Uranium Mining in Australia

Transcription

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 October 2015 Uranium Mining in Australia Marino G. Pieterse, publisher and editor Uranium in Australia has been mined since In calendar year 2014 the country produced 5,897 tonnes U3O8 (5,000 tu), which makes it the world s third-ranking uranium producer behind Kazakhstan and Canada. All production is exported. The country uses no nuclear power, but with high reliance on coal (approximately 78% of its electricity) and likely carbon constraints on electricity generation will make it a strong possibility. Three mines are currently operating, including Ranger, owned and operated by Energy Resources of Australia ( ERA ), a 68.39% subsidiary or Rio Tinto, Olympic Dam, owned and operated by BHP Billiton, and Four Mile, owned and operated by Heathgate Resources, an associate of General Atomics of the USA. Uraniumletter International 1 Special Report October 2015

2 Ranger Olympic Dam ; Beverley Four Mile Honeymoon Total Calendar year 2011 production of U 3O 8: 2641 t from Ranger, 3954 t from Olympic Dam, 416 t from Beverley, 45 t from Honeymoon, total 7056 tonnes (5983 tu). Calendar year 2012 U 3O 8 production: 3710 t from Ranger, t from Olympic Dam, t from Beverley, t from Honeymoon, total 8244 tonnes ( tu). Calendar year 2013 U 3O 8 production: 2960 t from Ranger, t from Olympic Dam, t from Beverley, 112 t from Honeymoon, total 7488 tonnes ( tu). Calendar year 2014 U 3O 8 production: 1165 t from Ranger, 3952 t from Olympic Dam, 24.7 t from Beverley, 755 t from Four Mile, total 5897 tonnes (5000 tu). Federal policy on uranium mining in Australia Australian Labor Party (ALP) policy on uranium mining has varied over four decades. The 1971 Platform, on which the Whitlan Government was elected in 1972, committed the party to working towards the establishment of a domestic uranium, enrichment and nuclear power sector. But, after losing government in 1975, pressure grew in the Labor Party for a strong stand against uranium mining and export, as a counterpoint to Liberal Coalition policies to expedite uranium mining and export. The 1977 ALP National Conference adopted a new policy. Community concerns with the threat of nuclear war were to be allayed by ending uranium mining and ceasing Australia s contribution to the nuclear fuel cycle. The change committed a future Labor government to declare a moratorium on uranium mining and treatment and to repudiating any commitments in mining. But, the Commonwealth Government announced in 1977 that new uranium mining was to proceed with the Ranger project in the Northern Territory. The mine opened in 1981, producing 2,800 tonnes per year of uranium. Production over three years to end 2002 averaged 3,533 tonnes of uranium per annum. By the time of the 1982 ALP National Conference, there was concern that the repudiation of contracts would raise issues of sovereign risk and would expose a Labor government to compensation liabilities. This committed Labor to a policy on uranium mining which was a classic political compromise. The policy was designed to prevent new uranium mines; limit Australia s uranium production with a view to the eventual phasing out of mining all together; and provide moral leadership in ending the nuclear industry. In the 1983 federal election the ALP won office. The 1984 ALP National Conference then dropped the language of moratorium, repudiation of contracts and phase-out from the Platform. For the first time the three-mines-policy was delineated by naming Naborlek, Ranger and Roxby Downs (Olympic Dam) as the only projects from which exports would be permitted. Provisional approvals for marketing from other prospective uranium mines were cancelled. During 1988, Western Mining Corp. s (now BHP) Olympic Dam Project commenced operation. The naming of specific mines was later deleted from the Labor Platform in the light of the fact that Naborlek ceased production in 1988 and under a Coalition government Beverley started up in Uraniumletter International 2 Special Report October 2015

