Investor Update February 2014

Transcription

1 Investor Update February 2014

2 2 Cautionary Statements This presentation contains certain forward-looking statements and forward-looking information that are based on the current internal expectations, estimates, projections, assumptions and beliefs of Uranium Participation Corporation ( Uranium Participation Corp. or the Corporation ). Forwardlooking statements generally can be identified by the use of forward-looking terminology such as may, will, expect, intend, estimate, anticipate, plan, should, believe or continue or the negative thereof or variations thereon or similar terminology. By their very nature, forward- looking statements involve numerous factors, assumptions and estimates. A variety of factors, many of which are beyond the control of Uranium Participation Corp., may cause actual results to differ materially from the expectations expressed in the forward-looking statement. These factors include, but are not limited to, volatility and sensitivity to market prices for uranium, demands for nuclear power and the impact of change in foreign currency exchange. Additional information about the material factors or assumptions on which forward-looking information is based and the material risk factors that may affect actual results is contained in the Corporation s Annual Information Form dated May 2, 2013, included under Risk Factors. These and other factors should be considered carefully, and readers are cautioned not to place undue reliance on these forward-looking statements. t t Although h management reviews the reasonableness of its assumptions and estimates, unusual and unanticipated events may occur which render them inaccurate. Under such circumstances, future performance may differ materially from those expressed or implied by the forward-looking statements. Except where required under applicable securities legislation, Uranium Participation Corp. does not undertake to update any forward-looking information statement.

3 3 Investment Strategy At least 85% of net proceeds of any equity offering is invested in uranium Primary objective is to achieve appreciation in the value of its uranium holdings Investment strategy is to buy and hold and not to actively speculate on short-term term prices

4 4 Global Nuclear Trends Traditional 20 countries with nuclear power in steady state, but a few in slow decline Currently 30 countries with nuclear power capacity In Japan long-term energy policy remains up in the air Largest trade deficit due to weakening currency & higher energy costs. Estimates range from 32 to 42 reactors in operation by 2020 Up to 20 serious newcomer states About 10 fast growth/new build expansion countries

5 Demand Growth Fueled by New Builds 5 Top 3 represent over 59% of the 555 reactors under construction, planned or proposed China India Russia USA Japan UAE Ukraine South Korea Source: World Nuclear Association, January 2014 Under Construction Planned Proposed

6 6 China Nuclear Plans Post-Fukushima, complete review undertaken of existing nuclear regulations and safety features Delays in new construction approvals linked to government s need to gain public acceptance in nuclear program October 2012, State Council approved new nuclear safety plan and new nuclear energy targets 58 GWe by 2020, 96 GWe by 2025 Currently 19 operating units ~16 Gwe Under construction: 29 units / ~32 GWe should all be online by mid-2018

7 7 World Nuclear Power Reactors Proposed Planned Under Construction Today there are 92% more reactors under construction and planned than at the peak of the nuclear renaissance in Source: Ux Consulting, World Nuclear Association

8 8 Primary Uranium Supply Uranium production continues to increase even at low uranium prices Production increased by 8.8% from 2011 to production up by 2.5% Production concentrated in hands of mega-producers 9 producers represent ~90% of world production Increasing Geopolitical risk Threat to existing and planned production in Niger Kazakh and African production accounted for 55% of global production in 2012 Various new projects have been canceled/delayed AREVA, BHP, Cameco, and Uranium One have all altered plans due to new market environment 8

9 9 Secondary Supplies Russian HEU Deal ended d in 2013 Russia could still use HEU internally, but no chance of HEU-II deal US U.S. Department t of Energy excess uranium inventories i are lower, but still substantial 111 million pounds U 3 O 8 equivalent in 2012 Russian government still holds large quantities in various forms Russia intends to mainly use its own inventories to fuel domestic reactors Commercial inventories held by utilities and suppliers Japanese utilities sitting on as much as 100 million pounds U 3 O 8 e Enrichers will continue to underfeed plants, especially URENCO and Russia Bottom Line: secondary supplies will continue to be a low cost supply source through 2020 and beyond at 8-15% of total supply.

10 10 Near Term Uncovered Demand UxC Lbs s. U 3 O 8 (m million) M lbs. Non-U.S. Utilities U.S. Utilities - Source: Uranium Market Outlook, Q4 2013

11 11 Annual Spot Price Projections $90.00 (US$/lb U 3 O 8 ) $ $70.00 $60.00 Low Price Mid Price $50.00 High Price $40.00 $30.00 Source: Uranium Market Outlook, Q4 2013, Ux Consulting Company

12 UPC ACTIVITIES 12

13 Investment Portfolio - 01/31/14 (All figures are CDN$ 000s except per/unit costs) 13 Investments in Uranium: COST MARKET U 3 O 8 7,826,811 lbs $ 376,859 $308,943 UF 6 2,153,471 KgU $ 353,357 $237,852 1 TOTAL: $730,216 $546,795 U 3O 8 average cost and market value per pound: In CAD $ $ In USD $ $ UF 6 average cost and market value per KgU: In CAD $ $ In USD $ $ ) Includes a Cdn$4 0 million fair value adjustment for inventory held 1) Includes a Cdn$4.0 million fair value adjustment for inventory held at USEC. 1) Converted at the January 31, 2014 exchange rate of $

14 14 Licensed Storage Facilities Cameco Eurodif USEC Comurhex ConverDyn

15 15 Net Asset Value Since Inception (M Cdn$s) $1,000 $800 $600 $400 $200 $0 (As of Jan 31, 2014)

16 16 Share Price & NAV/share $20.00 $15.00 SHARE PRICE $10.00 $5.00 $0.00 NAV/SHARE (As of January 31, 2014)

17 17 Premium (Discount) to NAV 60.0% 50.0% 40.0% 0% 30.0% 20.0% 10.0% 0.0% 10.0% 20.0% 30.0% 40.0% (As of January 31, 2014)

18 18 Share Price & Spot Price $ $ SHARE PRICE $18.00 $16.00 (000s lb bs U 3 O 8 ) $ $ $80.00 $60.00 $ $20.00 UXCO SPOT PRICE $14.00 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $ January January 2014 $ (As of January 31, 2014)

19 19 Corporate Information Exchange TSX:U Ron Hochstein (President) Shares Outstanding M Jim Anderson (C.F.O.) Market Cap. $587.3 M Dick McCoy y( (Chairman) (as of January 31, 2014) Paul Bennett (Director) Jeff Kennedy (Director) Net Asset Value $555.0 M Garth MacRae (Director) NAV/Share $5.22 (as of January 31, 2014) Liquidity idit (3 mos. avg) 660,000000

20 20 Ron F. Hochstein, President & C.E.O. 595 Bay Street, Suite 402 Toronto ON M5G 2C2 Tel: