Unity
Annual Report 2016

Plain-text annual report

MANAG GEMENT’S  DISCUSSIO ON & ANAL LYSIS  FOR THE E YEAR EN DED FEBR UARY 29,  2016  ATION CORPO VIEW  ORATION  ABLE OF CONT TA BOUT URANIU AB RANIUM INDU UR VERALL PERFO OV UTLOOK  OU DDITIONAL IN AD AUTIONARY ST CA TENTS  UM PARTICIPA USTRY OVERV ORMANCE  FORMATION  TATEMENT R EGARDING FO ORWARD‐LOO OKING STATE EMENTS  2  2  6  11  17  17  This Mana (collectively financial co MD&A is consolidate agement’s Disc y, “UPC” or the ondition and re dated as of M ed financial sta cussion and A e “Corporation” esults of operat May 5, 2016 atements and re Analysis (“MD& ”) provides a d ions for the ye and should be elated notes fo &A”) of Uraniu etailed analysi ar ended Febru e read in con or the year ende um Participatio s of the Corpo uary 29, 2016 njunction with ed February 29 on Corporation oration’s busine to those of the the Corporatio 9, 2016. n and its subs ess and compa e previous year on’s audited a sidiary ares its r. This annual The audite Reporting amounts a published b the “Non-IF ed annual con Standards (“IF are expressed by Ux Consulti FRS Financial nsolidated fina FRS”) as issu in Canadian ng Company L Performance M ancial stateme ued by the Int dollars, unles LLC (“UxC”). F Measures” sect nts are prepa ternational Ac s otherwise n For all referenc tion. ared in accord ccounting Stan oted. All ura ces to the net a dance with Int ndards Board anium prices a asset value (“N ternational Fin (“IASB”). All are based on NAV”), please r nancial dollar prices refer to         Management’s D M Discussion & An nalysis ABOUT T URANIU UM PART TICIPATIO ON CORP PORATIO ON UPC inves uranium he in the valu under the services to Exchange sts substantially exafluoride (“U ue of its uraniu direction of t o the Corporat (“TSX”) under ets in uranium, ely “uranium”), rough increase y all of its asse F6”) (collective um holdings th on’s Board of the Corporatio tion. The com mmon shares o ”. the symbol “U” either in the f with the prima es in the uran Directors, pro of the Corpora form of uranium ary investment ium price. De ovides general ation are listed m oxide in con objective of ac enison Mines I l administratio d and trade on centrates (“U3O chieving appre Inc. (the “Mana n and manag n the Toronto O8”) or ciation ager”), gement Stock UPC was physical ur investment include ris uranium. T prices by e created to inv ranium owned t alternative fo ks associated The strategy of entering into ex vest in uranium by UPC. As a or investors int with investme f UPC is to inve xchange and/or m. The comm a result, an inv terested in inv ents in compan est in holdings r investment co on shares of t vestment in the esting directly nies that enga of uranium and ontracts or deriv the Corporatio e common sha in uranium, in age in the expl d not to activel vative arrange on represent a ares of the Cor n a manner th loration, minin y speculate on ments. n indirect inte rporation provid hat does not d g and process n changes in ur rest in des an directly sing of ranium URANI IUM INDU USTRY OV W VERVIEW In 2015, th attention w to the 54 r 2011. In J for nuclear industry ac Unit 1 reac 2015, and legal challe participants obtaining li he focus of the was focused on reactors that w June 2015, the r to provide rou chieved a sign ctor. The rest the subseque enges to their s in the nucle icences and ap e nuclear ener the number of were shut down e Japanese gov ughly 20-22% o ificant mileston art at Sendai U ent resumption continued com ear energy ind pprovals to brin rgy and uraniu f Japanese nuc n following the vernment appr of the country’s ne with the co Unit 1 was foll of two Takaha mmercial opera ustry in Japan ng over 20 addi um industries r clear reactors t e Fukushima D roved a draft p s power, and in ommercial resta lowed by the r ama units of K ation, these re n, which are i itional nuclear remained on J that were broug Daichii nuclear plan for electric n September 2 art of Kyushu restart of the S Kansai Electric estarts provide n the process power plants o Japan. During ght back on to incident, whic city generation 2015, the Japa Electric Powe Sendai Unit 2 r c Power. Whil significant en s of completing online. g the year, how the grid, as op ch occurred in to 2030, whic anese nuclear e r Company’s S reactor in Nov le continuing t couragement f g modifications wever, pposed March h calls energy Sendai vember to face for the s, and With Japan India and R India, nucle crisis aroun Year plan c as a way generation n returning to Russia – each ear power is s nd a lack of cle continue to be to combat cris is expected, a nuclear power of which have een as a prefe ean air and a g positive for the sis-level air po as well as addit r generation in adopted ambi erred choice to rowing problem e nuclear indus llution. A sign tional purchase 2015, the foc tious plans to provide reliab m with greenho stry, highlightin nificant increas es to expand C cus for the ind increase the u ble base load p ouse gas emiss g plans to acce se in the proje hina’s strategic ustry has start se of nuclear p power and add sions. Reports elerate the bui ected capacitie c uranium stoc ted to turn to power. In Chin resses the em s from China’s lding of new re es for nuclear ckpile. China, na and merging 13th 5- eactors power According capable of reactors ar of producin available fr between 6 where 21 r 66 reactors be operabl achieve thi years – me to the World N producing 26.8 re either planne ng up to 129 g rom nuclear. T and 7 reactor reactors were o s are either un le by 2030, rep is level of prod eaning that at le Nuclear Associ 8 gigawatts of ed or proposed igawatts of ele To achieve this s each year fo operable as of der constructio presenting ove duction, India’s east one additi ation (“WNA”), electricity. A f d. UxC estima ectricity by 203 s level of produ or the next 15 y March 1, 2016 on, planned or er 4 times as m fleet of nuclea onal reactor w , as of March 1 further 24 reac ates that 122 re 0, representing uction, China’s years. The WN 6, capable of pr proposed in In much power ca ar reactors will ill have to join t 1, 2016, China ctors are under eactors are exp g 5 times as m s fleet of nuclea NA is projectin roducing 5.3 gi ndia. UxC estim apacity as is cu have to increa the fleet each y a had 30 opera r construction a pected to be o much power ca ar reactors will ng a similar gro igawatts of pow mates that ove urrently availab ase by 19 react year. able nuclear re and an addition operable and ca pacity as is cu have to increa owth profile for wer. Taken tog er 22 gigawatts ble from nuclea tors over the n eactors nal 178 apable urrently ase by r India, gether, s could ar. To next 15 Throughou noted in m pound U3O The softne combinatio secondary producers would have ut 2015, the spo mid-2014. Whil O8, it softened s ess in the spot on of factors, in sources, and t with the oppor e been possible ot price of uran e the spot pric somewhat duri market continu ncluding produ the impact of a rtunity to sell i e in past years nium has susta ce increased d ng the fiscal ye ues to reflect th uction being so a strengthening nto the spot m . ained itself well uring the begin ear, to finish th he fact that the old into higher- g US dollar. Th market at signif l above the low nning of the fis he fiscal 2016 y e market is curr r-priced long te he strengthenin ficantly higher ws of US$28 pe scal 2016 year year at US$32 rently oversupp erm contracts, ng of the US do prices in their er pound U3O8 r, to near US$4 2.15 per pound plied, as a resu supply coming ollar provides s local currency 8 range 40 per U3O8. ult of a g from several y, than Although t combined w he uranium m with the expec market is curren cted depletion o ntly oversuppli of uranium reso ied, the long t ources in opera term growth p ation today, co projections for ontinue to sugg the nuclear in gest that a sign ndustry nificant 2 Management’s D M Discussion & An nalysis long term sustained p the new pr expected to the near t unavoidabl supply shorta period of low c roduction sourc o be required t term, it is pos le supply short ge could eme ommodity price ces necessary to justify the co ssible that eve age as soon as erge, even with es, the uranium to meet the ex onstruction of n en the most a s the early 202 h new product m mining indus xpected increa new mines, and mbitious deve 20s. tion sources e stry has been c ase in demand d in the absen elopment plans expected to co challenged to d in future year ce of a signific s could leave ome online. W iscover and ad s. Higher pric cant price incre the market w With a dvance es are ease in with an Uranium D Demand The WNA can genera 2016, 65 n China (24 Based on t or planned 2030. reports that the ate 384 gigawa nuclear reactor reactors unde the most recen around the wo ere are 440 nu atts of electricit rs are under c r construction) nt statistics from orld, and an ad uclear reactors ty and supply o onstruction in ), Russia (8), I m the WNA, the dditional 337 re operable in 30 over 11% of th 14 countries w ndia (6), the U ere are a total o eactors that ar 0 countries as e world's elect with the princip United States ( of 238 reactors re proposed, w of March 1, 20 trical requireme pal drivers of t (5), South Kor s that are eithe with the potentia 016. These re ents. As of Ma this expansion rea (3) and UA er under constru al to be operat eactors arch 1, being AE (4). uction, ting by According projected t generation 25%. The over 30% t demand, e to UxC, in its “ o increase by 3 capacities, Ch e Q1 Outlook a to as high as 2 xcluding inven Uranium Marke 39%, from 379 hina accounts also estimates 257.0 million po tory buildup, of et Outlook – Q 9.4 gigawatts in for 70% while that uranium ounds U3O8 by f 168.5 million Q1 2016” (the “Q n 2015 to 527.8 e India, South K demand, inclu 2025. This rep pounds of U3O Q1 Outlook”), g 8 gigawatts in Korea and Ru ding estimated presents an inc O8 in 2015. global nuclear 2030. Of the n ssia collectivel d inventory bu crease of over power capaciti net growth in n ly make up a f ildup, could gr 50% from esti ies are nuclear further row by imated Primary U ranium Suppl y According 158 million the Cigar States dec Cigar Lake 22% of th representin to the Q1 Outlo n pounds U3O8 Lake mine, glo clined in 2015 e increased pr e world’s prod ng nearly 40% ook, uranium p in 2015. Facto obal productio , while produc oduction from duction in 201 of production i production incre oring out the a n remained ro ction from Aus Canada. Can 15. Kazakhsta n 2015. eased year ove additional produ oughly flat from stralia, Russia nada remains an continues er year from 14 uction associat m 2014. Prod and Kazakhst the second la to be the wor 45.3 million pou ted with the ram duction from A tan remained rgest producin rld’s largest p unds U3O8 in 2 mp up of activi Africa and the relatively cons ng nation with roducer of ura 2014 to ities at United sistent. nearly anium, UxC has e will increas This repres above. In the increas in Canada, Namibia, w production increase a be required estimated in its se primary uran sents an increa past years, Ux ses in primary m , which is expe which is being b in 2016. For o ppreciably to s d. Q1 Outlook th nium supply fro ase of approxim xC projected th mine productio ected to increa built by a Chine other projects support their hi hat existing min om 158.0 millio mately 4.9%, as hat Kazakhstan on. In the Q1 O se production ese utility as a to move forwa igher cost prod ne production, on pounds U3O s compared to n was expected Outlook, the ma up to 18 millio source of capt rd to meet the duction profiles plus new plan O8 in 2015 to 1 the dramatic in d to continue to ain drivers are n pounds U3O tive supply, an production for s and the signi ned and poten 65.7 million po ncreases in ura o be one of the now limited to O8, per year, an nd continues to recasts, uraniu ificant capital e ntial mine produ ounds U3O8 by anium demand e principal driv the Cigar Lake nd the Husab m be projected t m prices will n expenditures th uction, y 2025. d noted ers for e mine mine in to start eed to hat will Secondary y Uranium Su pply Primary mi of demand uranium en ine production is supplied fro nrichers and inv supplies appro om secondary ventories held oximately 94% sources such by governmen % of current dem as commercial ts, in particular mand, excludin l inventories, re r the U.S. Depa ng inventory b eprocessing of artment of Ene uildup. The ba f spent fuel, sa ergy. alance ales by Excess com from the e German nu inventories governmen impact ove mmercial inven arly 1970s to t uclear program s could becom nt inventories, er the next 10 to ntories, which the early 2000 m and the con me a more si particularly in t o 20 years, alth were once one s, have largely tinued shut do gnificant facto the U.S. and R hough, the rate e of the major y been consum own of the ma or. A large s Russia. The dis e and timing of sources of sec med; however, ajority of the Ja source of sec sposition of the this material e condary suppli as a result of apanese nucle condary suppli ese inventories ntering the ma ies during the the shutdown ear fleet, comm ies continues s may have a m arket is uncerta period of the mercial to be market in. Reprocess Expansion significant UxC expec million pou sing of spent fu of this second increase in lon cts that second nds U3O8 per y uel is another s dary source wo ng-term uranium dary sources of year by 2025. source of seco ould require ma m prices. f supply will fal ondary supply b ajor investment but is expected ts in facilities w d to satisfy rou which could on ughly 6% of de ly be supporte emand. ed by a ll from 2015 lev vels of 44.3 m illion pounds U U3O8 per year t to 30.8 3 Management’s D M Discussion & An nalysis Uranium P Prices Nuclear ut deliveries t awarding m performanc number of indicators, volume flex mechanism tilities purchas to begin two to medium and l ce and produc f methods, inc but also long- xibility, floor pr ms are usually c se uranium pr four years afte ong-term cont ction cost profil cluding base p -term reference rices, ceiling pr confidential. rimarily throug er they are sign tracts, electric le, in addition prices adjusted e prices) and a rices and other h long-term c ned and provid utilities consid to the comme d by inflation annual price n r negotiated pro contracts. The e for delivery f der the produc ercial terms offe indices, refer negotiations. C ovisions. Und ese contracts from four to ten cer’s uranium fered. Prices a rence prices ( Contracts may er these contra usually provi n years thereaf reserves, rec are established generally spot also contain a acts, the actua de for fter. In cord of d by a t price annual al price The long-te UxC estima inventory b to 2020, s demand in representin estimated pounds U3 which is al portion of d erm demand th ates that uncov buildup. Uncov uch that up to n that year. U ng over 80% o to be over 10 3O8 greater tha lready committ demand that is hat actually ent vered demand vered demand, o 72.9 million p Uncovered dem of projected to 00% of total d an the total pro ted to the cove uncovered, uti ters the marke in 2016 is only however, is pr pounds remain mand rises ra otal demand. emand in 201 oduction expec ered portion of ilities will have t is affected in y 3.4 million po rojected by UxC ns uncovered f pidly for years At 173.6 mill 5, excluding i cted