UEX CORPORATION
Management’s Discussion and Analysis
For the year ended
December 31, 2018
TSX: UEX
Energetically Growing by Discovery, Innovation and Acquisition
www.uex-corporation.com
Message to Shareholders
The past year has been one of the busiest in recent memory for our Company. I am proud to report that UEX
achieved several impressive milestones. These include completing maiden resource estimates on two separate
projects, the vesting of a 60% interest in the Christie Lake Joint Venture, and successful recognition and
exploration of the cobalt-nickel potential at West Bear, where UEX was able to discover one of Canada’s first
cobalt resources at an extremely attractive discovery cost of $0.50/lb cobalt.
This past year has also seen tremendous changes to the uranium industry environment that should lead towards
the long-awaited uranium price recovery. Surprising was the rapid emergence of investor interest in the battery
metals industry.
Uranium Markets
The downturn in the uranium industry since the Fukushima incident in 2011 has impacted the uranium industry
much longer than many experts and analysts had originally anticipated and led to several years of oversupplied
uranium markets. Despite the fact that medium to long-term supply/demand fundamentals remain bullish for
uranium, prices have remained stubbornly low even considering the positive uranium spot price movement
since April.
There were significant signposts observed in 2018 suggesting the recovery of uranium prices to levels needed
to sustain the nuclear power industry may be approaching.
The volume of spot market purchases in 2018 reached an all-time high of 88.7 M lbs U3O8, up 81% from the
previous year setting an all-time annual volume record. In fact, a total of 55.8 M lbs U3O8 were sold after
Cameco’s McArthur River Mine suspension announcement. Financial speculators also re-entered the uranium
markets, offering investors direct exposure to uranium through the development of new physical uranium funds.
The biggest concern entering 2018 was the potential for several early retirements of select US reactors due to
economic pressure from cheap natural gas-powered electricity generation. In the second half of the year, many
US states were in the process of debating and enacting legislation to keep some of these reactors operating,
recognizing the need and value of carbon-free baseload electricity.
Nuclear power capacity continues to grow globally, with 57 new nuclear reactors under construction, led by
China, India, Russia and the UAE. Seven new reactors entered commercial production in China in 2018, and
Chinese nuclear power generation was up 18.6% from 2017. In mid-March, China announced the investment
of US$12 billion to build another four new reactors, the first new build announcement in that country since 2016.
Despite all these positive developments, the uncertainty surrounding the US Section 232 petition has caused
the entire nuclear industry to take pause. A decision on the petition is not expected until mid-year. American
utilities, whom collectively comprise 25% of uranium demand, have abstained from signing new uranium term
purchase contracts in order to ensure they assemble a uranium purchasing contract portfolio that meets any
potential new US regulatory requirements resulting from the upcoming Section 232 decision. Non-US utilities
purchasing decisions are also awaiting that decision, as fundamental changes to the uranium supply/demand
market for non-US produced uranium could occur should Section 232 result in quotas or tariffs being applied to
uranium imported into the United States.
Cobalt Markets
The explosion of investor interest in cobalt observed in 2017 and early 2018 has been the result of the structural
upheaval underway in the automobile industry due to the rapid growth in electrical vehicle sales. Up to now the
key consumer barrier to purchasing EVs has been the higher cost of battery-powered vehicles over traditional
gas-powered automobiles. With the rapid drop in battery manufacturing costs over the past couple of years,
these barriers are falling and EVs are expected to reach cost parity by 2024.
There has been a lot of confusing noise for investors in 2018 from battery manufacturers as they publicly stated
their wish of eliminating costly cobalt from their batteries. However, there are still significant battery safety and
stability challenges for manufacturers to overcome to make cobalt-free EV batteries that can operate with the
same safety and range dynamics as today’s cobalt-bearing batteries, never mind the need for several billions
of dollars in investments in new research and development. Experts such as Benchmark Minerals Intelligence
believe that even should the total amount of cobalt used in each EV battery decline on a per unit basis, the
anticipated growth in the number EV vehicle sales means that cobalt demand will still likely increase three-fold
between 2018 and 2030.
Approximately 99% of all cobalt mined is the result of bi-product production from either copper or nickel mines
making cobalt supply inelastic to changes in price. More concerning to cobalt users is the fact that almost 60%
of all cobalt is sourced from the Democratic Republic of Congo, a politically unstable country with an uncertain
mining investment environment and renown for questionable and unethical labour practices including conflict
minerals and child and slave labour.
What is clear is that the world is in dire need of ethically-sourced and secure supplies of cobalt from jurisdictions
outside the DRC. There is no doubt cobalt has become a strategic mineral in the race for dominance in the EV
world. Responsible sourcing and supply security of cobalt is expected to be a growing issue, as highlighted by
the joint decision of Ford, LG Chem, Huayou Cobalt and IBM to use blockchain technology to track ethical
sources of cobalt along the value chain from the DRC through to OEM EV manufacturing.
UEX is well positioned to be able to take advantage of the growing demand for both uranium and cobalt. In the
fourth quarter, we announced our maiden resource estimate at our Christie Lake Uranium Project and vested
our ownership interest at 60%. Since acquiring Christie, we have only tested the lowest of the lowest hanging
fruit. We are eagerly anticipating drilling the southwest end of the Yalowega Trend where there are no holes
testing the mineralized trend mere metres along strike from the Paul Bay Deposit. Nearby, on the parallel B
Conductor Trend, historic mineralized holes with uranium intersections occurring just below the unconformity
similar to the historic holes that led to our Ōrora Deposit discovery await follow-up during our summer drill
program.
Our portfolio of uranium assets is the envy of many of our peers. While our investors await the inevitable uranium
price recovery to occur, the team is hard at work growing our uranium resource base. Our existing deposits at
Horseshoe-Raven and Shea Creek provide shareholders with exposure to the next generation of developable
uranium deposits in the Athabasca Basin. In addition to the promising targets at Christie Lake, the Company
has excellent discovery potential for shallow basement-hosted uranium on our Hidden Bay Project.
The West Bear Cobalt-Nickel Deposit is one of the premier cobalt assets in Canada, and indeed North America.
This winter we embarked on an aggressive $4.25 million – 110 to 160 hole drill program to grow our cobalt and
nickel resources. Already the preliminary assay results we received has doubled the deposit’s strike length to
550 m and led us to re-examine the area underneath the existing West Bear Uranium Deposit, which is proving
to be prospective for hosting high-grade cobalt and nickel mineralization.
I believe that the work we are doing on our West Bear Project demonstrates that UEX is on the leading edge of
developing the Athabasca Basin into an emerging cobalt district in addition to its recognition as a world-class
uranium region. UEX possesses the unique understanding of this new style of cobalt-nickel deposit and holds
title to some of the most prospective, open pit-amenable land in the infrastructure-blessed eastern side of the
Basin. We have identified several high-priority cobalt-nickel targets that await drill testing. Being located in one
of the world’s top mining investment jurisdictions and the globe’s top mining policy district, we believe that West
Bear and our cobalt assets are well positioned to take advantage of the growing need for ethically-sourced,
reliable, and secure cobalt needed to fuel the world’s hunger for electrical vehicles.
We understand there are shareholders disappointed that the Company was unable to realize our goal of
maximizing the value of our cobalt assets in 2018. I am proud that the Company was able to move impressively
fast from the concept of testing West Bear’s value in November 2017 to exploration permitting, drilling, and to
possessing only the second NI 43-101 cobalt resource estimate in Canada in less than eight months.
Unfortunately, the cobalt price correction that occurred in July coupled with the sudden shift in analyst and
broker support for new cobalt equities meant that for at least a short period of time UEX is reluctant to execute
our valuation plan. Your Company remains committed to maximizing the value of our cobalt assets to the
maximum benefit of existing shareholders. Your Board is actively monitoring the cobalt investment environment
to determine when the time is right to forge ahead.
I look forward to reporting back to you the Company’s activities and successes in the coming months.
Roger Lemaitre
President & CEO
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
This Management’s Discussion and Analysis (“MD&A”) of UEX Corporation (“UEX” or the “Company”) for the year
ended December 31, 2018 is intended to provide a detailed analysis of the Company’s business and compares
its financial results with those of previous periods. This MD&A is dated March 20, 2019 and should be read in
conjunction with the Company’s audited consolidated financial statements and related notes for the year ended
December 31, 2018. The audited consolidated financial statements are prepared in accordance with International
Financial Reporting Standards (“IFRS”). Unless specified otherwise, all dollar amounts are in Canadian dollars.
Other disclosure documents of the Company, including its Annual Information Form, filed with the applicable
securities regulatory authorities in Canada are available at www.sedar.com.
Table of Contents
Introduction
1.
2. Exploration and Evaluation Update
3. Financial Update
4. Risks and Uncertainties
5. Disclosure Controls and Procedures
6.
7. Cautionary Statement Regarding Forward-Looking Information
Internal Controls over Financial Reporting
2
6
31
45
50
51
52
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
Introduction
Overview
UEX’s fundamental goal is to remain one of the leading global uranium and cobalt explorers and to advance our
portfolio of Athabasca Basin uranium and cobalt deposits and discoveries through the development stage to the
production stage. Since being listed on the Toronto Stock Exchange in 2002, UEX has pursued exploration on a
diversified portfolio of prospective uranium projects in three areas within the Athabasca Basin in Saskatchewan,
Canada. The Company is focusing its main efforts on four advanced projects, three in the eastern Athabasca
Basin and one in the western Athabasca Basin. Eastern Athabasca Basin advanced uranium projects include the
Horseshoe and Raven Project (“Horseshoe-Raven”, formerly a part of the Hidden Bay Project) that hosts the
Horseshoe and Raven Deposits and the 60% owned Christie Lake Project (“Christie Lake”) that hosts the Paul
Bay, Ken Pen, and Ōrora Deposits. The eastern Athabasca Basin advanced cobalt project is the 100%-owned
West Bear Cobalt-Nickel Deposit (“West Bear”, formerly part of the Hidden Bay Project), that hosts the West Bear
Cobalt-Nickel Zone and the West Bear Uranium Deposit. The western Athabasca Basin advanced project is the
49.1% owned Shea Creek Project (“Shea Creek”) that hosts the Kianna, Anne, Colette and 58B Deposits.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
2
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
UEX is involved in eighteen uranium projects located in the Athabasca Basin, the world’s richest uranium district,
which in 2017 accounted for approximately 22.0% of global primary uranium production. The Company’s uranium
projects include:
seven that are 100% owned and operated by UEX (Horseshoe-Raven, Hidden Bay, Laurie North, Riou
Lake, Christie West, Key West and Parry Lake),
one joint venture project with JCU (Canada) Exploration Company Limited (“JCU”) that is 60% owned
and operated by UEX (Christie Lake),
one joint venture with Orano Canada Inc. (“Orano”) and ALX Uranium (“ALX”) that is under option to and
operated by ALX Uranium (Black Lake),
eight projects joint-ventured with and operated by Orano (Western Athabasca Joint Venture projects
Shea Creek, Erica, Brander Lake, Alexandra, Nikita, Mirror River, Laurie and Uchrich),
one project joint-ventured with Orano and JCU that is operated by Orano (Beatty River).
Orano is part of the Orano group, one of the world’s largest nuclear service providers, and JCU is a private
Japanese company with significant investments in several uranium projects in Canada. ALX is a junior uranium
explorer who is listed on the TSX:V.
UEX is involved in one 100% owned cobalt-nickel exploration project located in the Athabasca Basin of northern
Saskatchewan. The West Bear Project was formerly part of UEX’s Hidden Bay Project and contains the West
Bear Cobalt-Nickel Deposit and the West Bear Uranium Deposit.
Since inception, UEX has been successful discovering and advancing uranium resources in the Athabasca Basin.
The Company has three 100% owned uranium deposits in the eastern Athabasca Basin (Horseshoe, Raven, and
West Bear), three 60% owned uranium deposits joint-ventured with JCU (Ken Pen, Paul Bay and Ōrora), and a
49.1% interest in four uranium deposits joint-ventured with Orano in the western Athabasca Basin. The following
charts summarize UEX’s ownership share of these mineral resources.
UEX Ownership of N.I. 43-101 Compliant Uranium Resources – All Projects Combined
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UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
N.I. 43-101 Mineral Resource Estimates – Uranium Resources
Deposit
Shea Creek (49.1% interest)
Kianna
Anne
Colette
58B
Total ‐ Shea Creek
Indicated Resources
Inferred Resources
(at 0.30% U3O8 Cut‐Off) (1)(2)(3)
(at 0.30% U3O8 Cut‐Off) (1)(2)(3)
Tonnes
Grade
(wt% U3O8)
U3O8
(lbs)
UEX Share
(lbs)
Tonnes
Grade
(wt% U3O8)
U3O8
(lbs)
UEX Share
(lbs)
1,034,500
564,000
327,800
141,800
2,067,900
1.526
1.991
0.786
0.774
1.484
34,805,000
24,760,000
5,680,000
2,417,000
67,663,000
17,088,385
12,156,541
2,788,738
1,186,687
33,220,841
560,700
134,900
493,200
83,400
1,272,200
1.364
0.880
0.716
0.505
1.005
16,867,000
2,617,000
7,780,000
928,000
28,192,000
8,281,275
1,284,882
3,819,786
455,625
13,841,567
Indicated Resources
Inferred Resources
(at 0.05% U3O8 Cut‐Off) (1)(4)(5)
(at 0.05% U3O8 Cut‐Off) (1)(4)(5)
Horseshoe‐Raven (100% interest)
Horseshoe
Raven
Total ‐ Horseshoe‐Raven
5,119,700
5,173,900
10,293,600
0.203
0.107
0.154
22,895,000
12,149,000
35,044,000
22,895,000
12,149,000
35,044,000
287,000
822,200
1,109,200
0.166
0.092
0.111
1,049,000
1,669,000
2,715,000
1,049,000
1,669,000
2,715,000
West Bear (100% interest)
78,900
0.908
1,579,000
1,579,000
Christe Lake (60% interest)
558,000
1.57
20,350,000
12,210,000
Indicated Resources
Inferred Resources
(at 0.2% U3O8 Cut‐Off) (1)(6)(7)
(at 0.2% U3O8 Cut‐Off) (1)((6)(7)
(1) The mineral resource estimates follow the requirements of National Instrument 43-101 – Standards of Disclosure for Mineral Projects
and classifications follow CIM definition standards.
