Clock - Uranium Supply Crunch and Critical ... - Andrew Johns

Canada Research | Page 22 of 87Uraniumrevenues. Further out, Denison’s external capital needs could rise further depending onthe development timeline of its Canadian, Mongolian, and Zambian assets.Paladin has US$936 mln in current LT debt and a debt/capital of 29% - the highest of thegroup. Paladin’s negative EBIT in 2012E implies zero coverage of interest payments – weassume they are funded out of cash on hand. Uranium One and Cameco havemanageable debt levels.Exhibit 36: Debt/Capital (Current)30%25%20%Debt/capitalCurrent29.2%24.1%15%11.4%10%5%nm nm 0.3%0%U URE DML CCO UUU PDNSource: Raymond James Ltd., Company ReportsExhibit 37: Interest Coverage (2012E)18x16x14x Interest Coverage12x Current10x8x6x4x16.2x4.3x2xnm nm nm nm0xDML PDN URE U UUU CCOSource: Raymond James Ltd., Company ReportsCapital SpendingPaladin has substantively completed capital spending at Langer Heinrich and Kayelekera– capex in 2014E and 2015E relates to building Mt. Isa, Australia. We note, however,that Manyingee may now be next in line for development. Meanwhile, we anticipategrowing capex requirements for Uranium One at its Mkuju River project and for Denisonin Mongolia.Exhibit 38: Capital Spending (2011A-2015E)US$ mln77567557547537527517575 604530150647635486Capital Spending('11-'15)347465to add24713522021296730588615220715532548902015CCO DML PDN UUU URE2011 2012 2013 2014 2015Source: Raymond James Ltd., Company Reports425Exhibit 39: Capital Intensity (Cumulative 2011A-2015E)750US$/lbUS$/lb723725700 353067525650 20Capital IntensityCumulative '11-'15?21 2215to10add1050PDN UUU CCO URE DMLSource: Raymond James Ltd., Company Reports33Resources and ReservesCameco outclasses the group in resources on the back of high-grade material in theAthabasca Basin. Uranium One’s ground hosts significant non-43-101-compliant, historicRussian resources not accounted for here (but often included in our DCFs). For Ur-Energy, bolstering pounds and incorporating non-43-101 material into the Lost Creekmine plan is a key hurdle, in our view. Radii of bubbles in Exhibit 41 are proportional tonumber of resource pounds.Raymond James Ltd. | 2200 – 925 West Georgia Street | Vancouver BC Canada V6C 3L2