fission uranium corp. we know pls is big. but can it be ... · birth of fission uranium (and...

Please see Disclosures and Disclaimers at the end of this report. A division of Dundee Securities Ltd.

Dundee Capital Markets is a registered trademark of Dundee Corporation, used under license.

Fission Uranium Corp. (FCU-T: C$1.35) April 24, 2014

BUY, Speculative Risk

Dundee target: C$2.10

David A. Talbot / (416) 350-3082 [email protected]

Aaron Salz / (416) 350-3371 [email protected]

We Know PLS is Big. But Can it Be Mined? We Think So. This is How.

We recommend Fission Uranium as a BUY, and implement a new price target of C$2.10 based on blended 10% NPV, resource value & cash. We maintain a Speculative Risk rating given that PLS lacks any NI 43-101 studies.

Our base case has US$1.2 B pre-tax 10% NPV (31% IRR), US$682 MM post-tax NPV (23% IRR). We assume 6 MM lbs pa U3O8 for 20 years, a 9:1 strip, initial Capex of US$720 MM (25% contingency), total cash costs at US$18.95/lb. A toll milling option drops Capex but Opex rises. Its post-tax NPV is US$620 MM (35% IRR). PLS could be one of the lowest cost uranium mines globally based on our assumptions.

PLS is one of the most exciting discoveries in the Athabasca Basin. It is driven by a highly successful technical team, and entrepreneurial management. A typical poly-metallic basement hosted unconformity uranium deposit, shallow mineralization trends for at least 2.4km. Five zones discovered to date are all wide open. R00E and R780E zones show excellent continuity as zero holes missed this winter. PLS frequently demonstrates high grades and great thicknesses as noted by 9.93% over 101m. This ranks PLS second only to McArthur River in grade x thickness. And there are 12 other targets on this property, located on a highway, in a great jurisdiction.

But it seems the time has passed where investors simply eagerly await drill results from this large, growing world class deposit. Now into a 3rd drill season, market participants are starting to ponder: Can it be mined? How? What about the lake? Where will it be processed? What are Capex and Opex requirements? And while we are not engineers and don’t have all the answers, this report is an exercise to help estimate costs, and review key challenges that this project might face.

We factor the NPV of a hypothetical o/p, mill on-site scenario into our FCU valuation, but retain a large proportion of our target price from our mineral inventory estimate and upside potential, plus cash. We still use rudimentary pounds in the ground valuation, which despite its shortcomings, is somewhat predictable in the Athabasca Basin (US$10/lb). Either way, FCU isn't fairly valued based on historical take-out metrics.

We take a preliminary look at potential mining and milling scenarios for PLS. On site and off site processing, and haulage options. And to determine mine parameters we employ Dundee's polygonal mineral inventory estimate, a pit parameter model and project NPV models. We suggest open pit mining, otherwise high grade portions would be sterilized, berm construction to keep out lake water and substantial overburden removal. A mill on site yields a higher NPV.

We estimate a growing inventory now at 55 MM lbs with potential for 120-140 MM lbs by extrapolating mineralization within a 1.4km long hypothetical pit shell that is 500m wide, covering R00E and R780E zones. Our estimated grade of 1.75% U3O8 dilutes to 1.58% for mining but improves at higher cut-offs.

FCU-T: Price/Volume Chart

Source: Factset

Company Description

Fission Uranium is a Canadian uranium exploration company with properties in the Athabasca Basin of Saskatchewan. Fission is currently advancing its 100% owned PLS discovery on the western side of the Athabasca. Results to date have demonstrated the potential for a shallow, thick and high grade deposit split between five zones - R00E, R780E, R600W, R1155E and R1620E.

J u l -1 2 J a n -1 3 J u l -1 3 J a n -1 4

0 .4

0 .6

0 .8

1

1 .2

1 .4

1 .6

1 .8

0

8

F i s s i o n U r a n i u m C o r p . (F C U -C A)

Vo lu m e (M i l l io n s ) P r ic e (C AD )

Vo lu m e F is s ion U ra n iu m C o rp .

Fission Uranium Corp. April 24, 2014

DUNDEE CAPITAL MARKETS Page | 2

EXECUTIVE SUMMARY - The World Class PLS Discovery is Evolving Beyond Mere Exploration Results

You remember where you were at some points in your life. I remember when Regan was shot. When Challenger blew up. When Hathor discovered Roughrider with 5% over 12m U3O8, I was in a cab on my way back to the PDAC in Toronto. It was just after noon, in March of 2008. Fission Energy's J-Zone discovery? I was sitting at my desk on 25-Jan-10. Saw significant scintillometer results. Talked to management that afternoon. And the next morning my first ever Fission note called "Potential Uranium Discovery 140m from Hathor's Roughrider" was sent to inboxes.

For PLS it was more of an evolution. As a geologist, then 18 years into my career, the first I heard of Fission Energy's boulder field on its PLS JV, I sensed something interesting was unfolding. While much of the street was still pondering J-Zone's latest big hit - 46.15% over 2m with 7.8% over 14.5m; I wrote a note on 5-Jul-11 - "Nearing a Discovery at Another Project?". All we knew was that a 4km x 900m high grade boulder train was returning significant and off-scale radioactivity. A few great boulder assays and drill hole smoke later, and on 5-Nov-12 we wrote "Discovery - Massive Pitchblende - Just Awaiting Assay Confirmation". It's been radioactive boulders. Discovery. Expansion. Delineation. Running parallel to great stock performance. Birth of Fission Uranium (and Fission 3.0). And now economics.

BUY, C$2.10 Target Price, Speculative Risk

We know PLS is a potentially large, high grade, near surface basement hosted unconformity uranium deposit. It is also likely to get larger and this fact alone has been able to sustain strong performance of Fission Uranium stock in the market. With FCU approaching half a billion market cap, investors are asking more involved questions about project value than a simple pounds-in-the-ground estimate can answer. The US$8 to US$10/lb rule of thumb valuation for high grade deposits in the Athabasca Basin seems acceptable by many, if not accurate based on several corporate take-overs. It has held true for each of the Roughrider, J-Zone and Millennium acquisitions, and in the post-Fukushima environment. However, we always contend that not every pound is created equal. Now increasing attention is being drawn by clients to the potential economics of PLS. How big might it get? Open pit or underground? How it would be accessed? Ballpark - what sort of capital and operating costs are we talking about? There is considerable overburden, a lake lies above the deposit, and there are no longer uranium mills on the western side of the Basin. So, could PLS, a growing and high grade deposit support berm construction and a new mill? What investors must remember is the value of this rock. A tonne of PLS rock is worth ~US$1,200 on average at current spot prices. Its value rises to over US$2,500 at Dundee's long-term uranium price of US$65/lb. That means PLS rock could be equivalent to 1 oz/t gold ore, or 65 oz/t silver ore. Plus PLS has significant thicknesses of uranium mineralization, over 100m in some cases with grades that are 6x the average for the deposit.

Dundee runs three models for PLS and Fission: 1) Polygonal Mineral Inventory Model; 2) Pit Parameter Model; 3) Project NPV Model. Our polygonal mineral inventory has been running since the beginning of this discovery. Our Pit Parameter Model offers hypothetical pit parameters. Finally, our Project NPV Model is a financial model brings the technical information, capital and operating cost assumptions together to determine project NPV and our new Fission Uranium target price.

We now factor the NPV of a hypothetical mining scenario into our Fission valuation (~25%) but still maintain a large proportion of our target price (75%) from our PLS potential mineral inventory estimate and upside potential. For these we still use the more rudimentary pounds in the ground valuation, which, despite its shortcomings, tends to be somewhat predictable in the Athabasca Basin (US$10/lb). Any acquirer would have to pay up for the value of the project itself as we have seen in the past. We value FCU as if it were being taken out by a competitor, not as if Fission itself was to construct the mine.

We have made several assumptions used in our financial model from our study of 17 cross sections - R00E and R780E Zones. All parameters and assumptions are purely hypothetical. PLS may ultimately host upwards of 120 to 140 MM lbs of uranium at 1.75% U3O8. Our current estimate is 55 MM lbs but we believe that conservative using our sectional polygonal model. We assume an open pit, acid leach, resin in pulp mine producing 6 MM lbs pa for 20 years. No underground or toll milling. Our base case has US$1.2 B pre-tax 10% NPV with a 31% IRR; US$682 MM post-tax 10% NPV with a 23% IRR. Initial Capex is estimated at US$720 MM. Total cash costs of US$18.95/lb. A toll milling option drops Capex but Opex rises. NPV insensitive to operating costs, and sensitive to capital costs and uranium prices. Overburden removal accounts for 8% of our Capex and the mine may require 3,200m of berm construction.

Roughrider was purchased for 1.17x pre-tax 10% NPV (from its 2011 PEA). Using this metric on our base case pre-tax 10% NPV of US$1.2 B would imply a takeout price of US$1.4 B for FCU or C$4.64/sh. If we were to assume a typical US$10/lb Athabasca Basin premium on our estimate of 135 MM lbs, then we come up with a project potentially worth US$1.35 B. Being more conservative, and applying a 1.2x multiple to our post-tax 10% NPV would imply a takeout price of US$800 MM or $2.65/sh.



Contents

PATTERSON LAKE SOUTH (PLS) - FISSION URANIUM (100%) ......................................................................................... 4

Quick Facts .......................................................................................................................................................................... 4

Dundee Hypothetical Mining Parameters ......................................................................................................................... 5

Model 1 - Dundee's Mineral Inventory Estimate Model ................................................................................................... 6

Model 2 - Dundee's Hypothetical Pit Shell ............................................................................................................................. 7

Four Milling Scenarios for PLS .......................................................................................................................................... 10

Operating Cost Assumptions: ................................................................................................................................................ 11

Capital Cost Assumptions: ..................................................................................................................................................... 13

Model 3 - Dundee's NPV Model for PLS ........................................................................................................................... 17

Sensitivity Analysis ................................................................................................................................................................ 18

Appendix 1 - Case Study - Midwest Deposit .................................................................................................................... 26

Appendix 2 - PLS Geology Summary ................................................................................................................................ 28

Appendix 3 - PLS Drilling Summary .................................................................................................................................. 33

DISCLOSURES & DISCLAIMERS .................................................................................................................................... 36

IDEA OF INTEREST. ..................................................................................................................................................... 38

EXPLANATION OF RECOMMENDATIONS AND RISK RATINGS ...................................................................................... 38



PATTERSON LAKE SOUTH (PLS) - FISSION URANIUM (100%)

Quick Facts

Location: The Patterson Lake South Property (PLS) is located in the SW Athabasca Basin (Figure 1). It lies approximately 550km NW of Prince Albert, and ~150km N of La Loche. Fort McMurray, ~175km W can also provide food, fuel and supplies.

Access: Via the gravel Cluff Lake mine road (Highway 955) that runs north-south through PLS property. Exploration may be based out of the Big Bear Lodge, ~20km from PLS (~100 person capacity). Big Bear currently runs on diesel generators, and the PLS project is located ~30-40 miles from the provincial power grid (would require an extension for commercial mining). FCU has sufficient surface rights to contain a potential mining and processing operation.

Nearby projects: In addition to the plethora of explorers in the region (particularly post discovery), the west side of the Athabasca Basin was once home to AREVA's Cluff Lake Mine (located ~80km N, accessible via Highway 955). Cluff Lake production commenced in 1980, and ceased in 2002 after reserves were depleted. The mine was both open pit and underground, producing a total of 64.2 MM lbs grading 0.92% U3O8 (UG produced 24.2 MM lbs). Shea Creek (51% AREVA; 49% UEX Corp.) is located ~20km south of Cluff Lake and 50km north of PLS. It has a compliant resource of 95.85 MM lbs grading 1.3% U3O8 (as of Apr/13). Both of those projects are located along the NS trending Saskatoon Lake Corridor. The fact that PLS lies close to this trend and represents another sizeable deposit on this side of the basin highlights the areas potential.

Figure 1: PLS location map in the Athabasca Basin.

Source: Company Reports

Overcoming the Lake Obstacle

Patterson Lake is relatively shallow, estimated at around 6-7m depth at the most where Fission is currently drilling, and therefore overlying the deposit. This fairly large lake is the shape of a horseshoe with drilling occurring roughly in the middle (Figure 2). Each leg of the lake is ~6-8km long, and ~2km at its widest point. Fission is working on full scale bathymetry to better understand lake depth, but management suggests that it's possible that PLS mineralization is located in one of the shallower areas (top of the horseshoe) of the entire lake. This could potentially ease some of the mining challenges.

The most obvious technical issue that surrounds mining of PLS is that most of the current deposit lies immediately below the overburden (glacial deposits, lake sediments and loon crap). The average depth to mineralization is 22m for the entire deposit, but for great extents occurs at the rock-overburden interface. We believe this is a challenge that can be overcome using berm



construction and lake draining as previously performed by Cameco, AREVA, Denison and others. See discussion on Midwest, which Denison dammed for exploration, in Appendix 1.

Figure 2: PLS satellite image. Current drilling and potential deposit location in the red box.

Source: Google Maps

Any fish/permitting issues? The company has permission to drill in shallower areas that were considered fish regions previously, and currently have no issue that would be considered outside of the ordinary. Environmental work is under way. It is likely that any loss of fish habitat would fall under the auspices of the Canadian Department of Fisheries and Oceans, and the Saskatchewan Government. While Midwest had been drained previously, it's our understanding that the cost associated with environmental procedures and replacing lost fish habitat had significantly increased the capital cost of that project. That remains a risk at PLS, but we maintain that PLS's shallow depth would likely decrease strip ratios significantly (9:1 at PLS vs 254:1 at Midwest) and therefore would require less pre-stripping capital than Midwest.

How might potential ore be accessed? In the event of open pit mining, for which this deposit is perfectly suited, a structure must be installed to keep out lake water, and potential pit area would need to be pumped prior to mining. The typical process is to set up berms/cofferdam and drain out a certain portion. Following mining the water is diverted back into the pit. This has been successfully done in the Athabasca Basin including Cameco's Collns Bay Mine and AREVA/Denison's Midwest Deposit; and elsewhere such as Dominion's Diavik mine in Northwest Territories.

