What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-04-17 compared with 2022-04-15 · 535 added, 516 removed, 165 unchanged (86% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

The information disclosed in this annual report,

and the information incorporated by reference herein, include “forward-looking statements” within the meaning of Section 27A

of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange

Forward-looking statements include, but are not limited to, statements regarding our or our management’s expectations,

hopes, beliefs, intentions or strategies regarding the future.

In addition, any statements that refer to projections, forecasts or other

characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements.

“anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,”

“intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,”

“project,” “should,” “would” and similar expressions may identify forward-looking statements, but

the absence of these words does not mean that a statement is not forward-looking.

The information disclosed in this annual report, and the information

incorporated by reference herein, includes “forward-looking statements” within the meaning of Section 27A of the Securities

Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Forward-looking

statements include, but are not limited to, statements regarding our or our management’s expectations, hopes, beliefs, intentions

or strategies regarding the future.

In addition, any statements that refer to projections, forecasts or other characterizations of future

events or circumstances, including any underlying assumptions, are forward-looking statements.

The words “anticipate,” “believe,”

“continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,”

“plan,” “possible,” “potential,” “predict,” “project,” “should,”

“would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that

a statement is not forward-looking.

The forward-looking statements contained or incorporated by reference

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On November 20, 2014, the Company completed a listing process on the Canadian Securities Exchange (“CSE”).

that process, the Company acquired 100% of the members’ interests of Pinon Ridge Mining LLC (“PRM”), a Delaware limited

liability company.

that process, the Company acquired 100% of the members’ interests of Pinon Ridge Mining LLC (“PRM”), a Delaware limited liability

The transaction constituted a reverse takeover (“RTO”) of Western by PRM.

Subsequent to obtaining appropriate

shareholder approvals, the Company reconstituted its board of directors and senior management team.

Effective September 16, 2015, Western

completed its acquisition of Black Range Minerals Limited (“Black Range”).

Subsequent to obtaining appropriate shareholder

approvals, the Company reconstituted its board of directors and senior management team.

Effective September 16, 2015, Western completed

its acquisition of Black Range Minerals Limited (“Black Range”).

On August 18, 2014, the Company closed on the

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lands in Utah and Colorado, and all represent properties that have been previously mined for uranium to varying degrees in the past.

The acquisition included the purchase of the Sunday Mine Complex.

acquisition included the purchase of the Sunday Mine Complex.

The Sunday Mine Complex is located in western San Miguel County, Colorado.

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mine and the Topaz Mine.

The operation of each of these mines requires a separate permit, and all such permits have been obtained by

Western and are currently valid.

In addition, each of the mines has good access to a paved highway, electric power to existing declines,

office/storage/shop and change buildings, and an extensive underground haulage development with several vent shafts complete with exhaust

These properties were formerly secured by a first priority interest collateralizing a $500,000 promissory note which was paid in

full on August 31, 2018, and thus, the properties are now held free and clear of encumbrances.

The Sunday Mine Complex is the Company’s

core resource property and was assigned “Active” status effective June 2019.

On September 16, 2015, Western completed its

acquisition of Black Range, an Australian company that was listed on the Australian Securities Exchange until the acquisition was completed.

The acquisition terms were pursuant to a definitive Merger Implementation Agreement entered into between Western and Black Range.

to the agreement, Western acquired all of the issued shares of Black Range by way of Scheme of Arrangement (“the Scheme”)

under the Australian Corporation Act 2001 (Cth) (the “Black Range Transaction”), with Black Range shareholders being issued

common shares of Western on a 1 for 750 basis.

On August 25, 2015, the Scheme was approved by the shareholders of Black Range, and on

September 4, 2015, Black Range received approval by the Federal Court of Australia.

In addition, Western issued options to purchase Western

common shares to certain employees, directors, and consultants.

Such stock options were intended to replace Black Range stock options

outstanding prior to the Black Range Transaction on the same 1 for 750 basis.

The operation of each of these mines requires a separate permit, and all such permits have been obtained by Western

and are currently valid.

In addition, each of the mines has good access to a paved highway, electric power to existing declines, office/storage/shop

and change buildings, and an extensive underground haulage development with several vent shafts complete with exhaust fans.

Mine Complex is the Company’s core resource property and in July 2021was assigned “Active” status when mining operations

were restarted.

On September 16, 2015, Western completed its acquisition

of Black Range, an Australian company that was listed on the Australian Securities Exchange until the acquisition was completed.

The acquisition

terms were pursuant to a definitive Merger Implementation Agreement entered into between Western and Black Range.

Pursuant to the agreement,

Western acquired all of the issued shares of Black Range by way of Scheme of Arrangement (“the Scheme”) under the Australian

Corporation Act 2001 (Cth) (the “Black Range Transaction”), with Black Range shareholders being issued common shares of Western

on a 1 for 750 basis.

On August 25, 2015, the Scheme was approved by the shareholders of Black Range, and on September 4, 2015, Black

Range received approval by the Federal Court of Australia.

In addition, Western issued options to purchase Western common shares to certain

employees, directors, and consultants.

Such stock options were intended to replace Black Range stock options outstanding prior to the

Black Range Transaction on the same 1 for 750 basis.

The Company has registered offices at 330 Bay

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and are traded on the OTCQX Best Market under the symbol “WSTRF”.

Its principal business activity is the acquisition and

development of uranium and vanadium resource properties in the states of Utah and Colorado in the United States of America (“United

Its principal business activity is the acquisition and development

of uranium and vanadium resource properties in the states of Utah and Colorado in the United States of America (“United States”).

Recent Developments

February 2021 Private Placement

On February 16, 2021, the Company closed on a non-brokered private

placement of 3,250,000 units at a price of CAD $0.80 per unit.

The aggregate gross proceeds raised in the private placement amounted to

CAD $2,600,000.

Each unit consisted of one common share of Western plus one common share purchase warrant of Western.

Each warrant entitled

the holder to purchase one common share at a price of CAD $1.20 per share for a period of three years following the closing date of the

private placement.

A total of 3,250,000 common shares and 3,250,000 warrants were issued in the private placement.

March 2021 Private Placement

On March 1, 2021, the Company closed on a non-brokered

January 2022 Private Placement

On January 20, 2022, the Company closed on a non-brokered

private placement of 2,495,575 units at a price of CAD $1.60 per unit.

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to CAD $3,992,920.

Each unit consisted of one common share and one common share purchase warrant.

Each warrant entitled the holder to

purchase one common share at a price of CAD $1.20 per share for a period of three years following the closing date of the private placement.

