Uranium Sector ReviewExploration, Development & ProductionMarch Quarter 2009
Uranium Sector ReviewExploration, Development & ProductionDecember Quarter 2011
Resource Capital Research
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Uranium Sector ReviewDecember Quarter 2011
Resource Analyst (Uranium): John Wilson
Resource Analyst: Dr Tony ParryResource Analyst: Murray Brooker
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7 December 2011
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December Quarter 2011 Disclaimer and disclosure attached. Copyright© 2011 by Resource Capital Research Pty Ltd. All rights reserved. 2
Contents Contents .............................................................................................................................. 2
Overview and Investment Comment ........................................................................................ 3
RCR December Quarter Featured Company Summary ................................................................ 5
[Industry Background and Analysis ........................................................................................... ] Comparative Charts ............................................................................................................... 7
Financial Data ....................................................................................................................... 9
Company Statistics ................................................................................................................ 9
Reserves, Resources and Historic Mineralisation ...................................................................... 10
Valuation and Performance Data ........................................................................................... 10
Exploration, Development and Production Companies
Alligator Energy Limited ............................................................................................. 11
[Anatolia Energy Limited ............................................................................................... ] [Black Range Minerals Limited........................................................................................ ] Energy and Minerals Australia Limited .......................................................................... 13
Energy Resources of Australia Limited* ........................................................................ 15
Hathor Exploration Limited ......................................................................................... 17
Laramide Resources Limited ....................................................................................... 19
Paladin Energy Limited* ............................................................................................. 21
Peninsula Energy Limited............................................................................................ 23
Toro Energy Limited................................................................................................... 25
[Uranium Price Fundamentals .................................................................................................. ] Selected Uranium Sector Performance Charts ......................................................................... 27
Report Contributors ............................................................................................................. 29
Disclosure and Disclaimer ..................................................................................................... 30
* Indicates companies with detailed financial projections and valuation available.
[This is the Abridged Report version of the December Quarter RCR Uranium Sector Review. The purchase price
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Overview and Investment Comment
Market performance summary table
Equity market performance In the past month, the uranium majors have had mixed share price performance: Cameco (CCO) is down 13% (3 month performance -13%), Denison Mines (DML) is down 4% (3 month performance +1%), Uranium One (UUU) down 12% (3 month performance +6%), Energy Resources of Australia (ERA) down 22% (3 month performance -41%), Extract Resources (EXT) up 5% (3 month performance +3%), and Paladin (PDN) up 22% (3 month performance -6%). The global uranium majors have significantly underperformed the broader share market over the past 12 months largely due to set backs following Fukushima. The Canadian majors are down around 50% in the past 12 months. In Australia, the worst performer has been ERA, down 82% over the past 12 months, the decline exacerbated by operational problems at Ranger (ERA). PDN is down 66%, its decline exacerbated by ramp-up delays and higher cost outlook, particularly at Kayelekera (PDN). The Merrill Lynch Uranium Equity Index (a global basket of uranium equities) is down 2% over the past month, down 7% over 3 months and down 54% over the past 12 months. The sector has faced near term uranium price uncertainty since the March nuclear crisis in Japan. Sector performance has also been impacted by broader global equity market volatility resulting from slow US economic activity and ongoing sovereign debt issues in the advanced economies. Uranium price and market outlook The uranium spot price is US$52.25/lb. Immediately prior to the Japanese earthquake on 11 March, the spot price had been trading at US$67.75/lb, a 12 month high.
7 December 2011 Current 1 month 3 month 6 month 12 month
Price*
:US$/lb 52.25 0.5 3.5 -8.3 -13.3
Uranium Participation Corp :C$/Share 5.78 -1.9 -1.4 -10.0 -29.9
247.8 -1.8 -7.3 -30.7 -54.3
Share Prices - Select Companies
:A$/share 1.47 -21.8 -41.3 -52.6 -82.1
Extract Resources :A$/share 8.08 5.3 2.7 4.9 -10.3
:A$/share 1.70 21.9 -6.4 -42.3 -66.5
:C$/Share 18.92 -13.1 -13.2 -28.3 -49.5
:C$/Share 1.49 -3.9 1.4 -25.1 -56.8
:C$/Share 2.49 -12.0 6.0 -25.9 -44.8
Market Indices
World Markets (all sectors) Morgan Stanley World Index 1193.7 -0.5 5.2 -7.7 -1.4
Currencies (compared to USD)
Australian dollar 1.03 -1% -4% -4% 4%
Canadian dollar 0.99 0% -3% -3% 0%
Euro 1.34 -3% -5% -9% 1%
Energy Resources of Australia
Paladin Energy
Uranium One
Cameco
Denison Mines
Performance (%)
Spot Uranium Price
Merrill Lynch Uranium Equity Index
The uranium market performance has, in general, stabilized over the past few months… …following the downward correction, post Fukushima. The Merrill Lynch Uranium Equity Index is down 2% over the past 1 month and down 54% over the past 12 months. The spot uranium price is US$52.25/lb.
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The dynamics driving the near term sector outlook continue to be dominated by the aftermath of Fukushima, including Germany’s decision to close reactors and the potential for disposal of surplus utility inventory. The spot market has been trading in the range of US$51-53/lb recently, except for a short breakout in November. Traders indicate they remain cautious going into 1H12. Nonetheless, buying opportunities continue to emerge driven by perceptions of a floor to the uranium spot price holding at around US$50/lb, and the recent emergence of strong strategic investor interest and acquisition activity at the large end of the market, viz., 1. Rio Tinto investing around US$1bn, A$342m in the ERA rights issue
and the acquisition of Hathor Exploration (TSX:HAT) for around
C$654m (assuming 100% acceptance). The HAT acquisition follows
a bidding war with Cameco (TSX:CCO) and coincides with a resource
upgrade at Roughrider and release of the PFS.
2. There is also the anticipated bid for Extract Resources by CGNPC,
which prompted EXT to enter into a trading halt (8 Dec). EXT
received its mining licence for Husab Nov ’11 and now has all
permits in place to commence project development.
Sector fundamentals appear positive in the mid and long term. Over 84 new nuclear power reactors are expected to be commissioned globally by 2017, with 62 currently under construction. There are 499 new reactors planned or proposed (1 Dec, WNA), including 171 in China, 57 in India, 44 in Russia, 34 in the USA, and 13 in Ukraine. The contract uranium price is US$62.50/lb (30 Nov). It has drifted down from US$64.50/lb (31 August), falling about US$0.50/lb per month. While it may trend a little weaker in the near term, we expect the contract price to remain around the US$60-70/lb mark. This level should support development decisions at a number of advanced uranium development projects, particularly in Namibia, eg the large scale Husab project of Extract Resources (ASX:EXT). Events of the past 3 months include: Olympic Dam is looking to expand production to 42mlbspa U3O8 by 2025. Australian state and federal government environment approvals for the expansion were received Oct ’11 and BHP has subsequently approved US$1.2bn in pre-commitment expenditure for long-lead items ahead of a formal Board decision to approve the expansion expected mid 2012. Stage 1 expansion expected 2013 (to 5,000tpa U3O8, up 600tpa). BHP intends to increase uranium output at Olympic Dam from around 4.5ktpa to 17kt over 11 years, plus an additional 2kt of U3O8 to be extracted from copper concentrate (for a total of 19ktpa, 42mlbspa). WNA reference case projections indicate the mine could account for ~20% of global uranium mine supply by 2025. December 2011: The Australian government approved the sale of Australian uranium to India reversing a long term ban, a move that paves the way for the sale of long term uranium contracts and should help underpin the development of Olympic Dam.
Uranium traders indicate they remain cautious going into 1H12. Emergence of strong strategic investor interest and acquisition activity in the uranium sector reinforce midterm positive fundamentals, viz., TSX:HAT, ASX:ERA, ASX:EXT. Over 84 new nuclear power reactors are expected to be commissioned by 2017. The contract price is US$62.50/lb (30 November). Australian state and federal government environment approvals received for the expansion of Olympic Dam.
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RCR December Quarter Featured Company Summary
AUSTRALIA
Company Code Comment
Alligator Energy Limited AGE Mid exploration
AGE is well funded, focused in ARUP, NT - Australia's premier uranium
province. High grade uranium prospects established on 7km trend. Dec '11
drill results at Caramal include 14m @ 0.707% U3O8. Potential for Ranger-
Jabiluka style trend.
Anatolia Energy Limited AEK Advanced Exploration
High grade (0.11% U3O8), ISL prospective Temrezli Uranium Project,
Turkey. Regional Exploration Target 30-50mlb. Drilling 2H11 (2,000m);
hydrology 4Q11; PFS 3Q12. Highly experienced management team led by
former Uranerz GmbH executives.
Black Range Minerals Limited BLR Scoping
BLR has consolidated ownership of the Hansen/Taylor Ranch uranium
project in Colorado. The project has a large resource of 90.9mlbs grading
0.060% U3O8. The revised PFS (due 2Q12) should clarify mine
development strategy and potentially drive a re-rating.
Energy and Minerals Australia Limited EMA Development
Major drill program planned at Mulga Rock (commencing 4Q11; 20,000m)
with a focus on expanding potential ISR amenable, sandstone-hosted
uranium resources at 5 prospects. Potential for rapid resource expansion
at low cost. PFS expected 4Q12/1Q13.
Energy Resources of Australia Limited ERA Producer
ERA is focused on mining, evaluating and exploring its leases in the highly
prospective East Alligator River region (NT). Ranger 3 Deeps u/g
exploration decline approved. ERA increasing exploration effort for near
mine upside, both opencut and u/g.
Paladin Energy Limited PDN Producer
PDN is making renewed efforts to achieve production targets at LHM and
KM and has initiated company wide cost cutting studies and initiatives.
This is a timely move - maximising operating asset returns to achieve
growth in a time of heightened global market uncertainty.
Peninsula Energy Limited PEN Prefeasibility Study
Lance ISR project (WY, USA; 100% PEN) economic prospects bolstered
by expanding/upgraded resource base (+25% June '11) and ongoing
advancement of key permitting milestones. Expanded DFS expected
1H12; production potential 2012/13.
Toro Energy Limited TOE BFS and Exploration
Wiluna Project and regional resources (TOE 100%) increased 32% to
50.1mlbs U3O8 (Nov '11). BFS expected 2Q12. Production potential 2H13.
Exciting Theseus (WA) discovery - potential large ISR - could be a second
project for TOE midterm.
CANADA
Company Code Comment
Hathor Exploration Limited HAT Advanced Exploration
RIO’s determination to secure Hathor reflects HAT’s strategic value – a
high grade (11.6% U3O8), low unit opex (US$14.40/lb) development asset,
with good near term exploration upside; and a high quality exploration
pipeline in one of the world’s premier uranium districts.
Laramide Resources Limited LAM Advanced Exploration/Development Stage
LAM's flagship project, Westmoreland (QLD) will be re-rated if the LNP
wins the QLD state election (1H12) - an outcome polls indicate is highly
likely. The company is also poised to reap a substantial royalty as URI's
Section 8 (USA) nears production (expected 2013).
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Comparative Charts
Hathor Exploration Limited (TSX:HAT) has been acquired by Rio Tinto (ASX:RIO) for C$654m - an adjusted EV/resource ratio US$9.85/lb.
Share price performance of uranium companies has been mixed over the last month. The spot uranium price has generally held in the US$51/lb-US$53/lb range, while global equity markets have continued to be volatile on concerns over the outlook for Europe.
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Explorers’ Development Cycle: Conceptual market capitalisation versus development stage; December Q 2011
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Financial Data
Company Statistics
C OM P A N Y Share Price (LC$/share)3
2 Fully
Diluted
Market
Cap Book
Enterprise
Value
ExchangesCode Status1 Yr End 52 week Current Shares Opt+W2 C. Notes2 Shares (undiluted) Cash Debt Value (Undiluted)
7 December 2011 Hi Low (m) (m) (m) (m) (LC$m)3 (LC$m)3 (LC$m)3 (LC$m)3 (LC$m)3
AUSTRALIA (A$)
Alligator Energy Limited AGE E June ASX No 0.25 0.08 0.11 156 21 0 177 17 8.6 0.0 18 17
Anatolia Energy Limited AEK E June ASX No 0.31 0.09 0.13 99 2 22 122 12 4.0 0.0 15 12
Black Range M inerals Limited BLR E June ASX TSX No 0.09 0.02 0.02 797 5 0 802 16 4.2 0.0 18 16
Energy and M inerals Australia Limited EM A E June ASX EM AO 0.30 0.08 0.09 388 186 30 604 35 8.9 0.0 12 35
Energy Resources of Australia Limited ERA P Dec ASX No 9.14 1.35 1.48 518 0 0 518 764 622.7 0.0 1301 764
Paladin Energy Limited PDN P June ASX TSX NSE No 5.61 1.11 1.70 835 8 109 952 1420 235.8 656.2 1272 2076
Peninsula Energy Limited PEN E June ASX PENOA, PENOC 0.16 0.04 0.04 2135 894 19 3048 79 19.6 0.0 70 79
Toro Energy Limited TOE E June ASX No 0.17 0.07 0.09 975 39 0 1014 88 16.3 0.0 96 88
Total: Australia 920.1 656.2 2803 3088
CANADA (C$)Hathor Exploration Limited HAT E M ar TSX No 5.10 1.50 4.70 128 12 0 139 600 23.0 0.0 137 600
Laramide Resources Limited LAM E Dec TSX AMEX No 2.87 0.61 0.73 68 7 0 75 50 1.2 0.0 89 50
Total: Canada 24.2 0.0 226 649
Total: (US$)4 972 676 3111 3823
(1) P: Producer; E: Explorer; I: Imminent - includes companies with bankable feasib ilit y studies and likely to be in product ion within 3 years; IHC: Investment Holding Company
(2) Fully Diluted (shares, options + warrants (opt . + w), convertible notes (Conv. N), other obligations)
(3) L.C. - Local Currency unit ; End of quarter forecast . (4) AUD/USD: 1.03; CAN/USD: 0.99
Exchanges
C OM P A N Y
(A) Exploration (L.C.$m)7 (B) Corporate (L.C.$m)7Drilling ('000 m)Code Land (A)/(A+B) %
7 D ecember 2011 ('000 ha)6 Sep-11 Dec-11 2011 2012 Sep-11 Dec-11 2011 2012 Sep-11 Dec-11 2011 2012 Dec-11 2011 2012
AUSTRALIA (A$)
Alligator Energy Limited AGE 860 2.9 2.0 0.5 6.9 1.6 1.6 2.9 4.1 0.4 0.4 1.6 1.6 80.0 64.1 72.4
Anatolia Energy Limited AEK 140 0.6 1.3 5.0 4.9 0.4 0.3 2.9 1.7 0.2 0.2 1.0 0.6 68 75 72
Black Range M inerals Limited BLR 7 0.5 1.4 11.5 9.4 2.4 1.0 1.0 5.7 0.3 0.3 1.2 1.1 76.9 44.9 84.3
Energy and M inerals Australia Limited EM A 242 2.5 15.0 30.0 27.5 0.4 2.0 3.2 4.9 0.5 0.4 2.4 1.7 82.6 57.2 74.0
Energy Resources of Australia Limited ERA 8 5.0 5.0 12.3 35.0 10.0 6.0 23.0 31.7 3.1 3.1 12.0 12.5 66.0 65.8 71.7
Paladin Energy Limited PDN na 15.0 15.0 100.0 60.0 4.3 4.0 17.6 14.3 13.9 13.0 54.0 52.4 23.5 24.6 21.4
Peninsula Energy Limited PEN 272 51.4 50.0 142.0 126.4 3.5 3.0 11.8 10.5 1.3 1.3 5.1 5.2 69.8 69.8 67.1
Toro Energy Limited TOE 3,668 5.3 5.8 25.7 35.5 5.8 3.8 15.5 15.0 1.2 1.1 3.5 4.5 77.3 81.5 77.0
Total: Australia 83 95 327 306 28 22 78 88
CANADA (C$)Hathor Explorat ion Limited HAT 102 15.0 0.0 44.5 40.0 8.0 4.0 15.7 20.0 3.2 2.5 4.3 8.4 61.5 78.4 70.5
Laramide Resources Limited LAM 700 0.0 0.0 0.0 5.0 1.4 1.4 5.0 5.6 0.4 0.6 2.3 2.4 70 69 70
Total: Canada 15 0 45 45 9 5 21 26
Total: (US$)4 39 28 101 116
(6) To convert hectares to acres, mult iply by 2.47; eg 100 thousand hectares ('000 ha) = 247 thousand acres ('000 ac)
(7) L.C. - Local Currency unit
(A) Exploration (L.C.$m)7 (B) Corporate (L.C.$m)7Drilling ('000 m)
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Reserves, Resources and Historic Mineralisation
Valuation and Performance Data
C OM P A N Y Total - Gold Product ion
Code Status1 Other Other Other Equivalent3 Commencement
7 D ecember 2011 M lb kt M lb kt M lb kt M lb kt (M oz) Year
AUSTRALIA
Alligator Energy Limited AGE E 0.0 0.0 0 .0 0.0 0.0 0 .0 0.0 0 .0 0% na
Anatolia Energy Limited AEK E 0.0 0.0 6.1 2.8 0.0 0 .0 6 .1 2 .8 0.2 na
Black Range M inerals Limited BLR E 0.0 0.0 58.1 26.4 0.0 0 .0 58.1 26.4 1.8 na
Energy and M inerals Australia Limited EM A E 0.0 0.0 59.6 27.0 0.0 0 .0 59.6 27.0 1.8 na
Energy Resources of Australia Limited ERA P 184.1 83.5 418.7 189.9 0.0 0 .0 602.8 273.4 1821% 1981
Paladin Energy Limited PDN P 155.1 70.4 528.9 239.9 21.9 9 .9 550.8 249.8 16.6 2008
Peninsula Energy Limited PEN E 0.0 0.0 41.4 18.8 6.1 2 .8 47.5 21.5 1.4 na
Toro Energy Limited TOE E 0.0 0.0 50.1 22.7 0.0 0 .0 50.1 22.7 1.5 na
Average: Australia
CANADAHathor Explorat ion Limited HAT E 0.0 0.0 58.0 26.3 0.0 0 .0 58.0 26.3 175% na
Laramide Resources Limited LAM E 0.0 0.0 62.4 28.3 4.7 2 .2 67.1 30.4 2.0 na
Total/Total Average 339 154 1283 582 33 15 1500 680
(1) P: Producer; E: Explorer; I: Imminent - includes companies with bankable feasibility studies, f inancing and likely to be in product ion within 3 years; IHC: Investment Holding Company
(2) Reserves, resources and mineralised material published by the relevant company. Tonnes are metric (2204.6 pounds).
