other -110Net Cash & Other -726Options Value 0TOTAL NPV (US$M) 1,086NPV per Share (US$) 1.28 U3O8 Cash Cost US$/lb 45.44 38.38 33.11 31.38 30.65




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11. Uranium One (UUU) Rated: Outperform Price Target: C$4.50

Uranium One is a Canadian-based company with listings on the TSX and the Johannesburg Stock Exchange (JSE). Uranium One has stakes in six producing mines in Kazakhstan with its interest varying from 30-70%. The company has development projects in US and Australia. ARMZ is the major shareholder with a 51% interest.

Key Takeaways

1. 1st and 2nd quartile cost production 2. Strongest production growth and cash generation of peers 3. Spot exposure leverages earnings to the uranium price

Recommendation

Uranium One remains BMO Research’s current preferred uranium stock, offering the most attractive production growth profile and forecast cash generation of the group.

BMO maintains an Outperform rating and C$4.50 target price (1.2xNPV).

Significant Production Growth by 2015

BMO Research forecasts Uranium One to increase its production from ~11Mlb U3O8 in 2012 to ~17Mlb U3O8 by 2015.

Production forecast to reach 17Mlb by 2015.

Mining operations at Karatau are progressing at full production capacity and the ramp up at Akbastau remaining on track. On a 100% basis, Karatau is currently producing 5.2Mlb U3O8 a year.

Akbastau is licenced to produce 5Mlb U3O8 per year and is currently producing at an annualised rate of ~3.6Mlb per year.

There is the potential to further increase production across the two operations, which are adjacent to each other, by ~2.6Mlb a year.

BMO Research forecasts cash costs to average US$21/lb and capital expenditure is expected to be ~US$690M during this period.

Mkuju River Could Provide Upside Optionality

BMO Research views Mkuju River as an appealing project with upside potential. Although currently estimated to be out of the money on current uranium prices, Uranium One’s option to by ARMZ’s stake in the project provides upside optionality if uranium prices increase.

Based on the pre-acquisition DFS, the Phase 1 development assumes an open-pit, resin-in-pulp operation expected to produce 4.2Mlbpa U3O8 (on a 100% basis). However, due to the size of its resources, BMO Research anticipates that initial production could be increased to 5.2Mlbpa U3O8 with a further 2Mlb added by a Phase 2 a heap leach.

Mkuju River option provides upside optionality.

Uranium One has started a feasibility study on Mkuju River project, which is expected to be delivered later this year.

Balance Sheet

Uranium One reported US$460M in cash and net debt of US$333M at the end of Q2/12.



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Risks

Uranium One’s earnings are directly linked to the spot price. Although production is low cost, earnings could come under pressure if the uranium price falls further.

Uranium One’s asset base is biased toward Kazakhstan. Whilst Kazakhstan is currently a stable jurisdiction, neighbouring countries have been less so. Perceived geopolitical risks may limit Uranium One’s market valuation multiples versus peers.

Fig 59: Uranium Production & Cash Costs (Mlb, US$/lb)

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Fig 63: Uranium One Summary Block Model

Uranium One Inc UUU CASH FLOW ANALYSIS - US$MTSX (Dec Year End) 2011A 2012E 2013E 2014E 2015E

As at 24-Oct-12

Recommendation: Outperform Edward Sterck Cash Flows From Operating ActivitiesBMO Capital Markets Receipts From Customers 530.4 536.6 703.1 1005.6 1204.9



Acq.of Property, Plant and Equip. (61.9) (236.5) (140.8) (151.7) (163.9)Exploration Expenditure 0.0 0.0 0.0 0.0 0.0

Ordinary Shares (M) 957.2 Other (99.0) (150.0) 0.0 0.0 0.0Options + Notes (M) 0.0

Cash Flows From Financing ActivitiesMarket Cap (US$M) $2,140 Market Cap (C$M) $2,058 Net Change in Borrowings 305.3 0.0 0.0 0.0 (260.0)

Dividends Paid 0.0 (0.0) 0.0 0.0 0.0Other incl Share Issue or Buy Back (18.0) 0.0 0.0 0.0 0.0

PRICE ASSUMPTIONS Net Increase In Cash Held 296.1 (169.0) 141.0 296.9 132.7(Dec Year End) 2011A 2012E 2013E 2014E 2015E Cash At End of Year 619.0 450.0 591.0 887.9 1020.6

Exchange Rate C$/US$ 1.014 1.0432 1.040 1.077 1.017Uranium - Spot US$/lb 57.00 49.99 54.38 70.00 70.00Price Realised US$/lb 55.64 49.56 54.42 70.00 70.00 BALANCE SHEET ANALYSIS - US$M

(Dec Year End) 2011A 2012E 2013E 2014E 2015ECurrent AssetsCash and Liquids 619.0 450.0 591.0 887.9 1020.6Other 230.9 237.9 244.9 251.9 258.9



Current LiabilitiesNPAT (Adj) (US$M) 88.4 68.1 94.3 236.2 297.8 Borrowings 52.1 0.0 0.0 260.0 464.0EPS (US$/share) 0.09 0.07 0.10 0.25 0.31 Creditors 58.3 68.3 78.3 88.3 98.3PER (x) 24.2 31.8 22.7 9.1 7.2 Other 24.6 25.0 25.4 14.4 14.8EPS Growth (%) +>100% -23.8 40.0 +>100% 26.1EBITDA (US$M) 309.0 291.4 363.6 615.6 738.9 Non-Current LiabilitiesEBITDA per Share (US$/share) 0.32 0.29 0.38 0.64 0.77 Borrowings 730.7 730.7 730.7 470.7 6.7EV/EBITDA (x) 7.5 8.6 6.3 3.2 2.2 Other 444.0 444.0 444.0 444.0 444.0Dividend (US$/share) 0.00 0.00 0.00 0.00 0.00 Minority Interest 0.0 0.0 0.0 0.0 0.0Yield (%) 0.0 0.0 0.0 0.0 0.0 SHAREHOLDERS FUNDS 1993.6 1974.9 2079.4 2339.7 2651.5Franking (%) 0.0 0.0 0.0 0.0 0.0 Net Debt/Equity % 8.2% 14.2% 6.7% -6.7% -20.7%

PROFIT AND LOSS STATEMENT - US$M DIVISIONAL EARNINGS (EBIT) - US$M(Dec Year End) 2011A 2012E 2013E 2014E 2015E (Dec Year End) Percent 2011A 2012E 2013E 2014E 2015E

