UEX CORPORATION
2009 ANNUAL REPORT
Message to Shareholders
Amongst the many uranium exploration companies formed during the last decade, UEX Corporation
has been one of the most successful at discovery and advancement of new uranium resources, the
ultimate goal of any mineral exploration company. Our success reflects the early and well selected
land positions the Company acquired in the prolific Athabasca Basin of Saskatchewan, strong
relationships with the world’s largest uranium companies, and effective management. Our current
focus on two advanced resource development projects, Hidden Bay and Shea Creek, puts UEX
among a small peer group of companies capable of providing superior results over the coming
years. During 2009, we funded approximately $14.5 million of exploration and development on our
Athabasca basin uranium projects, one of the largest uranium directed budgets in Canada.
Approved expenditures for 2010 total $9.0 million. UEX continues to be well financed, with a
current cash position of approximately $14.0 million.
The first of the two advanced resource development projects is our 100%-owned Hidden Bay
Project in the eastern Athabasca Basin, where we continue to advance a group of three deposits
towards production decisions. In 2009, we reported a combined National Instrument 43-101
compliant resource estimate, at a 0.05% U3O8 cut-off grade, for the Horseshoe, Raven and West
Bear Deposits of:
• 36.62 million pounds of U3O8 with an average grade of 0.16% U3O8 in the Indicated Mineral
Resource category; and
• 2.72 million pounds of U3O8 with an average grade of 0.11% U3O8 in the Inferred Mineral
Resource category.
In February 2010, we completed a preliminary feasibility study on the West Bear Deposit upgrading
the resource to a Probable Mineral Reserve estimate of 1,492,261 pounds of U3O8 grading 0.94%
U3O8 at a cut-off of 0.18% U3O8. We have also initiated a scoping level study for the Horseshoe and
Raven Deposits.
The second resource development project is our 49%-owned Shea Creek Project in the western
Athabasca Basin, which includes the Kianna, Anne and Colette Deposits and the highly prospective
58B Area (“58B”), located between the Kianna and Colette Deposits. AREVA Resources Canada Inc.
is the operator and 51% joint venture partner.
In 2009, we completed a diamond drilling program at Shea Creek consisting of three pilot holes
and 48 directional holes. The most significant intersections were:
• 141.4 metres of 1.02% eU3O8 found in the basement at Kianna; and
• 8.7 metres of 7.24% eU3O8 found at the unconformity at Anne.
UEX has initiated an independent resource calculation for the three deposits on the Shea Creek
Project which we expect to report by the end of the second quarter of 2010. While mineralization at
these deposits is still open in most directions, we anticipate that resources at the Kianna, Anne and
Colette Deposits, based on drilling up to the end of 2009, will very likely establish Shea Creek as
one of the most significant projects in the Athabasca Basin and Canada.
Recent drilling results in the 58B Area, announced on March 17, 2010, suggest the potential for a
new deposit which may lie in the sparsely drilled area between Kianna and Colette, further
demonstrating the high exploration potential of the project. We are currently utilizing four
directional drill rigs at Shea Creek, two at Kianna and two at 58B.
“signed”
Graham C. Thody, President & CEO
March 29, 2010
UEX Corporation
Management Discussion & Analysis
Year Ended December 31, 2009
(Expressed in Canadian Dollars, unless indicated otherwise.)
Introduction
This Management Discussion and Analysis (“MD&A”) of UEX Corporation (“UEX” or the
“Company”) provides a detailed analysis of the Company’s business and compares its financial
results with those of the previous year. This MD&A is dated March 29, 2010 and should be read in
conjunction with the Company’s audited financial statements and related notes for the year ended
December 31, 2009. The financial statements are prepared in accordance with Canadian generally
accepted accounting principles (“Canadian GAAP”).
Other continuous disclosure documents, including the Company’s press releases, interim and
annual financial statements and Annual Information Form are available through its filings with the
applicable securities regulatory authorities in Canada at www.sedar.com.
Overview
Strategy
The goals of UEX are to remain one of the leading uranium explorers in the Athabasca Basin of
northern Saskatchewan and to advance its portfolio of uranium deposits and discoveries through
the development stage to the production stage. Since being listed on the Toronto Stock Exchange
in July of 2002, UEX has aggressively pursued exploration on a diversified portfolio of prospective
uranium projects in three areas within the Athabasca Basin. UEX’s exploration success on two of
these three areas has resulted in UEX focusing its main efforts on its two advanced projects, the
100%-owned Horseshoe, Raven and West Bear Deposits in the eastern Athabasca Basin, and the
Kianna, Anne and Colette Deposits within the 49%-owned Shea Creek Project in the western
Athabasca Basin.
About UEX
UEX is a Canadian uranium exploration and development company actively involved in 19
uranium projects in the Athabasca Basin, including seven that are 100% owned and operated by
UEX, one joint venture with AREVA Resources Canada Inc. (“AREVA”) that is operated by UEX,
ten joint-ventured with AREVA and one under option from JCU (Canada) Exploration Company,
Limited (“JCU”), which are operated by AREVA. AREVA is part of the AREVA Group, the world’s
largest nuclear energy company. The 19 projects, totaling 338,972 hectares (837,618 acres), are
located on the eastern, western and northern perimeters of the Athabasca Basin, the world’s
richest uranium district, which accounts for approximately 22% of global primary uranium
production.
UEX’s 100%-owned projects are the Hidden Bay Project, the Riou Lake Project, and the Northern
Athabasca Projects. The Hidden Bay Project includes the Horseshoe, Raven and West Bear
Deposits. UEX operates the Black Lake Project, a joint venture with AREVA under which UEX holds
an 89.96% interest and AREVA holds a 10.04% interest. The Black Lake Project was the site of a
uranium discovery made by UEX during a drilling program in September 2004.
The Western Athabasca Projects, which include the Anne, Colette and Kianna Deposits located on
the Shea Creek Project, are ten joint ventures with UEX holding a 49% interest and AREVA
holding a 51% interest. AREVA is the operator of the Western Athabasca Projects. UEX and
AREVA are currently in the process of negotiating joint venture agreements for the various
projects.
UEX holds an option with JCU to acquire a 25% interest in the Beatty River Project (“Beatty
River”), located in the western Athabasca Basin in northern Saskatchewan, by funding $865,000
in exploration expenditures by December 31, 2011. Beatty River is located 40 kilometres south of
the Shea Creek uranium deposits. At present, AREVA owns a 50.7% interest and JCU owns a
49.3% interest in Beatty River. At December 31, 2009, UEX’s expenditures under the option were
$604,797.
Growth Strategy
The main growth strategies of UEX are:
• To continue the exploration and development work required to delineate and develop
economic resources at the Shea Creek Project;
• To advance the development process at the Horseshoe, Raven and West Bear Deposits;
• To maintain, explore and advance to discovery its other uranium projects; and
• To pursue a diversified portfolio of projects from early exploration through to development
and production.
Uranium Industry Trends
A number of trends in the nuclear industry have the potential to affect UEX’s business
environment.
During 2009, the uranium spot price peaked at US$54.00 per pound U3O8 during the month of
June. Since that time, the spot price declined to a low of US$42.00 per pound during September,
and by March 22, 2010 the spot price was at US$42.25 per pound U3O8. The long-term uranium
price was US$60.00 per pound U3O8, as of February 22, 2010. (Spot and long-term uranium
prices stated are as reported by The Ux Consulting Company, LLC at www.uxc.com).
In recent years, the nuclear industry has seen increased capacity at existing nuclear plants,
extensions of plant licenses, and new plant planning and construction. Electricity demands are
rising rapidly worldwide. Public opinion in many countries has moved in favour of nuclear power,
and recent historical high natural gas and oil prices have made nuclear energy the lowest cost
option in some countries. In the U.S., other than hydro, nuclear energy is the least expensive
source of electricity, and several U.S. utilities have recently taken steps toward the planning and
construction of new nuclear power plants. Global warming and clean energy concerns also support
increased interest in nuclear power.
Uranium Supply and Demand
Uranium supply sources include primary mine production and secondary sources. Principal
primary producers of uranium include Cameco Corporation (“Cameco”) and AREVA, both of which
produce principally from deposits in the Athabasca Basin of northern Saskatchewan. In 2009,
worldwide annual consumption was estimated at approximately 169 million pounds U3O8. World
primary production in 2009 was approximately 130 million pounds U3O8. The resulting shortfall
between consumption and production has been covered by several secondary sources including
excess inventories held by utilities, producers, other fuel cycle participants, reprocessed uranium
and plutonium derived from used reactor fuel, and uranium derived from the dismantling of
Russian nuclear weapons. These secondary sources will decline in importance as excess
inventories and recycled uranium from nuclear weapons are progressively consumed, resulting in
the need for further primary mine supply.
Demand for uranium is directly linked to the level of electricity generated by nuclear power
plants. As of January 2010, 436 reactors were in operation worldwide. Nuclear electricity
generation worldwide is growing, since world nuclear generating capacity continues to expand as
more reactors are built than are closed, and existing reactors are being operated at higher
capacity.
Long-Term Outlook
In 2000, uranium spot prices reached a low of US$7.10 per pound U3O8 due to the increased
availability of secondary supplies, short-term lower demand, and increased inventory sales. The
spot price is at US$42.25 per pound of U3O8 as of the date of this document, and the long-term
2
uranium market outlook remains positive with increased consumption and the continuing
drawdown of secondary uranium sources. Given the lead time necessary to find and develop new
mines, the projected gap in both supply and future depletion of existing high-grade uranium
deposits means that uranium exploration must be accelerated in order to meet future demand.
The recent resurgence of concern over energy security and supply, and the corresponding interest
in nuclear power as a reliable and clean source of energy, has heightened public awareness that
new uranium supplies will be needed in the long term. The new uranium production is likely to
come from deposits in Canada, Australia, Africa, Kazakhstan and the United States. Most deposits
generally have much lower grades than the high-grade deposits in the Athabasca Basin, and
consequently it is anticipated that the new supply will come at higher cost, which is expected to
put further upward pressure on the uranium price over the next several years.
Selected Financial Information
The following is selected financial data from the audited financial statements of UEX for the last
three completed fiscal years. The data should be read in conjunction with the audited financial
statements for the year ended December 31, 2009 and the notes thereto.
For the Years Ended December 31
2009
$
85,704
(8,020,216)
(0.04)
2008
$
1,249,734
(8,803,994)
(0.05)
2007
$
3,034,219
(5,472,534)
(0.03)
14,503,291
28,852,805
35,199,037
163,317,185
154,984,327
153,021,833
Investment income
Net loss for the year
Basic and diluted
earnings (loss) per
share
Capitalized exploration
and development
expenditures, net of
non-cash items
Total assets
The following quarterly financial data is derived from the interim, unaudited financial statements
of UEX as at (and for) the three-month periods ended on the dates indicated below. The data
should be read in conjunction with UEX’s interim, unaudited financial statements and the notes
thereto.
For the Quarters Ended
Dec.
2009
$
Sep.
2009
$
June
2009
$
March
2009
$
Dec.
2008
$
Sep.
2008
$
June
2008
$
March
2008
$
9,404
11,981
18,389
45,930
207,887
251,284
311,467
479,096
(821,778)
(1,638,125)
(5,231,009)
(329,304)
23,363
(2,098,103)
(5,922,594)
(806,660)
(0.004)
(0.009)
(0.027)
(0.002)
0.000
(0.011)
(0.032)
(0.004)
1,631,760
4,238,985
3,185,818
5,446,728
6,816,899
6,680,659
6,065,319
9,289,928
163,317,185
160,901,363
160,778,872
152,469,623
154,984,327
154,941,483
154,893,093
154,368,149
Investment
income
Net earnings
(loss) for the
period
Basic and diluted
earnings (loss)
per share
Capitalized
exploration and
development
expenditures, net
of non-cash items
Total assets
3
Share Capital
The Company is authorized to issue an unlimited number of common shares without par value, of
which 197,162,652 common shares were issued and outstanding as of December 31, 2009, and
an unlimited number of preferred shares issuable in series, of which 1,000,000 preferred shares
have been designated Series 1 Preferred Shares, none of which are issued and outstanding. As of
March 29, 2010, the number of common shares outstanding remained at 197,162,652.
At December 31, 2009, the Company had reserved a total of 14,654,700 common shares related
to director, employee and consultant options, the details of which are as follows:
Exercise Prices
Number Outstanding,
December 31, 2009
Weighted-Average
Remaining Contractual Life
$ 0.84
0.95
1.00
1.20
1.34
1.45
1.80
2.75
3.56
300,000
575,000
600,000
4,020,000
1,685,000
6,350,000
99,700
175,000
850,000
14,654,700
4.5 years
4.7 years
10.0 years
6.2 years
9.7 years
7.0 years
5.5 years
5.2 years
6.7 years
7.0 years
During the third quarter of 2009, the Company’s previous President and CEO announced his
retirement. His retirement agreement with the Company consisted of the voluntary surrender of
4,000,000 existing share purchase options, the reduction of the expiration date on his remaining
3,000,000 share purchase options to a three-year period ending October 31, 2012, and a cash
payment on November 1, 2009 of an amount equal to two years’ salary.
In December 2009, a total of 2,375,000 stock options with an exercise price of $4.22 per option
were voluntarily surrendered by directors, employees, and consultants.
Results of Operations for the Year Ended December 31, 2009
For the year ended December 31, 2009, the Company reported a net loss of $8,020,216
compared to a net loss of $8,803,994 for the year ended December 31, 2008. The lower net loss
for the year ended December 31, 2009 was primarily due to a $1,450,637 decrease in stock-
based compensation, a $120,000 decrease in donations, a $118,115 decrease in filing and stock
exchange fees, and a $380,159 increase in future income tax recovery, offset by a $1,164,039
decrease in investment income and a $651,286 increase in salaries and retiring allowance. In
addition, there was no write-down of capitalized mineral property expenditures during 2009
compared to a $435,360 write-down of mineral properties during 2008.
Investment income was $85,704 for the year ended December 31, 2009, compared to
$1,249,743 for the year ended December 31, 2009, a decrease of $1,164,039 due to significantly
lower interest rates during 2009 being applied to lower cash balances than those existing during
the year ended December 31, 2008.
The granting and vesting of stock options during the year ended December 31, 2009 resulted in
total stock-based compensation expense of $7,737,515, of which $977,271 was allocated to
mineral property expenditures and the remaining $6,760,244 was charged to operations. The
granting and vesting of stock options during the year ended December 31, 2008 resulted in total
stock-based compensation expense of $9,609,891, of which $1,399,010 was allocated to mineral
property expenditures and $8,210,881 was charged to operations.
The future income tax recovery for the years ended December 31, 2009 and 2008 were $464,703
and $84,544, respectively. The increased future income tax recovery for 2009 reflects the benefit
of a larger increase in future income tax assets during the current year.
4
Operating expenses before stock-based compensation expense for the year ended December 31,
2009 were $1,810,379, compared to $1,492,040 for the year ended December 31, 2008. This
increase of $318,339 is mainly due to a $651,286 increase in salaries and retiring allowance,
offset by a $118,115 decrease in filing and stock exchange fees, a $42,999 decrease in travel and
promotion, and a $120,000 decrease in donations. During 2008, the Company donated $100,000
to the Saskatchewan Research Council toward its uranium lab expansion. No donations were
made during the year ended December 31, 2009.
General and administrative expenses were $203,396 for the year ended December 31, 2009, a
decrease of $35,359 compared to the general and administrative expenses of $238,755 for the
year ended December 31, 2008 due to lower office consultant fees in 2009.
