Merger of Uranium Resources, Inc and Anatolia Energy Limited

38 Pages·2015·1.61 MB·English

by  Ben Wale

MERGER OF URANIUM RESOURCES, INC. (NASDAQ:URRE)
& ANATOLIA ENERGY LIMITED (ASX:AEK)
AUSTRALIAN URANIUM CONFERENCE, PERTH – JULY 15/16, 2015
A new uranium company with aim to fast-
track to high-margin uranium production

Paul Cronin
Chief Executive Officer and Managing Director
Anatolia Energy Limited

Christopher M. Jones
President and Chief Executive Officer
Uranium Resources, Inc.
1
CAUTIONARY STATEMENT
This presentation contains forward-looking statements within the meaning of the Private These risk factors and uncertainties include, but are not limited to, (i) the approval of the
Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks, proposed transaction by the shareholders of Anatolia and URI, (ii) the other terms and
uncertainties and assumptions and are identified by words such as “expects,” “estimates,” conditions to the proposed transaction, (iii) the ability to raise additional capital in the future,
“projects,” “anticipates,” “believes,” “could,” and other similar words. All statements (iv) worldwide demand for uranium, including specifically the spot price and long-term
addressing operating performance, events, or developments that Anatolia Energy Limited contract price of uranium, (v) the ability to reach agreements with any royalty holders, (vi)
(“Anatolia”) and Uranium Resources Inc. (“URI”) expect or anticipate will occur in the operating conditions at the projects, including without limitation weather conditions, (vii)
future, including but not limited to statements relating to (i) the timing and completion of the government (including tribal governments) regulation of the uranium industry and the nuclear
proposed transaction between URI and Anatolia, (ii) resulting cost savings, synergies and power industry, (viii) maintaining sufficient financial assurance in the form of sufficiently
other expectations as a result of the proposed transaction (iii) the ability to optimize collateralized surety instruments, (ix) unanticipated geological, processing, regulatory and
technical and operational components of a future combined business, (iv) the timing, legal or other problems which may be encountered, (x) the ability to enter into and
occurrence and rates of production at the properties in the United States and Turkey, successfully close acquisitions or other material transactions, (xi) the fact that NI 43-101
including statements regarding future growth pipeline, (v) the cost of uranium production at reports describe various types of “resources” which are not recognized by the SEC, inferred
the properties, (vi) capital resources, capitalization and ownership, including relationships resources are the lowest standard of resource allowed under NI 43-101 standards and may
with major shareholders, (vii) additions of reserves and resources, the timing of the analysis not qualify as “mineralized material” under SEC staff positions, “reserves” are defined
of historical data, and the occurrence, extent and results of any future exploration program, differently by the SEC and under NI 43-101 standards (see “Cautionary Note Regarding
including drilling, (viii) mineral resources and exploration results, which includes inferred References to Resources and Reserves”), (xii) access rights, (xiii) timely receipt of recovery
resources (see “Cautionary Note Regarding References to Resources and Reserves”), (ix) and other permits from regulatory agents, and (xiv) other factors which are more fully
future improvements in the demand for and price of uranium and growth in nuclear described in the URI’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and
generating capacity, (x) adequacy of funding and access to capital markets, (xi) plans other filings with the SEC, and Anatolia’s Annual Report.
for capital management, revenue, cash generation and profits, and (xii) timely closing and
benefits of definitive documents for URI’s sale-exchange transaction with Energy Fuels, are Should one or more of these risks or uncertainties materialize, or should any of the
forward-looking statements. underlying assumptions prove incorrect, actual results may vary materially from those
currently anticipated. In addition, undue reliance should not be placed on forward-looking
Because they are forward-looking, they should be evaluated in light of important risk factors statements. Except as required by law, Anatolia and URI disclaim any obligation to update or
and uncertainties. publicly announce any revisions to any of the forward-looking statements contained in this
presentation.
2
DISCLOSURE REGARDING FOREIGN ESTIMATES
The Company wishes to confirm that the information reported in relation to the URI Mineral Resources is on the basis of a foreign estimate (Foreign Estimate) and as such is not reported in
