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ISSUE 228 4th November, 2015

As a follow-up to last week’s commentary on the currently-maligned uranium sector, I’ve provided two ASX-

listed uranium plays for your consideration.

Like the majority of the resource sector at the present time, investment in the uranium sector in the current

climate is very much a ‘straw hats in winter’ strategy. Nevertheless, as we discussed last week – there are

important and very positive longer-term factors driving uranium market fundamentals.

In this week’s report I’ve elected to focus on two emerging uranium plays – Alligator Energy (ASX: AGE)

and Anatolia Energy (ASX: AEK) – which have solid appeal.

The first is an advanced and highly-skilled exploration play, operating in one of the world’s renowned

uranium provinces, which also boasts a very successful and very strong technical pedigree; whilst the

second opportunity has an emerging high-grade, low-cost production project that’s being effectively fast-

tracked to production status as a result of a prudent tie-up with a North American uranium play, which

boasts vast uranium mining and production experience.

The Uranium Outlook

As we discussed recently, the word patience certainly applies to the uranium sector – and investors who

follow the sector closely. The graphic below clearly illustrates the roller-coaster ride that the uranium price

undertook during the decade between 2004 and 2014.

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The period since 2011 in particular has been characterized by uncertainty in the wake of the Fukushima

nuclear disaster during March of that year, leading to a subsequent decimation of uranium equities.

Nevertheless, the overall energy conundrum remains the same - the world has relatively few immediate off-

the-shelf alternatives in terms of substantial and reliable base-load power generation.

In a world with a burgeoning population of 7 billion that’s tipped to reach 10 billion by 2050 (accompanied

by an exponential growth in energy demand), there will almost certainly be greater pressures placed on all

three forms of traditional energy - coal, gas and nuclear power.

Uranium prices appear to have bottomed and a more positive tone is enveloping the nuclear sector.

Japanese reactors are slowly coming back online, attitudes toward nuclear energy are beginning to shift

and countries such as China and India are looking to make the switch to uranium from other energy types.

Whilst it’s been a long time coming, escalating demand and a lack of new producing uranium mines is

leading to a supply deficit over the coming years - perhaps as early as 2018.

There’s been an overall lack of investment in the uranium sector that relates directly to two important

factors: firstly, a low uranium price environment has provided an enormous disincentive for exploration,

development and commissioning of new mines; whilst depressed equity and lending markets have made it

virtually impossible for new developments to be funded.

The fact that new supply isn’t even being contemplated is a major long-term problem. Even industry

heavyweights that maintain the balance sheet strength to fund their own developments have little incentive

to bring new supply on stream when prices are low. A hiatus on new project development ultimately means

restricted supply, with existing players maintaining their position of market strength.

I hope you enjoy this week’s report!

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Alligator Energy (AGE) – New Portfolio Stock

Advanced uranium explorer with a strong management team and strategic focus on the Alligators River

Uranium Province in the Northern Territory - targeting world-class +100M lb uranium deposits.

Corporate Details

Status: Advanced Explorer

Size: Small Cap

Commodity. Exposure: Uranium

Share Price: $0.038

12-month Range: $0.021 - $0.048

Shares: 351m, Options: 16.2m

Top 20: 50%

Net Cash: $2.4m

Market Value: $13m

Key Parameters Rating (out of 5)Quarterly Statistics

Management Quality Q3 2015 Exploration Spend: $1.27m

Financial Security Q3 2015 Administration Spend: $0.215m

Project Quality Exploration Spend 86%, Admin Spend 14%

Exploration / Resource Potential Q4 2015 Forecast Exploration Spend: $1.288m

Project Security Q4 2015 Forecast Admin Spend: $0.186m

Alligator Energy represents one of the uranium sector’s most interesting emerging uranium plays due to its

large, high-quality acreage position within an internationally recognized uranium province. The company

has maintained focused exploration activity within the Alligators River Uranium Project (ARUP) in the

Northern Territory, despite the poor prevailing sentiment associated with the uranium sector over recent

years since the Fukushima incidents in Japan in early 2011.

