Premier American Uranium: Reducing Estimates on Underwhelming Cebolleta PEA Economics

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As announced late last week, Premier American Uranium (PUR) released its much anticipated Preliminary Economic Assessment for the Cebolleta Uranium Project, located in New Mexico. The market reaction to the release was negative with shares declining -10% since release as the project economics largely underwhelmed. Incorporating the PEA, we change our valuation methodology for Cebolleta, going from a per lb in-situ multiple, to a cash flow driven, NPV8% valuation. As such, our price objective is reduced accordingly.

Ever since Premier American acquired American Future Fuels (its key asset being Cebolleta) in June 2024, we’ve been hesitant with the acquisition, knowing the history of the project. Cebolleta has been in an almost constant state of development and sale with a multitude of different owners over the last 15+ years. We acknowledge however both the high leverage the project has to uranium prices (NPV8% increasing by 83% when going from $90 per lb to $100 per lb LT) and the various recommendation stated in the PEA which could potentially increase the project economics (the execution of advanced metallurgical work, leach testing and confirmation drilling, among others). That said, we increase to a 0.75x NAV derived price objective (from 0.70x previously) owing to the now PEA level nature of Cebolleta. Incorporating our own estimates and migrating from a per lb multiple valuation to a cash flow driven, NPV8% valuation for the project, our 12-month price objective decreases accordingly going from C$2.10 per share, to C$1.73 per share. This equates to upside of +103% from the October 31 close. Shares of Premier American Uranium currently trade at a P/NAV of 0.37x.

On October 30^th, Premier American Uranium released the much anticipated Preliminary Economic Assessment (PEA) for the Cebolleta Uranium Project, located in New Mexico. The PEA figures incorporated an update to the Mineral Reserve Estimate (MRE) in which both of the Project’s Indicated and Inferred resource estimates were increased relative to the previous Technical Report dated from April 2024. Though the economic projections from the PEA have underwhelmed, we acknowledge both the high leverage the project has to uranium prices (NPV8% increasing by 83% when going from $90 per lb to $100 per lb LT) and the various recommendation stated in the PEA which could potentially increase the project economics (the execution of advanced metallurgical work, leach testing and confirmation drilling, among others).

HIGHER RESOURCE ESTIMATE AT CEBOLLETA HOWEVER THE PEA METRICS UNDERWHELM

Relative to the previous Cebolleta resource estimate from an April 2024 Technical report, the updated MRE for Cebolleta (effective May 14, 2025) increased the Indicated mineral resources by 1.7 Mlb eU3O8 (+9%) to now reach 20.3 Mlb eU3O8. Additionally, the Inferred mineral resources increased by 2.2 Mlb eU3O8 (+45%) to now reach 7.0 Mlb eU3O8. The updated MRE now has Cebolleta confirmed as one of the largest undeveloped uranium deposits located within the United States.

Recall that historically, the Cebolleta Project was host to over 4,000 drill holes. A modern confirmation drill program began in 2023, the results validated the stratigraphy, mineralization thickness, and grades. The MRE incorporates over 3,300 validated drill holes totaling greater than 1.7M feet. Cebolleta mineralization is primarily stratabound and tabular, hosted within medium- to coarse-grained, humate-rich fluvial sandstones of the Jackpile Sandstone. Mineralization is primarily hosted in the relatively flat laying Jackpile Sandstone at depths below the surface of 0 feet to 500 feet. The Project is composed of the St. Anthony, Willie P, and Areas I, II, III, IV, and V mining areas.

CEBOLLETA PEA HIGHLIGHTS STRONG LEVERAGE TO LT URANIUM PRICING

Prepared in accordance to accordance to the NI43-101 standards, the PEA illustrated a long life of mine (LOM operation spanning 13 years and averaging the production of 1.4M lbs U3O8 per year. Specifically, the PEA contemplates a two-year underground pre-production period and a 13-year active mine life comprised of underground and open pit mining across seven mining zones (St. Anthony, Willie P, and Areas I, II, III, IV, and V). The primary mining methods expected to be employed at Cebolleta will be open pit (St. Anthony Area) and room and pillar (Areas I, II, III, IV, V and Willie P, St. Anthony North and South Zones).

According to the PEA, the underground mining areas will be accessed by a 3,500-ft long adit decline starting near the heap pad location for Area III, with a 2,500-ft long extension of this decline to access Area II. There will be a second access to the underground mining at Area I and Willie P, which will be a 930-ft long adit starting at a location in the northwest corner of the St. Anthony open pit. These two underground accesses will be connected by a 3,800-ft long drift. A minimum mining thickness of six feet was applied to two-foot-thick mining blocks. Over the LOM, mining is expected to supply total process feed of 10.46 Mst with an average head grade of 0.11% e U3O8. Mining rates are anticipated to be 1,079 short tons per day (stpd) from underground and 1,982 stpd from open pit operations.

PEA ECONOMICS UNDERWHELM

Factoring in total capital of $206M (development capital, sustaining capital and reclamation) and an average operating cost of $41.60 per LOM, using a $90 per lb LT uranium price deck, the PEA calculated an after-tax NPV8% of $83.8M and an after-tax IRR of 17.70%.

As evidenced by the near 10% share price decline subsequent to the PEA release, the projected returns underwhelmed both the market and our own estimates as well. Note however that the project is very leveraged to the underlying LT uranium price - the Project after-tax NPV8% increases by +83% when going from $90 per lb to $100 per lb LT. Additionally, the PEA also set the framework with various recommendations which could potentially increase the Project returns (the execution of advanced metallurgical work, leach testing and confirmation drilling, among others).

As per our own estimates, we remain on the more conservative side with a modeled $43.00 per lb in average LOM operating costs while also following a similar development schedule. For the time being, we continue to use $80.00 per lb as our LT price deck.

EXPECTED NEAR-TERM TIMELINE

• 2H/2025: Drill results from current exploration at Kaycee

• 2H/2025-1H/2026: Development details for Cebolleta

• 2H/2025-1H/2026: Development details for Cyclone

VALUATION

Given the now PEA level of Cebolleta, we increase to a 0.75x NAV derived price objective (from 0.70x previously). Incorporating our own estimates and migrating from a per lb multiple valuation to a cash flow driven, NPV8% valuation for the project, our 12-month price objective decreases accordingly going from C$2.10 per share, to C$1.73 per share (owing to a higher Cebolleta valuation we carried using a in-stu per lb based valuation). Our revised price objective equates to upside of +103% from the October 31 close. Shares of Premier American Uranium currently trade at a P/NAV of 0.37x.