3 Australia s export policy on uranium There are restrictions on the export of uranium from Australia. The federal Government s nuclear safeguards policy has been developed under the Nuclear Non-Proliferation Treaty of 1970 (the NNPT ), which was ratified by Australian government in The Federal Government only allows sales to countries that have a bilateral nuclear safeguards agreement with Australia. Australia India - Bilateral nuclear cooperation may open the door for uranium sales to India A bilateral nuclear cooperation agreement opening the door to export uranium to India was signed by the two countries prime ministers in September 2014, and the proposed agreement was tabled before the bipartisan. The Australian government s Joint Standing Committee on Treaties ( JSCOT ) in October 2014 has recommended that uranium sales to India should only be allowed to proceed after its concerns about non-proliferation, nuclear regulation and safeguards have been addressed. India represents a major potential market for Australia s uranium, as the country plans to triple its nuclear capacity by 2024 from 5 giga watts up to 17 giga watts, and is aiming to have 25% of its electricity come from nuclear power by At present, India has 21 nuclear reactors in operation and 6 under construction, as well as 22 planned and an estimated 35 proposed. Australian States uranium policy In Western Australia, the replacement of the ALP government in September 2008 by an alliance of the Liberal Party and National Party resulted in the removal of the ban on uranium mine development. Since Western Australia s uranium mining ban was lifted in 2008, more than A$ 300 million has been invested in uranium exploration, and fur projects having been advanced. According to Bill Marmion, Western Australia s mine and petroleum minister, exports from these four advanced projects could top A$ 1 billion a year by 2020, if uranium prices recover to economic levels. These mines could employ more than 1,500 people during construction and 500 people during explorations, not to mention the individual employment opportunities. In Queensland, the ALP won the state election of March 2009 with the anti-uranium mining policy remaining in place there. However, following five consecutive terms in office the ALP was defeated on the March 24, 2012 elections by the LNP, who has a historically pro-uranium mining stance. Uranium was last mined in Queensland in 1982 at the Mary Kathleen mine in North West Queensland. The mining of uranium was banned by the Goss Labor Government in 1989, but did not extend to exploration for uranium, which has continued during this time under exploration permits for minerals (EPMs). The estimated value of identified uranium deposits in Queensland is $ 10 billion. In March 2013, the Uranium Mining Implementation Committee delivered a comprehensive report with forty recommendations outlining how a uranium industry should be re-established in Queensland. The report makes practical recommendations about important issues, including environmental management and protection, health and safety economic and community development and the safe transportation of uranium. An inter-department committee of senior officers from a number of State agencies will be formed to develop the Newman Government s response to the Committee s recommendations. This group was asked to submit a draft report to the Resources Cabinet Committee outlining an implementation strategy for the recommendations, including identification of any budget implications and necessary legislative changes. Uraniumletter International 3 Special Report October 2015

4 However, in March 2015 it was announced that the new elected Palaszuk Labor Government expressed its intention to reinstate the ban on uranium mining, but exploration allowed to continue. The announcement has been slammed by the Queensland Resource Council ( QRC ) and the new opposition mining minister Andrew Cripps. The QRC asked the government to judge uranium projects on their individual merits, instead of enacting a banked ban. Uranium companies directly hurt are Queensland s biggest uranium player Summit Resources (82.08% owned by Paladin Energy) with three major holdings in the Mount Isa region of northwest Queensland, including Valhalla and Skal, having shelled out A$ 40 million in exploration efforts over the last five years and Laramide Resources, owning the Westmoreland Project with a book value of Cdn$ 54 million and the Ben Lomond Project, owned by Mega Uranium