Metal Energy Corp · TSXV:MERG
Metal Energy — Energy Metals — Merger or Acquisition (June 2007)
52 slides from Metal Energy's merger presentation, Jun 5, 2007
Slide 1: Consolidating our Senior Company Status – The EMC Transaction
Consolidating our Senior Company Status – The EMC Transaction Conference Call June 4, 2007 SXR – Toronto Stock Exchange, Johannesburg Stock Exchange EMC – Toronto Stock Exchange; EMU - NYSE Arca
Slide 2: Cautionary Statement
Cautionary Statement Readers are advised to refer to independent technical reports containing detailed information with respect to the material properties of Uranium One and EMC. These technical reports are available under the profiles of Uranium One and UrAsia Energy Ltd., in the case of Uranium On
Slide 3: Additional Information About the Transaction
Additional Information About the Transaction Where to Find Additional Information About the Proposed Transaction: Subject to the terms and conditions set forth in the definitive agreement, EMC intends to file a notice of meeting, management information circular and related materials with Canadian se
Slide 4: Transaction Rationale
Transaction Rationale Creates a powerhouse in the United States uranium sector Uranium One In line with stated strategy of value-accretive external growth with a focus in the United States and Australia Enhanced geographic diversification and well-balanced portfolio of assets Technical expertise in
Slide 5: The EMC Asset Base
The EMC Asset Base Building the leading U.S. uranium company A large high quality portfolio of uranium resources in the U.S. 2008 production visibility from the Hobson facility Uranium One projects production from the Wyoming properties in 2010 Other advanced stage projects Low production cost proje
Slide 6: Strategic Review
Strategic Review Transaction Overview Projected Development Plans Uranium One Update Conclusion
Slide 7: Uranium One Vision
Maximise shareholder returns by delivering on our projects and growing Uranium One into a low production cost top 5 international uranium producer 6 Uranium One Vision 5 year focus 3
Slide 8: Uranium One is strategically driven
Uranium One is strategically driven Uranium One Strategy External Growth Internal Growth Focused on near term production, low technical risk, low production cost and long life assets Geographically and Strategically Focused Further creation of shareholder value through Internal and external growth i
Slide 9: Internal Growth
Internal Growth The best bang for your buck DRUM expansion potential DRUM extensions Production expansions at South Inkai and Kharasan through the potential conversion of P1 resources Exploration in Australia and Canada 5 DRUM Prospecting Rights
Slide 10: External Growth
External Growth Net Asset Value is the underlying fundamental December 19, 2005 – Completes RTO of Southern Cross Resources July 11, 2006 – Announces exclusive negotiations for the purchase of U.S. Energy’s Uranium Assets February 12, 2007 – Announces acquisition of UrAsia Energy April 20, 2007 – Co
Slide 11: U.S. uranium for U.S. utilities
U.S. uranium for U.S. utilities 7 Largest generator of nuclear energy Consumes 11 times more uranium than it produces Needs to reduce its exposure to oil and foreign energy supplies A U.S. nuclear renaissance is evident Expansions in Australia and Asia earmarked for China U.S. dollar denominated cas
Slide 12: Transaction Overview
Strategic Review Transaction Overview Projected Development Plans Uranium One Update Conclusion
Slide 13: Acquisition of Energy Metals Corporation
