Rick Rule and Mining Executives discuss the future of the Uranium Market

00:28 Rick Rule: We’re going to do a few things today which I hope are amusing to you. First of all is that my job as a moderator is actually to moderate. So I get to have fun asking questions, and I’m not going to answer any of them. The gentlemen that are with me have to give short answers. That includes you Dev. We have four or five questions. We have four or five guys, all of whom are loquacious. We’re going to get through it. So nobody gets to take anybody else’s time. That’s it. It’s going to be very interesting. Rather than me read canned presentations that the conference made with regards to your panelists, which I didn’t bring with me. Anyway, I’m going to ask them individually to introduce themselves, beginning on my immediate left, and proceeding to my far left. Noting once again, in Canada everybody is to my left.

01:19 David Miller: Good afternoon. I’m David Miller with ALX Corporation. We have a booth over here, number 54. It’s in the middle down there. We’re a junior explorer in the Athabasca Basin.

01:36 Jordan Trimble: My name is Jordan Trimble. I’m the President of Skyharbour Resources. We’re also exploration, early stage development in the basin, discovery driven. Prospect generator is a secondary strategy as well.

01:50 Dev Randhawa: My name is Dav Randhawa. I help run a company called Fission Uranium.

01:58 Daniel Major: Daniel Major, CEO of GoviEx Uranium. I’m the odd one out, which is why I don’t get a piece of table. I’m in Africa with a development stage project. I’m basically looking to finance improving price to build a mine.

02:14 Rick Rule: Uranium finds itself where it found itself in 1999 and 2000, that is to say really a liquidation. International Energy Agency and Cameco both say that the incentive price to put new production in place is about $60 a pound. Meaning that the total cost to produce uranium on a global basis is 60 bucks a pound. So we produce the stuff for 60, and we sell it for 23, losing $37 a pound, and being miners trying to make it up on volume.

02:42 The question I have goes like this. You resolve a commodities bear market one of two ways. One is demand creation, which is a consequence of the fact that the low price of the commodity generates so much utility for consumers that they increase consumption, and raise the price. The second way that you resolve commodities bear markets are through extended periods of liquidation, where you destroy the productive capacity of the industry, and you match supply and demand through supply destruction, rather than demand creation. Gentlemen, quick answers. Looking forward to the next two or three years. Do we A, go out of business, no more uranium, and the lights don’t go on? I’m giving you the answer. B, do we generate so much utility for our consumers that the price of uranium goes up, because the stuff is just too cheap? Or C, do we restore the balance between supply and demand through the consequence of demand creation?

03:41 David Miller: I guess I’m up first. I’ve worked in uranium for 40 years, in production, exploration. Yeah, we’ve seen this cycle before. We saw it ten years ago, back to 2004. It was extremely strong. I don’t think we’re going to go back to that. But yes, I see option C here, there will be more discoveries made. The reason ALX is in the Athabasca Basin is because that’s the highest grade, cheapest mine deposits in the world. The lower grade deposits around the world I don’t think will be that competitive going forward.

04:19 Jordan Trimble I think the supply side is what’s really interesting with uranium. I mean we know the demand side, 59 reactors under construction, many hundreds more proposed, planned, ordered. More nuclear energy came on the grid last year than any year over the last 40 years. So the demand side we know is going to be pretty steady. The supply side is interesting. The supply has worked against us, hence, we’re trading at a $20 uranium price. I think it’s important to emphasize there’s not one mine right now that actually makes money at $20 a pound. When we talk about this $60 price to incentivize new production to come online, that’s triple the price, that’s triple where we are right now. So I think if you look globally right now, there’s really not a whole lot of significant supply of new mines coming online in the next five to ten years. So I think the supply side is going to be the driver going forward.