OwnedSales Revenue 530.4 536.6 703.1 1005.6 1204.9 Akdala 70% 39 55 45 71 70Revenue Adjustments -5.3 0.0 0.0 0.0 0.0 South Inkai 70% 96 59 78 134 134Operating Costs 143.6 189.0 269.6 311.9 388.6 Kharasan 30% 0 0 6 23 40Gross Operating Profit 381.5 347.6 433.5 693.7 816.3 Karatau 50% 62 51 53 92 92Depreciation 125.2 141.9 180.8 203.2 248.2 Akbastau 50% 30 29 51 101 133Exploration 4.4 8.2 8.0 8.0 8.0 Zarechnoye 50% 17 11 17 38 46Corporate/Royalties/Other 58.6 60.8 61.9 70.0 69.5 Non Kazakh Operations 0 -7 -8 13 36EBIT (Subsidiaries & JV) 193.3 136.7 182.9 412.5 490.7Less Net Interest Expense 42.0 30.3 35.1 35.5 13.9 EBIT 243 198 243 472 551Pre-Tax Profits 151.3 106.4 147.7 376.9 476.8Tax 62.9 39.0 54.7 139.5 176.4Plus Assoc. less Min 0.0 0.7 1.2 -1.2 -2.6NPAT (pre-Abs) 88.4 68.1 94.3 236.2 297.8Net Abnormals 0.0 9.8 0.0 0.0 0.0Reported Profit 88.4 77.9 94.3 236.2 297.8

DIVISIONAL VALUATION RESERVES AND RESOURCES URANIUM SALES BY DIVISIONNPV US$M Attributable Contained Mine Percent 2011A 2012E 2013E 2014E 2015E

Akdala 440 U3O8 Life OwnedSouth Inkai 904 (Mlb) (Years) Akdala 70% Mlb 1.4 2.2 1.8 1.8 1.8Kharasan 462 South Inkai 70% Mlb 3.6 3.3 3.6 3.6 3.6Karatau 699 Reserves 76 4 Kharasan 30% Mlb 0.0 0.0 0.6 0.9 1.6Akbastau 1042 Resources 331 17 Karatau 50% Mlb 2.6 2.5 2.6 2.6 2.6Zarechnoye 388 BMO Guesstimate 516 27 Akbastau 50% Mlb 1.4 1.3 1.9 2.4 3.2Non Kazakh Operations 313 Zarechnoye 50% Mlb 0.9 0.9 1.0 1.2 1.5Mantra Option 131 Non Kazakh Operations Mlb 0.0 0.6 1.4 1.8 3.0Corporate -328Net Cash and Options -317 Total Attrib Uranium Mlb 9.9 10.8 12.9 14.4 17.2TOTAL NPV (US$M) 3,733NPV per Share (US$) Diluted $3.90 U3O8 Cash Cost US$/lb 16 18 22 22 23




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12. Exploration/Development Co’s

BMO Research continues to prefer current uranium producers over exploration and development plays. However, a recent spate of M&A does not preclude activity in this space. EV/lb transaction values are presented in the following table.

Fig 64: EV/Resource lb for the BMO Uranium Universe and Transaction Implied Values

Company Recommendation Target PriceShare Price

Shares Out (M)

Market Cap

(US$M)

EV (US$M)

Reserves (Mlb)

EV/Reserve lb (US$/lb)

Total Resources

(Mlb)

EV/Total Resource lb

(US$/lb)

Global Resources*

(Mlb)

EV/Global Resource lb

(US$/lb)BMO UniverseBannerman Market Perform (S) n/a A$0.09 275 26 26 na na 170 0.14 170 0.14Cameco Outperform C$29.00 C$18.41 395 7572 7572 495 15.90 917 8.59 917 8.59Denison Market Perform (S) C$1.80 C$1.29 389 522 522 0 2786.70 120 3.13 150 3.13ERA Market Perform A$1.50 A$1.37 518 758 758 30 5.26 258 0.61 421 0.37Paladin Outperform C$1.50 C$1.21 836 1052 2140 150 11.84 537 3.31 537 3.31Uranium One Outperform C$4.50 C$2.15 957 2140 1778 76 32.34 331 7.47 489 5.06

Transactions YearDeal Price

Shares Out (M)

Deal Value

(US$M)

Reserves (Mlb)

Deal Value/Reserve

lb (US$/lb)

Total Resources

(Mlb)

Deal Value/Total Resource lb

(US$/lb)

Global Resources*

(Mlb)

Deal Value/Global Resource lb

(US$/lb)UraMin by Areva 2007 C$7.50 333 2500 157 15.92 239 10.46Kintyre by Cameco/Mitsubishi 2008 na na 495 79 6.24Failed Forsys bid from George Forrest 2008 C$7.00 79 513 51 9.99 103 4.99 103 4.99Aurora Energy by Paladin 2010 na na 261 137 1.90 137 1.90Mantra by ARMZ 2011 1000 57 17.54 101 9.90 101 9.90Hathor by Rio Tinto 2011 C$4.70 139 654 57 11.51 57 11.51Extract by CGNP Consortium 2012 A$8.65 254 2051 205 10.01 367 5.59 367 5.5928% of Millennium by Cameco 2012 na 150 19 7.95 19 7.95Yeellirrie by Cameco 2012 na 452 145 3.12

N.B. UraMin deal value and shares out are approximate*Global Resources include non-code compliant and historical resources


Fig 65: Selected Undeveloped Uranium Projects by Global Resource (Mlb U3O8)

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Lak

e(P

alad

in)

Min

e W

aste

Sol

utio

ns(A

nglo

Gol

d A

shan

ti)

Yee

lirrie

(B

HP

)

Val

enci

a (F

orsy

s)

Letlh

akan

e (A

-Cap

)

Kin

tyre

(Cam

eco/

Mits

ubis

hi)

Mlb

U3O

8




of 44

13. Bannerman Resources (BMN) Rated: Market Perform (S) Price Target: na

Bannerman Resources is an ASX- and TSX-listed uranium exploration company. Bannerman’s primary asset is the Etango project in Namibia, which has total resources of 170Mlb U3O8 at an average grade of 194ppm (100%).

The Etango project is a low-grade alaskite-hosted uranium deposit, geologically and metallurgically similar to Rio Tinto’s Rössing mine located 30km to the northeast.

Key Takeaways

1. Low grade deposit estimated to be uneconomic at current prices 2. Leveraged to uranium price 3. Well placed for quick production decision on uranium price increase

Recommendation

Due to the speculative nature of the valuation and stage of development, BMO Research rates Bannerman Market Perform (Speculative) with no target price.

Etango appears marginal.

Cost and Production Forecasts

A definitive feasibility study completed early in the year estimates that Etango could produce 6.5Mlb U3O8 per annum for total life-of-mine production of 104Mlb of U3O8. The study estimated project development capex to total US$870M and life-of-mine cash costs of US$46/lb U3O8.

BMO is forecasting cash costs of ~US$46/lb and total costs of around US$57/lb before top company and financing costs.