Acquisition of Energy Metals Corporation Directors of EMC unanimously recommend that shareholders accept this offer 8 Structure Plan of arrangement Share for share exchange Exchange Ratio 1.15 Uranium One shares for each EMC share Consideration Offered C$19.12 per share based on closing price of Ura
Slide 14: Transaction Terms and Timing
Transaction Terms and Timing Strong support from insiders 9 June August September JUNE 4 Roadshow to commence with one-on-one shareholder meetings End of June Mailing of circulars End of July Shareholder vote Closing shortly after shareholder vote July Note: Subject to regulatory approvals • Hard lo
Slide 15: Corporate and Operational Capacity
14 Corporate and Operational Capacity Experienced management teams with a regional focus 10 Neal Froneman President & CEO Paul Matysek EVP Americas John Sibley EVP, General Counsel and Secretary Robert van Niekerk EVP Africa & Europe Jean Nortier EVP Corporate Affairs Robin Merrifield Chief Financia
Slide 16: Pro Forma Capitalization
Pro Forma Capitalization Well-capitalized for development of projects 11 millions except share price Uranium One EMC Pro Forma Basic Shares Outstanding (1) 364 83 460 FD Shares Outstanding (2) 388 95 497 Share Price (C$) (3) $16.63 $19.12 $16.63 FD Market Capitalization (C$ mm) (3) $6,447 $1,817 $8,
Slide 17: Pro Forma Market Capitalization
Pro Forma Market Capitalization Significant re-rating potential 12 Note: EMC market capitalization based on transaction equity value. PF U1 is the sum of Uranium One market capitalization and EMC transaction equity value. $0.0 $5.5 $11.0 $16.5 $22.0 Cameco PF U1 Uranium One Paladin ERA Denison Urami
Slide 18: Expanding Global Footprint
Pitchstone JV Shootaring Mill Dominion Reefs Uranium Mine (DRUM) Honeymoon Project South Inkai Akdala Kharasan Sheep Mountain Energy Metals Corp. Expanding Global Footprint A well balanced portfolio of international uranium assets 13
Slide 19: Diversification
Diversification A well balanced portfolio of assets, with 71% projected ISR production in 2012 14 Total Reserve and Resource Distribution 1. Russian P1 and Historical resource are non-43-101 compliant – please see cautionary note. (1) (1) Mining Method – 2012 Production Note: Projected forecasts con
Slide 20: Pro Forma Reserves and Resources
Pro Forma Reserves and Resources Large, geographically diversified resource base 15 161 mm lbs of code compliant Measured and Indicated resources 284 mm lbs of code compliant Inferred resources 164 mm lbs of Russian P1 resources 199 mm lbs of historical resources in the United States with additional
Slide 21: Projected Project Pipeline
Texas Wyoming Colorado Production* 2008 2009 2010 2011 2012 Production* Production* Projected Project Pipeline Enhancing Uranium One’s production growth profile out to 2013 Development Drilling New Mexico Production* Development Drilling Development Drilling 16 2013+ Akdala Honeymoon Dominion South
Slide 22: Projected Production Profile
Unrivalled production growth profile Projected Production Profile 17 Source: PF Uranium One production forecasts as per management estimates (note: EMC production forecasts contingent on conversion of historical resources). Production for Cameco based on estimates in Cameco’s May 8, 2007 Merrill Lyn
Slide 23: A Compelling Acquisition
A Compelling Acquisition Significant re-rating potential 18 Source: Resource information based on reports of the Applicable Companies. Uranium One includes historical and Russian P1 resources. EMC based on trading price as at May 17, 2007. PF U1 based on sum of Uranium One EV and EMC transaction EV.