with a book value of Cdn$ 5.5 million. In Northern Territory, in February 2013, Environmental Minister Tony Burke introduced the Completion of Kakadu National Park (Koongarra Project Area Repeal) Bill signaling an end to one of three long standing struggles against uranium mining within the Alligator Rivers region of Australia s Northern Territory. In 1995, the Koongarra Deposit was acquired by Areva. The company tried several times over the years to access the deposit, but it was blocked each and every time by the Mirrar Traditional Owners. On March 15, 2013, Koongarra officially became a part of the World Heritage listed Kakadu National Park. Koongarra was not the only area that was excluded from the National Park. The government also left out the Ranger and Jabiluka sites, both of which are owned by Rio Tinto. Despite the concerns on the unintentional release of an estimated 2 million liters of contaminated water, Rio Tinto, through its subsidiary Energy Resources of Australia, wants to expand the Ranger Mine. Exploitation of the Jabiluka deposit was halted in 1998, following an eight-month blockade that included thousands of indigenous and non-indigenous protestors. As a result of that effort, Rio Tinto eventually came to sign the Jabiluka Long-Term Care and Maintenance Agreement which guaranteed that the Mirrar would have veto rights over any future development at Jabiluka. Overview of major uranium companies and projects Olympic Dam Project, South Australia, world s largest uranium ore body owned by BHP Billiton During 1988, the Olympic Dam Project, then a joint venture of Western Mining Corp. and BP Minerals, commenced its operations about 560 km north of Adelaide, in an arid part of the middle South Australia. The Project is owned by BHP Billiton, following its 2005 takeover of WMC Resources. In November 2012, the State government of South Australia granted a 4-year extension for the planned open pit expansion, conditional to the company spending A$ 650 million on pre-project research on heap leach and on community work. The massive deposit is underground, some 350 metres below the surface, and is the largest known uranium ore body in the world. It produces copper, with gold and uranium as by-products. Olympic Dam has enormous reserves of ore. Total reserves are 589 million tonnes grading 0.059% U3O8 which contain 347,500 tonnes U3O8. In addition, total resources are 9,080 million tonnes U3O8 grading 0.027% U3O8 which contain 2.45 million tonnes U3O8. The plan was to develop a large open pit with associated infrastructure over 11 years and lift uranium production to 19,000 tonnes U3O8 per year. The open pit will mean that up to 98% of the ore is mined rather than 25% of it. Uraniumletter International 4 Special Report October 2015

5 In November 2014, in a general announcement about productivity, BHP Billiton flagged a 27% increase in copper production at Olympic Dam from 2018, and a doubling from that level subsequently by a low-risk underground expansion with significantly lower capital intensity than the previous open cut design. This has the potential to deliver over 450,000 tonnes of copper production a year at first quartile C1 costs by the middle of next decade. The uranium implications were not mentioned, but assuming the same ore as today, it would mean about 5000 t U 3 O 8 (4200 tu) per year from 2018 and some 9400 t U 3 O 8 (8000 tu) per year in mid-2020s. The small Beverley Mine in South Australia, owned and operated by Heathgate Resources Pty, an associate of General Atomics in the USA, started operation late in 2000, 520 kilometres north of Adelaide on the plains northwest of Lake Frome. It was Australia s first in-situ leach (ISL) mine, accessing a palaeochannel deposit in sand in a saltine aquifer. The mine was licenced to produce 1,180 t/yr U3O8 (1,000 tu) and reached this level in 2004 through production has declined since. In the last two years of operation almost all production through the Beverley plant came from the north ore body, which is contiguous with the Four Mile Deposit originally owned for 75% by Quasar Resources and for 25% by Alliance Resources. As per July 13, 2015, Alliance sold its 25% interest to Quasar. Mining of Beverley ceased at the end of 2013, and of Beverley North early in Energy