Dundee Hypothetical Mining Parameters

We know PLS is a potentially large, high grade, near surface basement hosted unconformity uranium deposit. It is also likely to get larger and this fact alone has been able to sustain strong performance of Fission Uranium stock in the market. However, with the company at $458 MM market cap, investors are asking: 1) what is the value of this deposit and therefore company, and 2) can it be mined? The rule of thumb valuation for high grade deposits in the Athabasca Basin has been the US$8-$10/lb range as acceptable if not accurate. This has held true for each of the Roughrider, J-Zone and Millennium acquisitions since 2011 (post-Fukushima). However, we have always contended that this is not the greatest valuation option as every deposit is different making every pound different.



Much attention has been drawn to the potential economics of mining PLS. How big might it get, open pit or underground, how it would be accessed, capital and operating costs. There is considerable overburden, a lake lies above the deposit and a mill isn't located nearby. Should a berm be built or mill constructed?

But, what investors must keep in mind is the value of this rock. A potential operator will have significant breathing room to still make healthy margins, even in today's depressed uranium price environment, in our opinion. At spot prices of US$32.50/lb, a tonne of PLS rock is worth ~US$1,254 on average. At Dundee's long-term uranium price of US$65/lb, and one might argue that it may take years to get PLS into production that number would rise to US$2,500 (using 1.75% U3O8). At today's low uranium prices, PLS rock is equivalent to 1 oz/t gold ore 65 oz/t silver ore. And PLS has significant thicknesses, in some cases up to 50-100m.

We used the below inflation rates (provided by Dundee Gold Research) to price certain operating and capital metrics from historical studies to 2013 dollars.

Figure 3: Open-pit mining inflation rates (based on the gold space).

Source: Dundee Gold Research

Model 1 - Dundee's Mineral Inventory Estimate Model

Dundee runs three models for PLS and Fission: 1) Polygonal Mineral Inventory Model; 2) Pit Parameter Model; 3) Project NPV Model. Our polygonal mineral inventory model helps determine average grades and ore dilution based on assays. We have been running this model since the beginning of this discovery. Our Pit Parameter Model offers a hypothetical pit shell that helps estimate tonnage of overburden, waste rock and ore, contained pounds, and provide the dimensions and estimated footprint for an open pit which would impact berm requirements. Finally, our Project NPV Model brings the technical information, capital and operating cost assumptions together to determine project NPV and our new Fission Uranium target price.

Dundee's mineral inventory estimate as of April 22, 2014. This cannot be considered a mineral resource and definitely not a reserve. While R600W has less than 100,000 lbs U3O8 to its credit, it is not included in any further discussion.

Source: Company Reports, Dundee Capital Markets

-20%

-10%

0%

10%

20%

30%

40%

50%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Zone L x W Tonnes Grade MM lbs Tonnes Grade MM lbs

R00E 165 x 45 188,339 1.88% 7.77 80,195 3.87% 6.84

R780E 855 x 95 1,257,720 1.73% 48.05 414,783 4.61% 42.12

R600W 30 x 30 20,013 0.21% 0.09

TOTAL 1,466,073 1.73% 55.91 494,978 4.49% 48.95

0.1% Cut-Off 1% Cut-Off



We use a hand drawn polygonal plan model approach for PLS that we believe to be a conservative representation of its potential mineral inventory at that point in time. We estimate block sizes, dip, true thickness, and density (or SG) for each hole individually as assays are returned. The polygonal model on plan view is compiled on an ongoing basis from drill assay data only, not scintillometer or down hole gamma logs (see detailed drill hole data in Appendix 3).

Our estimate for each hole is determined as follows:

1) Block Area * True Thickness = Volume

2) Volume * Density = Tonnage

3) Tonnage * Grade * 2204.6 = Pounds U3O8

Some other features to our mineral inventory estimate:

We use both 0.1% and 1% U3O8 as lower cut-offs to determine tonnages and average grades; Each drill hole is limited to a radius of 7.5m along and perpendicular to strike to create roughly 15m x 15m blocks.

Therefore higher grades cannot smear beyond its own volume and skew our results; Each drill hole is provided a true thickness at its pierce point. This may be difficult to determine, especially on sections

that host just one drill hole at this time. If in doubt we may assume a 70 degree dip and therefore a 0.6x multiple assuming vertical drill holes;

A specific gravity (SG) is determined using the McArthur River formula (regression analysis) so that each grade provides a certain SG. Uranium is extremely dense, therefore higher grades increase density of the rock. Our SG modeling suggests an average of 2.40 and ranges from 2.35 to 2.62. We use 2.30 for waste in sandstone (not required at PLS), 2.15 for waste in basement rocks, and 2.66 for overburden. Several of the other densities are based on studies by AREVA at the nearby Shea Creek deposit.

Tonnages are determined using volume and specific gravity unique to every hole. Tonnage only within our hypothetical pit shell is used (more on that later);

Uranium mineralization within mineralized units is stacked to determine thickness of uranium mineralization in any given hole, weighted average grades and contained pounds. Waste or barren units within the broader mineralized package are represented in our pit shell model as a percentage of the entire package. Currently our model suggests that pounds have been cumulating at two of the five known mineralized zones, given the amount of drilling to date;

For our financial model we dilute grades and tonnages by 10% to get a mineable grade (1.58% U3O8).

*Although Talbot has spent almost 10 years in the gold exploration industry and 11 years in mining research at Dundee and completed many estimates/mineral inventories, this estimate should not be confused with a resource or reserve. We would consider this more accurate than a back of the envelope (using strike x average width x average height) estimate.

Model 2 - Dundee's Hypothetical Pit Shell

A hypothetical pit shell has been created, but this can be considered back of the envelope. We have assumed open pit mining for several reasons. First off, it is deposit driven. Mineralization is very shallow, coming to surface on many sections with an average depth to ore of 22m, and ranging from 0m to 68m. There is no Athabasca Sandstone, just dominantly basement rock. Despite basement rock host, this isn’t enough of a depth to provide an adequate crown pillar without leaving a considerable amount of mineralization out of the mining plan to provide support. Secondly, it is cheaper to build and operate.

From our study of 17 cross sections through the R00E and R780E zones, we have made several determinations which have led to many assumptions used in our financial model. The mineral inventory and pit shell helped us determine the size of open pit, amount of berm required, tonnages of waste, ore and strip ratios. A pit slope of 38 degrees and overburden slope of 38 degrees has been used, based on the Midwest study. Using the resultant pit dimensions, we have added a buffer zone of 50m at the crest of the pit for safety, water catchment areas (pumps) and dewatering wells in the overburden. This provides about 3,200m of required berm length around the parts of the pit that occur within the lake and extending onto land on the north and south limbs of the berm (Figure 4).

We maintain that we are geologists and financial professionals and not mining engineers. Any ideas with respect to the open pit shell, berm construction or mining methods, while based on other projects, is purely hypothetical at PLS. The project will have to undergo the typical resource estimate, Pre-Feasibility Studies, Feasibility Studies and Permitting as per normal course of business prior to any mining decision being made.



Table 1: Summary of PLS mineralization and hypothetical pit parameters as estimated by Dundee Capital Markets.


The R00E and the R780E zones might be mineable according to our work at this time. The gap between these two zones is assumed to be barren and therefore doesn’t require mining, although overburden does need to be removed. Future drilling may in fact delineate uranium in this area. We assume 38° pit slopes and overburden slopes similar to the Midwest study. Given current drilling, we suggest that mineralization extends for 1,145m and is 60m wide at the most. Given these parameters, we have modeled mineralization extending from L65W to L1080E (excluding the gap between the two zones from roughly L100E to L200E), with an average ore width of 28m (N-S). Given assumed pit angles, we estimate a pit footprint extending from ~L140W to ~L1345E along strike and an average width of 403m, but up to 685m wide towards the east where pit depths are greater. There is a chance that strike of mineralization might continue east and west, but we don’t have drilling to support that currently, and at some point as the deposit gets deeper and overlying rock increases, it does start to make sense that underground methods might become more efficient.

Figure 4: Hypothetical Dundee estimated pit shell, with berm measurements denoted by solid lines.


Parameter: m Parameter: m

Strike of Pit 1,483 ~140W to 1350E Ave Thickness of Uranium Mineralization 70.5

Strike of Ore 1,145 60W to 1080E Min 2.5

Ave Width of Pit 403 Max 150.0

Min 128 Ave Thickness of Zones Only 41.8

Max 685 Min 2.5

Ave Width of Ore 28 Max 101.0

Min 15 Ave Waste Rock within Mineralized Intervals 0.41

Max 60 Ave Overburden Thickness 54.1

Ave Depth of Pit 153 Min 50.0

Min 50 Max 66.0

Max 250 Ave Depth to Ore 21.5

Berm required 3,200 Min 0.0

+50m pit width for catchment Max 68.0



We infer that the pit area may ultimately host ~135 MM lbs contained uranium mineralization assuming average grades of 1.75% U3O8, pending further delineation drilling. Grades were then diluted by 10% to 1.58% and tonnages increased by 10% to 4.3 MM t to represent mining dilution in our DCF model.

Pit depth. The depth to pit floor was determined using cross sections provided by the company. We attempted to include most of the mineralized units within each hole, although there are some outliers below the pit floor (for which contained pounds are not included). The average pit depth is 153m, ranging from 50m at R00E to 250m towards the east end of R780E where pit depths are deeper and mineralization is significantly wide. A pit depth of 153m is more than reasonable (the Dome pit in Timmins extends for 335m vertically below the crest of the pit).

Tonnage estimation/extrapolation. This model provided the proportion of mineralized intervals, uranium mineralization, internal dilution and 38° pit and overburden slopes, we have determined potential total tonnages and strip ratios for PLS. Considering that drilling has covered only a proportion of the potential strike and width of the R00E and R780E zones, we then extrapolated uranium mineralization between sections and in a NS direction averaging 28m (we excluded a potential gap between the two zones). This would suggest ultimate potential for about 120-135 MM lbs U3O8 in this area. We note that mineralized intervals range from 3m to 150m in thickness and average 70.5m and 28m wide where drilled. This includes uranium mineralization, barren rock and weak or thin mineralization (<3m) which may be treated as barren rock and excluded from the estimate. We estimate uranium mineralization has an average thickness of 42m, ranging from 3m to 101m. The percentage of dilution or barren material within the mineralized intervals is calculated at 41% and impacts the overall strip ratio when combined with basement rock outside of mineralized intervals. This estimate is completed manually on a sectional polygonal basis.

Extensive overburden. Overburden makes up the largest volume of material in the pit as its average depth is 54m across the entire deposit, and ranges from 50m to 66m. These unconsolidated glacial deposits account for 42.8 MM tonnes. Further study would be required to determine fractions of each component including boulders, rock fragments, gravel, sand, silt, clay and other materials.

Strip ratios. We estimate that our hypothetical open pit model encompassed 35.0 MM t ore waste and 3.9 MM t of ore which suggests an 8:95 strip ratio. Notably, the R00E zone is largely at surface and internal dilution is very low, thus ore tonnage exceeds waste tonnage and therefore the strip ratio is very low. However, grades are also lower in this area.

Table 2: Estimated tonnages and strip ratio for PLS.

*Tonnages includes ends


Zone Waste Ore Waste:Ore OVBN

R00E Zone 65,586 156,960 0.42 2,393,627

R780E Zone 34,884,920 3,747,484 9.31 38,874,615

Overburden b/t 1,489,532

TOTAL 34,950,506 3,904,444 8.95 42,757,774



Figure 5: Corebox cross-section of PLS, with zones and mineralization highlighted. Overall there appears to be a slight plunge to the east.

Source: Corebox, Company Reports, Dundee Capital Markets

Four Milling Scenarios for PLS

We see four potential mining and milling scenarios, assuming open pit mining. We only model options #1 and #2:

1) Construct a mill at PLS - this may ultimately be possible should grades and contained pounds be sufficient to support the construction capital of a mill. We have run this scenario through our DCF model. It has become our base case scenario due to both logistical and economic reasons. Assuming our production rate of 6 MM lbs pa, our 10% discounted payback on this is 5.5 years, or almost 36 MM lbs at a head grade of 1.58% U3O8. More on this later.

2) Toll mill PLS ore at Key Lake, McClean Lake or Rabbit Lake Mills - this would assume a toll milling arrangement as there is some open mill space on the eastern side of the basin at this time, namely at Rabbit Lake. Although it may be possible to expand either Key Lake, Rabbit Lake or McClean Lake mills. The Key Lake Mill, which would be most sensible, is located ~697km via existing roads from PLS. Both Rabbit and McClean are even further, and transportation of high grade radioactive uranium ore or concentrate along public highways is unlikely in our view. But we have run this scenario through our DCF model.

3) Construct a mill for Western Basin deposits including PLS (perhaps funded through a consortium) - the 96 MM lbs AREVA/UEX Shea Creek deposits located just to the north of PLS is deeper and will have to be accessed via more expensive underground methods. The shallower PLS deposit would be cheaper and development time would be less than Shea Creek. One could envision earlier mill payback using PLS material and then moving on to the deeper Shea Creek deposits which wouldn't have to support mill capital on its own. This would require a decision to participate by AREVA/UEX.

4) Build a direct road to Eastern Mills. Construction of a road direct to Key Lake, which would be ~200km, would be fraught with difficulties of its own, and likely require a second stage of permitting. Following discussions with the Honorable Bill Boyd, Minister Responsible for the Global Transportation Hub Authority, we believe that construction of a new east-west road across the Basin to decrease travel times is unlikely.



Figure 6: Patterson Lake distance to Key Lake Mill.

Source: Google Maps

Cost Parameters for PLS

#1) Base Case = On-site mill

#2) Toll Milling Case = Transport to Key Lake

Basic assumptions:

US$65/lb uranium price (Dundee long-term) Diluted head grade of 1.58% U3O8 (Dundee mineral inventory estimate) Strip ratio of 8.95:1 (Dundee hypothetical open pit) 95% recovery rate (conservative based on Midwest, Shea Creek, Hidden Bay, McArthur and Cigar Lake technical studies) 6 MM lb pa production rate over 20 years Capital costs spread out over 2 years Depreciation runs as a percentage of depleted tonnage 30% tax rate

Operating Cost Assumptions:

We broke down operating costs into three main components in order to maintain simplicity: mining, processing and G&A:

Mining Costs of US$4/t or US$1.21/lb - We looked at both Hidden Bay o/p costs of US$2.70 (inflated to US$3.48/t, smaller operation), and Midwest o/p costs US$1.48/t (inflated to US$3.71/t, similar size operation). The global average may be closer US$2.50-$3.00/t, but again we are remaining conservative and anticipating the added challenges of mining a pit within a lake. The cost of moving overburden is US$1.50/t due to its proximity to surface and unconsolidated nature that requires no blasting.