One of the most important strategic developments took place during late 201,3 when the company

announced an investment partnership with the Macallum Group (MGL) - a private company incorporating

key members of the previously hugely-successful ASX-listed uranium company, Extract Resources. The

group holds an 18.8% stake and boasts an outstanding track record of exploration and operational success.

The involvement of MGL reinforces the credibility of AGE’s exploration strategy and potential.

The ARUP hosts nearly 1 billion pounds of high grade uranium resources and past production, including the

Ranger Mine and Jabiluka deposits. Since listing in February 2011, the company has completed in excess

of 15,000m of drilling, defined a maiden high-grade, JORC compliant resource at Caramal (6.5Mlb U3O8 at

3100ppm U3O8) and is now testing further high-priority, large-scale resource targets that have the potential

to deliver a minimum 100M lb U3O8 resource base, which would satisfy commercial development criteria.

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Project Overview

The Alligator Rivers Uranium Province (ARUP) boasts nearly 1 billion pounds of high grade uranium

resources and past production, including the Ranger and Jabiluka deposits. Alongside the Athabasca Basin

in Canada, the Alligator Rivers province ranks as one of the world's premier uranium addresses.

The company maintains in excess of 1,000 sq km of Exploration Licence applications and is also in joint

venture with Cameco Australia Pty Ltd with respect to the Mamadawerre and Beatrice projects, which lie

within the ARUP.

Alligator’s exploration program involves an ongoing focus on developing methods and techniques to

discover concealed unconformity-style uranium deposits. The use of sandstone as a sampling media to

detect long-lived radiogenic plumes is the major focus of research. In particular, investigations and

experimentation is being undertaken on innovative applications of radiogenic isotope geochemical testing

and Sub Audio Magnetics (SAM) Geophysical techniques.

As part of this overall approach, Alligator’s board and management team have committed to a strategy

focused exclusively on the discovery of deposits with resources greater than 100Mlb U3O8 through a

disciplined process of evaluation of multiple ‘A’-class targets. The company’s focus has shifted to identifying

and testing larger-scale uranium targets than has previously been the case during the company’s existence.

The rationale for this is based on likely project economics, economies of scale and the potential to attract

outside investor and corporate interest. The company is targeting a deposit of considerable size, within the

range of 100M lb U3O8,

To help achieve this goal, the strategic investment partnership with MGL during late 2013 resulted in a

restructuring of the company’s board, with MGL nominees John Main joining as Chairman, along with Peter

McIntyre and Paul Dickson joining as non-executive directors. John Main is a geologist with 45 years of

global experience in mineral exploration and evaluation, including executive positions with CRA and Rio

Tinto. He has led teams that have discovered eight commercial deposits.

More recently during the September quarter, Greg Hall, a senior resource industry executive with significant

uranium sector experience, joined Alligator’s board as a non-executive director.

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Tin Camp Creek

Alligator’s Tin Camp Creek Project has been explored intermittently since 1970 and it hosts the Caramal

deposit, one of the more significant occurrences of uranium mineralisation within the ARUP outside of the

Ranger-Jabiluka mining camp. The deposit was discovered during 1971; however historical exploration

remained limited due to major historical access impediments which have now been resolved.

The company committed to drill-testing five of these targets during the 2014 field season, which comprised

the Orion North, North East Myra, Mintaka, Orion South and Orion East prospects within the Tin Camp

Creek project during September/October 2014.

A total of 5,965 metres across 34 holes were drilled during the campaign, with three of the five targets -

North East Myra, Mintaka and Orion South - returning positive results that warranted subsequent follow-up

work during the 2015 calendar year. These targets are undergoing further testing.

Beatrice Project

Alligator consummated a joint venture with Cameco Australia during late-2014, allowing it to farm-into

Cameco’s Beatrice Project within the ARUP. Beatrice comprises ELs 24291 and 26796, along with ELAs

26793, 26794 & 26795 (held 100% by Cameco) covering 481 sq km and as the graphic above clearly

illustrates it is situated immediately south of Alligator’s Tin Camp Creek project area.

