uranium upside - Azarga Uranium Corp.

AMERICA’S NEXT URANIUM DEVELOPER
Investor Presentation – June 2015
TSX: AZZ / FRA: P8AA / OTCMKTS: PWURF
DISCLAIMER / SAFE HARBOR STATEMENT
Certain statements in this presentation are forward-looking statements. Forward-looking statements consist of statements that are not purely historical, including any
statements regarding beliefs, plans, expectations or intentions regarding the future. Often, but not always, forward-looking statements can be identified by the use of
words such as “plans”, “expects”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or variations (including negative and grammatical
variations) of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be
achieved. Such forward-looking statements may include, but are not limited to, statements with respect to the future financial or operating performance of the Company
and its mineral projects, the estimation of mineral resources, the timing and amount of estimated future production and capital, operating and exploration expenditures.
Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause Azarga Uranium Corp.’s (“Azarga” or the
"Company”) actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur
or, if they do occur, what benefits the Company will obtain from them. These forward-looking statements reflect management's current views and are based on certain
expectations, estimates and assumptions which may prove to be incorrect.
A number of risks and uncertainties could cause its actual results to differ materially from those expressed or implied by the forward looking statements, including, but
not limited to: global economic conditions; uranium price fluctuations; public acceptance of nuclear energy and competition from other energy sources; the Company
will require significant amounts of additional capital in the future; competition for properties and experienced employees; uranium industry competition and international
trade restrictions; possible loss of interests in exploration and development properties; mining and mineral exploration is inherently dangerous and subject to factors
beyond the Company’s control; the Company’s mineral resources are estimates; the nature of exploration and development projects; environmental regulatory
requirements and risks; currency fluctuations; government regulation and policy risks; public involvement in the permitting process; Native American involvement in the
permitting process; political risk; the Company has no history of mining operations; property title rights; dependence on key personnel and qualified and experienced
employees; delineation of mineral reserves and additional mineral resources; insurance coverage; dilution from further equity financing and outstanding stock options
and warrants; the market price of the Company’s shares; the Company has never paid dividends and may not do so in the foreseeable future; litigation and other legal
proceedings; technical innovation and obsolescence; disclosure and internal controls; conflicts of interest; exposure to emerging markets and the resolution of
contentions pertaining to the Dewey Burdock United States Nuclear Regulatory Commission license.
These forward-looking statements are made as of the date of this presentation and, except as required by applicable securities laws, the Company assumes no
obligation to update these forward-looking statements, or to update the reasons why actual results differed from those projected in the forward-looking statements.
Additional information about these and other assumptions, risks and uncertainties are set out in the "Risks and Uncertainties" section in the Company's MD&A filed with
Canadian security regulators.
Certain technical data in this presentation was taken from the technical report entitled “NI 43-101 Technical Report Preliminary Economic Assessment Dewey-Burdock
Uranium ISR Project, South Dakota, USA” dated 29 January 2015, prepared by Douglass H. Graves of TREC Inc. and Steve E. Cutler of Roughstock Mining Services
(the “Technical Report and PEA”) and is subject to the assumptions, qualifications and procedures described therein. The Technical Report and PEA is preliminary in
nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would
categorize them as Mineral Reserves. There is no certainty that the results of the Technical Report and PEA will be realized. Mineral Resources that are not mineral
reserves do not have demonstrated economic viability.
Mr. John Mays, P.E. is the Qualified Person who supervised the preparation of the exploration technical data in this presentation.
This presentation shall not constitute an offer to sell or the solicitation of an offer to buy securities.
2
WE…
ARE EXPERIENCED MINE DEVELOPERS
BELIEVE IN URANIUM UPSIDE
OWN THE HIGHEST GRADE UNDEVELOPED
ISR URANIUM PROJECT, DEWEY BURDOCK,
AMONG PEER GROUP1
ARE PROGRESSING A PIPELINE OF PROJECTS
ARE TSX MAIN BOARD LISTED AND
RESOURCED TO SUCCEED
Notes: 1. Various company announcements and research notes; refer to slide 12 for additional details.