accordance with the JORC Code. The following additional information is provided in accordance with Listing Rule 5.12.
The information provided in relation to Foreign Estimates was extracted from URI’s website and various filings with the SEC (USA). URI discloses Mineral Resources, including inferred
resources, pursuant to the Canadian Institute of Mining, Metallurgy and Petroleum Standards (CIM Standards) for reporting Mineral Resources and Reserves, and Canadian National Instrument
43-101 (NI 43-101).
The Company believes that the categories of mineralisation reported are similar to the JORC Code (2012) classification. The Foreign Estimates in their current form are considered to be an
accurate representation of the available data, and are the most recent Resource Statement by URI.
The Company considers the Foreign Estimates to be material to the Company, given the intention that the Company and URI propose to merge their business interests. The Company also
believes that the Foreign Estimates are relevant to Shareholders as they provide an indication of the current estimated mineralisation under the control of URI.
The Company believes that the Foreign Estimates are sufficiently reliable and consistent with estimation methodologies commonly used at the time of their estimation. URI reported the
Foreign Estimates and has been involved in the exploration and evaluation of these deposits. URI has significant experience in uranium exploration and the production of uranium from its
uranium assets in South Texas, USA, and files all necessary information relating to their activities with the governing authorities (SEC).
Information relating to the key assumptions, mining and processing parameters, and methods used to prepare the Foreign Estimates are documented in a number of historic NI-43 101 reports
held by URI, and various filings with the SEC.
After completion of the merger of URI and Anatolia (Merger) URI intends to evaluate the required work necessary to verify the Foreign Estimates in accordance with Appendix 5A (JORC
Code).
Cautionary Statement
The information in this presentation that relates to Foreign Estimates is not reported in accordance to the JORC Code. A Competent Person has not done sufficient work to classify the
Foreign Estimates as mineral resources or ore reserves in accordance with the JORC Code but the Company notes the close similarity of the Canadian NI 43-101 and JORC classification
systems. It is uncertain that following evaluation and/or further exploration work that the foreign estimates will be able to be reported as mineral resources or ore reserves in accordance with
the JORC Code. This will require new estimates and future reporting under JORC (2012) after the completion of the Merger.
.
3
COMPETENT PERSONS STATEMENTS
For Anatolia
Information in this presentation which relates to Anatolia’s Mineral Resources and Exploration Results is based on information compiled by Mr Dmitry Pertel and Mr Robert Annett, who are Members of
the Australian Institute of Geosciences (“AIG”). Mr Pertel is employed by CSA Global Pty Ltd and Mr Annett is a non-Executive Director of Anatolia Energy Ltd. Mr Pertel and Mr Annett have over 20
years of exploration and mining experience in a variety of mineral deposit styles, and have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and
to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for reporting of Exploration Results, Mineral Resources and Ore
Reserves”. Mr Pertel and Mr Annett consent to inclusion in the report of the matters based on their information in the form and context in which it appears.
The information in this presentation which relates to Temrezli Plant and Well field Engineering is based on information compiled by Mr Thomas Young who at the effective date of the Pre-feasibility Study
was employed by TetraTech Inc. Mr Young is a Professional Engineer in the State of Colorado and is a member of a Recognised Overseas Professional Organisation (ROPO) as listed by the ASX. Mr
Young has over 30 years experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as
defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Young consents to inclusion in this presentation of the matters
based on this information in the form and context in which it appears.
The information in this presentation which relates to well field geology is based on and fairly represents information compiled by Mr Stephen Lunsford who at the effective date of the Temrezli Pre-
feasibility Study is a consultant to TetraTech Inc.. Mr Lunsford is a Professional Geologist in the State of Wyoming and is a member of a Recognised Overseas Professional Organisation
(ROPO) as listed by the ASX. Mr Lunsford has over 40 years experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is
undertaking to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Lunsford
consents to inclusion in this release of the matters based on this information in the form and context in which it appears.

