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Gold/Mining/Energy : DISCOVERY BOARD ~ PRECIOUS METALS ENERGY URANIUM OIL -- Ignore unavailable to you. Want to Upgrade?

To: PaperPerson who wrote (3674)	4/11/2011 5:10:30 PM
From: roymario	Read Replies (1) \| Respond to of 4690

Paper, just in case you find Pescod's HAT comments valuable. R. e-mail: debbie.lewis@canaccord.com e-mail: david.pescod@canaccord.com April 11, 2011 AN INTERVIEW WITH MICHAEL GUNNING, Ph.D. PRESIDENT, CEO and Director HATHOR EXPLORATION (As of April 5, 2011) We are here with Mike Gunning, who is the leader of the crew at Hathor Exploration and needless to say, with what uranium has gone through over the last while, for those looking to take an opportunity in these dark days, maybe that moment is here. David Pescod: Mr. Gunning, can we get your take on what’s next for the uranium industry, particularly with what’s next for the nuclear plants around the world? Michael Gunning: I think what’s next for the nuclear industry around the world is that emotions will subside and rational thought will take over; given the magnitude of the quake, the reactor fleet in Japan has faired relatively well. And in the bigger picture, we still have 430 reactors operating around the world that are providing 15% of base-load electricity. We still have 60 reactors that are under construction. Base-load electricity is still a basic measure of the quality of life, and I just don’t think any of us see that changing. The earthquake in Japan was more than a once-in-a-lifetime, truly a once in millennia event and in the big picture, we can be grateful that the environmental and human impact from the nuclear plants was so minimal. At the end of the day, we need to stand back and let the emotions subside and realize that nuclear power was an important part of the solution for Japan post war in the build up of that industrialized nation. It still makes sense for them today, and in a lot of other countries around the world. We don’t generate base-load electricity from solar and wind on the scale of cities with 20 million people, so I think the reality is we’ve got a fleet of conventional reactors that we still need to power. We still have a fundamental supply/demand gap in the industry, mine production of somewhere around 135 million pounds a year, well short of demand at around 180 million pounds a year. Hathor Exploration David Pescod T: 780.408.1750 Debbie Lewis T: 780.408.1748 Fax: 780.408.1501 Page 2 We’ve made up that short fall during the past 30 years by inventory, or secondary supply, but those inventories are going to finally run out by 2013 or 2015. That is what the industry has been focused on for the last decade. Fukushima hasn’t changed that, and I think that is why you saw the spot price rebound fairly quickly after the Fukushima event. And I think by the end of this year, you are going to see the spot price continue back on its climb, back to the $70, $80, $90 range, because I think that is where it needs to be to incentivize new mine openings. When you look at the marginal cost of operation of uranium projects around the world, $50 or $60 just doesn’t do it, you simply won’t get the mine production that you need to solve the supply/demand gap if uranium prices stay in the $50 - $60 range. So, I think for now you just stand back, you let the dust settle from this Japan event, you let the emotions subside, and you will see a sector that is still an important electricity-generator. You will see a sector that still has a fundamental supply/demand gap and you will realize that there are mining companies out there that will still be looking for what I call “best-of-breed” discoveries and development opportunities because I think the price of uranium is going to rebound. The industry needs significant mine openings over the next three or four years, and I think as an investor, when you have events like this, you want to come back to your comfort zone of strong historical districts and jurisdictions, and in uranium, that means a place like Saskatchewan. The first mine went into production in 1955, the Athabasca Basin opened up as a pre-imminent high grade district in 1975, and 40 years later, Cigar and McArthur will be still be operating for another 30 years. You’ve got a Province for which uranium has been a tremendous contributor to GDP and local employment. This is a jurisdiction that is not going to blink in the wake of Fukushima; it has been a terrific industry for that Province, and the Athabasca Basin is going to continue to be a world-leader in uranium production. It is districts like the Athabasca, jurisdictions like Saskatchewan and new discoveries like Roughrider that you really want to focus on as an investor because they are not going to waiver. This industry is not going to disappear. DP: Let’s get back to the international, let’s get to the surprising reaction of Germany over the last month or two. To receive the Late Edition and be on our daily circulation simply e-mail Debbie at Debbie.lewis@canaccord.com and give your address, phone number and e-mail and we’ll have you on the list tonight