Nuclear Power and Uranium Mining in the United States

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1 Uraniumletter I N T E R N A T I O N A L the international independent information and advice bulletin for uranium resource investments June 2015 Nuclear Power and Uranium Mining in the United States Marino G. Pieterse, publisher and editor The USA is the world s largest producer of nuclear power, accounting for more than 30% of worldwide nuclear generation of electricity. The country s 100 nuclear reactors produced 798 kwh in 2014, over 19% of total electrical output There are now 99 units operable (98.7 GWe) and 5 under construction. Following a 30-year period in which few reactors were built, it is expected that 6 new units may come online by 2020, 4 of those resulting from 16 licence applications made since mid-2007 to build 24 new nuclear reactors. However, lower gas prices since 2009 have put the economic viability of some existing reactors and proposed projects in doubt. Government policy changes since the late 1990s helped pave the way for significant growth in nuclear capacity. In 2013, the US electricity generation was 4,294 TWh (billion kwh) gross, 1,717 TWh or 40% on it from coalfired plant, 1,150 TWh or 27% from gas, 822 TWh or 19% from nuclear, 291 TWh or 70% from hydro, 170 TWh or 4% from wind, 12 TWh from solar and 18 TWh from geothermal; (IEA data) Structural electricity demand is projected to increase to 5,000 kwh in 2030 though in the short-term is it depressed and has not recovered to the 2007 level, which it is expected to reach this year. The US has 99 nuclear power reactors in 30 states, operated by 30 different power companies. Since 2001 these plants have achieved an average capacity factor of over 90%. Outlook nuclear share of US electricity generation by 2040 On April 15, 2015, the US Information Administration (EIA) announces that it forecasts that between 2013 and 2040, nuclear power s share of total energy electricity generation in the USA will fall from 19% to 15% in its High Oil and Gas Resource case and to 18% in its High Oil Price case, were higher natural gas prices lead to additional grants in nuclear capacity. EIA published its prediction in its Annual Energy Outlook 2015 (AEO 2015), which focuses on the factors expected to shape the country s energy markets by Total electricity use in Reference case, including both purchased from electric power producers and on-site generation, grows by an average of 0.8% per year from TWh in 2013 to TWh in The relatively slow rate of growth in demand, combined with rising natural gas prices, environment regulations and continuing growth in renewable generation, leads to tradeoffs between the fuels used for electricity generation, EIA said. Uraniumletter International 1 Special Report June 2015

2 From 2000 to 2012, electricity generation from natural gas-fired plants more than doubled as natural gas prices fell to relatively low levels. In the AEO Reference case, natural gas-fired generation remains below 2012 levels until after 2025, while generation from existing coal-fired plants and new nuclear and renewable plants increases. In the longer term, natural gas fuels more than 60% of the new generation needed from 2025 to 2040, and growth in generation from renewable energy supplies most of the remainder. Generation from coal and nuclear energy remains fairly flat, EIA said, as high utilization rates at existing units and high capital costs and long leach times for new units mitigate growth in nuclear and coal-fired generation. High construction costs for nuclear plants limit their competitiveness to meet new demand in the Reference case. In the near term, 5.5 GWe of planned additions are put into place by 2020 offset by 3.2 GWe of retirements over the same period. After 2025, 3.5GWe of additional nuclear capacity is built. In the High Economic Growth and High Oil Price cases, an additional 10 GWe to 13 GWe of nuclear capacity above the Reference case is added by to meet demand growth as a result of higher costs for the alternative technologies and/or higher capacity requirements, the EIA said. Environmental policy of the United States The environmental policy of the US is federal governmental action to regulate activities that have an environmental impact in the United States. The goal of environmental policy is to protect the environment for future generations while interfering as little as possible with the efficiency of commerce or the liberty of the people and to limit inequity in who is burdened with environmental costs. This policy grew mainly out of the environmental movement in the United States in the 1960s and 1970s during which several environmental laws were passed, regulating air and water pollution and forming the Environmental Protection Agency (EPA). Partially due to the high costs associated with these regulations, there has been a backlash from business and politically conservative interests, limiting increases to environmental regulatory budgets and slowing efforts to protect the environment. Since the 1970s, despite frequent legislative gridlock, there have been significant achievements in environmental regulation, including increases in air and water quality and, to a lesser degree, control of hazardous waste. In April 2014 the US Energy Information Administration forecast that the country will lose 10,800 MWe of nuclear generation by 2020 because of lower prices of natural gas and stagnant growth in electricity demand. This will have significant implications for CO2 emissions, and it projected that early retirement of nuclear capacity, instead of coal, could see annual CO2 emissions be 500 million tonnes higher by In June 2014 the US Environmental Protection Agency (EPA) announced that it would use its authority under the Clean Air Act to require a reduction in carbon emissions from US power plants of 25% below 2005 levels by 2020, and a 30% reduction by 2030, with states to be responsible for achieving this. There has already been a 16% drop since Under this EPA Clean Power Plan, the rules are expected to be finalized in June 2015, and states will then have at least one year to submit their plans to comply with the emission reductions, using various means including increased energy efficiency, greater use of nuclear power and renewables, and carbon capture and storage. Nuclear plants are already the main carbon-free generation source for over half of US states, and avoid the emission of over 750 million tonnes of CO 2 per year relative to coal. It is becoming accepted that the 30% reduction by 2030 will be impossible without at least the present level of nuclear contribution. In November 2014, the National Association of Regulatory Utility Commissioners urged the EPA, in its proposed rule to reduce carbon emissions from existing power plants, to adopt regulations which encourage states to preserve, life-extend, and expand existing nuclear generation. The EPA proposal in its original form would not achieve what is intended in respect to nuclear power. Uraniumletter International 2 Special Report - June 2015