Etango appears uneconomic at current uranium prices. BMO sees the need for further project optimization or higher uranium prices.

Valuation Methodology

Given that the Etango is an early stage project, BMO Research continues to value Bannerman’s on an EV/lb of resource basis using a market-derived valuation.

BMN evaluated on an EV/lb basis.

Based upon peer group metrics, BMO estimates Bannerman to have a valuation of A$0.56/share (reflecting the value of an established resource).

Completed A$8M debt raising and refinancing A$10M convertible debt.

Balance Sheet

Bannerman reported A$10M cash and A$7M in debt at the end of fiscal 2012. The company raised A$8M through an equity placement in December. The A$10M convertible note held by Resource Capital was also refinanced by issuing A$2M in shares and extending the maturity of the remaining A$8M debt by two years to 2014.

Risks – Project Economics May Hamper Financing

The marginal economics of the Etango project at current uranium prices may make project or equity finance difficult to secure. The project could be delayed if the necessary approvals and licenses are not approved on time.



of 44

Fig 66: Bannerman Summary Block Model

Bannerman Resources Ltd ASX:BMN CASH FLOW ANALYSIS - A$MTSX:BAN (June Year End) 11/12A 12/13E 13/14E 14/15E 15/16E

As at 24-Oct-12

Recommendation: Market Perform (S) Edward Sterck Cash Flows From Operating ActivitiesBMO Capital Markets Receipts From Customers 0.0 0.0 0.0 0.0 0.0

Payments To Suppliers 0.0 0.0 0.0 0.0 0.0Share Price (US$) $0.10 Share Price (A$) $0.09 Net Interest 0.2 0.2 2.3 13.6 15.2

Other (7.6) (6.0) (6.0) (6.0) (6.0) Target Value (US$) na Target Value (A$) na NPV (US$) $0.60 Valuation (A$) $0.56 Cash Flows From Investing Activities

Acq.of Property, Plant and Equip. (0.2) (22.3) 0.0 (289.6) (555.5)Exploration Expenditure (8.9) (9.0) 0.0 0.0 0.0


Cash Flows From Financing ActivitiesMarket Cap (US$M) $26 Market Cap (A$M) diluted $25 Net Change in Borrowings 0.0 0.0 346.4 0.0 0.0

Dividends Paid 0.0 0.0 0.0 0.0 0.0Other 10.8 548.4 (1.2) (1.2) (1.2)

PRICE ASSUMPTIONS Net Increase In Cash Held (5.6) 511.3 341.5 (283.2) (547.6)(June Year End) 11/12A 12/13E 13/14E 14/15E 15/16E Cash At End of Year 9.6 520.9 862.4 579.3 31.7

Exchange Rate C$/US$ 1.00 1.02 1.02 1.02 0.98Exchange Rate A$/US$ 1.03 1.05 1.06 1.05 0.99Uranium - Spot US$/lb 51.98 49.74 63.75 70.00 70.00 BALANCE SHEET ANALYSIS - A$M

(June Year End) 11/12A 12/13E 13/14E 14/15E 15/16ECurrent AssetsCash and Liquids 9.6 521.0 862.5 579.3 31.7Other 0.6 7.6 14.6 21.6 28.6


FINANCIAL SUMMARY Other 0.0 0.0 0.0 0.0 0.0(June Year End) 11/12A 12/13E 13/14E 14/15E 15/16E

Current LiabilitiesNPAT (Adj) (A$M) -5.8 -5.8 -3.7 7.6 9.2 Borrowings 0.0 0.0 34.6 34.6 34.6EPS (¢ps) -2.1 -1.1 -0.1 0.1 0.1 Creditors 1.2 1.2 1.2 1.2 1.2PER (x) na na na 50 50 Other 0.2 0.6 1.0 1.4 1.8EPS Growth (%) 41.7 48.1 94.8 +>100.0 20.2EBITDA (A$M) -6.0 -6.0 -6.0 -6.0 -6.0 Non-Current LiabilitiesEBITDA per Share (¢ps) -2.2 -0.2 -0.1 -0.1 -0.1 Borrowings 6.8 6.8 318.5 318.5 318.5EV/EBITDA (x) -3.6 35.8 -10.8 -58.0 ->100.0 Other 0.0 0.0 0.0 0.0 0.0Dividend (¢ps) 0.0 0.0 0.0 0.0 0.0Yield (%) 0.0 0.0 0.0 0.0 0.0 SHAREHOLDERS FUNDS 64.5 604.7 606.4 619.4 634.0Franking (%) 0.0 0.0 0.0 0.0 0.0 Net Debt/Equity % -4% -85% -84% -37% 51%

PROFIT AND LOSS STATEMENT - A$M DIVISIONAL EARNINGS (EBIT) - A$M(June Year End) 11/12A 12/13E 13/14E 14/15E 15/16E (June Year End) 11/12A 12/13E 13/14E 14/15E 15/16E

Sales Revenue 0.0 0.0 0.0 0.0 0.0 Etango 0.0 0.0 0.0 0.0 0.0Revenue Adjustments 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Operating Costs 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Gross Operating Profit 0.0 0.0 0.0 0.0 0.0 129.7 137.6 140.0Depreciation 0.0 0.0 0.0 0.0 0.0Exploration and Royalties 0.0 0.0 0.0 0.0 0.0Corporate and Other 6.0 6.0 6.0 6.0 6.0EBIT -6.0 -6.0 -6.0 -6.0 -6.0Less Net Interest Expense -0.2 -0.2 -2.3 -13.6 -15.2Pre-Tax Profits -5.8 -5.8 -3.7 7.6 9.2Less Tax 0.0 0.0 0.0 0.0 0.0plus Minorities 0.0 0.0 0.0 0.0 0.0Less Pref Dividends 0.0 0.0 0.0 0.0 0.0NPAT (pre-Abs) -5.8 -5.8 -3.7 7.6 9.2Net Abnormals 0.0 0.0 0.0 0.0 0.0Reported Profit -5.8 -5.8 -3.7 7.6 9.2

VALUATION RESERVES AND RESOURCES URANIUM SALES BY DIVISIONAttributable Contained Mine Percent 11/12A 12/13E 13/14E 14/15E 15/16E

76% U3O8 Life OwnedRnR Mlb 213 (Mlb) (Years) Etango* 100% Mlb 0.0 0.0 0.0 0.0 0.0Per lb Value US$/lb 0.77 U3O8 Resources 162 16BMN Estimated EV US$M 164 BMO Estimate 113 15BMN Estimated EV A$M 153EV/Share A$/sh 0.56Net Cash A$/sh 0.00Adj Valuation A$/sh 0.56

*W.Avg By Grade, RnR 30<200, Grade 0.01%<0.06%

*Current ownership is 80%, BMO assumes Bannerman will acquire minority partners' 20% interest by start of production.




of 44

14. Denison Mines (DML) Rated: Market Perform (S) Price Target: C$1.80

Denison is an exploration company with offices in Vancouver and Toronto, and is listed on the TSX. The company recently sold its U.S. assets to Energy Fuels. Denison’s primary assets include a 23% interest in the McClean Lake Mill and nearby deposits, as well as a 25% interest in the delayed Midwest project.

