By: Joe Lowry

Originally published by Joe Lowry on April 1, 2016 under the title “FMC — The Rest of the Story.” Click here to view the original article.

FMC’s (NYSE:FMC) annual report came in the mail this week. I read it with interest. FMC tells their shareholders (and anyone else who cares to read the document) “2015 was an important year for the lithium business” and they made “great progress” in strengthening their position. Interesting perspective.

One of the more curious items in the lithium section of FMC’s report is the chart stating they focus on “high value” specialty lithium products. They use the chart below to explain that the overall global lithium market volume is 71% industrial and only 29% specialty. They further state that overall market revenue is 43% industrial and 57% specialty – the impression being created is that the specialty sector is a “sweet spot” or “the place to be”. The final part of the chart shows that FMC’s revenue is only 21% in the industrial sector and 79% in the specialty sector.

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Wow – it should be a great thing that FMC’s lithium business is a full 79% in the “high value” specialty sector and only 21% in the industrial sector.

Just one small question for FMC: if your business is 79% “high value” specialty and you are #2 of the “Big 3″ in revenue – why are you by far the least profitable “Big 3” lithium business???

Why do Albemarle (NYSE:ALB)/Rockwood and SQM (NYSE:SQM) make more profit in a quarter than FMC does in a year? There must be a logical answer…….

It also seems ironic that FMC has redefined hydroxide as a “downstream” business. Historically hydroxide was considered an upstream “primary” product. During the days that hydroxide was considered an upstream primary product, FMC was a much stronger force and often received a significant premium vs their competitors.

Today, FMC’s share position in the high end (battery) portion of hydroxide market, while still significant, continues to erode. When capacity declines in a growing market; there is only one direction your market share can go. FMC still likes to think of itself as number one in hydroxide yet three companies in China that were not factors in the market five years ago now have more hydroxide capacity than FMC.

Tesla’s supply chain has to rely on China for incremental lithium supply because they certainly can’t rely on a company who is not expanding capacity. Talk about “throughput” increases sounds good (see below) but means next to nothing to customers in a fast growing market.

The hydroxide ‘throughput’ story

As shown below: FMC proudly discussed their recent hydroxide throughput (aka production) increases. Certainly real increases in throughput from existing assets is something to trumpet in an annual report. The “rest of the story” on these laudable throughput increases is that they come after a precipitous decline in throughput from the halcyon days of just a few years ago.

The bottom line is that even with a 10% increase in 2016, FMC will still be producing less hydroxide than they were just a few years ago. In an era where hydroxide is in a global period of undersupply and prices are triple last year in some markets –it would be wonderful if FMC could state they had record production but unfortunately they do not and prefer to highlight incremental year over year increases.

There is some undisputed good news in FMC’s lithium story. Of the “Big 3” — FMC will realize the largest upstream price increases in 2016. FMC has a tiny share of the carbonate market and is able to sell in the highest price niches. Like most people in the industry, I consider hydroxide an upstream product – especially since it is a first product in the process the Chinese use. FMC still has a good position in hydroxide despite losing share each year to China and ceding share for Tesla cathode demand. Given FMC’s limited profitability – they should be able to double profits (and get back to historic highs) in 2016. I am not sure a return to profitability levels of the last decade is a victory especially when carbonate and hydroxide global average prices are more than double what they were then. It seems “great progress” has multiple definitions.

In recent days ALB has confirmed their intention to more than double their capacity and SQM has entered a JV with Lithium Americas to bring an additional 40,000 MT of capacity online in Argentina in the coming years. We don’t hear any talk of meaningful expansion from FMC.

In what management likes to call “The New FMC” the position of lithium in the FMC portfolio has been greatly diminished. I kind of liked it better when FMC truly was a leader in the lithium market. Although still a member of the legacy “Big 3” – when “The New Lithium World Order” is considered FMC would likely be considered at best #4 and more likely #5 globally with the emergence of companies like Sichuan Tianqi and Ganfeng in China.

 

Editorial Disclosure: Joe Lowry was employed by FMC from 1989 to 2012. His most recent title was Global Sales and Business Development Director — Lithium.

After more than two decades with a major lithium producer holding senior leadership positions at lithium operations in the US, Japan and China; Mr. Lowry formed Global Lithium LLC – an advisory firm that works with lithium producers, users, investors, hedge funds and governments on four continents. He has an extensive network of contacts with the leadership of the world’s leading lithium suppliers and users. His knowledge of lithium supply and demand, pricing, the lithium ion battery market and industry trends enables him to provide unique insights into the world of lithium.

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Dajin Resources Corp. (TSXV:DJI,OTCMKTS:DJIFF) announced that the Company’s wholly owned subsidiary, Dajin Resources (US) Corp., has acquired by staking a 100% interest in an additional 37 placer claims covering 710 acres of ground on the Teels Marsh in Mineral County, Nevada.

These additional contiguous claims have expanded and strengthened Dajin’s land position in the Teels Marsh region as it moves forward with its surface, seismic and drilling exploration plans.

Connect with Dajin Resources Corp. (TSXV:DJI,OTCMKTS:DJIFF) to receive an Investor Presentation.

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Avalon Advanced Materials Inc. (TSX:AVL,OTCQX:AVLNF) (formerly Avalon Rare Metals Inc.) announced a progress report on process development work for its Separation Rapids Lithium Project, Kenora Ontario.

As quoted in the press release:

Pilot processing of a bulk sample of the ore has successfully produced one tonne of high purity lithium mineral concentrate (petalite) that meets target specifications. Approximately 300kg will be used for further process development work toward defining a flowsheet for production of a high purity lithium chemical for battery applications. Preliminary work is already underway and scheduled for completion in June, 2016 with further piloting of the process planned for later in 2016. The remainder of the concentrate will be shipped to potential customers in the glass industry who have requested product samples for evaluation in glass-ceramic applications.

The bulk sample pilot plant was conducted at metallurgical facilities in Germany under the direction of Dorfner Anzaplan GmbH, Germany (“Anzaplan”), a specialist in industrial minerals process development. The flow sheet employs magnetic separation and froth flotation processes that are a significant improvement on the process originally developed and patented by Avalon in 1998-99 to produce a petalite concentrate for glass-ceramics. The concentrate produced meets customer expectations on lithium content and purity, assaying 4.0% Li₂O and less than 0.01% Fe₂O₃. The work was supervised by Avalon’s Senior Vice President, Metallurgy and Technology Development, Mr. David Marsh.

Future Plans

The PEA is currently being compiled based on the resource as defined during the original drilling programs conducted by Avalon in 1997-2001. At currently anticipated production rates this would provide sufficient resources for a minimum 10 year operating life. The resource remains open to depth and along strike for expansion and a summer exploration drilling program is currently being planned to delineate additional lithium resources.

Following the completion of the PEA this summer, Avalon intends to proceed into a full feasibility study along with environmental assessment work with a target date for completion in Q2 2017.

In the meantime, the Company is studying alternatives for delivery of clean, low-cost power to the project site and alternative locations for the hydrometallurgical plant to produce the proposed lithium hydroxide product for the battery industry.

Connect with Avalon Advanced Materials Inc. (TSX:AVL,OTCQX:AVLNF) to receive an Investor Presentation.

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CALGARY, ALBERTA–(Marketwired – April 5, 2016)

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW.

Tourmaline Oil Corp. (TSX:TOU) (“Tourmaline” or the “Company“) is pleased to announce that it has closed its public offering of 10,350,000 common shares at a price of $27.11 per share, which includes 1,350,000 common shares issued pursuant to the exercise in full of the over-allotment option, for gross proceeds of approximately $280.6 million. Concurrent with the closing of the public offering, certain directors, officers and employees of the Company and their associates, purchased a total of 37,500 common shares at the offering price of $27.11 per share on a private placement basis. The gross proceeds from the offering and concurrent private placement totalled approximately $281.6 million.

The public offering was underwritten by a syndicate of underwriters led by Peters & Co. Limited and included FirstEnergy Capital Corp., Scotia Capital Inc., National Bank Financial Inc., CIBC World Markets Inc., RBC Dominion Securities Inc., TD Securities Inc., BMO Nesbitt Burns Inc. and Raymond James Ltd.

The net proceeds of the offering and concurrent private placement will be used to temporarily reduce bank indebtedness under its credit facility, which will be available to be redrawn for general working capital purposes and future potential acquisition opportunities.

The securities offered have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act“), or any U.S. state securities laws and may not be offered or sold in the United States absent registration or an available exemption from the registration requirement of the U.S. Securities Act and applicable U.S. state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Tourmaline Oil Corp.

Tourmaline is a Canadian senior crude oil and natural gas exploration and production company focused on long-term growth through an aggressive exploration, development, production and acquisition program in the Western Canadian Sedimentary Basin.

Forward-Looking Information

This news release contains forward-looking information that involves known and unknown risks and uncertainties, most of which are beyond Tourmaline’s control, including, without limitation, those listed under “Risk Factors” and “Forward-Looking Statements” in Tourmaline’s Annual Information Form and in its other filings available on SEDAR at www.sedar.com. Forward-looking information in this press release includes, but is not limited to, the anticipated use of proceeds of the offering and concurrent private placement. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking information. Accordingly, undue reliance should not be placed on this forward-looking information. This forward-looking information is made as of the date of this release and, other than as required by applicable securities laws, Tourmaline does not assume any obligation to update or revise it to reflect new events or circumstances. The forward-looking information contained in this release is expressly qualified by this cautionary statement.

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PALO ALTO, CA–(Marketwired – Apr 4, 2016) – Tesla (NASDAQ: TSLA) Q1 deliveries consisted of 12,420 Model S vehicles and 2,400 Model X vehicles. Q1 deliveries were almost 50% more than Q1 last year and Tesla remains on track to deliver 80,000 to 90,000 new vehicles in 2016.

The Q1 delivery count was impacted by severe Model X supplier parts shortages in January and February that lasted much longer than initially expected. Once these issues were resolved, production and delivery rates improved dramatically. By the last full week of March, the build rate rose to 750 Model X vehicles per week, however many of these vehicles were built too late to be delivered to their owners before end of quarter.

The root causes of the parts shortages were: Tesla’s hubris in adding far too much new technology to the Model X in version 1, insufficient supplier capability validation, and Tesla not having broad enough internal capability to manufacture the parts in-house. The parts in question were only half a dozen out of more than 8,000 unique parts, nonetheless missing even one part means a car cannot be delivered. Tesla is addressing all three root causes to ensure that these mistakes are not repeated with the Model 3 launch.

Because production is now on plan and Q1 orders exceeded Q1 deliveries by a wide margin, with Q1 Model S orders being 45% higher than Q1 last year, Tesla reaffirms its full-year delivery guidance. These additional details are being provided because of the unusual circumstances of this quarter and will not typically be provided in quarterly delivery releases going forward. As always, more detailed information will be contained in Tesla’s quarterly shareholder letter.

There may be small changes to the Q1 delivery count (usually well under 1%), as Tesla only counts a delivery if it is transferred to the end customer and all paperwork is correct.

Tesla vehicle deliveries represent only one measure of the company’s financial performance and should not be relied on as an indicator of quarterly financial results, which depend on a variety of factors, including the cost of sales, foreign exchange movements and mix of directly leased vehicles.

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Brazil Resources (TSXV:BRI) recently completed results of a Time Domain Electromagnetic (“TDEM”) ground survey on its Rea Uranium Project in Saskatchewan’s Athabasca Basin. The Rea project is owned 75 percent by Brazil Resources and 25 percent by AREVA Resources Canada.

As quoted in the press release:

• Preliminary ground Time Domain Electromagnetic (“TDEM”) results confirm and further delineate the presence of a high-priority airborne electromagnetic conductor at the Rea Project.
• The conductor is located two kilometres west of AREVA Resources Canada Inc.ꞌs high-grade Maybelle River Uranium Project.
• The ground TDEM conductor is sub-parallel to and likely related to the Maybelle River Shear Zone.
• The Rea Project is one of the largest landholdings in the Western Athabasca Basin, a region that has experienced a surge in exploration activity with the recent discoveries and announcement of large, near surface, high-grade, basement hosted uranium resources by NexGen Energy Ltd. and Fission Uranium Corp.