3 In January 2015, the NEI said that a top priority was for nuclear plant operators to be fully compensated in competitive wholesale US electricity markets for the value they provide as the main source of reliable, carbonfree, 24/7 base-load power. Domestic uranium mining accounts for only 10% of the fuel used in US reactors In the 1950s, the USA had a great deal of uranium mining, promoted by federal subsidies. Peak production since 1970 was 16,800 tonnes U in 1980, when there were over 250 mines in operation. After the Three Mile Island, Pennsylvania accident in 1979, this abruptly dropped to 50 mines in 1984 when 5,700 tu was produced. Then there was steady decline to 2003, by which time there were only 2 small operations producing a total of less than 1,000 tu per year, or about 5% of the uranium consumed by US plants. Consequently, almost all of the uranium used in the US commercial reactors is imported. After reaching the peak in 1980, domestic mining new accounts for only 10% of the fuel used in US reactors. So for the first step in the nuclear fuel cycle the on imports of uranium from countries such a Canada and Australia and supply from the Megatons to Megaton arrangement with Russia supplying about half of US demand, finished in The EIA s Uranium Marketing Report said that 24,206 tonnes of U3O8 (equivalent) was purchased by US utilities in 2014, 22,701 tonnes of this (90%) from foreign sources. Only 1,505 tonnes of US origin U3O8 (equivalent) was delivered in 2014, 6% of total. Of the imported 22,701 tonnes, Kazakhstan provided 5,459 tonnes, Australia 4,769 tonnes, Canada 4,441 tonnes, Russia 3,112 tonnes, Namibia 2,088 tonnes, Uzbekistan 807 tonnes and Niger 597 tonnes U3O8. During 2014, 6,594 tonnes (27%) was purchased under spot contracts and the balance (63%) under longterm contracts or other arrangements, the overall weighted average price being $ Total US commercial inventory increased to 61,075 tonnes U3O8 (51,789 tonnes U), 52,652 tonnes of this held by utilities continuing an increase from As the price of uranium has increased since 2013, there has been a revival in exploration and plans to reopen new mines. Exploration expenditure increased over to $ 50 million, but has dropped since. A number of companies announced plans to refurbish and restore mines in Wyoming, Colorado, Utah, Arizona and New Mexico. There are now operating mines on relatively small scale in Wyoming, New Mexico, Texas, Colorado, Utah and Nebrasca. Most US production has been from Wyoming and New Mexico. In 2014 more than two-thirds of US uranium production came from Wyoming s Powder River Basin. Some 40% of resources are in New Mexico and amenable to ISL recovery. Resources on the Western Colorado Plateau require conventional mining and milling, as does high-grade breccia pipe mineralization in northwest Arizona. Smaller resources are in Utah, Nebrasca and Texas. Production potential is about 50% underground mining, 26% open-pit and 24% In situ leach (ISL). US uranium production (tonnes) ,866 2,061 1,774 1,685 1,922 1,814 1,882 2,118 2,263 1,583 1,748 1,504 1,429 1,630 1,538 1,596 1,796 1,919 Uranium was produced from one mill (White Mesa, Utah) and 5 ISL operations in 2006 and In 2008 Rosita became a 6th ISL production site before being shut down and a total of 10 underground mines (4 more than during 2007) produced uranium. Production has remained at about the same level since 2006, with an upturn in 2013 and In 2014 production came from the White Mesa, 1 underground mine and 7 ISL operations. Uraniumletter International 3 Special Report June 2015