Processing costs US$300/t ore or US$9.09/lb - We based our estimate on Roughrider's 2011 PEA. The study suggests US$480/t milled or US$6.70/lb (3.30% head grade) for a smaller operation. This was the basis of our estimate; it's the



most recent precedent in the Athabasca suggesting an owner-operator model (as opposed to toll-milling). Using the annual mill expenditure (US$33.8 MM) and dividing by our assumed PLS milling tonnage, we hit our processing cost assumption of US$300/t. At a cost of US$300/t milled ore, head grade of 1.58% and 95% recoveries, milling costs on a per pound basis come in at US$9.09. For our toll milling scenario, we beefed up costs by US$2/lb (or US$70/t) in order to account for a Tailings Management Facility (TMF) required at another site (ie: Rabbit would need more room), a stand-alone water treatment plant (more details below), and the toll milling costs.

G&A costs of US$10/t or US$3.00/lb - We found several per/t G&A cost estimates (closer to $20-$25/t) from various technical studies, including Cigar Lake and McArthur River, and costs of US$6/lb for established producers (PDN and CCO). We felt the size of PLS relative and as a stand-alone asset would not garner such significant overhead expenditures. Assuming 6 MM lbs pa production we forecast G&A for PLS at ~US$18 MM pa.

Royalty of US$5.64/lb - The tiered royalty system in Saskatchewan is calculated on the positive difference between the sales price per pound of U3O8 and prescribed prices: 6% on the difference between sales price and US$18.66, 4% on the difference between sales price and US$28.00, and 5% on the difference between the sales price and US$37.33. This system is on the way out, however a new system hasn't yet been implemented.

Transportation costs US$0.50/t km or US$10.71/lb - This only applies to our shipping and toll-mill scenario. Our base case scenario assumes a mill on site, so no meaningful transportation costs. We see costs of ~US$0.50/t km, based on our evaluation of existing haulage costs in the basin: Trucking from McArthur River to Key Lake, which is a 70km haul, costs about ~US$0.35/lb contained. Breaking it down to a per/t km basis we calculate a cost of US$0.44/t km. Transportation in the Midwest study suggests US$10/t for 25km haul, or US$0.40/t km (in 2006 dollars). Overall, we see a transportation cost of US$353/t (or US$10.71/lb) for the ~700km journey.

Figure 7: Operating cost breakdown for both base and toll-mill mining scenarios (in US$/lb).


Base case total cash cost estimate of US$18.95/lb U3O8. This compares to Cigar Lake at US$18.57/lb total cash costs, US$19.23/lb for McArthur River, and US$14.40/lb for Roughrider - all of the most recent studies out of the Athabasca (all underground also). PLS would be one of the lowest cost open pit uranium mines globally based on our evaluation. Given grades, depth to mineralization, thickness, and location, we don’t see this as an unreasonable conclusion. This total cash cost estimate would rise to US$31.77/lb assuming the toll milling scenario, partially due to toll milling costs and haulage.

US$/lb Base Toll-Mill

Mining 1.21 1.21

Processing 9.09 11.22

G&A 3.00 3.00

Royalties 5.64 5.64

Transport - 10.71

TOTAL 18.95 31.77

Base Case Toll-Mill

Mining, 1.21

Processing , 9.09

G&A , 3.00

Royalties, 5.64

Mining, 1.21

Processing , 11.22

G&A , 3.00

Royalties, 5.64

Transport, 10.71



Figure 8: Open pit cumulative production cost curve.

Source: Company Reports, UxC, Dundee Capital Markets

Capital Cost Assumptions:

Base case capital costs estimated at US$720 MM. This includes the mine, mill, tailings management facility, water treatment plant, dewatering wells, berm and overburden removal (and 25% contingency).

Toll milling capital costs estimated at US$306 MM. This includes the mine, truck loading stations, water treatment plant, dewatering wells, berm and overburden removal (and 25% contingency).

We have focused our due diligence on the cost to berm a lake, pre-strip 54m of overburden, a new mill located on the west side of the Athabasca Basin, an open pit mine, tailings management facility and support infrastructure.

Mill capital cost - US$300 MM. We propose a relatively small 500 tpd uranium mill for PLS using acid leach, resin in pulp (RIP), ion exchange, similar to the Roughrider operation and the Kayelekera Mine in Malawi. This would be ~1.7x the cost of Roughrider's proposed mill accounting for increased tonnage and slightly larger footprint (also time to permit). We estimate sustaining capital would average ~US$3/lb or US$18 MM pa for PLS.

Comparative capital costs of various uranium mills:

o McClean Lake/JEB Mill - The McClean Lake mill expansion from 13 MM lbs to 24 MM lbs (11 MM lbs new capacity) is expected to cost $150 MM. But of course that number represents expansion of a state of the art mill, and would not reflect initial build costs whatsoever.

o Roughrider Mill - The PEA suggested US$172 MM (or US$215 MM including contingency) for a mill capable of producing 5 MM lbs or ~78,000 tpa (using a head grade of 3.3% and 97.7% recovery rate). Our proposed mill for PLS would be required to process ~181,000 tpa (using a head grade of 1.58% and 95% recovery rate) with only slightly more production at 6 MM lbs pa.

o Kayelekera Mill - Located in Malawi, the mill cost ~US$250 MM for 3.3 MM lbs pa operation (1.5 Mtpa mill). The scale, ore type, grades, jurisdiction and timing are completely different than what is required at PLS, but KM remains a useful data point.

Mine-site capital costs - US$100 MM: While mine-site costs will certainly differ across mines, we assumed a cost of US$100 MM based on prior studies in the Basin, the need for added infrastructure being located on the west side of the basin (haul roads, camp, hydro extension, potential gas pipeline, etc.). We added another US$25 MM for the toll milling option given the lack of mill would require further truck loading facilities and associated infrastructure.

Tailings management capital - US$60 MM: Given that we have assumed essentially twice the tonnage through a hypothetical PLS mill versus Roughrider, we have assumed essentially twice the cost. This would only be needed in our

0

10

20

30

40

50

60

70

80

90

100

0% 20% 40% 60% 80% 100%

All

-in

Cas

h C

ost

s (U

S$/l

b)

Cumulative Production



base case, with a processing facility on site. We assumed added processing costs of US$2/lb in the toll milling scenario in order to account for TMF costs at Key Lake.

De-watering wells - US$34 MM: Water wells are required in order to drawdown the water table around the open pit and decrease the amount of water processing required should the water make it into a uranium open pit mine. We use Midwest as an analog here, which suggests costs of US$115 MM for de-watering wells (using its updated 2009 estimate). We believe costs could be substantially cheaper for PLS, given the depth of Midwest pit (200m) versus the average depth of PLS (153m in the pit but 54m of unconsolidated overburden which is easier to drill). The difference here is that PLS occurs within basement rocks so host rocks are impermeable to underground water inflow. There is also no overlying Athabasca Sandstone like at Midwest which would leak like a sieve. We do assume that the glacial sediments (overburden) are somewhat impermeable, but without data, we must assume that water wells might be required. However, we only assume water wells in the overburden and not in the basement rocks where they would do no good. This should be cheaper than Midwest as the overburden is 66m at its thickest and material is unconsolidated, so installation should be relatively simple. That said, assuming Midwest well capital of $115 MM serviced 50 wells to 200m pit-depth in sandstone, we assume 50 wells (further spaced out) in overburden to a depth of 60m. Therefore we estimate a cost of US$34 MM for de-watering wells at PLS.

Water treatment plant - US$26-$30 MM: By comparison the open pit at Midwest, which was expected to receive 24,000 gpd of water seepage through the Athabasca sandstone, there is no sandstone here. Therefore we don’t expect a sizeable reverse osmosis plant saving further on capital. We assume a plant is needed in both scenarios, but we believe it would be marginally cheaper in our base case (on-site plant) given it would be located within a large existing building, as opposed to standalone in the toll milling scenario. A 2011 estimate from the Rabbit Lake Reverse Osmosis PFS completed by WARDROP and Cameco estimated a total capital cost of US$26 MM. Rabbit currently mines within basement rocks at Eagle Point. Therefore for PLS we suggest a total capital cost US$26 MM in our base case and US$30 MM in our toll milling scenario.

Berm construction costs - US$4.6 MM: Probably the biggest pushback from investors is the fear of mining below Patterson Lake and the feasibility of erecting a dam or berm off the lake from the open pit mine. There are several examples from the Athabasca Basin and elsewhere in Canada. We highlight Cameco's original Rabbit Lake deposit. The Collins Bay B-Zone began mining in 1985 and subsequently mined out in 1991. The pits can still be seen today (filled in) from a satellite view. We calculate rough dimensions of ~600m wide on the lake, and ~800m long for the historical pit (Figure 9). At Denison's Midwest deposit, the overlying Mink Arm of McMahon Lake has been dammed and even pumped dry for test mining in the past (photo in the Midwest Case Study in Appendix 1). Dominion's Diavik mine is a well-known example, and certainly helps give a visual of what PLS could one day look like (Figure 10). The pit has a 3.9km long water retention dike surrounding it. We will later explain how we expect PLS will require a 3.2 km long berm.

Figure 9: Mined out Collins Bay pits in the eastern Athabasca Basin.

Source: Google Maps



Figure 10: Diavik Mine in Lac de Gras, Northwest Territories.


o A berm is required to keep Patterson Lake out of the pit. Creating a berm is largely an earth moving exercise. We estimate that 1.6 MM t of material will be required to create the berm that would surround the open pit (this assumption is explained later). It is likely much of this material can be acquired from unconsolidated overburden material. There is more than enough overburden on land over the R00E mineralization to sort and use as berm material. Removal of this material is already required, so it's perhaps a matter of where to send the haul trucks. Of course, engineering studies on the berm and overburden are required to determine if it is suitable substrate to hold back water. One should steer clear of fine silt, carbonate rich or mica rich material for reasons of erosion, weathering or weakness. The berm would also require crushed rock (boulders are present in overburden but at what amounts), and clay impermeable layers, not including cement work or dewater piping.

Figure 11: Dike cross-section, proposed for the Jay pit at Ekati.

Source: Dominion Diamond Corp.



o Berm size and configuration. Berm construction would be completed at the same time as overburden stripping, essentially being made from overburden material. Based on our estimates there is 3.1 MMt of overburden on land between L60W and L45E. We estimate berm construction will require ~1.6 MM t of material (V = HL(C+(HS)/2) cubic meters). Our hypothetical berm measures 13m high to handle the lake that is estimate at 6-7m deep. The berm would be 54m across at the base, 3m wide at its crest, have a 1:2 slope angle, and its total length would be 3.2km to encircle the entire pit area, allow for a 38° pit and overburden slope angles, and leave enough room for interior water catchment trenches.

Figure 12: Figure of a 13m high berm similar to our hypothetical PLS berm showing the formula to determine the volume of earthworks.

Source: FAO Irrigation and Drainage Paper

o Berm capital costs estimation. We assume US$3/t cost for the constructing the berm (given the material should be cheaper than ore to mine). As we already account for costs of the overburden transport out of the pit, we are essentially double counting the earthworks of the berm inside the US$64 MM worth of overburden removal costs. However we estimate a cost of US$4.6 MM for berming, assuming there will be other costs associated with its construction such as concrete pouring or fines containment in the lake during construction. Should sorting of the glacial overburden be required in order to ensure that fines are not used, or that boulders are used, then we could see this cost rise.

Overburden removal capital costs - US$64 MM: Using our pit model overburden estimate of 42.7 MM t, and a US$1.50/t cost (Midwest overburden removal inflated to 2013 dollars) we estimate US$64 MM for overburden removal. This would likely take place during the two year construction phase of the project and run contemporaneously with construction of the berm. Removal will start at the far western edge of the pit (L140W) and work towards the lake. Once the berm is erected, the pit area can be pumped dry, dewatering wells and water containment structures emplaced. We have capitalized overburden removal costs in order to add it to depreciation for tax benefits, but we have not provided contingency for this line item (it's essentially an operating cost).



Figure 13: Capital cost breakdown for PLS in both base and toll-mill mining scenarios (in MM US$).


Model 3 - Dundee's NPV Model for PLS

Considering all of the above inputs we calculate the following NPV and IRR metrics for both the base case and toll milling scenarios, and present sensitivities below. Overall our base case yielded a higher 10% post-tax NPV of US$682 MM (or US$1.2B pre-tax) versus US$620 MM for our toll milling scenario. The IRR is higher in the toll milling case as expected given the substantially less capital required for this option. The tradeoff is significantly higher operating costs for the next 20 years. Considering our base case provides for better economics, we use it in deriving our Fission Uranium target price.

Base Case - Construction of a mill on-site.

Source: Dundee Capital Markets

MM US$ Base Toll-Mill

Mill 300 0

Mine 100 125

Tailings 60 0

Water Treatment 26 30

Dewatering Wells 34 34

Berm 4.6 4.6

Overburden Removal 64 64

Total 588.6 257.6

Contingency (25%)* 719.8 306.0

*Excludes pre-strip

Base Case Toll-Mill

Mill, 300

Mine, 100

Tailings, 60

Water Treatment,

26

Dewatering Wells, 34

Berm, 4.6Overburden

Removal, 64

Mine, 125

Water Treatment,

30

Dewatering Wells, 34

Berm, 4.6

Overburden Removal, 64

NPV (MM US$): Post-Tax Pre-Tax

0% $2,991 $4,448

5% $1,429 $2,252

10% $682 $1,194

15% $294 $639

IRR 23% 31%



Toll-Mill Case - Transport to Key Lake for milling.


Sensitivity Analysis

PLS appears insensitive to mining costs in both scenarios, modestly sensitive to both processing and capital costs and highly sensitive to uranium prices. Our NPV is also modestly sensitive to transportation in the toll milling scenario.

Base Case - Change in NAV based on percentage change of inputs.


Toll-Milling Case - Change in NAV based on percentage change of inputs.


NPV (MM US$): Post-Tax Pre-Tax

0% $2,211 $3,321

5% $1,138 $1,765

10% $620 $1,010

15% $347 $610

IRR 35% 48%

0

200

400

600

800

1,000

1,200

1,400

1,600

-40% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0%

NP

V (

MM

$)

Mining Costs Processing Costs Uranium Price Capital Costs

-200

0

200

400

600

800

1,000

1,200

1,400

-40% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0%

NP

V (

MM

$)

Mining Costs Processing CostsUranium Price Capital CostsTransportation



Figure 14: Base Case - Sensitivity tables for various parameters.