Brazil Resources CEO, Garnet Dawson, said:

The 2016 geophysical program confirmed and refined a high priority target for follow-up drill testing. This target as well as several other high priority anomalies have been identified on the Rea Project and will be the focus of a future drill program. The recent success by Fission and NexGen along the Patterson Lake Corridor points to the potential for large, near surface, basement hosted deposits in this under-explored region of the Western Athabasca Basin.

Click here for the full press release.

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Houston Lake Mining Inc. (TSXV:HLM) announced it has closed a non-brokered private-placement offering for a total of 3,864,929 units of the company priced at 21 cents per unit for total gross proceeds of $811,635.

Proceeds from the financing will be used to advance exploration of Houston Lake Mining’s 100-per-cent-owned-and-optioned Pak lithium project located in Northwestern Ontario.

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On Monday, Denison Mines (TSX:DML,NYSEMKT:DNN) released results of a preliminary economic assessment (PEA) for the Wheeler River project in Northern Saskatchewan, and the numbers were strong in spite of current uranium prices.

Highlights included a pre-tax net present value (NPV) of C$513 million and an internal rate of return (IRR) of 20.4 percent using a price of US$44 per pound of U3O8.

Denison owns 60 percent of the Wheeler River project, with Cameco (TSX:CCO) owning 30 percent of the project and JCU (Canada) Exploration Company owning the remaining 10 percent. The report was prepared on a pre-tax basis, since each partner has different circumstances from a taxation standpoint.

However, Denison also received an indicative post-tax assessment based on its ownership, showing a base-case post-tax IRR of 17.8 percent and a post-tax NPV of C$206 million with a payback period of approximately three years.

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“We are very pleased with the positive results of the PEA – particularly being able to illustrate that the project has potential to generate robust economics based on today’s uranium price and with our current resource base,” said Denison president and CEO, David Cates, in Monday’s release. “Thanks to the existing infrastructure in the eastern Athabasca Basin, our ownership interest in the McClean Lake mill, and a project designed to minimize risk and upfront capex, the Wheeler River project has the potential to emerge as one of the next producing assets in the region”

Analysts were also positive on the results of the report. In an emailed statement, Rob Chang of Cantor Fitzgerald noted that the project “posts respectable base case PEA figures even under the current uranium price environment,” citing strengths from good local infrastructure on the eastern side of the Athabasca Basin, favourable Canadian-to-US dollar exchange rates, and a 22.5 percent stake in the McLean Lake Mill.

Indeed, Chang stated that the report “provides excellent ‘worst case scenario’ protection,” with its base case assessment since the firm is forecasting much higher uranium prices than those used in the report.

“[W]e believe its production case using a US$62.60/lb. is the more likely outcome since our forecast price for the same period is US$80/lb,” Chang wrote.

For his part, David Sadowski of Raymond James believes that a price of US$44 per pound “refreshingly, is in-line with the current posted long-term price,” but was still positive on the project overall. “Given modest capital requirements and low operating costs, the underground mine would return solid economics, even at the low base case uranium price of US$44/lb,” he stated in a note to clients.

Sadowski pointed to several key benefits for the project, noting that all ore is expected to be toll-milled at the operating McLean Lake mill. He also pointed out that the Gryphon deposit, which does not require ground freezing, will be mined ahead of the higher-grade Pheonix deposit via conventional longitudinal long-hole methods. The Pheonix deposit will be frozen as Gryphon is mined.

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Overall, Sadowski gave the company an ‘outperform’ rating with a target price of $0.50. Chang stated that Cantor Fitzgerald’s recommendation and target price is currently under review for Denison, but added that the firm most recently gave the company a ‘buy’ rating with a C$1.85 target price.

While analysts were positive on results of the PEA, the market does not appear to have reacted in quite the same way. Shares of Denison were down 2.74 percent on Monday to $0.71 on the TSX, losing 4.18 percent to finish at $0.537 in New York.

Still, shares of the company have gained 9.23 percent and 8.3 percent over the past month in Toronto and New York respectively, and Sadowski believes there could be more in store should a shift in uranium prices occur.

“Denison is one of our top picks in the uranium space – we encourage investors to bolster positions on a strong study with realistic development potential for exposure to a rebound in spot and long-term uranium prices which we believe will occur over the next 12-24 months,” he stated.

 

Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article. 

Related reading:

Denison Mines Intersects Additional High-grade Mineralization Near Gryphon

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Nemaska Lithium (TSXV:NMX,OTCQX:NMKEF) saw a jump in share price Monday morning following the release of an updated feasibility study for its Whabouchi hard rock lithium mine and concentrator in Quebec.

Shares of Nemaska were up as much as 18 percent during Monday trading hours to $0.78. Approximately 3.3 million shares of the company traded hands, about three times the average daily trading volume for the company.

Overall, the new feasibility study indicates a 100 percent increase in after-tax net present value (NPV) to $1.19 billion, a 44 percent increase in after-tax internal rate of return (IRR) to 30.3 percent, and a pay back period of 2.4 years, down from 3.7 years previous.

Capital costs have risen 10 percent to $549 million, but projected life of mine revenues have also increased 33 percent from C$6.9 billion to C$9.2 billion.

Those increases are the result of a number of changes from Nemaska’s May 2014 feasibility study for Whabouchi. First, there’s the change in location for the project’s hydromet plant from Salaberry-de-Valleyfield to Shawinigan, a switch that’s expected to save the company roughly $20 million. The site is serviced by CN rail, and is close to Hyro-Quebec and natural gas networks.

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Improved production costs

Nemaska has also been working hard to optimize its processes for producing lithium end-products, bringing production costs down 22 percent to C$2,693 per tonne (US$2,154 per tonne) for lithium hydroxide and 18 percent to C$3,441 per tonne (US$2,753 per tonne) for 99.99 percent purity lithium carbonate. As Nemaska CEO Guy Bourassa stated in a conference call held Monday afternoon, that puts the company at “the lowest cost globally,” according to market analysis from Roskill.

“Our new and improved cost of production is the highlight of this report,” said Bourassa in an emailed statement. “We are projecting to be the lowest cost producer of the highest quality lithium compound products.”

While many lithium makers produce lithium carbonate as the initial product, Nemaska has taken a different approach, focusing on lithium hydroxide first.

“Lithium hydroxide is emerging as a new chemistry of choice for battery cathode manufacturers because it creates a battery with better power density, longer lifecycle and enhanced safety features,” Bourassa stated. “Our decision to directly produce lithium hydroxide, rather than take the traditional route of producing lithium carbonate and then transforming it into hydroxide gives us a leading cost advantage in the fastest growing segment of all the lithium compounds.”

Lithium price updates

The updated study looked at changes to projected lithium prices as per a report from Roskill. The firm expects lithium hydroxide prices to increase to US$13,210 by 2025, with lithium carbonate prices anticipated to reach US$8,640 per tonne over the same period. However, Bourassa noted during the conference call that Bourassa used more conservative price projections of US$9,500 per tonne FOB for hydroxide and US$7,000 per tonne FOB for carbonate. Still, that amounts to an increase of 19 percent in the price of lithium hydroxide and 40 percent in the price of lithium carbonate used in the 2014 study.

Those numbers are not out of line either. Indeed, some market watchers see prices rising past those levels even faster.

Finally, the feasibility study also considered a more favourable exchange rate for the Canadian dollar, changing to 80 cents to the US dollar versus a rate of 90 cents to the greenback in the 2014 study. Certainly, that contributed to the increase in life of mine revenues for the project, since Nemaska intends to sell its end products in US dollars.

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What’s next?

Looking ahead, Nemaska will aim to finalize its agreement with Johnson Matthey Battery Materials (JBMM), which will include an upfront payment of US$12 million for Nemaska’s Phase 1 plant. The company has already ordered long lead items and partially completed engineering for the Phase 1 plant.

“This project will launch once the JMBM Deal has closed,” Bourassa said. Nemaska is also looking to sign an offtake agreement with JBMM for product from its commercial plant.

“Finally we are looking to secure additional offtake this year with at least one more large end user,” he added. “This should help us secure better terms for our commercial project financing.” Nemaska still needs to raise $549 million to build the Whabouchi mine. It’s anticipating some support from the Quebec government, but the majority of the project financing is expected to come from private capital.

At close of day on Monday, shares of Nemaska were up 15 percent to $0.76. The company has traded within a 52-week range of $0.15 to $0.80 and has a market capitalization of approximately $153 million. Nemaska has gained 72.73 percent year-to-date and 347 percent in the past year.

 

Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article. 

Editorial Disclosure: Nemaska Lithium is a client of the Investing News Network. This article is not paid for content.

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In a recent interview by Epstein Research spoke with Malcolm Bell, newly appointed Technical Advisor with Nevada Energy Metals (TSXV:BFF) (OTC Pink:SSLMF).

As quoted in the press release:

Your extensive experience in natural resources, including sourcing projects & capital, affords you opportunities to serve in advisory roles for many Nevada juniors. Why choose lithium, and why Nevada Energy Metals, Inc.? 

Nevada is an area of strong interest for me. At times it’s been for gold or copper, but now my focus is on lithium and its strategic importance. For months before joining the Technical Board, I was working closely with the Company on identifying and locking down lithium-bearing properties and staking ground. I helped them with the 100% acquisition of Teels Marsh West and with their option agreement on up to 60% of Alkali Lake. I’m very bullish on lithium demand and Nevada’s potential role in supplying it.

Regarding Nevada Energy Metals, I’m excited by the pace, the speed at which things are getting done. In addition to the two transactions mentioned, I helped successfully stake a very promising property in the San Emidio Desert basin. On top of that, the Company is already starting (next week) a phase 1 exploration program on Teels Marsh West.

So, this is a company that wants to advance properties, not just sit on them. Regarding other lithium juniors, I think that I can add the most value here, by spearheading an aggressive property acquisition mandate. The Nevada Energy Metals has a lot of irons in the fire, the next few months should be a very active time for both me and the Company!

You and Nevada Energy Metals are not alone in being bullish on lithium prospects in the State. What about the climate / geology of Nevada fostered the deposition of lithium in brines? 

That’s a great question. Dry desert-like climatic conditions and a favorable geological environment created conditions, over hundreds of thousands of years, that are today prospective for lithium in clays and lithium in brine deposits. There are four main reasons.

Firstly, it’s generally recognized that undrained, or closed desert playa basins are the most prospective locations. Secondly, there should be a history of large-scale volcanic eruptions, contributing large volumes of volcanic ash, containing trace amounts of lithium into the basin. Thirdly, the basin should sit atop, or be in very close proximity to, a geothermal heat source and hot springs.

Can you please explain the initial phase of exploration at Teels Marsh West, and what you hope to accomplish?

Yes, we’re excited to start a surface exploration program on Teels Marsh West next week. The marsh covers roughly 2,000 acres (~810 hectares) in Mineral County. Lithium concentrations at Teels Marsh of up to 850 ppm were reported in sampling programs conducted by the US Geological Survey (OFR: 76-567).

The initial exploration phase consists of 20 shallow holes designed to collect fluid and sediment samples situated nearby a previously discovered thermal area. The area is on, and adjacent to, a range front fault system along the west side of the marsh. Close proximity to a geothermal heat source is believed to be a principal requirement for concentrating lithium in the brines at Clayton Valley.

Finding lithium concentrations is all fine and good, but the parts per million (ppm) are lower than the brines found in Argentina & Chile, why should anyone care about Nevada? 

I’m no expert in lithium fundamentals or pricing, but the only North American producing mine, Silver Peak, is thought to be concentrating brines with initial lithium values of 150ppm to 250ppm. That’s using the decades old technology / process of solar evaporation. Most geologists believe that closed basins in places like Clayton Valley would be able to produce average concentrations of at least 200ppm.

Right, 200ppm is less than South American lithium values, but Nevada is ground zero of several new processing technologies that have potential to be superior to harvesting brines in giant evaporation ponds. To be clear, these technologies are mostly in scale-up phase. Still, most lithium juniors around the world are several years from commercial production, leaving plenty of time for new technologies to catch up.

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NexGen Energy (TSXV:NXE) will drill continuously through spring break-up at its Arrow deposit through to the commencement of summer. The company will also begin construction of an all-season access road to its Rook 1 property, having recently been approved and issued the necessary permit.

