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Entering the Uranium Sector Investor Presentation July 2020 - - PowerPoint PPT Presentation

1 Entering the Uranium Sector Investor Presentation July 2020 TSX-V: NXN 2 Disclaimer Information Contained In This Presentation This presentation is a summary description of NxGold Ltd. (NxGold or the Company) and its business


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TSX-V: NXN

Entering the Uranium Sector

Investor Presentation July 2020

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Information Contained In This Presentation This presentation is a summary description of NxGold Ltd. (“NxGold” or the “Company”) and its business and does not purport to be complete. This presentation is not, and in no circumstances is it to be construed as, a prospectus, an advertisement, or a public offering of securities. No securities regulatory authority or similar authority has reviewed or in any way passed comment upon the document or the merits of the Company’s securities and any representation to the contrary is an offence. Except where otherwise indicated, the information contained in this presentation has been prepared by NxGold and there is no representation or warranty by NxGold or any other person as to the accuracy or completeness of the information set forth herein. Except as otherwise stated, information included in this presentation is given as of the date hereof. The delivery of this presentation shall not imply that the information herein is correct as of any date after the date hereof. All dollar amounts referenced herein, unless otherwise indicated, are expressed in Canadian dollars. Cautionary Note Regarding Forward-looking Information This presentation contains "forward-looking information" and “forward looking statements” within the meaning of applicable Canadian securities laws. Forward-looking information and statements include, but are not limited to, statements with respect to, planned exploration activities, the future interpretation of geological information and cost of such exploration activities, future financings, the future price of gold, and requirements for additional capital. Generally, but not always, forward looking information and statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or the negative connotation thereof or variations of such words and phrases or statement that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved” or the negative connation thereof. Forward-looking information and statements are based on our current expectations, beliefs, assumptions, estimates and forecasts about the Company’s business and the industry and markets in which it operates. Such forward information and statements are based on numerous assumptions, including among others, the availability of financing, the accuracy of previous exploration records and results, that the results of planned exploration activities are as anticipated, the price

  • f gold, the cost of planned exploration activities, that third party contractors, equipment and supplies and governmental and other approvals required to conduct the Company’s planned exploration activities will be available on reasonable

terms and in a timely manner and that general business and economic conditions will not change in a material adverse manner. Although the assumptions made by the Company in providing forward looking information or making forward- looking statements are considered reasonable by management at the time, there can be no assurance that such assumptions will prove to be accurate. Forward-looking information and statements also involve known and unknown risks and uncertainties and other factors, which may cause actual results, performances and achievements of NxGold to differ materially from any projections of results, performances and achievements of NxGold expressed or implied by such forward-looking information or statements, including, among others: limited operating history, negative operating cash flow and dependence on third party financing, uncertainty of additional financing, delays or failure to obtain required permits and regulatory approvals, no known mineral resources/reserves, reliance on a single project, aboriginal title and consultation issues, reliance on key management and other personnel; potential downturns in economic conditions; availability of third party contractors; availability of equipment and supplies; failure of equipment to operate as anticipated; accidents, effects of weather and

  • ther natural phenomena and other risks associated with the mineral exploration industry; changes in laws and regulation, competition, and uninsurable risks.

Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those contained in the forward-looking information or implied by forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking statements or information. The Company undertakes no obligation to update or reissue forward-looking information as a result of new information or events except as required by applicable securities laws. The footnotes, endnotes and appendices to this presentation contain important information. The endnotes and appendices are found at the end of the presentation.