US$/lb $682 0% 5% 10% 15% $682 0% 5% 10% 15%

39.0 60% 1,135 380 29 -145 1.8 20% 3,064 1,470 707 311

45.5 70% 1,599 642 192 -35 3.6 40% 3,046 1,460 701 307

52.0 80% 2,063 904 355 74 5.4 60% 3,028 1,449 695 303

58.5 90% 2,527 1,166 519 184 7.2 80% 3,009 1,439 688 298

65.0 100% 2,991 1,429 682 294 9.0 100% 2,991 1,429 682 294

71.5 110% 3,455 1,691 845 404 10.7 120% 2,973 1,418 675 290

78.0 120% 3,919 1,953 1,008 514 12.5 140% 2,955 1,408 669 285

84.5 130% 4,384 2,216 1,172 624 14.3 160% 2,937 1,398 663 281

91.0 140% 4,848 2,478 1,335 733 16.1 180% 2,918 1,388 656 277

85.50% 90.25% 95.00% 99.75%

US$/lb $682 0% 5% 10% 15% $682 90% 95% 100% 105%

2.4 60% 3,032 1,452 696 304 1.26% 80% 251 312 374 436

2.8 70% 3,022 1,446 692 301 1.34% 85% 320 386 451 516

3.2 80% 3,011 1,440 689 299 1.42% 90% 389 459 528 597

3.6 90% 3,001 1,435 685 296 1.50% 95% 459 532 605 678

4.0 100% 2,991 1,429 682 294 1.58% 100% 528 605 682 759

4.4 110% 2,981 1,423 678 292 1.65% 105% 597 678 759 839

4.8 120% 2,971 1,417 675 289 1.73% 110% 666 751 836 920

5.2 130% 2,961 1,412 671 287 1.81% 115% 736 824 913 1,001

5.6 140% 2,951 1,406 668 284 1.89% 120% 805 897 990 1,082

US$/t $682 0% 5% 10% 15% US$ MM $682 0% 5% 10% 15%

180.0 60% 3,297 1,601 789 366 430.9 60% 3,324 1,712 934 523

210.0 70% 3,220 1,558 762 348 502.7 70% 3,241 1,641 871 466

240.0 80% 3,144 1,515 736 330 574.5 80% 3,157 1,570 808 409

270.0 90% 3,068 1,472 709 312 646.3 90% 3,074 1,500 745 351

300.0 100% 2,991 1,429 682 294 718.1 100% 2,991 1,429 682 294

330.0 110% 2,915 1,386 655 276 790.0 110% 2,908 1,358 619 237

360.0 120% 2,838 1,342 628 258 861.8 120% 2,825 1,287 556 179

390.0 130% 2,762 1,299 601 240 933.6 130% 2,742 1,216 493 122

420.0 140% 2,686 1,256 574 222 1005.4 140% 2,659 1,146 430 65

US$/lb $682 0% 5% 10% 15%

1.8 60% 3,092 1,486 717 318

2.1 70% 3,067 1,472 708 312

2.4 80% 3,042 1,457 700 306

2.7 90% 3,016 1,443 691 300

3.0 100% 2,991 1,429 682 294

3.3 110% 2,966 1,415 673 288

3.6 120% 2,941 1,400 664 282

3.9 130% 2,916 1,386 655 276

4.2 140% 2,890 1,372 646 270

Discount Rate

Discount Rate

Discount Rate

Stri

p R

atio

Hea

d G

rad

e

Recovery Rates

Discount Rate

Discount Rate Discount Rate

Cap

ital

Co

sts

(init

ial +

sust

ain

ing)



Figure 15: Toll-Milling Case - Sensitivity tables for various parameters.


US$/lb $620 0% 5% 10% 15% $620 0% 5% 10% 15%

39.0 60% 354 89 -33 -93 1.8 20% 2,283 1,179 645 364

45.5 70% 818 351 130 17 3.6 40% 2,265 1,169 639 360

52.0 80% 1,282 613 293 127 5.4 60% 2,247 1,158 633 355

58.5 90% 1,746 875 456 237 7.2 80% 2,229 1,148 626 351

65.0 100% 2,211 1,138 620 347 9.0 100% 2,211 1,138 620 347

71.5 110% 2,675 1,400 783 457 10.7 120% 2,192 1,127 613 342

78.0 120% 3,139 1,662 946 566 12.5 140% 2,174 1,117 607 338

84.5 130% 3,603 1,925 1,110 676 14.3 160% 2,156 1,107 600 334

91.0 140% 4,067 2,187 1,273 786 16.1 180% 2,138 1,097 594 329

85.50% 90.25% 95.00% 99.75%

US$/lb $620 0% 5% 10% 15% $620 90% 95% 100% 105%

2.4 60% 2,251 1,161 634 356 1.26% 80% 189 250 312 374

2.8 70% 2,241 1,155 630 354 1.34% 85% 258 324 389 454

3.2 80% 2,231 1,149 627 352 1.42% 90% 327 397 466 535

3.6 90% 2,221 1,143 623 349 1.50% 95% 397 470 543 616

4.0 100% 2,211 1,138 620 347 1.58% 100% 466 543 620 697

4.4 110% 2,200 1,132 616 344 1.65% 105% 535 616 697 777

4.8 120% 2,190 1,126 613 342 1.73% 110% 604 689 774 858

5.2 130% 2,180 1,121 609 340 1.81% 115% 674 762 851 939

5.6 140% 2,170 1,115 605 337 1.89% 120% 743 835 927 1,020

US$/t $620 0% 5% 10% 15% US$ MM $620 0% 5% 10% 15%

222.0 60% 2,587 1,351 752 436 145.2 60% 2,424 1,294 745 453

259.0 70% 2,493 1,298 719 414 169.4 70% 2,371 1,255 714 426

296.0 80% 2,399 1,244 686 391 193.6 80% 2,317 1,216 682 400

333.0 90% 2,305 1,191 653 369 217.8 90% 2,264 1,177 651 373

370.0 100% 2,211 1,138 620 347 242.0 100% 2,211 1,138 620 347

407.0 110% 2,116 1,085 587 324 266.2 110% 2,157 1,099 588 320

444.0 120% 2,022 1,031 553 302 290.4 120% 2,104 1,060 557 294

481.0 130% 1,928 978 520 280 314.6 130% 2,050 1,021 526 267

518.0 140% 1,834 925 487 258 338.8 140% 1,997 982 495 240

US$/lb $620 0% 5% 10% 15% US$/t $620 0% 5% 10% 15%

1.8 60% 2,311 1,195 655 371 211.9 60% 2,570 1,341 746 432

2.1 70% 2,286 1,180 646 365 247.2 70% 2,480 1,290 715 411

2.4 80% 2,261 1,166 637 359 282.5 80% 2,390 1,239 683 389

2.7 90% 2,236 1,152 629 353 317.8 90% 2,300 1,189 651 368

3.0 100% 2,211 1,138 620 347 353.1 100% 2,211 1,138 620 347

3.3 110% 2,185 1,124 611 341 388.4 110% 2,121 1,087 588 325

3.6 120% 2,160 1,109 602 335 423.8 120% 2,031 1,036 556 304

3.9 130% 2,135 1,095 593 329 459.1 130% 1,941 985 525 283

4.2 140% 2,110 1,081 584 323 494.4 140% 1,851 934 493 262


Ura

niu

m P

rice

Stri

p R

atio

Recovery Rates

Discount Rate

G&

A

Discount Rate

Tra

nsp

ort

atio

n

Discount Rate

Min

ing

Cost

s

Hea

d G

rad

e


Pro

cess

ing

Cost

s

Cap

ital

Co

sts

(init

ial +

sust

ain

ing)



Valuation

BUY recommendation, Speculative Risk, C$2.10 target. Our new target price for Fission Uranium is still based largely on resource valuation, with a proportion derived using a 1.0x NAV multiple and adjusting for balance sheet items. We maintain our Speculative Risk given that this project is early stage without a resource estimate or Preliminary Economic Assessment.

Our NAV is comprised of four key parts:

1) 25% of PLS value from our base case NPV;

2) 50% of PLS value from the current mineral inventory est. using a US$10/lb multiple;

3) 25% of PLS value from our assumed upside using a US$8/lb multiple;

4) Balance Sheet & Other Items.


Blending valuation methods to achieve target price. While there are several ways to value this stage of project, as Fission's market cap rises, more investors are questioning the potential economics of the project. This report is more of an exercise to help estimate capital and operating costs, and some of the key challenges (such as berm construction or long haul ore transport) that this project might face. We wish to factor the NPV of a hypothetical mining scenario into our valuation (~25%). But we still maintain a large proportion of our target price (~75%) from our PLS potential mineral inventory estimate (~50%) and upside potential (~25%), plus cash. For mineral inventory we are still using the more rudimentary pounds in the ground valuation, which, despite its shortcomings, tends to be somewhat predictable in the Athabasca Basin ($10/lb). We recognize that we do not account for time value of money in our NPV. But given the early stage of exploration, we couldn't even wage an estimate of when production might begin; hence we only attribute 25% of our PLS NPV to the value of Fission. Any acquirer would have to pay up for the value of the project itself as we have seen in the past. We do value the stock as if it were being taken out by a competitor, not as if Fission was to construct the operation itself, diluting shareholders in the process.

NPV multiple versus pounds-in-the-ground valuation. While NPV multiples are seldom used when discussing mining company takeovers, we believe it's worth noting in this situation. Roughrider was purchased for 1.17x pre-tax 10% NPV (from its 2011 PEA). Using this metric on our base case pre-tax 10% NPV of US$1.2 B would imply a takeout price of US$1.4 B for FCU or C$4.64/sh. Gut check, if we were to assume the standard $10/lb Athabasca Basin pounds in the ground valuation on our estimate of 135 MM lbs, then we come up with a project potentially worth US$1.35 B. Being more conservative, and applying a 1.2x multiple to our post-tax 10% NPV would imply a takeout price of US$0.8 B or C$2.65/sh. Considering some analysts already assume Fission has potentially delineated 55 MM lbs (our estimate assuming assays only) to 100 MM lbs (at US$8/lb), we believe that we remain in the right ballpark regarding our valuation, but are now somewhat more satisfied that PLS is likely to get much larger, and that economics of the project at US$65/lb U3O8 is reasonable to get this project to work.

NET ASSET VALUE (C$) - 10% Multiple /Share NAV ($ MM)

PLS Value: US$ C$

Project NPV 682 753 0.25x 0.57 188

Current Resource @ $10/lb 559 617 0.50x 0.93 309

Estimated Upside @ $8/lb 680 751 0.25x 0.56 188

Balance Sheet & Other Items:

Cash & Investments 45 1.00x 0.14 45

Debt 0 1.00x 0.00 0

2014 Exploration & Overhead -30 1.00x -0.09 -30

Total 2.10 699

Dundee DCF Target Multiple 1.00x

Share Price Target C$ 2.10

Value ($ MM)



Figure 16: NAV waterfall chart for Fission Uranium.


A $10/lb pounds-in-the-ground valuation still works. Given all the positive attributes of PLS we often discuss - shallow and thick mineralization, high grades, and significant upside potential - we have always felt that Fission deserved to trade at ~US$8 to US$10/lb. This is in-line with a number of significant Athabasca Basin transactions over the past few years, namely: Denison buying Fission Energy at $9.18/lb; Cameco buying Millennium from AREVA at $8.04/lb; and Rio Tinto Buying Hathor at $10.84/lb. What's more, these transactions were all for the new generation of "basement hosted unconformity uranium deposits" such as PLS. Uranium stocks right now are trading at $4.53/lb for producers, $0.87/lb for developers and $0.32/lb for explorers (Figure 17).

Figure 17: FCU relative EV/lb valuation chart.


Stock is pricing in zero upside. Considering that Fission is trading at US$6.70/lb right now, we believe there is further value to be had, just based on the 55 MM lbs of U3O8 that we estimate may be there already (with more assays to come). So while that may seem like a reasonable valuation especially given today's depressed uranium price environment, that would include zero upside for potential resource expansion (at PL-3B or parallel conductors). Looking at our EV/lb valuation matrix below (in C$ and fully-diluted), and assuming FCU can maintain an US$8-US$10/lb valuation, we could see the stock almost double from its current levels if the current drill program can increase the resource towards 100 MM lbs.

2.10

0.00

0.50

1.00

1.50

2.00

2.50

Project NPV CurrentResource @

US$10/lb

EstimatedUpside @US$8/lb

Cash &Investments

2014Exploration& Overhead

Total NAV Target Price(1.0x NAV)

(C$

/sh

)

US$ 0.00

US$ 1.00

US$ 2.00

US$ 3.00

US$ 4.00

US$ 5.00

US$ 6.00

US$ 7.00

US$ 8.00

US$ 9.00

US$ 10.00

FCU PrecedentAvg.

AthabascaPrec. Avg.

Producers Developers Explorers

EV/l

b (

US$

)



Table 3: FCU EV/lb valuation matrix.


Risks

We maintain a Speculative Risk Rating. Risks to Fission and our valuation of the company are varied. These include metal price assumptions, development and operating cost forecasts, production schedules, and licensing and permitting assumptions. Investing in mining and exploration companies is inherently risky. Adding uranium into the equation further complicates matters, especially from safety, socioeconomic, environmental and permitting points of view. At any stage of a project things can go awry, or not reach expectations. Furthermore, while our estimates are backed by company reports, comparable projects, and industry experience, the project has no current NI 43-101 resource report or economic study.

Mineral inventory estimate. Our valuation is predicated on the belief that PLS could host upwards of 120 MM economic pounds. The basis of our evaluation is a hand drawn polygonal model, and subjective estimates on true thickness. We make an effort to not smear or extrapolate results beyond defined 15m x 15m blocks, but we may still be overestimating resource potential. Our technique is not NI 43-101 standard, and hence our estimated mineral inventory cannot be relied upon as an accurate estimate of compliant resources.

Exploration risk. Further upside potential contributes to our valuation in two ways: 1) As an estimated additional resource value, and 2) built into our Project NPV. Without further mineral inventory added to our mine model, the operation would have a shortened life, or might not pass the viability test all together (although a 5.5 year payback suggests that only ~36 MM lbs is required to make this project feasible). Therefore, a significant part of our FCU valuation hinges on the belief that exploration success will continue, and more economic mineralization will be discovered along the main PLS trend. This seems reasonable as we believe that Fission Uranium hit mineralization in every single hole during its winter drill campaign.