A total of 3,125,000 common shares and 3,125,000 warrants were issued in the private placement.

December 2021 Private Placement

On December 17, 2021, the Company closed a non-brokered private placement

of 372,966 units at a price of CAD $1.60 per unit.

The aggregate gross proceeds raised in the private placement amounted to CAD $596,746

(USD $434,973 in net proceeds).

Each unit consisted of one common share plus one warrant.

Each warrant entitled the holder to purchase

one common share at a price of CAD $2.50 per share for a period of three years following the closing date of the private placement.

total of 372,966 common shares and 372,966 warrants were issued in the private placement.

Each unit consisted of one common share of Western plus one common share purchase warrant of Western.

entitled the holder to purchase one common share at a price of CAD $2.50 per share for a period of three years following the closing date

of the private placement.

A total of 2,495,575 common shares and 2,495,575 warrants were issued to investors, and 98,985 warrants were

issued to broker dealers in connection with the private placement.

Annual 2022 Incentive Stock Option Grant

The Company granted an aggregate of 1,665,000 stock options (“Options”)

to purchase common shares to a number of officers, directors, and employees of Western under the Company’s Incentive Stock Option

The Options were granted on October 31, 2022 after market close, and with the exercise price being set at CAD$1.60 based upon the

lower of the closing price on the day of the grant, and the pricing of units offered in the most recent private placement conducted by

Each option is exercisable to acquire one common share for a five-year term starting with the vesting date.

The Options vest

equally in two instalments beginning on the date of grant and thereafter on April 30, 2023.

Bullen Property (Weld County)

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and Black Range purchased the property in 2008 for its Keota Uranium Project.

In 2017, the Company signed a three year oil

and gas lease which in 2020 was extended for an additional three year term or until the end of continuous operations.

The consideration

was in the form of upfront bonus payments and backend 3/16 th production royalty payment.

Additional right-of-way easement

agreements were signed which allowed for the development of a pipeline.

The lease agreement allows the Company to retain property rights

to vanadium, uranium, and other mineral resources.

A 2019 lawsuit was filed in the Weld County District

Court over the original Bullen Property deed language which was negotiated before the Company acquired Black Range by prior management

and a bank representing the estate of the property owner.

The Company settled with the plaintiffs by awarding the estate’s beneficiaries

a non-participating royalty interest of 1/8th for all hydrocarbon and non-hydrocarbon substances that are produced and sold from the

In early 2020, Bison Oil & Gas traded

this lease to Mallard Exploration (“Mallard”), Mallard subsequently filed an application with the Colorado Oil &

Gas Conservation Commission (“COGCC”) to update the permit to create a new pooled unit.

During 2021, the operator advanced through the

oil well production stages:

drilling was completed in the first quarter, wellfield completion/fracking was completed during the second

quarter, drill out was completed in July, and flowback was completed in August.

By August 2021, each of the eight (8) Blue Teal Fed wells

had commenced oil and gas production.

The first royalty payment was made in January 2022 and monthly royalty payments have been received

subsequently.

These wells continue to rank among the top Colorado producing wells.

Due to the success of the first 8 wells, the operator

has decided to develop a second set of 8 wells within Western’s royalty area during 2022.

During the years ended December 31, 2021

and 2020 the Company recognized aggregate revenue of $272,142 and $54,620, respectively, under these oil and gas lease arrangements.

January 31, 2022, the Company received $207,552 as payment for royalties recognized during the period August 2021 through December 2021.

In 2017, the Company signed a three year oil and

gas lease which in 2020 was extended for an additional three year term or until the end of continuous operations.

The consideration was

in the form of upfront bonus payments and a backend production royalty payment.

Additional right-of-way easement agreements were signed

which allowed for the development of a pipeline.

The lease agreement allows the Company to retain property rights to vanadium, uranium,

and other mineral resources.

In early 2020 Bison Oil & Gas (“Bison”)

traded this lease to Mallard Exploration (“Mallard”), Mallard subsequently filed an application with the Colorado Oil &

Gas Conservation Commission (COGCC) to update the permitting to create a new pooled unit.

In late 2020 Mallard began development of the

These DJ-Basin wells target the Niobrara formation.

During 2021, the operator completed all well development stages and eight

(8) wells commenced oil and gas production by August 2021.

The first royalty payment was made in January 2022.

During 2022, the operator

completed all well development stages on a second set of eight (8) wells which commenced oil and gas production by August 2022.

monthly royalty payment including production from the new wells was made in January 2023.

Monthly royalty payments are ongoing.

In January 2023, Mallard was acquired by Bison.

During the years ended December 31, 2022 and 2021, we recognized aggregate

revenue of $635,363 and $272,142, respectively, under these oil and gas lease arrangements.

On January 31, 2022, the operator of the Weld

County Colorado oil and gas pooled trust issued the first cumulative royalty payment in the amount of $207,552 for August 2021 through

December 2021 sales, which was recognized as income in the fourth quarter of 2021.

Kinetic Separation Licensing

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Sunday Mine Complex Permitting Status

On February 4, 2020, the Colorado DRMS sent a Notice

of Hearing to Declare Termination of Mining Operations related to the status of the mining permits issued by the state of Colorado for

the Sunday Mine Complex.

On February 4, 2020, the Colorado DRMS sent a

Notice of Hearing to Declare Termination of Mining Operations related to the status of the mining permits issued by the state of Colorado

for the Sunday Mine Complex.

At issue was the application of an unchallenged Colorado Court of Appeals Opinion for a separate mine (Van

4) with very different facts that are retroactively modifying DRMS rules and regulations.

The Company maintains that it was timely in meeting

existing rules and regulations.

The hearing was scheduled to be held during several monthly MLRB Board meetings, but this matter was delayed

several times.

The Company maintains that it was timely in

meeting existing rules and regulations.

The hearing was scheduled to be held during several monthly MLRB Board meetings, but this matter

was delayed several times.

The permit hearing was held during the MLRB Board monthly meeting on July 22, 2020.

At issue was the status of the five

existing permits which comprise the Sunday Mine Complex.

Due to COVID-19 restrictions, the hearing took place utilizing a virtual-only

The Company prevailed in a 3-to-1 decision which acknowledged that the work completed at the Sunday Mine Complex under DRMS oversight

was timely and sufficient for Western to maintain these permits.

In a subsequent July 30, 2020 letter, the DRMS notified the Company that

the status of the five permits (Sunday, West Sunday, St.