The applicable mineral resource codes are by country: Australian: JORC, Canadian: NI 43-101, South Africa: SAM REC
(3) For uranium only. Assumes a uranium price of US$52.25/ lb and a gold price of US$1730/oz
* M ineral resource est imates are inclusive of the mineral reserve. ^ ERA reserves are in addit ion to resources.
(All M ineralisat ion)1
Total Uranium (U3O8)
Uranium (U3O8) Uranium (U3O8) Uranium (U3O8)
Reserves (Equity)2 Resources (Equity)2
Historical/M ineralised M aterial
(Equity)2
C OM P A N Y EV-Cash EV-Cash EV-Cash
Code P/Book P/Net Cash /Reserves /Res'v+resources /Total U3O8 Spot Contract
7 D ecember 2011 (x) (x) US$/lb US$/ lb US$/ lb 52.25 62.50 1 month 3 month 6 month 12 month Hi Lo
AUSTRALIA
Alligator Energy Limited AGE 0.9 2.0 na na na na na 25 0 22 na 55 47
Anatolia Energy Limited AEK 0.8 3.1 na 1.41 1.41 3 2 19 -11 -24 -38 60 39
Black Range M inerals Limited BLR 0.9 3.8 na 0.2 0.2 0 0 -13 -23 -35 -50 78 5
Energy and M inerals Australia Limited EM A 3.0 4.0 na 0.46 0.46 1 1 -17 -9 -39 -60 69 20
Energy Resources of Australia Limited ERA 0.6 1.2 0.79 0.35 0.35 1 1 -22 -41 -52 -82 84 10
Paladin Energy Limited PDN 1.1 -3.4 12.22 3.58 3.44 7 6 22 -6 -42 -66 70 53
Peninsula Energy Limited PEN 1.1 4.0 na 1.48 1.29 3 2 -10 -26 -53 -42 76 6
Toro Energy Limited TOE 0.9 5.4 na 1.5 1.5 3 2 15 8 7 -40 47 34
Average: Aust ralia 6.50 1.28 1.23 2 2
CANADAHathor Exploration Limited HAT 4.4 26.1 na 9.85 9.85 19 16 2 13 87 35 8 213
Laramide Resources Limited LAM 0.6 40.6 na 0.77 0.71 1 1 -22 -34 -41 -64 75 20
Average: Canada na 5.31 5.28 10 8
Total/Total Average 4.34 1.96 1.92 4 3 0 -12 -16 -41 56 41
(%)
Share Price Performance Current Share Price
% off 12 month
Valuat ion (%) of U3O8
Price (USD)
Res'v+resources
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December Quarter 2011 Disclaimer and disclosure attached. Copyright© 2011 by Resource Capital Research Pty Ltd. All rights reserved. 11
Alligator Energy Limited
0.25
Debt (A$m) - Dec 11F
Enterprise value (A$m)
Avg monthly volume (m)
Cash (A$m) - Dec 11F
Price/Cash (x) Cash (A$m)
Price/Book (x)
Listed company options: Net asset backing (Ac/share)
* Uranium prospective properties only. Quarters refer to calendar year.
Contacts Directors
Mr Denis Gately
Executive Chairman G Duncan (Exec Alternate)
Tel: +61 (07) 3852 4712 P Dickson (Non Exec)
Spring Hill, Qld, Australia L Curyer (non Exec)
A Vigar (Non Exec)
Analyst: John Wilson Mamadawerre 0/40/90/40% U Cameco
Analyst: Murray Brooker
155.6
860
155.6
4.5
-
Unconformity na Expl
0.0
Expl
Unconformity Adv Expl
Status
Project
AUS (NT)
Kt Mlb
0.0
U3O8
860
0.0
3.2
2.1
-
AUS (NT)
Mlb
(JORC)
na AUS (NT)
Expl
0.0 0.0
60
U3O8 Eqty
* An aboriginal trust holds 2% in tw o of the three granted tenements. Cameco has back in rights on these projects. 'Initial earn in.
Alligator Energy Limited
Uranium
Reserves and Resources/Mineralised MaterialCode for reporting mineral resources - Australian:
PartnerOption
0.8
0.0
Location
AUS (NT)
1.2
6,940
2.40
0.0
0
6,000
10.5
1.60
Project
12.3
Unconformity
100%
Type
Unconformitynone*
U
U none*
100%Caramal
Key Projects
Ownership/ Process
Route
R Sowerby (CEO Exec)
www.alligatorenergy.com.au
Project
Gorrunghar
8.6
0.0
Investment Points
0.9
12.0
7
2.0
Cash backing (Ac/share)
No
Funding from JV partners (A$m)
705
Geology
705
Equity
Classification/
8.0
Tenement costs ($k per year)
Capital rais ings (A$m)
Cut OffU3O8
8.5
0.0
00
10.5
-
0 0
17.5
Land holding ('000 ha)
Mr Robert Sow erby (3.6%), MO U Investments (2.6%)
155.3
-
Major shareholders: Macquarie Bank (11.3%), Lagoon Creek Res. (4.5%), 860
5002,940
Shares on issue (pr end) (m shares)
0.0
Number of shares (m)
Fully diluted (m)
Convertible notes (m)
Options and warrants (m)
17.1
2.8
155.6
176.8
0.0
155.6
11.3
7.08.6
2,000
0 0
12.5
-
5.5
11.8
6.8
Drilling - Other/Diamond (m)
72
Corporate (A$m)
Market capitalisation (undiluted) (A$m)
0 0Drilling - RAB (m)
Funding duration at current burn (years)
0.11
0.0752012F
155.6
1.62
Exploration and evaluation (A$m)
21.3
4.101.60
1.57
AGE.AU7 December 2011
Uranium
Australia (NT)
1.60
Mid exploration
Exchanges: ASX:AGE
Share price (A$)
Capital Profile
52 week range (A$/share)
2.89
to
6481
0.400.37
Exploration/(Expl.+ Corporate) (%) 80
A$ 0.11
Production and Financial Forecasts
2013FDec-11F 2011aSep-11a
AGE is well funded, focused in ARUP, NT - Australia's premier
uranium province. High grade uranium prospects established on
7km trend. Dec '11 drill results at Caramal include 14m @ 0.707%
U3O8. Potential for Ranger-Jabiluka style trend.
Year End: June
Company Comment
Mineralised Material (est., non compliant w ith JORC)
Resources
Ore
0.0
0.0
U3O8
Reserves
Mt
0.0
%
na
Focused on Australia's premier uranium region - Alligator
River Uranium Province (ARUP) - host to 950 mlb U3O8.
Tenements within Arnhem Land, 60 km east of Jabiluka,
and in the same host rocks. 2H11 exploration focus on
three prospects in the eastern part of Tin Camp.
Arnhem Land under-explored due to former government
3 mines uranium policy, previous low uranium prices
and access restrictions by traditional owners.
AGE prospects contain historical high grade uranium
intersections >0.5%. Jabiluka-style setting at Caramal
prospect, with potential for a JORC resource 1H12.
33 drill holes (4,500m) completed 2H11 at Tin Camp.
Caramal Dec '11 results include 18m @ 0.338%
U3O8 and 9m @ 0.327% U3O8.
AGE board and management have extensive uranium
industry experience.
none*
Target
Metal
JV
Total
AUS (NT)
U3O8
ppm
U
none* naU
ExplUnconformity na
100%South Horn
Two Rocks 100%
0.00
0.05
0.10
0.15
0.20
0.25
0.30
Feb
-11
Ma
r-11
Ap
r-1
1
May
-11
Jun
-11
Aug
-11
Sep
-11
Oct
-11
No
v-11
Sh
are
Pri
ce (
$/S
ha
re)
AGE - Alligator Energy Limited
Source: Bloomberg
Overview: AGE listed on the ASX 3rd February 2011, with a focus on uranium exploration in the prolific Alligator River Uranium Province (ARUP) of the Northern Territory (NT), having successfully bid for tenements held by major uranium producer Cameco, in a highly competitive bid process. The project area contains prospects where previous exploration drilling has intersected high grade uranium mineralisation. Mining and Exploration agreements are in place with Traditional Owners. Cameco retains an option to buy back 51% of total resources at 10% of spot price if a deposit >20,000t U3O8 is identified. AGE also holds 11 Exploration Licence Applications (ELAs) in the ARUP totalling 415km2. Alligator River Uranium Province (ARUP): Targets are high grade unconformity style uranium deposits, such as ARUP deposits Ranger orebodies 1 and 3 (multiple pods, 134mlb U3O8), Jabiluka (312mlb U3O8) and Nabarlek (single pod of ~24mlb U3O8). The tenements cover the same units, structural setting and mineralisation as these deposits. Little uranium exploration was undertaken in the ARUP between the 1970’s and the 1990’s due to low U prices and the former 3 mines policy. Tin Camp Creek - (NT; uranium): 275km E of Darwin, purchased from Cameco for A$3m. The tenements include several prospects, the most advanced of which is Caramal, ~60km east of Jabiluka and ~20km south of Nabarlek. 2H11 Caramel 25 holes, 3,200m; South Horn 6 holes, 1000m; Two Rocks 2 holes, 300m. Caramal: Dec ’11 drill results (including CAD11-020 14m @ 0.707% U3O8 from 108m, CAD11-019 18m @ 0.338% U3O8 from 116m) confirms continuity and extends historically defined mineralisation. Historical high grade intersections include 21m @ 0.50% U3O8 and 22.7m @ 0.38% U3O8. Mineralised envelope is now defined over 350m strike, 40m to 80m wide, and 10m to 30m thick, with upside potential beyond this. Suggested similarities with Jabiluka and Ranger in the geological setting, host lithologies and alteration styles. Exploration results in 2011 confirm key structures and host rocks over a 7km trend from Caramal to South Horn and will be the focus of follow up drilling in 2012. Most of the area is under shallow cover (<50m). South Horn (NT; uranium): Drilling is targeted adjacent to the Beatrice Fault, which juxtaposes dolerite and prospective Cahill Formation. Radiometric data highlights elevated uranium responses in the north of the prospect requiring drilling. Historical drilling includes 13m @ 0.21% and 15m @ 0.47% U3O8. Two Rocks (NT, Uranium): Historical exploration defined two small zones of uranium and copper with the best historical intersection of 4m @ 0.82% U3O8. Electromagnetic and radiometric targets representing possible black shales are a priority for 500m of 2H11 drilling. Mamadawerre JV - AGE has negotiated to earn into Cameco EL24992 (contiguous to other AGE prospects) in the ARUP; high quality, early stage targets spending $0.5m and drilling 600m by December 2012. AGE can earn 40% spending $2m in 3 years and 90% spending $10m within 6 years. Cameco retains a 60% claw back right. A 3km anomalous zone is associated with a regional fault. Drilling expected 3Q12. Investment Comment: AGE’s tenements are in one of the world’s premier provinces for high grade uraniumdeposits. Initial exploration is to concentrate on granted tenements with historical high grade intersections, vizCaramal, South Horn and Two Rocks. Share price drivers are drill results and resource definition in an area of historical high grade uranium discoveries. Potential maiden resource 1H12 at Caramal.
Resource Capital Research
December Quarter 2011 Disclaimer and disclosure attached. Copyright© 2011 by Resource Capital Research Pty Ltd. All rights reserved. 12
AGE’s exploration tenements are exclusively in the Alligator River Uranium Province (ARUP, NT), purchased from Cameco (51% claw back), held 100%, and JV (Mamadawerre). ARUP known uranium endowment is 950mlbs of high grade resources (>0.1% U3O8) – includes Ranger and Jabiluka (ERA).
Caramal Project (NT): December ’11 drill results include 14m @ 0.707% U3O8 from 108m (CAD11-20). Drilling 2H11 confirms continuity and extension of historical drill results (1970s). Priority exploration zone
established along 7km corridor - from Caramal to South Horn. Shallow cover – mostly <50m.
Caramal-South Horn Key structures and host rocks defined over 7km trend.
Resource Capital Research
December Quarter 2011 Disclaimer and disclosure attached. Copyright© 2011 by Resource Capital Research Pty Ltd. All rights reserved. 13
Energy and Minerals Australia Limited
0.30
Debt (A$m) - Dec 11F
Enterprise value (A$m)
Avg monthly volume (m)
Cash (A$m) - Dec 11F
Price/Cash (x) Cash (A$m)
Price/Book (x)
Listed company options: Net asset backing (Ac/share)
* Subject to PFS. * Uranium prospective properties only granted and under application. Quarters refer to calendar year.
Reserves
Resources
Mulga Rock Deposits
Ambassador* Inferred
Emperor Inferred
Shogun Inferred
Total
Mineralised Material (est., non compliant with JORC)
Contacts Directors
Mr Mike Fewster
Executive Director
Tel: 61 (0) 8 9389 2700
West Perth, WA, Australia
Analyst: John Wilson
sandstone
Tenement costs ($k per year)
340
0 2,500
-
242
-
0.2
70
0.0
* Includes 10kt U3O8 grading 0.06% in Upper Lignite, 1.2kt grading 0.032% in Low er Lignite and 1.7kt grading 0.024% in sandstone.
242
U
Drilling - Other/Diamond (m) 10,000
sandstone
4.00
2,500
26.4
Process
Status
0.0
Aus (WA)
na
na
0.0
U,Ni,Co Lignitena
Route
na
RIP/ISR
Aus (WA)Early Expl
Development
Early Expl Aus (WA)
387.9
3.7
0.047
24.1
10.00
%
1.68
387.9
Mlb
0.0
25,000
242
7,500
242
4.943.18
Dec-11FSep-11a
0.2
57
0.9
74
2.38 1.74
A$ 0.09
2012F
Production and Financial Forecasts
YEAR END: June
Major drill program planned at Mulga Rock (commencing 4Q11;
20,000m) with a focus on expanding potential ISR amenable,
sandstone-hosted uranium resources at 5 prospects. Potential for
rapid resource expansion at low cost. PFS expected 4Q12/1Q13.
