Item 1B. Unresolved Staff Comments
Item 1B. Unresolved Staff Comments
 
Not applicable
 
27
 
 
Item 2. Description of Properties
 
 
Overview
 
Uranium Energy Corp. is engaged in conventional and in situ recovery (ISR) uranium extraction and recovery, along with the exploration, permitting and evaluation of uranium properties in the United States, the Republic of Paraguay, and Canada.
 
28
 
 
 
Measured Mineral Resources
 
Indicated Mineral Resources
 
Inferred Mineral Resources
 
Ore Tons
(000s)
Grade (%
eU3O8)
Pounds
(000s
eU3O8)
 
Ore Tons
(000s)
Grade (%
eU3O8)
Pounds
(000s
eU3O8)
 
Ore Tons
(000s)
Grade (%
eU3O8)
Pounds
(000s
eU3O8)
 
Irigaray
0
N/A
N/A
 
3,881
0.076
5,899
 
104
0.068
141
Christensen Ranch
0
N/A
N/A
 
6,555 
0.073
9,596
 
0
N/A
N/A
Moore Ranch
2,675
0.060
3,210
 
0
N/A
N/A
 
46
0.047
44
Reno Creek
14,990
0.043
12,920
 
16,980
0.039
13,070
 
1,920
0.039
1,490
Ludeman
2,674
0.094
5,017
 
2,660
0.088
4,697
 
866
0.073
1,258
Allemand-Ross
246
0.085
417
 
32
0.066
42
 
1,275
0.098
2,496
Barge
0
N/A
N/A
 
4,301
0.051
4,361
 
0
N/A
N/A
Jab/West Jab
1,621
0.072
2,335
 
253
0.077
392
 
1,402
0.060
1,677
Charlie
0
N/A
N/A
 
1,255
0.123
3,100
 
411
0.120
988
Nine Mile Lake
0
N/A
N/A
 
0
N/A
N/A
 
3,405
0.036
4,308
Red Rim
0
N/A
N/A
 
337
0.170
1,142
 
473
0.163
1,539
Clarkson Hill
0
N/A
N/A
 
0
N/A
N/A
 
957
0.058
1,113
Burke Hollow
70
0.082
115
 
1,337
0.087
2,209
 
2,494
0.095
4,859
Goliad
1,595
0.053
2,668
 
1,504
0.102
3,492
 
333
0.195
1,225
Palangana
0
N/A
N/A
 
232
0.134
643
 
302
0.100/0.110
-0.300
1,001
Salvo
0
N/A
N/A
 
0
N/A
N/A
 
1,125
0.091
2,839
Yuty
0
N/A
N/A
 
9,074
0.049
8,962
 
2,733
0.040
2,203
ISR Subtotal
 
 
26,682
 
 
 
57,605
 
 
 
27,181
 
Anderson
0
N/A
N/A
 
16,175
0.099
32,055
 
0
N/A
N/A
Conventional Subtotal
 
 
0
 
 
 
32,055
 
 
 
0
Total Mineral Resources
 
 
26,682
 
 
 
89,660
 
 
 
27,181
 
Notes:
1. The Mineral Resources estimates in this table meet S-K 1300 definitions
 
2. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability
 
3. Mineral Resources are estimated using a long-term uranium price of $40 per pound for ISR projects and $65 per ton for conventional properties
 
4. Mineral Resources are 100% attributable to the Company
 
5. Numbers may not add due to rounding
 
29
 
 
ISR Uranium Activities
 
The Company conducts its ISR recovery activities through its Irigaray Central Processing Plant (“CPP”) and Christensen Ranch ISR Project, located in northeast Wyoming, which it acquired in December 2021 through the acquisition of U1A, and its Hobson CPP and Palangana ISR Project, located in south Texas, which it acquired in 2009 from Uranium One.
 
The Irigaray CPP Project includes: (i) the Irigaray CPP (100% ownership); (ii) the Christensen Ranch Wellfields (100% ownership); (iii) the Charlie Wellfields (100% ownership); (iv) the Reno Creek ISR Project (100% ownership); (v) the Moore Ranch ISR Project (100% ownership); (vi) the Ludeman ISR Project (100% ownership); (vii) the Allemand-Ross ISR Project; (viii) the Barge ISR Project; (ix) the Jab/West Jab ISR Project (100% ownership); (x) the Nine Mile Lake ISR Project (100% ownership); (xi) the Red Rim ISR Project (100% ownership); and (xii) the Clarkson Hill ISR Project all in Wyoming. See “Non-Material Mineral Properties - Other ISR Projects.” Production from existing wellfields at Christensen Ranch ceased in 2018 and the project was put in care and maintenance mode. Processing of toll resins from other projects continues at the Irigaray CPP. In order for Christensen Ranch to engage in future uranium extraction, the Company will need to incur capital expenditures to restart idled wellfields.
 
The Hobson CPP Project includes: (i) the Hobson CPP (100% ownership); (ii) the Palangana ISR Project (100% ownership); (iii) the Burke Hollow ISR Project (100% ownership); (iv) the Goliad ISR Project (100% ownership); and (v) the Salvo ISR Project all in Texas. Production from existing wellfields at the Palangana ISR Project ceased in 2016 and the project was put in care and maintenance mode. In order for Palangana to engage in future uranium production, the Company will need to incur capital expenditures to restart idled wellfields.
 
The 100% owned Yuty ISR Project, located in Paraguay, is an exploration phase project.
 
Conventional Uranium Activities
 
The Company’s Anderson Project (100% ownership) located in Arizona, is an exploration phase project containing estimated resources that are suitable for conventional open-pit and underground mining methods.
 
30
 
 
Irigaray CPP
 
The following technical and scientific description for the Irigaray CPP Project area (the “Irigaray Project Area”) is based in part on the TRS titled “S-K 1300 Mineral Resource Report Wyoming Assets ISR Hub and Spoke Project, WY USA”, dated March 31, 2022, prepared by Western Water Consultants d/b/a WWC Engineering (“WWC”), a qualified firm (the “QP herein”). The Irigaray Project Area does not have mineral reserves and is therefore considered an Exploration Stage property under S-K 1300 definitions, despite a history of commercial production.
 
Property Description
 
The Irigaray Project Area is located in Johnson County, Wyoming, northwest of Pumpkin Buttes and near Willow Creek, within the Powder River Basin (the “PRB”). The Irigaray Project Area covers 3,107 acres, including all (or portions of) 12 sections of the PRB.
 
The Irigaray Project Area is approximately 70 air miles north-northeast of Casper, Wyoming, and 30 air miles east of Kaycee, Wyoming. The Irigaray Project Area can be accessed from Kaycee, Wyoming, by traveling east on State Highway 192 through the town of Sussex, and then traveling north on Streeter Road to the intersection of Irigaray Road. The Irigaray Project Area is located on Irigaray Road approximately four miles north of the intersection with Streeter Road. The Irigaray Project Area is primarily located on private surface land, federal BLM land and a portion located on one section of state-managed land.
 
 
Figure 1: Map of UEC Project Areas
 
31
 
 
Ownership
 
The Irigaray Project Area is owned and operated by UEC. UEC has executed surface use and access agreements and fee mineral leases with landowners who hold surface and mineral ownership within and outside the various Irigaray Project Area boundaries. UEC also holds unpatented BLM lode claims and leases on Wyoming state land on the various project areas.
 
Mineral rights for the Irigaray Project Area are a combination of federally administered minerals (unpatented lode claims), State of Wyoming mineral leases and private (fee) mineral leases. Federal mining claims were staked and recorded consistent with federal and state law, state mineral leases were obtained by submitting a lease application and appropriate fee to the State Board of Land Commissioners and fee mineral leases were obtained through negotiation with individual mineral owners.
 
Table 1: Property Characteristics Summary
Project Area
State of Wyoming Leases
Fee Mineral Leases
Federal Lode Mining Claims
Total
Irigaray
Acreage
480
0
1,640
2,120
Leases/Claims
2
0
82
84
Total Annual Cost
$1,600
$0
$13,530
$15,130
 
Within the Irigaray Project Area, UEC holds one State of Wyoming uranium lease on state lands and 257 unpatented lode claims on federally administered minerals. There is one fee (private) mineral lease on the Irigaray Project Area.
 
Payments for the state and private lease and BLM mining claim filing payments are up to date, as of the effective date of the TRS.
 
Accessibility, Climate, Local Resources, Infrastructure and Physiography
 
The Irigaray Project Area is within Johnson County, Wyoming. This county resides in the Wyoming Basin Physiographic Province in the southern portion of the PRB. The site generally lies near the synclinal axis of the basin. The PRB is a part of the Northwestern Great Plains eco-region, a semiarid rolling plain of shale and sandstone punctuated by occasional buttes. Regional structural features also include the Big Horn Mountains to the west, Casper Arch to the south and the Black Hills to the east. In the Irigaray Project Area the landscape is dominated by the Pumpkin Buttes.
 
Topography in the Irigaray Project Area ranges from generally flat to gently rolling hills with numerous drainages containing ephemeral streams dissecting the Irigaray Project Area. Elevations ranges from approximately 4,500 ft to 5,400 ft above mean sea level.
 
Vegetation within the Irigaray Project Area consists primarily of grassland, with areas of sagebrush. The Irigaray Project Area lies within the mixed grass eco-region of the Northwestern Great Plains. Interspersed among these major vegetation communities, within and along the ephemeral drainages, are grassland and meadow grassland and less abundant types of seeded grasslands (improved pastures).
 
The Irigaray Project Area in the PRB is located in a semi-arid or steppe climate. The region is characterized by cold, harsh winters and hot, dry summers. The spring season is relatively warm and moist, and autumns are cool. Temperature extremes range from roughly -25° F in the winter to 100° F in the summer. Typically, the last freeze occurs during late May and the first freeze occurs in mid- to late September.
 
Yearly precipitation in the PRB averages about 13 inches. The PRB is prone to severe thunderstorm events throughout the spring and early summer months, and much of the precipitation is attributed to these events. Snow falls throughout the winter months (approximately 40 to 50 inches per year), but provides much less moisture than rain events.
 
32
 
 
The nearest community to the Irigaray Project Area is Wright, a small, incorporated town with a population of 1,644 at the junction of Wyoming Highway 387 and Wyoming Highway 59. Gillette is a major local population center with a population of 33,403 and a regional airport. Gillette is located along Interstate 90, north and east of the Irigaray Project Area via both Wyoming Highway 59 (due north of Wright) and Wyoming Highway 50. The towns of Edgerton and Midwest are in Natrona County, southwest of the Irigaray Project Area on Wyoming Highway 387.
 
A major north–south railroad, BNSF Railway, used primarily for transporting coal, lies east of the Irigaray Project Area and parallel to Wyoming Highway 59.
 
Equipment and supplies needed for exploration and day-to-day operations are available from population centers such as Gillette and Casper. Specialized equipment for the Irigaray Project Area will likely need to be acquired from outside of Wyoming.
 
The local economy is geared toward coal mining and oil and gas production as well as ranching operations, providing a well-trained and capable pool of workers for ISR production and processing operations. Workers will reside locally and commute to work daily.
 
As a result of energy development over the past 50 years, the Irigaray Project Area has existing or nearby (less than two miles) electrical power, gas and adequate telephone and internet connectivity.
 
The Irigaray Project Area is a fully operational and licensed ISR processing plant for resin elution, precipitation, filtration, and drying and packaging of U 3 O 8 . The Irigaray Project Area has a capacity of 1.3 million lbs U 3 O 8 per year, which is expandable to 2.5 million lbs U 3 O 8 per year. A second elution system is also at the Irigaray Project Area for toll processing. The Irigaray Project Area is equipped with a warehouse and office, power, telephone, water tank and domestic waste disposal.
 
History
 
Uranium was first discovered in the southern PRB during the early 1950s. By the mid- to late 1950s, small open pit mine operations were established in the PRB. Early prospecting and exploration included geologic mapping and gamma surveys, which led to discoveries of uranium in the Wasatch and Fort Union Formations. Extensive drill hole exploration has been utilized to locate deeper uranium mineralization since the 1960s to progress geologic models.
 
The table below describes the historic ownership and operations at the Irigaray Project Area.
 
Table 2: Historic Ownership and Operations at the Irigaray Project Area
Year
Company
Operations/Activity
Amount
(No. of Drill holes)
Results of Work
1969
Homestake Mining (“Homestake”)
Original controller of the Irigaray Project Area.
Approximately 1,340
Right to mine secured. Preliminary delineation of mineralized areas.
1975
Westinghouse Electric Corporation (“Westinghouse”)
Acquired property from Homestake. The project was licensed for ISR production in 1978 and was operated by Wyoming Mineral Corporation, a subsidiary of Westinghouse. Operations ceased in 1982 due to market trends.
Approximately 470
Delineation of mineralized areas. Began ISR production.
1987
Malapai Resources Company (“Malapai”)
Acquired property from Westinghouse.
None
Ownership transition.
1990
Total Minerals Corporation (“TOMIN”) and Électricité de France (“EDF”)
Acquired property from Malapai. TOMIN acted as project operator.
None
Ownership transition.
1993
COGEMA Resources, Inc. (“COGEMA”) (now Orano S.A.)/Areva
Replaced TOMIN as project operator in partnership with EDF. COGEMA acquired interests from TOMIN.
Approximately 20
0.74 million lbs of U 3 O 8  produced from 1978 through 2000.
2010
Uranium One
Dried many millions of pounds from Christensen Ranch and through toll milling.
N/A
Decommissioned Irigaray wellfields.
2021
UEC
Irigaray Project Area acquired by UEC from Uranium One.
N/A
Ownership transition.
 
33
 
 
Permitting and Licensing
 
A majority of the resources in the Irigaray Project Area are not permitted. Portions of the Irigaray Project Area resources on federal lands would require BLM permitting. Permitting would include wildlife considerations, such as greater sage grouse leks and core area, which could limit development of resources. The CPP and related infrastructure are fully permitted to process loaded ion-exchange resins.
 
Geologic setting, Mineralization, and Deposit
 
The Irigaray Project Area resides in the PRB. The PRB extends over much of northeastern Wyoming and southeastern Montana and consists of a large north-northwest trending asymmetric syncline, with the basin axis located to the west of the projects. The PRB is bounded by the Big Horn Mountains and Casper Arch to the west, the Black Hills to the east and the Hartville Uplift and Laramie Mountains to the south. The PRB is filled with marine, non-marine and continental sediments ranging in age from early Paleozoic through Cenozoic.
 
Within the PRB, the Paleocene Fort Union Formation conformably overlies the Lance Formation and is a fluvial-sedimentary stratigraphic unit that consists of fine- to coarse-grained arkosic sandstone, which is interbedded with siltstone, mudstone and carbonaceous materials. In some areas of the PRB, the Fort Union Formation is divided into two members, identified as the Upper and Lower members of the Fort Union Formation. However, Flores divides the Fort Union into three members: the Tullock; Lebo; and Tongue River members (listed from oldest to youngest); as follows:
 
 
●
The Tullock member consists of sandstone, siltstone and sparse coal and carbonaceous shale.
 
●
The Lebo member consists of abundant drab gray mudstone, minor siltstone and sandstone and sparse coal and carbonaceous shale beds.
 
●
The Tongue River member consists of interbedded sandstone, conglomerate, siltstone, mudstone, limestone, anomalously thick coal beds and carbonaceous shale beds. This member has been mined extensively for its coal beds, which can be hundreds of feet thick.
 
Uranium mineralization occurs in zones that are located in channel sands of the Fort Union Formation. These channel sands are typical fining upward sand sequences consisting of fine-grained sandstones. The zones of mineralization are formed as typical roll-front deposits in these sandstones.
 
The early Eocene Wasatch Formation unconformably overlies the Fort Union Formation around the margins of the PRB. However, the two formations are conformable and gradational towards the basin center. The relative amount of coarse, permeable clastics increases near the top of Fort Union, and the overlying Wasatch Formation contains numerous beds of sandstone that can sometimes be correlated over wide areas. The Wasatch-Fort Union contact is separated by Paleocene and Eocene rocks and is generally placed above the Roland coal. However, other authors have placed the Wasatch-Fort Union contact above the School, Badger and Anderson Coals in other parts of the PRB.
 
The Wasatch Formation occurs at the surface in the central PRB, but has been mostly removed by erosion with only small, scattered outcrops still present in the southern PRB. The Wasatch Formation is also a fluvial sedimentary unit that consists of a series of silt to very coarse-grained gradational intervals in arkosic sandstone. The sandstone horizons in the Wasatch Formation are the host rocks for several uranium deposits in the central PRB. Within this area, mineralization is found in a 50- to 100-ft thick sandstone lens. On a regional scale, mineralization is localized and controlled by facies changes within this sandstone, including thinning of the sandstone unit, decrease in grain size and increase in clay and organic material content. The Wasatch Formation reaches a maximum thickness of about 1,600 ft and dips northwestward from one degree to two-and-a-half degrees in the southern and central parts of the PRB.
 
The Oligocene White River Formation overlies the Wasatch Formation and has been removed from most of the basin by erosion. Remnants of this unit crop out on the Pumpkin Buttes, and at the extreme southern edge of the PRB. The White River Formation consists of clayey sandstone, claystone, a boulder conglomerate and tuffaceous sediments, which may be the primary source rock for uranium in the southern part of the PRB as a whole. The youngest sediments consist of Quaternary alluvial sands and gravels locally present in larger valleys. Quaternary eolian sands can also be found locally.
 
The Irigaray Project Area targets mineralization in the Eocene-aged Wasatch Formation.
 
34
 
 
Mineralization in the Irigaray Project Area occurs in fluvial sandstones of the lower parts of the Wasatch Formation. Most of the upper Wasatch Formation has been eroded away. The sandstones are arkosic, fine- to coarse-grained with local calcareous lenses. The sandstones contain minor amounts of organic carbon that occurs as dispersed bits or as stringers. Unaltered sandstones are generally gray, while altered sandstones are tan or pink due to hematite, or show yellowish coloring due to limonite.
 
Pyrite occurs in several forms within the host sandstones. In unaltered sandstones, pyrite occurs as small to large single euhedral crystals associated with magnetite, ilmenite and other dark detrital minerals. In altered sandstone, pyrite is typically absent, but locally occurs as tarnished, very fine-grained euhedral crystals. In areas of intense or heavy mineralization, pyrite locally occurs as massive, tarnished crystal aggregates (Utah International, 1971).
 
The Irigaray Project Area contain portions of four alteration systems, all within fluvial sands of the Wasatch Formation. These fluvial host systems are labelled K1, K2, K3 and K4 sands and are in descending order. These sands vary in thickness from 0 ft to 100 ft within the Irigaray Project Area. They coalesce within portions of the Irigaray Project Area and form massive sand sequences of roughly 250 ft (80 m) in thickness. These sands in turn host the K1, K2, K3 and K4 uranium roll-front systems, each of which is composed of multiple stacked individual roll-front deposits.
 
Data Verification
 
The resource estimate is based on historic drill holes with uranium assays by gamma logging and a limited number of core holes with chemical assays. Industry standard methods were used at the time of data collection.
 
The Irigaray Project Area is currently on care and maintenance and has been successfully mined since 1978. Past production from both projects confirms the presence of significant mineral resources that were estimated using similar methods.
 
A study was conducted in 1982 that compared the chemical assays of 77 historic core holes drilled on the Irigaray Project Area with radiometric data that had been reinterpreted. Conclusions of the study indicate that the total grade thicknesses (the “GT”) are well within the margin of error expected in such calculations, but that radiometric interpretations showed a bias. The original estimates underestimated the in-place grades and overestimated the in-place thicknesses of mineralized zones. It was concluded that these biases effectively offset one another.
 
Another study in 1994 was conducted with Prompt Fission Neutron (“PFN”) logging equipment to determine equilibrium and to determine the extent of remobilized uranium in a producing wellfield. Core samples were also collected and chemically assayed to check the accuracy of the PFN logging and further determine disequilibrium. The study found that the PFN logging determined the same vertical and horizontal mineralization limits as the gamma logs. Core hole chemical assays were also compared with historic gamma logs, and the results overall indicated reasonably good correlations between the two.
 
A WWC professional previously worked at the Irigaray Project Area from 1995 until 1999. During that time, he was the only on-staff geologist at the Irigaray Project Area and was responsible for reviewing thousands of logs for mine unit planning and development and has personal knowledge of the data quality.
 
Mineral Resource Estimates
 
The following key assumptions were used for resource estimates, unless otherwise noted:
 
 
●
resources are located in permeable and porous sandstones; and
 
●
resources are located below the water table.
 
The GT contour method was used to estimate the mineral resources at the Irigaray Project Area. The GT contour method is one of the most widely used and dependable methods to estimate resources in uranium roll-front deposits. The basis of the GT contour method is the GT (grade x mineralized thickness) values, which are determined for each drill hole using radiometric log results and a suitable GT cutoff, below which the GT value is considered to be zero. The GT values are then plotted on a drill hole map and GT contours are drawn accordingly using roll-front data derived from cuttings and the nature of the gamma anomalies. The resources are calculated from the area within the GT contour boundaries considering the disequilibrium factor (“DEF”) and the ore zone density.
 
35
 
 
The resource estimate method, general parameters and mineralized cutoffs used at the Irigaray Project Area are summarized below.
 
Table 3: Irigaray Project Area Resource Estimate Methodology
 
 
 
 
Cutoff Parameters
Project Area
Mineral Resource
Estimation Method
Disequilibrium
Factor
Bulk
Density
(ft 3 /Ton)
Min. Grade
(% U 3 O 8 )
Min. Thickness
(ft)
Min. GT
Irigaray
GT Contour Method
1.0
17.0
0.04
2
0.25
Note
Cutoff parameters are discrete and therefore the GT cutoff is not necessarily the product of cutoff grade and cutoff thickness.
 
Based on the depths of mineralization, average grade, thickness and GT, it is the TRS QP’s opinion that the mineral resources of the Irigaray Project Area can be recoverable by ISR methods using a long-term uranium price of $40/lb.
 
Uranium does not trade on the open market and many of the private sales contracts are not publicly disclosed. UEC used $40/lb as the forecast uranium price for the Irigaray Project Area. This is based on: (i) the long-term contract price at the end of February 2022, which was $43.88/lb from Cameco Resources’ combination of Ux Consulting (“UxC”) and Trade Tech reports (Cameco, 2022); (ii) the spot price at the end of February 2022 ($48.75/lb); (iii) UxC’s price forecast; and (iv) UEC’s understanding of market expectations. The table below contains the UxC uranium price forecast for Q4 of 2021
 
Table 4: UxC Q4 2021 Uranium Price Forecast ($/lb U 3 O 8 )
UxC Market Outlook Q4 2021
2021
2022
2023
2024
2025
UxC High Price Midpoint
$36.00
$46.37
$48.11
$52.13
$56.47
UxC Low Price Midpoint
$36.00
$40.02
$41.33
$42.59
$43.02
UxC Mid Price Midpoint
$36.00
$43.18
$44.14
$46.71
$48.39
 
In the opinion of the TRS QP, $40/lb is a conservative forecast price for the following reasons:
 
 
●
first, at the issuance date, both the long-term price and spot price are greater than $40/lb;
 
●
second, new physical uranium investment vehicles were created in 2021, such as the Sprott Physical Uranium Trust and the upcoming physical uranium fund backed by Kazatomprom, the National Bank of Kazakhstan and Genchi Global Ltd., which effectively remove uranium supply from the market;
 
●
third, the increasing demand for carbon-free energy and global plans to construct new nuclear reactors will increase demand for uranium; and
 
●
finally, there has already been a steady increase in the uranium price for the last three years with a sharp rise to greater than $40/lb in the second half of 2021, due in part to increased demand from the Sprott Physical Uranium Trust. Due to recent volatility in the uranium market, the TRS QP believes that a conservative forecast price is justified.
 
For the above reasons, the TRS QP also believes that a $40/lb price is considered reasonable by the QP for use in cutoff determination and to assess reasonable prospects for eventual economic extraction.
 
36
 
 
Measured, indicated and inferred resource classifications at the Irigaray Project Area are defined by the density of the drill hole data. Higher drill hole densities allow more confidence in the shape and size of the interpreted mineral horizons. The table below details the resource classification criteria used in the resource estimates in the Irigaray Project Area.
 
Table 5: Irigaray Project Area Drill Hole Information
 
Distance Between Drill Hole Locations
for Resource Classifications (ft)
Project Area
Measured
Indicated
Inferred
Irigaray
0 - 100
100 – 300
300 – 500
 
There are numerous reasons that mineralization was interpreted as measured resources within the Irigaray Project Area:
 
 
●
first, the drill hole spacing used to classify the measured resource is generally less than or equal to the 100 ft well spacing in a typical production pattern, which enables a detailed wellfield design to be completed;
 
●
second, the sub-surface geology within the Irigaray Project Area is very well characterized with aquifers that correlate, consistent host sandstone intervals and reliable aquitards across the resource areas;
 
●
third, mineralization occurs along the redox interface, and the oxidized sands have different coloration than the reduced sands. These color variations are visible in drill cuttings and are used to map the redox interface and to guide drilling and wellfield design; and
 
●
finally, historic production has occurred both commercially and through research and development facilities at the Irigaray Project Area.
 
This combination of drill hole spacing, well-known subsurface geology, well-understood deposit model, successful production and the variety of data collected led WWC, as the TRS QP, to conclude that the mineralization in areas with drill hole spacing tabulated above fit the definition for measured resources.
 
Mineral resources were estimated separately for the Irigaray Project Area. The estimates of measured and indicated mineral resources for the Irigaray Project Area are reported in the table below and the estimates of inferred mineral resources are reported in the table following.
 
Table 6: Irigaray Project Area Measured and Indicated Mineral Resources
Mineral Resource
GT Cutoff
Average Grade % eU 3 O 8
Ore Tons
(000s)
eU 3 O 8
(lbs)
Irigaray
Measured
N/A
N/A
0
0
Indicated
0.25
0.076
3,881
5,899,000
Total Measured and Indicated
0.25
0.076
3,881
5,899,000
 
Table 7: Irigaray Project Area Inferred Mineral Resources
Mineral Resource
GT Cutoff
Average Grade % eU 3 O 8
Ore Tons
(000s)
eU 3 O 8
(lbs)
Irigaray
Inferred
0.25
0.068
104
141,000
 
Details regarding the mineral resource estimate disclosed herein can be found in Chapter 11, Mineral Resource Estimates of the TRS.
 
Present Condition of Property and Work Completed to Date
 
Irigaray is operating in a toll processing capacity with the facilities maintained for this purpose.
 
The Company ’ s Planned Work
 
Irigaray will be maintained to continue to serve in a toll processing capacity.
 
37
 
 
Christensen Ranch ISR Project
 
The following technical and scientific description for the Christensen Ranch Project Area (the “Christensen Ranch Project Area”) is based in part on the TRS titled “S-K 1300 Mineral Resource Report Wyoming Assets ISR Hub and Spoke Project, WY USA”, current on March 31, 2022, prepared by WWC, a qualified firm (the “QP” herein). The Christensen Ranch Project Area does not have mineral reserves and is therefore considered an Exploration Stage property under S-K 1300 definitions, despite a history of commercial production.
 
Property Description
 
The Christensen Ranch Project Area is located in Johnson and Campbell Counties, Wyoming, west of Pumpkin Buttes within the PRB. The Christensen Ranch Project Area covers 14,163 acres, including all (or portions of) 30 sections of the PRB.
 
The Christensen Ranch Project Area is approximately 70 air miles north-northeast of Casper, Wyoming, and 30 air miles east of Kaycee, Wyoming. The Christensen Ranch Project Area can be accessed from Kaycee, Wyoming, by traveling east on State Highway 192 through the town of Sussex, and then traveling north on Streeter Road to the intersection of Irigaray Road. The Christensen Ranch Project Area boundary is located 1.6 miles southeast of the intersection of Streeter Road and Irigaray Road. The Christensen Ranch satellite ion exchange (IX) plant is approximately three miles north-northeast of Irigaray Road. The Christensen Ranch Project Area is primarily located on private surface land, with two portions located on federal BLM-managed land.
 
Figure 1: Map of UEC Project Areas
 
38
 
 
Ownership
 
This Christensen Ranch Project Area is owned and operated by UEC. UEC has executed surface use and access agreements and fee mineral leases with landowners who hold surface and mineral ownership within and outside the various Christensen Ranch Project Area boundaries. UEC also holds unpatented BLM lode claims and leases on Wyoming state land on the project area.
 
Mineral rights for the Christensen Ranch Project Area are a combination of federally administered minerals (unpatented lode claims), State of Wyoming mineral leases and private (fee) mineral leases. Federal mining claims were staked and recorded consistent with federal and state law, state mineral leases were obtained by submitting a lease application and appropriate fee to the State Board of Land Commissioners, and fee mineral leases were obtained through negotiation with individual mineral owners.
 
Table 1: Property Characteristics Summary
Project Area
State of Wyoming Leases
Fee Mineral Leases
Federal Lode Mining Claims
Total
Christensen Ranch
Acreage
1,280
720
5,140
7,140
Leases/Claims
1
1
257
259
Total Annual Cost
$5,120
Confidential
$42,405
$47,525
 
Within the Christensen Ranch Project Area, UEC holds one State of Wyoming uranium lease on state lands and 257 unpatented lode claims on federally administered minerals. There is one fee (private) mineral lease on the Christensen Ranch Project Area.
 
Payments for the state and private lease and BLM mining claim filing payments are up to date, as of the effective date of the TRS.
 
Accessibility, Climate, Local Resources, Infrastructure and Physiography
 
The Christensen Ranch Project Area is within the Johnson and Campbell counties, Wyoming. These counties reside in the Wyoming Basin Physiographic Province in the southern portion of the PRB. The sites generally lie near the synclinal axis of the basin. The PRB is a part of the Northwestern Great Plains eco-region, a semi-arid rolling plain punctuated by occasional buttes. Regional structural features also include the Bighorn Mountains to the west, Casper Arch to the south and the Black Hills to the east. In the Christensen Ranch Project Area, the landscape is dominated by the Pumpkin Buttes.
 
Topography in the Christensen Ranch Project Area ranges from generally flat to gently rolling hills, with numerous drainages containing ephemeral streams dissecting the Christensen Ranch Project Area. Elevations ranges from approximately 4,500 ft to 5,400 ft above mean sea level.
 
Vegetation within the Christensen Ranch Project Area consists primarily of grassland, with areas of sagebrush. The Christensen Ranch Project Area lies within the mixed grass eco-region of the Northwestern Great Plains. Interspersed among these major vegetation communities, within and along the ephemeral drainages, are grassland and meadow grassland and less abundant types of seeded grasslands (improved pastures).
 
The Christensen Ranch Project Area in the PRB is located in a semi-arid or steppe climate. The region is characterized by cold, harsh winters and hot, dry summers. The spring season is relatively warm and moist, and autumns are cool. Temperature extremes range from roughly -25° F in the winter to 100° F in the summer. Typically, the last freeze occurs during late May and the first freeze in mid- to late September.
 
Yearly precipitation in the PRB averages about 13 inches. The PRB is prone to severe thunderstorm events throughout the spring and early summer months, and much of the precipitation is attributed to these events. Snow falls throughout the winter months (approximately 40 to 50 inches per year), but provides much less moisture than rain events.
 
39
 
 
The nearest community to the Christensen Ranch Project Area is Wright, Wyoming, a small, incorporated town with a population of 1,644 at the junction of Wyoming Highway 387 and Wyoming Highway 59. Gillette is a major local population center with a population of 33,403 and a regional airport. Gillette is located along Interstate 90, north and east of the Christensen Ranch Project Area via both Wyoming Highway 59 (due north of Wright) and Wyoming Highway 50. The towns of Edgerton and Midwest are in Natrona County, southwest of the Christensen Ranch Project Area on Wyoming Highway 387.
 
A major north–south railroad, BNSF Railway, used primarily for transporting coal, lies east of the Christensen Ranch Project Area and parallel to Wyoming Highway 59.
 
Equipment and supplies needed for exploration and day-to-day operations are available from population centers such as Gillette and Casper. Specialized equipment for the wellfields will likely need to be acquired from outside of Wyoming.
 
The local economy is geared toward coal mining and oil and gas production as well as ranching operations, providing a well-trained and capable pool of workers for ISR production and processing operations. Workers will reside locally and commute to work daily.
 
As a result of energy development over the past 50 years, the Christensen Ranch Project Area has existing or nearby (less than two miles) electrical power, gas, and adequate telephone and internet connectivity.
 
The Christensen Ranch Project Area is equipped with a satellite IX plant with a 6,500 gallons per minute (gpm) installed capacity, a groundwater restoration plant with a 1,000 gpm capacity, two wastewater disposal wells and four lined evaporation ponds.
 
40
 
 
History
 
Uranium was first discovered in the southern PRB during the early 1950s. By the mid- to late 1950s, small open pit mine operations were established in the PRB. Early prospecting and exploration included geologic mapping and gamma surveys, which led to discoveries of uranium in the Wasatch and Fort Union Formations. Extensive drill hole exploration has been utilized to locate deeper uranium mineralization since the 1960s to progress geologic models.
 
The table below describes the historic ownership and operations at the Christensen Ranch Project Area.
 
Table 2: Historic Ownership and Operations at the Christensen Ranch Project Area
Year
Company
Operations/Activity
Amount
(No. of Drill holes)
Results of Work
1967
Independent Operators
Assembled as a large land package by independent operators.
Approximately 4,860
Right to mine secured. Preliminary delineation of mineralized areas.
1979
Arizona Public Services (“APS”), parent company of Malapai
APS became a 50% partner in 1979.
Approximately 2,220
Delineation of mineralized areas.
1981
Malapai
Malapai assumed sole ownership of the Christensen Ranch Project Area by acquiring the interests of Wold Energy (“Wold”) and Western Nuclear Corporation (“WNC”). Malapai purchased the Irigaray Project Area from Westinghouse in 1987, and the Christensen Ranch Project Area was licensed for operations under the Irigaray U.S. Nuclear Regulatory Commission (“NRC”) and Wyoming Department of Environmental Quality (“WDEQ”) license/permit in 1988. Uranium production by ISR was started by Malapai in 1989 and was placed on standby in 1990.
Approximately 1,460
Delineation of mineralized areas. Began ISR production.
1990
TOMIN and EDF
EDF acquired the Irigaray and Christensen Ranch Project Areas from Malapai in 1990. TOMIN acted as project operator for EDF under a joint participation agreement. TOMIN restarted ISR operations in 1991.
Approximately 2,270
Delineation of mineralized areas. Restarted ISR production.
1993
COGEMA and EDF
In 1993, COGEMA acquired the assets of TOMIN and changed the name of the operating entity to COGEMA Mining, Inc. EDF (now Malapai) was still owner of 29%, COGEMA, as operator, owned 71% through the joint participation agreement.
Approximately 3,690
3.70 million lbs of U 3 O 8  produced from 1989 through 2000.
2000
COGEMA and Malapai
Groundwater restoration of Mine Units 2 through 6 was completed. The Christensen Ranch Project Area was placed on standby from 2006 through 2010, at which time COGEMA and Malapai sold the project to Uranium One and Uranium One USA, Inc. (collectively, “Uranium One”).
N/A
188,000 lbs of U 3 O 8  produced during restoration.
 
 
41
 
 
Table 2: Historic Ownership and Operations at the Christensen Ranch Project Area (Continued)
Year
Company
Operations/Activity
Amount
(No. of Drill
holes)
Results of Work
2010
Uranium One
Mine Units 7, 8 and 10 were installed and operated. A ramp up occurred in 2011, and a ramp down occurred in 2013 (all wellfield development ceased). Low production mode occurred in 2014 through 2018, and production ended in 2018, at which time the Christensen Ranch Project Area was placed on care and maintenance.
N/A
2.6 million lbs of U 3 O 8  produced.
2021
UEC
The Christensen Ranch Project Area acquired by UEC from Uranium One.
N/A
Ownership transition.
 
42
 
 
Permitting and Licensing
 
The Christensen Ranch Project Area is fully permitted through the WDEQ/Land Quality Division (“LQD”).
 
Geologic Setting, Mineralization and Deposit
 
The Christensen Ranch Project Area resides in the PRB. The PRB extends over much of northeastern Wyoming and southeastern Montana and consists of a large north-northwest trending asymmetric syncline, with the basin axis located to the west of the projects. The PRB is bounded by the Bighorn Mountains and Casper Arch to the west, the Black Hills to the east, and the Hartville Uplift and Laramie Mountains to the south. The PRB is filled with marine, non-marine and continental sediments ranging in age from early Paleozoic through Cenozoic.
 
Within the PRB, the Paleocene Fort Union Formation conformably overlies the Lance Formation and is a fluvial-sedimentary stratigraphic unit that consists of fine- to coarse-grained arkosic sandstone, which is interbedded with siltstone, mudstone and carbonaceous materials. In some areas of the PRB, the Fort Union Formation is divided into two members, identified as the Upper and Lower members of the Fort Union Formation. However, the U.S. Geological Survey (“USGS”) divides the Fort Union into three members: the Tullock; Lebo; and Tongue River members (listed from oldest to youngest); as follows:
 
 
●
The Tullock member consists of sandstone, siltstone, and sparse coal and carbonaceous shale.
 
●
The Lebo member consists of abundant drab gray mudstone, minor siltstone and sandstone and sparse coal and carbonaceous shale beds.
 
●
The Tongue River member consists of interbedded sandstone, conglomerate, siltstone, mudstone, limestone, anomalously thick coal beds and carbonaceous shale beds. This member has been mined extensively for its coal beds, which can be hundreds of feet thick. The total thickness of the Fort Union Formation varies between 2,000 and 3,500 ft.
 
Uranium mineralization occurs in zones that are located in channel sands of the Fort Union Formation. These channel sands are typical fining upward sand sequences consisting of fine-grained sandstones. The zones of mineralization are formed as typical roll-front deposits in these sandstones.
 
The early Eocene Wasatch Formation unconformably overlies the Fort Union Formation around the margins of the PRB. However, the two formations are conformable and gradational towards the basin center. The relative amount of coarse, permeable clastics increases near the top of Fort Union, and the overlying Wasatch Formation contains numerous beds of sandstone that can sometimes be correlated over wide areas. The Wasatch-Fort Union contact is separated by Paleocene and Eocene rocks and is generally placed above the Roland coal. However, other authors have placed the Wasatch-Fort Union contact above the School, Badger and Anderson Coals in other parts of the PRB.
 
The Wasatch Formation occurs at the surface in the central PRB, but has been mostly removed by erosion with only small, scattered outcrops still present in the southern PRB. The Wasatch Formation is also a fluvial sedimentary unit that consists of a series of silt to very coarse-grained gradational intervals in arkosic sandstone. The sandstone horizons in the Wasatch Formation are the host rocks for several uranium deposits in the central PRB. Within this area, mineralization is found in 50- to 100-ft thick sandstone lenses. On a regional scale, mineralization is localized and controlled by facies changes within this sandstone, including thinning of the sandstone unit, decrease in grain size, and increase in clay and organic material content. The Wasatch Formation reaches a maximum thickness of about 1,600 ft and dips northwestward from one degree to two-and-a-half degrees in the southern and central parts of the PRB.
 
The Oligocene White River Formation overlies the Wasatch Formation and has been removed from most of the PRB by erosion. Remnants of this unit crop out on the Pumpkin Buttes and at the extreme southern edge of the PRB. The White River Formation consists of clayey sandstone, claystone, a boulder conglomerate and tuffaceous sediments, which may be the primary source rock for uranium in the southern part of the PRB as a whole. The youngest sediments consist of Quaternary alluvial sands and gravels locally present in larger valleys. Quaternary eolian sands can also be found locally.
 