Resources of Australia (ERA ASX) Energy Resources of Australia ( ERA 68.39% subsidiary of Rio Tinto), is one of the nation s largest uranium producers. The Company s Ranger mine located 8 kilometres east of Jabiru and 260 kilometres east of Darwin in Northern Territory, is Australia s largest continually operating uranium mine. Uranium has been mined for three decades. The Company produced 1,165 tonnes U3O8 for the year ended December 31, 2014, 61% lower than in Production was adversely impacted by the suspension of processing operation following the failure of Leach Tank No.1 on December 7, Revenue from the sale of U3O8 was A$ 379 million (2013: A$ 356 million). Sales were 3,148 tonnes, up from 2,815 tonnes achieved in The average realized sale price of U3O8 in 2014 as US$ 49.50/lb (2013: US$ 53.92/lb). During the period ERA purchased a total 843 tonnes of U3O8 for a cost of A$ 67 million to meet committed sales in the second half of Total cash costs were higher than in 2013, largely due to purchase U3O8 and an increase in contractors and consultants due to progress on the Ranger 3 Deeps Exploration Decline and Prefeasibility Study, along with the costs associated with the leach tank recovery works. Total exploration and evaluation expenditures for 2014, including the Ranger 3 Deeps Exploration Decline Study, and other exploration, was A$ 83 million compared to 2013 expenditures of $ 66 million. Capital expenditure decreased in 2014 to A$ 12 million (2013:A$ 91 million). ERA s net loss after tax for the half year ended June 30, 2015 as A$ 255 million, including a non-cash charge of $ 197 million for the write-down of deferred tax assets, compared to a loss of A$ 127 million in the first half of U3O8 production for the first half was 978 tonnes. This compares to zero U3O9 production for the 2014 half year due to the suspension of processing operations following the failure of Leach Tank No.1 in December Sales volume for the period as 1,245 tonnes compared to 1,524 tonnes for the June 2014 half. Forecast sales in the second half of 2015 are expected to be broadly alligned to the first half of Uraniumletter International 5 Special Report October 2015

6 The average realized sales price of U3O8 for the 2015 half-year period as US$ 49.14/lb, compared to US$ 46.65/lb for the corresponding period in For the 2015 half year, the average long-term uranium price as US$ 48.50/lb and the average spot price was US$ 37.33/lb, compared to US$ 46.75/lb and US$ 31.95/lb, respectively.for the same period of Cash costs for the June 2015 half-year period were substantially lower than the corresponding period in Reduced expenditures on purchased U3O8, which was required whilst operations were suspended in the first half of 2014, and reduction in expenditures of the Ranger 3 Deeps project were partly offset by higher expenditures on raw materials and consumable used production. Capital expenditure or the June 2015 half-year was A$ 74 million compared to A$ 5.8 million in the corresponding period in Since the start of 2012 ERA has spent A$ 392 million on rehabilitation and water treatment projects forth Ranger and Jubiluka sites. Progressed rehabilitation of the Ranger Project Area continued during the first half of Commissioning is scheduled for the September 2015 quarter. ERA and its major shareholder, Rio Tinto, are engaged in discussions regarding a conventional credit facility to assist ERA to fund its rehabilitation program, should additional funding ultimately be required. In June 2015, ERA announced that the Ranger 3 Deeps Project would not proceed to Final Feasibility Study in the current operating environment. The decision was driven primarily to by two factors. First, the Board s view that the uranium market had not improved as ERA previously expected and there was uncertainty regarding the uranium market s direction in the immediate future. Secondly, having finalized and considered the Prefeasiblity Study, the economics of the project required operations beyond the current Ranger Authority, which expires in In July 2015, ERA announced that it had updated the Ranger 3 Deeps mineral resource estimate as part of the 3 Deeps Feasibility Study. This estimate has increased the mineral resource to million tonnes with a change in the overall grade to 