High Plains Roadshow Presentation - November 2005

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An Emerging Uranium An Emerging Uranium Development Company Development Company Roadshow Presentation November 2005

Transcript of High Plains Roadshow Presentation - November 2005

Page 1: High Plains Roadshow Presentation - November 2005

An Emerging Uranium An Emerging Uranium Development CompanyDevelopment Company

Roadshow Presentation November 2005

Page 2: High Plains Roadshow Presentation - November 2005

Some of the statements contained in this presentation are forward-looking statements, such as estimates and statements that describe future plans, objectives or goals, including words to the effect that High Plains expects a stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results relating to among other things, reserves, resources, results of exploration, reclamation and other post-closure costs, capital costs and mine production costs could differ materially from those currently anticipated in such statements by reason of factors such as changes in general economic conditions and conditions in the financial markets, changes in demand and prices for the minerals, litigation, legislative, environmental and other judicial, regulatory, technological and operational difficulties encountered in connection with mining activities, labor relations matters, costs and changing foreign exchange rates. This list is not exhaustive of the factors that may affect any of the forward-looking statements contained in this presentation. These and other factors should be considered carefully and readers should not place undue reliance on such statements. Unless otherwise indicated, all amounts are expressed in Canadian dollars.

Forward Looking Statements

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Issuer High Plains Uranium, Inc.

Offering Size $25,000,000 - $35,000,000

Offering Price $1.25 - $1.75 per Common Share

Over-Allotment Option

15%; exercisable for 60 days from closing

Use of Proceeds

Eligibility Eligible for RRSPs, RESPs, RRIFs and DPSPs in all provinces

Listing An application will be made to list the Common Shares for trading on the Toronto Stock Exchange

Pricing Week of November 7, 2005

Closing Week of November 14, 2005

Terms of the Offering

For details, please refer to the Amended and Restated Preliminary Prospectus of High Plains Uranium, Inc. dated October 14, 2005

Allemand Ross Project Approx. $12 MM

Swinney Switch Project Approx. $9 MM

Acquisition and development of additional uranium opportunities

$ ▪

Working capital and general corporate purposes $ ▪

TOTAL $ ▪

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Acquire large, previously explored uranium resources Acquire large, previously explored uranium resources with prior resource calculations in Wyoming, Texas with prior resource calculations in Wyoming, Texas and other jurisdictions where more rapid permitting is and other jurisdictions where more rapid permitting is possible, with the goal of entering into production at possible, with the goal of entering into production at the earliest possible opportunitythe earliest possible opportunity

The Opportunity

Since its formation in mid-2004, High Plains has Since its formation in mid-2004, High Plains has acquired 6.8 million pounds of historical uranium acquired 6.8 million pounds of historical uranium resources within a potentially larger global resourceresources within a potentially larger global resource

High Plains is rapidly advancing its existing projects High Plains is rapidly advancing its existing projects and targeting acquisitions of additional high-impact and targeting acquisitions of additional high-impact uranium prospects, principally in Wyoming and Texasuranium prospects, principally in Wyoming and Texas

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Investment Highlights

Rapidly advancing in-situ-leach (ISL) uranium projects in Wyoming and Rapidly advancing in-situ-leach (ISL) uranium projects in Wyoming and TexasTexas

Significant resources at principal projects in Wyoming (Allemand Ross) and Significant resources at principal projects in Wyoming (Allemand Ross) and Texas (Swinney Switch) Texas (Swinney Switch)

Knowledgeable and experienced Management Team supported by a strong Knowledgeable and experienced Management Team supported by a strong Board of DirectorsBoard of Directors

Wyoming and Texas have several producing ISL uranium mines: Wyoming and Texas have several producing ISL uranium mines: mitigates permitting riskmitigates permitting risk

Strongest uranium market in a generation: spot price at US$33/lb Strongest uranium market in a generation: spot price at US$33/lb

Acquired leases totaling over 36,000 acres of high-impact uranium Acquired leases totaling over 36,000 acres of high-impact uranium prospects with extensive drill patterns showing presence of uranium and prospects with extensive drill patterns showing presence of uranium and historical resource calculationshistorical resource calculations

Significant financial flexibility + no debtSignificant financial flexibility + no debt

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Knowledgeable and experienced Management Team supported by a strong Board of DirectorsManagementJim BaughmanPresident & Chief Executive Officer25 years of mining experience; manager for MK Gold Company from 1996 – 2001; uranium experience with Western Nuclear, Inc. in Wyoming

John RyanChief Financial OfficerCadence Resource, Metalline Mining, Western Goldfields

Dan GorskiVice-President, Operations35 years in uranium, base and precious metalsexploration, development and operations, primarily in Mexico, Texas, and the western U.S.

Board of DirectorsBobby CooperChairman Former Chairman & CEO, Kennecott

Howard CrosbyDirector25 years of mining industry experience; former Vice President of UNC Nuclear Industries; President of Crosby Enterprises, Inc., and President and Chief Executive Officer of Cadence Resources Corporation

Kurt HoffmanDirector10 years experience in all phases of mining; President and director of Sundance Diamonds Corp.; founder of Trend Mining Company

Ishiung WuDirectorDirectorships and senior management positions with Trend Mining Company, IW Exploration Co., General Minerals Corporation, Exxon and Chevron. M.A. (1971) and Ph.D. (1975) in economic geology from Harvard University

James A. KnoxDirector45 years of experience in the mining industry. Former principal of James A. Knox and Associates, Inc.; former President and Chief Executive Officer of USMX, Inc.

Philip S. MartinDirectorExperience in the mining industry as well as mining finance (TD Securities) and research; former consultant engineer with Dames & Moore

Management & Board of Directors

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Rapidly Advancing ISL Uranium Projects in Wyoming and Texas

All the Properties Were Drilled Extensively in the Last Uranium Bull Market

In-Situ-Leach Properties located in Wyoming and Texas Where Uranium Production Currently Exists and the Permitting Process is Straightforward and Relatively Fasterthan in Other States

High Plains Has Secured a Significant Resource of Uranium in the Continental United States – Previously-Drilled, Mineralized Uranium Properties

Inventory In The GroundInventory In The Ground

Rapidly advancing ISL uranium projects in Wyoming and Rapidly advancing ISL uranium projects in Wyoming and TexasTexas

Low-Risk StrategyLow-Risk Strategy

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High Plains’ Principal Projects

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Page 9: High Plains Roadshow Presentation - November 2005

Allemand RossWyoming

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ALL EM A NDUS

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High P la ins Uranium IncorporatedA llem and R oss - S and D raw, B ea r C reek

Converse County, Wyoming, U .S.A.

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Swinney SwitchTexas

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Extensively Drilled Principal Projects

Allemand Ross – Powder River Basin, WyomingProperty Surface Rights Mineral Rights Federal Lode Claims Pounds

Sand Draw 2,765 acres 1,172 acres 1,593 acres Indicated 970,000 Recoverable PoundsInferred 3,790,000 Recoverable Pounds

Bear Creek 2,796 acres - 876 acres Inferred 827,700 Recoverable Pounds

Total 5,561 acres 1,172 acres 2,469 acres Indicated 970,000 Recoverable PoundsInferred 4,617,700 Recoverable Pounds

Previous Exploration Conoco, Power Reactor and Nuclear Fuel Development Corp.