Jude, Carnation, and Topaz) had been changed to “Active” status effective

June 10, 2019, the original date on which the change of the status was approved.

On August 23, 2020, the Company initiated a request for

Temporary Cessation status for the Sunday Mine Complex as the mines had not been restarted within a 180-day window due to the direct and

indirect impacts of the COVID-19 pandemic.

Accordingly, a permit hearing was scheduled for October 21, 2020 to determine Temporary Cessation

In a unanimous vote, the MLRB approved Temporary Cessation status for each of the five Sunday Mine Complex permits (Sunday, West

At issue was the status

of the five existing permits which comprise the Sunday Mine Complex.

Due to COVID-19 restrictions, the hearing took place utilizing a

virtual-only format.

The Company prevailed in a 3 to 1 decision which acknowledged that the work completed at the Sunday Mine Complex

under DRMS oversight was timely and sufficient for Western to maintain these permits.

In a subsequent July 30, 2020 letter, the DRMS notified

the Company that the status of the five permits (Sunday, West Sunday, St.

Jude, Carnation, and Topaz) had been changed to “Active”

status effective June 10, 2019, the original date on which the change of the status was approved.

On August 23, 2020, the Company initiated

a request for Temporary Cessation status for the Sunday Mine Complex as the mines had not been restarted within a 180-day window due to

the direct and indirect impacts of the COVID-19 pandemic.

Accordingly, a permit hearing was scheduled for October 21, 2020 to determine

Temporary Cessation status.

In a unanimous vote, the MLRB approved Temporary Cessation status for each of the five Sunday Mine Complex

permits (Sunday, West Sunday, St.

Jude, Carnation, and Topaz).

On October 9, 2020, the MLRB issued a board order which finalized the findings of the July 22,

On October 9, 2020, the MLRB issued a board order which finalized the findings

of the July 22, 2020 permit hearing.

On November 10, 2020, the MLRB issued a board order which finalized the findings of the October 21,

2020 permit hearing.

On November 12, 2020, a coalition of environmental groups filed a lawsuit against the MLRB seeking a partial appeal

of the July 22, 2020 decision by requesting termination of the Topaz mine permit.

On December 15, 2020, the same coalition of environmental

groups amended their complaint against the MLRB seeking a partial appeal of the October 21, 2020 decision requesting termination of the

Topaz mine permit.

On November 6, 2020, the MLRB signed an order placing the five Sunday Mine Complex mine permits into Temporary Cessation.

On November 12, 2020, a coalition of environmental groups (the “Plaintiffs”) filed a complaint against the MLRB seeking a

partial appeal of the July 22, 2020 decision by requesting termination of the Topaz Mine permit.

On December 15, 2020, the same coalition

of environmental groups amended their complaint against the MLRB seeking a partial appeal of the October 21, 2020 decision requesting

termination of the Topaz Mine permit.

The Company has joined with the MLRB in defense of their July 22, 2020 and October 21, 2020 decisions.

On May 5, 2021,

the Plaintiff in the Topaz Appeal filed an opening brief with the Denver District Court seeking to overturn the July 22, 2020 and October

21, 2020 MLRB permit hearing decisions on the Topaz mine permit.

The MLRB and the Company were to respond with an answer brief within

35 days on or before June 9, 2021, but instead sought a settlement.

The judicial review process was delayed as extensions were put in

place until August 20, 2021.

On May 5, 2021, the Plaintiffs in the Topaz Appeal filed an opening brief with the Denver District Court seeking to overturn the July

22, 2020 and October 21, 2020 MLRB permit hearing decisions on the Topaz Mine permit.

The MLRB and the Company were to respond with an

answer brief within 35 days on or before June 9, 2021, but instead sought a settlement.

The judicial review process was delayed as extensions

were put in place until August 20, 2021.

A settlement was not reached, and the MLRB and the Company submitted answer briefs on August

Plaintiff submitted a reply brief on September 10, 2021.

On March 1, 2022, the Denver District Court reversed the MLRB’s orders

regarding the Topaz Mine and remanded the case back to MLRB for further proceedings consistent with its order.

The Company and the MRLB

have until April 19, 2022 to appeal the Denver District Court’s ruling.

The Company is also working toward the completion of an

updated Topaz mine Plan of Operations which is a separate federal requirement of the BLM for the conduct of mining activities on federal

Sunday Mine Complex Project 2021 Restart

The project entailed the development

of multiple SMC ore bodies.

This year’s project involves a shift in the base of operations from the St.

Jude Mine (2019) to the

Sunday Mine (2021).

The Plaintiff submitted a reply brief on September 10, 2021.

On March 1, 2022, the Denver District Court reversed the MLRB’s

orders regarding the Topaz Mine and remanded the case back to MLRB for further proceedings consistent with its order.

The Company and

the MLRB had until April 19, 2022 to appeal the Denver District Court’s ruling.

Neither the Company nor the MLRB appealed the Denver

District Court ruling.

Subsequently on March 20, 2023, the MLRB issued a board order for the Company to commence final reclamation, which

upon completion will terminate mining operations at the Topaz Mine.

Reclamation is to commence immediately at the Topaz Mine and is to

be completed within five years by March 2028.

The Company is currently working toward the completion of an updated Topaz Mine Plan of

Operations which is a separate federal requirement of the BLM for the conduct of mining activities on the federal land at the Topaz Mine

and needed to re-permit the Topaz Mine with Colorado’s DRMS.

Sunday Mine Complex Project 2021/2022 Project

The SMC project entailed the development of multiple SMC ore bodies

and involves a shift in the base of operations from the St.

Jude Mine (2019) to the Sunday Mine (2021).

The Sunday Mine Complex is the

Company’s core resource property and in July 2021 was assigned “Active” status when mining operations were restarted.

Underground development began in August 2021 following mine ventilation, power upgrades, and increasing explosive capabilities.

The first target was the extension of the drift (tunnel) 150 feet to reach the first surface exploration drill hole to access the GMG

Ore Body (GMG).

Early results were positive as drilling toward the GMG resulted in the location of ore-grade material within thirty feet

of the existing mine workings.

Notably, only limited exploration drilling has been done in this area due to the mountainous terrain on

the surface above.

As drifting proceeded, very high-grade ore continued to be intersected through the drift path and on both sides of

As a result, the team shifted from development to mining.

During the December 2021 to March 2022 period, over 3,000 tons of

high-grade uranium/vanadium ore was mined from the drift.

The mining contractor calculated grades based upon on site scintillometer readings.