Salaries and retiring allowance totaled $1,116,372 during the year ended December 31, 2009, a
$651,286 increase over the salaries and retiring allowance of $465,086 incurred by the Company
during the year ended December 31, 2008. This increase is due to the payment of $630,000 to
the Company’s previous President and CEO upon his retirement on November 1, 2009, pursuant
to a retirement agreement.
Legal and audit expenses for the year ended December 31, 2009 were $204,046, comparable to
the legal and audit expenses of $219,795 during the year ended December 31, 2008. Filing fees
and stock exchange fees significantly decreased in the year ended December 31, 2009 to
$97,671, compared to $215,786 during 2008, directly due to decreased stock exchange and
regulatory fees, which are based on the Company’s market capitalization at the end of the
previous year.
The continuity of expenditures on UEX’s uranium projects is as follows:
Project
Balance
December 31,
2007
Exploration & Write-down
Development
Expenditures
Balance
of Mineral December 31,
2008
Properties
2008
Hidden Bay
Western Athabasca
Black Lake
Riou Lake
Northern Athabasca
Beatty River
$ 41,273,130
30,702,947
13,883,916
7,454,397
5,636,733
588,459
$ 18,064,686
9,751,660
1,369,198
1,477,100
212,489
9,122
$
-
-
-
-
(435,360)
-
$ 59,337,816
40,454,607
15,253,114
8,931,497
5,413,862
597,581
2009
Exploration &
Development
Expenditures
$ 9,702,937
5,948,784
156,780
80,301
24,771
7,216
Balance
December 31,
2009
$ 69,040,753
46,403,391
15,409,894
9,011,798
5,438,633
604,797
$ 99,539,582
$ 30,884,255
$ (435,360)
$129,988,447
$ 15,920,789
$145,909,266
(For further information regarding exploration and development expenditures on the projects
shown in the above table, please refer to “Exploration Activities” below.)
During the year ended December 31, 2009, the Company incurred exploration and development
expenditures totaling $14,503,291, before non-cash stock-based compensation, future income
taxes and amortization totaling $1,417,498. Exploration and development expenditures during
the year ended December 31, 2008 totaled $28,852,805, before non-cash stock-based
compensation, future income taxes and amortization totaling $2,031,450. This $14,349,514
decrease in expenditures, before non-cash items, is due to lower overall exploration and
development budgets for 2009 relating to the Hidden Bay and Western Athabasca Projects,
compared to 2008. The Company conducted extensive drilling programs at its Hidden Bay Project
during 2008 with the goal of performing the necessary drilling for the purposes of obtaining
National Instrument 43-101 (“N.I. 43-101”) resource estimates on its Horseshoe and Raven
Deposits, which were received during 2009. As a result, drilling conducted in 2009 was
considerably reduced when compared to 2008. In addition, the Company reduced its exploration
activities on its projects located in the northern Athabasca Basin and consequently incurred less
exploration expenditures.
5
Results of Operations for the Three Months Ended December 31, 2009
During the three months ended December 31, 2009, the Company incurred a net loss $821,778.
A total of 2,375,000 stock options with an exercise price of $4.22 per option were voluntarily
surrendered by directors, employees, and consultants during the fourth quarter. A total of
375,000 of these options were not vested at the time of forfeiture. The effect on fourth quarter
results was a decrease to net loss of $122,092, a decrease in mineral properties of $21,050, and
a decrease of $143,142 in contributed surplus.
There were no other significant non-recurring year-end adjustments affecting the Company’s
fourth quarter results.
Financing Activities
On April 15, 2009, the Company issued 8,700,000 flow-through common shares at $1.00 per
share for gross proceeds of $8,700,000, pursuant to a brokered private placement. A commission
of $348,000 was paid to the broker and $78,968 of additional issuance costs were incurred.
On December 17, 2009, the Company issued 3,628,100 flow-through common shares at $1.12
per share and 975,000 non-flow-through common shares at $1.02 per share for aggregate gross
proceeds of $5,057,972, pursuant to a non-brokered private placement. The Company incurred
issuance costs of $36,270.
The Company realized $12,520 from the exercise of stock options during the year ended
December 31, 2009, compared to $143,680 received from stock options exercised during the year
ended December 31, 2008.
Liquidity and Capital Resources
As UEX has not begun production on any of its exploration and development properties, the
Company does not generate cash from operations. As at December 31, 2009 the Company had
current assets of $17,243,131, including $16,938,416 in cash and cash equivalents, compared to
current assets as at December 31, 2008 that totaled $24,785,318. Working capital at December
31, 2009 was $16,548,206, compared to working capital of $19,501,945 at December 31, 2008.
At the year end, the Company’s cash balances were invested in highly liquid bankers’ acceptance
notes with terms of 90 days or less. The Company had sufficient cash resources at December 31,
2009 to fund its approved 2010 budgets of approximately $9.0 million for exploration and
development and administrative costs.
Accounts payable and accrued liabilities at December 31, 2009 were $694,925, which is
significantly lower than the amount at December 31, 2008 of $5,283,373 due to a lower amount
of exploration and development activities during the last two months of 2009 compared to 2008.
The Company has an obligation under an operating lease for its office premises. The future
minimum lease payments are $37,384 in 2010. The Company has no other financial commitments
or obligations beyond those required to fund exploration and development related to the
maintenance and title of its mineral dispositions and its option agreement obligations to JCU.
The Company’s net future income tax liability of $14,829,975 at December 31, 2009 is comprised
of a $16,139,907 future income tax liability related to the tax effect of the difference between the
carrying value of the Company’s mineral properties and their tax values, offset by the Company’s
future income tax assets totaling $1,039,932. At December 31, 2008, the Company’s net future
income tax liability was $15,058,296.
All acquisition, exploration, development and start-up costs are capitalized until such time as the
project to which they relate is put into commercial production, sold, abandoned or recovery of
costs is determined to be unlikely. Upon reaching commercial production, these capitalized costs
are amortized over the estimated ore reserves on a unit-of-production basis. For properties which
do not yet have proven reserves, the capitalized amounts represent costs to date and are not
6
intended to represent present or future values. The underlying value of all properties is entirely
dependent on the existence and economic recovery of reserves in the future, and the ability to
obtain sufficient financing to put the project into production.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements.
Financial Instruments
The Company’s financial instruments consist of cash and cash equivalents, amounts receivable
and accounts payable and accrued liabilities. Cash and cash equivalents are designated as held
for trading and carried at fair value, with the unrealized gain or loss recorded in the statement of
operations. Interest income is recorded in the statement of operations. Amounts receivable is
classified as loans and receivables, and accounts payable and accrued liabilities are classified as
other financial liabilities, and recorded at amortized cost using the effective interest rate method.
In addition, any impairment of loans and receivables is deducted from amortized cost. The
Company does not hold any derivative financial instruments.
The Company operates entirely in Canada and is therefore not subject to any significant foreign
currency risk. The Company’s financial instruments are exposed to limited liquidity risk, credit risk
and interest rate risk.
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they
fall due. The Company manages liquidity risk through the management of its capital structure.
The Company’s objective when managing capital is to safeguard the Company’s ability to continue
as a going concern in order to pursue the exploration and development programs on its mineral
properties. The Company manages its capital structure, consisting of shareholders’ equity, and
makes adjustments to it, based on funds available to the Company, in order to support the
exploration and development of its mineral properties. Historically, the Company has relied
exclusively on the issuance of common shares for its capital requirements. Accounts payable and
accrued liabilities are due within the current operating period.
Credit risk is the risk of an unexpected loss if a third party to a financial instrument fails to meet
its contractual obligations. The Company’s exposure to credit risk includes cash and cash
equivalents and amounts receivable. The Company reduces its credit risk by maintaining its bank
accounts at large international financial institutions. The maximum exposure to credit risk is equal
to the carrying value of cash and cash equivalents and accounts receivable. The Company’s
investment policy is to invest its cash in highly liquid short-term interest-bearing investments that
are redeemable 90 days or less from the original date of acquisition. Amounts receivable consists
mainly of GST receivable and office recoveries and are not considered past due.
The Company is subject to interest rate risk on its cash and cash equivalents.
The carrying values of amounts receivable, and accounts payable and accrued liabilities are a
reasonable estimate of their fair values because of the short period to maturity of these
instruments.
Related Party Transactions
The Company did not have any related party transactions.
Exploration and Development Activities
The following is a general discussion of UEX’s exploration and development activities during the
year ended December 31, 2009. For more detailed information regarding UEX’s exploration
projects, please refer to UEX’s current Annual Information Form, available at www.sedar.com, or
to UEX’s website at www.uex-corporation.com.
7
Western Athabasca Projects: 2009 Exploration and Development Programs
AREVA acts as operator on the ten Western Athabasca Projects, which include the Shea Creek
exploration and development project, and the Douglas River, Erica, Alexandra, Mirror River,
Laurie, Nikita, Uchrich, James Creek and Brander Lake exploration projects totaling 154,301
hectares (381,286 acres).
UEX approved 2009 expenditures totaling approximately $11.0 million as proposed by AREVA for
the Western Athabasca Projects. The 2009 expenditures included an exploration budget of $9.0
million, of which $8.25 million was allocated to Shea Creek, and a development budget for Shea
Creek of $2.0 million. Expenditures under the joint venture were funded 49% by UEX and 51% by
AREVA.
Shea Creek Project
The Shea Creek Project (“Shea Creek”) hosts the Kianna, Anne and Colette Deposits, and consists
of 11 claims totaling 19,581 hectares (48,386 acres).
Directional drilling, first introduced in the Athabasca Basin by AREVA, is utilized at Shea Creek.
This technology, which uses a steerable drill bit to allow several target intersections to be
completed from one pilot hole, reduces the cost while improving targeting precision when drilling
deep targets. A pilot hole is strategically positioned within a target area and subsequent
directional cuts from the pilot hole are made towards specific targets. For example, a vertical pilot
hole may reach the unconformity at a depth of 700 metres and continue into the basement for
another 150 metres. Directional drilling from that pilot hole could begin in the sandstone at the
400-metre level, angling in a new direction to a different unconformity impact location and
beyond, thus saving the time and expense of “re-drilling” the 400-metre length to the point
where the directional hole begins.
As a result, a unique nomenclature is used for the Shea Creek drill holes. For example, "SHE-109"
refers to a vertical pilot hole, with subsequent directional cuts from that pilot hole numbered
"SHE-109-1", "SHE-109-2", etc.
The Kianna, Anne and Colette Deposits within Shea Creek are distributed along a strike length of
over three kilometres of the north-northwest trending Saskatoon Lake graphitic conductor. The
Saskatoon Lake Conductor is coincident with a southwest-dipping reverse fault that displaces the
flat-lying unconformity with the overlying Athabasca Group sandstone by several tens of metres.
Depths to the unconformity typically range from 700 to 740 metres.
Mineralized areas along the Saskatoon Lake Conductor at Shea Creek occur often in areas where
northeast-trending discordant faults offset the northwest-trending conductive graphitic unit. Three
styles and settings of mineralization are present:
• Basement-hosted mineralization (“B”) is found in zones up to 200 metres below the
unconformity. Drilling at the Kianna Deposit (“Kianna”) has outlined a zone of this style of
mineralization with a strike length of 200 metres and a downdip extension of 160 metres
which includes intercepts such as SHE-114-11 grading 4.09% U3O8 over 45.0 metres,
including 18.07% U3O8 over 6.0 metres. This mineralization style is also seen at the Anne
Deposit (“Anne”) and the Colette Deposit (“Colette”), which includes intercepts such as
SHE-122-1 at Anne, grading 4.21% U3O8 over 36.0 metres, including 23.17% U3O8 over
3.5 metres, and SHE-111-6 at Colette, grading 3.23% U3O8 over 8.0 metres. The
basement mineralization at Colette has been traced over a strike length of 240 metres,
and is largely open. In the 58B Area, basement mineralization includes intercepts such as
2.21% U3O8 over 2.6 metres, including 6.73% U3O8 over 0.7 metres in SHE-58B.
• Unconformity-type mineralization (“UC”)
is disseminated, nodular and massive
mineralization in close proximity to the unconformity. Drilling between Kianna and Anne
has established that mineralization at the unconformity is continuous between the
deposits, indicating a strike length of at least 1,000 metres of mineralization which is open
in all directions. Intercepts of this style include SHE-115-3, grading 9.34% U3O8 over 12.2
metres, including 21.15% U3O8 over 4.3 metres at Kianna and SHE-99-2, grading 5.65%
8
U3O8 over 17.9 metres, including 14.55% U3O8 over 6.5 metres at Anne. The unconformity
mineralization at Colette has been traced over a strike length of 650 metres, and is open
in all directions. Intercepts at Colette include SHE-52 grading 2.34% U3O8 over 16.8
metres. Recent drilling in the 58B Area has intersected significant unconformity
mineralization such as 6.55% U3O8 over 2.4 metres in SHE-133-4.
• Perched mineralization (“P”) is sandstone-hosted pervasive and fracture-controlled
pitchblende-bearing mineralization found in discrete zones tens of metres above the
unconformity. At Kianna, the largest of these pods has a defined strike length of 80 metres
and a width of 60 metres, and includes intercepts such as SHE-114-5, grading 20.72%
eU3O8 over 10.2 metres, including 27.73% eU3O8 over 7.60 metres. This mineralization
style at Colette includes intercepts such as SHE-111-11, grading 1.43% U3O8 over 6.0
metres. Fracture/fault-controlled perched mineralization is also developed within the Anne
area; however intersections cannot be correlated between drill holes with the current
density of drill information.
Mineralization of these styles is open in many parts of the deposits. The zones may be stacked
with additional underlying zones successively beneath a zone at or above the unconformity. For
example, at Kianna, high-grade uranium mineralization has been intersected in multiple zones at
depths from 662 metres to 922 metres, a vertical distance of approximately 260 metres. Areas of
low-grade mineralization intersected near the unconformity in widely spaced holes between the
deposits suggest the potential for additional mineralized zones in areas which are largely
untested, or where historical drill holes did not penetrate sufficiently deeply to test for all
mineralization settings. In addition, excellent exploration potential occurs along the extensions of
the Saskatoon Lake Conductor in southern and central parts of the property, as well as along
parallel conductors to the west.
Uranium grades reported below are calculated from gamma probe logging. True widths of
mineralized intervals have not yet been determined. The probe results are reported as uranium
equivalent (eU3O8). Equivalent uranium probe results are obtained using a DHT27-STD gamma
probe which collects continuous readings along the length of the drill hole. Probe results are
calibrated using a radiometric to grade conversion calculated from the comparison of probe
results against geochemical analyses in previous drill holes in the Shea Creek area. The reader is
referred to UEX’s news release of March 24, 2009 for further discussion of probe calibration and
comparative treatment of geochemical and probe data.
2009 Drilling and Exploration Program at Shea Creek
The 2009 diamond drilling program at Shea Creek began in early February utilizing three diamond
drills. A fourth drill was added in July, and the drilling was concluded in late October. A total of 54
diamond drill holes were completed on the project during the 2009 program, including three pilot
drill holes and 51 directional cuts.
Drilling during the 2009 program concentrated on four principal areas at Shea Creek:
•
Infill and step-out drill holes at the Kianna Deposit;
Infill drilling at the Anne Deposit;
•
• Exploration drill holes between Anne and Kianna; and
• Exploration drill holes in the 58B target area, located between the Kianna and Colette
Deposits.