As quoted in the press release:

As a result of the winter 2016 program success, the Company has decided to continue its drill program uninterrupted through the shoulder season of mid-April to early-June before the summer 2016 program is scheduled to begin. This shoulder season program will comprise 7,500 m drilled with three diamond drill rigs, that will all be utilizing TECH directional drilling. This program will focus on the 180 m southwest extension of Arrow (see News Releases dated March 15 and 30, 2016) and the infilling the A2 High Grade Domain (which includes the higher grade A2 sub-zone). The budget for this program is $3 million.

Additionally, NexGen is pleased to announce it has been approved and issued a permit by the Saskatchewan Ministry of Environment to construct an all-season access road from Provincial Highway 955 to the Rook I Project, which will span approximately 13 km that will primarily utilize existing trails. This road will support the rapidly developing Arrow Deposit and further optimize exploration and development at the Rook I property, in a highly capital efficient manner. Construction of this access road will commence shortly and scheduled to take approximately two months to complete with a budget of $1.25 million.

NexGen has $34 million cash on hand and is well funded for all planned drilling and development programs well into 2017.

Garrett Ainsworth, Vice-President, Exploration and Development, commented: “The winter 2016 drill program has been exceptionally successful. We are very pleased to continue drilling in between the winter and summer 2016 programs. The ability to drill through Spring break-up at the Arrow Deposit is attributed to its land based location with overburden that has good drainage.”

Leigh Curyer, Chief Executive Officer commented: “The decision to continue drilling uninterrupted is in direct response to the high level of success we have had this winter program with the infill of the A2 High Grade Domain and the newly discovered southwest extension at Arrow. The decision to construct the all weather road to the Project reflects our commitment to exceptionally high standards of operations incorporating safety as our priority. We would like to thank the Saskatchewan Ministry of Environment for their diligent work in processing our permit application for our camp access road as we progress Arrow along its development path.”

Click here for the full press release.

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Denison Mines (TSX:DML) released results of a preliminary economic assessment (PEA) for its 60 percent owned Wheeler River project. Highlights included a base case pre-tax IRR of 20.4 percent at current uranium prices (based on today’s long term contract price for uranium).

As quoted in the press release, highlights of the PEA included:

• Current uranium price: Base case scenario uses today’s long term contract price for uranium of US$44 per pound of U₃O₈, leading to a pre-tax IRR of 20.4% and a pre-tax Net Present Value (“NPV”) of CAD$513M (Denison’s share CAD$308M);
• Exposure to rising uranium price: Strong profitability at today’s price offers lower risk exposure to rising prices, as evidenced by a US$62.60 per pound U₃O₈ production case scenario resulting in a pre-tax IRR of 34.1% and pre-tax NPV of CAD$1,420M (Denison’s share CAD$852M);
• Strategic development plan: Designed to minimize risk, generate higher up-front margins, and reduce initial capital funding requirements – by development of the conventionally mined basement hosted Gryphon deposit first, followed by the unconformity hosted Phoenix deposit;
• Existing infrastructure & reduced risk: Decreased project risk, capex, and schedule by utilizing existing infrastructure in the eastern Athabasca Basin (including excess milling capacity, provincial highways, and the provincial power grid), justifying an 8% discount rate, and leading to an initial project CAPEX of CAD$560M (Denison’s share CAD$336M);
• Cash operating costs: The Gryphon deposit is expected to produce 40.7 million pounds U₃O₈, over a seven year mine life, at a cash operating cost of USD$14.28 per pound U₃O₈. The Phoenix deposit is expected to produce 64.0 million pounds U₃O₈, over a nine year mine life, at a cash operating cost of USD$22.15 per pound U₃O₈;
• Resource upside: Ability to incorporate potential resource growth at the Gryphon deposit, as demonstrated by the high-grade intersections previously reported from the winter 2016 exploration program (not included in the PEA), including drill holes WR-641, with 3.9% eU₃O₈, over 9.2 metres, and WR-633D1, with 1.7% eU₃O₈ over 7.6 metres including 6.3% eU₃O₈ over 1.7 metres (see Denison news release dated March 10, 2016).

Click here for the full press release.

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Nemaska Lithium Inc. (TSXV:NMX,OTCQX:NMKEF) announced the results of an update to its May 2014 Feasibility Study on the Whabouchi Mine and Concentrator to be located in the Eeyou Istchee James Bay territory in Quebec and the Hydromet Plant to be located in Shawinigan, Quebec. The Updated Feasibility Study Shows a Pre-Tax NPV at 8% Discount Rate of $1.9 B (After-Tax $1.16 B) and a Pre-Tax IRR of 37.7% (After-Tax 30.3%)

As quoted in the press release:

The 2016 updated Feasibility Study encompasses a combined open pit and underground mine plan and was prepared by Met-Chem, a division of DRA Americas Inc. (Met-Chem) and Seneca Inc. with contribution from Michel L. Bilodeau, Eng., M. Sc. (App.), Ph.D. for the cash flow model. The previous Mineral Reserve declared as part of the 2014 Feasibility Study with an effective date of May 13th, 2014 has not changed.

The Feasibility Study outlines a combined open pit and underground mine. The open pit mine Proven and Probable Reserves are 20 million tonnes at 1.53% Li2O. The underground mine Proven and Probable Reserves are 7.3 million tonnes at 1.28% Li2O.

The hydromet plant will be located in Shawinigan, QC. This site has been selected for its excellent existing infrastructure and availability of existing buildings. The site is serviced by the CN railway system and a pool of skilled workers and contractors from Shawinigan and the Mauricie area. The hydromet plant will be state of the art and will use Nemaska Lithium’s patented process to convert the spodumene concentrate into the purest lithium hydroxide on the market. Proximity to the Hydro-Quebec network, as the plant will use close to 50 MW once in full operation, and access to the natural gas network were also deciding factors.

Nemaska Lithium President and CEO, Guy Bourassa, stated:

It was necessary to update our Feasibility Study to reflect the change of location of the hydromet plant from Salaberry-de-Valleyfield to Shawinigan, both in the Province of Quebec; and to reflect the optimization of our processes. These improvements will enable Nemaska Lithium to be a low costs producer of lithium hydroxide with a cost per tonne of CDN$2,693 (US$2,154/t); while lithium carbonate will have a cost per tonne of CDN$3,441/t (US$2,753/t). Our new costs of production for lithium hydroxide and lithium carbonate are respectively 22% and 18% lower than our production cost in the 2014 Feasibility Study. We also took into consideration the current trends in the US to Canadian dollar exchange rate, as well as the forecasted prices of lithium compounds to reflect the reality of price increases in the lithium compounds market. The end result is a 106% improvement in the pre-tax NPV (8% discount) base case, going from $924 M in 2014 to $1.9 B and a 49% improvement in the pre-tax IRR increasing to 37.7% from 25.2% in 2014.

Our lithium hydroxide cost is competitive with any supplier of lithium hydroxide today and in the foreseeable future. Our new flow sheet has been designed to optimize the production of lithium hydroxide, while also producing a high purity lithium carbonate (99.99%), as a by-product. Nemaska Lithium’s market penetration and growth strategy is to become an important supplier of lithium hydroxide by offering the highest quality product at competitive prices, while maintaining healthy margins. In tandem, Nemaska plans to grow its target market through converting lithium carbonate users to lithium hydroxide by offering a superior product (lithium hydroxide).

Connect with Nemaska Lithium Inc. (TSXV:NMX,OTCQX:NMKEF) to receive an Investor Presentation.

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Western Uranium Corporation (CSNX:WUC) (OTC PINK:WSTRF) announced a non-brokered private placement on the following terms:

Gross Proceeds:	Approximately $500,000 in Canadian funds.
Offering:	Non-brokered private placement of approximately 295,000 common share units (‘Units’).
Offering Price:	Cdn $1.70 per each common share unit each unit consisting of one (1) common share plus one full common share purchase warrant.
Warrants:	Each full common share purchase warrant shall entitle the holder to purchase one common share at the exercise price of Cdn$2.60 for a term of 5 years from the closing date of the Offering.
Over Allotment Option:	The Company may at its discretion sell additional common share units of up to fifty per cent (50%) of the Gross Proceeds of the Offering.
Prospectus Exemption:	The offering will only be eligible to be purchased by subscribers who are “accredited investors” or who qualify under another exemption from prospectus requirements in the jurisdictions where the Offering is sold.
Statutory Hold:	All shares issued under the Offering will be subject to a 4 month and one (1) day hold period, as well as any other mandatory hold period(s) imposed under applicable laws and regulations.
Use of Proceeds:	The proceeds of the Offering will be used for the costs of completion of the Black Range Minerals Limited transaction, the further development, permitting and licensing of the Ablation Technology, the costs of the OTCQX listing, mine planning and preparation, the additional hiring of specialized personnel, and for working capital purposes.
Finders’ Fee:	A 5% finder s’ fee in cash or Units may be paid to qualified persons at the discretion of the Company.
Closing Date:	On or about April 8, 2016.

Connect with Western Uranium Corporation (CSNX:WUC) (OTC PINK:WSTRF) to receive an Investor Presentation.

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Lithium Australia NL (ASX:LIT) announced the grant to the Company of Mineral Exploration Licence 30897 in the Bynoe Pegmatite Field in the Northern Territory, Australia.

As quoted in the press release:

Lithium Australia’s Bynoe Project is located 50 kilometres south-southwest of Darwin, capital of the Northern Territory, close to infrastructure (see Figure 1). Despite the favourable location, exploration in the area, until recently, has been restricted and of narrow focus with little work undertaken on lithium. The latest exploration has targeted spodumene (a lithium silicate) and lithium micas and activity levels rival that of similar pegmatite fields such as Pilgangoora in Western Australia.

Figure 1: Location of LIT’s Bynoe Lithium Project.

The Bynoe Project lies within the Bynoe Pegmatite Field, the latter being the main part of the larger Litchfield Pegmatite Belt. Located along the western margin of the Pine Creek Orogen – which is of Palaeoproterozoic age – the Litchfield Pegmatite Belt is almost 200 kilometres long and has been intruded by a suite of highly differentiated ‘S-type’ granites, believed to be the source of the pegmatites. Pegmatites abound (there are more than 100 in the Bynoe Pegmatite Field alone) and many have been exploited, in the past, for their tin and tantalum mineralisation.

Connect with Lithium Australia NL (ASX:LIT)  to receive an Investor Kit.

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Oakridge Global Energy Solutions (OTCMKTS:OGES) announced the very successful completion of the first quarter of 2016 with the company now in commercial production of its game-changing lithium-ion battery products.  In continuing with the many successes previously announced Oakridge had its highest quarterly revenues in the history of the company by closing out the first quarter 2016 with $263,427 in revenues.

As quoted in the press release:

During what will clearly be seen as one of the most significant quarters in company history to date, Oakridge was able to continue to build momentum off its previously announced successes by generating the company’s first commercial revenues.

Other previously announced milestones for the first quarter, 2016, were the successful launch of production operations; the signing of a Strategic Business Alliance Agreement with the major global Japanese company, Sojitz Machinery Corporation; the production release of the Liberty Series motorsports starter battery; the first regular commercial production shipments of the Pro Series golf car battery; the strategic business alliance with Maritime Tactical Systems, Inc.; and the  start-up of second shift production operations at the Company’s new Palm Bay, Florida, manufacturing facility.

Each of these events is further demonstration of the successful business that has been created by the major restructuring process that the company undertook during the previous 18 months.

In mid-March Oakridge was able to provide the first revenue guidance in the company’s history to the markets.  This will become a trend as the company will now regularly provide revenue guidance for each quarter, as the company continues to build commercial production momentum throughout the remainder of the year by virtue of its offering customer focused, market leading products and service on a global scale.

Oakridge also looks to begin production shipments on its powerful Freedom IV series of living space power products in Q2 as well as continue product development and refinements in its  Pro Series, Liberty Series and Patriot Series of Golf Car, Power Sports, and Unmanned Vehicle battery product ranges..

Oakridge Executive Chairman and CEO, Steve Barber, stated:

This is a very exciting time to be part of Oakridge. We have, for the first time in company history (which dates back to the 1980’s), generated significant commercial revenues in Q1, 2016, and in doing so have exceeded our guidance of $250,000 in expected Q1 revenues.  We have an amazing team and an amazing product line.  Our team really pulled it all together in the first quarter and we are very proud of them.  We have passed the turning point after our lengthy restructure and transition of the company from an R&D company to a fully-fledged commercial production and manufacturing business and are looking forward to a very successful year in 2016.