Energy and Minerals Australia Limited
2013F2011a
604
30
Options, warrants, convertible notes (m) Corporate (A$m)
Funding duration at current burn (years)
83
1.4
0.48 0.42
2.000.44
Major shareholders:
Performance Shares* (m)
Fully diluted (m)
Market capitalisation (undiluted) (A$m)
0.0
3.7
Number of shares (m)
35.3
52 week range (A$/share)
Exchanges: ASX:EMA
Capital Profile
Share price (A$) 0.091
388
to
387.9 387.9
48
387.9
EMA.AU
186
Uranium, Base Metals, Rare Metals
Australia (WA)
Development
7 December 2011
Shares on issue (pr end) (m shares)
10.00
Classification
3.1
0.076
Exploration and evaluation (A$m)
Exploration/(Expl.+ Corporate) (%)
20,00015,000
0.0
1.5
5.7
2.5
Drilling - Other/RAB (m)
12.9
Kt
0.3
0.0
2,500
100-200
200
28.4
U3O8 Eqty
0.0
U3O8
Reserves and Resources/Mineralised Material
0.2
0.0
(JORC)
Uranium
59.627.155.4
0.0
200
M. Few ster (73.5%), Acorn Capital (7.6%)
8.9
2.3
0.00
2.9
Capital rais ings (A$m)
0.0
1.1
0.3
100%Mulga Rock Deposits
JV
0
35.3
Cash backing (Ac/share)
8.9
-
Funding from JV partners (A$m) 0.0
www.eama.com.au
M Fewster (Exec)
S Penrose (Non-Exec)
Mulga Rock Deposits (MRD): possible production 2014
(2.6mlbpa), plus by-product revenues base metals (Ni,
Co) and rare metals (Sc, REE) after year 2.
JORC Inferred Resource at MRD is 59.6mlb grading
0.047%-0.059% U3O8, in upper and lower lignite, and
sandstone (June 2010).
Sandstone-hosted uranium could be amenable to low
cost ISR (In Situ Recovery). Exploration Target 7.6kt-
13kt U3O8 grading 0.024 to 0.065% (Prospects 1-3).
Drilling ISR Prospects 1-5; JORC Statement expected
2Q12 for Prospects 1-3.
Scoping Study (Nov '10): 2.6mlbpa U3O8 from 2014-
2025, split 50/50 between ISR and lignite open cut.
Capex A$260m, opex US$23/lb with by-product credits.
Funding in place following $10m convertible note issue
(4Q11) to institutional investors.
RCR valuation: NAV A$120m or A$0.26/share.
P Golding (Non Exec Chair)
4.0
Investment Points
3.0
EMAO
U3O8
0.3
1.3
Code for reporting mineral resources - Australian:
U3O8
Narnoo regional
4.8
Location
100%
U,lignite
Project
Type
2.2
Gunbarrel
100%
100% na
Ownership/
Project Option Metal Partner
ppm
Cut OffOre
Company Comment
0
Land holding ('000 ha)*
0.00
-
U3O8
100%
Equity
0.050
27.6
0.059
Mlb
28.4
12.0
-
Mt
Project
0.00
0.1
Target
59.6
26.4
0.0
100%
Key Projects
4.8
0.00
0.05
0.10
0.15
0.20
0.25
0.30
Dec
-10
Jan
-11
Feb
-11
Mar
-11
May
-11
Jun
-11
Aug
-11
Oct
-11
Sh
are
Pri
ce (
$/S
har
e)
EMA - Energy and Minerals Australia Limited
Source: Bloomberg
Overview: Energy and Minerals Australia listed on the ASX in May ’08. It holds 1,527km2 in granted
tenements in WA, prospective for uranium, precious and base metals, and lignite. Mulga Rock Deposits (WA): 240km NE of Kalgoorlie. Mulga Rock was discovered in 1980 by PNC Exploration (Japan) and developed as a uranium deposit. It is comprised of three known deposits –Ambassador, Emperor and Shogun. Host rocks are sandstones and lignite below a clay cap, at shallow depths (40m to 70m). Aside from uranium, commodities include base metals (nickel, cobalt), scandium and rare earth elements. Current JORC Inferred resource (Jun ’10) is 27.1kt (59.6mlbs) U3O8 grading an average 0.049% at cut-off 100ppm (sandstone) to 200ppm (lignite). The resource is based on uranium-equivalent grades from EMA radiometric data and diamond drilling. An upgrade to Indicated resource will need to address remaining uncertainty with regard to sample integrity during previous drilling (Coffey Mining, June 2010). Three sandstone prospects (Prospects 1-3) within 10km of Ambassador have a combined Exploration Target of 7.6kt to 13kt U3O8 at grades of 0.024% to 0.065% eU3O8 and a further two sandstone prospects have also been found near the Emperor Deposit. Other WA tenements: Narnoo (surrounding the MRD) and Gunbarrel are prospective for MRD-style, calcrete and palaeochannel uranium deposits. Scoping Study (Nov ’10): See following page for a summary of key parameters. Based on production at Ambassador of 12kt U3O8 from 2014-2025, i.e. 1.2ktpa or 2.6mlbs per annum at full production. Assumption is a 50/50 split (600tpa each) between open cut mining of lignite and in situ recovery (ISR) of the sandstone-hosted uranium. Years 1 and 2 would be ISR only; ISR continues to Year 11 and open pit to Year 13. Processing is solvent extraction (SX) for ISR, and acid leach and RIP (resin in pulp) for lignite. Forecast opex is US$23/lb U3O8 after by product credits such as base and rare metals. EMA recently lodged Mining Lease applications and is gearing up for a Pre-Feasibility Study of the MRD, expected to start in 2H11 and finalised 4Q12/1Q13. The PFS will include a field leach trial to test ISR potential(expected 2Q-3Q12), and advanced metallurgical and mineralogical studies of lignite-hosted mineralisation.Uranium recovery from hyper saline leach liquors is being pioneered by ANSTO (for ASX:USA) and confirms the viability of chelating resins for IX (2Q11) – a development that could have significant opex and capex benefits for Mulga Rock (both for ISR and lignite projects). Corporate: EMA raised $10m via the issue of 10.684m convertible notes Oct ’11 to Acorn Capital, Macquarie Bank and Element Resources Fund. Notes have a 2 year term, 10% coupon and conversion price set at an initial $0.18/note. The company is also issuing 59.36m 2 year options with the notes with strike price of $0.22/share. As part of the company restructure Mike Fewster will reduce his holding in EMA to under 45% by Oct ’12. Investment Comment: Based on the Scoping Study, our base case DCF valuation at a long-term U3O8
price of US$60/lb and allowing for risk, we estimate NAV10 is A$120m or A$0.26/share fully diluted. EMA share price catalysts include resolution in the Wardens Court of the Yarri Mining Plaints (listed for hearing Mar ‘12), resource statement expected for ISR Prospects 1-3 2Q12, ongoing project de-risking with PFS results, and reduction of Mike Fewster’s stake in EMA to under 45%.
Resource Capital Research
December Quarter 2011 Disclaimer and disclosure attached. Copyright© 2011 by Resource Capital Research Pty Ltd. All rights reserved. 14
Our NAV valuation for EMA is based on the November 2010 Scoping Study of the Ambassador Deposit at the Mulga Rock Deposits (WA), and RCR’s uranium price assumptions (base case US$60/lb long term,
A$/US$ = 0.84 long term). This gives a target price of A$0.26/share (fully diluted).
ENERGY AND MINERALS AUSTRALIA, VALUATION
Target
Uranium Price (Low) (High)
Resource/Target Valuation Discount A$m A$m A$m
Projects (mlbs) US$/lb for risk
+ Mulga Rock, Ambassador Resource 28.4 2.58 30% 87 37 134
+ Mulga Rock, Emperor and Shogun 31.2 0.53 40% 20 5 93
+ Ambassador Exploration 45.4 0.06 60% 3 2 4
Sub Total 105 110 44 231
+ Cash 8.9 8.9 8.9
+ Tax Losses 8.2 8.2 8.2
- Corporate 6.8 6.8 6.8
Sub Total 10.2 10.2 10.2
EMA NET ASSET VALUE 120 55 241
Capital Structure
Shares 388 388 388
Fully Diluted Shares* 604 604 604
EMA NET ASSET VALUE PER SHARE :A$/share 0.31 0.14 0.62
EMA NET ASSET VALUE DILUTED :A$/share fully diluted 0.26 0.15 0.46
* Includes 30.042m performance shares, 10.68m convertible notes plus options
Target price based on RCR forecast long term uranium price US$60/lb; A$/US$ = 0.84. Low = US$50/lb, High = US$70/lb l. term price.
MULGA ROCKS PROJECT, AMBASSADOR DEPOSIT (based on November 2010 Scoping Study)
Equity
LONG TERM URANIUM PRICE^ :US$/lb 40 50 60 70 80
EXCHANGE RATE :AUUS 0.84 0.84 0.84 0.84 0.84
MULGA ROCKS URANIUM NPV @ 10% NOMINAL* :A$m 100% na 53 125 191 254
MULGA ROCKS URANIUM NPV @ 10% NOMINAL* :US$m 100% na 45 105 161 213
NPV/SHARE :A$/share na 0.14 0.32 0.49 0.65
* Includes a Scoping Study and Inferred Resource project discount of 35% of valuation: 35%
^Uranium contract price forecasts are US$68/lb in 1H11, US$65/lb to 1Q12, US$60/lb to 4Q17, thence long term price indicated.
MULGA ROCKS URANIUM PROJECT KEY ASSUMPTIONS*
RESOURCE ESTIMATES
Mt % Mlbs Kt
Conceptual Uranium Target
Mulga Rocks, Ambassador Resource 27.6 0.047 28.4 12.9
Mulga Rocks, Emperor and Shogun 27.8 0.051 31.2 14.2
Ambassador exploration targets 42.0 0.049 45.4 10.3
Total 97.3 0.049 105 37.4
MINING METHOD ISR (In Situ Recovery) for sandstone; open pit for lignite-hosted uranium and other metals.
PROCESS METHOD Dual front end, and combined product preparation facility
Front end: solvent extraction (SX) for ISR; acid leach and RIP (Resin in Pulp) for lignite
SX and RIP pregnant fluids combined at RIP plant for uranium precipitation
PRODUCTION RATE (U3O8) :tpa 1,200 Study assumes 50/50 ISR and RIP
:mlbspa 2.6
CAPITAL COSTS :A$m 260 Combined ISR and RIP operations
RECOVERY - URANIUM :% 65-82 ISR 65%, RIP 82%. Likely to change with further testing.
OPERATING COSTS :US$/lb 23 Net of by-product credits: base, rare and minor metals, gold
EMA assumes A$600m revenue over life of mine
TAX :% 30
ROYALTY (WA) :% 2.5%, 5% Royalty rate for base metals 2.5%, uranium 5%.
MINE LIFE :Years 12
TARGET COMMISSION DATE : 1Q14
* These figures are preliminary in nature and are intended to provide only a general indication of project potential scale and economic robustness. Further
refinement may result from the Pre-Feasibility Study, which should commence in 2H11 and include ISR borefield trials.
Valuation Sensitivity
Sensitivity
Uranium
Resource Capital Research
December Quarter 2011 Disclaimer and disclosure attached. Copyright© 2011 by Resource Capital Research Pty Ltd. All rights reserved. 15
Energy Resources of Australia Limited*
9.14
Debt (A$m) - Dec 11F
Enterprise value (A$m)
Major shareholders: Rio Tinto (68.39%);
Avg monthly volume (m)
Cash (A$m) - Dec 11F
Price/Cash (x) Drilling - RAB (m)
Price/Book (x)
Listed company options: Land holding ('000 ha)*
*Ranger only. Quarters refer to calendar year.
(JORC); As at 31 Dec '10; + estimated adjustments 4 Aug ERA release.
Jabiluka
Jabiluka
Jabiluka
Ranger Stockpile Stockpile - Measured
Mineralised Material (est.)
* Ranger cut-off grades: 0.02% U3O8 open pit; 0.15% U3O8 underground; 0.02% U3O8 stockplie ore.
Contacts Directors
Status
19.0
16.2
47.3
184.183.7
0.07
184.1
67.7 148.9 148.90.49 0.20
Aus (NT)
Cut Off*
192.7192.7
0.07125.3
4.54
100%
Analyst: John Wilson
Darwin (NT), Australia H. Garnett (Non Exec Dir)
www.energyres.com.au J. Pegler (Non Exec Dir)
Option Type
Reserves and Resources/Mineralised Material
Energy Resources of Australia Ltd
2.8
Route
Project
Partner
na Unconformity acid leach
10.4
Target
0.20
35,000
kt
-
1.7
Cut Off
-
Mt
Ore
7.9
Resources (in addition to reserves)
Ranger Stockpile
Sub total
Reserves
Ranger No. 3 pit
Proved and Probable
-6
0.30
-12
U3O8
0.0%
25
7.9
-
Production
Tel: 61 (0) 3 9283 3628 (RIO) P. Taylor (Non Exec Dir) Jabiluka
Ranger
Project
David Skinner (IR - Rio Tinto) M. Coulter (Non Exec Dir)
Tel: 61 (0) 8 8924 3500 (ERA) R. Atkinson (Director)
Mr Rob Atkinson (CEO) D. Klinger (Chairman)
0.00.0
Ownership/ JV Process
0.00
0.12
100% 0.36Measured and Ind.
Inferred 100% 6.0
Unconformityna
Key Projects
47.3
194.7
0.0
0.10
57.5 126.810.9
48.0 0.04
189.9 418.7
126.80.53
0.02 21.5
0.20
Uranium
0
Market capitalisation (undiluted) (A$m)
EPS (norm) (A¢/share)
Investment Points
0.6
7.1
16.4
Pending Aus (NT)
418.7
36.2
7.4
0.0
15.6 15.6
36.2
87.4
Company Comment
16.2
U3O8
7.9
19.00.21
U3O8
Project
Mlb
8.6
13.8
0.06
0.08100%
100%
%
Classification
-55
23.0
0
12,277
273
%
2009a
764
764
518
1.48
1.35
No
BlackRock Investment Management (5.03%)
55
1.2
622.7
71
2010a 2011F
5,240
393
ERA.AU
0
7 December 2011
Uranium
Australia (NT)
Producer
Exchanges: ASX:ERA
518
to
Equity Production (t)
Share price (A$)
52 week range (A$/share)
241
2012F
3,793
Net Profit (norm) (A$m)
EBIT (A$m)
YEAR END: Dec
25
53
-33
75
Fully diluted (m)
Number of shares (m)
Options and warrants (m)
0Convertible notes (m)
Production and Financial Forecasts Capital Profile
-17
47
143
ERA offers 100% exposure to uranium production and
exploration in Australia (NT).
Capital raising $500m @ A$1.53 Nov '11. Key use of
proceeds: brine concentrator $220m; Ranger 3 Deeps
exploration decline A$120m + evaluation A$55m.
Ranger 3 Deeps exploration decline proceeding.
Timeline: Box cut 3Q12; exploration drilling from June
'13, potential production late 2015.
Ranger operating costs under review: $150m in
cumulative cost reductions identified through 2014.
Additional initiatives likely.
Jabiluka mining lease granted - subject to development
consent from traditional land owners. 12 year mine life.
Ranger Pit No. 3 mining to end 4Q12; treatment of low
gra+de stockpiles to end 4Q16. Potential extension of
low grade processing to 2020 subject to costs.
NPV $2.55/share - outlook remains volatile - increasingly
geared to exploration success.
Major shareholder is Rio Tinto: 68.39%
2.1
26.4%
38.0
5.6
0.6P/CF (x)
30.0
Drilling - Other/Diamond (m)
7.9
CFPS (A¢/share)
ERA is focused on mining, evaluating and exploring its leases in the
highly prospective East Alligator River region (NT). Ranger 3 Deeps
u/g exploration decline approved. ERA increasing exploration effort
for near mine upside, both opencut and u/g.
2,606
-60
2,655 4,061
-87
7
31.7
-8.7-13.3 -30.7
5.1
00
0.0%
6.6
31.7
PER (x)
Yield (%)
6.0
EV/EBITDA (x)
1.0
39Dividends (A¢/share)
5.4%
8
Ranger No. 3 pit Measured and Ind.