from new f the demand p to return to the a large part b ounds U3O8 or C to increase s for 2020, repre s after 2020 t lion pounds, th nventory build and existing m projected in 20 e market and e y utilities’ unco 2% of projecte significantly ove esenting rough to 173.6 millio he uncovered dup, and appro mine production 025. In order t enter into long-t overed requirem ed demand, inc er the period o hly 38% of pro on pounds for demand in 2 oximately 7.9 n in 2025 – so to address the term contracts. ments. cluding of 2016 ojected 2025, 025 is million ome of e rising . From 2006 year and a comparison spot marke each year. contract vo activity will cycle in ord 6 to 2010, on a approximately 2 n, from 2011 to et per year, wh In 2014 and 2 olumes in rece l have to incre der to fuel the w average, rough 200 million pou o 2015, on ave hile less than 1 2015, long term ent years and ase in the futu world’s growing hly 40 million po unds U3O8 equ erage, roughly 4 100 million pou m contracting vo increasing un ure as utilities g fleet of nuclea ounds U3O8 eq ivalent were co 48 million poun unds U3O8 equ olumes were ro ncovered requ look to secure ar reactors. quivalent were ontracted in th nds U3O8 equiv uivalent were c oughly 78 millio uirements, we e supply and m purchased on he long term m valent have be contracted in t on pounds U3O expect that lo move U3O8 thro the spot mark market each yea en purchased he long term m O8 per year. W ong term contr ough the nucle ket per ar. By on the market With low racting ar fuel The long-t historically fiscal year. erm price is p low volumes, published on a as noted abov a monthly basi e, the long-term is and began m price decline fiscal 2015 at ed to US$44.00 t US$49.00 pe 0 per pound U3 er pound U3O8 3O8 by the end 8. On of the Electric uti producers, price bega the fiscal y US$27.50 lities procure t traders and o n the fiscal yea year and then per pound U3O their remaining other suppliers ar at US$38.75 declined to US O8 on May 2, 20 g uranium requ . Historically, 5 per pound U3O S$32.15 per po 016. uirements throu spot prices ar O8. It rose to U ound U3O8 by t ugh spot and n re more volatile US$39.50 per p the end of the near-term purc e than long-ter pound U3O8 du fiscal year an chases from ur rm prices. Th uring the beginn d was last quo ranium e spot ning of oted at Given the s (including reflect the US dollar t and has se strengthening o Kazakhstan, C fundamental s terms and fore een significant of the US dolla Canada, and A strength of the eign currency te increases in fo ar relative to th ustralia), a rela uranium marke erms, in particu reign currency he currencies o atively flat US et. While othe ular oil, uraniu terms. of the majority o dollar denomi er commodities m has remaine of the uranium nated spot pric s have declined ed relatively fla m producing cou ce for uranium d significantly i at in US dollar untries m could n both r terms Current M arket Conditio ons Despite ve uranium pr US$36.00 analysts, t requiremen be content forced to m ery positive long rice fall below t per pound U3O his correction nts emerging in t to sit out as l mark down their g term supply a the mid-2014 lo O8 as recent as has been driv n the coming y long as the pri r prices to entic and demand fu ows (US$27.50 s December 20 ven by unusua ears are watch ice is flat or fa ce a sale during undamentals, t 0 per pound as 015. While disa ally low trading hing the marke alling. Sellers g this relatively the first three m s of May 2, 201 appointing, and g volumes. Ut et closely, looki with available y inactive mark ket. months of 2016 16). Spot prices d somewhat u ility fuel buyer ng for an entry spot material 6 have seen th s were trading nforeseen by m rs who have u y point, but app have therefore he spot above market unfilled pear to e been Two things increases surprising, described needs) bac s may result fr in existing pro this is notewo above; and (2) ck into the mar rom the recen oduction capac orthy given the ) On the dema rket. Low price t fall in the sp city and may th very significan nd side, it cou es have alread pot price: (1) hen delay, or c nt, and loomin ld bring both s dy sparked som On the supply cancel, new m g, increases in speculators and me mid-term ut y side, it could mine developm n uranium dem d utilities (buyin tility buying inte d further disco ent plans. Wh mand that have ng for actual fo erest for those ourage hile not e been orward eager 4 Management’s D M Discussion & An nalysis to lock in b demand in bargain prices the spot marke as far into the et when traders e future as the s backfill their f carry-trade ec forward commi conomics will a itments. allow. These m mid-term deals create The marke and discre sovereign p both count et direction for tionary deman players, such a ries have recen the remainder d. However, it as China and In ntly announced of 2016 will de is important to ndia, can dwar d plans to add t epend on the t o note that the rf this more trad to their strateg timing and volu e ongoing stock ditional activity ic uranium inve ume of utility n kpiling activitie y and should be entories. near term purch es of major em e followed close hasing merging ely, as SELEC CTED AN NUAL FIN NANCIAL L INFORM MATION (in thousand ds, except per sh hare amounts) Unrealized Net (loss) g Net (loss) g (losses) gains gain for the yea gain per comm s on investmen ar mon share – bas sic and diluted ts in uranium Fe ebruary 29, 2016 February 2015 28, $ $ $ (71,181) (75,072) (0.65) $ 13 $ 12 $ 4,606 8,680 1.10 Total Asse Total Liabil NAV(1) ts lities 651,550 2,071 649,479 $ 73 3,413 2,355 1,058 $ 73 (1) The Ne Financ et Asset Value o ial Performance or “NAV” is calc Measures” secti culated as the v on below. value of total ass sets less the va alue of total liab ilities. See “No on-IFRS SUMM ARY OF QUARTE ERLY FINA ANCIAL I INFORMA ATION Uranium rela ated (loss) gain ( (in thousands) Net (loss) ga ain for the period d (in thousands) $ (62,263) $ (8,563 3) $ (63,467) $ (9,928 8) $ 68, ,190 $ (67 7,101) $ 66, ,694 $ (68 8,371) February 29, November 30 0, August 31 1, 2016 2015 2015 May 3 31, 5 2015 Net (loss) ga ain per common share – basic an nd diluted hare – basic and d diluted NAV per sh U3O8 spot pr UF6 spot pric Foreign exc rice (US$) ce (US$) hange noon-rate e (US$ to CAD$) Uranium rela ated gain (loss) ( (in thousands) Net gain (los ss) for the period d (in thousands) Net gain (los ss) per common share – basic an nd diluted hare – basic and d diluted NAV per sh U3O8 spot pr UF6 spot pric Foreign exch rice (US$) ce (US$) hange noon-rate e (US$ to CAD$) $ (0.55) $ (0.09 9) $ 0 0.57 $ (0.59) $ 5.62 6 $ 6.16 $ 6 6.24 $ 5.67 $ 32.15 $ 36.00 0 $ 36 6.75 $ 35.00 $ 90.00 0 $ 99.00 $ 101 1.00 $ 98.50 1.3523 3 1.3333 1.3 3223 1 .2465 February 28, November 30 0, August 31 1, 2015 2014 2014 May 3 31, 4 2014 $ 36,178 2 $ 178,992 $ 34,807 $ 177,395 5 $ 0.30 $ 1.52 2 $ 39, ,629 $ (120 0,280) $ 38, ,466 $ (121 1,988) $ 0 0.33 $ ( (1.04) $ 6.26 $ 5.96 6 $ 4 4.44 $ 4.11 $ 38.75 $ 40.00 0 $ 31 1.00 $ 28.25 $ 107.00 $ 112.50 0 $ 87 7.00 $ 81.00 1.2508 1.1427 7 1.0 0858 1 .0867 5 Management’s D M Discussion & An nalysis OVERA ALL PER FORMAN NCE The net lo uranium of realized ga unrealized manageme oss for the yea f $71,181,000, ain on sale of u net gains on ent fees of $1,8 ar ended Febr , storage fees uranium of $1,0 investments 871,000 and tra ruary 29, 2016 of $2,347,000 027,000. The n in uranium of ansaction fees 6 was mainly 0 and manage et gain for the $134,606,000 of $919,000. due to unreali ement fees of year ended Fe 0, slightly offse ized net losse $2,216,000, s ebruary 28, 201 et by storage es on investme slightly offset 15 was mainly fees of $2,43 ents in by the due to 31,000, Unrealized decrease i from 1.250 and US$90 UF6 at Feb net losses on n spot prices, 08 during the f 0.00 per KgU a bruary 28, 2015 investments in partly offset by iscal year. Th as UF6 at Feb 5. n uranium durin y the increase he spot prices ruary 29, 2016 ng the year end in the U.S. do during the fisc 6, from US$38 ded February 2 ollar to Canad cal year decrea .75 per pound 29, 2016 were ian dollar exch ased to US$32 U3O8 and US caused by an o hange rate to 1 2.15 per pound S$107.00 per K overall 1.3523 d U3O8 KgU as Unrealized increase in as an incre net gains on i n spot prices fro ease in the U.S nvestments in om US$35.50 S. dollar to Cana uranium durin per pound U3O adian dollar for g the year end O8 and US$99. reign exchange ded February 2 00 per KgU as e noon-rate fro 28, 2015 were c s UF6 at Februa om 1.0867 durin caused by an o ary 28, 2014, a ng the fiscal ye overall as well ear. UPC’s NAV decreased V per share d to $649,479,0 ecreased to $ 00 at February 5.62 at Februa y 29, 2016, from ary 29, 2016, m $731,058,00 from $6.26 at 0 at February 2 t February 28, 28, 2015. 2015. Total equity The Corpo primarily d give rise to oration had an ue to the fact t o a net deductib effective tax that the Compa ble temporary d rate of nil for any’s available difference – for the years end tax shelter an r which the Com ded February d cost basis re mpany does no 29, 2016 and elated to its inv ot recognize de February 28, vestments in ur eferred tax ass 2015, ranium ets. Investme ent Portfoli o UPC’s inve estment portfoli io consists of th he following as s at February 2 29, 2016: (in thousand ds, except quanti ty amounts) nts in Uranium m: Investmen U3O8 UF6 U3O8 avera In Can In Unit age cost and m nadian dollars ted States dolla ars market value pe er pound: UF6 averag In Can In Unit ge cost and fair nadian dollars ted States dolla ars r value per KgU U: Quantity Cos st Fair Value 9,4 1,9 470,024 lbs 903,471 KgU $ 45 $ 31 54,486 11,862 $ $ 411,723 230,390(1 ) $ 76 66,348 $ 642,113 $ $ 47.99 43.97 $ $ 43.48(2 32.15 ) $ 1 $ 1 163.84 151.62 $ $ 2) 121.04(1)(2 ) 89.50(1 (1) Inc (2) Tr cludes a $1,276,00 ranslation to Canad 00 fair value adjustm dian dollars calculat ment for UF6 inven ted at period-end fo tory held with the U oreign exchange no United States Enric oon-rate. chment Facility. Purchases s of Uranium No purchas Corporatio cash consi ses were made n purchased 1 deration of $42 e during the ye ,090,000 poun 2,424,000 (US$ ear ended Feb nds of U3O8 at $38,225,000). ruary 29, 2016 t an average p 6. During the y price of US$35 year ended Fe 5.07 per pound ebruary 28, 201 d of U3O8, for 15, the a total Sale of Ura anium Given the s Corporatio used the p month. Th share, whic month of O were made significant disc n completed th proceeds from he Corporation ch represented October 2015. e during the yea count of the Co he sale of 100,0 the sale of the was able to p d a discount of The realized ar ended Febru orporation’s sha 000 pounds of e uranium to fu purchase 867,7 16.8% when c gain on the sa uary 28, 2015. are price relativ U3O8 for cash und the purcha 700 of its outst compared to th ale of the uran ve to its NAV p consideration ase of the Cor tanding shares he NAV per sha nium in Octobe per share durin of $4,743,000 rporation’s sha s at an averag are of $6.23 at er 2015 was $1 ng October 201 (US$3,625,00 ares during the e cost of $5.18 t the beginning 1,027,000. No 15, the 0) and e same 85 per of the o sales 6 Sale of Co nversion Comp ponents Management’s D M Discussion & An nalysis The Corpo U3O8. ration sold con nversion compo onent in UF6 as s outlined belo ow, in order to c convert some o of its UF6 holdi ings to In Novemb UF6 to occ ber 2014, the C ur over three tr Corporation ag ranches: greed to the sa ale of the conv version compo nent contained d in 250,000 K KgU as 1) co onversion com onsideration of co ponent contain f US$700,000 t ned in 100,000 that was compl 0 KgU as UF6 eted in Decem mber 2014; in return for 2 261,285 pound ds of U3O8 and d cash onversion com 2) co onsideration of co mponent contain f US$357,500 t ned in 50,000 that was compl KgU as UF6 eted in Februa in return for 1 ary 2015; and 130,643 pound ds of U3O8 and d cash onversion com 3) co onsideration of co ponent contain f US$715,000 t ned in 100,000 that was compl 0 KgU as UF6 eted in May 20 015. in return for 2 261,285 pound ds of U3O8 and d cash Losses on $68,000 an February 2 the sales of th nd $140,000, re 2015 totaled $2 e conversion c espectively. T 28,000. There w components in Transaction fee were no transa December 201 s relating to th action fees rela 14, February 2 he transactions ating to the sale 015 and May 2 s completed in e completed in 2015 were $24 December 201 May 2015. 47,000, 14 and Uranium Le ending Arrange ement In March 2 party with calculated end of eac guarantee, uranium pr (US$41,79 EVENTS fo oration entered 2015, the Corpo in April 2017 a return date ed on the avera quarterly base the previous t ch month for d in the amou was provided ary 29, 2016, rice. At Febru 95,000). In Ma arch 2016, the s. or more details d into an agree . The loan w age of the U3O three months. nt of US$56,0 the market va e loan was term ment to loan 1 was subject to 8 spot price pe Collateral fo 000,000, which alue of the 1,30 minated early ,300,000 poun a loan fee of er pound, as de or the loan, in h can be adju 00,000 pounds by mutual agr nds of U3O8 to f 1.0% per ann efined and pub n the form of sted based on s of U3O8 loan reement. Refe an independen num, with pay blished by UxC an irrevocable n movements ed was $56,51 er to SUBSEQ nt third yments at the e bank in the 19,000 QUENT In 2009, th term, which fee of 4.5% KgU as UF transferred a major fin borrowed q and 2) a co from Dece 2013 to De he Corporation h was subsequ % per annum b F6. To facilita d to the borrowe nancial instituti quantity separa onversion com mber 31, 2013 ecember 31, 20 entered into a uently extended based on the g te the loan of er, with 3,480,9 ion sent to UP ated into two t ponent of 467, 3 to July 15, 2 014. a loan of the co d an additional greater of the m the conversio 944 pounds of PC as collatera tranches: 1) a ,230 KgU as U 2013, while the onversion comp year. The con month end con on component U3O8 and an i al. In May 20 conversion co UF6 (“Tranche 2 e return date f ponent of 1,33 nversion comp nversion value in December irrevocable lett 013, the loan r omponent of 86 2”). The return for Tranche 2 32,230 KgU as ponent loaned w e per KgU as U 2009, 1,332,23 ter of credit of return date wa 65,000 KgU a n date for Tran was extended UF6 for a thre was subject to UF6 or US$11.7 30 KgU as UF US$15,700,00 as amended w s UF6 (“Tranch nche 1 was am from Decemb e year a loan 75 per F6 was 0 from ith the he 1”); mended ber 31, On July 15 to 1,220,81 was return 5, 2013, Tranch 11 pounds of U ed to the Corpo he 1 was return U3O8 and an irre oration and the ned to the Corp evocable letter e letter of credit poration and th r of credit of US t was cancelled he collateral he S$6,039,000. d. eld by the Corp On December poration was re 31, 2014, Tran educed nche 2 Fair Value Adjustment on n UF6 held with the USEC Fac cility In May 201 its Paduca other supp USEC Fac may take a recorded a with the US 13, the United S h Gaseous Dif pliers. With few cility. In order a considerable an initial fair va SEC Facility. States Enrichm ffusion Plant in wer enrichmen to transfer the amount of tim alue adjustmen ment Facility (“U n Kentucky. A t customers, th e Corporation’s me and the Cor nt of $3,987,00 USEC Facility”) s a result, man here has been s UF6 held with rporation may 0, in fiscal 201 ) announced th ny