The Christensen Ranch Project Area targets mineralization in the Eocene-aged Wasatch Formation.
 
43
 
 
Mineralization in the Christensen Ranch Project Area occurs in fluvial sandstones of the lower parts of the Wasatch Formation. Most of the upper Wasatch Formation has been eroded away. The sandstones are arkosic, fine- to coarse-grained with local calcareous lenses. The sandstones contain minor amounts of organic carbon that occurs as dispersed bits or as stringers. Unaltered sandstones are generally gray, while altered sandstones are tan or pink due to hematite, or show yellowish coloring due to limonite.
 
Pyrite occurs in several forms within the host sandstones. In unaltered sandstones, pyrite occurs as small to large single euhedral crystals associated with magnetite, ilmenite and other dark detrital minerals. In altered sandstone, pyrite is typically absent, but locally occurs as tarnished, very fine-grained euhedral crystals. In areas of intense or heavy mineralization, pyrite locally occurs as massive, tarnished crystal aggregates.
 
The Christensen Ranch Project Area contains portions of four alteration systems, all within fluvial sands of the Wasatch Formation. These fluvial host systems are identified as K1, K2, K3 and K4 sands and are in descending order. These sands vary in thickness from 0 ft to 100 ft within the Christensen Ranch Project Area. They coalesce within portions of the Christensen Ranch Project Area and form massive sand sequences of roughly 250 ft (80 m) in thickness. These sands in turn host the K1, K2, K3 and K4 uranium roll-front systems, each of which is composed of multiple stacked individual roll-front deposits.
 
Uranium mineralization at the Christensen Ranch Project Area is typical of Wyoming roll-front sandstone deposits. The formation of roll-front deposits is largely a groundwater process that occurs when uranium-rich, oxygenated groundwater interacts with a reducing environment in the subsurface and precipitates uranium. The most favorable host rocks for roll-fronts are permeable sandstones with large aquifer systems. Interbedded mudstone, claystone and siltstone are often present and aid in the formation process by focusing groundwater flux. The geometry of mineralization is dominated by the classic roll-front “C” shape or crescent configuration at the redox interface. The highest-grade portion of the front occurs in a zone termed the “nose” within reduced ground just ahead of the alteration front. Ahead of the nose, at the leading edge of the solution front, mineral quality gradually diminishes to barren within the “seepage” zone. Trailing behind the nose, in oxidized (altered) ground, are weak remnants of mineralization referred to as “tails” which have resisted re-mobilization to the nose due to association with shale, carbonaceous material or other lithologies of lower permeability. Tails are generally not amenable to ISR because the uranium is typically found within strongly reduced or impermeable strata, therefore making it difficult to leach.
 
Data Verification
 
The resource estimate is based on historic drill holes with uranium assays by gamma logging and a limited number of core holes with chemical assays. Industry standard methods were used at the time of data collection.
 
The Christensen Ranch Project Area is currently on care and maintenance and has been successfully mined since 1978. Past production confirms the presence of significant mineral resources that were estimated using similar methods.
 
A study was conducted in 1982 that compared the chemical assays of 77 historic core holes drilled on the Christensen Ranch Project Area with radiometric data that had been reinterpreted. Conclusions of the study indicate that the total GT are well within the margin of error expected in such calculations, but that radiometric interpretations showed a bias. The original estimates underestimated the in-place grades and overestimated the in-place thicknesses of mineralized zones. It was concluded that these biases effectively offset one another.
 
Another study in 1994 was conducted with PFN logging equipment to determine equilibrium and to determine the extent of remobilized uranium in a producing wellfield. Core samples were also collected and chemically assayed to check the accuracy of the PFN logging and further determine disequilibrium. The study found that the PFN logging determined the same vertical and horizontal mineralization limits as the gamma logs. Core hole chemical assays were also compared with historic gamma logs, and the results overall indicated reasonably good correlations between the two.
 
A WWC professional previously worked at the Christensen Ranch Project Area from 1995 until 1999. During that time, he was the only on-staff geologist at the Christensen Ranch Project Area and was responsible for reviewing thousands of logs for mine unit planning and development and has personal knowledge of the data quality.
 
44
 
 
Mineral Resource Estimates
 
The following key assumptions were used for resource estimates, unless otherwise noted:
 
 
●
resources are located in permeable and porous sandstones; and
 
●
resources are located below the water table.
 
The GT contour method was used to estimate the mineral resources at the Christensen Ranch Project Area. The GT contour method is one of the most widely used and dependable methods to estimate resources in uranium roll-front deposits. The basis of the GT contour method is the GT (grade x mineralized thickness) values, which are determined for each drill hole using radiometric log results and a suitable GT cutoff, below which the GT value is considered to be zero. The GT values are then plotted on a drill hole map and GT contours are drawn accordingly using roll-front data derived from cuttings and the nature of the gamma anomalies. The resources are calculated from the area within the GT contour boundaries considering the DEF and the ore zone density.
 
The resource estimate method, general parameters and mineralized cutoffs used at the Christensen Ranch Project Area are summarized below.
 
Table 3: Christensen Ranch Project Area Resource Estimate Methodology
 
 
 
 
Cutoff Parameters
Project Area
Mineral Resource
Estimation Method
Disequilibrium
Factor
Bulk
Density
(ft 3 /Ton)
Min.
Grade
(% U 3 O 8 )
Min.
Thickness (ft)
Min. GT
Christensen
Ranch
GT Contour Method
1.0
17.0
0.04
2
0.25
Note
Cutoff parameters are discrete and therefore the GT cutoff is not necessarily the product of cutoff grade and cutoff thickness.
 
Based on the depths of mineralization, average grade, thickness and GT, it is the TRS QP’s opinion that the mineral resources of the Christensen Ranch Project Area can be recoverable by ISR methods using a long-term uranium price of $40/lb.
 
Uranium does not trade on the open market and many of the private sales contracts are not publicly disclosed. UEC used $40/lb as the forecast uranium price for the Christensen Ranch Project Area. This is based on: (i) the long-term contract price at the end of February 2022, which was $43.88/lb from Cameco Resources’ combination of UxC and Trade Tech reports (Cameco, 2022); (ii) the spot price at the end of February 2022 ($48.75/lb); (iii) UxC’s price forecast; and (iv) UEC’s understanding of market expectations. The table below contains the UxC uranium price forecast for Q4 of 2021.
 
Table 4: UxC Q4 2021 Uranium Price Forecast ($/lb U 3 O 8 )
UxC Market Outlook Q4 2021
2021
2022
2023
2024
2025
UxC High Price Midpoint
$36.00
$46.37
$48.11
$52.13
$56.47
UxC Low Price Midpoint
$36.00
$40.02
$41.33
$42.59
$43.02
UxC Mid Price Midpoint
$36.00
$43.18
$44.14
$46.71
$48.39
 
In the opinion of the TRS QP, $40/lb is a conservative forecast price for the following reasons:
 
 
●
first, at the issuance date, both the long-term price and spot price are greater than $40/lb;
 
●
second, new physical uranium investment vehicles were created in 2021, such as the Sprott Physical Uranium Trust and the upcoming physical uranium fund backed by Kazatomprom, the National Bank of Kazakhstan and Genchi Global Ltd., which effectively remove uranium supply from the market;
 
●
third, the increasing demand for carbon-free energy and global plans to construct new nuclear reactors will increase demand for uranium; and
 
●
finally, there has already been a steady increase in the uranium price for the last three years with a sharp rise to greater than $40/lb in the second half of 2021, due in part to increased demand from the Sprott Physical Uranium Trust. Due to recent volatility in the uranium market, the QP believes that a conservative forecast price is justified.
 
For the above reasons, the TRS QP also believes that a $40/lb price is considered reasonable for use in cutoff determination and to assess reasonable prospects for eventual economic extraction.
 
45
 
 
Measured, indicated and inferred resource classifications at the Christensen Ranch Project Area are defined by the density of the drill hole data. Higher drill hole densities allow more confidence in the shape and size of the interpreted mineral horizons. Table below details the resource classification criteria used in the resource estimates in the Christensen Ranch Project Area.
 
Table 5: Project Area Drill Hole Information
 
Distance Between Drill Hole Locations for Resource Classifications (ft)
Project Area
Measured
Indicated
Inferred
Christensen Ranch
0 - 100
100 – 300
300 – 500
 
There are numerous reasons that mineralization was interpreted as measured resources within the Christensen Ranch Project Area:
 
 
●
first, the drill hole spacing used to classify the measured resource is generally less than or equal to the 100 ft well spacing in a typical production pattern, which enables a detailed wellfield design to be completed;
 
●
second, the sub-surface geology within the Christensen Ranch Project Area is very well characterized with aquifers that correlate, consistent host sandstone intervals, and reliable aquitards across the resource areas;
 
●
third, mineralization occurs along the redox interface and the oxidized sands have different coloration than the reduced sands. These color variations are visible in drill cuttings and are used to map the redox interface and to guide drilling and wellfield design; and
 
●
finally, historic production has occurred both commercially and through research and development facilities at the Irigaray Project Area.
 
This combination of drill hole spacing, well-known subsurface geology, well-understood deposit model, successful production and the variety of data collected led WWC, as the TRS QP, to conclude that the mineralization in areas with drill hole spacing tabulated above fit the definition for measured resources.
 
Mineral resources were estimated separately for the Christensen Ranch Project Area. The estimates of measured and indicated mineral resources for the Christensen Ranch Project Area are reported in the table below and the estimates of inferred mineral resources are reported in table following.
 
 
46
 
 
Table 6: Christensen Ranch Project Area Measured and Indicated Mineral Resources
Mineral Resource
GT Cutoff
Average Grade
% eU 3 O 8
Ore Tons
(000s)
eU 3 O 8
(lbs)
Christensen Ranch
Measured
N/A
N/A
0
0
Indicated
0.25
0.073
6,555
9,596,000
Total Measured and Indicated
0.25
0.073
6,555
9,596,000
 
Table 7: Christensen Ranch Project Area inferred Mineral Resources
Mineral Resource
GT Cutoff
Average Grade
% eU 3 O 8
Ore Tons
(000s)
eU 3 O 8
(lbs)
Christensen Ranch
Inferred
N/A
N/A
0
0
 
Details regarding the mineral resource estimate disclosed herein can be found in Chapter 11, Mineral Resource Estimates of the TRS.
 
Present Condition of Property and Work Completed to Date
 
The Christensen Ranch Project Area is currently under care and maintenance. Mine Units 2, 3, 4 and 6 were determined restored by the WDEQ/LQD in 2021. Mine Units 5, 7, 8 and 10 are in a standby mode awaiting restart, and Mine Units 9, 11 and 12 have yet to be constructed.
 
The Company ’ s Planned Work
 
The Christensen Ranch Project Area is currently under care and maintenance, pending market conditions improving sufficiently to resume production.
 
47
 
 
Moore Ranch ISR Project
 
The following technical and scientific description for the Moore Ranch project area (the “Moore Ranch Project Area”) is based in part on the TRS titled “S-K 1300 Mineral Resource Report Wyoming Assets ISR Hub and Spoke Project, WY USA”, current on March 31, 2022, prepared by WWC, a qualified firm (the “QP” herein). The Moore Ranch Project Area does not have mineral reserves and is therefore considered an Exploration Stage property under S-K 1300 definitions, despite a history of commercial production.
 
Property Description
 
The Moore Ranch Project Area is located in Campbell County, Wyoming, the southern portion of the Pumpkin Buttes within the PRB. The Moore Ranch Project area covers 6,281 acres, including all (or portions of) 16 sections of the PRB.
 
The Moore Ranch Project Area is 54 air miles northeast of Casper, Wyoming, and 24 miles southwest of Wright, WY, along State Highway 387. The Moore Ranch Project Area is primarily located on private surface land with some areas of state-managed land.
 
Figure 1: Map of UEC Project Areas
 
48
 
 
Ownership
 
This Moore Ranch Project Area is owned and operated by UEC. UEC has executed surface use and access agreements and fee mineral leases with landowners who hold surface and mineral ownership within and outside the various Moore Ranch Project Area boundaries. UEC also holds unpatented BLM lode claims and leases on Wyoming state land on the project area.
 
Mineral rights for the Moore Ranch Project Area are a combination of federally administered minerals (unpatented lode claims), State of Wyoming mineral leases and private (fee) mineral leases. Federal mining claims were staked and recorded consistent with federal and state law, state mineral leases were obtained by submitting a lease application and appropriate fee to the State Board of Land Commissioners and fee mineral leases were obtained through negotiation with individual mineral owners.
 
Table 1: Property Characteristics Summary
Project Area
State of Wyoming
Leases
Fee Mineral
Leases
Federal Lode
Mining Claims
Total
Moore Ranch
Acreage
1,200
1,740
1,754.1
4,694.1
Leases/Claims
2
5
86
93
Total Annual Cost
$3,600
Confidential
$14,190
$17,790
 
Within the Moore Ranch Project Area, UEC holds two State of Wyoming uranium leases on state lands and 86 unpatented lode claims on federally administered minerals. There are five fee (private) mineral leases with private mineral owners on the Moore Ranch Project Area.
 
Payments for the state and private lease and BLM mining claim filing payments are up to date, as of the effective date of the TRS.
 
Accessibility, Climate, Local Resources, Infrastructure and Physiography
 
The Moore Ranch Project Area is within Campbell County, Wyoming. This county resides in the Wyoming Basin Physiographic Province in the southern portion of the PRB. This site generally lies near the synclinal axis of the basin. The PRB is a part of the Northwestern Great Plains eco-region, a semi-arid rolling plain of shale and sandstone punctuated by occasional buttes. Regional structural features also include the Big Horn Mountains to the west, Casper Arch to the south and the Black Hills to the east. In the northern Moore Ranch Project Area, the landscape is dominated by the Pumpkin Buttes.
 
Topography in the Moore Ranch Project Area ranges from generally flat to gently rolling hills, with numerous drainages containing ephemeral streams dissecting the Moore Ranch Project Area. Elevations ranges from approximately 4,500 ft to 5,400 ft above mean sea level.
 
Vegetation within the Moore Ranch Project Area consists primarily of grassland, with areas of sagebrush. The Moore Ranch Project Area lies within the mixed grass eco-region of the Northwestern Great Plains. Interspersed among these major vegetation communities, within and along the ephemeral drainages, are grassland and meadow grassland and less abundant types of seeded grasslands (improved pastures).
 
The Moore Ranch Project Area in the PRB is located in a semi-arid or steppe climate. The region is characterized by cold, harsh winters and hot, dry summers. The spring season is relatively warm and moist, and autumns are cool. Temperature extremes range from roughly -25° F in the winter to 100° F in the summer. Typically, the last freeze occurs during late May and the first freeze occurs in mid- to late September.
 
Yearly precipitation in the PRB averages about 13 inches. The PRB is prone to severe thunderstorm events throughout the spring and early summer months, and much of the precipitation is attributed to these events. Snow falls throughout the winter months (approximately 40 to 50 inches per year), but provides much less moisture than rain events.
 
49
 
 
The nearest community to the Moore Ranch Project Area is Wright, Wyoming a small, incorporated town with a population of 1,644 at the junction of Wyoming Highway 387 and Wyoming Highway 59. Gillette is a major local population center with a population of 33,403 and a regional airport. Gillette is located along Interstate 90, north and east of the Moore Ranch Project Area via both Wyoming Highway 59 (due north of Wright) and Wyoming Highway 50. The towns of Edgerton and Midwest are in Natrona County, approximately 20 to 30 miles southwest of the Moore Ranch Project Area on Wyoming Highway 387.
 
A major north–south railroad, BNSF Railway, used primarily for transporting coal, lies east of the Moore Ranch Project Area and parallel to Wyoming Highway 59.
 
Equipment and supplies needed for exploration and day-to-day operations are available from population centers such as Gillette and Casper. Specialized equipment for the wellfields will likely need to be acquired from outside of Wyoming.
 
The local economy is geared toward coal mining and oil and gas production as well as ranching operations, providing a well-trained and capable pool of workers for ISR production and processing operations. Workers will reside locally and commute to work daily.
 
As a result of energy development over the past 50 years, all the Moore Ranch Project Area has existing or nearby (less than two miles) electrical power, gas and adequate telephone and internet connectivity.
 
At the Moore Ranch Project Area, non-potable water will be supplied by wells developed on or near the Moore Ranch Project Area. Water extracted as part of ISR will be recycled for reinjection. Four Class I Underground Injection Control (UIC) disposal wells have been permitted for disposal of limited quantities of fluids that cannot be returned to the production aquifers. The Moore Ranch Project Area is adjacent to paved, public roadways which facilitate the transportation of equipment, supplies, personnel and products. Electrical power lines extend into and across the Moore Ranch Project Area.
 
History
 
Uranium was first discovered in the southern PRB during the early 1950s. By the mid- to late 1950s, small open pit mine operations were established in the PRB. Early prospecting and exploration included geologic mapping and gamma surveys, which led to discoveries of uranium in the Wasatch and Fort Union Formations. Extensive drill hole exploration has been utilized to locate deeper uranium mineralization since the 1960s to progress geologic models.
 
50
 
 
The table below describes the historic ownership and operations at the Moore Ranch Project Area.
 
Table 2: Historic Ownership and Operations at the Moore Ranch Project Area
Year
Company
Operations/Activity
Amount
(No. of Drill holes)
Results of Work
1971
Conoco Minerals (“Conoco”) and Kerr-McGee Corporation (“Kerr-McGee”)
Conoco and Kerr-McGee operated as a joint venture. Of the joint venture, Conoco controlled 50% of the Moore Ranch Project Area and served as the operator.
Approximately 2,700 rotary drill holes
Approximately 130 core holes
Discovery and delineation of mineralized areas. Permitting and licensing of a proposed uranium processing facility known as Sand Rock Mill was completed through the WDEQ/LQD and the NRC.
1983
Wold and Kerr-McGee
Conoco sold interests to Wold in 1983. Kerr-McGee retained the rights with Wold. Assessment drilling was conducted.
None
Retained mining claims. Mining claim assessment drilling.
1989
Rio Algom Mining Corp.
(“Rio Algom”)
Rio Algom acquired the project in 1989. Rio Algom conducted mining claim assessment drilling to retain mining claims through 1992, which was the last year to allow mining claim assessment drilling.
None
Retained mining claims. Mining claim assessment drilling.
1992
Rio Algom
Claim maintenance paid directly to the BLM. No further drilling conducted.
None
Mining claims retained through payment.
2002
Power Resources, Inc. (“PRI”)
(now Cameco Resources)
Rio Algom acquired by PRI.
None
Ownership transition.
2004
Energy Metals Corporation (“EMC”)
EMC acquired most of the mining claims and state leases.
N/A
Secured right to mine.
2007
Uranium One
Uranium One acquired EMC and all rights to the Moore Ranch Project Area. Uranium One completed verification and resource enhancement drilling, coring, baseline monitor wells, and pump test wells. The Moore Ranch Project Area is fully permitted by WDEQ/LQD in 2011 and the NRC in 2013.
Approximately 800
Exploration efforts focused on developing and upgrading mineral resources.
2021
UEC
Moore Ranch Project Area acquired by UEC from Uranium One.
N/A
Ownership transition.
 
51
 
 
Permitting and Licensing
 
The Moore Ranch Project Area is fully permitted through the WDEQ/LQD.
 
Geologic Setting, Mineralization, and Deposit
 
The Moore Ranch Project Area resides in the PRB. The PRB extends over much of northeastern Wyoming and southeastern Montana and consists of a large north-northwest trending asymmetric syncline, with the basin axis located to the west of the projects. The PRB is bounded by the Big Horn Mountains and Casper Arch to the west, the Black Hills to the east, and the Hartville Uplift and Laramie Mountains to the south. The PRB is filled with marine, non-marine and continental sediments ranging in age from early Paleozoic through Cenozoic.
 
Within the PRB, the Paleocene Fort Union Formation conformably overlies the Lance Formation and is a fluvial-sedimentary stratigraphic unit that consists of fine- to coarse-grained arkosic sandstone, which is interbedded with siltstone, mudstone and carbonaceous materials. In some areas of the PRB, the Fort Union Formation is divided into two members, identified as the Upper and Lower members of the Fort Union Formation. However, Flores divides the Fort Union into three members: the Tullock; Lebo; and Tongue River members (listed from oldest to youngest); as follows:
 
 
●
The Tullock member consists of sandstone, siltstone and sparse coal and carbonaceous shale.
 
●
The Lebo member consists of abundant drab gray mudstone, minor siltstone and sandstone and sparse coal and carbonaceous shale beds.
 
●
The Tongue River member consists of interbedded sandstone, conglomerate, siltstone, mudstone, limestone, anomalously thick coal beds and carbonaceous shale beds. This member has been mined extensively for its coal beds which can be hundreds of feet thick.
 
Uranium mineralization occurs in zones that are located in channel sands of the Fort Union Formation. These channel sands are typical fining upward sand sequences consisting of fine-grained sandstones. The zones of mineralization are formed as typical roll-front deposits in these sandstones.
 
The early Eocene Wasatch Formation unconformably overlies the Fort Union Formation around the margins of the PRB. However, the two formations are conformable and gradational towards the basin center. The relative amount of coarse, permeable clastics increases near the top of Fort Union, and the overlying Wasatch Formation contains numerous beds of sandstone that can sometimes be correlated over wide areas. The Wasatch-Fort Union contact is separated by Paleocene and Eocene rocks and is generally placed above the Roland coal. However, other authors have placed the Wasatch-Fort Union contact above the School, Badger and Anderson Coals in other parts of the PRB.
 
The Wasatch Formation occurs at the surface in the central PRB but has been mostly removed by erosion with only small, scattered outcrops still present in the southern PRB. The Wasatch Formation is also a fluvial sedimentary unit that consists of a series of silt to very coarse-grained gradational intervals in arkosic sandstone. The sandstone horizons in the Wasatch Formation are the host rocks for several uranium deposits in the central PRB. Within this area, mineralization is found in a 50- to 100-ft thick sandstone lens. On a regional scale, mineralization is localized and controlled by facies changes within this sandstone, including thinning of the sandstone unit, decrease in grain size and increase in clay and organic material content. The Wasatch Formation reaches a maximum thickness of about 1,600 ft and dips northwestward from one degree to two-and-a-half degrees in the southern and central parts of the PRB.
 
The Oligocene White River Formation overlies the Wasatch Formation and has been removed from most of the PRB by erosion. Remnants of this unit crop out on the Pumpkin Buttes, and at the extreme southern edge of the PRB. The White River Formation consists of clayey sandstone, claystone, a boulder conglomerate and tuffaceous sediments, which may be the primary source rock for uranium in the southern part of the PRB as a whole. The youngest sediments consist of Quaternary alluvial sands and gravels locally present in larger valleys. Quaternary eolian sands can also be found locally.
 
The Moore Ranch Project Area targets mineralization in the Eocene-aged Wasatch Formation.
 
52
 
 
Mineralization in the Moore Ranch Project Area occurs in fluvial sandstones of the lower parts of the Wasatch Formation. Most of the upper Wasatch Formation has been eroded away. The sandstones are arkosic, fine- to coarse-grained with local calcareous lenses. The sandstones contain minor amounts of organic carbon that occurs as dispersed bits or as stringers. Unaltered sandstones are generally gray, while altered sandstones are tan or pink due to hematite, or show yellowish coloring due to limonite.
 
Pyrite occurs in several forms within the host sandstones. In unaltered sandstones, pyrite occurs as small to large single euhedral crystals associated with magnetite, ilmenite and other dark detrital minerals. In altered sandstone, pyrite is typically absent, but locally occurs as tarnished, very fine-grained euhedral crystals. In areas of intense or heavy mineralization, pyrite locally occurs as massive, tarnished crystal aggregates.
 
Geology at the Moore Ranch Project Area is similar to the geology at the North and Southwest Reno Creek resource areas and includes the Felix and Badger coals. The mineralized host sand lies 5 to 30 ft below this coal bed and at a depth of 200–350 ft below the surface. The host sandstone is 80-150 ft thick.
 
Uranium mineralization at the Moore Ranch Project Area is typical of Wyoming roll-front sandstone deposits. The formation of roll-front deposits is largely a groundwater process that occurs when uranium-rich, oxygenated groundwater interacts with a reducing environment in the subsurface and precipitates uranium. The most favorable host rocks for roll-fronts are permeable sandstones with large aquifer systems. Interbedded mudstone, claystone and siltstone are often present and aid in the formation process by focusing groundwater flux. The geometry of mineralization is dominated by the classic roll-front “C” shape or crescent configuration at the redox interface. The highest-grade portion of the front occurs in a zone termed the “nose” within reduced ground just ahead of the alteration front. Ahead of the nose, at the leading edge of the solution front, mineral quality gradually diminishes to barren within the “seepage” zone. Trailing behind the nose, in oxidized (altered) ground, are weak remnants of mineralization referred to as “tails” which have resisted re-mobilization to the nose due to association with shale, carbonaceous material or other lithologies of lower permeability. Tails are generally not amenable to ISR because the uranium is typically found within strongly reduced or impermeable strata, therefore making it difficult to leach.
 
Data Verification
 
Data used for the resource estimate at the Moore Ranch Project Area consisted of drill maps, cross-sections, geophysical logs and lithologic logs developed by Conoco, a major US company, intent on developing the property as a production center. Standard industry methods were used at the time of data collection.
 
Paper records of historic radiometric data were input into a spreadsheet. Radiometric log interpretation was spot checked for the higher-grade intercepts.
 
Historic drill hole locations were verified by plotting their coordinates and checking against original maps. Historic drill hole location coordinates were then converted to match the North American Datum (“NAD”) 83 coordinate system for recent drill holes. Approximately 10% of the historic drill holes were resurveyed.
 
Recent drill hole data included collar elevation, collar location, grade and elevation of mineralized intercepts, bottom hole elevation and locations that had utilized modern survey grade GPS equipment.
 
Confirmation drilling by way of offset holes has been conducted by previous owners to validate historic data.
 
Since no historic core samples exist for verification, core drilling of the Moore Ranch Project Area was conducted in 2006 and 2008. The cores were assayed to verify historic data and two were used for leach testing.
 
WWC prepared an independent Canadian NI 43-101 technical report on resources for this Moore Ranch Project Area in April of 2019 (WWC, 2019a). The current resource estimate is based, in part, on that report.
 
53
 
 
Mineral Resource Estimates
 
The following key assumptions were used for resource estimates, unless otherwise noted:
 
 
●
resources are located in permeable and porous sandstones; and
 
●
resources are located below the water table.
 
The GT contour method was used to estimate resources at the Moore Ranch Project Area. The GT contour method is one of the most widely used and dependable methods to estimate resources in uranium roll-front deposits. The basis of the GT contour method is the GT (grade x mineralized thickness) values, which are determined for each drill hole using radiometric log results and a suitable GT cutoff, below which the GT value is considered to be zero. The GT values are then plotted on a drill hole map and GT contours are drawn accordingly using roll-front data derived from cuttings and the nature of the gamma anomalies. The resources are calculated from the area within the GT contour boundaries considering the DEF and the ore zone density.
 
The resource estimate methods, general parameters and mineralized cutoffs used at the Moore Ranch Project Area are summarized below.
 
Table 3: Moore Ranch Project Area Resource Estimate Methodology
 
 
 
 
 
Cutoff Parameters
Project Area
Mineral Resource
Estimation Method
Disequilibrium
Factor
Bulk
Density
(ft 3 /Ton)
Min.
Grade
(% U 3 O 8 )
Min.
Thickness
(ft)
Min. GT
Moore Ranch
GT Contour Method
1.0
16.0
0.02
2
0.30
Note
Cutoff parameters are discrete and therefore the GT cutoff is not necessarily the product of cutoff grade and cutoff thickness.
 
Based on the depths of mineralization, average grade, thickness and GT, it is the TRS QP’s opinion that the mineral resources of the Moore Ranch Project Area can be recoverable by ISR methods using a long-term uranium price of $40/lb.
 
Uranium does not trade on the open market and many of the private sales contracts are not publicly disclosed. UEC used $40/lb as the forecast uranium price for the Moore Ranch Project Area. This is based on: (i) the long-term contract price at the end of February 2022, which was $43.88/lb from Cameco Resources’ combination of UxC and Trade Tech reports; (ii) the spot price at the end of February 2022 ($48.75/lb); (iii) UxC’s price forecast; and (iv) UEC’s understanding of market expectations. The table below contains the UxC uranium price forecast for Q4 of 2021.
 
Table 4: UxC Q4 2021 Uranium Price Forecast ($/lb U 3 O 8 )
UxC Market Outlook Q4 2021
2021
2022
2023
2024
2025
UxC High Price Midpoint
$36.00
$46.37
$48.11
$52.13
$56.47
UxC Low Price Midpoint
$36.00
$40.02
$41.33
$42.59
$43.02
UxC Mid Price Midpoint
$36.00
$43.18
$44.14
$46.71
$48.39
 
In the opinion of the TRS QP, $40/lb is a conservative forecast price for the following reasons:
 
 
●
first, at the issuance date, both the long-term price and spot price are greater than $40/lb;
 
●
second, new physical uranium investment vehicles were created in 2021, such as the Sprott Physical Uranium Trust and the upcoming physical uranium fund backed by Kazatomprom, the National Bank of Kazakhstan and Genchi Global Ltd., which effectively remove uranium supply from the market;
 
●
third, the increasing demand for carbon-free energy and global plans to construct new nuclear reactors will increase demand for uranium; and
 
●
finally, there has already been a steady increase in the uranium price for the last three years with a sharp rise to greater than $40/lb in the second half of 2021, due in part to increased demand from the Sprott Physical Uranium Trust. Due to recent volatility in the uranium market, the QP believes that a conservative forecast price is justified.
 
For the above reasons, the TRS QP also believes that a $40/lb price is considered reasonable by the QP for use in cutoff determination and to assess reasonable prospects for eventual economic extraction.
 
54
 
 
Measured, indicated and inferred resource classifications at the Moore Ranch Project Area are defined by the density of the drill hole data. Higher drill hole densities allow more confidence in the shape and size of the interpreted mineral horizons. The table below details the resource classification criteria used in the resource estimates in each of the Moore Ranch Project Area.
 
Table 5: Moore Ranch Project Area Drill Hole Information
 
Distance Between Drill Hole Locations
for Resource Classifications (ft)
Project Area
Measured
Indicated
Inferred
Moore Ranch
0 – 70
70 – 200
200 – 400
 
There are numerous reasons that mineralization was interpreted as measured resources within the Moore Ranch Project Area:
 
 
●
first, the drill hole spacing used to classify the measured resource is generally less than or equal to the 100 ft well spacing in a typical production pattern, which enables a detailed wellfield design to be completed;
 
●
second, the sub-surface geology within the Moore Ranch Project Area is very well characterized with aquifers that correlate, consistent host sandstone intervals and reliable aquitards across the resource areas;
 
●
third, mineralization occurs along the redox interface, and the oxidized sands have different coloration than the reduced sands. These color variations are visible in drill cuttings and are used to map the redox interface and to guide drilling and wellfield design; and
 
●
finally, historic production has occurred both commercially and through research and development facilities at the Irigaray Project Area.
 
This combination of drill hole spacing, well-known subsurface geology, well-understood deposit model, successful production and the variety of data collected led WWC, as the TRS QP, to conclude that the mineralization in areas with drill hole spacing tabulated above fit the definition for measured resources.
 
Mineral resources were estimated separately for the Moore Ranch Project Area. The estimates of measured and indicated mineral resources for the Moore Ranch Project Area are reported in the table below.
 
Table 6: Moore Ranch Project Area Measured and Indicated Mineral Resources
Mineral Resource
GT Cutoff
Average Grade
% eU 3 O 8
Ore Tons
(000s)
eU 3 O 8
(lbs)
Moore Ranch
Measured
0.30
0.060
2,675
3,210,000
Indicated
N/A
N/A
0
0
Total Measured and Indicated
0.30
0.060
2,675
3,210,000
 
The estimates of inferred mineral resources are reported in the table below.
 
Table 7: Moore Ranch Project Area Inferred Mineral Resources
Mineral Resource
GT Cutoff
Average Grade
% eU 3 O 8
Ore Tons
(000s)
eU 3 O 8
(lbs)
Moore Ranch
Inferred
0.30
0.047
46
43,700
 
Details regarding the mineral resource estimate disclosed herein can be found in Chapter 11, Mineral Resource Estimates of the TRS.
 
Present Condition of Property and Work Completed to Date
 
The Moore Ranch Project Area is currently under care and maintenance with the license renewal process in public notice.
 
The Company ’ s Planned Work
 
The Company intends to continue to keep the Moore Ranch Project Area in a care and maintenance mode.
 
55
 
 
Reno Creek ISR Project
 
The following technical and scientific description for the Reno Creek Project Area (the “Reno Creek Project Area”) is based in part on the TRS titled “S-K 1300 Mineral Resource Report Wyoming Assets ISR Hub and Spoke Project, WY USA”, current on March 31, 2022, prepared by WWC, a qualified firm (the “QP” herein). The Reno Creek Project Area does not have mineral reserves and is therefore considered an exploration stage property under S-K 1300 definitions, despite a history of commercial production.
 
Property Description
 
The Reno Creek Project Area is in Campbell County, Wyoming, within the PRB. The Reno Creek Project Area covers 18,763 acres, including all (or portions of) 46 sections of the PRB.
 
The Reno Creek Project Area is approximately five miles to the northwest of the North and Southwest Reno Creek Resource Areas. The Pine Tree Resource Area lies approximately five miles to the southwest of the permitted resource areas, immediately southeast of the intersection of U.S. Highway 387 and Wyoming Highway 50, also known as Pine Tree Junction. The Bing Resource Area lies approximately five miles west of the permitted Resource Areas adjacent to Wyoming Highway 50, three miles north of Pine Tree Junction.
 
Figure 1: Map of UEC Project Areas
 
56
 
 
Ownership
 
This Reno Creek Project Area is owned and operated by UEC. UEC has executed surface use and access agreements and fee mineral leases with landowners who hold surface and mineral ownership within and outside the various Reno Creek Project Area boundaries. UEC also holds unpatented BLM lode claims and leases on Wyoming state land on the project area.
 
Mineral rights for the Reno Creek Project Area are a combination of federally administered minerals (unpatented lode claims), State of Wyoming mineral leases and (fee) private mineral leases. Federal mining claims were staked and recorded consistent with federal and state law, state mineral leases were obtained by submitting a lease application and appropriate fee to the State Board of Land Commissioners, and fee mineral leases were obtained through negotiation with individual mineral owners.
 
Table 1: Property Characteristics Summary
Project Area
State of Wyoming
Leases
Fee Mineral Leases
Federal Lode
Mining Claims
Total
Reno Creek
Acreage
3,200
4,583
10,980
18,763
Leases/Claims
4
36
549
589
Total Annual Cost
$9,600
Confidential
$90,585
$100,185
 
Within the Reno Creek Project Area, UEC holds four State of Wyoming uranium leases on state lands and 549 unpatented lode claims on federally (BLM) administered minerals. The BLM administers no surface rights at the Reno Creek Project Area, only mineral rights. UEC has 36 fee (private) mineral leases on the Reno Creek Project Area.
 
Payments for the state and private lease and BLM mining claim filing payments are up to date, as of the effective date of the TRS.
 
Accessibility, Climate, Local Resources, Infrastructure and Physiography
 
The Reno Creek Project Area is within Campbell County, Wyoming. This county resides in the Wyoming Basin Physiographic Province in the southern portion of the PRB. This site generally lies near the synclinal axis of the basin. The PRB is a part of the Northwestern Great Plains eco-region, a semiarid rolling plain of shale and sandstone punctuated by occasional buttes. Regional structural features also include the Big Horn Mountains to the west, Casper Arch to the south, and the Black Hills to the east. In the Reno Creek Project Area, the landscape is dominated by the Pumpkin Buttes.
 
Topography in the Reno Creek Project Area ranges from generally flat to gently rolling hills, with numerous drainages containing ephemeral streams dissecting the Reno Creek Project Area. Elevations ranges from approximately 4,500 to 5,400 ft above mean sea level.
 
Vegetation within the Reno Creek Project Area consists primarily of grassland, with areas of sagebrush. The Reno Creek Project Area lies within the mixed grass eco-region of the Northwestern Great Plains. Interspersed among these major vegetation communities, within and along the ephemeral drainages, are grassland and meadow grassland and less abundant types of seeded grasslands (improved pastures).
 
The Reno Creek Project Area in the PRB is located in a semi-arid or steppe climate. The region is characterized by cold, harsh winters and hot, dry summers. The spring season is relatively warm and moist, and autumns are cool. Temperature extremes range from roughly -25° F in the winter to 100° F in the summer. Typically, the “last freeze” occurs during late May and the “first freeze” occurs in mid- to late September.
 
Yearly precipitation in the PRB averages about 13 inches. The PRB is prone to severe thunderstorm events throughout the spring and early summer months, and much of the precipitation is attributed to these events. Snow falls throughout the winter months (approximately 40 to 50 inches per year), but provides much less moisture than rain events.
 
57
 
 
The nearest community to the Reno Creek Project Area is Wright, Wyoming, a small, incorporated town with a population of 1,644 at the junction of Wyoming Highway 387 and Wyoming Highway 59. Gillette is a major local population center with a population of 33,403 and a regional airport. Gillette is located along Interstate 90, north and east of the Reno Creek Project Area via both Wyoming Highway 59 (due north of Wright) and Wyoming Highway 50. The towns of Edgerton and Midwest are in Natrona County, approximately 20 to 30 miles southwest of the Reno Creek Project Area on Wyoming Highway 387.
 
A major north–south railroad, BNSF Railway, used primarily for transporting coal, lies east of the Reno Creek Project Area and parallel to Wyoming Highway 59.
 
Equipment and supplies needed for exploration and day-to-day operations are available from population centers such as Gillette and Casper. Specialized equipment for the wellfields will likely need to be acquired from outside of Wyoming.
 
The local economy is geared toward coal mining and oil and gas production as well as ranching operations, providing a well-trained and capable pool of workers for ISR production and processing operations. Workers will reside locally and commute to work daily.
 
As a result of energy development over the past 50 years, the Reno Creek Project Area has existing or nearby (less than two miles) electrical power, gas and adequate telephone and internet connectivity.
 
UEC owns 40 acres of land near the intersection of Wyoming State Highway 387 and the Clarkelen County Road to build and operate a future satellite facility. This land is equipped with a warehouse and office, power, telephone, water tank and domestic waste disposal. A well will be drilled to provide potable water for the Reno Creek Project Area.
 
History
 
Uranium was first discovered in the southern PRB during the early 1950s. By the mid- to late 1950s, small open pit mine operations were established in the PRB. Early prospecting and exploration included geologic mapping and gamma surveys, which led to discoveries of uranium in the Wasatch and Fort Union Formations. Extensive drill hole exploration has been utilized to locate deeper uranium mineralization since the 1960s to progress geologic models.
 
58
 
 
The table below describes the historic ownership and operations at the Reno Creek Project Area.
 
