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Resource World - Apr-May 2016 - Vol 14 Iss 3

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A P R I L / M A Y 2 0 1 6 www.resourceworld.com 35 Cameco options Canalaska's West Mcarthur Project With 1.9 million acres of ground in the Athabasca Basin, CanAlaska uranium [CVV-TSXV; CVVUF-OTCQB; DH7-FSE] bills itself as a highly leveraged uranium explorer with international partnerships. Over the past few years, those partnerships have helped to fund over $50 million in exploration that has in turn defined numerous promis- ing targets in the heart of this very rich uranium district. The company's flagship property, the West McArthur Project, is adjacent to Cameco Corp.'s [CCO-TSX; CCJ-NYSE] McArthur River operation, the world's richest uranium mine. Since 2006, CanAlaska and partner MC Resources (Mitsubishi) spent over $17 million on the property; however, exploration was suspended in 2013 due to slump- ing market conditions. A year earlier the partners identified what is now believed to be the possible western extension Cameco's recently disclosed Fox Lake uranium discovery about 15 km west of the McArthur River Mine. The first drill holes completed on the Grid 5 Target Zone identified a large arsenic alteration zone in drill holes WMA 28 and 34 – similar to that reported associated with the Fox Lake Zone. Inferred resources at Cameco's Fox Lake discovery are estimated to be 68.1 million lbs contained within 387,000 tonnes of rock averaging 7.99% U 3 O 8 . The Fox Lake discovery is within the Read Lake Project operated by Cameco (Cameco 78.2%/Areva 21.8%). In January 2016, CanAlaska purchased the option back from Mitsubishi for $600,000 and a 1% NSR. Unsurprisingly, Cameco quickly optioned a 60% interest in the West McArthur Project. The deal allows Cameco to earn up to a 60% in the project by spending $12.5 million in cash payments to CanAlaska and accelerating exploration programs, culminating in a joint venture. "Manitoba has also been good to us over the past few years," said Peter Dasler, the CEO of CanAlaska. "Chuck Fipke's Northern Uranium Corp, has put over $5 million into a target we found that looks very similar to what NexGen Energy is drilling on the other side of the basin." Makena Resources [MKN-TSXV; CANSF-OTC; 45C-FSE] has also partnered with CanAlaska and is currently testing an intense 1.5 by 0.5 km gravity anomaly on the Patterson West Project. The project has simi- larities to the Triple R and Arrow uranium discoveries at Patterson Lake. CanAlaska also has a deal with Denison Mines [DML-TSX] on their Moon South Project. The deal was announced in early January. Drilling began in February and follows a drill program on Denison's adjacent Crawford Lake Project. The drill target at the Moon South property is located within a prominent magnetic low which is thought to represent the location of major cross structures with basement fluid flow and associated uranium mineralized zones. This target is on strike with a basement EM conductor on the adjacent Crawford Lake property. Cameco has started drilling. n 380,000 MWe of total capacity. • These provide 11% of the worlds electricity as continuous, reliable base-load power without car- bon dioxide emissions • 56 countries operate a total of about 240 research reactors and a further 180 nuclear reactors power some 140 ships and submarines • 65 reactors under construction • 159 reactors on order or planned • A total of 90 (net) new reactors expected by 2022 • Global electricity demand is expected to grow 76% by 2030 and half of this increase in energy growth will come from Asia • Uranium demand is expected to grow by 45% by 2030. That translates to about 3.1% per year • 10 new reactors put on line in 2015: China (8), South Korea (1) and Russia (1) (9,497 WMe of installed capacity) • The US has 99 operating reactors, which supply 20% of that nation's electrical energy. Five are under construction: two in Georgia, two in South Carolina and one in Tennessee. A total of 22 new reactors are planned or proposed in the US alone. The statistics also indicate the supply side of the equation will be squeezed as well. For example, Kazakhstan is currently the largest single supplier of uranium, producing 41% of the world's uranium. Over the last decade, increased uranium demand has largely been met by increased production from Kazakhstan's ISR operations. These deposits are being depleted and there is speculation that Kazakhstan cannot sustain current production rates. The bottom line is that new mine production is not keeping up with growing demand and that gap is currently being filled by secondary supplies from various sources like stockpiles. This gap is estimated to be 32 million lbs U 3 O 8 in 2016 and 43 million lbs by 2019. Ultimately for new uranium production to come on stream, higher prices are required to incentivize the development of new projects. A last compelling argument is the signing of the Global Carbon Reduction Agreement in Paris in 2015. This agreement was signed by 196 countries and envisions zero greenhouse gas emissions post 2050. That suggests nuclear generation will need to rise from 400 GWe to 1,000 GWe by 2050. "Unless a miracle occurs, we are going to have to rev up nuclear power fast…Whatever combination works, but the numbers don't add up unless you put nuclear power in the mix," stated Kerry Emanuel, Professor of Atmospheric Science at MIT. n uRANIuM

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