Kianna Deposit
Drilling at Kianna in 2009 comprised one pilot hole and 12 directional cuts, excluding two holes
which were not completed due to drilling difficulties. Drilling focused on better definition of
mineralization in the basement and at the unconformity, following up on previous results. True
widths of mineralized intervals have not yet been determined. The most significant intercepts,
which returned grades of greater than 0.5% eU3O8 and a grade-thickness product of greater than
5.0 include the following:
9
•
•
•
•
•
(UC) 2.90% eU3O8 over 6.9 metres in hole SHE-118-18;
(P) 3.86% eU3O8 over 14.2 metres, including 20.64% eU3O8 over 1.4 metres, and
(B) 1.85% eU3O8 over 8.7 metres in hole SHE-114-18A;
(P) 5.94% eU3O8 over 12.0 metres, including 15.72% eU3O8 over 1.2 metres
and 33.56% eU3O8 over 1.3 metres in hole SHE-114-19;
(P) 2.71% eU3O8 over 14.2 metres, and
(B) 3.73% eU3O8 over 10.8 metres in hole SHE-114-19A; and
(B) 1.02% eU3O8 over 141.4 metres, including 2.27% eU3O8 over 4.0 metres,
2.72% eU3O8 over 6.6 metres, 5.55% eU3O8 over 15.8 metres, and
2.39% eU3O8 over 5.3 metres in hole SHE-114-20.
Drill hole SHE-114-20 substantially upgrades the eastern portion of the basement mineralization
in Kianna. The high-grade subinterval of 5.55% eU3O8 over 15.8 metres expands the outlines of
higher-grade material from previous drilling results. In addition, upper parts of the basement
intercept in drill hole SHE-114-20 have expanded both the extent and potential of the basement
zone. The mineralization intersected by this drill hole will require follow-up drilling, which is
planned as part of the 2010 exploration program.
The perched and unconformity results listed above further define the high-grade portions of these
zones.
Between the Anne and Kianna Deposits
Drilling in this area was undertaken to further assess the extent and continuity of mineralization
between Anne and Kianna, and to define areas of higher-grade mineralization within this corridor.
A total of 21 directional cuts in the SHE-37, 50 and 121 series drill holes were completed in this
area, excluding one hole which was not completed due to drilling difficulties.
Some of the more significant intercepts, with a grade-thickness product greater than 5.0, include:
•
•
•
•
(UC) 1.09% eU3O8 over 5.5 metres in hole SHE-50-2;
(UC) 4.56% eU3O8 over 2.9 metres in hole SHE-50-5;
(UC) 3.06% eU3O8 over 4.3 metres in hole SHE-50-8; and
(UC) 1.62% eU3O8 over 4.3 metres in hole SHE-50-11.
Drilling in this area has better-defined the unconformity mineralization, allowing for the
incorporation of this zone in future resource estimation.
Anne Deposit
Drilling at Anne in 2009 was performed with the following objectives:
a) To further test open areas in southeastern portions of Anne; and
b) To further define mineralization in the northern portions of Anne.
One pilot hole and 12 directional cuts were completed. Significant intercepts in these areas, with
a grade-thickness product greater than 5.0, include the following:
•
•
•
(UC) 1.47% eU3O8 over 7.6 metres in hole SHE-131-3;
(UC) 7.24% eU3O8 over 8.7 metres, including 18.48% eU3O8 over 2.2 metres, and
(B) 1.45% eU3O8 over 11.1 metres in hole SHE-109-5; and
(UC) 4.51% eU3O8 over 8.9 metres in hole SHE-109-6.
The 109-series drill holes further outline mineralization in the northern Anne Deposit. The
SHE-131 series drill holes fill large gaps in previous drilling at the southeastern end of Anne,
establishing and extending continuity of mineralization approximately 100 metres further to the
southeast of previous systematic areas of drilling. Unconformity mineralization throughout much
of Anne, and all mineralization at the southeast end of the Anne Deposit are open and will be
further tested during the 2010 program.
10
58B Area
This highly prospective, but virtually untested, area lies between the Kianna and Colette Deposits
along a one-kilometre strike length of the Shea Creek trend, which has been previously tested by
very widely-spaced holes. In 2009, one new pilot hole and two directional cuts were completed to
test the possible continuity of mineralization previously intersected by drill hole SHE-58B, which
encountered multiple mineralized intervals in the basement, including 2.21% U3O8 over 2.6
metres that also included 6.73% U3O8 over 0.7 metres. Drilling in 2009 intersected similar styles
of structurally controlled, vein-hosted mineralization in the basement, including 1.21% eU3O8 over
3.1 metres and 0.85% eU3O8 over 1.0 metres in drill hole SHE-133-2.
UEX and AREVA view the 58B Area as highly prospective for the discovery of additional basement-
hosted mineralization comparable to that observed in Kianna. This assessment is based on the
dominance of basement mineralization, the presence of east-west trending, steeply dipping
pitchblende veins, the intensity and extent of basement clay alteration, and a geophysical
signature similar to the Kianna area. Additional drilling here, and in the relatively untested areas
between the 58B target and the Kianna Deposit, are currently underway.
2009 Development Program at Shea Creek
In addition to ongoing exploration in 2009, engineering and environmental work also continued at
Shea Creek. Previous work in 2007 and 2008 included environmental baseline, geotechnical and
hydrological studies on the Anne and Kianna Deposits and surrounding areas.
The 2009 program included the gathering of site-specific information from Kianna by AREVA
personnel and external consultants. Work included a comprehensive geotechnical core logging
program of current and previous drill holes, hydraulic tests, drilling of two holes for geotechnical
purposes adjacent to Kianna for conceptual mine design planning, and further environmental
baseline studies.
Shea Creek 43-101 Technical Report
A 43-101 compliant technical report on the Shea Creek property entitled “Technical Report on the
Shea Creek Property, Northern Saskatchewan” by D.A. Rhys, P.Geo., L. Horn, AusIMM and R. S.
Eriks, P.Geo. dated April 3, 2009 was filed on www.sedar.com. The technical report was prepared
to provide a review of significant exploration results at the Shea Creek property.
2009 Exploration Program at the Alexandra Project
A ground geophysical program was carried out over the conductive zone outlined by the 2004
airborne MEGATEM® survey. The ground geophysical survey consisted of 65 line-kilometres of
new grid preparation. Following grid establishment, a total of 50 kilometres of moving loop SQUID
electromagnetic survey was completed over the grid in October 2009. Results of the geophysical
survey are pending.
No significant exploration work was conducted on the Brander Lake, Douglas River, Erica, James
Creek, Laurie, Mirror River, Nikita or Uchrich Projects during 2009.
Western Athabasca Projects: 2010 Exploration and Development Programs
UEX has approved total 2010 expenditures of approximately $11.8 million proposed by AREVA for
the Western Athabasca Projects. The 2010 expenditures include an exploration budget of $8.7
million, of which $7.96 million has been allocated to Shea Creek, and a development budget for
Shea Creek of $3.1 million. Subsequent to the budget approval, AREVA has informed UEX that
they wish to reduce the 2010 development budget to approximately $2.0 million. Expenditures
under the joint venture are funded 49% by UEX and 51% by AREVA.
2010 Drilling and Exploration Program at Shea Creek
The 2010 exploration program at Shea Creek began in mid-January and consists of diamond
drilling utilizing at least four drills. The drilling program is intended to focus on the Kianna, Anne,
and Colette Deposits as well as the area between the Kianna and Colette Deposits (“58B Area”).
11
Kianna Deposit
Proposed 2010 drilling at Kianna is planned to:
•
Investigate the north side of the Kianna Deposit. A new pilot hole will be placed 100
metres north of the main deposit to investigate the potential for unconformity
mineralization. Directional drilling from this pilot hole will test potential open
mineralization associated with drill hole SHE-114-17, as well as the downdip extension of
the Kianna basement mineralization which to date has not been determined;
• Test the eastern portion of the Kianna basement mineralization and the extent of the
high-grade mineralization recently intersected in drill hole SHE-114-20 grading 1.02%
eU3O8 over 141.4 metres, including 5.55% eU3O8 over 15.8 metres (see UEX’s news
release of November 19, 2009); and
• Further investigate the western and downdip portions of the Kianna basement where
open areas of potential mineralization may exist.
Anne Deposit
Mineralization at the Anne Deposit is open in many areas of the unconformity, and also to the
southeast. The 2010 drilling program at Anne is planned to further step out to the southeast
along strike to test open areas of mineralization, which could expand the overall strike length of
the mineralization at Shea Creek. A new pilot hole and three directional cuts are planned.
Area Between the Kianna and Colette Deposits (“58B Area”)
The area between the Kianna and Colette Deposits, along a one-kilometre strike length of the
Shea Creek conductive trend, is highly prospective and has only been tested by very few holes.
Previous drilling has intersected multiple intervals of basement-hosted mineralization in the 58B
Area located 700 metres northwest of Kianna. In 1997, drill hole SHE-58B intersected
unconformity mineralization grading 0.44% eU3O8 over 8.1 metres and basement-hosted
mineralization grading 2.21% U3O8 over 2.6 metres including 6.73% U3O8 over 0.7 metres.
Drilling in the 58B Area during 2009 intersected basement-hosted mineralization grading 1.34%
eU3O8 over 3.2 metres and 0.88% eU3O8 over 1.1 metres in drill hole SHE-133-2 (see UEX’s news
release of November 19, 2009). This basement-hosted mineralization occurs in steeply dipping
vein systems, suggesting the potential for Kianna-style structurally controlled mineralization in
the basement.
The 2010 drilling program at 58B initially utilized the previously drilled pilot hole SHE 133. Two
directional cuts, SHE-133-3 and SHE 133-4, were completed and the results include the following
mineralized intersections (see UEX’s news release of March 17, 2010):
• SHE-133-3
(UC) 1.81% eU3O8 over 7.6 metres, including 2.65% eU3O8 over 4.8 metres;
(B)
(B)
(B)
1.02% eU3O8 over 1.1 metres;
0.54% eU3O8 over 0.8 metres; and
4.80% eU3O8 over 0.9 metres.
• SHE-133-4
(UC) 6.55% eU3O8 over 2.4 metres;
(B)
(B)
1.08% eU3O8 over 1.6 metres; and
1.21% eU3O8 over 1.3 metres.
These results identify the existence of high-grade unconformity mineralization as has previously
been outlined at the Kianna, Anne and Colette Deposits, and establishes the continuation of
unconformity and basement-hosted mineralization in the 58B Area.
12
Colette Deposit
Previous drilling at the Colette Deposit is widely spaced and, as a result, the extent of high-grade
mineralization at the unconformity is poorly defined. In addition, a significant zone of basement
mineralization which is open downdip to the west was intersected in multiple drill holes completed
in 2007 and 2008 in southern parts of this deposit. Perched mineralization in northern portions of
this deposit also remains only partially outlined. Drilling in 2010 at Colette is planned to:
• Test the continuity of higher-grade mineralization at the unconformity;
• Expand the extent of the perched mineralization located in the northern part of this
deposit and test for underlying basement mineralization. Stacked zones of mineralization
observed in the other deposits at Shea Creek may also exist here; and
• Test open extensions of basement mineralization located in the southern part of this
deposit.
2010 Development Work at Shea Creek
UEX had initially approved a development budget for 2010 in the amount of $3.10 million, as
proposed by AREVA, of which UEX’s 49% share would have been $1.52 million. Subsequent to
this approval, AREVA requested a reduction of the total of development work to approximately
$2.0 million. Development expenses under the revised budget will serve to update surface
infrastructure including a review of options regarding power generation, tailings facilities and mill
locations. The expenses will also provide for the collection of field data and a review of the overall
project development strategy. AREVA, the joint venture operator, had previously considered the
possibility of sinking an exploration shaft to facilitate the exploration of the Shea Creek Deposits
from underground. Upon further review, it was decided that the rate of resource expansion
achieved using surface drilling was significantly faster, and at a lower cost, than the exploration
shaft alternative and hence has been adopted as the best approach for this phase of the project.
Shea Creek Resource Estimate
UEX has commissioned Golder Associates Ltd. (‘Golder”) of Burnaby, British Columbia, to provide
an independent N.I. 43-101 compliant resource estimate for the Kianna, Anne and Colette
Deposits. Currently, incorporation of additional infill sampling in support of resource geochemical
modeling, and wireframe modeling by UEX personnel are underway in support of this work. It is
anticipated that the resource calculation will be completed by the end of the second quarter in
2010.
2010 Exploration Program at the Mirror River Project
The Mirror River Project is one of the ten 49%-owned Western Athabasca Uranium Projects joint-
ventured with AREVA, the operator. A $643,000 budget for 2010 has been approved to carry out
a ground geophysical program of 82.5 line-kilometres of IP/DC resistivity. UEX’s 49% share of
this budget is $315,000. This ground geophysical program is planned over conductive areas
outlined by a previous airborne MEGATEM® survey that has the potential to be associated with
unconformity-style uranium mineralization.
Beatty River Project
Beatty River consists of seven claims totaling 6,688 hectares located in the western Athabasca
Basin approximately 40 kilometres south of the Shea Creek deposits. At present, AREVA owns a
50.7% interest and JCU owns a 49.3% interest in Beatty River. UEX entered into an agreement
dated June 15, 2004 with JCU wherein JCU granted UEX an option to acquire a 25% interest in
Beatty River. Under the agreement, UEX can earn a 25% interest in Beatty River by funding
$865,000 in exploration expenditures by December 31, 2011.
No significant exploration work was conducted on the Beatty River Project during 2009.
A 2010 diamond drilling program consisting of three holes totaling 1,164 metres at a cost of
approximately $500,000 has been completed. No significant mineralization was intersected.
13
Hidden Bay Project: 2009 Exploration and Development Programs
UEX operates its 100%-owned Hidden Bay Project, which consists of 41 claims totaling 57,024
hectares (140,909 acres). The Horseshoe, Raven and West Bear Deposits are located within the
Hidden Bay Project.
Uranium Deposits
Hidden Bay is host to three uranium deposits which have recently estimated N.I. 43-101
compliant resources: Horseshoe, Raven and West Bear. These deposits are of the unconformity
type: West Bear is a classic unconformity-hosted deposit at very shallow depths, while Horseshoe
and Raven are basement-hosted varieties of the unconformity type. Previous N.I. 43-101
compliant resources are supported by a technical report by K. Palmer, P.Geo. of Golder Associates
Ltd. with an effective date of January 23, 2009. This report was filed at www.sedar.com
(“SEDAR”) on February 19, 2009. In July 2009, UEX received updated N.I. 43-101 resources
based on additional drilling and expansion of the known area of deposits from the late fall 2008
and winter 2009 drilling programs. A N.I. 43-101 compliant report with an effective date of July
15, 2009 was filed on SEDAR on September 8, 2009. The updated resources using a 0.05% U3O8
cut-off grade are provided in Tables 1 and 2 below:
Table 1
July 2009 N.I. 43-101 Compliant Indicated Mineral Resources on the Hidden Bay
Project at a Cut-off Grade of 0.05% U3O8
Deposit
Tonnes
U3O8 (%)
U3O8 (lbs)
Horseshoe
Raven
West Bear
Total
5,119,700
5,173,900
78,914
10,372,514
0.203
0.107
0.908
0.160
22,895,000
12,149,000
1,578,500
36,622,500
Table 2
July 2009 N.I. 43-101 Compliant Inferred Mineral Resources on the Hidden Bay
Project at a Cut-off Grade of 0.05% U3O8
(There are no Inferred resources for the West Bear Deposit)
Deposit
Tonnes
U3O8 (%)
U3O8 (lbs)
Horseshoe
Raven
Total
287,000
822,200
1,109,200
0.166
0.092
0.111
1,049,000
1,666,000
2,715,000
The resource estimates were calculated using a minimum cut-off grade of 0.01% U3O8 utilizing a
geostatistical-block model technique with ordinary kriging methods and the DATAMINE Studio 3
software package.