3
MINE DEVELOPERS
Alexander Molyneux
Chairman and CEO
Richard Clement
Deputy Chairman
John Mays
Chief Operating Officer
Former CEO SouthGobi Resources
(Ivanhoe Group) with 10-years+ prior
experience as resources banker
Professional Geologist with 35-years+
experience in uranium and former
CEO of Azarga Uranium
20-years+ experience in design,
construction and operation of ISR
uranium mines and formerly Chief
Engineer, UrAsia Energy
Blake Steele
Chief Financial Officer
Curtis Church
Vice President and Director
Former SouthGobi Resources Finance
Director and previously with Deloitte in
Audit and Financial Advisory practices
18-years mining and exploration
experience, 8-years based in Central
Asia
4
URANIUM UPSIDE
Analysts’ forecast a recovery in Uranium price
US$/lb
80
70
Analysts’ forecast
Fukushima incident
67
60
57
48
50
39
40
30
Uranium at nine-year low
20
2011
2012
2013
2014
2015
2016
2017
2018
Source: TradeTech for historical spot. Analysts’ forecast is based on average of 16 analyst forecasts as shown in latest available reports (analysts include: BAML; BMO; Cantor;
CIBC; CIMB; Comark; CS; Dundee; JPM; Raymond James; RBC; RFC Ambrian; Salman; Scotiabank; TD; and UBS).
5
URANIUM UPSIDE
Strong demand growth is now expected at a time when supply has been cut back
NUCLEAR MAKES SENSE
§ 
§ 
Unlike solar or wind, nuclear supplies reliable base load power
Unlike coal, oil or natural gas, nuclear is carbon free
URANIUM DEMAND IS GROWING1
§ 
§ 
§ 
2017 will see nuclear power generation pass its pre-Fukushima high
65 reactors under construction – 59% of them in Asia
Demand growth of 4-5% per year to 2020
SUPPLY HAS BEEN CUT BACK
§ 
§ 
§ 
Supply reduced 10% in 20142
Mined supply cut back in price downturn – Kaylekera and Honeymoon shutdown, Areva
and Cameco on growth moratoria3
Secondary supply from historical deal between Russia and America to down blend
Russian highly enriched uranium eliminated
Notes: 1. World Nuclear Association. 2. Raymond James research note of 20 May 2015. 3. Company announcements.
6
URANIUM UPSIDE
A 40% increase in mined supply is needed by 2020 and prices need to move to achieve that
HIGHER PRICES ARE NEEDED
US$/lb
100
80
60
40
20
0
80-85
36
Spot
§ 
49
Long-term
contract
A JPMorgan analysis of March 2015
estimates the average price required to
induce meaningful new supply is
US$80-85/lb
Supply
incentive
price
FUEL CYCLE IS LONG SO MARKETS REACT EARLY
Mining / milling
UF6 conversion
U-235 enrichment
Fuel fabrication
Fuel loading
12-18 months
7
HIGHEST GRADE UNDEVELOPED ISR PROJECT
DEWEY BURDOCK
SOUTH DAKOTA, USA
8
HIGHEST GRADE UNDEVELOPED ISR PROJECT
What is in-situ recovery (ISR) mining?
§ 
§ 
§ 
§ 
§ 
Produces >47% of global uranium
Injection wells add oxygen and carbon
dioxide to groundwater creating a lixiviant
solution in the layer of earth containing the
uranium ore
Uranium dissolves into the solution
Recovery wells pump the solution back
to the surface to a processing facility and
then returned to injection wells after
removal of uranium
Monitoring wells are checked regularly to
ensure uranium and lixiviant is not
escaping the uranium deposit
Source: United States Nuclear Regulatory Commission (www.nrc.gov)
9
HIGHEST GRADE UNDEVELOPED ISR PROJECT
Why we like ISR so much?... It’s cheaper and more reliable
§ 
No movement of rock, no
dust or tailings
§ 
Average global cash costs
are c. 25% cheaper than
non-ISR
§ 
§ 
§ 
Capital costs per lb of
production around 65%
cheaper
ISR VS CONVENTIONAL – GRADE AND CASH COST
COMPARISON USING CAMECO AS A GUIDE
Conventional
20
Ave = 17.3%
Reserves grade
10
(% U3O8)
Ave = 0.1%
0
New projects in Athabasca
can be high-grade but in
general fail to achieve
project economics of ISR
Only sandstone hosted
deposits with the right
hydrological and geological
conditions are amenable to
ISR
ISR
McArthur
River &
Key Lake
30
Cash cost
(US$/lb)
Cigar
Lake
Ave = US$23/lb
Inkai
Nebraska
&
Wyoming
Ave = US$21/lb
20
10
0
Grades of Athabasca assets average 200x more than ISR… BUT ISR has
10% lower cash cost!