At the end of March, the mining contractor engaged by Western decided to retire from contract mining operations.

As a result of this

decision, Western will take over the mining operations and has acquired a full complement of mining equipment.

The equipment is being

prepared for operations and upgrades to mine ventilation, support buildings and infrastructure are underway.

Further mine development

and ore production is expected to resume in early summer after upgrades are completed.

Western’s mining team will be expanded to

facilitate mine development and full ore production.

Van 4 Mine Permitting Status

A prior owner of the Van 4 mine had been granted

a first Temporary Cessation from reclamation of the mine by the Colorado Mined Land Reclamation Board (“MLRB”) which was

set to expire June 23, 2017.

Prior to its expiration, PRM formally requested an extension through a second Temporary Cessation.

PRM subsequently

participated in a public process which culminated in a hearing on July 26, 2017.

Prior to the hearing, three non-profit organizations

who pursue environmental and conservation objectives filed a brief objecting to the extension.

The MLRB board members voted to grant

a second five-year Temporary Cessation for the Van 4 mine.

Thereafter, the three objecting parties filed a lawsuit on September 18, 2017.

The MLRB was named as the defendant and PRM was named as a party to the case due to the Colorado law requirement that any lawsuit filed

after a hearing must include all of the parties in the proceeding.

The plaintiff organizations are seeking for the court to set aside

the board order granting a second five-year Temporary Cessation period to PRM for the Van 4 mine.

The Colorado state Attorney General

was defending this action in the Denver Colorado District Court.

On May 8, 2018, the Denver Colorado District Court ruled in favor, whereby

the additional five-year Temporary Cessation period was granted.

The Plaintiffs appealed this ruling to the Colorado Court of Appeals,

and on July 25, 2019, the ruling was reversed, ruling that the additional five-year Temporary Cessation period should not have been granted.

The MLRB and the Colorado Attorney General advised

Western that it will not make an additional appeal of the ruling.

Further, the time period for an appeal has passed.

The judge has subsequently

issued an instruction for the MLRB to issue an order revoking the permit and putting the Van 4 mine into reclamation.

On January 22,

2020, the MLRB held a hearing, and on March 2, 2020, the MLRB issued an order vacating the Van 4 Temporary Cessation, revoking the permit,

and ordering commencement of final reclamation, which must be completed within five years.

The Company commenced reclamation of the Van

4 mine, but progress has been delayed both by COVID-19 restrictions and countywide fire and open flame restrictions.

The reclamation

cost is fully covered by the reclamation bonds that have been posted with the state of Colorado.

Our mining operations team has made

significant progress on the reclamation as all surface structures have been disassembled and removed with the exception of the head frame.

target was the extension of the drift (tunnel) 150 feet to reach the first surface exploration drill hole to access the GMG Ore Body (GMG).

Early results were positive as drilling toward the GMG resulted in the location of ore-grade material within thirty feet of the existing

mine workings.

Notably, only limited exploration drilling has been done in this area due to the mountainous terrain on the surface above.

As drifting proceeded, very high-grade ore continued to be intersected through the drift path and on both sides of the drift.

the team shifted from development to mining.

From December 2021 to March 2022, over 3,000 tons of uranium/vanadium ore was mined from

The mining contractor calculated grades based upon scintillometer sampling of each 10-ton truckload.

At the end of March 2022, the mining contractor

engaged by Western decided to retire from contract mining operations.

Thereafter, Western began the acquisition of a full complement of

mining equipment and personnel to take over mining operations.

Western’s transition from employing a mining contractor to building

an in-house mining operation has now been completed.

Since this transition began in spring 2022, additional employees have been hired

to support mining operations and mining equipment and vehicles have been acquired to support deployment of two (2) fully equipped mining

The equipment has been prepared for operations and readied for deployment;

site infrastructure upgrades have been finished.

early 2023, the mines were reopened for ventilation and infrastructure upgrades.

Mining operations are restarting in April 2023 and will

initially involve additional development of the GMG Ore Body, stockpiling of high-grade ore and underground drilling/exploration to define

additional production zones.

The next project will be similar in scope but on the St.

Jude Mine target areas defined during the 2019/2020

work project.

Uranium Section 232 Investigation/Nuclear Fuel Working Group

An investigation under Section 232 of the

Trade Expansion Act of 1962 was undertaken by the DoC in 2018 to assess the impact to national security of the importation of the

vast majority of uranium utilized by the approximately 100 operative civilian nuclear reactors within the United States.

to the Section 232 report, the White House disseminated a Presidential Memoranda in July 2019.

At that time, President Trump formed

the Nuclear Fuel Working Group (“NFWG”) to find solutions for reviving and expanding domestic nuclear fuel production

and reinvigorating recommendations.

An investigation under Section 232 of the Trade

Expansion Act of 1962 was undertaken by the DoC in 2018 to assess the impact to national security of the importation of the vast majority

of uranium utilized by the approximately 100 operative civilian nuclear reactors within the United States.

In response to the Section

232 report, the White House disseminated a Presidential Memoranda in July 2019.

At that time, President Trump formed the Nuclear Fuel

Working Group (“NFWG”) to find solutions for reviving and expanding domestic nuclear fuel production and reinvigorating recommendations.

In April 2020, the DoE released the NFWG report

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nuclear fuel cycle.

The NFWG findings and recommendations presented are a positive outcome for U.S.

The undertaking of some NFWG findings and recommendations was a positive outcome for the U.S.

nuclear industry and

uranium miners.

however, the ultimate

outcome and timing remains uncertain as the continuing process requires approvals and budget appropriation from Congress and implementation

government agencies.

This remains an ongoing process where a number

of bills were introduced in both the U.S.

Senate and House to implement the key provisions of the NFWG report’s recommendations.

In November 2020, after the U.S.

election, the Senate Committee on Appropriations released its funding measures and allocations recommending

the creation and funding of the American Uranium Reserve.

In October 2020, the DoC extended the Russian Suspension Agreement for an additional

20 years until 2040.

The Russian Suspension Agreement was extended

for an additional 20 years until 2040.

Existing categories of quotas on imports of Russian uranium into the U.S.

were reduced by a graduated scale, and

additional provisions were modified to eliminate loopholes.

An extension of this agreement was among the NFWG’s recommendations.

In further implementation of the report’s recommendations, the DoE made multiple investment awards to companies advancing new nuclear

technologies.