4 Most US uranium-producing states are agreement states vis à vis the Nuclear Regulatory Commission (NRC) and have authority to issue permits and regulate uranium mining and milling. NRC s role is then confined to oversight. NRC itself currently provides oversight of three ISL sites and one conventional uranium mill. In mid-2009, the Nuclear Regulatory Commission (NRC) issued a generic Environmental Impact Statement (EIS) on ISL (or in situ recovery, ISR) mining in the Western USA. This will streamline but not eliminate the requirement for a supplementary EIS for each new mine. The NRC expects 17 applications for ISL facilities in the next couple of years, with each taking 2 years to process, including participation. US uranium production (tonnes) ISL operations State hardrock mill Cameco Smith Ranch- Highland Wyoming Cameco Crow Butte Nevada Uranium One Willow Creek Wyoming Uranerz Nichols Ranch Wyoming 77 - Uranium Energy (UEC) Hobson-La Palangana Texas 10 - Mestena Uranium Alta Mesa Texas - 77 Ur-Energy Lost Creek Wyoming Energy Fuels White Mesa Mill source: WNA Under a 2012 agreement NRC collaborates with the federal Bureau of Law Management (BLM) on environmental assessment of mine proposals. With land access partly controlled by the US government, in 2011, the Interior Secretary issued an order banning new hard rock uranium mining in about 4,000 square kilometres of land in Arizona for 20 years, which sterilized 145,000 tu of known resources according to the NEI and also much prospective ground. In March 2013, the US District Court affirmed the ban. In January 2015, the Environment Protection Agency (EPA) proposed new health and environmental protection standards for uranium extraction, including tighter groundwater quality and monitoring standards under the Uranium Mill Tailings Radiation Control Act of The proposed standards address use of ISL for uranium recovery in the USA. The proposed rule describes how ISL facilities are to characterize groundwater chemistry before commencing uranium mining. Information source: World Nuclear Association/WNA Uraniumletter International 4 Special Report - June 2015

5 Source: Nuclear Regulatory Commission map Updated February 2013 Uraniumletter International 5 Special Report June 2015

6 Overviews of worldwide uranium production and exploration companies June 15, 2015 Trade symbol Share price Change 12 months Shares Market current year-end in % H L issued cap. U.S Cdn$ Cdn$ million million Producers: US$ US$ US$ US$ US$ Uranium Energy UEC AMEX Uranerz 1) URZ AMEX Cdn$ Cdn$ Cdn$ Cdn$ Cdn$ Ur-Energy 2) URE TSX Energy Fuels 3) EFR TSX Development / Exploration: US$ US$ US$ US$ US$ Uranium Resources URRE NASDAQ Cdn$ Cdn$ Cdn$ Cdn$ Cdn$ Western Uranium 4) WUC CNSX Azarga Uranium 5) AZZ CDN Laramide Resources 6) LAM TSX Virginia Energy VUI TSX.V Baysw ater Uranium 7) BYU TSX.V A$ A$ A$ A$ A$ Peninsula Energy 8) PEN ASX Black Range Minerals 4) BLR ASX Royal Resources ROY ASX Energy Ventures 9) EVE ASX ) ISR production commenced on April 15, 2014; takeover offer by Energy Fuels on January 5, 2015 representing a premium of 37%; closing of the transaction expected to be completed on June 19, ) ISR poduction commenced on August 2, ) acquired Denison Mines ' American uranium mining assets in consideration of million Energy Fuels shares valued at Cdn$ 81 million incl. acquisition of Strathmore Minerals in August 2013; takeover bid on Uranerz Energy on January 5, 2015 at premium of 37% 4) On M arch 23, 2015, takeover offer for Black Range Minerals fomalised; set out for completion in July ) formerly Azarga Resources ; merger with Powertech Uranium ; name change to Azarga Uranium (Oct.29, 2014) 6) main focus on Australia 7) also uranium assets in Canada 8) also uranium assets in South Africa 9) also assets in southern Africa and Sweden Energy Fuels (NYSE UUUU and TSX EFR), is the premier uranium company in the United States. The Company s properties are located in Colorado, Utah, Arizona, Wyoming and New Mexico. The Company s wholly-owned subsidiaries include: Energy Fuels Holdings (previously known as Denison Mines Holdings, Magnum Uranium Corp., Titan Uranium, Strathmore Minerals, and their respective subsidiaries. Energy Fuels owns and controls the only operational conventional uranium processing facility in the United States, the White Mesa Mill, strategically located near Blanding, Utah, central to the uranium mines of the Four Corners region. The Mill has a capacity of 2,000 tons per day and the potential to process up to 8 million pounds of uranium per year. The White Mesa Mill also has two separate circuits designed to produce vanadium (as V2O5) from the uranium/vanadium mines in the Colorado/Utah border and to produce low-cost alternate feed materials for the production of uranium. Energy Fuels operates a producing uranium mine on the Arizona Strip that supplies ore to the White Mesa Mill. In addition the Company owns numerous other projects on standby or in various stages of development and permitting. As market conditions warrant, these mines are expected to be brought into production. Uraniumletter International 6 Special Report - June 2015