Disclaimer

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Technical Information The scientific and technical information in this presentation has been prepared or approved by Darren Lindsay, Vice President of Exploration and Development of the Company, a “qualified person” within the meaning of National Instrument 43-101 – Standards of Disclosure for Mineral Projects. For details of the Kuluu Project including the sampling procedures, quality assurance program and quality control measures, analytical or testing procedures applied during the execution of the work reported on in this presentation please refer to the “Technical Report on the Kuluu Project” bearing an effective date of January 10, 2017 and available on the Company’s profile at www.sedar.com. This presentation contains information regarding Agnico Eagle’s Meliadine Gold Project. Mr. Lindsay has been unable to verify the information contained herein regarding Agnico Eagle’s Meliadine Gold Project and such information is not necessarily indicative of the mineralization on the Kuulu project in which the Company has an exclusive right to earn up to a 70% interest in. Technical Information Related to the Ben Lomond Project The following is taken from the Mega Uranium Annual Information Form for the year ended September 30, 2019 as dated December 18, 2019. The AIF incorporates by reference the technical report dated July 16, 2005 and entitled “Technical Report on the Mining Leases Covering the Ben Lomond Uranium-Molybdenum Deposit, Queensland, Australia”, prepared by Andrew Vicar and David G. Jones of Mining Associates Pty Ltd (the “Ben Lomond Report”). The mineral resource estimates at Ben Lomond, based on documents supplied for the Ben Lomond Report, have been calculated on 4 separate occasions over the years 1979 to 1982. The range of resource estimates varies from a low of 4,000 tonnes contained uranium to a high of 5,400 tonnes. An independent resource calculation was conducted by the Australian Atomic Energy Commission (“AAEC”) in 1982. A summary of the AAEC estimate, using a cut-off grade of 500 parts per million uranium and converted to % uranium oxide (“U3O8”), is tabulated on slide 12. The AAEC resource categories were chosen based on the Australian Joint Ore Reserves Committee (“JORC”) code guidelines of the time. In the opinion of Andrew Vigar, who is a qualified person under the current JORC Code and NI 43-101, the AAEC estimate is relevant, is within the range of reliability expected for this style of deposit, uses the resource category definitions in their current context and has not been superseded by any more recent estimates. It is Messrs. Vigar and Jones’ opinion that the resource estimate is compliant with the definitions under section 1.3 and 1.4 of the current NI 43-101. Technical Information Related to the Mountain Lake Project The property contains a historical inferred mineral resource estimate of 8.2 million pounds U3O8 with an average grade of 0.23% U3O8 contained in 1.6 million tonnes of mineralization. The estimate was reported in the technical report entitled “Mountain Lake Property, Nunavut” prepared for Triex and dated February 15, 2005. This resource is a historical estimate and a qualified person has not done sufficient work to classify the historical estimate as current mineral

  • resources. As a result, the historical estimate is not being treated as a current mineral resource. However, the Company believes that the historical estimate is relevant and reliable, as it was prepared by a Qualified Person (as defined in

National Instrument 43-101 – Standards of Disclosure for Mineral Projects) with significant experience on the project, using methods that were standard in the industry. In order to upgrade or verify the historical estimate as current mineral resources, the Company anticipates that it will need to incorporate the drilling data collected by Triex and Pitchstone in 2006-2008. The historical resource uses the “inferred mineral resource” category set out in section 1.2 of National Instrument 43-101. There are no more recent estimates available to the Company. The historical estimate was prepared with the polygonal method using only intervals greater than 0.1% U3O8 with a vertical thickness of at least 1.0 metre. Polygon sides were determined by drawing lines perpendicular to, and one half the distance to each adjacent drill hole. Estimated uranium was then obtained by multiplying the polygon areas by their thickness, a specific gravity of 2.5, and the grade of the drill hole interval. The mineral resource was classified as inferred.

Disclaimer

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New Sector, Rife with Opportunity

  • NxGold is entering the Uranium Sector by way of securing an options to acquire the advanced Ben Lomond and

Georgetown projects in Queensland Australia from Mega Uranium as well as the Mountain Lake project in Nunavut from IsoEnergy

  • The sector has recently emerged from a +10-year bear market
  • Opportunities for NxGold to participate and profit in sector are abundant
  • NxGold is uniquely positioned in the sector:
  • Founded by the team behind NexGen Energy Ltd. (TSX: NXE, NYSE: NXE)
  • New management brings more then a decade of experience in the sector
  • Consolidation represents proven strategy generating outsized returns in previous bull market
  • Existing gold portfolio represents further upside potential
  • Holds an 80% interest in the Mt. Roe Gold Project which is located in the Pilbara region in Western

