Uranium Participation Corporation

In March 2013, the Cyprus government reached an agreement with the Eurogroup to receive a €10 billion loan to refinance its public debt and achieve its macroeconomic targets. As a condition of receiving the Eurogroup loan, Cyprus’s two major banks, Laiki Bank and Bank of Cyprus were restructured to restore their capital requirements. Uninsured deposits greater than €100,000 were subject to conversions into Bank of Cyprus shares. On February 28, 2013, UPC held approximately €13,000 in Cyprus bank accounts therefore these funds should be fully insured and are not anticipated to be impacted by the bank restructurings. UPC's uranium held by Uranium Participation Cyprus Limited’s Luxembourg branch is also not impacted by the Eurogroup bailout of Cyprus.

The substantively enacted future tax rates, in UPC’s various jurisdictions, range from 3.0% to 26.5%. In fiscal 2013, the Corporation incurred current tax recoveries of $13,000 and future tax recoveries of $3,021,000. The combined tax recoveries for the year of $3,034,000 reflected an effective tax rate of approximately 3.1% compared to tax recoveries of $18,997,000 and an effective tax rate of 7.8% in the prior year. The decline in the effective tax rate is primarily a result of an increase in the proportion of deductible temporary differences arising in the year that have not been benefited as deferred tax assets or used to offset tax liabilities, and an increase in the proportion of inventory held by the Luxembourg branch of UPC’s wholly owned subsidiary, Uranium Participation Cyprus Limited, which is taxed at the lowest rate within the Corporation.