utilities have a decrease in h the USEC F incur significan 14 to reflect th hat it ceased ur e sought enric n the demand f acility to anoth nt costs. As s he risk associat ranium enrichm chment service for UF6 held w her storage fac uch, the Corpo ted with its UF ment at s from with the cility, it oration F6 held During the USEC Fac Facility to associated Facility, the year ended F cility to anothe 378,566 KgU with the tran e fair value adj February 29, 20 er storage facil with a fair va sfers amounte ustment was re 016, the Corpo lity. The trans lue of $46,074 ed to $2,711,0 educed to $1,2 oration transfer sfers reduced 4,000, before a 00. As a res 76,000. rred a total of the Corporatio adjustment, as ult of the redu 685,434 KgU a on’s UF6 hold s at February uction in UF6 as UF6 held w ings with the 29, 2016. Th held with the with the USEC e cost USEC Subsequen with the US nt to the year e SEC Facility to ended February another storag y 29, 2016, the ge facility. Refe e Corporation t er to SUBSEQ transferred an QUENT EVENT additional 42,2 TS for more det 290 KgU as UF tails. F6 held 7 The Corpo twelve mon adjustment oration plans to nths and curre t of $1,276,000 o relocate the ently expects th 0. remaining ma he cost associ aterial to anoth iated with this her facility thro process to be ough location s e offset by the swaps over th remaining fair e next r value LIQUIDIT TY AND CA APITAL RES SOURCES Management’s D M Discussion & An nalysis Cash and c The decrea of $6,507,0 cash equivalen ase of $8,785, 000, partly offse nts were $8,968 000 was prima et by cash gen 8,000 at Febru arily due to net nerated by inve ary 29, 2016 c t cash used in sting activities compared with operations of of $2,923,000 $17,753,000 a $5,201,000 an . at February 28, nd financing ac 2015. ctivities During Mar bid (“2014 to 7,500,00 and ended $1,999,000 its outstan transaction rch 2015, the C NCIB”) filed w 00 of the Corp on November 0, including tra nding shares a n costs. Corporation pu with the TSX in oration’s comm r 23, 2015. Sh ansaction costs at an average rchased 356,50 November 201 mon shares du hares were purc s. During Octo cost of $5.18 00 of its outsta 14. The 2014 ring the 12 mo chased at an a ober 2015, the 85 per share f anding shares, NCIB authoriz onth period tha average cost o Corporation p for a total exp pursuant to a n zed the Corpor at commenced f $5.60 per sha purchased an a penditure of $ normal course ration to purcha November 24 are for a total c additional 867, 4,508,000, inc issuer ase up , 2014 cost of 700 of cluding During Ma conversion considerati were relate facility. ay 2015, the n component c ion of $4,743,0 ed to costs of $ Corporation re contained in 000 upon comp $2,711,000 ass eceived cash 100,000 KgU pleting the sale sociated with th consideration as UF6. In e of 100,000 po he transfers UF of $891,000 October 2015 ounds of U3O8 F6 held with the upon complet 5, the Corpora . Cash used b e USEC Facilit ting the sale ation received by investing ac ty to another s of the d cash ctivities torage The Corpo normally fu in, or set a required m circumstan to facilitate arrangeme oration’s capita unded through aside for, future minimum amoun nces, the Corpo e the purchase ents. al structure co common share e purchases of nt of 85% of it oration can ent es of uranium onsists of sha e offerings with f uranium. At F ts aggregate g ter into short-te . To date, th re capital and h at least 85% February 29, 2 ross proceeds erm borrowing a e Corporation d contributed of the gross pr 2016, the Corpo s of share offer arrangements has not ente surplus. Uran roceeds of sha oration has inv rings in uraniu for up to 15% red into any s nium purchase are offerings inv vested more th m. In strictly of its net asset short-term borr es are vested an the limited t value rowing On Octobe regulatory shares or w to be deter offering am November Prospectus s. er 31, 2014, the authorities in e warrants or an rmined based o mount of up to 30, 2016. A e Corporation f each of the pro y combination on market cond o $200,000,00 As at February filed the Short ovinces of Can of such securi ditions at the ti 00 during the y 29, 2016, the Form Base Sh nada, other tha ities as units (“ ime of sale and 25 month per e Corporation helf Prospectus an Québec. Th “Securities”), in d as set forth i riod that the P has not issue s (“Prospectus he Corporation n amounts, at n the Prospect Prospectus rem ed any Securi s”) with the sec n may issue co prices, and on tus, for an agg mains effective ties pursuant curities ommon terms regate e until to the In January Corporatio commencin purchase o y 2016, the Co n to purchase ng January 18 of its outstandin orporation filed e up to 10,19 8, 2016 and e ng shares unde d a normal co 92,641 of the ending on Janu er the 2016 NC ourse issuer b e Corporation’s uary 17, 2017 CIB. id (“2016 NCI s common sh 7. To date, th B”) with the T hares during he Corporation TSX, authorizin a 12 month n has not mad ng the period de any RELATE ED PARTY T TRANSACTI IONS Manageme ent Services A Agreement wit th Denison Mi ines Inc. Pursuant t following fe uranium co reasonable asset value associated to its managem ees to the Man ompleted at the e out-of-pocket e in excess of with a transac ment services ager, as applic e request of the t expenses), p $100,000,000 ction or arrange agreement wit cable: a) a com e Board of Dire plus an addition ; and c) a fee, ement (other th th the Manage mmission of 1.5 ectors; b) a min nal fee of 0.3% at the discreti han a financing er dated April % of the gross nimum annual % per annum ion of the Boar g, or the purcha 1, 2013, the C s value of any p management f based upon th rd, for on-going ase or sale of u Corporation pa purchases or sa fee of $400,000 he Corporation g monitoring o uranium). aid the ales of 0 (plus n’s net or work The manag between th See SUBS gement service he Corporation SEQUENT EVE es agreement n and the Man ENTS for furthe er details. expired on Ma ager effective arch 31, 2016. April 1, 2016 A new three (“Renewed M e year agreeme anagement Se ent was entere ervices Agreem ed into ment”). 8 The followi ing outlines the e fees paid to th he Manager fo r the years end ded: (in thousand ds) February 29, F 2016 February 2015 28, Management’s D M Discussion & An nalysis anager: Fees incur Managem Transacti Total fees red with the Ma ment fees on fees – comm incurred with missions on ura h the Manager anium sales an nd purchases $ $ 2,216 71 2,287 $ 1 $ 2 1,871 636 2,507 As at Febr Manager w ruary 29, 2016 with respect to t 6, trade and o the fees indicat ther payables ted above. Key Mana gement Perso onnel included $260 0,000 (Februar ry 28, 2015: $ $250,000) due to the Key mana controlling the membe agement perso the activities o ers of its Board onnel are thos of the Corporat d of Directors. se persons ha tion, directly or aving authority r indirectly. Th y and respons he Corporation sibility for plan n’s key manage nning, directin ement personn g and nel are The followi ing compensat ion was award ed to key mana agement perso onnel for the ye ears ended: (in thousand ds) Directors’ f Total key m fees management personnel com mpensation FINANCI IAL INSTRU UMENTS AN ND OTHER I INSTRUME February 29, 2016 February 2015 y 28, $ $ 235 235 5 5 $ $ 223 223 NTS The Corpo those risks ration examine s. These risks es the various f may include co financial risks t ommodity price to which it is ex e risk, currency xposed and ass risk, credit risk sesses the imp k and liquidity r pact and likelih risk. hood of Commodity y Price Risk The Corpo increase in decrease w oration’s NAV is n the uranium s would have the s directly tied t spot price wou e same but opp to the spot pric ld have increa osite effect. ce of uranium p sed the Corpo published by U oration’s total e UxC. At Febru equity by $64,3 ary 29, 2016, a 339,000, while a 10% a 10% Currency R Risk Changes in Corporatio and trade a n the value of n’s foreign den and other paya the Canadian nominated inve ables. dollar compare estments in ura ed to foreign cu anium, cash an urrencies will a nd cash equiva affect the value alents, trade an e, as reported, nd other receiv of the vables, As the pric significantly increase in $64,559,00 ces of uranium y impact the v n the U.S. dolla 00, while a 10% are quoted in U valuation of ur ar to Canadian % decrease wo U.S. currency, ranium from a n dollar exchan uld have the sa fluctuations in Canadian do nge rate would ame but oppos site effect. the Canadian d llar perspectiv have increase dollar relative t ve. At Februa ed the Corpora to the U.S. doll ary 29, 2016, a ation’s total equ lar can a 10% uity by k Credit Risk Credit risk contractua includes th uranium. I that these to recover is the risk of l agreement th he carrying am Investments in organizations a its investments loss due to a c hat will result in mounts of cas uranium are h are not able to s in uranium he counterparty’s n a financial lo sh and cash e held with licens o continue as a eld with the org inability to me oss to the Corp equivalents, tra sed storage fac going concern ganizations. eet its obligatio poration. The ade and other cilities owned n could have a ons under a fin Corporation’s r receivables, by different org a significant imp nancial instrum credit risk exp and investme ganizations. Th pact on UPC’s ment or posure ents in he risk ability To limit th equivalents he credit risk s in credit wort exposure on hy financial ins its cash and stitutions. In or cash equivale rder to ensure ents, the Corp recoverability o poration holds on the Corpora its cash and ation’s investme d cash ents in 9 Management’s D M Discussion & An nalysis uranium, w in uranium receivables adequate s which are held w m with organiza s is limited si security is prov with storage fa ations that are nce the Corpo vided for any lo cilities owned credible and f oration lends aned uranium. by different org financially stab uranium exclu ganizations, the ble. Credit ris usively to large e Corporation h sk exposure on e organization holds its invest n its trade and ns and ensure tments d other es that Liquidity R isk Financial l generate c current cas commitmen cash or are iquidity repres cash from the sh balance is nts to purchase e contingent on sents the Corp lending or sal sufficient to m e uranium peri n its ability to ra poration’s abili e of uranium, meet its operat odically, the co aise funds throu ity to fund fut or the sale of ting cash requ ommitments ar ugh the sale of ture operating f additional eq uirements. Alt re normally fun f additional equ activities. Th quity securities hough the Co nded by the Co uity securities. he Corporation . The Corpor rporation ente orporation’s av n may ation’s rs into ailable Fair Value e of Investmen nts, Financial A Assets and Fi nancial Liabil ities IFRS requi that prioritiz ires disclosures zes the inputs s about the inp to fair value m puts to fair valu easurement. T e measuremen The three level nts, including th s of the fair va heir classificati lue hierarchy a on within a hie are: erarchy    Le Le in Le evel 1 – Unadju evel 2 – Input directly; and evel 3 – Inputs that are not ba ased on observ vable market d ata. usted quoted p ts other than q prices in active quoted prices markets for ide that are obse entical assets o rvable for the or liabilities; asset or liabi lity either dire ctly or Investment reporting p dollars usin uranium ba stored. ts in uranium period-end base ng the month-e ased on its ass are categorize ed on the most end foreign exc sessment of th ed in Level 2. t recent spot p change rate. M he valuation im Investments prices for uraniu Management m mpact of risks a in uranium ar um published b may also adjust associated with re measured a by UxC and co the fair value h the location w at fair value at onverted to Can of the investme where the uran t each nadian ents in nium is All financia instrument al instruments s. All purchase s’ fair values es and sales of approximate t f financial asse their carrying ets are account values due to ted for at settle o the short-te ement date. erm nature of these The Corpo ration has not offset financial assets with fin nancial liabilitie es. OFF-BA LANCE SHE EET ARRAN S NGEMENTS The Corpo ration does no t have any off- balance sheet arrangements . SUBSEQ QUENT EVE ENTS Uranium L Lending Arran ngement In March 2 April 2017. return date 2016 and t 2015, the Corp . In March 20 e. As a result o the related ban poration entere 16, the Corpor of the early term k guarantee w d into an agre ration and borr mination, the C as cancelled a eement to loan rower agreed to Corporation rec nd returned to 1,300,000 po o terminate the ceived cash co the borrower. unds of U3O8 e loan one yea onsideration of with a return d ar before the o US$435,000 i date in original n April Transfer o of UF6 held wit th the USEC F Facility to anot ther storage fa acility On May 2 facility. Th Corporatio , 2016, the Co he costs assoc n’s UF6 holding orporation tran ciated with tran gs with the USE sferred 42,290 nsferring the m EC Facility to 3 0 KgU as UF6 aterial amount 336,276 KgU. held with the ted to US$85,0 USEC Facility 000. The trans y to another s sfer has reduc torage ed the Renewal o of Managemen nt Services Ag greement with the Manager A new thre effective A fees from t fee equal t $500,000,0 discretion o ee year mana pril 1, 2016. U the Corporation to (i) 0.3% per 000, and (ii) 0. of the Board, f gement servic Under the Rene n: a) a base fee annum of the 2% per annum for on-going m es agreement ewed Managem e of $400,000 p Corporation’s m of the Corpor monitoring or wo was entered ment Services A per annum, pay total assets in ration’s total as ork associated into between Agreement, the yable in equal excess of $10 ssets in exces d with a transac the Corporatio e Manager will quarterly insta 00,000,000 and ss of $500,000 ction or arrang on and the Ma receive the fol llments; b) a va d up to and inc ,000; c) a fee, gement (other anager lowing ariable cluding at the than a 10 Management’s D M Discussion & An nalysis financing, purchases loan arrang or the acquisit or sales of U3 gements. tion of or sale O8 or UF6, or g e of U3O8 or U gross interest f UF6); and d) a fees payable to commission o o the Corporat of 1.0% of the ion in connecti e gross value ion with any ur of any ranium Migration of Subsidiary y At Februar owned sub Republic o through wh ry 29, 2016, th bsidiary, Uraniu of Cyprus on S hich the operat he majority of um Participatio September 10 ions of UPCL w the Corporatio on Cyprus Lim , 2006. In Aug were conducted on's uranium w mited ("UPCL"). gust 2007, UP d. was held direc . UPCL was in PCL establishe ctly or indirect ncorporated un ed a branch o ly through its nder the laws office in Luxem wholly of the mbourg UPCL migr was registe Bermuda. liabilities w of directly operating c rated to Bermu ered under the Immediately fo were transferred investing in, a costs. uda on March 1 name of Uran ollowing the m d to UPBL. UP and holding, ur 11, 2016, upon ium Participati migration, the PBL’s success ranium. The n receipt of app on Bermuda L branch office ful continuance migration to B proval from the imited (“UPBL” in Luxembour e in Bermuda Bermuda is exp e Bermuda Mon ”) by the Regis rg was closed will allow it to pected to redu netary Authorit strar of Compa and all asset carry on its ac ce the Corpor