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Alligator considers the tenements to be highly prospective for unconformity-style uranium mineralization -

and as they form a contiguous landholding with the TCC project area – exploration will be more efficient in

terms of pursuing prospective structures and mineralised trends across both project areas.

The Beatrice project area contains known uranium occurrences including the historic Beatrice prospect

(that includes a best historic drill-intersection of 7 metres at 2.8% U3O8 by Queensland Mines Ltd in 1971).

Alligator considers that by applying techniques refined over the past two years, it can quickly and efficiently

define top class drill targets within these structural trends.

Recent Activity

The 2015 drilling campaign began during early September, involving a 3,500-metre shallow geochemical

drilling program encompassing the BT-1, BT-4 and Beatrice prospect targets. They are radiometric and

conductor features within the basement rock and are covered by shallow alluvial and colluvial sediments.

The air-core drilling program is designed to test for anomalous geochemical responses, mineralisation and

alteration under these sediments.

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Drilling at BT-4 is targeting a strong, north-south trending SAM conductor extending over 1,000 metres. The

anomaly is located 2km north of the Beatrice prospect along strike from the SAM (Sub Audio Magnetics)

conductor, magnetic and uranium mineralisation and soil anomalism that defines the Beatrice drill target.

The target is concealed by sands that render traditional spectrometer, geochemical sampling and

radiogenic isotope sampling methods ineffective.

Eleven shallow (maximum depth 34 metres) air-core drill holes were completed on three traverse lines to

test a SAM geophysical target. Drilling has intersected a fault zone with associated alteration. While

alteration and the fault zone were accurately defined by the SAM anomaly, the basement rock types no

significant uranium mineralisation has been intersected. The contact with basement lithologies more likely

to host mineralization is now considered further to the north of existing drilling. The results of this latest

drilling will be further assessed before undertaking future drilling at BT-4.

An additional priority target has been defined under the Kombolgie Sandstone to the north of BT-1. The BT-

8 target is defined by a coincident SAM/TFEM and radiogenic isotope anomaly and adds to the existing set

of three Kombolgie sandstone covered targets to be drill-tested during 2016.

Separately, shallow air-core drilling is underway at the Beatrice prospect to test a potential southerly

extension to previously discovered high-grade mineralisation that included 19 metres @ 3,626ppm (0.36%)

U3O8. Soil and ground radiometric surveys completed over Beatrice prospect show strong uranium

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(>100ppm U3O8) and strong radiogenic isotope anomalies extending more than 200 metres south from the

known high-grade mineralisation to the edge of younger cover material.

The BT-1 target will be the final target tested during this phase of drilling. Drilling at BT-1 will test a very

strong, shallow, east-west trending SAM conductor extending over 4,000 metres that’s associated with a

known strong uranium radiometric anomaly – and covered by thin, alluvial material. Drilling is planned to

collect weathered bedrock geochemical samples from beneath the young alluvial material for

radiometric/geochemical analysis. Identification of anomalous uranium and strong alteration will be

considered a highly positive result.

Drilling is expected to be completed during early November, with assay results to be reported during late

November. Due to the shallow nature of drilling in oxidized rock types, reporting of gamma logging is not

considered reliable due to disequilibrium effects. Laboratory analysis for uranium is considered the only

appropriate measure for these sample types and therefore results will be reported only when final assay

results have been received.

Summary

Alligator Energy maintains a high quality acreage position within a proven, world-class uranium

province and has now earned a 51% stake in Cameco’s Beatrice project. The Alligators River region

has received significantly less exploration attention than the geologically-similar Athabasca Basin

in Canada, which continues to generate new discoveries. The company maintains key shareholders

and management that know how to drive success in the uranium business and importantly are

prepared to help fund the company’s exploration activities.