Horseshoe and Raven Deposits
Horseshoe and Raven are basement-hosted deposits and are located approximately five
kilometres southeast of the edge of the Athabasca Group sandstones, which normally cover
uranium deposits in the Athabasca Basin.
The July 2009 updated Horseshoe mineral resource estimate was prepared by Kevin Palmer,
P.Geo., of Golder, who is independent of UEX. The mineral resource calculation utilized 376
diamond drill holes (119,400 metres from holes HU-001 to HU-350 and HO-01 to HO-16) drilled
between 2005 and 2009, which tested the deposit at 7.5-metre to 30-metre drill centres. The
mineral resource estimate was calculated using a minimum cut-off grade of 0.02% U3O8 utilizing
a geostatistical block-model technique with ordinary kriging methods and the DATAMINE Studio 3
software package.
Details of the mineral resources at different cut-off levels are provided in Tables 3 and 4 below.
Note that approximately 95% of the resource is in the Indicated category at a 0.05% U3O8 cut-
14
off. At a cut-off of 0.20% U3O8, most of the contained U3O8 in the deposit is within areas
averaging 0.412% U3O8.
Table 3
July 2009 Indicated Mineral Resources at the Horseshoe Deposit
with Tonnes and Grade at Various U3O8 Cut-off Grades
Cut-off
0.02
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
Tonnes
7,042,400
5,119,700
3,464,800
2,380,800
1,567,000
1,059,900
722,600
529,100
414,600
U3O8 (%)
0.157
0.203
0.266
0.330
0.412
0.502
0.609
0.713
0.807
U3O8 (lbs)
24,427,000
22,895,000
20,302,000
17,331,000
14,219,000
11,726,000
9,696,000
8,319,000
7,377,000
Table 4
July 2009 Inferred Mineral Resources at the Horseshoe Deposit
with Tonnes and Grade at Various U3O8 Cut-off Grades
Cut-off
0.02
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
Tonnes
U3O8 (%)
444,900
287,000
159,700
106,800
79,800
53,500
29,300
15,500
11,400
0.122
0.166
0.239
0.298
0.340
0.398
0.502
0.665
0.769
U3O8 (lbs)
1,192,000
1,049,000
840,000
702,000
598,000
469,000
324,000
227,000
193,000
The July 2009 updated Raven resource estimate was prepared by Kevin Palmer, P.Geo., of
Golder. The resource calculation utilized 243 diamond drill holes (65,600 metres from holes
RU-001 to RU-213 and RV-001 to RV-028) drilled between 2005 and 2009 to define the deposit at
7.5-metre to 50-metre drill centres. The resource estimate was calculated using a minimum cut-
off grade of 0.02% U3O8 utilizing a geostatistical-block model technique with ordinary kriging
methods and the DATAMINE Studio 3 software package.
Details of the resources at different cut-off levels are provided in Tables 5 and 6 below. The bulk
of the resource is in the Indicated category at a 0.05% U3O8 cut-off. At a cut-off grade of 0.10%
U3O8, most of the contained U3O8 in the Indicated category is within areas averaging 0.170%
U3O8.
Table 5
July 2009 Indicated Mineral Resources at the Raven Deposit
with Tonnes and Grade at Various U3O8 Cut-off Grades
Cut-off
0.02
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
Tonnes
9,646,100
5,173,900
1,893,400
827,700
424,000
241,500
139,100
80,300
48,400
15
U3O8 (%)
0.073
0.107
0.170
0.234
0.294
0.349
0.406
0.467
0.529
U3O8 (lbs)
15,544,000
12,149,000
7,113,000
4,274,000
2,752,000
1,859,000
1,244,000
827,000
565,000
Table 6
July 2009 Inferred Mineral Resources at the Raven Deposit
with Tonnes and Grade at Various U3O8 Cut-off Grades
Cut-off
0.02
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
Tonnes
1,537,600
822,200
176,000
96,000
48,500
25,700
15,800
11,700
8,200
U3O8 (%)
0.067
0.092
0.186
0.239
0.302
0.370
0.431
0.468
0.509
U3O8 (lbs)
2,278,000
1,666,000
723,000
506,000
323,000
209,000
150,000
121,000
92,000
UEX received a report on metallurgical test work for the Horseshoe and Raven Deposits.
Representative samples derived from composited drill core assay rejects from the Horseshoe
Deposit and from three HQ-diameter metallurgical holes, two from Horseshoe and one from
Raven, have undergone testing for leach and effluent treatment conditions and grindability
analysis under the direction of Melis Engineering Ltd. of Saskatoon, Saskatchewan at SGS
Lakefield Research Limited in Lakefield, Ontario. These tests indicate that uranium in both
deposits is easily leached under relatively mild atmospheric leach conditions, producing leach
extractions of 98%, and lacking any significant concentrations of deleterious elements such as
arsenic, molybdenum, selenium or base metals.
Horseshoe and Raven mineralization is comprised of pitchblende and other uranium oxides and
silicates without the potentially deleterious nickel-arsenide minerals that may affect extraction
and pose tailings disposal problems. Initial effluent treatment testwork indicates that regulatory
discharge limits will be achievable. Tailings aging tests of waste raffinate and leach residue
suggest that while molybdenum and residual uranium levels in the tailings supernatant increase
upon aging, excess tailings water would be re-used and/or treated in the mill process and waste
treatment circuits under normal operating conditions to potentially mitigate these effects. These
results suggest that methods for treatment of waste and effluent generated by the processing of
this mineralization would be comparable to those in use at operating mines in the area.
Nine composites were submitted for Bond ball mill work index (BWI) and SPI®
determinations.
The Horseshoe and Raven composites were categorized as medium in hardness from the
perspective of SAG milling, and moderately hard for ball mill grinding.
As part of the advancement of development on the Horseshoe and Raven Deposits, environmental
baseline studies carried out by Golder to collect biological, hydrogeological and other
environmental data were completed in 2009. During the 2007 and 2008 drilling programs,
geotechnical studies were completed to assess rock properties and the hydrogeology of the
Horseshoe and Raven Deposits area. The Company is currently reviewing draft reports on this
work, and has initiated a scoping level evaluation of the potential economic viability of mining the
deposits.
The Horseshoe and Raven Deposits are situated in close proximity to two mills, namely Cameco’s
Rabbit Lake Mill less than 5 kilometres to the northeast of these deposits, and AREVA’s McClean
Lake facilities located 12 kilometres to the northwest of these deposits, which could facilitate
potential production if such a decision is made. Given the location of the Horseshoe and Raven
Deposits in impermeable basement rocks, any open pits created by mining either deposit will be
evaluated as tailings disposal facilities for UEX’s deposits.
West Bear Deposit
On January 5, 2009, UEX announced it had received a N.I. 43-101 compliant resource estimate
report from Golder for the West Bear Deposit. The mineral resource estimate contains 78,914
16
tonnes grading 0.908% U3O8 in the Indicated category containing 1.58 million pounds U3O8 at a
cut-off grade of 0.05% U3O8. A supporting technical report entitled “Technical Report on the
Hidden Bay Property, Saskatchewan, Canada including Mineral Resource Estimates for Horseshoe,
Raven and West Bear Deposits” by K. Palmer, P.Geo. with an effective date of January 23, 2009
was filed on SEDAR on February 19, 2009.
The updated January 2009 West Bear resource estimate was prepared by K. Palmer, P.Geo., of
Golder, who is independent of UEX. The resource calculation utilized the results from 216 drill
holes totaling 6,400 metres that were completed during the 2005 and 2007 sonic drilling
programs. The total contained Indicated uranium resources at the West Bear Deposit have not
significantly changed from the December 2007 N.I. 43-101 compliant resource calculation, also
prepared by K. Palmer, P.Geo. (73,800 tonnes grading 1.00% U3O8 containing 1.61 million pounds
of U3O8 using a cut-off grade of 0.15% U3O8 – see December 13, 2007 news release). The
resource estimate was calculated using a minimum cut-off grade of 0.01% U3O8 utilizing a
geostatistical-block model technique with ordinary kriging methods and the DATAMINE Studio 3
software package.
The new resource reported below reflects the remodeling of the deposit after significant infill
sampling of drill core was undertaken in the late summer of 2007 to better define mineralization
outlines. The changes in volume, with corresponding decrease in grade with respect to the
December 2007 N.I. 43-101 compliant Indicated resource, reflect incorporation of lower-grade
material in the new resource outlines. All resources at West Bear are classified as Indicated;
details at different cut-off levels are provided in Table 7 below:
Table 7
January 2009 Indicated Mineral Resources at the West Bear Deposit
with Tonnes and Grade at Various U3O8 Cut-off Grades.
Cutoff
0.01
0.02
0.03
0.04
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
Tonnes
209,655
188,137
112,950
85,265
78,914
76,067
70,316
63,767
57,332
52,067
47,764
43,560
Dry Density
1.99
1.99
1.99
2.02
2.03
2.03
2.04
2.04
2.04
2.04
2.04
2.05
U3O8 (%)
0.36
0.40
0.65
0.84
0.91
0.94
1.01
1.09
1.19
1.28
1.37
1.46
U3O8 (lbs)
1,654,594
1,646,208
1,605,245
1,584,573
1,578,500
1,574,010
1,557,586
1,532,152
1,500,142
1,468,219
1,437,236
1,402,640
West Bear Metallurgical Testing
Melis Engineering Ltd. of Saskatoon, Saskatchewan oversaw a confirmation metallurgical testing
program using representative composites derived from fresh drill core samples collected from the
2007 sonic drilling program. The composites were processed at SGS Lakefield Research Ltd. of
Lakefield, Ontario to confirm leach and effluent treatment conditions on fresh samples of core.
Metallurgical testing resulted in an estimated overall uranium recovery of 95%.
West Bear Preliminary Feasibility Study
In February 2010, UEX received the results of the Preliminary Feasibility Study (the “Study”) on
the West Bear Deposit prepared by Golder. Upon finalization, the Study will be filed on SEDAR at
www.sedar.com and posted on UEX’s website at www.uex-corporation.com.
The Study has upgraded the previously released West Bear resource estimate to a Probable
Mineral Reserve estimate of 1,492,261 pounds of U3O8 grading 0.94% U3O8 at a cut-off of 0.18%
U3O8 which represents 96% of the mineral resource. The high conversion rate reflects the near-
17
surface nature of the West Bear mineralization which is amenable to open-cast mining in a
shallow pit.
The Study presents a base case scenario uranium price of $77.73 (Canadian) per pound of U3O8,
resulting in a Net Present Value of $23.4 million and an Internal Rate of Return of 118%. The
feasibility of mining West Bear is most sensitive to the uranium price and is moderately sensitive
to capital and operating costs. A detailed uranium price sensitivity analysis is provided in the
Study as follows:
U3O8 Price
(C$/lb)
50.00
75.00
77.73 (base case)
100.00
125.00
Pre-tax
Post-tax
NPV
(C$M)
-2.8
32.6
36.5
68.0
103.5
IRR
(%)
n/a
161
180
332
502
NPV
(C$M)
-3.1
20.8
23.4
44.6
68.5
IRR
(%)
n/a
105
118
223
340
The uranium price sensitivity analysis is presented on an undiscounted basis as West Bear would
be mined within a period of approximately 12 months. Potentially economic material would be
mined using open pit methods and then transported off-site to an existing processing facility for
custom milling. Capital costs are estimated to be approximately $20.8 million and mine closure
costs are estimated at $8.75 million. Working capital requirements are estimated to be
approximately $0.5 million per month over the life of the operation. The Study concludes with
various recommendations regarding environmental, socio-economic, toll-milling and mining
matters.
2009 Winter Drilling Program at the Horseshoe and Raven Deposits
The winter 2009 drilling program comprised 32,167 metres of drilling in 105 diamond drill holes
which were completed between January and April 2009 using three drills. This program included
56 drill holes (16,631 metres) at Raven consisting mostly of stepout drill holes in western parts of
the deposit, but also included four infill drill holes and seven holes drilled to test targets east of
Raven. A total of 49 drill holes (15,536 metres) were completed at Horseshoe, and were focused
mainly on expanding mineralization in the Horseshoe Northeast area. Ten of the Horseshoe drill
holes explored the area between Horseshoe and Raven to the west.
Drilling during this program expanded the footprint of the deposits, and the results were
incorporated into a revised and expanded N.I. 43-101 resource estimate which was received from
Golder in July 2009.
Geochemical samples are selected with the aid of a hand-held scintillometer to identify areas of
above-background radioactivity. Samples are split, with half remaining in the core box, and the
remainder shipped to Saskatchewan Research Council Geoanalytical Laboratories (“SRC”) where
they are crushed and ground to minus 106 microns. The pulp is digested in aqua regia leach and
analyzed by ICP for uranium and other elements. In addition to the geochemical analyses, down-
hole probe radiometric results obtained for all drill holes on completion of drilling provide an
independent check of the geochemical data. Probe results can be used for grade calculations
where poor ground conditions occur and drill core recoveries are low, although at Raven and
Horseshoe recoveries are generally at, or close to, 100%. UEX has commenced systematic
insertion of sample blanks and standards of several grades into the sample stream. In addition,
repeat analyses are routinely analyzed, laboratory standards are inserted by SRC, and selected
sample pulps have been submitted to other independent laboratories for check analyses to assess
sample repeatability and accuracy of the SRC results.
Horseshoe Drilling Results
The winter 2009 drilling in the Horseshoe Northeast area expanded mineralization by
approximately 300 metres to the northeast of the previous January 2009 N.I. 43-101 compliant
18
Horseshoe resource. Mineralization in this area occurs in two new zones which lie close to, but
northeast of, the previously defined areas of mineralization. The mineralization was defined at
approximately 30-metre drill hole spacing. One drill hole was also completed as an infill hole in
previously defined eastern parts of Horseshoe. Highlights of significant drilling intercepts include
the following:
• 0.082% U3O8 over 15.0 metres in hole HU-311 (section 4805N);
• 0.187% U3O8 over 8.0 metres in hole HU-316 (section 4915N);
• 0.068% U3O8 over 21.0 metres in hole HU-321 (section 4954N);
• 0.220% U3O8 over 19.6 metres in hole HU-324 (section 4847N),
including 1.089% U3O8 over 3.1 metres;
• 0.192% U3O8 over 25.5 metres in hole HU-331 (BE zone infill drill hole, section 4673N),
including 1.517% U3O8 over 1.5 metres;
• 0.687% U3O8 over 3.2 metres in hole HU-349 (section 4858N);
• 0.183% U3O8 over 5.6 metres also in hole HU-349 (section 4858N); and
• 0.068% U3O8 over 27.0 metres also in hole HU-349 (section 4858N).
True thickness and morphology of the mineralization associated with these intercepts is variable,
with the northeastern pod defining a steep northwest-dipping, broad lobe that is parallel to the
metamorphic stratigraphy. The deeper G zone, represented by drill hole HU-324 and several other
holes drilled in the fall of 2008, including drill hole HU-289 (0.57% U3O8 over 23.0 metres), is a
lenticular, southeast dipping lens which lies at depths of 300 to 450 metres below surface and
immediately to the northeast of the previous resource. The HU-349 intercept is a broad
mineralized interval that returned 0.034% U3O8 over 316.4 metres when composited
continuously, including 84.6 metres that were not sampled and which have been composited at
zero grade. This latter intercept, while probably drilled at a shallow angle to a mineralized zone,
has established a steeply dipping link between the two Horseshoe Northeast zones and has
enhanced the understanding of the mineralization continuity.