Australia, immediately adjacent to Novo Resources' Karratha Gold Project

  • Executed agreement to earn up to a 70% interest in the Kuluu Project which is located immediately

adjacent and northwest along trend from Agnico Eagle’s multi-million-ounce Meliadine Gold project, Nunavut

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Philip Williams Pres, CEO & Director

  • Chartered Financial Analyst with over 20 years of mining and finance industry experience
  • Former C-Suite roles, as a sell-side research analyst, in fund management and as managing

director of investment banking focused on the metals and mining sector

Janine Richardson CFO

  • Chartered Professional Accountant with over +30 years experience in the mining industry
  • CFO of IsoEnergy Ltd. and Financial Consultant to Atlantic Gold Corporation

Peter Mullens VP Corp Dev

  • Professional geologist with 35 years of experience across a wide range of commodities and

countries

  • Extensive uranium experience including as VP Exploration for Laramide Resources

Management and Board of Directors Extensive Uranium Sector Expertise

Leigh Curyer Chairman

  • CEO of NexGen Energy
  • Chartered Accountant with +20 years experience and ex-CFO of Southern Cross Resources (now

Uranium One)

  • Ex-Head Corporate Development at Accord Nuclear Resources Management assessing global

uranium assets for First Reserve International

Trevor J. Thiele Director

  • Chartered Accountant with +30 years experience in capital markets including CFO of major

Australian Agribusinesses (Elders and Viterra)

Karl Laufmann Director

  • Over 25 years of experience in financial markets focusing on capital raising, portfolio

management and corporate advisory mandates

  • Previously held positions with Salomon Smith Barney Inc., Citigroup Inc. and HSBC

Anthony Milewski Director

  • Over 15 years of experience in various aspects of the mining industry, including as a company

director, adviser, founder and investor.

  • Currently serves as the chairman of Conic Metals.
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Uranium Sector On the Rise

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Recent Uranium Market Dynamics…

The uranium spot price and volumes are up dramatically over the past several months… driven primarily by COVID related supply side disruptions.

Mine(s) Operator Current Impact

Cigar Lake Cameco 1.5m reduction per month based on 18m lbs per annum Kazakhstan ISR Kazatomprom 59.2m lbs target reduced to 49.4 – 50.7m lbs Husab CGN 21 day reduced operations (2019 production of 8.8m lbs ramping to 15m lbs) Rossing CNUC 21 day reduced operations (2019 production of 5.4m lbs)

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Pulling Forward the Long-Term Market Case

Demand for nuclear power on the rise:

  • Low carbon base load power
  • China driving new build
  • Growing in other markets

Supply constraints abound:

  • Deficit projected going forward
  • Operating mines depleting
  • Current pricing not sufficient to support

exiting mines let alone new mine development

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Consolidation a Proven Strategy Mega Uranium Case Study

1 Calculated from January 1, 2015 to November 5, 2018

Between Jan 2005 and Dec 2006 Mega announced nine acquisitions and raised over $50m in capital. During that period its share price increased by 25 times and its market cap went from ~$15m to $940m.

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Queensland Project Acquisition: Ben Lomond and Georgetown

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Queensland Projects: Location

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  • Acquired by Mega in Jan 2005 for $3.8m
  • Over ~$10m spent to date
  • Located in Queensland 50km west of Townsville,

was

  • Original discovered in 1975 by Pechiney SA
  • A bankable feasibility study on the project was

completed by Minatome in 1982

  • An Environmental Impact Study was accepted by the

relevant Federal and State authorities in 1984

  • In 1985 the planned mine development was halted

by the imposition of the “the Three Uranium Mines Policy” by the then Australian Federal Labour Government

  • The deposit remains open to the east over at least a

1.05 km strike length where, in this area, limited widely spaced surface drilling has intersected encouraging intervals of uranium mineralization and rock alteration.

