Latitude Uranium - Everything You Need to Know August 2023

Introduction

Latitude Uranium Inc. (CSE:LUR, OTCQB:LURAF, FRA:EI1) is a Canadian uranium exploration company focused on acquiring, exploring and developing uranium projects in politically stable jurisdictions. Formerly Labrador Uranium, the company was renamed to Latitude Uranium in June 2023, following the acquisition of ValOre Metals' Angilak uranium project. Latitude Uranium holds district-scale uranium projects in Nunavut and Labrador, Canada.

The company's strategy is to build a premier Canadian uranium exploration company by leveraging its world-class potential assets located in excellent mining jurisdictions. Latitude Uranium is purpose-driven with the goal of delivering sustainable long-term benefits to all stakeholders through a collaborative and supportive culture.

Uranium Market Outlook

The current excitement and investor interest around uranium is being driven by the critical role nuclear power must play in achieving global net zero emissions targets. Nuclear energy currently provides 10% of the world's electricity from 440 operating reactors, generating 400 GWe of total capacity. But much more nuclear generation will be needed.

Looking at global energy use, there are three main sources - heating, transport, and electricity generation. Electricity generation makes up the largest share, yet only 25% comes from clean, renewable sources like nuclear and hydro that can provide consistent baseline power.

Other renewables like solar and wind are intermittent - they cannot reliably deliver baseload power by themselves. To increase the share of clean electricity, more capacity needs to come from nuclear and hydro, displacing coal, oil and gas.

As CEO John Jentz explains: "You've only got a quarter of the electricity supply in green power. How do we increase that? Well we've got to get it out of coal, oil and gas, the fossil fuels, and get it into nuclear and hydro. Hydro is great but it needs the natural topography of the land so if you're on flat land with no water hydro is not really an option...you're going to need nuclear to supplement that on the baseload side - nuclear can dial up and dial down during the day whereas most others you can't."

Nuclear is the most scalable clean energy source capable of displacing fossil fuels. All sectors - heating, transport, electricity - need to increase electrification powered by clean sources. This is why many see nuclear power undergoing a 5-10 year bull run as the world strives to reach net zero emissions.

Jentz summarizes: "I think there's a 5-10 year bull run in nuclear and I think people are just starting to realize that. When they look at the numbers, the numbers are hard to push around. Nuclear is not the only option, but it's going to be the backbone of all those options."

According to the World Nuclear Association, nuclear power generation needs to double by 2050 in order to significantly reduce global greenhouse gas emissions. This will require constructing approximately 1000 GWe of new nuclear capacity, necessitating new sources of uranium supply. With uranium demand expected to outstrip supply in the coming years, investors are looking closely at uranium exploration and development companies, like Latitude Uranium, that can help close the widening supply gap.

Company Snapshot

Latitude Uranium has a tight share structure with approximately 203 million basic shares outstanding and a market capitalization of ~C$34 million at current prices.

The company is well funded, with a current cash balance of ~C$15 million following the recent oversubscribed private placement. This provides sufficient capital for Latitude's planned $12 million exploration programs at both Angilak and the CMB project in 2023.

In terms of research coverage, Red Cloud Securities analyst Dave Talbot has initiated coverage on Latitude Uranium with a "Buy" rating and C$1.35 target price.

The company is led by an experienced board and management team that brings decades of uranium exploration, development and financing experience. CEO John Jentz is an experienced mining professional having held operational, investment banking and board of director roles across the mining industry. The technical team is headed up by Nancy Normore, P.Geo, who has extensive experience in the uranium-rich Athabasca Basin. The board includes directors from ValOre Metals, providing continuity from the project's previous operator. Latitude Uranium also added an independent director, Brigitte Berneche, who is a CPA and corporate finance professional.

With its tight share structure, strong balance sheet, top-tier assets, and proven team, Latitude Uranium is well-positioned among junior uranium explorers to deliver value for shareholders as the uranium bull market unfolds. The company offers a compelling investment case for investors bullish on the uranium sector.

