Fortbridge Media Release

Resource Capital Research [RCR] - RCR Company Update, Anatolia Energy Limited (ASX:AEK), May 2014

Resource Capital Research has released an equity research report on Anatolia Energy Limited (ASX:AEK).

Temrezli ISR Project (100% AEK) development decision and financing expected 2H14; production potential 1Q16. Updated PEA confirms robust economics with 11.3mlb resource (MI) at 0.122% U₃O₈. NPV breakeven US$30/lb U₃O₈. Low EV/resource ratio compared to peers: AEK is arguably the sectors best value explorer/developer: 12 month price target 19cps.

Investment points:

* Temrezli Project (Turkey): 1mlbpa plant, LOM 10 years. Low capex (US$30m), and low opex (US$20.22/lb) � the lowest cost quartile. Project after tax NPV₁₀ A$137m, (LT uranium price US$60/lb, AUD:USD 0.90).

* Updated PEA (May 14): Key improvements over PEA (Jul 13) include resource upgrade to Measured and Indicated: 11.25mlbs at 0.122% U₃O₈; opex US$20.22/lb (reduced from US$22.30/lb, -9.3%) � the lowest cost quartile for the sector. NPV breakeven ~US$30/lb (down from ~US$35/lb).

* Total regional Exploration Target of 30-50mlbs grading 0.075-0.10% U₃O₈ at Temrezli, Sefaatli and West Sorgun.

* Temrezlis high grade of 0.116% compares very favorably to Wyoming ISR peers which are frequently less than half this, ie, around 0.05% U₃O₈.

* Low EV to resource ratio compared to ISR peers: ~US$1.70/lb Vs select peer range of US$5-23/lb (MI). We have a 12 month price target for AEK of 19cps and 18 month target of 30+cps. Key catalysts include PFS (expected Aug 14); financing discussions and forward uranium sales well advanced � announcements expected 2H14.

* Blue chip share register includes specialist mining fund RMB (part of Rand Merchant Bank), Azarga Resources, Doyen, Richmond Capital and Sprott.

* Management team and board are highly experienced uranium executives.

* Turkey has a stable democracy. Revised and transparent mining law (Dec 10) recognizes uranium. Major mining company presence. Nuclear energy has strong political support in Turkey: 8 nuclear reactors approved; a total of 12 nuclear reactors are expected online by 2030.

* The uranium price is US$28.00/lb (spot); US$45/lb (contract). Challenging market conditions are expected to persist short to mid-term, though a turnaround is anticipated as Japanese reactors start to come back online, possibly 2H14. Significantly, uranium fund UPC raised C$57.6m Feb 14 in a sign that investors are starting to look to a market turnaround. Positive fundamentals longer term are expected to drive the incentive price above US$60/lb later this decade.

To view the full announcement please click on the link below:

For further information please contact:
John Wilson
Analyst
+61 2 9439 1919.