Engineering estimates. We did our best to estimate overburden, ore, waste, strip ratios, and potential cost of a berm. All of these estimates were based on almost ten years industry experience, project comparisons, company reports, industry contacts and research papers. And while we believe our estimates are fair, true costs may vary significantly from what we have forecasted.

Production risks. Assumptions were made for PLS. That includes production rates, mine life, Capex, Opex, and recovery rates. We believe estimates were made rather conservatively, with most estimates backed by comparable projects.

Commodity price risk. Fission is exposed to uranium price risk over the long-term, which may lead to fluctuations in financial performance, and deviation from expectations. We modeled PLS using our long-term price of US$65/lb, which we deem conservative, given the strong fundamentals for the sector despite near term spot supplies pressuring prices.

Financing risk. We have assumed the company will be capable of meeting all exploration funding and overhead obligations through further equity financing. We value the stock as if it were being taken out by a competitor, not as if Fission was to construct the operation itself, diluting shareholders in the process.

Permitting and licensing risks. Uranium permitting and licensing takes an extra step in Canada. This typically adds time and cost to the development of the project. See below for further information.

New Uranium Mine Permitting & Licensing

The Canadian Nuclear Safety Commission (CNSC) is the independent agency charged with developing and implementing the nuclear regulatory regime in Canada. New uranium mines and mills must meet the requirements of both the Nuclear Safety and Control Act (NSCA, came into force in May 2000), and the Canadian Environmental Assessment Act (CEAA). The

Fully Diluted

FCU 30 40 50 60 70 80 90 100 110 120

1 0.28 0.31 0.34 0.36 0.39 0.42 0.45 0.47 0.50 0.53

2 0.36 0.42 0.47 0.53 0.58 0.64 0.69 0.75 0.80 0.86

3 0.45 0.53 0.61 0.69 0.77 0.86 0.94 1.02 1.10 1.18

4 0.53 0.64 0.75 0.86 0.97 1.07 1.18 1.29 1.40 1.51

$/lb 5 0.61 0.75 0.88 1.02 1.16 1.29 1.43 1.57 1.70 1.84

6 0.69 0.86 1.02 1.18 1.35 1.51 1.68 1.84 2.00 2.17

7 0.77 0.97 1.16 1.35 1.54 1.73 1.92 2.11 2.30 2.49

8 0.86 1.07 1.29 1.51 1.73 1.95 2.17 2.39 2.60 2.82

9 0.94 1.18 1.43 1.68 1.92 2.17 2.41 2.66 2.90 3.15

10 1.02 1.29 1.57 1.84 2.11 2.39 2.66 2.93 3.20 3.48

Estimated Size of Deposit



commission enforces compliance of both regulations, and also co-operates with other national governments to ensure compliance with non-proliferation terms.

Generally there are four parts to licensing: 1) a license to prepare a site and to construct; 2) license to operate; 3) license to decommission; and 4) a license to abandon. Before any one of these licenses can be granted, applicants must complete an environmental assessment (EA) to identify whether a project is likely to cause significant adverse environmental effects, taking into account the appropriate mitigation measures. At the same time, the CNSC would prepare a Comprehensive Study Track Report (CSTR), which has to do with public concerns related to the project. Timing can vary greatly for different projects, given project location, size, requirements, public involvement, etc. Overall the EA process could take up to 36 months to complete. The CNSC does utilize a harmonized or joint regulatory approach for provincial or territorial participation. This even expands to federal departments, which should help expedite permitting.

Other legislations which applicants must comply with include: the Canadian Environmental Protection Act; the Fisheries Act; the Species at Risk Act; the Migratory Bird Convention Act; the Canada Water Act; and the Transport of Dangerous Goods Act.



Source: Company Reports, FactSet, Dundee Capital Markets

Fission Uranium (FCU-T)Rating BUY C$ Target $2.10 Shares O/S (MM) 332.4

Risk* Speculative C$ Close $1.35 Fully Diluted Shares (MM) 366.3

David A. Talbot, VP, Sr. Mining Analyst 12-month return 56% Basic Mkt. Capitalization ($MM) C$ 458.65

[email protected] Enterprise Value ($MM) C$ 413.6

PRODUCTION ESTIMATES (MM lbs) BALANCE SHEET (C$ MM)

Year-end June Y1 Y2 Y3 Y4 Y5 Year-end June 2013A Q2/14

PLS 6.0 6.0 6.0 6.0 6.0 Assets:

Cash & ST Investments 15.07 20.47

TOTAL 6 6 6 6 6 Other Current Assets 3.25 1.88

Current Assets 18.32 22.35

TOTAL CASH COST ESTIMATES (excl. non-cash) (US$/lb)

Year-end June Y1 Y2 Y3 Y4 Y5 Mineral Properties 10.04 187.32

PLS 18.95 18.95 18.95 18.95 18.95 Other non-current Assets 0.25 0.26

Total Assets 28.61 209.93

Wt. Avg. Total Cash Costs 18.95 18.95 18.95 18.95 18.95 Liabilities:

Current Liabilities 2.34 6.09

DUNDEE ESTIMATED MINERAL INVENTORY Long-term Debt 0.00 0.00

Tonnes Grade Cont U3O8 (MM lbs) Other non-current Liabilities 1.66 0.00

Ownership t % U3O8 100% Basis FCU Share Total Liabilities 4.00 6.09

Patterson Lake South (0.1% Cut-Off)

R00E 100% 188,339 1.88% 7.77 7.77 Capital Stock 79.80 276.39

R780E 100% 1,257,720 1.73% 48.05 48.05 Retained Earnings -55.20 -72.55

R600W 100% 20,013 0.21% 0.09 0.09 Total Shareholder Equity 24.61 203.84

TOTAL ESTIMATED POUNDS 1,466,073 1.73% 55.91 55.91

INCOME STATEMENT (C$ MM)

Patterson Lake South (1% Cut-Off) Year-end June Q2/14

R00E 100% 80,195 3.87% 6.84 6.84 Total Revenue: 0.2

R780E 100% 414,783 4.61% 42.12 42.12 % Uranium 0%

R600W 100% 0 0.00% 0.00 0.00 % Other 100%

TOTAL ESTIMATED POUNDS 494,978 4.49% 48.95 48.95 Operating Costs 0.0

Current Per Pound Metrics (0.1% Cut-Off) G&A 3.3

EV/lb Exploration 0.0

FCU US$ 6.70 Premium/Discount Depreciation 0.0

Precedent Avg. US$ 4.09 64% Other (5.8)

Athabasca Prec. Avg. US$ 9.36 -28% EBITDA 2.7

Producers US$ 4.53 48% EBIT 2.7

Developers US$ 0.87 672% Interest Expense 0.0

Explorers US$ 0.32 2006% EBT 2.7

Taxes -0.3

NET ASSET VALUE (C$) - 10% Multiple /Share NAV ($ MM) Equity Earnings 0.2

PLS Value: US$ C$ Other 0

Project NPV 682 753 0.25x 0.57 188 Net Income (Reported) 2.28

Current Resource @ $10/lb 559 617 0.50x 0.93 309 Net Income (Adjusted) 2.28

Estimated Upside @ $8/lb 680 751 0.25x 0.56 188

Balance Sheet & Other Items: EPS (Reported) $/sh 0.01

Cash & Investments 45 1.00x 0.14 45 EPS (Adjusted) $/sh 0.01

Debt 0 1.00x 0.00 0 Average Shares (MM) 197.7

2014 Exploration & Overhead -30 1.00x -0.09 -30

Total 2.10 699 CASH FLOW STATEMENT (C$ MM)

Dundee DCF Target Multiple 1.00x Year-end June Q2/14

Share Price Target C$ 2.10 Net Income (Reported) 2.3

Depreciation (0.0)

Assumptions: Working Capital Changes (0.4)

- 10% Discount Rate Other (5.4)

- $65/lb U3O8 Price Operating Cash Flow (3.6)

- Open Pit Operating Cash Flow/sh ($/sh) -0.02

- 6 MM lb pa prod. Capital Expenditures (8.7)

- 20y LOM Acquisitions 8.4

Other (2.0)

Investing Cash Flow (2.2)

Common Share Dividends 0.0

Equity Financing 11.9

Debt Issue 0.0

Debt Repayment 0.0

Other 0.6

INPUT PRICES Financing Cash Flow 12.5

2012A 2013A 2014E 2015E

Dundee Spot Uranium (US$/lb) 48.7 38.5 42.0 52.0 Net Change in Cash 6.7

Uranium Realized Price (US$/lb) 0.0 0.0 0.0 0.0 Cash Balance 20.5

Exchange (US$/C$) 1.00 0.97 0.91 0.89 Free Cash Flow (12.3)

Value ($ MM)

0

200

400

600

800

1,000

1,200

1,400

1,600

-40% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0%

NP

V (

MM

$)

Mining Costs Processing Costs Uranium Price Capital Costs



Appendix 1 - Case Study - Midwest Deposit

Midwest is an unconformity deposit is located in the Eastern Athabasca Basin, ~15km from the McClean lake Mill. It is currently at PFS level and is under care and maintenance. It is owned by AREVA (69.16%), Denison (25.17%), and OURD (5.67%). We believe Midwest is a useful analog for analyzing PLS, despite never having entered production:

Similarities: The ore body is long and cigar shaped and relatively continuous along its entire 600m trend; occurs under a lake, with comparable depths of mineralization - ~200m (down to ~100m below the unconformity); an open pit mining scenario was considered, which includes draining a portion of a lake.

Differences: Midwest grades 5.19% and contains 43.3 MM lbs - we have no NI 43-101 compliant resource but PLS will likely grade lower overall, but has potential to be over twice the size; Midwest is wide and tabular, with vertical thickness averaging ~8m at the unconformity. PLS have several holes that demonstrate mineralized rocks up to 150m thick within the basement. While tabular in some areas (R00E), PLS is gently dipping and plunges to the east.

Open pit mining was considered based on a 2006 technical report. That involved draining part of the South McMahon Lake to construct an open pit mine approximately 900m long by 350m wide and 220m deep. The lake depth is ~6.5m, on par with PLS. The mineralization is located at the unconformity roughly 200m depth, below overlying sandstones. This scenario involved excavation of 44.5 MM bank cubic meters (bcm) of waste rock to recover ~42.6 MM lbs U3O8 at a grade of 5.47%. Our PLS estimates suggest waste rock and ore combined are similar to that of Midwest.

Mink Arm was previously dewatered. In 1988 a portion of the lake was dewatered, which involved the construction of a retention rock core earth fill dam. After test mining was completed the basin was allowed to re-flood.

EA approved for de-watering lake. On 15-Aug-12, Canada's Environment Minister, the Honorable Peter Kent, announced that the proposed mining and milling of Midwest is not likely to cause significant adverse environmental effects. That includes "dewatering of Mink Arm; installation of a dewatering well ring around the proposed open pit." We do note that the Mink Arm of the South McMahon Lake is perhaps 400m across and already somewhat separated from the rest of the lake, as opposed to PLS which would potentially require a berm to dewater portions of the main lake. But we believe that this bodes well for PLS. PLS is roughly of similar size but has the added feature of occurring within impermeable basement rocks. Thus we don't expect dewatering wells to be necessary in bedrock, but perhaps just in the overlying unconsolidated overburden (much shallower and cheaper to install).

Figure 18: Existing mink arm dam location. The proposed mine would add a new secondary retention dam.

Source: AREVA



Planned dewatering method. AREVA plans to discharge as much surface water over the dam into the adjacent South McMahon Lake as possible (as previously done). The water will be pumped via barge and floating pipeline. It's expected that it could take 28-48 weeks depending on the mean annual flood threshold. During mining the perimeter of the pit would have ~50 dewatering wells. All water will have to be treated during the mine life and the inflow of water into the pit through the porous sandstone is massive, almost 24,000 gallons per day. PLS on the other hand occurs within impermeable basement rocks, thus we don't expect dewatering wells to be necessary in bedrock. Perhaps only in the overlying unconsolidated overburden (much shallower and cheaper to install). In turn we would not expect an oversized reverse osmosis water filtration system at PLS either.

Mining plan. Operations called for a two-year ore mining period, followed by 12 years of toll processing at the McClean Lake mill. Ore would be diluted to 2.35% U3O8 in order to ensure safe handling to the mill, from mining grades of 5.47%. Approximately 2.5t of special waste would be blended with the ore to haul. PLS ore would be similar grade (on average) overall, but there are certainly higher grade portions of the deposit that would likely require down blending. A similar waste blend strategy would likely be employed (this happens now at McArthur River). Dundee's potential PLS mined grade is lower than 2.35%, we do not see the need for dilution and haulage has been priced on this volume.

Figure 19: Midwest block model and hypothetical pit design (200m depth).




Appendix 2 - PLS Geology Summary

The Athabasca Basin is a sequence of predominantly fluvial sandstones, with minor marine transgressions. The sandstone beds have a shallow dip, with generally gradational contacts between the formations. They rest unconformably on the basement rocks, and their thickness exceeds 1,400m towards the center of the basin. The Athabasca Basin unconformably overlies northeast trending Archean to Paleoproterozoic crystalline basement rocks that considered to be part of the Rae (Western Craton) and Hearne Provinces of the Precambrian Churchill Structural Province of the Canadian Shield. A paleoweathered zone exists at the basal unconformity between the sandstone and the

Crystalline basement. The zone extends from a few centimeters to over 220m into the basement particularly in faulted zones. Major fault zones in the basement are generally northeast to east trending.

Unconformity-associated uranium deposits are characterized by elongate, pod shaped uranium mineralization at the unconformity between Proterozoic fluvial, conglomeratic sedimentary basin and favorable graphitic metasedimentary basement rocks. Uranium at PLS is found in basement rocks of the Clearwater Domain and is comprised of granite, porphyritic granite, and felsic gneiss. The rocks dip steeply to the south. There is no overlying Athabasca Group sandstone, but a discontinuous unit of Devonian Sandstone up to 2m thick can be found on some sections to the west. Mineralization occurs dominantly as pitchblende (varying amounts but often over 1% U3O8) and is associated with varying amounts of gold, cobalt and arsenic. PLS is similar to other basement hosted polymetallic unconformity deposits such as Midwest or Cigar Lake. The other type of basement unconformity deposit is the mono-mineralic type such as McArthur River. Little is known about the geological controls on mineralization or the length, width, depth and continuity of mineralization at PLS. The mineralization often has plume shaped haloes of clay alteration (illite-kaolinite-chlorite) that can extend well up into the sediments, although PLS has no remaining sandstone above.