ty, and nies in ts and ctivities ation’s OUTSTA ANDING SHA ARE DATA At May 5, other instru 2016, there w uments issued were 115,648,7 and outstandin 713 common s ng. hares issued a and outstandin ng. There are no stock optio ons or OUTLO OOK The Corpo Outlook, th future fair v Based on projected t oration’s NAV is he spot price of value of invest UxC’s project o increase up t s directly tied t f U3O8 is projec tments in uran ions, by 2020, to a high of alm to the spot pric cted to rise ove ium held by U , the Corporat most $1 billion, ce of uranium er the next 15 PC, based on tion’s estimated and by 2030, u published by U years. The fol the low to hig d future fair v up to a high of UxC. Accordin llowing chart d gh spot price p value of invest over $1.5 billio ng to UxC’s 20 isplays the pro rojections from ments in uran on. 016 Q1 ojected m UxC. ium is Project ted Fair Value e of Investmen nts in Uranium m (1) i m u n a r U n i s t n e m t s e v n I f o e u l a V r i a F ) s n o i l l i m n i ( 1,800 1,600 1,400 1,200 1,000 800 600 400 200 - 2016 2017 2018 2 2019 2020 20 21 2022 2023 3 2024 2025 2026 2027 2028 2029 2 030 Year h High Mid Low 11 The estima projected a ated future fair as follows: value of invest tments in uran ium, illustrated d in the previou us graph, held b by the Corpora ation is Management’s D M Discussion & An nalysis (in millions) High Spot P Mid Spot Pr Low Spot Pr (2) rice Projections 3) ice Projections (3 4) rice Projections ( 2020 (1) $ 968 2025 (1) 8 $ 1, ,315 2030 $ (1) 1,597 $ 78 1 $ 1, ,101 $ 1,339 $ 553 3 $ 835 $ 916 (1) The es - Spot - The - The (2) High sp (3) Mid spo (4) Low sp timated fair value t price projection US to Canadian investments in u pot price projecti ot price projectio pot price projectio e of investments s from UxC’s 20 dollar foreign ex uranium held by t ons for 2020, 20 ons for 2020, 202 ons for 2020, 202 in uranium calcu 16 Q1 Outlook a xchange noon-ra the Corporation o 25 and 2030 we 25 and 2030 were 25 and 2030 wer ulated above are and noted in (2), ate at February 2 on February 29, re US$48.30, US e US$38.96, US$ re US$27.60, US e based on the fo (3) and (4) below 9, 2016 of 1.352 2016. S$65.60 and US $54.94 and US$ S$41.63 and US$ ollowing: w; 23; and $79.68, respectiv $66.78, respectiv $45.68, respectiv vely. vely. vely. CONTRO OLS AND P ROCEDURE ES The Corpo effectivene National In period cov Financial O oration carried o ess of the desi nstrument 52-1 vered by this Officer conclude out an evaluati gn and operat 09 Certificatio report. Based ed that the Cor on, under the s tion of the Cor on of Disclosur d on that eva rporation’s disc supervision an rporation’s “dis re in Issuers’ A luation, the Pr closure controls nd with the part sclosure contro Annual and Int resident and C s and procedur ticipation of its ols and proced terim Filings) a Chief Executiv res are effectiv management, dures” (as defi as of the end ve Officer and ve. of the ned in of the Chief The Corpo control ove reporting b Organizatio Chief Fina February 2 oration’s mana er financial rep based on the ons of the Trea ncial Officer co 29, 2016. agement is res porting and co Internal Contr adway Commis oncluded that sponsible for e onducted an ev rol – Integrate ssion. Based o the Corporatio establishing an valuation of th d Framework, on this evaluatio on’s internal co nd maintaining he effectivenes 2013 issued on, the Preside ontrol over fina g an adequate ss of internal c by the Comm ent and Chief E ancial reporting e system of in control over fin mittee of Spon Executive Offic g was effective nternal nancial nsoring cer and e as of There has year ende Corporatio not been any ed February 2 n’s internal con change in the 29, 2016 that ntrol over finan Corporation’s has materiall cial reporting. internal contro ly affected, o ol over financia r is reasonab l reporting that bly likely to m t occurred duri materially affec ng the ct, the CRITICA AL ACCOUN NTING ESTI MATES AN D JUDGME ENTS The prepa accounting consolidate materially f aration of con g estimates and ed financial sta from these esti solidated finan d judgments th atements and i mates. Signific ncial statemen hat affect the r income and ex cant estimates nts in conform reported amou xpenses during s and judgment mity with IFRS unts of assets a g the reporting ts made by ma S requires ma and liabilities a period. Actua nagement inclu anagement to as of the date al results could ude: make of the d differ Investment ts in Uranium Investment for uranium Manageme impact of r ts in uranium a m published by ent may also a isks associated are measured a y UxC and con adjust the fair v d with the locat at fair value at e verted to Cana value of the inv tion where the each reporting adian dollars u vestments in u uranium is stor period-end ba using the mont ranium based red. ased on the mo h-end foreign e on its assessm ost recent spot exchange noo ment of the val prices n rate. luation Deferred In ncome Taxes Deferred in assets and or substan The Corpo future taxa ncome taxes a d liabilities and tively enacted oration is also ble income. are based on their respectiv tax rates expe required to lim temporary diff ve tax bases. ected to apply w mit the amount ferences betwe Deferred tax a when the differ t of deferred t een the financ assets and liab rences are ant tax assets rec cial statement bilities are mea icipated to be ognized based carrying amou asured using en recovered or s d on expectati unts of nacted settled. ons of 12 Accountin ng Standards I Issued But No ot Yet Adopted d Management’s D M Discussion & An nalysis The Corpo periods be oration has not ginning on or a yet adopted th after March 1, 2 he following ac 2016: ccounting pron nouncements e effective for the e Corporation’s s fiscal IFRS 9 Fin nancial Instrume ents In July 201 the classifi Financial I assets in IA how an en characteris replacing t on or after 14, the IASB p cation, measu Instruments: R AS 39 with a s ntity manages i stics of the fin he multiple imp January 1, 201 ublished the fi rement, impair Recognition an ingle principle its financial ins ancial assets. pairment meth 18; however, it nal version of rment and hed d Measureme based approac struments in th The new sta ods in IAS 39. is available fo IFRS 9 Financ dge accounting nt. IFRS 9 r ch for determin he context of it andard also re The final ve r early adoption cial Instruments g phases of the replaces the m ning the classifi ts business mo equires a singl ersion of IFRS n. s (“IFRS 9”), w e IASB’s proje multiple classif ication of finan odel and the c e impairment 9 is effective f which brings to ect to replace I ications for fin ncial assets bas contractual cas method to be for periods beg ogether AS 39 nancial sed on sh flow used, ginning IFRS 15 – Revenue from Contracts with h Customers IFRS 15 de statements contracts w standard re is effective eals with reven s about the na with customers eplaces IAS 18 for annual per nue recognition ature, amount, s. Revenue is 8 “Revenue” an riods beginning and establishe timing and un s recognized w nd IAS 11 ”Co g on or after Ja es principles fo ncertainty of r when a custom nstruction Con nuary 1, 2018 or reporting use revenue and c mer obtains c ntracts” and rel and earlier app eful information cash flows aris ontrol of a go ated interpreta plication is perm n to users of fin sing from an e ood or service. ations. The sta mitted. nancial entity’s . The andard IFRS 16 – Leases In January “Leases”. with the int annual per y 2016, the IA IFRS 16 requi tent of providin riods beginning ASB issued IFR res all leases, ng greater trans g on or after Jan RS 16 which including finan sparency on a nuary 1, 2019, replaces existi ncing and opera company’s lea with early ado ing standards ating leases, to ase assets and option permitted and interpreta o be reported o d liabilities. IFR d if IFRS 15 is ations under IA on the balance RS 16 is effect adopted. AS 17 e sheet tive for The Corpo ration has not yet assessed t the impact nor determined wh hether it will ea rly adopt these e standards. RISK FA ACTORS An investm considered negatively could mate from those the outlook UPC. This the future. ment in securit d by prospectiv affect UPC’s b erially affect th e described in f k and condition s information, b ties of UPC is ve investors be business and t he Corporation forward-looking ns currently kn by its nature, is highly specul efore purchasi he value of UP ’s future opera g statements re nown to UPC t not all-inclusiv ative and invo ng such secur PC’s securities ating results an elating to the C that could hav ve and is not a olves significan rities. There a , including the nd could cause Corporation. T ve a material im guarantee that nt risks, which are a number factors listed e actual event he following in mpact on the f t other factors w should be ca of factors that below. Such f ts to differ mat formation perta financial condi will not affect U arefully t could factors terially ains to tion of UPC in Uranium P Price Volatility fr rom Demand a and Supply Fac ctors Since almo sensitive to continue to demand fo and politic reactor fue participants ost all of the C o fluctuations o be, affected b or nuclear powe al response to el and the re-en s; and producti Corporation’s a in the prices o by numerous fa er; political and o a nuclear ac nrichment of de ion levels and p ctivities involve of uranium. H actors beyond d economic co ccident; improv epleted uranium production cos e investing in istorically, the the Corporatio onditions in ura vements in nu m tails; sales of sts in key uraniu uranium, the v fluctuations in on’s control. S anium producin uclear reactor f excess invent um producing c value of its sec n these prices Such factors inc ng and consum efficiencies; re tories by gover countries. curities will be have been, a clude, among o ming countries; eprocessing of rnments and in highly nd will others: public f used ndustry Since UF6 supply/dem may move Price will a is a different c mand balances differently tha affect the NAV o commodity than s of U3O8 and n the spot pric of the Corporat n U3O8, its pric for conversion ce of U3O8 or th tion, which in tu ce is affected b services. As he spot conver urn may affect by its own sup a result, the s rsion price alon the price of the ply/demand ba spot price of U ne. The factor e Corporation’s alance as well UF6 (the “UF6 rs that affect th s securities. as the Price”) he UF6 13 Management’s D M Discussion & An nalysis Set out in t 29, if applic the table below cable) for each w is the spot pri h of the last the ce for U3O8 pe five fiscal yea er pound and th rs(1). he UF6 Price pe er KgU at Febr ruary 28 (or Fe bruary (1) U3O8 (1) UF6 2012 $52.00 0 $141.00 2013 $42.00 0 $120.00 2014 $35.50 $99.00 2015 $38.75 0 $107.00 2016 $32.15 5 0 $90.00 (1) As publ lished by UxC in US dollars. Public Acc eptance of Nuc clear Energy an nd Competition n from Other En s Energy Sources The growth technology affect the n demand fo anywhere in the future p h of the uranium as a means of nuclear industry r nuclear powe n the world cou prospects for nu m and nuclear p f generating ele y, the industry er and increase ld impact the co clear generator power industry ectricity. Becau is subject to p e the regulation ontinued accept rs, which could h will depend up se of unique po public opinion r of the nuclear tance by the pu have a material pon continued a olitical, technolo risks which cou r power industry blic and regulat l adverse effect and increased a ogical and envir uld have an ad ry. An acciden tory authorities t on the Corpora acceptance of n ronmental facto dverse impact t at a nuclear r of nuclear ener ation. nuclear ors that on the reactor rgy and Nuclear en energy sou prices of o energy, ma energy, suc pressure on ergy competes rces are to som oil, natural gas, ay result in low ch as wind and n the demand fo with other sou me extent interc coal and hydr wer demand for d solar power, or uranium conc rces of energy, hangeable with ro-electricity, as r uranium. Tec could make the centrates. , including oil, n nuclear energy s well as the p chnical advance ese forms of en natural gas, coa y, particularly ov possibility of de ements in rene nergy more co al and hydro-ele ver the longer te eveloping other ewable and oth mmercially viab ectricity. These erm. Sustained low cost sourc her alternate fo ble and put add e other d lower ces for orms of ditional Risks Asso ociated with the USEC Facility The USEC As a result there has b UF6 as at t facilities. W UF6, and U USEC Fac C Facility, one o t, many utilities been less dem the date hereo While UPC is c UPC may incur cility has amoun of the licensed s have sought mand for UF6 he of. UPC has b continuing to p costs to do so nted to approxi d facilities with enrichment se eld with the US been working to pursue opportu o, which could b mately US$2.1 which UPC ho rvices from oth SEC Facility. T o transfer its U nities, it may ta be significant. 1 million. olds UF6, ceas her suppliers. The Corporatio UF6 held with t ake a conside To date, the c sed enrichment With fewer en on currently ho he USEC Faci rable amount o cost to transfer t operations in nrichment custo olds 336,276 K ility to other lic of time to trans its UF6 held w 2013. omers, KgU as censed sfer its with the UPC’s con UPC will ne ntract with the egotiate an ext USEC Facility tension or have y was amended e 180 days to r d to extend its remove its UF6 s expiry date to from the facilit o December 3 ty. 31, 2016, after which Risks Asso ociated with Fa acilities All uranium one, a “Fac to arrange the benefit standard in will fully co legally resp could have m is stored at l cility” or collect for all uranium t of the Corpora ndustry terms. over or absolve ponsible for los e a material adv icensed uraniu tively, the “Fac m to be stored a ation or ensure There is no g e the Corporat sses and/or da verse effect on um conversion cilities”). Under at Facilities and e that the Corp guarantee that tion in the even mages not cov the financial c or enrichment r the managem d to ensure tha poration has th either the inde nt of loss or da vered by indem condition of the t facilities owne ment services a at the Facilities e benefit of ins emnities or insu amage. The C mnity provisions Corporation. ed by different agreement, the provide satisfa surance arrang urance in favou Corporation ma s or insurance t organizations Manager is re actory indemnit gements obtain ur of the Corpo ay be financial . Such respon (each equired ties for ned on oration lly and nsibility As the num commercia storage ter mber of duly l ally beneficial t rms with the Fa licensed Facili to the Corpora acilities may ha ties is limited, ation will be re ave a material a there can be eadily available adverse effect e no assurance e. Failure to n on the financia e that new arr negotiate comm al condition of t hat are rangements th mercially reaso onable n. the Corporation By holding these Facil in uranium financial co its investment lities and their held with the F ondition of the C ts in uranium w operators. The Facilities. Failu Corporation. with various lice ere is no guara ure to recover a ensed Facilities antee that the C all uranium hol s, the Corporat Corporation ca dings could ha tion is exposed n fully recover ave a material a d to the credit r all of its invest adverse effect risks of tments on the Foreign