Connect with Oakridge Global Energy Solutions (OTCMKTS:OGES) to receive an Investor Kit.

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Tesla Motors (NASDAQ:TSLA) unveiled its Model 3 sedan last week, and as expected the latest creation from the electric vehicle maker is getting plenty of attention.

Pre-orders for the car hit nearly 200,000 in a little over 24 hours (potential customers must pay $1,000 to reserve a vehicle). That’s making things look pretty good in terms of Elon Musk’s dream of bringing electric vehicle transport to the masses.

“It’s very important to accelerate the transition to sustainable transport,” Musk said at Thursday night’s unveiling. “This is really important for the future of the world.”

The roomy sedan features a range of over 200 miles, all-wheel drive and a price point of $35,000 before government incentives. Tesla expects to begin production for the Model 3 in late 2017, ultimately ramping up production to 500,000 vehicles per year.

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All of that might have some lithium investors wondering what the Model 3 means for the critical metals market. Of course, all of those vehicles are going to need lithium-ion batteries, which will be made at the lithium-ion battery gigafactory that critical metals investors have been so excited about.

The Investing News Network reached out to Simon Moores of Benchmark Mineral Intelligence on Friday to ask about what all of the fuss over the Model 3 means for the lithium market and lithium investors. While Tesla is certainly far from the only player in terms of lithium demand (several other companies are planning lithium-ion battery megafactories of their own), Moores stated that pre-orders for the Model 3 could still impact lithium hydroxide demand.

Here’s more of what he had to say.

INN: Were you expecting this much excitement over the Model 3?

SM: I actually thought there was more build up to the Powerwall, but maybe that’s just from my London perspective.

It makes sense that this car is hyped and there is a buzz — this is the world’s most important electric car to date. No question.

I expect the Model 3 to be the true successor to the Toyota Prius.

INN: What could all of this excitement over the Model 3 mean for lithium demand?

SM: With pre-orders at nearly 200,000 in 24 hours, it could do a lot for lithium demand.

The question is all about the batteries now for Tesla. They need to learn how to build low-cost lithium-ion batteries at scale. So getting the gigafactory up and running and securing the supply of lithium, graphite and cobalt is crucial.

Demand is no longer an issue in this market. Raw material supply security is now the critical factor.

INN: At the same time, in light of other megafactory projects coming online, how much of a difference will demand for the Model 3 really make for in terms of global lithium demand?

SM: At the moment, the pre-orders will increase demand for lithium hydroxide by 20 to 30 percent. That’s pretty significant considering this is just one product.

The numbers are still rising as well. Tesla has always believed they will need more than one gigafactory in near future. That belief appears to be founded. Now it’s a question of execution for the company — they need to deliver.

INN: What do you think this excitement over the Model 3 says about interest in the electric vehicle space overall?

SM: It shows that full electric vehicles are here to stay.

It’s important to note that the costs and performance specs that Tesla outlined are the worst-case scenario.

When customers start receiving their Model 3 orders — most of which will be fulfilled in 2018 — the batteries will be better and cheaper.

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Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article. 

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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Last week, the S&P/TSX Venture Composite index (INDEXTSI:JX) closed fairly flat at 581.41 points, up 0.33 points. 

The top gainer on the exchange was Rock Tech Lithium (TSXV:RCK), and it was followed by Azimut Exploration (TSXV:AZM) and Northern Graphite (TSXV:NGC). The fourth- and fifth-places spots on this week’s list are a toss up as Cypress Development (TSXV:CYP), Uragold Bay Resources (TSXV:UBR), American Creek Resources (TSXV:AMK) and Gold Bullion Development (TSXV:GBB) all gained the same amount.

Rock Tech Lithium

As mentioned, last week’s biggest gainer on the TSXV was Rock Tech Lithium. The company, which holds the Georgia Lake lithium project in Ontario, saw its share price gain 65.22 percent to end at $0.19. During the period, Rock Tech announced that its shares have been listed on the Frankfurt Stock Exchange under the symbol RJIB.

Who Might Be Tesla’s Graphite Supplier?   Get the professionals’ forecasts for graphite in this exclusive report:  Graphite Mining in the US: Best Graphite Stocks

Azimut Exploration

Just behind Rock Tech, Azimut Exploration gained 65 percent last week to end at $0.33. The increase came after the company said that it’s identified a “highly prospective gold target” at the Quebec-based Eleonore South property, which is a joint venture between Azimut, Goldcorp (TSX:G,NYSE:GG) subsidiary Les Mines Opinaca and Eastmain Resources (TSX:ER). The target was identified after public data was reanalyzed.

Northern Graphite

Northern Graphite’s share price rose a more modest — but still impressive — 35.9 percent last week to reach $0.53. The company holds the Ontario-based Bissett Creek deposit, and last week announced plans to partner with five other graphite companies on spherical graphite development. More specifically, the companies will jointly acquire a micronizing and spheronizing mill to produce spherical graphite.

Other gainers

As mentioned, a slew of other companies all gained the same amount (33.33 percent) last week, tying for the fourth and fifth places on this list. Here’s a very brief overview of those companies and what happened to them last week.

Cypress Development’s share price ended last week at $0.08. During the period, the zinc- and lithium-focused company closed a non-brokered private placement of 6 million units priced at $0.05 each. Net proceeds came to $300,000.

Uragold Bay Resources, which is focused on high-purity quartz and gold exploration, closed at $0.16 last week. Its gain came after it announced that it’s started testing its process to convert high-purity quartz to solar-grade silicon metal.

American Creek Resources holds gold and silver projects in British Columbia, and last week its share price ended at $0.06. Its share price increased after it acquired the Silvershot silver property.

Finally, Gold Bullion Development’s share price closed last week at $0.10. The company is focused on its Granada gold property in Quebec, and like Cypress Development, last week closed a private placement. It raised gross proceeds of $920,137.15.

 

Data for 5 Top TSXV Stocks articles is retrieved each Friday after market close using The Globe and Mail’s market data filter. Only companies with a market capitalization greater than $10 million prior to the week’s gains are included. Companies within the mining and precious metals sectors are considered.

Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.

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5 Top TSXV Stocks: Rusoro Mining Gains 40 Percent

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Last week, Galaxy Resources (ASX:GXY) received notice from its partner, General Mining (ASX:GMM), that mining operations have commenced at the Mt Cattlin hard-rock lithium mine in Western Australia.

As per the company’s release, an initial five-week program will recover and stockpile spodumene and tantalum concentrates. Crusher and coarse-circuit commissioning is expected to take place during the June quarter, with the company working through a three-month ramp up to a base-case throughput rate of 800,000 tonnes per year.

The project is fully funded through this optimization phase via offtake payments. At the start of March, Galaxy announced a $36-million spodumene concentrate offtake agreement with two Chinese buyers, to be settled through Mitsubishi (TSE:8058).

Certainly, the milestone is an important one for Galaxy. Mt Cattlin was put on care and maintenance in 2012, but the company signed an agreement with General Mining last September to bring the mine back online by Q1 2016.

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“The recommencement of production at Mt Cattlin represents another major achievement by General Mining in not only meeting its obligations to Galaxy Resources, but also in becoming a reliable, independent and growing supplier of spodumene concentrate to the global lithium market,” said General Mining Executive Chairman Michael Fotios in a statement.

“The Project team has delivered against a very tight commissioning timeline in order to take advantage of market demand, and I’m confident in our ability to continue to meet our ramp up schedule over the coming months,” he added.

General Mining has an option to earn a 50-percent interest in the Mt Cattlin project. The company provided the capital for the restart and ramp up of operations at Mt Cattlin.

First delivery of concentrates to the company’s Chinese customers is expected to take place in July or August.

Shares of Galaxy were trading at $0.255 on Friday. The company’s share price is up 37 percent in the past month and 121 percent so far in 2016. General Mining is up 49 percent so far in 2016 at $0.38 per share.

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Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: Galaxy Resources is a client of the Investing News Network. This article is not paid-for content.

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North Korea is still pursuing nuclear programs, defying the United States and its allies. South Korea’s Joint Chief’s of Staff told CBS News that North Korea had fired a short-range missile into the sea on Friday, and that the nation stated it would continue advancing its nuclear program.

According to Reuters, the country conducted its fourth nuclear test in January, and fired a long-range rocket the in February.

“If the United States continues (drills with the South), then we have to make the countermeasures also, as I told you. So, we have to develop and we have to make more deterrence, nuclear deterrence,” North Korea UN Ambassador to the United Nations, So Se Pyong, told the news agency.

News of the latest rocket launch came as a nuclear security summit took place in Washington on April 1st. US President Barack Obama has said that the country will up its focus on preventing nuclear materials.

As per another Reuters article, “much of the world’s plutonium and enriched uranium remains vulnerable to theft.” The United States and Japan recently successfully removed all highly enriched uranium and separated plutonium fuels from a Japanese research reactor.

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Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.

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Oil prices fell roughly 4 percent on Friday, Reuters reported, on the back of reports that Saudi Arabia would not freeze production levels.

As quoted in the publication:

Brent crude for June delivery fell $1.55, or 3.8 percent, to $38.78 a barrel by 12:13 p.m. ET (1613 GMT). Brent rose 6 percent in the first quarter of this year, its first such increase since a 15 percent rally in the second quarter of 2015.

U.S. crude fell $1.38, or 3.6 percent, to $36.96 a barrel after settling up 2 cents on Thursday. Prices rose almost 4 percent over January-March, also the first quarterly gain since surging nearly 25 percent in the second quarter of last year.

Click here for the full article.

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Rigzone reported that BP (NYSE:BP) has signed a production sharing contract for shale gas exploration and production with China National Petroleum Corporation (CNPC).

As quoted in the article:

The contract will cover an area of approximately 1,500 square kilometers and positions CNPC as the operator of the project. This PSC is the first achievement from BP and CNPC’s framework agreement on strategic cooperation that was signed last October during the President of The People’s Republic of China, Xi Jinping’s, visit to the UK. In addition to unconventional resources, the framework agreement covers possible future fuel retailing ventures in China, exploration of oil and LNG trading opportunities globally, and carbon emissions trading, as well as sharing of knowledge around low carbon energy and management practices.

Click here for the full article.

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The first quarter of 2016 is now over, and it’s fair to say that for gold it was a good one. The yellow metal rose an impressive 16.5 percent during the period, achieving its biggest quarterly gain since 1986. 

Major gold stocks have also achieved notable gains so far in 2016. According to The Wall Street Journal, Newmont Mining’s (NYSE:NEM) share price was up 48 percent for the year as of Friday; meanwhile, Randgold Resources (LSE:RRS,NASDAQ:GOLD) has gained 54 percent and Barrick Gold (TSX:ABX,NYSE:ABX) has risen a whopping 72 percent.

A slew of factors have driven gold up these past few months. The Journal notes that the precious metal saw a good boost in the first six weeks of 2016, “when stocks, junk bonds and oil prices slumped, began to recover and then tumbled again.” However, even though a variety of stock indices gained at the end of Q1, overall concern about world markets has kept the gold price up.

Updated December 2015 Get Our Expert Guide to Copper Investing FREE! Download this FREE Special Report, From LME Copper to Copper ETFs: Understanding Today’s Copper Price for Investing in Copper.

“People are reluctant to take profits on their gold positions because of all the insecurity the world is facing,” George Gero, managing director at RBC Wealth Management, explained to the publication. As of 1:45 p.m. EST on Friday, gold was changing hands at $1,220.90 per ounce.

For its part, silver rose just under 10 percent during Q1, and was trading at $15 per ounce as of 2:18 p.m. EST on Friday. Check out our more detailed overview of silver’s Q1 price performance in this article.

On the base metals side, the copper price ended the first quarter up a more modest 4.63 percent. And unfortunately, a recent price dip has some market watchers worried that even that small increase may not be sustainable.

“Investors have been attracted to commodities as one of the best performing assets so far in 2016. However, in the absence of any concerted fundamental improvements, those returns are unlikely to be repeated in the second quarter, making commodities vulnerable to a wave of investor liquidation,” Barclays (LSE:BARC) analyst Kevin Norrish warned earlier this week.

Finally, oil prices fell Friday on news that output from OPEC countries rose by 64,000 barrels a day in March, hitting 33.09 million barrels a day. Notably, production from Iraq and Iran was the highest in four years, states CBC News.

