MEETING THE URANIUM DEMANDS OF A CHANGING WORLD

The global economy is facing an unprecedented confluence of events that stands to re-shape the way people think and do business. China, India and their neighbors are leveraging their huge populations and transforming their societies to create an urban middle class of epic proportions. As this middle class of people continues to swell in numbers, the resulting demand for energy and in fact all commodity resources will remain robust.

To meet the growing demand for energy, the global economy will have to identify strategies to reduce dependence on fossil fuel. 2008 saw Crude Oil prices rise to very nearly $150/barrel before tumbling back to the $50 range. To many, this price surge was a warning sign of what may lay ahead for the global economy. As the global economy emerges from its current malaise, future such price surges could take Crude Oil prices even higher yet, driven by robust global demand and driven by the realization that new supplies will prove harder to find and exploit.

Several years ago, it was recognized that the global economy cannot continue to rely on hydrocarbon energy. This realization sparked a fury of investment activity in the Uranium sector. Uranium prices quickly raced to $130/pound. Uranium prices have since pulled back leaving many investors in shock. But, a rational analysis of the situation reveals that there is no formal exchange for Uranium like there is for Crude Oil and other commodities and hence the price discovery mechanism is somewhat opaque. Uranium price indicators are developed by private business organizations like Ux Consulting LLC who follow bids, offers and transactions. Hence, when watching the Uranium sector, it is more important to focus on the prevailing trend than on the absolute price. Despite the recent softness in absolute spot price, the prevailing trend in Uranium prices remains to the upside.

This trend becomes understandable when one stops to consider that 1/6th of the worlds electricity comes from the 440 existing nuclear reactors. By 2050, experts suggest the world will need to have several hundred more nuclear power plants up and running. Demand for Uranium is already outstripping supply to the point where we are relying on the recycling of old Soviet warheads and on Government stockpiles to meet demand. Both of these supply sources are finite - a fact which has not been lost on developing nations like China who have taken bold steps to secure future supply contracts with Australia.

As technology advances, experts suggest that the economics of nuclear power generation will become cheaper than coal, solar, wind and fuel cells. Despite the gloom and doom that now pervades the Uranium sector, the shift toward nuclear energy that has begun in earnest is not about to stop. Meeting the future projected demands for Uranium will require the identification and development of many new Uranium deposits the world over.

The opportunity to identify and develop new Uranium deposits is certain to be an exciting challenge and one that the team at Uranium City Resources has already embraced and taken action on. The time for investors to embrace Uranium as an investment theme is now....

New Mexico Uranium Exploration

Uranium City Resources has entered into a strategic joint venture in the Datil Basin - a geologically significant area of New Mexico. Serious Uranium exploration in the Datil Basin began in the 1960's when Gulf Oil (Nuclear Fuels Division) drilled out a series of medium sized ore bodies totalling several million pounds of Uranium and several million pounds of Vanadium. Mineralization in this area occurs at a transition interval between the Eocene Era Baca formation and the Cretaceous Age Crevasse Canyon formation.

Gulf's success attracted a host of other players including Pioneer Nuclear, Occidental Petroleum, and Energy Reserves Group. Just as these other players were gaining momentum, the Uranium cycle of the 1970's peaked and exploration activity ceased. No further work in this Datil area was done for the ensuing 25 years.

In 2007 Running Fox Resources acquired a series of lode claims totalling 3100 acres in the heart of the Datil Basin. Uranium City Resources has now been fortunate enough to enter into a Joint Venture with Running Fox on this property.

Work is now underway to define a drilling program that will take place in 2009. In the meantime, Uranium City Resources is looking at other property parcels in the Datil Basin.

Saskatchewan Uranium Exploration

Uranium City Resources has established a key presence in the past producing Beaverlodge / Uranium City Mining District in north-west Saskatchewan. Between 1950 and 1982, sixteen mines within the Uranium City District produced more than 65 million pounds of uranium from moderate grade deposits. Several of these past producing mines are located immediately adjacent to property now held by Uranium City Resources.

"...it's a lesser known fact that more accessible ores are found outside of the Athabasca Basin proper. In these outlying areas, the sandstone that once covered the basement rocks has been eroded making deposits easier to get at. But while basement deposits are extremely prospective, they have been largely ignored by investors who focus more on those companies working in the middle of the Basin....But with prices rising, the industry is now realizing that lower grade deposits may be important sources of yellowcake....Therein lies the opportunity. Many companies with prospective basement deposits have none of this factored into their share price, meaning we can take a low cost ride on the potential of such plays..."
Doug Casey - Casey Research
Bull & Bear Report April/May 2007

Newfoundland Uranium Exploration

Uranium City Resources has also established a presence in the Province of Newfoundland with its 50/50 Sops Arm-Sheffield joint venture with Metals Creek Resources (TSXv:MEK). The Sops Arm-Sheffield property is located in the White Bay area of north-central Newfoundland. The Trans Canada Highway is some 20 miles south and there are numerous towns and infrastructure in the area.

The 394 sq. kms that comprise this project area are underlain by what is thought to be the remnants of a Silurian caldera complex. This type of geological setting is analogous to large volcanic hosted uranium systems associated with the Streltsovka caldera complex in Russia and the McDermitt caldera complex in Nevada. Other exploration companies currently working in this area of Newfoundland have noted uranium mineralization values of up to 0.89%.

Future Growth Opportunities

In addition to projects in Canada, the UCR team is currently evaluating opportunities in other jurisdictions that would be accretive to shareholder value. These opportunities are not all necessarily Uranium related and span the wide range of commodity resources being sought after by the global economy.