For Uranium Resources
Information in this presentation which relates to Foreign Estimates under the control of URI in Texas and New Mexico is reported in accordance with ASX Listing Rule 5.12 and is based on and fairly
represents information and supporting documentation compiled by and verified under the supervision of Mr Dean Wilton (CPG-7659) who is Chief Geologist and Vice President of Uranium Resources,
and a Qualified Person under Canada National Instrument 43-101. Mr Wilton is a Professional Geologist in the State of Wyoming and is a member of a Recognised Overseas Professional Organisation
(ROPO) as listed by the ASX. Mr Wilton has over 40 years experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking
to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Wilton consents to the
inclusion in this release of this information in the form and context in which it appears and confirms that this information is an accurate representation of the available data and studies in respect of the
projects to which the Foreign Estimates relate.

4
URI CAUTIONARY NOTE REGARDING REFERENCES TO RESOURCES
AND RESERVES
URI discloses mineral resources, including inferred resources, pursuant to the Canadian Institute of Mining, Metallurgy and Petroleum Standards (CIM Standards) for reporting mineral resources and
reserves, and Canadian National Instrument 43-101 (NI 43-101). Investors are cautioned that the requirements and terminology of NI 43-101 and the CIM Standards differ significantly from the
requirements and terminology of the SEC set forth in the SEC’s Industry Guide 7 (“SEC Industry Guide 7”). Accordingly, URI’s disclosures regarding mineralization may not be comparable to similar
information disclosed by URI in the reports it files with the SEC. Without limiting the foregoing, while the terms “mineral resources,” “inferred resources,” “indicated resources” and “measured mineral
resources” are recognized and required by NI 43-101 and the CIM Standards, they are not recognized by the SEC and are not permitted to be used in documents filed with the SEC by companies subject
to SEC Industry Guide 7. Mineral resources which are not mineral reserves do not have demonstrated economic viability, and investors are cautioned not to assume that all or any part of a mineral
resource will ever be converted into reserves. Further, inferred resources have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. It cannot
be assumed that all or any part of the inferred resources will ever be upgraded to a higher resource category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of a
feasibility study or prefeasibility study, except in rare cases. The SEC normally only permits issuers to report mineralization that does not constitute SEC Industry Guide 7 compliant “reserves” as in-place
tonnage and grade without reference to unit amounts. In addition, the NI 43-101 and CIM Standards definition of a “reserve” differs from the definition in SEC Industry Guide 7. In SEC Industry Guide 7, a
mineral reserve is defined as a part of a mineral deposit which could be economically and legally extracted or produced at the time the mineral reserve determination is made, and a “final” or “bankable”
feasibility study is required to report reserves, the three-year historical price (or in certain circumstances, a contract price) is used in any reserve or cash flow analysis of designated reserves and the
primary environmental analysis or report must be filed with the appropriate governmental authority. URI discloses non-reserve mineralized material that is considered too speculative geologically to be
categorized as reserves under SEC Industry Guide 7. Estimates of non-reserve mineralized material are subject to further exploration and development, are subject to many risks and highly speculative,
and may not be converted to future reserves of URI. Investors are cautioned not to assume that all or any part of such non-reserve mineralized material exists, or is economically or legally extractible.
Mineralized material that is not reserves does not have any demonstrated economic viability.

ADDITIONAL INFORMATION AND WHERE TO FIND IT
This presentation is being provided in respect of the proposed acquisition of Anatolia Energy Limited (“Anatolia”) by Uranium Resources, Inc. (“URI”) and related matters. In connection with the proposed
transaction, URI will file with the Securities and Exchange Commission (“SEC”) a proxy statement and will mail or otherwise disseminate the proxy statement and a form of proxy to its stockholders
when it becomes available. STOCKHOLDERS AND INVESTORS ARE ENCOURAGED TO READ THE PROXY STATEMENT (AND OTHER RELEVANT MATERIALS) REGARDING THE PROPOSED
TRANSACTION CAREFULLY AND IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE, AND BEFORE MAKING ANY VOTING DECISION, AS IT WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE TRANSACTION. Stockholders and investors will be able to obtain a free copy of the proxy statement (when available), as well as other filings made by URI regarding URI, Anatolia and the
proposed transaction, without charge, at the SEC website at www.sec.gov. In addition, documents filed with the SEC by URI will be available free of charge on the investor section of URI’s website at
www.uraniumresources.com.

URI and certain of its directors and executive officers may be deemed, under SEC rules, to be participants in the solicitation of proxies from URI’s stockholders in connection with the proposed
transaction. The names of URI’s directors and executive officers and a description of their interests in URI are set forth in URI’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014,
which was filed with the SEC on March 19, 2015, and Amendment No. 1 thereto, which was filed with the SEC on April 30, 2015. Additional information about the interests of potential participants will be
contained in the proxy statement (when filed) and other relevant materials to be filed with the SEC in connection with the proposed transaction. These documents may be obtained from the SEC website
and from URI in the manner noted above.
5
SIMPLE COMPELLING RATIONALE
URI AEK
+
Experienced technical personnel
High grade advanced ISR project in Turkey
Relocatable plant infrastructure
Near term low cost production
Large uranium resource base in
New Mexico & South Texas Finance & marketing expertise
Potential medium term production Exploration upside
Funding by, and support from, one of the largest resource Lowest quartile operating costs
private equity firms in the world
Favourable regulatory jurisdiction
Cash, NASDAQ listing and better trading liquidity
Established infrastructure
Direct access to the world’s largest capital and nuclear