Denison also has exploration properties in Zambia, Mongolia and Saskatchewan, including the prospective Wheeler River and Moore Lake projects. In addition, Denison manages the Uranium Participation Corp. (UPC) physical uranium fund and has an environmental division, Denison Environmental Services.

Key Takeaways

1. Prospective exploration in the Athabasca and Zambia 2. Resources established to date lack critical mass 3. Could show M&A appeal on additional resource discovery

Recommendations

Due to the speculative nature of the valuation and stage of development, BMO Research maintains a Market Perform (Speculative) rating with a C$1.80 (1.3x NPV) target price.

Valuation Methodology

Given that the company’s projects are at an early stage, BMO Research values Denison on an EV/lb of resource basis using a market-derived valuation.

DML evaluated on an EV/lb basis.

Based upon peer group metrics, BMO estimates Denison to have a valuation of C$1.35/share (reflecting the value of an established resource).

Drilling at the Wheeler River is ongoing.

Wheeler River

Exploration is ongoing and Denison is continuing with its drilling program. Indicated Resources are estimated at 36Mlb contained U3O8 at a grade of 18%, and Inferred Resource at 4Mlb at a grade of 7%. Denison expects to update the mineral resource estimate in Q4/12.

Plans for 2013 drilling are being finalised with the scale of the winter and summer drilling programs expected to be similar to that in 2012.

Mutanga

Exploration is continuing on Mutanga, which has a resource of 21Mlb U3O8 at 277ppm. The project already holds a mining licence.

Funded until end of 2013. Balance Sheet

Denison reported cash and Cash equivalents of US$46M with US$0.3M debt at the end of Q2/12. BMO Research estimates that Denison should have sufficient cash to fund its exploration activities until end of 2013 but will likely require a further US$50M to continue exploration beyond 2014.

Early stage project carry inherent financial and operational risks.

Risks – Future Financing Depends on Credit/Equity Markets

Funding prospects would largely depend on the market conditions and Denison may be forced to issue shares at a deep discount or raise debt at higher interest rates. The projects are in early stages and could be delayed if the necessary approvals and licenses are not approved on time.



of 44

Fig 67: Denison Summary Block Model

Denison Mines Corp DML CASH FLOW ANALYSIS - US$MTSX (Dec Year End) 2010A 2011A 2012E 2013E 2014E 2015E

As at 24-Oct-12

Recommendation: Market Perform (S) Edward Sterck Cash Flows From Operating ActivitiesBMO Capital Markets Receipts From Customers 128.2 96.8 36.6 20.3 20.9 20.5

Payments To Suppliers (89.6) (79.4) (25.2) (16.5) (16.8) (14.1)Share Price (US$) $1.34 Share Price (C$) $1.29 Net Interest 0.7 1.4 1.0 1.2 0.5 0.7

Other (3.8) (38.7) (14.7) (8.2) (10.7) (11.5) Target Value (US$) $1.87 Target Value (C$) $1.80 NPV (US$) $1.40 NPV (C$) $1.35 Cash Flows From Investing Activities

Acq.of Property, Plant and Equip. (19.5) (70.2) (7.0) (2.3) (2.9) (4.0)Exploration Expenditure (7.8) (13.8) (15.4) (17.0) (10.0) (10.0)

Ordinary Shares (M) 388.8 Other 7.8 (1.8) 0.0 0.0 0.0 0.0Options + Notes (M) 0.0

Cash Flows From Financing ActivitiesMarket Cap (US$M) $522 Market Cap (C$M) $502 Net Change in Borrowings (0.7) (0.2) 0.0 0.0 0.0 0.0

Dividends Paid 0.0 0.0 0.0 0.0 0.0 0.0Other incl Share Issue or Buy Back 61.3 62.4 0.3 0.3 50.3 0.3

PRICE ASSUMPTIONS Net Increase In Cash Held 77.8 (44.0) (24.5) (22.1) 31.3 (18.1)(Dec Year End) 2011A 2012E 2013E 2014E 2015E Cash At End of Year 97.5 53.5 29.0 6.9 38.2 20.1

Exchange Rate C$/US$ 1.014 1.008 1.013 1.032 1.040Uranium - Spot US$/lb 57.00 49.99 54.38 70.00 54.38Price Realised US$/lb 60.40 59.88 53.58 68.71 68.71 BALANCE SHEET ANALYSIS - US$M

(Dec Year End) 2010A 2011A 2012E 2013E 2014E 2015ECurrent AssetsCash and Liquids 97.6 53.5 29.0 6.9 38.3 20.2Other 54.5 51.3 26.6 23.3 23.8 23.4

Non-Current AssetsInvestments 3.0 0.5 0.5 0.5 0.5 0.5Fixed Assets 714.5 367.4 382.5 401.8 414.7 428.7

FINANCIAL SUMMARY Other 83.0 31.8 36.8 41.8 46.8 51.8(Dec Year End) 2011A 2012E 2013E 2014E 2015E

Current LiabilitiesNPAT (Adj) (US$M) -38.2 -17.8 -16.1 -11.9 -10.3 Borrowings 0.2 0.1 0.0 0.0 0.0 0.0EPS (US$ps) -0.10 -0.05 -0.04 -0.03 -0.03 Creditors 13.8 9.3 19.3 29.3 39.3 49.3PER (x) n/a na na na na Other 1.0 1.9 2.3 2.7 3.1 3.5EPS Growth (%) ->100% 53.8 10.1 26.1 13.6EBITDA (US$M) -17.0 -16.2 -26.4 -19.2 -16.8 Non-Current LiabilitiesEBITDA per Share (¢ps) -0.04 -0.04 -0.07 -0.05 -0.04 Borrowings 1.3 0.1 0.1 0.1 0.1 0.1EV/EBITDA (x) -26.93 -30.3 -19.5 -25.2 -29.9 Other 130.1 38.3 38.3 38.3 38.3 38.3Dividend (US$ps) 0.00 0.0 0.0 0.0 0.0 Minority Interest 3.0 4.0 4.0 4.0 4.0 4.0Yield (%) 0.0 0.0 0.0 0.0 0.0 SHAREHOLDERS FUNDS 806.1 454.8 426.8 415.2 454.5 444.7Franking (%) 0.0 0.0 0.0 0.0 0.0 Net Debt/Equity % -11.9% -11.6% -6.7% -1.6% -8.3% -4.5%