Projects Overview

Latitude Uranium holds two promising uranium projects located in Canada's northern territories - the Angilak project in Nunavut and the Central Mineral Belt (CMB) project in Labrador.

As CEO John Jentz explains, Angilak is a large 685 km2 property with a historical resource of 43 million pounds U3O8 at a world-class grade of 0.69%. He notes "for those who don’t know uranium, a gold equivalent at current metal prices would be something like 16 or 17 grams so very high grade." There are also molybdenum, copper and silver credits.

For 2023, an $8 million budget is planned at Angilak with 5,500-6,000 meters of drilling in the first phase.

The CMB project covers an even larger area of over 1,520 km2 in Labrador. It contains historical uranium resources at Moran Lake and Anna Lake. This year, $4 million has been budgeted for exploration. About $1 million has already gone into geophysics, looking for additional targets at Mustang Lake.

The remaining $3 million will fund an extensive ground gravity survey over the entire 125 km long property. Two key targets are unknown uranium occurrences and IOCG (iron oxide copper gold) potential. Survey results will be interpreted before year-end 2023.

Both projects provide substantial upside for new uranium discoveries and resource expansion, underpinned by strong historical datasets. Latitude Uranium is fully funded for an aggressive exploration campaign in 2023.

Angilak

Latitude Uranium's flagship project is the 100% owned Angilak Property located in Nunavut, Canada. Angilak hosts the Lac 50 Trend deposit, which has a historical inferred mineral resource estimate of 43.3 million pounds U3O8 grading 0.69% U3O8. This makes it one of the highest-grade undeveloped uranium deposits globally.

The project covers a total area of 685 km2 and has seen over $95 million invested in exploration since 1975. However, the Lac 50 Trend is the primary focus for near-term resource expansion and exploration drilling. This trend hosts the historical resource over a strike length of 1.7 km, with robust discovery potential in the 2 km gap between the J4 and Ray zones.

The deposit occurs at shallow depths of 350m below surface, amenable to open pit mining. It is a classic high-grade Beaverlodge-type uranium deposit characterized by narrow, high-grade uranium veins. The name refers to a specific type of uranium deposit found in the Beaverlodge area in Saskatchewan. These Beaverlodge-type vein-type uranium deposits were historically important uranium producers, which contributed significantly to Canada's early uranium mining industry in the 50's and 60's.

Some key characteristics of Beaverlodge-type deposits:

• Host Rocks: Typically found in metasedimentary rocks like schists and quartzites. Lac 50 is hosted in volcanics.
• Vein Formation: Uranium mineralization deposited from late-stage hydrothermal fluids circulating through fractures/shear zones.
• Narrow Veins: Veins range from centimeters to several meters wide with complex geometries.
• High Grades: Known for high uranium grades, typically 0.1-0.5% U3O8. Lac 50 is higher grade at 0.69% U3O8.
• Base Metal Association: Uranium veins often contain lead, zinc, copper, silver sulfide minerals. Lac 50 has molybdenum, copper, silver.

Initial metallurgical testwork has demonstrated >95% uranium recoveries, high-purity yellowcake and low reagent consumption. Radiometric ore sorting tests indicate the deposit is well-suited to upgrading through sensing technologies.

Beyond Lac 50, Angilak has extensive district-scale discovery potential. Over 68,000 hectares remain underexplored and open to new uranium discoveries.

Resource Expansion Targets

The Angilak property contains numerous targets that provide potential to expand resources beyond the existing Lac 50 deposit.

As CEO John Jentz explains, the proven technique for targeting mineralization starts with flying Very Low Frequency Electromagnetics (VLF-EM) over the property. This helps define conductive zones, which can be indicative of uranium mineralization.

However, not all conductors bear uranium, so this is followed up by geochemical sampling like enzyme leach soil sampling to confirm and delineate targets. Where the VLF-EM conductors overlap with soil anomalies, there is high probability of discovering uranium mineralization.

Some of the priority targets identified for follow up exploration include Flare, Spark, Blaze, Pulse, Hot, and ML, as shown on the map. Systematic exploration using the established VLF-EM and soil sampling methodology will continue generating high-probability drill targets across Angilak.