As a result, West Texas Intermediate was down $1.55, or 4 percent, at $36.78 per barrel, midway through Friday. Meanwhile, Brent crude was down $1.56 at $38.78.

 

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. 

Related reading: 

Weekly Round-Up: Gold Price Dampened by Fed Worries

Weekly Round-Up: Silver Outperforming Gold

Weekly Round-Up: 13-month High for Gold Price

Weekly Round-Up: Gold Enters Bull Market Territory

Weekly Round-Up: Buy Gold Now, Says Deutsche Bank

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Tesla (NASDAQ:TSLA) fans got an extra surprise with the unveiling of the company’s Model 3 last night. The new vehicle will be shaped like a Batmobile, and yes, it will still cost about $35,000.

“We’re all about taking risks,” said Tesla CEO Elon Musk at Thursday night’s reveal. “The Model S was pretty cool, but with the Model 3, we’re hoping to take it to a whole new level.”

Analysts were concerned that consumers expecting a roomy sedan would be disappointed. The car was meant to be a spacious, affordable electric vehicle that would appeal to a broader market.

However, it appears that market watchers have underestimated just how “cool” consumers want their cars to be. Preorders for the Batmobile Model 3 passed the 150,000 mark on Thursday night, Potential Model 3 buyers must put down $1,000 to reserve a car.

“I was excited before, but now that I’m getting an electric Batmobile, I’m just over the moon,” said one potential Tesla buyer. “What’s better than helping the environment in style?”

The new Tesla Model 3 comes only in black.

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Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article. 

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Galaxy Resources Limited (ASX:GXY) announced it has received a Production Notice from General Mining Corporation Ltd (ASX:GMM) in accordance with the obligations in the Acquisition and Development Agreement on the Mt Cattlin Project. Mining and processing operations have now formally commenced.

As quoted in the press release:

Production has commenced, with both mining and processing operations having started up. An initial 5-week program will sequentially recover and stockpile spodumene and tantalum concentrates from the fines circuit ahead of crusher and HMS circuit (coarse circuit) commissioning in the June quarter.

Given the quantities of ore already mined and available for processing, the immediate focus at restart through to May 2016, is on the processing circuit. This work shall include progressive commissioning of the primary and secondary feed preparation circuits, thickener, fine and course circuit screens, mica removal screens, the tantalum spirals and tables, as well as the fines reflux classifiers and filter belt.

Mining of blasted ore in the Dowling Pit has also commenced and this ore will be stockpiled for processing in the June quarter. Recovery of fines material from the TSF for processing in the fines circuit is scheduled to begin during the quarter. Initial plant feed will be sourced from the existing crushed fine ore stockpile adjacent to the plant.

Regular operational updates will be provided to the market as the Mt Cattlin processing facility works through its 3-month ramp up to a base case throughput rate of 800ktpa by the end of June 2016. A second optimization phase will continue through the second half of the year to improve yields to a targeted 70-75%, based off the ongoing 800ktpa throughput rate. Funding for the capital expenditure required for this optimization phase and all working capital requirements from the commencement of production onwards, will be covered by pre payments to be paid by offtakers.

Connect with Galaxy Resources Limited (ASX:GXY)  to receive an Investor Presentation.

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NexGen Energy Ltd. (TSXV:NXE,OTCQX:NXGEF) released results from eight angled holes completed as part of an ongoing winter drill program at its Athabasca Basin-based Rook I project.

Highlights include:

Southwest Extension:

• AR-16-77c2 (180 m southwest step-out) intersected 109.5 m of total composite mineralization including 2.3 m of total composite off-scale radioactivity (>10,000 – 50,000 cps) within a 163.5 m section (615.5 to 779.0 m).

A2 Shear:

• AR-16-76c3 (58 m up-dip and southwest from AR-15-44b) intersected 67.5 m of total composite mineralization including24.35 m of total composite off-scale radioactivity (10,000 – >61,000 cps) within a 124.5 m section (470.5 to 595.0 m) in the Sub-Zone.
• AR-16-76c4 (81 m down-dip and southwest of AR-15-44b) intersected 105.7 m of total composite mineralization including20.85 m of total composite off-scale radioactivity (10,000 – >61,000 cps) within 171.5 m section (494.0 to 665.5 m) in the Sub-Zone.

Garrett Ainsworth, vice president, exploration and development, at NexGen, commented:

Hole AR-16-77c2 has intersected significant mineralization and alteration located 180 m southwest from the current Arrow resource model extent.  The frequency and intensity of dravite breccias that we have observed in hole -77c2 are akin to what we see proximal to the higher grade A2 sub-zone, so undoubtedly we are excited to continue drilling wide spaced step-outs in this area of high potential for another high grade sub-zone.

Click here to read the full NexGen Energy Ltd. (TSXV:NXE,OTCQX:NXGEF) press release.

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In its 2015 financial and operational results, Uranium One (TSX:UUU) reported adjusted net earnings of $41.1 million, compared to adjusted net losses of $57.4 million in 2014.

As quoted in the press release:

2015 Highlights

Operational

• The average total cash cost per pound sold of produced material was $11.4 per pound during 2015 compared to $14.0 per pound during 2014.
• Total attributable production during 2015 was 12.5 million pounds compared to 10.4 million pounds in 2014. The Corporation did not recognize production from the Akdala, South Inkai and Kharasan mines, due to the loss of subsoil rights to produce uranium at those mines, from June 4, 2014 to October 17, 2014. The Corporation’s attributable production would have been 12.6 million pounds for 2014 if these rights had not been lost.

Financial

• Attributable sales volumes of produced material for 2015 were 12.3 million pounds sold from the Corporation’s operations and joint ventures, compared to 10.8 million pounds sold during 2014. Similarly, sales volume of produced material during 2014 was impacted by the temporary loss of the subsoil use rights for the Akdala, South Inkai and Kharasan mines.
• Headline revenues were $324.7million in 2015, compared to $260.9 million in 2014.
• Attributable revenues consistent with the Corporation’s segment reporting, which includes revenues from interests in joint ventures, amounted to $541.2 million in 2015, compared to $476.2 million in 2014.
• The average realized sales price of produced material as well as the average spot price during 2015 was higher at $36 per pound and $37 per pound respectively, compared to $33 per pound in 2014.
• Gross profit was $4.4 million during 2015, compared to gross loss of $11.4 million in 2014.

Click here for the full press release.

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Lithium Australia NL (ASX:LIT) announced the discovery of several additional lithium pegmatites at the Ravensthorpe Lithium Project. It is now established that there are at least 12 lithium pegmatites present and the potential economic significance of the project has increased substantially.

As quoted in the press release:

The Ravensthorpe project area contains the Cocanarup Lithium Pegmatites, located only a few kilometres to the south-west of the Mt Cattlin lithium mine (Figure 1) operated by Galaxy Resources Limited (ASX:GXY) and General Mining Corporation Limited (ASX:GMM).

 

Figure 1: Ravensthorpe Lithium Project, including prospect locations.

The project is well supported by established transport routes, nearby infrastructure and services at Ravensthorpe. The large, deep water port of Esperance is 185km east of Ravensthorpe.

Previous fieldwork led to definition of an exploration target* at the “Horseshoe prospect” of 900,000 tonnes of lithium mineralisation at a minimum grade of 1% Li₂O (with a size range from 525,00t to 1,281,000t and grade range of 0.8% – 1.2%).

*Exploration Target: The potential quantities and grades are conceptual in nature and there has been insufficient exploration to-date to define a Mineral Resource. It is not certain that further exploration will result in the determination of a Mineral Resource under the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, the JORC Code” (JORC 2012). The Exploration Target is not being reported as part of any Mineral Resource or Ore Reserve.

Connect with Lithium Australia NL (ASX:LIT) to receive an Investor Presentation.

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Avalon Advanced Materials Inc. (TSX:AVL,OTCQX:AVLNF) (formerly Avalon Rare Metals Inc.) announced that it has placed among Corporate Knights’ 2016 Future 40 Responsible Corporate Leaders in Canada, from a shortlist of 107 eligible small and mid-cap organizations. This is the second consecutive year Avalon has ranked as a Future Responsible Corporate Leader.

Corporate Knights is an award-winning magazine and website that reports on sustainability and corporate social responsibility for a wide readership across Canada and in the US. The methodology for the 2016 Future 40 Responsible Corporate Leaders in Canada ranking is based on 12 key performance indicators covering resource, employee and financial management. All information is derived from publicly-disclosed data. The full methodology for this year’s ranking is available from Corporate Knights here.

The full ranking can be viewed in Corporate Knights’ 2016 spring edition, released on March 30, 2016.

Connect with Avalon Advanced Materials Inc. (TSX:AVL,OTCQX:AVLNF) to receive an Investor Presentation.

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American Manganese Inc. (TSXV:AMY) announced the Company has submitted applications for government scientific research grants both in the United States and Canada to extend its patented technology for producing electrolytic products from low grade manganese resources located in the US Southwest by proof of concept testing for recycling and for upcycling lithium ion electric vehicle (EV) batteries.

As quoted in the press release:

Currently the lithium demand for electric vehicle battery cathode materials is outstripping available supply.  The price of the lithium carbonate feedstock in North America is currently about US $6400/tonne.  Recently reported Chinese spot prices have been up to triple this amount.

Successful application of the AMI Patented Process could result in the following benefits:

• Reducing the demand for new cathode materials, notably lithium and cobalt.
• Providing a source of lower cost recycled/upcycled cathode materials, potentially generating higher profit margins for battery manufacturers.
• Improving battery safety, as hydrometallurgical processing eliminates product crushing and grinding potentially lowering processing costs, while generating products with less extraneous metal contamination thereby lowering the chances of battery explosions or fires due to thermal run-away.

The AMI process offers other potential advantages:

• A hydrometallurgical process that is easily scalable.
• The potential to recycle all lithium and base metal matrix compounds.
• A process applicable to multiple lithium ion battery chemistries including Lithium Cobalt (LiCoO2), Lithium Aluminum Cobalt, Lithium Nickel Manganese Cobalt (LiNixMnyCozO2), and Lithium Manganese (LiMn2O4).
• The ability to tailor treatment processes to precipitate cathode materials with tailored structures and chemistries for improved battery performance.

Subject to securing adequate funding, the Company intends to partner with Kemetco Research Inc. to demonstrate on a bench scale that the conceptual process can successfully treat spent lithium ion battery cathode materials, producing rejuvenated materials suitable for re-use in new lithium ion batteries.  The proposed testing program would be carried out at Kemetco Research Inc.’s laboratory located in Richmond, BC.

 

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Uranium prices have been lagging of late, with the latest U3O8 spot price registering on UxC at $29.15. But just because market activity is flat, doesn’t mean that countries have given up on their nuclear power ambitions. 

This week, Australian is set to approve the sale of uranium to the Ukraine, under an agreement to be signed ahead of a nuclear security summit led by US President Barack Obama being held in Washington from March 30 to April 2. Australia’s Foreign Minister Julie Bishop has said that the uranium will be used for nuclear power generation.

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Uranium market watchers are no doubt aware that Australia does not have its own nuclear industry. However, the country is one of the top uranium producing nations in the world with 31 percent of the world’s total uranium. As all of Australia’s uranium is exported, the country has steadily been increasing the number of countries cleared to buy its supply for peaceful purposes.

Other countries that have already been cleared for Australia to sell uranium to include Canada, China, France, India, Japan, South Korea, Russia, Britain and the United States. Also of note is that Australia is ranked first according to the Global Review Initiative on reducing Nuclear Threat Initiative.

For Australia, Minerals Council of Australia spokesperson, Daniel Zavattiero commented that “Access to growing Ukrainian uranium demand creates opportunities for more tonnes, more exports, and more jobs in mine construction and operations.”

Uranium and the Ukraine

As far as the Ukraine is concerned, Interfax writes that “[t]he annual needs of Ukrainian nuclear power plants for uranium concentrate are about 2,400 tonnes, while its internal production by state enterprise VostGOK in 2015 is planned in the amount of 1,200 tonnes.”

The Ukraine is heavily dependent on nuclear energy, with 15 nuclear reactors generating roughly half of its electricity. The Straits Times reported that according to a joint report from the OECD Nuclear Energy Agency and The International Atomic Energy Agency, the Ukraine is on track to almost double its nuclear power generation capabilities by 2035.