Swinney Switch – Gulf Coast Uranium Province, TexasProperty Surface Rights Mineral Rights Federal Lode Claims Pounds

Wallace Ranch 3,144 acres 2,050 acres - 1,200,000 In-Situ Pounds

Seager-Salvo 475 acres 475 acres - -

Johnson 605 acres 726 acres - -

Total 4,224 acres 3,251 acres - 1,200,000 In-Situ Pounds

Previous Exploration TXO Minerals

Total

Surface Rights Mineral Rights Federal Lode Claims Pounds

9,785 acres 4,423 acres 2,469 acres Indicated 970,000 Recoverable Pounds Inferred 4,617,700 Recoverable Pounds1,200,000 In-Situ Pounds

6,787,700 lbs. 11

For further details, please see Amended and Restated Preliminary Prospectus dated October 14, 2005

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North Platte

Le Bar-Hall

Ruby Ranch

Reno Creek

Red Desert

Gas Hills

Brelum Cadena

Acreage* 8,920 3,760 3,640 1,360 13,160 4,420 Optioned 894

Location Wyoming Wyoming Wyoming Wyoming Wyoming Wyoming Texas Texas

Previous Exploration

UNC, Kerr-McGee and others

JV between Denison Mines, Cabot, Pioneer Nuclear

Cleveland Cliffs, TVA, Texas Eastern Nuclear

Rocky Mountain Energy (previously delineated)

Conoco, Kerr McGee, Texas Gulf Oil, Exxon

Pathfinder Mines, Union Carbide, Western Nuclear, American Nuclear

Mobil Oil, Coastal States Energy

N/A

Historical Resources √ √ √ √ √ √ √ √

* Acreage includes surface rights, mineral rights and federal claims

Additional High-ImpactProspects

Over 36,000 acres of high-impact uranium prospects

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Milestones Achieved

In just 14 months, High Plains has…In just 14 months, High Plains has…

Successfully completed private placements towards the acquisition of the Allemand Ross and Swinney Switch properties plus its numerous prospects

Commissioned and obtained a preliminary 3rd party assessment study (NI 43-101 Technical Report) on Allemand Ross and Swinney Switch by Micon International

Built a portfolio of high-impact projects, including numerous properties in the prolific Powder River Basin of Wyoming and Gulf Coast Uranium Province of Texas

Assembled its core Management Team and established a Board of Directors with extensive uranium industry experience

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Growth Strategy

Following its IPO, High Plains intends to…Following its IPO, High Plains intends to…

Consolidate its Wyoming and Texas properties as well as close on the acquisition of a number of other attractive uranium prospects

Complete engineering studies and core drilling at Allemand Ross and Swinney Switch to be followed by feasibility studies

Negotiate participation/production contracts with nuclear utilities

Actively seek a radioactive material license in Texas - a critical step towards facilitating production at its properties there

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Strongest Uranium Market in a Generation

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05

US

$/lb

Ura

nium

X Low Uranium PricesLow Uranium PricesX Few Greenfields ProjectsFew Greenfields Projects

“ “Tight” MarketTight” Market Primary Supply << DemandPrimary Supply << Demand Rapidly Rising PricesRapidly Rising Prices

Oil

Shoc

k

Supply Shortage

Inventory Drawdown

Source: NUEXCO

020,00040,00060,00080,000

100,000120,000140,000160,000180,000200,000220,000

2005E 2006E 2007E 2008E 2009E 2010E 2011E 2012E 2013E 2014E 2015E

MM

Lbs

. of U

rani

um

Forecast Uranium Mine Production Forecast Uranium Demand

Source: Paladin Resources, Research Capital

Rising uranium prices Rising uranium prices resulting from …resulting from …

... growing projected ... growing projected supply deficit from mine supply deficit from mine productionproduction

Uranium Spot PriceUranium Spot Price

Forecast Uranium Mine Supply v. DemandForecast Uranium Mine Supply v. Demand

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Uranium producers (ex. Cameco, Denison, ERA, Cogema) Uranium producers (ex. Cameco, Denison, ERA, Cogema) currently trade at approximately currently trade at approximately C$13.00/lb.C$13.00/lb.

Near-producers (ex. Paladin Resources, SXR Uranium One) Near-producers (ex. Paladin Resources, SXR Uranium One) currently trade at approximately currently trade at approximately C$4.50/lb. C$4.50/lb.