TerraPower and X-energy received awards to build demonstration models of their advanced reactor designs, and NuScale received

support to deploy the first U.S.

small modular reactor (“SMR”) plan comprised of 12 modules at the Idaho National Laboratory.

were reduced by a graduated

scale, and additional provisions were modified to eliminate loopholes.

Also, the DoE made multiple investment awards to companies advancing

new nuclear technologies.

TerraPower and X-energy received awards to build demonstration models of their advanced reactor designs, and

NuScale received support to deploy the first U.S.

small modular reactor (“SMR”) plan comprised of 12 modules at the Idaho

National Laboratory.

The International Development Finance Corp.

signed a letter of intent to finance NuScale’s development of 42 SMR modules in South

signed a letter of intent to finance NuScale’s development of 42

SMR modules in South Africa.

In an acknowledgement of the future growth potential of new nuclear technologies, the U.S.

government has increased its industry

support to a level not seen in decades.

This is being done to level the playing field versus state-sponsored foreign entities.

Congress passed the “COVID-Relief and Omnibus Spending Bill,” which included $75 million for the establishment

of a strategic U.S.

government has

increased its industry support.

In December 2020, U.S.

Congress passed the “COVID-Relief

and Omnibus Spending Bill,” which included $75 million for the establishment of a strategic U.S.

Uranium Reserve.

The Biden-Harris Administration has rolled the 2021 funding into its 2022 fiscal year budget to

continue this initiative.

The DoE continues to work on establishing the parameters of the program and in August 2021, the DoE put out

a Request for Information (RFI) to obtain additional comments related to the establishment of the DoE’s Uranium Reserve program.

On October 13, 2021, Western submitted a response to the Request for Information:

Establishment of the Uranium Reserve Program to the

DoE’s National Nuclear Security Administration

Also, recent follow through includes the July

2021 public release of the uranium Section 232 report which the DoC presented to President Trump in April 2019.

The report concluded

that uranium imports were “weakening our internal economy” and “threaten to impair the national security” and

recommended immediate actions to “enable U.S.

producers to recapture and sustain a market share of U.S.

The Biden-Harris

Administration has rolled the 2021 funding into its 2022 fiscal year budget to continue this initiative.

In July 2021, the uranium Section

232 report was publicly released.

The report concluded that uranium imports were “weakening our internal economy” and “threaten

to impair the national security” and recommended immediate actions to “enable U.S.

producers to recapture and sustain a market

share of U.S.

uranium consumption”.

These actions were not taken in favor of the NFWG process.

Due to the Russian invasion of Ukraine and strong market

positions of Russia and the former Soviet Republics in nuclear fuel the term “energy security” has taken on increased urgency,

as dependencies have impacted many free-market economies.

With respect to the uranium market, the national security risks to the United

States have been identified and reported under both the Section 232 Investigation and subsequently by the NFWG.

In response to the Russian

invasion, a number of U.S.

Senators and Representatives have utilized the Uranium Reserve program as a basis for proposing a U.S.

to Russia’s invasion and reducing U.S.

expenditures benefiting the Russian regime.

The Russian invasion of Ukraine has fast tracked the Uranium Reserve

On May 5, 2022, the U.S.

Secretary of Energy Jennifer Granholm testified before the Senate Committee on Energy and Natural Resources

that the DoE “would make direct purchases of domestically mined and converted uranium this calendar year to establish a strategic

uranium reserve”.

Secretary Granholm’s comments make clear that the U.S.

is thinking larger.

Granholm stated that “We

should not be sending any money to Russia for any American energy or for any other reason,” and “if we move away from Russia

right away, we want to make sure we have the ability to continue to keep the fleet afloat.” To accomplish this, she further disclosed

that the DoE is “developing a full-on uranium strategy that’s going through the interagency process.”

Subsequently in June 2022, the DoE issued a Request for Proposals (“RFP”)

to purchase up to 1 million pounds of uranium at an initial funding level of $75 million into the newly established U.S.

Uranium Reserve.

The RFP sought uranium that was already held in inventory at Honeywell’s Metropolis Works Plant, the U.S.

conversion facility.

DOE awarded contracts in December 2022 for the purchase of approximately 1,000,000 lbs of uranium.

To fulfill Uranium Reserve requirements,

origin uranium will be delivered during the first quarter of 2023.

Five uranium companies disclosed receiving contract awards within

a price range from $59.50 to $70.50 per pound.

Western did not hold qualifying inventory, and as such did not submit a bid proposal.

expansion of the U.S.

Uranium Reserve program continues to be discussed.

As originally proposed, the program contemplated $150M in annual

purchases for a 10-year period, which would aggregate to $1.5 billion over its lifetime.

Vanadium Section 232 Investigation

4 unchanged sentences

circumstances of vanadium imports into the United States threaten to impair the national security.

The Section 232 National Security

Investigation of Imports of Vanadium was concluded, and a report was submitted to President Biden in February 2021.

In July 2021, the

report was made public.

It concluded that vanadium imports “do not threaten to impair the national security as defined in Section

232,” but identified and recommended “several actions that would help to ensure reliable domestic sources of vanadium and

lessen the potential for imports to threaten national security.” No action has been taken on these recommendations.

The Section 232 National Security Investigation

of Imports of Vanadium was concluded, and a report was submitted to President Biden in February 2021.

In July 2021, the report was made

It concluded that vanadium imports “do not threaten to impair the national security as defined in Section 232,” but

identified and recommended “several actions that would help to ensure reliable domestic sources of vanadium and lessen the potential

for imports to threaten national security.” No action has been taken on these recommendations.

Biden-Harris Administration

The positive momentum has continued for the nuclear

and uranium mining sector due to the Biden-Harris Administration’s emphasis on climate change.

The “Plan to Build a Modern

Sustainable Infrastructure and an Equitable Clean Energy Future” emphasizes climate change solutions.

Upon taking office, the Biden

team immediately rejoined the Paris Agreement and continued its pursuit of campaign promises of investments in clean energy, creating

jobs, producing clean electric power, and achieving carbon-pollution free energy in electricity generation by 2035.

Since taking office,

President Biden has given all agencies climate change initiatives and has started a climate change working group.

The positive momentum has continued for the nuclear and uranium mining

sector due to the Biden-Harris Administration’s emphasis on climate change.

Upon taking office, the Biden team immediately rejoined

the Paris Agreement and continued its pursuit of campaign promises of investments in clean energy, creating jobs, producing clean electric

power, and achieving carbon-pollution free energy in electricity generation by 2035.

Since taking office, President Biden has given all

agencies climate change initiatives and has started a climate change working group.