4.10
Sub total
100%
Ranger No. 3 pit
Proved and Probable
100%
28.3
7.9
-
11.4
3.4
14,933 21,081
Equity
Code for reporting mineral resources - Australian:
Uranium
Exploration and Evaluation (A$m)
100% Uranium acid leach
Location
-30
Metal
0.0%
5.1
Inferred
Stockpile
100%
100%
A$ 1.48
30,000
29
Mlb
2013F
EqtyU3O8
-
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
Dec
-10
Jan
-11
Feb
-11
Mar
-11
Ap
r-11
Jun
-11
Jul-
11
Aug
-11
Sep
-11
Oct
-11
No
v-11
Sh
are
Pri
ce (
$/S
har
e)
ERA - Energy Resources of Australia Ltd
Source: Bloomberg
Overview: ERA has mined ore and produced uranium oxide at Ranger (NT) since 1981. Ranger has beenthe world's second largest uranium mine with normalised production of ~5.5ktpa of U3O8, equivalent to 12% of global uranium mine supply. ERA also holds title to the Jabiluka deposit 22km north of Ranger. Ranger Pit No. 3: Ranger is an open cut mine scheduled to operate till year end 2012 after which stockpiled ore will be processed through 2016. Post 2016 low grade ore processing is subject to further cost/processing studies. Mining and processing is due to cease under the current lease arrangement Jan 2021, followed by a 5 years rehab to 4Q25. Rehab will commence after pit closure (4Q12) – annual site rehab budget 2013-2025 is ~$52mpa. The provision of $550m is subject to revision 4Q12 on completion of detailed studies. Process water management and treatment: The current water management capital program and brine concentrator DFS is budgeted at A$287m; and $367m if the brine concentrator is approved 1Q12. Ranger 3 Deeps’ exploration decline board approval announced 3Q11 and regulatory approval received.Capital cost A$120m, 35km of drilling. Box cut completion Oct ‘12. Exploration results expected 2014. Ranger 3 Deeps resource target is 15m-20mt containing 30k-40kt U3O8 - defined over 1.2km strike (open to the north) and 250m-500m depth. Resource statement includes 34kt U3O8 grading 0.34% (ind and Inf) associated with Ranger 3 Deeps. A decision on the exploration decline reflects a number of factors, including the attitude of the Mirrar, whose support will be important during the EIS for an underground mine, and mining lease extension beyond 2021. The absence of a clear indication in advance by the Mirrar adds to ERA’s project risk in committing to the exploration decline. Exploration: ERA holds a strategic land position in the prospective Alligator Rivers region (NT), one of the world’s most prospective uranium districts - cumulative exploration budget in the wider Ranger project area is a cumulative $40m over 2012-2014. Current drill targets include Georgetown and Ranger 18 East. Jabiluka: The project remains on long term care and maintenance, and will not proceed without the consent of the traditional owners - the Mirrar. All regulatory permits are granted (some may need to be reviewed). We model mine production to commence by 2020, subject to approval. Investment Comment: ERA’s share price is expected to remain volatile reflecting Ranger production risk and growing reliance on exploration success. RCR NPV is $2.55/share (LT uranium price US$60/lb, LT AUD 0.84). Major capital raising Nov ’11: $500m at $1.53/share added 327m new shares to the 191m shares on issue and was fully supported by major shareholder Rio Tinto. Share price catalysts in the next 12 months hinge on exploration success. Midterm catalysts include potential for an underground mine at Ranger 3 Deeps (development decision 2014) and extension of low grade ore treatment beyond 2016. Risk factors include water management, rehab costs (4Q12) and potential for a further capital raising in 2014/15. Reduced earnings outlook reflect higher depreciation charges on diminished ore reserve base.
Resource Capital Research
December Quarter 2011 Disclaimer and disclosure attached. Copyright© 2011 by Resource Capital Research Pty Ltd. All rights reserved. 16
Energy Resources of Australia Ltd
A SSUM P T ION S 2009 a 2010a 2011F 2012F 20 13F F IN A N C IA L R A T IOS 2009a 2010a 20 11F 2012F 2013FA$/US$ 0.80 0.92 1.0 3 1.00 1.00
Uranium Price - Spot (US$/lb) 46 47 56 54 55 Net debt/equity (%) -33% -25% - 8 2 % -95% -89%
Uranium Price - Contract (US$/lb) 66 61 6 7 65 65 Net debt/ net debt + equity (%) -50% -33% - 4 4 2 % -2060% -775%
Uranium Price Realised (US$/lb) 51 48 59 57 53 Current rat io (x) 3.1 3.4 13 .2 15.5 15.5
EBIT/ interest (x) 35 5 - 2 0 -2
Debt /operat ing cashf low (%) 0% 0% na 0% 0%
EQUIT Y P R OD UC T ION Explorat ion/total overhead (%) 68% 76% 59% 72% 71%
Ranger Product ion (t) 5,240 3,793 2 ,6 0 6 4,061 2,655 EV/EBITDA (x) 1.7 5.6 11.4 2.8 5.1
Jabiluka Product ion (t) 0 0 0 0 0 M arket cap/net cash (x) 3.0 4.1 1.2 1.0 1.1
ERA Equity Product ion U3O8 (t ) 5,240 3,793 2 ,6 0 6 4,061 2,655 M arket cap/book (x) 0.8 0.8 0 .6 0.6 0.6
Cash Costs (US$/lb) 17.87 41.51 6 8 .3 8 20.21 17.93
P R OF IT A N D LOSS (A $ m) F IN A N C IA L SEN S IT IVIT IESRevenues 781 586 4 8 4 508 311
Operat ing costs -218 -352 - 3 6 0 -157 -91 % Change in EPS for a 10% increase in:
Depreciat ion/amort isat ion -67 -61 - 12 7 -265 -206
Explorat ion and evaluat ion -30 -38 - 17 -32 -32 AUD/USD -64% 136% 33%
Corporate -14 -12 - 12 -13 -13 Uranium Price 31% -141% -40%
Other -59 -48 - 2 8 -35 -25
EB IT 3 9 3 75 - 6 0 7 - 55
Finance costs 11 16 2 8 32 32 % Change in NPV for a 10% increase in forecast minelife
Operat ing p ro f it / loss 3 8 2 59 - 8 9 - 2 5 - 8 7 commodity assumptions for:
Tax -109 -12 55 -5 0 B ase + 10 %
M inorit ies 0 0 0 0 0 A $/ shar eA $/ share %
N et p r o f it / loss 2 73 4 7 - 3 3 - 3 0 - 8 7 Uranium Price 2.61 4.61 77%
Net other 0 0 - 9 9 0 0
Net prof it / loss (reported) 273 47 - 13 3 -30 -87
B A LA N C E SH EET ( A $ m) VA LUA T ION (A $ m ) Q4 11
C ash and deposit s 2 54 18 8 6 2 3 72 8 6 76
Total current assets 449 412 759 864 812 A ssumpt ions B ase " W hat if "
PP&E 4 70 54 0 76 8 6 55 6 2 5 Long Term Contract Uranium Price (from 2018) :US$/ lb 6 0 70
Total non-current assets 910 1011 113 3 1021 991 Long Term AUUS 0 .8 4 0.84
Total assets 1359 1423 18 9 2 1885 1803 Pro ject s
Total current liabilit ies 145 122 57 56 47 Ranger 100% NPV@10% US$3.65/ lb 12 8 950
Reclamation reserves 199 300 53 4 534 534 Jabiluka - probability factor 40% 100% NPV@10% US$3.63/ lb 54 1 1002
Long t erm debt 0 0 0 0 0 R esources
Total non-current liabilit ies 247 351 53 4 534 534 Ranger 100% 255.7 mlb US$2.00/ lb 511 818
Total liabilit ies 393 472 59 1 590 581 Jabiluka - probability factor 40% 100% 163.0 mlb US$0.64/ lb 10 4 215
Equit y 9 6 7 9 51 13 0 1 12 9 5 12 2 2 Explorat ion 55 85
A sset s
Tot al d eb t 0 0 0 0 0 Cash and deposits 6 2 3 623
Net debt -254 -188 -623 -728 -676 Rehabilitat ion Fund 0 0
Average shares (fully diluted) (m) 191 191 2 72 518 518 Other 0 0
Liab il it ies
F LOW OF F UN D S (A $ m) Debt 0 0
EB ITD A 4 6 0 13 6 6 7 2 72 151 Corporate - 8 0 -80
Cash f low from operat ing act ivit ies Reclaimation reserve - 53 4 -534
Operat ing surplus 560 224 111 321 189 N et A sset s 13 4 9 3 0 79
Corporate -14 -12 - 12 -13 -13
Net f inancing cost -1 -6 - 2 0 0 0 Fully Diluted Shares (m) 518 518
Net tax paid -132 -75 - 4 6 -5 0 N et asset s/ share ( A $/ share) 2 .6 1 5.9 5
Net explorat ion paid -30 -38 - 2 3 -32 -32
Other non cash items -134 -51 - 2 4 18 20
N et cash f rom operat ing act ivit ies 2 4 9 4 2 - 14 2 8 9 16 5 Valuat ion/Reserve lb :US$/lb 6 .15 14.05
Cash f low from invest ing act ivit ies Valuat ion/Reserve & Resource lb :US$/lb 1.8 8 4.29
Capital expenditure -37 -45 - 13 0 -153 -176
Other non cash items 0 0 0 0 0
N et cash f rom invest ing act ivit ies - 3 7 - 4 5 - 13 0 - 153 - 176 OWN ER Share %Cash f low from f inancing act ivit ies
Net proceeds from issue of shares 0 0 50 0 0 0 Rio Tinto 68
Dividends paid -65 -63 0 0 0
Net proceeds from borrowings 0 0 - 13 0 0
N et cash f rom f inancing act ivit ies - 6 5 - 6 3 4 8 7 0 0
Net change in cash 147 -66 3 4 4 136 -11 R anger Product ion Forecast R ange
Current operat ions including Pit 3 (ending end of 2012) and excludes Ranger 3 Deeps.
P R OD UC T ION ST A T IST IC S
R anger 10 0 %
Ore Treated (kt) 2268 2400 158 9 2600 2600
Head Grade (%) 0.26 0.19 0 .2 0 0.18 0.11
Recovery (%) 88 87 8 9 88 89
Recovered grade (%) 0.23 0.17 0 .16 0.16 0.10
U3O8 Produced (t) 5240 3793 2 6 0 6 4061 2655
Equit y Product ion ( t ) 52 4 0 3 79 3 2 6 0 6 4 0 6 1 2 6 55
C ash C ost s ( U S$/ lb , est .) 17.9 4 2 3 .14 2 9 .2 9 2 1.0 2 18 .11
D IR EC T OR 'S IN T ER EST S SharesJab iluka 10 0 %
Ore Treated (kt) 0 0 0 0 0
Head Grade (%) 0.00 0.00 0 .0 0 0.00 0.00
Recovery (%) 0 0 0 0 0
Recovered grade (%) 0.00 0.00 0 .0 0 0.00 0.00
U3O8 Produced (t) 0 0 0 0 0
Equit y Product ion ( t ) 0 0 0 0 0
C ash C ost s ( U S$/ lb ) 0 .0 0 0 .0 0 0 .0 0 0 .0 0 0 .0 0
Product ion Costs ($/t) 0.00 0.00 0 .0 0 0.00 0.00
Source: ERA
Year YearYEAR END: Dec
Resource Capital Research
December Quarter 2011 Disclaimer and disclosure attached. Copyright© 2011 by Resource Capital Research Pty Ltd. All rights reserved. 17
Hathor Exploration Limited
5.10
Debt (C$m) - Dec 11F
Enterprise value (C$m)
Avg monthly volume (m)
Cash (C$m) - Dec 11F
Price/Cash (x) Cash (C$m)
Price/Book (x)
Company options : Net asset backing (Cc/share)
^ Uranium prospective tenements only, both held and under application. Quarters refer to calendar year.
Reserves and Resources/Mineralised Material
^ 500ppm cut-off based on open pit; 4000ppm based on underground.
Contacts Directors
24.2
0.343
Code for reporting mineral resources - Canada (NI43-101). Date: November 2010 (West); May 2011 (East Zone).
500 0.0 0.0 0.0
T otal High G rade (W est) 500
0.336
Ind and Inf 100% 58.00.556 500 26.3
3.6
Ind and Inf 100%
0.31
100% 0.095 11.60
0.48 500
11.0
Inferred 100%
1.6 3.6
Ind and Inf 24.2
100%
Inferred 100%
10.68 500
0.037 13.07 500 4.8
West Zone - High Grade
10.5
0.48
0.00
nana
- High Grade
0.0
100%
- Low Grade
www.hathor.ca
Vancouver, Canada
Tel: 604-684-6707
President, CEO & Director
West Zone - Low Grade Indicated
Dr. Michael Gunning
Key Projects
Metal
100%
%
Ore
U3O8
58.0
Eqty
0.0
Mlb
Historical (est., non compliant w ith NI43-101)
Can (SK)
Can (SK)
(TSX.V:FDC)
Advanced Expl.
Early Expl.
Partner LocationStatus
Early Expl.na
Project
Early Expl.
(TSX.V:TXM)
Can (AB)Hatchet Lake
Can (SK)Early Expl.nana
kt
13.7
10.5
6.2 13.7
40000
0.0
102
1.00
Mlb
0.1
-
0
0.0
Henday Lake
ppm
Cut Off^
Company Comment
- -
0.0
Geology
21
Can (SK)
12.3
12
Project
M Gunning (CEO, Pres) Option
JV/Ownership/
139.2
Uranium
Vedette Lake
Contingent obligations (m shares)
Project
B Ainsworth (Exec Dir)
94
11.6
Exploration budget ~C$16mpa - 100% Athabasca Basin.
Pipeline of high potential Athabasca Basin properties
contiguous or near major, high-grade uranium mines of
Areva and Cameco.
Midwest NE: Roughrider - exceptional high grade
resource (11.6% U3O8); high met. recovery (98%); low
arsenic.
Positive PEA Sep '11. Production potential 1Q20;
5mlbspa U3O8, capex US$540m, opex US$14.40/lb.
Far East - 3rd discovery zone along 700m resistivity
anomaly. Initial resource expected Dec '11.
Good regional infrastructure. Pro-uranium mining
jurisdiction with ~25% of global uranium mine production.
0
Grade
Exploration/(Expl.+ Corporate) (%)
26.1
4.4
No
Cash backing (Cc/share)
Investment Points
Fully diluted (m)
Market capitalisation (undiluted) (C$m)
0.0
128
0.6
Shares on issue (pr end) (m shares)
1.00
25000
102102
18.6
C$ 4.70
7 December 2011
0
44545
23.0
599.8
Major shareholders:
15000
19
HAT.CN
Capital Profile
52 week range (C$/share) to
Production and Financial Forecasts
2013FDec-11F 2011aSep-11a 2012F
Options and warrants (m)
Share price (C$)
Number of shares (m)
Uranium, Gold, Silver
Canada (AB,SK, NT)
Advanced Exploration
Exchanges: TSX:HAT
YEAR END: Mar4.70
1.50
0.25
0.0
599.8
3.16
127.6
-
Land holding ('000 ha)^
1.00
4.73
102
78
0.25
1.2
0.00
21.1
8.00
Total Resources
Funding duration at current burn (years)
20.8
0Drilling - RAB (m)
26.5
102
Indicated
2.80
128
23.8
21
-
Capital raisings (C$m)
18.0
23.0
Drilling - Other/Diamond (m)
128
72
Exploration and evaluation (C$m)
85
0
2.50
0.215.7
20.00
8.36
Uranium
Equity
Classification/
15.68
4.33
RIO’s determination to secure Hathor reflects HAT’s strategic value – a
high grade (11.6% U3O8), low unit opex (US$14.40/lb) development
asset, with good near term exploration upside; and a high quality
exploration pipeline in one of the world’s premier uranium districts.
Corporate (C$m)
4.00 16.00
M Glynn
J Currie
0.0
Mt
0.007
na
Cap.
T otal Low G rade ( W est)
J Malone (Non Exec Ch.)