Explorers (ex. Energy Metals, Maple Minerals, Strathmore Explorers (ex. Energy Metals, Maple Minerals, Strathmore Minerals, Uranium Power, Western Prospector) currently Minerals, Uranium Power, Western Prospector) currently trade at approximately trade at approximately C$3.00. C$3.00.

On a resource multiple (Enterprise Value/lb. of resource) …On a resource multiple (Enterprise Value/lb. of resource) …

Assuming a C$30 MM initial public offering at C$1.50, High Assuming a C$30 MM initial public offering at C$1.50, High Plains will have an Enterprise Value of ~ C$53 MM (US$45 MM)Plains will have an Enterprise Value of ~ C$53 MM (US$45 MM)

Assume USD/CAD = 0.85

Valuation

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1 EV = Market Cap + Long Term & Short Term Interest Bearing Debt + Preferred Shares - Cash & Equivalents2 Assumptions used for converting Market Cap. and Enterprise Value to USD for calculating EV/lb Reserve + Resource, Mkt. Cap./lb Reserve + Resource: CAD/AUD = 0.90, CAD/EUR = 1.40, CAD/USD = 1.203 Pro-forma for the merger of Southern Cross Resources and Aflease Resources announced July 5, 2005 subject to closing by year-end 2005.* In-situ-leach uranium extraction method** URASIA share price is proposed IPO priceOutliers not included in calculation of averages

Source: Research Capital Corporation estimates

Comparables

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Share Price Market Enterprise EV / Producible Mkt. Cap. Producible /Ticker 2-Nov-05 Cap. (mlns) Value (mlns)

1 lb2 (C$) lb2 (C$)

Explorers

CANALASKA VENTURES CVV $0.36 $16 $12 $1.61 $2.20ENERGY METALS * EMC $3.10 $80 $59 $2.26 $3.07MEGA URANIUM LTD MGA $2.96 $90 $82 $3.90 $4.27RODINIA MINERALS RM $0.96 $10 $9 $0.94 $1.03STRATHMORE MINERALS STM $1.43 $73 $50 $1.11 $1.62TRIEX MINERALS TXM $2.05 $18 $14 $3.48 $4.37UEX UEX $3.87 $655 $603 $12.73 $13.83URANIUM POWER UPC $0.40 $24 $20 $3.21 $3.90WESTERN PROSPECTOR GROUP WNP $4.89 $183 $160 $6.94 $7.93

Average $2.93 $3.55

Near-Producers

PALADIN RESOURCES PDN AUD 1.97 AUD 800 AUD 761 $6.23 $6.55SXR URANIUM ONE3 * SXR $1.15 $430 $426 $2.93 $2.95

Average $4.58 $4.75

Producers

AREVA (COGEMA) CEI € 397.00 € 14,071 € 14,487 $20.00 $19.42CAMECO CCO $59.40 $10,335 $10,748 $11.18 $10.75DENISON MINES DEN $13.15 $336 $330 $12.58 $12.81ENERGY RESOURCES OF AUSTRALIA ERA AUD 12.90 AUD 1,843 AUD 1,799 $3.87 $3.96INTERNATIONAL URANIUM IUC $5.95 $485 $474 $9.66 $9.90URANIUM RESOURCES * URIX $0.70 $94 $82 $1.82 $2.09URASIA ENERGY *, ** N/A $1.80 $660 $87 $0.30 $2.28

Average $13.35 $13.22

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Capitalization

CapitalizationCapitalizationCommon Shares Outstanding 40,843,557

Common Shares Issued in IPO* 20,000,000

Basic Common Shares Outstanding Post-IPO 60,843,557Options 1,050,000

Warrants 6,717,200

Fully Diluted Common Shares Outstanding Post-IPO 68,610,757

Based On a $30 MM IPO, Management & Board Would Beneficially Own Approximately 10% of the Common Shares Outstanding On a Fully Diluted Basis

* Assumes $30,000,000 issue at $1.50 per share

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