Proven Team, Proven Approach: The First and Only Pure Play Uranium - - PowerPoint PPT Presentation
Proven Team, Proven Approach: The First and Only Pure Play Uranium - - PowerPoint PPT Presentation
URC : TSX-V Proven Team, Proven Approach: The First and Only Pure Play Uranium Royalty Company Corporate Presentation August 2020 2 FORWARD-LOOKING STATEMENT Forward-Looking Information The information contained herein contains forward
FORWARD-LOOKING STATEMENT
2
Forward-Looking Information The information contained herein contains “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislation. “Forward-looking information” includes, but is not limited to, statements with respect to the activities, events or developments that Uranium Royalty Corp. (“URC” or the “Company”) the Company expects or anticipates will or may occur in the future, including the completion of tentative transactions. Forward-looking information and statements are based on the then current expectations, beliefs, assumptions, estimates and forecasts about URC’s business and the industry and markets in which it operates. Forward-looking information and statements are made based upon numerous assumptions and 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 URC to differ materially from any projections of results, performances and achievements of URC, including, without limitation, URC's limited control and access to data to the projects underlying its interests, commodity, commodity and investment price risks, currency risks, counterparty risks, proposed acquisitions may not be completed as contemplated or at all, risks faced by the operators and owners of the projects underlying URC's interests and the other risk factors set forth, from time to time, in the Company’s disclosure documents (including its prospectus dated November 22, 2019), which are available under its profile at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information or implied by forward-looking information, there may be
- ther 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. Technical Information Certain scientific and technical information in this presentation is based on information prepared under the Joint Ore Reserves Committee (JORC) 2004 or 2012 code, the terms Inferred Mineral Resources, Indicated Mineral Resources, Measured Mineral Resources, Ore Reserves, Proved Ore Reserves and Probable Ore Reserves are substantially similar to the terms Inferred Mineral Resources, Indicated Mineral Resources, Measured Mineral Resources, Mineral Reserves, Proven Mineral Reserves and Probable Mineral Reserves, respectively, used in Canadian National Instrument 43-101 (“NI 43-101”). Darcy Hirsekorn, the Company's Chief Technical Officer, has supervised the preparation of and reviewed the technical information contained in this presentation. Darcy holds a B.Sc. in Geology from the University of Saskatchewan, is a qualified person as defined in National Instrument 43-101 and is registered as a professional geoscientist in Saskatchewan. External Information Where this presentation quotes any information or statistics from any external source, it should not be interpreted that the Company has adopted or endorsed such information or statistics as being accurate. The Company also advises investors that some of the information presented herein is based on or derived from statements by third parties, has not been independently verified by or on behalf of the Company, and that no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of this information or any other information or opinions contained herein, for any purpose whatsoever. No Investment Advice This presentation is not, and is not intended to be, an advertisement, prospectus or offering memorandum, and is made available on the express understanding that it does not contain all information that may be required to evaluate, and will not be used by readers in connection with, the purchase of or investment in any securities of any entity. This presentation accordingly should not be treated as giving investment advice and is not intended to form the basis of any investment decision. It does not, and is not intended to, constitute or form part of, and should not be construed as, any recommendation or commitment by URC or any of its directors, officers, employees, direct or indirect shareholders, agents, affiliates, advisors or any other person, or as an offer or invitation for the sale or purchase of, or a solicitation of an offer to purchase, subscribe for or otherwise acquire, any securities, businesses and/or assets of any entity, nor shall it or any part of it be relied upon in connection with or act as any inducement to enter into any contract or commitment or investment decision whatsoever. Readers should not construe the contents of this presentation as legal, tax, regulatory, financial or accounting advice and are urged to consult with their own advisers in relation to such matters. U.S. Non-Solicitation This presentation is not an offer of securities for sale in the United States and is not an offer to sell or solicitation of an offer to buy any securities of URC nor shall it form the basis of, or be relied upon in connection with any contract for purchase or subscription. The securities of URC have not been and will not be registered under the Securities Act or the securities laws of any state and may not be offered
- r sold in the United States absent registration or pursuant to an applicable exemption therefrom.
