Electricity: capturing added value

Our investment in BPLP has been an excellent source of cash flow. Our focus is on maintaining steady cash flow and building synergies with our other segments. BPLP is considering extending the operating life of the four Bruce B units and we will have an opportunity to invest if BPLP decides to proceed. We would base this investment decision on the underlying value proposition and the strategic fit with our other growth objectives.

Note Concerning Forward-Looking Information Regarding Our Strategy

This discussion of our strategy and our process to increase our annual uranium production by 2018 is all forward-looking information. It is based on the assumptions and subject to the material risks discussed here, and specifically on the assumptions and risks listed here.

Assumptions

Our statements about increasing annual production by 2018 to 40 million pounds reflect our current production target for 2018. Although we are confident in our efforts to reach that target, we cannot guarantee that we will. We have made assumptions about 2018 production levels at each of our existing operating mines. We have also made assumptions about the development of mines that are not operating yet and their 2018 production levels. We believe these assumptions are reasonable, individually and together, but if an assumption about one or more mines proves to be incorrect, we will not reach our 2018 target production level unless the shortfall can be made up by additional production at another mine.

Material risks that could prevent us from reaching our target

we cannot locate additional mineral reserves and identify appropriate methods of mining to maintain and increase production levels at McArthur River
we cannot locate additional mineral reserves to extend Rabbit Lake's mine life to maintain production
our partner or the Kazakh government does not support an increase in production to the expected level at Inkai, blocks 1 and 2, or we do not reach the full production level as quickly as we expect
we cannot bring block 3 into production at Inkai if the feasibility study is not favourable or we cannot secure partner or government approval
development at Cigar Lake is not completed on schedule, or we do not reach the full production level as quickly as we expect
development of Kintyre is delayed due to political, regulatory or indigenous people issues
we cannot obtain a favourable feasibility study for Kintyre or the Millennium project, or we cannot reach agreement with our project partners to move ahead with production at Kintyre or Millennium
the Key Lake mill does not have enough capacity to handle anticipated production increases, and we are not able to expand its capacity or to identify alternative milling arrangements
the projects under evaluation do not proceed or, if they do, are not completed on schedule or do not reach full production levels as quickly as we expect
uranium prices and development and operating costs make it uneconomical to develop projects under consideration
we cannot obtain or maintain necessary permits or approvals from government authorities
disruption in production or development due to natural phenomena, labour disputes, political risks, blockades or other acts of social or political activism, lack of tailings capacity, or other development and operation risks