Uranium – An Asian tide NOVEMBER

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C ONFIDEN TI AL

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Uranium themes and catalysts Positive near-term price outlook supported by several underlying themes

Kazakhstan

Japanese reactor re-starts

New reactor capacity

 Kazakhstan is the dominant supplier and seen by many buying entities as an authoritarian regime in a geopolitically unsteady area, fuelling an increasing concern about supply security. Kazakhstan was also the only country that continued to build out its capacity during times of low prices, with little new supply from established producers  Currently 43 Japanese reactors are operable and available for restart, and 24 of these 43 reactors are in the process of restart approvals. 2 reactors had restarted by Nov 2015  China’s government plans to increase nuclear generating capacity three-fold to 58 Gwe by 2020-21 and 150GWe by 2030. China completed construction and commenced operation of 20 new nuclear power reactors from 2002-14

US Department of Energy inventory sales litigation

 The DoE has been dumping ~5Mlb of uranium per annum to the market (>8Mlb in 2013, twice the US production)  Coverdyn’s 2014 lawsuit against the DoE, if successful, will make it illegal to dump uranium supply into the market, causing spot prices to increase substantially

Project deferrals due to low prices

 Weak prices over the last four years have caused project deferrals, which will cause an undersupply given that global demand will likely increase due Japan’s return to nuclear power, as well as new reactors in China, India, Russia and Korea

Accelerating M&A

 Consolidation such as Energy Fuel’s acquisition of Uranerz Energy may be commonplace in order to drive project advancement. China’s strong appetite to secure further supply through overseas investments has been seen through CNNC’s purchase of 25% in Paladin’s Langer Heinrich and CGNPC’s takeover of Kalahari Minerals

Global nuclear power plant status USA

99

France

1

58

Japan

43

Russia

3 9

34

China

26

South Korea

24

India

21

Canada

19

UK

16 0

9

31

25

43

4 8

6

22

2

4 25

Operable

55

50

Source: World Nuclear Association

3

75

Under Construction

100

Planned

Uranium – the future is getting bright for miners  Nuclear power currently provides 11% of the world’s electricity and is popular globally  Whilst there is a lack of feasible clean energy alternatives to nuclear, nuclear will remain a key component of the developed world’s requirements to achieve reduced carbon emissions alongside increased electricity demands  With the number of planned or proposed reactors in China, India, Russia and South Korea, the market is looking at a 2-3% annual growth rate over the next 15 years (largest growth since 1970s)  Currently 67 reactors are under construction worldwide, with 436 operational. The majority of reactors are found in the USA, France, Japan, and Russia. An additional 183 reactors have been planned, with approvals, funding and major commitments in place. These are expected to be in operation within 8-10 years  Whilst there is currently a significant inventory overhang of uranium in the market (particularly in Japan) we anticipate a gradual clearing of excess inventory from 2016 with a material tightening of the market possible  Increased near term demand for uranium is unlikely to be met by timely increases in supply due to the long permitting process for new mines, generally few new credible projects and many projects put on ice since Fukushima (11th March 2011)

Consumption outpaces production 250

150

32

35k 30k

169

165 132

170 165 155 155 155 154155 147 152 141 140

140

100

Thousand TWH

mm lbs

200

World electricity consumption 230

25k 20 20k 15k 10k

50

10

6

5k 0

0k 2009

2010

2011

2012

Consumption

2013 2014E 2015E Existing production

2024E

1980

1990 OECD

2012

2035 (est)

Non-OECD

Increased demand for uranium is unlikely to be met by timely increases in supply due to the long permit process for new mines and the lack of high grade uranium deposits with appropriate infrastructure 4

Source: Cameco investor presentation September 2015

Uranium market outlook is positive Overview  Global requirements for 2015 are estimated at 66,000tU with OECD countries representing about 67% (44,900tU) of global demand  The United States accounts for approximately 28% of global uranium consumption and is the single largest consumer  The European Union as a whole consumes around 30% and has no production of significance at the moment  China and India are key demand drivers. China’s power generation is projected to grow 26% by 2020, and India’s to more than double, from 5.8GWe to 12GWe by 2020  We estimate that OECD demand is set to grow by 10.3% from 2015-2020  Uranium is a very small cost of the electricity production from nuclear, with the largest cost being upfront capital

Global nuclear power production

Global uranium consumption by country- 2015

MWe

Rest of world 6.5%

600,000 Rest of world Japan India South Korea Russia France

500,000 400,000 300,000 200,000

China

100,000 USA

Source: World Nuclear Association

2030E

2028E

2026E

2024E

2022E

2020E

2018E

2016E

2014

2012

2010

2008

-

OECD – 67.1%

Russia 6.4% South Korea 7.6%

USA, 28.4% China, 12.4% Other OECD 4.8%

EU – 30.0%

France, 14.0%

Japan 3.9% Other EU 4.8% Belgium 1.5%

Source: World Nuclear Association

Germany 2.9% Spain 1.9%

Sweden 2.3%

UK 2.6%

We expect the current oversupply situation to ease now that Japan has decided to restart its nuclear power generation 5

Uranium globally – reserves and current supply European production and resources are minimal even so Europe consumes 30%, of global supply  Currently 43% of production is through underground mining, 15% open pit and 39% in-situ recovery (and 3% as a combination of these)

Russia 9% Canada 8%

Kazakhstan 12% USA 4% China 3% Niger 7%

Production by country Others 21% Namibia 6% Niger 7% Australia 9%

Kazakhstan 41%

Canada 16%

Brazil 5% Namibia 6%

Australia 29%

South Africa 6%

>10% $50/lb)  Exploration budget were curtailed and many projects were postponed indefinitely  Re-starts in Japan have commenced and China and India continue to construct nuclear power stations, tightening the market for uranium in the near future

