ARMZ Uranium Holding Co.:

An emerging Asia leader in uranium mining

Dmitry Shulga, Director, External Affairs & Investor Relations

Asia Mining Congress 2009, March 2009

ARMZ in Russian Nuclear Industry

ARMZ

• Uranium mining and supply

• Worldwide mining and exploration

• World’s №2 in uranium resources

• World’s №5 in uranium production

TENEX

• Uranium enrichment, export sales

• 40% of world’s uranium

enrichment capacity

Energoatom

• Nuclear power plant

operation, generation

and sales

ROSATOM

Full nuclear fuel cycle,

NPP construction, power generation

TVEL

• Nuclear fuel fabrication, export sales

• 17% or world’s nuclear fuel market (every 6th reactor)

ARMZ Today

• 2nd in uranium resources

• 5th in uranium production

• Russia’ s only uranium mining

company

• ARMZ owns Priargunsky - the world’s

largest mine as for aggregated

historical U production - over 130

thousand tons of uranium

• Highly diversified by mining

technology and geography

– Russian miners use all known

uranium mining methods

– Exploration and mining projects

in 3 continents

• 14 thousand employees in production

sites and service companies

BHP Billiton

33%

ARMZ

538

11%

2nd place

AREVA

10%

Rio

Tinto

9%

Cameco

7%

Kazatomprom

7%

Uranium One

4%

Navoi

3%

VostGOK

3%

Paladin Energy

2%

Others

11%

Rio Tinto

18%

CAMECO

16%

AREVA

16%

Kazatomprom

11%

ARMZ

3687

8%

5th place

BHP

Billiton

8%Navoi

5%

Uranium One

3%

Paladin

Energy

2%

Others

13%

2008 Uranium resources, thou. tons (in-situ)

2008 Uranium production, tons

ARMZ Global Presence

1

2

3

4

5

Operational and under

construction facilities

1. Priargunsky

2. Khiagda

3. Dalur

4. Akbastau (Karatau)

5. Zarechnoe

8

7

6

Planned facilities

6. Elkon

7. Gornoe

8. Olovskaya

9

10

11

12

13

Exploration ventures and prospective projects

9. Mongolia

10. Canada

11. Russia

12. Namibia

13. Armenia

14. Ukraine

14

Growth Results 2006-2008

• Number of subsidiaries and projects increased

from 4 to 18

• 16% growth of uranium output in two years

• 4-fold growth of uranium resources

• 16 uranium deposits licensed

• New joint ventures set up to mine, drill and

explore for uranium in Russia and abroad, new

management and service companies in operation

Khiagda

Istochnoe

KolichikanKoretkonde

Namaru

DybrynVershinnoe

Teyrahskoe

Khiagda Ore Field:

Baunt Region, Buryatia, Russia

190 km from the city of Chita

Deposits Type – “sandstone” in

paleochannels

Include 8 uranium ore deposits

U Reserves: 32 215 t (C1+C2)

U Resources: 15 325 t (P1)

U Resources Expansion Potential:

100 thou. tU

Ore grade: 0,05 %

Mining method: acid ISL

Planned U mine capacity 2000 tU/y

Cost of production: under $40 p/lb

Vitim Uranium Ore District

Elkon: World’s Largest New Planned Uranium

Production Center

Interesnaya

Elkon Plateau

Elkon

Severnaya

Neprohodimoe

Druzhnoe

Kurung

Lunnoe

1 - Mesozoic intrusions; 2 - Cambrian platform carbonate formations;

3 - Pre-Cambrian metamorphites and granitoids; 4 – Blastomylonites

5 - Revived old fractures; 6 - Mesozoic tectonic zones; 7 - Uranium

Deposits

Elkon Uranium Field

Recoverable uranium resources in Elkon district amount to

5.3% of world known uranium resources, which makes it

second biggest U deposit

• Elkon district

• Deposits - Elkon Ore Field

• In-Situ U resources - 344 thou. t

• Au Reserves – 140 t

• Ore grade - 0,146% U, 0,84 g/t

Au

• Mining Method – Underground

• Current status - Projected

Plant capacity• Initially 2.2 Mtpa, processing ore

from Elkon Plateau and Kurung,

• Potential to expand to 4.5 Mtpa to

process ore from all 5 mines

Plant recovery• Uranium 89.6%

• Gold 43.4%

• Silver 35.8%

• Molybdenum 38.9% (from

Druzhnoye mine

•Pre-feasibility study by SRK Consulting to be

complete in late April, 2009

•3D modeling complete

•DCF modeling complete

•Expertise of Russian and international research

consultancies fully employed

• New technical solutions developed to lower

cost of production to less than $100 per kilo U

•Resource classification to JORC and Normative

N43-101 to be complete by end of spring 2009

Preliminary estimates indicate

definite benefits for potential

investors

1=Elkon mine

2=Elkon Plateau mine

3=Kurung mine

4=Neprokhodimoye mine

5=Druzhnoye mine

6=Processing plant

Elkon: Current Status

World economic & financial crunch:

How U miners are affected

Uranium prices U Miners Share Price

World economic & financial crunch:

How U miners are affected (cont.)

Primary Uranium Producers

• Ramping up uranium production

• Expanding existing mines and mills, acquisition of new facilities

• Acquisition of exploration companies with attractive projects

• Establishing joint ventures in exploration for and mining of uranium

Planned and Junior Uranium Producers

• Maintaining or scaling down uranium production plans

• Lack of financial resources for project development/ Raising capital becoming increasingly difficult

• Plans to build new mines delayed or abandoned

ARMZ Weathering the Crisis

Uranium Production

Acquisitions

Expanding Resource Base

In the face of the world economic and financial crisis,

ARMZ has expanded its plans rather than curtailing them

•Supported by Ministry of Natural Resources

and Federal Agency of Resources & Mining,

ARMZ implements a program for Russia’s

uranium resource base expansion

•Exploration and resource base expansion at

operational mines and facilities under

construction in Russia and Kazakhstan:

Priargunsky, Dalur, Khiagda, Akbastau, and

Karatau

•Exploration for uranium within existing

tenements of planned facilities, as per license

agreements: Elkon, Gornoe, Olovskaya

•Exploration for uranium deposits in Africa:

«SWA Uranium Mines» Joint Venture, NamibiaARMZ purchased assets from Effective

Energy N.V. (Netherlands) to become world’s

second largest uranium miner in terms of

uranium reserves

ARMZ Competitive Advantages in Times of Crisis

ARMZ

Advantages

Demand for uranium

guaranteed by State-

owned Rosatom

Direct financial aid

from the State

budget

Debt financing

completely

backed up by

assets

ARMZ Crisis Management

• Slashing production and management expenditure at mining facilities

• Increasing production efficiency through use of advanced machinery, materials,

and technologies, deployment of modern mining equipment

• Cutting production costs, bringing up product competitiveness

Asia and the Pacific: Uranium Market

• 109 out of world’s 439 operating nuclear reactors

• Overall capacity of 79,6 GWe

• Overall nuclear capacity to increase to 190,4 GWe by 2030 (IAEA)

Power Generation by Nuclear

•Current: 15 thou tU in 2008

•Forecast: increase to 40 thou tU in 2030Uranium Requirements

•Current: 900 tU in 2008

•Forecast: increase to 2 000 tU in 2030

Uranium Production Volume

Uranium required in 2008:

15 thou tU

Uranium required in 2030 (F):

40 thou tU

Asia and the Pacific: U Demand & Supply

Huge misbalance – to reach 95% in

the foreseeable future - between

demand for U by nuclear reactors

and supply of locally produced

uranium

Locally sourced 900 tU Locally sourced 2000 tU

Russian Nuclear in Asia and the Pacific

•Building 2 nuclear reactors of 1000 MWe each

•Agreement to build 4 additional NPRs at Kudankulam nuclear power station

•Agreement to build nuclear power stations of Russian design at new sites

•Protocol to supply nuclear fuel to nuclear power stations in India (2 thou tU over 5 years for $780 million)

•Tianwan Phase 1 constructed by Russia in commercial operation

•Tianwan Phase 2 construction planned

•Construction of Uranium Enrichment Facility Phase 4, deliveries of Russian enriched uranium product worth $1,5 billion

•Negotiations re. agreement on cooperation in peaceful nuclear energy

•Atomic energy deal between Atomenergoprom and Toshiba Corp. re construction of joint uranium enrichment plants in Japan and other Asian countries

Why Asia Mining?

• ARMZ introductions to Asia and the Pacific mining

business community

• Sharing info re. ARMZ uranium projects

• Highlighting importance of nuclear and uranium

for Asia and the Pacific

• Getting in contact with potential partners in

uranium mining and exploration: miners,

consultants, fund managers, investors

THANK YOU