SECUTOR. UEX Corporation T-UEX. UEX Update 2015 Exploration Program Heats Up. Company Update. 23 March 2015

Transcription

1 COMPANY SUMMARY Project: Loca on: Ownership: Commodity: Status: Resources: Project: Loca on: Ownership: Commodity: Status: Resources: MARKET DATA Price: Market Cap: Common Shares: Fully Diluted: 52 Wk Range: 30 Day Avg Vol: TOP HOLDERS Cameco Global X Uranium ETF Blackrock TOP HOLDERS Management/insiders ORATION Shea Creek Athabasca Basin, Saskatchewan 49.1% Uranium Explora on % (indicated) (49.1% basis) Hidden Bay Athabasca Basin, SK 100% Uranium Explora on % (indicated) $0.27 $63.5 MM MM MM $ , % 7.8 % 3.3 % 8.5 % Source: quotemedia.com Company Update UEX Corporation T-UEX UEX Update 2015 Exploration Program Heats Up 23 March 2015 UEX is a uranium explorer with a major presence in the Athabasca basin. The Company s por olio includes six wholly-owned and 11 joint ventured uranium projects totaling 260,121 hectares in the eastern, western and northern perimeters of the Athabasca Basin. UEX s por olio includes some of the highest quality projects in the Basin: Shea Creek and Hidden Bay are the Basin s second and sixth largest undeveloped uranium resources respec vely. On many of its joint venture projects, UEX is partnered with AREVA, a strong project partner. The Company is fully funded in 2015, with a robust cash balance of approximately $6.8 million which will suffice to advance explora on at several of its priority projects. For the year, partners UEX and AREVA have commi ed $4.8 million toward explora on spending at the Western Athabasca JV projects (WAJV), an increase over last year s budget of $2 million. UEX also plans to spend $2.5 million at its 100%-owned Hidden Bay project, as well as $455,000 at its 90.69%-owned Black Lake project. Extensive Drill Program Kicks Off at Shea Creek A er a Year of Hiatus. The WAJV proper es include Shea Creek, Erica, Brander Lake, Alexandra, Nikita, Laurie, Mirror River and Uchrich. The Shea Creek project is the most advanced, with $51.5 million spent on explora on and development to the end of The 27,343 hectare Shea Creek property is jointly owned by UEX and AREVA, with UEX holding a 49.1% interest. Shea Creek is located 13 kilometres south of the historic Cluff Lake mine, with road access via Highway 955. At Shea Creek, global resources total 95.9 Mlbs grading 1.30% U3O8 (100% basis) and have been defined in four deposits: Kianna, Anne, Colle e and 58B. The uranium deposits at Shea Creek are hosted in sandstone perched above the unconformity, straddling the unconformity, as well as in the basement rock. Mineraliza on remains open in almost all direc ons. UEX can earn up to an addi onal 0.9% interest in the project and up to 49.9% interest in further resource discoveries by spending up to $18.0 million over six years. The Company has earned an addi onal 0.1% interest to date. Of the $4.8 million 2015 explora on budget designated by the partners for the WAJV projects, $2.8 million will be spent on drilling and electromagne c surveying at Shea Creek, with approximately $1.4 million of the subtotal funded by UEX. In mid-february, the partners began a 31.5 kilometre electromagne c survey of the southernmost claims of the Shea Creek. The program is expected to be completed by the end of March. The survey will give the partners insight on priority drill targets. During the summer, the partners will commence a 4,900 metre, 8 hole drill program at Shea Creek targe ng four high-priority areas. Drilling is expected to begin in June, when a drill rig is mobilized from the Erica property. Maria Kalbarczyk, CFA Analyst mkalbarczyk@secutor.ca (416) Arie Papernick Equity Capital Markets apapernick@secutor.ca (416) The majority of previously drilled holes have been concentrated along a small sec on of the Saskatoon Lake Conductor. So far, only 3 kilometres of the 33 kilometre Saskatoon Lake Conductor have been explored, and holes drilled during this year s drill program will target peripheral areas.