The existing U.S.

reactor fleet currently produces in excess of 50% of U.S.

clean energy, and new, advanced nuclear technologies promise to generate additional

clean energy.

A White House national climate advisor told the media in a press briefing that the Biden-Harris Administration intends

to seek a national clean energy standard that includes nuclear energy.

The Company believes that nuclear energy will be increasingly

able to compete on a level playing field with renewable energy technologies.

There has been legislative advancement of implementation

mechanisms including tax credits, subsidies, and/or U.S.

utilities being required to produce an increasing proportion of electricity

generation from clean energy power sources.

President Biden’s Build Back Better agenda has several components supportive of nuclear

power generation.

Already signed into law is the $1.2 trillion Infrastructure Investment and Jobs Act that provides the DoE funding to

prevent the premature retirement of existing nuclear plants and invest in advanced nuclear projects.

The separate $1.7 trillion Build

Back Better Reconciliation Legislation, which has not yet made its way through the U.S.

Congress, further addresses climate change through

the inclusion of a zero-emission nuclear power production credit.

If passed in its current form, beginning in 2022 qualified nuclear

power facilities would be eligible to receive a base credit and a bonus credit if certain requirements are met.

President Biden attended the United Nations Climate

Change Conference (COP26) in Glasgow, Scotland.

His administration simultaneously released a proposed plan targeting the reduction of

methane emissions.

Many of the proposed initiatives from the Climate Summit target reduced utilization of fossil fuels and if implemented

expand future opportunities for nuclear power generation, given its ability to provide baseload and carbon-free energy.

To conclude the

COP2, in a surprise announcement, the U.S.

and China pledged to work together to slow global warming.

This is significant because the

and China represent the two countries with the largest CO2 emissions.

They jointly pledged to take “enhanced climate actions”

to meet the 2015 Paris Agreement temperature goal of limiting global warming to less than 1.5C.

nuclear reactor fleet currently

produces in excess of 50% of U.S.

clean energy, and new, advanced nuclear technologies promise to generate additional clean energy.

White House national climate advisor told the media in a press briefing that the Biden-Harris Administration intends to seek a national

clean energy standard that includes nuclear energy.

The Company believes that nuclear energy will be increasingly able to compete on a

level playing field with renewable energy technologies.

The Harris-Biden DoE has been a supporter of new nuclear technologies and invested

in next generation demonstration reactors due to its pro-climate agenda.

On August 16, 2022, President Biden signed into

law the Inflation Reduction Act, which is a significantly reduced version of the Build Back Better plan.

This Act provides for $369 billion

in climate and energy investments, a portion of which will significantly benefit the U.S.

domestic nuclear industry.

Notably, while protecting

the climate, there is a leveling of the playing field with renewable energy, which has long benefited from government support.

the benefits to nuclear split across existing reactors, new advanced reactors, low enriched uranium and high-assay low enriched uranium

nuclear fuels, and in multiple stages of the domestic nuclear fuel cycle.

We believe that each of these benefits increase future aggregate

uranium demand.

While this represents the largest funding support of the U.S.

nuclear industry in decades, there could be a larger secondary

benefit as greater funding was allocated to battery technologies including vanadium redox flow batteries (VRFB).

During 2022, we have observed the DoE becoming increasingly outspoken

and working hard at creating nuclear fuel solutions to address the current dependence on Russia and promote a geopolitical realignment

of the nuclear fuel cycle away from Russia.

As an example, during September 2022, activity in the U.S.

escalated in response to Russia’s

invasion of Ukraine.

Secretary of Energy, Jennifer Granholm, in an address to the IAEA Vienna conference stated:

those countries held hostage by Russian fossil fuels right now, nuclear power—freed of Russian supply chains—is part of the

solution to sever that dependence.” The Biden-Harris Administration requested $1.5 billion in emergency funding to replace nuclear

fuel and services coming from Russia.

This followed the DOE $4.3 billion commitment for the development of expanded domestic reactor fuel

supply chain specifically focused on domestic enrichment and conversion services.

Most notably, the DoE continues to make preparations

for a Russian counter-sanction terminating the flow of nuclear fuel and services from Russia.

Multiple bills were introduced into the

legislature, and many of these have bipartisan support.

Nuclear Fuel and Uranium Effect from the Russian Invasion of

The start of the Russia/Ukraine war created extraordinary volatility

in uranium markets during the first half of 2022.

At the peak, the spot price was at an 11-year high.

Prior to the invasion on February

24, 2022, uranium spot prices were in the $43 per pound range and rose to slightly over $63 per pound by April 2022, an increase of ~$20

Later in May 2022 and June 2022, the spot price receded to $45 levels, before recovering to the $50 level into September 2022.

In the subsequent six months, the spot price of uranium has been range bound at $50 +/- per pound levels.

Equity markets followed the price action of physical uranium prices

in speculation that governments worldwide would sanction and ban nuclear fuel from Russia.

This was in recognition of Russia’s dominant

position in nuclear fuel services including 38% of world conversion capacity and 46% of world enrichment capacity.

The market position

of Rosatom, Russia’s national nuclear company, was developed through decades of government subsidies.

However, because of the lack

of replacement capacity in the global nuclear fuel cycle, Rosatom has avoided sanctions.

Because of the Ukraine invasion, new contracts are largely not being

signed with Rosatom, but deliveries under existing contracts continue to be made.

Customer dependencies upon the Russian supply of uranium,

conversion and enrichment are being addressed slowly by governments as alternative suppliers are not currently available.

However, a desire

to stay away from bad actors and the threat of Russia weaponizing energy exports or a Russian embargo has elicited responses.

utilities have accelerated their contracting of non-Russian conversion and enrichment services.

New uranium supply agreements are being

signed with western producers.

In the United States, multiple new nuclear funding programs have already been put in place and the language

from the Department of Energy has only gotten stronger.

The Secretary of Energy recently declared:

“The United States wants to be

able to source its own fuel from ourselves and that’s why we are developing a uranium strategy.”

In January 2023, ban and sanction discussions intensified as Rosatom

was shown to have become an active participant in the Ukraine war.

An article entitled “Russia’s nuclear entity aids war effort,

leading to calls for sanctions” was published by the Washington Post.

Obtained documents show that the Rosatom state nuclear power

conglomerate was supplying the Russian military with “components, technology, and raw materials for missile fuel” to be used

in the Ukraine war.

In the months since, multiple legislative sanction proposals have been put forth in the United States, including banning

Russian uranium imports.

has the largest fleet of nuclear reactors, these actions have the potential to cause a realignment

of uranium markets.