Slide 24: Projected Development Plans
Strategic Review Transaction Overview Projected Development Plans Uranium One Update Conclusion
Slide 25: Combined United States Asset Base
Combined United States Asset Base Significant exploration potential and a platform for organic growth 19 Wyoming - PRB M&I: 7.7 mm lbs Inferred: 0.1 mm lbs Historical: 25.8 mm lbs Projected Plant Capacity: 3.0 mm lbs Key Properties: Peterson Ranch, Nine Mile, Moore Ranch, Allemand-Ross New Mexico In
Slide 26: South Texas Mining Venture
20 South Texas Mining Venture Comprised of Hobson ISR processing facility and the La Palangana property Fully Permitted Hobson Processing facility with production visibility in late 2008 Hobson facility capacity being upgraded to approximately 1 million lbs U3O8 per annum La Palangana projected as a
Slide 27: Wyoming
21 Wyoming Large historical resource base offers significant upside Powder River Basin Projects Great Divide Basin Projects Shirley Basin Projects Processing facilities in Powder River Basin (PRB) and Great Divide Basin (GDB) planned in projected analysis Compliant resources in PRB & GDB Additional
Slide 28: New Mexico
22 New Mexico New Mexico could potentially contribute to long-term production Nose Rock Crownpoint Hosta Butte Favourable geologic setting and historical mining activity in the area Projects are believed to be amenable to ISR mining methods Processing facility in New Mexico planned in conceptual ana
Slide 29: Utah - Shootaring Mill Synergies
Utah - Shootaring Mill Synergies Projected production visibility in 2010 23 San Rafael, Frank M and Velvet provide additional resource potential for Shootaring feed Velvet has a 2.1 million lb indicated resource at a grade of 0.34% Application submitted on amending DRC licence from reclamation to op
Slide 30: Other U.S. Assets
24 Other U.S. Assets Large historical resource in a number of different jurisdictions Advanced exploration projects located in Arizona, Colorado, Nevada, Oregon and Utah Significant Indicated resources of 18.3 million lbs U3O8 at the Aurora (Oregon) project Additional Historical resources of 97.4 mi
Slide 31: Projected Production Analysis
Potential for year on year growth in production out to 2013 Projected Production Analysis 25 Projected Production Centre Contribution Projected Production by Resource Category Note: Projected forecasts contingent on conversion of historical resources 0.0 2.0 4.0 6.0 8.0 10.0 2008 2009 2010 2011 2012
Slide 32: Uranium One Update
Strategic Review Transaction Overview Projected Development Plans Uranium One Update Conclusion
Slide 33: Update on Dominion
26 Update on Dominion 2007 feasibility production target of 491,000 lbs U3O8 expected to be achieved Ammonium diuranate (ADU) production has commenced under atmospheric leach conditions Autoclaves will be commissioned in June and August resulting in final design recoveries Potential expansion feasib
Slide 34: Integration of UrAsia Energy
27 Integration of UrAsia Energy Production at Akdala running ahead of year to date budgeted levels Significant cash flow from Akdala is being reinvested in the development of South Inkai and Kharasan Production from South Inkai expected in Q4 2007 and from Kharasan in Q1 2008 Product marketing has b
Slide 35: Conclusion
Strategic Review Transaction Overview Projected Development Plans Uranium One Update Conclusion
Slide 36: Conclusion
Conclusion Invest in our Energy Transaction establishes Uranium One’s pre-eminent position in the United States Targeted production visibility from Texas in 2008 Projected production visibility from Wyoming and Utah in 2010 ISR amenable projects with additional conventional mining opportunities Geog
Slide 37: Appendix: Additional Reserve & Resource Information
Appendix 1 Additional Reserve & Resource Information
Slide 38: PF Uranium One Reserves and Resources
PF Uranium One Reserves and Resources Source: Company Reports. All numbers are subject to rounding. 1. Non 43-101 compliant resource – please refer to cautionary statement. A-1 Company Share k lbs Proven & Probable Reserves Proven 4,100 Probable 44,627 Total P&P 48,727 Additional Measured & Indicate