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Anatolia Energy (AEK) – New Portfolio Stock

The subject of a recent successful merger with Uranium Resources Inc, the company will be able to fast-

track development of its flagship uranium deposit in Turkey by relocating URI’s processing infrastructure.

Corporate Details

Status: Emerging Producer

Size: Small Cap

Commodity Exposure: Uranium

Share Price: $0.06

12-month Range: $0.052 - $0.088

Shares: 312m, Options: 110m

Top 20: 60%

Net Cash: $1.1m

Market Value: $19m

Key Parameters Rating (out of 5)Quarterly Statistics

Management Quality Q3 2015 Exploration Spend: $0.911m

Financial Security Q3 2015 Administration Spend: $0.594m

Project Quality Exploration Spend 61%, Admin. Spend 39%

Exploration / Resource Potential Q4 2015 Forecast Exploration Spend: $0.9m

Project Risk Q4 2015 Forecast Admin. Spend: $1.9m

Anatolia Energy has positioned itself to become a key explorer and miner in Turkey’s emerging uranium

sector. The company maintains a 100% interest in nine licences encompassing more than 18,000ha,

including several advanced exploration and development opportunities within the central Anatolian region.

The Central Anatolia region has been identified by the Turkish government as one of the nation’s key

uranium districts.

All project activities are undertaken by Adur Madencilik Ltd Sti (Adur), a wholly-owned subsidiary company

considered to be one of Turkey’s foremost uranium exploration companies. The company’s flagship project,

Temrezli, has seen the completion of a positive Pre-Feasibility Study (PFS) that involves the construction of

a central processing plant at the Temrezli site, which is planned to have a production capacity of 1.2 Mlb of

U308 p.a. over an initial 12-year mine life, processing uranium-bearing solutions from the Temrezli well field.

There is also the potential for processing of uranium-loaded resin transported from any satellite uranium

deposits developed in the future from the company’s other projects in the region. Adding to the project’s

development potential is the just-approved merger with North American uranium stock, Uranium Resources

Inc, which will see Temrezli developed through the relocation of URI’s US-based processing infrastructure.

This will significantly reduce start-up costs and also minimise the timeframe to first production.

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Recent Activity

Approval for Merger with Uranium Resources

Anatolia has recently received shareholder and Australian Supreme Court approval for its proposed merger

with North American uranium play, Uranium Resources, Inc. (Nasdaq: URRE; URI), with a detailed

announcement to follow shortly outlining the timetable for completion.

The merger proposal was first announced during June 2015, when Uranium Resources announced a

merger proposal with Anatolia Energy by way of a binding Scheme of Arrangement. The consideration

payable involves 0.06579 common shares in URI for each Anatolia share held (an implied offer price of

A$0.115 per share at the time of the offer and a 29.1% premium to Anatolia’s pre-bid share price.

The boards of both Anatolia and Uranium Resources unanimously recommended the terms of the offer and

tat shareholders vote in favour of the offer.

Uranium Resources plans to seek to establish an ASX listing of URI shares via ASX-listed CHESS

Depositary Interests (CDIs). Anatolia ordinary shareholders will receive their consideration shares as either

URI shares traded on the ASX (in the form of CDIs) or URI shares traded on the NASDAQ Stock Market.

Anatolia shareholders will own approximately 41% of the merged company, with URI shareholders owning

around 59%. Two existing Anatolia directors will join the seven‐man composite board.

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Post-merger, Uranium Resources will have a basic capitalisation of around US$61m and a total enterprise

value of around US$59m. Furthermore, RCF, which has provided US$8m in loan funding to URI, has

indicated that it will evaluate providing project finance for the development of Anatolia’s Temrezli project.

Project Overview

Anatolia’s strategy is backed by an experienced project team and is geared towards becoming a key

explorer and miner within Turkey’s uranium sector. The company’s activities in Turkey are undertaken by

Adur Madencilik Ltd Sti (Adur), which has an office in Ankara employing technical, administration and public

relations staff. Adur is considered to be one of Turkey’s foremost uranium exploration companies.