Drill holes HU-348 and HU-350 to HU-358 were directed at exploration targets west of the
Horseshoe Deposit and east of the Raven Deposit. The most significant mineralization intercepted
in this area is 0.078% U3O8 over 11.0 metres in drill hole HU-350. This mineralization could form
part of a small pod between the two deposits, although its size is limited by adjacent drill holes.
The potential for additional small pods still exists between the two deposits in areas of widely
spaced drilling.
Raven Drilling Results
The winter 2009 drilling program expanded the Raven Deposit an additional 250 metres west of
the January 2009 N.I. 43-101 compliant Raven resource. Mineralization intersected is primarily in
extensions of the two previously defined principal zones within the Raven Deposit: the shallow-
plunging Upper zone and the southeast-dipping Lower zone. In addition, two infill drill holes also
better established continuity of mineralization within the existing resource area. Principal drilling
intercepts include the following:
• 0.748% U3O8 over 2.3 metres in hole RU-162 (section 5062E);
• 0.222% U3O8 over 5.4 metres in hole RU-164 (section 5065E);
• 0.166% U3O8 over 6.6 metres in hole RU-168 (section 4996E);
• 0.425% U3O8 over 18.4 metres in hole RU-169 (section 4936E),
including 1.095% U3O8 over 3.1 metres;
• 0.191% U3O8 over 6.2 metres also in hole RU-169 (section 4936E);
• 0.141% U3O8 over 23.0 metres in hole RU-172 (infill hole, section 5529E);
• 0.108% U3O8 over 30.0 metres in hole RU-175 (section 4911E);
• 0.060% U3O8 over 28.0 metres in hole RU-177 (section 5613E);
• 0.169% U3O8 over 23.0 metres in hole RU-179 (infill hole, section 5613E);
• 0.298% U3O8 over 7.0 metres also in hole RU-179 (infill hole, section 5613E);
• 0.085% U3O8 over 16.8 metres in hole RU-181 (section 5220E);
• 0.212% U3O8 over 11.25 metres in hole RU-187 (infill hole, section 5000E);
• 0.087% U3O8 over 15.0 metres also in hole RU-187 (infill hole, section 5000E);
19
• 0.120% U3O8 over 25.0 metres in hole RU-192 (section 4915E);
• 0.800% U3O8 over 1.5 metres in hole RU-195 (section 4936E);
• 0.138% U3O8 over 12.0 metres in hole RU-197 (section 4937E);
• 0.228% U3O8 over 10.3 metres in hole RU-206 (section 4968E); and
• 0.062% U3O8 over 27.2 metres in hole RU-207 (section 5065E).
True thickness of the intercepts is variable since mineralized zones have complex shapes. Most
zones are lensoidal.
Seven holes drilled east of the Raven Deposit (RU-191, 194, 196, 198, 201, 202 and 204)
indicate that the principal mineralized zones are now bounded in this eastern area. Narrow
intervals of mineralization were intersected in several of these holes, including 0.122% U3O8 over
2.0 metres in drill holes RU-194, and intercepts of 0.152% U3O8 over 1.5 metres and 0.161%
U3O8 over 1.0 metres in hole RU-202. Similar to the holes drilled west of Horseshoe, these results
suggest the potential for small mineralized pods between the two deposits, but bounding drill
holes limit their potential size.
Winter/Spring 2009 Geophysical Program in the Horseshoe and Raven Area
A geophysical program consisting of approximately 210 line-kilometres of linecutting, 170 line-
kilometres of DC Resistivity and 130 line-kilometres of gravity was carried out from late March to
May 2009. The geophysical surveys were carried out in areas to the north, south and west of the
Horseshoe and Raven Deposits. Preliminary processing and interpretation of the DC resistivity and
gravity survey results were used to help define priority targets outside the known areas of
mineralization for follow up during a summer 2009 drilling program.
Summer 2009 Exploration Program at the Hidden Bay Project
The summer 2009 drilling program at Hidden Bay was comprised of 49 drill holes totaling 15,071
metres. Significant mineralization was intersected in several holes. The program was completed in
September 2009 and was carried out in three areas:
• Horseshoe and Raven - designed to test targets peripheral to the Horseshoe and Raven
Deposits for possible extensions of mineralization and to assess nearby geophysical and
geological targets;
• Telephone Lake - designed to follow up previous drilling results and to further explore the
Telephone Lake trend. This trend is a major fault zone which contains previous mineralized
drill intercepts and extends northward into the Sue Deposits on the adjacent McClean Lake
Mine property, operated by AREVA; and
• Vixen Lake South - designed to test a geophysical anomaly coincident with intense clay
alteration in historical drill holes.
Drilling in the Area of the Horseshoe and Raven Deposits
During the summer of 2009, 23 drill holes totaling 7,103 metres were completed in the
Horseshoe, Raven and adjacent areas. Thirteen of these holes tested possible extensions of some
mineralized zones to assess the potential for resource expansion and to test for downdip
continuation of mineralization. Drilling intercepts with a grade-thickness product of greater than
0.05 and grades of greater than 0.05% U3O8 include the following:
• 0.076% U3O8 over 4.0 metres, and 0.140% U3O8 over 2.1 metres in hole HU-361
(Horseshoe northeast);
• 0.087% U3O8 over 1.0 metre in hole RU-219 (pod on south side of Raven);
• 0.107% U3O8 over 4.4 metres in hole RU-225 (Raven west); and
• 0.120% U3O8 over 4.6 metres in hole RU-226 (Raven west).
These intercepts slightly expand the strike length of the mineralized zones and would result in a
small increase in estimated resources. Other drill holes bounded mineralization downdip.
20
The remaining drill holes tested geophysical, structural and known alteration targets within one
kilometre of the Horseshoe and Raven Deposits. While none of these holes intersected significant
mineralization, areas of intense alteration which could potentially host mineralization were
intersected, identifying future targets. Notably, in one deep hole (HU-363) which tested the
Dragon Lake Fault on the east side of the Horseshoe Deposit, extensive and intense alteration
extends downward for at least 600 metres into basement rocks, forming a potential feeder zone
for mineralization. Given the intensity of alteration along this corridor, future drilling will target
areas to the south where the Dragon Lake Fault intersects graphitic gneiss.
Telephone Lake
During the summer of 2009, 7,968 metres of drilling in 26 drill holes distributed over a four-
kilometre strike length were completed in the Telephone Lake area (“Telephone”). Telephone is
located immediately south of the Sue and McClean Lake Deposits and has the potential for the
discovery of Sue C, D and E or Eagle Point style basement-hosted mineralization along the
Telephone Lake Fault, or where fault systems intersect the sub-Athabasca unconformity.
Drilling in 2009 targeted areas of known mineralization near the unconformity that included
previous intercepts of 0.20% U3O8 over 6.8 metres in 2006 drill hole SP-166 and 4.52% U3O8
over 0.5 metres in 2005 drill hole SP-156.
Drilling intercepts with a grade-thickness product of greater than 0.05 and grades of greater than
0.05% U3O8 include the following:
• 0.110% U3O8 over 0.5 metres in hole SP-191;
• 0.100% U3O8 over 2.0 metres, and 0.401% U3O8 over 1.9 metres in hole SP-193;
• 0.277% U3O8 over 0.3 metres in hole SP-194;
• 0.066% U3O8 over 1.1 metres, and 0.055% U3O8 over 1.0 metres in hole SP-196;
• 0.105% U3O8 over 1.1 metres, and 0.074% U3O8 over 2.8 metres in hole SP-201;
• 1.527% U3O8 over 1.5 metres in hole SP-203;
• 0.076% U3O8 over 1.6 metres in hole SP-207;
• 0.062% U3O8 over 1.0 metres in hole SP-209;
• 0.120% U3O8 over 0.7 metres in hole SP-210;
• 0.370% U3O8 over 6.5 metres, including 1.131% U3O8 over 2.0 metres, in hole SP-211;
• 0.360% U3O8 over 1.0 metres in hole SP-212; and
• 0.140% U3O8 over 0.4 metres, and 0.125% U3O8 over 2.7 metres in hole SP-213.
True thickness of mineralization has not yet been determined. Intercepts in drill holes SP-201,
203, 210, 211 and 212 are unconformity-hosted mineralization, while all other intercepts are
basement-hosted.
The Telephone drilling has highlighted three anomalously mineralized areas that contain a
combination of unconformity-hosted and basement-hosted mineralization. Additional mineralized
drilling intercepts are also present periodically along the four-kilometre length of the Telephone
Lake trend and extend southward into the Shamus Lake area.
As mineralization is open in many areas, UEX focused its 2010 winter exploration program to
follow up these results.
Vixen Lake South
In the Vixen Lake South area, which lies 1.5 kilometres northwest of the Raven Deposit, drilling
tested the core of a well-defined, east-northeast trending gravity-resistivity low where historical
drilling in shallow holes had identified broad areas of clay alteration. Alteration style, geophysical
signature and the east-northeast trend of the alteration zones are similar to the alteration
signature associated with the Horseshoe and Raven Deposits. Four drill holes (VU-001 to VU-004,
1,697 metres total) were drilled; no significant mineralization was intersected.
21
Hidden Bay Project: 2010 Exploration and Development Programs
A budget of $1.6 million was approved for UEX’s 2010 winter program on the Hidden Bay
property.
Winter 2010 Drilling Program at Telephone Lake
A winter 2010 diamond drilling program in the Telephone Lake area of the Hidden Bay property
consisting of 21 holes totaling 6,531 metres commenced on February 1st and was completed on
March 1st. Two drills, operated by Driftwood Diamond Drilling Ltd. of Smithers, British Columbia,
were utilized during the program.
The drilling program was designed to test potential downdip continuation of known mineralization,
to test along strike for extensions of unconformity mineralization, and to test gaps where widely-
spaced sections have geology favourable for basement-hosted mineralization. The geochemical
results from this drilling program are pending.
Winter 2010 Geophysical Program in the Telephone-Shamus Area
A geophysical program consisting of approximately 150 line-kilometres of linecutting and 120
line-kilometres of DC Resistivity and gravity is currently in progress. This geophysical survey will
extend from the southwestern parts of the Telephone Lake area southwesterly to the Hidden Bay
property boundary and will test for areas of alteration potentially associated with uranium
mineralization. Areas of anomalous alteration and low-grade mineralization have previously been
intersected in several drill holes on the Shamus grid and mineralization occurs to the southwest
on adjacent properties along the same trend.
In addition to these activities, property-wide compilation and evaluation will continue utilizing
previous exploration data.
Future Scoping Studies for Horseshoe and Raven
With a high proportion of the Horseshoe and Raven resource base in the Indicated category, UEX
will be initiating a scoping-level evaluation of the potential economic viability of mining the
deposits, which could then be advanced to feasibility level if results are encouraging. These studies
will examine the most efficient methods and procedures for extracting the defined uranium
resource, including the most appropriate road access and support infrastructure, mining methods,
operating plans, cash flow analyses and projections in order to determine net present values and
internal rates of return for the deposits at various uranium price levels. In support of such work,
environmental baseline studies have been underway since 2006, previously reported metallurgical
studies have been completed and initial geotechnical studies have been performed. UEX has
engaged a Mining Engineer to oversee all aspects of this project on its behalf including the
identification of independent consulting firms from which proposals will be requested, review of
proposals, granting of the contract and continued monitoring of the project.
Other Athabasca Projects
During 2009, UEX’s major focus was to expand on the successes of exploration and development
on it’s Hidden Bay and Western Athabasca Projects. Consequently, no significant exploration work
was conducted on its Black Lake, Riou Lake and Northern Athabasca Projects during 2009 or
planned for 2010.
Black Lake Project
The Black Lake Project (“Black Lake”) is located within the northern part of the Athabasca Basin
and consists of 12 claims totaling 30,381 hectares. The centre of the property area is
approximately 15 kilometres south of the town of Stony Rapids, Saskatchewan.
Riou Lake Project
The Riou Lake Project (“Riou Lake”) consists of 12 claims totaling 32,306 hectares and is located
within the northern Athabasca Basin near the town of Stony Rapids, Saskatchewan.
22
Northern Athabasca Projects
UEX’s 100%-owned Northern Athabasca Projects consists of five projects totaling 57,975 hectares
in 17 claims located on the northern rim of the Athabasca Basin near Stony Rapids,
Saskatchewan.
Qualified Person
The disclosure of technical information regarding UEX’s properties in the MD&A has been reviewed
and approved by R. Sierd Eriks, P.Geo., UEX’s Vice President of Exploration, who is a Qualified
Person as defined by N.I. 43-101.
Risks and Uncertainties
An investment in UEX common shares is considered speculative due to the nature of UEX’s
business and the present stage of its development. A prospective investor should carefully
consider the risk factors set out below.
It is not possible to determine if the exploration programs of UEX will result in
profitable commercial mining operations
The successful exploration and development of mineral properties is speculative. Such activities
are subject to a number of uncertainties, which even a combination of careful evaluation,
experience and knowledge may not eliminate. Most exploration projects do not result in the
discovery of commercially mineable deposits. There is no certainty that the expenditures made or
to be made by UEX in the exploration and development of its mineral properties or properties in
which it has an interest will result in the discovery of uranium or other mineralized materials in
commercial quantities. While discovery of a uranium deposit may result in substantial rewards,
few properties that are explored are ultimately developed into producing mines. Major expenses
may be required to establish reserves by drilling and to construct mining and processing facilities
at a site. It is impossible to ensure that the current exploration programs of UEX will result in
profitable commercial uranium mining operations.
Uranium price fluctuations could adversely affect UEX
The market price of uranium is the most significant market risk for companies exploring for and
producing uranium. The marketability of uranium is subject to numerous factors beyond the
control of UEX. The price of uranium may experience volatile and significant price movements
over short periods of time. Factors impacting price include demand for nuclear power, political
and economic conditions in uranium producing and consuming countries, reprocessing of spent
fuel and the re-enrichment of depleted uranium tails or waste, sales of excess civilian and military
inventories (including from the dismantling of nuclear weapons) by governments and industry
participants and production levels and costs of production in countries such as Russia, Africa and
Australia.
Competition in the uranium industry could adversely affect UEX
The international uranium industry is highly competitive. The uranium mining industry is global,
and consists of a small, decreasing number of large players. In 2003, eight producers accounted
for approximately 80% of the world’s uranium production. However, given the large number of
commercial reactors and diverse fuelling requirements, there are market niches for smaller low
cost producers. The key requirement for most producers now is low cost production and flexible
marketing more than high volume production. An enabling factor is mine location. Geographically,
about 50% of the world’s mined uranium comes from Canada and Australia with Canada well
positioned for further development. UEX competes with other domestic and international
companies that have greater financial, human and technical resources.
Resource estimates are based on interpretation and assumptions
Mineralization figures presented in this document and in UEX’s filings with securities regulatory
authorities, press releases and other public statements that may be made from time to time are
based upon estimates. These estimates are imprecise and depend upon geological interpretation
and statistical inferences drawn from drilling and sampling analysis, which may prove to be
23
unreliable. There can be no assurance that these estimates will be accurate or this mineralization
could be mined or processed profitably.
Mineralization estimates for UEX’s properties may require adjustments or downward revisions
based upon further exploration or development work, actual production experience, or future
changes in uranium price. In addition, the grade of mineralization ultimately mined, if any, may
differ from that indicated by drilling results. There can be no assurance that minerals recovered in
small scale tests will be duplicated in large scale tests under on-site conditions or in production
scale.