PROFIT AND LOSS STATEMENT - US$M DIVISIONAL EARNINGS (EBIT) - US$M(Dec Year End) 2011A 2012E 2013E 2014E 2015E (Dec Year End) 2010A 2011A 2012E 2013E 2014E 2015E

Sales Revenue 96.8 36.6 20.3 20.9 20.5 Canadian Ops -13 -4 -12 -5 -3 -3Revenue Adjustments 0.0 0.0 0.0 0.0 0.0 White Mesa 2 -17 4 0 0 0Operating Costs 79.4 25.2 16.5 16.8 14.1 Denison Environmental Service 4 2 1 0 0 0Gross Operating Profit 17.3 11.4 3.8 4.0 6.4 & UPCDepreciation 23.7 7.3 0.0 0.0 0.0 EBIT -7 -19 -8 -4 -3 -3Exploration 13.8 15.4 17.0 10.0 10.0Corporate/Royalties/Other 20.5 12.1 13.2 13.2 13.2EBIT (Subsidiaries & JV) -40.7 -23.5 -26.4 -19.2 -16.8Less Net Interest Expense -1.4 -1.0 -1.2 -0.5 -0.7Pre-Tax Profits -39.2 -22.5 -25.2 -18.6 -16.1Tax -1.0 -4.7 -9.1 -6.7 -5.8Plus Associates less Divs 0.0 0.0 0.0 0.0 0.0NPAT (pre-Abs) -70.8 -112.0 -16.1 -11.9 -10.3Net Abnormals 32.6 94.3 0.0 0.0 0.0Reported Profit -38.2 -17.8 -16.1 -11.9 -10.3

DIVISIONAL VALUATION RESERVES AND RESOURCES URANIUM SALES BY DIVISIONEV/lb Derived NPV US$M Attributable Contained Mine Percent 2010A 2011A 2012E 2013E 2014E 2015E

U3O8 Life OwnedMcClean Lake & Midwest 24 (Mlb) (Years) Canadian Ops 22.5-25.17% Mlb 0.5 0.0 0.0 0.0 0.0 0.0Mutanga 127 White Mesa 100% Mlb 1.4 1.1 0.4 0.0 0.0 0.0Wheeler River 108 Reserves 0 1JEB mill 262 Resources 120 364 Total Attrib Uranium Mlb 1.8 1.1 0.4 0.0 0.0 0.0Exploration 23 BMO Guesstimate 48 145Investments 1 U3O8 Cash Cost US$/lb 49 80 46 0 0 0Corporate & Other -52Net Cash 52Options 0TOTAL NPV (US$M) 546NPV per Share (US$) Diluted $1.40




of 44

I. Appendices Fig 68: Nuclear Capacity (GWe)


Fig 69: Uranium Supply/Demand Summary Table (Mlb U3O8e)


