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Business Description

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Submitted By zhuyunshowshow
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1. Business and Product Description
Cameco (Acquirer)
Businese Overview

* One of the largest uranium exploration and process for nuclear plants * Production and distribution of components of nuclear reactors and unique alloy products (Mlb) * Proven and Probable 465 * M&I 244 * Inferred 287 * 2012 Production 21.9 * Fuel Service * Cameco is a major supplier of Uranium processing service, offering fuel refining, coversion, manufacturing and generation of uranium concentrate and sales of conversion. * Electricity (Generation and Sale of Electricity) * 31.6% in BruceBruce Power Limited Partnership (South Ontario)

* Uranium segment carries about 66.61% of the company’s total revenue in 2012 * Fuel segment accounted for about 11.93% of the company’s total revenue in 2012. * Electricity segment takes 20.25% of the company’s total revenue in 2012.

Cameco’s overall Strategy 1. Increase annual uranium supply to 36 million pounds by 2018, subject to market conditions; 2. Invest in opportunities across the nuclear fuel cycle that it expects will complement and enhance its business.

* Growth strategy: focus on uranium segment.
Rationale:
1. Over the next 10 years, annual consumption is expected to increase by 50 million pounds as new reactors come on line. 2. Deliveries under the Russian HEU commercial agreement will end in 2013, and the industry will need new uranium production.

Thus, Cameco is preparing its assets today to make sure it can be among the first to respond when the market signals new production is needed.

* Acquisition Strategy
Cameco has a dedicated team looking for acquisition opportunities that could further add to its supply, support its sales activities and complement and enhance its business in the nuclear industry. It will invest when an opportunity is available at the right time and the right price. It strives to pursue corporate development initiatives that will leave it and its shareholders in a fundamentally stronger position than it is today.
In the process of selection, Paladin came into sight with two reasons. First, as a uranium company, Paladin holds sizeable reserves with high expected production growth rate and therefore fit Cameco’s growth strategy. Second, Paladin is currently deeply undervalued. Combined with the bullish expectation about the future of uranium industry, making a bid for Paladin now is consistent with Cameco’s acquisition strategy to undertake an acquisition at the right time and the right price.

Paladin Energy Ltd (PDN) (Target)
Businese Overview

Its main business activities engage in acquisition, exploration, evaluation, development and operation of uranium * Uranium Production * Namibia & Malawi projects (Major projects)
Aurora Project etc (Developing) * Reserves (Mlb) * M&I 378.07 * 2012 Production 6.9 * Inferred 150.7

Namibian project * Stage 2 construction has completed, which increased its production from 2.6 Mlb to 3.7Mlb. * The commencing stage 3 construction would raise its production of 3.7Mlb to 5.2Mlb. * Completion of stage 4 construction by 2014 would bring up to 10Mlb U3O8 production. * This segment takes about 65.39% of total annual revenue (2011 figure).

Kayelekera Mine * The first commercial mining venture for Malawi, where has accounted for around 34.61% of the total revenue of PDN (2011 figure). * PDN holds the Kayelekera Mine licence.

Paladin’s overall Strategy 1. Become a major uranium mining house in the world 2. Operate at worldwide best practice emphasizing on the environment and safety * Growth strategy 1. Accumulate superior uranium projects with lower cost 2. Geographic diversification benefits from uranium projects operations 3. Signed with CGNPC Uranium Resources Co. Ltd for long-term sales of uranium to expand Chinese market in 2010.
PDN now is in the situation that shifting its development stage to optimizing the mining productions by technological innovation and cost optimization and main at being the major player in the world * Expansion 1. Seeking progressive development of its uranium resources by strategical acquisition and merge. 2. Preparing to timely acquire new projects in order to achieve the goal as becoming a Tier 1 uranium producer. 3. Looking for Partners and JV for global growth.

--------------------------------------------
[ 1 ]. http://www.cameco.com/investors/strategy/
[ 2 ]. Paladin Energy signs strategic MOU with China's CGNPC Uranium Resources,
[ 3 ]. http://www.smh.com.au/business/paladin-seeks-partners-for-global-growth-20110902-1jqa0.html

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