(2) The Shea Creek mineral resources were estimated at a cut-off of 0.30% U3O8 and are documented in the Shea Creek Technical Report
with an effective date of May 31, 2013 which was filed on SEDAR at www.sedar.com on May 31, 2013.
(3) Certain amounts presented in the Shea Creek N.I. 43-101 report have been rounded for presentation purposes. This rounding may
impact the footing of certain amounts included in the tables above.
(4) The Horseshoe, Raven, and West Bear mineral resources were estimated at a cut off of 0.05% U3O8, and are documented in the
“Preliminary Assessment Technical Report on the Horseshoe and Raven Deposits, Hidden Bay Project, Saskatchewan, Canada” (The
Preliminary Assessment Technical Report”, the “PA” or the Horseshoe-Raven Report”) with an effective date of February 15, 2011 which
was filed on SEDAR at www.sedar.com on February 23, 2011.
(5) Certain amounts presented in the Horseshoe-Raven report have been rounded for presentation purposes. This rounding may impact
the footing of certain amounts included in the tables above.
(6) The Christie Lake mineral resources were estimated at a cut off of 0.2% U3O8, and are documented in the “Technical Report for the
Christie Lake Uranium Project, Saskatchewan, Canada” (The Christie Lake Technical Report with an effective date of December 13,
2018 which was filed on SEDAR at www.sedar.com on February 1, 2019.)
(7) Certain amounts presented in the Christie Lake Technical Report have been rounded for presentation purposes. This rounding may
impact the footing of certain amounts included in the tables above.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
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UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
On July 10, 2018, UEX announced the maiden cobalt and nickel resource estimate at the West Bear Cobalt-
Nickel Deposit located on the Company’s 100% owned West Bear Project. The cobalt and nickel resources are
summarized in the table below:
Mineral Resource Statement, West Bear Cobalt-Nickel Deposit, Saskatchewan
Grade
Contained Metal
Category
Quantity
Cobalt
Nickel
Cobalt
Nickel
Inferred
Tonnes
390,000
%
%
(lb)
(lb)
0.37
0.22
3,172,000
1,928,000
(1) The mineral resource estimates follow the requirements of National Instrument 43-101 – Standards of Disclosure for Mineral Projects
and classifications follow CIM definition standards.
(2) The West Bear Cobalt-Nickel Deposit mineral resources were estimated at a cut off of 0.023% Cobalt equivalent and are documented
in the UEX News Release of July 10, 2018 which was filed on SEDAR at www.sedar.com and has an effective date of July 6, 2018.
(3) Certain amounts presented in the West Bear Cobalt-Nickel Deposit Mineral Resource Statement outlined in the UEX News Release of
July 10, 2018 have been rounded for presentation purposes. This rounding may impact the footing of certain amounts included in the
tables above.
Mineral resources that are not mineral reserves do not have demonstrated economic viability. Further information
on each of these deposits and the mineral resource estimates presented above is available under the Christie
Lake, Western Athabasca Projects – Shea Creek, Horseshoe-Raven and West Bear sections of this MD&A.
Growth Strategy – UEX
To extract value for UEX shareholders from our West Bear Cobalt-Nickel Deposit to take advantage of
the rapid growth in the demand for cobalt due to the anticipated growth in electric vehicle manufacturing.
To plan and execute the exploration and evaluation work required to delineate and develop economic
uranium resources at Christie Lake.
To continue the exploration and evaluation work required to delineate and develop economic uranium
resources at Shea Creek.
To advance the evaluation/development process at our 100%-owned Horseshoe and Raven uranium
deposits to a production decision once uranium commodity prices have demonstrated a sustained
recovery from current spot and long-term prices.
To find new uranium deposits at the 100%-owned Hidden Bay Project and at the Western Athabasca
Projects with our joint-venture partner Orano.
To evaluate and make timely acquisitions of uranium and cobalt projects in favorable, low-cost
jurisdictions.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
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UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
Exploration and Evaluation Update
The following is a general discussion of UEX’s recent exploration and evaluation activities. 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.
Christie Lake Project
Located in the eastern Athabasca
Basin, 9 km northeast and along
strike of the McArthur River Mine.
Maiden resource estimate
announced on December 19, 2018 of
an inferred resource 588,000 t at an
average grade of 1.57% U3O8 for
20.35 M lbs U3O8.
UEX now has a 60% interest in the
project and has entered into a joint
venture with JCU. UEX will not be
pursuing the option to earn a 70%
interest in the Project.
Mineral Resources
Deposit
Paul Bay Deposit
Ken Pen Deposit
Ōrora Deposit
Total
Cut-Off
Grade
(% U3O8)
Tonnage
(t)
Resources
(million lbs
U3O8)
Average
Grade
(% U3O8)
0.2
0.2
0.2
338,000
149,000
102,000
588,000
13.49
3.44
3.41
20.35
1.81
1.05
1.53
1.57
(1) Mineral resources are not mineral reserves and have not demonstrated economic viability.
(2) The Christie Lake mineral resources were estimated at a cut off of 0.2% U3O8 and are documented in the “Technical Report for the
Christie Lake Uranium Project, Saskatchewan, Canada” (The Christie Lake Technical Report with an effective date of December 13,
2018 which was filed on SEDAR at www.sedar.com on February 1, 2019).
(3) Certain amounts presented in the Christie Lake Technical Report have been rounded for presentation purposes. This rounding may
impact the footing of certain amounts included in the tables above.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
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UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
On December 19, 2018, UEX announced the results of the maiden uranium resource estimate for the Christie
Lake Property pursuant to the requirements of National Instrument 43-101 “Standards for Disclosure for Mineral
Projects” (“NI-43-101”). UEX announced the filing of the technical report supporting the mineral resource on
February 1, 2019.
The Christie Lake Project is currently estimated to contain 588,000 tonnes grading 1.57% U3O8, which equates
to 20.35 million pounds of U3O8 using a cut-off grade of 0.2 percent U3O8.
The Technical Report is entitled: “Technical Report for the Christie Lake Uranium Project, Saskatchewan,
Canada” and was prepared by SRK Consulting (Canada) Inc. by Dr. Aleksandr Mitrofanov, P.Geo., supported by
Dr. David Machuca, P.Eng., and Mr. Glen Cole, P.Geo. of SRK Consulting (Canada) Inc., (each of whom is an
independent “Qualified Person” for the purposes of NI 43-101) and by Mr. Christopher Hamel, P.Geo., Chief
Geologist of UEX Corporation (who is a non-independent “Qualified Person”). The Technical Report is dated
February 1, 2019 and has an effective date of December 13, 2018.
The Technical Report is available on the Company’s website at www.uex-corporation.com and is available on
SEDAR at www.sedar.com.
Number of claims
Hectares
Christie Lake
6
7,922
Acres
19,576
UEX
Ownership %
60.00
The Christie Lake Project is currently 60% owned by UEX and 40% owned by JCU (Canada) Exploration
Company, Limited (“JCU”). The Company signed a Letter of Intent (“LOI”) on October 26, 2015 to earn up to a
70% interest in the project by making cash payments of $7.0 million and funding $15.0 million in exploration work
commitments over 5 years.
On January 16, 2016, UEX signed the definitive Option Agreement with JCU under which UEX earned its interest.
UEX earned a 10% interest in the project by making a $250,000 payment upon the signing of the LOI and making
a $1,750,000 payment on January 22, 2016. UEX increased its interest in the project to 30% by making a
$2,000,000 payment on December 22, 2016 and completing the required $2,500,000 of work in 2016. UEX earned
a 45% interest in the project on December 7, 2017 by making a cash payment of $1,000,000 and completing the
required $2,500,000 of work as required in 2017 under the Option Agreement. On November 13, 2018, UEX had
made another cash payment of $1.0 million and on November 16, 2018 UEX informed JCU that UEX has incurred
$10.0 million in cumulative exploration expenditures, which under the Option Agreement increased UEX’s interest
in the Project to 60%.
Both parties agreed that UEX had earned a 60% interest in the project. UEX informed JCU on December 5, 2018
that UEX was terminating the Option Agreement and that JCU owned 40% of the Project and UEX owned 60%.
UEX and JCU signed the Joint Venture Agreement on July 15, 2016 that sets the terms and conditions that will
govern all decisions related to the exploration, development and any future mining production from the Christie
Lake Project as well as the relationship between the Joint Venture participants. The Joint Venture Agreement
took effect upon the termination of the Option Agreement on November 13, 2018.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
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UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
As was the Company’s right, UEX terminated the Option Agreement on November 13, 2018 after completing all
requirements necessary to earn a 60% interest in the Christie Lake Project. UEX now owns a 60% interest in the
Project and JCU owns a 40% interest. UEX is no longer eligible to increase its interest in the Christie Lake Project
to 70% under the provisions of the Option Agreement. The Christie Lake Joint Venture Agreement, signed on
July 15, 2016, came into effect on November 13, 2018 and now governs the relationship between JCU and UEX
on the Project.
UEX believes that the P2 Fault trend that hosts the McArthur River mine may continue onto the Christie Lake
Project. Beyond the known mineralized zones, management believes that the full potential of this productive
corridor has only begun to be understood and that it holds very good potential for the discovery of new uranium
deposits and expansion of the historical resources. This belief has been bolstered by the discovery of the Ōrora
Zone in January 2017, located 500 m northeast and along strike of the Ken Pen Deposit. Many kilometres of
conductors exist on the southern half of the project which have never been drill tested and provide excellent
greenfields exploration potential proximal to producing uranium mines.
Further information on the geology of the Christie Lake Project is documented in the Technical Report for the
Christie Lake Uranium Project, Saskatchewan, Canada with an effective date of December 13, 2018, which was
filed on SEDAR at www.sedar.com on February 1, 2019.
2018 Exploration Program
In 2018, UEX completed 11 drill holes totaling
approximately 5,871 m with a budget of
approximately $2.2 million testing gaps in the
unconformity expression of the Yalowega Trend
along a 1.4 km length of the Trend northeast of
the Ken Pen Deposit.
In the first quarter, UEX completed a $1.29
million drill program consisting of approximately
3,234 m of drilling in 6 holes. The program tested
targets located along strike and northeast of the
Ōrora Deposit.
The winter program tested unconformity targets
northwest and up-dip of modest basement-
hosted uranium mineralization drilled by the
previous operator in the 1990s. Similar testing by
UEX in 2017 led to the discovery of the Ōrora
Deposit. While the Yalowega Structure that
hosts all the mineralization at Paul Bay, Ken Pen,
and Ōrora was encountered in all six holes, no
intersected.
significant mineralization was
several
However,
considered
features
anomalous
for uranium mineralization were
observed in drill core.
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UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
UEX completed a 5 hole (CB-130 – CB-134) – 2,637 m summer drill program that was focused on testing for the
southwest strike extension of the Ōrora and tested targets in the Shoreline Area within the 400 m gap between
the Ken Pen and Ōrora Deposits
Highlights from the summer program include hole CB-132 that intersected 0.37% U3O8 over 11.2 m from 450.0
to 461.2 m approximately 250 m southwest of the Ōrora Deposit, which included a subinterval of 1.21% U3O8
over 2.7 m from 458.5 to 461.2 m, which itself included a subinterval of 5.67% U3O8 over 0.5 m from 459.3 to
459.8 m.
All five summer drill holes encountered low to moderate-grade uranium mineralization between the Ken Pen and
Ōrora Deposits.
Maiden Resource Estimate
In December 2018, UEX completed and announced the results of its’ maiden resource estimate on the Christie
Lake Project. For additional information on this resource estimate, please see the subsection “Mineral Resources”
above.
2019 Exploration Program
On December 19, 2018, UEX announced that the Joint Venture partners had approved a $2 million 2019
exploration program and budget for the Christie Lake Project. Exploration activities will include a property-wide
120 line-km DC resistivity survey and a 4,800 m – 8 – 10 hole diamond drilling program that will target along strike
to the southwest of the Paul Bay Deposit and following up historic mineralization on the B Conductor where hole
CB94-48 encountered 0.25% U3O8 over 1.5 m approximately 20 m below the unconformity, which has never been
followed up.
JCU informed UEX that JCU will not be contributing its share of expenditures for the 2019 approved program and
will be diluting its interest in the project. UEX agreed to contribute JCU’s share of the 2019 expenditures and as
a result, UEX’s interest in the Christie Lake Project is expected to increase to approximately 63.27% and JCU’s
interest will likely decrease to approximately 36.73% should the 2019 program and budget be completed as
proposed.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
9
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
West Bear Project
Maiden resource estimate for the
West Bear Co-Ni Deposit announced
in July 2018 of 390,000 tonnes at
0.37% Co and 0.22% Ni.
Located east of
the West Bear
Uranium Deposit but does not itself
contain uranium.
The shallowest Co-Ni deposit
in
Canada near excellent infrastructure.
Open-pit
amenable
cobalt
as
mineralization
is currently defined
between 15-85 m depths and remains
open in all directions.
The presence of cobalt at West Bear
was not recognized or tested for by
previous explorers.
