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 Thu Jul 21, 2022
Tracker: Outcome Visualization Canalaska: West McArthur as Arrow Clone
    Publisher: Kaiser Research Online
    Author: Copyright 2022 John A. Kaiser

Outcome Visualization Project as of Jul 20, 2022: Canalaska: West McArthur as Arrow Clone
Project:West McArthurLocation:CanadaStage:3-Discovery Delineation
Net Interest:77.1% WIUncapped NSR:8.3%Target Metals:Uranium
OV Project ID:1000037OVP Posted:7/21/2022OVP Retired:
Current OV ID:1000097Current OV Confirmed:7/21/2022Visualizer:JK
Canalaska Uranium Ltd (CVV-V)
ProfileSearchWeb SiteTreeForumSEDARQuoteIPV
Working Capital
Key People: Cory Belyk (CEO), Thomas Jr Graham (Chair), Peter G. Dasler (Pres), Harry Chan (CFO), Dianne M. Szigety (Sec),
As of
Visualized Outcome: Canalaska: West McArthur as Arrow Clone
Canalaska Uranium Ltd announced a basement hosted intersection on July 15, 2022 while testing a conductor southwest of the 42 Zone which has sandstone hosted mineralization related to the structure that hosts the Fox Lake zone owned by Cameco and Orano. The Fox Lake deposits are about 400,000 tonnes of 7.99% U3O8. An OV created for West McArthur in 2016 visualized a McArthur River clone and used costs provided by Cameco in a 2012 43-101 report. McArthur River is mined at only 200 tpd because it is about 1 million tonnes of 16% and located at the unconformity which creates difficult mining conditions that entail very high costs. While it is possible the unconformity above the hole #67 interval may host a McArthur egress-style zone, for the sake of this OV a deposit similar to NexGen's basement hosted Arrow deposit (P+P 4,575,0000 @ 2.37% U3O8) but higher grade was visualized as an outcome and underground mined at 1,300 tpd using the costs presented in NexGen's February 2021 feasibility study.
Visualized Outcome Summary: Canalaska: West McArthur as Arrow Clone
Deposit Scenario: 5,000,000 t @ 2.50% Uranium
Mining Scenario: Underground 1,300 tpd 10.5 yrs, CapEx $975.0 million, SustCapEx $324.0 million, OpEx $290.00/t (USD), AISC $549.80/t (USD)
LOM Payable: 269.0 million lb U3O8 uranium
Economic Value (after-tax): IRR 57.6%, Payback 1.7 yrs, NPV at 8.0% - USD $2,732,332,126, Future Price/sh: CAD $18.90
Economic Outcome - Discount Rate: 8.0% - CAD AT NPV: $3.5 billion - Fair Speculative Value
Gross Rock Value (USD/t):$2,535Recoverable Rock Value:$2,472Payable Rock Value:$2,472
LOM CapEx & Sustaining Cost:$1,299,000,000LOM Operating Cost:$1,450,000,000AISC per tonne:$549.80
LOM Net Payable Revenue (USD):$11,339,876,803LOM PT Cash Flow (USD):$9,565,876,803LOM AT Cash Flow (USD):$5,957,708,546
USD Pre-Tax NPV:$4,934,063,742Pre-Tax IRR:93.1%Pre-Tax Payback:1.1
USD After-Tax NPV:$2,732,332,126After-Tax IRR:57.6%After-Tax Payback:1.7
CAD Fair Spec Value Low:$88,008,418CAD Fair Spec Value High:$176,016,836CAD Implied Project Value:$91,268,218
Price Target if Visualized Outcome delivered by Expl-Dev Cycle without dilution: CAD $18.90
Economic Outcome (USD): Revenue Model at OV designated Metal Prices