Ben Lomond: High Grade/Low Capex

Category Tonnes (m) Grade (%) Lbs (m) Indicated 1.33 0.27 7.9 Inferred 0.6 0.21 2.8

NI 43-101 Compliant Resource

* See disclaimer on slide #3

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  • Acquired by Mega in December 2005 for $6.9m
  • Over ~$20m spent to date
  • Located in Queensland ~500km north-east west of Ben

Lomond

  • Contains the outcropping Maureen uranium deposit,

which was detected in 1971 in an airborne magnetic- radiometric survey.

  • From 2006 to 2007 Mega drilled 94 RC/diamond core holes

in order to validate and extend the historical Maureen resource, to seek resource extensions and to discover additional resources in the immediate vicinity.

  • On June 25, 2008, Mega announced a new NI43-101

compliant resource (see table)

  • Potential for new discovery exists elsewhere in the

property, within both the Proterozoic basement and

  • verlying Upper Devonian/Lower Carboniferous volcanics

/metasediments, in the form of radiometric anomalies, uranium occurrences and favourable geological settings for uranium

Georgetown – Satellite Resources and/or Processing Location for Ben Lomond

Category Tonnes (m) Grade (%) Lbs (m) Indicated 3.12 0.09 5.95 Inferred 0.15 0.11 0.38

NI 43-101 Compliant Resource

* As published in the technical report dated June 25, 2008 and entitled “A Review and Resource Estimate for the Maureen Uranium-Molybdenum Deposit, North Queensland, Australia Held by Mega Uranium Ltd.”, prepared by Mining Associates Pty Ltd (the “Georgetown Report”).

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Interest Terms

Option

  • 900,000 NXN common shares
  • 900,000 NXN warrants priced at three cents for 24 months
  • $180,000 cash
  • Completed on June 17, 2020

To Acquire 100%

  • For Ben Lomond:
  • $2,500,000 payable in cash or NXN shares
  • Exercisable for 24 months
  • For Georgetown:
  • $500,000 payable in cash or NXN shares
  • At Mega’s election up to 120 days after Ben Lomond option is exercised

Contingent payments

  • For Ben Lomond:
  • $535,000 when the spot price of uranium reaches USD$50/lb U3O8
  • $800,000 when the spot price of uranium reaches USD$75/lb U3O8
  • $1,050,000 when the spot price of uranium reaches USD$100/lb U3O8
  • For Georgetown:
  • $315,000 when the spot price of uranium reaches USD$50/lb U3O8
  • $475,000 when the spot price of uranium reaches USD$75/lb U3O8
  • $635,000 when the spot price of uranium reaches USD$100/lb U3O8

Misc.

  • NxGold will be required to repay to Mega expenditures related to keep the projects in good

standing between the option date and the exercise date

Queensland Projects: Acquisition Terms

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Work Programs:

  • Review the resource and exploration

potential of Ben Lomond and Georgetown

  • Assess potential drilling requirements to test

exploration potential and for updated resource calculations and QA/QC purposes

  • Engage with key local and state stakeholders
  • Undertake an updated PEA of the

development potential of Ben Lomond including reviewing and evaluating potential

  • ff-site processing locations
  • Establish relationships with utilities and

trading houses, particularly in the Asia Pacific Region Budget:

  • Approx. $75,000 in 2020

Queensland Projects: Work Program

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Nunavut Project Acquisition: Mountain Lake

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Queensland Projects: Location

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  • Staked by ISO in 2017
  • 220 holes drilled by previous operators
  • Higher grade potential identified
  • Up to 5.18% never followed up
  • New discovery potential identified by ISO
  • Next steps include:
  • Gravity survey
  • Resampling core
  • Drilling

Mountain Lake: High Grade Exploration Upside

Category Tonnes (m) Grade (%) Lbs (m) Inferred 1.6 0.23 8.2

Historic Mineral Resource

* See disclaimer on slide #3

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Interest Terms

Option

  • 900,000 NXN common shares

To Acquire 100%

  • $1,000,000 payable in cash or NXN shares
  • Exercisable for 24 months

Contingent payments

  • $410,000 when the spot price of uranium reaches USD$50/lb U3O8
  • $615,000 when the spot price of uranium reaches USD$75/lb U3O
  • $820,000 when the spot price of uranium reaches USD$100/lb U3O8

Misc.

