Azarga Uranium

Overview

Azarga Uranium Corp. (TSX:AZZ,OTCQB:AZZUF) is an integrated uranium exploration and development company that controls 10 uranium projects and prospects in the United States (South Dakota, Wyoming, Utah and Colorado), with a primary focus of developing in-situ recovery uranium projects. The Dewey Burdock in-situ recovery uranium project in South Dakota, which is the Company’s initial development priority, has received its US Nuclear Regulatory Commission License and draft Class III and Class V Underground Injection Control permits from the Environmental Protection Agency (EPA) and continues to advance towards construction.

Azarga Uranium’s flagship Dewey Burdock project has a preliminary economic assessment (PEA) that outlines a 16 year mine life, and the project is forecast to produce 14.3 million pounds of U3O8. The base case economic assessment results in a pre-income tax internal rate of return (IRR) of 55 percent and a pre-income tax net present value (NPV) of US$171.3 million when applying an 8 percent discount rate. Using the same discount rate, the post-income tax IRR is 50 percent and the post-income tax NPV is US$147.5 million. The projected cash flows for the Dewey Burdock project PEA are positive in the second year of production, two years after the commencement of construction.

Azarga Uranium President and CEO Blake Steele commented, “What’s really interesting about our Dewey Burdock project is the economics. The PEA demonstrates robust economics and cements the Dewey Burdock project as one of the preeminent undeveloped in-situ recovery (ISR) projects in the United States. The PEA results further validate our company’s strategy and we continue to progress the project towards construction as the global uranium market strengthens by virtue of supplier discipline and higher demand. The estimated cost profile and modest initial capital expenditures leave Dewey Burdock and the company well positioned to capitalize on the anticipated recovery in the uranium price.”

An initial capital investment of US$31.7 million for the Dewey Burdock project is sector leading for a project of its size and forecast C1 cash costs of US$10.46/lb per pound of production are first quartile on the cost curve.

In addition to its flagship Dewey Burdock project, the company has a strong pipeline of uranium projects in the US with 41 million pounds of measured and indicated plus 6 million pounds of inferred U3O8 resources.

Company Highlights

• The company’s flagship Dewey Burdock project is one of the preeminent undeveloped uranium projects in the United States, possessing a unique combination of grade and scale.
• Initial capital investment of US$31.7 million for the Dewey Burdock project is sector leading for a project of its size.
• The Dewey Burdock project has robust economics at low uranium prices.
• ISR is favorable over conventional mining due to environmental and low-cost advantages.
• Strong demand growth of uranium is forecast at a time when supply has been cut back.
• Management is made up of experienced mine developers.
• The company has a strong pipeline of projects in the US, including its Gas Hills Project in Wyoming, which has the potential to transform into a significant satellite deposit for the Dewey Burdock project.