INVESTMENT HIGHLIGHTS
URC is well positioned to take advantage of current market conditions as a provider of alternative capital to the uranium sector
3
First Mover Advantage
▪ URC is the first company to apply the successful royalty and streaming
business model exclusively to the uranium sector
$39M Cash & Listed Securities*
▪ Strong balance sheet, which positions it to capitalize on accretive uranium
royalty and streaming acquisition opportunities
Physical Uranium Ownership
▪ Through its approximately 9% stake in London-listed Yellow Cake plc,
URC holds interests in physical uranium, acquired at cyclical lows
Large & Diversified Royalty Portfolio
▪ Portfolio includes interests on development, advanced, permitted and past-
producing uranium projects in multiple jurisdictions
Expertise
▪ Management and board possess decades of uranium industry experience,
including senior executive and advisory roles to prominent companies and governments in the sector
* As of the Company’s filing for the quarter ended January 31, 2020
4
MANAGEMENT & BOARD
Management
Scott Melbye (President, CEO & Director)
- Uranium industry veteran with 35 years
experience including Executive roles with Cameco, Uranium One & Uranium Participation Corp.
- Former Strategic Advisor to Kazatomprom
- Executive VP of UEC
- Based in Denver
Darcy Hirsekorn (CTO)
▪
Professional geoscientist with 20 years experience at Cameco
▪
Part of exploration groups that outlined over 200Mlbs of uranium
▪
Based in Saskatoon Josephine Man (CFO)
▪
Former partner at Ernst & Young LLP
▪
Over 20 years of experience working with public companies primary in the mining industry
▪
Based in Vancouver
Board of Directors
Amir Adnani (Chairman)
▪
Entrepreneur and Founder, President & CEO of Uranium Energy Corp (UEC: NYSE American)
▪
Chairman of GoldMining Inc. (GOLD: TSX)
▪
Based in Vancouver Lady Barbara Judge CBE (Director)
▪
Former chair and board member of the U.K. Atomic Energy Commission
▪
Former U.S. Securities and Exchange Commissioner
▪
Served on the Boards of the StatOil, and Magna
▪
Strategic Advisor to the Emirates Nuclear Energy Corp., Tokyo Electric Power and the Astana Stock Exchange
▪
Based in London, U.K. David Neuburger (Director)
▪
Over 30 years experience in operations leadership roles, corporate strategic planning, projects and mine engineering
▪
Formerly: VP, International Mining and VP, Mining (Saskatchewan) for Cameco Corp., VP, GM of Kupol Operations for Kinross
▪
Based in Saskatoon Vina Patel (Director)
▪
18 years experience raising capital from U.K. and European institutional investors in mining and exploration equities, including uranium companies
▪
Formerly Head of London Institutional Sales for Haywood Securities
▪
Based in London, U.K.
Strategic Partner
Uranium Energy Corp
▪ Initial shareholder ▪ Strategic partner, ongoing technical
and operational support
CAPITALIZATION & OWNERSHIP PROFILE
5
(1) As of the Company’s filing for the quarter ended January 31, 2020 (2) All, except for 500,000 common share purchase warrants, are trading on the TSX-V Exchange (3) $55M cash to be received should all warrants are exercised All figures are in Canadian dollars
CURRENT ASSETS
Cash, Cash Equivalents, and Listed Securities(1)
- Approx. $39 Million
SHARE STRUCTURE
Shares Outstanding 71.8 Million Warrants 27.9 Million(2) Options Fully Diluted(3) 99.7 Million
KEY SHAREHOLDERS
Uranium Energy Corp. Altius Resources Inc. Mega Uranium Ltd. Marin Katusa KCR Fund Extract Capital Rick Rule Sprott Global Commodity Capital
RECENT ACTIVITY
$1.26 (URC : TSX-V)
As of Aug 6, 2020
- Avg. Daily Vol. (3-mo): 97,578
$0.30 (URC.WT : TSX-V)
As of Aug 6, 2020
$90 Million Market Cap
OUR STRATEGY:
BUILDING A DIVERSIFIED PORTFOLIO
6
URC’s Diversified Approach is Well Suited to Uranium
Geographical
Multiple countries
Counterparty
Range of market capitalization
Development Stage
Grassroots to producing
Invest Across the Cost Curve
Maximizes leverage to uranium recovery
Acts as a substitute for near term royalty / stream cash flow: ▪ Yellow Cake investment ▪ Potential future physical purchases
PORTFOLIO COMPOSITION STRATEGY
URC has a pipeline of primary and by-product royalty and streaming opportunities on projects in development, care and maintenance, and production worldwide Royalties held or under option on diverse portfolio of projects at various stages across several key uranium jurisdictions
7
Leverage to Future Uranium Price Future Pipeline Direct Exposure to Current Spot Price
URC's Portfolio
8
STRONG COUNTERPARTIES
9
Counterparties include many of the sector’s leading growth-oriented uranium companies
GLOBAL DIVERSIFIED ASSET PORTFOLIO
10 Note: Physical storage of Yellow Cake material is provided at Cameco’s Blind River facility
Ownership
▪
Approximately 9%
Rights
▪
URC has the option to acquire up to US$31.25M (US$2.5M – US$10M per year) of uranium between Jan 2019 – Jan 2028
▪
URC has an option to participate in any and all future uranium royalty and stream transactions Yellow Cake pursues on a 50:50 basis.