Notes: Data sourced from Dundee’s Cameco research note of 29 October 2014. Cash cost numbers are 2016’F to
take into account when all comparable assets are in steady state production (i.e., after Cigar Lake has ramped up to
8m lb per annum).
10
HIGHEST GRADE UNDEVELOPED ISR PROJECT
Dewey Burdock: Location and infrastructure
§ 
Edgemont uranium district in south west
South Dakota, approximately 60 miles from
Cameco’s Crow Butte mine in Nebraska
§ 
Mineral rights and surface rights covering
approximately 17,800 acres and 13,880
acres, respectively
§ 
Well served for infrastructure
Sixteen miles from Edgemont, serviced
by two lane, all weather gravel road
10 miles Residential / light use power already at
site will supply first two years, then 15
miles of 69kV line to be built to nearest
substation to provide upgraded power
for central processing plant in third year
Two 3,000 foot wells to be drilled on
site to pump water from the Madison
Formation
Source: Technical Report and PEA.
11
HIGHEST GRADE UNDEVELOPED ISR PROJECT
Dewey Burdock: Highest grade among peers
NI 43-101 COMPLIANT RESOURCE
§ 
Measured & Indicated: 8,582,000 lbs at
average grade of 0.25%
§ 
Inferred: 3,528,000 lbs at average grade
of 0.05%
0.30
DEWEY BURDOCK2
0.25
Grade (U3O8%)
Source: Technical Report and PEA. Only includes ISR
amendable resources. Mineral Resources that are not
mineral reserves do not have demonstrated economic
viability.
.
HIGHEST GRADE AMONG PEERS1
0.20
0.15
0.10
CENTENNIAL3
0.05
0.00
0
5
10
15
20
25
30
Life of mine project size (lbs)
Notes: 1. Peers include: Uranium Energy Corp.’s Golliad and Burke Hollow, Uranerz’s Nichols Ranch, UR-Energy’s Lost
Creek and Shirley Basin, and Peninsula Energy’s Lance. Peer grade data is sourced from latest NI 43-101 compliant
published average grade for Measured plus Indicated Resources for all except Lance, where the grade was published
according to the Australian JORC Code for Measured plus Indicated Resources. Life of Mine project size data comes from
the latest published stated life of mine production from each project. 2. Source: Technical Report and PEA; includes some
12
Inferred Resources in production. 3. Source: NI 43-101 Preliminary Assessment Powertech Uranium Corp. Centennial
Uranium Project Weld County, Colorado, SRK, 2 June 2010; includes some Inferred Resources in production.
HIGHEST GRADE UNDEVELOPED ISR PROJECT
Dewey Burdock: 2015 PEA demonstrating robust economics
ROBUST PROJECT ECONOMICS1
Annual U3O8 production
1.0m lbs
Mine life (incl. two year ramp-up)
11 years
Total LOM production
9.7m lbs
Initial capital expenditure
US$27.0m or US
$2.80/lb
Cash operating costs
- Plant and well field operating
- Restoration / de-commissioning
- Site management / overhead
- Production taxes and royalties
US$18.86/lb
US$8.50/lb
US$1.25/lb
US$2.06/lb
US$7.05/lb
Sustaining capital costs
US$14.00/lb
Free cash flow pre-tax / post-tax
NPV (8% disc) pre-tax / post-tax
IRR pre-tax / post tax
US$284.2m /
US$220.9m
US$149.4m /
US$113.8m
67% / 57%
§ 
Initial capital of US$27m is ‘sector
leading’ for a project of this size
§ 
Cash costs below peers’ projections
from Peninsula Energy, Uranerz and
Uranium Energy Corp.
§ 
Pre-tax IRR of 67% at US$65/lb longterm uranium price (note: post-Federal
tax IRR of 57%)
§ 
At US$49/lb uranium, which is current
long-term price as assessed by UxC,
pre-tax IRR is 38%
§ 
Vanadium income has not been
incorporated but assays and historical
data indicate significant vanadium is
present
Notes: 1. Source: Technical Report and PEA, which is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the
economic considerations applied to them that would categorize them as Mineral Reserves. There is no certainty that the results of the Technical Report and PEA will be realized. Mineral
Resources that are not mineral reserves do not have demonstrated economic viability.