7 Energy Fuels is one of the largest holders of uranium and vanadium resources in the United States. The Company owns and controls approximately 33.4 million tons of Measured and Indicated NI compliant resources that contain 8.8 million pound U3O8 at grades that range from 0.07% to 0.31% and 34.9 million pounds V2O5 at grades that range from 0.30% to 1.39%. In addition Energy Fuels owns or controls approximately 11,3 million tons of Inferred NI compliant U3O8 at grades that range from 0.05% to 0.98%, and 13.1 million pounds V2O5 at grades that range from 0.20% to 1.89%. Energy Fuels expects the current minerals processing campaign at the White Mesa Mill to conclude in the first half of 2015, resulting in the production of approximately 250,000 pounds of finished goods of which 140,000 pounds were produces in the three months ended March 31, At March 31, 2015, Energy Fuels had 816,408 pounds of finished goods inventory available for delivery into its contracts or for spot sales. On February 6, 2015, Energy Fuels announced that it is preparing to resume development of its high-grade Canyon Mine in Arizona. The Company expects to transition mining personal from the currently producing Pinemont Mine to the Canyon Mine during Q2, 2015, at which point Energy Fuels expects the economic resources at the Pinemont Mine to be depleted. According to the Arizona Strip Technical Report, prepared in accordance with NI and dated June 27, 2012, the Canyon Deposit is estimated to have approximately 83,000 tons of Inferred Mineral Resources containing approximately 1.63 million pounds of uranium having an average grade of 0.98% eu3o8. Energy Fuels has three existing long-term contracts which require future deliveries of 683,333 pounds during the remainder of fiscal year 2015, 450,000 pounds in fiscal year 2016 and 420,000 pounds in fiscal year Of these amounts, a total of 653,331 pounds is required to be produced by the Company, while it has the option to fulfill the remaining 900,000 pounds from production and/or purchase. Energy Fuels forecasts fiscal year 2015 sales to total approximately 800,000 pounds of U3O8, of which 116,666 pounds were sold in the first quarter. The Company expects to receive an average realized price of $ per pounds of U3O8 sold during the fiscal year across of all three contracts. Acquisition of Uranerz Corporation (TSX URZ) On January 4, 2015, Energy Fuels entered into an Agreement and Plan of Merger with Uranerz Corporation, a Nevada corporation. Pursuant to the Merger Agreement each issued and outstanding share of Uranerz will be converted into the right to receive common shares of Energy Fuels, based on which the Company will issue approximately million shares. Upon completion of the transaction, Uranerz shareholders will own approximately 55% of the common shares of Energy Fuels. The transaction represents a 37% premium to Uranerz shareholders. Uraniumletter International 7 Special Report June 2015

