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Uranium: Expanding Global PresenceARMZ Uranium Holding Co., Russia

Vadim Zhivov, Director GeneralINDABA, February 2009

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ARMZ• Uranium mining and supply

• Worldwide mining and exploration

• World’s #2 in uranium resources

• World’s #5 in uranium production

Tenex

• Uranium enrichment, export sales

• 40% of world’s uranium enrichment capacity

ARMZ In Russian Nuclear Industry

Energoatom• Nuclear power plant

operation, generation and sales

Rosatom

Full nuclear fuel cycle, NPP construction, power generation

TVEL

• Nuclear fuel fabrication, export sales

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

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ARMZ: successor to the largest uranium miningcomplex created by the USSR

Historical uranium productionUSSR

• USSR - the world’s largest uranium

producer in the 1980’s – up to 15,5

thousand tons/year

• USSR - world’s largest uranium

resources: 1,700 thousand tons (incl.

Russia’s 546 thousand tons)

• Widest geography – mining in all

republics of USSR, countries of

Eastern Europe, Mongolia, China , etc.

• All known uranium mining methods

• USSR and USA simultaneously

developed the most effective mining

method – in-situ leach

Cumulative U production:

365,7Kt

World record 15,5Kt

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• 2nd in uranium resources

• 5th in uranium production

• Russia’ s only uranium mining company

• ARMZ owns Priargunsky - the world’slargest mine as for aggregated historical Uproduction - over 130 thousand tons ofuranium

• Highly diversified by mining technology andgeography

– Russian miners use all known uraniummining methods

– Exploration and mining projects in 3continents

• 14 thousand employees in production sitesand service companies

ARMZ Today

BHP Billiton33%

ARMZ53811%

2nd place

AREVA 10%

Rio Tinto9%

Cameco7%

Kazatomprom 7%

Uranium One4%

Navoi3%

VostGOK3%

Paladin Energy2%

Others11%

Rio Tinto 18%

CAMECO 16%

AREVA 16%

Kazatomprom11%

ARMZ 36878%

5th place

BHP Billiton

8%Navoi5%

Uranium One3%

Paladin Energy2%

Others13%

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

2008 Uranium production, tons

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ARMZ Growth Results 2006-2008

• Number of subsidiaries and projectsincreased from 4 to 18

• 18% growth of uranium output in twoyears

• 4-fold growth of uranium resources

• 16 uranium deposit licensed

• New joint ventures set up to mine, drilland explore for uranium in Russia andabroad, new management and servicecompanies in operation

3190 3527 3687

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Priargunsky Zarechnoe

Dalur Khiagda

2006 2007 2008

2006 2007 2008

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0

Tons

Thou tons

145

538

2006 2007 2008

Operational and under construction facilities

Planned mines Exploration ventures and new projects

Management and service companies

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ARMZ Steady Development Through Financial Turmoil

• Strong demand for ARMZ’s uranium isguaranteed by long-term contractswith Rosatom nuclear companies

• Business of strategic importance,ARMZ enjoys support of its majoritystakeholder – Rosatom

• First-class borrower: debt financingfully backed by assets

• Superior technologies and expertisemake ARMZ a partner welcomeglobally

• Most of uranium is sold through long-term contracts insensitive to short-term market fluctuations

? ?What should we do?

ARMZ has the answer: Uranium Mining!

! !

77

• ARMZ plans to ramp up mines’

uranium production capacity to

20 thou tons per annum by

2025

• Major part of required

financing will be raised in

financial markets and/or

contributed by strategic

investors

ARMZ Production Outlook

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ARMZ uranium production capacity

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ARMZ Global Presence

1

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4

5

Operational and under construction facilities1. Priargunsky

2. Khiagda

3. Dalur

4. Akbastau (Karatau)

5. Zarechnoe

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7

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Planned facilities

6. Elkon

7. Gornoe

8. Olovskaya

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Exploration ventures and Prospective projects

9. Mongolia

10. Canada

11. Russia

12. Namibia

13. Armenia

14. Ukraine

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99Source: OECD / IAEA Red Book - 2007

Why Africa?

• Large cumulative uranium production –

400 thou tons, 17% of world total

• Significant uranium resources – 19% of

world’s total (1044,7 thou tons)

• High potential for increasing uranium

resources – about 50% growth resulting

from exploration in last 2 years

• High potential for new uranium deposits

discovery

• Effective methods of uranium mining –

open-pit, heap-leach, and, possibly, in-situ

leach

• Favorable climate and investment policy

Uranium exploration results in Africa

ton

s/ye

ar

Uranium Production in Africa/ South Africa

1010

• Existing infrastructure• Water supply• Favorable climate

• Government support for uranium exploration• Stable political, economic, and financial situation• Developed mining industry

• Potential uranium resources > 10 thou tons• Favorability for sandstone type mineralization

• Mine production capacity > 700 tons a year• Identified uranium resources > 10 thou tons• Open pit or ISL mining method• Production cost < $80/kg

ARMZ Uranium Project Preferences

Mine technical and economic preferences

Geological favorability for

exploration

Country political and economic

aspects

Infrastructural preferences

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• ARMZ developed a database on

uranium deposits and occurrences in

Africa

• ARMZ, being a state-owned company,

cooperates with governmental,

investment, mining, and exploration

organizations

• Uranium mining countries with high U

potential - Namibia, Niger, South

Africa

• A few countries susceptible to

exploration for uranium

Where in Africa?

1

2

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2

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3

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3 JV SWA Uranium Mines

Established in 2008 for uranium exploration in Namibia

The JV partners are ARMZ, VTB Capital Namibia and ArlanInvestment Co.

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2

1

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ARMZ Contribution to Africa

• Bringing investments into

African mining sector

• Infrastructure development in

regions for potential uranium

sites

• Additional tax proceeds for

national budgets

• Modern environmentally friendly

technologies of uranium

exploration, mining and

processing

• Creating new jobs

• Unique new expertise for Africa’s

mining industry

1313

ARMZ is open to partnership

in uranium exploration and mining in Africa

Why Mining INDABA 2009?

• ARMZ formal introductions to

African mining community

• Voicing ARMZ uranium-related

plans for Africa

• Meeting colleagues and building

relationships with government

bodies, exploration and mining

companies, financial institutions

• Sharing news and views in

uranium-related activities