Ex xchange Rates The Corpo expenses quoted in ration maintain in Canadian cu U.S. currency ns its accountin urrency. In ad y, fluctuations ng records, rep ddition, its secu in the U.S. cu orts its financia urities trade in urrency exchan al position and n Canadian cur nge rate relati results, and pa rrency. As the ive to the Can ays certain ope e price of uran nadian currenc erating nium is cy can 14 Management’s D M Discussion & An nalysis significantly perspective that such f securities. y impact the e. Because ex fluctuations wil valuation of xchange rate f ll not have an uranium and fluctuations are adverse effect the associate e beyond the C t on the Corpo ed purchase Corporation’s c oration’s opera price from a control, there c ations or on the Canadian cu can be no assu e trading value urrency urance e of its Uranium Le ending The Corpo Corporatio However, equivalent uranium he oration may, fr n has, and will there is a risk value of borro eld by the Corp rom time to tim in the future, e k that the bor wed uranium i poration may be me, enter into ensure that ad rower may no n cash. In suc e higher depen uranium lendi equate security ot be able to r ch circumstanc nding on prevai ing arrangeme y is provided w return the ura ces, given the r iling market co ents. As a ma with respect to nium and may replacement co nditions. atter of practic any loaned ura y, in lieu, repa ost of U3O8 an ce, the anium. ay the d UF6, No Public M Market for Uran ium There is no does not p does not o able to acq and sellers purchase o Corporatio inability to securities o o public market provide for phy ffer a formal m quire uranium s is limited, a or sale cycle m n may experie purchase and of the Corporat t for the sale of sical delivery o market but rathe or, once acqu and each trans may take sever nce additional d sell on a time tion. f uranium. The of uranium, on er facilitates the ired, sell urani saction may re ral months to c difficulties pur ely basis in su e uranium futur ly cash on set e introduction o um for a numb equire the neg complete. In a rchasing uraniu ufficient quantit res market on t ttlement, and t of buyers to se ber of months. gotiation of sp addition, as th um in the even ties could have the New York M he trading foru ellers. The Co . The pool of pecific provisio e supply of ur nt that it is a sig e a material a Mercantile Exc um by certain b rporation may potential purch ons. Accordin ranium is limite gnificant buyer dverse effect o change buyers not be hasers ngly, a ed, the r. The on the From time generally s purchases to time, the C subject to cond contemplated Corporation en ditions in favou by such comm nters into com ur of both the mitments will be mmitments to p vendor and th e completed. purchase U3O8 he Corporation, 8 or UF6. Suc , and there is ch commitmen no certainty th nts are hat the Industry Co ompetition for t the Supply of U Uranium The interna are availab inventory f excess enr supply of u sources, a the Corpor ational uranium ble from a num from utilities an richment capac uranium is also nd the impact ration, may imp m industry, incl mber of source nd governmen city, which can o tied to politic of a change in pact the supply luding the sup es including: a nt sources; rep n be used for u cal and econom costs, govern of uranium an ply of uranium relatively sma processed uran underfeeding o mic conditions ment policies a d its market pr m concentrates, all number of u nium and pluto r re-enriching s in uranium pr and other facto rice. , is competitive uranium mining onium from us depleted urani roducing count ors which are b e. Uranium su g companies; e sed reactor fue um tails. Wor tries. The var beyond the con upplies excess el; and rldwide riety of ntrol of For examp agreement restrictions States and ple, the supply ts and policies s are beyond th Europe, which y of uranium fr s. These agre he control of th h are the larges rom Russia is, eements and a he Corporation st markets for u to some exte any similar fut n and may affe uranium in the ent, impeded b ure agreemen ect the supply world. by a number o ts, governmen of uranium av of international ntal policies or vailable in the l trade r trade United Lack of Op perational Liqui idity The expen revenue fro additional guarantee the Corpor the Corpor nses of the Co om lending of cash from eith that the Corpo ration in the fut ration will be ab orporation are uranium. On her the lending oration will be ture, that the C ble to generate funded from ce such availa g or sale of ura able sell addit Corporation will revenue throu cash on hand able cash has anium, or the ional equity or be able to sel ugh lending arra d that is not o been expend sale of additio r equity related l uranium in a angements. otherwise inves ed, the Corpo onal equity sec d securities on timely or profit sted in uranium ration may ge curities. There terms accepta table manner, m and nerate e is no able to or that NAV The NAV r may not ne deducting t any future reported by the ecessarily refle the Corporatio income taxes, e Corporation is ect the actual re n’s liabilities fro if applicable. s based on the ealizable value om its assets a spot price of u e of uranium he as at the releva uranium publish eld by the Corp ant period end. hed by UxC. A poration. The . The liabilities Accordingly, the NAV is calcula s include liabilit e NAV ated by ties for 15 Management’s D M Discussion & An nalysis Market Pric ce and Liquidity y of Common S Shares The Corpo share. Sec in the past These fact attractivene term chang condition o securities. be limited investment point in tim oration cannot p curities of comp t, often based tors include m ess of particula ges in commo or results of op If an active m and the price t in the Compa me may not acc predict whethe panies in, or in on factors unr macroeconomic ar industries. T odity prices, ot erations as ref arket for the co of the securitie ny. As a result urately reflect t r the common nvesting in, the related to the f c conditions in The price of UP ther mineral p flected in its pe ommon shares es of the Corp t of any of thes the long-term v shares will, in e natural resou financial perfor North Americ PC's securities prices, currency eriodic reports s does not cont poration may d se factors, the m value of UPC. the future, trad urce sector hav rmance or pro ca and globall s is also likely t cy exchange fl and changes i tinue, the liquid decline such th market price of de above, at o ve experienced ospects of the ly, and marke to be significan uctuation, cha in general mar dity of an inves hat investors co f the securities or below the NA d substantial vo companies inv t perceptions ntly affected by anges in its fin rket interest in stor's investmen ould lose their of UPC at any AV per olatility volved. of the short- nancial UPC's nt may entire y given The Corpo the Corpor until a det Corporatio oration’s princip ration may not termination is n has not decla pal source of fu have the reso made to sell ared any divide unds is from th ources to decla a portion of i ends, and the C he sale or lend are any dividen its uranium ho Corporation has ding of Uranium nds or make o oldings for suc s no current int m by the Corpo other cash dist ch purpose. tention to decla oration. Accor tributions unles Since inceptio are any dividen dingly, ss and on, the nds. Reliance o n Board of Dire ectors and Man nager The Corpo of the Corp directing t manageme oration is a self poration’s com he affairs and ent services. f-governing cor mon shares. T d for investme rporation that is The Corporatio ent and other s governed by on will, therefor material decis y the Board app re, be depende sions and the pointed and el ent on the serv e Manager for ected by the h vices of its Boa r administratio holders ard for on and Resignatio n by Manager The Manag The Corpo under the from time manageme Manageme ger may termin oration may no Management S to time there ent of the Co ent Services Ag nate the Renew ot be able to r Services Agree e may be cha orporation and greement. wed Managem readily secure ement, and its anges in pers d impact the ment Services A similar service operations ma sonnel at the management Agreement in a es or at mana ay therefore be Manager, and t services pro accordance wi agement fees c e adversely aff d these chan ovided to Cor th the terms th comparable to fected. Additio ges could alt rporation unde hereof. those onally, er the er the Conflict of Interest Directors a and parties reasonable Corporatio and officers of s. The direct e time as is re n as they arise the Corporatio ors and office equired to prop e from time to ti on may provide ers of the Corp perly fulfill thei ime. e investment, a poration have ir responsibiliti administrative a devoted, and ies in respect and other serv have undertak to the busines vices to other e ken to devote ss and affairs entities , such of the Regulatory y Change The Corpo could, depe oration may be ending on their affected by ch r nature, benef hanges in regu it or adversely ulatory requirem affect the Corp ments, custom poration. ms, duties or ta axes. Such ch hanges Impact of G Global Econom mic Conditions Global fina instability i business in be adverse ancial condition n recent years n uncertain fina ely impacted by ns have been in s. The Corpor ancial condition y risks arising f ncreasingly vol ration takes pre ns and market from global fina latile, and the e ecautions to m ts. However, th ancial condition economies of c mitigate agains here is no guar ns and unstable certain countrie st risks associa rantee that the e economies in es have experi ated with carry e Corporation w n the future. ienced ying on will not Spot marke pressure o credit at va producers of increme et volumes ma on the spot pric arious stages or uranium ex ntal supply of u ay also be imp ces for uranium in the uranium ploration and d uranium made pacted by globa m. Global eco m market, such development. available to the al economic co onomic conditio as the constr In addition, glo e market from onditions, whic ons may influe ruction of new obal economic remaining exce ch can cause d ence the availa reactors, prod c conditions ca ess inventories downward or u ability of financ duction from ur n impact the a s. upward cing or ranium amount 16 Management’s D M Discussion & An nalysis Disclosure and Internal C Controls Internal co are proper recorded a disclosed b reported o executive o control sys with respec ntrols over fina ly authorized, a and reported. by a company n a timely bas officer and chie stem, no matte ct to the reliabi ancial reporting assets are safe Disclosure co in reports filed sis and is acc ef financial offic er how well de lity of reporting g are procedur eguarded again ntrols and proc with securities umulated and cer, as approp esigned and op g, including fina res designed to nst unauthorize cedures are de s regulatory aut communicated riate, to allow t perated, can p ancial reporting o provide reaso ed or improper esigned to ens thorities is reco d to company’ timely decision rovide only rea g and financial onable assuran r use, and trans sure that inform orded, process ’s managemen ns regarding re asonable, not statement prep nce that transa sactions are pr mation required sed, summarize nt, including its equired disclosu absolute, assu paration. actions roperly d to be ed and s chief ure. A urance NON-IFR RS FINANCI IAL PERFO RMANCE M MEASURES This MD&A performanc at NAV pe Diluted NA outstanding IFRS and comparabl quantitative NAV per s information Corporatio A contains ref ce measures. r share, the NA AV per share g, adjusted for therefore may e IFRS financ e reconciliation share and dilu n useful to its s n’s business re ferences to “N The NAV is ca AV is then divi is calculated dilutive instrum y not be com ial measure pr n for such non- uted NAV per shareholders i elative to that o et Asset Value alculated as the ded by the tota by dividing the ments. The te parable to sim resented in UP -IFRS financia share consis n understandin of its peers. e” or “NAV” a e value of total al number of c e NAV by the rm NAV does milar measures PC’s consolida l performance tently for man ng UPC’s perfo and “diluted NA assets less th common shares e weighted ave not have any s s presented b ated financial s measure. The ny years and ormance and m AV”, which are he value of tota s outstanding a erage number standardized m by other comp statements and e Corporation believes these may assist in t e non-IFRS fin al liabilities. To as at a specific r of common s meaning accord anies. There d thus no app has calculated e measures p the evaluation nancial o arrive c date. shares ding to is no licable d NAV, provide of the ADDITIO ONAL INFOR RMATION Additional Annual Info information reg ormation Form garding UPC, , are available including the C under the Corp Corporation's p poration's profi press releases le at www.seda s, quarterly and ar.com. d annual repor rts and CAUTIO NARY STAT TEMENT RE EGARDING FORWARD D-LOOKING G STATEME NTS Certain inf forward loo “may”, “wil or variation ormation conta oking informati l”, “expect”, “in ns thereon or s ained or incorp on. These sta tend”, “estimat imilar terminolo porated by refe atements can b te”, “anticipate” ogy. erence in this be identified by ”, “plan”, “shou MD&A constitu y the use of fo ld”, “believe” o utes forward lo orward looking or “continue” or ooking stateme terminology su r the negative t ents or uch as thereof By their ve factors, ma expectation please refe ery nature, forw any of which ns expressed i er to the “RISK ward looking st are beyond th in the forward FACTORS” se atements invol he control of looking statem ection in this M D&A. lve numerous f UPC, may ca ments. For a lis factors, assum ause actual re st of the princi mptions and est esults to differ ipal risks of an timates. A var materially fro n investment in riety of om the n UPC, These and these forw estimates, future perfo where req information d other factors ward looking s unusual and u ormance may uired under a n. should be con tatements. A unanticipated e differ materially pplicable secu nsidered carefu Although mana events may occ y from those e urities legislatio ully, and reade agement review cur which rend xpressed or im on, UPC does ers are caution ws the reason der them inacc mplied by the fo s not undertak ned not to plac nableness of i curate. Under orward looking ke to update ce undue relian ts assumption such circumsta statements. E any forward lo nce on ns and ances, Except ooking 17 AN NNUAL CO ONSOLIDAT TED FINAN NCIAL STAT TEMENTS  FOR THE E YEAR EN DED FEBR UARY 29,  2016  NG  TAB RES IND CON CON CON CON NOT BLE OF CONT SPONSIBILITY  DEPENDENT A NSOLIDATED  NSOLIDATED  NSOLIDATED  NSOLIDATED  TES TO CONS ENTS  FOR FINANC AUDITOR’S RE STATEMENTS STATEMENTS STATEMENTS STATEMENTS SOLIDATED FI IAL REPORTIN EPORT  S OF FINANCI S OF COMPRE S OF CHANGE S OF CASH FL NANCIAL STA AL POSITION EHENSIVE GA ES IN EQUITY  OWS  ATEMENTS  AIN (LOSS)  2  3  5  6  7  7  8        Annua al Consolidated d Financial State ements Respo nsibility for Finan ncial Repo orting Uranium P the presen prepared Internation Participation Co ntation of thes by manageme al Accounting S orporation’s (th se consolidate ent, in accord Standards Boa he “Corporation d financial sta dance with Int ard, for review b n”) manageme atements. Th ternational Fin by