Table 2: Historic Ownership and Operations at the Reno Creek Project Area
 
Year
Company
Operations/Activity
Amount
(No. of Drill holes)
Results of Work
Reno Creek –  North Reno Creek
Late 1960s
Rocky Mountain Energy Company (“RME”)
Drilled exploration holes at and around North Reno Creek resource area.
Approximately 5,800
Delineated Approximately 10 miles of roll-front deposits.
Mid 1970s
RME, Mono Power Company (“Mono”) and Halliburton Services
Partnership formed to develop North Reno Creek Resource Area using ISR methods.
N/A
Acquisition of the Reno Creek Project Area.
1992
Energy Fuels Nuclear Inc./International Uranium Corporation
Energy Fuels Nuclear Inc. acquired RME's North Reno Creek Resource Area and later became International Uranium Corporation.
N/A
Acquisition of the Reno Creek Project Area.
2001
Rio Algom
Rio Algom acquired International Uranium Corporation’s property.
N/A
Acquisition of the Reno Creek Project Area.
2001
PRI
PRI acquired North Reno Creek Area and dropped claims in 2003.
N/A
Acquisition of the Reno Creek Project Area and mining claims dropped.
2004
Strathmore Minerals Corporation and American Uranium Corporation (“AUCA”)
Re-staked and filed new mining claims on approximately 16,000 acres.
N/A
Refiled mining claims and secured right to mine.
2007
AUCA
Advanced project through acquisition of most major permits and required authorizations.
N/A
Acquisition of the Reno Creek Project Area and secured permits and authorizations.
2017
UEC
Consolidated ownership of multiple resource areas and oversaw technical reporting and auditing of Project resources.
N/A
Consolidation of ownership. Auditing of project resources.
 
59
 
 
Table 2: Historic Ownership and Operations at the Reno Creek Project Area
Year
Company
Operations/Activity
Amount
(No. of Drill holes)
Results of Work
Reno Creek –  Southwest Reno Creek
Pre-2007
AUCA and Tennessee Valley Authority JV
Controlled Southwest Reno Creek and drilled exploration holes.
Approximately 700
Delineation of mineralized areas.
2007
AUCA
Advanced project through acquisition of most major permits and required authorizations.
N/A
Secured permits and required authorizations.
2017
UEC
Consolidated ownership of multiple Resource Areas and oversaw technical reporting and auditing of Project resources.
N/A
Consolidation of ownership. Auditing of the Reno Creek Project Area resources.
Reno Creek –  Moore, Pine Tree, and Bing
1960s
Utah International Mining Company
Exploration on Moore and Pine Tree Resource Areas.
N/A
Delineation of mineralized areas.
Late 1970s
Pathfinder Mines, Inc.
Utah International Mining Company becomes Pathfinder Mines, Inc. and continues exploration on Moore and Pine Tree Resource Areas.
>1,560
Delineation of mineralized areas.
1980s
RME
Obtained ownership of Moore Area, continued exploration drilling until the 1990s.
>400
Acquired the Reno Creek Project Area. Delineation of mineralized areas.
1960s
Cleveland-Cliffs Iron Company
Exploration of Bing Area, drilled several hundred exploration holes and conducted limited hydrologic testing in the 1970s.
177
Delineation of mineralized areas through drilling and conducted hydrologic testing.
2007
AUCA
Consolidated the Resource Areas under one owner.
N/A
Consolidated ownership.
2017
UEC
Oversaw technical reporting and auditing of project resources.
N/A
Auditing of the Reno Creek Project Area resources.
 
60
 
 
Permitting and Licensing
 
The Reno Creek Project Area is fully permitted through the WDEQ/LQD.
 
Geologic Setting, Mineralization, and Deposit
 
The Reno Creek Project Area resides in the PRB. The PRB extends over much of northeastern Wyoming and southeastern Montana and consists of a large north-northwest trending asymmetric syncline, with the basin axis located to the west of the projects. The PRB is bounded by the Big Horn Mountains and Casper Arch to the west, the Black Hills to the east and the Hartville Uplift and Laramie Mountains to the south. The PRB is filled with marine, non-marine and continental sediments ranging in age from early Paleozoic through Cenozoic.
 
Within the PRB, the Paleocene Fort Union Formation conformably overlies the Lance Formation and is a fluvial-sedimentary stratigraphic unit that consists of fine- to coarse-grained arkosic sandstone, which is interbedded with siltstone, mudstone and carbonaceous materials. In some areas of the PRB, the Fort Union Formation is divided into two members, identified as the Upper and Lower members of the Fort Union Formation. However, Flores divides the Fort Union into three members: the Tullock; Lebo; and Tongue River members (listed from oldest to youngest); as follows:
 
 
●
The Tullock member consists of sandstone, siltstone and sparse coal and carbonaceous shale.
 
●
The Lebo member consists of abundant drab gray mudstone, minor siltstone and sandstone and sparse coal and carbonaceous shale beds.
 
●
The Tongue River member consists of interbedded sandstone, conglomerate, siltstone, mudstone, limestone, anomalously thick coal beds and carbonaceous shale beds. This member has been mined extensively for its coal beds which can be hundreds of feet thick.
 
Uranium mineralization occurs in zones that are located in channel sands of the Fort Union Formation. These channel sands are typical fining upward sand sequences consisting of fine-grained sandstones. The zones of mineralization are formed as typical roll-front deposits in these sandstones.
 
The early Eocene Wasatch Formation unconformably overlies the Fort Union Formation around the margins of the PRB. However, the two formations are conformable and gradational towards the basin center. The relative amount of coarse, permeable clastics increases near the top of Fort Union, and the overlying Wasatch Formation contains numerous beds of sandstone that can sometimes be correlated over wide areas. The Wasatch-Fort Union contact is separated by Paleocene and Eocene rocks and is generally placed above the Roland coal. However, other authors have placed the Wasatch-Fort Union contact above the School, Badger and Anderson Coals in other parts of the PRB.
 
The Wasatch Formation occurs at the surface in the central PRB but has been mostly removed by erosion with only small, scattered outcrops still present in the southern PRB. The Wasatch Formation is also a fluvial sedimentary unit that consists of a series of silt to very coarse-grained gradational intervals in arkosic sandstone. The sandstone horizons in the Wasatch Formation are the host rocks for several uranium deposits in the central PRB. Within this area, mineralization is found in a 50- to 100-ft thick sandstone lens. On a regional scale, mineralization is localized and controlled by facies changes within this sandstone, including thinning of the sandstone unit, decrease in grain size and increase in clay and organic material content. The Wasatch Formation reaches a maximum thickness of about 1,600 ft and dips northwestward from one degree to two-and-a-half degrees in the southern and central parts of the PRB.
 
The Oligocene White River Formation overlies the Wasatch Formation and has been removed from most of the PRB by erosion. Remnants of this unit crop out on the Pumpkin Buttes, and at the extreme southern edge of the PRB. The White River Formation consists of clayey sandstone, claystone, a boulder conglomerate and tuffaceous sediments, which may be the primary source rock for uranium in the southern part of the PRB as a whole. The youngest sediments consist of Quaternary alluvial sands and gravels locally present in larger valleys. Quaternary eolian sands can also be found locally.
 
The Reno Creek Project Area targets mineralization in the Eocene-aged Wasatch Formation.
 
61
 
 
Mineralization in the Reno Creek Project Area occurs in fluvial sandstones of the lower parts of the Wasatch Formation. Most of the upper Wasatch Formation has been eroded away. The sandstones are arkosic, fine- to coarse-grained with local calcareous lenses. The sandstones contain minor amounts of organic carbon that occurs as dispersed bits or as stringers. Unaltered sandstones are generally gray, while altered sandstones are tan or pink due to hematite, or show yellowish coloring due to limonite.
 
Pyrite occurs in several forms within the host sandstones. In unaltered sandstones, pyrite occurs as small to large single euhedral crystals associated with magnetite, ilmenite and other dark detrital minerals. In altered sandstone, pyrite is typically absent, but locally occurs as tarnished, very fine-grained euhedral crystals. In areas of intense or heavy mineralization, pyrite locally occurs as massive, tarnished crystal aggregates.
 
At the Reno Creek Project Area, the Felix Coal seams are laterally continuous in the North and Southwest Reno Creek resource areas and extend northward into the Moore and Bing resource areas. The Felix Coal seams and the underlying Badger Coal seam provide important correlation points across the Reno Creek Project Area. Sandstone horizons that host uranium mineralization within the production zone aquifer are typically cross-bedded, graded sequences fining upward from very coarse-grained at the base to fine-grained at the top, representing sedimentary cycles from 5-20 ft thick. Stacking of depositional cycles resulted in sandstone body accumulations over 200 ft thick.
 
Uranium mineralization at the Reno Creek Project Area is typical of Wyoming roll-front sandstone deposits. The formation of roll-front deposits is largely a groundwater process that occurs when uranium-rich, oxygenated groundwater interacts with a reducing environment in the subsurface and precipitates uranium. The most favorable host rocks for roll-fronts are permeable sandstones with large aquifer systems. Interbedded mudstone, claystone and siltstone are often present and aid in the formation process by focusing groundwater flux. The geometry of mineralization is dominated by the classic roll-front “C” shape or crescent configuration at the redox interface. The highest-grade portion of the front occurs in a zone termed the “nose” within reduced ground just ahead of the alteration front. Ahead of the nose, at the leading edge of the solution front, mineral quality gradually diminishes to barren within the “seepage” zone. Trailing behind the nose, in oxidized (altered) ground, are weak remnants of mineralization referred to as “tails” which have resisted re-mobilization to the nose due to association with shale, carbonaceous material or other lithologies of lower permeability. Tails are generally not amenable to ISR because the uranium is typically found within strongly reduced or impermeable strata, therefore making it difficult to leach.
 
Data Verification
 
WWC prepared an independent TRS titled “S-K 1300 Initial Assessment Mineral Resource Report Reno Creek Project Campbell County, WY USA”, which was completed and was current on March 31, 2022. That TRS details the resource estimate data verification for the Reno Creek Project Area. A summary of the data verification found in that TRS is provided below.
 
The UEC database contains 10,151 drill holes drilled by RCH and other former operators on and adjacent to the resource areas. Electric log gamma data are available for more than 75% of these holes, and interval data (thickness, grade, and grade-thickness) are available for about 95% of the mineralized holes.
 
Approximately 50 drill holes were not used in the current resource estimate due to identification of problematic data during recent data validation processes.
 
Data for 6,191 drill holes were used in the current resource estimate; however, more or less all of the holes supported geological model construction, so essentially all holes were used to support mineral resource estimation. Within the data set, 6,061 holes are within the Reno Creek Project Area. The drill hole data consists of logs, surveys and data generated for those holes.
 
UEC personnel entered the data into the database and constantly monitored data quality during data entry and when data are extracted for any purposes.
 
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As previously discussed, industry standard methods were utilized at the time of data collection. Available data were from drill maps, cross sections, geophysical logs and lithologic logs. WWC has worked with UEC contacts to obtain and verify exploration drilling and sampling data was complete, thorough and accurate. Geophysical logs for historic drill holes were analyzed and evaluated for completeness and sufficiently quality check in the process of developing the drill hole database for the resource modeling. Surveyed monuments or markers documenting the location of abandoned drill holes were not able to be physically inspected during the site visit, however, the database of drill hole locations was checked against the hole location identified on geophysical logs.
 
Mineral Resource Estimates
 
The following key assumptions were used for resource estimates, unless otherwise noted:
 
 
●
resources are located in permeable and porous sandstones; and
 
●
resources are located below the water table.
 
The estimation method was a two-dimensional (2D) Delaunay Triangulation implemented in RockWorks, a comprehensive software program for creating 2D and 3D maps and is an industry standard in the environmental, geotechnical, petroleum and mining industries. The Delaunay Triangulation method connects data points (drill holes) via a triangular network with one data point at each triangle vertex and constructs the triangles as close to equilateral as possible. Once the network was determined, the slope of each triangular plate was computed using the three vertex point values. Next, a 25 ft x 25 ft grid was superimposed over the triangular network, and each grid node (grid center) was assigned a Z-value, based on the intercept of the node and the sloping triangular plate. Only grid nodes falling within the boundary of the triangular network (convex hull) were estimated. The distance of the grid node from a drill hole location was computed and used to determine whether the node was located within UEC’s property boundary. Triangulations and grids for both grade and thickness were constructed. Next, the thickness and grade grids were multiplied to obtain a GT grid. Finally, the mineral resource classification criteria was applied to the GT grid to obtain a classified mineral resource. Resource pounds were determined by taking the average GT in each GT contour interval and multiplying it by the area and a conversion factor, then dividing that value by the tonnage factor. The resource estimate methods, general parameters and mineralized cutoffs used at the Reno Creek Project Area are summarized below.
 
Table 3: Reno Creek Project Area Resource Estimate Methodology
 
 
 
 
Cutoff Parameters
Project Area
Mineral Resource
Estimation Method
Disequilibrium
Factor
Bulk
Density
(ft 3 /Ton)
Min. Grade
(% U 3 O 8 )
Min.
Thickness
(ft)
Min. GT
Reno Creek
Delaunay Triangulation Method
1.0
17.0
0.01
1
0.20
Note
Cutoff parameters are discrete and therefore the GT cutoff is not necessarily the product of cutoff grade and cutoff thickness.
 
Based on the depths of mineralization, average grade, thickness and GT, it is the TRS QP’s opinion that the mineral resources of the Reno Creek Project Area can be recoverable by ISR methods using a long-term uranium price of $40/lb.
 
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Uranium does not trade on the open market and many of the private sales contracts are not publicly disclosed. UEC used $40/lb as the forecast uranium price for the Reno Creek Project Area. This is based on: (i) the long-term contract price at the end of February 2022, which was $43.88/lb from Cameco Resources’ combination of UxC and Trade Tech reports (Cameco, 2022); (ii) the spot price at the end of February 2022 ($48.75/lb); (iii) UxC’s price forecast; and (iv) UEC’s understanding of market expectations. The table below contains the UxC uranium price forecast for Q4 of 2021.
 
Table 4: UxC Q4 2021 Uranium Price Forecast ($/lb U3O8)
UxC Market Outlook Q4 2021
2021
2022
2023
2024
2025
UxC High Price Midpoint
$36.00
$46.37
$48.11
$52.13
$56.47
UxC Low Price Midpoint
$36.00
$40.02
$41.33
$42.59
$43.02
UxC Mid Price Midpoint
$36.00
$43.18
$44.14
$46.71
$48.39
 
In the opinion of the TRS QP, $40/lb is a conservative forecast price for the following reasons:
 
 
●
first, at the issuance date, both the long-term price and spot price are greater than $40/lb;
 
●
second, new physical uranium investment vehicles were created in 2021, such as the Sprott Physical Uranium Trust and the upcoming physical uranium fund backed by Kazatomprom, the National Bank of Kazakhstan and Genchi Global Ltd., which effectively remove uranium supply from the market;
 
●
third, the increasing demand for carbon-free energy and global plans to construct new nuclear reactors will increase demand for uranium; and
 
●
finally, there has already been a steady increase in the uranium price for the last three years with a sharp rise to greater than $40/lb in the second half of 2021 due in part to increased demand from the Sprott Physical Uranium Trust. Due to recent volatility in the uranium market, the QP believes that a conservative forecast price is justified.
 
For the above reasons, the TRS QP also believes that a $40/lb price is considered reasonable by the QP for use in cutoff determination and to assess reasonable prospects for eventual economic extraction.
 
Measured, indicated and inferred resource classifications at the Reno Creek Project Area are defined by the density of the drill hole data. Higher drill hole densities allow more confidence in the shape and size of the interpreted mineral horizons. The table below details the resource classification criteria used in the resource estimates in each of the Reno Creek Project Area.
 
Table 5: Reno Creek Project Area Drill Hole Information
 
Distance Between Drill Hole Locations
for Resource Classifications (ft)
Project Area
Measured
Indicated
Inferred
Reno Creek
0 – 50
50 – 250
250 – 500
 
There are numerous reasons that mineralization was interpreted as measured resources within the Reno Creek Project Area:
 
 
●
first, the drill hole spacing used to classify the measured resource is generally less than or equal to the 100 ft well spacing in a typical production pattern, which enables a detailed wellfield design to be completed;
 
●
second, the sub-surface geology within the Reno Creek Project Area is very well characterized with aquifers that correlate, consistent host sandstone intervals, and reliable aquitards across the resource areas;
 
●
third, mineralization occurs along the redox interface, and the oxidized sands have different coloration than the reduced sands. These color variations are visible in drill cuttings and are used to map the redox interface and to guide drilling and wellfield design; and
 
●
finally, historic production has occurred both commercially and through research and development facilities at the Reno Creek Project Area.
 
64
 
 
This combination of drill hole spacing, well-known subsurface geology, well-understood deposit model, successful production and the variety of data collected led WWC, as the TRS QP, to conclude that the mineralization in areas with drill hole spacing tabulated above fit the definition for measured resources.
 
Mineral resources were estimated separately for the Reno Creek Project Area. The estimates of measured and indicated mineral resources for the Reno Creek Project Area are reported in the table below and the estimates of inferred mineral resources are reported in the table following.
 
Table 6: Reno Creek Project Area Measured and Indicated Mineral Resources
Mineral Resource
GT Cutoff
Average Grade
% eU 3 O 8
Ore Tons
(000s)
eU 3 O 8
(lbs)
Reno Creek
Measured
0.20
0.043
14,990
12,920,000
Indicated
0.20
0.039
16,980
13,070,000
Total Measured and Indicated
0.20
0.041
31,970
25,990,000
 
Table 7: Reno Creek Project Area Inferred Mineral Resources
Mineral Resource
GT Cutoff
Average Grade
% eU 3 O 8
Ore Tons
(000s)
eU 3 O 8
(lbs)
Reno Creek
Inferred
0.20
0.039
1,920
1,490,000
 
Details regarding the mineral resource estimate disclosed herein can be found in Chapter 11, Mineral Resource Estimates of the TRS.
 
Present Condition of Property and Work Completed to Date
 
The Reno Creek Project Area is currently under care and maintenance with additional areas currently being added to the Reno Creek Project Area through the amendment process overseen by the state of Wyoming.
 
The Company ’ s Planned Work
 
The Company plans to complete permit and license amendments to add new mineable acreage to the Reno Creek Project Area. Drilling plans are also in the initial stages of development.
 
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Ludeman ISR Project
 
The following technical and scientific description for the Ludeman Project (the “Ludeman Project Area”) is based in part on the TRS titled “S-K 1300 Mineral Resource Report Wyoming Assets ISR Hub and Spoke Project, WY USA”, current on March 31, 2022, prepared by WWC, a qualified firm (the “QP” herein). The Ludeman Project Area does not have mineral reserves and is therefore considered an Exploration Stage property under S-K 1300 definitions, despite a history of successful in situ research and development testing.
 
Property Description
 
The Ludeman Project Area is located in Converse County, Wyoming, in the southern portion of the PRB. The Ludeman Project Area covers 19,888 acres including all (or portions of) 31 sections of the PRB.
 
The Ludeman Project Area is located approximately 12 miles northeast of Glenrock and 30 miles east-northeast of Casper, Wyoming. State Highway 95 provides access to the Ludeman Project Area from the Towns of Glenrock and Rolling Hills to the west and State Highway 93 provides access from Douglas to the southeast. Interstate 25 provides access to both of these state highways from the south of the Ludeman Project Area. The Ludeman Project Area is primarily located on private surface land with some areas of Federal or state lands.
 
Figure 1: Map of UEC Project Areas
 
66
 
 
Ownership
 
This Ludeman Project Area is owned and operated by UEC. UEC has executed surface use and access agreements and fee mineral leases with landowners who hold surface and mineral ownership within and outside the various Ludeman Project Area boundaries. UEC also holds unpatented BLM lode claims and leases on Wyoming state land on the Ludeman Project Area.
 
Mineral rights for the Ludeman Project Area are a combination of federally administered minerals (unpatented lode claims), State of Wyoming mineral leases and private (fee) mineral leases. Federal mining claims were staked and recorded consistent with federal and state law, state mineral leases were obtained by submitting a lease application and appropriate fee to the State Board of Land Commissioners, and fee mineral leases were obtained through negotiation with individual mineral owners.
 
Table 1: Property Characteristics Summary
Project Area
State of Wyoming
Leases
Fee Mineral Leases
Federal Lode
Mining Claims
Total
Ludeman
Acreage
1,440
1,749.9
17,586.1
20,768
Leases/Claims
4
2
746
752
Total Annual Cost
$4,320
Confidential
$123,090
$127,410
 
Within the Ludeman Project Area, UEC holds four State of Wyoming uranium leases on state lands with a combined acreage of 1,440 acres. UEC also holds 746 unpatented lode claims on federally administered minerals. An additional two fee mineral leases are held with private mineral owners. In total, the project mineral holdings total approximately 20,768 acres in the Ludeman Project Area.
 
Payments for state and private leases and BLM mining claim filing payments are up to date, as of the effective date of the TRS.
 
Accessibility, Climate, Local Resources, Infrastructure and Physiography
 
The Ludeman Project Area is within Converse County, Wyoming. This county resides in the Wyoming Basin Physiographic Province in the southern portion of the PRB. This site generally lies near the synclinal axis of the basin. The PRB is a part of the Northwestern Great Plains eco-region, a semi-arid rolling plain of shale and sandstone punctuated by occasional buttes. Regional structural features also include the Big Horn Mountains to the west, Casper Arch to the south, and the Black Hills to the east. In the Ludeman Project Area, the landscape is dominated by the Pumpkin Buttes.
 
Topography in the Ludeman Project Area ranges from generally flat to gently rolling hills, with numerous drainages containing ephemeral streams dissecting the Ludeman Project Area. Elevations ranges from approximately 4,500 to 5,400 ft above mean sea level.
 
Vegetation within the Ludeman Project Area consists primarily of grassland, with areas of sagebrush. The Ludeman Project Area lies within the mixed grass eco-region of the Northwestern Great Plains. Interspersed among these major vegetation communities, within and along the ephemeral drainages, are grassland and meadow grassland and less abundant types of seeded grasslands (improved pastures).
 
The Ludeman Project Area in the PRB is located in a semi-arid or steppe climate. The region is characterized by cold, harsh winters and hot, dry summers. The spring season is relatively warm and moist, and autumns are cool. Temperature extremes range from roughly -25° F in the winter to 100° F in the summer. Typically, the “last freeze” occurs during late May and the “first freeze” occurs in mid- to late September.
 
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Yearly precipitation in the PRB averages about 13 inches. The PRB is prone to severe thunderstorm events throughout the spring and early summer months, and much of the precipitation is attributed to these events. Snow falls throughout the winter months (approximately 40 to 50 inches per year), but provides much less moisture than rain events.
 
Equipment and supplies needed for exploration and day-to-day operations are available from population centers such as Douglas, Glenrock and Casper. Specialized equipment for the wellfields will likely need to be acquired from outside of Wyoming.
 
The local economy is geared toward coal mining and oil and gas production as well as ranching operations, providing a well-trained and capable pool of workers for ISR production and processing operations. Workers will reside locally and commute to work daily.
 
As a result of energy development over the past 50 years, all the Ludeman Project Area have existing or nearby (less than two miles) electrical power, gas and adequate telephone and internet connectivity.
 
The Ludeman Project Area has been historically used for livestock grazing. Nearby uranium operations have occurred historically. Non-potable water will be supplied by wells developed on or near the Ludeman Project Area. Water extracted as part of ISR operations will be recycled for reinjection. Ponds are the primary permitted wastewater disposal method at the Ludeman Project Area. However, typical ISR mining operations use disposal wells, which are permitted as a secondary wastewater disposal method at the Ludeman Project Area. The proximity of the Ludeman Project Area to paved roads will facilitate transportation of equipment, supplies, personnel and products. High voltage transmission lines from the Dave Johnston Power Plant pass within the Ludeman Project Area.
 
History
 
Uranium was first discovered in the southern PRB during the early 1950s. By the mid- to late 1950s, small open pit mine operations were established in the PRB. Early prospecting and exploration included geologic mapping and gamma surveys, which led to discoveries of uranium in the Wasatch and Fort Union Formations. Extensive drill hole exploration has been utilized to locate deeper uranium mineralization since the 1960s to progress geologic models.
 
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The table below describes the historic ownership and operations at the Ludeman Project Area.
 
Table 2: Historic Ownership and operations at the Ludeman Project Area
Year
Company
Operations/Activity
Amount
(No. of Drill holes)
Results of Work
1960s-1970s
Cordero Mining
Numerous exploration companies including Teton Exploration (“Teton”), PRI, Uranium Resources, Inc. (“URI”) and Malapai (a subsidiary of APS) collectively explored in the Ludeman Project Area.
Approximately 5,420
Explored for uranium roll-front mineralization and delineated deposits in the Ludeman Project Area.
1980
United Nuclear Corp. (“UNC”) and partner Teton
Constructed and operated the Leuenberger ISR pilot test facility for 12 months. Groundwater restoration was completed following production and a commercial permit to mine was granted. Due to a decline in the market, the permitted mine was not placed into commercial operation and the permit expired.
N/A
Produced 12,800 lbs of U 3 O 8  from the pilot facility.
1981
URI
Constructed and operated the North Platte ISR project on a portion of the Ludeman Project Area. The pilot test facility produced for five months during 1982.
N/A
Produced 1,515 lbs of U 3 O 8  from the pilot facility.
1980s
Malapai
Permitted the Peterson Project for pilot operations but was never operated.
N/A
Facility was never operated.
1985-Early 1990s
Central Electrical Generating Board of England (known as PRI)
Nedco and Union Pacific properties were consolidated into the Teton Leuenberger Project. PRI purchased the property and added to the acreage through the purchase of adjacent claim blocks owned by Kerr-McGee.
N/A
Ownership transition and growth in acreage through acquisitions.
Late 1990s
PRI
Leuenberger properties were released due to declining market trends. Some claims reverted to previous owners.
N/A
Decrease in claims and generally the Ludeman Project Area.
Early to Mid- 2000s
High Plains Uranium (“HPU”) and EMC
HPU held most claims and leases in the Ludeman Project Area. Energy Metals held the remaining claims in the Ludeman Project Area.
N/A
Claims and leases increased in the Ludeman Project Area.
2007
EMC
EMC acquired HPU.
N/A
Consolidation through acquisition.
 
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Table 2: Historic Ownership and operations at the Ludeman Project Area (Continued)
Year
Company
Operations/Activity
Amount
(No. of Drill holes)
Results of Work
2007
Uranium One
Uranium One acquired Energy Metals in late 2007 and continued exploration of the Ludeman Project Area from 2007 through 2012. The primary goals of drilling included exploration to establish continuity of regional ore trends, development drilling to determine the lateral extents of the ore body, stratigraphic investigation, confirmation of the location and nature of mineralization, and collection of cores for leach testing and analysis of uranium, mineralogy, trace metals, disequilibrium, permeability, porosity and density. Acquired the WDEQ/LQD mine permit and NRC license.
Approximately 2,180
Continued exploration of the Ludeman Project Area. Additional holes included boreholes, core holes, and monitor wells.
2021
UEC
The Ludeman Project Area acquired by UEC from Uranium One.
N/A
Ownership transition.
 
 
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Permitting and Licensing
 
The Ludeman Project Area is fully permitted through the WDEQ/LQD.
 
Geologic Setting, Mineralization, and Deposit
 
The Ludeman Project Area resides in the PRB. The PRB extends over much of northeastern Wyoming and southeastern Montana and consists of a large north-northwest trending asymmetric syncline, with the basin axis located to the west of the projects. The PRB is bounded by the Big Horn Mountains and Casper Arch to the west, the Black Hills to the east and the Hartville Uplift and Laramie Mountains to the south. The PRB is filled with marine, non-marine and continental sediments ranging in age from early Paleozoic through Cenozoic.
 
Within the PRB, the Paleocene Fort Union Formation conformably overlies the Lance Formation and is a fluvial-sedimentary stratigraphic unit that consists of fine- to coarse-grained arkosic sandstone, which is interbedded with siltstone, mudstone and carbonaceous materials. In some areas of the PRB, the Fort Union Formation is divided into two members, identified as the Upper and Lower members of the Fort Union Formation. However, Flores divides the Fort Union into three members: the Tullock; Lebo; and Tongue River members (listed from oldest to youngest); as follows:
 
 
●
The Tullock member consists of sandstone, siltstone and sparse coal and carbonaceous shale.
 
●
The Lebo member consists of abundant drab gray mudstone, minor siltstone and sandstone and sparse coal and carbonaceous shale beds.
 
●
The Tongue River member consists of interbedded sandstone, conglomerate, siltstone, mudstone, limestone, anomalously thick coal beds and carbonaceous shale beds. This member has been mined extensively for its coal beds which can be hundreds of feet thick.
 
The total thickness of the Fort Union Formation varies between 2,000 and 3,500 ft.
 
Uranium mineralization occurs in zones that are located in channel sands of the Fort Union Formation. These channel sands are typical fining upward sand sequences consisting of fine-grained sandstones. The zones of mineralization are formed as typical roll-front deposits in these sandstones.
 
The early Eocene Wasatch Formation unconformably overlies the Fort Union Formation around the margins of the PRB. However, the two formations are conformable and gradational towards the basin center. The relative amount of coarse, permeable clastics increases near the top of Fort Union, and the overlying Wasatch Formation contains numerous beds of sandstone that can sometimes be correlated over wide areas. The Wasatch-Fort Union contact is separated by Paleocene and Eocene rocks and is generally placed above the Roland coal. However, other authors have placed the Wasatch-Fort Union contact above the School, Badger and Anderson Coals in other parts of the PRB.
 
The Wasatch Formation occurs at the surface in the central PRB, but has been mostly removed by erosion with only small, scattered outcrops still present in the southern PRB. The Wasatch Formation is also a fluvial sedimentary unit that consists of a series of silt to very coarse-grained gradational intervals in arkosic sandstone. The sandstone horizons in the Wasatch Formation are the host rocks for several uranium deposits in the central PRB. Within this area, mineralization is found in a 50- to 100-ft thick sandstone lens. On a regional scale, mineralization is localized and controlled by facies changes within this sandstone, including thinning of the sandstone unit, decrease in grain size and increase in clay and organic material content. The Wasatch Formation reaches a maximum thickness of about 1,600 ft and dips northwestward from one degree to two-and-a-half degrees in the southern and central parts of the PRB.
 
The Oligocene White River Formation overlies the Wasatch Formation and has been removed from most of the PRB by erosion. Remnants of this unit crop out on the Pumpkin Buttes, and at the extreme southern edge of the PRB. The White River Formation consists of clayey sandstone, claystone, a boulder conglomerate and tuffaceous sediments, which may be the primary source rock for uranium in the southern part of the PRB as a whole. The youngest sediments consist of Quaternary alluvial sands and gravels locally present in larger valleys. Quaternary eolian sands can also be found locally.
 
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The Ludeman Project Area targets mineralization in the Fort Union Formation, which underlies the Wasatch Formation. The host rocks for the uranium ore deposits in the project areas are the arkosic sandstones of the Fort Union Formation. These channel deposits are confined by mudstones that serve as aquitards to the water saturated aquifers.
 
Uranium mineralization at the Ludeman Project Area is typical of Wyoming roll-front sandstone deposits. The formation of roll-front deposits is largely a groundwater process that occurs when uranium-rich, oxygenated groundwater interacts with a reducing environment in the subsurface and precipitates uranium. The most favorable host rocks for roll-fronts are permeable sandstones with large aquifer systems. Interbedded mudstone, claystone and siltstone are often present and aid in the formation process by focusing groundwater flux. The geometry of mineralization is dominated by the classic roll-front “C” shape or crescent configuration at the redox interface. The highest-grade portion of the front occurs in a zone termed the “nose” within reduced ground just ahead of the alteration front. Ahead of the nose, at the leading edge of the solution front, mineral quality gradually diminishes to barren within the “seepage” zone. Trailing behind the nose, in oxidized (altered) ground, are weak remnants of mineralization referred to as “tails” which have resisted re-mobilization to the nose due to association with shale, carbonaceous material or other lithologies of lower permeability. Tails are generally not amenable to ISR because the uranium is typically found within strongly reduced or impermeable strata, therefore making it difficult to leach.
 
Data Verification
 
Data used for the resource estimate at the Ludeman Project Area consisted of drill maps, cross-sections, geophysical logs, lithologic logs, reports and digital databases. Standard industry methods were used at the time of data collection.
 
Historic radiometric data log interpretation was spot checked for the higher-grade intercepts.
 
Historic drill hole locations were verified by plotting their coordinates and checking against original maps. Historic drill hole location coordinates were then converted to match the NAD 83 coordinate system for recent drill holes. Approximately 10% of the historic drill holes were resurveyed.
 
Recent drill hole data included collar elevation, collar location, grade and elevation of mineralized intercepts, bottom hole elevation and locations that had utilized modern survey grade GPS equipment.
 
Confirmation drilling by way of offset holes has been conducted by previous owners to validate historic data.
 
The Ludeman Project Area has been host to two successful pilot plant studies. The Leuenberger Pilot was in production for 12 months from two wellfields which recovered a combined 14,600 lbs U3O8. Recovery rates in the two wellfields were 68 percent and 27 percent of estimated in-place resources, and peak head grades were 175 ppm and 32 ppm (UNC Teton-Nedco, 1983). The North Platte Pilot was in production for five months with total recovery of 1,515 lbs of U3O8 at a recovery rate of 27 percent. Baseline investigations for a third pilot study were conducted by the APS Commission; however, actual pilot scale production was never conducted. Laboratory leach testing noted that the overall recovery averaged 76 percent of estimated in-place resource.
 
Mineral Resource Estimates
 
The following key assumptions were used for resource estimates, unless otherwise noted
 
 
●
resources are located in permeable and porous sandstones; and
 
●
resources are located below the water table.
 
The GT contour method was used to estimate the mineral resources at the Ludeman Project Area. The GT contour method is one of the most widely used and dependable methods to estimate resources in uranium roll-front deposits. The basis of the GT contour method is the GT (grade x mineralized thickness) values, which are determined for each drill hole using radiometric log results and a suitable GT cutoff, below which the GT value is considered to be zero.
 
72
 
 
The GT values are then plotted on a drill hole map and GT contours are drawn accordingly using roll-front data derived from cuttings and the nature of the gamma anomalies. The resources are calculated from the area within the GT contour boundaries considering the DEF and the ore zone density.
 
The resource estimate methods, general parameters and mineralized cutoffs used at the Ludeman Project Area are summarized below.
 
Table 3: Ludeman Project Area Resource Estimate Methodology
 
 
 
 
Cutoff Parameters
Project Area
Mineral Resource
Estimation Method
Disequilibrium
Factor
Bulk
Density
(ft 3 /Ton)
Min.
Grade
(% U 3 O 8 )
Min.
Thickness
(ft)
Min. GT
Ludeman
GT Contour Method
1.0
17.0
0.02
2
0.25
Note
Cutoff parameters are discrete and therefore the GT cutoff is not necessarily the product of cutoff grade and cutoff thickness.
 
Based on the depths of mineralization, average grade, thickness and GT, it is the TRS QP’s opinion that the mineral resources of the Ludeman Project Area can be recoverable by ISR methods using a long-term uranium price of $40/lb.
 
Uranium does not trade on the open market and many of the private sales contracts are not publicly disclosed. UEC used $40/lb as the forecast uranium price for the Ludeman Project Area. This is based on: (i) the long-term contract price at the end of February 2022, which was $43.88/lb from Cameco Resources’ combination of UxC and Trade Tech reports (Cameco, 2022); (ii) the spot price at the end of February 2022 ($48.75/lb); (iii) UxC’s price forecast; and (iv) UEC’s understanding of market expectations. The table below contains the UxC uranium price forecast for Q4 of 2021.
 
Table 4: UxC Q4 2021 Uranium Price Forecast ($/lb U3O8)
UxC Market Outlook Q4 2021
2021
2022
2023
2024
2025
UxC High Price Midpoint
$36.00
$46.37
$48.11
$52.13
$56.47
UxC Low Price Midpoint
$36.00
$40.02
$41.33
$42.59
$43.02
UxC Mid Price Midpoint
$36.00
$43.18
$44.14
$46.71
$48.39
 
In the opinion of the TRS QP, $40/lb is a conservative forecast price for the following reasons:
 
 
●
first, at the issuance date, both the long-term price and spot price are greater than $40/lb;
 
●
second, new physical uranium investment vehicles were created in 2021, such as the Sprott Physical Uranium Trust and the upcoming physical uranium fund backed by Kazatomprom, the National Bank of Kazakhstan and Genchi Global Ltd., which effectively remove uranium supply from the market;
 
●
third, the increasing demand for carbon-free energy and global plans to construct new nuclear reactors will increase demand for uranium; and
 
●
finally, there has already been a steady increase in the uranium price for the last three years with a sharp rise to greater than $40/lb in the second half of 2021, due in part to increased demand from the Sprott Physical Uranium Trust. Due to recent volatility in the uranium market, the QP believes that a conservative forecast price is justified.
 
For the above reasons, the TRS QP also believes that a $40/lb price is considered reasonable by the QP for use in cutoff determination and to assess reasonable prospects for eventual economic extraction.
 
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Measured, indicated and inferred resource classifications at the Ludeman Project Area are defined by the density of the drill hole data. Higher drill hole densities allow more confidence in the shape and size of the interpreted mineral horizons. The table below details the resource classification criteria used in the resource estimates in each of the Ludeman Project Area.
 
Table 5: Ludeman Project Area Drill Hole Information
 
Distance Between Drill Hole Locations
for Resource Classifications (ft)
Project Area
Measured
Indicated
Inferred
Ludeman
0 – 70
70 – 200
200 – 400
 
There are numerous reasons that mineralization was interpreted as measured resources within the Ludeman Project Area:
 
 
●
first, the drill hole spacing used to classify the measured resource is generally less than or equal to the 100 ft well spacing in a typical production pattern, which enables a detailed wellfield design to be completed;
 
●
second, as shown on the geologic cross sections the sub-surface geology within the Ludeman Project Area is very well characterized with aquifers that correlate, consistent host sandstone intervals and reliable aquitards across the resource areas;
 
●
third, mineralization occurs along the redox interface and the oxidized sands have different coloration than the reduced sands. These color variations are visible in drill cuttings and are used to map the redox interface and to guide drilling and wellfield design; and
 
●
finally, historic production has occurred both commercially and through research and development facilities at the Ludeman Project Area.
 
This combination of drill hole spacing, well-known subsurface geology, well-understood deposit model, s uccessful production, and the variety of data collected led WWC, as the TRS QP, to conclude that the mineralization in areas with drill hole spacing tabulated above fit the definition for measured resources.
 
Mineral resources were estimated separately for the Ludeman Project Area. The estimates of measured and indicated mineral resources for the Ludeman Project Area are reported in the table below and the estimates of inferred mineral resources are reported in the table following.
 
Table 6: Ludeman Project Area Measured and Indicated Mineral Resources
Mineral Resource
GT Cutoff
Average Grade
% eU 3 O 8
Ore Tons
(000s)
eU 3 O 8
(lbs)
Ludeman
Measured
0.25
0.094
2,674
5,016,900
Indicated
0.25
0.088
2,660
4,696,900
Total Measured and Indicated
0.25
0.091
5,334
9,713,800
 
Table 7: Ludeman Project Area Inferred Mineral Resources
Mineral Resource
GT Cutoff
Average Grade
% eU 3 O 8
Ore Tons
(000s)
eU 3 O 8
(lbs)
Ludeman
Inferred
0.25
0.073
866
1,258,000
 
Present Condition of Property and Work Completed to Date
 
The Ludeman Project Area is fully permitted and in a care and maintenance mode.
 
The Company ’ s Planned Work
 
The Company plans to maintain the Ludeman Project Area in a care and maintenance status.
 