Figure 20: Patterson Lake regional geology map.




Current Drilling

Discovery drill hole PLS12-022, announced on 5-Nov-12 intersected 1.07% U3O8 from 70.5 to 79.0m, and to date over 172 holes have been drilled with best assay results of 9.93% U3O8 over 101m. Overall a fairly shallow plunge to mineralization appears to be about 7 degrees to the east. While early drilling suggested a flat lying zone in the north, dipping more steeply to the south, with increased drilling the company suggests that uranium mineralization appears to be more flat lying or sub horizontal in the south. The mineralization crosscuts lithology.

Five mineralized zones have been discovered to date over a 2.24km long trend that remains wide open along strike. Many holes exhibit high grades and significant thicknesses to the point where we believe only McArthur River (and Cigar Lake) has a higher grade x thickness intercepts. Drilling remains ongoing.

Figure 21: PLS property map with current zones highlighted.




Figure 22: PLS resistivity map with other geophysical features highlighted.


Figure 23: PLS radon map (radon highs have been largely covered by existing drilling).




Figure 24: PLS drilling in-set map (red holes have not been assayed yet).


Regional targets. Since 2007 Fission (and former partners) have completed electromagnetic (EM) and magnetic surveys on the property. This was followed up by high resolution airborne magnetic, EMIT and VTEM surveys, ground resistivity, and radon, radiometric and boulder surveys with trenching. Drilling began in 2011. Basement uranium mineralization was discovered using EM and radon anomalies to pinpoint the source of high grade uranium boulders from a large 6km x 1km boulder field found at surface by proprietary airborne radiometric surveying by Fission. The VTEM survey in particular was instrumental in defining conductive packages over the entire project area. Target C has become known to occur along trend of the PLS mineralization, although there remains considerable upside potential as a ~13 targets are known on this property:

Target area A - PLS-A Conductor in the vicinity of cross structure indicated by a widening of the intense resistivity low. This area is also in a part of a VTEM conductive ‘bright spot’. This conductor has a dip to the south.

Target area B - EM cross conductor D in the vicinity of cross structure indicated by a widening of the intense resistivity low. This area is also in a part of a VTEM and EM conductive ‘bright spot’. This conductor is sub-vertical.

Target area C - PLS-B Conductor in the vicinity of cross structure indicated by a widening of the intense resistivity low. This conductor has a dip to the north.

Target area D - PLS-C Conductor in the vicinity of cross structure indicated by a widening of the intense resistivity low. This conductor has a dip to the north. The direction indicated by this conductor/structure is to the NW as opposed to the NNE direction indicated by many of the resistivity inferred structures.

Target area E - PLS-A conductor in the vicinity of structures near lines 5700E & 6200E as well as an EM conductivity high on line 6000E. This conductor has a dip to the south.

Target area F - PLS-A conductor with an increase in the intensity of the resistivity low and an inferred resistivity cross structure. The conductor has a dip to the south.

Target area G - VTEM conductor with inferred resistivity cross structure.

Target area H - PLS-F conductor in the vicinity of increased resistivity low and probable cross structure. The conductor has a dip to the south.

Target area I - PLS-G conductor on a slightly more intense resistivity low.



Target area J - weaker VTEM conductors on a possible resistivity cross structure.

Target area K - VTEM conductor along a resistivity inferred cross structure.

Target area L - a VTEM conductor with an increased resistivity low and inferred resistivity cross structure.

Target area M - a VTEM conductor with an inferred resistivity cross structure.

Figure 25: PLS 2012 main grid geophysical target Interpretation. Black Circles identify target areas for review and follow up.




Appendix 3 - PLS Drilling Summary


MAIN MAIN Total Amount of Largest Contin.

Hole Grid Line Location From (m) To (m) Width (m) CPS Mineralization (m) Off-scale (m) Interval Assay Results Scint Assays

2012PLS12-022 000W R00E 57.5 78.5 21 <300 - >9999 21 0.4 0.2 1.07% over 8.5m, incl. 2.63% over 2.5m 5-Nov-12 5-Dec-12

-23 000W R00E 63 76 13 <300 - 3300 13 - - 0.27% over 9.5m, from 66.5m to 76m 12-Nov-12 5-Dec-12

-24 010W R00E 59 83 24 <300 - >9999 24 2.3 0.41.78% over 18m, incl. 2.49% over 12.5m, incl. 4.33%

over 3.5m, incl. 11.1% over 0.5m

12-Nov-12 5-Dec-12

-25 010W R00E 60.5 83 22.5 330 - >9999 22.5 0.05 0.05 0.4% over 22.5m, including 0.85% over 4.03m 15-Nov-12 5-Dec-12

Winter 2013

-26 025W R00E 63 84 21 306 - >9999 21 0.75 0.5 0.77% over 21.5m, incl. 1.41% over 8m 7-Feb-13 10-Apr-13

-27 025W R00E 60.5 97.5 37 180 - >9999 37 4.35 0.62 1.06% over 37.5m, incl. 1.97% over 13m 7-Feb-13 10-Apr-13

-38 385E R780E 86.5 121 34.5 260 - >9999 57.5 11.65 6.1

Upper - 4.92% U3O8 over 34m, incl. 12.38% over

12.5m, and 35.1% over 0.5m… Lower - 0.96% U3O8

over 17.5m, incl. 2.07% over 5.5m

19-Feb-13 25-Mar-13

-28 090E n/a 48.5 52.5 4 <300 - 1400 4 - - 0.16% over 4m 25-Feb-13 10-Apr-13

-29 025W R00E 59.5 93.5 34 <300 - >9999 34 1.88 0.440.76% over 30m, incl. 3.57% over 3.5m and 2.08%

over 3.5m

25-Feb-13 10-Apr-13

-30 090E No significant mineralization 25-Feb-13 10-Apr-13

-31 025W R00E 67.5 93.5 26 <300 - >9999 26 1.54 0.62 0.67% over 23.5m, incl. 1.58% over 7.5m 25-Feb-13 10-Apr-13

-32 090E n/a 49 51.5 2.5 310-480 2.5 - - 0.05% over 1.5m 25-Feb-13 10-Apr-13

-33 025W R00E 69 72 2.5 380-1900 2.5 - - 0.17% over 2m 25-Feb-13 10-Apr-13-34 105E n/a No significant mineralization 25-Feb-13 10-Apr-13

-35 010W R00E 62 71.5 9.5 <300 - >9999 19 0.85 0.5 0.96% over 8.5m, incl. 1.57% over 4.5m25-Feb-13 10-Apr-13

-36 105E n/a No significant mineralization 25-Feb-13 10-Apr-13

-37 025W R00E 70 78.5 8.5 <300 - >9999 22.5 1.8 0.73

Several intersections of thin, high grade uranium -

2.25% over 7.5m, incl. 7.43% over 2m, and 6.31%

over 2m, and 7.27% over 3.5m, incl. 12.4% over 2m

25-Feb-13 10-Apr-13

-44 390E R780E 86 89 3 320 - >9999 3 0.1 0.1 0.24% over 17m, incl. 1% over 1.24m 11-Mar-13 5-Jun-13

-46 390E R780E 96 99 3 <300 - 1300 - - - 0.13% over 1.5m 11-Mar-13 5-Jun-13

-51 405E R780E 95 148 53 <300 - 9999 53 13.89 11.56.57% U3O8 over 53m, incl. 29.2% over 10.5m -

Zone Average increases to 4.76% over 56m 11-Mar-13 22-Apr-13

-40 2190E Reigonal East No significant mineralization 11-Mar-13 27-May-13

-42 1995E Reigonal East No significant mineralization 11-Mar-13 27-May-13

-53 375E R780E 66 116.5 50.5 <300 - >9999 67 18.9 8.9

6.26% U3O8 over 49.5m, incl. 35% over 6m, and a

lower zone, 2.63% over 16.5m incl. 13.19% over 3m -

Zone Average increases to 4.98% U3O8 over 59.3m 13-Mar-13 24-Apr-13

-48 780E R780E 155 177 22 <300 - 2800 22 - - 0.08% over 9.5m, and 0.18% over 6.5m 18-Mar-13 5-Jun-13

-55 780E R780E 165 176.5 11 <300 - >9999 16.5 0.9 0.8 0.57% over 10m, incl. 1.87% over 2.5m 18-Mar-13 5-Jun-13

-39 040W R00E 125 18.5 3.5 500 - 1600 3.5 - -Several thin relatively low grade intersections: 0.1%

over 3m, 0.12% over 0.5m 19-Mar-13 16-May-13

-41 040W R00E 72 91 19 <300 - >9999 19 4.15 3.25 5.54% over 13.5m, incl. 17.08% over 3.5m 19-Mar-13 27-May-13

-43 040W R00E 63 89.5 26.5 <300 - >9999 26.5 4.63 3.36 4.8% over 22m, incl. 8.04% over 2.5m 19-Mar-13 16-May-13

-45 040W R00E 64 89 25 <300 - >9999 25 0.13 0.13 0.23% over 21m 19-Mar-13 16-May-13

-47 060W R00E 64 68.5 4.5 310 - 1500 4.5 - - 0.18% over 3.5m 19-Mar-13 16-May-13

-49 060W R00E 64.5 83.5 19 <300 - >9999 19 3.35 2.65 1.93% over 18.5m incl. 8.04% over 2.5m 19-Mar-13 16-May-13

-50 060W R00E 63.5 64.5 1 330 - 700 1 - - 0.07% over 1.5m 19-Mar-13 16-May-13

-52 015E R00E 62 93.5 31.5 <300 - >9999 31.5 5.95 3.98

Two Zones - Upper: 0.87% over 10.5m, incl. 2.01%

over 3.5m; Lower: 3.56% over 18m, incl. 11.95% over

4.5m 19-Mar-13 16-May-13

-54 015E R00E 68 79.5 11.5 330 - >9999 11.5 0.27 0.27 0.28% over 11.5m 19-Mar-13 16-May-13

-56 015E R00E 62.5 72 9.5 <300 - 3600 9.5 - - 0.16% over 9m 19-Mar-13 16-May-13

-60 780E R780E 133.5 175 41.5 <300 - >9999 59.5 1.8 1 0.18% over 7.5m, and 3% over 2.5m 1-Apr-13 5-Jun-13

-61 360E R780E 109.5 140 30.5 <300 - >9999 40 4.31 1.77 1.39% over 23.5m, incl. 4.34% over 6m 3-Apr-13 5-Jun-13

-62 375E R780E 51 55 4.5 320 - >9999 18.5 0.12 0.12 0.36% over 2.5m, and 0.19% over 12.5m 3-Apr-13 5-Jun-13

-64 405E R780E 108.5 137.5 29 <300 - >9999 29 0.34 0.34 0.43% over 10.5m, incl. 1.37% over 2m 3-Apr-13 5-Jun-13

-66 420E R780E 81.5 145.5 64 <300 - >9999 64 5.57 1.26 1.15% over 63.5m, incl. 9.51% over 2m 3-Apr-13 5-Jun-13

-58 010W R00E 65 87.5 22.5 <300 - >9999 22.5 0.5 0.5 0.18% over 17m 15-Apr-13 27-May-13

-59 030E R00E 55 86 26.5 <300 - >9999 26.5 9.9 6.53.61% over 6.5m, incl. 8.99% over 2.5m…8.57% over

20.5m, inlc. 17.78% over 9.5m 15-Apr-13 27-May-13

-65 060E R00E 50.5 54.5 4 <300 - 1400 4 - - 0.12% over 2.5m 15-Apr-13 5-Jun-13

-67 045E R00E 61 67.5 6.5 570 - >9999 7.5 2 1.15 0.09% over 1.5m, and 6.86% over 4m 15-Apr-13 5-Jun-13

-69 045E R00E 52 54 2 600 - 7200 6.5 - - 0.36% over 1.5m 15-Apr-13 5-Jun-13

-71 045E R00E n/a 15-Apr-13 5-Jun-13

-68 390E R780E 95.5 117 21.5 <300 - 3300 21.5 - - 0.26% over 15m 15-Apr-13 5-Jun-13

-70 390E R780E 85.5 89 3.5 <300 - 2100 3.5 - - 0.13% over 3.5m 15-Apr-13 5-Jun-13

-57 2190E Regional East No significant mineralization 15-Apr-13 5-Jun-13

-63 990E Regional East No significant mineralization 15-Apr-13 5-Jun-13

No significant radioactivity

Technical problems

No significant radioactivityNo significant radioactivity

Reported










Summer 2013

-72 345E R780E 62 147.5 85.5 <300 - >9999 85.5 18.93 4.68.15% U3O8 over 34.5m, incl. 19.28% over 7.5m and

19.28% over 7.5m 18-Jul-13 4-Spet-13

-75 330E R780E 57.5 127.5 82 <300 - >9999 82 21.65 16.7 9.08% over 54.5m incl. 21.76% over 21.5m 29-Jul-13 25-Sep-13

-73 435E R780E 102 121.5 19.5 <300 - 2100 30.5 0.43 0.1 0.25% U3O8 over 19.5m, incl. 0.92% over 3m 29-Jul-13 25-Sep-13

-74 075W R00E 65 66 1 550 -1050 2 - - 0.13% over 2.5m 8-Aug-13 29-Oct-13

-76 030W R00E 177.5 191.5 14 <300 - 2700 14 - - 0.16% over 4.5m 8-Aug-13 29-Oct-13

-77 000W R00E 59 70.5 11.5 340 - 7500 26.5 - - 0.39% over 11.5m (upper); 0.13% over 15.5m (lower) 8-Aug-13 29-Oct-13

-79 015E R00E 82.5 101 18.5 330 - >9999 20.5 4.94 4.63 5.98% over 17.5m incl. 19.51% over 5.5m 8-Aug-13 29-Oct-13

-80 780E R780E 122.5 167 48.5 <300 - >9999 48.5 13.41 7.66.93% over 43m incl. 26.73% over 2m incl. 15.64%

over 14m 12-Aug-13 17-Oct-13

-84 945E R780E 159.5 195 35.5 <300 - 3700 66 2.7 1 3.69% over 13.5m, incl. 7.27% over 4.5m 15-Aug-13 18-Dec-13