According to the World Nuclear Association, the country receives a significant amount of its nuclear fuel and fuel services from Russia, however, has been reducing its dependence by instead purchasing fuel from Westinghouse.

Furthermore, earlier in the week, Russia’s news agency, TASS, announced that the International Uranium Enrichment Center plans to conclude a contract with Ukrainian partners for the supply of uranium from Ukraine to Russia. However, “the terms of the contract for 2016 for the supply of raw uranium from the Ukraine for its further enrichment at the facilities of IUEC and fuel farbication for the needs of Ukrainian NPPs at the facilities of TVEL company have been completed.”

“Ukraine sends its uranium to Russia for enrichment and the subsequent production of nuclear fuel for its nuclear power plants. The main supplier of fuel for Ukrainian nuclear power plant is Russian TVEL Fuel Company,” TASS writes.

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Securities Disclosure: I, Vivien Diniz, hold no investment interest in any of the companies mentioned. 

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Alix Resources Corp. (TSXV:AIX) announced it is increasing the non-brokered private placement announced on Feb. 10, 2016, from four million units to 10 million units at a price of five cents per unit for total gross proceeds of $500,000.

Proceeds from the offering will be used for general working capital and to advance the company’s lithium concessions located in Sonora, Mexico.

 

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TORONTO, ONTARIO–(Marketwired – March 30, 2016) – Denison Mines Corp. (TSX:DML)(NYSE MKT:DNN) (“Denison”) is pleased to announce the execution of a Definitive Share Purchase Agreement (the “Agreement”) with GoviEx Uranium Inc. (CSE:GXU) (“GoviEx”) to combine their respective African uranium mineral interests (the “Transaction”) to create the leading African-focused uranium development company.

Under the terms of the Transaction, GoviEx will acquire Denison’s wholly owned subsidiary, Rockgate Capital Corp., which holds all of Denison’s African-based uranium interests (collectively “DML Africa”) in exchange for approximately 56.1 million shares of GoviEx (the “Consideration Shares”) plus approximately 22.4 million common share purchase warrants of GoviEx (the “Consideration Warrants”). Upon completion of the Transaction, Denison will hold 25% of GoviEx shares outstanding and 28% of GoviEx shares on a fully diluted basis.

The asset portfolio of the combined company will include two permitted uranium development projects – including GoviEx’s Madaouela project in Niger and Denison’s Mutanga project in Zambia. It will also include Denison’s Falea project, an advanced exploration-stage asset project in Mali, and the exploration-stage Dome project in Namibia. Following completion of the Transaction, GoviEx will control one of the largest uranium resource bases among publicly listed companies, with combined Measured & Indicated resources of 124.29 Mlbs U₃O₈, plus Inferred resources of 73.11 Mlbs U₃O₈.

David Cates, President and Chief Executive Officer of Denison, commented: “This transaction will provide Denison shareholders with significant exposure to the Madaouela project, one of the world’s most advanced uranium development assets, while finding an excellent home for our own uranium projects in Africa. This transaction completes Denison’s transition to fully focus on becoming an Athabasca Basin uranium producer.”

Govind Friedland, Founder and Executive Chairman of GoviEx, commented: “We welcome the opportunity to join forces with mining industry leader Lukas Lundin, and his team at Denison, to combine Africa’s leading uranium assets into one consolidated vehicle. This Transaction is a win-win as it provides GoviEx with geographical diversification and allows Denison to focus on its core assets in Canada, while enhancing its upside exposure to our combined Africa assets.”

Benefits to Denison Shareholders

• Ownership in GoviEx’s Madaouela project, one of the few permitted, near-term uranium development projects in the world.

• Ability to maintain exposure to the assets of DML Africa through its ownership stake in GoviEx.

• Enhanced optionality to the uranium price through the significant ownership of share purchase warrants in GoviEx.

• Renewed focus for Denison on its principal assets in the Athabasca Basin of Saskatchewan.

• Board representation within GoviEx.

Benefits to GoviEx Shareholders

• Creation of a growth-focused African uranium company with a robust project development pipeline and increased jurisdictional diversification, with assets in Niger, Zambia, Mali, and Namibia.

• One of the largest combined uranium resource bases, estimated in accordance with NI 43-101, amongst its peer group with combined Measured resources of 28.59 Mlbs U₃O₈, Indicated resources of 95.70 Mlbs U₃O₈, and Inferred resources of 73.11 Mlbs U₃O₈.

• Considerable exploration potential to further increase mineral resources, with several drill-ready targets defined at each property.

• Mining permits approved or granted in Niger and Zambia, both recognized mining countries with good infrastructure and mining history.

• Significant metallurgical testwork and engineering studies already completed on its three principal development assets, providing GoviEx with an opportunity to continue with optimization work.

• Strong shareholder base, including Denison, Ivanhoe Industries, Toshiba Corporation and Cameco Corporation.

Transaction Details

Pursuant to the terms of the Agreement, GoviEx will acquire DML Africa from Denison in exchange for 56,050,450 Consideration Shares and 22,420,180 Consideration Warrants, being four-tenths of a Consideration Warrant for each Consideration Share to be issued. Each such Consideration Warrant will be convertible into one common share of GoviEx at a price of US$0.15 per share for a period of three years. The Consideration Warrants will include an acceleration clause which will provide that, in the event that the closing price of GoviEx’s common shares on the Canadian Securities Exchange (“CSE”) is equal to or greater than C$0.24 per share for a period of 15 consecutive trading days, GoviEx may provide holders of the Consideration Warrants with written notice that holders have 30 days within which to exercise the Consideration Warrants on the original terms, failing which the exercise price of the Consideration Warrants will be increased to US$0.18 per share and the term of the Consideration Warrants will be reduced by six months.

At the time of closing the Transaction, Denison will ensure that DML Africa is capitalized with a minimum working capital of US$700,000, which is equivalent to the forecasted annual budget for the assets of DML Africa.

For so long as Denison holds at least 5% of the issued and outstanding common shares of GoviEx, Denison will have the right to appoint one director to the GoviEx board of directors and will have the right participate in future GoviEx equity financings in order to maintain its pro-rata ownership.

Concurrent Financing

As part of the Transaction, GoviEx will undertake a concurrent equity financing by means of a non-brokered private placement (the “Placement”) to raise gross proceeds of not less than US$2,000,000, of which Denison will provide the lead order for 25% up to a maximum of US$500,000. The Placement is expected to be completed prior to, or concurrently with, the closing of the Transaction (“Closing”) and is a condition of Closing.

Expected Closing

The Transaction is expected to close on or about May 17, 2016, subject to the receipt of required consents and approvals, as well as the satisfaction of other conditions customary for a transaction of this nature.

Haywood Securities Inc. is acting as Denison’s financial advisor.

Raymond James Ltd. is acting as GoviEx’s financial advisor.

Further Information on Mineral Resources

Following completion of the Transaction, GoviEx will control one of the largest undeveloped uranium resource bases among publicly listed companies, as summarized below:

Measured Mineral Resource Estimates ⁽¹⁾⁽²⁾

Project/Deposit	Tonnes (Mt)	Grade (kg/t eU3O8 or U3O8)	Contained Metal (Mlb eU3O8 or U3O8)
Madaouela(3) – Marianne/Marilyn	2.14	1.79	8.45
Madaouela(3) – Miriam	7.26	1.13	18.14
Mutanga – Mutanga(4)	1.88	0.48	2.00
Total Measured	11.28	1.15	28.59

Indicated Mineral Resource Estimates ⁽¹⁾⁽²⁾

Project/Deposit	Tonnes (Mt)	Grade (kg/t eU3O8 or U3O8)	Contained Metal (Mlb eU3O8 or U3O8)
Madaouela(3) – Marianne/Marilyn	14.72	1.43	46.30
Madaouela(3) – Miriam	1.95	0.80	3.48
Madaouela(3) – MSNE	5.05	1.61	17.88
Madaouela(3) – Maryvonne	1.23	1.79	4.84
Mutanga – Mutanga(4)	8.40	0.31	5.80
Falea(5)(6)	6.88	1.15	17.40
Total Indicated	38.23	1.14	95.70

Inferred Mineral Resource Estimates ⁽¹⁾⁽²⁾

Project/Deposit	Tonnes (Mt)	Grade (kg/t eU3O8 or U3O8)	Contained Metal (Mlb eU3O8 or U3O8)
Madaouela(3) – Marianne/Marilyn	5.04	1.17	13.02
Madaouela(3) – Miriam	0.21	1.26	0.57
Madaouela(3) – MSNE	0.10	1.34	0.29
Madaouela(3) – Maryvonne	0.42	1.66	1.55
Madaouela(3) – MSCE	0.72	1.81	2.88
Mutanga – Mutanga(4)	7.20	0.21	3.30
Mutanga – Dibwe(4)	17.00	0.23	9.00
Mutanga – Dibwe East(4)	39.80	0.32	28.20
Mutanga – Mutanga Ext(4)	0.50	0.34	0.40
Mutanga – Mutanga East(4)	0.20	0.32	0.10
Mutanga – Mutanga West(4)	0.50	0.34	0.40
Falea(5)(6)	8.78	0.69	13.40
Total Inferred	80.47	0.41	73.11

Notes:
(1)	Mineral resources are not mineral reserves and do not have demonstrated economic viability. CIM definitions were followed for classification of mineral resources.
(2)	The mineral resources were estimated at various cut-off grades, as follows:
	i.	Madaouela: 0.4 kg/t eU
	ii.	Mutanga: 0.1 kg/t U3O8, Dibwe: 0.1 kg/t U3O8, Dibwe East: 0.1 kg/t U3O8, Mutanga Ext: 0.2 kg/t U3O8, Mutanga East: 0.2 kg/t U3O8, Mutanga West: 0.2 kg/t U3O8
	iii.	Falea: 0.3 kg/t U3O8
(3)	Mineral resources estimated in radiometric equivalent uranium from a total gamma downhole probe (“eU3O8“). Source: An Updated Integrated Development Plan for the Madaouela Project, Niger, dated September 20, 2013 and amended and restated August 20, 2015, authored by Eur.Geol. Robert John Bowell PhD C.Chem. C.Geol, Daniel Guibal, Min Eng, FAusIMM (CP), MMICA, MGAA, Timothy John McGurk B.Eng (Hons), C.Eng, FIMMM, Neal Rigby, CEng, PhD, MIMMM, Richard Ingram Skelton MSc, BSc (Hons), C.Eng, MIMMM, MSAIMM, ARSM, John Arthur, PhD, MSc, BSc, MIMMM. The reported mineral resources have been adjusted to account for the absence of the Agaliouk license.
(4)	Mineral resources estimated in U3O8. Source: Mineral Resource Estimates for the Mutanga Uranium Project (the “Combined Mutanga Report”), dated September 12, 2013, authored by Malcolm Titley, B.Sc., MAusIMM, MAIG.
(5)	Mineral resources estimated in U3O8. Source: Technical Report on the Felea Uranium, Silver and Copper Deposit, Mali, West Afica dated October 26, 2015 authored by Mark B. Mathisen, C.P.G. The results of the estimates are included in the tables above. CIM definitions were followed for classification of Mineral Resources. A copy of the report is available on Denison’s website (http://www.denisonmines.com/).
(6)	The mineral resource also contains 0.161% copper (24.4 million pounds) and 72.8 g/t Ag (16.11 million ounces) in the Indicated mineral resource, and 0.2% copper (38.7 million pounds) and 17.3 g/t Ag (4.9 million ounces) in the Inferred mineral resource

Further information on the material mineral resources noted above is available on SEDAR (www.sedar.com) under Denison’s and GoviEx’s respective profiles.

Qualified Persons

The disclosure of a scientific or technical nature contained in this news release relating to Denison was prepared by Dale Verran, MSc, Pr.Sci.Nat., Denison’s Vice President, Exploration, who is a Qualified Person in accordance with the requirements of NI 43-101.

The scientific and technical information disclosed in this release relating to GoviEx has been reviewed, verified and approved by Dr. Rob Bowell, a chartered chemist of the Royal Society of Chemistry, a chartered geologist of the Geological Society of London and Fellow of the Institute of Mining, Metallurgy and Materials who is an independent Qualified Person under the terms of National Instrument 43-101 for uranium deposits.