05:14 Dev Randhawa: Well I’m going to embarrass myself and say that I’m going to plagiarize right out of the shoot. You either can be a contrarian, or you’re a victim. I heard that from somebody here. I’ll plagiarize Tim Gitzel. These prices are irrational and sustainable. Fukushima didn’t drop the demand for uranium, it changed the way of the buying cycle. So what we have today is people playing with the spot price in a way, another agenda. So to me when you see 50,000 pounds of uranium determining a $150 million market, something is wrong. So it’s the easiest contrarian play out there.

05:51 Our partners are in China, and we hear their story. The bottom line is before utilities used to buy uranium five, ten years in advance. Now it’s two to three years in advance. So therefore there are not any buyers right now. I do believe that psychologically Japan is the key, in terms of elephants. But the big elephant will be China in our view of what they’re doing, they see it as real. But to those investors, the nice thing is for you guys there’s not a lot of great names out there. So if you can survive this market we’re in, pick a number of names, and a lot of them are at this table. So be a contrarian or a victim. But there’s no way this market should stay the way it is. There’s more demand now than since Fukushima. The difference is the buying cycle of utilities.

06:47 Daniel Major: Very much the supply side argument here. Demand is well covered. You’re looking at going from 180 million pounds to 240 million pounds over the next 25 years. In the next ten years you’re going to see 20 percent of world production close. Why? Because these are old minds that are coming to their end. You cannot incentivize that price. You are looking at long term contracts unwinding very quickly. That is important, because if you are making money on your contract, you’ll stay in business. As soon as you go to make that contract decision, you have to make a production decision. We saw that already this year with Cameco. When their Tepco contract was canceled, the first thing they did was take production out of the market to push it down.

07:30 If Cameco, for example, was to have contracts canceled, and they pushed down the production, that gives you the production squeeze. There is no spot market. We’re seeing utilities around the market looking to find out where they’re going to get production from. The big tier one utilities we’re talking to, because we’re at that development stage, are saying they’re comfy today. They have a contract, they have inventory. They’re very nervous three years from now. Five years from now they are very, very nervous about where their supply will come from.

08:02 Rick Rule: Are there technological changes afoot in production, in processing, in exploration, that could drive down the cost of producing uranium, or that could either simultaneously or not make individual companies more attractive? What about the future of technology in the uranium business. I’ll start this time with you Dan.

08:27 Daniel Major: One of the reasons that we’ve been able to be successful on our development of our projects is we’ve not been scared of new technology. So we have been working on upgrading our material before we actually apply any consumables to it. So we’re to a point where we get about 95 percent of our uranium is in 20 percent of the material that actually ends up in the consumable part. In addition to that, we found ways of separating [? meleginum] and uranium, so we turned a negative into a positive. Where meleginum is now ten percent of our byproduct revenue rather than the other. So there are small changes. I think negative prices make us all think harder. We can continue to squeeze. Have we seen anything as fundamental as heap leaching from sulphides? No. We haven’t seen the game change in our industry. What we are seeing is we’re all having to work a lot harder to make our projects at a better incentive price, and that’s really our push.

09:25 Dev Randhawa: There is no fission uranium. If our technical team, led by Ross, doesn’t believe in how do we beat the big boys. We took an airplane that no one had taken before, lowered it to the ground, and copied what Stu Blusson and some of the guys did in diamonds. Took an airplane really low, and were looking for outcrops of uranium, or boulders, in our case we found boulders. As young companies, if you’re not doing anything different than anybody else, you’re not going to get the same results. So without trying different things, that’s the only way we can get ahead. That’s how the PLS deposit was discovered. You’ve got to go against the grain.

10:04 Everybody told us, you’ve got to go in the east, that’s where everything is. We didn’t, we went to the west. We’re not actually in the basin, because everybody said all the uranium is in the basin. But what the basin was 100 million years ago is not the basin. So I think that’s the only way junior companies can beat the big boys, is that we have to think differently. I’m thankful that we have some people that were smart, and thought outside the box. So we wouldn’t even be here if it wasn’t for us trying some different things.