We believe the shift away from Russia/Rosatom will be a major catalyst

in the realignment of nuclear fuel markets which will benefit western producers.

As a result, Western continues to accelerate the advancement

of our operational strategy in anticipation of increasing uranium price levels that will reward near-term scaled-up ore production.

Strategic Acquisition of Physical Uranium

On May 28, 2021, the Company executed a binding

agreement to purchase 125,000 pounds of natural uranium concentrate at the market price.

In May 2021, the Company executed a binding agreement

to purchase 125,000 pounds of natural uranium concentrate at approximately $32 per pound.

In December 2021, the Company paid $4,044,083

or $32.16 per pound, in connection with its full prepayment of the purchase price for 125,000 pounds of natural uranium concentrate.

This uranium concentrate was delivered to the purchaser on April 13, 2022, pursuant to the terms of the aforementioned uranium concentrates

supply agreement.

in connection with its full prepayment of the purchase price for 125,000 pounds of natural uranium concentrate.

This uranium concentrate

was subsequently delivered and sold under the terms of the uranium supply agreement in the second quarter of 2022.

Uranium Supply Agreement Delivery

On April 13, 2022, in satisfaction of the Year 5 delivery

under its supply contract, the Company delivered 125,000 lbs of uranium concentrate from its prepaid uranium concentrate inventory.

delivery of uranium concentrate resulted in a sale of $7,130,000, at a price of approximately $57 per pound.

The Company expects to receive

the cash from this sale in May 2022.

In the second quarter of 2022, in satisfaction

of the Year 5 delivery under our supply contract, we delivered and sold 125,000 lbs of uranium concentrate from our prepaid uranium concentrate

Accordingly, during the year ended December 31, 2022, we recorded revenue of $7,223,609 (at a price of approximately $57 per

pound) and cost of revenue of $4,044,083 related to this uranium delivery.

Sprott Physical Uranium Trust

The Sprott Physical Uranium Trust (U.UN) (the “Trust”) took

over the former Uranium Participation Corp.

(U.TO) and launched an at-the-market program (ATM) on August 17, 2021 to raise capital for

the closed-ended trust.

Since the inception of the ATM program, the Trust has bought significant quantities of uranium causing spot prices

It is anticipated that a Sprott U.S.

vehicle will receive New York Stock Exchange (NYSE) approval and be made available for

investment during 2022.

It is also likely that a comparable physical uranium holding vehicle will be launched in affiliation with Kazatomprom,

the world’s largest uranium miner.

The world has been, and continues to be, impacted

by the novel coronavirus (“COVID-19”) pandemic.

COVID-19, and measures to prevent its spread, impacted our business in a

number of ways.

The impact of these disruptions and the extent of their adverse impact on the Company’s financial and operating

results will be dictated by the length of time that such disruptions continue, which will, in turn, depend on the currently unpredictable

duration and severity of the impacts of COVID-19, and among other things, the impact of governmental actions imposed in response to COVID-19

and individuals’ and companies’ risk tolerance regarding health matters going forward and developing strain mutations.

date, COVID-19 has primarily caused Western delays in reporting, regulatory matters, and operations.

Most notably, the Company initiated

a request for Temporary Cessation status for the Sunday Mine Complex in August 2020 as the mines had not been restarted within the 180-day

window due to the direct and indirect impacts of the COVID-19 pandemic.

The Van 4 Mine reclamation process was delayed because of COVID-19

pandemic lockdowns.

The need to observe quarantine periods also caused a limited loss of manpower and delay to the 2021 / 2022 Sunday

Mine Complex project.

The COVID-19 pandemic has also limited Western’s participation in industry and investor conference events

during 2020 and 2021.

The Company is continuing to monitor COVID-19and its subvariants, and the potential impact of the pandemic on the

Company’s operations.

The Sprott Physical Uranium Trust (U.UN) (the “Trust”)

took over the former Uranium Participation Corp.

(U.TO) and launched an at-the-market program (ATM) on August 17, 2021 to raise capital

for the closed-ended trust.

Since the inception of the ATM program, the Trust has bought significant quantities of uranium, causing spot

prices to increase.

The New York Stock Exchange (NYSE) declined the U.S.

listing application for the anticipated Sprott U.S.

uranium trust vehicle.

Sprott has stated that they do not have an intent to further pursue a listing on a U.S.

exchange “in the

near term.” In the one year since the Trust initiated its ATM program in August 2021, it has purchased in excess of 39 million pounds

of uranium and grown the net asset value to ~ $2.8 billion.

Due to Sprott’s success, a clone physical uranium fund was launched

on May 12, 2022.

The ANU Energy OEIC Ltd fund raised over $75 million dollars in a private placement and has made its first uranium purchase.

Kazatomprom, the world’s largest producer of uranium is a strategic investor and uranium supplier to ANU Energy.

Kazatomprom has

made the first uranium delivery at Cameco’s Port Hope conversion facility.

Utah Mineral Processing Plant

In January 2023, the Company issued news releases

announcing that it has begun site and facility design and permitting on a property acquired in Green River, Emery County, Utah to build

a state-of-the-art mineral processing plant.

This facility will be designed to recover uranium, vanadium and cobalt from conventional

ore mined both from Company mines and ore produced by other mining companies.

Selecting and acquiring the processing site has taken over

one year to find a location with the road, power and water infrastructure required.

The processing plant will utilize the latest processing

technology, including Western’s patented Kinetic Separation process.

These technology advancements will result in lower overall

capital and processing costs.

This processing plant is expected to have a cost of approximately $50 to $60 million.

After permitting and

construction, the processing of uranium and vanadium ore is expected to commence in late 2026.

The facility will be designed to recover

cobalt, a metal essential in battery technology and electric vehicles.

Within the State of Utah, there are numerous occurrences of cobalt

which may be economical to mine, if a processing facility were available.

Construction of the cobalt circuit will be dependent on the

availability of feed material.

The processing plant is expected to be licensed and constructed for annual production of two million pounds

of U3O8 and six to eight million pounds of V2O5.

The world continues to be impacted by the COVID-19 pandemic.

and the measures to prevent its spread previously impacted the Company’s business in a number of ways.

COVID-19 has primarily caused

Western delays in reporting, regulatory matters, operations, and sick/quarantine days for employees infected/exposed to COVID-19.

COVID-19 pandemic previously limited Western’s participation in industry and investor conference events during 2020 and 2021.

impact of future disruptions and the extent of adverse impacts on the Company’s financial and operating results will be dictated

by the unpredictable duration and severity of the future waves of COVID-19.

