ARMZ
Uranium Holding Co.
Rosatom State Corporation’s Mining Arm
ARMZ Uranium Holding Co.: Drive for Leadership and Guaranteed Supplies for Decades to Come Vadim L. Zhivov Director General, ARMZ Uranium Holding Co.
than US$20 per pound of U3O8 – has become an important step along this strategic avenue. On December 15, 2010, ARMZ Uranium Holding Co. and Mantra Resources Limited signed an agreement whereby ARMZ shall purchase 100% of outstanding shares of this publicly-traded Australian corporation with valuable uranium assets in Tanzania and Mozambique. In 2009, ARMZ Uranium Holding Co. boosted uranium output a staggering 25% to 4624 metric tons at its mines in Russia and overseas. Last year, ARMZ hiked its production up another 12% and the output reached 5162 metric tons of uranium. Today, ARMZ possesses unique competencies in uranium mining: with 50 years of experience in developing and mining uranium deposits in various geographies, under most diverse geological and climatic conditions, guided by highest health and environmental safety standards, ARMZ Uranium Holding Co. has over 20 uranium and non-uranium projects all over the world in its portfolio spanning all stages of industrial development – from geological exploration to intensive mining. All of these factors combined will make sure ARMZ Uranium Holding Co. is in a position to make it to the top three best and largest uranium miners in the world, as well as to guarantee sustainability of supplies for decades to come.
ARMZ Uranium Holding Co. (ARMZ), also known as Atomredmetzoloto, is the mining arm of Rosatom State Corporation and one of the global leaders in uranium mining. It is currently ranked as the world’s second largest uranium mining corporation by resource base and is the fifth biggest global producer. Our parent company, Rosatom State Corporation, has embarked on an ambitious development program. The share of nuclear power in Russia’s energy mix is expected to grow from the present 16 to 25% by 2025. Rosatom has been consistently and energetically strengthening its positions in the global markets of nuclear power plant construction and supply of fuel for nuclear power stations. Presently, ARMZ Uranium Holding Co.’s key task is to meet the ever growing needs of the national nuclear industry for reactor feedstock. In the move to ensure sustainability of supplies, ARMZ has been paying considerable attention to diversifying its project portfolio. While growing the business domestically, ARMZ Uranium Holding Co. is planning on building – through partnerships, mergers, and acquisitions – an impressive international portfolio of highly liquid assets with competitive production costs. Consolidation of a controlling stake in the Canadian publicly-traded Uranium One Inc. – a large uranium miner with a low average operational production cost of less
Rosatom: Civilian Nuclear Activities and ARMZ Uranium Holding Co.’s Role
Enrichment
ARMZ Ore Processing
Conversion Fuel Fabrication
Exploration MOX Fuel Fabrication
Mining
Used Nuclear Fuel Reprocessing
Spent Nuclear Fuel Burial
Nuclear Power Stations
Spent Nuclear Fuel Storage
Rosatom Strategy for New Nuclear Build Overseas
Rosatom State Corporation: 32 nuclear power units of 24.2 GWe aggregate installed capacity in Russia 37 nuclear power units built overseas
Belorussia Czech Republic Hungary
Ukraine Slovakia
Bulgaria Turkey Tunisia Morocco Libya
16% in electricity generation mix in Russia
Kazakhstan
Over 275 thousand employees at more than 270 production facilities, scientific centers, research and development organizations
Armenia China
Jordan Egypt
Iran India
World’s only nuclearpropelled icebreaker fleet
Vietnam
Rosatom: Building New Nuclear Plants Abroad
Nuclear industry’s full technological cycle from uranium mining to electricity generation, used fuel reprocessing and storage
Project Under Construction Project Planned Negotiations/Bidding Contest Proposed
45% of world’s uranium enrichment services’ market
Number of NPPs Built (by Company) DOOSAN
Source: Company Information, ARMZ Estimations
NPCIL Mitsubishi Heavy Industries AECL
Source: Rosatom State Corporation, WNA
Rosatom AREVA Toshiba/Westinghouse 0
20
40
60
80
100
120
140
160
140
Nuclear New Build (NPPs by Country) China India Russia
Under Construction Planned Proposed
USA Ukraine Japan
Source: WNA
UAE South Korea 20
40
17% of world’s nuclear fuel market 9% of world’s natural uranium mining
GE-Hitachi
0
23% of world’s NPP construction market
60
80
100
120
180
ARMZ Uranium Holding Co. Project Geography
Uranium One
Canada ARMZ Uranium Holding Co. owns a controlling equity stake in Canada’s uranium miner Uranium One.
