Uranium – Exploration & Corporate Development

Our exploration program is directed at replacing mineral reserves as they are depleted by our production, and ensuring our future growth. We have maintained an active program even during periods of weak uranium prices, which has helped us secure land with exploration and development prospects that are among the best in the world, mainly in Canada, Australia, Kazakhstan and the US. Globally, our land holdings total 1.7 million hectares (4.2 million acres). In northern Saskatchewan alone, we have direct interests in 584,000 hectares (1.4 million acres) of land covering many of the most prospective exploration areas of the Athabasca Basin. Many of our prospects are located close to our existing operations where we have established infrastructure and capacity to expand.

For properties that meet our investment criteria, we may partner with other companies through strategic alliances, equity holdings and traditional joint venture arrangements. Our leadership position and industry expertise in both exploration and corporate social responsibility make us a partner of choice.

In 2014, we continued our exploration strategy of focusing on the most prospective Canadian and Australian projects in our portfolio. Exploration is key to ensuring our long-term growth, and since 2008, we have continued to invest in exploring the land we hold.

2014 update

Brownfield exploration

Brownfield exploration is uranium exploration near our existing operations, and includes expenses for advanced exploration projects where uranium mineralization is being defined.

This year we spent $4.1 million on six brownfield exploration projects, $5.5 million on our projects under evaluation in Australia, and $5.0 million for resource definition at Inkai and at our US operations.

Regional exploration

We spent about $32 million on regional exploration programs (including support costs), primarily in Saskatchewan and Australia.

Planning for the future

We plan to maintain an active uranium exploration program and continue to focus on our core projects in Saskatchewan under our long-term exploration strategy.

Brownfield exploration

In 2015, we plan to spend approximately $2.8 million on brownfield exploration in Saskatchewan and Australia. Our expenditures on projects under evaluation are expected to total $5 million.

Regional exploration

We plan to spend about $25.6 million on 23 projects in Canada and Australia, the majority of which are at drill target stage. Among the larger expenditures planned is $6.9 million on the Read Lake project, which is adjacent to McArthur River in Saskatchewan.

Acquisition program

We have a dedicated team looking for acquisition opportunities within the nuclear fuel cycle that could further add to our supply, support our sales activities, and complement and enhance our business in the nuclear industry. We will invest when an opportunity is available at the right time and the right price. We strive to pursue corporate development initiatives that will leave us and our shareholders in a fundamentally stronger position.

An acquisition opportunity is never assessed in isolation. Acquisitions must compete for investment capital with our own internal growth opportunities. They are subject to our capital allocation process described here. Currently, given the conditions in the uranium market, and our extensive portfolio of reserves and resources, our focus is on those projects in our portfolio that provide us with the greatest certainty in the near term.