In addition, certain of the resource estimates presented in this document and in UEX’s filings with
securities regulatory authorities, press releases and other public statements that may be made
from time to time are historical estimates. These historical estimates were not made using current
Canadian Institute of Mining, Metallurgy and Petroleum categories and no current resource or
reserve confidence categories were applied. As a result, these estimates are not compliant with
N.I. 43-101. UEX has not independently verified the results of these historical resource estimates
and they may not be reliable.
Failure to obtain additional financing on a timely basis could cause UEX to reduce its
interest in its properties
The Company has sufficient financial resources to carry out planned exploration on all its projects
and to fund its general administrative costs; however, there are no revenues from operations and
no assurances that sufficient funding will be available to conduct further exploration and
development of its projects or to fund exploration expenditures under the terms of any joint
venture or option agreements after that time. If the Company’s exploration and development
programs are successful, additional funds will be required for development of one or more
projects. Failure to obtain additional funding could result in the delay or indefinite postponement
of further exploration and development or the possible loss of the Company’s properties. It is
intended that such funding will be obtained primarily from future equity issues. If additional funds
are raised from the issuance of equity or equity-linked securities, the percentage ownership of the
current shareholders of UEX will be reduced, and the newly issued securities may have rights,
preferences or privileges senior to or equal to those of the holders of UEX’s existing common
shares. The ability of UEX to raise the additional capital and the cost of such capital will depend
upon market conditions from time to time. There can be no assurances that such funds will be
available at reasonable cost or at all.
Competition from other energy sources and public acceptance of nuclear energy
Nuclear energy competes with other sources of energy, including oil, natural gas, coal and hydro-
electricity. These other energy sources are to some extent interchangeable with nuclear energy,
particularly over the longer term. Lower prices of oil, natural gas, coal and hydro-electricity may
result in lower demand for uranium concentrate and uranium conversion services. Furthermore,
the growth of the uranium and nuclear power industry beyond its current level will depend upon
continued and increased acceptance of nuclear technology as a means of generating electricity.
Because of unique political, technological and environmental factors that affect the nuclear
industry, the industry is subject to public opinion risks which could have an adverse impact on the
demand for nuclear power and increase the regulation of the nuclear power industry.
Dependence on key management employees
UEX’s development to date has depended, and in the future will continue to depend, on the
efforts of key management employees.
Compliance with and changes to current environmental and other regulatory laws,
regulations and permits governing operations and activities of uranium exploration
implementation, application or
interpretation,
companies, or more stringent
enforcement thereof, could have a material adverse impact on UEX
Mining and refining operations and exploration activities, particularly uranium mining, refining and
conversion in Canada, are subject to extensive regulation by provincial, state, municipal and
federal governments. Such regulations relate to production, development, exploration, exports,
24
taxes and royalties, labour standards, occupational health, waste disposal, protection and
remediation of the environment, mines decommissioning and reclamation, mine safety, toxic
substances and other matters. Compliance with such laws and regulations has increased the costs
of exploring, drilling, developing and constructing. It is possible that, in the future, the costs,
delays and other effects associated with such laws and regulations may impact UEX’s decision to
proceed with exploration or development or that such laws or regulations may result in UEX
incurring significant costs to remediate or decommission properties which do not comply with
applicable environmental standards at such time. UEX believes it is in substantial compliance with
all material laws and regulations that currently apply to its operations. However, there can be no
assurance that all permits which UEX may require for the conduct of uranium exploration
operations will be obtainable or can be maintained on reasonable terms or that such laws and
regulations would not have an adverse effect on any uranium exploration project which UEX
might undertake. World-wide demand for uranium is directly tied to the demand for electricity
produced by the nuclear power industry, which is also subject to extensive government regulation
and policies.
Failure to comply with applicable laws, regulations and permitting requirements may result in
enforcement actions. These actions may result in orders issued by regulatory or judicial
authorities causing operations to cease or be curtailed, and may include corrective measures
requiring capital expenditures, installation of additional equipment or remedial actions.
Companies engaged in uranium exploration operations may be required to compensate others
who suffer loss or damage by reason of such activities and may have civil or criminal fines or
penalties imposed for violations of applicable laws or regulations.
Dilution from further equity financing
If UEX raises additional funding by issuing additional equity securities, such financing may
substantially dilute the interests of shareholders of UEX and reduce the value of their investment.
Conflicts of interest
Some of the directors of UEX are also directors of other companies that are similarly engaged in
the business of acquiring, exploring and developing natural resource properties. Such associations
may give rise to conflicts of interest from time to time. In particular, one of those consequences
will be that corporate opportunities presented to a director of UEX may be offered to another
company or companies with which the director is associated, and may not be presented or made
available to UEX. The directors of UEX are required by law to act honestly and in good faith with a
view to the best interests of UEX, to disclose any interest which they may have in any project or
opportunity of UEX, and to abstain from voting on such matter. Conflicts of interest that arise will
be subject to and governed by procedures prescribed in the Company’s Code of Ethics and by the
Canada Business Corporations Act.
Accounting policies
The accounting policies and methods employed by the Company determine how it reports its
financial condition and results of operations, and they may require management to make
judgements or rely on assumptions about matters that are inherently uncertain. The Company’s
results of operations are reported using policies and methods in accordance with Canadian GAAP.
Management of UEX exercises judgement in applying accounting methods to ensure that, while
GAAP compliant, they reflect the most appropriate manner in which to record the Company’s
financial condition and operating results. In certain instances, Canadian GAAP allows accounting
policies and methods to be selected from two or more alternatives, any of which might be
reasonable but may result in UEX reporting materially different amounts. Management regularly
re-evaluates its assumptions but the choice of method or policy employed may have a significant
impact on the actual values reported.
Internal controls
Internal controls over financial reporting are procedures designed to provide reasonable
assurance that transactions are properly authorized, assets are safeguarded against unauthorized
or improper use, and transactions are properly recorded and reported. A control system, no
25
matter how well designed and operated, can provide only reasonable, not absolute, assurance
with respect to the reliability of financial reporting and financial statement preparation.
Market price of shares
Securities of mining companies have experienced substantial volatility in the past, including
during the current credit crisis, often based on factors unrelated to the financial performance or
prospects of the companies involved. These factors include macroeconomic conditions in North
America and globally, and market perceptions of the attractiveness of particular industries. The
price of UEX’s securities is also likely to be significantly affected by short-term changes in
commodity prices, other mineral prices, currency exchange fluctuation, or in its financial condition
or results of operations as reflected in its periodic reports. Other factors unrelated to the
performance of UEX that may have an effect on the price of the securities of UEX include the
following: the extent of analytical coverage available to investors concerning the business of UEX
may be limited if investment banks with research capabilities do not follow UEX’s securities;
lessening in trading volume and general market interest in UEX’s securities may affect an
investor’s ability to trade significant numbers of securities of UEX; and the size of UEX’s public
float and its inclusion in market indices may limit the ability of some institutions to invest in UEX’s
securities. If an active market for the securities of UEX does not continue, the liquidity of an
investor’s investment may be limited and the price of the securities of the Corporation may
decline. If an active market does not exist, investors may lose their entire investment in the
Company. As a result of any of these factors, the market price of the securities of UEX at any
given point in time may not accurately reflect the long-term value of UEX. Securities class-action
litigation has been brought against companies following periods of volatility in the market price of
their securities. UEX may in the future be the target of similar litigation. Securities litigation could
result in substantial costs and damages and divert management’s attention and resources.
Reliance on other companies as operators
Where another company is the operator and majority owner of a property in which UEX has an
interest, UEX is and will be, to a certain extent, dependent on that company for the nature and
timing of activities related to those properties and may be unable to direct or control such
activites.
The potential costs which could be associated with any liabilities not covered by
insurance or in excess of insurance coverage may cause substantial delays and require
significant capital outlays, adversely affecting UEX’s financial position
The nature of the risks UEX faces in the conduct of its operations are such that liabilities could
exceed policy limits in any insurance policy or could be excluded from coverage under an
insurance policy. The potential costs that could be associated with any liabilities not covered by
insurance or in excess of insurance coverage or compliance with applicable laws and regulations
may cause substantial delays and require significant capital outlays, adversely affecting UEX’s
financial position.
International Financial Reporting Standards (“IFRS”)
The use of IFRS for financial reporting in Canada will be applicable for the fiscal year beginning
January 1, 2011. The Company’s IFRS transition plan consists of three main phases – Scoping,
Analysis and Implementation. The Scoping phase involves a high-level analysis of the significant
accounting differences between IFRS and Canadian GAAP and determining the potential impact of
the new accounting standards on business areas such as information technology, internal controls
and disclosure controls. The Analysis phase involves a more comprehensive analysis of the
accounting standards, including the development of accounting policies and the quantification of
the conversion impact. The Implementation phase executes the changes identified in the Analysis
phase.
The Company has completed the Scoping phase, and both the Analysis and Implementation
phases are in progress. The Company has made an initial determination that no IFRS 1 optional
elections will be utilized. In addition, the Company has made an initial determination of which
accounting policies will be adopted under IFRS. The Company is still analyzing how IFRS will
26
impact financial statement disclosure and the options that are available. A more in-depth
discussion of the expected accounting changes follows after the transition plan summary.
The following table highlights some of the key activities in the transition plan and what has been
accomplished as of December 31, 2009.
Key Activity
Milestones
Status
Financial Statement Preparation
•
Identification of significant
accounting differences
• Selection of accounting policy
choices
• Selection of choices available
under IFRS 1 (first-time
adoption)
•
Financial statement format
• Changes in disclosure
Infrastructure
• Development of knowledge and
resources
•
IT impact assessment and
conversion
Control Environment
• Assessment of impact on ICFR
and DC&P
• Changes in processes to
accommodate IFRS
• Documentation requirements
Business Policy
Identification of major
differences and accounting
policy choices made by the
end of first quarter of 2010
Quantification and
development of disclosure to
occur through 2010
Identification of areas of major
accounting differences completed
Completed review of probable
accounting changes
Completed review of probable
utilization of IFRS 1 optional
elections
Detailed analysis required for
financial statement disclosure
options
Major knowledge training
completed by end of 2009;
new developments monitored
throughout 2010
IT systems ready to process
information in parallel in
2010
Formal course training completed
and more courses being attended
throughout 2010
Regular updates provided to the
audit committee
IASB activity being monitored on
ongoing basis
IT system ready to account for the
Company’s activities under both
Canadian GAAP and IFRS for 2010
Processes and documentation
to be complete by end of
2010
Impact assessment started
Processes and policies being
evaluated and amended to
accommodate accounting policy
choices
• Assessment of impact on capital
adequacy
Assessment to be complete
by mid-2010
Impact assessment to be
monitored throughout 2010
Financial Statement Impact – IFRS 1
The Company does not expect to use any of the IFRS 1 optional elections available to first time
adopters of IFRS.
IFRS – Accounting Policy Choices
To date, the Company has identified one accounting policy choice which is significantly different
from the Company’s current accounting policies. Under IFRS 6 Exploration for and Evaluation of
Mineral Resources, there are two options for the recognition and measurement of exploration and
evaluation expenditures. The Company is currently reviewing the option to expense exploration
and evaluation expenditures through the statement of operations as they are incurred. This would
be a departure from the Company’s current accounting practice of capitalizing mineral property
exploration costs until such time as the project to which they relate is put into commercial
production, sold, abandoned or the recovery of costs is determined to be unlikely. This may also
27
impact the recognition and measurement of future income taxes in accordance with IAS 12,
Income Taxes.
The Company is in the process of assessing the IFRS conversion adjustments, but does not
expect any significant changes from the adoption of the following IFRS:
•
•
•
•
IFRS 2 – Share Based Payments;
IAS 16 Property, Plant and Equipment;
IAS 36 Impairment of Assets; and
IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
Critical Accounting Estimates
The Company prepares its financial statements in accordance with Canadian Generally Accepted
Accounting Principles (“GAAP”), which require management to estimate various matters that are
inherently uncertain as of the date of the financial statements. Accounting estimates are deemed
critical when a different estimate could have reasonably been used or where changes in the
estimate are reasonably likely to occur from period to period, and would materially impact the
Company’s financial statements. The Company’s significant accounting policies are discussed in
the audited annual financial statements. Critical estimates inherent in these accounting policies
are discussed below:
Valuation of Mineral Properties - The amounts shown for mineral properties and deferred
exploration costs represent costs to date, and do not necessarily represent present or future
values, as they are entirely dependent upon the economic recovery of current and future
reserves. All acquisition, exploration, development and start-up costs are capitalized until such
time as the project to which they relate is put into commercial production, sold, abandoned or
recovery of costs is determined to be unlikely by management.
Asset Retirement Obligations - The Company’s mining, exploration and development activities
are subject to various environmental government regulations, including those for asset retirement
obligations. The Company’s judgements and estimates are made when estimating the discounted
future cash settlement of an asset retirement obligation. In some cases, these obligations could
be incurred many years from the date of estimate. These estimates may be revised as a result of
changes in government regulations, or as a result of escalation of exploration properties to
development or production stage.
Stock-based Compensation - UEX uses the Black-Scholes Option Pricing Model to determine
the fair value of options granted. Option pricing models require management to estimate and
input highly subjective assumptions including the expected future price volatility and the expected
life of the options. Changes in the subjective input assumptions can materially affect the fair
value estimate, and therefore the existing models do not necessarily provide a reliable single
measure of the fair value of the Company’s stock options granted.
Disclosure Controls and Procedures
The Company has established disclosure controls and procedures to ensure that information
disclosed in this MD&A and the related financial statements was properly recorded, processed,
summarized and reported to the Company’s Board and Audit Committee. The Company’s
certifying officers conducted or caused to be conducted under their supervision an evaluation of
the disclosure controls and procedures as required under Canadian Securities Administration
regulations, as at December 31, 2009. Based on the evaluation, the Company’s certifying officers
concluded that the disclosure controls and procedures were effective to provide a reasonable level
of assurance that information required to be disclosed by the Company in its annual filings and
other reports that it files or submits under Canadian securities legislation is recorded, processed,
summarized and reported within the time period specified and that such information is
accumulated and communicated to the Company’s management, including the certifying officers,
as appropriate to allow for timely decisions regarding required disclosure.
28
It should be noted that while the Company’s certifying officers believe that the Company’s
disclosure controls and procedures provide a reasonable level of assurance and that they are
effective, he does not expect that the disclosure controls and procedures will prevent all errors
and fraud. A control system, no matter how well conceived or operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system are met.
Internal Controls Over Financial Reporting
The Company’s certifying officers acknowledge that they are responsible for designing internal
controls over financial reporting, or causing them to be designed under their supervision in order
to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with Canadian GAAP.
There were no changes in these controls during the most recent interim period ending December
31, 2009 that had materially affected, or are reasonably likely to materially affect, such controls.
Based upon the Internal Control over Financial Reporting – Guidance for Smaller Public Companies by The
Committee of Sponsoring Organization of the Treadway Commission (COSO) framework, the Company’s
certifying officers, have evaluated or caused to be evaluated under their supervision the
effectiveness of the Company’s internal controls over financial reporting. Based upon this
assessment, management has concluded that as at December 31, 2009, the Company’s internal
control over financial reporting was effective to provide reasonable assurance regarding the
preparation of the Company’s financial statements in accordance with Canadian GAAP.
The internal controls over financial reporting were designed to ensure that testing and reliance
could be achieved. Management and the Board of Directors work to mitigate the risk of a material
misstatement in financial reporting; however, there can be no assurance that this risk can be
reduced to less than a remote likelihood of a material misstatement.