0.224% U3O8, equaling to 43,858 tonnes of contained U3O8. ERA expects uranium production in 2015 to be within the range of 1,600 tonnes of U3O8 2,200 tonnes and expects that sales to be broadly in line with production. Alliance Resources (AGS ASX) has sold its 25% interest in the Four Mile Uranium project located in South Australia as per July 13, 2015 to unlisted Quasar Resources (held 75% interest), including the Company s share of uranium oxide concentrates already mined for a total consideration of A$ million. Total production (100%) of the Four Mile Mine since commencement of mining in April 14, 2014 to June 30, 2015, is estimated to be 2.44 million pounds U3O8 at an estimated cash operating cost of $ per pound, with Alliance s share of production estimated to be pounds of U3O8. Quarterly production (100%) is estimated to be 436,941 pounds of U3O8 at an estimated cash operating cost of $ per pound produced. In June 2015, Alliance announced an Inferred Mineral resource estimate for the Four Mile Northeast uranium prospect as 75 million tonnes averaging 0.30% U3O8, containing 50.0 million pounds of U3O8. Uraniumletter International 6 Special Report October 2015

7 Toro Energy (TOE ASX) Wiluna Project is the Company s primary asset situated in Western Australia. Wiluna consists of 4 core deposits, Centipede, Millipede, Lake Maitland and Lake Way, as well as 2 secondary deposits, Dawson Hinkler and Nowthanna. Wiluna has a minimal resource of 76.5 million pounds U3O8 grading 479 ppm including 42.2 million pounds grading 898 ppm. Over 80% of the resource is in the Measured or Indicated category, while 98% of the current mine plan sources from Measured or Indicated resources. In addition to the advanced development Wiluna Project, Toro s Theseus Prospect is an advanced exploration project in Western Australia with an Inferred resource of 6.9 million pounds U3O8. Environmental approvals are in place for Wiluna s mining and milling at Centipede and Lake Maitland. The alkaline leach plant with direct participation has a 1.3 million tonnes per year capacity. The capital cost estimate is A$ 415 million. Planned annual production is 2 million plus U3O8 for 15 years. The outcome of beneficiation studies is expected to result in potential reduction in project Capex and Opex. Revised project economics will be reported in Q1, With the approval process having commenced in February 2014, a Draft Public Environment Review with the WA government is due for review. The public comment period is in Q4, The environmental approval is anticipated for Q3, An aboriginal agreement is anticipated end Vimy Resources (VMY ASX) primary focus is the Mulga Rock Uranium Project (MRUP), which is located in the Great Victoria Desert of Western Australia and is one of the third largest undeveloped uranium deposits in Australia. In May 2015, the Company released a Scoping Study which included a Preliminary Economic Valuation. Key highlights from the Study include a total resource estimate of 59.7 million tonnes at 550 ppm U3O8 for a contained 72.7 million pounds U3O8; a life of mine of 16 years with a total production of 47.0 million pounds U3O8; 70% of the uranium mining inventory for first 7 years is from Indicated resources. Cash cost in years 1 to 7 is US$ 25/lb U3O8 including by-product credits; cash cost for the life of mine is US$ 29/lb including by-product credits. MRUP will generate an average annual EBITDA of A$ 161 million at a US$ 75/lb U3O8 price and is calculated to have a robust pre-ta Net Present Value of A$ 764 million with a 39% Invest Rate of Return and a 2.6 year payback. The breakeven price is US$ 46/lb U3O8, including capital payback at a 10% discount rate. A number of opportunities have been identified to further reduce operating and capital costs, which will be incorporated into the Prefeasibility Study which is expected to be completed in the September Quarter Pilot plant test work for the uranium flow sheer will commence in early 2016 to demonstrate the process flow sheet ahead of completing the Definitive Feasibility Study in late Vimy has an A$ 30 million financing package with Resource Capital Fund VI. The Placement proceeds will allow the Company to complete the Pre-feasibility Study on MRUP. Armee Foster Wheeler has estimated an engineering and construction period of 18 months, with 12 months to physically construct and erect the plant. Uraniumletter International 7 Special Report October 2015