-78 435E R780E 85 116.5 31.5 <300 - >9999 42 1.25 1 0.66% over 30m, incl. 7.62% over 1.5m 23-Aug-13 14-Nov-13

-81 405E R780E 105 130.5 25.5 <300 - 7300 25.5 - - 0.19% over 18.5m 23-Aug-13 14-Nov-13

-83 315E R780E 53 70.5 17.5 <300 - >9999 61.5 0.1 0.1 0.53% over 17.5m incl. 1.63% over 4m 23-Aug-13 23-Dec-13

-85 330E R780E 82 104.5 22.5 <300 - >9999 36 2.16 2 0.93% ovr 22m incl. 4.07% over 4m 23-Aug-13 14-Nov-13

-86 360E R780E 75 122 47 <300 - >9999 47 5.27 3 1.93% over 43m incl. 9.91% over 5m 23-Aug-13 14-Nov-13

-82 795E R780E 146.5 181.5 35 <300 - >9999 54 4.7 3 1.25% over 41m incl. 4.94% over 9m 12-Sep-13 15-Jan-14

-89 765E R780E 150 166.5 16.5 <300 - 3200 42 0.16 0.16 0.17% over 16m 12-Sep-13 15-Jan-14

-92 945E R780E 163 179 16 <300 - >9999 39.5 0.9 0.5 0.84% over 16m incl. 1.62% over 4m 16-Sep-13 18-Dec-13

-96 930E R780E 135.5 178 42.5 <300 - >9999 42.5 9.92 3.191.59% over 40m, and 7.91% over 14m incl. 18.2%

over 5.5m 16-Sep-13 18-Dec-13

-98 585E R780E 123 139.5 16.5 <300 - >9999 76 7.62 2.218.47% over 16.5m, incl. 26.3% over 4.5m, and

18.62% over 4m 23-Sep-13 23-Dec-13

-87 315E R780E 68.5 83 14.5 <300 - >9999 44.5 0.25 0.25 0.4% over 8.5m (multiple intersections) 27-Sep-13 14-Nov-13

-88 480E R780E 80 103.5 23.5 <300 - 9800 63 0.12 0.12 0.21% over 23.5m and 0.52% over 7m 27-Sep-13 23-Dec-13

-91 225E R780E 268.5 272.5 4 <300 - 1000 5.5 - - 0.11% over 0.5m 27-Sep-13 23-Dec-13

-93 225E R780E 134.5 139.5 5 <300 -3300 7.5 - - 0.1% over 3.5m 27-Sep-13 23-Dec-13

-94 450E R780E 130 142 12 <300 - >9999 25.5 0.15 0.15 0.3% over 7.5m and 0.5% over 11.5m 27-Sep-13 23-Dec-13

-95 300E R780E 68 79.5 11.5 <300 - >9999 63.5 0.68 0.49 0.63% over 11.5m incl. 2.79% over 2m 27-Sep-13 23-Dec-13

-100 450E R780E 99.5 119.5 20 <300 - 8000 57.5 0.54 0.34 0.75% over 5.5m, incl. 2.54% over 1m 27-Sep-13 23-Dec-13

-102 300E R780E 137.5 148 10.5 <300 - >9999 65 0.34 0.24 0.58% over 9.5m incl. 1.44% over 1m 27-Sep-13 15-Jan-14

-99 960E R780E 108.5 213.5 105 <300 - >9999 144 8.0 1.73.99% over 17m, incl. 18.52% over 3.5m and 2.69%

over 30.5m incl. 5.4% over 7.5m 9-Oct-13 30-Dec-13

-104 465E R780E 95.5 112.5 17 <300 - >9999 70 3.0 1.48 4.97% over 13m inlc. 1.44% over 1m 16-Oct-13 15-Jan-14

-106 585E R780E 191.5 214.5 23 <300 - 4500 90.5 - - 0.39% over 12.5m 16-Oct-13 5-Feb-14

-97 795E R780E 117.5 176 58.5 <300 - >9999 90 6.5 3.63 0.99% over 48m incl. 6% over 3.5m 16-Oct-13 15-Jan-14

-101 810E R780E 103 138 35 <300 - 9200 96 0.5 0.17 0.5% over 34.5m incl. 1.89% over 4.5m 16-Oct-13 15-Jan-14

-105 765E R780E 113 131.5 18.5 <300 - >9999 46.5 1.6 1.06 3.93% over 3m, incl. 10.85% over 1m 16-Oct-13 5-Feb-14

-107 765E R780E 138.5 163 24.5 <300 - 8400 63.5 1.0 0.5 0.57% over 6.5m incl. 1.58% over 1m 16-Oct-13 5-Feb-14

-108 810E R780E 174.5 195.5 21 <300 - >9999 105.5 3.3 0.75 0.99% over 19.5m, and 1.33% over 11m 16-Oct-13 5-Feb-14

-109 750E R780E 136 170 34 <300 - >9999 99.5 6.9 3.28 4.22% over 8m, incl. 11.1% over 3m 16-Oct-13 5-Feb-14

-90 1155E Reigonal East 189.5 202 12.5 <300 - 1600 12.5 - - 0.09% over 12m 16-Oct-13 30-Dec-13

-103 1155E Reigonal East 188 193.5 5.5 <300 - 770 16.5 - - 0.06% over 3.5m 16-Oct-13 30-Dec-13

-116 600W R600W 143 144 1 300-310 1 - - No significant mineralization 4-Nov-13 5-Feb-14

-118 600W R600W 191.5 199.5 8 <300 - 5500 21.5 - - 0.34% over 6.5m 4-Nov-13 5-Feb-14

-121 600W R600W 98.7 110 11.3 <300 - >9999 16.8 0.05 0.05 0.2% over 11.8m 12-Nov-13 5-Feb-14

-122 585W R600W 101.5 103.5 2 <300 - 800 8 - - 0.15% over 0.5m 12-Nov-13 5-Feb-14

-123 585W R600W 95 115 20 <300 - 1200 32.5 - - 0.08% over 16m, and 0.1% over 7m 27-Nov-13 5-Feb-14

-124 615W R600W 97.5 104 6.5 450 - 5500 37 - - 0.29% over 6m 27-Nov-13 5-Feb-14

-110 405W Regional West No significant mineralization 27-Nov-13 5-Feb-14









No significant radioactivityNo significant radioactivityNo significant radioactivityNo significant radioactivityNo significant radioactivity

No significant radioactivityNo significant radioactivityNo significant radioactivityNo significant radioactivity

Reported






Winter 2014-125 570E R780E 115 144 29.5 220 - >9999 88 1.96 0.5 0.46% over 56.5m, incl. 1.91% over 6m 27-Jan-14 14-Apr-14

-126 780E R780E 131 161 30 <300 - >9999 64.5 3.09 0.5 4.44% over 1m, and 4.66% over 2m 27-Jan-14 14-Apr-14

-127 825E R780E 146 161.5 15.5 <300 - >9999 92.5 0.79 0.2 1.39% over 2m, and 1.17% over 2.5m 27-Jan-14 14-Apr-14

-128 945E R780E 140 182.5 42.5 <300 - >9999 61.5 1.6 0.5 6.74% over 4m, incl. 13.04% over 2m 27-Jan-14 14-Apr-14

-129 600E R780E 56 94 38 310 - >9999 111.5 36.72 9.5 Combined, 9.93% over ~100m for a GT of 992 27-Jan-14 19-Feb-14

-130 345E R780E 67 98.5 31.5 <300 - >9999 72.5 1.04 0.6 0.47% over 17m, incl. 1.57% over 3.5m 10-Feb-14 14-Apr-14

-131 780E R780E 166 231.5 65.5 <300 - >9999 125.5 1.9 0.3 0.3% over 30.5m, incl. 0.93% over 3.5m 10-Feb-14 14-Apr-14

-132 810E R780E 131.5 179.5 48 <300 - >9999 134 6.1 0.7 0.72% over 46m, incl. 2.41% over 10.5m 10-Feb-14 14-Apr-14

-133 315E R780E 167 180.5 13.5 <300 - >9999 77 0.92 0.59 0.9% over 13.5m, incl. 8.37% over 1m 10-Feb-14 14-Apr-14

-134 465E R780E 143 162.5 19.5 <300 - 7800 38 - - 0.3% over 8m 10-Feb-14 14-Apr-14

-135 960E R780E 136 175 39 <300 - 4400 81.5 0.2 0.2 0.16% over 40.5m 10-Feb-14 14-Apr-14

-136 600E R780E 119 160 41 <300 - >9999 49.5 2.26 0.6 0.92% over 41m, incl. 2.59% over 8m 10-Feb-14 14-Apr-14

-137 390E R780E 194.5 195.5 1 350-420 1.5 - - 0.06% over 1m 5-Mar-14 14-Apr-14

-138 285E R780E 170 87.5 17.5 <300 - >9999 77.5 0.6 0.5 1.04% over 17m, incl. 2.88% over 4.5m 5-Mar-14 22-Apr-14

-139 585E R780E 119.5 160 40.5 <300 - 4900 55 - - 0.15% over 30m 5-Mar-14 22-Apr-14

-140 780E R780E 225 245 20 <300 - >9999 84 0.1 0.1 0.28% over 7.5m 5-Mar-14 22-Apr-14

-141 975E R780E 177 193.5 16.5 <300 - >9999 64.5 0.97 0.45 5-Mar-14

-142 480E R780E 154.5 180 25.5 <300 - 4000 46.5 - - 0.09% over 23m 5-Mar-14 22-Apr-14

-143 570E R780E 145 161 16 <300 - 5200 50.5 - - 5-Mar-14

-144 750E R780E 127.5 159 31.5 <300 - >9999 66.5 3.5 1 5-Mar-14

-145 825E R780E 89 156.5 67.5 <300 - >9999 120 2 0.5 0.97% over 22.5m, incl. 2.2% over 7.5m 5-Mar-14 22-Apr-14

-146 915E R780E 131.5 18.5 53.5 <300 - >9999 99.5 7.35 1 2.18% over 47m, incl. 14.27% over 2m 5-Mar-14 22-Apr-14

-147 615E R780E 115 143.5 28.5 <300 - 6800 53 - - 0.15% over 28.5m 5-Mar-14 22-Apr-14

-148 765E R780E 154.5 158.5 4 320 - >9999 22 1.65 0.3 5-Mar-14

-149 405E R780E 117.5 134.5 17 <300 - >9999 22.5 0.15 0.15 5-Mar-14

-150 915E R780E 216.5 226 9.5 <300 - >9999 72 0.96 0.86 5-Mar-14

-151 615E R780E 213 215.5 2.5 1900 - >9999 27.5 0.15 0.15 0.31% over 6m 5-Mar-14 22-Apr-14

-153 870E R780E 165.5 186.5 21 <300 - >9999 101 1.8 0.4 5-Mar-14

-155 780E R780E 144.5 160 15.5 <300 - 1800 96.5 - - 5-Mar-14

-156 720E R780E 103 160 57 <300 - >9999 78 7.2 1.4 5-Mar-14

-157 285E R780E 156 183.5 27.5 <300 - 9990 70.5 - - 5-Mar-14

-158 990E R780E 152 182 30 <300 - >9999 86 10.86 5.34 5-Mar-14

-159 345E R780E 68.5 107 38.5 <300 - 9300 69 - - 7-Mar-14

-160 540E R780E 69 107.5 38.5 <300 - >9999 85.5 16.18 10.7 7-Mar-14

-161 930E R780E 209.5 225 16 <300 - >9999 90 2.65 0.7 7-Mar-14

-163 030E R00E 126 133.5 7.5 <300-2400 8.5 - - 7-Mar-14

-164 810E R780E 95.5 192 96.5 <300 - >9999 136 30.08 5.67 10-Mar-14

-165 540E R780E 159 167 8 <300 - >9999 59 0.25 0.25 10-Mar-14

-166 960E R780E 133.5 178 44.5 <300 - 4700 81.5 0.1 0.1 10-Mar-14

-167 360E R780E 77.5 139 61.5 <300 - >9999 69 2.1 0.9 10-Mar-14

-169 285E R780E 159.5 178.5 19 <300 - 5100 41.5 - - 17-Mar-14

-170 915E R780E 134.5 193.5 59 <300 - >9999 131.5 5.85 1.8 17-Mar-14

-171 690E R780E 60 94.5 34.5 <300 - >9999 97.5 15.25 1.85 17-Mar-14

-172 825E R780E 82.5 114 31.5 <300 - >9999 106 7.14 1.1 17-Mar-14

-173 255E R780E 72.5 73 0.5 360 1 - - 17-Mar-14

-174 690E R780E 135 175 40 <300 - >9999 75.5 2.8 1 17-Mar-14

-175 870E R780E 120 180.5 60.5 <300 - >9999 96 1.4 0.35 17-Mar-14

-177 525E R780E 174 185.5 11.5 <300 - 2800 42.5 - - 17-Mar-14

-178 750E R780E 133 183.5 50.5 <300 - 8900 99 - - 24-Mar-14

-179 840E R780E 127.5 164.5 37 <300 - 7400 94 3.08 0.78 24-Mar-14

-180 990E R780E 123 161 38 <300 - >9999 80.5 5.45 3.5 24-Mar-14

-181 555E R780E 117 165.5 48.5 <300 - >9999 62.5 4.6 4 24-Mar-14

-183 840E R780E 170 190 20 <300 - >9999 111 2.15 0.75 24-Mar-14

-184 570E R780E 110 125 14.5 <300 - >9999 65.5 5.89 0.6 24-Mar-14

-185 1005E R780E 134.5 159 24.5 <300 - 2900 50.5 - - 24-Mar-14

-186 765E R780E 157 170.5 13.5 <300 - >9999 85.5 6.5 4.9 24-Mar-14

-187 660E R780E 58.5 165 106.5 <300 - >9999 146 53.47 9.25 5.98% over 102.5m, incl. 12.93% over 10.5m 24-Mar-14 22-Apr-14

-189 1080E R780E 256 294 38 <300 - >9999 82.5 4.2 2 31-Mar-14

-190 1155E R1155E 197 207.5 10.5 <300 - 6200 30.5 - - 31-Mar-14

-191 720E R780E 122 130.5 8.5 <300 - >9999 22.5 0.9 0.5 31-Mar-14

-192 630E R780E 94 161 67 <300 - >9999 99 1.1 0.5 31-Mar-14

-193 735E R780E 162 176 14 <300 - >9999 30.5 0.4 0.4 31-Mar-14

-196 1620E R1620E 99 129 30 300 - 6100 30.5 - - 31-Mar-14

-194 1005E R780E 247 262.5 15.5 <300 - >9999 34 0.45 0.25 7-Apr-14

-195 885E R780E 243.5 248.5 5 <300 - >9999 84 0.40 0.40 7-Apr-14

-197 675E R780E 102 128.5 26.5 300 - >9999 60.5 13.6 3.0 7-Apr-14

-198 705E R780E 95 135 40 <300 - >9999 63 9.4 5.5 7-Apr-14

-199 1080E R780E 233.5 251.5 18 <300 - >9999 67.5 0.2 0.2 7-Apr-14

-200 675E R780E 107.5 167 59.5 <300 - >9999 115.5 16.2 4.75 7-Apr-14

-201 855E R780E 125 179.5 54.5 <300 - >9999 82.5 16.8 10 7-Apr-14

Reported



Disclosures & Disclaimers

This research report (as defined in IIROC Rule 3400) is issued and approved for distribution in Canada by Dundee Securities

Ltd. (“Dundee Capital Markets”), an investment dealer operating its business through its two divisions, Dundee Capital

Markets and Dundee Goodman Private Wealth. Dundee Capital Markets is a member of the Canadian Investor Protection

Fund, the Investment Industry Regulatory Organization of Canada and an investment fund manager registered with the

securities commissions across Canada. Dundee Capital Markets is a subsidiary of Dundee Corporation.

