ARMZ Uranium Holding:
Expanding Global Presence
World nuclear renaissance
World NPP’s construction plans dynamics, pcs.
600
Proposed
500
Planned
551
Under construction
400
250
300
345
266
222
200
327
158
106
43
141
53
151
64
28
93
34
Jan-2007
Jan-2008
Jan-2009
Jan-2010
Jun-2010
100
0
Прочие
Others
88%
607
700
USA
США
600
500
Russia
Россия
440
Корея
S. Korea
300
Japan
Япония
200
India
Индия
100
Китай
China
2010
2009
Source: WNA
The total number of NPPs under
construction, planned / proposed
increased from 250 to 551 units over the
past 3.5 years.
In a 20 years:
88 % growth of operating NPPs
worldwide.
Most active nuclear industry development
- in China and India.
2,5-fold grow of installed NPP’s capacity
in Russia.
Франция
France
400
0
55 new NPPs under construction
worldwide.
119% growth of total installed nuclear
capacity.
823
800
440 operating Nuclear Power Reactors
with a installed capacity of 376 GWe.
55
NPP’s construction, pcs.
900
Today
2020
2030
Global financial crunch had no impact on
NPPs plants construction. It gave
impetus to nuclear energy development,
confirming its reliability, efficiency and
profitability.
Today the Nuclear Renaissance is a
reality.
Rosatom — Global Leader in Nuclear Industry
ARMZ, Uranium mining
 Uranium mining and supply
 World’s №5 in uranium production
Electricity generation
 World’s №2 in installed capacity (23.2GW)
 Operates 32 reactor cores across
10 power stations
 Further 7 power stations in construction
Rosatom
NPP construction
Holds 16% market share in terms
of nuclear power plant construction worldwide
Is a fully diversified corporation,
with operations ranging from
uranium mining to NPP construction,
power generation, and sales
Uranium conversion and enrichment
 40% of world’s uranium enrichment
capacity
 Enrichment and supply of uranium to the
US, Europe, Asia, and other countries
NPP’s Engineering and equipment supply
 Supplies equipment and services to the power
generation and Oil & Gas sectors
 Supplies equipment to over 20 countries
Nuclear fuel fabrication and supply
 Supplies NPPs in Russia and 76 other NPPs
across 14 countries (17% market share)
 Annual export volume in excess of $1bn
3
Rosatom’s Strategy and Primary Focus —
NPP Construction Abroad
Rosatom
Byelorussia
Germany
Czech Republic
Ukraine
Kazakhstan
Hungary Slovenia
Bulgaria
Portugal
Armenia
Turkey
Jordan Iran
Belgium
Croatia
Serbia
Georgia
Albania
Armenia
Cyprus
China
Israel
Jordan
Libya
Egypt
Kuwait
Qatar
Taiwan
India
Vietnam
Gambia
Guinea-Bissau
Vietnam
Philippines
Dschibuti
Sri Lanka
Rosatom holds 16% current
market share in NPP
construction worldwide
Brunei
Togo
Malaysia
Active units worldwide
Nuclear power plants
NPP Constructed – 31 units
ROSATOM
Under construction – 5 units
3rd worldwide
by active units
Decision’s been made – 29 units
Negotiations – 16 units
Source: Company reports
Rosatom’s global development strategy
suggests reliable and long-term
uranium supplies. Thus, ARMZ’s strategy aimed at diversification of its assets
4
by low risk and long-term uranium projects.
Uranium production capabilities to 2030
tU
Uncovered demand «window of opportunities»
production
Stages of the uranium industry development
 2010- 2020 - reactor demand covered by uranium production
 after 2020 - uranium production shortage
 after 2025 – decrease of uranium production
and
production capacity shortage
(decommissioning of some mines due to U resources depletion)
WNA,2009,
reference
5
World uranium production at a glance
Companies – leaders of U production in 2010, tU
World uranium production in 2004-2010, tU
60000
12000
54000
50305
50000
40251 41557
40000
39357 41102
Others
43648
10000
USA
Uzbekistan
8000
Russia
Namibia
20000
Kazakhstan
8770
7157
6620
6000
4276
Niger
30000
10608
4000
2000
2347 2300 2088
1453 1120
0
Australia
10000
Canada
0
2004
2005
2006
2007
2008
2009
2010
U production growth rate in 2010, %
80
 World uranium production in 2010 reached 53,4 thou tU.