About Denison

Denison is a uranium exploration and development company with interests focused in the Athabasca Basin region of northern Saskatchewan. Including its 60% owned Wheeler River project, which hosts the high grade Phoenix and Gryphon uranium deposits, Denison’s exploration portfolio consists of numerous projects covering over 390,000 hectares in the eastern Athabasca Basin. Denison’s interests in Saskatchewan also include a 22.5% ownership interest in the McClean Lake joint venture, which includes several uranium deposits and the McClean Lake uranium mill, which is currently processing ore from the Cigar Lake mine under a toll milling agreement, plus a 25.17% interest in the Midwest deposit and a 61.55% interest in the J Zone deposit on the Waterbury Lake property. Both the Midwest and J Zone deposits are located within 20 kilometres of the McClean Lake mill. Internationally, Denison owns 100% of the Mutanga project in Zambia, 100% of the uranium/copper/silver Falea project in Mali, and a 90% interest in the Dome project in Namibia.

Denison is also engaged in mine decommissioning and environmental services through its Denison Environmental Services division and is the manager of Uranium Participation Corp., a publicly traded company which invests in uranium oxide and uranium hexafluoride.

About GoviEx Uranium

GoviEx is a mineral resource company focused on the exploration and development of uranium properties. GoviEx’s principal objective is to become a significant uranium producer through the continued exploration and development of its Mine Permitted Madaouela Project and its other uranium properties in Niger.

Cautionary Statement Regarding Forward Looking Statements

This press release may contain forward-looking information within the meaning of applicable securities laws. All information and statements other than statements of current or historical facts contained in this press release are forward-looking information. Forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed here and elsewhere in both GoviEx’s and Denison’s periodic filings with Canadian securities regulators. When used in this news release, words such as “will”, “could”, “plan”, “estimate”, “expect”, “intend”, “may”, “potential”, “should,” and similar expressions, are forward-looking statements. Information provided in this document is necessarily summarized and may not contain all available material information.

Forward-looking statements include, without limitation, statements regarding completion and expected benefits of the Transaction and other statements that are not facts. Forward-looking statements are based on a number of assumptions and estimates that, while considered reasonable by management based on the business and markets in which GoviEx and Denison operate, are inherently subject to significant operational, economic and competitive uncertainties and contingencies.

Assumptions upon which forward looking statements relating to the transaction have been made include that GoviEx and Denison will be able to satisfy the conditions in the Agreement; that all required third party, regulatory, stock exchange, and government approvals will be obtained; and that the Transaction will be successfully concluded. In addition, the factors described or referred to in the section entitled “Risk Factors” in the MD&A of both companies and which are available on the SEDAR website at www.sedar.com, should be reviewed in conjunction with the information found in this news release.

Although Denison has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in the forward-looking statements, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate or that management’s expectations or estimates of future developments, circumstances or results will materialize. As a result of these risks and uncertainties, the Transaction could be modified, restricted or not completed, and the results or events predicted in these forward looking statements may differ materially from actual results or events. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this news release are made as of the date of this news release, and Denison disclaims any intention or obligation to update or revise such information, except as required by applicable law, and Denison does not assume any liability for disclosure relating to GoviEx herein.

Cautionary Note to United States Investors Concerning Estimates of Measured, Indicated and Inferred Mineral Resources: This press release may use the terms “measured”, “indicated” and “inferred” mineral resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize them. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted into mineral reserves. United States investors are also cautioned not to assume that all or any part of an inferred mineral resource exists, or is economically or legally mineable.

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CALGARY, ALBERTA–(Marketwired – March 30, 2016) –

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES OF AMERICA.

Manitok Energy Inc. (the “Corporation” or “Manitok“) (TSX VENTURE:MEI) is pleased to provide highlights from its 2015 independent reserves evaluation, its 2015 fourth quarter and year-end unaudited financial and operational results and provide an operational update. All financial amounts referred to in this press release are management’s internal estimates and the year-end financial statements have not yet been audited.

The full text of Manitok’s year-end report containing its audited financial statements as at and for the year ended December 31, 2015, the related management’s discussion and analysis and Manitok’s annual information form for the year ended December 31, 2015 will be available electronically on Manitok’s profile on the System for Electronic Document Analysis and Retrieval (“SEDAR“) at www.sedar.com and also on Manitok’s website at www.manitokenergy.com on or before April 29, 2016.

2015 Independent Reserves Evaluation

Sproule Associates Limited (“Sproule“), Manitok’s independent qualified reserves evaluator based in Calgary, Alberta, prepared a reserves estimation and economic evaluation effective December 31, 2015 in respect of Manitok’s oil and natural gas properties (“2015 Sproule Report“). Sproule also prepared the reserves estimation and economic evaluation effective December 31, 2014 (“2014 Sproule Report” and together with the 2015 Sproule Report, the “Sproule Reports“). The reserves estimates stated herein are effective as at December 31, 2015 and 2014 (as applicable) and are extracted from the Sproule Reports. The Sproule Reports have been prepared in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook (“COGE Handbook“) and National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (“NI 51-101“).

2015 Year-End Reserves Results:

• Manitok achieved significant reserves growth in 2015 despite it being a challenging year in our industry. Based on the 2015 Sproule Report, total proven developed producing (“PDP“) reserves were 6,013 Mboe (45% oil), total proved (“TP“) reserves were 9,938 Mboe (44% oil) and total proved plus probable (“P+P“) reserves were 17,626 Mboe (41% oil). The Corporation’s PDP reserves increased 61%, TP reserves increased 75% and P+P reserves increased 54% from the 2014 Sproule Report to the 2015 Sproule Report.
• Manitok replaced 360% of its 2015 production with the increase in TP reserves and 480% of its 2015 production with the increase in P+P reserves through positive revisions to its Lithic Glauconitic wells in Carseland and a successful acquisition in its southern Alberta core area in 2015.
• Manitok achieved its lowest historical one year finding costs in 2015. The Corporation’s 2015 average finding and development (“F&D“) costs and finding, development and acquisition (“FD&A“) costs including the change in future development capital (“FDC“) are $7.54/boe and $6.88/boe respectively for TP reserves. The FD&A, including FDC, for P+P reserves is $5.26/boe.
• Recycle ratios are 3.4 times, using 2015 F&D costs including FDC, and 3.7 times, using 2015 FD&A costs including FDC, respectively for TP reserves. Using 2015 FD&A costs including FDC, the recycle ratio is 4.9 times for P+P reserves. The recycle ratios above are based on an average 2015 operating netback, including the realized gain or loss on financial instruments, of $25.66/boe. Manitok has maintained a material price hedging program over the last 4 years in order to protect shareholder value and will continue to do so going forward.
• Recycle ratios are 1.5 times, using 2015 F&D costs including FDC, and 1.6 times, using 2015 FD&A costs including FDC, respectively for TP reserves. Using 2015 FD&A costs including FDC, the recycle ratio is 2.1 times for P+P reserves. The recycle ratios above are based on an average 2015 operating netback, excluding realized gain or loss on financial instruments, of $11.08/boe.
• Year over year, Manitok increased its reserve life index (“RLI“) by 77%, to 6.9 years from 3.9 years, on TP reserves, and by 54%, to 12.2 years from 7.9 years, on P+P reserves⁽ⁱ⁾.
• The pre-tax net present value discounted at 10% (“NPV10%“)⁽ⁱⁱ⁾ of PDP, TP and P+P reserves increased by approximately 10%, 19% and 13% respectively, to $88.5 million, $131.9 million and $207.7 million respectively, in the 2015 Sproule Report as compared to the 2014 Sproule Report despite Sproule’s December 2015 forecast prices being significantly lower than Sproule’s December 2014 forecast prices.
• The net asset value on a P+P NPV10% valuation (“NAV“) is about $0.97 per share, assuming an undeveloped land value of approximately $42 million (valued at $100/acre), 420 square miles of 3D seismic valued at approximately $10 million, net of debt of about $59 million at March 31, 2015 and other obligations and having 161,079,746 common shares outstanding.

The following table summarizes Manitok’s working interest oil and natural gas reserves based on the 2015 Sproule Report, using the 2015 Sproule Report forecast price assumptions:

Summary of Oil and Natural Gas Reserves⁽¹⁾⁽²⁾

		Light and Medium Oil		Natural Gas		Natural Gas Liquids		Total
		Gross(3)	Net(4)	Gross(3)	Net(4)	Gross(3)	Net(4)	Gross(3)	Net(4)
Reserve Category		(Mbbls)	(Mbbls)	(Mmcf)	(Mmcf)	(Mbbls)	(Mbbls)	(Mboe)	(Mboe)
Proved
	Developed Producing	2,698.8	2,051.9	17,758	14,352	354.2	270.5	6,012.6	4,714.3
	Developed Non-Producing	297.9	244.9	6,671	5,092	209.1	161.6	1,618.8	1,255.0
	Undeveloped	1,407.9	991.9	4,762	3,906	105.5	79.7	2,307.1	1,722.6
Total Proved		4,404.6	3,288.6	29,190	23,348	668.8	511.9	9,938.4	7,691.9
Probable		2,889.2	2,170.5	26,369	22,549	403.1	299.5	7,687.2	6,228.1
Total Proved Plus Probable		7,293.8	5,459.1	55,559	45,896	1,071.9	811.4	17,625.6	13,919.9

(1)	Based on Sproule’s December 31, 2015 forecast prices and costs. The forecast of commodity prices used in the 2015 Sproule Report can be found at http://www.sproule.com/.
(2)	Columns may not add due to rounding of individual items.
(3)	Gross reserves are the Corporation’s working interest share before deduction of royalty obligations and without including any royalty interests.
(4)	Net reserves are the Corporation’s working interest share after deduction of royalty obligations, plus royalty interests in such reserves.

⁽ⁱ⁾ Production rate used to calculate the 2015 RLI is based on the estimated average production rate for 2016 on PDP reserves disclosed in the 2015 Sproule Report and the 2014 RLI is based on the estimated average production rate for 2015 on PDP reserves disclosed in the 2014 Sproule Report.

⁽ⁱⁱ⁾ Estimates of future net revenues whether discounted or not do not represent fair market value.

The following table is a summary of the net present value of future net revenue associated with Manitok’s reserves based on the 2015 Sproule Report before deducting future income tax expense and calculated at various discount rates:

Net Present Values of Future Net Revenue Before Income Taxes

			Value Before Income Taxes Discounted at (%/year) (1)(2)(3)
		0%	5%	10%	15%	20%
Reserve Category		(M$)	(M$)	(M$)	(M$)	(M$)
Proved
	Developed Producing	122,478	103,011	88,564	77,605	69,093
	Developed Non-Producing	32,920	24,500	19,160	15,582	13,053
	Undeveloped	39,626	30,846	24,146	19,073	15,190
Total Proved		195,024	158,356	131,870	112,260	97,335
Probable		159,560	107,440	75,862	55,507	41,694
Total Proved Plus Probable		354,584	265,796	207,732	167,767	139,029

(1) Based on Sproule’s December 31, 2015 forecast prices and costs. The forecast of commodity prices used in the 2015 Sproule Report can be found at http://www.sproule.com/.

(2) Columns may not add due to rounding of individual items.

(3) Estimates of future net revenues whether discounted or not do not represent fair market value.

The following table is a reconciliation of Manitok’s gross reserves as derived from the Sproule Reports:

Reserves Reconciliation of Gross Reserves⁽¹⁾⁽²⁾

	Gross		Gross		Gross Proved Plus
	Proved(Mboe)		Probable(Mboe)		Probable (Mboe)
December 31, 2014	5,689.1		5,749.3		11,438.3
Discoveries, extensions and infill drilling	–		134.4		134.4
Acquisitions (dispositions)	5,156.9		2,470.1		7,627.1
Technical revisions(3)	862.1		(708.2	)	153.9
Economic factors	(134.6	)	41.5		(93.0	)
Production over the year	(1,635.1	)	–		(1,635.1	)
December 31, 2015	9,938.4		7,687.2		17,625.6

(1) Gross reserves are the Corporation’s working interest share before deduction of royalty obligations and without including any royalty interests.

(2) Columns may not add due to rounding of individual items.

(3) Technical revisions resulted from category changes and reservoir performance.

2015 Finding, Development and Acquisition Costs

The following table outlines Manitok’s estimate of its F&D costs per boe and FD&A costs per boe, including the change in FDC and recycle ratios on a TP and P+P basis.