Annual AverageLife of Mine (LOM)LOM Stats
Recoverable Revenue:$1,172,920,227$12,359,538,750$2,472/t ore Recoverable Value:
   Smelter/Transport Costs:$0$00.0% of Recoverable Revenue
Gross Payable Revenue:$1,172,920,227$12,359,538,750100.0% of Recoverable Revenue
   Royalties:($96,765,919)($1,019,661,947)8.3% of Gross Payable Revenue
Net Payable Revenue:$1,076,154,309$11,339,876,80391.8% of Recoverable Revenue
   Mining Cost:($53,618,500)($565,000,000)32% of OpEx - $113.00/t ore
   Processing Cost:($61,685,000)($650,000,000)37% of OpEx - $130.00/t ore
   Other Cost:($22,301,500)($235,000,000)13% of OpEx - $47.00/t ore
   Sustaining Cost:($29,454,545)($324,000,000)18% of OpEx - $64.80/t ore
Total Operating Cost:($167,059,545)($1,774,000,000)16% of Net Payable Revenue - OpEx - $354.80/t ore
Pre-Tax Cash Flow:$909,094,763$9,565,876,80384% of Net Payable Revenue - $1,913.18/t ore
   Taxes:($342,958,251)($3,608,168,257)38% of Pre-Tax Cash Flow - $721.63/t ore
After-Tax Cash Flow:$566,136,513$5,957,708,54653% of Net Payable Revenue - $1,191.54/t ore
Note: Concentrate transport costs, smelter treatment costs and retention are subtracted from recoverable revenue to get gross payable revenue to which the uncapped royalty rate for the project is applied. The annual average of LOM sustaining cost is expensed as an annual operating cost. Annual average figures reflect full production years.
Economic Outcome (USD): Royalty Model for 1% NSR at OV designated Metal Prices
Mine Life:11 yearsStartupNPV 5%NPV 10%NPV 15%
Annual Avg NSR:$10,761,543Now$82,361,124$61,956,407$48,045,899
LOM NSR:$113,398,7682030$55,745,251$28,903,121$15,706,290
Fair Speculative Value Stock Price Range: CAD $0.47 - $0.94
MSV (Market Cycle S Curve): Market Speculative Value represents the typical market pricing pattern of a new discovery as it moves through its exploration-development cycle. The irrational pricing behavior of the yellow channel contrasts with the fair speculative value of the blue channel as defined by the rational speculation model because during the pre-economic study stages there is great uncertainty about how big the discovery will turn out.
Fair Speculative Value Ladder
USD OV NPVCAD OV NPVExch RateDilutedNet Interest
Project StageUncertainty RangeCAD FSV RangeCAD FSV per Share RangeCAD MSV per Share Range
Grassroots 0.5% - 1.0% $17,601,684 - $35,203,367 $0.09 - $0.19 $0.19 - $0.47
Target Drilling 1.0% - 2.5% $35,203,367 - $88,008,418 $0.19 - $0.47 $0.47 - $0.94
Discovery Delineation 2.5% - 5.0% $88,008,418 - $176,016,836 $0.47 - $0.94 $0.94 - $14.17
Infill & Metallurgy 5% - 10% $176,016,836 - $352,033,671 $0.94 - $1.89 $9.45 - $18.90
PEA 10% - 25% $352,033,671 - $880,084,178 $1.89 - $4.72 $4.72 - $14.17
Prefeasibility 25% - 50% $880,084,178 - $1,760,168,355 $4.72 - $9.45 $4.72 - $9.45
Permitting & Feasibility 50% - 75% $1,760,168,355 - $2,640,252,533 $9.45 - $14.17 $4.72 - $9.45
Construction 75% - 100% $2,640,252,533 - $3,520,336,711 $14.17 - $18.90 $9.45 - $14.17
Production 100% $3,520,336,711 $18.90 $18.90 - $23.62
Market Speculative Value Stock Price Range: CAD $0.94 - $14.17
Warning: while the market spec value (S-Curve) and fair spec value channels presented in project value terms track the evolving expected ultimate outcome value, when presented in stock price terms the expected stock prices are subject to dilution through future equity financings or project interest farmouts.
Alternative Metal Price Scenarios

