ASX RELEASE | 4 November 2015 | AIM/ASX: BKY

Zona 7 transforms Salamanca project economics

Inclusion of the high grade Zona 7 deposit into an updated Pre-Feasibility Study has transformed the economics of the Salamanca project.

The project now has a Net Present Value of US$871.3 million (£580.9 million) with an internal rate of return of 93% based on a discount rate of 8% and a long term uranium price of US$65 per pound.

This valuation represents around £3.22 per share on an undiluted and unfinanced basis compared with the current share price of around £0.22 per share.

Managing Director Paul Atherley commented:

'These outstanding results very much support the Board's decision to rapidly push ahead with the development of the project.

With the major approvals in place and discussions with potential financiers underway we are expecting to commence site works in mid-2016.'

As previously reported, Zona 7 is a shallow, high grade deposit with impressive metallurgical characteristics located within ten kilometres of the proposed processing plant.

Its inclusion in the updated Study has increased the mine life from eleven to eighteen years and reduced the operating costs from US$24.60 to US$15.60 per pound of uranium produced during steady state operations making it one of the lowest cost producers in the world once developed.

In addition to the reduction in operating cost, the capital cost to initial production has reduced from US$95.1 million to US$81.4 million due to the lower cost of developing the Zona 7 deposit and the benefits of currency depreciation.

Paul Atherley commented further:

'We believe that the potential exists for further discoveries of Zona 7 style deposits and are finalising an exploration programme to commence in the New Year which will follow up a number of near surface, high grade drill intersections, located within ten kilometres of the plant that have not yet been fully evaluated.'

For further information contact:

Paul Atherley Hugo Schumann

Managing Director Corporate Manager

+44 207 478 3900 +44 207 478 3900

[email protected]

Table 1 - Summary of Key Study Outputs

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Introduction

This Pre-Feasibility Study (Study) has been managed internally utilizing inputs from a number of independent contractors.

Table 2 - Study Contractors

The Study incorporates the Zona 7 deposit into the previous Pre- Feasibility Study which was reported on 26 September 2013.

The Study considers the integrated development of the Retortillo, Zona 7 and Alameda deposits and is based on extracting 69.6 million tonnes of ore at an average grade of 396 ppm U3O8 to produce 51.6 million pounds of U3O8.

The Study reports on an initial mine schedule of 17.5 years producing on average 3 million pounds of uranium per year.

After an initial ramp up, production averages 4.3 million pounds per year during steady state operations.

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Mineral Resource

The latest Mineral Resource Estimate (MRE) for the Salamanca project is

89.5 million pounds of U3O8 (refer to announcement 7 October 2015).

The Study was based solely on the Measured and Indicated MREs for the Retortillo, Zona 7 and Alameda deposits.

The Study did not incorporate any Inferred Mineral Resources from Retortillo, Zona 7 and Alameda (totaling 4.8 million pounds of U3O8) nor any Inferred Mineral Resources from the other satellite deposits contained within the overall MRE for the project (totaling 23.6 million pounds of U3O8)

Table 3 - Mineral Resource Estimates for Retortillo, Zona 7 and Alameda reported at a cut-off grade of 200 ppm U3O8

(*)All figures are rounded to reflect appropriate levels of confidence. Apparent differences occur due to rounding

Mining

Conventional open pit and transfer mining methods will be used for the mining of the three deposits.

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