					Three Year			Five Year
		2015			Weighted Average			Weighted Average
Capital Expenditures (M$)
Exploration and Development(1)(2)			12,737			187,681			267,372
Acquisitions/(Dispositions)			24,500			(6,602	)		22,881
Total Capital Expenditures			37,237			181,079			290,253
Change in FDC (M$)
Total Proved			3,264			(7,220	)		25,488
Proved Plus Probable			3,919			4,140			63,908
F&D and FD&A costs including change in FDC
	F&D – TP(2)	$	7.54		$	36.71		$	27.16
	F&D – P+P(2)(3)	$	(4.73	)	$	44.20		$	20.31
	FD&A – TP	$	6.88		$	26.17		$	20.86
	FD&A – P+P	$	5.26		$	24.71		$	15.68
	F&D Recycle Ratio – TP(4)		3.4			0.8			1.1
	F&D Recycle Ratio – TP(5)		1.5			0.7			1.0
	F&D Recycle Ratio – P+P(4)		(5.4	)		0.7			1.4
	F&D Recycle Ratio – P+P(5)		(2.3	)		0.6			1.3
	FD&A Recycle Ratio – TP(4)		3.7			1.1			1.4
	FD&A Recycle Ratio – TP(5)		1.6			1.0			1.2
	FD&A Recycle Ratio – P+P(4)		4.9			1.2			1.9
	FD&A Recycle Ratio – P+P(5)		2.1			1.1			1.6
	Operating Netback including hedging	$	25.66		$	30.05		$	29.20
	Operating Netback excluding hedging	$	11.08		$	26.20		$	25.78

(1) Exploration and development expenditures excludes $3.2 million (three year – $7.8 million and five year – $9.6 million) of capitalized overhead costs.

(2) F&D costs are the aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs.

(3) The negative 2015 F&D costs are the result of the negative change in FDC, excluding the amount related to acquisitions, being in excess of exploration and development spending in 2015.

(4) Recycle ratio is calculated as the average annual operating netback including realized gains or losses on financial instruments divided by F&D costs. The annual operating netback for the three year and five year periods are a weighted average for the applicable periods.

(5) Recycle ratio is calculated as the average annual operating netback excluding realized gains or losses on financial instruments divided by F&D costs. The annual operating netback for the three year and five year periods are a weighted average for the applicable periods.

2015 Fourth Quarter and Year-end Results (based on unaudited management prepared financial statements):

• Production in 2015 averaged 4,480 boe/d (49% light oil and liquids) as compared to 4,502 boe/d (57% light oil and liquids) in 2014.
• Fourth quarter production averaged 4,459 boe/d (49% light oil and liquids), a 10% increase over production of 4,072 boe/d (56% light oil and liquids) in the fourth quarter of 2014.
• Recorded funds from operations of $30.4 million in 2015, a 34% decrease over funds from operations of $46.0 million in 2014.
• Operating netback including the realized gain or loss on financial instruments was $25.66/boe in 2015, a 22% decrease over the operating netback of $32.91/boe in 2014.
• Capital expenditures before acquisition and divestitures were $16.1 million as compared to $97.4 million in 2014. Capital expenditures after acquisition and divestitures were $40.6 million as compared to $69.7 million in 2014.
• As at December 31, 2015, net bank debt was $53.4 million and net debt which includes long-term financial obligations was $68.4 million.
• On December 30, 2015, Manitok closed the first tranche of a best-efforts private placement of 23,766,831 common shares (“Common Shares“) in the capital of Manitok issued at a price of $0.13 per Common Share and 35,079,500 Common Shares issued on a “flow-through” basis in respect of Canadian exploration expense under the Income Tax Act (Canada) (“Flow-through Shares“) at a price of $0.15 per Flow-through Share for gross proceeds of approximately $8.4 million. At the close of the first tranche of the equity financing, Manitok had 143,936,115 common shares outstanding.

Financial Update Subsequent to Year-end 2015:

• As disclosed on January 26, 2016 and February 16, 2016, Manitok closed the second and third tranches of a private placement equity financing for the issuance of an additional 15,973,631 Common Shares at a price of $0.13 per Common Share and 1,170,000 Flow-through Shares at a price of $0.15 per Flow-through Share for gross proceeds of $2.3 million. After the closing of all tranches, Manitok issued an aggregate of 39,740,462 Common Shares and 36,249,500 Flow-through Shares resulting in aggregate combined gross proceeds to Manitok of approximately $10.6 million. At the close of the equity financing, Manitok had 161,079,746 common shares outstanding.
• In conjunction with the equity financing, Manitok’s credit facility was revised to $60.0 million in January 2016. The previously reported $10.0 million payment in March 2016 and $20.0 million payment in May 2016 are no longer required. The credit facility will be up for review in June 2016.
• As disclosed on March 2, 2016, Manitok monetized some of its crude oil hedges, mostly in 2017, in the first quarter of 2016 for a total cash payment of $12.3 million from its counterparty in an effort to reduce outstanding bank indebtedness. Manitok’s anticipated 2016 oil production net of royalties, remains fully hedged with a swap of 500 bbls/d of crude oil at $80.15 CAD WTI and collar transactions for 1,000 bbls/d of crude oil from an average price of $68.68 to $86.18 CAD WTI net of the deferred premium. In conjunction with the hedge monetization, Manitok’s credit facility has been revised from $60.0 million to $50.0 million.
• As disclosed on March 4, 2016, Manitok closed an asset acquisition of a 14 Mmcf/d natural gas processing plant in the Carseland area along with approximately 450 mcf/d net (75 boe/d net) of natural gas production, the related gathering system, 5,760 acres of undeveloped land and an 11 kilometre sales gas line tied into the ATCO south sales system. Total cash consideration for the acquisition was $4.8 million prior to customary closing adjustments.
• As at March 31, 2016, Manitok anticipates its net bank debt will be approximately $44.0 million and its total net debt to be approximately $59.0 million, which includes $15.0 million of long term financing with a remaining term of 7.5 years.

2016 Operational Update

Based on field estimates, Manitok’s production averaged approximately 4,265 boe/d (46% oil) during the first two weeks of March 2016. Manitok continued to produce its two Lithic Glauconitic wells at Carseland with significant restrictions over the first quarter of 2016 and two other Basal Quartz horizontal wells drilled in late 2014 have not been tied in yet due to the liquids handling capacity issues at the Carseland gas plant.

Since acquiring the Carseland gas plant on March 4, 2016, Manitok has been able to increase plant throughput with minor modifications to the plant. Production in the area has increased from about 590 boe/d (32% oil) in the first 2 weeks of March 2016 to about 940 boe/d (26% oil) over the last 7 days. Manitok expects to spend about $1.2 million on additional improvements to the facilities over the second quarter of 2016 which is expected to result in a material increase in the plant’s ability to handle liquids from Manitok’s oil wells in the Carseland area. Once the improvements are completed, Manitok will also tie in the remaining two Basal Quartz wells which tested at a combined rate of approximately 548 boe/d (36% oil) in December 2014.

Manitok closed the acquisition of 122 boe/d (86% oil) from one partner in the Stolberg Cardium F pool in March 2016. Manitok exchanged a 19.9% non-operated working interest in a gas plant in a non-core area, where it has no current throughput volumes, for a 17.5% average working interest in the Cardium F pool in Stolberg, along with an average 45% working interest in 10,500 acres of undeveloped land in Stolberg. Manitok has identified an additional 4 to 6 Cardium oil drilling locations, extending the existing Cardium oil trend 2 miles to the southeast, and 6 to 8 additional Mannville gas drilling locations on these lands.

Based on an expected average WTI oil price of US$44/bbl, an expected average AECO natural gas price of $2.00/gj and its current oil price hedges (about 100% of anticipated oil production net of royalties), Manitok expects its 2016 capital spending to remain within its funds from operations which will allow the Corporation to spend approximately $11 to $14 million on drilling and completions in the second half of the year which will satisfy its drilling commitments for 2016. The start date on the 2016 drilling program will be dependent on commodity prices.

About Manitok

Manitok is a public oil and gas exploration and development company focusing on conventional oil and gas reservoirs in southeast Alberta and the Canadian foothills. The Corporation will utilize its experience to develop the untapped conventional oil and liquids-rich natural gas pools in both southeast Alberta and the foothills areas of the Western Canadian Sedimentary Basin.

For further information view our website at www.manitokenergy.com .

Forward-looking Statements

This press release contains forward-looking statements. More particularly, this press release contains statements concerning the anticipated net bank debt and total net debt as at March 31, 2016, field estimated average production during the first two weeks of March 2016, anticipated amount of expenditure by Manitok on additional improvements to the Carseland gas plant during the second quarter of 2016 and the resulting anticipated material increase in the plant’s ability to handle liquids from Manitok’s oil wells in the area and the anticipated 2016 capital spending remaining within its funds from operations. The forward-looking statements in this press release are based on certain key expectations and assumptions made by Manitok, including expectations and assumptions concerning the success of future drilling and development activities, the performance of existing wells, the performance of new wells, the successful application of technology, prevailing weather conditions, commodity prices, royalty regimes and exchange rates and the availability of capital, labour and services.

Although Manitok believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Manitok can

give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserves estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), uncertainty as to the availability of labour and services, commodity price and exchange rate fluctuations, unexpected adverse weather conditions, general business, economic, competitive, political and social uncertainties, capital market conditions and market prices for securities and changes to existing laws and regulations. Certain of these risks are set out in more detail in the AIF, which is available on Manitok’s SEDAR profile at www.sedar.com.

Forward-looking statements are based on estimates and opinions of management of Manitok at the time the statements are presented. Manitok may, as considered necessary in the circumstances, update or revise such forward-looking statements, whether as a result of new information, future events or otherwise, but Manitok undertakes no obligation to update or revise any forward-looking statements, except as required by applicable securities laws.

Any references in this press release to initial and/or final raw test or production rates and/or “flush” production rates are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will commence production and decline thereafter. These test results are not necessarily indicative of long-term performance or ultimate reserve recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production.

Non-GAAP Financial Measures

This press release contains references to measures used in the oil and natural gas industry such as “funds from operations”, “operating netback”, “adjusted working capital deficit”, and “net debt”. These measures do not have standardized meanings prescribed by generally accepted accounting principles (“GAAP“) an, therefore should not be considered in isolation. These reported amounts and their underlying calculations are not necessarily comparable or calculated in an identical manner to a similarly titled measure of other companies where similar terminology is used. Where these measures are used they should be given careful consideration by the reader. These measures have been described and presented in this press release in order to provide shareholders and potential investors with additional information regarding the Corporation’s liquidity and its ability to generate funds to finance its operations.

Funds from operations should not be considered an alternative to, or more meaningful than, cash provided by operating, investing and financing activities or net income as determined in accordance with GAAP, as an indicator of Manitok’s performance or liquidity. Funds from operations is used by Manitok to evaluate operating results and Manitok’s ability to generate cash flow to fund capital expenditures and repay indebtedness. Funds from operations denotes cash flow from operating activities as it appears on the Corporation’s Statement of Cash Flows before decommissioning expenditures, acquisition-related expenses and changes in non-cash operating working capital. Funds from operations is also derived from net income (loss) plus non-cash items including deferred income tax expense, depletion and depreciation expense, impairment expense, stock-based compensation expense, accretion expense, unrealized gains or losses on financial instruments and gains or losses on asset divestitures. Operating netback denotes petroleum and natural gas revenue and realized gains or losses on financial instruments less royalty expenses, operating expenses and transportation and marketing expenses calculated on a per boe basis. Adjusted working capital deficit includes current assets less current liabilities excluding the current portion of the amount drawn on the credit facilities, the current portion of the fair value of financial instruments and the deferred premium on financial instruments. Manitok uses net bank debt and net debt as a measure to assess its financial position. Net bank debt includes outstanding bank indebtedness plus adjusted working capital (surplus) deficit and net debt includes net bank debt plus the long-term financial obligations.

Barrels of Oil Equivalent

The term barrels of oil equivalent (“boe“) may be misleading, particularly if used in isolation. Per boe amounts have been calculated using a conversion ratio of six thousand cubic feet (6 mcf) of natural gas to one barrel (1 bbl) of crude oil. The boe conversion ratio of 6 mcf to 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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