zimtu capital corp.: canadian uranium exploration & the athabasca basin
DESCRIPTION
Presentation from Derek Hamill, Research and Communications Zimtu Capital Corp. on Canadian Uranium Exploration & The Athabasca Basin. Orginally Presented at Vancouver Cambridge House Investment Conference Sunday January 26, 2014.TRANSCRIPT
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CONNECTING OPPORTUNITY AND YOU.
January 2014 / www.zimtu.com
TSXv: ZC
FSE: ZCT1
Canadian Uranium Exploration & The Athabasca Basin
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No Place Like Home
Source: Luke Schuss
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Introduction
Electricity Generating Capacity 15-yr CAGR (2010-2025) Institutional
forecasts Total electricity Nuclear
Renewables (ex-
hydro) Natural gas
US eia 2.6% 3.4% 3.7% 2.2%
BP 2.4% 1.4% 10.0% 2.2%
Exxon Mobil 2.0% 2.3% 5.6% 2.3%
Average 2.3% 2.4% 6.4% 2.2%
Talking Points
1. Electricity Demand – a seat at the table for
nuclear energy
2. The Commercial Nuclear Industry – future
outlook has everything coming up roses?
3. The Commercial Nuclear Industry – contenders
emerge
4. Reactor Builds – China is the major growth
driver
5. Zimtu’s Global Uranium Demand Projections –
scenario analysis
6. The Athabasca Basin – the ultimate winner and
why the region deserves your respect
7. Conclusion – Grade is King
Source: BP Statistical Review 2013
0%
20%
40%
60%
80%
100%
120%
140%
1985 1988 1991 1994 1997 2000 2003 2006 2009 2012
Global Electricity Growth, 1985-2012
Electricity Generation
Nuclear
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COMPANY
BUILDING
Private to Public
Global Nuclear Reactor Trends
PROJECT
GENERATION
Zimtu locates and acquires
mineral properties of
Merit and connects them
With public resource
companies
-15
-5
5
15
25
35
45Construction starts
Grid connections
Permanent shutdowns
Cancelled Constructions
Three Mile Island Chernobyl
Fukushima
Source: IAEA|PRIS
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The Bright Future for Commercial Nuclear Energy
IEA Global Forecast Generating Capacity Required by 2035 (GW)
2010 2035 Required Increase
NPS* 450 S** NPS* 450 S**
Hydro 1027 1629 1803 59% 76%
Wind 195 1102 1685 465% 764%
Solar PV 28 499 901 1682% 3118%
Nuclear 393 633 865 61% 120%
Nuclear current capacity = 374GW
*New Policy Scenario (NPS) = IEA base case
** 450 Scenario (450 S) = probable achievement in reduction of global warming
OECD LCOE Ranges, 2010 (USD/MWh)
Technology* Discount rate
5% 10%
Nuclear 29-82 42-137
Wind, onshore 48-163 70-234
Gas** 67-105 76-120
Coal** 54-120 67-142
*Solar not included as sample population too small
**Includes carbon price of $30/tonne
Given a low discount rate,
nuclear is competitive with
other electricity generating
technologies using a
levelized cost comparison.
Nuclear Reactor Overview
Number of
reactors
Net Capacity
(GWe)
Net MW
per reactor
Operational 438 374 855
Under
construction 71 70 981
Permanent
Shutdown 147 55 375
Source: IEA/NEA/OECD
Source: IEA’s World Energy Outlook 2011 Source: IAEA|PRIS
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Smooth Sailing Ahead
0
5
10
15
20
25 US 2012 Electricity Production Costs (cents per KWh)
Coal
Gas
Nuclear
Petroleum
OECD Overnight Construction Costs, 2010
Technology
Pre-financing
charges
(USD/kW)
Investment as share of total
costs* Construction
period (years) 5% 10%
Nuclear 1600-5900 60% 75% N/A
Wind 1900-3700 77% 87% 1-2
Gas 520-1800 12% 16% 2-3
*Investment includes financing but excludes future liabilities for clean-up
**Onshore
0
50
100
150
200
1994 1997 2000 2003 2006 2009 2012
Te
raw
att
-ho
urs
Annual Nuclear Consumption
China
India
Korea
Russia
Source: IEA/NEA/OECD
Source: BP Statistical Review 2013 Source: Nuclear Energy Institute
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0
100
200
300
400
500
Operable UnderConstruction
Planned Proposed
China US World ex US & China
Nuclear reactors and historic U3O8 spot price up to 2014
$0
$20
$40
$60
$80
$100
$120
$140
$160
Source: Cameco Source: IAEA|PRIS, WNA
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Lurking Under the Surface
0
300
600
900
1977 1984 1991 1998 2005 2012
Te
raw
att
-ho
urs
Annual Nuclear Consumption USA
France
Japan
Germany
Largest Consumers of Nuclear Energy
2010 Peak Consumption
(corresponding to
left margin)
2012
World 2768 TWh World 2477 TWh
USA 30.7% 2010 USA 32.7%
France 15.5% 2005 France 17.2%
Japan 10.6% 1998 Russia 7.2%
Russia 6.2% 2012 Korea 6.1%
Korea 5.4% 2011 Germany 4.0%
Germany 5.1% 2001 China 3.9%
Canada 3.2% 2006 Canada 3.9%
Ukraine 3.2% 2007 Ukraine 3.9%
Four countries – the US, France, Japan, and
Russia represented 63% of total nuclear energy
consumption in 2010.