United States Uranium One develops projects to build uranium mines in Wyoming, Arizona, and Utah.
ARMZ Mines and Projects Operational and Under Construction Planning and Design Stage Prospective Projects
Namibia
Controlled Through Alliance with Uranium One
SWA Uranium Mines is an exploration joint venture.
Uranium-Producing Countries Over 3 thou tU/annum From 1 to 3 thou tU/annum From 0.1 to 1 thou tU/annum No Production
Russia
Kazakhstan
ARMZ Uranium Holding Co.’s major operating – the Priargunsky, Dalur, Khiagda – and planned uranium mines are located in the Russian Federation.
Through its shareholding in Uranium One, ARMZ Uranium Holding Co. controls shares in Kazakhstanbased ZARECHNOE, Akbastau, Karatau, Betpak Dala, and Kyzylkum uranium-mining joint ventures.
Elkon Khiagda
Dalur
Lunnoe Gornoe
Olovskoe Priargunsky
Mongolia Central Asia Uranium Company (CAUC) develops the Dornod uranium deposit.
Australia Uranium One develops the Honeymoon Project to build an ISR uranium mine.
Armenia The Armenian-Russian Mining Co. conducts geological exploration works in Sunik District of the Republic of Armenia.
Tanzania Late in 2010, ARMZ Uranium Holding Co. agreed to purchase 100% of outstanding common shares of Mantra Resources Limited.
ARMZ Uranium Holding Co. Mines and Projects Priargunsky Industrial Mining and Chemical Union (PIMCU)
Olovskoe Mining Chemical Company
Dalur
Lunnoe
Krasnokamensk, Trans-Baikal Territory, Russia Uranium deposit ����������������Streltsov Uranium Field ARMZ shareholding ���������������������������������� 79,33% Status �������������������������������������������������Operational Start of production (including pilot production) �������������������������������������������� 1968 Nameplate capacity, tU/annum ���������������������� 3500 Production in 2010, tU (forecast) ��������������� 2920,0 Total resources, tU ����������������������������������� 118341
Chernyshev District, Trans-Baikal Territory, Russia Uranium deposit ���������������������������������������Olovskoe ARMZ shareholding ��������������������������������������100% Status ����������������������������������� Planning and Design Nameplate capacity, tU/annum �������������������������600 Total resources, tU ������������������������������������� 11726
Dalmatov District, Kurgan Region, Russia Uranium deposits ��������������������Dalmatov, Khokhlov ARMZ shareholding ���������������������������������� 98,89% Status �������������������������������������������������Operational Start of production (including pilot production) �������������������������������������������� 1998 Nameplate capacity, tU/annum �������������������������800 Production in 2010, tU (forecast) ����������������� 507,0 Total resources, tU ������������������������������������� 22114
Tommot, Sakha Republic (Yakutia), Russia Uranium deposit ����������������������������������������� Lunnoe ARMZ shareholding ���������������������������������� 50,03% Status ����������������������������������� Planning and Design Nameplate capacity, tU/annum �������������������������100 Total resources, tU ������������������������������������������408
Khiagda
ARMENIANRUSSIAN MINING COMPANY
Bauntov District, Republic of Buryatia, Russia Uranium deposit ����������������� Khiagda Uranium Field ARMZ shareholding �������������������������������������100% Status.....................................Under Construction Start of production (including pilot production) �������������������������������������������� 1999 Nameplate capacity, tU/annum ���������������������� 1800 Production in 2010, tU (forecast) ����������������� 135,0 Total resources, tU ������������������������������������� 41661
Elkon Mining Metallurgical Plant
Tommot, Sakha Republic (Yakutia), Russia Uranium deposit ����������������������Elkon Uranium Field ARMZ shareholding ��������������������������������������100% Status ����������������������������������� Planning and Design Nameplate capacity, tU/annum ���������������������� 5000 Total resources, tU ����������������������������������� 319184
Gornoe Uranium Mining Company
Krasnochikoy District, Trans-Baikal Territory, Russia Deposits ���������������������������������� Gornoe, Berezovoe ARMZ shareholding ��������������������������������������100% Status ����������������������������������� Planning and Design Nameplate capacity, tU/annum �������������������������400 Total resources, tU ��������������������������������������� 7918
Sunik area West, Armenia Uranium deposit ���������������a number of mineralized properties in Armenia ARMZ shareholding ���������������������������������������� 50% Status ������������������������������������������������� Exploration
