26, 2010

SUBJECT: Finally a bounce in the Uranium Price, U spot Price up 2$ per lbs to US$ 43.50/lb, Term Unchanged at US$ 60/lbs

SUMMARY: Producers, Traders, and Utilities all entered the market last week to purchase a total of 800 M lbs U3O8. The main reasons for this increased demand in the short term are based on labour issues at converdynes conversion facility and the potential for ongoing labour disputes to affect supply of UF6 in the short term. On a larger Macro basis the signing of CCO's 23 MM lbs contract over 10 yrs with the Chinese could force other utilities into the market in the short term while they continue to sign strategic long term contracts with suppliers. Another potential driver in the next 6 mths could be TEPCO which has been trying to close a 20% equity stake in UUU for the last 18 mths. With ARMZ now having a 51% control block in UUU (expected closing lat 2010 to Q1-2011) we believe that the JUMI deal will not close and that could force Japanese utilities into the market, which could put further upward pressure on the spot price, which should drive uranium equities. To note, spot price drives investor sentiment, as such, any further increase, no matter how small, could have a significant impact on U equities.

David Fuller's view 26, 2010

SUBJECT: Finally a bounce in the Uranium Price, U spot Price up 2$ per lbs to US$ 43.50/lb, Term Unchanged at US$ 60/lbs

SUMMARY: Producers, Traders, and Utilities all entered the market last week to purchase a total of 800 M lbs U3O8. The main reasons for this increased demand in the short term are based on labour issues at converdynes conversion facility and the potential for ongoing labour disputes to affect supply of UF6 in the short term. On a larger Macro basis the signing of CCO's 23 MM lbs contract over 10 yrs with the Chinese could force other utilities into the market in the short term while they continue to sign strategic long term contracts with suppliers. Another potential driver in the next 6 mths could be TEPCO which has been trying to close a 20% equity stake in UUU for the last 18 mths. With ARMZ now having a 51% control block in UUU (expected closing lat 2010 to Q1-2011) we believe that the JUMI deal will not close and that could force Japanese utilities into the market, which could put further upward pressure on the spot price, which should drive uranium equities. To note, spot price drives investor sentiment, as such, any further increase, no matter how small, could have a significant impact on U equities.