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Allemand-Ross ISR Project
 
The following technical and scientific description for the Allemand-Ross Project Area (the “Allemand-Ross Project Area”) is based in part on the TRS titled “S-K 1300 Mineral Resource Report Wyoming Assets ISR Hub and Spoke Project, WY USA”, current on March 31, 2022, prepared by WWC, a qualified firm (the “QP” herein).
 
Property Description
 
The Allemand-Ross Project Area is located in Converse County, Wyoming, in the southern PRB Uranium District of Wyoming. The Allemand-Ross Project Area covers 10,757 acres, including all (or portions of) 21 sections within three townships of the PRB.
 
The Allemand-Ross Project Area is located approximately 42 air miles northeast of Casper, Wyoming. The Allemand-Ross Project Area is primarily located on private surface land with some areas of federal or state-managed land. The Allemand-Ross Project Area was previously divided into North and South areas, with North Allemand-Ross historically called the Sand Draw Property and South Allemand-Ross called the North Bear Creek Property. This designation is not utilized by UEC, as both areas are now within the Allemand-Ross Project Area. The land ownership is a combination of private, state of Wyoming, and federally owned land administered by the BLM.
 
 
Figure 1: Map of UEC Project Areas
 
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Ownership
 
This Allemand-Ross Project Area is owned and operated by UEC. UEC has executed surface use and access agreements and fee mineral leases with landowners who hold surface and mineral ownership within and outside the various Allemand-Ross Project Area boundaries. UEC also holds unpatented BLM lode claims and leases on Wyoming state land on the project area.
 
Mineral rights for the Allemand-Ross Project Area are a combination of federally administered minerals (unpatented lode claims), State of Wyoming mineral leases and private (fee) mineral leases. Federal mining claims were staked and recorded consistent with federal and state law, state mineral leases were obtained by submitting a lease application and appropriate fee to the State Board of Land Commissioners and fee mineral leases are obtained through negotiation with individual mineral owners.
 
Table 1: Property Characteristics Summary
Project Area
State of Wyoming
Leases
Fee Mineral
Leases
Federal Lode
Mining Claims
Total
Allemand-Ross
Acreage
318
2,773.9
8,518.2
11,610.1
Leases/Claims
2
7
452
461
Total Annual Cost
$683
Confidential
$74,580
$75,263
 
Within the Allemand-Ross Project Area, UEC holds two State of Wyoming uranium leases with a combined acreage of 318 acres. UEC also holds 452 unpatented lode claims on federally administered minerals. An additional seven fee (private) mineral leases are held with private mineral owners. In total, the net mineral holdings in the Allemand-Ross Project Area comprise 11,610.1 acres.
 
Payments for state and private leases and BLM mining claim filing payments are up to date as of the effective date of the TRS.
 
Accessibility, Climate, Local Resources, Infrastructure and Physiography
 
The Allemand-Ross Project Area is within Converse County, Wyoming. This county resides in the Wyoming Basin Physiographic Province in the southern portion of the PRB. This site generally lies near the synclinal axis of the basin. The PRB is a part of the Northwestern Great Plains eco-region, a semiarid rolling plain of shale and sandstone punctuated by occasional buttes. Regional structural features also include the Big Horn Mountains to the west, Casper Arch to the south and the Black Hills to the east. In the northern Allemand-Ross Project Area, the landscape is dominated by the Pumpkin Buttes.
 
Topography in the Allemand-Ross Project Area ranges from generally flat to gently rolling hills, with numerous drainages containing ephemeral streams dissecting the Allemand-Ross Project Area. Elevations ranges from approximately 4,500 ft to 5,400 ft above mean sea level.
 
Vegetation within the Allemand-Ross Project Area consists primarily of grassland, with areas of sagebrush. The Allemand-Ross Project Area lies within the mixed grass eco-region of the Northwestern Great Plains. Interspersed among these major vegetation communities, within and along the ephemeral drainages, are grassland and meadow grassland and less abundant types of seeded grasslands (improved pastures).
 
The Allemand-Ross Project Area in the PRB is located in a semi-arid or steppe climate. The region is characterized by cold, harsh winters and hot, dry summers. The spring season is relatively warm and moist, and autumns are cool. Temperature extremes range from roughly -25° F in the winter to 100° F in the summer. Typically, the last freeze occurs during late May and the first freeze occurs in mid- to late September.
 
Yearly precipitation in the PRB averages about 13 inches. The PRB is prone to severe thunderstorm events throughout the spring and early summer months, and much of the precipitation is attributed to these events. Snow falls throughout the winter months (approximately 40 to 50 inches per year), but provides much less moisture than rain events.
 
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The Allemand-Ross Project Area is accessible via two-wheel drive on existing county and/or two-track roads as follows: from Douglas, Wyoming, proceed northwesterly on WY Highway 93, approximately 21 miles to the junction with WY Highway 95. From the junction of WY Highways 93 and 95, proceed northerly approximately 32 miles on Converse County Road 31, also known as the Ross Road. The Ross Road is an all-season road that is maintained by Converse County. The southern section of which is paved, and the northern section is gravel surface. A major north–south railroad, BNSF Railway, used primarily for transporting coal, lies east of the Allemand-Ross Project Area and parallel to Wyoming Highway 59.
 
Equipment and supplies needed for exploration and day-to-day operations are available from population centers such as Glenrock, Douglas and Casper. Specialized equipment for the wellfields will likely need to be acquired from outside of Wyoming.
 
The local economy is geared toward coal mining and oil and gas production as well as ranching operations, providing a well-trained and capable pool of workers for ISR production and processing operations. Workers will reside locally and commute to work daily.
 
As a result of energy development over the past 50 years, all the Allemand-Ross Project Area have existing or nearby (less than two miles) electrical power, gas and adequate telephone and internet connectivity.
 
At the Allemand-Ross Project Area, non-potable water will be supplied by wells developed on or near the Allemand-Ross Project Area. Water extracted as part of ISR will be recycled for reinjection. At least two Class I UIC deep disposal wells are planned for the Allemand-Ross Project Area. The Allemand-Ross Project Area is adjacent to all-weather roadways which facilitate the transportation of equipment, supplies, personnel and product. Electrical power lines extend into and across the Allemand-Ross Project Area.
 
History
 
Uranium was first discovered in the southern PRB during the early 1950s. By the mid- to late 1950s, small open pit mine operations were established in the PRB. Early prospecting and exploration included geologic mapping and gamma surveys, which led to discoveries of uranium in the Wasatch and Fort Union Formations. Extensive drill hole exploration has been utilized to locate deeper uranium mineralization since the 1960s to progress geologic models.
 
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The table below describes the historic ownership and operation at the Allemand-Ross Project Area.
 
Table 2: Historic Ownership and Operations at the Allemand-Ross Project Area
Year
Company
Operations/Activity
Amount
(No. of Drill holes)
Results of Work
1967
Kerr-McGee, Homestake, Teton
Early uranium exploration completed by the three companies in the Allemand-Ross Project Area. Exploration was typically for shallower mineralization (<1,000 ft).
Approximately 100
Exploration of shallow mineralization (<1,000 ft).
1971
Conoco
Conoco staked lode mining claims in 1969. In 1970, Conoco entered an agreement with National Resources Corporation to earn in on the Allemand-Ranch land holdings. National Resources Corporation’s interests were acquired by Pioneer Nuclear in 1972 and the joint venture partnership was maintained until 1975. In 1979, Conoco continued to operate the drilling program. Conoco closed its mineral department in 1984.
Approximately 1,180
A significant amount of the mineralization within the Allemand-Ross Project Area was delineated.
1984
Power Reactor and Nuclear Fuel Development Corporation (“PNC”)
PNC assumed control of the Allemand-Ross Project Area and continued exploration.
Approximately 50
Additional exploration completed by PNC.
Early 1990s
PNC
Mineral rights were allowed to lapse due to further declining uranium market conditions.
N/A
Lost mineral rights.
Early 2000s-2005
HPU and EMC
Claims and leases were acquired during the uranium market upswing. HPU held most claims and leases and EMC holding the remainder of the Allemand-Ross Project Area.
N/A
Mineral rights were acquired.
2007
EMC
EMC acquired HPU. The properties were consolidated.
N/A
Properties consolidated.
2007
Uranium One
Uranium One acquired EMC. Uranium One proceeded to conduct verification and resource enhancement drilling. Most drilling was completed between 2008 and 2010.
Approximately 300
Additional exploration completed within the Allemand-Ross Project Area with average depths ranging from 1,118 ft to 1,546 ft.
2021
UEC
The Allemand-Ross Project Area acquired by UEC from Uranium One.
N/A
Ownership transition.
 
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Permitting and Licensing
 
The Allemand-Ross Project Area is not permitted.
 
Geologic Setting, Mineralization, and Deposit
 
The Allemand-Ross Project Area resides in the PRB. The PRB extends over much of northeastern Wyoming and southeastern Montana and consists of a large north-northwest trending asymmetric syncline, with the basin axis located to the west of the projects. The PRB is bounded by the Big Horn Mountains and Casper Arch to the west, the Black Hills to the east and the Hartville Uplift and Laramie Mountains to the south. The PRB is filled with marine, non-marine and continental sediments ranging in age from early Paleozoic through Cenozoic.
 
Within the PRB, the Paleocene Fort Union Formation conformably overlies the Lance Formation and is a fluvial-sedimentary stratigraphic unit that consists of fine- to coarse-grained arkosic sandstone, which is interbedded with siltstone, mudstone and carbonaceous materials. In some areas of the PRB, the Fort Union Formation is divided into two members, identified as the Upper and Lower members of the Fort Union Formation. However, Flores divides the Fort Union into three members: the Tullock; Lebo; and Tongue River members (listed as oldest to youngest); as follows:
 
 
●
The Tullock member consists of sandstone, siltstone and sparse coal and carbonaceous shale.
 
●
The Lebo member consists of abundant drab gray mudstone, minor siltstone and sandstone and sparse coal and carbonaceous shale beds.
 
●
The Tongue River member consists of interbedded sandstone, conglomerate, siltstone, mudstone, limestone, anomalously thick coal beds and carbonaceous shale beds. This member has been mined extensively for its coal beds, which can be hundreds of feet thick.
 
The total thickness of the Fort Union Formation varies between 2,000 and 3,500 ft.
 
Uranium mineralization occurs in zones that are located in channel sands of the Fort Union Formation. These channel sands are typical fining upward sand sequences consisting of fine-grained sandstones. The zones of mineralization are formed as typical roll-front deposits in these sandstones.
 
The early Eocene Wasatch Formation unconformably overlies the Fort Union Formation around the margins of the PRB. However, the two formations are conformable and gradational towards the basin center. The relative amount of coarse, permeable clastics increases near the top of Fort Union, and the overlying Wasatch Formation contains numerous beds of sandstone that can sometimes be correlated over wide areas. The Wasatch-Fort Union contact is separated by Paleocene and Eocene rocks and is generally placed above the Roland coal. However, other authors have placed the Wasatch-Fort Union contact above the School, Badger and Anderson Coals in other parts of the PRB.
 
The Wasatch Formation occurs at the surface in the central PRB, but has been mostly removed by erosion with only small, scattered outcrops still present in the southern PRB. The Wasatch Formation is also a fluvial sedimentary unit that consists of a series of silt to very coarse-grained gradational intervals in arkosic sandstone. The sandstone horizons in the Wasatch Formation are the host rocks for several uranium deposits in the central PRB. Within this area, mineralization is found in a 50- to 100-ft thick sandstone lens. On a regional scale, mineralization is localized and controlled by facies changes within this sandstone, including thinning of the sandstone unit, decrease in grain size and increase in clay and organic material content. The Wasatch Formation reaches a maximum thickness of about 1,600 ft and dips northwestward from one degree to two-and-a-half degrees in the southern and central parts of the PRB.
 
The Oligocene White River Formation overlies the Wasatch Formation and has been removed from most of the PRB by erosion. Remnants of this unit crop out on the Pumpkin Buttes, and at the extreme southern edge of the PRB. The White River Formation consists of clayey sandstone, claystone, a boulder conglomerate and tuffaceous sediments, which may be the primary source rock for uranium in the southern part of the PRB as a whole. The youngest sediments consist of Quaternary alluvial sands and gravels locally present in larger valleys. Quaternary eolian sands can also be found locally.
 
79
 
 
The Allemand-Ross Project Area targets mineralization in the Fort Union Formation, which underlies the Wasatch Formation and is part of the thick PRB sedimentary series. It consists of mudstones, siltstones and clays with minor cross bedded sandstone channels and occasional thin limestone and lignite beds (Lemmers and Smith, 1981). The Fort Union Formation sandstones were deposited in a fluvial paleo-drainage system, which flowed generally in a north-northeasterly direction. The targeted host rocks for uranium ore deposits in the Allemand-Ross Project area are the arkosic sandstones of the Lebo member of the Fort Union formation. These channel deposits are confined by mudstones that serve as aquitards to the water saturated aquifers.
 
Pyrite occurs in several forms within the host sandstones. In unaltered sandstones, pyrite occurs as small to large single euhedral crystals associated with magnetite, ilmenite and other dark detrital minerals. In altered sandstone, pyrite is typically absent, but locally occurs as tarnished, very fine-grained euhedral crystals. In areas of intense or heavy mineralization, pyrite locally occurs as massive, tarnished crystal aggregates.
 
Uranium mineralization at the Allemand-Ross Project Area is typical of Wyoming roll-front sandstone deposits. The formation of roll-front deposits is largely a groundwater process that occurs when uranium-rich, oxygenated groundwater interacts with a reducing environment in the subsurface and precipitates uranium. The most favorable host rocks for roll-fronts are permeable sandstones with large aquifer systems. Interbedded mudstone, claystone and siltstone are often present and aid in the formation process by focusing groundwater flux. The geometry of mineralization is dominated by the classic roll-front “C” shape or crescent configuration at the redox interface. The highest-grade portion of the front occurs in a zone termed the “nose” within reduced ground just ahead of the alteration front. Ahead of the nose, at the leading edge of the solution front, mineral quality gradually diminishes to barren within the “seepage” zone. Trailing behind the nose, in oxidized (altered) ground, are weak remnants of mineralization referred to as “tails”, which have resisted re-mobilization to the nose due to association with shale, carbonaceous material or other lithologies of lower permeability. Tails are generally not amenable to ISR because the uranium is typically found within strongly reduced or impermeable strata, therefore making it difficult to leach.
 
Data Verification
 
Data used for the resource estimate at the Allemand-Ross Project Area consisted of drill maps, cross-sections, geophysical logs, lithologic logs and historic reports developed by Conoco intent on developing the property as a production center. Standard industry methods were used at the time of data collection.
 
Paper records of historic radiometric data were input into a spreadsheet. Radiometric log interpretation was spot checked for the higher-grade intercepts.
 
Historic drill hole locations were verified by plotting their coordinates and checking against original maps. Field checks of historic drill hole locations were conducted, with the locations found to be within acceptable tolerances. Historic drill hole location coordinates were then converted to match the NAD 83 coordinate system for recent drill holes. Approximately 10% of the historic drill holes were resurveyed.
 
Recent drill hole data included collar elevation, collar location, grade and elevation of mineralized intercepts, bottom hole elevation and locations that had utilized modern survey grade GPS equipment.
 
Confirmation drilling by way of offset holes has been conducted by previous owners to validate historic data.
 
Since no historic core samples exist for verification, core drilling of the project was conducted in 2005 with the completion of 11 holes.
 
Mineral Resource Estimates
 
The following key assumptions were used for resource estimates, unless otherwise noted:
 
 
●
resources are located in permeable and porous sandstones; and
 
●
resources are located below the water table.
 
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The GT contour method was used to estimate the mineral resources at the Allemand-Ross Project Area. The GT contour method is one of the most widely used and dependable methods to estimate resources in uranium roll-front deposits. The basis of the GT contour method is the GT (grade x mineralized thickness) values, which are determined for each drill hole using radiometric log results and a suitable GT cutoff, below which the GT value is considered to be zero. The GT values are then plotted on a drill hole map and GT contours are drawn accordingly using roll-front data derived from cuttings and the nature of the gamma anomalies. The resources are calculated from the area within the GT contour boundaries considering the DEF and the ore zone density. The GT Contour method was used to estimate the resources at all the Christensen Ranch Project Area.
 
The resource estimate methods, general parameters, and mineralized cutoffs used at the Allemand-Ross Project Area are summarized below.
 
Table 3: Allemand-Ross Project Area Resource Estimate Methodology
 
 
 
 
Cutoff Parameters
Project Area
Mineral Resource
Estimation Method
Disequilibrium
Factor
Bulk
Density
(ft 3 /Ton)
Min.
Grade
(% U 3 O 8 )
Min.
Thickness
(ft)
Min. GT
Allemand-Ross
GT Contour Method
1.0
16.0
0.02
-
0.25
Note
Cutoff parameters are discrete and therefore the GT cutoff is not necessarily the product of cutoff grade and cutoff thickness.
 
Based on the depths of mineralization, average grade, thickness and GT, it is the TRS QP’s opinion that the mineral resources of the Allemand-Ross Project Area can be recoverable by ISR methods using a long-term uranium price of $40/lb. The cutoffs were determined separately for each Allemand-Ross Project Area with the unique aspects of each Allemand-Ross Project Area taken into consideration.
 
Uranium does not trade on the open market and many of the private sales contracts are not publicly disclosed. UEC used $40/lb as the forecast uranium price for the Allemand-Ross Project Area. This is based on: (i) the long-term contract price at the end of February 2022, which was $43.88/lb from Cameco Resources’ combination of UxC and Trade Tech reports (Cameco, 2022); (ii) the spot price at the end of February 2022 ($48.75/lb); (iii) UxC’s price forecast; and (iv) UEC’s understanding of market expectations. The table below contains the UxC uranium price forecast for Q4 of 2021
 
Table 4: UxC Q4 2021 Uranium Price Forecast ($/lb U3O8)
UxC Market Outlook Q4 2021
2021
2022
2023
2024
2025
UxC High Price Midpoint
$36.00
$46.37
$48.11
$52.13
$56.47
UxC Low Price Midpoint
$36.00
$40.02
$41.33
$42.59
$43.02
UxC Mid Price Midpoint
$36.00
$43.18
$44.14
$46.71
$48.39
 
In the opinion of the TRS QP, $40/lb is a conservative forecast price for the following reasons:
 
 
●
first, at the issuance date, both the long-term price and spot price are greater than $40/lb;
 
●
second, new physical uranium investment vehicles were created in 2021, such as the Sprott Physical Uranium Trust and the upcoming physical uranium fund backed by Kazatomprom, the National Bank of Kazakhstan and Genchi Global Ltd., which effectively remove uranium supply from the market;
 
●
third, the increasing demand for carbon-free energy and global plans to construct new nuclear reactors will increase demand for uranium; and
 
●
finally, there has already been a steady increase in the uranium price for the last three years with a sharp rise to greater than $40/lb in the second half of 2021, due in part to increased demand from the Sprott Physical Uranium Trust. Due to recent volatility in the uranium market, the TRS QP believes that a conservative forecast price is justified.
 
For the above reasons, the TRS QP also believes that a $40/lb price is considered reasonable by the QP for use in cutoff determination and to assess reasonable prospects for eventual economic extraction.
 
81
 
 
Measured, indicated and inferred resource classifications at the Allemand-Ross Project Area are defined by the density of the drill hole data. Higher drill hole densities allow more confidence in the shape and size of the interpreted mineral horizons. The table below details the resource classification criteria used in the resource estimates in each of the Allemand-Ross Project Area.
 
Table 5: Allemand-Ross Project Area Drill Hole Information
Project Area
Distance Between Drill Hole Locations
for Resource Classifications (ft)
 
Measured
Indicated
Inferred
Allemand-Ross
0 – 70
70 – 200
200 – 400
 
There are numerous reasons that mineralization was interpreted as measured resources within the Allemand-Ross Project Area:
 
 
●
first, the drill hole spacing used to classify the measured resource is generally less than or equal to the 100 ft well spacing in a typical production pattern, which enables a detailed wellfield design to be completed;
 
●
second, the sub-surface geology within the Allemand-Ross Project Area is very well characterized with aquifers that correlate, consistent host sandstone intervals and reliable aquitards across the resource areas;
 
●
third, mineralization occurs along the redox interface and the oxidized sands have different coloration than the reduced sands. These color variations are visible in drill cuttings and are used to map the redox interface and to guide drilling and wellfield design; and
 
●
commercial production at the Smith Highland Mine is just south of the Allemand-Ross Project Area.
 
This combination of drill hole spacing, well-known subsurface geology, well-understood deposit model, successful production and the variety of data collected led WWC, as the TRS QP, to conclude that the mineralization in areas with drill hole spacing tabulated above fit the definition for measured resources.
 
Mineral resources were estimated separately for the Allemand-Ross Project Area. The estimates of measured and indicated mineral resources for the Allemand-Ross Project Area are reported in the table below and the estimates of inferred mineral resources are reported in the table following.
 
Table 6: Allemand-Ross Project Area Measured and Indicated Mineral Resources
Mineral Resource
GT
Cutoff
Average Grade
% eU 3 O 8
Ore Tons
(000s)
eU 3 O 8
(lbs)
Allemand-Ross
Measured
0.25
0.085
246
417,000
Indicated
0.25
0.066
32
42,400
Total Measured and Indicated
0.25
0.083
278
459,400
 
82
 
 
Table 7: Allemand-Ross Project Area Inferred Mineral Resources
Mineral Resource
GT
Cutoff
Average Grade
% eU 3 O 8
Ore Tons
(000s)
eU 3 O 8
(lbs)
Allemand-Ross
Inferred
0.25
0.098
1,275
2,496,000
 
Present Condition of Property and Work Completed to Date
 
The Allemand-Ross Project Area is not permitted.
 
The Company ’ s Planned Work
 
The Company plans to maintain the mineral leases and mining claims in the Allemand-Ross Project Area.
 
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Barge ISR Project
 
The following technical and scientific description for the Barge Project Area (the “Barge Project Area”) is based in part on the TRS titled “S-K 1300 Mineral Resource Report Wyoming Assets ISR Hub and Spoke Project, WY USA”, current on March 31, 2022, prepared by WWC, a qualified firm (the “QP” herein).
 
Property Description
 
The Barge Project Area is located in Converse County, Wyoming, the southern portion of the PRB Uranium District of Wyoming. The Barge Project Area covers 7,014 acres, including all (or portions of) 18 sections of the PRB.
 
The Barge Project Area is located approximately 50 air miles northeast of Casper, Wyoming. The Barge Project Area is primarily located on private surface land with some areas of federal BLM or state-managed land.
 
Figure 1: Map of UEC Project Areas
 
84
 
 
Ownership
 
This Barge Project Area is owned and operated by UEC. UEC has executed surface use and access agreements and fee mineral leases with landowners who hold surface and mineral ownership within and outside the various Barge Project Area boundaries. UEC also holds unpatented BLM lode claims and leases on Wyoming state land on the project area.
 
Mineral rights for the Barge Project Area are a combination of federally administered minerals (unpatented lode claims), State of Wyoming mineral leases and (fee) private mineral leases. Federal mining claims were staked and recorded consistent with federal and state law, state mineral leases were obtained by submitting a lease application and appropriate fee to the State Board of Land Commissioners and fee mineral leases were obtained through negotiation with individual mineral owners.
 
Table 1: Property Characteristics Summary
Project Area
State of Wyoming
Leases
Fee Mineral Leases
Federal Lode
Mining Claims
Total
Barge
Acreage
640
0
6,374.2
7,014.2
Leases/Claims
1
0
342
343
Total Annual Cost
$1,920
$0
$56,430
$58,350
 
Within the Barge Project Area, UEC holds one State of Wyoming uranium leases of 640 acres. UEC also holds 342 unpatented lode claims on federally administered minerals. In total, the net mineral holdings in the Barge Project Area comprise 7,014 acres.
 
Payments for state leases and BLM mining claim filing payments are up to date as of the effective date of this TRS.
 
Accessibility, Climate, Local Resources, Infrastructure and Physiography
 
The Barge Project Area is within Converse County, Wyoming. This county resides in the Wyoming Basin Physiographic Province in the southern portion of the PRB. This site generally lies near the synclinal axis of the basin. The PRB is a part of the Northwestern Great Plains eco-region, a semi-arid rolling plain of shale and sandstone punctuated by occasional buttes. Regional structural features also include the Big Horn Mountains to the west, Casper Arch to the south and the Black Hills to the east. In the northern Barge Project Area, the landscape is dominated by the Pumpkin Buttes.
 
Topography in the Barge Project Area ranges from generally flat to gently rolling hills, with numerous drainages containing ephemeral streams dissecting the Barge Project Area. Elevations ranges from approximately 4,500 ft to 5,400 ft above mean sea level.
 
Vegetation within the Barge Project Area consists primarily of grassland, with areas of sagebrush. The Barge Project Area lies within the mixed grass eco-region of the Northwestern Great Plains. Interspersed among these major vegetation communities, within and along the ephemeral drainages, are grassland and meadow grassland and less abundant types of seeded grasslands (improved pastures).
 
The Barge Project Area in the PRB is located in a semi-arid or steppe climate. The region is characterized by cold, harsh winters and hot, dry summers. The spring season is relatively warm and moist, and autumns are cool. Temperature extremes range from roughly -25° F in the winter to 100° F in the summer. Typically, the last freeze occurs during late May and the first freeze occurs in mid- to late September.
 
Yearly precipitation in the PRB averages about 13 inches. The PRB is prone to severe thunderstorm events throughout the spring and early summer months, and much of the precipitation is attributed to these events. Snow falls throughout the winter months (approximately 40 to 50 inches per year), but provides much less moisture than rain events.
 
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The site is accessible via two-wheel drive. From Glenrock, Wyoming, proceed northeast on WY Highway 95 approximately 18 miles to the junction with WY Highway 93. From Douglas, Wyoming, proceed northwesterly approximately 21 miles to the junction with WY Highway 95. From the junction of WY Highways 93 and 95, proceed northerly approximately 25 miles on Ross Road. The site is then approximately two miles west of Ross Road. A major north–south railroad, BNSF Railway, used primarily for transporting coal, lies east of the Barge Project Area and parallel to Wyoming Highway 59.
 
Equipment and supplies needed for exploration and day-to-day operations are available from population centers such as Gillette and Casper. Specialized equipment for the wellfields will likely need to be acquired from outside of Wyoming.
 
The local economy is geared toward coal mining and oil and gas production as well as ranching operations, providing a well-trained and capable pool of workers for ISR production and processing operations. Workers will reside locally and commute to work daily.
 
As a result of energy development over the past 50 years, all the Barge Project Area have existing or nearby (less than two miles) electrical power, gas and adequate telephone and internet connectivity.
 
Near the Barge Project Area, historical uranium operations in the late 1970s and early 1980s brought access and electrical power to the area, which remain. Water supply needs to be reestablished in the Barge Project Area. Loaded resin would be transported to the Irigaray CPP for final concentrate production. The Barge Project Area is adjacent to all-weather roadways which facilitate the transportation of equipment, supplies, personnel and product.
 
History
 
Uranium was first discovered in the southern PRB during the early 1950s. By the mid- to late 1950s, small open pit mine operations were established in the PRB. Early prospecting and exploration included geologic mapping and gamma surveys, which led to discoveries of uranium in the Wasatch and Fort Union Formations. Extensive drill hole exploration has been utilized to locate deeper uranium mineralization since the 1960s to progress geologic models.
 
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The table below describes the historic ownership and operations at the Barge Project Area.
 
Table 2: Historic Ownership and Operations at the Barge Project Area
Year
Company
Operations/Activity
Amount
(No. of Drill holes)
Results of Work
1969
Mono and RME
Under a joint venture, Mono and RME conducted the initial exploration program through drilling. Upon successful exploration, the Bear Creek Uranium Company was formed under general partnership between Mono and RME.
Unspecified and included in the total estimate.
Successful exploration led to joint venture and mill construction.
1975-1982
Bear Creek Uranium Company
A mill was constructed in 1975. Open pit mining operations began in 1977 until 1982. Mining claims were dropped after 1982.
Approximately 6,880
4.7 million tons of material from open pit mining processed at the Bear Creek mill.
2006
EMC
EMC located the unpatented mining claims and acquired the state mineral leases.
N/A
Lapsed mineral leases acquired.
2007
Uranium One
Uranium One acquired EMC and all rights to the Barge Project Area.
None as of 2019.
No exploration had been completed.
2021
UEC
Barge Project Area acquired by UEC from Uranium One.
N/A
Ownership.
 
87
 
 
Permitting and Licensing
 
The Barge Project Area is not permitted.
 
Geologic Setting, Mineralization, and Deposit
 
The Barge Project Area resides in the PRB. The PRB extends over much of northeastern Wyoming and southeastern Montana and consists of a large north-northwest trending asymmetric syncline, with the basin axis located to the west of the projects. The PRB is bounded by the Big Horn Mountains and Casper Arch to the west, the Black Hills to the east and the Hartville Uplift and Laramie Mountains to the south. The PRB is filled with marine, non-marine and continental sediments ranging in age from early Paleozoic through Cenozoic.
 
Within the PRB, the Paleocene Fort Union Formation conformably overlies the Lance Formation and is a fluvial-sedimentary stratigraphic unit that consists of fine to coarse-grained arkosic sandstone, which is interbedded with siltstone, mudstone and carbonaceous materials. In some areas of the PRB the Fort Union Formation is divided into two members, identified as the Upper and Lower members of the Fort Union Formation. However, Flores divides the Fort Union into three members: the Tullock; Lebo; and Tongue River members (oldest to youngest); as follows:
 
 
●
The Tullock member consists of sandstone, siltstone and sparse coal and carbonaceous shale.
 
●
The Lebo member consists of abundant drab gray mudstone, minor siltstone and sandstone and sparse coal and carbonaceous shale beds.
 
●
The Tongue River member consists of interbedded sandstone, conglomerate, siltstone, mudstone, limestone, anomalously thick coal beds and carbonaceous shale beds. This member has been mined extensively for its coal beds, which can be hundreds of feet thick.
 
The total thickness of the Fort Union Formation varies between 2,000 and 3,500 ft.
 
Uranium mineralization occurs in zones that are located in channel sands of the Fort Union Formation and Wasatch Formation. These channel sands are typical fining upward sand sequences consisting of fine-grained sandstones. The zones of mineralization are formed as typical roll-front deposits in these sandstones.
 
The early Eocene Wasatch Formation unconformably overlies the Fort Union Formation around the margins of the PRB. However, the two formations are conformable and gradational towards the basin center. The relative amount of coarse, permeable clastics increases near the top of Fort Union, and the overlying Wasatch Formation contains numerous beds of sandstone that can sometimes be correlated over wide areas. The Wasatch-Fort Union contact is separated by Paleocene and Eocene rocks and is generally placed above the Roland coal. However, other authors have placed the Wasatch-Fort Union contact above the School, Badger and Anderson Coals in other parts of the PRB.
 
The Wasatch Formation occurs at the surface in the central PRB but has been mostly removed by erosion, with only small, scattered outcrops still present in the southern PRB. The Wasatch Formation is also a fluvial sedimentary unit that consists of a series of silt to very coarse-grained gradational intervals in arkosic sandstone. The sandstone horizons in the Wasatch Formation are the host rocks for several uranium deposits in the central PRB. Within this area, mineralization is found in a 50- to 100-ft-thick sandstone lens. On a regional scale, mineralization is localized and controlled by facies changes within this sandstone, including thinning of the sandstone unit, decrease in grain size and increase in clay and organic material content. The Wasatch Formation reaches a maximum thickness of about 1,600 ft and dips northwestward from one degree to two-and-a-half degrees in the southern and central parts of the PRB.
 
The Oligocene White River Formation overlies the Wasatch Formation and has been removed from most of the PRB by erosion. Remnants of this unit crop out on the Pumpkin Buttes, and at the extreme southern edge of the PRB. The White River Formation consists of clayey sandstone, claystone, a boulder conglomerate and tuffaceous sediments, which may be the primary source rock for uranium in the southern part of the PRB as a whole. The youngest sediments consist of Quaternary alluvial sands and gravels locally present in larger valleys. Quaternary eolian sands can also be found locally.
 
The Barge Project Area mineralization occurs in both the Wasatch Formation and the Paleocene Fort Union Formation.
 
88
 
 
Mineralization in the Barge Project Area occurs in fluvial sandstones of the lower parts of the Wasatch Formation. Most of the upper Wasatch Formation has been eroded away. The sandstones are arkosic, fine- to coarse-grained with local calcareous lenses. The sandstones contain minor amounts of organic carbon that occurs as dispersed bits or as stringers. Unaltered sandstones are generally gray while altered sandstones are tan or pink due to hematite, or show yellowish coloring due to limonite.
 
Pyrite occurs in several forms within the host sandstones. In unaltered sandstones, pyrite occurs as small to large single euhedral crystals associated with magnetite, ilmenite and other dark detrital minerals. In altered sandstone, pyrite is typically absent, but locally occurs as tarnished, very fine-grained euhedral crystals. In areas of intense or heavy mineralization, pyrite locally occurs as massive, tarnished crystal aggregates.
 
Mineralization and Deposit Type
 
Uranium mineralization at the Barge Project Area is typical of Wyoming roll-front sandstone deposits. The formation of roll-front deposits is largely a groundwater process that occurs when uranium-rich, oxygenated groundwater interacts with a reducing environment in the subsurface and precipitates uranium. The most favorable host rocks for roll-fronts are permeable sandstones with large aquifer systems. Interbedded mudstone, claystone and siltstone are often present and aid in the formation process by focusing groundwater flux. The geometry of mineralization is dominated by the classic roll-front “C” shape or crescent configuration at the redox interface. The highest-grade portion of the front occurs in a zone termed the “nose” within reduced ground just ahead of the alteration front. Ahead of the nose, at the leading edge of the solution front, mineral quality gradually diminishes to barren within the “seepage” zone. Trailing behind the nose, in oxidized (altered) ground, are weak remnants of mineralization referred to as “tails”, which have resisted re-mobilization to the nose due to association with shale, carbonaceous material or other lithologies of lower permeability. Tails are generally not amenable to ISR because the uranium is typically found within strongly reduced or impermeable strata, therefore making it difficult to leach.
 
Data Verification
 
Data used for the resource estimate at the Barge Project Area consisted of original geophysical and lithologic logs and an electronic drill hole database.
 
The TRS QP reviewed the mineral resource model and in the QP’s opinion the model is accurate and reliable.
 
Mineral Resource Estimates
 
The following key assumptions were used for resource estimates, unless otherwise noted:
 
 
●
resources are located in permeable and porous sandstones; and
 
●
resources are located below the water table.
 
The GT contour method was used to estimate the mineral resources at the Barge Project Area. The GT contour method is one of the most widely used and dependable methods to estimate resources in uranium roll-front deposits. The basis of the GT contour method is the GT (grade x mineralized thickness) values, which are determined for each drill hole using radiometric log results and a suitable GT cutoff, below which the GT value is considered to be zero. The GT values are then plotted on a drill hole map and GT contours are drawn accordingly using roll-front data derived from cuttings and the nature of the gamma anomalies. The resources are calculated from the area within the GT contour boundaries considering the DEF and the ore zone density.
 
89
 
 
The resource estimate methods, general parameters and mineralized cutoffs used at the Barge Project Area are summarized below.
 
Table 3: Barge Project Area Resources Estimate Methodology
 
 
 
 
Cutoff Parameters
Project Area
Mineral Resource
Estimation Method
Disequilibrium
Factor
Bulk
Density
(ft 3 /Ton)
Min.
Grade
(% U 3 O 8 )
Min.
Thickness
(ft)
Min. GT
Barge
GT Contour Method
1.0
16.0
0.02
-
0.25
Note
Cutoff parameters are discrete and therefore the GT cutoff is not necessarily the product of cutoff grade and cutoff thickness.
 
Based on the depths of mineralization, average grade, thickness and GT, it is the TRS QP’s opinion that the mineral resources of the Barge Project Area can be recoverable by ISR methods using a long-term uranium price of $40/lb.
 
Uranium does not trade on the open market and many of the private sales contracts are not publicly disclosed. UEC used $40/lb as the forecast uranium price for the Barge Project Area. This is based on: (i) the long-term contract price at the end of February 2022, which was $43.88/lb from Cameco Resources’ combination of UxC and Trade Tech reports (Cameco, 2022); (ii) the spot price at the end of February 2022 ($48.75/lb); (iii) UxC’s price forecast; and (iv) UEC’s understanding of market expectations. The table below contains the UxC uranium price forecast for Q4 of 2021.
 
Table 4: UxC Q4 2021 Uranium Price Forecast ($/lb U3O8)
UxC Market Outlook Q4 2021
2021
2022
2023
2024
2025
UxC High Price Midpoint
$36.00
$46.37
$48.11
$52.13
$56.47
UxC Low Price Midpoint
$36.00
$40.02
$41.33
$42.59
$43.02
UxC Mid Price Midpoint
$36.00
$43.18
$44.14
$46.71
$48.39
 
In the opinion of the TRS QP, $40/lb is a conservative forecast price for the following reasons:
 
 
●
first, at the issuance date, both the long-term price and spot price are greater than $40/lb;
 
●
second, new physical uranium investment vehicles were created in 2021, such as the Sprott Physical Uranium Trust and the upcoming physical uranium fund backed by Kazatomprom, the National Bank of Kazakhstan and Genchi Global Ltd., which effectively remove uranium supply from the market;
 
●
third, the increasing demand for carbon-free energy and global plans to construct new nuclear reactors will increase demand for uranium; and
 
●
finally, there has already been a steady increase in the uranium price for the last three years with a sharp rise to greater than $40/lb in the second half of 2021, due in part to increased demand from the Sprott Physical Uranium Trust. Due to recent volatility in the uranium market, the QP believes that a conservative forecast price is justified.
 
For the above reasons, the TRS QP also believes that a $40/lb price is considered reasonable by the QP for use in cutoff determination and to assess reasonable prospects for eventual economic extraction.
 
Measured, indicated and inferred resource classifications at the Barge Project Area are defined by the density of the drill hole data. Higher drill hole densities allow more confidence in the shape and size of the interpreted mineral horizons. The table below details the resource classification criteria used in the resource estimates in each of the Barge Project Area.
 
Table 5: Barge Project Area Drill Hole Information
Project Area
Distance Between Drill Hole Locations
for Resource Classifications (ft)
 
Measured
Indicated
Inferred
Barge
-
50 – 100
-
 
90
 
 
There are numerous reasons that mineralization was interpreted as measured resources within the Barge Project Area:
 
 
●
first, the drill hole spacing used to classify the measured resource is generally less than or equal to the 100 ft well spacing in a typical production pattern, which enables a detailed wellfield design to be completed;
 
●
second, as shown on the geologic cross sections the sub-surface geology within the Barge Project Area is very well characterized with aquifers that correlate, consistent host sandstone intervals and reliable aquitards across the resource areas; and
 
●
third, mineralization occurs along the redox interface and the oxidized sands have different coloration than the reduced sands. These color variations are visible in drill cuttings and are used to map the redox interface and to guide drilling and wellfield design.
 
This combination of drill hole spacing, well-known subsurface geology, well-understood deposit model, successful production and the variety of data collected led WWC, as the TRS QP, to conclude that the mineralization in areas with drill hole spacing tabulated above fit the definition for measured resources.
 
Mineral resources were estimated separately for the Barge Project Area. The estimates of measured and indicated mineral resources for the Barge Project Area are reported in the table below and the estimates of inferred mineral resources are reported in the table following.
 