Hathor Exploration Limited
128113
0
7162
0 0
0.0 0.0 0.0
Uranium na na
Route
Can (SK)Wollas ton Northeast
1.3
Funding from JV partners, est. (C$m)
18
0
Tenement costs ($k per year)
Reserves
0.058
na na
na
60/70%
100%
naUranium
Early Expl.49%
Analyst: John Wilson 100%
nana
Uranium
na
naUranium
Uranium
Russell Lake
1.6 3.6
Midwest Northeast
Process
East Zone
100%
30.1
Plant
30.1
Resources - Roughrider
Inferred 100% 0.118 11.58 4,000 13.7
3.6500
0.00
1.00
2.00
3.00
4.00
5.00
6.00
De
c-1
0
Ja
n-1
1
Fe
b-1
1
Ma
r-1
1
Ap
r-1
1
Ju
n-1
1
Jul-
11
Au
g-1
1
Se
p-1
1
Oct
-11
No
v-1
1
Sh
are
Pri
ce
($
/Sh
are
)
HAT - Hathor Exploration Limited
Source: Bloomberg
Overview: HAT’s main uranium projects are in the Athabasca Basin, Canada. It is actively exploring 4 projects in the eastern part of the Basin, an area that accounts for ~25% of world uranium mine production. Midwest Northeast: (NE Athabasca Basin, depth to unconformity 210m). Located along strike and 4km NE of the Midwest uranium orebody of AREVA, Denison Mines and OURD Canada (41.7mlbs U3O8 grading 5.47% U3O8).and Midwest A. Excellent regional infrastructure, 8.5km from regional service town of Points North. Roughrider (West Zone): Robust, high grade deposit. The high grade zone of the resource (Ind and Inf) is 95,000t grading 11.6% U3O8 for 24mlbs SRK, Nov ’10). Mineralogy is predominantly pitchblende. The resource envelope is ~220m strike by 100m wide; mineral zones are up to 55-60m thick. The deposit is low in toxic elements (eg arsenic, selenium) making it desirable for blending through a nearby mill (25km to Cameco’s under-utilized Rabbit Lake Mill) – the synergistic rationale for CCO’s bid, saving ~C$170m (HAT C$1.22/share) in plant construction cost. Roughrider East Zone: located on land, 200m east of West Zone. Resource announced May ’11 of 30.1mlbs U3O8 grading 11.58%. Best intercepts 63.5m @ 7.75% U3O8 (announced Oct ’10) including an interval of 17.5m grading 24.3% and assays up to 87.2%. Identified strike length ~220m. It is part of a 700m resistivity anomaly that extends along the Midwest uranium trend and which hosts a third mineralised system at Far East Zone. Initial resource at Far East expected Dec ’11 (subject to new owners) – open to south and east –ultimate resource size could exceed East Zone (30mlbs). Preliminary Economic Assessment (PEA, SRK, Sep ’11): Confirms project is economically robust: Annual production 5mlbspa U3O8, mill rate 70ktpa, ROM feed grade 3.3%, recovery 97.7%, LOM 10.5 years, capex US$540m (includes contingency, working capital and supporting infrastructure), opex US$14.40/lb. Assumes underground mining, 53mlbs U3O8 mineable resource (West Zone and East Zone). RCR NPV C$422m (US$60/lb U3O8 price, CAUS long term xrate 0.84, 10% r/i, and assuming 28mlb resource at Far East). Investment Comment: With Cameco allowing its bid for HAT to lapse, RIO has now successfully acquired the company (>70% acceptance 30 Nov, and offer extended till 12 Dec) with its revised bid of C$4.70 share, all cash offer, valuing HAT at C$654m (US$631m) on a fully diluted basis. The bid equates to an EV ratio (adjusted for cash) of US$10.48/lb U3O8. Cameco’s inital hostile bid was C$3.75/share August 29. RIO’s determination to secure HAT reflects HAT’s strategic value – a high grade (11.6% U3O8), low unit opex (US$14.40/lb) development asset, with good near term exploration upside on the Roughrider and Midwest trends, and a pipeline of high quality exploration projects in one of the world’s premier uranium districts.
Resource Capital Research
December Quarter 2011 Disclaimer and disclosure attached. Copyright© 2011 by Resource Capital Research Pty Ltd. All rights reserved. 18
Base
Resource Base NAV Adjusted
Equity Val'n NAV Factor Value
(%) (US$/lb) (C$m) (%) (C$m)
Assumptions
LT Realised Uranium Price : US$/lb 60 60 40 50 70 80
LT Exchange Rate: CAUS 0.84 0.84 0.84 0.84 0.84 0.84
Projects
Roughrider project : NPV @10% 100% 3.57 272 70% 190 83 99 283 374
Resources and Exploration
Roughrider (resource +28mlbs) : NPV @10% 100% 3.72 150 70% 105 36 84 127 149
Other 60 60 40 50 70 80
Sub-total Exploration 210 165 76 134 197 229
Assets/Other
+ Cash 23 23 23 23 23 23
+ Tax losses 9 9 9 9 9 9
+ Strategic potential (plant redundancy - CCO synergy) 170 170 170 170 170 170
Liabilities
- Debt 0 0 0 0 0 0
- Corporate 7 7 7 7 7 7
- BFS, reserve drilling, permitting 35 35 35 35 35 35
HAT Net Assets 642 515 320 393 639 763
Fully diluted shares (m) 139.2 139.2 139.2 139.2 139.2 139.2
Cash on Option Conversion 26.2 26.2 26.2 26.2 26.2 26.2
HAT Net Asset Value per share : C$/share 5.03 4.04 2.50 3.08 5.01 5.98
HAT Net Asset Value Diluted : C$/share dil 4.80 3.89 2.48 3.01 4.78 5.67
Sensitivity of Net Asset Value to Equity Raising Price:
HAT Net Asset Value (assuming C$300m capex raised through share issue at C$5.00) 4.22 3.24 3.61 4.85 5.47
HAT Net Asset Value (assuming C$300m capex raised through share issue at C$4.00) 3.93 3.02 3.36 4.51 5.08
HAT Net Asset Value (assuming C$300m capex raised through share issue at C$3.00) 3.52 2.70 3.01 4.04 4.55
RESOURCE ESTIMATES
Uranium Resource Grade Uranium
% Cutoff Mlbs
PEA (and RCR) model assumptions Roughrider - West (Ind) 1.06 15.8
Roughrider - West (Inf) 1.06 9.3
Roughrider - East (Inf) 1.06 28.2
Total 53.3
MINING METHOD UNDERGROUND - raisebore, ground freezing, main access via decline
PROCESS METHOD GRIND, ACID LEACH, RESIN-IN-PULP
RESOURCE CONVERSION :% 91% (Inferred and Indicated - assumed in PEA economic model. Assumes 1.06% cut-off.)
TONNAGE DILUTION :% 30%
WASTE DILUTION GRADE :% 0
BASE CASE ASSUMPTIONS
PRODUCTION RATE :ktpa 70.4
AVERAGE HEAD GRADE - U3O8 :% 3.3
HIGH GRADE :% na
RECOVERY - URANIUM :% 97.7
URANIUM PLANT CAPACITY :mlbspa 5.00 Assumes expanded resource base (not included in base case NPV)
CAPITAL COSTS :US$m 540
OPERATING COSTS: :US$/lb 14.40 Assumes Mining C$421/t milled; Processing C$480/t milled; G&A C$136/t milled.
FIXED ROYALTY :% 4
TIERED ROYALTY :% 10 Tier Two rate - uranium price range US$45/lb to US$60/lb U3O8. PEA index 1.3056.
Tier One: 6% (US$30/lb to US$45/lb); Tier Three: 15% (>US$60/lb).
CAPITAL TAX SURCHARGE :% 3
INCOME TAX :% 27 Federal income tax: 15%, Provincial income tax: 12%. Payable after capital recovery.
MINE LIFE :Years 10.5
COMMISSION PROJECT : 1Q 2020 24 month ramp-up. Assumes 4 years BFS/permits/financing; +4 years construction.
These figures are preliminary in nature and are intended to provide only a general indication of project scale and economic robustness. Considerable
refinement may result from subsequent feasibility studies.
58 7.2
PEA capex C$567m. Includes working capital, closure costs, 25% contingency,
and supporting infrastructure.
732 3.3
286 2.5
388 3.3
ROUGHRIDER URANIUM PROJECT KEY ASSUMPTIONS (derived from PEA - SRK, September 2011)
Tonnes
kt % U3O8
HATHOR EXPLORATION LIMITED VALUATION
Adjusted
Uranium Price Sensitivity
(C$m)
Resource Capital Research
December Quarter 2011 Disclaimer and disclosure attached. Copyright© 2011 by Resource Capital Research Pty Ltd. All rights reserved. 19
Laramide Resources Limited
2.87
Debt (C$m) - Dec 11F
Enterprise value (C$m)
Major shareholders: Not disclosed.
Avg monthly volume (m)
Cash + s-t inv. (C$m)
Price/Cash (x)
Price/Book (x) Net asset backing (Cc/share)
Company options: Quarters refer to calendar year.
h
La Sal Historical
Melrich Historical
Los Ochos Historical
Sub Total
Total LAM
Contacts Directors
P Mullens (Dir)
11.3
8.40.098 200 3.8
0.079 200 11.3
8.4
5.1
West'land (Redtree) Inf. and Ind. 100% 17.3 0.084 200
Uranium
ProcessTarget
Sandstone
US (UT)
Grade
Project
Reserves
14.6
Various
naUraniumLa Sal
23.6
4.7
Ownership/ JV/
Early-Mid Explvarious
Sandstone
100%
100%
% ppmMt
Sandstone
Unconfomity na
2.1
3.9
0.31
Cut Off
Kt
0.0
Laramide Resources Limited
Reserves and Resources/Mineralised Material
0
5,000
700
Option Metal
2.7
700
1.2 1.2
0
700
Ore
4.7
32.3
0.1
0.0
68
0
0.0
68
0
Tenement costs ($k per year)
49.5
700
Advanced Exploration/Development Stage
Exchanges: TSX:LAM
LAM's flagship project, Westmoreland (QLD) will be re-rated if the
LNP wins the QLD state election (1H12) - an outcome polls indicate
is highly likely. The company is also poised to reap a substantial
royalty as URI's Section 8 (USA) nears production (expected 2013).
68
0.40
0.2
Drilling - Other/Diamond (m)
0.0
0.61 to
Share price (C$)
Number of shares (m)
0.73
52 week range (C$/share)
Market capitalisation (undiluted) (C$m)
74.6
Sep-11a
0
0.4
0
2011F2010aDec-11F
0
5.03
0
7668
69
Production and Financial Forecasts
2012F
1.0
70
5.60
2.29
YEAR END: Dec
1.0
1.0
Uranium na
Cu/Au/U
40.6
0.6
royalty
Capital Profile
4.7
Uranium Aus
convent'l
0.4
100%
1.0
Route
52.0
0.24
0.085
4.7
Type
100%
Adv. Expl.
Adv. Expl.convent'l
1.0
1.2 2.7
Uranium
Australia, USA
US (NM)
LocationStatus
Project
67.2
Key Projects
67.1
Partner
6.29
1.62
78
LAM.CN
Shares on issue (pr end) (m shares)
1.40
0.60Corporate (C$m)
Funding duration at current burn (years)
70
62.4
10.410.4
Drilling - RAB (m)
Exploration/(Expl.+ Corporate) (%)
1.42
0
Exploration and evaluation, est. (C$m)
Equity
52.0
133.9
100%
Mineralised Material (est., non NI 43-101 compliant)
100%
na BFS US (NM)
Adv. Expl.acid leach
ISL
Capital raisings (C$m)
0
0.0
La Jara Mesa
27.7
Inf. and Ind.
Inf. and Ind.
West'land (Huarabagoo) 100%
Analyst: John Wilson
Laramide Resources Ltd
Tel: +1 416 599 7363
S Patterson (Dir)
www.laramide.com P Wilkens (Dir)
Toronto, Canada
131.8
na Unconformity
100%
Aus (QLD)Westmoreland
URI Royalty
La Jara Mesa
M Henderson (Dir)
Regional QLD/NT
J Booth (Non Exec Chair)
Exploration and development budget C$5m in 2011.
Westmoreland (QLD) resource: 52mlbs U3O8 at 0.085%
(to 60m depth). Good local and regional exploration
upside. Production potential 2015.
Westmoreland: 11 year mine life, producing 3mlbspa
U3O8 (GRD Minproc scoping study, Apr '07). Revised
scoping study expected 1Q12.
Large pipeline of drill prospects in the NT. Early stage,
high value unconformity targets. Drilling expected 2012.
High value URI ISL production royalty at Churchrock
(NM). BFS expected 1Q12. Key production permits
already in place (NRC and state). Production potential
2H13.
Permitting La Sal (UT). Potential for a small underground
mine (<0.5mlbspa U3O8) to be in production 2012.
QLD election (by June 2012). Early polls suggest LNP
victory. LNP policy supports uranium mining in QLD.
Marc Henderson (President)
7 December 2011
Uranium (U3O8)
Funding from JV partners (C$m)
128.3
No
Investment Points
Fully diluted (m)
6.8
1.8
0
0
1.2
Land holding ('000 ha)
67.9
0.0
Cash + s-t Inv.(C$m) - Dec 11F
Options and warrants (m)
50
2
Convertible notes (m)
32.3
28.3 62.4
0.0
West'land (Junnagunna) Inf. and Ind. 100%
0.0
0.3
Company Comment
Cash +s-t inv. backing (Cc/share)
Eqty
MlbMlb
122.6
0.0
Resources
Code for reporting mineral resources - Canadian:
0.0
7.8
131.8
0.0
Westmoreland - total
ProjectClassification
1.8
C$ 0.73
3.2
0
10.2
10.0
700
79
2.40
0.6
0
6.5
(NI 43-101)
0.2
0.00
0.00.0
0.00
0.50
1.00
1.50
2.00
2.50
3.00
Dec
-10
Jan
-11
Feb
-11
Ma
r-11
Ap
r-1
1
Jun
-11
Jul-
11
Aug
-11
Sep
-11
Oct
-11
No
v-11
Sh
are
Pri
ce (
$/S
har
e)
LAM - Laramide Resources Limited
Source: Bloomberg
Overview: LAM is a Toronto-based resource company focused on uranium. The company’s strategy is to acquire historic, advanced exploration projects in safe jurisdictions. It has a number of near term, production visible projects; viz La Sal - 2012 (Utah, small scale, toll treatment); URI royalty - 2013 (New Mexico, production royalty), a significant value driver with royalty rates ranging from 13-24%; La Jara Mesa - 2014 (NM, underground mine), 10.4mlb @ 0.24% U3O8 resource plus exploration upside; and key project is Westmoreland – 2015 (QLD, large resource, strategic exploration upside). LAM also holds equity interests in a number of listed gold and uranium companies (September 30 market value C$9.7m). Westmoreland (QLD): The GRD Minproc scoping study (Apr ’07) indicates 3 open pits to be mined sequentially over 11 years, conventional acid leach plant of 1.5mtpa capacity producing 3mlbspa U3O8, plant recovery 90.6%, capex US$214m (assumes contract mining), and opex ranging from US$37.95/t (U$19/lb) to US$50.40/t (US$25/lb). Pit optimisation uranium price US$50/lb. Previously, RIO completed a pre-feasibility study (mid '90's) for an open cut, acid leach project. An updated scoping study (Jacobs Engineering) is expected 1Q12 with likely expanded production rate on account of the increased resource (Apr ’09) – 80% occurs within 50m of surface, and enhanced metallurgical recoveries of 97% (ANSTO Jul ’11) . Production potential 2015 (assuming LNP election victory 1H12). LAM also has 4 regional, strategic JV exploration projects prospective large scale, unconformity style uranium targets in QLD and the NT, much of which is little explored. URI royalty (NM, USA): RCR site visit 3Q11 to Section 8. LAM acquired a production based royalty portfolio (Dec ’06) on 3 separate parcels of land in the Churchrock area, in the prolific Grants Mineral District, viz Section 8, Section 17, and Mancos. The properties are owned by URI (NASDAQ: URRE). The project is permitted (NRC and state) for ISL production, and a BFS is expected 1Q12, incorporating Section 8 in which LAM holds royalty interest over 6.5mlbs U3O8 (mineralised material non JORC compliant). Litigation is expected to be resolved quickly, potentially 4Q11. Production potential 2H13. Investment Comment: LAM’s share price has potential for significant re-rating in the next 6 months with anticipated victory of an LNP government in QLD, revised Westmoreland scoping study (1Q12), and a favourable BFS at Section 8 (URI, 1Q12). Westmoreland (QLD) is expected to be a significant beneficiary of a change in government at the next state election (on or before 16 June 2012). A September Newspoll indicated a landslide victory to the LNP – a party supportive of uranium mining in QLD. The URI royalty is a significant value driver for LAM. Reactivation of NRC licence Oct ’11 saw URRE’s share price rise by ~100%. While it has since drifted back down on broader equity market concerns, the significant potential value of the status/progress of Section 8 has largely been overlooked by the market in relation to LAM.RCR’s 12 month share price target for LAM is $2.00, assuming equity markets have stabilized.
Resource Capital Research
December Quarter 2011 Disclaimer and disclosure attached. Copyright© 2011 by Resource Capital Research Pty Ltd. All rights reserved. 20
Resource Capital Research
December Quarter 2011 Disclaimer and disclosure attached. Copyright© 2011 by Resource Capital Research Pty Ltd. All rights reserved. 21
Paladin Energy Limited*
5.61
Debt* (US$m) - Dec 11F
Enterprise value (A$m)
Avg monthly volume (m)
Cash (US$m) - Dec 11F
Price/Cash (x) Drilling - RAB (m)
Price/Book (x)
Listed company options: Land holding ('000 ha)
* Convertible notes due Mar '13 (US$325m) and Nov '15 (US$300m). ^ EBITDA Quarters refer to calendar year. AU/US:
Code for reporting mineral resources Aust/Canadian: (JORC/NI 43-101)
Resources (includes proved and probable reserves)
Langer Heinrich M.Ind.Inf../calcrete 250
Kayelekera M.Ind.Inf../sndst-rf 300
Aurora (Mich. +5 CMB dep) M,Ind,Inf /IOCGU *
Valhalla (Mt Isa Uranium) M,Ind,Inf./Ir ox vein 230/250
250
120
Bigrlyi Ind. & Inf./sndst 500
Angela/Pamela 300
Other (6 projects)^
Sub total
Mineralised Material (est., non JORC compliant)
Oobagooma Historic/sndst.