West Bear Cobalt-Nickel Deposit
Very high-grade cobalt was encountered in thirteen holes drilled by UEX over a 175 m by 75
m area between 2002 and 2005. Many of the 41 drill holes testing the Deposit during the 2018
winter drilling program are very high-grade and have expanded the size of the zone.
The maiden resource estimate at the West Bear Co-Ni Deposit was announced in July 2018 at
390,000 tonnes at 0.37% Co and 0.22% Ni for contained metal of 3,172,000 lbs cobalt and
1,928,000 lbs nickel.
The known Co-Ni mineralization remains open for expansion in all directions.
Many historical holes have been drilled in the area, but most do not intersect the structure that
hosts the Co-Ni mineralization. On the rare occasion when a historical hole actually tested the
structure, samples were often not analyzed for cobalt.
On January 9, 2019 UEX announced that drilling has commenced on the West Bear Property
with the objective of expanding the high-grade West Bear Co-Ni Deposit. The 2019 winter
exploration program will consist of approximately 17,000 m of drilling in approximately 110-160
holes utilizing two drill rigs and will focus on extending high-grade cobalt mineralization along
strike to the west.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
10
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
West Bear Uranium Deposit
Shallowest undeveloped uranium deposit in the Athabasca Basin
Near existing milling infrastructure and power lines
Short distance from year-round all-weather access by commercial airport and via Provincial
Highway 905
Mineral Resource Estimates
For details of the West Bear Resource estimate for the West Bear Uranium Deposit, please see the next section,
Mineral Resource Estimates, Horseshoe and Raven Project, as the uranium resources at the West Bear Uranium
Deposit were estimated as part of the Horseshoe-Raven Report.
The West Bear Co-Ni Deposit resource estimate was outlined in the UEX news release of July 10, 2018 prepared
by SRK Consulting (Canada) Inc. (“SRK Consulting”) and Mr. S. Bérnier, P.Geo., with an effective date of July 6,
2018. Details for the mineral resource estimates at a cut-off grade of 0.023% cobalt equivalent grades (“CoEq”)
as follows:
Mineral Resource Statement, West Bear Cobalt-Nickel Deposit, Saskatchewan
Grade
Contained Metal
Category
Quantity
Cobalt
Nickel
Cobalt
Nickel
Inferred
Tonnes
390,000
%
%
(lb)
(lb)
0.37
0.22
3,172,000
1,928,000
(1) The mineral resource estimates follow the requirements of National Instrument 43-101 – Standards of Disclosure for Mineral Projects
and classifications follow CIM definition standards.
(2) The West Bear Cobalt-Nickel Deposit mineral resources were estimated at a cut off of 0.023% Cobalt equivalent and are documented
in the UEX News Release of July 10, 2018 which was filed on SEDAR at www.sedar.com and has an effective date of July 6, 2018.
(3) Certain amounts presented in the West Bear Cobalt-Nickel Deposit Mineral Resource Statement outlined in the UEX News Release of
July 10, 2018 have been rounded for presentation purposes. This rounding may impact the footing of certain amounts included in the
tables above.
The mineral resource model is relatively sensitive to the selection of reported CoEq cut-off grade. The following
table illustrates the sensitivity to various cut-off grades. The reader is cautioned the figures presented in the table
should not be misconstrued as mineral resources but are presented to show the sensitivity of the block model
estimates with a conceptual open pit shell optimized to changes in CoEq cut-off grade.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
11
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
Global Block Model Quantities and Grade Estimates at Various Cobalt Equivalent Grade
West Bear Cobalt-Nickel Deposit
Cut-Off
Grade
CoEq
(%)
Volume/Quantity
Volume
Tonnage
(m3)
(tonnes)
0.010
0.020
0.023
0.025
0.030
0.035
0.040
0.050
0.060
0.070
0.080
0.090
0.100
139,013
138,722
138,653
138,601
138,294
136,724
133,539
129,814
121,668
113,880
105,772
98,529
93,811
393,406
392,582
392,387
392,240
391,371
386,928
377,915
367,373
344,321
322,279
299,334
278,837
265,484
Inferred Blocks
Grade
Co
(%)
0.37
0.37
0.37
0.37
0.37
0.37
0.38
0.39
0.42
0.44
0.47
0.50
0.52
Ni
(%)
0.22
0.22
0.22
0.22
0.23
0.23
0.23
0.24
0.25
0.26
0.28
0.29
0.30
CoEq
(%)
0.41
0.41
0.41
0.41
0.42
0.42
0.43
0.44
0.47
0.49
0.53
0.56
0.58
The sensitivity analysis demonstrates the high-grade nature of the deposit. When compared to the base case
resource estimate, over 96% of the contained cobalt still lies within the conceptual pit shell when cut-off grades
are increased to 0.09% CoEq (278,837 t at 0.50% Co and 0.29% Ni equaling 3.07 million pounds Co and 1.78
million pounds Ni).
Number of claims
Hectares
West Bear
24
7,983
Acres
19,726
UEX
Ownership %
100.00
The West Bear Property lands are 100% owned by UEX with the exception of Mineral Lease 5424 which is a joint
venture between UEX (77.575%), Empresa Nacional Del Uranio S.A. (7.680%), Nordostschweizerische
Kraftwerke A.G. (7.68%) and Encana (7.066%). West Bear was acquired from Cameco upon UEX’s formation in
2001 as part of the Hidden Bay Project, which established Cameco’s initial equity position in UEX.
UEX has elected to separate West Bear from the Hidden Bay Project due to its advanced stage of exploration
and development compared to the remainder of the original project lands and due to the fact that future exploration
focus will be on expanding cobalt-nickel resources instead of uranium resources. The West Bear Uranium
Deposit is located on the West Bear Project and has uranium resources that have been subject to advanced
studies including a Preliminary Feasibility Study ( https://uex-corporation.com/projects/west-bear/ ).
Historical Work
Exploration activities on the West Bear Property prior to UEX were conducted by three groups, one being Gulf
Minerals, one the Conwest Joint Venture, and the other group the Umpherville River Joint Venture which was led
by Noranda. The ownership interests of all three groups (other than the current minority interests in Mineral Lease
5424) were eventually consolidated by Cameco Corporation and Saskatchewan Mineral Development
Corporation (a predecessor of Cameco Corporation). Cameco’s interest was passed onto UEX as part of UEX’s
formation in 2001.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
12
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
In addition to the West Bear Co-Ni Deposit, the Property hosts one uranium deposit and several occurrences and
showings including the West Bear Uranium Deposit (“WBU Deposit”), the Pebble Hill Uranium Occurrence, the
Mitchel Lake Uranium Occurrences, and the Umpherville Uranium Occurrence. The WBU Deposit has been the
subject of several NI-43-101 resource reports and a pre-feasibility study commissioned by UEX (https://uex-
corporation.com/projects/west-bear/ ).
Exploration on different portions of the property commenced in the 1970’s by several explorers including Gulf
Minerals, Noranda, and the Conwest Exploration Joint Venture that continued through the 1980’s and led to the
discovery of the WBU Deposit and nearby uranium showings. Historical exploration efforts focused exclusively
on discovering classic unconformity uranium deposits of the Cigar Lake-style, which meant that drill holes tested
the intersection of graphitic pelites with the unconformity surface. Exploration drill holes rarely penetrated more
than 15 m below the unconformity surface.
Upon acquisition of the West Bear Project, UEX completed significant exploration work between 2002 and 2009
that included the definition of the WBU Deposit and the discovery and only partial definition of the West Bear
Cobalt-Nickel Deposit in thirteen drill holes.
Despite the large number of historical holes drilled in the West Bear area before UEX assumed ownership of the
property, the vast majority of these holes failed to test the West Bear Fault structure below its intersection with
the Athabasca Basin unconformity and thus did not adequately test the structure that hosts the cobalt-nickel
mineralization.
On the rare occasion when the West Bear Fault was intersected in historical holes below the unconformity, past
explorers such as Gulf Minerals often failed to assay samples for cobalt. UEX has identified several areas in the
vicinity of the West Bear Co-Ni Deposit and the WBU Deposit where very high concentrations of nickel are present
that were not assayed for cobalt.
At the end of 2018, the West Bear Co-Ni Deposit had been defined over a strike length of 250 m, ranges in
thickness from 1 m to 39 m and is located at vertical depths between 15 m and 85 m and dips between 5º and
20º to the south.
The WBU Deposit has been defined over a strike length of 530 m, ranges in width between 20 m and 70 m,
ranges in thickness from 0.1 m to over 15 m and is located at vertical depths between 15 m to 35 m. The WBU
Deposit is a classic cigar-shaped body similar to the Cigar Lake and McClean Lake deposits and is hosted at and
above the intersection of faulted graphitic metapelites with the unconformity with the overlying Athabasca Group
sandstone. For more details of the WBU Deposit including an estimate of the contained resources, please review
the latest technical report filed on SEDAR and on our website accessible from this link: https://uex-
corporation.com/projects/west-bear/
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
13
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
2018 Exploration Program
In March and April, UEX completed a 4,457 m – 41 hole drill program with the objective of expanding the West
Bear Cobalt-Nickel Deposit and completing a maiden resource estimate of the deposit.
Several high-grade cobalt-nickel intersections were intersected which expanded the deposit at least 55 m in the
down-dip direction and at least 10 m up-dip towards the unconformity. The West Bear Co-Ni Deposit remains
open for expansion down dip and along strike to the east and west.
Significant assay intersections received from the winter program are outlined in the table below:
Table: Assay Results of 2018 Winter Program – West Bear Cobalt-Nickel Deposit
Hole
WBC-001
including
WBC-002
including
WBC-003
WBC-004
WBC-005
including
and
WBC-006
including
WBC-007
including
WBC-008
including
WBC-009
including
WBC-010
including
or
and
WBC-011
including
WBC-012
including
WBC-013
WBC-014
including
WBC-023
including
WBC-024
including
WBC-025
including
and
WBC-026
including
Depth
From (m)
27.1
46.0
36.0
55.0
57.5
63.0
55.0
31.5
39.0
44.0
30.0
40.5
27.0
29.0
27.0
47.0
36.0
57.5
62.0
40.5
40.5
40.5
67.5
49.0
70.0
73.5
77.0
67.0
24.0
42.8
45.0
52.0
28.5
30.0
38.5
39.0
39.0
28.5
30.0
To (m)
58.0
56.5
41.0
61.0
60.0
88.5
84.0
52.0
41.5
50.0
42.0
41.0
35.5
30.0
57.0
48.0
46.1
67.0
65.0
70.5
52.0
44.0
69.0
79.5
74.5
96.0
85.0
69.0
51.5
43.5
67.0
53.5
32.0
30.7
76.5
44.0
40.0
37.5
31.0
Core Length
(m*)
30.9
10.5
5.0
6.0
2.5
25.5
29.0
20.5
2.5
6.0
12.0
0.5
8.5
1.0
30.0
1.0
10.1
9.5
3.0
30.0
11.5
3.5
1.5
30.5
4.5
22.5
8.0
2.0
27.5
0.7
22.0
1.5
3.5
0.7
38.0
5.0
1.0
9.0
1.0
Cobalt
(wt%t)
0.78
2.00
0.18
0.59
1.37
0.02
0.02
0.73
1.14
1.79
0.11
1.91
0.17
0.69
0.07
0.74
0.04
1.26
3.78
0.28
0.56
1.64
0.87
0.04
0.16
1.78
4.90
0.02
0.12
2.37
0.14
1.08
0.13
0.53
0.17
1.05
4.54
0.20
1.21
* True widths are estimated to be 90-95% of core lengths
t Composite assays calculated using a cut-off grade of 0.01% Co
Nickel
(wt%)
0.53
1.26
0.16
0.51
1.02
0.04
0.08
0.36
0.47
0.72
0.15
1.08
0.13
0.32
0.08
0.43
0.08
0.59
1.47
0.23
0.28
0.58
1.26
0.07
0.14
1.06
2.08
0.06
0.11
1.59
0.17
1.18
0.14
0.54
0.12
2.02
1.38
0.19
0.78
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
14
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
This summer, UEX reviewed most of the available drill core and historical geological records from the West Bear
Project to validate cobalt drill targets on several other areas on the property that the exploration team has identified
as prospective for hosting additional cobalt-nickel zones.
On March 7, 2018, UEX entered into a purchase agreement with Denison Mines Corp. (“Denison”) to acquire a
single 890 ha claim which was incorporated into the West Bear Project. UEX made a cash payment of $11,000
to aquire a 100% interest in the property and granted a 1.5% net smelter return royalty to Denison which can be
purchased anytime for a cash payment of $950,000. This claim partially completes a gap within UEX’s land claim
holdings in the West Bear area.
Map of Winter Drilling and Assay Results in 2018 – West Bear Cobalt-Nickel Deposit
In July 2017, three non-core Hidden Bay claims (prior separation of claims that led to the formation of the West
Bear Project) were allowed to expire. These claims were staked to expand the property in 2015, but no exploration
work was completed on these claims prior to their expiry. UEX successfully disputed the termination of these
claims with the Saskatchewan government and these three claims were re-instated. Two of these claims have
been transferred to the West Bear Project.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
15
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
2019 Exploration Program
In early January, UEX announced it had commenced a $4.25 million 17,000 m 110-160 drill hole program at West
Bear with the objective of expanding the size of the West Bear Cobalt-Nickel Deposit (the “Deposit”) and extending
cobalt mineralization along strike to the west.
The drilling program is expected to continue until early to mid-April. The Company expects that final assay results
from the 2019 program will be received by mid-May, although assay results are expected to be received
throughout the first quarter of 2019.
