Ann: Presentation - DFS Completed for Lance, page-60

Hi @Shurley, I think your calculations are a bit off. It looks like you're taking the US$75/lb uranium price, removing tax, and coming up with an earnings figure. The order is wrong. Suggest you start with the uranium price, then deduct the AISC (which includes cash costs, royalties, sustaining capex etc). That'll give you your margin per pound. Multiply that by pounds produced to get your EBITDA, then remove tax. So for your example it goes like this: $75/lb less AISC $39.1/lb = $35.9/lb x 2,000,000 lb's p/a = EBITDA US$71.8M. Then remove your taxes. Comes out a lot lower.

Secondly, I think you need to question your P/E multiple. Is 10x realistic for a miner with a limited life, reliant on a historically volatile commodity in a sector where fear and uncertainty around safety are ever-present (unfairly, of course) and government regulations are extremely tight? Worth looking at what multiples other miners operate off.

Thirdly, with AISC of US$39.1M and average annual production (from DFS) of 1,300,000 lb's p/a I got these rough figures:

Uranium price sustained at...

• US$65/lb - annual EBITDA US$33.6M or A$48.0M
• US$75/lb - annual EBITDA US$46.6M or A$66.5M
• US$90/lb - annual EBITDA US$66.1M or A$94.4M

Then subtract taxes as required. Yes they will ideally get to 2m lb's p/a but that's not until year four of production.

As an interested uranium observer (no holdings right now but I follow plenty), it seems like there are better opportunities out there. But I'm only basing this off DFS numbers, qualifier is that I've not followed PEN all that closely so take it all with a pinch of salt.