8 Cameco (CCO TSX) has been actively exploring for uranium in Australia since 1996 and is involved in a number of projects across the country, including two of Australia s largest undeveloped uranium deposits, Kintyre and Yeelirrie. Kintyre is an advanced-stage joint venture exploration project amenable to open pit mining techniques with Mitsubishi Development Pty. The Project is located in the East Pilbara region in Western Australia. Cameco and Mitsubishi acquired Kintyre from Rio Tinto in Cameco owns 70% of the Project and is the operator. Kintyre has a Measured and Indicated mineral resource estimate of about 55 million pounds U3O8 (100% basis) at an average grade of 0.58%. In 2012 a Prefeasibility Study was completed which concluded that under current market conditions the economics of the Project are challenging. In the same year a Kintyre Mining Development Indigenous Land Use Agreement was signed with traditional owners, the Marhi. In 2014, Cameco Australia carried out further exploration to test for further potential satellite deposits at Kintyre and other regional projects close to Kintyre, which did not produce any significant results. Western Australia s Environmental Protection Authority recommended approval of the Project s Environmental Review and Management Program; further governmental approvals are pending. On September 1, 2015 Cameco released the Public Environment Review (PER) documentation for the Yeelirrie Project. Located in the Shire of Wiluna in the Northern Goldfields region of Western Australia. The PER is an important part of the environmental assessment process and the public review period for a period of two months to December 14, Once the public review period has been close, public submissions, which will be considered by the EPA as it prepares to its report and recommendations on the Project to the Minister for Environment. Cameco is taking prudent steps to prepare the Yeelirrie Project for improved market conditions. Cauldron Energy (CXU ASX) has two project areas covering more than 4,500 km² in two known uranium provinces in South Australia and Western Australia. The Yanray Project in Western Australia comprises 12 granted exploration licences and 7 applications for exploration licences. The Marree Joint Venture in South Australia comprises 5 exploration licences prospective for sedimentary-hosted uranium deposits of both the Beverley uranium and Four Mile uranium style, and for base metal mineralization. In July 2015, incorporating new results from the partially completed drill program of 2014 resulted in an increase of the Mineral Resource (JORC 2012) to 36.1 million tonnes at 270 ppm eu3o8 for a contained metal content of 21.5 million pounds U3O8, including 90% increase in the Indicated Mineral resource to 18.1 million tonnes at 300 ppm eu3o8 for a contained metal content of 12 million pounds U3O8. On September 22, 2015, Cauldron announced that an updated modeling shows the potential for largescale U3O8 mineralization at Bennett Well (Yanray region), attested to by the exploration estimate. A 4,000 metres mud rotary drilling is in progress and is designed to test the exploration target with drill results expected to fall within the target range. Laramide Resources (Laramide) (LAM TSX) assets in development include more than 60 million pounds of U3O8 (NI compliant) in one Australian (Queensland) and two US-based projects (Utah and New Mexico). The Company s main focus is the development of its flagship asset, the Westmoreland Uranium Project in Queensland, which is ranked as one of the 10 largest uranium deposits in Australia. Uraniumletter International 8 Special Report October 2015