the Audit Co nt is responsib e consolidated nancial Report ommittee and a ble for the inte d financial sta ting Standards approval by the egrity and fairn atements have s as issued b e Board of Dire ness of e been by the ectors. The prepa accordance manageme necessary becomes a available. aration of cons e with Interna ent to present when transac solidated financ ational Financ fairly and cons tions affecting cial statements cial Reporting sistently the co the current pe s requires the Standards a onsolidated fina eriod cannot b e selection of and the use ancial position be finalized wit appropriate ac of estimates of the Corpora th certainty un ccounting polic and judgmen ation. Estimat ntil future inform cies in nts by tes are mation The Board Audit Com Corporatio consolidate report outli independe d of Directors c mmittee, which n’s consolidate ed financial sta nes the scope nt auditor has f carries out its h is comprise ed financial st atements have of its examina full access to th responsibility f ed solely of i tatements and been audited ation and expre he Audit Comm for the consolid independent d recommends by Pricewaterh esses its opinio mittee with or w dated financia directors. Th their approva houseCoopers on on the cons without manage l statements p he Audit Com al to the Board s LLP, our inde solidated financ ement present. principally throu mmittee review d of Directors. ependent audito cial statements ugh its ws the . The or. Its s. The (Signed) “D David Cates” David Cate President a es and Chief Exec cutive Officer May 5, 201 16 (Sign ned) “Mac McD Donald” Mac Chief McDonald f Financial Offi cer 2 May 5, 2016 Independent Auditor’s Report To the Shareholders of Uranium Participation Corporation We have audited the accompanying consolidated financial statements of Uranium Participation Corporation and its subsidiary, which comprise the consolidated statements of financial position as at February 29, 2016 and February 28, 2015 and the consolidated statements of comprehensive gain (loss), consolidated statements of changes in equity, and consolidated statements of cash flows for the years then ended, and the related notes, which comprise a summary of significant accounting policies and other explanatory information. Management’s responsibility for the consolidated financial statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion. PricewaterhouseCoopers LLP PwC Tower, 18 York Street, Suite 2600, Toronto, Ontario, Canada M5J 0B2 T: +1 416 863 1133, F: +1 416 365 8215, www.pwc.com/ca “PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership. Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Uranium Participation Corporation and its subsidiary as at February 29, 2016 and February 28, 2015 and their financial performance and their cash flows for the years then ended in accordance with International Financial Reporting Standards. (Signed) “PricewaterhouseCoopers LLP” Chartered Professional Accountants, Licensed Public Accountants CONS OLIDATE ED STATE EMENTS OF FINA ANCIAL P OSITION Annua al Consolidated d Financial State ements (Expressed in thousands of C Canadian dollars s except for shar re amounts) At F February 29, 2016 At February 2015 y 28, ASSETS Current Cash and c Trade and cash equivalen other receivab nts bles Non-Curre Investment Total asset ent ts in uranium (n ts note 5) ES LIABILITIE Current Trade and Total liabili other payables s ties ital (note 8) d surplus EQUITY Share capi Contributed Deficit y Total equity y ties and equity Total liabili Common s Issued shares d and outstand ing (note 8) Subsequen nt Events (note e 11) $ 8,968 469 9,437 $ 17 18 7,753 330 8,083 642,113 651,550 715 $ 733 5,330 3,413 $ $ 2,071 2,071 $ 2 2 2,355 2,355 822,343 6,762 (179,626) 649,479 651,550 $ 831 4 (104 731 $ 733 1,048 4,564 ,554) 1,058 3,413 115,648,713 116,872 2,913 The accompan nying notes are e an integral pa art of these ann nual consolidat ted financial sta atements. O N B E H A AL F O F T H E E B O AR D O (Signed) “R Richard H. McC Coy” F U R AN I U M M P AR T I C I P A AT I O N C O R R P O R AT I O N (Sign ned) “Garth A. C C. MacRae” Richard H. Director McCoy Garth Direc h A. C. MacRa ctor e 5 CONS OLIDATE ED STATE EMENTS OF COM MPREHEN NSIVE GA AIN (LOSS S) Annua al Consolidated d Financial State ements (Expressed in n thousands of Ca anadian dollars ex xcept for share an nd per share amou unts) Years Ended Fe ebruary 29, 2016 February 2015 28, URANIUM Unrealized Realized lo Realized g Income fro RELATED GA (losses) gains oss on sale of c ain on sale of u m lending of u AIN (LOSS) s on investmen conversion com uranium (note ranium (note 6 ts in uranium ( mponents (note 5) ) note 5) e 5) OPERATIN Transactio Manageme Storage fee Public com General off Legal and Interest inc Foreign ex S NG EXPENSES n fees ent fees (note 9 es 9) es llaneous onal fees mpany expense fice and misce other professio come xchange gain (lo oss) Net (loss) g Income tax gain before tax x expense (note xes e 7) Net and co omprehensive e (loss) gain fo or the year Net (loss) Basic gain per com and diluted mon share Weighted Basic average numb and diluted ber of commo on shares outs standing $ (71,181) ) ) (140) 1,027 7 7 557 ) (69,737) (85) ) ) (2,216) ) (2,347) ) (485) ) (332) ) (139) 4 144 7 127 (5,333) ) ) (75,070) ) (2) $ 134 4,606 (315) - 228 4,519 (919) ,871) ,431) (438) (306) (137) 445 (180) ,837) 8,682 (2) 134 (1 (2 ( ( (5 128 $ (75,072) ) $ 128 8,680 $ ) (0.65) $ 1.10 9 116,192,169 116,872 2,913 financial statem ments. The accom mpanying notes are an integral p art of these annu ual consolidated 6 CONS OLIDATE ED STATE EMENTS (Expressed d in thousands o of Canadian dolla ars) Balance a Issue cos Net gain f Balance a at February 28 sts on common for the year at February 28 , 2015 , 2014 shares issued d (note 8) Common Net loss f Balance shares purcha for the year at February 29 9, 2016 ased (note 8) CONS OLIDATE ED STATE EMENTS (Expressed in thousands of C Canadian dollars s) ar Operating Net gain (lo Adjustmen Unrea Realiz Realiz Activities oss) for the yea t for: lized losses (g zed loss on sale zed gain on the ains) on invest e of conversion e sale of uraniu tments in urani n components ( m (note 5) um (note 5) (note 5) Changes in Chang Chang Net cash u n non-cash wo ge in trade and ge in trade and used in operat rking capital: other receivab bles s other payables ting activities te 5) Investing A Purchase o Sale of ura Sale of con Costs asso Net cash g Activities of uranium (not anium (note 5) nversion compo ociated with tra generated (use onents, net of c nsfer of uraniu ed) by investi costs (note 5) m (note 5) ng activities Financing Common s Issue costs Net cash u Activities shares purchas s on common s used in financ sed, including tr shares issued ( cing activities ransaction cos (note 8) ts (note 8) Decrease i Cash and c Cash and in cash and cas cash equivalen cash equivale sh equivalents nts – beginning ents – end of t of the year the year Annua al Consolidated d Financial State ements OF CHAN NGES IN EQUITY Share Capital Contributed Surplus Deficit Total Equ uity $ 831,130 (82) - $ 831,048 $ 4,564 - - $ 4,564 $ 602, $ (233,234 4) - ( - 0 128, 128,680 $ 731, 4) $ (104,554 ,460 (82) ,680 ,058 (8,705) - $ 822,343 2,198 - $ 6,762 (75,072) $ (179,626 - (6,5 (75, ) $ 649, 6) 507) 072) ,479 OF CASH H FLOWS S Years Ended Fe ebruary 29, 2016 February 2015 28, $ (75,072) ) $ 128 8,680 71,181 140 0 ) (1,027) (134 ,606) 315 - ) (139) (284) ) ) (5,201) (65) 151 ,525) (5 - - 3 4,743 891 (2,711) ) 3 2,923 (42 1 ,424) - 1,231 - ,193) (41 (6,507) ) - - ) (6,507) - (82) (82) ) (8,785) 17,753 3 8 8,968 (46 64 $ 17 ,800) 4,553 7,753 $ The accomp panying notes a re an integral pa art of these ann nual consolidate ed financial state ements. 7 Annua al Consolidated d Financial State ements NOTES FOR THE (Expressed S TO CON YEARS ENDE in Canadian dol NSOLIDA ED FEBRUARY lars, unless othe ATED FIN Y 29, 2016 AN erwise noted) NANCIAL D FEBRUARY STATEM Y 28, 2015 MENTS 1. URAN NIUM PARTICI PATION CORP PORATION Uraniu March Canad um Participatio h 15, 2005. The da, M5J 1T1. on Corporation e address of its (“UPC”) was s registered he established un ead office is 40 nder the Busin University Ave ness Corporatio enue, Suite 110 ons Act (Ontar 00, Toronto, O rio) on Ontario, UPC, oxide investm uraniu provid listed a including its s in concentrat ment objective m price. Deni es general adm and trade on th subsidiary (coll es (“U3O8“) a e of achieving son Mines Inc ministration an he Toronto Sto ectively, the “C and uranium h appreciation i . (the “Manage d managemen ck Exchange (“ Corporation”), hexafluoride (“ in the value o er”), under the t services to th “TSX”) under th invests substa “UF6“) (collecti of its uranium antially all of it ively “uranium holdings throu direction of the e Corporation’s he Corporation n. The commo he symbol “U”. . ts assets in ur m”) with the p ugh increases s Board of Dire n shares of UP ranium primary in the ectors, PC are 2. BASIS S OF PRESEN TATION These Februa Repor interpr Standa Handb e audited annu ary 29, 2016 rting Standards retations of the ards Board has book – Account ual consolidate and February s (“IFRS”) as e International F s approved for ting. ed financial st 28, 2015 hav issued by the Financial Repo r incorporation atements of th ve been prepa International A orting Interpreta into Part 1 of he Corporation ared in accord Accounting St ations Committ the Chartered n as at and f dance with In tandards Board tee which the C Professional A for the years ternational Fin d (“IASB”), an Canadian Acco Accountants C ended nancial d with ounting Canada All dol lar amounts ar re expressed in n Canadian dol lars, unless oth herwise noted. These on Ma e audited annua ay 5, 2016. al consolidated d financial state ements were a approved by th he Corporation’ ’s Board of Dir rectors 3. SIGNI FICANT ACCO OUNTING POL LICIES The si descri gnificant accou bed below: unting policies used in the pre eparation of th hese annual co onsolidated fina ancial statemen nts are (a) Co onsolidation The ac owned entity w the ab on wh interco ccompanying c d subsidiary. A when the grou bility to affect th hich control is ompany balanc consolidated fin A subsidiary is a p is exposed to hose returns thr obtained by t ces and transac nancial statem an entity over w o, or has rights rough its powe he Corporation ctions are elim ents consolida which the Corp s to, variable re er over the entit n and deconso inated on cons ate the account poration has co eturns from its i ty. A subsidiary olidated from solidation. ts of the Corpo ontrol. The Co involvement wi y is fully conso the date that oration and its orporation contr ith the entity an olidated from th control cease wholly rols an nd has he date s. All (b) Fo oreign Currenc cy Translation (i) Functional a and Presentatio on Currency Functional c the Corpora currencies are ation and its su determined ba bsidiary. ased on the cu urrency of the primary econo omic environme ent for (ii) ) Transaction s and Balance s Foreign cur prevailing a settlement consolidate rrency transac at the dates o of such trans d statement o ctions are tran of the transact sactions and of financial pos nslated into th tion. Foreign the re-measur sition are reco he functional c exchange ga rement of mo ognized in net currency using ins and losses onetary items gain (loss). g the exchang s resulting fro at the date Non-monetary e rate om the of the items 8 Annua al Consolidated d Financial State ements measured a of financial at fair value are position. e translated us ing the exchan nge rate at the date of the co nsolidated stat tement (c) Ca ash and Cash E Equivalents Cash a and cash equiv valents include cash on hand , deposits held d with banks. (d) Fi inancial Instrum ments The C trade a and re instrum Corporation’s fin and other paya eceivables. Tra ments’ fair valu nancial instrum ables. Cash an ade and other ues approximat ments consist o nd cash equiva payables are c te their carrying of cash and ca alents and trad categorized as g values due to ash equivalents de and other re financial liabili o the short-term s, trade and ot eceivables are ties at amortiz m nature of thes es, and ther receivable s loans categorized as ed cost. All fin nancial s. se instruments (e) In vestments in U Uranium Invest of the which value Comp Relate (loss) ments in urani uranium pass are expensed at each reporti any, LLC (“Ux ed fair value inc as “Unrealized um are initially s to the Corpo as incurred. ng period end xC”) and conve crement gains d gains (losses) y recorded at c ration. Cost is Subsequent to based on the m erted to Canad and losses are ) on investmen cost, on the dat s calculated as o initial recognit most recent sp dian dollars us e recorded in th ts” in the perio te that significa s the purchase tion, investmen pot prices for u sing the month he consolidated od in which they ant risks and re e price exclud nts in uranium ranium publish h-end foreign e d statement of y arise. ewards of own ing transaction are measured hed by Ux Cons exchange noon comprehensiv nership n fees, at fair sulting n rate. ve gain Due t consid Estima releva framew 40 Inv apprec to the lack of dered IAS 1 Pr ates and Error nt the e work. Conseq vestment Prop ciation. to f specific IFR resentation of F rs, to develop economic de uently, the ura perty, which a RS guidance o Financial State and apply an cision-making nium investme llows the use on accounting ements and IA accounting po needs of ents are presen of a fair valu g for investme AS 8 Accountin olicy that would users within nted at fair valu ue model for ents in uraniu ng Policies, Ch d result in info the overall ue based on th assets held f um, the Corpo anges in Acco ormation that is IFRS acco he application for long-term oration ounting s most ounting of IAS capital (f) Le ending of Urani ium Uraniu of ura conso um on loan rem anium is classi lidated stateme mains part of th ified as an op ent of compreh he Corporation’ perating lease. hensive gain (lo s investment p Income earn oss) and is reco portfolio and ar ned from lend ognized when e re carried at fai ding of uranium earned. ir value. The le m is included ending in the (g) Sa ale of Uranium The sa the bu consid ale of uranium uyer. The rea deration receive is recognized alized gain or ed and the hist when the sign loss from the torical cost of th he uranium. ificant risks an sale of uraniu d rewards of o um is calculat ownership of th ted as the diff he uranium pas ference betwee sses to en the (h) Sa ale of Conversi ion Componen ts The s conve is calc compo sale of convers rsion compone culated as the onents. sion compone ents passes to difference be nts is recogni the buyer. Th etween the con ized when the he realized gain nsideration rec e significant ris n or loss from t ceived and the sks and rewa the sale of con e historical cos rds of owners nversion compo st of the conv ship of onents version (i) In come Taxes The C expect date a Corporation foll ted taxes paya and adjusted fo lows the liabili able on the tax r taxes payable ity method of xable income f e in respect of accounting fo for the period, prior periods. r income taxe calculated at es. Current in tax rates enac ncome taxes a cted at the rep are the porting Deferr reporti tax rat losses utilized red income tax ing and tax ba tes and laws th s which are ava d against future x