SWA Uranium Mines Joint Venture Namibia
Uranium deposit ���������������������������Klein Spitzkoppe ARMZ shareholding ���������������������������������������� 13% Status ������������������������������������������������� Exploration Total resources, tU** ��������������������������������������660
Central Asia Uranium Company (CAUC)
Mongolia Deposit ������������������������������������������������������ Dornod ARMZ shareholding ���������������������������������������� 21% Status ������������������������������������������������ Prospective Nameplate capacity, tU/annum** ��������������������252 Total resources, tU** ����������������������������������� 3117
ARMZ through its controlling shareholding in Uranium One Inc. Karatau Joint Venture
ZARECHNOE Joint Venture
Uranium deposit ����������������������������� Budenovskoe-2 Uranium One shareholding ������������������������������� 50% Status �������������������������������������������������Operational Start of production (including pilot production) �������������������������������������������� 2007 Nameplate capacity, tU/annum* ** �������������� 1000 Total resources, tU** ��������������������������������� 23894
Uranium deposits ����� Zarechnoe, South Zarechnoe Uranium One shareholding ����������������������������49,7% Status �������������������������������������������������Operational Start of production (including pilot production) �������������������������������������������� 2007 Nameplate capacity, tU/annum* ** �����������������800 Total resources, tU** ��������������������������������� 23976
Akbastau Joint Venture
Kyzylkum Joint Venture
Uranium deposit ���������������������� Budenovskoe-1,3,4 Uranium One shareholding ������������������������������� 50% Status �������������������������������������������������Operational Start of production (including pilot production) �������������������������������������������� 2009 Nameplate capacity, tU/annum* ** �������������� 1500 Total resources, tU** ��������������������������������� 39983
Uranium deposit ���������������������������North Kharasan Uranium One shareholding ������������������������������� 30% Status ������������������������������������Under Construction Start of production (including pilot production) �������������������������������������������� 2008 Nameplate capacity, tU/annum** ��������������������900 Total resources, tU** ��������������������������������� 26524
Betpak Dala Joint Venture
Honeymoon Joint Venture
Uranium deposit ������������������������������������������Akdala Uranium One shareholding ������������������������������� 70% Status �������������������������������������������������Operational Start of production (including pilot production) �������������������������������������������� 2001 Nameplate capacity, tU/annum** ��������������������700 Total resources, tU** ����������������������������������� 7921
Uranium deposits ������� Honeymoon, East Kalkaroo, Gould’s Dam, Billeroo Uranium One shareholding ������������������������������� 51% Status ������������������������������������Under Construction Start of production (including pilot production) �������������������������������������������� 2011 Nameplate capacity, tU/annum** ��������������������172 Total resources, tU** ����������������������������������� 4090
Betpak Dala Joint Venture
US Assets
Uranium deposit �����������������������������������South Inkai Uranium One shareholding ������������������������������� 70% Status �������������������������������������������������Operational Start of production (including pilot production) �������������������������������������������� 2007 Nameplate capacity, tU/annum** ����������������� 1400 Total resources, tU** ��������������������������������� 63757
A number of uranium deposits in the US Total resources, Irigaray, tU** ��������������������� 10208 Total resources, other assets in the US, tU** ���������������������� 18910
Kazakhstan
Kazakhstan
Kazakhstan
Kazakhstan
Kazakhstan
Kazakhstan
South Australia, Australia
Utah, Arizona, Wyoming
* - Uranium One-ARMZ alliance’s aggregate share in attributable uranium production of Karatau, Akbastau, and ZARECHNOE joint ventures in 2010 (forecast) – 1601,0 tU ** - Total resources and nameplate capacities comply with ARMZ and Uranium One shareholdings in mines/projects
ARMZ – Uranium One Transaction In 2010, ARMZ Uranium Holding Co. consolidated a controlling share in Canada’s Uranium One Inc. The ARMZ-Uranium One alliance ranked world’s fourth largest uranium miner in terms of production volume. The alliance is slated to become the world’s second biggest player by 2015.
ARMZ Uranium Holding Co. Structure Khiagda
Priargunsky
Dalur
Elkon Armenian-Russian Mining Co.