▪
URC and Yellow Cake also plan to collaborate on future
- pportunities involving physical uranium
▪
In the event URC exceeds 10% ownership, URC has the right to nominate one director to the Yellow Cake Board, currently have observer rights
Overview
▪
Yellow Cake has a long term supply agreement with Kazatomprom, the world's largest uranium producer
▪
The supply agreement enables Yellow Cake to purchase up to US$1.07bn (including existing purchases) of uranium from Kazatomprom over a 10 year period
Purchasing
▪
Yellow Cake completed its initial purchase of uranium, acquiring 8.1Mlbs of U3O8 for a cost of US$170M
▪
Since the initial investment, Yellow Cake has purchased an additional 0.35Mlbs of U3O8 from Kazatomprom for US$8.2M and 1.175Mlbs for US$30.4M
STRATEGIC PARTNERSHIP – YELLOW CAKE PLC INVESTMENT
11
▪
7.6M shares were purchased as part of a US$19.25M cornerstone strategic investment in the Yellow Cake PLC (AIM:YCA) US$200M IPO completed on July 5th, 2018
Supply Agreement with Kazatomprom URC Investment in Yellow Cake Blind River Uranium Storage Facility
Source: Bloomberg, Capital IQ, Public company disclosure
Sep 2011 Announce completion of PEA (historical)(3) Oct 2011 Rio Tinto makes all cash offer, followed by bidding war with Cameco Jan 2012 Rio Tinto completes acquisition of Hathor for C$654M Jun 2017 Rio Tinto fully impairs Roughrider and Rossing
▪
Roughrider was discovered by Hathor Exploration in 2008
▪
In 2011, Cameco made a hostile bid for Hathor
▪
Rio ultimately outbid Cameco and acquired Hathor for C$654M Location Saskatchewan, Canada Geological District Athabasca Basin Owner / Operator Rio Tinto Canada Orebody Type Unconformity Mine Type Underground Stage Development Tonnage Grade U3O8 Category (kt) (% U3O8) (Mlbs) Indicated 394 1.98% 17.2 Inferred 161 11.43% 40.7
ROYALTY PORTFOLIO Athabasca Basin Royalty
(1) These estimates are historical in nature and are not being treated as current resources or reserves by URC as a qualified person has not done sufficient work on behalf of URC to classify such historical estimates as current mineral resources or reserves. The disclosure of these historical estimates have been included herein as URC believes that it provides an indication of the potential for the properties underlying its royalties (2) The historic mineral resources were estimated in accordance with NI 43-101 and are disclosed by reference to the Historic Roughrider Technical Report titled “Preliminary Economic Assessment Technical Report for the East and West Zones, Roughrider Uranium Project, Saskatchewan”, with an effective date of September 13, 2011, prepared for Hathor and authored by Gordon Doerksen, P.Eng., Bruce Fielder, P. Eng., Louri Iakovlev, P. Eng., David Keller, P. Geo., Mark Liskowich, P. Geo., Bruce Murphy, FSAIMM, and Cam Scott, P. Eng. (3) Such Sept 2011 PEA is not being treated as current by URC
Historical Resources(1,2) Roughrider Project (1.97% NSR) Project Location
12
Diabase Project (3% GRR) Key Milestones
- Early Exploration project operated by UEC
- Project overlies a highly prospective regional corridor, similar to
the Patterson Lake corridor that hosts the Arrow and RRR deposits
Measured Indicated Inferred Deposit Tonnage (Mt) Grade (% U308) U3O8 (Mlbs) Tonnage (Mt) Grade (% U308) U3O8 (Mlbs) Tonnage (Mt) Grade (% U308) U3O8 (Mlbs) Reno Creek(2) 13.6 0.043% 12.9 15.4 0.039% 13.1 1.7 0.039% 1.5 Church Rock(3)
- 30.7