Anatolia’s current focus is on the development of its advanced Temrezli uranium project in central Turkey,

where a Pre-Feasibility Study (PFS) has been completed on the establishment of an ISR uranium facility

that can leach the ore in-situ and recover uranium from Temrezli and other satellite deposits.

The company’s Sefaatli project is an advanced exploration project situated to the southwest of Temrezli,

with the potential for a mineralised uranium corridor between the two areas.

The Turkish Government remains committed to plans to construct a nuclear power facility in SE Turkey;

with an ultimate goal that nuclear power provides 20% of Turkey’s energy requirement by 2030.

Temrezli Project

Anatolia’s flagship operation is the Temrezli uranium project in central Turkey. Temrezli is located within

one the richest uranium districts in the country, situated 200km east (and a comfortable 3‐hour car journey

along well-maintained bitumen roads) of Turkey’s capital city, Ankara.

Through its wholly‐owned Turkish subsidiary company, Adur, nine exploration licences are currently held of

which three licences extend over the entirety of the Temrezli uranium deposit. Adur is currently in the

process of converting these exploration licences into operation licences.

The project area is serviced by an established infrastructure network centred on the regional towns of

Yozgat and Sorgun. The project is also ideally located next to a 154 kV electric transmission, essential for

electric power for operating pumps and plant facilities.

The Temrezli deposit is the largest and highest-grade uranium deposit known in Turkey. An independent

PFS was released during March 2015 that was managed by Tetra Tech, a global engineering firm with vast

experience in uranium ISL operations, was prepared to an accuracy of ±25%, in accordance with NI43‐101

Standards.

The PFS confirmed the technical viability of the project, as well as the robust returns capable of being

achieved. Two scenarios were evaluated in the PFS: the base case, based on the Measured and Indicated

Resources only and the development case, which included Measured and Indicated Resources as well as

80% of the Inferred Resource.

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The Anatolia Board considers the development option to be a more accurate representation of the project

economics, based on the assumption that a large volume of Inferred Resources are likely to be recovered

in the ISL process. Measured and Indicated Resources constitute 85% of the contained uranium.

The development plan is based on the construction of a central processing plant at the Temrezli site, with a

planned production capacity of 1.2Mlbs per annum of U3O8. The PFS modelling is based on the current

resource of 5.206Mt at a grade of 1,157 ppm eU3O8 containing 13.3 Mlb U3O8. The project is expected to

produce 9.9 Mlb of U3O8 over an initial mine life of 12 years.

The PFS confirmed the Temrezli Project to be technically low-risk and highly-profitable, driven by its

relatively high-grade, low upfront capital expenditure and low operating costs - which would position

Temrezli as one of the lowest-cost uranium producers in the world. There is also potential to further boost

project economics and mine life through the integration of satellite opportunities, such as the company’s

wholly‐owned Sefaatli project.

Detailed plant engineering studies are expected to further reduce capital costs and there is additional scope

to reduce on‐going development costs. Relocation of URI’s Rosita plant from Texas to Temrezli could alone

reduce upfront capital costs by US$8m, with a further savings of US$3m in EPCM and engineering costs.

At the uranium price of US$65/lb used in the PFS, the pre‐tax NPV of the project (for the development

case, at an 8% discount rate) is US$191.1m. At a US$/A$ exchange rate of 0.75, this equates to $A254.8m

or $0.82 per Anatolia share.

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However, even at significantly lower uranium prices, the NPV is still robust. At a uranium price of US$50/lb,

the pre‐tax NPV8% is US$107.6m or A$143.5m (A$0.46/share) and at a uranium price of US$40/lb, the

valuation is US$52.0m or A$69.3m (A$0.22/share). At the current long-term contract price for uranium of

around US$46/lb, the pre‐tax NPV would in the order of A$0.34 per share, several orders of magnitude

above the current share price.