Olovskoe
Central Asia Uranium Co.
ARMZ Uranium Holding Co.
Gornoe
SWA Uranium Mines (Pty) Ltd.
Lunnoe Akbastau Joint Venture
Uranium One Australia Pty Ltd
Uranium One Inc.
Uranium One U.S.A. Inc.
Karatau Joint Venture ZARECHNOE Joint Venture
Betpak Dala Joint Venture
World’s seventh by measured and indicated uranium resources Leader in low-cost uranium resources (Kazakhstan)
High corporate governance standards
World’s eighth by uranium production volume in 2009 Twofold increase in uranium production in 2010 as compared to 2009
Significant growth potential
Uranium One offers the best opportunity to fulfill uranium asset diversification strategy and is viewed as ARMZ’s global growth platform
Highly professional management team
Have brought projects to production Large M&A experience
Asset diversification
Operational mines in Kazakhstan Mines under construction and exploration projects in Australia and the US
A publicly-traded company with significant experience and a good reputation among market players
Best uranium assets with low production costs
Kyzylkum Joint Venture
ARMZ Strategy: Through Diversification to World Leadership Exploration Mongolia
Armenia
Namibia
ARMZ Uranium Holding Co. indirectly (through Priargunsky) owns 21% of Central Asia Uranium Co. (CAUC) which develops the Dornod uranium deposit
The parity-based joint venture with the Republic of Armenia (ArmenianRussian Mining Co.) started field exploration works in Sunik District of Armenia in 2009. ARMZ Uranium holding Co. is considering participation in gold deposit development in the territory of Armenia
SWA Uranium Mines was jointly established by ARMZ, VTB Capital Namibia, and Arlan Investment Company in 2008 to explore for and mine uranium in Namibia
Planning and Design Stage Elkon Mining Metallurgical Plant
Gornoe Uranium Mining Company
Olovskoe Mining Chemical Company
Lunnoe
Construction Stage Kyzylkum Joint Venture
Khiagda
Irigaray
Honeymoon Joint Venture
Operational Stage Priargunsky
Dalur
Karatau Betpak Dala
Akbastau ZARECHNOE
World’s Nuclear Power Development
New NPP Construction
Planned New Nuclear Build In the World
Number of units
Source: WNA
900
823
800 700
607
600
% 88
Others
440
France
400
Korea
300
India
100
China 2009
2020
Planned
500
Under Construction
400 327 300
2030
345
266 222
200
Japan
200
0
Proposed
US Russia
500
Source: WNA
Number of nuclear reactors, units
600
158
100 64
0
93
106
141
151
55 53 43 34 28 January January January January June 2007 2008 2009 2010 2010
2010:
2030:
There are 440 operating nuclear power units with 376 GWe of aggregate installed capacity
Number of operating nuclear power units to grow 88%
55 new nuclear power units are currently under construction with 60 GWe of aggregate installed capacity
Nuclear generation capacity to grow 119%
Over the last 3.5 years, the world’s overall number of nuclear power units under construction, as well as those planned and proposed, has increased from 250 to 551
China and India to be most active in new nuclear build Russia is planning to increase nuclear generation capacity by 150% Источник: WNA
Uranium Requirements and Production Forecast: 100000
tU Uranium production forecast Uranium Requirements
90000 80000 70000 60000 50000 40000 30000 20000
2028
2029
2030
2028
2029
2030
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
0
2009
10000
Stages of uranium mining development: 2010-2020 – production covers requirements; Post-2020 – uranium production capacity shortage Post- 2025 – decline in production volume and capacity shortage
Uranium Resource Cost Category in 2008-2030 90
thou tU
80 70 60 50 40 30 20
Over $130 per kgU $80 to $130 per kgU Less than $80 per kgU
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
0
2008
10
48%
12% 49%
52% Significant decrease in the number of large uranium deposits at less than $80 per kgU
39%
Depletion of a few large deposits (McArthur River, Cigar Lake, Rossing, Ranger, Akdala, Inkai, etc.) by 2030 Putting on line uranium deposits at the cost exceeding $130 per kgU
2008
2030
Source: company information, ARMZ estimations
ARMZ Uranium Holding Co. 22 B. Drovyanoi Lane Moscow, Russia 109004
Phone: +7-495-508-8808 Fax: +7-495-508-8810 E-mail: info@ armz.ru