Uranium demand over the next 10 years will
be a function of the traditional “big 4” and a
new entrant – China Source: BP Statistical Review 2013
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DISCOVERY
SPECULATION
DEVELOPMENT
INVESTMENT ANALYSIS
PRODUCTION
RE-VALUATION
USA, 100
France, 58
Japan*, 50
Russia, 3
3
Other, 197
Regional Breakdown of
Operational Reactors
0
5
10
15
20
25
30
35
0
5
10
15
20
25
30
35
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44
Gig
aw
att
s of
Cap
acit
y
Nu
mb
er
of
Reacto
rs
Age (Years)
Weighted-average Age of Reactors Worldwide
number of reactors
Total net electrical
generating capacity
Uranium Demand: age becoming material
Source: IAEA|PRIS
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Energy Consumption: Nuclear vs Wind + Solar
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
0
500
1,000
1,500
2,000
2,500
3,000
1996 1998 2000 2002 2004 2006 2008 2010 2012
nu
cle
ar
% o
f g
lab
al
ele
ctr
icit
y
TW
h
Nuclear Wind & Solar
Source: BP Statistical Review 2013
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Reactor Constructions: Regional issues
Median Reactor Construction Duration
Reactor grid connections 1981-1995 Reactor grid connections 1996-2012
Number of reactors
Median construction duration (years)
Number of reactors
Median construction duration (years)
Korea 10 5.25 12 4.65
China 3 6.08 14 5.15
Japan 28 3.90 8 3.82
USA 48 11.43 1 N/A
Total 245 8.17 65 7.58
China, 28
Russia, 10
India, 6
Korea, 5
Other, 22
Reactors Under Construction, Regional Breakdown
Expected Reactor Connections to Grid
2013 2014 2015
Number of reactors 14 17 13
China 7 8 8
Actual 4 1 Source: IAEA|PRIS
Source: IAEA|PRIS
Source: WNA
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Uranium Production Sensitivity Analysis
Base Case, 2040 Outlook
New grid
connections 198
Reactor
needs
Secondary
Supply
Mining
est.
permanent
shutdowns 119 million pounds of U3O8
Results 514 219 0 219
Additional U3O8 Production
Requirements 90
Growth 18% 28% -100% 46%
Best Case, 2040 Outlook
New grid
connections 294
Reactor
needs
Secondary
Supply
Mining
est.
permanent
shutdowns 119 million pounds of U3O8
Results 610 260 0 260
Additional U3O8 Production Requirements 131
Growth 40% 52% -100% 73%
Worst Case, 2040 Outlook
New grid
connections 198
Reactor
needs
Secondary
Supply
Mining
est.
permanent
shutdowns 330 million pounds of U3O8
Results 303 129 20 109
Additional U3O8 Production Requirements (41)
Growth -30% -24% -7% -27%
End of 2013 Number of
reactors
Median global
reactor
requirements
Supply from
downblend of
HEU
Mining
production
est.
million pounds of U3O8
Currently
Operable 435 171 21 150
The Athabasca Basin in Northern Saskatchewan, hosts the highest grade uranium deposits in the world and substantial existing infrastructure. This is an attractive proposition for uranium exploration.
Source: IEA’s WEO 2011 and ZC estimates
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Spot price U3O8 and Canadian Uranium Exploration (millions of USD)
0
50
100
150
200
250
300
350
400
0
10
20
30
40
50
60
70
80
90
100
We anticipate 2013 to be a trough for
Canadian uranium exploration
expenditures, rebounding strongly by
approximately 70% by 2018, following a
nominal price increase of 76% for uranium
Source: Cameco, NRC, Federal Reserve, and ZC estimates
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The Athabasca Basin
Identified Resources of U3O8
Cost Ranges Adjusted for Mining Inflation per pound U3O8
< $18 < $36 < $59 < $117
Australia
-
3,508.1
4,319.8
4,520.5
Kazakhstan
123.2
1,263.0
1,635.5
2,131.0
Russia
-
144.0
1,266.6
1,690.6
Canada
912.0
1,083.6
1,218.5
1,597.3
Namibia
-
17.2
678.5
1,346.9
USA
-
101.7
539.2
1,227.4
Niger
14.3
14.3
1,094.5
1,158.2
World total
1,770.2
8,003.4
13,849.5
18,449.6
2013 expected global reactor requirements = 168.9 million pounds U3O8
Spot Price Estimates
Annual mean Zimtu
2013 39.74
2014 48.75
2015 54.03
2016 59.85
2017 65.74
2018 69.89
The Athabasca Basin is
the global low-cost
uranium supplier. The
Basin will profit from
exploration dollars
transitioning out of high
cost regions in Africa,
Kazakhstan, and
Australia. Source: OECD Uranium Red Book 2011 and ZC estimates
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Conclusion: Grade is King
Supply of Uranium As Per The World Nuclear
Association Website
Very high-grade ore (Canada) - 20% U 200,000 ppm U
High-grade ore - 2% U, 20,000 ppm U
Low-grade ore - 0.1% U, 1,000 ppm U
Very low-grade ore* (Namibia) - 0.01% U 100 ppm U
Granite 3-5 ppm U
Sedimentary rock 2-3 ppm U
Earth's continental crust (av) 2.8 ppm U
Seawater 0.003 ppm U
Largest High Grade Mines in the World
Mine Average Grade U3O8
McArthur River 16.89%
Cigar Lake 18.30%
Athabasca Basin Sample Deposit
Depths
Projects Mean Approximate Depths
(meters)
McArthur River 530-640
Cigar Lake 410-450
Roughrider 225-350
Shea Creek 650-850
PLS 50-300
The Athabasca Basin is the global low-
cost uranium supplier. This competitive
advantage is extremely important and
will drive investment dollar to the
region.
Source: Cameco, Denison, Hathor, FCU
Source: Cameco
Source WNA
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