* Cut-off: 200ppm open cut; 500ppm underground.
^ Manyingee (24mlbs U3O8), Andersons (4.7mlbs), Watta (3.8mlbs), Bikini (11.5mlbs), Duke Batman (3.1mlbs), Honey Pot (3.96mlbs)
Contacts Directors
P. Baily (Non-Ex Dir)
P. Donkin (Non-Ex Dir)
Angela and Pamela
Aust (WA)
Adv. Expl.
Aust (QLD)
Aust (NT)
Adv. Expl.
Adv. Expl.
Malawi
Manyingee
Production Namibiaalk. leach
1500 acid leachKayelekera
Langer Heinrich
85%
-
79.0
23.4
Aust (WA)
Key Projects
Malawi Gov.
174
0.02
0
61.3
9.0
11
103
0.00
A$ 1.70
Mlb
174
2013F
0.07
13
Mt Isa Uranium 91% U
na Can (NL)
155.1
42
23.0
Grade
Kt
15
0.055
%
70.3
na
42
Adv. Expl.
100%
6.0
Mr John Borshoff (MD/CEO)
Dividends (US$/share)
Michelin + Jacques L.
Oobagooma 100%
100%
Scoping Studyna
na
U convention'l
ISR
100%
8.2 0.12
50% 10.7
Takardeit 11 11
-
Proved and Prob.
257
Inferred
0.28
60,000
6
0
14.3
Eqty
-
Cut Off
13.0
Project Option
Sub total
U
100%
Ownership/
Skal (S+E, Mt Isa Uranium) Ind,Inf/ Ir ox vein
155.1
23.4
Mlb
308
12.2
100,000
17.6
-
60,000
15.4
National Nom (9.15%), JP Morgan (8.48%)
Major shareholders: CDS & Co (19.95%), HSBC Cus. Nom. Aust (16.13%)
1.1
No
Reserves
PDN is 100% focused on uranium. Exploration budget
~US$14m FY12.
LHM: Stage 3 (5.2mlbspa) production ramp-up underway.
LHM: Stage 4 expansion: to 8.7mlbspa + possible
1.3mlbspa heap leach; LOM opex ~US$25-30/lb
U3O8; onsite capex +US$350m. DFS expected 4Q11.
Kayelekera (KM) Sept Q production 395klbs vs 825klb/q
nameplate. Impacted by 6 weeks lost production.
Cost optimisation study and initiatives underway company
wide: KM mining contract restructured. Target corporate
cost cuts of 10-15% in FY12.
Extensive pipeline of exploration projects globally. Initiative
underway to attract JV partners for Australian projects.
PDN NPV $2.67/share (US$60/lb uranium, spot AUD1.02).
We expect a modest maiden profit FY12 as ramp-up and
expansions continue at LHM and KM.
242.9
Investment Points
Uranium (U3O8)
Reserves and Resources/Mineralised Material
Market capitalisation (undiluted) (A$m)
Fully diluted (m) 952
PER (x)
675.9
CFPS (US$/share)^
PDN.AU
8
109
Options and warrants (m)
Uranium
Convertible notes + incentive shares (m)
Australia (WA,QLD,NT), Namibia, Malawi, Niger, Canada (CMB)
Producer
7 December 2011
Number of shares (m)
Exchanges: ASX:PDN; TSX:PDN; NSX (Namibia):PDN
1.70
Capital Profile
2009a1.1152 week range (A$/share) to
YEAR END: June
Production and Financial Forecasts
Share price (A$)
835
2082.9
1420.2
nmf
Net Profit (norm) (US$m)
EBIT (US$m)
Equity Production (kt)
EPS (norm) (US$/share)
24P/CF (x)
Yield (%)
Exploration and evaluation (US$m)
EV/EBITDA (x)
0.00
P+P and s tockpile.
-
Geology
0.14
Drilling - Other/Diamond (m)
0.07
nmf
0
0.00
nmf
0.059
(ppm)
250
0.098
2011a
0.05
-43.6
0
nmf
10.6
- -
Classification/
Langer Heinrich
Mt
Ore
0.055
14.1
1.02
109.2
3212
0.00
nmf
-
17.1
59.7
Kayelekera 400
Paladin Energy Ltd
300.5
-0.78
1245
-2.2
-45.6
Project
2435
2010a
3047
-0.11-0.07
-82.3
3.4
1898
2012F
144.5
120.1
100% 10.9
100%
0
-
105,000
nmf
105,000
S. Llewelyn (Non-Ex Dir)
R. Crabb (Non-Ex Chair)
(ktpa)
100% 1500
MetalPaladin Resources Ltd J. Borshoff (MD)
Tel: 61 (0) 8 9381 4366
Analyst: John Wilson
Perth, Australia D. Shumka (Non-Ex Dir)
www.paladinenergy.com.au
4.8
9.6
0.021
6.6
19.0
0.128
0.09 62.1
39.3
0.077
131.7 131.7
0.00
24
-
Company Comment
PDN is making renewed efforts to achieve production targets at LHM
and KM and has initiated company wide cost cutting studies and
initiatives. This is a timely move - maximising operating asset returns
to achieve growth in a time of heightened global market uncertainty.
51 49
22
9
22 22
0.052
91%
69.3
3839
61.5 148.0
0.076
0.16
100%
Equity
23.1
529
21
567
U na
ProjectProcess
Partner
na
100%
91% 12.7
24.6
42.1% 7.5
100%
51.9
JV
137 137
87 79
22.0 22
Status Location
Plant
Production
ISR
Route
10.0350
convention'lnaCCO
na
U
U
na
0.13 14.0 31 15Inf./Sandstone
SMM
U
convention'l
0.00
1.00
2.00
3.00
4.00
5.00
6.00
Dec
-10
Jan
-11
Feb
-11
Mar
-11
May
-11
Jun
-11
Jul-
11
Aug
-11
Sep
-11
Oct
-11
No
v-11
Sh
are
Pri
ce (
$/S
har
e)
PDN - Paladin Energy Ltd
Source: Bloomberg
Overview: Paladin Energy Ltd is an Australian company listed on the ASX and TSX. It is a mid tier uranium producer with two mines in production. PDN holds 19.98% stake in Deep Yellow (ASX:DYL). RCR conducted a site visit to Langer Heinrich Feb ‘11. Langer Heinrich Mine: Sept Q production 849klb U3O8 (Stage 2 nameplate production 925klb/q; 3.7mlbpa U3O8). C1 opex increased to US$32/lb 3Q11 due to stronger Namibian dollar and lower production with Stage 3 tie in; compares with US$28/lb FY11. Stage 3 expansion commissioning commenced (front end 2Q11) - production target 5.2mlbspa U3O8 by year end and assumes mill throughput head grade of 0.079% U3O8. Stage 4 potential expansion to 8.7mlbspa U3O8 (+92% over Stage 3) ex ROM (8mtpa) grading ~0.053% U3O8; and possible additional production of 1.3mlbspa from low grade material – cut-off and process not yet defined, though potential heap leach. Stage 4 capex ~US$400m; opex US$25-30/lb; heap leach capex ~US$50m, opex <US$35/lb. BFS for Stage 4 expected 4Q11 - potential production ramp up from 3Q13 – however, management flagged it “will not waste a good ore body” on sub-par returns – suggesting IRR may be below the hurdle rate. LHM reserves stated using US$60/lb U3O8. Kayelekera: Sept Q production of 395klbs U3O8 remains below nameplate (825klbs) due to ongoing debottlenecking issues, 3 week remediation shutdown and 3 week plant upgrade tie in. Ramp-up commenced Apr ’09 and nameplate production of 3.3mlbpa U3O8 is anticipated 2012 with ongoing plant debottlenecking. Plant upgrade brought forward to 3Q11 (from 4Q11), in part to facilitate debottlenecking of the front end (crusher and conveyors). Optimised production 3.8mlbspa planned for late 2012. Forecast opex ~US$30/lb C1 costs US$40/lb 3Q11, down from US$50/lb FY11. Pit design used US$30/lb U3O8. Isa Uranium JV: (IUJV, QLD, PDN 90.95%). Valhalla and Skal (IOCGU deposits). PDN managed regional resources stand at 128mlb U3O8. 2011 drilling budget for resource expansion: 40,000m, US$10m; DFS to commence 4Q11. Development potential post 2015. Investment Comment: Our NAV for PDN is A$2.67/share at spot AUD/USD 1.02 (market long term uranium price US$60/lb, 10% discount rate). We expect positive results from the company wide cost optimisation study and initiatives, as well as renewed efforts to achieve production targets through 2012. PDN’s share price is highly leveraged to improved operating performance and should benefit from sector fundamentals that look positive midterm. The share price is up ~50% to A$1.70 from its 12 month low of A$1.11 Oct 4. Placement to institutions Oct '11 raised A$68m @ A$1.20/share. Newmont retains a 6.7% stake in PDN. PDN, as an unaligned producer, remains a strategic acquisition target.
Resource Capital Research
December Quarter 2011 Disclaimer and disclosure attached. Copyright© 2011 by Resource Capital Research Pty Ltd. All rights reserved. 22
Paladin Energy Ltd
A SSUM P T ION S 2009a 2010a 2011a 2012F 2013F F IN A N C IA L R A T IOS 2009a 2010a 2011a 2012F 2013F
A$/US$ 0.75 0.88 1.0 0 1.01 1.00
Uranium Price - Spot (US$/lb) 51 44 57 53 55 Net debt/mkt equit y (%) 36% 27% 4 2 % 30% 37%
Uranium Price - Contract (US$/lb) 71 61 6 6 65 65 Net debt/ net debt + mkt equity (%) 27% 21% 3 0 % 23% 27%
Uranium Price Realised (US$/ lb) 64 54 55 57 59 Current rat io (x) 2.0 4.3 4 .4 7.5 6.1
EBIT/interest (x) 0 0 - 1 1 3
Debt/operating cashflow (%) na na na 783% 374%
EQUIT Y P R OD UC T ION Exploration/total overhead (%) 26% 20% 5% 5% 4%
Langer Heinrich Production (t) 1226 1521 159 9 2005 2503 EV/EBITDA (x) nmf nmf nmf 16.4 9.4
Kayelekera Production (t) 18 378 8 3 6 1042 1336 M arket cap/net cash (x) -2.7 -3.7 - 2 .4 -3.3 -2.7
PDN Equity Production U3O8 (t) 1245 1898 2 4 3 5 3047 3839 M arket cap/book (x) 2.3 1.5 1.0 1.1 1.0PDN Equity Production U3O8 (mlbs) 2.7 4.2 5.4 6.7 8.5
Cash Costs (US$/lb) 19.31 31.45 3 3 .54 37.40 27.90
P R OF IT A N D LOSS (US$ m) F IN A N C IA L SEN SIT IV IT IES
Revenues 115 214 2 71 456 542
Operating costs -53 -132 - 18 0 -251 -236 % Change in EPS for a 10% increase in:
Depreciat ion/amortisation -9 -14 - 3 6 -76 -88
Exploration -12 -9 - 3 -3 -2 AUD/USD 0% 0% 0%
Corporate -35 -39 - 54 -52 -52 Uranium Price -68% 69% 242%
Other 8 17 4 1 12 16
EBIT - 2 3 - 4 4 6 2 14 8
Interest 31 21 6 2 53 53 % Change in NPV for a 10% increase in forecast minelife
Oper at ing pro f it / loss - 3 3 - 18 - 10 5 8 9 5 commodity assumptions for:
Tax 237 -29 17 7 -31 B ase + 10 %
M inorit ies -96 -1 - 6 1 3 US$/ sh US$/ sh %
N et pro f it / loss 3 0 1 - 4 6 - 8 2 14 6 1 AUD/USD 2.71 3.24 -20%
Net other -781 -7 * 0 -133 0 Uranium Price 2.71 3.24 20%
Net profit / loss (reported) -480 -53 - 8 2 -119 61
* Net adjust ment f or abnormal impairment charges
B A LA N C E SH EET (US$ m) VA LUA T ION (US$ m) Q4 11
Cash and depo sit s 6 6 3 4 8 117 2 53 16 9
Total current assets 182 516 3 2 9 451 368 NPV A ssump t io ns B ase "W hat if "
PP&E 4 58 54 1 6 3 0 4 6 7 6 2 1 Long Term Realised Uranium Price :US$/ lb 59 70
Total non-current assets 1282 1442 2 0 74 1881 2049 Currency A$/US$ 1.0 2 0.84
Total assets 1464 1958 2 4 0 4 2333 2416 Pro ject s
Total current liabilit ies 91 121 119 111 111 Langer Heinrich + phase III, IV 100% NPV@10% 9 9 9 .2 1348.9
Reclamation reserves 0 0 0 0 0 Kayelekera 85% NPV@10% 4 52 .9 588.7
Lo ng t er m d ebt 572 6 8 2 6 76 6 8 3 6 9 6 Resources
Total non-current liabilit ies 741 880 9 3 0 913 926 Kayelekera 85% 38.0 mlb US$7.00/lb 2 2 6 .2 294.1
Total liabilit ies 832 1001 10 4 9 1023 1037 M anyingee 100% 24.0 mlb US$3.75/lb 9 0 .0 117.0
Equi t y 6 3 1 9 56 13 55 13 0 9 13 8 0 Oobagooma 100% 21.9 mlb US$3.00/lb 6 5.7 85.4
Isa Uranium (100%; 81.9% SM M ) various 117.7 mlb US$6.00/lb 70 6 .2 918.1
T ot al d ebt 58 6 73 0 72 0 6 8 3 6 9 6 Angela and Pamela 50% 26.4 mlb US$5.00/lb 6 6 .0 89.1
Net debt 520 382 6 0 2 430 526 M ichelin + 5 CM B deposits 100% 136.8 mlb US$2.00/lb 2 73 .6 369.4
Average shares (fully diluted) (m) 618 697 752 836 851 Other + Exploration 12 5.0 168.8
Asset s
F LOW OF F UN D S (US$ m) Cash and deposits 2 4 2 .9 242.9
EBIT DA 7 18 - 8 13 8 2 3 6 Other 4 2 .0 56.7
Cash f low from operating act ivit ies Liabil it ies
Operating surplus 59 71 8 7 198 297 Debt - 6 75.9 -675.9
Corporate -35 -39 - 54 -52 -52 Corporate - 16 8 .3 -168.3
Net interest paid -40 -35 - 4 2 -60 -62 Other liabilit ies - 19 0 .8 -230.0
Net tax paid 0 -16 - 3 4 -12 -15 Reclaimation reserve 0 .0 0.0
Net exploration paid -12 -17 - 18 -14 -13 Net A sset s 2 2 55 3 2 0 5
Other non cash items 8 2 - 4 2 27 30 Shares (m) 9 52 952
N et cash f r om op erat ing act ivit ies - 2 0 - 3 5 - 10 2 8 7 18 6 Net N PV / share ( US$/ share) 2 .71 3 .71
Cash f low from invest ing activit ies Net N PV / share ( A$/ share) 2 .6 6 4 .4 1
Capital expenditure -237 -170 - 12 9 -67 -242 Valuation/Reserve lb :US$/lb 14 .53 20.66
Other non cash items -33 -9 - 3 -14 -13 Valuation/Reserve & Resource lb :US$/lb 4 .2 6 6.06
N et cash f r om invest ing act ivi t ies - 2 70 - 18 0 - 13 3 - 8 1 - 2 55
Cash f low from f inancing activit ies OWN ER Shares Net proceeds from issue of shares 6 375 1 68 0
Dividends paid 0 0 0 0 0
Net proceeds from borrowings -13 120 0 76 -14
N et cash f r om f inancing act ivi t ies - 7 4 9 5 1 14 4 - 14
Net change in cash -297 281 - 2 3 3 150 -84
P R OD UC T ION ST A T IST IC S
Lang er Heinrich 10 0 %
Ore Treated (kt) 1608 1995 2 2 4 0 2890 3600
Head Grade (%) 0.09 0.10 0 .0 9 0.08 0.08
Recovery (%) 80 80 8 0 84 88
Recovered grade (%) 0.08 0.08 0 .0 7 0.07 0.07
U3O8 Produced (t ) 1206 1521 159 9 2005 2503
Equi t y Pro duct io n ( t ) 12 0 6 152 1 159 9 2 0 0 5 2 50 3
C ash Co st s ( U S$/ lb ) 2 6 .3 4 2 5.9 1 2 8 .0 0 2 6 .8 1 2 2 .54
Production Costs (US$/t ) 43.62 43.54 4 4 .0 6 41.01 34.55
Kayelekera 8 5% D IR EC T OR 'S IN T ER EST S
Ore Treated (kt) 18 571 10 2 3 1212 1620 (m shares) %
Head Grade (%) 0.11 0.13 0 .15 0.12 0.11 M r. John Borshoff 21.5 2.6%
Recovery (%) 80 59 72 83 89
Recovered grade (%) 0.09 0.08 0 .10 0.10 0.10
U3O8 Produced (t ) 16 444 9 8 4 1225 1572
Equi t y Pro duct io n ( t ) 13 3 78 8 3 6 10 4 2 13 3 6
C ash Co st s ( U S$/ lb ) na na 50 .0 0 3 6 .0 6 3 2 .2 4
Production Costs (US$/t ) na na 116 .6 9 80.42 68.97
Shares
Year YearYEAR END: June
M anaging Director
Resource Capital Research
December Quarter 2011 Disclaimer and disclosure attached. Copyright© 2011 by Resource Capital Research Pty Ltd. All rights reserved. 23
Peninsula Energy Limited
0.16
Debt (A$m) - Dec 11F
Enterprise value (A$m)
Avg monthly volume (m)
Cash (A$m) - Dec 11F
. Cash (A$m)
Price/Book (x)
Listed company options :* Net asset backing (Ac/share)
* PENOA (3c, exp 30 June 2012); PENOC (3c, exp 31 December 2015). *Uranium prospective tenements only, both held and under application. Quarters refer to calendar year.