0.075% 50.8 Dewey-Burdock(4) 4.9 0.132% 14.3 2.0 0.072% 2.8 0.6 0.055% 0.7 Lance(5) 3.4 0.049% 3.7 11.1 0.05% 12.1 36.2 0.048% 37.8 Asset Royalty (%) Location Operator Stage
Reno Creek 0.5% NPI Wyoming UEC Development Church Rock 4% NSR New Mexico Laramide Development Dewey- Burdock 30% NPI South Dakota Azarga Development Lance 4% GRR
(Kendrick & Barber Areas)
Wyoming Peninsula Production Idled
(1) Reno Creek, Dewey-Burdock, and Lance royalties do not apply to the entire project area covered by this estimate (2) Reno Creek resources sourced from technical report titled "Technical Report and Audit of Resources of the Reno Creek ISR Project, Campbell County, Wyoming, USA" dated December 31, 2018 and authored by Robert E. Cameron, Ph.D., MMSA, and Robert Maxwell, CPG, AIPG and made in accordance with NI 43-101, (3) Church Rock resources sourced from the technical report titled "Technical Report on the Church Rock Uranium Project, McKinley County, State of New Mexico, U.S.A." with an effective date of September 30, 2017, prepared for Laramide Resources Ltd. and authored by Mark B. Mathisen, C.P.G. and made in accordance with NI 43-101, (4) Dewey-Burdock resources sourced the technical report titled "NI 43-101 Technical Report, Preliminary Economic Assessment, Dewey-Burdock Uranium ISR Project, South Dakota, U.S.A.", with an effective date of December 3, 2019, prepared for Azarga Uranium Corp. and authored by Steve Cutler, P.G. and Douglass H. Graves, P.E. and made in accordance with NI 43-101, (5) Lance resources sourced from Peninsula Energy Limited September 30, 2019 quarterly activities report and made in accordance with JORC.
Resources (1) Asset Overview
13
Project Location
ROYALTY PORTFOLIO U.S. ISR Royalties
Powder River Basin
Legend ISR Mines (Advanced/Development) ISR Mines (Production Idled) Cities (Over 500k Pop)
Resources
Indicated Inferred Deposit Tonnage (Mt) Grade (% U308) U3O8 (Mlbs) Tonnage (Mt) Grade (% U308) U3O8 (Mlbs) Anderson (OP)(1) 25.4 0.028% 15.5 4.6 0.024% 2.5 Anderson (UG) (1) 1.4 0.048% 1.5 8.4 0.052% 9.5 Slick Rock(2)
- 2.3
0.228% 11.6 Workman Creek(3)
- 2.9
0.086% 5.5 Asset Royalty (%) Location Operator Stage
Anderson 1% NSR Arizona UEC Advanced Slick Rock 1% NSR Colorado UEC Advanced Workman Creek 1% NSR Arizona UEC Development Roca Honda(4) 4% GRR New Mexico Energy Fuels Development
(1) Anderson resource sourced from the the technical report titled "Technical Report and PEA on the Anderson Uranium Project, Yavapai County, Arizona, USA", with an effective date of July 6, 2014, prepared for Uranium Energy Corp. and authored by Douglas Beahm, PE, PG, Terence P. McNulty, D. Sc., P.E., Bruce Davis, FAusIMM, and Robert Sim, P.Geo. estimated in accordance with NI 43-101; (2) Slick Rock resources sourced from the technical report titled "Technical Report Preliminary Economic Assessment, Slick Rock Project Uranium / Vanadium Deposit, San Miguel County, Southwest Colorado, USA" with an effective date of April 8, 2014, prepared for Uranium Resources Corp. and authored by Douglas Beahm, PE, PG, Bruce Davis, FAusIMM, and Robert Sim, P. Geo. estimated in accordance with NI 43-101; (3) Workman Creek resources sourced from the technical report titled "Technical Report on the Workman Creek Project, Central Arizona", with an effective date of March 2, 2012, prepared for Uranium Resources
- Corp. and authored by Neil G. McCallum, B.Sc, P.Geo., and G.H. Giroux, MASc, P.Eng. estimated in accordance with NI 43-101.
(4) The Roca Honda royalty only applies to Section 17 of the project.