10:36 Jordan Trimble: Just to echo what Dev said. In particular in the basin there has been a lot of innovation, and new thinking with the exploration. Hence you’ve had these spectacular discoveries, fission, next gen, even Denison’s Gryphon deposit. So new, more refined geophysical techniques is one. Directional drilling. With these you’re finding a needle in a haystack. So you want to, as I say, return on drilling. You want to make sure that that, $50,000, $60,000, $70,000 drill hole gets you some uranium. Another big thing too, as Dev talked about, is the thinking in the basin. It used to just be very myopic. You were looking for sandstone hosted, unconformity deposits. Look at the recent discoveries, they’ve all been in the basement  rock, the feeder zone, so that’s important. So as an exploration company, that’s something we’re looking at. We’re implementing, we want to be ahead of the curve. Necessity breeds innovation. That’s what we’ve seen in the basin, that’s what we’ve seen in a depressed uranium market.

11:39 On the development production side of things, our flagship project on the east side of the basin is called Moore Lake. What we’re finding there is shallow, high grade mineralization. It is unconformity hosted. We’re looking to test the basement rock as well. There’s a new extraction technology being developed by two of our partners. One is our larger shareholder, Denison Mines, and another company called Areva, and industry leader out of france. It’s called SABRE. What it is is Surface Acts as Borehole Resource Extraction. That’s a bit of a mouthful. But you’re basically drilling a borehole down, and jet boring high grade uranium into a high grade uranium slurry, and pumping it up to the surface. It’s quite interesting. They’re trying to commercialize it. Right now they’re working on it at McLain Lake, but it works down to about 300 meters. Our project could be a potential fit for that. You bring your mining costs way down, and you basically ship it up to McClain Lake, which has excess capacity.

12:41 David Miller: I spent 20 years with Areva. I remember when Cigar Lake, the single highest grade deposit in the world was discovered back in the early 80s. It was a game changer then. It has just now been in production the last few years, so it has taken a long time. But Athabasca is a great place to be. You’d have to find a Cigar Lake every three years right now to meet the worldwide demand for uranium. I think that’s actually possible. I think the basin and the immediate surrounding areas is the best place to be in the world.

13:17 There’s a couple things you have to have if you’re in this junior market. You have to have the people, people who know what they’re doing, have a proven track record. You also have to have the integrity. You have to be honest with your shareholders, and honest with anyone who is putting up the dollars with your group. There’s one other component though, Rick, it’s politics. Saskatchewan used to be kind of a tough province to work in. Now I believe it’s ranked number one by the Fraser Institute here in Vancouver. So that’s why we’re there. I’ve looked for uranium in almost every continent but Antarctica, and the place I want to be is the Athabasca Basin.

13:55 Rick Rule: At the beginning of the last bull market cycle in uranium 1998, 1999, 2000, I think there were five uranium juniors in the world. Not being able to choose amongst them, I bought as much as I could afford of all five. A little confession here. I was rewarded for my genius by seeing them all fall in price by 50 percent fairly immediately, which was actually okay. You test your thesis, that’s okay. Because the worst of them in the next six years went up 22 to 1. I remember very well at the bottom of the cycle, people were of two minds with uranium. They either were bored of it, because they hadn’t had a bull market in it for 20 years, or they hated it as a consequence of Nagasaki, Hiroshima, or Three Mile Island. I’d be on the podium, and I’d be talking about uranium. I’d get off, and people would say, you unconscionable son of a bitch, you’re just a despicable human being. Four years later when the uranium price had gone from 10 bucks a pound to 130 bucks a pound, and the worst company in the industry was up 22 to 1. The same people who were questioning my ethics and morals were asking me for stock picks, which I found to be hugely amusing.

15:12 The most interesting part from my point of view of that is that at the beginning of the exercise, there were five juniors looking for uranium. At the end of the exercise, there were 500 juniors looking for uranium. Now what was interesting about that, and I will get to a question, believe me. What was interesting about that is at the beginning of the exercise there may have been 12 or 15 teams worldwide that were competent to look for uranium. So the probability that you had a competent team in a junior was taking the number of starts, five, and looking at the number of competent teams, 15. Those are pretty good odds, right? Assuming the investors behind them are competent, the chances are 100 percent. At the top of the cycle, the number of teams hadn’t changed. It was 15. Maybe you’d shaken a few at a Cameco, so maybe there was 17 or 18. But the number of starts was 500. So the chance that your uranium junior was run by a competent team at the top of the sector, when everybody wanted to be in uranium, was simply a function of dividing the number of available teams, 15 to 20, by 500, the number of the companies. It’s odd how people react.