assets and lia ases of assets hat are expecte ailable to be ca e taxable incom abilities are det and liabilities, ed to apply wh arried forward a me. termined based and are meas hen the differen are recognized d on temporary sured using the nces are expec d as assets to y differences b e enacted or s cted to reverse the extent that between the fin ubstantively en e. The benefit t they are likely nancial nacted t of tax y to be 9 Annua al Consolidated d Financial State ements Tax as they re entities ssets and liabi elate to incom s where there lities are offse e taxes levied is an intention et if there is a l by the same to settle the ba legally enforce tax authority o alance on a net eable right to o on either the s t basis. offset the asset same tax entity ts and liabilitie y or different ta es, and axable (j) Ne et Gain (Loss) per Common S Share Net ga holder ain (loss) per c rs of the Corpo ommon share ration by the w is calculated b weighted averag by dividing the n ge number of c net gain (loss) common shares for the period s outstanding. attributable to equity (k) Op perating Segm ment The C U3O8 increa operat Europ Corporation ma and UF6, for th ses in the ura ting segment a e. anages its bus he primary pur anium price. and are held w iness under a rpose of achie All of the Co with storage fa single operati eving appreciat orporation’s as acilities and fin ing segment, c tion in the valu ssets and inco nancial institutio consisting of h ue of its uraniu ome are attribu ons in Canada holdings of ass um holdings th utable to this a, United State sets in hrough single es and The o manag maker allocat operating segm gement who, u r. Executive m ting resources ment is reporte nder the direct management, u and assessing ed in a manne tion of the Corp under the direc g performance o er consistent w poration’s boar ction of the Co of the operatin with the intern rd of directors, orporation’s bo g segment. al reporting pr act as the chie oard of director rovided to exe ef operating dec rs, is responsi ecutive cision- ble for Accou unting Standa ards Issued Bu ut Not Yet Ado opted The C fiscal p Corporation has periods beginn s not yet adop ing on or after pted the followi March 1, 2016 ing accounting 6: g pronounceme ents effective f for the Corpor ation’s IFRS 9 9 – Financial In nstruments In July togeth replac classif classif busine require versio adopti y 2014, the IA her the classific ce IAS 39 Fi fications for fi fication of finan ess model and es a single imp n of IFRS 9 is on. ASB published cation, measu inancial Instru nancial assets ncial assets ba d the contractu pairment metho effective for pe the final vers rement, impair uments: Recog s in IAS 39 w ased on how a ual cash flow c od to be used, eriods beginnin sion of IFRS 9 rment and hed gnition and M with a single an entity mana characteristics replacing the m ng on or after J 9 Financial Ins dge accounting Measurement. principle bas ages its financi of the financia multiple impairm January 1, 201 struments (“IFR g phases of th IFRS 9 re ed approach ial instruments al assets. The ment methods 18; however, it RS 9”), which he IASB’s proj places the m for determinin s in the context e new standar in IAS 39. Th is available fo brings ject to multiple ng the t of its rd also he final or early IFRS 15 – Revenue from Contracts s with Custome ers IFRS financ entity’s The st standa 15 deals with ial statements s contracts wit tandard replac ard is effective revenue recog about the natu h customers. es IAS 18 “Re for annual peri gnition and est ure, amount, tim Revenue is rec venue” and IA iods beginning tablishes princ ming and unce cognized when AS 11 ”Constru on or after Jan ciples for repor ertainty of reven n a customer o ction Contracts nuary 1, 2018 a rting useful inf nue and cash f obtains control s” and related and earlier app formation to us flows arising fr of a good or se interpretations plication is perm sers of rom an ervice. s. The mitted. IFRS 16 – Leases In Jan “Lease sheet effectiv been a nuary 2016, the es”. IFRS 16 r with the intent ve for annual p adopted. e IASB issued requires all lea t of providing g periods beginn IFRS 16 which ases, including greater transpa ning on or after h replaces exis financing and arency on a co r January 1, 20 sting standards operating leas ompany’s lease 019, with early s and interpret ses, to be repo e assets and li y adoption perm tations under I orted on the ba abilities. IFRS mitted if IFRS 1 AS 17 alance S 16 is 15 has The C orporation has not yet assess sed the impact nor determine ed whether it w ill early adopt t these standard s. 10 Annua al Consolidated d Financial State ements 4. CRITIC CAL ACCOUN NTING ESTIMA ATES AND JU DGEMENTS The p accou the co differ m preparation of c nting estimates nsolidated fina materially from consolidated fi s and judgeme ancial statemen these estimate inancial statem ents that affect nts and income es. Significant ments in confo the reported a e and expenses estimates and ormity with IFR amounts of ass s during the rep d judgements m RS requires m sets and liabilit porting period. made by manag anagement to ties as of the d Actual results gement include make date of s could e: (a) In nvestments in U Uranium In nvestments in u pot prices for u sp xchange noon ex ssessment of t as uranium are m uranium publis rate. Managem he valuation im measured at fai hed by UxC a ment may also mpact of risks a r value at each nd converted t o adjust the fair associated with h reporting per to Canadian d r value of the in h the Corporatio riod-end based ollars using th nvestments in u on’s uranium h d on the most he month-end f uranium based eld with the fac recent foreign d on its cilities. (b) D Deferred Income e Taxes eferred incom D am mounts of ass measured using m nticipated to be an ssets recognize as me taxes are b sets and liabilit g enacted or s e recovered or ed based on ex based on tem ties and their substantively e r settled. The xpectations of f mporary differe respective tax enacted tax rat Corporation is future taxable i ences between x bases. Defe tes expected t also required income. n the financial erred tax asse to apply when to limit the am l statement ca ets and liabilitie n the difference mount of deferr arrying es are es are red tax 5. INVES STMENTS IN U URANIUM The in nvestments con ntinuity summa ry is as follows s: (in thou usands) Balanc ce at February 28, 2014 nts in uranium Unre bef ealized net gain fore purchases urchases of U3 of conversion ce at February ns on investme s and sales 3O8 components 28, 2015 P Sale Balanc Cost Fair Value Adjustment r Fair (1)(2) Value $ 730,217 $ (190,371 1) $ 53 39,846 - 124,05 50 12 24,050 42,424 (1,546) 771,095 07 5 10,40 9 ( 149 $ 5) $ 71 $ (55,765 52,831 1,397) 15,330 $ oss on investm m ments in uranium U nrealized net lo before sales ale of conversi ale of uranium F6 fair value ad ce at February S S U Balan on component s djustment (2) y 29, 2016 - (1,031) (3,716) - $ 766,348 $ 0) (70,250 9 96 (1,027 7) 1 2,71 5) (124,235 (7 70,250) (935) (4,743) ( 2,711 42,113 $ 64 The ba alance of inves stments in uran nium consists o of: (in thou usands, except q quantity amounts ) Qu antity Cost Fair Value t Adjustment Fair Value (1 1)(2) U3O8 ) UF6 (2) ce at February Balan y 29, 2016 9,470, 024 lbs $ 454,486 $ $ (42,763 3) $ 411 1,723 1,903,4 471 KgU 311,862 766,348 $ (81,472 (124,235 2) 5) 230 $ 642 0,390 2,113 $ (1) (2) Inv pu vestments in uran ublished by UxC of ium are categorize US$32.15 per pou ed in Level 2 of th und U3O8 and US$9 he fair value hierar 90.00 per KgU as U rchy. Fair values UF6, translated at th as at February 29 he foreign exchang 9, 2016 reflect spo ge noon rate of 1.35 ot prices 523. Inc as ad cluded in the fair v ssociated with the djustment was redu values at February Corporation’s UF6 uced to $1,276,000 28, 2015 and 2014 held with the Unit , to reflect the redu 4 was a fair value a ted States Enrichm uction in the remain adjustment of $3,9 ment Facility (“USE ning material held w 987,000 reducing fa EC Facility”). Duri with the USEC Fac air value to reflect t ng the year, the fa ility. the risks air value 11 Purcha ases of Uraniu m Annua al Consolidated d Financial State ements During price o g the year ende of US$35.07 pe ed February 28 er pound of U3O 8, 2015, the Co O8, for a total c orporation purc cash considera chased 1,090,0 tion of $42,424 000 pounds of 4,000 (US$38,2 f U3O8 at an av 225,000). verage Sale o of Uranium In Oct $4,743 tober 2015, th 3,000 (US$3,62 he Corporation 25,000), resulti completed th ing in a realize he sale of 100 d gain of $1,02 0,000 pounds o 27,000. of U3O8 for ca ash considerat tion of Sale o of Conversion C Components In Nov as UF6 vember 2014, t 6 to occur over the Corporatio r three tranches n agreed to th s: e sale of the c conversion com mponent conta ined in 250,00 0 KgU 1) ) conversion consideratio component co on of US$700,0 ntained in 100, 000 that was co ,000 KgU as U ompleted in De UF6 in return for ecember 2014; r 261,285 poun nds of U3O8 and d cash 2) ) conversion consideratio component co on of US$357,5 ontained in 50,0 500 that was co 000 KgU as UF ompleted in Fe F6 in return for ebruary 2015; 130,643 poun and nds of U3O8 and d cash 3) ) conversion consideratio component co on of US$715,0 ntained in 100, 000 that was co ,000 KgU as U ompleted in Ma UF6 in return for ay 2015. r 261,285 poun nds of U3O8 and d cash Losses $247,0 Decem compl s on the sales 000, $68,000 mber 2014 and eted in May 20 s of the conve and $140,000 d February 20 015. ersion compon 0, respectively. 015 totaled $2 ents in Decem Transaction 28,000. There mber 2014, Fe fees relating e were no tra ebruary 2015 a to the transa nsaction fees and May 2015 actions comple relating to the 5 were eted in e sale Transf fer of UF6 held with the USEC C Facility to ano other storage fa facility During the US USEC The co g the year ende SEC Facility to C Facility to 37 ost associated ed February 2 o another stora 8,566 KgU wit with the transf 9, 2016, the C age facility. T th a fair value ers amounted Corporation tran The transfers r of $46,074,00 to $2,711,000. nsferred a tota reduced the C 00 before adjus al of 685,434 K Corporation’s U stments, as at KgU as UF6 he UF6 holdings w t February 29, ld with ith the 2016. The fa the ris adjust Februa air value of UF6 sks associated ment was redu ary 29, 2016, t 6 holdings at Fe with the Corpo uced to reflect he fair value ad ebruary 28, 20 oration’s mater t the reduction djustment was 15 included a f rial held with th in the remain reduced to $1, fair value adjus he USEC Facil ning material h ,276,000. stment loss of lity. During the eld with the U $3,987,000 to e year, the fair USEC Facility. reflect r value As at equent to the y Subse held w with the USEC s. details ear ended Feb C Facility to an bruary 29, 2016 nother storage 6, the Corporat facility. Refe tion transferred er to note 11 S d an additional SUBSEQUENT l 42,290 KgU a T EVENTS for as UF6 r more 6. URAN NIUM LENDING G ARRANGEM MENTS In Mar third p to be c UxC a bank movem loaned Refer rch 2015, the C party with a retu calculated qua at the end of ea guarantee, wa ments in the u d was $56,519 to note 11 SUB Corporation en urn date in Apri arterly based on ach month for th as provided in uranium price. ,000 (US$41,7 BSEQUENT EV tered into an a il 2017. The lo n the average he previous thr the amount At February 95,000). In Ma VENTS for mo agreement to lo oan was subjec of the U3O8 sp ree months. C of US$56,000 29, 2016, the arch 2016, the re details. oan 1,300,000 ct to a loan fee pot price per po Collateral for the 0,000, which a market value e loan was term pounds of U3O of 1.0% per an ound, as defin e loan, in the fo allowed for adj of the 1,300,0 minated early b O8 to an indepe nnum, with pay ed and publish orm of an irrevo justments bas 000 pounds of by mutual agree endent yments hed by ocable sed on f U3O8 ement. In 200 year te to a lo US$11 KgU a US$15 return 865,00 09, the Corpora erm, which was oan fee of 4.5% 1.75 per KgU a as UF6 was tran 5,700,000 from date was ame 00 KgU as UF6 ation entered in s subsequently % per annum b as UF6. To fa nsferred to the m a major finan ended with the 6 (“Tranche 1”) nto a loan of th y extended an a based on the g acilitate the loa borrower, with ncial institution borrowed quan ); and 2) a con he conversion additional year greater of the n of the conve h 3,480,944 pou n sent to the C ntity separated version compo component of r. The convers month end co ersion compon unds of U3O8 a Corporation as d into two tranc onent of 467,23 f 1,332,230 Kg sion componen onversion value ent, in Decem and an irrevoca collateral. In ches: 1) a conv 30 KgU as UF U as UF6 for a nt loaned was s e per KgU as mber 2009, 1,33 able letter of cr May 2013, th version compon 6 (“Tranche 2”) a three subject UF6 or 32,230 redit of e loan nent of ). The 12 Annua al Consolidated d Financial State ements return Tranch date for Tran he 2 was exten che 1 was ext nded from Dece tended from D ember 31, 2013 December 31, 2 3 to December 2013 to July 1 r 31, 2014. 