9 Westmoreland s latest NI compliant resource totals 51.9 million pounds of U3O8 comprised of 36.0 million pounds Indicated and 15 million pounds Inferred resources contained in 18,7 million tonnes grading 0.089% U3O8 (Indicated) and 9 million tonnes grading 0.083% U3O8 (Inferred). Laramide also is a joint venture partner with Rio Tinto in the Rio Tinto Murphy-Farm-in (51%) and Joint Venture Agreement, situated in the Northern Territory adjacent at the Westmoreland Project, which creates a true district scale opportunity. In October 2014, the Company announced that it had entered into a Sale Purchase Agreement to acquire 100% of the Gulf Joint Venture from Gulf Copper. Energy Metals (EME - ASX) has eight exploration targets located in the Northern Territory and Western Australia covering over 4,000 km². Most of the project contains uranium mineralization discovered by major companies, including the advanced Bigrlyi Project in the Northern Territory. The Company has a 53% interest in the Bigrlyi Joint Venture with Paladin Energy (46.7%) comprising 10 granted exploration licences in retention, two granted exploration licences, and several applications within the Ngalia Basin. A maiden uranium resource estimate of 691 tonnes U3O8 at 555 ppm average (200 ppm cut-off) was obtained for the historical Karins Deposit announce during the six month period ended June 30, Exploration targeting work continues throughout the Company s tenure in the Ngalia Basin, utilizing results from last year s geophysical survey. Four key target areas have been identified. Energy Metals is one of only five companies that currently hold all the required permits and authorities to export Uranium Oxide Concentrates (UOC) from Australia. The Company recently completed a first shipment of UOC and is currently negotiating purchase agreement with Australian uranium producers to enable further shipments from Australia for resale, primary to major Chinese utility China General Nuclear Power Group (CGN), ultimately Energy Metals largest shareholder with 60.6% equity stake. Paladin Energy (PDN ASX) With the ban on uranium mining having been reinstated by the Queensland s state government in early 2015, this has caused Paladin to slow the development of its uranium holdings in the Mount Isa Region of northwest Queensland. The Company has an 82.08% majority shareholding in Summit Resources acquired in 2007, which has three projects including 10 deposits containing million pounds U3O8 Measured and Indicated Mineral resources, as well as 42.2 million pounds U3O8 Inferred Mineral resources (JORC 2004 and NI compliant). 51.4% of the Mineral Resources are located at Valhalla, Skal and Odin, the most important of the other 9 projects. In Western Australia, Paladin holds the Manyingee Uranium Project which has a Mineral Resource estimate, updated JRC 2012 and NI compliant, in January 2014 of 8.37 million tonnes grading 850 ppm for million pounds U3O8 in the Indicated category. Current work on the Project is concentrated on compiling a Field Leach Trial proposal document expected to be submitted to the WA department of Mine and Petroleum in the first half of Several special studies have been started for this work and these include hydrogeological modeling, metallurgical testing and environmental and radiation approval assistance. Uraniumletter International 9 Special Report October 2015

10 At June 1, 2015 Paladin Energy signed a binding Heads of Agreement (HOA) to purchase Energia Minerals Carley Bore Uranium Project, neighboring its Manyingee Uranium Project for a buy consideration of 45 million PDN shares plus A$ 1.6 million in cash (A$ 1.58 million of value based on PDN share price of A$ payable upon completion). Prospective mines Jabiluka Deposit, Northern Territory, owned by ERA (68.4% owned by Rio Tinto) The Jabiluka Uranium Deposit in the Northern Territory was discovered in , 20 kilometres north of the Ranger mine. It is surrounded by the Kakadu National Park but the mine lease area is excluded from the National Park and adjoins the Ranger lease. It has resources of over 130,000 tonnes of U3O8 and is one of the world s largest high-grade uranium deposits. A mining lease was granted in 1982, but development was stalled due to disagreements with the Aboriginal traditional owners, then with the Australian Labor Party coming to power at the 1983 federal election. Commonwealth approval was withdrawn and development ceased. In 1991, ERA, the operator of the adjacent Ranger Mine, bought the Jabiluka lease from Pancontinental Uranium for A$ 125 million. In 1995, the Koongarra Deposit was acquired by Areva. The company tried several times over the years to access the deposit, but it was blocked each and every time by the Mirrar Traditional Owners. In March 