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