2 UEX Corpora on 23 March 2015 One of the explora on holes will be drilled on an electromagne c (EM) conductor which runs parallel and to the west of the Saskatoon Lake Conductor, approximately 650 metres southwest of the Anne deposit. Three holes will be drilled along the Saskatoon Lake Conductor and will test the area to the south of the known deposits at Shea Creek. Three addi onal holes will be drilled along the Saskatoon Lake Conductor at the southernmost end of the property. UEX will follow-up on hole SHE-2, which was drilled along the Saskatoon Lake Conductor and intersected 0.342% U3O8 over 0.4 metres. In addi on to Shea Creek, the partners have planned explora on work at the Erica property this year. The property s geophysical signature is analogous to that at Shea Creek. UEX owns a 49.1% interest in Erica, while AREVA owns the remaining 50.9% and is the project operator. During 2015, the partners plan to spend $1.5 million on explora on at the property, with $736,000 of the program to be funded by UEX. The partners program will include 3,500 metres of drilling in four to six holes to test an EM conductor which lies parallel to the Saskatoon Lake Conductor. UEX opted not to par cipate in funding explora on at the Laurie project. AREVA alone will fund a $500,000 program on the property. As a result of op ng out of funding the current year program, UEX s interest in the project will be reduced to 42.25% from % previously. UEX can propose to increase this year s explora on budget for the WAJV projects by up to $4 million, and UEX may consider expanding the program if explora on at Shea Creek proves to be very successful. A decision would also be con ngent on the partners ability to fund an expanded program. Shea Creek Wireframe Model Source: Company filings 2015 Drilling at Hidden Bay to Test Priority Basement Targets. UEX s 100% owned Hidden Bay deposit lies in the eastern por on of the Athabasca Basin, and is only 4 kilometres from the Rabbit Lake Mill and McLean Lake mills. The deposit is road accessible via Highway 905, and has power access via a hydroelectric transmission line 3 kilometres north of the property. Global resources at Hidden Bay total 39.3 Mlbs U3O8 and are contained within the Horseshoe, Raven and West Bear deposits. In September 2014, UEX reviewed the deposit s historical database for indicators of basement-hosted uranium mineraliza on. The historical data is extensive, and includes 379 kilometres of EM conductors and 1,800 drill holes. Historically, the property has been explored for over four decades, but historical explora on focused on the poten al for uranium mineraliza on at or above the unconformity. Only ~25% of the holes drilled during previous campaigns tested the basement rocks. The Company s review successfully iden fied twelve untested basement uranium targets.

3 UEX has allocated a $2.5 million explora on budget for Hidden Bay in The Company plans to drill approximately 10,000 metres in 30 holes. Drilling will test up to 4 of 12 basement targets on the property which were iden fied during last year s historical review. The program ini ally kicked off with one drill rig and was subsequently expanded to two rigs. One drill rig is currently turning at the Dwyer Lake target area, and the second rig is drilling at the Wolf Lake target area. As of February 20th, the Company had completed 4,000 metres in 19 holes at Hidden Bay, primarily around the Dwyer Lake target area. Many of the holes encountered strong sandstone hydrothermal altera on, clay altera on within basement rocks, faul ng and favorable basement lithology. At Dwyer Lake, drilling resulted in the expansion of a zone of intense clay altera on around historical hole D-57 to 175 metres by 75 metres, and also encountered kaolinite-illite clays, which were not seen in hole D-57. The Company is planning to drill addi onal holes to the north, south and along strike of this altera on zone Drilling Begins at Black Lake. Finally, at Black Lake, UEX has outlined a $455,000 budget to fund a 1,900 metre drill program during the year. Black Lake covers 30,381 hectares, and is located at the northern margin of the Athabasca Basin. Almost $16 million has been spent on explora on at the property to date. UEX owns a 90.69% interest in the property and is the operator, with AREVA holding the remaining 9.31% interest. In 2013, UEX and Uracan Resources entered into an agreement whereby Uracan has the op on to earn a 60% par cipa ng interest in Black Lake from UEX by incurring $10 million in explora on expenditures over a 10-year period. Historical drilling encountered mineraliza on at the unconformity, and last year s drill program intersected mineraliza on up to 19 metres below the unconformity in hole BL-148. Dravite, siderite and pyrite veining has been iden fied at Hidden Bay, there are mul ple clay altera on zones, and mul ple intervals of mineraliza on grading over 0.5% U3O8 have been encountered in past drilling on the property. Unconformity style mineraliza on has been traced along a fault of the Pla Creek fault system over a 1.7 kilometre strike length. UEX Property Map Source: Company filings