BM

O Q

1/

12

UR

AN

IUM

MA

RK

ET

OU

TLO

OK

20

09

A2

01

0A

20

11

A2

01

2E

20

13

E2

01

4E

20

15

E2

01

6E

20

17

E2

01

8E

20

19

E2

02

0E

20

21

E2

02

2E

20

23

E2

02

4E

20

25

E

Pri

mary

Su

pp

ly F

ore

cast

Aust

ralia

Mlb

U3O

822.7

16.6

21.5

17.2

18.0

18.4

17.5

17.4

16.0

18.7

22.2

22.2

22.2

22.2

16.7

16.7

16.7

Canada

Mlb

U3O

826.5

23.6

23.1

24.9

22.4

26.2

33.4

38.2

38.4

36.3

35.0

35.2

32.2

26.5

26.5

26.5

26.5

Kaza

khst

an

Mlb

U3O

836.1

45.5

49.0

54.0

59.2

63.5

67.0

70.7

70.1

71.0

69.0

67.8

65.9

65.4

65.4

63.3

62.8

Nam

ibia

Mlb

U3O

811.4

12.9

10.6

12.2

12.3

15.9

18.1

18.1

21.1

24.1

27.1

30.1

16.8

16.8

16.8

16.8

16.8

Nig

er

Mlb

U3O

87.7

10.9

11.1

12.2

12.2

12.2

12.2

14.2

16.2

19.2

23.2

23.2

23.2

23.2

23.2

23.2

23.2

Russ

iaM

lb U

3O

88.2

6.7

7.8

8.3

10.1

10.2

10.2

10.2

10.2

10.2

10.2

10.2

10.2

10.2

10.2

10.2

10.2

Oth

er

Mlb

U3O

817.7

19.4

20.5

21.4

22.7

24.4

25.8

25.6

26.2

30.0

30.0

29.6

30.1

27.9

26.2

27.2

26.2

PRIM

ARY S

UPPLY

TO

TAL

Mlb

U3O

8130.3

135.7

143.6

150.1

156.9

170.6

184.1

194.4

198.1

209.5

216.6

218.3

200.6

192.1

184.9

183.8

182.3

Ura

niu

m F

rom

In

ven

tori

es

an

d S

eco

nd

ary

Su

pp

ly

Russ

ian H

EU

Deal

Mlb

U3O

8e

23.4

23.4

23.4

23.4

15.6

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

West

ern

Tails

Re-E

nrich

ment

Mlb

U3O

8e

7.8

5.2

5.2

5.2

2.6

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

DO

E S

urp

lus

Ura

niu

m S

ale

sM

lb U

3O

8e

1.6

6.2

6.6

7.3

8.0

8.0

8.0

8.0

8.0

8.0

8.0

8.0

8.0

5.9

5.9

5.9

5.9

Repro

cess

ed U

raniu

m/M

OX

Mlb

U3O

8e

7.8

8.7

9.4

10.2

10.9

11.6

12.4

13.0

13.6

14.2

14.8

15.4

15.2

15.0

14.7

14.5

14.3

Oth

er

and R

uss

ian L

EU

/HEU

Beyo

nd 2

013

Mlb

U3O

8e

9.2

10.6

9.6

8.5

7.4

6.3

5.2

5.2

5.2

5.2

5.2

5.2

5.2

5.2

5.2

5.2

5.2

INVEN

TO

RY A

ND

SECO

ND

ARY S

UPPLY

TO

TAL

Mlb

U3O

8e

49.8

54.1

54.1

54.5

44.5

25.9

25.6

26.2

26.8

27.4

28.0

28.6

28.4

26.1

25.9

25.6

25.4

TO

TA

L S

UP

PLY

Mlb

U3O

8e

18

0.1

18

9.7

19

7.7

20

4.6

20

1.4

19

6.5

20

9.7

22

0.5

22

4.9

23

6.9

24

4.6

24

6.9

22

9.0

21

8.2

21

0.7

20

9.4

20

7.7

Dem

an

d F

ore

cast

In

clu

din

g B

uff

er

Inven

tori

es

USA a

nd t

he

Am

eric

as

Mlb

U3O

8e

57.5

57.6

55.4

54.5

53.5

55.9

59.3

56.5

54.6

57.9

63.5

62.2

61.7

64.5

70.1

65.5

65.5

Euro

pe

Mlb

U3O

8e

63.4

66.5

57.2

60.3

61.3

59.2

58.8

59.6

60.3

66.5

68.1

68.5

63.1

68.6

67.9

73.2

66.8

Chin

aM

lb U

3O

8e

5.5

9.5

11.7

27.0

36.7

35.6

22.9

29.2

37.3

51.8

53.7

58.9

66.7

69.3

69.1

63.4

65.1

India

Mlb

U3O

8e

2.7

2.4

5.6

3.4

3.6

3.0

4.9

5.3

3.9

5.0

7.5

10.8

8.6

13.1

11.2

14.4

18.6

Japan

Mlb

U3O

8e

18.5

17.3

8.1

4.5

3.8

11.4

12.6

12.6

12.6

12.6

12.6

12.6

12.6

12.6

12.6

12.6

12.6

Russ

iaM

lb U

3O

8e

9.7

10.2

12.0

16.6

16.9

17.1

23.7

24.0

30.3

34.0

30.4

36.4

32.3

39.2

46.7

40.9

40.0

Rest

of Asi

aM

lb U

3O

8e

11.1

12.8

16.0

16.8

14.0

14.0

16.3

15.9

17.3

17.5

20.5

26.6

21.7

27.3

23.3

22.1

22.1

Oth

er

Mlb

U3O

8e

1.1

2.0

1.8

1.8

1.8

1.8

4.1

4.8

5.9

8.9

10.3

8.8

11.3

14.1

11.2

11.6

13.7

BM

O D

em

an

d F

ore

cast

In

clu

din

g B

uff

er

Inven

tori

es

Mlb

U3O

8e

16

9.4

17

8.2

16

7.8

18

5.0

19

1.6

19

7.9

20

2.5

20

7.8

22

2.0

25

4.2

26

6.5

28

4.7

27

8.1

30

8.5

31

2.1

30

3.8

30

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Fig 70: Mine by Mine Uranium Supply Forecast 2009A to 2025E (Mlb U3O8)

Country/Mine Operator 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

AustraliaBeverley Heathgate 1.39 0.76 0.92 0.92 0.92 0.88 0.91 0.91 - - - - - - - - - Honeymoon Mitsui JV - 0.00 0.10 0.22 0.88 0.88 0.88 0.77 0.28 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Yeelirrie Cameco - - - - - - - - - 3.00 6.48 6.48 6.48 6.48 6.48 6.48 6.48 Olympic Dam BHP Billiton 9.19 4.80 9.06 8.33 8.91 9.76 10.18 10.18 10.18 10.18 10.18 10.18 10.18 10.18 10.18 10.18 10.18 Ranger ERA/Rio Tinto 12.12 11.08 11.39 7.69 7.33 6.84 5.54 5.54 5.54 5.54 5.54 5.54 5.54 5.54 0.00 0.00 0.00 Australia Sub-Total 22.69 16.64 21.47 17.16 18.04 18.36 17.51 17.40 16.00 18.72 22.20 22.20 22.20 22.20 16.66 16.66 16.66

CanadaCigar Lake Cameco 0.00 0.00 3.75 11.04 16.07 17.92 17.83 17.49 17.72 18.24 15.50 15.50 15.50 15.50 McArthur River Cameco 19.05 17.96 19.59 20.91 18.80 18.80 18.80 18.50 18.50 18.50 17.50 17.50 14.00 11.00 11.00 11.00 11.00 McClean Lake AREVA 3.69 1.73 0.00 - - - - - - - - - - - - - - Rabbit Lake Cameco 3.80 3.90 3.53 3.97 3.60 3.60 3.60 3.60 1.97 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Canada Sub-Total 26.55 23.59 23.12 24.88 22.40 26.15 33.44 38.17 38.40 36.33 34.99 35.22 32.24 26.50 26.50 26.50 26.50

ChinaChina Various 1.95 2.15 2.52 2.82 3.06 3.25 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02

China Sub-Total 1.95 2.15 2.52 2.82 3.06 3.25 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 Czech Republic

Straz Rozna DIAMO 0.93 0.93 0.93 0.93 - - - - - - - - - - - - - Czech Republic Sub-Total 0.93 0.93 0.93 0.93 - - - - - - - - - - - - -

FranceJouac AREVA 0.02 0.02 - - - - - - - - - - - - - - - France Sub-Total 0.02 0.02 - - - - - - - - - - - - - - -

GermanyWismut General Atomics 0.05 0.10 - - - - - - - - - - - - - - - Germany Sub-Total 0.05 0.10 - - - - - - - - - - - - - - -

IndiaJaduguda UCI 0.44 0.86 0.86 0.86 0.86 0.86 0.86 0.86 0.86 0.86 0.86 0.86 0.86 0.86 0.86 0.86 0.86 India Sub-Total 0.44 0.86 0.86 0.86 0.86 0.86 0.86 0.86 0.86 0.86 0.86 0.86 0.86 0.86 0.86 0.86 0.86