Highlights from the first batch of assay results received from the 2019 program in February, include composite
assay grades from WBC-044 averaging 2.94% cobalt and 2.08% nickel over a 4.5 m core length between 68.0
m and 72.5 m and 1.94% cobalt and 3.68% nickel over 11.0 m between 40.5 m and 51.5 m. Both of these
intervals were located within a wider mineralized interval containing 0.72% cobalt and 1.06% nickel over 50.0 m
core length between 24.0 m and 74.0 m, the second widest mineralized interval encountered at West Bear.
Hole WBC-046 returned the widest mineralized interval at the West Bear Co-Ni Deposit, a 52.0 m intersection
averaging 0.53% Co and 0.36% Ni from 27.0 m to 79.0 m that included two high-grade subintervals, the first
assayed 1.65% Co and 0.75% Ni over 2.0 m from 27.0 m to 29.0 m and the second subinterval, assayed 2.17%
Co and 1.07% Ni over 9.0 m from 50.5 m to 59.5 m.
Hole WBC-042 returned 20.5 m of mineralization averaging 0.55% Co and 0.25% Ni between 22.5 m and 43.0 m
that included a subinterval of 1.90% Co and 0.57% Ni over 5.5 m from 36.0 m to 41.5 m.
Holes WBC-043 and WBC-045 were drilled 200 m along strike to west of the West Bear Co-Ni Deposit as defined
by the 2018 drilling program and the current resource estimate as outlined in the July 10, 2018 maiden resource
estimate (see UEX News Release dated July 10, 2018). WBC-043 intersected 0.12% Co and 0.31% Ni over 13.8
m between 24.7 m and 38.5 m. Hole WBC-045 encountered 20.5 m of 0.04% Co and 0.14% Ni between 25.5
and 46.0 m.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
16
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
Based upon the dip of the mineralization and dip angle of the drill holes, true widths are expected to be 90-95%
of core lengths.
UEX also completed a regional geophysical exploration program on other parts of the West Bear dome comprised
of 118.4 line kilometers of linecutting and 102.5 kilometers of MAXMIN horizontal-loop EM to refine drill targeting
on cobalt targets in the West Bear area.
Horseshoe and Raven Project
Two known deposits: Horseshoe and
Raven.
Proximal to uranium mills, year-round
access by road and air, electric
transmission lines transect the
property.
Two of the shallowest deposits in the
Athabasca Basin ranging from 50 – 450
m depth exclusively hosted in
competent basement rocks with no
sandstone cover and can be mined
using conventional hard rock mining
techniques.
July 2016 metallurgical testing of
Horseshoe and Raven Deposit
mineralization indicates the deposits
could be amenable to heap leaching
extraction.
In December 2016, UEX received the
results of a positive scoping study
determining the viability of a heap-
leaching operation at Horseshoe and
Raven.
Cameco’s Rabbit Lake Mill (including Eagle Point),
currently on care and maintenance, has produced
over 203.3 million pounds of U3O8 to date. (1)
Orano’s McLean Lake JEB Mill has produced over
69 million pounds of U3O8 to date and is currently
being used to process Cigar Lake ore. (2)
(1) Source: https://www.cameco.com/businesses/uranium-operations/canada/rabbit-lake
(2) Source: http://mining.areva.com/EN/canada-119/orano-canada-incactivitiesoperations-partnerships-
and-overviews.html
Number of claims
Hectares
Horseshoe & Raven
1
4,486
Acres
11,085
UEX
Ownership %
100.00
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
17
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
The Horseshoe and Raven Project (“Horseshoe-Raven”) was acquired from Cameco upon UEX’s formation in
2001 as part of the Hidden Bay Project, which established Cameco’s initial equity position in UEX.
UEX has elected to separate Horseshoe-Raven from the Hidden Bay Project due to its advanced stage of
exploration and development compared to the remainder of the original project lands. Horseshoe-Raven has
significant uranium resources that have been subject to advanced studies including a Preliminary Assessment
and a heap leach scoping study.
Horseshoe and Raven Deposits
In 2011, a positive PA was completed using a commodity price of US$60/lb U3O8 – see discussion below.
Very shallow undeveloped uranium resource in the Athabasca Basin amenable to conventional mining
techniques.
Located 4 km from Cameco’s Rabbit Lake Mill and 22 km from Orano’s McClean Lake Mill.
Existing power line supplying Rabbit Lake Mill crosses over the deposits.
Year-round all-weather access by commercial airport and via Provincial Highway 905.
In July 2016, preliminary metallurgical testing indicated that the two deposits may be amenable to heap
leach processing.
In December 2016, a scoping study of the Horseshoe and Raven Deposits that considered heap leach
extraction was completed. The objective of the study was to determine whether heap leach processing
was as economically viable as the conventional tank leach process considered in the 2011 PA. The
results of the scoping study were positive and further investigation is warranted.
Mineral Resource Estimates
The current technical report, “Preliminary Assessment Technical Report on the Horseshoe and Raven Deposits,
Hidden Bay Project, Saskatchewan, Canada” (the “Preliminary Assessment Technical Report”, the “PA” or the
“Horseshoe-Raven Report”), prepared by SRK Consulting (Canada) Inc. (“SRK Consulting”) and G. Doerksen,
P.Eng., L. Melis, P.Eng., M. Liskowich, P.Geo., B. Murphy, FSAIMM, K. Palmer, P.Geo. and Dino Pilotto, P.Eng.,
with an effective date of February 15, 2011 was filed on SEDAR at www.sedar.com on February 23, 2011. Details
for the mineral resource estimates at a cut-off grade of 0.05% U3O8 as follows:
Deposit
Horseshoe
Raven
West Bear(1)
TOTAL(2)
Indicated
Tonnes
Grade
U3O8 (%)
U3O8
(lbs)
5,119,700
5,173,900
78,900
0.203
0.107
0.908
22,895,000
12,149,000
1,579,000
Inferred
Tonnes
Grade
U3O8 (%)
287,000
822,200
0.166
0.092
-
-
U3O8
(lbs)
1,049,000
1,666,000
-
10,372,500
0.160
36,623,000
1,109,200
0.111
2,715,000
(1) Mineral resource estimates for the West Bear Deposit are located on the Hidden Bay Project but are included in this table as
they were estimated, evaluated, and included within the Horseshoe-Raven Report.
(2) The mineral resource estimates follow the requirements of National Instrument 43-101 – Standards of Disclosure for Mineral
Projects and classifications follow CIM definition standards.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
18
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
The PA is preliminary in nature and includes inferred mineral resources that are considered too speculative
geologically to have economic considerations applied to them that would enable them to be categorized as mineral
reserves. There is no certainty that the preliminary economic assessment will be realized. Mineral resources that
are not mineral reserves do not have demonstrated economic viability.The PA found the economics of mining the
Horseshoe and Raven deposits to be positive and, based on a spot price of US$60 per pound of U3O8, reported
undiscounted earnings before interest and taxes (“EBIT”) of $246 million, a pre-tax net present value (“NPV”) at
a 5% discount rate of $163 million and an internal rate of return (“IRR”) of 42%.
Projects in the mining sector have experienced rising costs, including rising capital and operating costs, during
the past few years. The price of uranium has declined since the date of the PA which could negatively impact the
results of the PA. Projects in the mining sector have also experienced significant fluctuations in costs, which
could impact EBIT, NPV and IRR which have been calculated based upon historical costs. Accordingly, readers
should bear these factors in mind when reading the PA and should not place undue reliance on the PA.
The PA recommended the Horseshoe and Raven deposits be advanced to a preliminary feasibility level.
The PA for the Horseshoe and Raven Deposits (see discussion above) also recommended that the West
Bear Deposit be advanced to a preliminary feasibility level along with the Horseshoe and Raven Deposits.
Heap Leach Potential
In July 2016, UEX contracted SGS Lakefield Laboratories to undertake a metallurgical study of mineralization
from the Raven and Horseshoe Deposits. The study consisted of two columns crushed to both 12.7 mm and 6.35
mm and one column was loaded with the 2011 test material crushed to 6.35 mm.
The column leach tests averaged 98% uranium recovery over a 60-day leaching period and for the newly collected
material crushed to 12.7 mm 95% recovery was achieved after 28 days of testing. We believe that the results of
the column leaching test program demonstrate that the Horseshoe and Raven Deposits are promising candidates
for heap leach uranium processing. Following the column leach tests, a scoping study of the project incorporating
heap leaching was undertaken. The Company was pleased with the findings of this study and will be
contemplating the next steps of the development process once uranium markets signal a price recovery is
underway.
2017 and 2018 Activities
UEX did not conduct an exploration drilling program at Horseshoe-Raven in 2017 and 2018.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
19
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
Hidden Bay Project
Proximal to uranium mills, year-round
access by road and air, electric
transmission lines transect the
property.
Competitive advantage due to
extensive historic core library and large
historic drilling database:
o Have identified new targets for
basement-hosted uranium & cobalt
mineralization.
Fourteen high-priority areas identified
for additional exploration focusing on
basement-hosted uranium deposits.
Over 198 km of conductor trends and
1,880 drill holes that barely tested
basement structure where the new
generation of Athabasca uranium
deposits are located.
Covered by 0 to 175 m of Athabasca
Sandstone.
Cameco’s Rabbit Lake Mill (including Eagle Point),
currently on care and maintenance, has produced
over 203.3 million pounds of U3O8 to date. (1)
Orano’s McLean Lake JEB Mill has produced over
69 million pounds of U3O8 to date and is currently
being used to process Cigar Lake ore. (2)
(1)
(2)
Source: https://www.cameco.com/businesses/uranium-operations/canada/rabbit-lake
http://mining.areva.com/EN/canada-119/orano-canada-incactivitiesoperations-partnerships-
and-overviews.html
Number of claims
Hectares
Acres
UEX
Ownership %
Hidden Bay
44
51,124
126,330
100.00
Hidden Bay, along with the Horseshoe and Raven Project and West Bear Project, was acquired from Cameco
upon UEX’s formation in 2001 establishing Cameco’s initial equity position in UEX.
The Hidden Bay Project is comprised of the Tent-Seal, Telephone-Shamus, Rabbit West, Wolf Lake, Rhino, and
Dwyer target areas. The Hidden Bay Property originally included the Horseshoe-Raven Project and West Bear,
which were separated from the Hidden Bay Project due to those projects more advanced stage of exploration
and development and in the case of West Bear, the focus on cobalt as an exploration target.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
20
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
In July 2017, three non-core Hidden Bay claims lapsed. These claims were staked to expand the property in 2015,
but no exploration work was completed on these claims. UEX successfully disputed the termination of these
claims with the Saskatchewan government and these three claims were re-instated in April 2018. Two of these
claims have been transferred to the West Bear Project.
In December 2017, UEX acquired 14 claims totaling 5,782 hectares via staking. The majority of these claims
were staked between the Dwyer Lake and Wolf Lake target areas, and closed the gap between the north and
south claim blocks. Claims were also acquired by staking in the Hidden Bay Landing area to cover the extension
of a known electromagnetic conductor trend.
In December 2017, 19 claims totaling 5,488 hectares were removed from the Hidden Bay Project lands and used
to form the West Bear Project, which hosts both the West Bear Co-Ni Deposit and the WBU Deposit.
Basement Targeting at Hidden Bay
Work completed between 2015 and 2018 has confirmed that previous operators on the Hidden Bay Project
focused primarily on testing unconformity targets with little effort expended on testing basement targets at depths
below the unconformity where the Millennium, Gryphon and Roughrider basement-hosted deposits were found.
In the western half of the Hidden Bay property where Athabasca sandstone cover is present, less than 25% of
the historical drilling extended deep enough below the unconformity to test for basement uranium mineralization
potential.
UEX’s existing unconformity-focused exploration database confers a substantial competitive advantage, as it can
be used to generate high-quality basement targets with limited capital outlay. Substantial investment in
geophysics, prospecting and drilling would be required to obtain a fraction of the information that UEX already
possesses and is using to vector toward basement-hosted deposits.
2018 Exploration Program
In 2018, UEX completed a review of the geological database and historical drill core to further refine targets to
drill test for shallow basement-hosted uranium mineralization, similar to small programs completed in 2016 and
2017. UEX has currently identified over 14 high-priority targets that have uranium mineralization or strong
geochemical enrichments and/or hydrothermal that requires follow-up exploration drilling in future exploration
programs.
2019 Exploration Program
UEX intends to complete final reviews of historical drill core to identify potential targets for basement-hosted
uranium and cobalt in several other areas across the Project in the summer of 2019 and an exploration drill
program on Project is expected to be undertaken in the winter of 2020.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
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UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
Western Athabasca Projects (“WAJV”) – Overview
Eight separate joint ventures:
o UEX 49.1%, Orano 50.9% on three of
the joint ventures including Shea
Creek.
Flagship project: Shea Creek Project
o Four deposits: Kianna, Anne,
Colette & 58B.
2019 exploration budget of $3 million.
o UEX has elected to dilute its interests
in the early stage Alexandra and
Nikita Projects in 2019.
Orano’s former Cluff Lake Mine
produced over 62 million pounds of
U3O8 during its successful 22 years
of operation. *
* Source: http://www.saskmining.ca/commodity-
info/Commodities/38/uranium.html
Western Athabasca
Projects
Number of
claims
Hectares
Acres
Project
Operator
UEX
Ownership %
Orano
Ownership %
Alexandra
Brander Lake
Erica
Laurie
Mirror River
Nikita
Shea Creek
Uchrich
Total
4
9
20
4
5
6
18
1
67
8,783
13,993
36,992
8,778
17,400
15,131
32,962
2,263
21,703
34,577
91,409
21,691
42,996
37,390
81,451
5,592
136,302
336,809
Orano
Orano
Orano
Orano
Orano
Orano
Orano
Orano
39.1957
49.0975
49.0975
32.9876
32.3354
22.5388
49.0975
30.4799
60.8043
50.9025
50.9025
67.0124
67.6646
77.4612
50.9025
69.5201
In 2004, UEX entered into an agreement with Cogema (predecessor of AREVA, in turn predecessor to Orano) to
fund $30 million of exploration costs in exchange for a 49% interest in the Western Athabasca Projects, which
included Shea Creek. UEX successfully met its funding target and earned its 49% interest in 2007. The current
approximate 49.1% ownership interest for three of the eight projects reflects additional amounts funded 100% by
UEX under the WAJV 2013 Option Agreement dated April 4, 2013 (see discussion below).