16:29 So putting you all on the spot now, I don’t know how many starts there are in the world now. Maybe 30. I mean how many juniors will still admit to being in the uranium business. They’re not looking for uranium as an indicator for lithium, cobalt, or something. Tell me why I can believe that your company has a credible team? In other words, tell me why your intellectual capital makes you deserve to be here.

16:59 David Miller: Well thanks Rick. The ALX team has been around a long time. Some of them go back further than I do in the uranium sector, which goes back 41 years for me. But they were with all the big boys. Saskatchewan Development Corporation, which was spun into Cameco years ago. Myself, I came through a company called Utah International, Pathfinder, General Electric. Then we were taken over by Areva. Now the Utah GE connection was the largest corporate merger in history based on uranium assets in the US. Again, I’ve forgotten more than a lot of people that are in uranium now talk about it.

17:45 Rick Rule: We’re not trying to make senility a good thing, are we?

David Miller: That’s probably part of it too Rick. But I’ve known you in uranium for 20 plus years now.
Rick Rule: Sad, but true.
David Miller: The other team members have the same type of experience. They stayed in the basin, they have successful track records in the basin, they have their fingerprints on a lot of things. In fact I know very few examples of expiration, whether it’s uranium or something else, around the world, where it’s one individual that made a difference. It’s a team effort. The team has to work together to make the things happen. That’s what I see in ALX. Some of my former team members that I had in previous companies are in the group. We’re working hard to go through the properties we have. Frankly our cash or cash equivalent now is greater than our market cap. It’s a great entry point for us for you to get into that particular situation. But we’re going to rotate through properties. We’re going to drop ones where we don’t like the results. We’re going to pick up others where we think we have a fresh idea. It’s all about ideas. Sitting around and not coming up with new ideas, that’s a death knoll.

18:59 Jordan Trimble: I mean people are arguably the most important ingredient for success with these companies. One of the things, we started Skyharbour about four years ago. My chairman, Jim Pettit and I, we built and sold a gold company, sold that to New Gold. We really did see an opportunity in the basin in uranium. We went out and started building a team that we thought had the best focused expertise. It’s one thing to have a lot of years of experience and knowledge. Another thing is you want to make sure it’s focused expertise. What are we doing? We’re going out there and looking for high grade uranium in the basin, we’re exploring for high grade uranium in the basin. It probably doesn’t serve us well to have a mining engineer that knows ISR deposits in the US. We needed to find guys that know how to find high grade in the basin.

19:49 So we started with a gentleman named Rick Kazmierski. His nickname, coined by Lukas Lundin is radioactive Rick. That’s a well deserved name. He has found a lot of uranium. He’s a 40 year veteran in the basin. He was with Cameco for a number of years. He was actually the exploration manager there. He started a company in 1999 called J&R. He took it from a five million dollar market cap to over 400 in 2007. Subsequently sold it to Denison Mines. So Rick and his team in Saskatoon; Dave Bayard, Christine McKechnie, who actually wrote her thesis at university. Saskatchewan on one of our projects. A very strong geological team with focused expertise in the basin.

20:31 Dave Cates, the President and CEO of Denison Mines, our largest strategic shareholder. Dave is on our board. We have a strategic partnership with him, we have a very close working relationship. Last but not least, Paul Matysek. Well known name in the industry. He’s built and sold four companies in the last 12 years. Notably Energy Metals Corp, a uranium company. It started at a 10 million dollar valuation, sold it to Uranium One for 1.8 billion. We have a good mix. We have the passion, the youth. We also have many, many years of experience with Rick, and Paul, and Dave Cates as well.