Research Analyst Certification: Each Research Analyst involved in the preparation of this research report hereby certifies that: (1) the views and recommendations expressed herein accurately reflect his/her personal views about any and all of the securities or issuers that are the subject matter of this research report; and (2) his/her compensation is not and will not be directly related to the specific recommendations or views expressed by the Research Analyst in this research report. The Research Analyst involved in the preparation of this research report does not have authority whatsoever (actual, implied or apparent) to act on behalf of any issuer mentioned in this research report. U.S. Residents: Dundee Securities Inc. is a U.S. registered broker-dealer, a member of FINRA and an affiliate of Dundee Capital Markets. Dundee Securities Inc. accepts responsibility for the contents of this research report, subject to the terms and limitations as set out above. U.S. residents seeking to effect a transaction in any security discussed herein should contact Dundee Securities Inc. directly. Research reports published by Dundee Capital Markets are intended for distribution in the United States only to Major Institutional Investors (as such term is defined in SEC 15a-6 and Section 15 of the Securities Exchange Act of 1934, as amended) and are not intended for the use of any person or entity. UK Residents: Dundee Securities Europe LLP, an affiliate of Dundee Capital Markets, is authorized and regulated by the

United Kingdom’s Financial Conduct Authority (No 586295) for the purposes of security broking & asset management.

Research prepared by UK-based analysts is under the supervision of and is issued by its affiliate, Dundee Capital Markets.

Dundee Securities Europe LLP is responsible for compliance with applicable rules and regulations of the FCA, including Chapter

12 of the FCA’s Conduct of Business Sourcebook (the “FCA Rules”) in respect of any research recommendations (as defined in

the FCA Rules) in reports prepared by UK-based analysts. Dundee Capital Markets and Dundee Securities Europe LLP have

implemented written procedures designed to identify and manage potential conflicts of interest that arise in connection with

the preparation and distribution of their research. Dundee Capital Markets is responsible (i) for ensuring that the research

publications are compliant with IIROC Rule 3400 Research Restrictions and Disclosure Requirements. And (ii) including all

required conflict of interest disclosures.

General:

This research report is provided, for informational purposes only, to institutional investor and retail clients of Dundee Capital

Markets in Canada. This research report is not an offer to sell or the solicitation of an offer to buy any of the securities

discussed herein.

The information contained in this research report is prepared from publicly available information, internally developed data

and other sources believed to be reliable, but has not been independently verified by Dundee Capital Markets and Dundee

Capital Markets makes no representations or warranties with respect to the accuracy, correctness or completeness of such

information and they should not be relied upon as such. All estimates, opinions and recommendations expressed herein

constitute judgments as of the date of this research report and are subject to change without notice. Dundee Capital Markets

does not accept any obligation to update, modify or amend this research report or to otherwise notify a recipient of this

research report in the event that any estimates, opinions and recommendations contained herein change or subsequently

becomes inaccurate or if this research report is subsequently withdrawn.

Past performance is not a guarantee of future results, and no representation or warranty, express or implied, is made

regarding future performance of any security mentioned in this research report. The price of the securities mentioned in this

research report and the income they produce may fluctuate and/or be adversely affected by market factors or exchange rates,

and investors may realize losses on investments in such securities, including the loss of investment principal. Furthermore, the

securities discussed in this research report may not be liquid investments, may have a high level of volatility or may be subject

to additional and special risks associated with securities and investments in emerging markets and/or foreign countries that

may give rise to substantial risk and are not suitable for all investors. Dundee Capital Markets accepts no liability whatsoever

for any loss arising from any use or reliance on this research report or the information contained herein.



The securities discussed in this research report may not be suitable for all types of investors and such reports do not take into

account particular investment needs, objectives and financial circumstances of a particular investor. An investor should not

rely solely on investment recommendations contained in this research report, if any, as a substitution for the exercise of their

own independent judgment in making an investment decision and, prior to acting on any of contained in this research report,

investors are advised to contact his or her investment adviser to discuss their particular circumstances.

Non-client recipients of this research report should consult with an independent financial advisor prior to making any

investment decision based on this research report or for any necessary explanation of its contents. Dundee Capital Markets

will not treat non-client recipients of this research report as its clients by virtue of such persons receiving this research report.

Nothing in this research report constitutes legal, accounting or tax advice. Investors should consult with his or her own

independent legal or tax adviser in this regard.

Dundee Capital Markets Research is distributed by email, website or hard copy. Dissemination of initial research reports and any subsequent research reports is made simultaneously to a pre-determined list of Dundee Capital Markets' Institutional Sales and Trading representative clients and Dundee Goodman Private Wealth retail private client offices. The policy of Dundee Capital Markets with respect to Research reports is available on the Internet at www.dundeecapitalmarkets.com. Dundee Capital Markets has written procedures designed to identify and manage potential conflicts of interest that arise in connection with its research and other businesses. The compensation of each Research Analyst/Associate involved in the preparation of this research report is based competitively upon several criteria, including performance assessment criteria based on quality of research. The Research Analyst compensation pool includes revenues from several sources, including sales, trading and investment banking. Research analysts do not receive compensation based upon revenues from specific investment banking transactions. Dundee Capital Markets generally restricts any research analyst and any member of his or her household from executing trades in the securities of a company that such research analyst covers. Certain discretionary client portfolios are managed by portfolio managers and/or dealing representatives in its private client

advisory division, Dundee Goodman Private Wealth. The aforementioned portfolio managers and/or dealing representatives

are segregated from Research and they may trade in securities referenced in this research report both as principal and on

behalf of clients (including managed accounts and investment funds). Furthermore, Dundee Capital Markets may have had,

and may in the future have, long or short positions in the securities discussed in this research report and, from time to time,

may have executed or may execute transactions on behalf of the issuer of such securities or its clients.

Should this research report provide web addresses of, or contain hyperlinks to, third party web sites, Dundee has not

reviewed the contents of such links and takes no responsibility whatsoever for the contents of such web sites. Web addresses

and/or hyperlinks are provided solely for the recipient's convenience and information, and the content of third party web sites

is not in any way incorporated into this research report. Recipients who choose to access such web addresses or use such

hyperlinks do so at their own risk.

Unless publications are specifically marked as research publications of Dundee Capital Markets, the views expressed therein

(including recommendations) are those of the author and, if applicable, any named issuer or Investment dealer alone and they

have not been approved by nor are they necessarily those of Dundee Capital Markets. Dundee Capital Markets. expressly

disclaims any and all liability for the content of any publication that is not expressly marked as a research publication of

Dundee Capital Markets.

Forward-looking statements are based on current expectations, estimates, forecasts and projections based on beliefs and

assumptions made by the author. These statements involve risks and uncertainties and are not guarantees of future

performance or results and no assurance can be given that these estimates and expectations will prove to have been correct,

and actual outcomes and results may differ materially from what is expressed, implied or projected in such forward-looking

statements.

© Dundee Securities Ltd. Any reproduction or distribution in whole or in part of this research report without permission is prohibited. Informal Comment: Informal Comments are analysts’ informal comments that are posted on the Dundee website. They generally pertain to news flow and do not contain any change in analysts' opinion, estimates, rating or target price. Any rating(s) and target price(s) in an Informal Comment are from prior formal published research reports. A link is provided in any Informal Comment to all company specific disclosures and analyst specific disclosures for companies under coverage, and general disclosures and disclaimers.



Presentations do not include disclosures that are specific to analysts and specific to companies under coverage. Please refer to formal published research reports for company specific disclosures and analyst specific disclosures for companies under coverage. Please refer to formal published research reports for valuation methodologies used in determining target prices for companies under coverage. Idea of Interest: Dundee Capital Markets has not initiated formal continuing coverage of Idea of Interest companies. Dundee

Capital Markets from time to time publishes reports on Idea of Interest securities for which it does not and may not choose to

provide formal continuous research coverage. All opinions and estimates contained in an Idea of Interest report are subject to

change without notice and are provided in good faith but without the legal responsibility that would accompany formal

continuous research coverage. The companies may have recommendations and risk ratings as per our regular rating system

and may have target prices, see Explanation of Recommendations and Risk Ratings for details. Any recommendations, ratings,

target prices and/or comments expire 30 days from the published date, and once expired should no longer be relied upon as

no assurance can be given as to the accuracy or relevance going forward. Dundee does not accept any obligation to update,

modify or amend any Idea of Interest report or to otherwise notify a recipient of an Idea of Interest report in the event that

any estimates, opinions and recommendations contained in such report change or subsequently become inaccurate. Dundee

clients should consult their investment advisor as to the appropriateness of an investment in the securities mentioned.

IIROC Rule 3400 Disclosures and/or FCA COBS 12.4.10 Disclosures: A link is provided in all research reports delivered by electronic means to disclosures required under IIROC Rule 3400. Disclosures required under IIROC Rule 3400 for sector research reports covering six or more issuers can be found on the Dundee Capital Markets website at www.dundeecapitalmarkets.com in the Research Section. Other Services means the participation of Dundee in any institutional non-brokered private placement exceeding $5 million. Where Dundee Capital Markets and its affiliates collectively beneficially own 1% or more (or for the purpose of FCA disclosure 5% or more) of any class of the issuer’s equity securities, our calculations will exclude managed positions that are controlled, but not beneficially owned by Dundee Capital Markets. Explanation of Recommendations and Risk Ratings

Dundee target: represents the price target as required under IIROC Rule 3400. Valuation methodologies used in determining the price

target(s) for the issuer(s) mentioned in this research report are contained in current and/or prior research. Dundee target N/A: a price

target and/or NAV is not available if the analyst deems there are limited financial metrics upon which to base a reasonable valuation.

Recommendations: BUY: Total returns expected to be materially better than the overall market with higher return

expectations needed for more risky securities. NEUTRAL: Total returns expected to be in line with the overall market. SELL:

Total returns expected to be materially lower than the overall market. TENDER: The analyst recommends tendering shares to

a formal tender offer. UNDER REVIEW: The analyst will place the rating and/or target price Under Review when there is a

significant material event with further information pending; and/or when the analyst determines it is necessary to await

adequate information that could potentially lead to a re-evaluation of the rating, target price or forecast; and/or when

coverage of a particular security is transferred from one analyst to another to give the new analyst time to reconfirm the

rating, target price or forecast.

Risk Ratings: risk assessment is defined as Medium, High, Speculative or Venture. Medium: securities with reasonable liquidity

and volatility similar to the market. High: securities with poor liquidity or high volatility. Speculative: where the company's

business and/or financial risk is high and is difficult to value. Venture: an early stage company where the business and/or

financial risk is high, and there are limited financial metrics upon which to base a reasonable valuation.

Investors should not deem the risk ratings to be a comprehensive account of all of the risks of a security. Investors are directed to read Dundee Capital Markets Research reports that contain a discussion of risks which is not meant to be a comprehensive account of all the risks. Investors are directed to read issuer filings which contain a discussion of risk factors specific to the company’s business. Medium and High Risk Ratings Methodology: Medium and High risk ratings are derived using a predetermined methodology based on liquidity and volatility. Analysts will have the discretion to raise but not lower the risk rating if it is deemed a higher risk rating is warranted. Risk in relation to forecasted price volatility is only one method of assessing the risk of a security and actual risk ratings could differ. Securities with poor liquidity or high volatility are considered to be High risk. Liquidity and volatility are measured using the following methodology: a) Price Test: All securities with a price <= $3.00 per share are considered high risk for the purpose of this test. b) Liquidity Test: This is a two-tiered calculation that looks at the market capitalization and trading volumes of a company. Smaller capitalization stocks (<$300MM) are assumed to have less liquidity, and are, therefore, more subject to



price volatility. In order to avoid discriminating against smaller cap equities that have higher trading volumes, the risk rating will consider 12 month average trading volumes and if a company has traded >70% of its total shares outstanding it will be considered a liquid stock for the purpose of this test. c) Volatility Test: In this two step process, a stock’s volatility and beta are compared against the diversified equity benchmark. Canadian equities are compared against the TSX while U.S. equities are compared against the S&P 500. Generally, if the volatility of a stock is 20% greater than its benchmark and the beta of the stock is higher than its sector beta, then the security will be considered a high risk security. Otherwise, the security will be deemed to be a medium risk security. Periodically, the equity risk ratings will be compared to downside risk metrics such as Value at Risk and Semi-Variance and appropriate adjustments may be made. All models used for assessing risk incorporate some element of subjectivity. SECURITY ABBREVIATIONS: NVS (non-voting shares); RVS (restricted voting shares); RS (restricted shares); SVS (subordinate voting shares). Dundee Capital Markets Equity Research Ratings

As at March 31, 2014


70%

27%

3%

35%

14%

20%

0%

11%

22%

33%

44%

55%

66%

77%

Buy Neutral Sell

% of companies covered by Dundee Capital Markets ineach rating category

% of companies within each rating category for whichDundee Capital Markets has provided investment bankingservices for a fee in the past 12 months.

fission uranium corp. we know pls is big. but can it be ... · birth of fission uranium (and...

Documents