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
22
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
In February 2018, UEX received notification that our WAJV partner AREVA Resources Canada Inc. changed their
name to Orano Canada Inc. (“Orano”).
The 2018 WAJV exploration programs had a combined budget of $2.8 million (Nikita - $2.2 million and Alexandra
- $600,000) and were funded by Orano. UEX elected not to participate in the 2018 programs at both projects.
The Company decided it was in shareholders’ best interests to employ its exploration capital on the Christie Lake
and West Bear Projects and not fund these early grassroots exploration projects.
The decision not to fund our share of the proposed 2018 exploration programs did not have an impact on UEX’s
ownership interest in the other WAJV projects, including the Company’s ownership of the existing uranium
resources at the Shea Creek Project which remains at 49.0975%.
UEX’s ownership interest in the Shea Creek, Erica, and Brander Lake Projects remain at 49.0975% as of
December 31, 2018.
WAJV 2013 Supplemental Option Agreement
Pursuant to this agreement with Orano dated April 4, 2013, UEX had the option to increase its ownership interest
in the Western Athabasca Projects, which includes Shea Creek, to 49.9% through the expenditure by UEX of an
aggregate of up to $18.0 million (the “Additional Expenditures”) by December 31, 2018. For further details on the
terms of this agreement, please refer to the 2018 Annual Information Form, which is available at www.sedar.com.
Total expenditures of approximately $2.0 million relating to this agreement were incurred in 2013 with exploration
work completed in December 2013 and minimal costs were incurred in early 2014. This increased UEX’s
ownership interest each of the WAJV projects by approximately 0.1% to 49.1%.
Due to uranium market conditions, the Company allowed the Supplemental Option to lapse on December 31,
2018. UEX has no intention to abandon these projects.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
23
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
Western Athabasca Projects – Shea Creek
Four known deposits – Kianna, Anne,
Colette and 58B, distributed along a
3 km strike-length at the north end of
the 33 km Saskatoon Lake Conductor
(“SLC”).
2015 drilling near SHE-02 to follow-up
historical uranium mineralization
outlined a previously unknown
hydrothermal clay alteration zone that
will require follow-up drilling in future
programs.
UEX owns 49.0975% equity in the Shea
Creek deposits.
Shea Creek – Colette, 58B, Kianna and Anne Deposits
One of the largest undeveloped
uranium resource projects in the
Athabasca Basin (the “Basin”).
Resources are open in almost every
direction and have excellent potential
for significant expansion.
Three styles of mineralization have
been observed at Shea Creek:
unconformity-hosted, basement-
hosted and perched.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
24
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
A N.I. 43-101 independent mineral resource estimate for Shea Creek was prepared by James N. Gray, P.Geo. of
Advantage Geoservices Limited in April 2013 (see UEX news release dated April 17, 2013). This estimate
includes resources from the Kianna, Anne, Colette and 58B deposits based on drilling information up to December
31, 2012. A technical report entitled “Technical Report on the Shea Creek property, northern Saskatchewan, with
an updated mineral resource estimate”, prepared by R.S. Eriks, P.Geo., J.N. Gray, P.Geo., D.A. Rhys, P.Geo.
and S. Hasegawa, P.Geo. with an effective date of May 31, 2013 supporting this mineral resource estimate was
filed on SEDAR on May 31, 2013. Details of the mineral resource estimate at a cut-off grade of 0.30% U3O8 are
as follows:
Deposit
Kianna
Anne
Colette
58B
Tonnes
Grade
U3O8 (%)
U3O8
(lbs)
Tonnes
Grade
U3O8 (%)
U3O8
(lbs)
1,034,500
1.526
34,805,000
560,700
1.364
16,867,000
564,000
1.992
24,760,000
134,900
0.880
2,617,000
Indicated
327,800
0.786
5,680,000
Inferred
493,200
0.716
7,780,000
141,600
0.774
2,417,000
83,400
0.505
928,000
TOTALS (1)(2)
2,067,900
1.484
67,663,000
1,272,200
1.005
28,192,000
(1) Certain amounts presented in the Shea Creek N.I. 43-101 report have been rounded for presentation purposes. This rounding may
impact the footing of certain amounts included in the tables above.
(2) The mineral resource estimates follow the requirements of National Instrument 43-101 – Standards of Disclosure for Mineral Projects
and classifications follow CIM definition standards.
Mineral resources that are not mineral reserves do not have demonstrated economic viability. For additional
information on the mineral resource estimate, please refer to “Technical Report on the Shea Creek property,
northern Saskatchewan, with an updated mineral resource estimate” as filed on SEDAR on May 31, 2013.
Shea Creek – 2018 Exploration Program
Orano did not propose a program or budget for the Shea Creek Project in 2018.
Shea Creek – 2019 Exploration Program
Orano did not propose a program or budget for the Shea Creek Project in 2019. UEX is in the process of
completing a detailed review of the Shea Creek Deposits with the objective of identifying opportunities.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
25
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
Western Athabasca Projects – Other Projects
The Western Athabasca Projects – Other Projects include Mirror River, Erica, Laurie, Alexandra, Brander Lake,
Nikita, and Uchrich. See area map above under Western Athabasca Projects (“WAJV”) – Overview.
2018 Exploration Programs at Nikita and Alexandra
During the winter of 2018, Orano completed 6 holes totaling 4,236 m and 40.2 km of Moving Loop EM surveys
on the Nikita Project. The Project budget was $2.2 million. The six drill holes tested the Nikita Creek Conductor
over a strike length of 2.7 km. While most holes encountered brittle fault-impacted graphitic pelitic rocks in the
basement and breccias in the sandstone column, no significant alteration or radioactivity was noted in theses
holes.
Orano completed 2 holes totaling 2,029 m on the Alexandra Project. The Project budget was $0.6 million. Both
holes intersected faulted sandstone and basement gneissic rocks but failed to explain the presence of the
conductor, as neither graphitic rocks, hydrothermal alteration, or radioactivity were noted in either hole. Orano
has re-interpreted the conductor model based upon new borehole EM results and believes the graphitic packages
may intersect the unconformity 120-150 m east of these two holes.
UEX elected not to participate in the 2018 programs at Nikita and Alexandra. As a result, UEX’s ownership
interest in the Nikita Project dropped to 22.54% and on the Alexandra Project to 39.20% on December 31, 2018.
2019 Proposed Exploration Programs at Nikita and Alexandra
The partners approved 2019 exploration proposals and budgets totalling $3.05 million for the Nikita and Alexandra
Projects during the joint venture meetings on November 7, 2018.
At Nikita in 2019, a program was approved consisting of seven to nine drill holes totaling 5,400 m to test three
targets with a budget of $2,250,000. UEX’s share of costs would have been approximately $507,150 based on
UEX’s projected ownership interest as of December 31, 2018.
At Alexandra, the partners approved a 2019 budget of $800,000 which will consist of three drill holes totaling
1,800 m. UEX’s share of the budget based upon our projected ownership interest on December 31, 2018 is
estimated to be $313,600.
UEX has elected not to participate in either the Nikita or Alexandra Projects in 2019 and the Company’s interest
is anticipated to drop to 15.75 % at Nikita and 30.02% at Alexandra as of December 31, 2019.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
26
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
Beatty River Project
Number
of claims
Hectares
Acres
Project
Operator
UEX
Ownership
%
Orano
Ownership
%
JCU
Ownership
%
Beatty River
7
6,688
16,526
Orano
25.0
50.70
24.30
The Beatty River Project is located in the western Athabasca Basin approximately 40 km south of the Shea Creek
Deposits. Please see the Western Athabasca Projects map for the location of the Beatty River Project.
No program was proposed for 2017.
The 2018 program and budget for the project was $0.6 million and would have consisted of a combined 41.30
km SQUID EM geophysical survey. Due to contractor unavailability and weather issues, this work has been
deferred by Orano, the project operator, until 2019.
UEX elected not to participate in the 2019 program at Beatty River. As a result, should Orano complete the 2019
program and budget as proposed, UEX’s ownership interest in the Beatty River Project is anticipated to drop to
22.49%.
Black Lake Project
Located at the northern edge of
the Athabasca Basin.
The property is currently under
option to ALX Uranium.
Year-round access by road and
air, power lines transect the
property.
Nearby Stony Rapids provides
accommodations and other
support services.
Uranium mineralization has been
encountered on three separate
areas of the property.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
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UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
Number of
claims
Hectares Acres
Project
Operator
Black Lake
12
30,381 75,073
UEX
UEX
ALX
Orano
Ownership
Ownership
Ownership
%
50.92
%
40.00
%
9.08
On April 6, 2017, ALX Uranium Corp. (“ALX”) entered into a letter of intent (“LOI”) with UEX to complete a due
diligence review of the Black Lake Project. On July 26, 2017, ALX informed the Company that they had completed
their review and wished to proceed with an option to acquire up to a 75% interest in the Project.
On September 5, 2017, ALX and UEX entered into an Option Agreement, under which ALX will have the right to
earn a 75% interest in three stages as follows:
Stage 1 - By completing $1,000,000 in exploration work on the project and issuing to UEX a total of
5,000,000 shares of ALX to earn an initial 40% interest in the project by September 5, 2018 (completed);
Stage 2 - By completing an additional $2,000,000 (for a cumulative total of $3,000,000) in exploration
work and issuing a further 4,000,000 shares of ALX to the Company (for a cumulative total of 9,000,000
ALX shares) to earn an additional 11% interest in the project (cumulative interest of 51%) by March 5,
2020;
Stage 3 - By completing an additional $3,000,000 (for a cumulative total of $6,000,000) in exploration
work and issuing a further 3,000,000 shares of ALX to the Company (for a cumulative total of 12,000,000
ALX shares) to earn an additional 24% interest in the project (cumulative interest of 75%) by
September 5, 2021.
ALX paid $25,000 to UEX and completed approximately $87,000 in exploration work during the due diligence
period that was credited towards the Stage 1 exploration work commitment. Upon vesting any interest, ALX will
become a party to the existing Black Lake Joint Venture.
In September 2017, ALX commenced their first exploration program on the Black Lake Project which consisted
of an approximately 725 km of airborne ZTEM EM geophysical survey and five drill holes totaling approximately
2,830 m testing targets identified on the northern portion of the project. ALX announced on November 20, 2017
that two holes encountered minor pitchblende veinlets just below the unconformity.
On June 20, 2018, ALX issued 5,000,000 ALX shares to UEX and completed over $1 million in exploration work
expenditures on the project. As a result, ALX satisfied the Stage 1 requirements of the Option Agreement and
has vested a 40% interest in the project and has become a party to the Black Lake Joint Venture. UEX’s interest
in the project has dropped to 50.92%.
ALX will be earning its remaining interest in the Black Lake Project under the option agreement exclusively from
UEX’s 50.92% interest in the Joint Venture.
ALX has yet not informed UEX or Orano about a proposed program or budget for 2019.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
28
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
Riou Lake Project
Located at the northern edge of the
Athabasca Basin.
Year-round access by road and air,
close to existing power lines.
Nearby Stony Rapids provides
accommodation and other support
services.
Uranium mineralization has been
encountered in three areas.
UEX is actively seeking partners to advance the Riou Lake Project
Riou Lake
Number of
claims
14
Hectares
Acres
UEX
Ownership %
14,455
35,719
100.00
With the presence of radioactive boulders in glacial till on the property containing up to 11.3% uranium, graphite-
bearing gneiss units in the underlying basement rocks and evidence of significant post-Athabasca reverse
faulting, the property is prospective for unconformity-style uranium deposits.
UEX continues to maintain several Riou Lake claims in good standing.
The Company will continue to seek partners that may be interested in earning into this project to follow up on
historic uranium mineralization encountered on the property.
UEX restaked several claims at Riou Lake in January 2018 to cover highly prospective areas of the property as
determined from previous drill programs. These restaked claims cover lands that had previously been covered
by mineral claims owned by UEX that had lapsed in 2017 and 2018.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
29
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
Other Projects
In December 2017, UEX acquired two new projects via staking. Both projects are located in southwest corner of
the Athabasca Basin.
The Parry Lake Project was acquired via staking due to its proximity to the Patterson Lake Corridor and its
potential to host different types of uranium deposits.
The Laurie North Project was also acquired via staking. The claims cover the gap between the Laurie and Uchrich
projects that is believed to overlie extensions of electromagnetic conductively between the existing projects. Such
electromagnetic conductive trends are considered prospective uranium exploration targets in the Athabasca
Basin.
An ownership position in both projects were offered to Orano as per area of interest provisions of the Western
Athabasca Option Agreement. Orano elected not to exercise its rights to acquire a stake in the two projects at
this time. Orano can elect to participate in these projects by January 2021.
In March 2018, UEX staked two claims adjacent to the Christie Lake Project. An ownership position in these
claims was offered to JCU, who elected not to participate in these two claims.
In January 2019 UEX staked three claims immediately west of and adjacent to Cameco’s Key Lake Uranium
Operations. These three claims, now known as the Key West Project, straddle the edge of the Athabasca Basin
where the unconformity ranges from 0-75 m and is considered by the UEX team to be prospective for both uranium
and cobalt.
For a location of these claims, please refer to the map in Section 1 – Introduction, Overview.