8 The continuation of Energy Fuels and Uranerz, resulting in a current market capitalization of Cdn$ 196 million, will result in the creation of the largest integrated uranium production company focused solely on the United States. The closing of the transaction is expected on June 19, The Company expects to have a total of 6 uranium supply contracts with terms that extend into In 2015, alone, these contracts require approximately 1 million pounds of uranium to be delivered at an average price of approximately US$ 58 per pound, a premium of approximately 63% above the current spot price of US$ Around mid-year 2014, Uranerz commenced uranium recovery activities at the Company s Nichols Ranch ISR Uranium Project located in the central Powder River Basin of Wyoming. The Company sold 175,000 pounds of uranium at an average realized sales price of approximately US$ 57 per pound which generated revenue of approximately $ 10 million and gross profit of $ 3.8 million. The average cost of goods sold was $ per pound U3O8, including taxed and royalties. In Q1, 2015, mining operations at Nichols Ranch extracted approximately 55,000 pounds U3O8 and delivered 50,000 pounds to one utility customer at an average realized sales price of $ 68 per pound U3O8, representing a 92% premium to the current spot price. Realized revenue amounted to $ 3.4 million with a gross operating profit of $ 1.5 million. The average cost of goods sold was $ per pound U3O8, including taxes and royalties. Uranerz held approximately 55,000 pounds of uranium inventory at March 31, the State of Texas. Uranium Energy Corp. (NYSE - UEC) is a U.S.-based uranium production, development and exploration company. The Company s fully licensed and permitted Hobson Processing Facility is central to all of its in-situ recovery ( ISR ) projects in the South Texas Uranium Belt in Designed to process uranium-loaded resins from satellite projects into dried U3O8, the Hobson Plant forms the basis of UEC s regional hub-and-spoke production strategy in South Texas. Hobson is central to all of UEC s projects in the South Texas Uranium Belt, including the Palangana Mine, the Goliad Project, which is fully permitted for production, and the Burke Hollow Project its highest priority development stage project. The Salvo, Nichols and recently acquired Longhorn projects are targeted to continue exploration and development in the future. UEC has a project portfolio of 26 properties in 5 US States, including Texas, Arizona, Colorado, New Mexico Wyoming and 2 projects in Paraguay, with over 96 million pounds U308, and one of the largest databases of historic uranium exploration and development in the country. South Texas Hub-and-Spoke Production Strategy UEC is focused on its hub-and-spoke production strategy in the 270-mile long South Texas uranium belt extending from east central Texas to South Texas. Here, the Company owns and operates the Hobson Processing Plant and six uranium projects, and with current NI resources, in all categories, of about 16.1 million pounds U308 with an additional Exploration Target on its Burke Hollow Project to add up to an additional 7.1 million pounds The plant is designed to process uranium-loaded resins from satellite facilities to U3O8 as the final product and has the physical capacity to process 2 million pounds of U3O8 per year. The South Texas uranium Belt has historically been one of the most concentrated areas for uranium mining in the U.S., and UEC has some of the prime acreage in the State. In the 1970s and early 1980s, this region was one of the largest uranium-producing areas in the U.S. Uraniumletter International 8 Special Report - June 2015

9 Major companies were exploring and producing from this regional trend, including names like Union Carbide, Mobil Oil, Tenneco, Kerr McGee, Continental Oil and many others. UEC has gradually acquired a substantial percentage of historical exploration data based on this work, enabling the Company to target properties for lease that have already been the subject of significant exploration and development by senior energy companies. This trend holds significant known resources that are amenable to ISR recovery of uranium. 26 of 31 current of historic deposits in the trend have been ISR amenable. This is noteworthy because ISR mining requires lower capital and operating costs than conventional mines and is the most environmentally friendly method of uranium mining. The Hobson Facility has a physical capacity to process 2 million pounds of U3O8 annually, which provides for the capacity to process uranium-loaded resins from a number of satellite ISR mining facilities. In January 2011, the Hobson Facility began processing uranium-loaded resins received from the Palangana Mine upon commencement of uranium extraction in November Since commencing uranium extraction at the Palangana ISR Mine in November 2010 to January 2015, the Hobson Processing Facility has processed finished goods representing 571,000 pounds U3O8, of which 490,000 pounds have been sold, resulting in a finished goods inventory balance of 81,000 pounds U3O8 remaining as of January 31, During the six months ended January 2015, UEC continued with a strategy plan for reduced operations initiated in Fiscal Uranium extraction at PAA-1, 2 and 3 of the Palangana Mine has continued to operate at a reduced pace. In May 2015, UEC announced the Palangana ISR Mine has received the required permits and is now fully permitted for extraction in new resource areas with a larger mine permit and aquifer exemption and includes Production Area-4 (PA-4). Regarding the Burke Hollow ISR Project advances, the Texas Commission on Environmental Quality (TCEQ) has now issued two Class 1 disposal well permits, indicating the conclusion of a successful technical review, as a result of which the applications for the Project are currently in the later stages of technical review with the TCEQ. Burke Hollow contains an NI qualified Inferred resource estimate of 5.12 million pounds of uranium at an average grade of 0.09% U3O8. In addition to its portfolio of US properties UEC has two projects in Paraguay, including the Yuty ISR Project and the Oviedo ISR Project. Uraniumletter International 9 Special Report June 2015

