Investing in Kazakhstan's Uranium

StockInterview: What makes you respect the Kazakhs with regards to Isl mining in their country?

Fletcher Newton: First of all, they have a great number of feel with this. Kazakhstan and Uzbekistan have been doing Isl mining of uranium longer than anyone in the world. The Kazakhs, in single KazAtomProm, have over the last 30 years, maybe more, developed an startling number of expertise in how to recover uranium effectively, inexpensively. They are highly environmentally sensitive. Kazakhstan, to my knowledge, has had none of the environmental issues with Isl recovery of uranium that, for example, we've had in this country. They have gone to great lengths to be sensitive to the interests of population in local communities, who are obviously all the time implicated about groundwater. But, the bottom line is they are highly competent in their capability to mine uranium. They are among the very best, if not the best.

Kazakhstan

StockInterview: Why do you call them among the very best?

Fletcher Newton: I think it's a merge of things. They have an highly well educated work force. These are guys with PhDs in hydrology, ground water chemistry and metallurgy. This is a inheritance of the old Soviet educational system. You have got a lot of very engaging people. Moukhtar Dzhakishev is a PhD in physics, the head of KazAtomProm. Every one of his population have developed degrees in science and engineering, finance or business. They all speak two or three languages. They are urbane. They travel. That's the current generation.

StockInterview: What makes the Kazakh Isl activities among the best?

Fletcher Newton: The Soviet theory was incredibly thorough. When they went out and drilled an exploration well, they logged the entire hole, top to bottom. And they've kept all that data. They spent a lot of time and money in uranium production in Central Asia. And in the course of doing it, they learned how to do it good than just about whatever else in the world.

StockInterview: If the Kazakhs are among the best, why do they need Cameco?

Fletcher Newton: When we went over there to invest, what they needed was not so much our expertise, but our support. They've got fullness of their own expertise. And that's an important point to make. This was in the late 1990s and the price of uranium was near an all-time low. The country of Kazakhstan was just broken off from the Soviet Union. Was it going to be independent? It wasn't clear yet, and there was indeed no interest in uranium mining. And so, we were able to meet that need, as was Cogema, at a time when they needed to attract foreign investment. It was very much a request of fortuitous timing.

StockInterview: So Kazakhstan needed the money then, but now they don't?

Fletcher Newton: I do not think they need the money now. That's true. They indeed needed it then. We brought maybe dissimilar ideas about how to mine uranium. Not better, but just different. One of the things I admire about the Kazakhs so much is they are willing to learn, willing to look at a dissimilar theory and say, 'Hmmm, ok let's try that.' Whereas in the United States, for example, I can tell you that getting population to change is very difficult. Again, this is one of the reasons why Kazakhstan has been so impressive. They are willing to embrace change. Moukhtar is a guy who is more than willing to say, 'Hey, if you show me that something like this can be better, you bet, we'll try it.'

StockInterview: Why is Isl mining dissimilar in Kazakhstan aside from the use of sulphuric acid?

Fletcher Newton: You generally use all the same equipment: the same pumps, pipes, all of that. generally speaking, the distinction is that the deposits in Kazakhstan are much bigger. They are much more uniform. As a supervene of that, your recoveries are a lot better.

StockInterview: Reportedly, you can get 80-percent recovery in Kazakhstan, compared to 70-percent or less in the United States.

Fletcher Newton: You have to be rigorous when you talk about the 80-percent recovery. The guess is you never know exactly how much uranium is down there to begin with. When you quantum uranium with a logging truck, you don't indeed quantum the uranium directly. What you quantum is the attentiveness of bismuth-214, which is a daughter goods of uranium. You can then extrapolate back from that to guess how much uranium is there. There can be problems with something called disequilibrium. One of the results of that is your calculations can then be off. Your geologists will come up with what they think is a uncostly number of uranium there. Sometimes, you'll recover 80 percent of that. Sometimes you'll recover 120 percent or 50 percent. The great thing about the uranium in Kazakhstan, at least in our feel is that it is effortlessly leachable. It's just right there in the sand.

StockInterview: How would you report the environmental atmosphere toward uranium mining in Kazakhstan?

Fletcher Newton: They have a very suitable and comprehension regulatory environment. They have a government that supports uranium mining. At the same time, they are very sensitive to communal issues, and to development sure they pursue sustainable development in all they do. They understand that population are plainly afraid of radioactivity. They understand that population are afraid of anyone who says 'I'm going to do something with ground water.' Even if it's ground water you could never drink or do something with. They go to a lot of efforts to educate people, to interpret what they are doing, to safe people, and to make indeed confident that there is never a threat to condition and communal safety. And they go a very good job of this.

StockInterview: during your presentation at the Platts Nuclear Fuel Strategies argument in Washington, D.C. You had talked about the 'challenging' part of mining uranium in Kazakhstan.

Fletcher Newton: No. When I said 'challenging,' I didn't mean that in a pejorative sense. We have the same challenges in the United States: regulatory, infrastructure, human resources. I think you would have them in any country. Remember this business has been on its back for twenty-five years. Suddenly, in the space of four years, the price has gone from to . Well, that makes it a challenge for everybody. Not just Kazakhstan.

StockInterview: How do you collate doing business in Kazakhstan with your operations in the United States?

Fletcher Newton: My feel is little to just the uranium business. We are exceptionally pleased with our partner, with the relations we have with our partner KazAtomProm and with our feel there. They are an perfect partner. They are highly technically capable and sophisticated. We learned a great number from them. They've taught us a lot, and it's been a very good relationship. We do not have the nightmare stories you've heard from other people. We have not experienced that at all.

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Investing in Kazakhstan's Uranium

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