KazakhstanAkbastau (Budenovskoye) Kazatomprom JV 1.00 1.17 2.72 2.60 3.86 4.85 6.37 7.80 7.80 7.80 7.80 7.80 7.80 7.80 7.80 7.80 7.80 Akdala Kazatomprom JV 2.19 2.73 2.01 3.09 2.56 2.56 2.56 2.56 2.56 2.56 2.56 2.56 2.38 1.87 1.87 1.87 1.87 Kanzhugan (Kainarski) Kazatomprom 1.00 0.78 0.78 0.78 0.78 0.78 0.78 0.78 0.78 0.78 - - - - - - - Karamurun (North) Kazatomprom 2.08 2.08 2.08 2.60 2.60 2.60 2.00 1.00 - - - - - - - - - Karamurun (South) Kazatomprom 0.39 0.65 0.65 0.65 0.65 0.65 0.65 0.30 - - - - - - - - - Karatau Kazatomprom JV 3.25 4.68 5.14 5.09 5.13 5.13 5.13 5.13 5.13 5.13 5.13 3.97 2.20 2.20 2.20 2.20 2.20 Kharassan Kazatomprom JV 0.00 0.00 0.00 0.00 1.98 3.09 5.20 5.20 5.20 5.20 5.20 5.20 5.20 5.20 5.20 5.20 5.20 Kharassan 2 Kazatomprom? (Baikan U - Inkai JV Cameco/Kazatomprom 1.83 4.33 4.17 4.19 5.67 5.63 5.64 8.80 9.46 10.40 10.40 10.40 10.40 10.40 10.40 10.40 10.40 Inkai (South) Kazatomprom JV 0.00 3.53 5.17 4.71 5.20 5.20 5.20 5.20 5.20 5.20 5.20 5.20 5.20 5.20 5.20 5.20 5.20 Irkol (Semizbai/Zhalpak) Kazatomprom JV 1.17 1.95 2.15 3.40 5.28 7.16 7.16 7.16 7.16 7.16 7.16 7.16 7.16 7.16 7.16 7.16 7.16 Moinkum (South) and Tortkuduk AREVA/Kazatomprom 8.15 8.72 9.38 10.40 10.40 10.40 10.40 10.40 10.40 10.40 10.40 10.40 10.40 10.40 10.40 10.40 10.40 Mynkuduk (Central) Kazatomprom 3.12 4.00 4.50 4.80 5.20 5.20 5.20 5.20 5.20 5.20 5.20 5.20 5.20 5.20 5.20 5.20 5.20 Mynkuduk (East/PV-19) Kazatomprom 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 0.55 - Mynkuduk (West) "Zapadnyi" Kazatomprom JV 0.65 1.30 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 Semizbai Kazatomprom JV 0.65 1.30 1.30 1.30 1.30 1.30 1.30 1.30 1.30 1.30 - - - - - - - Stepnoye Region and Stepnogorsk Ura Kazatomprom 1.30 1.30 1.30 1.30 1.30 1.30 1.30 1.30 1.30 1.30 1.30 1.30 1.30 1.30 1.30 1.30 1.30 Zarechnoye Kazatomprom JV 1.30 1.59 1.84 1.88 2.09 2.43 2.92 3.42 3.42 3.42 3.42 3.42 3.42 3.42 3.42 3.42 3.42 Unallocated Kazakh Production 5.45 2.78 0.59 2.00 - - - - - - - - - - - - - Kazakhstan Sub-Total 36.14 45.49 48.99 54.00 59.21 63.47 67.02 70.74 70.10 71.05 68.97 67.80 65.86 65.35 65.35 63.30 62.75

MalawiKayelekera Paladin 0.59 1.02 2.12 2.66 3.42 3.66 3.52 3.50 3.48 3.48 3.50 3.48 3.48 1.74 - - - Malawi Sub-Total 0.59 1.02 2.12 2.66 3.42 3.66 3.52 3.50 3.48 3.48 3.50 3.48 3.48 1.74 - - -

NamibiaLanger Heinrich Paladin 2.11 3.23 3.80 4.93 5.08 4.99 4.82 4.82 4.82 4.82 4.82 4.82 4.82 4.82 4.82 4.82 4.82 Rossing Rio Tinto 9.15 9.61 6.74 6.28 7.24 10.95 13.28 13.28 13.28 13.28 13.28 13.28 0.00 0.00 0.00 0.00 0.00 Husab CGNP JV 0.00 0.00 0.00 0.00 3.00 6.00 9.00 12.00 12.00 12.00 12.00 12.00 12.00 Trekkopje AREVA 0.10 0.10 0.10 1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Namibia Sub-Total 11.36 12.94 10.64 12.21 12.32 15.94 18.10 18.10 21.10 24.10 27.10 30.10 16.82 16.82 16.82 16.82 16.82

NigerAkouta AREVA 3.73 4.02 3.73 3.73 3.73 3.73 3.73 3.73 3.73 3.73 3.73 3.73 3.73 3.73 3.73 3.73 3.73 Arlit AREVA 3.99 6.89 6.89 6.89 6.89 6.89 6.89 6.89 6.89 6.89 6.89 6.89 6.89 6.89 6.89 6.89 6.89 Imouraren AREVA - - - - - 2.00 4.00 7.00 11.02 11.02 11.02 11.02 11.02 11.02 11.02 Teguidda (Azelik) CNCC - 0.00 0.50 1.54 1.54 1.54 1.54 1.54 1.54 1.54 1.54 1.54 1.54 1.54 1.54 1.54 1.54 Niger Sub-Total 7.72 10.92 11.12 12.16 12.16 12.16 12.16 14.16 16.16 19.16 23.19 23.19 23.19 23.19 23.19 23.19 23.19

PakistanBaghalcar/Issa Khel UCI 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 Pakistan Sub-Total 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12

RomaniaCarpathians/Banat RAPMR 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 Romania Sub-Total 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23

RussiaDalur AMRZ 1.31 1.28 1.39 1.36 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 Khiagda ARMZ 0.22 0.35 0.69 0.92 1.14 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 Priargunsky/Krasnokamensk ARMZ 6.62 5.07 5.69 6.00 7.80 7.80 7.80 7.80 7.80 7.80 7.80 7.80 7.80 7.80 7.80 7.80 7.80 Russia Sub-Total 8.15 6.70 7.78 8.27 10.11 10.16 10.16 10.16 10.16 10.16 10.16 10.16 10.16 10.16 10.16 10.16 10.16

South AfricaEzulwini First Uranium 0.02 0.00 0.06 0.00 0.21 0.25 0.23 0.26 0.43 0.43 0.43 0.43 0.43 0.69 0.69 0.69 0.69 Mine Waste Solutions First Uranium 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.40 0.00 0.00 1.00 - Vaal Reef AngloGold Ashanti 1.29 1.30 1.32 1.49 1.98 1.98 1.98 1.98 1.98 1.98 1.98 1.98 1.98 1.98 1.98 1.98 1.98 South Africa Sub-Total 1.29 1.30 1.38 1.49 2.20 2.23 2.21 2.24 2.42 2.42 2.42 2.42 2.82 2.68 2.68 3.68 2.68

SpainSalamanca - - - - - - 0.00 0.00 0.00 1.05 1.50 1.50 1.50 1.50 1.50 1.50 1.50 Spain Sub-Total - - - - - - 0.00 0.00 0.00 1.05 1.50 1.50 1.50 1.50 1.50 1.50 1.50

TanzaniaMkuju Mantra - - 0.00 0.00 0.00 0.00 0.00 0.00 0.40 4.32 5.36 6.29 7.08 7.21 7.21 7.21 7.21 Tanzania Sub-Total - - 0.00 0.00 0.00 0.00 0.00 0.00 0.40 4.32 5.36 6.29 7.08 7.21 7.21 7.21 7.21