Table 6: Barge Project Area Measured and Indicated Mineral Resources
Mineral Resource
GT Cutoff
Average Grade
% eU 3 O 8
Ore Tons
(000s)
eU 3 O 8
(lbs)
Barge
Measured
N/A
N/A
0
0
Indicated
0.25
0.051
4,301
4,361,000
Total Measured and Indicated
0.25
0.051
4,301
4,361,000
 
Table 7: Barge Project Area Inferred Mineral Resources
Mineral Resource
GT Cutoff
Average Grade
% eU 3 O 8
Ore Tons
(000s)
eU 3 O 8
(lbs)
Barge
Inferred
N/A
N/A
0
0
 
Present Condition of Property and Work Completed to Date
 
The Barge Project Area is not permitted.
 
The Company ’ s Planned Work
 
The Company plans to maintain the mineral leases and federal mining claims within the Barge Project Area.
 
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Jab/West Jab ISR Project
 
The following technical and scientific description for the Jab/West Jab Project Area (the “Jab/West Jab Project Area”) is based in part on the TRS titled “S-K 1300 Mineral Resource Report Wyoming Assets ISR Hub and Spoke Project, WY USA”, current on March 31, 2022, as prepared by WWC, a qualified firm (the “QP” herein).
 
Property Description
 
The Jab/West Jab Project Area is located in the Great Divide Basin (“GDB”) in Fremont and Sweetwater Counties, Wyoming, USA.
 
The Jab/West Jab Project Area consists of two separate areas of mining claims and state leases separated by less than two miles in the GDB. Jab is located entirely in Sweetwater County in all or portions of 11 sections (4,006 acres).
 
The Jab/West Jab Project Area is located in both Fremont and Sweetwater Counties in all or portions of 11 sections (3,509 acres).
 
The Jab/West Jab Project Area is approximately 100 air miles southwest of Casper, Wyoming, and 20 air miles southwest of Jeffrey City, Wyoming. The Jab/West Jab Project Area is accessed from State Highway 287 and through Bairoil, Wyoming by traveling west on Bairoil Road (County Road 22). Alternatively, the Jab/West Jab Project Area may be accessed by traveling south from Jeffrey City, Wyoming, following Crooks Gap Road. The Jab/West Jab Project Area are located on federal BLM and state-managed land.
 
Figure 1: Map of UEC Project Areas
 
92
 
 
Ownership
 
This Jab/West Jab Project Area is owned and operated by UEC. UEC has executed surface use and access agreements and fee mineral leases with landowners who hold surface and mineral ownership within and outside the various Jab/West Jab Project Area boundaries. UEC also holds unpatented BLM lode claims and leases on Wyoming state land on the Jab/West Jab Project Area.
 
Mineral rights for the Jab/West Jab Project Area are a combination of federally administered minerals (unpatented lode claims) and State of Wyoming mineral leases. Federal mining claims were staked and recorded consistent with federal and state law and state mineral leases were obtained by submitting a lease application and appropriate fee to the State Board of Land Commissioners.
 
Table 1: Property Characteristics Summary
Project Area
State of Wyoming
Leases
Fee Mineral
Leases
Federal Lode
Mining Claims
Total
Jab/West Jab
Acreage
960
0
4,483.4
5,443.4
Leases/Claims
3
0
217
220
Total Annual Cost
$2,880
$0
$35,805
$38,685
 
Within the Jab/West Jab Project Area, UEC holds three State of Wyoming uranium leases on state lands and 217 unpatented lode claims on federally administered minerals. There are no fee (private) minerals in the Jab/West Jab Project Area.
 
Payments for state leases and BLM mining claim filing payments are up to date, as of the effective date of this TRS.
 
Accessibility, Climate, Local Resources, Infrastructure and Physiography
 
The Jab/West Jab Project Area is in Sweetwater and Fremont Counties, Wyoming. These counties are in the north-central portion of the GDB, which is the major physiographic feature of southwestern Wyoming. The GDB is an oval-shaped structural depression that encompasses nearly 3,500 square miles in south-central Wyoming. Regional structural features also include the Granite Mountains and Wind River Range to the North, the Rawlins Uplift to the east, Rock Springs Uplift to the west and the Wamsutter Arch to the south.
 
The topography in Sweetwater County ranges from flat plains to gentle slopes that are dissected by southerly-flowing ephemeral washes. Elevations in the area ranges from approximately 6,900 ft to 7,400 ft above mean sea level. Vegetation on the Jab/West Jab Project Area mostly consists of sagebrush but includes some native perennial grasses, cushion plants, cacti, perennial forbs and lichens. Yearly precipitation in the Jab/West Jab Project Area is approximately 8 to 12 inches.
 
The Jab/West Jab Project Area is located in Sweetwater and Fremont Counties in the GDB. The nearest community is the small, incorporated town of Bairoil, Wyoming, with a population of 68, which is approximately 22 miles from the Jab/West Jab Project Area. The Jab/West Jab Project Area is accessed from State Highway 287 and through Bairoil by traveling west on Bairoil Road (County Road 22). Alternatively, the Jab and West Jab Project Area may be accessed by traveling south from Jeffrey City following Crooks Gap Road. The Jab/West Jab Project Area may be accessed from Rawlins an incorporated community with population of 8,221, which is located on Interstate 80 approximately 45 air miles southeast. Alternatively, the Jab/West Jab Project Area may be accessed from Casper, by traveling southwest on Wyoming Highway 220 to the intersection with Wyoming Highway 287. The Jab/West Jab Project Area may then be accessed from Wyoming Highway 287 by County Road 22. Bairoil is approximately 90 miles from Casper.
 
A major east-west railroad (the Union Pacific) lies approximately 40 air miles south of the Jab/West Jab Project Area. The Union Pacific generally parallels the alignment of Interstate 80 south of the Jab/West Jab Project Area.
 
93
 
 
Equipment and supplies needed for exploration and day-to-day operation are available from population centers such as Rawlins and Casper.
 
The local economy is geared toward coal mining and oil and gas production as well as ranching operations, providing a well-trained and capable pool of workers for ISR production and processing operations. Workers will reside locally and commute to work daily.
 
History
 
Uranium mineralization was discovered in the GDB at the Lost Creek Schoekingerite deposit in the early 1950s. The Schoekingerite deposits were exposed at the surface along the Lost Creek drainage and were located using radiometric surveys. The USGS used shallow exploration to further evaluate the deposits. Similar to the PRB, drilling for deeper deposits began in the 1960s and exploration has primarily consisted of drilling since that time.
 
94
 
 
Table 2: Historic Ownership and Operations at the Jab/West Jab Project Area
Year
Company
Operations/Activity
Amount
(No. of Drill holes)
Results of Work
Jab
Unspecified
Silverbell Industries
Originator of the Jab/West Jab Project Area.
Not specified.
The Jab/West Jab Project Area initially developed.
1972
Union Carbide Corporation (“UCC”)
Delineated an area of shallow oxidized mineralization and completed feasibility studies for open pit mining. The plan was not executed, and a mining permit was prepared for the WDEQ/LQD. The permit was withdrawn due to the declining uranium market in 1982.
Approximately 1,830
Delineation of shallow oxidized material.
1985-2000
Yellowstone Fuels
Property held until a decline in the uranium market in 2000. No data developed by Yellowstone Fuels were available for evaluation.
No data available.
The Jab/West Jab Project Area held but not substantially developed.
West Jab
Unspecified
AMAX Petroleum Company
Originator of the Jab/West Jab Project Area.
Not specified.
The Jab/West Jab Project Area initially developed.
1975-1983
WNC
WNC drilled the Jab/West Jab Project Area until 1983 when uranium markets had dropped. WNC terminated claim. AMAX Petroleum Company regained control until the claims were dropped.
Approximately 1,020
Exploration completed by WNC.
Jab/West Jab
2006
EMC
Identified the unpatented mining claims and acquired the state mineral leases.
N/A
Secured right to mine.
2007
Uranium One
Uranium One acquired EMC and all rights to the Jab/West Jab Project Area.
None as of 2019
No exploration had been completed. Right to mine secured.
2021
UEC
The Jab/West Jab Project Area acquired by UEC from Uranium One.
N/A
Ownership transition.
 
95
 
 
Permitting and Licensing
 
The Jab/West Jab Project Area is not permitted.
 
Geologic Setting, Mineralization, and Deposit
 
The Jab/West Jab Project Area is located within the north-central part of the GDB. The GDB and the Washakie Basin (“WB”) in the southwest together compromise the Greater Green River Basin (the “GGRB”). These basins contain up to 25,000 ft of cretaceous to recent sedimentary rocks.
 
During the end of the Cretaceous Period, the Laramide Orogeny divided the Wyoming Basin Province into a series of down warped basins. As these basins were created, uplift created the Granite and Seminoe Mountains, and older formations were altered during the same time. In the northern regions of the GDB, swamps, alluvial plains and fluvial fans were present at the margins of the uplifted Granite Mountains. To the southwest, the GDB is occupied by the lacustrine Eocene Green River Formation and by the lower energy Wasatch Formation. These two facies interfinger with the high-energy fluvial facies of the Battle Spring Formation at the central and eastern areas in the GDB.
 
Uranium deposits occur principally in the Battle Spring Formation which consists of alluvial-fluvial fan deposits of west- to southwest-flowing paleodrainage. The common rock type is arkosic sandstone with interbedded claystone. These types of rock are typical of alluvial-fan facies. Much of this material is sourced from the Granite Mountains, by blockages in normal drainages due to differential subsidence rates. The Wasatch Formation, due to its fluvial nature, contains interbedded siltstones, coal, carbonaceous shale, fine-grained sandstone, sandy limestone and medium-grained fluvial sandstones.
 
The permeable medium- to very coarse-grained sandstones and arkoses are a favorable host for sandstone-type uranium deposits. Fluvial channels incised into less permeable underlying siltstones and sandstones in the Battle Spring during early Eocene time. The channels were backfilled by the massive, poorly-sorted, coalescing alluvial fan deposits, known as the Battle Spring Formation. The Battle Spring Formation includes impermeable carbonaceous shales that created an impermeable boundary for uranium deposits.
 
Overbank and floodplain deposits in the Battle Spring Formation also were likely to restrict groundwater flow. These boundaries focused uranium-rich waters into confined permeable units. Faulting also created structural and permeability control.
 
Geology – Battle Spring Hosted Mineralization
 
One of the primary stratigraphic units in the Jab/West Jab Project Area is in the Battle Spring Formation, which is the host to uranium mineralization. The Battle Spring Formation is overlain by erosional remnants of the Laney Member of the Green River Formation and the Bridger Formation. The Battle Spring Formation was deposited by a large alluvial fan system consisting of deposits of very fine- to very coarse-grained arkosic sandstones with interbedded think shales, mudstones and localized conglomerates. The Battle Spring Formation is relatively flat in the Jab/West Jab Project Area. In the Jab/West Jab Project Area, there is a high-angle normal fault, which forms the northern limit of mineralization in the Silverbell portion of the deposit. The displacement along the fault is approximately 80 ft. The Silverbell portion of the mineralization is on the down-thrown side of the fault, while the Red Desert portion of the mineralization is on the up-thrown side of the fault. Within the Jab/West Jab Project Area, mineralization occurs within a single sandstone unit. At the Jab/West Jab Project Area, most of the mineralization occurs within a single unit; however, in the northeast portion of the Jab/West Jab Project Area, there is also mineralization in a lower sand unit.
 
Mineralization and Deposit Type
 
Uranium mineralization at the Jab/West Jab Project Area is typical of Wyoming roll-front sandstone deposits. The formation of roll-front deposits is largely a groundwater process that occurs when uranium-rich, oxygenated groundwater interacts with a reducing environment in the subsurface and precipitates uranium. The most favorable host rocks for roll-fronts are permeable sandstones with large aquifer systems. Interbedded mudstone, claystone and siltstone are often present and aid in the formation process by focusing groundwater flux. The geometry of mineralization is dominated by the classic roll-front “C” shape or crescent configuration at the redox interface. The highest-grade portion of the front occurs in a zone termed the “nose” within reduced ground just ahead of the alteration front. Ahead of the nose, at the leading edge of the solution front, mineral quality gradually diminishes to barren within the “seepage” zone. Trailing behind the nose, in oxidized (altered) ground, are weak remnants of mineralization referred to as “tails” which have resisted re-mobilization to the nose due to association with shale, carbonaceous material or other lithologies of lower permeability. Tails are generally not amenable to ISR because the uranium is typically found within strongly reduced or impermeable strata, therefore making it difficult to leach.
 
96
 
 
Data Verification
 
Data used for the resource estimate at the Jab/West Jab Project Area consisted of original geophysical and lithologic logs and an electronic drill hole database.
 
The TRS QP has reviewed the data verification procedures of this report and considers the procedures credible and reliable. The TRS QP reviewed a random sampling of 10 percent of the original logs and compared the GT, intercept depth, and location to the mineral intercept table used in the GT contour mineral resource estimate.
 
Confirmation drilling to validate historic data on the Jab portion of the Jab/West Jab Project Area was conducted by previous owners in 2006 and 2007. 20 offset holes were drilled within 10 ft of the surface location of historic holes. With respect to total GT of all 20 verification holes, the variance from historic holes was less than one percent; however, variation in individual holes was higher. The GT variation of offset holes ranged from 39 percent less to 142 percent more than the historic holes.
 
In the opinion of the TRS QP, the methods used and results of the exploration potential for the Jab/West Jab Project Area are reasonable and standard for the ISR industry. However, exploration potential does not meet the SEC standards identified in S-K 1300 to be considered mineral resources or mineral reserves and as such, there is no certainty that the exploration potential provided herein will be realized.
 
Mineral Resource Estimates
 
The following key assumptions were used for resource estimates, unless otherwise noted:
 
 
●
resources are located in permeable and porous sandstones; and
 
●
resources are located below the water table.
 
Mineral resource estimation methods used for the Jab/West Jab Project Area include the GT contour method and the Delaunay Triangulation Method. Each method is briefly discussed below.
 
The GT contour method is one of the most widely used and dependable methods to estimate resources in uranium roll-front deposits. The basis of the GT contour method is the GT (grade x mineralized thickness) values, which are determined for each drill hole using radiometric log results and a suitable GT cutoff, below which the GT value is considered to be zero. The GT values are then plotted on a drill hole map and GT contours are drawn accordingly using roll-front data derived from cuttings and the nature of the gamma anomalies. The resources are calculated from the area within the GT contour boundaries considering the DEF and the ore zone density.
 
The resource estimate methods, general parameters and mineralized cutoffs used at the Jab/West Jab Project Area are summarized below.
 
Table 3: Methods, Parameter, and Cutoff Summary by Jab/West Jab Project Area
 
 
 
 
Cutoff Parameters
Project Area
Mineral Resource
Estimation Method
Disequilibrium
Factor
Bulk Density
(ft 3 /Ton)
Min.
Grade
(% U 3 O 8 )
Min.
Thickness
(ft)
Min. GT
Jab/West Jab
GT Contour Method
1.0
16.0
0.02
-
0.25
Note
Cutoff parameters are discrete and therefore the GT cutoff is not necessarily the product of cutoff grade and cutoff thickness.
 
97
 
 
Based on the depths of mineralization, average grade, thickness and GT, it is the TRS QP’s opinion that the mineral resources of the Jab/West Jab Project Area can be recoverable by ISR methods using a long-term uranium price of $40/lb.
 
Uranium does not trade on the open market and many of the private sales contracts are not publicly disclosed. UEC used $40/lb as the forecast uranium price for the Jab/West Jab Project Area. This is based on: (i) the long-term contract price at the end of February 2022, which was $43.88/lb from Cameco Resources’ combination of UxC and Trade Tech reports (Cameco, 2022); (ii) the spot price at the end of February 2022 ($48.75/lb); (iii) UxC’s price forecast; and (iv) UEC’s understanding of market expectations. The table below contains the UxC uranium price forecast for Q4 of 2021.
 
Table 4: UxC Q4 2021 Uranium Price Forecast ($/lb U 3 O 8 )
UxC Market Outlook Q4 2021
2021
2022
2023
2024
2025
UxC High Price Midpoint
$36.00
$46.37
$48.11
$52.13
$56.47
UxC Low Price Midpoint
$36.00
$40.02
$41.33
$42.59
$43.02
UxC Mid Price Midpoint
$36.00
$43.18
$44.14
$46.71
$48.39
 
In the opinion of the TRS QP, $40/lb is a conservative forecast price for the following reasons:
 
 
●
first, at the issuance date, both the long-term price and spot price are greater than $40/lb;
 
●
second, new physical uranium investment vehicles were created in 2021, such as the Sprott Physical Uranium Trust and the upcoming physical uranium fund backed by Kazatomprom, the National Bank of Kazakhstan and Genchi Global Ltd., which effectively remove uranium supply from the market;
 
●
third, the increasing demand for carbon-free energy and global plans to construct new nuclear reactors will increase demand for uranium; and
 
●
finally, there has already been a steady increase in the uranium price for the last three years with a sharp rise to greater than $40/lb in the second half of 2021, due in part to increased demand from the Sprott Physical Uranium Trust. Due to recent volatility in the uranium market, the QP believes that a conservative forecast price is justified.
 
For the above reasons, the TRS QP also believes that a $40/lb price is considered reasonable by the QP for use in cutoff determination and to assess reasonable prospects for eventual economic extraction.
 
Confidence Classification of Mineral Resource Estimates
 
Measured, indicated and inferred resource classifications at the Jab/West Jab Project Area are defined by the density of the drill hole data. Higher drill hole densities allow more confidence in the shape and size of the interpreted mineral horizons. The table below details the resource classification criteria used in the resource estimates in the Jab/West Jab Project Area.
 
Table 5: Jab/West Jab Project Area Drill Hole Information
 
Distance Between Drill Hole Locations
for Resource Classifications (ft)
Project Area
Measured
Indicated
Inferred
Jab/West Jab
50 – 100
50 – 100
-
 
98
 
 
There are numerous reasons that mineralization was interpreted as measured resources within the Jab/West Jab Project Area:
 
 
●
first, the drill hole spacing used to classify the measured resource is generally less than or equal to the 100 ft well spacing in a typical production pattern, which enables a detailed wellfield design to be completed;
 
●
second, the sub-surface geology within the Jab/West Jab Project Area is very well characterized with aquifers that correlate, consistent host sandstone intervals and reliable aquitards across the resource areas;
 
●
third, mineralization occurs along the redox interface and the oxidized sands have different coloration than the reduced sands. These color variations are visible in drill cuttings and are used to map the redox interface and to guide drilling and wellfield design; and
 
●
finally, historic production has occurred both commercially and through research and development facilities at the Irigaray Project Area.
 
This combination of drill hole spacing, well-known subsurface geology, well-understood deposit model, successful production and the variety of data collected led WWC, the TRS QP, to conclude that the mineralization in areas with drill hole spacing tabulated above fit the definition for measured resources.
 
Mineral resources were estimated separately for the Jab/West Jab Project Area. The estimates of measured and indicated mineral resources for the Jab/West Jab Project Area are reported in the table below.
 
Table 6: Jab/West Jab Project Area Measured and Indicated Resources Summary
Mineral Resource
GT
Cutoff
Average Grade
% eU 3 O 8
Ore Tons
(000s)
eU 3 O 8
(lbs)
Jab/West Jab
Measured
0.25
0.072
1,621
2,335,000
Indicated
0.25
0.077
253
392,000
Total Measured and Indicated
0.25
0.073
1,874
2,727,000
 
The estimates of inferred mineral resources are reported in the table below.
 
Table 7: Jab/West Jab Project Area Inferred Resources Summary
Mineral Resource
GT
Cutoff
Average Grade
% eU 3 O 8
Ore Tons
(000s)
eU 3 O 8
(lbs)
Jab/West Jab
Inferred
0.25
0.060
1,402
1,677,000
 
Uncertainties (Factors) That May Affect the Mineral Resource Estimate
 
Factors that may affect the mineral resource estimate include:
 
 
●
assumptions as to forecasted uranium price;
 
●
changes to the assumptions used to generate the GT cutoff;
 
●
changes to future commodity demand;
 
●
variance in the grade and continuity of mineralization from what was interpreted by drilling and estimation techniques;
 
●
density assignments; and
 
●
changes to the continued ability to access the site, retain mineral and surface rights titles, maintain environment and other regulatory permits and maintain the social license to operate.
 
99
 
 
Mineral resource estimation is based on data interpretation and uses a limited number of discrete samples to characterize a larger area. These methods have inherent uncertainty and risk. Three elements of risk are identified for the Jab/West Jab Project Area:
 
 
●
Grade interpretation methods: interpreted to be low to moderate risk. Automated grade estimates depend on many factors and interpretation methods assume continuity between samples. A risk exists that a grade estimate at any three-dimensional location in a deposit will differ from the actual grade at that location when it is mined;
 
●
Geological definition: interpreted to be a moderate risk. The geological roll-front interpretation by the UEC geologists was checked using several automated techniques. The host units are relatively flat-lying, but there is a possibility of miscorrelation of a horizon when multiple closely spaced intercepts are present. A few uncertain roll-front interpretations were noted. Some of the interpretations were revised, but additional work is needed to ensure a remaining small percentage of interpretations are verified; and
 
●
Continuity: interpreted to be low risk. The QP and coworkers supervised by the QP reviewed multiple maps, drilling records and prior work at the Project that demonstrate and confirm the continuity of the roll-fronts within the Jab/West Jab Project Area.
 
Mineral resources do not have demonstrated economic viability, but they have technical and economic constraints applied to them to establish reasonable prospects for economic extraction. The geological evidence supporting indicated mineral resources is derived from adequately detailed and reliable exploration, sampling and testing, and is sufficient to reasonably assume geological and grade continuity. The measured and indicated mineral resources are estimated with sufficient confidence to allow the application of technical, economic, marketing, legal, environmental, social and government factors to support mine planning and economic evaluation of the economic viability of the Jab/West Jab Project Area.
 
The inferred mineral resources are estimated on the basis of limited geological evidence and sampling; however, the information is sufficient to imply, but not verify, geological grade and continuity. The QP expects that the majority of the inferred mineral resources could be upgraded to indicated mineral resources with additional drilling.
 
Present Condition of Property and Work Completed to Date
 
The Jab/West Jab Project Area is not permitted.
 
The Company ’ s Planned Work
 
The Company plans to maintain the State of Wyoming mineral leases and lode claims within the Jab/West Jab Project Area.
 
100
 
 
Charlie ISR Project
 
The following technical and scientific description for the Charlie Project (the “Charlie Project Area”) is based in part on the TRS titled “S-K 1300 Mineral Resource Report Wyoming Assets ISR Hub and Spoke Project, WY USA”, current on March 31, 2022, prepared by WWC, a qualified firm (the “QP” herein). The Charlie Project Area does not have mineral reserves and is therefore considered an Exploration Stage property under S-K 1300 definitions.
 
Property Description
 
The Charlie Project Area is in the PRB in Johnson County. It is surrounded by the Christensen Ranch Project Area. The Charlie Project Area covers 720 acres including all (or portions of) two sections of the PRB.
 
The Charlie Project Area is located approximately 90 air miles north of Casper, Wyoming, and is located on private surface land.
 
Figure 1: Map of UEC Project Areas
 
101
 
 
Ownership
 
This Charlie Project Area is owned and operated by UEC. UEC has executed surface use and access agreements and fee mineral leases with landowners who hold surface and mineral ownership within and outside the various Charlie Project Area boundaries. UEC also holds unpatented BLM lode claims and leases on Wyoming state land on the Project Area.
 
Mineral rights for the Charlie Project Area are a combination of federally administered minerals (unpatented lode claims), State of Wyoming mineral leases and private (fee) mineral leases. Federal mining claims were staked and recorded consistent with federal and state law, state mineral leases were obtained by submitting a lease application and appropriate fee to the State Board of Land Commissioners, and fee mineral leases are obtained through negotiation with individual mineral owners.
 
Table 1: Property Characteristics Summary
Project Area
State of Wyoming
Leases
Fee Mineral
Leases
Federal Lode
Mining Claims
Total
Charlie
Acreage
720
0
0
720
Leases/Claims
1
0
0
1
Total Annual Cost
$2,880
$0
$0
$2,880
 
UEC controls the state mineral lease.
 
Accessibility, Climate, Local Resources, Infrastructure and Physiography
 
The site is accessible from Casper via Interstate 25, then U.S. Highway 87 to Lynch, State Highways 387 and 192 and along 18 miles of secondary unpaved roads. Access from Gillette is via Highway 50, Campbell County Highway 14 and the “Black and Yellow” road to Heldt Draw. All roads are shared by oilfield and other uranium ISR operators and are usually maintained during the winter. The site is readily accessible year-round.
 
The Charlie Project is located at an average elevation of 4,615 feet above mean sea level. The property is dissected by Willow Creek, which is a tributary of the Powder River and carries intermittent seasonal flow. Topography of the area consists of gently rolling hills to the east of the Willow Creek drainage and steep sided drainage features to the west.
 
Climate at the Charlie Project Area is continental semi-arid, with an average annual precipitation of approximately 14 inches, mostly falling in the form of late autumnal to early spring snows. The summer months are usually hot with temperature occasionally exceeding 100°F, dry and clear except for infrequent rains. Winter conditions can be severe and can include sub-zero temperatures and ground blizzards. Most drainages in the area are ephemeral, flowing only during storm events or spring snow melt. The Project is located approximately midway between Casper and Gillette, Wyoming. Casper and Gillette, Wyoming average weather conditions follow:
 
Table 2: Property Climatological Summary
 
Casper
Gillette
Average Annual high temperature
59.2°F
59.9°F
Average Annual low temperature
31.3°F
33°F
Average Annual temperature
45.25°F
46.15°F
Average annual precipitation –  rainfall
12.48 inches
16.93 inches
Average annual snowfall
75 inches
59 inches
 
102
 
 
Most common native vegetation is sagebrush and prairie grasses and to a lesser extent, rabbit brush. No threatened or endangered plants are known in the area. There is no cultivation for crops within 10 miles of the site. The general area is subject to grazing by sheep and cattle.
 
Mule deer and pronghorn antelope are common, as are nesting raptors. Small rodents and rabbits are common. The Greater Sage Grouse are present in the general area of the Charlie Project Area, however, the Charlie Project Area is not within a Sage Grouse Core area.
 
Mine development will require access, power and water supply. Infrastructure in the immediate vicinity includes an electrical substation and coal-bed methane gas plant. There is also a 14.4 kVa electrical supply at the Willow Creek ISR mine operated by the Sheridan-Johnson Rural Electrical association approximately two miles from the Charlie Project Area. Water is typically supplied through ground water wells. Several industrial water wells are located in the vicinity of the Charlie Project Area.
 
The nearest major communities include Casper and Gillette, Wyoming. Casper is the second-largest city in Wyoming, with a population of approximately 55,000. Gillette is the third largest city in Wyoming with a population of approximately 29,000.
 
Casper and Gillette are, respectively, the county seats of Natrona and Campbell counties. Both areas have a long history of both an oil and gas development and uranium and coal mining. Several oilfield and mining service companies are located in Casper, including a caterpillar dealership, several drilling companies and industrial supply companies. Casper and/or Gillette has an adequate workforce skilled in mining and mineral exploration to support the Charlie Project Area.
 
Surface ownership is held by the Christensen Ranch. UEC will need to develop a surface use agreement with the Christensen Ranch.
 
Wyoming has granted surface use for open pit mining in a portion of the Charlie Project Area in the past and is not expected to hinder ISR mine development including necessary surface facilities subject to appropriate permitting and licensing.
 
For future mining and mineral processing, the author concludes that UEC can obtain through permitting and licensing of site activities, sufficient surface rights for possible future mining operations, including potential waste disposal areas, ISR wellfields and potential plant sites.
 
History
 
Uranium was first discovered in the southern PRB during the early 1950s. By the mid to late 1950s, small open pit mine operations were established in the PRB. Early prospecting and exploration included geologic mapping and gamma surveys which led to discoveries of uranium in the Wasatch and Fort Union Formations. Extensive drill hole exploration has been utilized since the 1960s to locate deeper uranium mineralization and progress geologic models.
 
103
 
 
Table 3: Historic Ownership and Operations at the Charlie Project Area
Year
Company
Operations/Activity
Amount
(No. of Drill holes)
Results of Work
1966
Preston Oil Co. (“Preston Oil”)
Awarded the state lease for 720 acres.
None.
Right to mine secured.
1966
Inexco Oil Company (“Inexco”)
Inexco assigned lease from Preston Oil in 1966 and conducted exploration drilling program in 1969 and 1970.
215
Delineation of mineralized areas.
1974
Uranerz USA
Inexco formed a joint venture with Uranerz USA who became the operator. Over the next two years, Uranerz expanded the drilling program, including core drilling.
715
Delineation of mineralized areas.
Not specified
Cotter Corporation (“Cotter”)
Cotter acquired the property and evaluated both conventional open pit and in situ mining methods. Cotter obtained a surface mining permit in 1979. A 200-foot-deep test pit was excavated in 1981 in a small mineralization area. The pit was subsequently reclaimed, but the state mining permit remains active.
Not specified
Falling uranium prices in the 1980’s halted
further development.
1994
Cotter and PRI
PRI entered a joint venture agreement with Cotter and completed a feasibility study for development as an ISR mine (PRI, 1995). Completed additional drilling in 1994.
Not specified
The feasibility study was positive; however, the Charlie Project Area did not proceed, and the joint venture agreement expired.
2014
Cotter
In 2014 Cotter sought to convert the permit to ISR mining; however, that process has not been completed.
None
Unknown.
2018
Anfield Energy Inc. (“Anfield”)
Anfield acquired the Charlie Project Area from Cotter.
None
Oversaw technical reporting and auditing of Charlie Project Area resources.
2021
UEC
UEC acquired the Charlie Project Area from Anfield.
N/A
Ownership transition.
 
104
 
 
Permitting and Licensing
 
The Charlie Project Area is not permitted for ISR, but does have a permit to mine using open-pit methods.
 
Geologic setting, Mineralization, and Deposit
 
The Charlie Project Area resides in the PRB. The PRB extends over much of northeastern Wyoming and southeastern Montana, and consists of a large north-northwest trending asymmetric syncline, with the basin axis located to the west of the Charlie Project Area. The PRB is bounded by the Big Horn Mountains and Casper Arch to the west, the Black Hills to the east and the Hartville Uplift and Laramie Mountains to the south. The PRB is filled with marine, non-marine and continental sediments ranging in age from early Paleozoic through Cenozoic.
 
Within the PRB, Tertiary geology includes the Paleocene Fort Union Formation, which conformably overlies the Lance Formation and is a fluvial-sedimentary stratigraphic unit that consists of fine to coarse-grained arkosic sandstone, which is interbedded with siltstone, mudstone and carbonaceous materials. In some areas of the PRB, the Fort Union Formation is divided into two members, identified as the Upper and Lower members of the Fort Union Formation. However, Flores divides the Fort Union into three members: the Tullock; Lebo; and Tongue River members (listed from oldest to youngest); as follows:
 
 
●
The Tullock member consists of sandstone, siltstone and sparse coal and carbonaceous shale.
 
●
The Lebo member consists of abundant drab gray mudstone, minor siltstone and sandstone and sparse coal and carbonaceous shale beds.
 
●
The Tongue River member consists of interbedded sandstone, conglomerate, siltstone, mudstone, limestone, anomalously thick coal beds and carbonaceous shale beds. This member has been mined extensively for its coal beds which can be hundreds of feet thick.
 
The total thickness of the Fort Union Formation varies between 2,000 and 3,500 ft.
 
Fort Union Formation uranium mineralization occurs in zones that are located in channel sands. These channel sands are typical fining upward sand sequences consisting of fine-grained sandstones. The zones of mineralization are formed as typical roll-front deposits in these sandstones.
 
The early Eocene Wasatch Formation unconformably overlies the Fort Union Formation around the margins of the PRB. However, the two formations are conformable and gradational towards the basin center. The relative amount of coarse, permeable clastics increases near the top of Fort Union, and the overlying Wasatch Formation contains numerous beds of sandstone that can sometimes be correlated over wide areas. The Wasatch-Fort Union contact is separated by Paleocene and Eocene rocks and is generally placed above the Roland coal. However, other authors have placed the Wasatch-Fort Union contact above the School, Badger and Anderson Coals in other parts of the PRB.
 
The Wasatch Formation occurs at the surface across much of the PRB. The Wasatch is a fluvial sedimentary unit that consists of a series of silt to very coarse-grained gradational intervals in arkosic sandstone. The sandstone horizons in the Wasatch Formation are the host rocks for several uranium deposits in the central PRB. Within this area, mineralization is found in a 50- to 100-ft thick sandstone lens. On a regional scale, mineralization is localized and controlled by facies changes within this sandstone, including thinning of the sandstone unit, decrease in grain size and increase in clay and organic material content. The Wasatch Formation reaches a maximum thickness of about 1,600 ft and dips northwestward from one degree to two-and-a-half degrees in the southern and central parts of the PRB.
 
The Oligocene White River Formation overlies the Wasatch Formation and has been removed from most of the PRB by erosion. Remnants of this unit crop out on the Pumpkin Buttes, and at the extreme southern edge of the PRB. The White River Formation consists of clayey sandstone, claystone, a boulder conglomerate and tuffaceous sediments, which may be the primary source rock for uranium in the southern part of the PRB as a whole. The youngest sediments consist of Quaternary alluvial sands and gravels locally present in larger valleys. Quaternary eolian sands can also be found locally.
 
The Charlie Project Area targets mineralization in the Eocene-aged Wasatch Formation.
 
105
 
 
Mineralization in the Charlie Project Area occurs in fluvial sandstones of the lower parts of the Wasatch Formation. Most of the upper Wasatch Formation has been eroded away. The sandstones are arkosic, fine to coarse-grained with local calcareous lenses. The sandstones contain minor amounts of organic carbon that occurs as dispersed bits or as stringers. Unaltered sandstones are generally gray while altered sandstones are tan or pink due to hematite, or show yellowish coloring due to limonite.
 
Pyrite occurs in several forms within the host sandstones. In unaltered sandstones, pyrite occurs as small to large single euhedral crystals associated with magnetite, ilmenite and other dark detrital minerals. In altered sandstone, pyrite is typically absent, but locally occurs as tarnished, very fine-grained euhedral crystals. In areas of intense or heavy mineralization, pyrite locally occurs as massive, tarnished crystal aggregates.
 
At the Charlie Project Area, the Wasatch Formation sand units have been subdivided into eight separate sub-roll-fronts within the overall mineralized horizon. The sands have been designated locally as A through G in descending order. The majority of the currently defined mineral resource falls within the A through D sands, which have a combined thickness of approximately 80 to 100 feet. While mineralization is present in the F and G sands, less than 40 of the over 1,100 drill holes fully penetrated the F and G sands. Similarly, the E sand has only been partially explored.
 
Uranium mineralization at all of the Charlie Project Area is typical of Wyoming roll-front sandstone deposits. The formation of roll-front deposits is largely a groundwater process that occurs when uranium-rich, oxygenated groundwater interacts with a reducing environment in the subsurface and precipitates uranium. The most favorable host rocks for roll-fronts are permeable sandstones with large aquifer systems. Interbedded mudstone, claystone and siltstone are often present and aid in the formation process by focusing groundwater flux. The geometry of mineralization is dominated by the classic roll-front “C” shape or crescent configuration at the redox interface. The highest-grade portion of the front occurs in a zone termed the “nose” within reduced ground just ahead of the alteration front. Ahead of the nose, at the leading edge of the solution front, mineral quality gradually diminishes to barren within the “seepage” zone. Trailing behind the nose, in oxidized (altered) ground, are weak remnants of mineralization referred to as “tails” which have resisted re-mobilization to the nose due to association with shale, carbonaceous material or other lithologies of lower permeability. Tails are generally not amenable to ISR because the uranium is typically found within strongly reduced or impermeable strata, therefore making it difficult to leach.
 
Data Verification
 
Exploration potential was estimated for several of the sand units at the Charlie Project Area. Exploration targets were defined for the E, F and G sand units. These units are deeper and were not as extensively drilled as the upper sand units A through D. While mineralization is present in drilling for the F and G sands, less than 40 of the over 1,100 drill holes fully penetrated the F and G sands. Similarly, the E sand has only been partially explored. Within the E sand, there are areas where the drill data reflects sufficient thickness, grade and continuity to estimate indicated and inferred mineral resources.
 
Exploration targets were estimated by applying a range of GT values, determined from available drill data to an interpreted trend of mineralization. A trend for each of the exploration target areas was defined from drilling and/or geologic data based on a redox front interpreted from the drill data by the TRS QP.
 
Specific parameters used:
 
 
●
The average GT by sand varied from a low value of 0.63 (7.0 feet @ 0.09 %eU3O8) to a high value of 1.28 (8.5 feet @ 0.151 %eU3O8);
 
●
A width across the redox front of 50 feet was assumed for both the low and high cases; and
 
●
The length of trend was interpreted as 10,060 feet without accounting for the typical sinuosity observed along roll-fronts.
 
In the opinion of the TRS QP, the methods used and results of the exploration potential for the Charlie Project Area are reasonable and standard for the ISR industry. However, exploration potential does not meet the SEC standards identified in S-K 1300 to be considered mineral resources or mineral reserves and, as such, there is no certainty that the exploration potential provided herein will be realized.
 
106
 
 
Mineral Resource Estimates
 
The following key assumptions were used for resource estimates, unless otherwise noted:
 
 
●
resources are located in permeable and porous sandstones; and
 
●
resources are located below the water table.
 
The primary method for estimating Charlie Project Area mineral resources is the GT contour method. The GT contour method is one of the most widely used and dependable methods to estimate resources in uranium roll-front deposits. The basis of the GT contour method is the GT (grade x mineralized thickness) values, which are determined for each drill hole using radiometric log results and a suitable GT cutoff, below which the GT value is considered to be zero. The GT values are then plotted on a drill hole map and GT contours are drawn accordingly using roll-front data derived from cuttings and the nature of the gamma anomalies. The resources are calculated from the area within the GT contour boundaries considering the DEF and the ore zone density.
 
The resource estimate methods, general parameters, and mineralized cutoffs used at the Charlie Project Area are summarized below.
 
Table 4: Charlie Project Area Resource Estimate Methodology
 
 
 
 
Cutoff Parameters 1
Project Area
Mineral Resource
Estimation Method
Disequilibrium
Factor
Bulk
Density
(ft 3 /Ton)
Min.
Grade
(% U 3 O 8 )
Min.
Thickness
(ft)
Min. GT
Charlie
GT Contour (Indicated)
Projected (Inferred)
1.0
16.0
0.02
-
0.20
Note
Cutoff parameters are discrete and therefore the GT cutoff is not necessarily the product of cutoff grade and cutoff thickness.
 
Based on the depths of mineralization, average grade, thickness, and GT, it is the TRS QP’s opinion that the mineral resources of the Charlie Project Area can be recoverable by ISR methods using a long-term uranium price of $40/lb. The cutoffs were determined separately for each Charlie Project Area with the unique aspects of each Charlie Project Area taken into consideration.
 
Uranium does not trade on the open market and many of the private sales contracts are not publicly disclosed. UEC used $40/lb as the forecast uranium price for the Charlie Project Area. This is based on: (i) the long-term contract price at the end of February 2022, which was $43.88/lb from Cameco Resources’ combination of UxC and Trade Tech reports (Cameco, 2022); (ii) the spot price at the end of February 2022 ($48.75/lb); (iii) UxC’s price forecast; and (iv) UEC’s understanding of market expectations. The table below contains the UxC uranium price forecast for Q4 of 2021.
 