4 Summary. Uranium spot prices have moved up into the US$40 per pound range in 2015, and are up almost 40% from 2014 lows. Price increases have also been accompanied by a dis nct spike in spot volumes, with year-to-date volumes also up ~40% compared to While it has been postulated that uranium prices have to reach a US$70 per pound range to incen vize the construc on of new mines, projects in the Athabasca Basin are likely to be amongst the most a rac ve when this me comes. The Athabasca Basin hosts the highest-grade uranium deposits in the world, with average grades fi een mes those in the rest of the world. 10 of 15 of the world s highest-grading uranium deposits are also found in the Athabasca Basin, and the Basin s mines account for over 20 percent of global produc on. With significant landholdings around the perimeter of the basin, UEX will benefit from increasing interest in the uranium market.

5 Secutor Capital Management Corpora on Commentary Disclaimers The informa on and opinions contained in this commentary were obtained or arrived at from sources we believe to be reliable at the me and neither Secutor Capital Management Corpora on (Secutor) nor its employees, agents or informa on suppliers can guarantee that such informa on is accurate or complete and it should not be relied on as such. Inves ng in companies within the mining and resource sector typically carries a great deal of risk, including forecast, financial, valua on, exchange and poli cal risks. Past performance should not be seen as an indica on of future performance. Any securi es in this commentary can fluctuate in value and accordingly you are not certain to make a profit by purchasing or selling them: you could make a loss. Secutor analysts are salaried employees who may receive a bonus that may be derived, in part, from corporate finance income. Analyst Certification I, Maria Kalbarczyk, cer fy that the views expressed in this commentary accurately reflect my personal views about the subject issuers. I also cer fy that I have not, am not, and will not receive, directly or indirectly, compensa on in exchange for expressing my views in this commentary. Secutor does, and seeks to do business, with companies covered in this commentary. As a result, investors should be aware that the firm may have a conflict of interest. Secutor and/or its employees from me to me may hold, buy and sell shares, op ons or warrants of any company included in this commentary. Ticker Company UEX-T UEX Corpora on X The Analyst preparing this report (or member of the Analysts' household) have a long or short posi on in the securi es of the company or serve as a director, officer or advisory board member As at the end of the month immediately preceding this publica on either Secutor, one of its affiliated companies, its directors or officers beneficially own 1% or more of the company Secutor or one of its affiliated companies has managed or co-managed or par cipated as selling group in a public offering of securi es for this company in the past 12 months An officer or director of Secutor or the Analyst preparing this commentary has received compensa on from this company in the past 12 months Secutor or one of its affiliated companies expects to receive compensa on or intends to seek compensa on for investment banking services from this company in the next 3 months The Analyst or Secutor has been reimbursed by the issuer for travel costs incurred as a result of a site visit in the last 12 months This commentary is intended for use only in provincial jurisdic ons where Secutor is registered and not to be construed as an offer or solicita on to buy or sell any security. The securi es men oned in this commentary may not be suitable for all investors and may not be eligible for sale in some jurisdic ons. Our commentary (an analyst comment about an issuer that does not include a ra ng or recommenda on) is only intended for professional investors. Secutor accepts no liability whatsoever for any loss arising from any use or reliance on this commentary or the informa on contained herein. Any reproduc on, in whole or part, of this commentary, without permission, is prohibited. Secutor is a member of the Investment Regulatory Organiza on of Canada and the Canadian Investor Protec on Fund.