21:08 Dev Randhawa: I buy beer. I think that’s what Rick used to say about what promoters do, figure out who buys the beer. My other job is to find people who are a lot smarter than me. That’s not that hard technically. We’ve been very fortunate. Even in this market, Fission is our third company of the original set of shares I started in a basement suite worth 350 million. There’s not an award our team hasn’t won. Mining person of Canada, Ernst & Young Entrepreneur of the Year, blah blah blah. My track record doesn’t really matter. How have my shareholders have done with me. Have you made money with me. If you own the original shares that you bought with me and Strathmore when I started out at $0.10, $0.08, today you won shares in your portfolio for four companies. My track record doesn’t matter, did you make money with me. I’m proud to say that’s what we’ve done for our people. We also over career brought in Sumitomo to our project, creating electric power into one project. Now CGN. We’ve prided ourselves on caring for our shareholders and management align, that’s when magic can happen, but you’ve got to have the right people. I’m proud that I buy beer for the very best people in the world.

22:31 Daniel Major: We’re in a very different position. I’m just going to go back to the monologue to start with. I think one point I have to make is in that bull cycle as it turned, two shares outperformed every other share by a very large margin. The two shares were Energy Fuels, and Paladin Resources. The difference between those two and everybody else is that they build mines. If you wanted to track all the developers and the producers, they actually all followed each other, and you could have just bought Cameco. We are a developer, that is what we are doing. We are out to build mines. We are already working on the debt side. The debt team we’ve got working on our project happens to be the only debt team in the private market that in the last cycle financed projects. Two of those projects were taken out at over a billion dollars, because that’s when the big producers come in to take out your projects, both of those in Africa.

23:21 My track record. I’ve worked on multiple projects, bringing them in well under budget. I’ve worked in Africa, I’ve worked in Russia, I’ve worked in South America, and Canada, and multiple commodities. I’ve got a strong technical team on our side. We have Cameco, we have Toshiba, and Denison as major shareholders. One of our major directors, other than David Cates I’d point out, because we are in West Africa, is Benoit La Salle, the fine founder of SEMAFO. So we obviously have to deal with political risk, and he’s a key guy for us understanding and operating in Africa.

23:56 The other benefit we have is that all of our countries we operate in are mining countries. Niger has been producing uranium since 1971. The Nigerians know how to mine uranium. Two mines next door are closing down. I’ve got over 3,000 labor force standing there waiting to look for jobs. The country exports 60 to 70 percent of its total exports every year, which is uranium. They need a new mine to replace the social issues there. We’re a $25 cash cost reducer all in at 36. We have the potential in this cycle to be the developer.

24:35 Rick Rule: So the next question, well I’ll give you the basis before I give you the question. I think everybody in the room is in the room because they either experienced the last uranium cycle, or they heard about the last uranium cycle. The upside in the middle from 10 bucks to 130 bucks. The upside in the stocks. Well let’s look at the most ridiculous. Paladin from $0.01 to $10 in four and a half years. Pardon the pun, but truly explosive up side. Everybody I think on the panel knows what would happen to their own fortunes if the uranium price went to $60 or $70.

25:13 My friend Doug Casey is famous when he talks about optionality, using the phrase when the wind blows even turkeys can fly. The question becomes the period between now and the storm, how do you keep the turkey from starving to death. If we assume, as an example, that the period between now and the time when the uranium bull market gets going in earnest is let’s say three years, how much cash do you have? How much cash will you need? If there is a delta, where do you propose to get it? There is no doubt, to quote Jerry Pogue, another guy I love to quote. If the uranium price goes up, you all are going to be dirty, filthy, stinky, slimy rich. The question is, do you starve before that happens? How much do you have? How much do you need? Where are you going to get the balance? Dan?