  • NxGold will be required to repay ISO for expenditures related to keep the projects in

good standing between the option date and the exercise date

  • IsoEnergy has the one-time right, exercisable on either the date that is six (6) months
  • r twelve (12) months following the date of the Option Agreement, to force Nxgold to

exercise the option and satisfy the remaining portion of the purchase price by issuing such number of Nxgold shares to IsoEnergy that results in IsoEnergy, together with the Nxgold shares already owned by IsoEnergy, owning an aggregate number of Nxgold shares equal to 9.9% of the total number of issued and outstanding Nxgold Shares after giving effect to such issuance.

  • In the event the contingency payment has been paid by NXG following the uranium

spot price reaching USD$50, IsoEnergy will have the one-time option to elect to receive $205,000 in lieu of, and not in addition to, each of the USD$75 and USD$100 contingent payments for a total aggregate amount of $410,000. Payable at Nxgold's

  • ption in cash or shares at the Market Price prior to the date Nxgold receives notice of

the election by IsoEnergy.

Mountain Lake Project: Acquisition Terms

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Capital Structure (as at July 2020)

Share Structure & Balance Sheet

Basic 14,963,229* Warrants 9,545,649 Options 1,355,000 Fully Diluted 25,863,878 Cash & Securities ~C$2.85 million Debt $Nil

Stock Options & Warrants

Stock Options Expiry

$4.50 Apr- 22 25,000 $2.00 Jun-23 330,000 $0.30 Jun-25 850,000 $0.50 Jul-25 150,000 Total Options 1,355,000

Warrants Expiry

$0.50 Jul-20 300,000 $0.50 Oct-20 569,000 $0.70 Oct-20 200,000 $1.80 Jun-21 118,635 $2.70 Jun-21 2,372,514 $0.20 Jun-22 85,500 $0.30 Jun-22 5,900,000 Total Warrants 9,545,649

*Includes 900,000 shares to be issued to IsoEnergy

Major Shareholders

Mega Uranium 6% IsoEnergy 6% Management and Directors 4.5%

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Wes Short Email: wshort@nxgold.ca

TSX-V: NXN

nxgold.ca

Phil Williams Chief Executive Officer Email: pwilliams@nxgold.ca

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Appendices:

  • Mt. Roe Gold Project, WA

Kuulu Project, Nunavut NexGen Track Record

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  • Located approximately 30 km south of Karratha,

Western Australia

  • 1,232 ha land package
  • Land package immediately adjacent to Novo

Resource’s Karratha Gold Project

  • Gold nuggets found at Mt. Roe show similar

characteristics to the recent gold discoveries by Novo Resources, Artemis Resources and De Grey Mining, in the same region

  • Novo Resources bulk samples at Purdy’s Reward

and Comet Well range from 2.16 to 6.1 g/t gold (see news release dated October 26, 2018

  • Artemis Resource’s Silica Hills gold project, a

coarse gold quartz vein stockwork system, is within 600m of the Mt. Roe Property.

Project Location: Mt. Roe

Photo: pan-sized nuggets

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  • A new source of coarse gold nuggets was discovered in

late 2016 by prospectors

  • Gold is from conglomerates belonging to the

Fortescue Group which has the potential for Pilbara- wide mineralization

  • Conglomerate-hosted deposits in Pilbara considered

similar to those of Nome, Alaska; South Island, New Zealand; and Witwatersrand, South Africa

  • Multiple layers of gold-bearing conglomerate are

possible in the contemplated transgression-regression geological model

The Pilbara Discoveries

Source: Novo Resources Corporate Presentation August 8, 2018

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  • Mt. Roe Gold Nuggets

“Melon Seed” nugget from Novo Resources. (Image source Novo Resources Corp.) “Melon Seed” nugget from NxGold Mt Roe Project