Caution Regarding Forward-Looking Statements
Statements contained in this document that are not historical facts are forward-looking statements and are
prospective. These statements appear in a number of different places in this Management Discussion and
Analysis, but principally under the headings “Overview” and “Outlook” above and can be identified by words
such as “estimates”, “projects”, “expects”, “intends”, “believes”, “plans”, or their negatives or other
comparable words. Forward-looking statements include statements regarding the outlook for our future
operations, plans and timing for the commencement or advancement of exploration activities on our
properties, statements about future market conditions, supply and demand conditions, forecasts of future
costs and expenditures, the outcome of any legal proceedings, and other expectations, intention and plans
that are not historical fact. Forward-looking statements are based on certain factors and assumptions
including expected economic conditions, uranium prices, results of operations, performance, and business
prospects and opportunities. UEX considers the factors and assumptions on which these forward-looking
statements are based to be reasonable at the time they were prepared, but cautions readers that these
assumptions may ultimately prove to be incorrect. Forward-looking statements by their nature necessarily
involve risks, uncertainties and other factors including without limitation, the risk that uranium price
fluctuations could adversely affect UEX, that UEX’s exploration activities may not result in profitable
commercial mining operations, that competition from other energy sources and public acceptance of nuclear
energy may affect UEX’s prospects, that competition in the uranium industry could adversely affect UEX, that
failure to obtain additional financing on a timely basis could cause UEX to reduce its interest in its properties,
that compliance with and changes to environmental and other regulatory laws could adversely affect UEX,
and other factors described herein under “Risks and Uncertainties” as well as other unanticipated and
unusual events. These and other factors could cause actual results to differ materially from future results
expressed or implied by such forward-looking statements. Consequently, all forward-looking statements
made in this Management Discussion and Analysis are qualified by this cautionary statement and there can
be no assurance that actual results or developments anticipated by UEX will be realized. For the reasons set
forth above, investors should not place undue reliance on forward-looking statements. Except as required by
applicable securities laws (and UEX’s disclosure policy), UEX disclaims any intention or obligation to update
or revise any forward looking statements whether as a result of new information, future events or otherwise.
29
Financial Statements of
UEX CORPORATION
Years ended December 31, 2009 and 2008
KPMG LLP
Chartered Accountants
PO Box 10426 777 Dunsmuir Street
Vancouver BC V7Y 1K3
Canada
Telephone (604) 691-3000
(604) 691-3031
Fax
www.kpmg.ca
Internet
AUDITORS' REPORT TO THE SHAREHOLDERS
We have audited the balance sheets of UEX Corporation as at December 31, 2009 and 2008 and the
statements of operations, comprehensive loss and deficit and cash flows for the years then ended.
These financial statements are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with Canadian generally accepted auditing standards. Those
standards require that we plan and perform an audit to obtain reasonable assurance whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.
In our opinion, these financial statements present fairly, in all material respects, the financial position
of the Company as at December 31, 2009 and 2008 and the results of its operations and its cash
flows for the years then ended in accordance with Canadian generally accepted accounting
principles.
KPMG LLP (signed)
Chartered Accountants
Vancouver, Canada
March 5, 2010
KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity.
KPMG Canada provides services to KPMG LLP.
UEX CORPORATION
Balance Sheets
December 31, 2009 and 2008
Assets
Current assets:
Cash and cash equivalents
Amounts receivable
Prepaid expenses
Equipment (note 3)
Mineral properties (note 4)
2009
2008
$
16,938,416
200,152
104,563
17,243,131
$
24,166,305
432,243
186,770
24,785,318
164,788
210,532
145,909,266
129,988,477
$ 163,317,185
$ 154,984,327
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities
$
694,925
$
5,283,373
14,829,975
15,058,296
138,144,108
37,050,195
(27,402,018)
147,792,285
124,699,739
29,324,721
(19,381,802)
134,642,658
$ 163,317,185
$
154,984,327
Future income taxes (note 5)
Shareholders' equity:
Share capital (note 6)
Contributed surplus (note 7)
Deficit
Nature of operations and going concern (note 1)
Commitments (notes 4 and 8)
Subsequent event (note 6(d))
See accompanying notes to financial statements.
Approved on behalf of the Board:
“Graham C. Thody”
Director
“Emmet McGrath”
Director
1
UEX CORPORATION
Statements of Operations, Comprehensive Loss and Deficit
Years ended December 31, 2009 and 2008
Expenses:
Amortization
Bank charges and interest
Donations
Filing fees and stock exchange
General and administration
Insurance
Legal and audit
Rent
Salaries and retiring allowance
Stock-based compensation (note 6(c))
Telephone
Travel and promotion
2009
2008
$
11,840
2,779
-
97,671
203,396
44,957
204,046
88,375
1,116,372
6,760,244
9,925
31,018
$
12,008
3,721
120,000
215,786
238,755
46,748
219,795
87,733
465,086
8,210,881
8,391
74,017
Loss before the undernoted items
(8,570,623)
(9,702,921)
Investment income
Write-down of mineral property
85,704
-
1,249,743
(435,360)
Loss before income taxes
(8,484,919)
(8,888,538)
Future income tax recovery (note 5)
464,703
84,544
Net loss and comprehensive loss for the year
(8,020,216)
(8,803,994)
Deficit, beginning of year
Deficit, end of year
(19,381,802)
(10,577,808)
$
(27,402,018)
$
(19,381,802)
Basic and diluted loss per share
$
(0.04)
$
(0.05)
Basic and diluted weighted average number of shares outstanding
190,161,338
183,662,888
See accompanying notes to financial statements.
2
UEX CORPORATION
Statements of Cash Flows
Years ended December 31, 2009 and 2008
Cash provided by (used for):
Operations:
Net loss for the year
Items not involving cash
Amortization
Future income tax recovery
Stock-based compensation
Write-down of mineral property
Changes in non-cash operating working capital:
Amounts receivable
Prepaid expenses
Accounts payable and accrued liabilities
Investments:
Mineral property expenditures
Purchase of equipment
Financing:
2009
2008
$
(8,020,216)
$
(8,803,994)
11,840
(464,703)
6,760,244
-
90,322
82,207
(107,990)
(1,648,296)
12,008
(84,544)
8,210,881
435,360
29,060
62,729
144,756
6,256
(18,841,980)
(44,867)
(18,886,847)
(27,766,842)
(47,263)
(27,814,105)
Common shares issued, net of share issuance costs
13,307,254
143,680
Decrease in cash and cash equivalents
(7,227,889)
(27,664,169)
Cash and cash equivalents, beginning of year
24,166,305
51,830,474
Cash and cash equivalents, end of year
$ 16,938,416
$
24,166,305
Supplementary information:
Interest received
Non-cash transactions:
Increase (decrease) in accounts payable and accrued
liabilities relating to mineral property expenditures
Decrease in amounts receivable relating to mineral
property expenditures
Non-cash stock-based compensation included
in mineral property expenditures
Increase in mineral properties due to future income taxes
Amortization included in mineral properties
See accompanying notes to financial statements.
$
102,755
$
1,332,728
(4,480,458)
141,769
977,271
361,456
78,771
435,262
650,701
1,399,010
517,443
114,997
3
UEX CORPORATION
Notes to Financial Statements
Years ended December 31, 2009 and 2008
1. Nature of operations and going concern:
The Company was incorporated under the Canada Business Corporations Act on October 2, 2001. On
October 23, 2001, the Company entered into an agreement with Pioneer Metals Corporation (Pioneer) and
Cameco Corporation (Cameco) to establish the Company as a public uranium exploration company. On
July 17, 2002, under a plan of arrangement with Pioneer, Pioneer transferred to the Company its uranium
exploration properties and all related assets, including the Riou Lake and Black Lake Projects. On the same
date, Cameco transferred its Hidden Bay uranium exploration property and certain related assets, in
exchange for shares of the Company.
The Company is in the business of exploring and developing its mineral properties and has not yet
determined whether its mineral properties contain ore reserves that are economically recoverable. The
recoverability of amounts shown for mineral properties is dependent upon the discovery of economically
recoverable ore reserves in its mineral properties, the ability of the Company to obtain the necessary
financing to complete exploration and development, and upon future profitable production or proceeds from
the disposition of its mineral properties. Based on the Board approved 2010 budgets of approximately $9
million for exploration and development and administrative costs, the Company has sufficient funding to
continue as a going concern.
2. Significant accounting policies:
(a) Basis of presentation:
These financial statements are stated in Canadian dollars and have been prepared in accordance with
Canadian generally accepted accounting principles (Canadian GAAP).
(b) Adoption of new accounting standards:
During the year, the Company adopted the following new accounting standards issued by the Canadian
Institute of Chartered Accountants (CICA):
(i) Goodwill and intangible assets:
On January 1, 2009, the Company adopted the new requirements of CICA Handbook Section 3064
Goodwill and Intangible Assets. This new accounting standard replaces Section 3062 Goodwill
and Other Intangible Assets. Section 3064 expands on the standards for the recognition,
measurement, presentation, and disclosure of goodwill subsequent to its initial recognition and
intangible assets. The adoption of this standard had no effect on these financial statements.
(ii) Credit risk and the fair value of financial assets and liabilities
On January 23, 2009, the CICA Emerging Issues Committee (EIC) issued EIC-173 Credit Risk and
the Fair Value of Financial Assets and Financial Liabilities. EIC-173 is effective for interim and
annual financial statements ending on or after January 20, 2009. Adoption of this guidance is to be
applied retrospectively without restatement. EIC-173 clarifies that an entity should take into
account its own credit risk and the credit risk of counterparties in determining the fair value of
financial assets and liabilities, including derivatives. The Company’s adoption of this abstract had
no effect on these financial statements.
4
UEX CORPORATION
Notes to Financial Statements
Years ended December 31, 2009 and 2008
2. Significant accounting policies (continued):
(b) Adoption of new accounting standards (continued):
(iii) Mining exploration costs:
In March 2009, the CICA Emerging Issues Committee issued EIC-174 Mining Exploration Costs.
This EIC abstract provides guidance related to the capitalization of exploration costs and
subsequent tests for recoverability and impairment of capitalized costs. This standard is effective
for financial statements issued after March 27, 2009. The Company’s adoption of this abstract had
no effect on these financial statements.
(iv) Financial Instruments:
Effective for fiscal years ending after September 30, 2009, the Company adopted the amendments
to CICA Handbook Section 3862 Financial Instruments - Disclosures during the year. The
amendments establish revised standards for the disclosure of financial instruments. This new
standard establishes a three-tier hierarchy as a framework for disclosing the fair value of financial
instruments based on the valuation inputs used.
(c) Use of estimates:
The preparation of financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenue and expenses
during the reporting period. Significant areas requiring the use of management estimates relate to the
valuation of mineral properties, determination of valuation allowances for future income tax assets and
assumptions used in determining the fair value of non-cash stock-based compensation. Actual
amounts may differ from such estimates.
(d) Cash equivalents:
Cash equivalents are highly liquid investments having a maturity of three months or less at the date of
acquisition and are readily convertible to contracted amounts of cash.
(e) Equipment:
Equipment is stated at cost less accumulated amortization. Amortization is provided on a declining-
balance basis over the expected useful lives of the assets, using the following rates:
Asset
Exploration equipment
Computer equipment
Furniture and fixtures
Rate
30%
30% - 100%
20%
In the year of acquisition, amortization is provided at one-half the declining balance rate.
5
UEX CORPORATION
Notes to Financial Statements
Years ended December 31, 2009 and 2008
2. Significant accounting policies (continued):
(f) Mineral properties:
All acquisition, exploration and development costs are capitalized until such time as the project to which
they relate is put into commercial production, sold, abandoned or the recovery of costs is determined to
be unlikely. Upon reaching commercial production, these capitalized costs are amortized over the
estimated ore reserves on a unit-of-production basis. For properties which do not yet have proven
reserves, the amounts shown represent costs to date and are not intended to represent present or
future values. The underlying value of all properties is dependent on the existence and economic
recovery of reserves in the future. All administrative costs are expensed in the year incurred.
(g) Asset retirement obligations:
The Company recognizes the fair value of a liability for an asset retirement obligation in the period in
which it incurs a legal obligation, if a reasonable estimate of fair value can be made, based on the
discounted estimated future cash settlement of an asset retirement obligation. The asset retirement
obligation is capitalized as part of the carrying amount of the associated long-lived asset and a liability is
recorded. This asset retirement cost will be depreciated over the life of the related asset. The liability is
accreted, through operating expense, over a period ending when the liability is finally settled in cash,
subject to annual adjustments for changes in estimates. The Company has assessed each of its
mineral projects and determined that no material asset retirement obligations exist as at December 31,
2009 and 2008.
(h) Financial instruments:
The Company’s financial instruments consist of cash and cash equivalents, amounts receivable and
accounts payable and accrued liabilities. Cash and cash equivalents are designated as held for trading
and carried at fair value, with the unrealized gain or loss recorded in the statement of operations as
interest income. Amounts receivable is classified as loans and receivables, and accounts payable and
accrued liabilities are classified as other financial liabilities, and recorded at amortized cost using the
effective interest rate method. In addition, any impairment of loans and receivables is deducted from
the amortized cost. The Company does not hold any derivative financial instruments.
(i) Stock-based compensation:
The Company has a share option plan which is described in note 6(c). The Company records all stock-
based payments using the fair value method.
Under the fair value method, stock-based payments are measured at the fair value of the consideration
received or the fair value of the equity instruments issued or liabilities incurred, whichever is more
reliably measurable, and are charged to operations over the vesting period. The offset is credited to
contributed surplus. Consideration received on the exercise of stock options is recorded as share
capital and the related contributed surplus is transferred to share capital.
6
UEX CORPORATION
Notes to Financial Statements
Years ended December 31, 2009 and 2008
2. Significant accounting policies (continued):
(j)
Income taxes:
Income taxes are accounted for under the asset and liability method. Under the asset and liability
method, future tax assets and liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets and liabilities and their
respective tax bases. Future tax assets and liabilities are measured using the substantively enacted tax
rates expected to apply when the asset is realized or the liability is settled. The effect on future tax
assets and liabilities of a change in tax rates is recognized in income in the period the substantive
enactment occurs. To the extent that the Company does not consider it more likely than not that a
future tax asset will be recovered, it provides a valuation allowance against the excess.
The future income tax benefit on eligible mineral property expenditures which are renounced to
investors due to the issuance of flow-through shares is charged to share capital at the time the tax
credit associated with the expenditures are renounced to shareholders, provided there is reasonable
assurance that the expenditures will be made.
(k) Earnings (loss) per share:
Basic earnings (loss) per share is calculated using the weighted-average number of common shares
outstanding and earnings (loss) available to shareholders. For all periods presented, earnings (loss)
available to shareholders equals reported earnings (loss). The treasury stock method is used to
calculate diluted earnings per share. However, outstanding options and warrants would have no dilutive
effects on basic loss per share for 2009 and 2008 due to the Company’s loss for the year.
(l) Variable interest entities:
The Company applies CICA Accounting Guideline 15, Consolidation of Variable Interest Entities (AcG-
15). AcG-15 prescribes the application of consolidation principles for entities that meet the definition of
a variable interest entity (VIE). An enterprise holding other than a voting interest in a VIE could, subject
to certain conditions, be required to consolidate the VIE if it is considered its primary beneficiary
whereby it would absorb the majority of the VIE’s expected losses, receive the majority of its expected
residual returns, or both. Management has determined the Company does not have any variable
interest entities for the years ended December 31, 2009 and 2008.