26:08 Daniel Major: In 2013 we had 110 people in our company. We currently have under 20. We’ve cut ourselves to the bone. We have basically mastered the ability of taking the low hanging fruit at low cost all the way through. I’ve got enough cash in the account to carry me all the way to June next year. I’ve got 10 million in warrants that I can accelerate. In excess of six million of that is actually with two of my strategics who both indicated they’re following the money. So I can survive for at least another two years in a tough market, as long as we don’t have another complete collapse.

26:44 But that also means that I’m sitting with the cash, that if the market does recover this year I’ve got instant access to funding to get through into the development stage on this project. To accelerate where we go with finalizing the technical. To pull that debt story back in together. That is very advanced. We’re talking to ECAs and banks to advance the conversations that I’m already having with off takers, which we won’t close until all the money is in place. So we’re well positioned to survive a tough market. But we’re also well leveraged, ready that if the market turns we can accelerate with it very quickly.

27:20 Dev Randhawa: That’s a great question. Hope isn’t a strategy. Hoping this happens, hope that happens is not a strategy when you’ve got people who work for you, and their families count on you. So in another saying, you take money when you can, not when you have to. We have about 60 million dollars in the bank. An expiration is great that way, you can dial it up and down. We are 20 percent owned by the central government of China through an SOE called CGN. The reason we did it is very simple. When you look at the contracts, the way they’re uncovered, etc., you know in the next ten years 800 million pounds are uncovered in contracts. So when we looked at the math, we figured we need to be able to survive at least four years. So we raised 82 million last year on that basis.

28:09 Then we’ve also found cheap ways. We’ve cut our overhead. But the other thing is because our deposit is very close to the surface, everything we find is close to the surface. So I don’t know if you know, but you do RFC drilling through overburden. You get to your core, and you use a core rig. We don’t do that anymore. We make sure the RFC rig, and do a downhill count, and mix the uranium in there, and then we keep going. So we found a way to cut our drilling costs by 25 to 30 percent that way. But that only works if you have a very close to the surface deposit. So for us we just plan for the worst. We hope for the best, but you plan for the worst. Because you owe that to your employees, and you owe that to your shareholders. We’re proud to say we have 60 million dollars in the bank.

28:53 Jordan Trimble: So we just actually closed the financing at $0.60 premium to the market. No warrant as well, mostly institutional. Denison was a part of that as well. Sent with just under four million in the treasury. It’s a great question Rick. I mean you’ve got to make sure the turkey is still alive. So we right now have a budget of drilling for basically the next 18 months, a two million dollar budget. We’re obviously covered for that with the financing that we just closed. We’re not going to drain the treasury to zero. We want to have that wiggle room in the event. There’s a sustained weakness in the market. So we’re covered for basically the next two years with the current treasury.

29:41 One of the other things too, the drilling that we’re doing, it’s focused at one project, the project we feel we have the best shot at adding value on, and making additional discoveries of the project, continuing to prove up the high grade. We just finished a 5,500 meter drill program. It came in under budget. We had accounted for an all in cost of about $350 a meter. It came in at about $260 all in a meter. We’re able to do that. There’s operational synergies, given the proximity of our project to Denison’s flagship wheeler. So if a part breaks down on the rig, or you need equipment, you’re not flying things in from Saskatoon, you’re just driving over to wheeler and picking it up there.

30:19 Also tricks of the trade. Rick and his team have been doing this for a long time. We talked about experience. Little things, like putting the drill holes into an existing previously drilled hole. Getting the water from down hole versus the closes lake. It’s cold in Saskatchewan, it’s minus 20, minus 30 degree in the winter. That water freezes, your rig shuts down. So getting the water that’s deeper down in these previous drill holes, it’s eight degrees versus four degrees. It’s warmer, it doesn’t freeze in the hose when it goes through the drill rig. So little things like that brought our costs down quite a bit.

30:52 So we’ll continue to look at ways. We run a lean and mean machine as well corporately. Last but not least, as I mentioned earlier, prospect generator. We have five projects. We’re bringing partner companies in now. Areva just optioned one of our projects for eight million dollars over six years. Another company, Azincourt. We’re generating cash flow from those option payments each and every year going forward, as well as share payments. So that’s another way to essentially subsidize, or offset some of the costs. We’re looking at optioning some of our other projects as well.