Number of
claims
11
5
2
3
Hectares
Acres
11,456
28,307
1,138
329
2,811
814
12,847
31,748
UEX
Ownership %
100.00
100.00
100.00
100.00
Parry Lake
Laurie North
Christie West
Key West
Qualified Person
The disclosure of technical information regarding UEX’s properties in this MD&A has been reviewed and approved
by Roger Lemaitre, P.Eng., P.Geo., UEX’s President and CEO, who is a Qualified Person as defined by National
Instrument 43-101 – Standards of Disclosure for Mineral Projects and is non-independent of UEX.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
30
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
Financial Update
Selected Financial Information
The following is selected financial data from the unaudited and restated consolidated financial statements of UEX
for the last three completed fiscal years. During the year ended December 31, 2016, the Company changed its
accounting policy related to exploration and evaluation expenditures on a retrospective basis. The data should
be read in conjunction with the audited consolidated financial statements for the years ended December 31, 2018,
2017, and 2016 and the notes thereto.
Summary of Annual Financial Results
December 31, 2018
December 31, 2017 December 31, 2016
Interest income
Net loss for the year
$ 133,976
$ 66,539
$ 91,839
(6,272,461)
(5,865,743)
(5,981,098)
Write-off of mineral property acquisition costs
Basic and diluted loss per share
Exploration and evaluation expense
Capitalized acquisition costs
-
(0.018)
4,359,568
1,018,098
(900)
(0.019)
4,224,084
1,014,840
(1,500)
(0.021)
4,825,953
3,750,000
Total assets
$ 21,931,143
$ 15,868,986
$ 13,951,299
The following quarterly financial data is derived from the unaudited condensed consolidated interim financial
statements of UEX as at (and for) the three-month periods indicated below.
Summary of Quarterly Financial Results (Unaudited)
2018
Quarter 4
2018
Quarter 3
2018
Quarter 2
2018
Quarter 1
2017
Quarter 4
2017
Quarter 3
2017
Quarter 2
2017
Quarter 1
Interest income
$ 47,822 $ 27,852 $ 29,533 $ 28,769 $ 15,305 $ 18,518 $ 19,544 $ 13,172
Net loss for the period
(907,141 )
(1,337,562 )
(1,850,228 )
(2,177,530 )
(787,878 )
(1,635,424 )
(1,276,131 )
(2,166,310 )
Write-off of mineral
property acquisition
costs
Basic and diluted loss
per share
Exploration and
evaluation expense
Capitalized mineral
property acquisition
costs
-
-
-
-
-
(900 )
-
-
(0.002 )
(0.004 )
(0.005 )
(0.006 )
(0.003 )
(0.005 )
(0.004 )
(0.007 )
494,633
885,136
1,112,059
1,867,740
304,315
1,336,971
518,621
2,064,177
1,001,484
2,361
-
14,253
1,014,840
-
-
-
Total assets
21,931,143
16,720,001
17,512,560
19,830,405
15,868,986
14,715,173
16,268,322
18,044,420
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
31
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
UEX’s business is not affected by seasonality as the Company is able to perform exploration and evaluation work
year-round. Variations in exploration and evaluation expenditures from quarter to quarter and year to year are
affected by the timing and size of the exploration and evaluation programs in the periods. In 2018, UEX focused
its exploration efforts on the Christie Lake and West Bear Cobalt-Nickel Projects.
UEX chose not to fund its share of exploration on the Western Athabasca Projects for 2017 and 2018 and we will
have diluted our ownership on certain projects but maintain our 49.1% interest in the Shea Creek project, where
significant uranium resources have been found.
During the fourth quarter of 2017, UEX paid $1,000,000 to increase our interest in Christie Lake to 45%, in addition
to the completion of $2,500,000 of exploration commitments during the year. In the fourth quarter of 2018, a
payment of $1,000,000 was made to increase our interest in Christie Lake to 60%, in addition to exploration
commitments of $5,000,000 being fulfilled before the end of the year.
Renunciation of tax benefits:
o Approximately $6.972 million of flow-through expenditures from the October 2018 placement were
renounced to eligible shareholders in February 2019 effective December 31, 2018. Approximately
$312,000 of flow-through expenditures were incurred by December 31, 2018 and the remaining
$6.66 million of flow-through expenditures are expected to be incurred during the remainder of 2019.
o Approximately $2.010 million of flow-through expenditures from the February 2017 placement were
renounced to eligible shareholders in January 2018 effective December 31, 2017. Approximately
$744,000 of flow-through expenditures were incurred by December 31, 2017 and the remaining
$1.257 million of flow-through expenditures were incurred during the first quarter of 2018.
o Approximately $2.002 million of flow-through expenditures from the December 2017 placement were
renounced to eligible shareholders in January 2018 effective December 31, 2017 and were incurred
during the remainder of 2018.
o The remaining $2.959 million in flow-through expenditures from the May 2016 placement was
renounced to eligible subscribers in February 2017, effective December 31, 2016 (under the look-
back rule) and the resulting tax recovery is reflected in the first quarter of 2017.
Share Capital
The Company is authorized to issue an unlimited number of common shares without par value, and an unlimited
number of preferred shares (no par value) issuable in series of which 1,000,000 preferred shares have been
designated Series 1 Preferred Shares, none of which are issued and outstanding.
381,385,811 common shares were issued and outstanding as at December 31, 2018 and March 20, 2019;
27,567,000 and 26,567,000 common shares related to director, employee and consultant share purchase
options were reserved by the Company as at December 31, 2018 and March 20, 2019, respectively. The
share purchase options are exercisable into common shares at exercise prices ranging from $0.15 per
share to $1.45 per share. As the number of options outstanding at March 20, 2019 is 26,567,000
(representing 7.2% of the Company’s current issued and outstanding common shares), the number of
options available for grant as of March 20, 2019 is 11,571,581 (representing 2.8% of the Company’s
current issued and outstanding common shares);
During January 2018, 22,761,905 warrants were exercised and 2,000,000 warrants expired.
Accordingly, the Company issued 22,761,905 common shares for gross proceeds of $5,028,572;
16,903,394 and 16,222,394 share purchase warrants with a weighted average exercise price of $0.42 per
share were outstanding as at December 31, 2018 and March 20, 2019.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
32
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
Results of Operations for the Three-Month Period Ended December 31, 2018
For the three-month period ended December 31, 2018, the Company earned interest income of $47,822
(Q4 2017- $15,305). The increase in interest income was primarily due to the higher monthly average cash
balance invested over the period and higher average interest rates in Q4 2018 compared to Q4 2017. In the fourth
quarter of 2018, the Company had an average cash balance invested of approximately $10.1 million versus $4.7
million in the comparative period.
For the three-month period ended December 31, 2018, the Company incurred expenses of $969,834 (Q4 2017 -
$803,913) with significant changes from the comparative period identified as follows:
Exploration and evaluation expenses of $494,633 (Q4 2017 - $304,315) were higher than in the
comparative period due to the timing of each period’s exploration programs. The Company started its
2018/2019 winter exploration earlier than in the comparative period, which resulted in higher costs for the
period.
Office expenses, net of project surcharges, of $36,978 (Q4 2017 - $129,850) decreased primarily due to
the project surcharge that was implemented for each project during Q1 2018 to represent office expenses
related to exploration, as well as the commission fee for subletting out the former head office and fees
associated with the office move that were incurred in 2017 but not in 2018.
Travel and promotion of $30,773 (Q4 2017 - $14,126) increased due to attendance at more industry
tradeshows in 2018, particularly for cobalt and other battery metals, compared to limited travel in Q4
2017.
The vesting of share purchase options during the three-month period ended December 31, 2018 resulted in total
share-based compensation of $166,442 (Q4 2017 - $106,770), of which $19,233 was allocated to exploration and
evaluation expenses (Q4 2017 - $16,096) and the remaining $147,209 was expensed to share-based
compensation (Q4 2017 - $90,674). The higher share-based compensation expense is due primarily to more
options being granted in 2018 compared to 2017.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
33
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
Results of Operations for the Year Ended December 31, 2018
For the year ended December 31, 2018, the Company earned interest income of $133,976 (2017 - $66,539). The
increase in interest income was primarily due to the higher monthly average cash balance invested over the
period and higher average interest rates in 2018 compared to 2017. In 2018, the Company had an average cash
balance invested of approximately $8.2 million versus $6.0 million in the comparative period.
For the year ended December 31, 2018, the Company incurred operating expenses of $6,421,308
(2017 - $6,168,962) with significant changes from the comparative period identified as follows:
Legal and audit expenses of $174,045 (2017 - $125,760) were higher due to the incorporation and
structuring work on the Company’s subsidiary, CoEX Metals Corp., and certain employment matters.
Maintenance expenses of $41,148 (2017 - $8,419) increased due to higher ongoing maintenance related
to the IT equipment at the Saskatoon office and ongoing cloud retention costs.
Office expenses, net of project surcharges, of $163,640 (2017 - $333,913) decreased primarily due to
project surcharge that was implemented for each project during Q1 2018 to cover administrative costs
related to exploration.
Rent expense of $78,836 (2017 - $143,338) decreased, reflecting lower rent costs associated with
moving the head office to Saskatoon at the end of 2017.
Travel and promotion of $185,089 (2017 - $134,855) increased due attendance at cobalt conferences in
2018 and the associated registration and travel costs.
The vesting of share purchase options during the year ended December 31, 2018 resulted in total share-based
compensation of $885,962 (2017 - $567,012), of which $109,437 was allocated to exploration and evaluation
expenses (2017 - $83,927) and the remaining $776,525 was expensed to share-based compensation (2017 -
$483,085). The value of the options granted and vested is affected by the share price at grant date, interest rate,
share price volatility and expected life of options.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
34
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
The following table outlines exploration and evaluation expenditures on projects, cumulatively as at and for the
year ended December 31, 2018 and 2017.
Project
Beatty River
Black Lake
Christie Lake
Hidden Bay (2)
Horseshoe-Raven
Riou Lake
West Bear Co-Ni
Western Athabasca
Alexandra
Brander
Erica
Laurie
Mirror
Nikita
Shea Creek
Uchrich
2017
2018
Cumulative to
December 31, 2016
Expenditures
in the period
Cumulative to
December 31, 2017
Expenditures
in the period
Cumulative (1) to
December 31, 2018
$
873,069
$
2,136
$
875,205
$
588
$
875,793
14,508,909
4,080,292
33,069,216
41,813,458
-
-
1,205,251
1,353,363
2,253,085
1,586,528
1,987,612
1,952,331
54,199,179
543,091
(20,402 )
14,488,507
-
3,981,889
8,062,181
2,255,103
200,905
8,413
-
38,359
1,457
-
-
2,774
2,774
1,826
3,289
664
33,270,121
41,821,871
-
62,572
954
614
38,359
2,014,132
1,206,708
1,353,363
2,253,085
1,589,302
1,990,386
1,954,157
54,202,468
543,755
2,103
-
-
-
-
3,244
20,258
-
14,488,507
10,317,284
33,332,693
41,822,825
614
2,052,491
1,208,811
1,353,363
2,253,085
1,589,302
1,990,386
1,957,401
54,222,726
543,755
All Projects Total
$
159,425,384
$
4,224,084
$
163,649,468
$
4,359,568
$
168,009,036
(1) Exploration and evaluation expenditures have been presented on a cumulative basis from July 17, 2002.
(2)
Includes the Hidden Bay exploration areas: Tent-Seal, Telephone-Shamus, Rabbit West, Wolf Lake, Rhino, and Dwyer-Mitchell.
Exploration and evaluation expenditures for the year ended December 31, 2018 and 2017 include the following
non-cash expenditures:
Depreciation
Share-based compensation
Project management fee
Year ended December 31
2018
2017
$
$
74,573
$
109,437
378,663
70,431
83,927
355,734
562,673
$
510,092
For further information regarding expenditures on the projects shown in the table above, please refer to
Exploration and Evaluation Activities. Also please refer to the Critical Accounting Estimates, Valuation of mineral
properties section.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
35
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
The Company has an interest in several joint operations relating to the exploration and evaluation of various
properties in the western, eastern and northern Athabasca Basin. These interests are governed by contractual
arrangements but have not been organized into separate legal entities or vehicles. The joint arrangements that
the Company is party to in some cases entitle the Company, or its joint venture partner, to a right of first refusal
on the projects should one of the partners choose to sell their interest. The joint arrangements are governed by
management committees which set the annual exploration budgets for these projects. Should the Company be
unable to, or choose not to, fund its required contributions as outlined in the agreements, there is a risk that the
Company’s ownership interest could be diluted. As a result of decisions to fund exploration programs for the joint
arrangements, the Company may choose to complete further equity issuances or fund these amounts through
the Company’s general working capital.
UEX is party to the following joint arrangements as at December 31, 2018 and March 20, 2019:
Ownership interest (%)
UEX
ORANO
Beatty River
Black Lake
Christie Lake
Western Athabasca
Alexandra
Brander
Erica
Laurie
Mirror River
Nikita
Shea Creek
Uchrich
25.0000
50.9200
60.0000
39.1957
49.0975
49.0975
32.9876
32.3354
22.5388
49.0975
30.4799
50.7020
9.0800
JCU
24.2980
ALX
-
-
40.0000
-
40.0000
60.8043
50.9025
50.9025
67.0124
67.6646
77.4612
50.9025
69.5201
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
100.0000
100.0000
100.0000
100.0000
100.0000
100.0000
100.0000
100.0000
100.0000
100.0000
100.0000
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
36
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
Financing Activities
As UEX has not begun production on any of its mineral properties, the Company does not generate cash from
operations and has historically funded its operations through monies raised in the public equity markets:
On October 10, 2018, the Company completed a flow-through private placement of 33,202,500 common
shares at a price of $0.21 per common share, for gross proceeds of $6,972,525. Share issue costs
included agent commissions of $418,351 and other issuance costs of $142,234. As the flow-through
share issuance price exceeded the quoted market price of the Company’s common shares at the time
flow-through shares were issued, a flow-through share premium of $332,025 was recorded.