Table 5:           UxC Q4 2021 Uranium Price Forecast ($/lb U3O8)
UxC Market Outlook Q4 2021
2021
2022
2023
2024
2025
UxC High Price Midpoint
$36.00
$46.37
$48.11
$52.13
$56.47
UxC Low Price Midpoint
$36.00
$40.02
$41.33
$42.59
$43.02
UxC Mid Price Midpoint
$36.00
$43.18
$44.14
$46.71
$48.39
 
107
 
 
In the opinion of the TRS QP, $40/lb is a conservative forecast price for the following reasons:
 
 
●
first, at the issuance date, both the long-term price and spot price are greater than $40/lb;
 
●
second, new physical uranium investment vehicles were created in 2021, such as the Sprott Physical Uranium Trust and the upcoming physical uranium fund backed by Kazatomprom, the National Bank of Kazakhstan and Genchi Global Ltd., which effectively remove uranium supply from the market;
 
●
third, the increasing demand for carbon-free energy and global plans to construct new nuclear reactors will increase demand for uranium; and
 
●
finally, there has already been a steady increase in the uranium price for the last three years with a sharp rise to greater than $40/lb in the second half of 2021, due in part to increased demand from the Sprott Physical Uranium Trust. Due to recent volatility in the uranium market, the QP believes that a conservative forecast price is justified.
 
For the above reasons, the TRS QP also believes that a $40/lb price is considered reasonable by the QP for use in cutoff determination and to assess reasonable prospects for eventual economic extraction.
 
Measured, indicated and inferred resource classifications at the Charlie Project Area are classified based on the density of the drill hole data. Higher drill hole densities allow more confidence in the shape and size of the interpreted mineral horizons. The specific criteria for classifying resources as measured, indicated or inferred vary by Charlie Project Area depending on the methodology used. The table below details the resource classification criteria used in the resource estimates in the Charlie Project Area.
 
Table 6:           Charlie Project Area Drill Hole Information
 
Distance Between Drill Hole Locations
for Resource Classifications (ft)
Project Area
Measured
Indicated
Inferred
Charlie
-
Up to 400
N/A
 
There are numerous reasons that mineralization was interpreted as measured resources within the Charlie Project Area:
 
 
●
first, the drill hole spacing used to classify the measured resource is generally less than or equal to the 100 ft well spacing in a typical production pattern, which enables a detailed wellfield design to be completed;
 
●
second, the sub-surface geology within the Charlie Project Area is very well characterized with aquifers that correlate consistent host sandstone intervals and reliable aquitards across the resource areas;
 
●
third, mineralization occurs along the redox interface, and the oxidized sands have different coloration than the reduced sands. These color variations are visible in drill cuttings and are used to map the redox interface and to guide drilling and wellfield design; and
 
●
finally, historic production has occurred both commercially and through research and development facilities at the Charlie Project Area.
 
Mineral resources were estimated separately for the Charlie Project Area. The estimates of measured and indicated mineral resources for the Charlie Project Area are reported in the table below.
 
Table 7: Charlie Project Area Measured and Indicated Mineral Resources
Mineral Resource
GT
Cutoff
Average Grade
% eU 3 O 8
Ore Tons
(000s)
eU 3 O 8
(lbs)
Charlie
Measured
N/A
N/A
0
0
Indicated
0.2
0.123
1,255
3,121,000
Total Measured and Indicated
0.2
0.123
1,255
3,121,000
 
108
 
 
The estimates of inferred mineral resources for the Charlie Project Area are reported in the table below.
 
Table 8: Charlie Project Area Inferred Mineral Resources
Mineral Resource
GT Cutoff
Average Grade
% eU 3 O 8
Ore Tons
(000s)
eU 3 O 8
(lbs)
Charlie
Inferred
0.2
0.12
411
988,000
 
This combination of drill hole spacing, well-known subsurface geology, well-understood deposit model, successful production and the variety of data collected led WWC, the TRS QP, to conclude that the mineralization in areas with drill hole spacing tabulated above fit the definition for measured resources.
 
Present Condition of Property and Work Completed to Date
 
A WDEQ Permit to Mine exists for the Charlie Project Area, which UEC intends to update to current standards for ISR mining and incorporate the Charlie Project Area as two additional Mine Units of the Christensen Ranch Project Area.
 
The Company plans to maintain the State of Wyoming mineral lease for the Charlie Project Area.
 
 
109
 
 
Nine Mile Lake ISR Project
 
The following technical and scientific description for the Nine Mile Lake Project Area (the “Nine Mile Lake Project Area”) is based in part on the TRS titled “S-K 1300 Mineral Resource Report Wyoming Assets ISR Hub and Spoke Project, WY USA”, current on March 31, 2022, prepared by WWC, a qualified firm (the “QP” herein). The Nine Mile Lake Project Area does not have mineral reserves and is therefore considered an Exploration Stage property under S-K 1300 definitions.
 
Property Description
 
The Nine Mile Lake Project Area is located in Natrona County, Wyoming, in the PRB. The Nine Mile Lake Project Area covers all or portions of approximately 22 sections of the PRB.
 
The Nine Mile Lake Project Area is located approximately 1.5 miles north of Casper, Wyoming, and is located on private surface land and state managed land. The Nine Mile Lake Project Area is bisected by Interstate 25 and is accessible from the Salt Creek highway which parallels Interstate 25 and from County Road 705. Casper is the major population center with a population of 58,287 and is located 5 miles south of the Nine Mile Lake Project Area. The east-west railway owned by BNSF is located approximately five miles south of the Nine Mile Lake Project Area.
 
Figure 1: Map of UEC Project Areas
 
110
 
 
Ownership
 
This Nine Mile Lake Project Area is owned and operated by UEC. UEC has executed fee mineral leases with landowners who hold mineral ownership within and outside the various Nine Mile Lake Project Area boundaries. UEC also holds unpatented BLM lode claims and leases on Wyoming state land on the various project areas.
 
UEC has a possessory right to explore, develop and produce on the unpatented lode mining claims and must pay an annual maintenance fee to the Bureau of Land Management of $155.00 per claim on or before September 1. Surface use on mining claims on BLM lands are allowed subject to 3809 regulations and require both BLM and WDEQ/LQD permitting. Surface use on private lands is subject to the terms of the respective surface owner leases and/or agreements.
 
Table 1: Property Characteristics Summary
Project Area
State of Wyoming
Leases
Fee Mineral
Leases
Federal Lode
Mining Claims
Total
Nine Mile Lake
Acreage
1,280
5,084
3,800
10,164
Leases/Claims
2
7
190
199
Total Annual Cost
$5,760
N/A
$29,450
$39,335
 
Accessibility, Climate, Local Resources, Infrastructure and Physiography
 
The site is accessible from either Interstate Highway 25 or from the Salt Creek highway. The site is readily accessible year-round. Infrastructure was established for past pilot ISR mining operations and currently exists for nearby residents, including power lines and water wells.
 
The PRB is a part of the Northwestern Great Plains ecoregion, a semiarid rolling plain of shale and sandstone punctuated by occasional buttes. The Nine Mile Lake Project Area is characterized as rolling prairie and dissected river breaks. Regional structural features include the Big Horn Mountains to the west, Casper Arch to the south and the Black Hills to the east. At the northernmost Nine Mile Lake Project Area in the PRB the landscape is dominated by the Pumpkin Buttes.
 
Topography in the area ranges from generally flat to gently rolling hills with numerous drainages containing ephemeral streams that dissect the area. Elevations range from approximately 4,500 to 5,400 ft above mean sea level. Nine Mile Lake for which the project is named is located approximately 2 miles south of the project.
 
Vegetation within the Nine Mile Lake Project Area consists primarily of grassland with areas of sagebrush. Some of the Nine Mile Lake Project Area lies within the mixed grass ecoregion of the Northwestern Great Plains. Interspersed among these major vegetation communities, within and along the ephemeral drainages, are grassland and meadow grassland and less abundant types of seeded grasslands (improved pastures).
 
The Nine Mile Lake Project Area is located in a semi-arid or steppe climate. The region is characterized by cold, harsh winters and hot, dry summers. The spring season is relatively warm and moist, and autumns are cool. Temperature extremes range from roughly -25° F in the winter to 100° F in the summer. Typically, the “last freeze” occurs during late May and the “first freeze” in mid- to late September.
 
Yearly precipitation averages about 13 inches. The region is prone to severe thunderstorm events throughout the spring and early summer months and much of the precipitation is attributed to these events. Snow falls throughout the winter months (approximately 40 to 50 inches per year) but provides much less moisture than rain events.
 
Most common native vegetation is sagebrush and prairie grasses and to a lesser extent, rabbit brush. No threatened or endangered plants are known in the area. Limited upland areas have juniper and limber pine trees on north facing slopes.
 
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Mule deer and pronghorn antelope are common, as are nesting raptors. Small rodents and rabbits are common. The Greater Sage Grouse, present in the general area of the Nine Mile Lake Project Area, however, the project is not within a Sage Grouse Core area.
 
Mine development will require access, power and water supply. Infrastructure is present and/or readily proximate to the Project. The nearest community is the town of Casper, Wyoming. Casper is the second-largest city in Wyoming, according to the 2010 census, with a population of 55,316. Several oilfield and mining service companies are located in Casper including a caterpillar dealership, several drilling companies, and industrial supply companies. Casper has an adequate workforce skilled in mining and mineral exploration to support the Nine Mile Lake Project.
 
History
 
The initial discovery of mineralization at the Nine Mile Lake Project Area was made in the early 1950s by a Mr. Vickers of Casper, Wyoming, who reportedly discovered surficial mineralization and mined some 100 tons at an average grade of 0.30 % U3O8 which was shipped to the U.S. Atomic Energy Commission (the “AEC”) buying station at Edgemont, South Dakota. Rocky Mountain Energy (“RME”) acquired interest in the Nine Mile Lake Project Area  in 1972 and conducted extensive drilling through 1978. Pilot scale ISR mining was conducted using four seven-spot patterns with a 50-foot radius. The first three patterns used sulfuric acid as the primary lixiviant and the fourth sodium carbonate-bicarbonate as the primary lixiviant. The U.S. Bureau of Mines assisted RME in conducting the pilot testing and documented the results in a publication titled “Case History of a Pilot-Scale Acidic In Situ Uranium Leaching Experiment”.
 
RME controlled the Nine Mile Lake Project Area until the late 1980s after which it dropped its mineral interests due to the declining uranium market. In 2005 and 2006, EMC began locating unpatented mining lode claims and securing mineral leases and surface agreements within the former area held by RME. EMC also acquired a variety of geologic data including reports, maps, and geophysical logs for the Nine Mile Lake Project Area. EMC was subsequently acquired by Uranium One Inc. in August of 2008. Uranium One sold its interest in 24 uranium projects located in Wyoming, including this project, to Anfield. The transaction closed on September 14, 2016. UEC acquired the Nine Mile Lake Project Area from Anfield in June 2022.
 
 
112
 
 
The table below describes the historic ownership and operations at the Nine Mile Lake Project Area.
 
Table 2: Historic Ownership and Operations at the Nine Mile Lake Project Area
Year
Company
Operations/Activity
Amount
(No. of Drill holes)
Results of Work
Early 1950s
Independent operator
An internal report from 1969 states a Mr. Vickers reportedly discovered surficial mineralization and mined approximately 100 tons U3O8 at an average grade of 0.30%. Uranium was shipped to the AEC buying station at Edgemont, South Dakota.
None
Exploration and production of 100 tons U3O8.
1972
RME
RME acquired interest in the project in 1972 and conducted extensive drilling through 1978. Pilot scale ISR mining was conducted using four seven-spot patterns with a 50-foot radius. The first 3 patterns used sulfuric acid as the primary lixiviant and the fourth sodium carbonate-bicarbonate as the primary lixiviant. The U.S. Bureau of Mines assisted RME in conducting the pilot testing and documented the results in a publication titled “Case History of a Pilot-Scale Acidic In Situ Uranium Leaching Experiment” (Nigbor, N. T., et al, 1982). RME controlled the project until the late 1980s when the mineral interests were dropped due to declining uranium prices.
Approximately 1,100
Exploration and pilot scale ISR mining.
2005 and 2006
EMC
EMC located unpatented mining lode claims and secured mineral leases and surface agreements within the area formerly held by RME. EMC conducted exploratory drilling and compiled previous data and maps for the project.
Approximately 45
Secured right to mine.
2008
Uranium One
EMC was acquired by Uranium One.
None
Ownership transition.
2016
Anfield
Anfield purchased Nine Mile Lake Project from Uranium One.
None
Oversaw technical reporting and auditing of project resources.
2022
UEC
UEC acquired the Nine Mile Lake Project from Anfield.
N/A
Ownership transition.
 
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Permitting and Licensing
 
The Nine Mile Lake Project Area is not permitted.
 
In order to conduct exploratory drilling UEC would be required to obtain a Drilling Notification (“DN”) approved by the WDEQ/LQD and the BLM. The DN would allow for surface use for the purposes of exploration by drilling on BLM surface. Separate surface leases and/or agreements would be required for drilling on private lands.
 
Although not required at this stage, mine development would require a number of permits depending on the type and extent of development, the most significant permits being the Permit to Mine issued by the WDEQ/LQD and the Source Materials License also from the WDEQ/LQD required for mineral processing of natural uranium. Any injection or pumping operations will require permits from the WDEQ which has authority under the Safe Water Drinking Act that stems from a grant of primacy from the U.S. Environmental Protection Agency for administering UIC programs in Wyoming.
 
Geologic Setting, Mineralization, and Deposit
 
The Nine Mile Lake Project Area resides in the PRB. The PRB extends over much of northeastern Wyoming and southeastern Montana and consists of a large north-northwest trending asymmetric syncline, with the basin axis located to the west of the projects. The PRB is bounded by the Big Horn Mountains and Casper Arch to the west, the Black Hills to the east, and the Hartville Uplift and Laramie Mountains to the south. The PRB is filled with marine, non-marine, and continental sediments ranging in age from early Paleozoic through Cenozoic.
 
The Nine Mile Lake Project Area is located along the southwestern flank of the PRB which is a asymmetric syncline trending north-northwest. The project is bounded to the west by the Casper Arch, a regional fold sub-parallel to the axis of the basin. In the vicinity of the project no major faults have been identified and the formation dip is less than 6° to the east, north-east.
 
Surface exposures, in order of prevalence, include the Cretaceous Lewis Shale, Quaternary sand and gravel deposits and the Cretaceous Mesa Verde Formation. Uranium mineralization occurs within the upper portions of the Mesa Verde Formation which is overlain by the Lewis Shale and underlain by the Cody Shale. Locally the Mesa Verde Formation is subdivided into the Teapot Sandstone and Nine Mile Lake Facies.
 
Uranium mineralization occurs in the Teapot Sandstone which is locally 50- to 100-ft thick and occurs at depths ranging from 50 to 600 feet below the ground surface. The Teapot Sandstone is further subdivided into two major stratigraphic horizons termed the Upper and Lower sands which are separated by a relatively thin (approximately 4 foot) layer of lignite and carbonaceous shale. The Teapot Sandstone is sub-arkosic, medium to fine grained, angular to sub-angular, and moderate to well sorted. Uranium mineralization occurs in both the Upper and Lower sands. Uranium mineralization is of the roll-front type with an average thickness of 9 feet. The principal uranium mineral is uraninite (UO2) with minor amounts of coffinite a uranium silicate. The principal reductant appears to be carbonaceous material and lignites interspersed in zones of mineralization.
 
Uranium deposits at the Nine Mile Lake Project Area are roll-front uranium deposits as defined in the “World Distribution of Uranium Deposits (UDEPO) with Uranium Deposit Classification”. The mineralization at the Nine Mile Lake Project Area is typical of the Wyoming roll-front sandstone deposits. However, the occurrence of uranium mineralization is only known to occur in the vicinity of the project.
 
The sedimentary host sandstone formed in a deltaic environment and is interfingered with thin shale, carbonaceous shale, and liginite units. The carbonaceous material considered the primary reductant although seepage of H2S gas from underlying oil and gas deposits reacting with iron in the ground water could account for the presence of pyrite which would also serve as a reductant.
 
Potential sources of uranium would include leaching of uranium from oligocene volcanic detritus in the White River Formation and leaching of uranium from Granite Mountains. Roll-front deposits are characterized by oxidized or altered rock on one side of the roll-front and reduced or unaltered rock on the opposite side of the front. Based on review of geologic reports and the drill data including geophysical logs and lithological descriptions, the TRS QP concludes that at the oxidized tongue of the geochemical system is located to the west of the mineralization with the reduced side of the roll-front to the east. Mineralization occurs in multiple fronts trending generally from south southeast to north north-west.
 
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The key components for the formation of roll-front type deposits according to Granger and Warren (1979) include:
 
 
●
a permeable host formation;
 
●
a source of soluble uranium;
 
●
oxidizing ground waters to leach and transport the uranium;
 
●
adequate reductant within the host formation;
 
●
time sufficient to concentrate the uranium at the oxidation/reduction interface;
 
●
both the Upper and Lower members of the Teapot Sandstone are permeable;
 
●
both the White River Formation and Granite Mountains are in reasonable proximity and could have provided the source of uranium;
 
●
oxidation of the sandstone host is evident from the lithologic descriptions from drilling and field examination of the outcrop;
 
●
carbonaceous material is described to occur within the host; and
 
●
drilling demonstrates the presence of uranium mineralization at an oxidation/reduction interface (“REDOX”) indicating that favorable hydrologic and geochemical conditions were present for sufficient time to concentrate uranium.
 
Data Verification
 
Data used for the resource estimate at the Nine Mile Lake Project Area consisted of original geophysical and lithologic logs and an electronic drill hole database.
 
The Nine Mile Lake Project Area was host to several pilot scale ISR studies in the 1970s performed by RME, including a joint study with U.S. Bureau of Mines from 1977 to 1979. Pilot scale ISR mining was conducted using four seven-spot patterns with a 50-foot radius. The testing demonstrated that uranium recovery using a sulfuric acid and hydrogen peroxide lixiviant was successful.
 
An independent NI 43-101 for the project was prepared in April of 2019 by BRS Inc. The TRS QP has reviewed the data verification procedures of this report and considers the procedures credible and reliable.
 
Currently available drill data for the main resource area consists of radiometric equivalent data (%eU3O8) for 1,100 drill holes completed primarily between 1972 and 1978. Of these 1,100 drill holes, 26 were cored. In addition, in 2006 EMC drilled 45 holes on a separate mineral lease. All original drill data including geophysical logs and lithological logs are available for the Nine Mile Lake Project Area. The drill hole databased utilized for the estimation of mineral resources was developed directly from the original geophysical logs by the TRS QP. The estimation of Indicated Mineral Resources was limited to this area where the original drill data was available.
 
Additional drilling was completed outside the main resource area. This includes areas along the REDOX north and south of the mean resource area and on both the east and west sides of I25. In these areas, available data includes maps showing drill hole locations, REDOX boundaries, GT data, and polygonal blocks used for historic resource estimation. While this data demonstrates the location and general nature of mineralization outside the main resource areas the drill data cannot be sufficiently verified, in the opinion of the TRS QP, to justify estimation of Indicated Mineral Resources. Thus, in these areas, where the available data clearly indicated a mineralized trend the TRS QP projected Inferred Mineral Resources.
 
 
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Pre-2000 drill data generally consists of geophysical logs of drill holes including of copies (blueprints) of original drill logs and copies of digital printouts of depth and counts per second (“CPS”) in one-half foot increments within the mineralized zones. The geophysical logs include natural gamma, resistivity, and spontaneous potential (“SP”). All drill holes were drilled with fluid and logged in the open hole with no casing. All drill holes were vertical. Drift data was available from 82% of the geophysical logs. Downhole drift shifted the downhole location with respect to the surface collar location by an average of 11.4. Variation in true depth ranged from 0 to 0.5 feet and averaged 0.2 feet. Radiometric equivalent data is available for all the drill holes used in the mineral resource estimate and is incorporated into the drill hole database.
 
Radioactive isotopes decay until they reach a stable non-radioactive state. The radioactive decay chain isotopes are referred to as daughters. When all the decay products are maintained in close association with the primary uranium isotope U238 for the order of a million years or more, the daughter isotopes will be in equilibrium with the parent isotope. Disequilibrium occurs when one or more decay products are dispersed as a result of differences in solubility between uranium and its daughters. Disequilibrium is considered positive when there is a higher proportion of uranium present compared to daughters and negative where daughters are accumulated and uranium is depleted. The DEF is determined by comparing radiometric equivalent uranium grade eU3O8 to chemical uranium grade. Radiometric equilibrium is represented by a DEF of 1, positive radiometric equilibrium by a factor greater than 1 and negative radiometric equilibrium by a factor of less than 1.
 
Except in cases where uranium mineralization is exposed to strongly oxidized conditions, most of the sandstone roll-front deposits reasonably approximate radiometric equilibrium. The nose of a roll-front deposit tends to have the most positive DEF and the tails of a roll-front would tend to have the lowest DEF. Available data shows a range in DEF from 0.835 to 1.125 and generally shows depletion of the tails or altered portions of the roll-front and enrichment near the REDOX boundary or nose of the roll-front.
 
Only 2% of the drilling was completed by coring, while the TRS QP does not consider the available core data sufficiently conclusive to apply a correction for DEF, an assumption of radiometric equilibrium (DEF = 1) is considered reasonable with respect to mineral resources as the mineralization is well below the ground water table and not subject to surficial oxidation. It is recommended that in the future assessment of mineral reserves additional data relative to radiometric equilibrium be collected and radiometric equilibrium conditions be evaluated.
 
The density of mineralization used in the resource estimation was 16 cubic feet per ton. This is the most common figure used for sandstone hosted, roll-front uranium deposits in Wyoming and Colorado, as noted extensively throughout the literature on these deposits, and from the QP’s working experience from mining similar sandstone-hosted deposits. Specific rock density studies are not available for the project.
 
Mineral Resource Estimates
 
The following key assumptions were used for resource estimates, unless otherwise noted:
 
 
●
resources are located in permeable and porous sandstones; and
 
●
resources are located below the water table.
 
The primary method for estimating Nine Mile Lake Project Area mineral resources is the GT contour method. The GT contour method is one of the most widely used and dependable methods to estimate resources in uranium roll-front deposits. The basis of the GT contour method is the GT (grade x mineralized thickness) values, which are determined for each drill hole using radiometric log results and a suitable GT cutoff below which the GT value is considered to be zero. The GT values are then plotted on a drill hole map and GT contours are drawn accordingly using roll-front data derived from cuttings and the nature of the gamma anomalies. The resources are calculated from the area within the GT contour boundaries considering the disequilibrium factor and the ore zone density.
 
At the Nine Mile Lake Project Area inferred mineral resources were estimated by projecting along an identified redox boundary or mineral trend.
 
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The resource estimate method, general parameters and mineralized cutoffs used at the Nine Mile Lake Project Area are summarized below.
 
Table 3: Nine Mile Lake Project Area Resource Estimate Methodology
 
 
 
 
Cutoff Parameters
Project Area
Mineral Resource
Estimation Method
Disequilibrium
Factor
Bulk
Density
(ft 3 /Ton)
Min.
Grade
(% U 3 O 8 )
Min.
Thickness
(ft)
Min. GT
Nine Mile Lake
GT Contour (Inferred)
Projected (Inferred)
1.0
16.0
0.015
-
0.25
 
Based on the depths of mineralization, average grade, thickness and GT, it is the TRS QP’s opinion that the mineral resources of the Nine Mile Lake Project Area can be recoverable by ISR methods using a long-term uranium price of $40/lb. The cutoffs were determined separately for each Nine Mile Lake Project Area with the unique aspects of each Nine Mile Lake Project Area taken into consideration.
 
Uranium does not trade on the open market and many of the private sales contracts are not publicly disclosed. UEC used $40/lb as the forecast uranium price for the Project. This is based on: (i) the long-term contract price at the end of February 2022, which was $43.88/lb. from Cameco Resources’ combination of UxC and Trade Tech reports (Cameco, 2022); (ii) the spot price at the end of February 2022 ($48.75/lb.); (iii) UxC’s price forecast; and (iv) UEC’s understanding of market expectations. The table below contains the UxC uranium price forecast for Q4 of 2021.
 
Table 4: UxC Q4 2021 Uranium Price Forecast ($/lb U3O8)
UxC Market Outlook Q4 2021
2021
2022
2023
2024
2025
UxC High Price Midpoint
$36.00
$46.37
$48.11
$52.13
$56.47
UxC Low Price Midpoint
$36.00
$40.02
$41.33
$42.59
$43.02
UxC Mid Price Midpoint
$36.00
$43.18
$44.14
$46.71
$48.39
 
In the opinion of the TRS QP, $40/lb is a conservative forecast price for the following reasons:
 
 
●
first, at the issuance date, both the long-term price and spot price are greater than $40/lb;
 
●
second, new physical uranium investment vehicles were created in 2021, such as the Sprott Physical Uranium Trust and the upcoming physical uranium fund backed by Kazatomprom, the National Bank of Kazakhstan and Genchi Global Ltd., which effectively remove uranium supply from the market;
 
●
third, the increasing demand for carbon-free energy and global plans to construct new nuclear reactors will increase demand for uranium; and
 
●
finally, there has already been a steady increase in the uranium price for the last three years with a sharp rise to greater than $40/lb in the second half of 2021, due in part to increased demand from the Sprott Physical Uranium Trust. Due to recent volatility in the uranium market, the QP believes that a conservative forecast price is justified.
 
For the above reasons, the TRS QP also believes that a $40/lb price is considered reasonable by the QP for use in cutoff determination and to assess reasonable prospects for eventual economic extraction.
 
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Inferred resources at the Nine Mile Lake Project Area are classified based on the density of the drill hole data. Higher drill hole densities allow more confidence in the shape and size of the interpreted mineral horizons. The specific criteria for classifying resources as measured, indicated or inferred vary by Nine Mile Lake Project Area depending on the methodology used. The table below details the resource classification criteria used in the resource estimates in each of the Nine Mile Lake Project Area.
 
Table 5:   Nine Mile Lake Project Area Drill Hole Information
 
Distance Between Drill Hole Locations
for Resource Classifications (ft)
Project Area
Measured
Indicated
Inferred
Nine Mile Lake
-
-
50-100
 
There are numerous reasons that mineralization was interpreted as measured resources within the Nine Mile Lake Project Area:
 
 
●
first, the drill hole spacing used to classify the measured resource is generally less than or equal to the 100 ft well spacing in a typical production pattern, which enables a detailed wellfield design to be completed;
 
●
second, the sub-surface geology within the Nine Mile Lake Project Area is very well characterized with aquifers that correlate, consistent host sandstone intervals and reliable aquitards across the resource areas; and
 
●
third, mineralization occurs along the redox interface and the oxidized sands have different coloration than the reduced sands. These color variations are visible in drill cuttings and are used to map the redox interface and to guide drilling and wellfield design.
 
Inferred mineral resources were estimated for the Nine Mile Lake Project Area and are summarized in the following table.
 
Table 6: Nine Mile Lake Project Area Inferred Mineral Resources
Mineral Resource
GT Cutoff
Average Grade
% eU 3 O 8
Ore Tons
(000s)
eU 3 O 8
(lbs)
Nine Mile Lake
Inferred
0.25
0.036
3,405
4,308,000
 
Present Condition of Property and Work Completed to Date
 
The Nine Mile Lake Project Area is not currently permitted and work includes maintaining the mineral leases and mining claims.
 
The Company ’ s Planned Work
 
The Company plans to maintain the leases and mining claims comprising the Nine Mile Lake Project Area.
 
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Red Rim Project
 
The following technical and scientific description for the Red Rim Project (the “Red Rim ISR Project Area”) is based in part on the TRS titled “S-K 1300 Mineral Resource Report Wyoming Assets ISR Hub and Spoke Project, WY USA”, current on March 31, 2022, as prepared by WWC, a qualified firm (the “QP” herein). The Red Rim ISR Project Area does not have mineral reserves and is therefore considered an Exploration Stage property under S-K 1300 definitions.
 
Property Description
 
The Red Rim Project Area is in the GGRB in Carbon County. The Red Rim Project Area covers 1,000 acres, including all (or portions of) 4 sections.
 
The Red Rim Project Area is located approximately 20 air miles southwest of Rawlins, Wyoming, and is located on federal BLM-managed land. The site is accessible via two-wheel drive via three different routes. The Daley Road which proceeds south from Interstate 80 to the site, and Carbon County Road 605 which proceeds approximately 23 miles southwest from Rawlins along Hogback Ridge. The shortest route to the site is to proceed west from Rawlins on I-80 11 miles to the Daley Road, then travel south for approximately eight miles.
 
Figure 1: Map of UEC Project Areas
 
119
 
 
Ownership
 
The Red Rim Project Area is owned and operated by UEC. UEC holds unpatented BLM lode claims for the Red Rim Project Area.
 
Mineral rights for the Red Rim Project Area are comprised of federally administered minerals (unpatented lode claims). Federal mining claims were staked and recorded consistent with federal and state law.
 
Table 1: Property Characteristics Summary
Project Area
State of Wyoming
Leases
Fee Mineral
Leases
Federal Lode
Mining Claims
Total
Red Rim
Acreage
0
0
1000
1,000
Leases/Claims
0
0
49
49
Total Annual Cost
$0
$0
$8,085
$8,085
 
UEC’s mineral holdings in the Red Rim Project Area include 49 unpatented federal mining lode claims (1,000 acres).
 
Payments for all claims are up to date as of the effective date of the TRS.
 
Accessibility, Climate, Local Resources, Infrastructure and Physiography
 
The Red Rim Project Area is located in the GGRB in Carbon County, Wyoming. The Red Rim Project Area is located in the northeast portion of the GGRB. The GGRB is a structural basin that encompasses nearly 21,000 square miles in southwest Wyoming and northwest Colorado. Regional structural features include the Wyoming thrust belt to the west, the Rawlins Uplift and the Sierra Madre Mountains to the east, the Wind River Mountains to the north and the Uinta Mountains to the south.
 
The topography at the Red Rim Project Area has a prominent low-lying ridge with a southwest/northeast orientation, and Separation Creek, which generally forms the southern boundary of the Red Rim Project Area. Elevations range from approximately 6,000 to slightly over 7,000 feet above mean sea level.
 
The Red Rim Project Area is located in the Wyoming Basin Level III ecoregion and are characterized as rolling sagebrush steppe. This ecoregion is a broad intermontane basin interrupted by hills and low mountains and dominated by arid grasslands and shrublands. The Red Rim Project Area is rangeland with vegetation also consisting primarily of sagebrush and grasses.
 
Yearly precipitation in the Red Rim Project Area is approximately 8 to 12 inches. Precipitation is predominantly in the form of late autumnal to early spring snows. The summer months are usually hot with temperature occasionally exceeding 100° F, dry and clear, except for infrequent rains. Winter conditions can be severe and can include sub-zero temperatures and ground blizzards.
 
History
 
Uranium mineralization was discovered in the GGRB at the Lost Creek Schoekingerite deposit in the early 1950s. The Schoekingerite deposits were exposed at the surface along the Lost Creek drainage and were located using radiometric surveys. The USGS used shallow exploration to further evaluate the deposits. As in the PRB, drilling for deeper deposits began in the 1960s and exploration since that time has primarily consisted of drilling.
 
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Table 2: Historic Ownership and Operations at the Red Rim Project Area
Year
Company
Operations/Activity
Amount
(No. of Drill holes)
Results of Work
1970
Kerr McGee Corp. and UCC
Both companies located claims in the vicinity and conducted exploration and drilling programs. The claims were dropped by 1973.
Not specified.
Exploration is reported to have encountered alteration and mineralization at depth.
1974
Timberline Minerals and Wold
Both companies located claims in the vicinity.
None.
Secured federal mining claims.
1976
UCC
UCC leased the Timberline Minerals property and entered a joint venture agreement with RME, a subsidiary of the Union Pacific Railroad, for the alternate sections of railroad grant lands in the area. UCC relinquished their mineral interests at Red Rim in 1986 and the mining claims reverted to Timberline Minerals, which subsequently dropped the claims.
138
Conducted an exploration and drilling program. Of the 138 drill holes on the current Red Rim Project Area, 42 are barren or contain trace mineralization and the remaining 96 are mineralized.
2004
EMC
Located 49 unpatented mining lode claims that comprise the current Red Rim Project Area.
None.
Secured federal mining claims.
2007
Uranium One
Uranium One Inc. acquired EMC. Through subsequent transactions, Uranium One Inc. became Uranium One Americas, Inc.
None.
Ownership transition.
2016
Anfield
Anfield purchased Red Rim Project from Uranium One.
None.
Oversaw technical reporting and auditing of project resources.
2022
UEC
UEC acquired the Red Rim project from Anfield.
N/A
Ownership transition.
 
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Permitting and Licensing
 
The Red Rim Project Area is not permitted.
 
Geologic Setting, Mineralization, and Deposit
 
The Red Rim Project Area is located within the WB portion of the GGRB. Together, the GDB and WB compromise the eastern portion of the GGRB. These basins contain up to 25,000 ft of Cretaceous to recent sedimentary rocks. The GGRB is a structural basin that extends over southwestern Wyoming and northwestern Colorado and is divided by the Rock Springs Uplift, a north-south trending anticline. The basin is bounded by the Wyoming thrust belt to the west, the Rawlins Uplift and the Sierra Madre Mountains to the east, the Wind River Mountains to the north and the Uinta Mountains to the south. The GGRB contains up to 25,000 ft of Cretaceous to recent sedimentary rocks.
 
During the end of the Cretaceous Period, the Laramide Orogeny divided the Wyoming Basin Province into a series of down warped basins. As these basins were created, uplift created the Granite and Seminoe Mountains, and older formations were altered during the same time. In the northern regions of the GGRB, swamps, alluvial plains and fluvial fans were present at the margins of the uplifted Granite Mountains. To the southwest, the GGRB is occupied by the lacustrine Eocene Green River Formation and by the lower energy Wasatch Formation. These two facies interfinger with the high-energy fluvial facies of the Battle Spring Formation at the central and eastern areas in the GGRB. The Paleocene Fort Union Formation Underlies the Wasatch or Battle Springs formation, depending on position within the basin. Uranium deposits occur in the GDB/WB predominantly in roll-front redox deposits, but also desert evaporite. Roll-front deposits occur in the Battle Spring, Wasatch and Fort Union Formations.
 
The Battle Spring Formation consists of alluvial-fluvial fan deposits of west to southwest-flowing paleodrainage. The common rock type is arkosic sandstone with interbedded claystone. These types of rock are typical of alluvial-fan facies. Much of this material is sourced from the Granite Mountains by blockages in normal drainages due to differential subsidence rates. The Wasatch Formation, due to its fluvial nature, contains interbedded siltstones, coal, carbonaceous shale, fine-grained sandstone, sandy limestone and medium-grained fluvial sandstones. The permeable medium- to very coarse-grained sandstones and arkoses are a favorable host for sandstone-type uranium deposits. Fluvial channels incised into less permeable underlying siltstones and sandstones in the Battle Spring during early Eocene time. The channels were backfilled by the massive, poorly-sorted, coalescing alluvial fan deposits, known as the Battle Spring Formation. The Battle Spring Formation includes impermeable carbonaceous shales that created an impermeable boundary for uranium deposits.
 
The Fort Union Formation surfaces around the boundary of the GDB. The Fort Union Formation is described as an interbedded sequence of white, gray, tan, buff and brown sandstone, gray to black shale, carbonaceous shale, siltstone, local conglomerate beds and (usually) thin coal beds. It may truncate and unconformably overlie older units near basin margins. The Fort Union is unconformably underlain by the Cretaceous Lance Formation and regionally overlain by either the Eocene Wasatch or Battle Spring Formation.
 
The Lance Formation is described as a gray to buff fine-grained to very fine-grained silty sandstone interbedded with drab to light-green to gray locally carbonaceous siltstone and thin conglomeratic lenses locally. The Lance Formation contains the upper Red Rim Member and the lower (unnamed) member. The Red Rim Member is a prominent sandstone package named for its color as it crops out south of Interstate 80 on the eastern rim of the WB.
 
Overbank and floodplain deposits in the Battle Spring Formation also were likely to restrict groundwater flow. These boundaries focused uranium-rich waters into confined permeable units. Faulting also created structural and permeability control.
 
Data Verification
 
Data used for the resource estimate at the Red Rim Project Area consisted of original geophysical and lithologic logs and an electronic drill hole database.
 
122
 
 
The original radiometric drill data was available as a paper record. This data was inputted as electronic data via a spreadsheet into the computer programs utilized in the development of this report. Data entry was checked and confirmed. Drill hole locations were scanned and digitally rectified. The resultant drill maps were then checked and confirmed by overlaying with the original maps. Radiometric log interpretation was confirmed from available geophysical logs. Geologic interpretation and correlation of lithology was completed by the QP by personally examining each drill log. The TRS QP worked on the Red Rim Project Area in 1980 and 1981 when the exploratory drilling was being conducted and can personally verify that the drill data was collected according to recognized standards of the industry.
 
Limited data is available for the evaluation of radiometric equilibrium. The Red Rim occurs at depth, is more than 1,000 feet below the modern water table and is not subjected to oxidizing surface waters. As a result, the mineralization is not expected to exhibit significant disequilibrium. Available chemical data from two core holes is summarized in the following table.
 
Table 3: Radiometric Equilibrium
Hole
Mineralization
Radiometric
Chemical
Equilibrium
Identification
Depth
Thickness
% U 3 O 8
G.T.
% U 3 O 8
G.T.
Ratio
RR-126 C-3
1814.0
4.0
0.063
0.252
0.05
0.215
0.85
RR-126 C-3
1853.5
1.5
0.211
0.317
0.15
0.225
0.71
RR-127 C-2
1922.5
1.5
0.050
0.075
0.06
0.11
1.47
RR-127 C-2
1947.0
3.5
0.089
0.312
0.10
0.335
1.08
 
It should be noted that the core holes intercepted thin intervals of mineralization and the equilibrium ratios varied from 0.71 (depletion) to 1.47 (enrichment) of chemical U3O8 assayed versus the radiometric equivalent. The TRS QP concludes that the available information does not warrant adjustment of the radiometric data and that a DEF of 1 be applied to the mineral resource estimate.
 
Mineral Resource Estimates
 
The following key assumptions were used for resource estimates, unless otherwise noted:
 
 
●
resources are located in permeable and porous sandstones; and
 
●
resources are located below the water table.
 
The primary method for estimating Red Rim Project Area mineral resources is the GT contour method. The GT contour method is one of the most widely used and dependable methods to estimate resources in uranium roll-front deposits. The basis of the GT contour method is the GT (grade x mineralized thickness) values, which are determined for each drill hole using radiometric log results and a suitable GT cutoff, below which the GT value is considered to be zero. The GT values are then plotted on a drill hole map and GT contours are drawn accordingly using roll-front data derived from cuttings and the nature of the gamma anomalies. The resources are calculated from the area within the GT contour boundaries considering the DEF and the ore zone density.
 
123
 
 
The resource estimate methods, general parameters, and mineralized cutoffs used at the Red Rim Project Area are summarized below.
 