Asset Overview
14
Project Location
ROYALTY PORTFOLIO U.S. Conventional Royalties
Legend
Conventional Mines (Advanced/Development) Cities (Over 500k Pop)
Conventional deposits provide longer term exposure to rising uranium prices. Potential processing at White Mesa Mill
Mar 2009 Fronteer Development Group completes acquisition of Aurora Energy Resources for ~$175M Sep 2009 Fronteer issues PEA (historical)(1) Feb 2011 Paladin acquires the asset for C$260.9M Dec 2011 Moratorium on uranium mining activity is lifted Aug 2012 Paladin signs long-term offtake with a major utility Jun 2014 Paladin issues an updated resource estimate (historical) Jun 2015 Paladin receives federal exemption from Non-Resident Ownership Policy Jun 2017 Paladin issues an updated resource estimate (historical) May 2018 Paladin forms JV on Project Tonnage Grade U3O8 Category (kt) (% U3O8) (Mlbs) Measured 17,800 0.097% 38.0 Indicated 36,600 0.084% 67.6 Inferred 13,100 0.077% 22.1
ROYALTY PORTFOLIO – MICHELIN PROJECT (2% GRR)
(1) This PEA is not being treated as current by URC. (2) Sourced from June 30, 2018 Annual Report. Resources were estimated in accordance with JORC with cut-off grades ranging between 0.2% - 0.5% and with an assumed uranium price of US$85/lb
Asset Overview Project Location
15
▪
Among largest deposits in North America Location Labrador, Canada Geological District Central Mineral Belt of Labrador Owner / Operator Paladin Energy (55%) / EDF Claimants (45%) Orebody Type Metasomatic Mine Type Open Pit/Underground Stage Development
Historical Data Resources (2)
Tonnage Grade U3O8 Category (Mt) (% U3O8) (Mlbs) Measured 97.0 0.044% 95.9 Indicated 18.8 0.044% 18.0 Inferred 6.3 0.042% 5.8
▪
Low technical risk project in a premier uranium jurisdiction
▪
Paladin undertaking operational review to assess process
- ptimization, cost reduction, production capacity and life of
mine alternatives Location Erongo, Namibia Geological District: Namib Desert Owner / Operator Paladin Energy Ltd (75%) / China National Nuclear Company (25%) Orebody Type Surficial Calcrete Uranium Deposit Mine Type Open Pit Stage Placed on Care & Maintenance in May 2018
ROYALTY PORTFOLIO – LANGER HEINRICH (A$0.12/kg U3O8 production royalty)
Resources (2) Asset Overview Project Location
16
Estimated restart Capex – (US$M) US$81.0
- Est. Peak Annual Production (Mlbs):
5.9
- Est. Mine Life:
17 Years
- Est. AISC (US$/lb)(3)
$32.00 Ramp-Up Period 12 months
2020 Restart Plan(1)
(1) Data based on ASX release from June 30, 2020 (2) Resources as of June 30, 2020, prepared under JORC 2012. The resources now include the low-grade and high-grade stockpiles. The underlying in-situ Mineral Resource as announced on October 14, 2019 remains unchanged, as are the tonnes and grade stated for ROM stockpiles in the same announcement. Further details available in the company’s ASX announcement. (3) Average life-of-mine all-in sustaining costs.