The proposed use of proceeds from the October 10, 2018 flow-through private placement is presented
in the table below:
PROPOSED USE OF PROCEEDS
ACTUAL USE OF PROCEEDS
Flow-through Private Placement
Use of Proceeds
Remaining to be Spent
Christie Lake Project
West Bear Project
Hidden Bay Project
Western Athabasca
TOTAL
$ 2,000,000
$
4,622,525
350,000
-
125,367
181,254
2,955
2,706
$
1,874,633
4,441,271
347,045
(2,706)
$ 6,972,525
$
312,282
$
6,660,243
The Company renounced the income tax benefit of the October 10, 2018 private placement to its
subscribers effective December 31, 2018 and will incur Part XII.6 tax at a rate of Nil% for January 2019,
1% for February and March, and 2% per month thereafter on unspent amounts.
On December 14, 2017, the Company completed a flow-through private placement of 5,560,000 common
shares at a price of $0.36 per common share, for gross proceeds of $2,001,600. Share issue costs
included the agent’s commission of $140,112 equal to 7% of the aggregate gross proceeds of the
financing paid in common shares of the Company at a price of $0.36 per common share, the fair value
of brokers warrants of $29,520 and other issuance costs of $65,137. The agent also received 222,400
broker warrants equal to 4% of the number of flow-through shares placed by the agent. Each broker
warrant is exercisable for one common share of the Company for a period of two years at a price of $0.42
per common share. As the quoted market price of the Company’s common shares exceeded the flow
through issuance price at the time flow-through shares were issued in 2017, no share premium liability
was recorded in 2017.
The initial fair value of the broker warrants on December 14, 2017 was determined using the Black-
Scholes option-pricing model with the following assumption: Pre-vest forfeiture rate – 0.00%; Expected
volatility – 73.42%; Risk-free interest rate – 1.56%; Dividend yield – 0.00%; and Expected life of warrants
– 2.00 years.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
37
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
The use of proceeds from the December 14, 2017 flow-through private placement was completed as of
October 31, 2018 and is presented in the table below:
PROPOSED USE OF PROCEEDS (1)
ACTUAL USE OF PROCEEDS
Flow-through Private Placement
Use of Proceeds
West Bear Project
Christie Lake Project
Hidden Bay Project
Western Athabasca
TOTAL
$ 1,570,000
431,600
-
-
$
874,506
1,095,521
30,965
608
$ 2,001,600
$
2,001,600
(1) Expenses related to the flow-through placement were funded out of the December 14, 2017 unit placement proceeds.
The Company renounced the income tax benefit of the December 14, 2017 private placement to its
subscribers effective December 31, 2017 and incurred Part XII.6 tax of $9,470 relating to this placement.
On February 27, 2017, the Company completed a private placement of 15,999,994 units at a price of
$0.25 per unit and 6,700,000 flow-through common shares at a price of $0.30 per common share, for
gross proceeds of $6,009,999. Share issue costs included a cash commission of $360,600, the fair value
of brokers warrants of $105,755 and other issuance costs of approximately $204,938. Each unit
consisted of one common share and one common share purchase warrant exercisable at a price of $0.42
per common share for a period of three years. The Company also issued 681,000 common share broker
warrants as part of the placement. Each broker warrant is exercisable at a price of $0.30 per common
share for a period of two years.
The initial fair value of the brokers warrants on February 27, 2017 was determined using the
Black-Scholes option-pricing model with the following assumptions: Pre-vest forfeiture rate – 0.00%;
Expected volatility – 67.84%; Risk-free interest rate – 0.76%; Dividend yield – 0.00%; and Expected life
of warrants – 2.00 years.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
38
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
The use of proceeds from the February 27, 2017 flow-through private placement was completed as of
March 31, 2018 and is presented in the table below:
PROPOSED USE OF PROCEEDS (1)
ACTUAL USE OF PROCEEDS
Flow-through Private Placement
Use of Proceeds
Christie Lake Project
West Bear Project
Hidden Bay Project
Western Athabasca
TOTAL
$ 1,510,000
$
500,000
-
-
$ 2,010,000
$
1,259,891
648,185
99,624
2,300
2,010,000
(1) Expenses related to the flow-through placement were funded out of the February 27, 2017 unit placement proceeds.
The Company renounced the income tax benefit of the February 27, 2017 private placement to its
subscribers effective December 31, 2017 and incurred $536 of Part XII.6 tax related to this placement.
233,333 share purchase options were exercised during the year ended December 31, 2018 (2017 – nil) for gross
proceeds of $49,667.
In January 2018, 22,761,905 warrants were exercised and 2,000,000 warrants expired. Accordingly, the
Company issued 22,761,905 common shares for gross proceeds of $5,028,572.
Liquidity and Capital Resource
Working capital as at December 31, 2018 was $9,691,545, compared to working capital of $4,956,732 as at
December 31, 2017 and includes the following:
Current assets as at December 31, 2018 and December 31, 2017 were $10,454,084 and $5,315,843
respectively, including:
o Cash and cash equivalents of $10,258,858 at December 31, 2018 and $5,106,761 at
December 31, 2017. The Company’s cash balances are invested in highly liquid term deposits
redeemable within 90 days or less.
Accounts payable and other liabilities as at December 31, 2018 and December 31, 2017 were $762,539
and $359,111, respectively:
o The balance at December 31, 2018 and December 31, 2017 was comprised of trade payables and
other liabilities.
The Company has sufficient financial resources for its planned exploration, evaluation, and administrative costs
over the next 12 months. The Company will require additional financing in the longer term and although it has
been successful in the past, there is no assurance that it will be able to obtain adequate financing in the future or
that such financing will be available on acceptable terms.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
39
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
Commitments
In the normal course of business, the Company enters into contracts and performs business activities that give
rise to commitments for future minimum payments. The Company has obligations under operating leases for its
premises, which expire between November 30, 2019 and February 29, 2024. Future minimum lease payments
are as follows:
2019
2020
2021
2024
2023 and beyond
December 31
2018
130,559
107,805
54,675
54,675
64,125
UEX has agreements with partners to fund exploration and make acquisition related payments that if not made
would result in project dilution or potentially loss of a project in its entirety.
Exploration Commitments – Western Athabasca
Due to uranium market conditions, UEX did not propose supplemental program budgets for the Western
Athabasca for 2015, 2016, 2017 or 2018. The Company did not incur Additional Expenditures and allowed the
Supplemental Option to lapse on December 31, 2018.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
40
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
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, deposits,
investments and accounts payable and other liabilities. Interest income is recorded in the statement of operations
and comprehensive loss. Cash and cash equivalents, as well as amounts receivable, are classified as loans and
receivables, and accounts payable and other 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 investments also include shares which have been classified as financial
assets at Fair Value in Other Comprehensive Income (“FVOCI”) and are carried at fair value with changes in fair
value recognized in other comprehensive income.
The Company operates entirely in Canada and is not subject to any significant foreign currency risk. The
Company’s financial instruments are exposed to limited liquidity risk, credit risk and market 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 other 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 amounts
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.
Market risk is the risk that changes in market prices such as foreign exchange rates and interest rates will affect
the Company’s income. The Company is subject to interest rate risk on its cash and cash equivalents. The
Company reduces this risk by investing its cash in highly liquid short-term interest-bearing investments that earn
interest on a fixed rate basis.
The carrying values of amounts receivable and accounts payable and other 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 loans and receivables and are initially recorded at fair value and
subsequently at amortized cost with accrued interest recorded in accounts receivable.
Investments are recorded at fair value. The Company holds 87,500 and 5,000,000 common shares of Vanadian
Energy Corp (formerly Uracan Resources Ltd.) and ALX, respectively. The fair value change for the common
shares represents the change to the quoted price of these publicly traded securities from the date they were
acquired. These common shares are being held for long-term investment purposes.
On June 23, 2017, 25,000 common share purchase warrants expired. Accordingly, the Company does not hold
any outstanding warrants of Vanadian.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
41
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
On June 14, 2018, ALX issued 5,000,000 common shares of ALX to UEX pursuant the Black Lake Option
Agreement to earn a 40% initial interest in the project.
The fair value of the Vanadian and ALX shares, classified as Level 1, is based on the market price for these
actively traded securities at December 31, 2018 and 2017, the financial statement fair value dates.
Related Party Transactions
The Company was involved in the following related party transactions during the year ended December 31, 2018
and 2017.
Related party transactions include the following payments which were made to related parties other than key
management personnel:
Cameco Corporation (1)
Management advisory board share-based payments (2)
Year ended
December 31
2018
$
441 $
2,385
2017
1,324
6,329
$
2,826 $
7,653
(1) Payments related to fees paid for use of the Cameco airstrip at the McArthur River mine.
(2) Share-based compensation expense is the fair value of options granted which have been calculated using the Black-Scholes option-pricing
model and the assumptions disclosed in Note 12(c) of the financial statements.
Key management personnel compensation includes management and director compensation, inclusive of any
consulting arrangements with directors, as follows:
Salaries and short-term employee benefits (1)(2)
Share-based payments (3)
Other compensation (4)
Year ended
December 31
2018
2017
$
611,364 $
696,749
691,136
118,325
399,104
15,750
$ 1,420,825 $ 1,111,603
(1) In the event of a change of control of the Company, certain senior management may elect to terminate their employment agreements and the
Company shall pay termination benefits of up to two times their respective annual salaries at that time and all of their share purchase options
will become immediately vested with all other employee benefits, if any, continuing for a period of up to two years.
(2) In the event that Mr. Lemaitre’s (UEX’s President and CEO) employment is terminated by the Corporation for any reason other than as a result
of a change of control, death or termination for cause, the Corporation will pay a termination amount equal to one year’s base salary plus any
bonus owing. All other employee related benefits will continue for a period of one year following such termination. Mr. Lemaitre may also
terminate the employment agreement upon three months’ written notice to the Board and receive a lump sum payment equal to his base salary
plus benefits for three months.
(3) Share-based compensation expense is the fair value of options granted which have been calculated using the Black-Scholes option-pricing
model and the assumptions disclosed in Note 12(c) of the financial statements.
(4) Represents payments to Altastra Office Systems Inc., a company owned by Wylie Hui, and Evelyn Abbott for CFO services rendered to UEX.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
42
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
Accounting Policies
The accounting policies and methods employed by the Company determine how it reports its financial condition
and results of operations and may require management to make judgments 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 IFRS. In preparing consolidated financial statements in accordance with IFRS, management is
required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and
expenses for the period. Management reviews its estimates and assumptions on an ongoing basis using the most
current information available.
Joint Arrangements
Joint arrangements are arrangements of which the Company has joint control, established by contracts requiring
unanimous consent for decisions about the activities that significantly affect the arrangements’ returns. They are
classified and accounted for as follows:
(i)
Joint operation – when the Company has rights to the assets, and obligations for the liabilities, relating
to an arrangement, it accounts for each of its assets, liabilities and transactions, including its share of
those held or incurred jointly, in relation to the joint operation.
(ii)
Joint venture – when the Company has rights only to the net assets of the arrangement, it accounts for
its interest using the equity method.
The Company has an interest in several joint operations relating to the exploration and evaluation of various
properties in the Athabasca Basin. The consolidated financial statements include the Company’s proportionate
share of the joint operations’ assets, liabilities, revenue and expenses with items of a similar nature on a line-by-
line basis from the date that the joint arrangement commences until the date that the joint arrangement ceases.
These interests are governed by contractual arrangements but have not been organized into separate legal
entities or vehicles.
The Company does not have any joint arrangements that are classified under IFRS 11 as joint ventures. However,
“joint operations” as defined by IFRS are nevertheless commonly referred to as “joint ventures” by UEX, its
operating partners and the general mining industry, and use of the term “joint venture” by UEX in its disclosures
for the purposes of describing its operating results is considered consistent with these statements.
The joint arrangements that the Company is party to in some cases entitle the Company to a right of first refusal
on the projects should one of the partners choose to sell their interest. The joint arrangements are governed by a
management committee which sets the annual exploration budgets for these projects. In certain cases, should
the Company choose not to fund the minimum required contributions as outlined in the agreement, there is a risk
that the Company’s ownership interest could be diluted. As a result of decisions to fund exploration programs for
the joint arrangements, the Company may choose to complete further equity issuances or fund these amounts
through the Company’s general working capital.
Critical Accounting Estimates
The Company prepares its consolidated financial statements in accordance with IFRS, which require
management to estimate various matters that are inherently uncertain as of the date of the consolidated 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 consolidated financial statements. The Company’s significant accounting policies are discussed
in the consolidated financial statements. Critical estimates inherent in these accounting policies are discussed
below.
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
43
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
Valuation of Mineral Properties
The recovery of amounts capitalized as mineral property assets is dependent upon the discovery of economically
recoverable resources, the ability of the Company to obtain financing to complete exploration and development
of the properties, and on future profitable production or proceeds of disposition. The Company recognizes in
income any costs recovered on mineral properties when amounts received or receivable are in excess of the
carrying amount. Upon transfer of exploration and evaluation assets into development properties, all subsequent
expenditures on the exploration, construction, installation or completion of infrastructure facilities is capitalized
within development properties.
All amounts capitalized in mineral properties are monitored for indications of impairment. Where a potential
impairment is indicated, assessments are performed for each area of interest. To the extent that the capitalized
acquisitions cost is determined to be impaired, this amount is recorded as a write-down of mineral properties in
the statement of operations and comprehensive loss in the period.