10 Ur-Energy (TSX URE) Ten of Company s projects in the US are located in the Great Divide Basin, Wyoming, including UEC s flagship Lost Creek Mine, which has been operating since August 2014 and, to date, over 1 million pounds of uranium have been captured in the plant from Mine Unit 1. The Lost Creek Processing Facility has a 2 million pounds per year name plate design capacity. In May 2015, Ur-Energy announced a new 95% increased mineral resource estimate for the Lost Creek Property. This increase is due to an updated resource estimation for the Mine Unit 1, as well as new resources encountered in recent exploration drilling within the Property, which consists of 6 contiguous project areas totaling approximately 42,000 acres. The exploration drilling was conducted on Lost Creek and LC East lands. The recalculation and analyses resulted in the MU1 mineral resource to be increased by 2.3 million to 4.7 million pounds uranium, averaging 0.058% U3O8. Shirley Basin, Ur-Energy s newest property, is one of the Pathfinder Mines assets, which were acquired in A Technical Report prepared in July 2014 discloses an initial uranium resource estimate for the Project of 8.8 million pounds U3O8 of Measured and Indicated resources, averaging 0.23% eu3o8. During 2014, Ur-Energy captured 596,176 pounds of U3O8 within the Lost Creek Plant. 547,992 of these pounds were packaged in drums and 562,553 pounds of the drummed inventory were shipped to the conversion facility were 517,760 pounds were sold to the Company s customers for a gross revenue of $ 26.5 million. A gross profit of $ 11.5 million on sales of $ 29.3 million was recognised, representing a gross margin of approximately 39%. The Company realized an average price per pound U3O8 sold of $ The cash cost per pound sold for the year was $ 19.73, while the total cost was $ Ur-Energy has captured for the first quarter of ,280 pounds U3O8 within the Lost Creek Plant. Of that, 177,057 pounds U3O8 were packaged in drums and 171,505 pounds U3O8 of the drummed inventory were shipped to the conversion facility. Uraniumletter International 10 Special Report - June 2015

11 The quarter included contractual product sales of 146,000 pounds U3O8, which were sold at an average price of $ 50,55 per pound for sales revenues totalling $ 7.4 million. The average price of $ per pound sold represents a 28% premium to the average spot price during the quarter. The Company recorded production cash costs of $ per pound sold this quarter compared to $ during the previous quarter. The total cost per pound sold including ad valorem and severance taxes, cash and non-cash costs was $ The gross profit in Q1, 2015 amounted to $ 1.99 million, which represents a gross profit margin of approximately 27%. This was lower than the previous quarters, 44% and 37.4% respectively, primarily due to a lower average sales price per pound of $ and $ 59.96, respectively. Continuing Guidance for 2015 Ur-Energy accelerated the timing of one delivery of 20,000 pounds from September 2014 to April To fulfil the delivery, the Company purchased 200,000 pounds from a trader at the then-current spot price. This generated net cash proceeds of approximately $ 4.0 million and lowered production requirements for the year by 200,000 pounds. Nevertheless, Ur-Energy s production plan for 2015 is still to maintain an average production rate of approximately 70,000 pounds per month and produce between 750,000 and 850,000 pounds U3O8. Excess production will be used to build inventory, which may be utilized to complete discretionary spot sales transactions on an as needed basis of market conditions warrant. The production rate may be adjusted based on continuing operational refinements and indications in the market, including uranium spot market pricing and other factors. The Q2, 2015 production target for Lost Creek is 210,000 pounds U3O8 dried and drummed. April 2015 production results are currently being finalized. The Company s initial production estimates indicate that 84,000 pounds were captured, 77,000 pounds drummed and 73,000 pounds shipped. As production levels increase, the cost per pound produced will tend to decrease so long as production and production costs remain on target. Laramide Resources (TSX LAM) has large high-grade quality JORC and NI compliant uranium (U3O8) resources at its wholly-owned projects located in Australia and the United States The Company s main focus is the advancement of its flagship asset, the Westmoreland Uranium Project in Queensland, Australia, which is likely to be one of the largest independent producers in Australia. However, after the ban on permitting new uranium mines in Queensland, imposed by the Goss Labor Government in 1989, in October 2012 was overturned and the Government in August 2014 announced that it was ready to accept uranium mine permit applications, on March 16, 2015, the Palasczuk government confirmed that it will once again prohibit the mining of uranium, although this decision might be adjusted by each project on its merits and against the regulatory framework for uranium. In the United States, Laramide s uranium assets include the La Sal Property in the Valley district of Utah, located 5 miles from Energy Fuels White Mesa Mill. Laramide has reached significant milestones in the permitting process for mining 3 million pounds U3O8. La Sal has a historic resource of 440,000 tonnes grading 0.31% of 3,100 ppm U3O8 for 2.7 million contained pounds of U3O8 (non NI compliant). At La Jara Mesa in Grants, New Mexico, a NI compliant resource evaluation identified 10.5 million pounds of U3O8 (2.4 million tonnes grading 0.22% or 2,200 ppm U3O8). Uraniumletter International 11 Special Report June 2015