Metal 1Metal 2Metal 3Metal 4


Spot:$46.00 /lb U3O8

OV Assigned:$46.00 /lb U3O8

Pessimistic:$25.00 /lb U3O8

Optimistic:$50.00 /lb U3O8

Fantasy:$100.00 /lb U3O8

Note: for Metal 1 pessimistic, optimistic and fantasy price scenarios, OV assigned prices are used for Metals 2-4
Economic Outcomes with Alternative Metal Price Scenarios

OV Assigned:$4,934,063,74293.1%$2,732,332,12657.6%1.7
Fair Speculative Value for Alternative Metal Price Scenarios
Stage: Discovery Delineation - 2.5% - 5.0%

CAD AT NPVCAD Target PriceCAD FSV RangeCAD FSV per Share RangeCAD MSV per Share Range
Spot:$3,520,336,711$18.90$88,008,418 - $176,016,836$0.47 - $0.94$0.94 - $14.17
OV Assigned:$3,520,336,711$18.90$88,008,418 - $176,016,836$0.47 - $0.94$0.94 - $14.17
Pessimistic:$1,161,021,981$6.23$29,025,550 - $58,051,099$0.16 - $0.31$0.31 - $4.67
Optimistic:$3,969,729,993$21.31$99,243,250 - $198,486,500$0.53 - $1.07$1.07 - $15.98
Fantasy:$9,587,146,015$51.47$239,678,650 - $479,357,301$1.29 - $2.57$2.57 - $38.60
Detailed Visualized Outcome (KRO Members Only)
VU = Very Unsure SU = Somewhat Unsure SS = Somewhat Sure VS = Very Sure
The confidence indicator is intended to convey the visualizer's degree of uncertainty with regard to a particular assumption.
Deposit Scenario

Metal 1Metal 2Metal 3Metal 4





Concentrate Grade:0.0%VS
Price:$46.00 /lb U3O8VS

Price Type:Spot

Annual Payable:25,498,266 lb U3O8

LOM Payable:268,685,625 lb U3O8

Mining Scenario
Tonnage:5,000,000VUStrip Rate:0.0VS
Operating Rate (tpd):1,300SSMining Type:UndergroundVS
Mine Life (years):10.5
Tax Treatment:SLM Straight Line DepreciationSSTax Rate:42.0%SS
Cost Scenario

CurrencyUSD CostExchange Rate
Sustaining Capital:$324,000,000VUUSD$324,000,0001.000
Mining Cost ($/t rock):$113.00VUUSD$113.001.000
Mining Cost ($/t ore):$113.00
Processing Cost ($/t):$130.00VUUSD$130.001.000
Other Cost ($/t):$47.00VUUSD$47.001.000
Total OpEx ($/t):$290.00
Risk Factors - Risk-Adjusted Discount Rate: 8.0%

Risk LevelRisk WeightConfidenceNote
Environmental Permitting:Very Low0.5SS
Social License:Very Low0.5SS
Title:Very Low0.5SS
Tax:Very Low0.5VS
GeoPolitical:Very Low1.0VS
Infrastructure:Very Low0.5SS
Financing:Very Low0.5SU
Risk Factor Weight Table

Very LowLowHighVery High
Environmental Permitting:
Social License:
The risk adjusted discount rate is the sum of the weight of the risk level assigned to each risk factor.
Disclaimer: A visualized outcome is one of many possible outcomes for an exploration project as it moves through the 9 stages of the exploration-development cycle from grassroots to a producing mine with failure as an outcome at any point along the way. The range of possible outcomes for the physical nature of a deposit shrinks after delivery of an initial 43-101 resource estimate. While the nature of the deposit constrains the range of mining scenarios, the cost assumptions will vary as the project moves through the feasibility demonstration stages of the cycle, which affects the economic value of the final outcome. This economic value will also vary according to the prices of the metals targeted for extraction which may change during the years it takes for a project to become a mine. An outcome visualization is thus a compilation of best guess assumptions for the key variables that drive the discounted cash flow model, the basis for assigning an economic value to a mine. An OV is not intended as a prediction, but rather as a framework that allows the incorporation of new information generated by the exploration-development cycle for the project into a valuation model on an ongoing, dynamic basis.

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