31:28 David Miller: Of the companies up here today, and maybe a lot of the other uranium companies, ALX probably has the lowest market cap. We’re in the six or seven million dollar range. As it turns out, that’s about our cash or cash equivalent position. So it’s a pretty good position to be in. Our overhead is low. I think we have two to three full time employees. I think our burn rate is less than 50 grand a month. We use our board members, who are all high level experts in this area. We use consultants when we need to drill the holes, or the geophysical groups that do surveys to our specs, to find the new targets that we want to drill at some point in the future. So we know how to survive in this market. So if you want to know company may have the best potential for doubling from here, I think we’re probably that best company. Rick knows this, and frankly I know other people on the panel know this. It’s just going to take a spark somewhere in the cycle to cause a bump. Another ranger flood in Australia, another Cigar Lake flood. There’s any number of things that can happen, that all of a sudden the market turns overnight. What you want to do is be positioned. Frankly, what Rick said about being in a half a dozen, or a dozen companies that are still around now when that turn comes. That’s probably the most important place to be.

33:02: Rick Rule: Finally what I’ve learned in small companies is that we think these are asset intensive businesses, but they’re not, they’re actually intellectual capital businesses. The ability of a management team to look at an exploration thesis, and ask themselves the most important unanswered question. The thing that adds the most value, that generates the most knowledge, the quickest, and for the lowest amount of money.

33:26 So I want to ask each of you briefly, because we don’t have much time left, what’s your most important unanswered question? Fully 80 percent of the juniors where I asked the most important unanswered question respond, hmm, I’ve never thought of that. Which is really useful to me, I can throw the story away and never listen again. Not having a plan is the same as planning to fail. So tell me your most important unanswered question. How you deliver, how you de risk your property the fastest, the quickest. Also tell me what’s the thing that keeps you awake at night. I learned from my grandfather, if I didn’t know three things that could go wrong with an investment, I didn’t know enough to make it. So give me the near term upside, the unanswered question, and the downside.

34:09 David Miller: Rick, that’s a tough question. But to me it all comes down to price, and what the market is going to do. When will that tick in the market happen. When will that mine that’s operating now get confiscated by the government. The biggest producer in the world is Kazakhstan. Maybe they have political issues there, and we lose 50 million pounds a year. That’s a hell of a turning point. That just makes it that much more important to be in stable environments. So I don’t lose any sleep over the politics in Canada, especially Saskatchewan. I would lose sleep if I was in Mongolia, or Kazakhstan, or one of these other countries.

34:49 So I think that’s a real important thing to pay attention to is the politics. As [? Jord Ricola] said back 500 years ago. Is the leader there friendly or inimical? Being evil, being against you. I’m in a work environment where the government is with us. As far as being able to raise money as we go forward without the uranium price bouncing up to make it easier to raise capital, I think we’re pretty much at the low right now, and it’s a great time to get in. But again, is it 12 months, 24 months, 36 months before we have a turnaround? I’ve done this for 40 years, and people have asked me that question all 40 years.

35:36 I remember 15 years ago a group interviewing me saying, Dave, uranium is at $15 a pound now. What do you think it will go to? I said, it might double. It went to 30. Then he asked me again, Dave, it has gone to 30 now, what do you think is going to happen now? I said, I could see it maybe doubling again. It went all the way up to $138. Again, if you had the word uranium in your company name, you were a ten banger right out of the gate. So again, the survivors, you’re probably looking at the survivors up here, the ones that are in the market right now.

36:11 Jordan Trimble: I’ll make it short and sweet. The unanswered question, how many economic pounds of uranium do we have at Moore. So we’re drilling to prove that up. As I mentioned earlier, some new extraction technologies that could bring the costs down. Ultimately when it goes into production for us as an exploration company, that will determine the valuation at the end of the day. Hopefully if we are acquired at a higher valuation, we look at that. Second unanswered question, discovery potential at other projects we have. We’re hoping to, again, use the prospect generator model, bring in strategic partners to answer those questions for us.