12 Uraniumletter International 12 Special Report June 2015

13 Peninsula Energy (ASX PEN) In October 2014 the Peninsula Energy Board approved a lower cost three stage scalable production development plan for the Company s Lance ISR projects located in Wyoming. In December 2014, Peninsula announced that it had secured $ 69.4 million in project funding, clearing the way for the completion of development and commencement of uranium production in the second half of The scalable production development plan comprises a 3-stage ramp-up strategy, with a Stage 1 production rate of between 500,000 and 700,000 pounds U3O8 per annum; a Stage 2 production rate of 1.2 million pounds U3O8 per annum; and a Stage 3 production rate of 2.3 million pounds U3O8 per annum. Peninsula also has a 74% interest in a total of 41 property rights in the Karoo Basin, South Africa. The residual 26% interest remains with BEE partners as required by South African law. Uranium Resources (NASDAQ URRE) has two licenced and currently idled facilities and approximately 17,000 acres of prospective ISR projects in Texas. In New Mexico the Company holds a federal Nuclear Regulatory Commission licence to recover up to 3 million pounds of uranium per year using the ISR process at certain properties and controls mineral rights encompassing approximately 195,000 acres in the prolific Grants Mineral Belt in New Mexico, which holds one of the largest known concentrations of sandstone-hosted uranium deposits in the world. Uranium Resources goals for 2015 include to complete and evaluate drill results from the phase one drilling programs at Butler Ranch and Alta Mesa projects in South Texas. The targeted cash expenditure level is $ 9 million. Western Uranium (CNSX WUC) On March 23, 2015, the execution of a Definitive Merger Implementation Agreement was formalized on Western Uranium s takeover offer for Black Range Minerals of Australia. Pursuant to the offer to Black Range shareholders will receive a Western share for every 750 Black Range shares. Based on Western Uranium s closing price of Cdn$ 4.53 at the date of the offer was announced on January 29, 2015 and an exchange rate of Cdn$ 1 = A$ 1.02, the offer valued Black Range Minerals at A$ 18.5 million or A$ , representing a 104% premium to the Company s most recent closing price. Western Uranium owns multiple advanced-stage, near-term development uranium projects in the USA, including the Sunday Mine Complex in Colorado that is fully permitted for mining. The Company s neardevelopment assets are complimentary to Black Range s Hansen/Taylor Ranch Uranium Project and its proprietary Ablatian technology, which affords conventional miners of sandstone-hosted uranium deposits, the opportunity to dramatically reduce both capital and operating costs Uraniumletter International is published by Goldletter International the Netherlands Marino G. Pieterse, Publisher and Editor Information and investment comments are independently and thoroughly researched and believed correct. No guaranty of absolute accuracy can be given however. Investment decisions are fully made for own risk KvK tel.: info@uraniumletterint.com