The goal is to make additional uranium discoveries and expand resources beyond the historical 43.3 million pounds at 0.69% U3O8 defined at Lac 50. Given the large size of the property, there is substantial potential for Angilak to evolve into a district-scale uranium camp through further discovery.

Favorable Economics of Lac 50

While grade is important, CEO John Jentz explains there are other factors that determine the economics of a deposit, including:

• Ore body orientation and structural controls
• Metallurgy
• Potential for ore sorting to upgrade feed grades

From a mining perspective, the sub-vertical orientation of the Lac 50 deposit starting at surface down to 300m depth would allow straightforward open pit or underground mining. Similar Beaverlodge-type high-grade uranium veins have been successfully mined globally, providing ample analogues.

Preliminary metallurgical testing by the previous operator ValOre has shown excellent recoveries of over 95% are achievable. Ore sorting technology also shows strong potential to significantly upgrade feed grades early in the milling process by rejecting up to 84% waste rock while only losing 6% of uranium ore.

While further studies are still required, these early results indicate ore from Lac 50 can be efficiently processed and sorted at commercial scale. This has the potential to substantially improve project economics. Latitude Uranium will be following up on these ore sorting studies to quantify the upside.

When considering the ore body characteristics, metallurgy and potential to optimize feed grades, Lac 50 shows promising economics that Latitude will continue to refine as the project is advanced.

Excellent Metallurgy & Low Reagent Consumption

Initial metallurgical testwork on mineralization from Lac 50 has been very promising. Over 95% uranium recovery was achieved in just a 48-hour leach cycle, indicating rapid uranium extraction is possible.

The resulting yellowcake product with ~70% uranium content is considered low impurity, meeting minimum specifications for penalty elements like arsenic, fluoride, molybdenum and vanadium.

This means no price discounts are expected on Angilak production. The yellowcake would be packaged in drums and transported off site to a uranium converter facility.

In terms of reagents, the alkaline leaching process developed can recycle 100% of the primary lixiviants. Only lime and sodium hydroxide are consumed during leaching, keeping operating costs down.

There is also potential to utilize the CO2 byproduct from the leaching process as carbon credits. This would provide additional cost offsets and environmental benefits.

Overall, the excellent recoveries, high-purity yellowcake, and low reagent intensity demonstrate promising metallurgy and potential for an environmentally friendly mining operation at Lac 50. Latitude Uranium will look to further optimize process design as the project continues advancing.

Nunavut Permitting & Uranium Mining

When Nunavut separated from the Northwest Territories in 1999, the territory formed Nunavut Tunngavik Inc. (NTI) to administer subsurface mineral rights. As CEO John Jentz explains, the arrangement Latitude has with NTI is "all standard, it spells out rights, responsibilities and economics." Some of Angilak consists of Inuit Owned Lands administered by NTI, while non-Inuit lands go through the federal government.

There is a perception that Nunavut is not supportive of uranium mining. In reality, this stems from a misunderstanding about the failed Kiggavik uranium project proposed by Areva (now Orano) in 2015.

As Jentz elaborates: "There was some misconception back at the time that they did not get their permit, which is true, but it’s really the reason why they did not get the permit - it wasn't because there was any opposition to uranium. It's basically because Kiggavik for whatever reason...submitted their application with no start date and that just didn't work...The company acknowledged uranium prices around $35-40 at the time made the project uneconomic and they were asking the territory for an open-ended start date, and that just didn't work."

In September 2017, NTI formally issued a uranium policy confirming they are not opposed to uranium mining provided economic benefits flow to Inuit communities. Jentz sums up: "You can go to the website, read it yourself - they are pro uranium. So when we start working our way through the permitting process, which we've started, we expect that will go reasonably smoothly."

Nunavut has a well-established regulatory process for mine permitting and is supportive of mining, with four currently operating mines (Meadowbank, Meliadine and Hope Bay operated by Agnico Eagle, and Mary River operated by Baffinland) making up the largest private sector GDP contributions. This bodes well for Latitude advancing the Angilak project through the proper territorial and federal permitting channels in the years ahead.