^ Ross Permit Area includes a Vanadium resource (MII): 2.33mlbs V2O
5 grading 0.0196%.
Contacts Directors
Mr. John (Gus) Simpson
Executive Chairman
Tel: 61 (0) 8 9380 9920
Subiaco, WA, Australia
Total Lance*
0.4
74%
J Simpson (Chairman)
M James (Exec Dir)
W Grigor (Non Exec Dir)
PENOA, PENOC
Karoo - Site 45
Historic
15.2
2.8
20.3
0.6
41.4
15.2
0.0
Karoo - Site 22
Status
4.8
Aus (WA)
US (WY)
100%
M Barton (Non Exec Dir)
www.pel.net.au A Gillman (Tech Dir)Raki Raki
Analyst: John Wilson
Mineralised Material (est., non compliant w ith JORC)
Karoo - Site 29
74% S'stoneKaroo Projects
50%
Western Australia
Lance Uranium Projects
acid
ISR100% na
Project
Historic
6.9
200
U3O8 Eq
20.3
Mid Expl. S. Africa
PFS
6.1
0
8.2
3.6
Project
1.1
19.6
Reserves and Resources/Mineralised Material
41.4
U3O8
2.1
Lance - Ross
Focused on uranium - CY11 exploration and evaluation
budget A$11m.
Lance: PFS (Lyntek, Jul '10) potential production
2012/13, 1.5mlbspa U3O8; C1 opex US$19.88/lb or
US$13.52/lb with Vn credit; initial capex US$53m (total
US$79.2m).
Lance mine permits and EIS lodged Dec '10. Extended
DFS expected 1H12. Construction 2H12. LOM 13 years.
Deep disposal test well permit granted (WDEQ, Apr '11).
Additional Lance resource target is 95-145mlb
U3O8 grading 0.036-0.05%.
Final NRC permits granted 3Q11 to 2 further companies
with WY ISR projects (TSX: URE, URZ).
Karoo Project: shallow, high grade uranium and moly
confirmed (1H11) from surface to 80m (Site 22).
2012 Karoo resource target 30mlb U3O8.
Lance - Barber
Reserves
100%
Ore
0.111
U (Mo)
74%
Type
Roll front
various
JV
Option
Ownership/
Key Projects
Process
RoutePartner
BEE
Mid Expl.
Early Expl.
9.2
16.5
Location
1.3
0.3
Target
* Inferred Resource is 30.2mlbs grading 0.042% U3O
8. Measured and Indicated Resources are 11.25mlbs U
3O
8 grading 0.045%.
3.7
0
5.4 2000.050
2.2
0.0
0.041
Historic
19.6
Tenement costs ($k per year)
Land holding ('000 ha)*
Drilling - RAB (m)
0.146
M,I,I
Company Comment
2.0
126,423
eU3O8
Fully diluted (m)
79.0
Au
4.0
Investment Points
1.1
Metal
100%
2635.5
47,500
2635.5
-
%
Cut Off
ppm
0.0
29.3
4.1
Market capitalisation (undiluted) (A$m)
Major shareholders: Pala Investment Holdings (13.96%) 272
-
U na
U
Options and warrants (m)
0.037
0.035
Performance shares (m)
YEAR END: June
22.7
Funding duration at current burn (years)
Drilling - Other/Diamond (m)
52 week range (A$/share) to
7 December 2011
Share price (A$)
Number of shares (m) 2135
1.0
Project
Kt
PEN.AU
894
Uranium, Molybdenum, Gold
USA (WY), South Africa, Australia (WA), Fiji
Prefeasibility Study
Exchanges: ASX:PEN
Capital Profile
2135.5
25.4
Equity
(JORC)
23.6
0.9
0
79.0
51,423
0
74
0.0
Shares on issue (pr end) (m shares)
3048
2093.4
19 Exploration/(Expl.+ Corporate) (%)
Mt
0
198
2.2
Exploration and evaluation (A$m)
1.6
61
2012F
5.15
142,000
0
70
1.6
0
6770
2013FDec-11F 2011a
1.30 5.101.25
Peninsula Energy Limited
Lance ISR project (WY, USA; 100% PEN) economic prospects bolstered
by expanding/upgraded resource base (+25% June '11) and ongoing
advancement of key permitting milestones. Expanded DFS expected
1H12; production potential 2012/13.
11.80 8.003.52
Corporate (A$m)
3.00
Sep-11a
A$ 0.037
Production and Financial Forecasts
2135.5
272 272
0
50,000
10.52
5.20
3.4
-
Capital rais ings (A$m)
Funding from JV partners (A$m)
1.1
3.3
Cash backing (Ac/share)
0
1.3
35.6
272
-
0
26.7
272
0.1
-
40.1
0.0
Resources
3.3
Lance - Ross Permit Area^ 100%
44.5
Code for reporting mineral resources - Australian:
Classification
MlbMlb
na
Fiji
Uranium
ASX:GPR
eU3O8
18.8
na na
0.076
74%
0.0
M,I,I
200
0.041
M,I,I
2.7 5.9 5.9
eU3O8
0.042
0.00
0.02
0.04
0.06
0.08
0.10
0.12
0.14
0.16
De
c-1
0
Jan
-11
Feb-1
1
Mar-
11
May
-11
Jun
-11
Ju
l-11
Au
g-1
1
Se
p-1
1
Oc
t-11
No
v-1
1
Sh
are
Pri
ce (
$/S
hare
)
PEN - Peninsula Energy Limited
Source: Bloomberg
Overview: Formerly Peninsula Minerals (name change Nov ’10), PEN is listed on the ASX and has operated under the current management team since 2007 when key US projects were vended into the company. Lance Uranium Project (USA, WY): Located in the northeast part of the Powder River Basin comprises 13 project areas (12,000 ha) including the Ross and Barber prospects - targeting roll front style uranium. The project area was discovered in the ‘70’s by JV partners Nuclear Dynamics and Bethlehem Steel (NuBeth) and drilled between 1970 and 1979. NuBeth drilled 5000 holes (912,000m). PEN acquired the project 2H07 with a database of drilling and pilot plant data (from Ur-Energy). 22 roll fronts have been defined over a combined strike length of 305km (190 miles). Initial forward sales contract (Feb '11): 1.15mlbs U3O8, priced at ~US$70/lb, 7 year term. PFS (Lyntek) July 2010 confirms development potential for satellite production and a centralised processing plant at Ross from 4Q12 with capacity to produce up to 3mlbspa U3O8, commencing at 1.5mlbpa. Initial production is targeted from Ross and Barber. The PFS vanadium circuit is subject to further confirmation testwork. Lance project resource target is 95 to 145mlbs U3O8 – in addition to current JORC resource. PEN drilling 2H11 is aimed at uplifting resources at Barber to support feed to the processing plant, extension drilling to the north of Ross (Emerson, Berger Hill, Area 05) and establishing additional resource areas outside Ross-Barber. The Expanded DFS (announced Sep ’11) will incorporate the full Ross-Barber resource (41.4mlbs U3O8) compared to the initial DFS resource at Ross (8.95mlbs (M&I)) and is expected to be released 1H12 in conjunction with anticipated receipt of final permits. Extending the scope of the DFS will enable PEN to optimize project design, LOM and economic value prior to raising development capital. The outlook for permitting in Wyoming is positive: Uranium One (TSX:UUU) received its NRC operating license (Oct ’10) for Moore Ranch; and 2 other companies received final NRC permits recently: Uranerz (TSX:URZ, July ’11) and Ur-Energy (TSX:URE, Aug ‘11). URZ has commenced construction of its Nichols Ranch ISR project in Wyoming and expects first production 2H12. Karoo Project (South Africa): Located in the Karoo Basin of the Western, Eastern and Northern Cape Provinces; tenements comprise 6 project areas (198,000ha) with defined U-Mo mineralisation across stacked sandstone units identified from surface to 40m. The region hosts Areva’s historic Ryst Kuil uranium mine (est. 40mlbs @ 0.1% U3O8). Three of PEN’s project areas host historic resources drilled by JCI and Union Carbide (~1,300 holes) in 1970-80’s. PEN has an exploration target of 90 – 150mlbs U3O8 grading 0.07 to 0.14%. Drill results (1H11) confirm high grade uranium and molybdenum from surface to ~75m depth: intercepts include 6.6ft @ 0.36% U3O8 and 0.26% Mo; and 6.6ft @ 0.31% U3O8 and 0.25% Mo. Results being assessed 2H11. Interim resource target 30mlbs grading 0.07 to 0.14% U3O8 expected late 2012. Investment Comment: PEN base case NPV, with full de-risking of Lance post commissioning is ~A$0.09/share fully diluted (see adjacent table; assumes US$60/lb realised uranium price, AUD/USD 0.84 and 10% discount rate). Base case sensitivities: AUD/USD 1.00: NPV ~A$0.08/share; No vanadium credit: NPV ~A$0.07/share. PEN remains well positioned to receive Lance Project permits near term with production visibility 2012/13.
Resource Capital Research
December Quarter 2011 Disclaimer and disclosure attached. Copyright© 2011 by Resource Capital Research Pty Ltd. All rights reserved. 24
Base
Resource Base NPV Adjusted
Equity Val'n NPV Factor Value
(%) (US$/lb) (A$m) (%) (A$m)
Assumptions
Realised Uranium Price : US$/lb 50 50 40 60 70 80
Exchange rate: AUUS 0.84 0.84 0.84 0.84 0.84 0.84
Projects
Lance project : NPV @10% 100% 7.09 158 75% 119 80 154 190 226
Resources and Exploration
Lance (resource est. +100%) : NPV @10% 100% 3.73 83 75% 63 46 78 93 108
Karoo/other 10 10 5 7 12 15
Sub-total Exploration 93 73 51 85 105 123
Assets
+ Cash 20 20 20 20 20 20
+ Tax Losses 8 8 8 8 8 8
Liabilities
- Debt 0 0 0 0 0 0
- Corporate 42 42 42 42 42 42
- Reclamation 0 0 0 0 0 0
PEN Net Assets 237 177 117 225 280 334
Fully diluted shares (m) 3048.2 3048.2 3048.2 3048.2 3048.2 3048.2
Cash on Option Conversion 28.0 28.0 28.0 28.0 28.0 28.0
PEN Net Asset Value per share : A$/share 0.11 0.083 0.055 0.105 0.131 0.157
PEN Net Asset Value Diluted : A$/share dil 0.087 0.067 0.048 0.083 0.101 0.119
Sensitivity of Net Asset Value to Equity Raising Price:
PEN Net Asset Value (assuming A$40m capex raised through share issue at A$0.07) 0.068 0.051 0.081 0.096 0.111
PEN Net Asset Value (assuming A$40m capex raised through share issue at A$0.06) 0.066 0.050 0.079 0.094 0.108
PEN Net Asset Value (assuming A$40m capex raised through share issue at A$0.05) 0.064 0.048 0.076 0.091 0.105
RESOURCE ESTIMATES
Uranium Resource Grade Uranium
Cutoff Mlbs
Resource (M,I,I) Lance 200ppm 41.4 (as at June 2011)
RCR modelling assumptions Lance 200ppm 18.8
MINING METHOD IN-SITU RECOVERY (ISR)
PROCESS METHOD CENTRALISED URANIUM PLANT
1. Ion exchange and vanadium circuit
2. Potential satellite facilities
RESOURCE CONVERSION :% 40-60% (Inferred to Indicated or better)
TONNAGE DILUTION :% na
GRADE UPLIFT :% 6
BASE CASE ASSUMPTIONS
PRODUCTION RATE :tpa na
AVERAGE HEAD GRADE - U3O8 :% na
HIGH GRADE :% na
RECOVERY - URANIUM :% 76 PFS: 80% recovery in-situ; then 95% plant recovery
URANIUM PLANT CAPACITY :mlbspa 3.00 Assumes expanded resource base (not included in base case NPV)
INITIAL URANIUM PRODUCTION :mlbspa 1.50 Production rate based on PFS resources
VANADIUM PRODUCTION :mlbspa 1.20
CAPITAL COSTS - INITIAL DEVELOPMENT :US$m 53
CAPITAL COSTS - TOTAL :US$m 79
OPERATING COSTS: (C1) :US$/lb 19.88
less by-product credit :US$/lb 6.36 PFS assumes vanadium production of 1.2mlbspa; price US$7.50/lb.
(C2) :US$/lb 21.42
(C3) :US$/lb 30.02
TAX :% 30
ROYALTY :% 6
MINE LIFE :Years 13 Years
COMMISSION PROJECT : 4Q 2012 36 month ramp-up.
These figures are preliminary in nature and are intended to provide only a general indication of project scale and economic robustness. Considerable
refinement may result from subsequent feasibility studies, expected to be completed in 1H12.
Includes sustaning capex of US$13.5m and US$2m for permitting and land
acquisition.
44.5 0.041
18.5 0.046
LANCE URANIUM PROJECT KEY ASSUMPTIONS (derived from PEN PFS (Lyntek) - July 2010)
Tonnes
Mt % U3O8
PFS includes vanadium circuit: production ratio V2O5:U3O8 0.8:1.
Cogema's Crowe Butte project recovers vanadium through IX circuit.
PENINSULA ENERGY LIMITED VALUATION
Adjusted
Uranium Price Sensitivity
(A$m)
Resource Capital Research
December Quarter 2011 Disclaimer and disclosure attached. Copyright© 2011 by Resource Capital Research Pty Ltd. All rights reserved. 25
Toro Energy Limited
0.17
Debt (A$m) - Dec 11F
Enterprise value (A$m)
Avg monthly volume (m)
Cash (A$m) - Dec 11F
Price/Cash (x) Cash (A$m)
Price/Book (x)
Listed company options: Net asset backing (Ac/share)
^ Uranium tenements held or applied for
Reserves
Resources
Wiluna: L. Way & C'pede Meas Ind & Inf.
Millipede Ind and Inf
Dawson-Hinkler Well Inferred
Nowthanna^ Inferred
Mineralised Material (est., non compliant with JORC)
^ Toro ow ns 100% of tw o tenements w hich comprise the major portion of the Now thanna deposit – Toro’s resource show n here.
Contacts Directors
Mr Greg Hall
Managing Director
Tel: 61 (0) 8 8132 5600
Norwood, SA, Australia D. Carter (Non Exec Dir)
A Coles (Non Exec Dir)
10.5 10.5
Cameco Unc+S'stone
Route
na
Calc/Alask25% na
100% Alk. LeachCalcretenone
Analyst: John Wilson
100% uranium focus. Expl. + Eval. budget ~A$15m pa.
Wiluna Project and regional resources increased to
50.1mlbs U3O8 grading 434ppm (200ppm cut-off) - up
32% through organic growth and acquisition.