power markets

6
A WELL-POSITIONED U.S. URANIUM COMPANY
Market Total In Situ
(US$ in millions, except Cap Total EV Resource EV/Resource
per share numbers) Price (M) (M) (Mlbs) ($/lb) Stage Location
Producer (ISR,
Energy Fuels $4.14 $186 $214 134.7 $1.59 U.S.
Conventional)
ISR Producer,
Uranium Energy $1.28 $125 $134 75.7 $1.76 U.S., Paraguay
Conventional Projects
Ur-Energy $0.75 $98 $133 36.2 $3.66 Producer (ISR) U.S.
Peninsula Energy $0.02 $129 $93 95.8 $0.97 Under Construction (ISR) U.S., South Africa
Azarga Uranium $0.27 $16 $14 32.0 $0.44 PEA Complete (ISR) U.S., Kyrgyzstan
Average $1.46
PFS Complete (ISR)
URI+AEK (Pro Forma) $0.97 $49 $46 133.1 1,2 $0.35 Targeting 2016 U.S., Turkey
Production
 URI is attractively valued relative to its peers
 It is also well-positioned for a re-rating as it progresses towards production
Source: Company materials, Bloomberg.
1. For Pro Forma URI, M&I pounds consist of 11.3M lbs at Temrezli and 6.4M lbs at Churchrock Section 8, Inferred pounds consist of 2.0M lbs at Temrezli, with the balance made up
of the remainder of URI’s Texas and New Mexico properties.
2. Refer to the table of mineral resources and non-reserve mineralisation and the relevant disclosures on slides 11 and 16 of this presentation.
7
HIGHLIGHTS
Creating a new uranium company aiming for a fast-track to high margin uranium production
 Temrezli ISR Uranium Project in Turkey approaching development
 Potential for high-grade, low-cost uranium confirmed by PFS
 Potential for significant cost savings through relocation of URI’s Rosita plant in Texas
 Board and senior management of both Anatolia and URI have extensive industry experience
 High-grade uranium returned from Turkish regional exploration program
 Kingsville Plant on standby for quick restart from nearby reserves in South Texas upon
sustained increase in uranium prices
 Extensive resources and land in New Mexico
 US non-core asset monetisation program underway, delivering significant benefits
8
URI PRIMER
 Founded in 1977 targeting uranium exploration and development
 Listed on NASDAQ in the US (URRE)
 Historically produced 8 million pounds of uranium in Texas, with 2 plants on standby for
restart
 Large claims portfolio in prime uranium districts in Texas and New Mexico
(212,000 acres)
 Significant exploration, development and operating experience in ISR uranium
 Continuing to actively seek opportunities to acquire near term production whilst
monetising longer term, conventional mining production options
 Average daily value traded of US$300k (greater than 20x that of AEK)
(1)

(1) July 2014 to 2 June 2015
9
EXPERIENCED URI OPERATING TEAM
• Joined in 2004; experienced in all phases
of ISR development and production;
Dain McCoig licensed Professional Engineer in Texas.
• Designed and oversaw construction of
VP South Texas Operations
the Rosita plant. B.S. in Mechanical
Engineering
Daniel Calderon Orlando Ron Grant Joshua Holland Jim Kegebein Daniel Mireles
Gonzalez
Plant Mgr. Reservoir Radiation Safety Logging Plant
Superintendent Plant Engineering Officer Supervisor Superintendent
Superintendent
• Joined in 2006; • Joined in 1987; • Joined 2006; • Joined in 1990; • 8 years with
• 7 years with
experienced in Professional certified safety experienced in URI; formerly in
URI; formerly
plant and Engineer trainer & former logging and wellfield
asst. plant
construction • B.S. Chemical Health, Safety formerly a lab maintenance
foreman and
engineering Engineering and Environ. technician.
lead man
• B.S. Mechanical Coordinator • Current
Engineering Vikas Joshi • Studying radiation safety
Environmental certificate
Reservoir
Kasi Yanammani
Management
Engineer
Chemist
• 7 years with
URI. Prof. David Calderon
• Joined in 2014
Engineer
HSE Coordinator • B.S. Chemical
• B.S. Chemical
Engineering
Engineering; M.S.
• 8 years with URI
Environmental
• Studied safety engineering,
Engineering
kinesiology
10