73
(ARMZ preliminary estimation)
60
 Production growth rate in 2010 amounted to 6%, and is lower
than 2009 production rate, which amounted to 15%.
40
20
20
16
10
6
3
 Kazakhstan significantly increased uranium production in
2010, whereas Australia, Canada, Namibia slightly decreased
uranium output.
0
 ARMZ – U1 alliance holds third place in 2010 global
uranium production after Kazatomprom and Cameco.
0
-20
-22
-40
-21
 As for U production growth rating, ARMZ – U1 alliance
holds second place among largest uranium producers.
ARMZ & Uranium One: established and reputable
partnership
7
Synergy and value creation
through organic growth and
further M&A deals
Uranium One price of shares, CAD
6
5
4
3
Dec, 2010
2
1
0
2008
2009
2010
2011
Jun 08, 2010
Second U1
deal expected
to close
Dec 15, 2009
Second U1 deal
announced
Jul, 2008
Jun 14, 2009
First U1
Deal Closed
Start of
negotiations
First U1 deal
announced
ARMZ’s
existing
stake
highlights its commitment to
Uranium One as a long-term
strategic partner.
7
Why Uranium One?
Best in class assets
with lowest cash
cost (Kazakhstan)
Significant growth
prospectives
Best in class management
(bringing mines into
operation, significant
experience in M&A)
Widest diversification
of assets (projects on 3
continents: America, Asia
and Australia)
Highest standards
Track record and high
of corporate
profile among the sector’s
governance
public companies
Uranium One is the best opportunity to implement ARMZ diversification
strategy and the platform for ARMZ growth
ARMZ projects pipeline
Exploration / Perspective
Mongolia
Armenia
Namibia
Designing / Exploration
Elkon
Gornoe
Olovskaya
Lunnoe
ARMZ strategy —
through
diversification to
world’s leadership
Construction
Khiagda
U1
Honeymoon
US ISL
N.Kharasan
Production
U1
Akbastau
Zarechnoe
Источник: АРМЗ
Priargunsky U1 Karatau
Akdala
Dalur
S.Inkai
9
ARMZ – U1 alliance potential
ARMZ — Uranium One will be one of
the leading global uranium producer.
It preliminary ranks second
in production volume by 2015.
2015 Uranium Production, th. t. U*
13.0
14.0
12.4
11.5
12.0
9.6
10.0
8.5
8.5
8.0
6.0
Further U resources strengthening,
especially in the lowest cash cost
category.
3.5
4.0
2.0
0.0
Synergy in combining production
facilities in Kazakhstan and political
risks minimization.
* on attributable basis
Key market players’ reserves
with cash cost less 80$/kg , th. t. U*
300.0
Rosatom guarantees U demand and
access to new markets.
264
250.0
200.0
150.0
192
146
103
100.0
95
84
64
37
50.0
0.0
The increase in market capitalization
and the ability to attract investment,
using all the market mechanisms.
Excellent potential for further ARMZ
– Uranium One growth.
* on attributable basis
Deal with the Uranium One is the first and most important step in ARMZ strategy
Source: UxC data, ARMZ evaluation
10
ARMZ New M&A Target - Mantra Resources
Assets Overview
Asset
Quality
Exploration
Upside
Project Geography
• Sandstone-hosted deposit located within
the Karoo sediments
• Multiple stacked mineralized horizons of
variable thickness at shallow depths (i.e.
less than 100 m)
• Relatively low technical risk based on
preliminary scoping study and
metallurgical work
• No drilling and blasting required
• Government has been very supportive of
the mining industry
• Significant resource increase potential
within existing licenses
• Nyota Prospect only covers 100 km2 of
3,250 km2 land package
• 100 km2 of airborne radiometric anomalies
detected
• Higher grade mineralization has been
observed at surface in outcrops and
trenches
Handa
Bahi North
TANZANIA
Mkuju River
Regional Karoo
Targets
MOZAMBIQUE
Mbamba Bay
ZVP Mozambique
PFS results overview
The flagship Mantra’s Mkuju River project
(Tanzania) is low cost, near term
production, significant potential to
increase resources and life of mine.
PFS
LOM Production
~3.7 mm lbs U3O8 per
annum
Mine Life
12 years, with potential to
increase
Mining Grade
308 to 586 ppm U3O8
Recovery
85% recovery and low acid
consumption
LOM Avg Cash
Cost
US$28.06 / lb U3O8
Development
Capex
US$298.1 million
11