36:46 What keeps me up at night. I think a point to highlight, in Saskatchewan the political picture there, it’s the best jurisdiction in the world. The permitting process is very straightforward. Great relations with the First Nations in the province as well. Cameco, Areva, are two of the largest employers of the First Nations there, so very good jurisdiction. What keeps me up at night, timing to be honest. We’re looking at this market. It’s volatile right now, we’ve seen it pull back again. But it has been highlighted here, it doesn’t take much to get this market moving. A couple utilities come back into the market, this herd mentality, like we saw back in the 2000s, or supply disruption. Keep in mind with uranium, there’s only a few mines globally that produce a lot of the global supply. If there’s any supply disruption, especially in Kazakhstan, look out, that will be a big driver.

37:42 Dev Randhawa: Well there’s no doubt for us. We have about 100 odd conductors on our property, and we tested two or three. So we know there’s a couple more out there. We might find something. So that’s the upside for us. Secondly the upside would be, as David has mentioned, what caused it last time was a fire and a flood. So it’s always a black swan event. So something has to happen in Kazakhstan, or again in Canada. So those are industry things for us. We need to keep finding more zones and new areas.

38:18 What keeps me up is not seeing Japan turn on their reactors. They’ve got 28 more to go. They’ve turned on four, two more are coming. So that’s a political issue. I believe it has caused the western utilities not to have long term contracts of five to ten years. When Japan was in this market, they planned way ahead. But unfortunately with all the financial issues that western utilities have, they’re not buying three to five years ahead. So we have to survive the next two or three years if that mental change doesn’t happen. But the good news is, we’ve got 60 million dollars in the bank, we’ve got the world’s largest utility CGN backing us, and they’ve said whatever you need we’ll provide.

39:06 Daniel Major: Permitting risk is not something I worry about, because two of my mines are already permitted. They were permitted in six months. That’s the difference between working in Africa and working in North America. The governments are pragmatic, they need their mining operations going, that is a key driver for their business. The things that keep me up at night include, and this is actually my up side, which is more what can I do to make my projects even better. We’re taking our process route and trying to remove all water from it up to the point we go to the acid tanks. Why is that important? 80 percent of your energy is spent pumping water. If I can get rid of the water, I save a lot of money. We’re acquiring additional licenses next to the ones we’ve got. Which we already know the resources of that, because we drilled them. We had to give them up as part of the permitting process. That’s already environmentally covered.

39:55 So for us it’s all about positioning this thing, because we do leave the market. We’re going, I don’t think you need a black swan event here. I think the market is already starting to tighten up. There is no liquidity. It certainly worries me on the positive when major utilities are sniffing around the producers, even the small ISRs, trying to find offtake because they’re starting to get worried about where it’s coming from. We’re talking to the tier one’s. They’re comfy today, as I said. Three years from now they are very uncomfortable. Five years from now they are actually scared, where are they going to get their material from. So I think you’re going to see a scenario coming up this year where a major utility will come looking for material, and he can’t find it. That will move the price.

40:41 Rick Rule: So ladies and gentlemen, in summary there are three things I think that I want you all to remember. The first thing is that uranium hasn’t worked for a few years, and the consequence of that is that people are bored by it. But the other truth is that uranium is one of the most important sources of base load power in the world. The truth is if you make it for 60 and sell it for 22, you have two choices over five or six years. Either the prices go up, or the lights go off. You need to decide which one of those there is.

41:07 Everybody is concerned about timing. They always ask me the when question. As you can tell by looking at me, I’ve been in this racket a fairly long time. I’ve learned that if the answer to the question you’re being asked begins with when, not if, it’s a very high quality question. My own suspicion is that if you look at the contents of this panel this year, and you look for over three or four years, this panel makes you more money than any other panel at this conference. I’d like you to thank my panelists for making you this money in the future. We look forward to seeing that from you.