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

Canada Research | Page 32 of 87UraniumValuation and FinancialsExhibit 49: RJL NAV Summary for CCOFunded NAV Valuation C$mln C$/afd.sh. %CorporateWorking Capital (1Q12) 1,843 4.64 23.8%Options & Warrants 29 0.07 0.4%LT Liabilities (922) -2.32 -11.9%SG&A (584) -1.47 -7.5%Future Equity Dilution 0 0.00 0.0%366 0.92 4.7%Uranium DivisionUranium Purchase Program 501 1.26 6.5%McArthur River (DCF 8%) - 70% 2,364 5.96 30.5%Cigar Lake (DCF 8%) - 50% 1,072 2.70 13.9%JV Inkai (DCF 8%) - 60% 772 1.94 10.0%Rabbit Lake (DCF 8%) - 100% 248 0.62 3.2%Smith Ranch (DCF 8%) - 100% 284 0.71 3.7%Crow Butte (DCF 8%) - 100% 98 0.25 1.3%Development Projects 611 1.54 7.9%Exploration & Invstm Assets 602 1.52 7.8%6,552 16.50 85%Other DivisionsFuel Services 183 0.46 2.4%Bruce Power LP (DCF 8%) -31.6% 639 1.61 8.3%823 2.07 10.6%7,741 $19.50 100.0%Adjusted Fully Diluted S/O (mln) 397.0Current Price/NAV (x) 1.15xSource: Raymond James Ltd.We have an Outperform rating and $28.00 target on Cameco. Our target is based on a50/50-weighting of (i) a 1.3x P/NAV applied to the project component of our C$19.50NAVPS (8% discount; see Exhibit 49) (ii) and a 14x P/CF applied to our 2013E CFPS ofC$2.26. Our multiples bias towards the lower end of historical trading ranges andconservatively against an average P/NAV of 1.5x (November 2009 to Fukushima) andforward P/CF of 15.5x (January 2005 to current).Cameco currently trades at 1.15x P/NAV and 9.9x 2013E P/CF, a premium to peersUranium One (0.72x and 7.0x) and Paladin (0.63x and 15.4x), as well as at US$8.24/lb forthe company’s 1,007.5 Mlbs in total resources vs. our global producer peers atUS$4.74/lb. Cameco typically trades at a premium to its peers. We believe this premiumis justified given the company’s size, dominant market position, liquidity, safejurisdictions and cash flows, and high quality reserves.Raymond James Ltd. | 2200 – 925 West Georgia Street | Vancouver BC Canada V6C 3L2