Slide 39: EMC NI 43-101 Compliant Resources
EMC NI 43-101 Compliant Resources Source: Company reports. A-2 Deposit Totals Company Share Tons Grade U 3 O 8 Lbs of U 3 O 8 Ownership Lbs of U 3 O 8 (000) (%) (000) (%) (000) Measured Resource Moore Ranch (WY) 2,950 0.100% 5,880 100% 5,880 Peterson Ranch (WY) 896 0.088% 1,576 100% 1,576 Jab (WY) 2
Slide 40: EMC Historical Resource
EMC Historical Resource Source: Company Reports. Note: Non 43-101 compliant resource – please refer to cautionary statement A-3 Deposit Totals Company Share Lbs of U 3 O 8 Ownership Lbs of U 3 O 8 (000) (%) (000) Wyoming Allemand Ross 7,800 100% 7,800 AC Block 9,000 100% 9,000 Antelope 15,000 100% 1
Slide 41: Uranium One Reserves & Resources
Uranium One Reserves & Resources Source: Company Reports. Note: Indicated resources shown inclusive of P&P reserves. Dominion Project includes Dominion Dumps. All numbers are subject to rounding. 1. Non 43-101 compliant resource – please refer to cautionary statement. A-4 Deposit Totals Company Shar
Slide 42: Appendix: Uranium One Asset Summaries
Appendix 2 Uranium One Asset Summaries
Slide 43: Akdala (70%)
Akdala (70%) 70% interest in the Akdala and South Inkai Project through Betpak Dala JV (30% Kazatomprom) Largest operating ISR mine in the world with annual attributable production of 1.8 mm lbs U3O8 Q1 2007 cash cost per pound sold US$12/lb Attributable Proven and Probable reserves of 17.4 mm lbs U
Slide 44: South Inkai (70%)
South Inkai (70%) Four times larger than Akdala Advanced ISR construction project located south of Cameco’s Inkai JV Production start-up expected in Q4 2007 with potential expansion to 7.3 mm lbs by 2012 Expected Cash costs of ~US$10.00/lb Targeted +25 year project life Astana Akdala K A Z A K H S T
Slide 45: Kharasan (30%)
Kharasan (30%) 30% interest in the Kharasan Project through the Kyzylkum Joint Venture (30% Kazatomprom; 40% Marubeni/TEPCO/Chubu) Advanced construction ISR project Start-up expected in Q1 2008 with potential expansion to 2.3 mm lbs attributable production by 2011 Expected Cash cost ~US$10.50/lb Tar
Slide 46: Dominion Phase 1 (100%)
Dominion Phase 1 & 2 (100%) Processing of ore commenced on schedule during Q1 2007 with steady state annual production of 3.8 mm lbs by 2011 Large code compliant Indicated resource base of 66 mm lbs U3O8 and additional 184 mm lbs U3O8 in Inferred category Cash costs US$14.50/lb Project life in exces
Slide 47: Dominion Potential Expansions (100%)
Dominion Potential Expansions (100%) Feasibility study on potential expansion to 300,000 tonnes per month to be released in early 2008 Prefeasibility study on potential expansion to 400,000 tonnes per month to be released in early 2008 Mill capacity expansion by 50% to 300,000 tpm and use of radiome
Slide 48: Honeymoon (100%)
Honeymoon (100%) Australia’s fourth uranium mine with mining and export license in place ISR project with 6.5 mm lb Indicated resource at a grade of 0.24% Production scheduled for start-up in Q1 2008 and steady state annual uranium production of 880,000 lbs over a 6 year project life Cash costs of U
Slide 49: U.S. Uranium Assets
U.S. Uranium Assets The mill and surrounding deposits provide near term production visibility Acquisition of U.S. Energy uranium assets completed on April 30, 2007 100% of Shootaring Canyon mill (750 tpd acid leach mill) and the Lisbon Valley, White Canyon, Henry Mountain and Sage Plains Properties
Slide 50: Appendix: Additional Information
Appendix 3 Additional Information
Slide 51: Expanded Board of Directors
50 Expanded Board of Directors EMC’s nominees provide strong U.S. presence and expertise Nominee for election to board at AGM on June 7, 2007 Assuming shareholder approval to increase the size of the board Andrew Adams Non Executive Director Dave Hodgson Non Executive Director Terry Rosenberg Non Ex
Slide 52: Extraction Method in the United States
Extraction Method in the United States ISR mining methods account for approximately 70% of projected production Note: Projected production forecasts contingent on conversion of historical resources A-13 0% 20% 40% 60% 80% 100% 2008 2009 2010 2011 2012 2013 Percentage of Projected 2013 Production ISR