Table 4: Red Rim Project Area Resource Estimate Methodology
 
 
 
 
Cutoff Parameters
Project Area
Mineral Resource
Estimation Method
Disequilibrium
Factor
Bulk
Density
(ft 3 /Ton)
Min.
Grade
(% U 3 O 8 )
Min.
Thickness
(ft)
Min. GT
Red Rim
GT Contour (Indicated)
Polygonal (Indicated)
GT Contour (Inferred)
Projected (Inferred)
1.0
16.0
0.02
-
0.20
 
Based on the depths of mineralization, average grade, thickness and GT, it is the TRS QP’s opinion that the mineral resources of the Red Rim Project Area can be recoverable by ISR methods using a long-term uranium price of $40/lb. The cutoffs were determined separately for each Red Rim Project Area with the unique aspects of each Red Rim Project Area taken into consideration.
 
Uranium does not trade on the open market and many of the private sales contracts are not publicly disclosed. UEC used $40/lb as the forecast uranium price for the Project. This is based on: (i) the long-term contract price at the end of February 2022, which was $43.88/lb from Cameco Resources’ combination of UxC and Trade Tech reports (Cameco, 2022); (ii) the spot price at the end of February 2022 ($48.75/lb); (iii) UxC’s price forecast; and (iv) UEC’s understanding of market expectations. The table below contains the UxC uranium price forecast for Q4 of 2021.
 
Table 5:           UxC Q4 2021 Uranium Price Forecast ($/lb U3O8)
UxC Market Outlook Q4 2021
2021
2022
2023
2024
2025
UxC High Price Midpoint
$36.00
$46.37
$48.11
$52.13
$56.47
UxC Low Price Midpoint
$36.00
$40.02
$41.33
$42.59
$43.02
UxC Mid Price Midpoint
$36.00
$43.18
$44.14
$46.71
$48.39
 
In the opinion of the TRS QP, $40/lb is a conservative forecast price for the following reasons:
 
 
●
first, at the issuance date, both the long-term price and spot price are greater than $40/lb;
 
●
second, new physical uranium investment vehicles were created in 2021, such as the Sprott Physical Uranium Trust and the upcoming physical uranium fund backed by Kazatomprom, the National Bank of Kazakhstan and Genchi Global Ltd., which effectively remove uranium supply from the market;
 
●
third, the increasing demand for carbon-free energy and global plans to construct new nuclear reactors will increase demand for uranium; and
 
●
finally, there has already been a steady increase in the uranium price for the last three years with a sharp rise to greater than $40/lb in the second half of 2021, due in part to increased demand from the Sprott Physical Uranium Trust. Due to recent volatility in the uranium market, the QP believes that a conservative forecast price is justified.
 
For the above reasons, the TRS QP also believes that a $40/lb price is considered reasonable by the QP for use in cutoff determination and to assess reasonable prospects for eventual economic extraction.
 
Table 6:           Red Rim Project Area Drill Hole Information
 
Distance Between Drill Hole Locations
for Resource Classifications (ft)
Project Area
Measured
Indicated
Inferred
Red Rim
-
N/A
N/A
 
124
 
 
There are numerous reasons that mineralization was interpreted as measured resources within the Red Rim Project Area:
 
 
●
first, the drill hole spacing used to classify the measured resource is generally less than or equal to the 100 ft well spacing in a typical production pattern, which enables a detailed wellfield design to be completed;
 
●
second, the sub-surface geology within the Red Rim Project Area is very well characterized with aquifers that correlate consistent host sandstone intervals and reliable aquitards across the resource areas;
 
●
third, mineralization occurs along the redox interface, and the oxidized sands have different coloration than the reduced sands. These color variations are visible in drill cuttings and are used to map the redox interface and to guide drilling and wellfield design; and
 
●
finally, historic production has occurred both commercially and through research and development facilities at the Red Rim Project Area.
 
Mineral resources were estimated separately for the Red Rim Project Area. The estimates of measured and indicated mineral resources for the Red Rim Project Area are reported in the table below.
 
Table 7: Red Rim Project Area Measured and Indicated Mineral Resources
Mineral Resource
GT
Cutoff
Average Grade
% eU3O8
Ore Tons
(000s)
eU3O8
(lbs)
Red Rim
Measured
N/A
N/A
0
0
Indicated
0.25
0.17
337
1,142,000
Total Measured and Indicated
0.25
0.17
337
1,142,000
 
The estimates of inferred mineral resources for the Red Rim Project Area are reported in the table below.
 
Table 8: Red Rim Project Area Inferred Mineral Resources
Mineral Resource
GT
Cutoff
Average Grade
% eU3O8
Ore Tons
(000s)
eU3O8
(lbs)
Red Rim
Inferred
0.25
0.163
473
1,539,000
 
This combination of drill hole spacing, well-known subsurface geology, well-understood deposit model, successful production and the variety of data collected led WWC, the TRS QP, to conclude that the mineralization in areas with drill hole spacing tabulated above fit the definition for measured resources.
 
Present Condition of Property and Work Completed to Date
 
The Red Rim Project Area remains undeveloped and unpermitted. Current work is claim maintenance only.
 
The Company ’ s Planned Work
 
The Company plans to maintain the federal lode claims comprising the Red Rim Project Area.
 
125
 
 
Clarkson Hill Project
 
The following technical and scientific description for the Clarkson Hill (the “Clarkson Hill Project Area”) is based in part on the TRS titled “S-K 1300 Mineral Resource Report Wyoming Assets ISR Hub and Spoke Project, WY USA”, current on March 31, 2022, as prepared by WWC, a qualified firm (the “QP” herein). The Clarkson Hill Project Area does not have mineral reserves and is therefore considered an Exploration Stage property under S-K 1300 definitions.
 
Property Description
 
The Clarkson Hill Project is located in Natrona County, Wyoming, about 20 air miles southwest of Casper, Wyoming. The property is located on portions of sections 7, 17, and 18 of T31N R82W. Land ownership consists of federal lands administered by the BLM, state lands, and private lands. The Clarkson Hill Project Area is accessible from either Highway 220 or from the Oregon Trail Road, a Natrona County improved gravel road. From Highway 220, the site is approximately four miles northwest of the junction of the highway with Natrona County Road 318. From the Oregon Trail Road, the site is approximately three miles to the southeast. Site access from either route will require an arrangement with intervening private landowners for ingress/egress. The communities of Alcova and Bessemer Bend are located 10 and 13 miles away, respectively, and have limited services. The east-west BNSF railway in Casper is approximately 25 miles northeast of the Clarkson Hill Project Area.
 
Figure 1: Map of UEC Project Areas
 
126
 
 
Ownership
 
This Clarkson Hill Project Area is owned by UEC. UEC acquired the property from Anfield in 2022. Land ownership consists of federal lands administered by the BLM, state lands and private lands. The mineral ownership is comprised of unpatented mining lode claims held by UEC. The 25 mining claims are unpatented mining lode claims, comprise some 500 acres and are located on federal lands.
 
Table 1: Property Characteristics Summary
Project Area
State of Wyoming
Leases
Fee Mineral
Leases
Federal Lode
Mining Claims
Total
Clarkson Hill
Acreage
N/A
N/A
500
500
Leases/Claims
 
 
25
25
Total Annual Cost
 
 
$3,875
$3,875
 
Accessibility, Climate, Local Resources, Infrastructure and Physiography
 
The Clarkson Hill Project Area is in the Wind River Basin (the “WRB”) in Natrona County, Wyoming. The Clarkson Hill Project Area is located near the southern and eastern margin of the WRB, just west of the Casper Arch, which separates the PRB and WRB. The Clarkson Hill Project Area is located in a broad synclinal valley northeast of the North Granite Mountain Fault. The Clarkson Hill Project Area extends from the base to the top of a small mesa known as Clarkson Hill. Although the site is situated on public lands administered by the BLM, site access from either route will require an arrangement with intervening private land owners for ingress/egress. Although past mining on a limited scale was completed on the site in the 1950s, no infrastructure is present at the site. Utility corridors exist along the Oregon Trail Road, including power and gas transmission lines. The principal access roads to the site are maintained year-round and year round operations could be conducted at the Clarkson Hill Project Area.
 
The Clarkson Hill Project Area is located in the Wyoming Basin Level III ecoregion, which is characterized as rolling sagebrush steppe. This ecoregion is a broad intermontane basin interrupted by hills and low mountains and dominated by arid grasslands and shrublands. Most common native vegetation is sage brush and prairie grasses and to a lesser extent, rabbit brush. No threatened or endangered plants are known in the area. Limited upland areas have juniper and limber pine trees on north facing slopes. Most drainages in the area are ephemeral, flowing only during storm events or spring snow melt. The North Platte River some 4-5 miles south of the Clarkson Hill Project Area, is perennial and is one of the major river systems in Wyoming.
 
The top of the mesa is relatively flat, with an elevation of approximately 6,200 feet above mean sea level. The mesa has approximately 200 feet of vertical relief with some relatively steep slopes, in excess of 3:1 (horizontal to vertical). The currently defined area of mineralization is at the base and along the slope of the mesa.
 
Climate at the Clarkson Hill Project Area is continental semi-arid, with annual precipitation of 8-12 inches, mostly falling in the form of late autumnal to early spring snows. The summer months are usually hot with temperature occasionally exceeding 100° F, dry and clear except for infrequent rains. Winter conditions can be severe and can include sub-zero temperatures and ground blizzards.
 
Mule deer and pronghorn antelope are common, as are nesting raptors. Small rodents and rabbits are common. The Greater Sage Grouse, present in the general area of the Clarkson Hill Project Area, has been considered for listing as a threatened or endangered species.
 
In addition to site access, mine development will require utilities and water supply. No current infrastructure is present at the site. The nature and scope of the mine operations will greatly influence utility and water supply demands. The closest utility services are along the right of way of the Oregon Trail Road. Water supply could be obtained from locally permitted and constructed wells or from surface water sources, including the Platte River south of the Clarkson Hill Project Area. Water rights for both surface and ground water are administered by the Wyoming State Engineer’s Office and are subject to prior water rights. Options for on-site power demands would include extension of existing utilities to the Clarkson Hill Project Area or the generation of power on site.
 
127
 
 
The nearest community is the town of Casper, Wyoming. Casper is the second-largest city in Wyoming, according to the 2010 census, with a population of 55,316. Casper is the County Seat and has a long history as an oil boomtown. Several oilfield and mining service companies are located in Casper, including a caterpillar dealership, several drilling companies and industrial supply companies. Casper has an adequate workforce skilled in mining and mineral exploration to support the Clarkson Hill Project Area.
 
History
 
The initial discovery of mineralization at the Clarkson Hill Claims was made in the 1950s and “small amounts of ore were mined and shipped for treatment from the old pit area located in Section 17, T31N, R82W” (Ljung et al, March 1974). However, USGS and U.S. Bureau or Mines databases list the Clarkson Hill Project Area claims as a surface mine prospect with no reported production. The surface disturbance, based on site observation by the QP of the TRS, is shallow (less than 20 feet in depth) and limited in aerial extent. Surface disturbance is limited and there is no known infrastructure, tailings or mine waste apparent at the site. Drill data utilized in the estimation of mineral resources at the Clarkson Hill Project Area Claims in the TRS reflect a deeper horizon and is not affected by the presence of “old pit”. Surface disturbance from past exploration and/or limited mining activities at the site are readily apparent from current aerial views and on the ground.
 
128
 
 
Table 2: Historic Ownership and Operations at the Clarkson Hill Project Area
Year
Company
Operations/Activity
Amount
(No. of Drill holes)
Results of Work
1959
Utah Construction and Mining
Conducted uranium exploration drilling.
Not specified.
Unknown.
1968
Minerals Exploration Company (“MEC”) and Nuclear Reserves Inc.
MEC performed exploratory drilling between 1968 and 1981. In 1969, MEC and Nuclear Reserves Inc. entered into a joint venture. MEC held the Clarkson Hill Project Area through the mid-1980s, when they dropped the claims due to declining uranium prices.
250
Delineation of mineralized areas. Falling uranium prices in the 1980’s halted further development.
Unknown
EMC
EMC performed initial staking of 14 claims and compiled relevant data for the Clarkson Hill Project Area. EMC optioned the Clarkson Hill Project Area to Artha Resources, who conducted limited verification drilling during 2008. The Clarkson Hill Project Area reverted from Artha to EMC.
5
Unknown.
2008
Uranium One
EMC was acquired by Uranium One Inc. Through subsequent transactions Uranium One Inc. became Uranium One Americas Inc.
None.
Ownership transition.
2016
Anfield Resources, Inc. (now Anfield Energy, Inc.)
Anfield purchased the Clarkson Hill Project Area from Uranium One.
None.
Oversaw technical reporting and auditing of the Clarkson Hill Project Area resources.
2022
UEC
UEC acquire the Clarkson Hill Project Area from Anfield.
N/A
Ownership transition.
 
129
 
 
Permitting and Licensing
 
The Clarkson Hill Project Area is not permitted.
 
In order to conduct exploratory drilling, UEC would be required to obtain a DN approved by the State of Wyoming WDEQ/LQD and the BLM to allow surface use for the purposes of exploration by drilling.
 
Although not required at this stage, mine development would require a number of permits depending on the type and extent of development, the most significant permits being the Permit to Mine issued by the WDEQ/LQD and the Source Materials License also issued by the WDEQ/LQD, which is required for mineral processing of natural uranium. Any injection or pumping operations will require permits from the WDEQ, which has authority under the Safe Water Drinking Act that stems from a grant of primacy from the U.S. Environmental Protection Agency for administering UIC programs in Wyoming.
 
Geologic Setting, Mineralization, and Deposit
 
The Clarkson Hill Project Area is located near the southern and eastern margin of the WRB, just west of the Casper Arch, which separates the PRB and WRB. The WRB is a structural basin in west-central Wyoming. The basin is bounded by the Wind River Range to the west, the Casper Arch to the east, the Owl Creek Mountains to the north and the Granite Mountains to the south. The WRB is filled with marine, lacustrine and fluvial sediments ranging in age from Paleozoic to Cenozoic.
 
Both the Wind River and Fort Union Formations are Cenozoic fluvial sedimentary deposits containing sandstone with economic quantities of uranium. The primary source of sediments for the Wind River and Fort Union Formations in the eastern WRB was the ancestral Granite Mountains along the southern boundary of the basin. The Granite Mountains were formed during the Laramide Orogeny, a period of extensive mountain building, which began at the end of the Mesozoic Era and continued into the early Cenozoic Era. Subsequent erosion of the Granite Mountain highlands coupled with the down-warping of adjacent basins, such as the Wind River and Powder River Basins, combined to accumulate thousands of feet of sedimentary deposits.
 
The Paleocene Fort Union is the oldest Tertiary formation and consists of sandstone, siltstone, shale, coal and local conglomerates. The Fort Union is overlain, often unconformably, by the Eocene Wind River Formation, which consists of sandstones, conglomerates, siltstones and shale. Overlying the Wind River Formation is the Oligocene White River Formation. The White River Formation also consists of sandstones, siltstone and shale, however, along with fluvial deposition of the sands and clays, substantial volumes of windblown volcanic ash (tuffs) were also deposited. This volcanic ash is regarded by many as the source of uranium for many Wyoming sandstone uranium deposits. Economic uranium deposits in the WRB typically occur as roll-front deposits in porous sandstones within the Wind River and Fort Union Formations.
 
Mineralization at the Clarkson Hill Project Area occurs in the Fort Union Formation. Mineralization has also been reported in the overlying Wind River Formation, but exploration has not characterized this mineralization.
 
The Paleocene Fort Union Formation is a terrestrial sedimentary deposit consisting of sandstone, siltstone, shale, coal and local conglomerates. The primary source of Fort Union Formation sediments was the ancestral Granite Mountains west and south of the Clarkson Hill Project Area. At the Clarkson Hill Project Area, the Fort Union Formation is approximately 75 to 150 feet thick.
 
At the Clarkson Hill Project Area, mineralization occurs at multiple depths within the Fort Union Formation. Mineralized thickness ranges from less than five feet to over 20 feet, and the mineralized trend is approximately 5,500 feet long.
 
Data Verification
 
Data used for the resource estimate at the Clarkson Hill Project Area consisted of original geophysical and lithologic logs and an electronic drill hole database.
 
130
 
 
The TRS QP has reviewed the data verification procedures and considers the procedures credible and reliable.
 
Currently available drill data consists of radiometric equivalent data (eU3O8) for 255 drill holes; 250 pre-2008 and five completed in 2008. No additional recent drilling is known. Of the total 238 drill holes, 17 were cored. All original drill data including geophysical logs, lithological logs, and chemical assay certificates are available for the Clarkson Hill Project Area.
 
The pre-2008 drill data was originally collected by MEC, using company logging trucks and several third party contractors. The pre-2008 drill data includes geophysical logs from MEC (40%), Century Geophysical (4%), Birdwell (20%), Master Logging Inc. (10%), Velocity Radiation Surveys (22%) and GEO Nuclear Services (4%). It was standard industry practice at the time, and it is the current practice, to maintain calibration of geophysical logging equipment through use of the AEC/ERDA (now DOE) standard calibration pits located at Casper, Wyoming and Grand Junction, Colorado, for quality control and assurance with respect to radiometric equivalent data.
 
The geophysical logs include natural gamma, resistivity and spontaneous potential. All drill holes were drilled with fluid and logged in the open hole with no casing. All drill holes were vertical with no drift data.
 
Radiometric equivalent data is available for all the drill holes used in the mineral resource estimate (pre- and post-2008) and is incorporated into the drill hole database. The pre-2008 drill data was combined with data from 2008 drilling in an electronic database. During the preparation of the Clarkson Hill Project Area’s TRS, the available electronic data was reviewed for each of the mineral resource areas. This process included:
 
 
●
Plotting of the drill hole locations and comparing these to drill maps prepared by previous operators;
 
●
Screening the drill hole data and preparing a subset of the data containing mineralized intercepts meeting grade, thickness and GT cut-off criteria;
 
●
Correlating the mineralized intercept data such that mineral resource estimates reflected only continuous horizons within the Fort Union Formation;
 
●
Excluding any spurious mineralized horizons (laterally or by depth from the continuous horizons) from the mineral resource estimate. This process excluded mineralization in the overlying Wind River Formation; and
 
●
Examining any mineralized intercepts which were either substantially higher or lower than the surrounding values to insure the data was considered reliable and therefore suitable to be used.
 
Radiometric equivalent (%eU3O8) drill data from a total of 255 drill holes was available for the Clarkson Hill Project Area. Of the total 255 drill holes, 110 expressed uranium mineralization greater than 0.02 %eU3O8 and a GT greater than 0.10 and thus were included in the mineral resource estimate.
 
For verification purposes, 10% of the drill holes used in the mineral resource estimate (5% of total drill holes) were selected, representing the range of mineralization observed and year drilled. The earliest year was 1968 and the latest was 1981. Mineralization in the selected drill holes ranged from a high GT value of 3.5 to a low value of 0.16. Barren holes were examined but not included in the analysis.
 
Examination of these drill holes confirmed that the drill hole database reasonably reflects the depth, thickness and radiometric equivalent uranium grade from the original geophysical logs. The only discrepancy noted was the omission of isolated mineralized intercepts of lower grade and thickness, which were not included in the database, which the TRS QP concurs with. Re-calculation by the QP shows the original interpretation of radiometric equivalent uranium grade is approximately 8.2% less the re-calculated values, which means that the database is conservative with respect to grade as compared to the re-calculated holes.
 
Radioactive isotopes decay until they reach a stable non-radioactive state. The radioactive decay chain isotopes are referred to as daughters. When all the decay products are maintained in close association with the primary uranium isotope U238 for the order of a million years or more, the daughter isotopes will be in equilibrium with the parent isotope. Disequilibrium occurs when one or more decay products are dispersed as a result of differences in solubility between uranium and its daughters. Disequilibrium is considered positive when there is a higher proportion of uranium present compared to daughters and negative where daughters are accumulated and uranium is depleted. The DEF is determined by comparing radiometric equivalent uranium grade eU3O8 to chemical uranium grade. Radiometric equilibrium is represented by a DEF of 1, positive radiometric equilibrium by a factor greater than 1 and negative radiometric equilibrium by a factor of less than 1.
 
131
 
 
Except in cases where uranium mineralization is exposed to strongly oxidized conditions, most of the sandstone roll-front deposits reasonably approximate radiometric equilibrium. The nose of a roll-front deposit tends to have the most positive DEF and the tails of a roll-front tend to have the lowest DEF. The great majority of the data available for estimation of mineral resources is radiometric geophysical logging data from which the uranium content is interpreted. Radiometric equilibrium conditions may affect the grade and spatial location of uranium in the deposit. Generally an equilibrium ratio (Radiometric eU3O8 to Chemical U3O8) is assumed to be 1, i.e. equilibrium is assumed. For the Clarkson Hill Project Area, data is available for the evaluation of radiometric equilibrium. Available chemical data includes 17 core holes, however, only 13 were mineralized. The table below summarizes the results of the data available for evaluation of radiometric equilibrium conditions:
 
Table 3: Evaluation of Radiometric Equilibrium Conditions
Grade Cutoff
Weight % eU3O8
Number of
Core Holes
Number of
Samples
Equilibrium Ratio
Chemical: Radiometric
>0.03 % eU3O8
13
75
0.96
>0.05 % eU3O8
11
44
1.06
 
In summary, based on available data and considering typical grade cutoffs in the range of 0.03 to 0.05 Weight % eU3O8, an assumption of radiometric equilibrium (DEF = 1) is reasonable with respect to mineral resources. It is recommended that in the future assessment of mineral reserves, additional data relative to radiometric equilibrium be developed and equilibrium be evaluated for each potential mining area by elevation with respect to the water table.
 
The density of mineralization used in the Clarkson Hill Project Area resource estimation was 16 cubic feet per ton. This is the most common figure used for sandstone hosted, roll-front uranium deposits in Wyoming and Colorado, as noted extensively throughout the literature on these deposits. Density studies were completed by a previous operator MEC based on limited data from 17 core holes (13 of which were mineralized). This study stated an average density of 16.9 cubic feet per ton.
 
Based on the limited number of core sampled for density, and the overall average being very similar to the 16 ft3/ton average used historically, the TRS QP has assumed a density factor of 16 ft3/ton for the mineral resource estimates reported in Section 14. The variance in the use of a density factor of 16 versus 16.9 cubic feet per ton is 5%.
 
Mineral Resource Estimates
 
The following key assumptions were used for resource estimates, unless otherwise noted:
 
 
●
resources are located in permeable and porous sandstones; and
 
●
resources are located below the water table.
 
The primary method for estimating Clarkson Hill Project Area mineral resources is the GT contour method. The GT contour method is one of the most widely used and dependable methods to estimate resources in uranium roll-front deposits. The basis of the GT contour method is the GT (grade x mineralized thickness) values, which are determined for each drill hole using radiometric log results and a suitable GT cutoff, below which the GT value is considered to be zero. The GT values are then plotted on a drill hole map and GT contours are drawn accordingly using roll-front data derived from cuttings and the nature of the gamma anomalies. The resources are calculated from the area within the GT contour boundaries considering the DEF and the ore zone density.
 
132
 
 
The resource estimate methods, general parameters and mineralized cutoffs used at the Clarkson Hill Project Area are summarized below.
 
Table 4: Clarkson Hill Project Area Resource Estimate Methodology
 
 
 
 
Cutoff Parameters
Project Area
Mineral Resource
Estimation Method
Disequilibrium
Factor
Bulk Density
(ft 3 /Ton)
Min.
Grade
(% U 3 O 8 )
Min.
Thickness (ft)
Min. GT
Clarkson Hill
GT Contour
1.0
16.0
0.02
2
0.20
 
The Clarkson Hill Project Area only contains inferred mineral resources.
 
Table 5:           Clarkson Hill Project Area Drill Hole Information
 
Distance Between Drill Hole Locations
for Resource Classifications (ft)
Project Area
Measured
Indicated
Inferred
Clarkson Hill
-
-
50-100
 
The estimates of inferred mineral resources for the Clarkson Hill Project Area are reported in the table below.
 
Table 6: Clarkson Hill Project Area Inferred Mineral Resources
Mineral Resource
GT Cutoff
Average Grade
% eU3O8
Ore Tons
(000s)
eU3O8
(lbs)
Clarkson Hill
Inferred
0.2
0.58
957
1,113,000
 
This combination of drill hole spacing, well-known subsurface geology, well-understood deposit model, successful production and the variety of data collected led WWC, the TRS QP, to conclude that the mineralization in areas with drill hole spacing tabulated above fit the definition for measured resources.
 
Present Condition of Property and Work Completed to Date
 
The Clarkson Hill Project Area remains unpermitted and work includes maintaining the federal lode claims.
 
The Company ’ s Planned Work
 
The Company intends to maintain the federal lode claims comprising the Clarkson Hill Project Area.
 
133
 
 
Hobson CPP
 
The independent TRS for the Hobson CPP (the “Hobson Project Area”) has been prepared for UEC, under the supervision of WWC (the “QP” herein”), pursuant to S‑K 1300. This TRS identifies and summarizes the scientific and technical information and conclusions reached from the initial assessment (“IA”) to support disclosure of mineral resources on the Hobson Project Area. The objective of this TRS is to disclose the mineral resources on the Hobson Project Area. There are no resources associated with the Hobson Project Area.
 
Property Description
 
The Hobson Project Area is located in Karnes County, Texas, northwest of Karnes City, within the Gulf of Mexico Basin (the “GMB”) approximately 100 miles northwest of Corpus Christi and 40 miles southeast of San Antonio. This facility represents the ‘hub’ of UEC’s ‘hub-and-spoke’ business model, which comprises a central processing facility supplied with uranium-loaded IX resin from ISR mining at one or more of the project areas. The Hobson CPP was constructed in 1978 when the Hobson Project Area was mined. In 2008, the plant was refurbished. The Hobson CPP has previously processed uranium from UEC’s Palangana Mine satellite facility (i.e., the first UEC ‘spoke’), and UEC plans to also process uranium from its Burke Hollow, Goliad, and Salvo Project satellite facilities.
 
The CPP consists of a resin transfer circuit for loading/unloading IX resin from tanker trucks, an elution circuit to strip uranium from the IX resin, a circuit to precipitate uranium oxide solids, a yellowcake thickener (if necessary) and a modern, zero-emission vacuum dryer. Other facilities and equipment include an advanced laboratory with inductively coupled plasma mass spectrometry, office building, yellowcake and 11e.(2) byproduct material storage area, chemical storage tanks and one permitted and constructed waste disposal well. Another waste disposal well is permitted but has not been drilled, because additional disposal capacity is not needed at the current time. The Hobson CPP is permitted for one million lbs per year of uranium concentrates (yellowcake or U3O8). With an average dryer cycle time of 40 hours and a current dryer loading capacity of 8 to 10 drums, the plant appears capable of yielding up to 1.5 million lbs per year without requiring physical modifications. However, an increase would require a license modification, which UEC is currently pursuing with an amendment to its current license being under review for an increased capacity of up to 4.0 million lbs per year. WWC personnel visited the Hobson CPP on November 2, 2021, and found it to be in a well-maintained and apparently fully operational condition, although the plant was inactive (i.e., not processing a batch of uranium-loaded resin) during the site visit.
 
The Hobson CPP will serve as the ‘hub’ of the Hobson Project Area with the other project areas serving as satellite facilities, or the ‘spokes.’ For the purposes of the TRS, the satellite facilities are considered material to the Hobson CPP. Mineral is mined at the project areas and is then transported to the Hobson CPP for processing.
 
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Figure 1: Map of UEC Project Areas
 
135
 
 
Ownership
 
This Hobson Project Area is owned and operated by UEC. UEC has executed surface use and access agreements within the Project.
 
Accessibility, Climate, Local Resources, Infrastructure and Physiography
 
The Hobson Project Area can be accessed off Texas Highway 44 toward Freer. Halfway between San Diego and Freer is a turn-off to the south called Ranch Road 3196 that runs through the Hobson Project Area. The road continues south, after passing Palangana, for about six miles to the town of Benavides. Access is excellent with major two-lane paved roads connecting the three surrounding towns and dirt secondary roads connecting to Palangana. For water supply, shallow wells in the Goliad Formation in Duval County generally yield mineralized water, whereas deeper wells yield water of comparatively low mineral content and are used for water supply. Corpus Christi, with a population of 317,773 and Alice, with a population of 17,761, are the largest nearby cities that should provide an ample workforce and any necessary supplies for the Hobson Project Area.
 
The Hobson CPP is about 40 miles west of the Goliad Project Area, about 55 miles northwest of the Burke Hollow Project Area, about 50 miles north northwest of the Salvo Project Area, and about 90 miles north of the Palangana Project Area.
 
Equipment, supplies and personnel needed for exploration and day-to-day operation are available from population centers such as San Antonio and Corpus Christi. Specialized equipment for the wellfields is often available in Texas, but may need to be acquired from outside of the state. The local economy for all five project areas is geared toward oil and gas exploration, energy production and ranching operations, providing a well-trained and capable pool of workers for ISR production and processing operations. Workers will reside locally and commute to work daily. As a result of energy development since the early 1900s, all the project areas have existing or nearby electrical power, gas and adequate telephone and internet connectivity.
 
History
 
Uranium exploration and mining in South Texas primarily targets sandstone formations throughout the Coastal Plain bordering the Gulf of Mexico. The area has long been known to contain uranium oxide, which was first discovered in Karnes County, Texas in 1954 using airborne radiometric survey. The uranium deposits discovered were within a belt of strata extending 250 miles from the middle coastal plain southwestward to the Rio Grande. This area includes the Carrizo, Whitsett, Catahoula, Oakville and Goliad geologic formations. Open pit mining began in 1961 and ISR mining was initiated in 1975. The uranium market experienced lower demand and price in the late 1970s, and in 1980 there was a sharp decline in all Texas uranium operations.
 
During the late 1970s and early 1980s, exploration for uranium in South Texas had evolved towards deeper drilling targets within the known host sandstone formations. Deeper exploration drilling was more costly and excluded many of the smaller uranium mining companies from participating in the down-dip, deeper undrilled trend extensions. Uranium had been mined by several major oil companies in the past in South Texas, including Conoco, Mobil, Humble (later Exxon), Atlantic Richfield (“ARCO”) and others. Mobil had found numerous deposits in South Texas in the past, including the O’Hern, Holiday-El Mesquite and several smaller deposits, mostly in Oligocene-age Catahoula Formation tuffaceous sands. ARCO discovered several Oakville Formation (Miocene-age) uranium-bearing deposits and acquired other deposits located nearby in Live Oak County. They were exploring deeper extensions of Oakville Formation trends when they discovered the Mt. Lucas deposit, located near Lake Corpus Christi in Live Oak County near the Bee County line.
 
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Ownership, control and operation of the Hobson Project Areas has varied greatly since the 1950s. The table below summarizes the operations and activities of various companies, the timeframe during which these activities were completed, and the results of the work. The table below also summarizes historic drilling and the number of drill holes completed during each period.
 
Table 1: Historic Ownership and Operations at the Hobson Project Area
Year
Company
Operations/Activity
Amount
(No. of Drill holes)
Results of Work
1979-1988
Everest Minerals Corporation (later Everest Exploration, Inc. (EEI))
Hobson facility constructed.
N/A
N/A
2005
Standard Uranium
N/A
N/A
N/A
2006
EMC
Standard Uranium and EMC merger.
Extensive renovation of the plant.
N/A
N/A
2007
Uranium One
Renovation of the plant.
N/A
CPP capable of processing 1.5 million lbs per year.
2009
UEC
Acquires the Hobson Plant through acquisition of South Texas Mining Venture (STMV)/Uranium One.
N/A
N/A
 
Permitting and Licensing
 
The Hobson CPP is fully permitted as necessary to process loaded resins from nearby satellite facilities.
 
Table 2: Permits
 
Permits
Property
RRC (Surface
Mining and
Reclamation
Division)
Exploration Permit
TCEQ Class I
Waste
Disposal Well
Permit(s)
TCEQ UIC
Mine Area
Permit
TCEQ Area
Permit and
Production
Area
Authorization
TCEQ/EPA
Aquifer
Exemption
TCEQ
Radioactive Materials
License
Hobson CPP
N/A
2
N/A
N/A
N/A
✔
 
Geologic Setting, Mineralization, and Deposit
 
The Hobson Project Area is located in the South Texas Uranium Province (“STUP”), which lies along the GMB. The coastal plains of the GMB were formed by the downfaulting and down warping of Paleozoic Era (252-541 Mya) basement rocks during the breakup of the Paleozoic mega continent, Pangaea and the opening of the North Atlantic Ocean in the Late Triassic Epoch (201-237 Mya). The Rocky Mountain Uplift in the Paleogene Period (43-65 Mya) gave rise to the vast river systems that flowed toward the Gulf of Mexico, carrying abundant sediments. Deposits typically thicken down-dip towards the Gulf of Mexico from western-northwestern sources. Stratigraphy in this area can be complex because of the cyclic deposition of sedimentary facies. Shallow inland seas formed broad continental shelves that covered most of Texas and deposited sedimentary units that are dominantly continental clastic with some near shore and shallow marine facies. Volcanic episodes during deposition (more than 20 Mya) are credited as being the source of the uranium deposits through ash-fall and related sediments.
 
Three main structural zones are present in the STUP: the Balcones Fault Zone, the San Marcos Arch and the Rio Grande Embayment. The Balcones Fault Zone is north of the Hobson Project Area and divides the Upper Cretaceous and Eocene strata. The Balcones Fault Zone is comprised of mainly normal faults that displace sediments by up to 1,500 ft, moving downward to the Gulf of Mexico. The San Marcos Arch, northeast of the Hobson Project Area between the Rio Grande Embayment and East Texas Basin, is a broad area of lesser subsidence and a subsurface extension of the Llano Uplift. The arch is crossed by basement-related normal faults that parallel the buried Ouachita Orogenic Belt of Paleozoic age. The Rio Grande Embayment is a small, deformed basin that lies between the El Burro Uplift in northeast Mexico and the basin marginal Balcones Fault Zone to the south. Some data indicate that the embayment was possibly compressed during the Laramide Orogeny in the Late Cretaceous–Paleogene.
 
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The uranium-bearing units in the STUP include most sands and sandstones in Tertiary formations ranging in age from Eocene (oldest) to Lower Pliocene (youngest).
 
All mineralization at the Hobson Project Area occurs in the Goliad Formation. The Goliad Formation was originally classified as Pliocene in age by most sources, but the formation has been reclassified as early Pliocene to middle Miocene after recent research revealed the presence of indigenous Pliocene-aged mega-fossils occurring in upper Goliad sands, whereas the lower Goliad fluvial sands are correlative with down-dip strata containing benthic foraminifera indicating a Miocene age. The Geology of Texas map published by the Texas Bureau of Economic Geology (“BEG”) in 1992 classifies the Goliad as Miocene in age.
 
The BEG’s geologic map of Texas describes the Goliad Formation as clays, sandstones, marls, caliches, limestones and conglomerates with a thickness of 100 ft to 500 ft. Above the Goliad Formation lies the Deweyville Formation, Beaumont Clay, Lissie Formation, Montgomery Formation and the Willis Sand, which are composed of sand, gravel, silt and clay.
 
Uranium mineralization occurs in zones that are located in fluvial channel sands of the Goliad Formation. These deposits consist of multiple mineralized sand horizons which are separated vertically by confining beds of silt, mudstone and clay.
 
Data Verification
 
No data verification is necessary though a site visit by the TRS QP was performed on November 2, 2021.
 
Mineral Resource Estimates
 
No mineral resources or reserves are present at the Hobson Project Area.
 
Present Condition of Property and Work Completed to Date
 
The Hobson Project Area remains in a care and maintenance status. The radioactive materials license is currently in timely renewal with the TCEQ.
 
The Company ’ s Planned Work
 
The Company plans to maintain the Hobson Project Area and related Hobson CPP in a care and maintenance status pending restart of uranium recovery operations.
 
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Palangana ISR Project
 
The independent TRS for the Palangana ISR Project (the “Palangana ISR Project Area”) has been prepared for UEC, under the supervision of WWC (the “QP” herein), pursuant to S-K 1300. This TRS identifies and summarizes the scientific and technical information and conclusions reached from the IA to support disclosure of mineral resources on the Palangana ISR Project Area. The objective of this TRS is to disclose the mineral resources on the Palangana ISR Project Area.
 
Property Description
 
The Palangana ISR Project Area is 25 miles west of the town of Alice, Texas and 15 miles to the southeast of Freer, Texas in Duval County. Corpus Christi is about 65 miles to the east of the Palangana ISR Project Area. The Palangana ISR Project Area has been developed by several operators since the 1950s and has several wellfields that are drilled and ready for operations. In addition, the Palangana ISR Project Area produced 563,600 lbs U3O8 from 2010 to 2016 and currently has the infrastructure to begin mining immediately. No resources are reported in areas outside of the Palangana ISR Project Area boundary. There are no reserves associated with the Palangana ISR Project Area and it is considered a remote ‘satellite’ to the Hobson CPP.
 
139
 
 
Figure 1: Map of UEC Project Areas
 
140
 
 
Ownership
 
There are nine current leases covering the area of interest of the Palangana ISR Project Area, which total to 6,987 acres. The PA-1 deposit is on the DeHoyos lease, while the PA-2 deposit, the Dome trend and the CC Brine trend are on the Palangana ISR Project Area Ranch Lease. Bordering the east side of the Palangana ISR Project Area Ranch Lease is the White Bell Ranch Lease, comprised of 1,000 acres, which contains the Jemison Fence and Jemison East trends. The fourth major lease is the Garcia/Booth lease, which borders the east side of the DeHoyos property. It contains the NE Garcia and SW Garcia trends.
 
Current lease ownership is in STMV, which is a Texas limited partnership that is wholly and indirectly owned by UEC through its subsidiary URN Resources Inc. (as to 99%), and through its direct acquisition of the remaining 1% of STMV from EEI. The PA-1 deposit is on the DeHoyos lease, while the PA-2 deposit is on the Schallert lease.
 
Table 1: Palangana ISR Project Area Mineral Lease Summary
Project Area
Fee Mineral Leases
County
Expires
Palangana
Acreage
6,987
 
 
Leases
9
Duval
Held by shut-in royalty
 
Accessibility, Climate, Local Resources, Infrastructure and Physiography
 
The Palangana ISR Project Area uranium ISR, of which PA-1 and PA-2 are a part, occurs in the South Texas Uranium Belt between San Antonio and Corpus Christi in Duval County. Corpus Christi is about 65 miles to the east of the Palangana ISR Project Area property. It can be accessed off Texas Highway 44 toward Freer. Halfway between San Diego and Freer is a turn-off to the south called Ranch Road 3196 that runs right through the property about eight miles from the turn. The road continues southward about six miles to the town of Benavides. Access is excellent, with major two lane roads connecting the three surrounding towns and dirt secondary roads connecting the Palangana ISR Project Area to these. Corpus Christi, 65 miles east, is the largest nearby metropolitan district.
 
The region’s subtropical climate allows uninterrupted, year-round mining operations. Temperatures during the summer range from 75° to 95°F, although highs above 100°F are common; winter temperatures range from 45° to 65°F. Humidity is generally over 85% year-round, and commonly exceeds 90% during the summer months. Average annual rainfall is 30 inches. The climate is characterized by a warm desert-like to subtropical climate and low gentle relief with elevations of 300 to 500 ft above sea level.
 
The dome area to the west of the PA-1 and PA-2 deposits is a concentric collapsed area with the surrounding landscape being hilly and elevated. Surface water generally drains away from the dome area although no prominent creeks or rivers are evident.
 