13
HIGHEST GRADE UNDEVELOPED ISR PROJECT
Dewey Burdock: Status of key permits
Final Source
and Byproduct
Materials
License
§ 
§ 
Issued April 2014
ASLB partially dismissed the contentions on NRC
license 30 April 2015
§ 
Remaining contentions concerning historical site
preservation have a clear process to completion
§ 
Expected publication of draft permits on
completion of ASLB contentions process
§ 
Water Rights
Permit
Applications complete and recommended for
approval
§ 
Large Scale
Mine Permit
Preliminary decision in late-2013 contending that
under SD Law, SD will issue permits after federal
regulators approve
§ 
State hearings could be convened once EPA
permit is published
UIC Class III
UIC Class V
14
PIPELINE OF PROJECTS
Summary of projects
USA
ASIA
Dewey
Terrace
(WY)
Savageton
(WY)
Aladdin
(WY)
Dewey
Burdock
(SD)
Centennial
(CO)
Kyzyl
Ompul
(Kyrgyz)
Development projects with NI
43-101 Resources and PEAs
Exploration projects with NI
43-101 Resources
Green fields exploration
15
PIPELINE OF PROJECTS
Centennial: Second project for development
NI 43-101 COMPLIANT RESOURCE
§ 
Indicated: 10,371,571 lbs at average
grade of 0.09%
§ 
Inferred: 2,325,514 lbs at average grade
of 0.09%
Source: NI 43-101 Preliminary Assessment Powertech Uranium Corp. Centennial Uranium Project Weld County,
Colorado, SRK, 2 June 2010
PROJECT ECONOMICS1
Annual U3O8 production
0.7m lbs
Total LOM production
9.5m lbs
Initial capital expenditure
Cash operating costs2
Pre-tax NPV (8% discount)3
US$71.1m or US$7.5/lb
US$34.95/lb
US$51.8m
Notes: 1. Source: NI 43-101 Preliminary Assessment Powertech Uranium Corp. Centennial Uranium Project Weld County, Colorado, SRK, 2 June 2010, which is preliminary in nature and
includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would categorize them as Mineral Reserves.
There is no certainty that the results of the Technical Report and PEA will be realized. Mineral Resources that are not mineral reserves do not have demonstrated economic viability.
2.Includes US$10.63/lb of satellite/well-field development costs. 3. At US$65/lb uranium price and including a 20% contingency on costs and capital expenditure.
16
RESOURCED TO SUCCEED
Financial resources and capital structure
FINANCIAL RESOURCES
Cash and listed
securities1
SHARE PERFORMANCE
C$/share
US$5.7m
0.55
Note: 1. As at 31 March 2015 (last quarterly filing). Includes cash of US$1.7m plus:
Black Range Minerals (ASX: BLR) shares at US$1.7m; and Anatolia Energy Shares
(ASX: AEK) at US$2.3m. It should be further noted that for accounting purposes the
shareholdings in the two ASX-listed companies are considered non current assets.
0.50
CAPITAL STRUCTURE
Shares outstanding1
Share price (TSX: AZZ)1
0.45
59.4m
0.40
C$0.375/share
Market cap (CAD)
C$22.3m
Market cap (USD)2
US$18.1m
0.35
Notes: 1. As at 2 June 2015. 2. Based on 1 CAD = 0.81 USD exchange rate.
0.30
1 Nov 14
2 June 15
Source: Quotemedia.
17
RESOURCED TO SUCCEED
Investment summary
DEVELOPMENT ASSETS WITH COMBINED PRE-TAX NPV >US$200m
CLASS LEADING ‘FLAGSHIP’ DEWEY BURDOCK
§ 
§ 
Highest grade undeveloped ISR uranium project among peer group1
Robust economics at low uranium prices
PORTFOLIO OF PROJECTS AT VARIOUS DEVELOPMENT STAGES
§ 
Two economically assessed development projects, two exploration projects with
established resources and two green fields exploration projects
VARIETY OF POTENTIAL UPCOMMING CATALYSTS
§ 
§ 
§ 
§ 
Finalization of Dewey Burdock permitting
Off-take or sales agreements over future uranium production
Results of geological work on exploration assets
Dewey Burdock moving to the construction phase
Notes: 1. Various company announcements and research notes; refer to slide 12 for additional details.
18
Corporate office
Powertech (USA) Inc.
Suite #140, 5575 DTC Parkway
Greenwood Village, Colorado
USA 80111
International operations
Azarga Uranium Corp.
Level 5-1, Suite 9, Sun’s Group Centre
200 Gloucester Road
Wanchai
Hong Kong SAR
Email: [email protected]
Web: www.azargauranium.com
Twitter: @AzargaUranium