(m) Future accounting policies:
(i)
International Financial Reporting Standards (IFRS):
In February 2008, the Accounting Standards Board announced that Canadian publicly accountable
enterprises will be required to adopt IFRS effective January 1, 2011. As a result, the Company will
publish its first financial statements, prepared in accordance with IFRS, for the quarter ending
March 31, 2011. The Company will also provide comparative data on an IFRS basis, including an
opening balance sheet as at January 1, 2010.
While IFRS uses a conceptual framework similar to Canadian GAAP, there are significant
differences on recognition, measurement and disclosures. While the effects of IFRS have not yet
been fully determined, the Company has identified a number of key areas which are likely to be
impacted by changes in accounting policy and disclosures, including the accounting for mineral
properties and future income taxes.
7
UEX CORPORATION
Notes to Financial Statements
Years ended December 31, 2009 and 2008
2. Significant accounting policies (continued):
(m) Future accounting policies (continued):
(ii) Business combinations:
Effective January 1, 2011, the Company will adopt three new CICA accounting standards:
CICA Handbook Section 1582, Business Combinations which replaces CICA Handbook
Section 1581, Goodwill and Business Combinations, and establishes revised standards for the
recognition, measurement, presentation and disclosure of business acquisitions and aligns
Canadian GAAP with IFRS standards.
CICA Handbook Section 1601, Consolidated Financial Statements and CICA Handbook
Section 1602, Non-Controlling Interests, which replace Handbook Section 1600, Consolidated
Financial Statements, and establish revised standards for the preparation of consolidated
financial statements.
Adoption of these standards is expected to have no impact on the Company’s financial statements.
3. Equipment:
2009
Exploration equipment
Computer equipment
Furniture and fixtures
2008
Exploration equipment
Computer equipment
Furniture and fixtures
Cost
Accumulated
amortization
Net book
value
$ 313,198
261,503
12,883
$ 217,437
201,161
4,198
$
95,761
60,342
8,685
$ 587,584
$ 422,796
$ 164,788
Cost
Accumulated
amortization
Net book
value
$ 313,198
217,815
11,704
$ 176,397
153,614
2,174
$ 136,801
64,201
9,530
$ 542,717
$ 332,185
$ 210,532
8
UEX CORPORATION
Notes to Financial Statements
Years ended December 31, 2009 and 2008
4. Mineral properties:
The continuity of expenditures on mineral properties is as follows:
Project
Hidden Bay
Western Athabasca
Black Lake
Riou Lake
Northern Athabasca
Beatty River
Project
Hidden Bay
Western Athabasca
Black Lake
Riou Lake
Northern Athabasca
Beatty River
Balance
December 31,
2008
$
59,337,816
40,454,607
15,253,114
8,931,497
5,413,862
597,581
Exploration
and
development
expenditures
$
9,702,937
5,948,784
156,780
80,301
24,771
7,216
$
$ 129,988,477
$
15,920,789
$
Write-down
of mineral
property
Balance
December 31,
2009
-
-
-
-
-
-
-
$
69,040,753
46,403,391
15,409,894
9,011,798
5,438,633
604,797
$ 145,909,266
Balance
December 31,
2007
Exploration
and
development
expenditures
Write-down
of mineral
property
Balance
December 31,
2008
$
41,273,130
30,702,947
13,883,916
7,454,397
5,636,733
588,459
$
18,064,686
9,751,660
1,369,198
1,477,100
212,489
9,122
$
$
-
-
-
-
(435,360)
-
59,337,816
40,454,607
15,253,114
8,931,497
5,413,862
597,581
$
99,539,582
$
30,884,255
$
(435,360) $ 129,988,477
A summary of the company’s mineral property interests is as follows:
(a) Hidden Bay Project:
The Company’s 100%-owned Hidden Bay Project, including the Horseshoe, Raven and West Bear
Deposits, is located in the eastern Athabasca Basin of northern Saskatchewan, Canada.
(b) Western Athabasca Projects:
The Western Athabasca Projects, located in the western Athabasca Basin, which include the Kianna,
Anne and Colette Deposits, are ten joint ventures with the Company holding a 49% interest and AREVA
Resources Canada Inc. (AREVA) holding a 51% interest as at December 31, 2009 and 2008. The
Company is in the process of preparing joint venture agreements with AREVA.
The Kianna, Anne and Colette Deposits are subject to a royalty of US$0.212 per pound of U3O8 sold to
a maximum royalty of US$10,000,000.
9
UEX CORPORATION
Notes to Financial Statements
Years ended December 31, 2009 and 2008
4. Mineral properties (continued):
(c) Black Lake Project:
The Black Lake Project, located in the northern Athabasca Basin, is a joint venture with the Company
holding an 89.96% interest and AREVA holding a 10.04% interest as at December 31, 2009 and 2008.
(d) Riou Lake Project:
The Company holds a 100% interest in the Riou Lake Project located in the northern Athabasca Basin.
(e) Northern Athabasca Projects:
The Company holds a 100% interest in the Northern Athabasca Projects located in the northern
Athabasca Basin. During the year ended December 31, 2008 the Company decided to allow certain
mineral claims of the Northern Athabasca Projects to lapse and wrote off $435,360 of deferred mineral
property costs associated with those claims.
(f) Beatty River Project:
The Company holds an option with JCU (Canada) Exploration Company, Limited (JCU) to acquire a
25% interest in the Beatty River Project, located in the western Athabasca Basin, by funding $865,000
in exploration expenditures by December 31, 2011.
5.
Income taxes:
The tax effects of temporary differences that give rise to significant portions of the future tax assets and
liabilities at December 31, 2009 and 2008 are presented below:
Future tax assets:
Losses carried forward
Equipment
Share issuance costs
Future tax liabilities:
Mineral properties
Net future tax liabilities
2009
2008
$
$
1,055,763
39,813
214,356
1,309,932
335,762
36,616
347,775
720,153
(16,139,907)
(15,778,449)
$
(14,829,975)
$
(15,058,296)
At December 31, 2009, the Company has non-capital losses available for income tax purposes totaling
approximately $3,890,000 (2008 - $1,123,562) which may be carried forward to reduce future years’ taxable
income. These losses, if not utilized, will expire in 2029.
10
UEX CORPORATION
Notes to Financial Statements
Years ended December 31, 2009 and 2008
5.
Income taxes (continued):
A reconciliation of income taxes at statutory rates with the reported taxes for the years ended December 31,
2009 and 2008 is as follows:
2009
2008
Loss before income taxes
$
(8,484,919)
$
(8,888,538)
Statutory rates
30%
31%
Income tax recovery at statutory rates
Non-deductible expenses and permanent differences
Change in future corporate tax rates and tax rate differences
$
2,545,476
(2,029,130)
(51,643)
$
2,755,447
(2,546,800)
(124,103)
Future income tax recovery
$
464,703
$
84,544
6. Share capital:
(a) Authorized:
The authorized share capital of the Company consists of an unlimited number of common shares and
an unlimited number of preferred shares issuable in series, of which 1,000,000 preferred shares have
been designated Series 1 Preferred Shares.
(b) Issued and outstanding - common shares:
Number
of shares
Value
Balance, December 31, 2007
182,903,052
$
124,485,587
Issued in 2008:
For cash on exercise of stock options (note 6(c))
Contributed surplus transferred on exercise of stock options
800,000
-
143,680
70,472
Balance, December 31, 2008
183,703,052
124,699,739
Issued in 2009:
For cash by way of private placements, net of share
issuance costs
For cash on exercise of stock options (note 6(c))
Contributed surplus transferred on exercise of stock options
Future income taxes on share issuance costs
13,303,100
156,500
13,294,734
12,520
-
-
12,041
125,074
Balance, December 31, 2009
197,162,652
$
138,144,108
11
UEX CORPORATION
Notes to Financial Statements
Years ended December 31, 2009 and 2008
6. Share capital (continued):
(b) Issued and outstanding - common shares (continued):
On April 15, 2009, the Company issued 8,700,000 flow-through common shares at $1.00 per share for
gross proceeds of $8,700,000, pursuant to a brokered private placement. A commission of $348,000
was paid to the broker and $78,968 of additional issuance costs were incurred.
On December 17, 2009, the Company issued 3,628,100 flow-through common shares at $1.12 per
share and 975,000 non-flow-through common shares at $1.02 per share for aggregate gross proceeds
of $5,057,972, pursuant to a non-brokered private placement. The Company incurred issuance costs of
$36,270.
(c) Stock-based compensation:
Under the Company’s stock-based compensation plan, the Company may grant options to its key
employees, directors, officers and others providing services to the Company. The maximum number of
shares issuable under the plan is a rolling number equal to 10% of the issued and outstanding common
shares of the Company from time to time. Under the plan, the exercise price of each option shall be
fixed by the board of directors but shall not be less than the quoted closing market price of the shares
on the Toronto Stock Exchange on the date prior to the option being granted and an option’s maximum
term is 10 years. The shares subject to each option shall become purchasable at such time or times as
may be determined by the board of directors.
A summary of the status of the Company’s stock-based compensation plan as of December 31, 2009
and 2008, and changes during the years ended on these dates are presented below.
Outstanding, December 31, 2007
Granted during the year
Exercised during the year
Surrendered during the year
Outstanding, December 31, 2008
Granted during the year
Exercised during the year
Surrendered during the year
Outstanding, December 31, 2009
Exercisable, December 31, 2009
Number
of options
Weighted-average
exercise price
10,181,200
8,895,000
(800,000)
(7,225,000)
11,051,200
10,135,000
(156,500)
(6,375,000)
14,654,700
12,488,034
$
4.37
2.88
0.18
5.63
2.65
1.41
0.08
3.46
$
1.47
$
1.48
12
UEX CORPORATION
Notes to Financial Statements
Years ended December 31, 2009 and 2008
6. Share capital (continued):
(c) Stock-based compensation (continued):
As at December 31, 2009, the Company had a total of 14,654,700 stock options outstanding related to
director, employee and consultant options, the details of which are as follows:
Exercise prices
Number outstanding,
December 31, 2009
Weighted-average
remaining contractual life
$ 0.84
0.95
1.00
1.20
1.34
1.45
1.80
2.75
3.56
300,000
575,000
600,000
4,020,000
1,685,000
6,350,000
99,700
175,000
850,000
14,654,700
4.5 years
4.7 years
10.0 years
6.2 years
9.7 years
7.0 years
5.5 years
5.2 years
6.7 years
7.0 years
The estimated fair value of all options granted and vested during 2009 is $7,737,515 (2008 -
$9,609,891). Of this amount, included in deferred exploration and development expenditures for the
year is $977,271 (2008 - $1,399,010). The unamortized balance of stock-based compensation expense
for options that were not vested at December 31, 2009 is $1,022,703 (2008 - $1,064,004).
The weighted average fair value of options granted during the year ended December 31, 2009 was
$0.82 (2008 - $1.35) per option using the Black-Scholes option pricing model with the following
assumptions:
Volatility
Risk-free interest rate
Dividend yield
Expected life of options
(d) Flow-through shares:
2009
2008
91%
1.7%
-
3 years
69%
3.0%
-
3 years
In February 2010, the Company renounced $12,763,472 of tax deductions associated with qualified
expenditures incurred and to be incurred with flow-through funds, and the Company recorded a future
income tax liability of $3,446,137, with a corresponding reduction in share capital.
13
UEX CORPORATION
Notes to Financial Statements
Years ended December 31, 2009 and 2008
7. Contributed surplus:
The continuity of the Company’s contributed surplus is as follows:
Contributed surplus, beginning of year
Fair value of options granted and vested during the year
Transferred to share capital on exercise of options
$
29,324,721
7,737,515
(12,041)
$
19,785,302
9,609,891
(70,472)
Contributed surplus, end of year
$
37,050,195
$
29,324,721
2009
2008
8. Commitments:
The Company has an obligation under an operating lease for its office premises until November 30, 2010.
The future minimum lease payments during 2010 are $37,384.
Other commitments in respect of the Company’s mineral properties are disclosed in note 4.
9. Management of capital:
The Company’s objective when managing capital is to safeguard the Company’s ability to continue as a
going concern in order to pursue the exploration and development programs on its mineral properties. The
Company manages its capital structure, consisting of shareholders’ equity, and makes adjustments to it,
based on funds available to the Company, in order to support the exploration and development of its mineral
properties. Historically, the Company has relied exclusively on the issuance of common shares for its
capital requirements.
All of the Company’s cash and cash equivalents are available for exploration and development programs
and administrative operations. The Company has not changed its approach to capital management during
the current period, and is not subject to any external capital restrictions.
14
UEX CORPORATION
Notes to Financial Statements
Years ended December 31, 2009 and 2008
10. Management of financial risk:
The Company operates entirely in Canada and is therefore not subject to any significant foreign currency
risk. The Company’s financial instruments are exposed to limited liquidity risk, credit risk and interest rate
risk.
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due.
The Company manages liquidity risk through the management of its capital structure as outlined in note 9 of
these financial statements. Accounts payable and accrued liabilities are due within the current operating
period.
Credit risk is the risk of an unexpected loss if a third party to a financial instrument fails to meet its
contractual obligations. The Company’s exposure to credit risk includes cash and cash equivalents and
amounts receivable. The Company reduces its credit risk by maintaining its bank accounts at large
international financial institutions. The maximum exposure to credit risk is equal to the carrying value of
cash and cash equivalents and accounts receivable. The Company’s investment policy is to invest its cash
in highly liquid short-term interest-bearing investments that are redeemable 90 days or less from the original
date of acquisition. Amounts receivable consists mainly of GST receivable and office recoveries and are not
considered past due.
The Company is subject to interest rate risk on its cash and cash equivalents..
All financial instruments measured at fair value are categorized into one of three hierarchy levels, described
below, for disclosure purposes. Each level is based on the transparency of the inputs used to measure the
fair values of assets and liabilities:
Level 1 – Values based on unadjusted quoted prices in active markets that are accessible at the
measurement date for identical assets or liabilities;
Level 2 – Values based on quoted prices in markets that are not active or model inputs that are
observable either directly or indirectly for substantially the full term of the asset or liability; and
Level 3 – Values based on prices or valuation techniques that require inputs that are both unobservable
and significant to the overall fair value measurement.
The carrying values of amounts receivable, and accounts payable and accrued liabilities are a reasonable
estimate of their fair values because of the short period to maturity of these instruments.
Cash and cash equivalents are classified as held-for-trading and are therefore recorded at fair value. At
December 31, 2009 and 2008, the Company’s cash and cash equivalents of $16,938,416 (2008 -
$24,166,305) are classified as Level 1 within the fair value hierarchy.
15
Corporate Information
Corporate Office
Suite 1007 – 808 Nelson Street
Vancouver, British Columbia, Canada V6Z 2H2
Telephone: (604) 669-2349
(604) 669-1240
Fax:
uex@uex-coprporation.com
Email:
www.uex-corporation.com
Website:
Solicitors
Blake Cassels & Graydon LLP
Suite 2600 - 3 Bentall Centre
P.O. Box 49314
595 Burrard Street
Vancouver, British Columbia V7X 1L3
Auditors
KPMG LLP
777 Dunsmuir Street
Vancouver, British Columbia V7Y 1Q3
Transfer Agency
Computershare Investor Services Inc.
3rd Floor, 510 Burrard Street
Vancouver, British Columbia V6C 3B9
Directors & Officers
Graham C. Thody
President, Chief Executive Officer, Chairman and Director
Colin C. Macdonald
Director
Suraj P. Ahuja
Director
Mark P. Eaton
Director
Emmet McGrath
Director
R. Sierd Eriks
Vice-President, Exploration
E. Louie Zioulas
Vice-President, Finance and Corporate Secretary