UkraineZholtye Vody VostGok 1.83 2.45 2.73 2.08 2.08 2.08 2.08 2.08 2.08 2.08 2.08 2.08 2.08 2.08 2.08 2.08 2.08 Ukraine Sub-Total 1.83 2.45 2.73 2.08 2.08 2.08 2.08 2.08 2.08 2.08 2.08 2.08 2.08 2.08 2.08 2.08 2.08

USAAlta Mesa Mestena 0.54 0.45 0.24 0.24 0.24 0.24 0.24 - - - - - - - - - - Highland/Smith Ranch/Crow Butte Cameco 1.28 2.43 2.05 2.23 2.60 3.40 3.80 3.80 3.80 2.85 1.43 0.95 0.48 0.00 0.00 0.00 0.00 Lost Creek UR Energy - - - - 0.10 0.50 0.90 1.00 1.00 1.00 1.00 0.20 - - - - - Palangana UEC - - 0.20 0.30 0.30 0.30 0.30 0.30 0.30 0.10 - - - - - - - White Mesa Mill and Deposits Denison 0.64 1.36 1.10 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 Wyoming Operations Uranium One - - 0.00 0.48 0.90 1.30 1.96 2.00 2.00 2.00 1.88 0.88 0.00 0.00 0.00 0.00 0.00 USA Sub-Total 2.46 4.24 3.59 4.27 4.74 5.94 6.74 6.60 6.60 5.45 3.93 2.65 1.98 1.50 1.50 1.50 1.50

UzbekistanMining Utility #5 Navoi 2.34 2.34 2.34 2.34 2.34 2.34 2.34 2.34 2.34 2.34 2.34 2.34 2.34 2.34 2.34 2.34 2.34 North Mining Utility Navoi 1.82 1.82 1.82 1.82 1.82 1.82 1.82 1.82 1.82 1.82 1.82 1.82 1.82 1.82 1.82 1.82 1.82 South Mine Mgt Navoi 1.82 1.82 1.82 1.82 1.82 1.82 1.82 1.82 1.82 1.82 1.82 1.82 1.82 1.82 1.82 1.82 1.82 Uzbekistan Sub-Total 5.98 5.98 5.98 5.98 5.98 5.98 5.98 5.98 5.98 5.98 5.98 5.98 5.98 5.98 5.98 5.98 5.98

ZambiaLumwana Equinox - - 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 - - - Zambia Sub-Total - - 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 - - - WORLD TOTAL 128.48 135.66 143.59 150.13 156.94 170.61 184.15 194.35 198.09 209.52 216.59 218.28 200.60 192.14 184.86 183.81 182.26

Source: BMO Capital Markets, N.B. Forecasts from 2012 onwards



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Disclosure Analyst’s Certification

I, Edward Sterck, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.

Analysts employed by BMO Nesbitt Burns Inc. and/or BMO Capital Markets Ltd. are not registered as research analysts with FINRA. These analysts may not be associated persons of BMO Capital Markets Corp. and therefore may not be subject to the NASD Rule 2711 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

Company Specific Disclosure

For Important Disclosures on the stocks discussed in this report, please go to http://researchglobal.bmocapitalmarkets.com/Public/Company_Disclosure_Public.aspx

Distribution of Ratings (September 30, 2012)

Rating Category

BMO Rating

BMOCM US Universe*

BMOCM US IB Clients**

BMOCM US IB Clients***

BMOCM Universe****

BMOCM IB Clients*****

Starmine Universe

Buy Outperform 38.3% 17.9% 57.8% 39.0% 49.5% 54.3% Hold Market Perform 58.5% 7.9% 39.1% 56.4% 48.5% 40.3% Sell Underperform 3.1% 11.8% 3.1% 4.6% 2.0% 5.3%

* Reflects rating distribution of all companies covered by BMO Capital Markets Corp. equity research analysts. ** Reflects rating distribution of all companies from which BMO Capital Markets Corp. has received compensation for Investment Banking services as percentage within ratings category. *** Reflects rating distribution of all companies from which BMO Capital Markets Corp. has received compensation for Investment Banking services as percentage of Investment Banking clients. **** Reflects rating distribution of all companies covered by BMO Capital Markets equity research analysts.

***** Reflects rating distribution of all companies from which BMO Capital Markets has received compensation for Investment Banking services as percentage of Investment Banking clients.

Ratings and Sector Key We use the following ratings system definitions: OP = Outperform - Forecast to outperform the market; Mkt = Market Perform - Forecast to perform roughly in line with the market; Und = Underperform - Forecast to underperform the market; (S) = speculative investment; NR = No rating at this time;

R = Restricted – Dissemination of research is currently restricted.

Market performance is measured by a benchmark index such as the S&P/TSX Composite Index, S&P 500, Nasdaq Composite, as appropriate for each company. BMO Capital Markets' seven Top 15 lists guide investors to our best ideas according to different objectives (CDN Large Cap, CDN Small Cap, US Large Cap, US Small Cap, Income, CDN Quant, and US Quant) have replaced the Top Pick rating. Other Important Disclosures For Important Disclosures on the stocks discussed in this report, please go to http://researchglobal.bmocapitalmarkets.com/Public/Company_Disclosure_Public.aspx or write to Editorial Department, BMO Capital Markets, 3 Times Square, New York, NY 10036 or Editorial Department, BMO Capital Markets, 1 First Canadian Place, Toronto, Ontario, M5X 1H3. Prior BMO Capital Markets Ratings Systems http://researchglobal.bmocapitalmarkets.com/documents/2009/prior_rating_systems.pdf

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of 44

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BMO Capital Markets is a trade name used by BMO Financial Group for the wholesale banking businesses of Bank of Montreal, BMO Harris Bank N.A, BMO Ireland Plc, and Bank of Montreal (China) Co. Ltd. and the institutional broker dealer businesses of BMO Capital Markets Corp. (Member SIPC), BMO Nesbitt Burns Trading Corp. S.A., BMO Nesbitt Burns Securities Limited (Member SIPC) and BMO Capital Markets GKST Inc. (Member SIPC) in the U.S., BMO Nesbitt Burns Inc. (Member Canadian Investor Protection Fund) in Canada, Europe and Asia, BMO Nesbitt Burns Ltée/Ltd. (Member Canadian Investor Protection Fund) in Canada, BMO Capital Markets Limited in Europe, Asia and Australia and BMO Advisors Private Limited in India.

“Nesbitt Burns” is a registered trademark of BMO Nesbitt Burns Corporation Limited, used under license. “BMO Capital Markets” is a trademark of Bank of Montreal, used under license. "BMO (M-Bar roundel symbol)" is a registered trademark of Bank of Montreal, used under license.

® Registered trademark of Bank of Montreal in the United States, Canada and elsewhere. TM Trademark Bank of Montreal

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Global Mining Research - Swiss Resource Capital · Source: BMO Capital Markets, Priced as of 24...

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