Past Producer Positioned for Re-Start
Royalty Model & Our Approach
17
18
URC OFFERS PARTNERSHIP “VALUE-ADDED” RELATIONSHIPS WITH PORTFOLIO COUNTERPARTIES
URC is vested in the success of its portfolio counterparties Experienced URC team offers uranium market and development insights to counterparty management and Boards Thorough due diligence and selection process offers third party endorsement to projects in the URC portfolio Ability to provide non-dilutive Project Financing URC capital markets presence provides expanded visibility
THE RIGHT MODEL FOR AN IMPROVING MARKET
19
Royalty Companies
- vs. Operators
Operating Companies Uranium ETF Physical Funds
Exposure to Uranium Price
✓ ✓ ✓ ✓
Fixed Operating Costs
✓ ✓ ✓
No Development or Sustaining Capital Costs
✓ ✓ ✓
Exploration & Expansion Upside Without the Associated Costs
✓
Diversified Asset Portfolio
✓ ✓ ✓
Ability to Grow Without Increased Management
✓ ✓ ✓
▪ To date URC’s strategy has been primarily focused on acquiring existing royalties ▪ The next wave of acquisitions are anticipated to focus on new royalties, streams physical uranium and other uranium interests
OUR STRATEGY: ROYALTY OPPORTUNITY
20
URC has a flexible strategy and desire to be a partner in growth
▪ Large number
- f active
dialogues ▪ Typically for shares and/or cash ▪ Focused discussions with priority targets ▪ Typically cash transaction ▪ On a case by case basis
URANIUM ROYALTY LANDSCAPE
21
13 194 2,027
Source: S&P Global Market Intelligence – October 2019. (1)Projects screened based on primary metal and includes global projects currently in production (2)Projects screened based on primary metal and includes global projects in the resource development, feasibility and preproduction stages (3)Includes all projects with uranium as the primary commodity or as a by-product
93
Uranium Projects Development and Advanced Projects Projects at Construction/ Production Stage
Producing U3O8
Primary and By-Product Uranium Projects(3)
URC management, board, and advisors have been to over 80 projects
Gold Uranium
Primary Commodity Advanced/Development Projects(2) Gold Uranium Primary Commodity Production Projects(1)
Royalties on uranium properties are less prevalent than on gold properties
Uranium market represents whitespace for the royalty sector with significant headroom for growth 23%
35%
34%
50%
Uranium Market Overview
22
23
With the world's population exceeding 7.7 billion people and growing, the need for reliable, non-intermittent, pollution-free electricity continues to increase. This growth and its associated needs are important drivers for the currently projected long-term increase in nuclear power generation and uranium demand.
URANIUM PLAYS KEY ROLE IN CLEAN AIR AND CLIMATE CHANGE SOLUTIONS
23
▪ China announced that it is likely to triple nuclear power capacity by 2030 ▪ India plans for 21 new nuclear reactors by 2031 ▪ U.A.E. completing construction on 4 units ▪ U.K. upgrading nuclear fleet to new advanced reactors ▪ Russia is building 36 reactors in China, India, Bangladesh, Turkey, Egypt, Iran, Finland, Belarus, Slovakia, Armenia, Uzbekistan and Hungary ▪ U.S. is completing two new AP-1000 reactors in Georgia
NUCLEAR POWER GROWTH REMAINS ROBUST MORE THAN 9% SINCE 2012
24
439 Operable Reactors Worldwide 48 Reactors Connected in 7 Years 56 Units Under Construction
Source: World Nuclear Association July 2020, IAEA PRIS June 2020
REACTOR DEMAND SIGNIFICANTLY EXCEEDS PRIMARY PRODUCTION
Source: UxC Market Outlook Q4 2019; Q2 2020
25
Spot Prices Below Production Costs and Hedges Falling Off
2020 Demand expected = 182M lbs. 2020 Production was expected @ 142M lbs., 12M lbs./mo pre COVID19 54% of Total monthly global production impacted by COVID19 2020 Production is now expected to be 61M lbs. below requirements Cumulative Gap is 310M lbs. by 2026
Supply/demand numbers will be impacted as a result of the COVID-19 pandemic. As of April 17, mine shutdowns included Cigar Lake + McLean Mill, Kazatomprom, Rossing, Husab, and Moab Khotsong, that will reduce supply by about -6.4 M lbs./mo. As of August 1st, some restart dates have been announced, but are not firm. To date, total supply reduction for 2020 is ~21M lbs. Reactor demand appears to have had minimal impact.
26
Uranium Spot Price Up ~30% Year-to-Date $33.00/lb.; Highest Since March 2016
26
Source: TradeTech; UxC, LLC: www.uxc.com
$138.00
Financial Crisis
2011: Fukushima event
Nov 2016: $17.75/lb 12 year low
$32.30 2005: Major Mine Disruptions
(Cigar Lake, McArthur River)
$70.00
$39.00
$0 $20 $40 $60 $80 $100 $120 $140 $160
Aug-04 Aug-05 Aug-06 Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Aug-12 Aug-13 Aug-14 Aug-15 Aug-16 Aug-17 Aug-18 Aug-19 Aug-20
Spot Daily Long Term
URANIUM SUPPLY – ACCELERATED REBALANCING Cuts, Exhaustion, Reduction, Suspension
27
Mine Curtailments, Depletion and Speculative Interest Accelerating Market Rebalancing
Source: TradeTech April 2020
URANIUM DEMAND Need for New Production – Beyond Existing Mines
28
▪ Inventory Overhang Drawing Down ▪ Uranium Price Too Low to Stimulate New Production Within the Permitting and Development Lead Times to Bring On New Mines TradeTech’s “Market Appetite” for New Production
- All assumptions are consistent with TradeTech’s latest proprietary assumptions, August 2019 (i.e. Q2 2019);
- Established Production Base shown is weighted to assimilate the challenge of existing operations remaining at
full capacity over Life-of-Mine. Source: TradeTech Uranium Market Study 2019
Appetite for New Production Secondary Supply Established Production Base (Weighted) Reactor Requirements
UTILITY PROCUREMENT CYCLE: Old Contracts Rolling Off… New Contracts Need to be Signed
29
Utility Uncommitted Demand Historic Long Term Contracting
Source: UxC Market Outlook Q2 2020
Secretary of State Mike Pompeo recently said: "We need to fundamentally review our supply chains and make sure that we know those supply chains and have control over them for moments just like this."