It is the intention to use In-Situ Leach Mining (ISL), also known as In Situ Recovery (ISR) to extract uranium

from the Temrezli uranium deposit. The method is widely used, particularly in the USA and central Asia

(Kazakhstan and Uzbekistan), as well as in Australia, China and Russia. In 2013, an estimated 47% of

world uranium mined was from ISL operations.

Unlike conventional mining, ISL leaves the ore where it is in the ground, recovering minerals by dissolving

them and pumping the pregnant solution to surface, where the minerals can be recovered. Once the

pregnant solution is returned to surface, the uranium is recovered in much the same way as in any other

uranium plant.

Sefaatli Uranium Project

Parallel to the preparation of the Temrezli project PFS, the company has been advancing its exploration

program on its Sefaatli project, which is located just 40km from the Temrezli site. The Sefaatli project area

covers approximately 50 sq km and includes the region’s most significant occurrences of uranium

mineralisation outside the Temrezli project.

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Uranium Resources’ Projects

Uranium Resources, Inc. is a uranium exploration and development company that was incorporated in 1977

to acquire and develop uranium in South Texas using the in‐situ recovery process (ISR). The company has

successfully completed several projects in the region, producing more than 8Mlb of uranium over extended

periods between the 1980s and 2009, when production was suspended at the company’s Kingsville Dome

project due to unfavourable market conditions.

URI has two licensed and currently idled processing facilities and approximately 17,000 acres of

prospective in‐situ recovery (ISR) projects in Texas. The company also holds a Federal Nuclear Regulatory

Commission (NRC) licence to recover up to 3 million pounds of uranium annually (using the ISR process) at

certain properties in New Mexico.

URI controls mineral rights encompassing approximately 190,000 acres within the Grants Mineral Belt in

New Mexico, which hosts one of the largest known concentrations of sandstone-hosted uranium deposits in

the world. URI currently has a Non‐Reserve Mineralised Material inventory of almost 120Mlb of uranium at

its properties in Texas and New Mexico.

Merger Rationale

Anatolia Energy will have access to a board and technical team with vast experience in uranium mining and

production, especially in‐situ leaching. Furthermore, the relocation of the existing Rosita ISL facility could

save up to US$11m in upfront costs and therefore have a positive impact on project economics.

Importantly, Anatolia shareholders will still retain a sizeable exposure to Temrezli project returns.

Through URI, Anatolia shareholders will also gain an exposure to large, strategic landholdings in uranium

rich regions of New Mexico and Texas, substantial databases of these regions, potential royalty streams

from medium term development properties and the ability to monetise non‐core assets.

Being part of a larger group will have obvious advantages when it comes to marketing uranium and

financing, while market liquidity should improve significantly with both ASX and NASDAQ listings.

As a low cost-producer, Temrezli should be able to withstand uranium price volatility and even at uranium

prices well below the US$65/lb used in the PFS, the project still has a substantial NPV.

Summary

We believe that now is the right time to introduce Anatolia Energy to our Portfolio. The company

has received all necessary approvals with respect to the combination with Uranium Resources and

there are clear and obvious synergies to the merger. Whilst uranium presently remains generally

out-of-favour with investors, attention will ultimately switch to those companies with the greatest

chance of developing new mines. Companies like the soon-to-be-merged Anatolia-URI are at a

distinct advantage, given their capacity to develop mines using existing infrastructure and hence

much lower capex requirements.

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Disclaimer: Gavin Wendt, who is a director of Mine Life Pty Ltd ACN 140 028 799, compiled this document. It does not constitute investment 

advice. In preparing this report, no account was taken of the investment objectives, financial situation and particular needs of any particular 

person. Before making an investment decision on the basis of this report, investors and prospective investors need to consider, with or without 

the assistance of a securities adviser, whether the information is appropriate in light of the particular investment needs, objectives and 

financial circumstances of the investor or the prospective investor. Although the information contained in this publication has been obtained 

from sources considered and believed to be both reliable and accurate, no responsibility is accepted for any opinion expressed or for any error 

or omission in that information.