2013, Koongarra officially became a part of the World Heritage listed Kakadu National Park. Exploitation of the Jabiluka Deposit was halted in 1998, following an eight-month blockade that included thousands of indigenous and non-indigenous protestors. As a result of that effort, Rio Tinto eventually came to sign the Jabiluka Long-Term Care and Maintenance Agreement which guaranteed that the Mirrar would have veto rights over any future development at Jabiluka. Honeymoon ISL mine, South Australia, owned by Russian state-owned ARMZ (formerly Uranium One) The Honeymoon mine in South Australia was commissioned in 2011 after Uranium One moved to development in In 2008, Mitsui of Japan agreed to join the Honeymoon Project as a 49% Joint Venture partner and a construction contract was then let. In calendar year 2012, Honeymoon ramped up production to tonnes U3O8. Mitsui s A$ 104 million participation largely funded the development and commissioning, but then withdrew from the Project in In November 2013, Uranium One closed the Honeymoon Mine and put it on care and maintenance until uranium prices improve. Uraniumletter International 10 Special Report October 2015

11 Overview of Australia's major uranium reserves and resources Name project Owner Category Resources (million tonnes) Grade U3O8 Reserves M + I Inferred in % Western Australia (WA) Kintyre Cameco Wiluna Toro Energy /0.898 Theseus Toro Energy Yeelirrie Cameco Mulga Rock Vimy Resources Manyingee Paladin Energy Ponton Double 8 Manhattan Corp Yanray Cauldron Energy /0.27 Northern Territory (NT) Ranger ERA Jabiluka ERA Koogarra Areva Bigrlyi Energy Metals/Paladin Energy /0.114 South Australia (SA) Olympic Dam BHP Billiton , , /0.027 Four Mile Quasar/Alliance Queensland (QLD) Valhalla Paladin Energy x /0.064 Westmoreland Laramide Resources /0.083 Skal Paladin Energy /0.052 Bikini Paladin Energy x /0.49 Ben Lomond Mega Uranium /0.21 x through 82.08% interest in Summit Resources Overview of listed major uranium companies focused on Australia (by market capitalization) September 30, 2015 US$ mln. Energy Resources of Australia (ERA) 1) 116 Toro Energy 103 Vimy Resources 57 Alliance Resources 2) 42 Cauldron Enrgy 26 Laramide Resources 3) 17 Emergy Metals 4) 13 1) 18.39% owned by and operated by Rio Tinto 2) accepted offer from Quasar Resources (unlisted) to purchase Alliance's 25% interest in the Four Mile Project for A$ million to hold a 100% interest in the project 3) also owns advanced development project (La Sal) and advanced exploration project (La Jara) in the United States 4) 66.45% equity interest held by China Uranium Development Company Uraniumletter International 11 Special Report October 2015

12 September 30, 2015 Trade symbol Share price Change 12 months Shares Market current year-end in % H L issued cap million million Australia Overviews of worldwide uranium production and exploration companies Producer: A$ A$ A$ A$ A$ Energy Resources of Australia ERA ASX Alliance Resources 1) AGS ASX Development / Exploration: Toro Energy 2) TOE ASX Vimy Resources 3) VMY ASX Cauldron Energy 4) CXU ASX Thundelarra Exploration 5) THX ASX Energy Metals Ltd. EME ASX Encounter Resources ENR ASX Yellow Rock Resources YRR ASX Alligator Energy AGE ASX Uranium Equities UEQ ASX UraniumSA USA ASX Marmota Energy MEU ASX Manhattan Corp. MHC ASX Pepinnini Minerals PNN ASX Cdn$ Cdn$ Cdn$ Cdn$ Cdn$ Mega Uranium 6) MGA TSX Laramide Resources 7) LAM TSX ) commenced ISR production Four Mile Project (Alliance 25% interest) on April 14, 2014; sold 25% interest to unlisted Quasar Resources (holding 75%) for considertion of $ million. 2) bought Mega Uranium 's Lake Maitland Project in August 2013 in exchange for 28% equity interest 3) name change from Energy and Minerals Australia (ASX - EMA) on December 16, ) also uranium assets in Argentina 5) near term focus on copper and gold 6) also uranium assets in Canada, sold Lake Maitland Project to Toro Energy in August 2013 in exchange for a 28% equity interest in Toro (currently 20.81%); also 8.69% equity interest in NexGen Energy 7) also two advanced uranium projects in the US Uraniumletter International a publication by Metal Commodities Investment Platform, 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 tel.: Chamber of Commerce marino.pieterse@metalcommodities-ip.com