 In our view, a strong case exists that uranium prices face upside pressure in the near future, providing a sought after reprieve from a generally negative price outlook for hard commodities  As a result of the above, current prices are materially below long term forecast prices (70% upside)  Share prices of most uranium miners do not yet reflect price increases  We think that uranium juniors would benefit most from a uranium price uplift, especially ones with low production costs and well advanced and run projects (post feasibility study) in stable jurisdictions  Being a strategic commodity and based on recent conversations with market participants we believe that Japanese, Chinese and European utilities are becoming increasingly concerned by the supply dominance of Kazakhstan, looking to gain access to long term supply from a diversified pool of sources

Increased demand for uranium might well provide an antidote to the negative outlook for most other commodities 13

Appendix

14

Trading comparables Market cap (US$mm)

Net debt (US$mm)

EV (US$mm)

1,067 412 (15) (231) 31

6,023 675 196 (94) 100

EV/EBITDA 2016E 2015E

P/E 2015E

2016E

Current Gearing

EV/Resources EV/Reserves (US$/lb) (US$/lb)

2016E

3-month price perf

1.15x NA 1.06x 0.43x NA

1.12x NA 0.89x 0.47x NA

(9.1%) 40.3% (16.7%) (4.7%) (29.2%)

5.38 1.29 1.40 NM 4.51

14.03 6.68 NA NM NA

0.88x 1.06x

0.83x 0.89x

(3.9%) (9.1%)

3.15 2.95

10.36 10.36

P/B 2015E

Uranium p eer gro up Pro ducers Cameco Paladin Denison Mines ERA UR-Energy

4,956 320 211 137 70

Average Median

21.5% 128.7% (6.9%) (168.8%) 44.1%

11.0x NM NM NM NM

8.3x 7.8x NM NM 18.8x

18.4x NM NM NM NM

13.1x 20.8x NM NM 18.1x

11.0x 11.0x

11.6x 8.3x

18.4x 18.4x

17.3x 18.1x

3.7% 21.5%

7.5x NM NM NM NM NM NA NM NA NM NM

NA NA 10.7x NM 9.4x 11.4x 4.8x NM NA NM NA

NM NM NM NM NM NM NA NM NA NM NM

5.6x NM 29.0x NM NM NM NA NM NA NM NA

(2.4%) (5.3%) (16.0%) (15.4%) 12.7% 9.1% (3.6%) (15.0%) (8.6%) (22.1%) (14.0%)

NA NA NA NA NA NA NA NA NA NA NA

NA NA NA NA NA NA NA NA NA NA NA

(0.3%) (26.0%) 21.1% 1.4% (28.3%) (18.2%) 9.6% 47.1% (0.5%) (39.3%) (21.1%)

NA 1.54 1.15 NA 1.05 1.33 1.13 0.65 0.73 0.13 0.24

NA NA NA NA NA NA NA NA NA NA NA

7.5x 7.5x

9.1x 10.0x

NA NA

17.3x 17.3x

(7.3%) (8.6%)

NA NA

NA NA

(4.9%) (0.5%)

0.88 1.05

NA NA

9.2x 9.2x

10.2x 9.4x

18.4x 18.4x

17.3x 18.1x

(3.9%) (6.1%)

0.88x 1.06x

0.83x 0.89x

(4.6%) (6.9%)

1.58 1.15

10.36 10.36

Develo p ers / Exp lo rers Uranium Participation Corp. Fission Peninsula Energy NexGen Energy Energy Fuels Uranium Energy Corp. Toro Energy Berkeley Energy Vimy Resources UEX Kivalliq Average Median

447 175 150 142 122 107 98 69 58 22 13

(11) (9) (24) (22) 16 10 (4) (10) (5) (5) (2)

437 165 127 120 142 116 94 58 53 17 11

Overall Average Median

Source: CapitalIQ as of 19 Sept 2015 Note: Fission Energy and Denison mines announced a merger in 2014 but was cancelled in Oct 2015

15

Transactions in uranium space Precedent transactions in the uranium sector since 2011 Closed

Target

Buyer

Seller

Geography

-

Four Mile Project1

Quasar Resources

Alliance Resources

Australia

Nov-14

Paladin Energy (15%)

HOPU

-

-

Jan-14

Langer Heinrich (25% stake)

CNNC

Paladin

Sep-13

Alpha Minerals Inc.

Fission Uranium Corp.

-

Jan-13

Uranium One Inc. (48.6% Stake)

ARMZ Uranium Holding Co.

-

Global

Aug-12

Yeelirrie

Cameco Corp

BHP Billiton

Australia

Jun-12

Denison Mines Corp (US Mining Division) Energy Fuels Inc.

Denison Mines Corp.

Jun-12

Millenium Project (27.94% stake)

Cameco Corp

Dec-11

Extract Resources Limited (57.26% Stake)

Aug-11

Hathor Exploration Limited

TOTAL

Deal value EV / resources (US$mm) (US$/lb) 552 52

0.90

57.7

Namibia

190

5.57

34.1

US

176

3.25

54.2

1,320

6.97

189.4

430

3.09

139.0

US

110

4.18

26.33

Areva Resources

Canada

150

7.94

18.9

CGNPC Uranium Resources

-

Namibia

2,200

4.18

526.3

Rio Tinto Plc

-

Canada

642

9.98

64.3

5,325

4.98

 Recent precedent M&A transactions in the uranium sector suggest EV / resource valuations of between US$4/lb to US$9/lb  M&A is concentrated around uranium deposits where resource size exceeds 25mm lbs

Source: SNL, Merger market, company filings 1Deal announced but not completed 2Deal included US$25mm worth of mined concentrate 3Historical resource estimates

16

Resources contained (Mlb) 3.73 14.8