  • Mt. Roe Gold Nuggets
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Kuulu Project Location

  • Kuulu (formally known as Peter

Lake Project) is 20 km NW and immediately along trend of Agnico Eagle's Meliadine gold development project

  • Meliadine deposits (3.7 Moz

proven and probable 16.1 Mt at 7.12 g/t Au as of December 31, 2017) (www.agnicoeagle.com). Agnico Eagle is set to start up process plant in Q2 2019

  • Kuulu is 40 km NW of Rankin Inlet
  • Kuulu Project covers 4,174 ha

within the Meliadine gold belt in Nunavut, Canada

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  • 3.7 Moz of gold in Proven & Probable Reserves (16.1 million

tonnes grading 7.12g/t)*

  • 20km SE of NxGold's Kuulu Property
  • Under construction- Mine expected to begin operations in Q2

2019 up to average mining rate of 400,000 oz per year*

  • $740 million capital budget (2017 & 2018)*
  • High-grade producing mine (largest gold mine by annual

production)

  • Agnico Eagle's Amaruq Exploration Project*
  • 2.1 Moz Indicated (16.9 million tonnes grading 3.88 g/t)
  • 1.4Moz Inferred (6.8 million tonnes grading 6.22 g/t)

*Source: Agnico Eagle Mines Limited, News Release dated February 15, 2017 Image Source: Agnico Eagle Mines Limited

Agnico Eagle’s Meliadine Gold Project Agnico Eagle’s Meadowbank/Amaruq Gold Mine

Nunavut Neighborhood-Kivalliq Region

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Interest Terms

Initial 50% interest

  • Incurring aggregate of $10-million in expenditures by 3rd anniversary ($1 million 1st

anniversary, $4 million 2nd anniversary and $5 million 3rd anniversary

  • Annual $75,000 cash payments
  • NxGold appointed exclusive operator

Additional 20% interest (up to 70%)

  • Incurring aggregate of $25-million in additional expenditures on the property, as follows:
  • $2-million in expenditures on 4th anniversary
  • $3-million in expenditures on 5th anniversary
  • $5-million in expenditures on 6th anniversary
  • $15-million in expenditures on 7th anniversary
  • Preparing and delivering a bankable feasibility study (“BFS”) by 7th anniversary
  • Annual $75,000 cash payments

Extension

  • NxGold can extend delivery of BFS for maximum of 3 years by paying $2.5 million per year for

each extended year

  • NxGold granted one-year ‘grace’ period where no payment required to extend

Misc.

  • NxGold can meet required expenditures by paying in cash or shares instead of expenditures
  • 2% NSR

Kuulu Earn-In Terms

Note

  • On November 28, 2017 NxGold delivered a notice of force majeure to the property vendors and on September 25,

2018 NxGold delivered a notice of force majeure to Nunavut Tunngavik Incorporated (NTI) due to the continued delay in the renewal of the existing Land Use Licenses, KVL311B01 and KVRW12E01 pertaining to the Kuulu project. This action enables NxGold to maintain its rights under the Earn-In Agreement and under the Mineral Exploration Agreement without having to incur the spending obligations.

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Track Record of Creating Shareholder Value NexGen Case Study

2 4 6 8 10 12 $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18

Volume (millions) Share Price (C$) Announced positive PFS results for the Arrow Project:  AT NPV8% of C$3.7B  AT IRR of 56.8%  AT average annual net cash flow of C$909M Announced intersection of widespread mineralization at Arrow Announced updated mineral resource estimate for the Arrow deposit Announced best assay results to date at Arrow Zone

+750% return1

1 Calculated from January 1, 2015 to November 5, 2018

January 1, 2015: C$75 million market value

  • Uranium spot price = ~US$40/lb

November 5, 2018: C$1.1 billion market value

  • Uranium spot price = ~US$25/lb

Announced maiden PEA results for the Arrow Project:  AT NPV8% of C$3.5B  AT IRR of 56.7%  AT average annual net cash flow of C$553M