Further, with respect to uranium, he stated that
“We've got to get back our mining, processing, enriching cycle”
Projected 2020 U.S. Demand: ~50M lbs. U.S. Production: ~0
$1.5 Billion for a U.S. Uranium Reserve in Trump’s FY2021 Budget
30
U.S. Is The World’s Largest Consumer of Uranium
31
INVESTMENT SUMMARY
URC OFFERS INVESTORS: ▪ First mover pure-play uranium royalty exposure ▪ Royalty portfolio covering array of development projects in key jurisdictions with the right partners ▪ Challenging market conditions create mutually beneficial royalty financing
- pportunities
▪ Team with extensive uranium industry experience, knowledge and access ▪ Nuclear energy gaining broader acceptance in a carbon-constrained world ▪ Robust uranium demand and curtailed mine production rebalancing market fundamentals ▪ $1.5B for a U.S. Uranium Reserve in Trump’s FY2021 Budget ▪ Market Fundamentals continue to improve with a growing deficit between primary production and reactor requirements
Appendix
32
ROYALTY AND STREAMS 101
33
“Royalties” are a payment to a royalty holder by a property owner, or project operator, and is typically based on a percentage of the minerals produced and the revenues or profits generated from the property Royalty Company Operating Company Royalty Company Operating Company
Up-front payment for royalty or stream Payment for stream delivery Royalty or stream delivery
“Streams” are physical commodity purchase agreements where, in exchange for an upfront deposit and ongoing payments for metal delivered, the holder purchases all or a portion of one or more metals produced from a mine, at a preset price.
TYPES OF ROYALTIES
34
Gross Proceeds Royalty (GPR)
▪ Based on the total revenue stream from the sale of production from the property, which
can sometimes include deductions.
▪ URC does not currently hold any GPR royalties.
Gross Revenue Royalty (GRR)
▪ Based on the total revenue stream from the sale of production from the property, which
can sometimes include deductions.
▪ URC GRR royalties include Michelin, Lance, Roca Honda, and the option on Diabase.
Net Profit Interest (NPI)
▪ Based on the profit realized after deducting costs related to production. ▪ URC has a NPI royalty on Reno Creek and Dewey-Burdock.
Net Smelter Returns (NSR)
▪ Based on the value of production or net proceeds received by the operator from a smelter
- r refinery.
▪ URC NSR royalties include Roughrider, Church Rock, Anderson, Slick Rock, and
Workman Creek.
Production Royalty (PR)
▪ Based on metal produced, often at a predetermined fixed price. ▪ URC has a PR on the Langer Heinrich Project.
Metal Streams
▪ Streams are distinct from royalties. They are metal purchase agreements where, in
exchange for an upfront deposit and ongoing payments for metal delivered, the holder purchases all or a portion of one or more metals produced from a mine, at a preset price.
▪ URC does not currently hold any streaming interests. However, part of its strategy
includes the potential acquisition of streams on primary uranium and uranium by-product assets.
▪ Widely used in the global mining sector.
35
The First and Only Pure Play Uranium Royalty Company
Uranium Royalty Corp. Toll Free: 1.855.396.8222 Phone: 604.396.8222 Email: Info@UraniumRoyalty.com www.UraniumRoyalty.com Corporate Office: 1030 West Georgia Street, Suite 1830, Vancouver, BC, V6E 2Y3 Canada President & CEO: Scott Melbye Investor Relations: Phone: 604.396.8222 Email: Info@UraniumRoyalty.com