15, 2013, while e the return da ate for On Ju 1,220, 2 was uly 15, 2013, T 811 pounds of returned to the Tranche 1 was f U3O8 and an i e Corporation a returned to th irrevocable lett and the letter o he Corporation ter of credit of U of credit was ca and the collat US$6,039,000 ancelled. teral held by U . On Decembe UPC was redu er 31, 2014, Tr ced to ranche 7. INCOM ME TAXES The C tax ex Corporation is s pense is comp subject to varyi prised of the fol ng rates of tax lowing for the y xation due to it years ended: ts operations in n multiple tax j urisdictions. In ncome (in thou usands) Curren Total nt tax expense income tax ex xpense February 29, F 2016 February 2015 y 28, $ $ 2 2 $ $ 2 2 Recon the Co nciliations of the orporation’s effe e combined Ca ective rate of in anadian federa ncome tax for t al and provincia the years ende al income tax ra ed are as follow ates in effect in ws: n Ontario, Can ada to (in thou usands) Net ga Combi Compu ain (loss) before ined federal an uted income ta e taxes nd provincial inc ax expense come tax rate ence in current ge in deferred t tax rates appli ax assets not r cable in other j recognized jurisdictions Differe Chang Other Total income tax ex xpense February 29, F 2016 y 28, February 5 2015 $ $ (75,072) % 26.50% ) (19,894) 28,682 $ 12 6.50% 26 34,101 $ 3 6 (28 15,876 6 (5 3,886 5 135 2 $ 2 8,419) 5,696) 16 2 $ The co differe omponents of ences as prese the Corporatio nted below: on’s deferred t tax balances fo for the years e ended are com mprised of tem porary (in thou usands) red tax assets Deferr Ta ax loss carry fo red tax assets - Deferr orwards - gross Set-off f against deferr Deferr red tax assets red tax liabilitie s (1) es s red tax liabilities Deferr s on investmen nrealized gains U s - gross red tax liabilities Deferr ax assets f by deferred ta Set-off ies (1) red tax liabiliti Deferr nts February 29, F 2016 y 28, February 5 2015 $ $ 486 486 $ $ 2,084 2,084 ) (486) 2,084) (2 $ - - $ - $ $ (486) (486) 486 $ (2 $ (2 2,084) 2,084) 2,084 $ - $ - (1) Defe erred tax assets and d liabilities relate to o temporary differen nces expected to re everse 12 months 13 or more after the re espective reporting g date. Annua al Consolidated d Financial State ements The C allow t Corporation beli the benefit of th ieves that it is he following de not probable t eferred tax asse hat sufficient ta ets not recogni axable income ized to be utiliz e will be availab zed: ble in future ye ears to (in thou usands) February 29, F 2016 February y 28, 5 2015 Deduc Tax lo Total ctible temporary sses deferred tax a y differences assets not reco ognized $ $ 7 6,937 5,341 12,278 $ 8 $ 5,316 3,076 8,392 A geog are as graphic split of s follows: f the Corporatio on’s tax losses not recognized d and the asso ociated expiry d dates of those losses (in thou usands) Expiry D Date February 29, F 2016 February 2015 28, Tax lo C C Lu sses - gross anada yprus uxembourg Tax lo sses - gross 2030-2 unlimi unlimi 2036 ited ited Tax be Set-off Total t enefit at tax rat f against deferr tax loss asset es between 2.9 red tax liabilitie ts not recogni % 92% to 26.50% es zed $ $ $ 8. COMM MON SHARES 21,139 480 5,656 9 $ 18 0 6 3 8,868 402 3,700 27,275 5 $ 22 2,970 5,827 (486) 5,341 7 5 ) (2 1 $ 3 5,160 ,084) 3,076 The C sched Corporation is a ule of the issue authorized to is ed and outstan ssue an unlimit ding common s ted number of shares is as fo f common shar ollows: res without par r value. A con ntinuity (in thou usands, except c common share am mounts) Balanc Is ce at February ssue costs on c 28, 2014 common shares s issued in Feb bruary 2014 Balanc C C Balan ce at February ommon shares ommon shares ce at February 28, 2015 s purchased in s purchased in y 29, 2016 March 2015 October 2015 N Number of Com mmon Shares Amoun nt 116,872,913 - $ 831 1,130 (82) 1 16,872,913 (356,500) (867,700) 1 15,648,713 $ 831 (2 (6 $ 822 1,048 ,535) ,170) 2,343 In Jan Corpo comm not ma nuary 2016, the ration to purc encing Januar ade any purcha e Corporation f hase up to 10 y 18, 2016 and ase of its outsta filed a normal 0,192,641 of t d ending on Ja anding shares course issuer the Corporatio anuary 17, 201 under the 2016 bid (“2016 NC on’s common s 7. As at Febru 6 NCIB. CIB”) with the T shares during uary 29, 2016, TSX, authorizi a 12 month the Corporatio ng the period on has In Nov author period 2014 N vember 2014, rized the Corpo that ended on NCIB as detaile the Corporat oration to purch n November 23 ed below: tion filed a no hase up to 7,5 3, 2015. A tot ormal course 00,000 of the C tal of 1,224,20 issuer bid (“2 Corporation’s c 00 outstanding 014 NCIB”) w common share shares were p with the TSX, es during a 12 purchased und which month der the uring March 2  D 5.60 per share $5 of f $536,000 bet hares purchase sh 2015, the Corp for a total exp tween the aver ed has been re poration purcha penditure of $1, rage historical ecorded as an i ased 356,500 o ,996,000, exclu proceeds on t ncrease in con of its outstand uding transacti the shares and ntributed surplu ding shares, at on costs of $3 d the total cash us. t an average c ,000. The diffe h expenditure f cost of erence for the 14 Annua al Consolidated d Financial State ements uring October  D av verage cost of $9 9,000. The dif ash expenditur ca 2015, the Co f $5.185 per s fference of $1,6 e for shares pu orporation purc share for a to 662,000 betwe urchased has b chased an add tal expenditure een the averag been recorded ditional 867,70 e of $4,499,00 ge historical pro as an increase 0 of its outsta 00, excluding oceeds on the e in contributed anding shares, transaction co shares and th at an osts of he total d surplus. On Oc regula comm and on for an effectiv pursua ctober 31, 2014 atory authoritie on shares or w n terms to be d aggregate offe ve until Novem ant to the Pros 4, the Corporat s in each of t warrants or any determined bas ering amount o mber 30, 2016 pectus. tion filed a sho the provinces y combination sed on market c of up to $200,00 6. As at Febru ort form base s of Canada, ot of such securi conditions at th 00,000 during uary 29, 2016 shelf prospectu ther than Qué ities as units (“ he time of sale the 25 month p , the Corporat s (“Prospectus ébec. The Co “Securities”), in and as set for period that the tion has not is s”) with the sec orporation may n amounts, at p rth in the Prosp e Prospectus re ssued any Sec curities y issue prices, pectus, emains curities In Sep Excha the 12 purcha ptember 2013, ange authorizin 2 month period ased by the Co , the Corporat g the Corporat d commencing orporation unde ion filed a nor tion to purchas g September 3 er the 2013 NC rmal course is se up to 8,035 30, 2013 and CIB. ssuer bid (“201 5,744 of the Co ending Septe 13 NCIB”) with orporation’s co mber 29, 2014 h the Toronto mmon shares 4. No shares Stock during s were 9. RELA ATED PARTY T TRANSACTION NS Manag gement Servic ces Agreemen nt with Deniso on Mines Inc. Pursua the fo uraniu (plus Corpo for on purcha ant to its mana llowing fees to m completed a reasonable o ration’s net ass -going monitor ase or sale of u agement servic o the Manager at the request o ut-of-pocket e set value in ex ring or work a uranium). ces agreement r: a) a commis of the Board o expenses), plu cess of $100,0 associated with with the Mana ssion of 1.5% o f Directors; b) us an addition 000,000; and c) h a transaction ager dated Apr of the gross v a minimum an nal fee of 0.3 ) a fee, at the d n or arrangeme ril 1, 2013, the value of any pu nnual managem 3% per annu discretion of th ent (other than Corporation w urchases or sa ment fee of $40 m based upo e Board of Dire n a financing, will pay ales of 00,000 on the ectors, or the The m into b Agree the Ma management se between the C ment”). See n anager for the y ervices agreem Corporation an note 11 SUBSE years ended: ment expired o d the Manage EQUENT EVE n March 31, 2 er effective A NTS for furthe 2016. A new t pril 1, 2016 ( er details. The three year agre (“Renewed Ma e following outli eement was e anagement Se ines the fees p ntered ervices paid to (in thou usands) February 29, F 2016 February 2015 28, he Manager: Fees i Mana Trans Total f ncurred with th agement fees saction fees – fees incurred commissions o with the Mana on uranium sale ager es and purchas ses $ $ 2,216 71 2,287 $ 1 $ 2 1,871 636 2,507 As at Manag February 29, 2 ger with respec 2016, trade and ct to the fees in d other payable es included $26 . ndicated above 60,000 (Febru ary 28, 2015: $ $250,000) due to the Key M Management P Personnel Key m contro are the management pe olling the activit e members of i ersonnel are t ties of the Corp its Board of Dir hose persons poration, direct rectors. having author tly or indirectly rity and respon y. The Corpora nsibility for pla ation’s key ma anning, directin nagement pers ng and sonnel The fo ollowing compe ensation was aw warded to key management p personnel for th he years ended d: (in thou usands) Directo Total ors’ fees key managem ment personne el compensatio on February 29, F 2016 February 2015 28, $ $ 235 235 $ $ 223 223 15 10. CAPIT TAL MANAGE MENT AND FI NANCIAL RIS SK Annua al Consolidated d Financial State ements Capita al Managemen nt The C object investm purcha share Corpo of uran Corporation’s ca ive is to achie ment strategy ases are norm offerings inves ration can ente nium. apital structure eve long-term and not to acti mally funded th sted in, or set er into borrowin consists of sh appreciation i vely speculate hrough commo aside for futur ng arrangemen hare capital and n the value o with regard to n share offerin re purchases o nts for up to 15% d contributed s of its uranium o short-term ch ngs with at lea of uranium. In % of its net ass surplus. The C holdings throu hanges in urani ast 85% of the n strictly limited set value to fac Corporation’s p ugh a buy and ium prices. Ur e gross proce d circumstance cilitate the purc primary d hold ranium eds of es, the chases At Feb procee purcha 6, the Corporat bruary 29, 2016 eds of share o offerings in ura . ase of uranium tion has invest anium. The Co ed the required orporation has d minimum am s no outstandin mount of 85% o ng borrowing a of its aggregate arrangements f e gross for the Financ cial Risk Corporation ex ood of those ri amines the va isks. These ri arious financia isks may inclu al risks to whic de commodity ch it is expos y price risk, cur sed and asses rrency risk, cre sses the impac edit risk and li ct and quidity The C likeliho risk. Comm modity Price Ris sk The C 2016, $64,33 Corporation’s ne a 10% increa 39,000, while a et asset value i ase in the ura a 10% decrease is directly tied t anium spot pr e would have t to the spot pric rice would ha he same but o ce of uranium p ave increased pposite effect. published by U the Corporati UxC. At Februa on’s total equ ary 29, uity by Curren ncy Risk Chang the Co receiv ges in the value orporation’s fo ables, and trad e of the Canad oreign denomin de and other pa dian dollar com nated investme ayables. mpared to foreig ents in uranium gn currencies w m, cash and c will affect the v cash equivalen value, as repor nts, trade and rted, of d other As the dollar 2016, Corpo e prices of ura can significan a 10% incre ration’s total e anium are quot tly impact the ease in the U equity by $64,5 ted in U.S. cu valuation of u U.S. dollar to 59,000, while a rrency, fluctua uranium from a Canadian do a 10% decreas ations in the C a Canadian do ollar exchange se would have Canadian dollar ollar perspectiv e rate would the same but o e U.S. r relative to the ary 29, ve. At Februa have increase ed the . opposite effect. Credit Risk Credit contra expos investm risk is the risk actual agreeme ure includes t ments in uraniu of loss due to ent that will re the carrying a um. a counterparty esult in a fina amounts of ca y’s inability to m ancial loss to ash and cash meet its obligat the Corporatio equivalents, t ions under a fin on. The Corp trade and oth nancial instrum poration’s cred her receivables ment or dit risk s, and To lim and ca facilitie other that ad it the credit ris ash equivalent es owned by o receivables is dequate securi k exposure on ts in credit wor organizations th limited since th ty is provided f its cash and c rthy financial in hat are credibl he Corporation for any loaned ash equivalent nstitutions, whi e and financia n lends uranium uranium. ts, the Corpora ile investments ally stable. Cre m exclusively t ation holds ess s in uranium a edit risk expos to large organi entially all of its are held with s sure on its trad izations and en s cash torage de and nsures Liquid ity Risk Financ genera curren comm availab cial liquidity re ate cash from t nt cash balance itments to pur ble cash or are presents the C the lending or e is sufficient to rchase uranium e contingent on Corporation’s a sale of uranium o meet its oper m periodically, n its ability to ra ability to fund f m, or the sale o rating cash req the commitm aise funds throu future operatin of additional eq quirements. A ments are norm ugh the sale of g activities. T quity securities lthough the Co mally funded b f additional equ The Corporatio s. The Corpor orporation ente by the Corpor uity securities. n may ation’s ers into ation’s 16 Fair V Value of Invest tments, Financ cial Assets an nd Financial L iabilities IFRS hierarc requires disclo chy that prioriti osures about t zes the inputs the inputs to fa to fair value m air value meas easurement. T surements, inc The three level cluding their c s of the fair va classification w lue hierarchy a within a are: Annua al Consolidated d Financial State ements    Le Le in Le evel 1 – Unadju evel 2 – Input directly; and evel 3 – Inputs that are not ba ased on observ vable market d ata. usted quoted p ts other than q prices in active quoted prices markets for ide that are obse entical assets o rvable for the or liabilities; asset or liabi lity either dire ctly or Invest reporti dollars investm Corpo ments in urani ing period base s using the mo ments in uraniu ration’s uraniu um are catego ed on the most onth-end foreig um based on it m is stored wit orized in Level t recent spot p gn exchange n ts assessment h. 2. Investmen prices for uraniu noon rate. Ma of the valuatio ts in uranium a um published b anagement ma n impact of ris are measured by UxC and co ay also adjust ks associated w at fair value a onverted to Can the fair value with facilities th at each nadian of the hat the All fina instrum ancial instrume ments. All purc ents’ fair value chases and sal es approximat es of financial e their carryin assets are acc ng values due counted for at s to the short-te erm nature of e. settlement date these The C orporation has not offset fina ncial assets wi th financial liab bilities. 11. SUBS SEQUENT EVE ENTS Uraniu um Lending A Arrangement In Mar in Apr origina US$43 rch 2015, the C ril 2017. In Ma al return date. 35,000 in April Corporation en arch 2016, the . As a result 2016 and the r ntered into an a Corporation a of the early related bank gu agreement to lo and borrower a termination, th uarantee was c oan 1,300,000 agreed to term he Corporatio cancelled and r 0 pounds of U3O inate the loan n received ca returned to the O8 with a retur one year befo ash considerat e borrower. rn date ore the tion of Trans fer of UF6 held d with the USE EC Facility to another stora age facility On Ma facility the Co ay 2, 2016, the y. The costs as orporation’s UF e Corporation t ssociated with F6 holdings with ransferred 42,2 transferring th h the USEC Fac 290 KgU as UF he material amo cility to 336,27 F6 held with the ounted to US$ 6 KgU. e USEC Facilit $85,000. The t ty to another s transfer has re torage educed Renew wal of Manage ement Service es Agreement with the Mana ager A new Under Corpo equal $500,0 the dis than a any pu uraniu w three year ag r the Renewed ration: a) a ba to (i) 0.3% per 000,000, and ( scretion of the a financing, or t urchases or sa m loan arrange reement was e d Management ase fee of $40 r annum of the ii) 0.2% per an Board, for on- the acquisition ales of U3O8 or ements. entered into be t Services Agr 00,000 per ann Corporation’s nnum of the Co going monitori of or sale of U UF6, or gross etween the Cor reement, the M num, payable i total assets in orporation’s tot ng or work ass U3O8 or UF6); a interest fees p rporation and th Manager will re in equal quarte excess of $10 tal assets in ex sociated with a nd d) a commi payable to the he Manager ef eceive the follo erly installmen 00,000,000 and xcess of $500, a transaction o ission of 1.0% Corporation in ffective April 1, owing fees fro nts; b) a variab d up to and inc 000,000; c) a r arrangement of the gross va connection wi 2016. om the ble fee cluding fee, at (other alue of ith any Migrat tion of Subsid diary At Feb owned Repub throug bruary 29, 2016 d subsidiary, U blic of Cyprus o gh which the op 6, the majority ranium Particip on September perations of UP of the Corpora pation Cyprus L 10, 2006. In A PCL were cond ation's uranium Limited ("UPCL August 2007, U ucted. m was held dire L"). UPCL was UPCL establish ectly or indirec s incorporated u hed a branch o ctly through its under the laws office in Luxem wholly s of the mbourg UPCL of its (“UPB closed migrated to B migration to B L”) by the Reg d and all assets ermuda on Ma Bermuda, and gistrar of Com s and liabilities arch 11, 2016, was registere mpanies in Ber were transferre upon receipt o d under the n rmuda. Upon m ed to UPBL. of approval from name of Uraniu migration, the m the Bermuda um Participatio branch office a Monetary Au on Bermuda L in Luxembour uthority Limited rg was 17 

Continue reading text version or see original annual report in PDF format above