In reviewing my notes on URI and ongoing conversations with management, I believe that several very important attributes need to be reiterated. I’m confident that most readers are unaware of these facts. First, the Company is a past producer, not an explorer or developer. URI has produced approximately 8 million pounds of uranium over the years as one of the oldest U.S. uranium names around. While not currently producing given current weak uranium prices, the Company has meaningful production experience and two licensed 800,000 pounds/year processing facilities on standby in Texas. The Company expects to relocate one plant for use at Temrezli, reducing capital costs there, and has a second plant ready to jump back into production once uranium prices rebound.

Second, speaking of vast experience, the management and Directors form a highly seasoned team, one of the best among juniors and mid-tier peers.

Third, the combined company will have far better access to funding and stronger trading liquidity on both the NASDAQ and Australian markets. There are many Australian-listed uranium companies including Paladin Energy, Toro Energy, Peninsula Energy Ltd., Energy Resources of Australia Ltd. each with market caps comfortably above US$ 100 million. The pro forma and existing largest shareholder, Resource Capital Fund, “RCF,” voted in favor of the merger and has the financial wherewithal to participate in funding initiatives, (at the project level, or extending relatively non-onerous debt). Alex Molyneux, Chairman of Azarga Uranium, had this to say, “I am a big supporter of Anatolia’s Temrezli project. It’s the world’s lowest cost, undeveloped uranium project, now in the hands of an experienced ISR team with demonstrated financial support from RCF.”

Funding of Temrezli should not be that difficult, URI could become a takeout target by next year

To be clear, project financing of Turkey’s Temrezli is yet to be determined. Management is looking at a variety of financing alternatives including long-term supply contracts to utilities. In addition to RCF there are numerous uranium players, both producing and not, that could be interested in acquiring URI outright. Energy Fuels has been in acquisition mode, recently acquiring Uranerz Energy Corp. A key consideration in any takeout scenario is that Turkey would represent both geographic and project level diversification to any suitor.  For example, Toro Energy has a few projects in Australia that probably won’t reach for production for 5+ years.

Fourth, URI has 119 million pounds of non-reserve, non reserve mineralized material and a NRC license to produce up to 3 million pounds per year. In my opinion, this is a crucial factor holding URI’s stock back. I believe that the in-ground resources are a free option in URI’s current valuation, representing hidden assets that could become more tangible and valuable over time. Note that URI’s deposits are in the prolific Grants Mineral Beltin New Mexico one of the foremost uranium basins in the world. URI has also expanded its feeder pipeline of high-potential ISR projects in Texas, near its processing infrastructure.

Anatolia’s Pre‐Feasibility Study indicated an after-tax NPV of US$126 million (based on a uranium price of US$65/lb. and a discount rate of 8%). Assuming a uranium price of US$ 55/lb. the after-tax NPV is still a respectable ~ $80 million, twice the EV of the combined company. Therefore, investors get exploration targets in Turkey and ALL the Texas & New Mexico assets for free, a long-term call option on the uranium price breaking sustainably through $55/lb. in 2017-18. Recall that the Temrezli project is profitable at $40/lb., with all-in costs of roughly US$ 30/lb, placing the project squarely in the lowest cost quartile. Temrezli’s cash flow could be used to fund select Texas and New Mexico projects.