State and Federal government approvals expected 1H12.
BFS expected 2H12. Production potential 4Q13.
Wiluna improved economic parameters (Nov '11): Plant
throughput 1.3mtpa , 1.8mlbpa U3O8, capex A$280m,
opex US$33/lb, mill recovery 85%, LOM 14 years.
NPV breakeven US$58/lb U3O8, AUD 0.84, 10% r/i - on
first 10 years of operation. ~US$50/lb with LOM extension.
Theseus Project (WA): potential ISR. Exploration Target
22m to 44mlbs U3O8 grading 400-500ppm. Maiden
resource expected 1H12.
HoA for Northern Minerals (ASX:NTU) to explore for HREE
(and other non U minerals) on TOE's Tanami properties.
NTU to spend $4m over 3 years to earn initial 51%.
Cashed-up OZL could bankroll Australian/overseas
www.toroenergy.com.au
G. Hall (MD)
J. Nitschke (Non Exec Dir)
P. Lester (Non Exec Dir)
E Smyth (Non Ex. Ch'man) JV /
Option Metal
16.3
U3O8
5.4
Investment Points
0.9
No
Type
Cash backing (Ac/share)
00
U3O8Project
29.7
Project
52.3
11.3
3.4
11.7
Mlb
0.043
100% 11.9 0.040
Mt
0.0
Uranium
Code for reporting mineral resources - Australian:
Classification U3O8
1.1
Capital rais ings (A$m)
0
9.0
0
Company Comment
Equity % ppm
U3O8
Reserves and Resources/Mineralised Material(JORC)
Kt
U DYL
U
28
Fully diluted (m)
Ore
77
-
-0.50.5
3,668
-
34,500
965.4
1,000 1,000
9.8
16.318.5
1.9
9.9
1.7
Drilling - RAB (m) 24,847
-
965.4
5,000
965.4
250
5,500
Tenement costs ($k per year)
Land holding ('000 ha) ^
87.8
1014
HSBC Nominees (1.5%), Allarrow Pty Ltd (1.0%)
0.0
Junket capitalisation (undiluted) (A$m)
Major shareholders: OZ Minerals Ltd (42.5%), ANZ Nominees (2.3%),
1.10Corporate (A$m)
Dec-11F
1.20
Convertible notes (m)
0.09
0.0752 week range (A$/share)
TOE.AU
39
Uranium
Australia (WA,NT,SA), Namibia
BFS and Exploration
Exchanges: ASX:TOE
Capital Profile
to
Number of shares (m) 975
7 December 2011
Share price (A$)
Shares on issue (pr end) (m shares)
Funding from JV partners (A$m)
Drilling - RC/Sonic/Diamond (m)87.8
0 Exploration/(Expl.+ Corporate) (%)
Funding duration at current burn (years)
Options and warrants (m)
965.4
3.4
77
YEAR END: June
83
3.75
Sep-11a
Exploration and evaluation (A$m) 5.78
2.6
2012F
Toro Energy Limited
Wiluna Project and regional resources (TOE 100%) increased 32%
to 50.1mlbs U3O8 (Nov '11). BFS expected 2H12. Production
potential 4Q13. Exciting Theseus (WA) discovery - potential large
ISR - could be a second project for TOE midterm.
A$ 0.09
Production and Financial Forecasts
2013F2011a
15.50
3,668
15.0015.03
4.503.53
81
1.6
4.40
77
840
4,6903,668 3,668
-
0.00.0
21.3100%
100%
Key Projects
Ownership/
U
100%
Wiluna
none
13.1
Early Expl.na
0.0
Target
9.0
Palaeo/IOCG
Partner
22.7
0.031
Cut Off
Process
Status
Project
10.90.051 200
200 4.1
200 4.7
0.0
Early Expl. Aus (SA)
0.0
23.9
0.0
U
Theseus (Lake Mackay)
Namibia
Birrindudu 50%
50.150.1
NamibiaEarly Expl.
0.0
BFS Aus (WA)
Total Resources
Mlb
Eqty
0.0
23.9
Aus (WA)
Location
9.0
-10.3
Quarters refer to calendar year.
965.4
48,000
0.0
250
0.0
-
0
-1.4
12.1
6.6100% 6.0 0.050 200 3.0 6.60.00
0.02
0.04
0.06
0.08
0.10
0.12
0.14
0.16
0.18
Dec
-10
Jan
-11
Feb
-11
Mar
-11
May
-11
Jun
-11
Jul-
11
Au
g-1
1
Se
p-1
1
Oct
-11
No
v-11
Sh
are
Pri
ce (
$/S
har
e)
TOE - Toro Energy Limited
Source: Bloomberg
Overview: TOE listed on the ASX in March ‘06 and is a pacesetter in advancing calcrete style uranium projects in Australia. Wiluna is at BFS stage and could be WA’s first new uranium producing project. Aspirational Targets: TOE has ambitious growth targets: 100mlb U3O8 resources by 2015 (currently 50mlb) and production of 5.5mlbpa by 2020 – targets may be achieved with backing from OZ Minerals. Wiluna Regional Resource Consolidation: TOE has been expanding its regional resource base through strategic acquisitions/alliances to great effect. Upgraded resources (Oct ’11) reflect a 32% increase to 50.1mlbs grading 434ppm U3O8 and have more than doubled from 24mlbs 4Q10. The Wiluna Project –Lake Way and Centipede deposits - contains 23.94mlbs grading 510ppm U3O8 of which 58% is in the Measured and Indicated categories. Acquisitions have been at ~A$1/lb, cheap by international benchmarks and could add over 6 years to the Wiluna project’s mine life. Wiluna BFS: The improved economic parameters released Nov ’11 supplements the PFS (Sep ’08) and subsequently the Optimisation Study (Sep ’09). The BFS is expected 2H12. The revised parameters indicate: plant throughput 1.3mtpa (previously 2mtpa), production 1.8mlbpa U3O8, capex A$280m(inclusive of all supporting infrastructure), C1 opex US$33/lb (average for first 10 years), mill recovery 85%, LOM 14 years. The new mining plan indicates a series of shallow open pits to 10m depth, progressively backfilled, 3 to 1 strip ratio, 250ppm cut-off for mining and 500ppm cut-off for processing. Parameters are based on selective mining and use of mining contractors. Plant is alkaline tank leach heated to 90oC producing uranium as UO2. TOE reported pilot plant test recoveries (Sep ’11) of 83-86% uranium. Additional project enhancement could come from further resource upside, potentially higher ROM head grade, reduced capex and lower AUD. RCR modelling indicates NPV breakeven at US$58/lb U3O8, AUD 0.84 using a 10% r/i over first 10 years of operation, plus upside with LOM extension. At the current exchange rate of ~AUD 1.00, NPV breakeven is US$68/lb U3O8 over the first 10 years’ operation. Other Exploration: Theseus Project (WA). Large ISR prospective discovery (2009) located 650km west of Alice Springs. Similar lithologies to 4 Mile and Beverley uranium projects (SA). Exploration Target Range (ETR) 20-40mt grading 400-500ppm U3O8 for 22mlb to 44mlbs U3O8 (Nov ’11). This ETR relates to one of 3 proximal palaeovalleys – the other 2 offer additional bluesky upside. Theseus mineralisation is defined over an interpreted palaeochannel exceeding 10km x 2km at ~90m to 130m depth, and consists of unconsolidated sand capped by clay layers. Drilling results 2011 include 4.46m @ 0.084% eU3O8, and 5.4m @ 0.046% U3O8. Hydrology tests 1H12. Resource statement expected 1H12. Potential $5m exploration budget in 2012 and multiple drill rigs (7,000m sonic/RC and 25,000m aircore). By comparison, the similar size and grade but more advanced Lance ISR Project in Wyoming (ASX:PEN) has an NPV of ~A$150m (US$60/lb U3O8, AUD0.84, 10%r/i) with resource of 44.5mt grading 410ppm for 41.4mlbs U3O8. Investment Comment: 2012 could see significant developments for TOE with government approvals expected 1H12 and BFS for the Wiluna Project expected 2H12. The exciting new Theseus Project has potential to advance with step change and rapidly emerge as a key, new project for TOE and drive a market rerating. An aggressive exploration program is expected 2012; maiden resource 1H12.Comparable, though more advanced projects to Theseus are trading with market values of A$50m to A$150m (eg ASX:PEN).
Resource Capital Research
December Quarter 2011 Disclaimer and disclosure attached. Copyright© 2011 by Resource Capital Research Pty Ltd. All rights reserved. 26
Flagship Wiluna Project (WA): Toro’s value-enhancing strategy of building Wiluna into a significant uranium production hub over the past year has seen the consolidated regional resource climb to 50mlb, a big increase from the 24mlb original Lake Way/Centipede resource. This will give a significant boost to the Wiluna NPV and project viability.
Theseus Project and regional palaeovalleys (WA): The map shows two additional, discrete palaeovalley systems with potential to be as prospective as Theseus. Each reports anomalous intercepts at kilometre spacing. Drilling 2012. Theseus Exploration Target is 22mlb - 44mlbs U3O8 grading 400-500ppm (Nov ’11).
Resource Capital Research
December Quarter 2011 Disclaimer and disclosure attached. Copyright© 2011 by Resource Capital Research Pty Ltd. All rights reserved. 27
Selected Uranium Sector Performance Charts
4
6
8
10
12
14
16
18
20
Ma
y-05
Au
g-0
5
No
v-0
5
Fe
b-06
Ma
y-06
Au
g-0
6
No
v-0
6
Fe
b-07
Ma
y-07
Au
g-0
7
No
v-0
7
Fe
b-08
Ma
y-08
Au
g-0
8
No
v-0
8
Fe
b-09
Ma
y-09
Au
g-0
9
No
v-0
9
Fe
b-10
Ma
y-10
Au
g-1
0
No
v-1
0
Fe
b-11
Ma
y-11
Au
g-1
1
No
v-1
1
(C$
/sh
are
)
Uranium Participaton Corp (TSX:U) Share Price(C$/share)
Source: Bloomberg
0
20
40
60
80
100
120
140
Ju
l-0
6
Oct
-06
Jan
-07
Ap
r-0
7
Ju
l-0
7
Oct
-07
Jan
-08
Ap
r-0
8
Ju
l-0
8
Oct
-08
Jan
-09
Ap
r-0
9
Ju
l-0
9
Oct
-09
Jan
-10
Ap
r-1
0
Ju
l-1
0
Oct
-10
Jan
-11
Ap
r-1
1
Ju
l-1
1
Oct
-11
(p/s
har
e)
Geiger Counter Limited (LSE:GCL) Share Price(GBP - p/share)
Source: Bloomberg
0
20
40
60
80
100
120
140
160
Dec
-01
Jun
-02
Dec
-02
Jun
-03
Dec
-03
Jun
-04
Dec
-04
Jun
-05
Dec
-05
Jun
-06
Dec
-06
Jun
-07
Dec
-07
Jun
-08
Dec
-08
Jun
-09
Dec
-09
Jun
-10
Dec
-10
Jun
-11
(US
$/lb
)
Uranium Spot Price (U3O8)(US$/lb)
Source: BloombergSource: Bloomberg
0
2
4
6
8
10
12
Feb
-07
Ap
r-0
7J
un-0
7A
ug-0
7O
ct-0
7D
ec-
07F
eb-0
8A
pr-
08
Jun
-08
Aug
-08
Oct
-08
De
c-08
Feb
-09
Ap
r-0
9J
un-0
9A
ug-0
9O
ct-0
9D
ec-
09F
eb-1
0A
pr-
10
Jun
-10
Aug
-10
Oct
-10
De
c-10
Feb
-11
Ap
r-1
1J
un-1
1A
ug-1
1O
ct-1
1
(C$
/sh
are)
Uranium Focused Energy Fund (TSX:UF.UN) Share Price (C$/share)
Source: Bloomberg
0
200
400
600
800
1000
1200
1400
Jan
-02
Jul
-02
Jan
-03
Jul
-03
Jan
-04
Jul
-04
Jan
-05
Jul
-05
Jan
-06
Jul
-06
Jan
-07
Jul
-07
Jan
-08
Jul
-08
Jan
-09
Jul
-09
Jan
-10
Jul
-10
Jan
-11
Jul
-11
US
D
Merrill Lynch Uranium Equity Index
Source: Bloomberg
0
50
100
150
200
250
300
350
400
450
Dec
-01
Jun
-02
Dec
-02
Jun
-03
Dec
-03
Jun
-04
Dec
-04
Jun
-05
Dec
-05
Jun
-06
Dec
-06
Jun
-07
Dec
-07
Jun
-08
Dec
-08
Jun
-09
Dec
-09
Jun
-10
Dec
-10
Jun
-11
US
D
DAX global Nuclear Energy Index
Source: Bloomberg
Resource Capital Research
December Quarter 2011 Disclaimer and disclosure attached. Copyright© 2011 by Resource Capital Research Pty Ltd. All rights reserved. 28
0
10
20
30
40
50
60
70
Dec-0
1
Dec-0
2
Dec-0
3
Dec-0
4
Dec-0
5
Dec-0
6
Dec-0
7
Dec-0
8
Dec-0
9
Dec-1
0
C$
/sh
are
Cameco Corporation (TSX:CCO) Share Price (C$/share)
Source: Bloomberg
0
50
100
150
200
250
Dec
-01
Jun
-02
Dec
-02
Jun
-03
Dec
-03
Jun
-04
Dec
-04
Jun
-05
Dec
-05
Jun
-06
Dec
-06
Jun
-07
Dec
-07
Jun
-08
Dec
-08
Jun
-09
Dec
-09
Jun
-10
Dec
-10
Jun
-11
(US
D/m
etr
ic t
on
ne)
McCloskey Newcastle fob Steam Coal Spot Price/Australia (USD/metric tonne)
Source: Bloomberg
0
20
40
60
80
100
120
140
160
Dec-0
1
Dec-0
2
Dec-0
3
Dec-0
4
Dec-0
5
Dec-0
6
Dec-0
7
Dec-0
8
Dec-0
9
Dec-1
0
(US
$/b
arr
el)
West Texas Intermediate (WTI) Cushing Crude Oil Spot Price (US$/barrel)
Source: Bloomberg
4000
6000
8000
10000
12000
14000
16000
Dec
-01
Dec
-02
Dec
-03
Dec
-04
Dec
-05
Dec
-06
Dec
-07
Dec
-08
Dec
-09
Dec
-10
US
D
Dow Jones Index
Source: Bloomberg
400
600
800
1000
1200
1400
1600
1800
De
c-0
1
De
c-0
2
De
c-0
3
De
c-0
4
De
c-0
5
De
c-0
6
De
c-0
7
De
c-0
8
De
c-0
9
De
c-1
0
US
D
Morgan Stanley World Index
Source: Bloomberg
0
2
4
6
8
10
12
Dec-0
1
Dec-0
2
Dec-0
3
Dec-0
4
Dec-0
5
Dec-0
6
Dec-0
7
Dec-0
8
Dec-0
9
Dec-1
0
A$
/sh
are
Paladin Energy (ASX:PDN, TSX:PDN) Share Price (A$/share)
Source: Bloomberg
Resource Capital Research
December Quarter 2011 Disclaimer and disclosure attached. Copyright© 2011 by Resource Capital Research Pty Ltd. All rights reserved. 29
Report Contributors
John Wilson: John has a background in mining, finance and equity research. He worked on Wall Street for 6 years and has covered US, Australian and Latin American mining stocks. He has also worked with BHP in their minerals division. Qualifications include an MBA from the Wharton School of the University of Pennsylvania and a Bachelor of Engineering from the University of Sydney. Tony Parry: Tony has extensive experience in metallurgical process development, (working with MIM Limited for five years) and in mining equity research, equity sales and mining corporate finance (working in London for five years and subsequently Perth). He was a founding Director and CEO of an ASX listed exploration company and has been engaged extensively as a strategic planning consultant to many small-medium enterprises. Tony’s qualifications include a BSc (Hons) in Metallurgy and a PhD in Metallurgy from the University of NSW. Murray Brooker: Murray has a background in mining and consulting as a geologist. He worked for North Limited (now part of Rio Tinto) for 10 years and for Parsons Brinckerhoff (a global engineering consultancy). He has 20 years’ experience assessing exploration projects in Australia, New Zealand, Mexico and South America. Murray has an MSc in Geology (James Cook University, Qld) and an MSc in Hydrogeology. He was also a founding Director of an unlisted Australian geothermal company.
Resource Capital Research
December Quarter 2011 Disclaimer and disclosure attached. Copyright© 2011 by Resource Capital Research Pty Ltd. All rights reserved. 30
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