Investments

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Uranium

Pinetree developed a positive view of uranium in 2004 based on several macro factors including global growth led by China and India and the renaissance of nuclear power, seen as a clean reliable base-load generating technology. Growth in energy needs, primarily from China and India, combined with concerns for the environment continue to keep the price of uranium high. On the supply side, the flooding of the Cigar Lake project and Ranger mine are removing supply in the near and medium term. Unless a significant number of additional mines are brought to production soon, we see demand outstripping supply into the foreseeable future.

Pinetree began investing in uranium when it traded at $20/lb. With no official uranium market it is difficult to assess the spot price for uranium. Only small quantities of uranium were actually selling at the high levels seen in early 2007. At Pinetree, we believe a realistic spot price for uranium is between $80-$100 lb, a price which makes many new discoveries very economic to mine. Pinetree is investing in junior uranium companies that are not locked into historical contracts and as a result are able to take advantage of higher uranium prices when negotiating supply agreements.

Sector Themes

• China continues massive build out of nuclear power plants
• More supply disruptions are likely in the future
• Merger and Acquisition activity to continue
• Long term prices are supported by a pending market deficit

Uranium Price - www.uxc.com