Central Mineral Belt (CMB)

Latitude Uranium's Central Mineral Belt (CMB) project covers 152,865 hectares in Labrador, Canada. This prominent land position secures a large portion of the highly prospective CMB uranium belt.

As CEO John Jentz explains, the CMB contains historical uranium resources at Moran Lake (5.2 million pounds U3O8) and Anna Lake (4.9 million pounds). Nearby is Paladin Energy's Michelin project, made up of 6 deposits with 127.7 million pounds U3O8.

Several copper occurrences have been identified across the project as well. The area has seen over 50 years of exploration by various companies, but never consolidated ownership like Latitude has now achieved.

An extensive $3 million airborne gravity-gradiometer-magnetics-radiometrics survey is underway, collecting 31,892 line-km of data. As Jentz notes, "doing something on a regional scale with airplanes is cost effective and works much better" in this remote terrain. It will provide a focus for new targets.

At Mustang Lake, ground geophysics has been completed and interpretation is ongoing. This area represents a compelling target given its proximity to Michelin. Extensive data compilation and machine learning is also underway to further refine targets belt-wide.

The CMB project provides Latitude with a vast exploration portfolio covering a highly fertile uranium district. Methodical exploration techniques will look to make the next major discovery in this emerging uranium camp.

Risks & Opportunities

Risks

• Exploration and development risks - As an early stage exploration company, there are no guarantees that exploration will successfully locate new uranium deposits or expand existing resources. Additional drilling is needed to upgrade historical estimates to current resources.
• Permitting risks - Operating in Canada's North requires extensive permitting and local stakeholder engagement. Delays or rejections of key permits could impact project timelines.
• Uranium price risks - While the uranium market is expected to enter a deficit, there are no guarantees prices will increase as predicted. Prolonged low prices could hamper project economics.
• Financing risks - Latitude will require further infusions of capital depending on exploration results. Equity financings may cause dilution for existing shareholders.
• Key person risk - The company relies on a small team, especially CEO John Jentz, for vision and leadership. Departures could impact Latitude's prospects.

Opportunities

• Resource expansion at Lac 50 - The deposit is open along strike and at depth with minimal regional exploration. Significant resource growth potential exists.
• New uranium discoveries - Only a fraction of the large Angilak and CMB land packages have been explored. Excellent opportunity for new district-scale finds.
• Higher uranium prices - Most analysts predict a severe supply deficit by 2024-2025, which should drive uranium prices and valuations higher.
• Strong partnerships - Latitude can leverage its ties to ValOre Metals and the Desmarais family for strategic support and preferential access to capital.
• Takeout potential - If exploration success continues, larger uranium producers may look to acquire Latitude and its assets rather than drill out their own discoveries.

Investment Summary

For investors excited by the uranium investment thesis, Latitude Uranium presents a compelling opportunity with significant upside potential.

The company is focused on building a premier Canadian uranium explorer by leveraging its world-class assets located in top mining jurisdictions. Angilak and the CMB project give Latitude critical mass in two emerging uranium camps with massive discovery potential.

Angilak's high-grade Lac 50 deposit is one of the best undeveloped uranium projects globally, with historical resources of 43.3 million pounds at 0.69% U3O8. This grade is comparable to prolific mines like Cameco's Eagle Point. Substantial resource expansion is possible both at Lac 50 and regionally across the vast 685 km2 land package.

Meanwhile, the CMB project covers a highly prospective 152,863-hectare uranium belt hosting numerous deposits. Geophysics and machine learning will unlock new targets across this underexplored terrain.

Supported by an experienced board and proven technical team, Latitude has outlined an aggressive $12 million exploration program for 2023. Fully funded after a recent oversubscribed financing, investors can expect steady news flow as the projects advance.

Uranium demand is forecasted to outstrip supplies starting in 2023-2024, igniting a structural deficit. Latitude offers exceptional leverage to capitalize on the coming uranium bull run. For investors seeking value, growth and exploration upside, Latitude Uranium warrants a close look.