The uranium leaseholders under most of the current leases have conveyed the surface rights under certain conditions of remuneration. These conditions essentially require payments for surface area taken out of usage.
 
Excepting the wellfield development, much of the infrastructure is in place, including roads and power maintenance faculties. A portion of the well control facilities and wellfields are yet to be constructed.
 
History
 
Uranium mineralization was discovered during potash exploration drilling of the Palangana ISR Project Area Dome’s gypsum-anhydrite cap rock in 1952 by Columbia Southern Inc. (“CSI”), a subsidiary of Pittsburgh Plate Glass Corp. CSI conducted active uranium exploration drilling on the property starting in March 1956. Records of CSI’s exploration work are unavailable. However, both CSI and the AEC estimated underground mineable uranium resources. The only known details of the estimation method include a 0.15% eU3O8, a minimum mining thickness of 3 ft and widely spaced drilling on a nominal 200 ft exploration grid.
 
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Union Carbide Corporation (“UCC”) acquired the Palangana ISR Project Area property in 1958 and initiated underground mine development. Development work was quickly abandoned due to heavy concentrations of H2S gas, and UCC dropped the property. UCC reacquired the Palangana ISR Project Area in 1967 after recognizing that it would be amenable to exploitation by the emerging ISR mining technologies. During the 1960s and 1970s, UCC drilled over 1,000 exploration and development holes and installed over 3,000 injection-production holes in a 31-acre block.
 
UCC attempted an ISR operation from 1977 through 1979 using a push/pull injection/recovery system. Ammonia was used as the lixiviate that later caused some environmental issues with groundwater. About 340,000 lbs of U3O8 were produced from portions of a 31-acre wellfield block. The production pounds indicate a 32% to 34% recovery rate. The push/pull injection/recovery system was later proven to be less productive than well configurations or patterns of injection wells around a recovery well. Further, the wellfield was developed without any apparent regard to the geology of the deposit, including disequilibrium. The UCC ISR work was basically conducted at a research level in contrast to the current level of knowledge. The historic production area lies on the western side of the dome and is not part of this resource estimate.
 
UCC placed the property leases up for sale in 1980. In 1981, Chevron Corporation (“Chevron”) acquired the UCC leases and conducted their own resource evaluation. After the price of uranium dropped to under US$10/lb, General Atomics acquired the property and dismantled the process plant in a property-wide restoration effort. Upon formal approval of the clean up by the Texas Natural Resources Conservation Commission and the NRC, the property was returned to the landowners in the late 1990s.
 
In 2005, EEI acquired the Palangana ISR Project Area property and later joint ventured with Energy Metals through the formation of STMV. An independent consultant estimated that there were 5.7 Mlbs of inferred resources in an area now referred to as the Dome trend proximal to the dome on the west side north of the prior UCC leach field. In 2006 and 2007, Energy Metals drilled approximately 200 additional confirmation and delineation holes. The PA-1 and PA-2 areas were found during this drilling program. In 2008, Energy Metals was acquired by Uranium One. During 2008 and 2009, the remainder of the holes on this Palangana ISR Project Area were drilled by Uranium One. During this time, the five exploration trends to the east of the dome were identified and partially delineated. In December 2009, UEC acquired 100% ownership of STMV.
 
 
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The table below describes the historic ownership and operations at the Palangana ISR Project Area.
 
Table 2: Historic Ownership and Operations at the Palangana ISR Project Area
Year
Company
Operations/Activity
Amount
(No. of Drill holes)
Results of Work
1952
CSI
Original controller of Palangana ISR Project Area.
Records of CSI’s exploration work was unavailable
Right to mine secured. Uranium mineralization was discovered during potash exploration drilling of the Palangana Dome in 1952 by CSI. CSI conducted active uranium exploration drilling on the property starting in March 1956. CSI and the AEC estimated underground mineable uranium resources. The estimation method included identifying 0.15% eU 3 O 8 , a minimum mining thickness of 3 ft, and exploration was widely spaced drilling on a nominal 200 ft exploration grid.
1958
UCC
UCC acquired the Palangana ISR Project Area in 1958 and ceased operations shortly after until 1967, when operations resumed for over a decade due to new technology. UCC placed the Palangana ISR Project Area up for lease in 1980.
Over 1,000 exploration and development holes in 1960s and 70s (296 cores)
Over 3,000 injection-production holes
Early development work was quickly abandoned because of concentrations of Hydrogen Sulfide (H 2 S) gas. The property was reacquired in 1967 after emerging ISR mining technologies were available. ISR operation occurred from 1977 through 1979. About 340,000 lbs of U 3 O 8  were produced from portions of a 31-acre wellfield block. The production pounds indicate a 32% to 34% recovery rate. The ISR work was conducted at a research level in contrast to the current level of knowledge. Historic production lies on the western flank of the dome and is not part of this resource estimate.
1981 –  Unknown
Chevron
Chevron acquired the UCC leases and conducted their own resource evaluation.
N/A
Chevron resource evaluation indicated that an estimated 8 million lbs (non-CIM compliant) of eU 3 O 8  existed on the entire site within unclassified material containing 0.125% eU 3 O 8 .
Unknown to late 1990 ’ s
General Atomics
General Atomics acquired the Palangana ISR Project Area for restoration work.
N/A
General Atomics acquired the property and dismantled the process plant in a property-wide restoration effort. Upon formal approval of the clean up by the Texas Natural Resources Conservation Commission and the NRC, the property was returned to the landowners in the late 1990s.
Late 1990 ’ s to 2005
N/A
The Palangana ISR Project Area returned to surface rights landowners.
N/A
N/A
2005
EEI and Energy Metals/Uranium One
EEI acquires Palangana and joint ventured with Energy Metals by forming the STMV. In 2008, Energy Metals was acquired by Uranium One.
Approximately 236 exploration and confirmation holes.
Blackstone (2005) estimated 5.7 million lbs of inferred resources in the area referred to as the Dome trend proximal to the dome on the west side, north of the prior UCC leach field. In 2006 and 2007, Energy Metals drilled approximately 200 additional confirmation and delineation holes. The PA-1 and PA-2 areas were delineated during this drilling program. During 2008 and 2009, the remainder of the holes were drilled by Uranium One. During this time, five exploration trends on the east side of the dome were identified and partially delineated.
 
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Table 2: Historic Ownership and Operations at the Palangana ISR Project Area (Continued)
Year
Company
Operations/Activity
Amount
(No. of Drill holes)
Results of Work
2009
UEC
Palangana Project Area acquired by UEC from Uranium One.
N/A
UEC acquires Palangana. SRK was retained by UEC in 2010 to provide an independent resource and reserve evaluation on PA-1 and PA-2 and adjacent exploration areas. SRK concluded the sandstone, roll-front deposits on the east side of the Palangana Dome contain significant resources of eU3O8. Specifically, PA-1 and PA-2 bodies are adequately delineated for the calculation of Measured and Indicated Resources. SRK developed resource estimates within distinct sand and roll-front zones utilizing detailed computer block modeling of grade and GT modeling. The results of the resource estimation are complex and presented in more detail in this report. In 2010, UEC resumed production at Palangana. Approximately 563,600 pounds were produced from 2010 to 2016 in PA-1, PA-2 and PA-3.
 
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Permitting and Licensing
 
All of the environmental baseline studies were completed as required by the permitting process. Completed studies include cultural resources (including archaeology), socioeconomic impact and soils mapping. Flora and fauna studies are completed as are background radiation surveys. The cultural resources study found no adverse impacts to the site and socioeconomic impacts are projected to be positive for the community.
 
The permitting process commenced in the summer of 2006 and was fully completed in January 2010. In November 2008, the larger Area Mine Permit was issued by TCEQ. In January 2009, PA-1 Permit was approved by TCEQ. The Class I disposal well permits for WDW-418 and WDW-419 were issued in March 2009. The Radioactive Material License was issued by the TCEQ in January 2010. This would complete all of the permitting requirements to begin operation at the Palangana ISR Project Area.
 
As far as the studies have shown, the Palangana ISR Project Area has no environmental liabilities. The UCC ISR field and plant site, partially on the DeHoyos tract, have been fully restored and reclaimed and are not hierologically linked to PA-1 and PA-2. The TRS QP has not assessed the potential for environmental liability associated with the Hobson Plant. UEC, as part of the acquisition of STMV has obtained all necessary permits and licenses to begin ISR mining operations at the Palangana ISR Project Area.
 
Geologic Setting, Mineralization, and Deposit
 
The Palangana ISR Project Area is located in the STUP, which lies along the GMB. The coastal plains of the GMB were formed by the downfaulting and down warping of Paleozoic Era (252-541 Mya) basement rocks during the breakup of the Paleozoic mega continent, Pangaea, and the opening of the North Atlantic Ocean in the Late Triassic Epoch (201-237 Mya). The Rocky Mountain Uplift in the Paleogene Period (43-65 Mya) gave rise to the vast river systems that flowed toward the Gulf of Mexico, carrying abundant sediments. Deposits typically thicken down-dip towards the Gulf of Mexico from western-northwestern sources. Stratigraphy in this area can be complex because of the cyclic deposition of sedimentary facies. Shallow inland seas formed broad continental shelves that covered most of Texas and deposited sedimentary units that are dominantly continental clastic with some near shore and shallow marine facies. Volcanic episodes during deposition (more than 20 Mya) are credited as being the source of the uranium deposits through ash-fall and related sediments.
 
Three main structural zones are present in the STUP: the Balcones Fault Zone; the San Marcos Arch; and the Rio Grande Embayment. The Balcones Fault Zone is north of the Palangana ISR Project Area and divides the Upper Cretaceous and Eocene strata. The Balcones Fault Zone is comprised of mainly normal faults that displace sediments by up to 1,500 ft moving downward to the Gulf of Mexico. The San Marcos Arch, northeast of the Palangana ISR Project Area between the Rio Grande Embayment and East Texas Basin, is a broad area of lesser subsidence and a subsurface extension of the Llano Uplift. The arch is crossed by basement-related normal faults that parallel the buried Ouachita Orogenic Belt of Paleozoic age. The Rio Grande Embayment is a small, deformed basin that lies between the El Burro Uplift in northeast Mexico and the basin marginal Balcones Fault Zone to the south. Some data indicates that the embayment was possibly compressed during the Laramide Orogeny in the Late Cretaceous–Paleogene.
 
The uranium-bearing units in the STUP include most sands and sandstones in Tertiary formations ranging in age from Eocene (oldest) to Lower Pliocene (youngest).
 
All mineralization at the Palangana ISR Project Area occurs in the Goliad Formation. The Goliad Formation was originally classified as Pliocene in age by most sources, but the formation has been reclassified as early Pliocene to middle Miocene after recent research revealed the presence of indigenous Pliocene-aged mega-fossils occurring in upper Goliad sands, whereas the lower Goliad fluvial sands are correlative with down-dip strata containing benthic foraminifera indicating a Miocene age. The Geology of Texas map published by BEG in 1992 classifies the Goliad as Miocene in age.
 
The BEG’s geologic map of Texas describes the Goliad Formation as clays, sandstones, marls, caliches, limestones and conglomerates with a thickness of 100 ft to 500 ft. Above the Goliad Formation lies the Deweyville Formation, Beaumont Clay, Lissie Formation, Montgomery Formation and the Willis Sand, which are composed of sand, gravel, silt and clay.
 
Uranium mineralization occurs along oxidation/reduction interfaces in fluvial channel sands of the Goliad Formation. These deposits consist of multiple mineralized sand horizons, which are separated vertically by confining beds of silt, mudstone and clay.
 
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Uranium mineralization at the Palangana ISR Project Area is typical of Texas roll-front sandstone deposits. The formation of roll-front deposits is largely a groundwater process that occurs when uranium-rich, oxygenated groundwater interacts with a reducing environment in the subsurface and precipitates uranium. The most favorable host rocks for roll-fronts are permeable sandstones with large aquifer systems. Interbedded mudstone, claystone and siltstone are often present and aid in the formation process by focusing groundwater flux. The geometry of mineralization is dominated by the classic roll-front “C” shape or crescent configuration at the redox interface. The highest-grade portion of the front occurs in a zone termed the “nose” within reduced ground just ahead of the alteration front. Ahead of the nose, at the leading edge of the solution front, mineral quality gradually diminishes to barren within the “seepage” zone. Trailing behind the nose, in oxidized (altered) ground, are weak remnants of mineralization referred to as “tails” which have resisted re-mobilization to the nose due to association with shale, carbonaceous material or other lithologies of lower permeability. Tails are generally not amenable to ISR because the uranium is typically found within strongly reduced or impermeable strata, therefore making it difficult to leach.
 
The local geology at the Palangana ISR Project Area is characterized by the occurrence of a Gulf Coast piercement salt dome. This dome is approximately two miles in diameter and is overlain by Pliocene sediments of the Goliad Formation. The Palangana ISR Project Area dome is marked at the surface by a shallow circular basin surrounded by low hills rising above the basin floor. The Palangana ISR Project Area dome has an almost perfectly circular salt core with a remarkably flat top that is approximately 10,000 ft across and occurs from 800 to 850 ft below ground surface (“bgs”). Radial faulting is present in all Goliad Formation sands on the flanks of the dome due to uplift during the intrusion of the dome. Faults and fractures also exist in a random nature in the sands above the caprock due to dissolution of the salt dome from groundwater. Once the salt was solubilized and removed, the overlying sediment collapsed, creating the basin and associated faults.
 
The Goliad Formation at the Palangana ISR Project Area is composed of fine- to medium-grained, often silty, channel sands interbedded with lenses of mudstone and siltstone. For the most part, the sand is very sparsely cemented although it varies from friable to indurated. There is known to be minor faulting on the north end of the PA-1 deposit. The Palangana ISR Project Area stratigraphy is horizontal to sub-horizontal, with a 2o to 3o southeasterly dip at most.
 
Data Verification
 
A review was made of UEC’s project files at their office in Corpus Christi, Texas. Review of information included both analog and digital gamma ray logs with conversions to chemical equivalents by interval, PFN logs with gamma and chemical equivalents, edited SP and resistivity logs flagging correlated sand zones and marker clays, interpretive GT maps, historical reports, memos, field photographs cuttings and invaluable discussions with experienced field personnel.
 
Over 100 drill logs, numerous cross-sections and analytical data were reviewed in detail and cross checked against input files in access for computer entry by Sean Muller. Some errors in correlation were discovered particularly for PA-2, not of a technical nature but of a correlation nature. Early interpretations of the mineralized sand zone had called the “E” sand, the “C”. This miscoding was recognized during computer validation runs and corrected with the assistance of UEC’s geologists. Other potential data miscodings were found where early rotary samples were either mixed with drilling mud or field interpretation of the oxidation-reduction zone was poor. To validate and correct these data entries to the model, the PFN tool proved invaluable providing disequilibrium data supporting either oxidized or reduced samples where neither could be discerned in the field. This was coordinated and corrected in the database.
 
As far as could be determined, the down-hole eU3O8 data from the Palangana ISR Project Area exploration programs are reliably represented by the continuous gamma-logs from the various drilling programs. These logs were run by in-house and independent contract logging companies. The procedure followed was standard to uranium industry practice and all required correction factors were recorded on the headings of the logs reviewed.
 
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To further quantify the corrected DEF data, the areal distribution by roll-front zone was mapped and integrated into the DEF adjusted resource estimate. This was done by taking half the distance of the average PFN hole spacing per hole in a zone for defining an area of influence on all of the gamma holes in a resource trend. Next, modeled blocks that fell outside of this range but still fell in the block were assigned the average DEF for the block. This technique far surpasses the older methodology of taking a deposit-wide average of the DEF for the conversion to chemical.
 
Quality control measures for PFN logging could be improved with periodic calibration of the probes. Adjustment of the data using the relogging of a core hole with known chemical values partially compensated for this QC omission. It has been concluded that adjustment of the DEF values to account for the PFN drift is acceptable.
 
Generally, the DEF of a deposit is based upon an average of the disequilibrium in core holes. This practice is a limitation in roll-front deposits that are in disequilibrium such as those found in South Texas. UEC has compensated for this limitation by using the PFN probe. To increase the accuracy of the application of the post-probing calibration, UEC employed a site and mineralized zone specific application of the DEF results rather than the averaging method. This method compensates for a limitation commonly used by the industry by increasing the accuracy of the prediction of grade in a specific area.
 
Mineral Resource Estimates
 
The following key assumptions were used for resource estimates, unless otherwise noted:
 
 
●
resources are located in permeable and porous sandstones; and
 
●
resources are located below the water table.
 
Mineral resource estimation methods used for the Palangana ISR Project Area include the GT contour, GT outline, block model using VULCAN software and Delaunay Triangulation method using RockWorks software. Each method is briefly discussed below.
 
The GT contour and outline methods are some of the most widely used and dependable methods to estimate resources in uranium roll-front deposits. The basis of these methods is the GT (grade x mineralized thickness) values, which are determined for each drill hole using radiometric log results and a suitable GT cutoff, below which the GT value is considered to be zero. The GT values are then plotted on a drill hole map and GT contours or a GT outline are drawn accordingly using roll-front data derived from cuttings and logs data trends. The resources are calculated from the area within the GT contour/outline boundaries considering the DEF and the ore zone density. The GT outline method was used to estimate the mineral resources at portions of the Palangana ISR Project Area (Dome, NE Garcia, SW Garcia, CC Brine, Jemison Fence and Jemison East).
 
147
 
 
The resource estimate methods, general parameters and mineralized cutoffs used at the Palangana ISR Project Area are summarized in the table below.
 
Table 3: Palangana ISR Project Area Resource Estimate Methodology
 
 
 
 
Cutoff Parameters
Project Area
Mineral Resource
Estimation Method
Disequilibrium
Factor
Bulk
Density
(ft 3 /Ton)
Min.
Grade
(% U 3 O 8 )
Min.
Thickness
(ft)
Min. GT
 
PA-1 and PA-2
Block Models (VULCAN) Method
1.453 - 2.424 1
17.00
0.00
None 2
None
Palangana
Dome, NE Garcia, SW Garcia, OC Brine, Jemison Fence and Jemison East
GT Contouring in Conjunction with 3D Block Models
None
17.00
0.02
None 2
0.10
Notes
1.    A range of disequilibrium data is presented because each production area/trend was divided into multiple zones that were each assigned a separate DEF. For more data on the Palangana ISR Project Area, please see NI 43-101 TRS on Resources, Uranium Energy Corp., Palangana ISR Uranium Project, Deposits PA-1, PA-2 and Adjacent Exploration Areas, Duval County, Texas. 
2.    Minimum thickness was not reported for several of the project areas. However, minimum thickness is inherent in minimum GT which is reported in every estimate other than PA-1 and PA-2 for the Palangana ISR Project Area.
 
Based on the depths of mineralization, average grade, thickness, and GT, it is the TRS QP’s opinion that the mineral resources at the Palangana ISR Project Area can be recoverable by ISR methods using a long-term uranium price of $40/lb. The cutoffs were determined separately for each Palangana ISR Project Area with the unique aspects of each project area taken into consideration.
 
Uranium does not trade on the open market and many of the private sales contracts are not publicly disclosed. UEC used $40/lb as the forecast uranium price for the Project. This is based on: (i) the long-term contract price at the end of February 2022, which was $43.88/lb from Cameco Resources’ combination of UxC and Trade Tech reports (Cameco, 2022); (ii) the spot price at the end of February 2022 ($48.75/lb); (iii) UxC’s price forecast; and (iv) UEC’s understanding of market expectations. The table below contains the UxC uranium price forecast for Q4 of 2021.
 
Table 4: UxC Q4 2021 Uranium Price Forecast ($/lb U3O8)
UxC Market Outlook Q4 2021
2021
2022
2023
2024
2025
UxC High Price Midpoint
$36.00
$46.37
$48.11
$52.13
$56.47
UxC Low Price Midpoint
$36.00
$40.02
$41.33
$42.59
$43.02
UxC Mid Price Midpoint
$36.00
$43.18
$44.14
$46.71
$48.39
 
In the opinion of the TRS QP, $40/lb is a conservative forecast price for the following reasons:
 
 
●
first, at the issuance date, both the long-term price and spot price are greater than $40/lb;
 
●
second, new physical uranium investment vehicles were created in 2021, such as the Sprott Physical Uranium Trust and the upcoming physical uranium fund backed by Kazatomprom, the National Bank of Kazakhstan and Genchi Global Ltd., which effectively remove uranium supply from the market;
 
●
third, the increasing demand for carbon-free energy and global plans to construct new nuclear reactors will increase demand for uranium; and
 
●
finally, there has already been a steady increase in the uranium price for the last three years with a sharp rise to greater than $40/lb in the second half of 2021, due in part to increased demand from the Sprott Physical Uranium Trust. Due to recent volatility in the uranium market, the TRS believes that a conservative forecast price is justified.
 
For the above reasons, the TRS QP also believes that a $40/lb price is considered reasonable by the QP for use in cutoff determination and to assess reasonable prospects for eventual economic extraction.
 
148
 
 
Measured, indicated and inferred resource classifications at the Palangana ISR Project Area are defined by the density of the drill hole data. Higher drill hole densities allow more confidence in the shape and size of the interpreted mineral horizons and the accuracy of the geologic model. The table below details the resource classification criteria used in the resource estimates in the Palangana ISR Project Area.
 
Table 5: Resource Classification Criteria by Palangana ISR Project Area
 
Distance Between Drill Hole Locations for
Resource Classifications (ft)
Project Area
Measured
Indicated
Inferred
 
PA-1 and PA-2
< 50
50 – 100
> 100
Palangana
Dome, NE Garcia, SW Garcia, OC Brine, Jemison Fence and Jemison East
-
-
≤ 400
 
There are several reasons that mineralization was interpreted as measured resources within the Palangana ISR Project Area:
 
 
●
first, the drill hole spacing used to classify the measured resource is generally less than or equal to the 100 ft well spacing in a typical production pattern, which enables a detailed wellfield design to be completed;
 
●
second, the sub-surface geology within each Palangana ISR Project Area is very well characterized, with aquifers that correlate, consistent host sandstone intervals and reliable aquitards across the Palangana ISR Project Area;
 
●
third, mineralization in the Goliad Formation occurs along the redox interface and the oxidized sands have different coloration than the reduced sands. These color variations are visible in drill cuttings and are used to map the redox interface and mineral trends; and
 
●
finally, historic production has occurred commercially at the Palangana ISR Project Area from 1977 to 1979 and again from 2010 to 2016 (UEC). Approximately 340,000 lbs of U3O8 were produced during historic operations and 563,600 lbs U3O8 were produced from 2010-2016.
 
This combination of drill hole spacing, well-known subsurface geology, well-understood deposit models, successful production and the variety of data collected led the TRS QP to conclude that the mineralization in areas with drill hole spacing tabulated above fit the definition for measured resources.
 
Mineral resources were estimated separately for the Palangana ISR Project Area. The estimates of measured and indicated mineral resources for the Project are reported in the table below and the estimates of inferred mineral resources are reported in the table following.
 
Table 6: Palangana ISR Project Area Measured and Indicated Resources Summary
Mineral Resource
GT Cutoff
Average Grade
(% eU 3 O 8 )
Ore Tons
 (000s)
eU 3 O 8
(lbs)
Palangana
Measured
-
-
-
-
Indicated
None
0.134
232
643,100
Total Measured and Indicated
None
0.134
232
643,100
Notes
1.         Pounds reported with DEF applied.
2.         Measured and indicated mineral resources as defined in 17 CFR § 229.1300.
3.         All reported resources occur below the static water table.
4.         The point of reference for mineral resources is in situ at the Palangana ISR Project Area.
5.         Mineral resources are not mineral reserves and do not have demonstrated economic viability.
 
149
 
 
Table 7: Palangana ISR Project Area Inferred Resources Summary
Mineral Resource
GT Cutoff
Average Grade
(% eU3O8)
Ore Tons
(000s)
eU3O8
(lbs)
Palangana
PA-1 and PA-2 Inferred
None
0.100
96
192,500
Dome, NE Garcia, SW Garcia, CC Brine, Jemison Fence and Jemison East Inferred
0.10
0.110 - 0.300
206
808,800
Total Inferred
None
0.100-0.300
302
1,001,300
Notes
1.        Pounds reported with DEF applied.
2.        A range of grades is presented for the Palangana ISR Project Area inferred mineral because the resource estimation methods differed between PA-1/PA-2 and the rest of the trends. There was no cutoff for PA-1 and PA-2 block models.
3.        Inferred mineral resources as defined in 17 CFR § 229.1300.
4.        All reported resources occur below the static water table.
5.        The point of reference for mineral resources is in situ at the Palangana ISR Project Area.
6.        Mineral resources are not mineral reserves and do not have demonstrated economic viability.
 
Factors that may affect the mineral resource estimate include:
 
 
●
assumptions as to forecasted uranium price;
 
●
changes to the assumptions used to generate the GT cutoff;
 
●
changes to future commodity demand;
 
●
variance in the grade and continuity of mineralization from what was interpreted by drilling and estimation techniques;
 
●
host formation density assignments; and
 
●
changes that affect the continued ability to access the site, retain mineral and surface rights titles, maintain environmental and other regulatory permits and maintain the social license to operate.
 
Mineral resource estimation is based on data interpretation and uses a limited number of discrete samples to characterize a larger area. These methods have inherent uncertainty and risk. Three elements of risk are identified for the Palangana ISR Project Area:
 
 
●
Grade interpretation methods: interpreted to be low to moderate risk. Automated grade estimates depend on many factors and interpretation methods assume continuity between samples. A risk exists that a grade estimate at any 3D location in a deposit will differ from the actual grade at that location when it is mined;
 
●
Geological definition: interpreted to be a moderate risk. The geological roll-front interpretation by the UEC geologists was checked using several techniques. The host units are relatively flat-lying, but there is a possibility of miscorrelation of a horizon when multiple closely spaced intercepts are present; and
 
●
Continuity: interpreted to be low risk. The TRS QP and coworkers supervised by the TRS QP reviewed multiple maps, drilling records, and prior work at the Palangana ISR Project Area that demonstrate and confirm the continuity of the roll-fronts within the Palangana ISR Project Area.
 
Mineral resources do not have demonstrated economic viability, but they have technical and economic constraints applied to them to establish reasonable prospects for economic extraction. The geological evidence supporting indicated mineral resources is derived from adequately detailed and reliable exploration, sampling and testing, and is sufficient to reasonably assume geological and grade continuity. The measured and indicated mineral resources are estimated with sufficient confidence to allow the application of technical, economic, marketing, legal, environmental, social and government factors to support mine planning and economic evaluation of the economic viability of the Palangana ISR Project Area.
 
The inferred mineral resources are estimated on the basis of limited geological evidence and sampling; however, the information is sufficient to imply, but not verify, geological grade and continuity. The TRS expects that the majority of the inferred mineral resources could be upgraded to indicated mineral resources with additional drilling.
 
150
 
 
In the opinion of the TRS QP, it is virtually impossible that all issues relating to relevant technical and economic factors likely to influence the prospect of economic extraction can be resolved with future work. However, the work undertaken on the Palangana ISR Project Area to date, both through historical in situ and recent laboratory testing demonstrates that uranium can be extracted using common industry methods and standard leaching technology. Further, through work conducted in support of receiving regulatory authorization, UEC has demonstrated that the host sandstones have the hydraulic properties required for in situ extraction with adequate confinement by overlying and underlying intervals. Finally, the host sandstones of the Goliad Formation have been mined in South Texas since the 1970s using ISR technology with significant production under similar conditions to those of the Palangana ISR Project Area.
 
Block models were constructed for the resource estimates at the Palangana ISR Project Area. UEC developed its resource estimates within distinct sand and roll-front zones utilizing detailed computer block modeling of grade and GT modeling. For PA-1 and PA-2, the targeted mineralized sands were differentiated and evaluated at each trend. The block model was derived from the stratigraphic Jemison East trends at the Palangana ISR Project Area, and GT contouring was conducted, which became the basis for the block models for each of the trends. Using the top and bottom elevations for each of the zone composite intercepts, digital terrain models for the top and bottom of the surfaces were created and loaded into the block models to create a thickness representation for each zone of each trend. The horizontal extent of the zones was limited by the respective zone outlines/contours. After the blocks were generated, GT data and other attributes were assigned to each block.
 
UEC resumed ISR production at the Palangana ISR Project Area in 2010. In addition to PA-1 and PA-2, UEC permitted PA-3 in the CC Brine Trend. Between these three PAs, 563,600 lbs U3O8 were produced from 2010 to 2016. A list of production in each PA can be seen in the table below. For the current estimate, production from 2010-2016 was subtracted from the 2010 estimate.
 
Table 8: Palangana Production from 2010 to 2016
Production Area
Pounds
PA-1
345,600
PA-2
67,800
PA-3 (CC Brine Trend)
150,200
 
Total Pounds Produced (2010-2016)
563,600
 
Present Condition of Property and Work Completed to Date
 
The Palangana ISR Project Area is in a care and maintenance status.
 
The Company ’ s Planned Work
 
The Company intends to continue the care and maintenance of the Palangana ISR Project Area pending restart of uranium recovery operations.
 
151
 
 
Burke Hollow ISR Project
 
The independent TRS for the Burke Hollow Project Area (the “Burke Hollow Project Area”) has been prepared for UEC, under the supervision of WWC (the “QP” herein), pursuant to S-K 1300. This TRS identifies and summarizes the scientific and technical information and conclusions reached from the IA to support disclosure of mineral resources on the Burke Hollow Project Area. The objective of this TRS is to disclose the mineral resources on the Burke Hollow Project Area. There are no reserves associated with the Burke Hollow Project Area.
 
Property Description
 
UEC’s Burke Hollow Project property is located within the extensive STUP. The Burke Hollow Project currently consists of a 19,335-acre lease area, after the addition of the 1,825-acre Welder lease, which was taken in December 2012. This lease area would allow for the mining of uranium by ISR methods while utilizing the land surface (with variable conditions) as needed, for mining wells and above ground surface facilities for fluid processing and uranium production during the mining and groundwater restoration phases of the Burke Hollow Project Area. The UEC Burke Hollow Project Area is about 18 miles southeast of the town of Beeville and is located on the western side of US 77 and northeasterly of US 181, which links with US 59 in Beeville. The approximate center of the Burke Hollow Project lease is located at latitude 28.2638 and longitude -97.5176, in decimal degrees. Site drilling roads are entirely composed of caliche and gravel, allowing access for trucks and cars in most weather conditions. Four-wheel drive vehicles may be needed during high rainfall periods.
 
152
 
 
Figure 1: Map of UEC Project Areas
 
153
 
 
Ownership
 
This Burke Hollow Project Area is owned and operated by UEC. UEC has executed surface use and access agreements and fee mineral leases with surface and mineral owners within and outside the various Burke Hollow Project Area boundaries.
 
Virtually all uranium mining in Texas is on private lands, with leases negotiated between companies and each individual landowner/mineral owner. The Burke Hollow Project Area consists of two fee (private) mineral leases comprised of 19,336 acres.
 
Payments for the private lease are up to date as of the effective date of the TRS.
 
The lease is a paid-up lease for a primary term of five years and allows for an extension term of an additional five years and so long thereafter as uranium or other leased substances are being produced. This lease term was extended on January 20, 2017. The lease has various stipulated fees for land surface alterations, such as per well or exploration hole fees (damages). The primary lease stipulation is the royalty payments as a percentage of production. Because the lease is negotiated with a private land and mineral owner and none of the property is located on government land, some of the details of the lease information and terms are considered confidential.
 
Table 1: Burke Hollow Project Area Mineral Lease Summary
Project Area
Fee Mineral Leases
County
Expires
Burke Hollow
Acreage
19,336
 
 
Leases
2
Bee
2/2027 and 12/2022
 
Accessibility, Climate, Local Resources, Infrastructure and Physiography
 
The southern portion of the Burke Hollow Project Area can be accessed from US Highway 181 and Farm to Market (FM)-797. The Burke Hollow Project Area has several other secondary gravel roads that provide access to the Burke Hollow Project Area. The nearest population centers are Skidmore (about three miles east with a population of 863), Tynan (about four miles south with a population of 254) and Beeville (about 10 miles north with a population of 13,641). While Skidmore and Tynan are relatively small towns, they provide basic needs for food and lodging and some supplies. Beeville is a much larger city and provides a well-developed infrastructure, resulting from regional oil and gas exploration and production.
 
The nearest population centers are Skidmore, approximately 11 miles west, Refugio, about 15 miles east, and Beeville, approximately 18 miles northwest. Refugio is a relatively small town but offers basic needs for food and lodging and some supplies. The Burke Hollow Project Area has good accessibility for light to heavy equipment. There is an excellent network of county, state and federal highways that serve the region. The topography with dominantly sandy, well-drained soils provides satisfactory construction conditions for building gravel access site roads.
 
The Burke Hollow Project Area is located in Bee County in a rural setting but includes excellent county, state and federal highways that serve the region and good construction conditions. Water supply in the Burke Hollow Project Area is from private water wells, mostly tapping sands of the Goliad Formation. Water supply for potential future mine development would be from the same sources. The Burke Hollow Project Area is about 30 to 35 miles north of Corpus Christi, the closest metropolitan district to the Bee County Project Area.
 
The Burke Hollow Project Area is situated in the interior portion of the Gulf Coastal Plain physiographic province. The area is characterized by rolling topography with parallel to sub-parallel ridges and valleys. There is a maximum of 47 feet of relief at the site, with ground surface elevations ranging from a low of 92 feet to a high of 139 feet above mean sea level. The leased property for the Burke Hollow Project Area is used mostly for petroleum production, ranching and game management. Access by vehicular traffic is provided from Highway 77 into the property by private gravel roads.
 
154
 
 
Bee County has a climate characterized by long, hot summers and cool to warm winters. The moderate temperatures and precipitation result in excellent conditions for developing an ISR mine. The average annual precipitation is approximately 32 inches with the months from November to March, normally the driest period, and May through October typically having more precipitation due partly to more intense tropical storms. From June through September, the normal high temperatures are routinely above 90° Fahrenheit, while the months from December through February are the coolest, with average low temperatures below 50° Fahrenheit. Periods of freezing temperatures are generally quite brief and infrequent. Tropical weather from the Gulf of Mexico can occur during the hurricane season and may affect the site area with large rain storms. The infrequent freezing weather and abnormally large rainfalls are the primary conditions that could cause temporary shutdowns at an operating ISR mine. Operations can be conducted year around.
 
History
 
Uranium exploration and mining in South Texas primarily targets sandstone formations throughout the Coastal Plain bordering the Gulf of Mexico. The area has long been known to contain uranium oxide, which was first discovered in Karnes County, Texas, in 1954 using airborne radiometric survey. The uranium deposits discovered were within a belt of strata extending 250 miles from the middle coastal plain southwestward to the Rio Grande. This area includes the Carrizo, Whitsett, Catahoula, Oakville and Goliad geologic formations. Open pit mining began in 1961 and ISR mining was initiated in 1975. The uranium market experienced lower demand and price in the late 1970s and in 1980, there was a sharp decline in all Texas uranium operations.
 
During the late 1970s and early 1980s, exploration for uranium in South Texas had evolved towards deeper drilling targets within the known host sandstone formations. Deeper exploration drilling was more costly and excluded many of the smaller uranium mining companies from participating in the down-dip, deeper undrilled trend extensions. Uranium had been mined by several major oil companies in the past in South Texas, including Conoco, Mobil, Humble (later Exxon), ARCO and others. Mobil had found numerous deposits in South Texas in the past, including the O’Hern, Holiday-El Mesquite and several smaller deposits, mostly in Oligocene-age Catahoula Formation tuffaceous sands. ARCO discovered several Oakville Formation (Miocene-age) uranium-bearing deposits and acquired other deposits located nearby in Live Oak County. They were exploring deeper extensions of Oakville Formation trends when they discovered the Mt. Lucas Goliad Formation deposit, located near Lake Corpus Christi in Live Oak County near the Bee County line.
 
The earliest known uranium exploration in the immediate area of the Burke Hollow Project Area was performed by Nufuels Corporation (“Nufuels”, a Mobil Corporation subsidiary) in 1982. Nufuels drilled a total of 18 exploration holes on or nearby UEC’s 1,825 acre Welder lease. These holes were drilled in conjunction with a larger regional program that was conducted by Nufuels. Each exploration hole was drilled to an average total depth of approximately 1,100 ft in order to test the entire prospective Goliad Formation. UEC acquired copies of the Nufuels logs through its purchase of TOMIN’s database.
 
Following Nufuels, in 1993, TOMIN conducted a short reconnaissance exploration drilling program on the Thomson-Barrow lease. TOMIN drilled a total of 12 holes on permitted acreage that they negotiated for exploration. 11 of the 12 drill holes intersected anomalous gamma ray log signatures indicative of uranium mineralization.
 
The historic data package obtained by UEC for portions of the current Burke Hollow Project Area provided the above described information. Based on the limited number of drill holes, no meaningful resource or reserve determination was made by TOMIN or Nufuels. However, the actual drilling and geophysical logging results have been determined to be properly conducted according to current industry standards.
 
155
 
 
Table 2: Historic Ownership and Operations at the Burke Hollow Project Area
Year
Company
Operations/Activity
Amount
(No. of Drill holes)
Results of Work
1982
Nufuels
Original controller of the Burke Hollow Project Area.
18 exploration holes on or nearby the Welder Lease
Nufuels drilled 18 exploration holes on or nearby UEC’s 1,825-acre Welder lease in conjunction with a larger regional program, which was conducted by Nufuels. Exploration holes were drilled to approximately 1,100 ft bgs and tested the entire prospective Goliad Formation. Results showed the presence of a reduction-oxidation interface in sands of the lower Goliad Formation, but there were insufficient data to link economically viable uranium mineralization.
1993
TOMIN
Exploration program.
12 exploration holes on or near the Thomson-Barrow Lease.
TOMIN conducted a short reconnaissance exploration drilling program on the Thomson-Barrow lease. TOMIN drilled a total of 12 holes on permitted acreage that they negotiated for exploration. 11 of the 12 drill holes intersected anomalous gamma ray log signatures indicative of uranium mineralization, but there were insufficient data to link economically viable uranium mineralization.
2011
UEC
The Burke Hollow Project Area was acquired by UEC from TOMIN.
From 2012-2017, 707 uranium exploration drill holes, including 30 monitor wells completed at the Welder lease (Kurrus et al. 2014).
The historic data package was obtained and reviewed by UEC for portions of the current Burke Hollow Project Area (Kurrus and Yancy, 2017). Based on the limited number of drill holes, no meaningful resource or reserve determination was made using the historic exploration data. However, the actual drilling and geophysical logging results were determined to be properly conducted, per industry standards. UEC completed two drilling campaigns to delineate the opened ended Lower B1 and B2 trends (Carothers et al., 2013). The results of historic and contemporary borehole gamma-ray, SP and resistance logs, as well as PFN logs indicate that uranium mineralization occurs in the upper to lower Goliad Formation sand/sandstone units below the water table at depths from approximately 180 to 1,100 ft bgs. Evidence indicate ISR would likely be the most suitable mining method for this project. In 2017, UEC estimated an Inferred Mineral Resource of 4,064,575 tons grading 0.088% pU 3 O 8  (PFN determination) containing approximately 7.09 million pounds U 3 O 8  in the combined Graben and Eastern Lower B trends.
 
156
 
 
Table 2: Historic Ownership and Operations at the Burke Hollow Project Area (Continued)
Yea