The Company performed an evaluation of impairment indicators under IFRS 6(20) for its exploration and
evaluation assets (mineral properties) as at December 31, 2018 and has concluded that there are no indicators
of impairment.
Environmental Rehabilitation Provision
The Company recognizes the fair value of a liability for environmental rehabilitation in the period in which the
Company is legally or constructively required to remediate, if a reasonable estimate of fair value can be made,
based on an estimated future cash settlement of the environmental rehabilitation obligation, discounted at a
pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the
obligation. The environmental rehabilitation obligation is capitalized as part of the carrying amount of the
associated long-lived asset and a liability is recorded. The environmental rehabilitation cost is amortized on the
same basis as the related asset. The liability is adjusted for the accretion of the discounted obligation and any
changes in the amount or timing of the underlying future cash flows. Significant judgements and estimates are
involved in forming expectations of the amounts and timing of environmental rehabilitation cash flows. The
Company has assessed each of its mineral projects and determined that no material environmental rehabilitations
exist as the disturbance to date is minimal.
Share-based Payments
The Company has a share option plan which is described in Note 12(c) of the consolidated financial statements
for the year ended December 31, 2018. The fair value of all share-based awards is estimated using the Black-
Scholes option-pricing model at the grant date and amortized over the vesting periods. An individual is classified
as an employee when the individual is an employee for legal or tax purposes (direct employee) or provides
services similar to those performed by a direct employee, including directors of the Company. Share-based
payments to non-employees are measured at the fair value of the goods or services received, or the fair value of
the equity instruments issued if it is determined the fair value of the goods or services cannot be reliably measured
and are recorded at the date the goods or services are received. The amount recognized as an expense is
adjusted to reflect the number of awards expected to vest.
None of the Company’s awards call for settlement in cash or other assets. Upon the exercise of the share
purchase options, consideration paid together with the amount previously recognized in the share-based
payments reserve is recorded as an increase in share capital. The offset to the recorded cost is to share-based
payments reserve. Consideration received on the exercise of share purchase options is recorded as share capital
and the related share-based payments value in the reserve is transferred to share capital. Charges for share
purchase options that are forfeited before vesting are reversed from share-based payments reserve. For those
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
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UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
share purchase options that expire or are forfeited after vesting, the recorded value is transferred to retained
earnings (deficit).
Valuation of Warrants
The Company has adopted the residual value method with respect to the measurement of shares and warrants
issued as part of units. The residual value method first allocates value to common shares issued in the private
placements at their fair value, as determined by the closing quoted bid price on the announcement date or the
price protection date, if applicable. The balance remaining, if any, is allocated to the warrants with the fair value
recorded in shareholders’ equity under warrant reserve.
Recent Accounting Announcements
In January of 2016, the IASB issued IFRS 16 Leases (“IFRS 16”) which replaces the existing leasing standard,
IAS 17 Leases. The new standard effectively eliminates the distinction between operating and finance leases for
lessees, while lessor accounting remains largely unchanged with the distinction between operating and finance
leases retained. IFRS 16 takes effect on January 1, 2019, with earlier application permitted.
The Company plans to adopt the new standard beginning January 1, 2019. The Company expects that the new
standard will result in an increase in assets and liabilities of approximately $340,000. The Company also expects
an increase in depreciation and interest expense and a decrease general and administrative expenses.
Risks and Uncertainties
The following factors are those which are the most applicable to the Company. The discussion which follows is
not inclusive of all potential risks. Risk management is an ongoing exercise upon which the Company
spends a substantial amount of time. While it is not possible to eliminate all of the risks inherent to the mining
business, the Company strives to manage these risks, to the greatest extent possible, to ensure that its assets
are protected.
Risks of exploration programs not resulting 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, cobalt or other mineralized
materials in commercial quantities. While discovery of a uranium or cobalt 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. There is
no assurance that the current exploration programs of UEX will result in profitable commercial uranium or cobalt
mining operations. UEX may abandon an exploration project because of poor results or because UEX feels that
it cannot economically mine the mineralization.
Joint ventures
UEX participates in certain of its projects (such as the WAJV Projects, Christie Lake and Black Lake projects)
through joint ventures (referred to as “joint operations” in the financial statements) with third parties. UEX has
other joint ventures and may enter into more in the future. There are risks associated with joint ventures, including:
disagreement with a joint-venture partner about how to develop, operate or finance a project;
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
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UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
a joint-venture partner not complying with a joint-venture agreement;
possible litigation between joint-venture partners about joint-venture matters; and
limited control over decisions related to a joint venture in which UEX does not have a controlling interest.
In particular, UEX is in the process of negotiating joint-venture agreements with Orano on the WAJV Projects and
there is no assurance that the parties will be able to conclude a mutually satisfactory agreement.
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 activities.
Uranium price fluctuations
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 has
recently experienced and may continue to 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, natural disasters such as those that struck Japan in March 2011,
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 regions such as Kazakhstan, Russia, Africa and Australia.
Cobalt price fluctuations
The market price of cobalt is the most significant market risk for companies exploring for and producing cobalt.
The marketability of cobalt is subject to numerous factors beyond the control of UEX. The price of cobalt has
recently experienced and may continue to experience volatile and significant price movements over short periods
of time. Factors impacting price include demand for electrical vehicles, political and economic conditions in cobalt
producing (particularly the Democratic Republic of Congo) and consuming countries, various government
programs incentivizing electrical vehicle sales and government legislation governing carbon emissions particularly
with respect to the automobile industry.
Reliance on the economics of the Horseshoe-Raven Technical Report
The market price of U3O8 has decreased since the date of the Horseshoe-Raven Technical Report (see “4.3.2
Horseshoe-Raven Project). The uranium industry has been adversely affected by the natural disasters that struck
Japan on March 11, 2011 and the resulting damage to the Fukushima nuclear facility. These events resulted in
many countries, which presently rely on nuclear power for a portion of their electrical generation, stating that they
will review their commitment to this source of clean energy. These reviews resulted in downward pressure on the
price of uranium and may have a significant effect on the country-by-country demand for uranium. The long-term
U3O8 market price, as reported by Ux Consulting on March 18, 2019, is US$32.00/lb. Given that the Horseshoe-
Raven Technical Report presented three economic scenarios using prices ranging from US$60 to US$80/lb of
U3O8, the economic analysis which uses U3O8 prices higher than the prevailing market price may no longer be
accurate and readers of the Horseshoe-Raven Technical Report are therefore cautioned when reading or relying
on this Report.
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UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
Competition for properties could adversely affect UEX
The international uranium and cobalt industries are highly competitive and significant competition exists for the
limited supply of mineral lands available for acquisition. Many participants in the mining business include large,
established companies with long operating histories. UEX may be at a disadvantage in acquiring new properties
as many mining companies have greater financial resources and more technical staff. Accordingly, there can be
no assurance that UEX will be able to compete successfully to acquire new properties or that any such acquired
assets would yield reserves or result in commercial mining operations.
Resource estimates are based on interpretation and assumptions
Mineral resource estimates presented in this document and in UEX’s filings with securities regulatory authorities,
news 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 unreliable. There can be no assurance that these estimates will
be accurate or that this mineralization could be extracted or processed profitably.
Mineral resource 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 the price of uranium
or cobalt. 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.
Requirement for financing
The Company currently has sufficient financial resources to carry out the majority of its anticipated short-term
planned exploration and development on all of its projects and to fund its short-term 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 or a reduction of interest in other joint venture projects. 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 existing holders of UEX’s 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. Failure to obtain additional financing on a timely basis could
cause UEX to reduce or render it unable to earn interests in its properties.
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, hydro-electricity and subsidized renewable energies 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
TSX:UEX | Energetically Growing by Discovery, Innovation and Acquisition
47
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
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. UEX will need additional financial, administrative, technical and operations staff to fill
key positions as the business grows. If UEX cannot attract and train qualified people, the Company’s growth
could be restricted.
Environmental and other regulatory laws, regulations and permits
Mining and refining operations and exploration activities, particularly uranium mining, refining and conversion in
Canada, are subject to extensive regulation by provincial, municipal and federal governments. Such regulations
relate to production, development, exploration, exports, 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.
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 may 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 a matter. Conflicts of interest that arise will be subject
to and governed by procedures prescribed in the Company’s by-laws and Code of Ethics and by the Canada
Business Corporations Act.
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48
UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
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 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 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 uranium or other
commodity 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 trading volume and general market interest in UEX’s securities which may affect an
investor’s ability to trade significant numbers of securities of UEX. If an active market for the securities of UEX
does not continue, the liquidity of an investor’s investment may be limited, the price of the securities of the
Corporation may decline and 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.
Risks relating to Liability Insurance Coverage
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.
No Mineral Production
The Company does not have an interest in a producing mineral property. There is no assurance that commercial
quantities of minerals will be discovered at any Company property, nor is there any assurance that any future
exploration programs of the Company on any of its properties will yield any positive results. Even where
potentially commercial quantities of minerals are discovered, there can be no assurance that any property of the
Company will ever be brought to a stage where mineral reserves can be profitably produced thereon. Factors
which may limit the ability of the Company to produce mineral resources from its properties include, but are not
limited to, the price of mineral resources, availability of additional capital and financing and the nature of any
mineral deposits.
Changes in Climate Conditions
A number of governments have introduced or are moving to introduce climate change legislation and treaties at
the international, national, state/provincial and local levels. Regulation relating to emission levels (such as carbon
taxes) and energy efficiency is becoming more stringent. If the current regulatory trend continues, this may result
in increased costs at some or all of the Company’s operations. In addition, the physical risks of climate change
may also have an adverse effect on the Company’s operations. Extreme weather events have the potential to
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UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
disrupt operations at the Company’s properties and may require the Company to make additional expenditures
to mitigate the impact of such events.
Information Systems and Cyber Security
The Company’s operations depend, in part, upon information technology systems. The Company’s information
technology systems are subject to disruption, damage or failure from a number of sources, including, but not
limited to, hacking, computer viruses, security breaches, natural disasters, power loss, vandalism, theft and
defects in design. Any of these and other events could result in information technology systems failures,
operational delays, production downtimes, destruction or corruption of data, security breaches or other
manipulation or improper use of our data, systems and networks, any of which could have adverse effects on the
Company’s reputation, business, results of operations, financial condition and share price.
The Company’s risk and exposure to these matters cannot be fully mitigated because of, among other things, the
evolving nature of these threats. As a result, cyber security and the continued development and enhancement of
controls, processes and practices designed to protect the Company’s systems, computers, software, data and
networks from attack, damage or unauthorized access remain a priority. As cyber threats continue to evolve, the
Company may be required to expend additional resources to continue to modify or enhance protective measures
or to investigate and remediate any security vulnerabilities.
Disclosure Controls and Procedures
The Company has established disclosure controls and procedures to ensure that information disclosed in this
MD&A and the related audited consolidated 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 applicable Canadian securities laws as at December
31, 2018. 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 applicable Canadian securities
laws 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.
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, they do 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.
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UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
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 IFRS.
Based upon the 2013 COSO Framework, the Company’s certifying officers 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 concluded that as at December 31, 2018 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 IFRS.
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 material misstatement in financial reporting;
however, there can be no assurance that this risk can be reduced to less than a remote likelihood of material
misstatement.
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UEX CORPORATION
Management’s Discussion and Analysis
For the year ended December 31, 2018 and 2017
(Expressed in Canadian dollars, unless otherwise noted)
Cautionary Statement Regarding Forward-Looking Information
This MD&A contains “forward-looking statements” within the meaning of applicable Canadian securities
legislation. Such 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, joint venture
and option earn in arrangements, 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. These forward-looking statements are based on certain factors and
assumptions, including expected economic conditions, uranium, cobalt, and nickel prices, results of operations,
performance and business prospects and opportunities.
Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors
which could cause actual events or results to differ from those expressed or implied by the forward-looking
statements, including, without limitation:
UEX’s exploration activities may not result in profitable commercial mining operations;
risks associated with UEX’s participation in joint ventures, ability to earn into joint venture and option
arrangements;
risks related to UEX’s reliance on other companies as operators;
risks related to uranium, cobalt, and nickel price fluctuations;
the economic analysis contained in the 2011 technical report on UEX’s Horseshoe-Raven project may no
longer be accurate or reliable as prevailing uranium prices are lower than those used in the report;
risks associated with competition for mineral properties from mining companies which have greater financial
resources and more technical staff;
risks related to reserves and mineral resource figures being estimates based on interpretations and
assumptions which may prove to be unreliable;
uncertainty in UEX’s ability to raise financing and fund the exploration and development of its mineral
properties which could cause UEX to reduce or be unable to earn interests in properties;
uncertainty in competition from other energy sources and public acceptance of nuclear energy;
risks related to dependence on key management employees;
risks related to compliance with environmental laws and regulations which may increase costs of doing
business and restrict our operations;
risks related to officers and directors becoming associated with other natural resource companies which may
give rise to conflicts of interests;
risks related to accounting policies requiring UEX management to make estimates and assumptions that
affect reported amounts of financial items;
risks related to UEX’s internal control systems providing reasonable, but not absolute, assurance on the
reliability of its financial reporting;
risks related to the market price of UEX’s shares; and
potential costs which could be associated with any liabilities not covered by insurance or in excess of
insurance coverage.
This list is not exhaustive of the factors that may affect our forward-looking statements. Reference should also
be made to factors described under “Risk Factors” in UEX’s latest Annual Information Form filed on
www.sedar.com. Should one or more of these risks and uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those described in the forward-looking
statements. UEX’s forward-looking statements are based on beliefs, expectations and opinions of management
on the date the statements are made. For the reasons set forth above, investors should not place undue reliance
on forward-looking statements.
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