honeymoon metric, page-2

Samgribbles,

I've copied from a report from Uranium One's website below. They settled in Dec 2008 for $A104 M for a 49% share of a 5.3 Mlb resource. This works out at $A40/Lb at a time when U3O8 was well of its peak. I believe this is high price is due to the low cost of ISR extraction, despite what Quasar has announced I would expect around $US 15 Lb total costs. It's got to be low for Mitsu to pay what they did. At $40/Lb, the equivalent price for AGS's 25% share of 61 MLb (but soon to be increased) is $610 M.

The value proposition of AGS is clear, and it is hugely undervalued on a value basis, all due to deliberate actions of our JV partners and their unconscionable US leader, which I hope are about to be dealt with for good by our astute directors. If Mitsui offered the same price per Lb for AGS as they did for Honeymoon it would be a good solution at the moment.


REVIEW OF DEVELOPMENT PROJECTS – AUSTRALIA

HONEYMOON URANIUM PROJECT

The Honeymoon Uranium Project is located in South Australia, approximately 75 kilometres northwest of the city of Broken Hill, New South Wales. The Corporation owns 51% of the Honeymoon Uranium Project Joint Venture, which owns the Honeymoon Uranium Project. The remaining 49% of the joint venture is owned by Mitsui & Co., Ltd, (“Mitsui”) who committed A$104 million towards the purchase of its interest in Uranium One Australia’s business and the development of the Honeymoon Uranium Project.

The project has a design capacity of 880,000 pounds per year, with an expected mine life (including production ramp-up) of six years. The current capital expenditure estimate for the Honeymoon project, including contingencies, is A$138 million (on a 100% basis). To
date, a total of A$66.3 million has been spent (on a 100% basis). The capital expenditure estimate increased by 17% from the previous estimate, due to anticipated cost overruns on the structural, mechanical and piping works, as well as the electrical and instrumentation
works cost estimates.

Cheers,
SF