The Company is continuing to monitor COVID-19 and its subvariants

and the potential impact of the pandemic on the Company’s operations.

Results of Operations

Year Ended December 31, 2022 as Compared to the Year Ended December

2 unchanged sentences

For the Years Ended

Lease and royalty revenue

Cost of revenue

Mining expenditures

6 unchanged sentences

Settlement expense

Warrant modification expense

Gain on forgiveness of debt

Other Comprehensive income (expense)

Foreign exchange gain (loss)

Foreign exchange (loss) gain

Comprehensive Loss

$ (1,038,377 )

$ (1,985,017 )

Net loss per share - basic and diluted

Our consolidated net loss for the years ended

December 31, 2021and 2020 was $2,074,037 and $2,392,890 or $0.06 and $0.08 per share, respectively.

The principal components of these

year over year changes are discussed below.

Our comprehensive loss for the years ended December

31, 2021 and 2020 was $1,985,017 and $2,503,750, respectively.

Our consolidated net loss for the years ended December 31, 2022 and

2021 was $713,767 and $2,074,037 or $0.02 and $0.06 per share, respectively.

The principal components of these year over year changes

are discussed below.

Our comprehensive loss for the years ended Decembers 31, 2022 and 2021

was $1,038,377 and $1,985,017, respectively.

Our revenue for the years ended December 31,

2022 and 2021 was $7,858,972 and $272,142, respectively.

This revenue resulted from lease revenue pursuant to a July 18, 2017 oil and gas

lease agreement, which was extended for an additional three years in 2020 at a 150% increased rate.

The February 2, 2018 pipeline easement,

with the initial operator has terminated resulting in a decrease in this portion of revenue.

The July 1, 2018 right-of-way agreement

with the new operator was consistent between periods.

The aforementioned revenue streams are derived from the Weld County oil and gas

By August 2021, each of the eight (8) Blue Teal Fed wells had commenced oil and gas production.

On January 31, 2022, the Company

received $207,552 as payment for royalties recognized during the period August 2021 through December 2021.

Mining Expenditures

Mining expenditures for the year ended December 31, 2021 were $717,657

The increase in revenue of $7,586,830 was primarily related to the revenue

recognized upon the satisfaction of the uranium concentrate delivery under our supply contract whereby we delivered 125,000 lbs of

uranium concentrate from our prepaid uranium concentrate inventory for $7,223,609 in the second quarter of 2022.

we recognized oil and gas royalties of $635,363 and $207,552 during 2022 and 2021, respectively.

Cost of Revenue

Cost of revenue was $4,044,083 for the year ended December 31, 2022

as compared to $0 for the year ended December 31, 2021.

The increase in mining expenditures of $324,475, or 82.5% was principally

attributable to mining expenditures related to restarting mining operations at the Company’s Sunday Mine Complex during the third

quarter of 2021.

This increase was a result of recording the cost of the uranium concentrate that

was sold and delivered during the second quarter of 2022.

Mining Expenditures

Mining expenditures for the year ended

December 31, 2022 were $762,333 as compared to $717,657 for the year ended December 31, 2021.

The increase in mining expenditures of

$44,676, or 6% was principally attributable to the relative scale and specific project costs of mining operations in 2022 versus

2021 at the Company’s Sunday Mine Complex.

Professional Fees

1 unchanged sentence

as compared to $365,302 for the year ended December 31, 2021.

The increase in professional fees of $65,394, or 21.8% was due to a $61,197

increase in legal fees which was primarily attributable to the Form S-1 share registration process.

The increase in professional fees of $128,638, or 35% was primarily due

to the increased use of professional and advisory services after the reduced utilization in the prior year period due to COVID-19.

General and Administrative

General and administrative expenses for the year ended December 31,

2021 were $1,172,585 as compared to $1,136,049 for the year ended December 31, 2020.

The increase in general and administrative expense

of $36,536, or 3.2% is due to a $136,756 increase in in payroll expenses, and an increase of $36,760 in utilities expenses in connection

with the Sunday Mine Complex project offset by a decrease of $212,796 of stock-based compensation.

General and administrative expenses for the year

ended December 31, 2022 were $3,246,171 as compared to $1,172,585 for the year ended December 31, 2021.

The increase in general and administrative

expense of $2,073,586 was due primarily to a $1,566,520 increase in stock-based compensation expense (the awards granted in 2022 were

intended to provide stock-based compensation for performance in both 2021 and 2022) and a $323,151 increase in payroll expenses for increased

headcount as we build in-house capability to support scaled-up mining operations and related support functions.

Consulting fees

Consulting fees for the year ended December 31,

2021 were $29,543 as compared to $39,137 for the year ended December 31, 2020.

The decrease in consulting fees of $9,594, or 24.5% was

principally due to the Company’s reduced utilization of consultants during the current period.

Consulting fees for the year ended December 31, 2022 were $91,626 as

compared to $29,543 for the year ended December 31, 2021.

The increase in consulting fees of $62,083 was principally due to the increased

use of consultants after the reduced utilization in the prior year period due to COVID-19.

Accretion and Interest

Accretion and interest for the year ended December 31, 2021 was $(16,960)

as compared to $13,338 for the years ended December 31, 2020.

The change of accretion and interest of $30,298 was due to the return of

the Hansen Picnic Tree Financial Warrantee with interest.

Warrant Modification Expense

Warrant modification expense for the year ended December 31, 2021

was $0 as compared to $639,012 for the year ended December 31, 2020.

The decrease in warrant modification expense relates to the Company’s

decision on April 20, 2020 to extend warrants issued to investors during various 2018 private placements and amend the trigger price in

the acceleration clause for each tranche of warrants, resulting in a warrant modification expense of $639,012 in 2020.

Gain on Forgiveness of Debt

Gain on forgiveness of debt for the year ended

December 31, 2021 was $0 as compared to $73,116 for the year ended December 31, 2020.

The gain on forgiveness of debt relates to the

Company having its PPP Loan forgiven by the U.S.

Small Business Association in December 2020.

Accretion and interest for the year ended

December 31, 2022 was income of $61,414 as compared to income of $16,960 for the year ended December 31, 2021.

The increase of $44,454 was principally attributable to investment interest earned on higher level balances in the 2022 year.

Foreign Exchange

Foreign exchange gain (loss) for the year ended December 31, 2021 was

$89,020 as compared to $(110,860) for the year ended December 31, 2020.

The change of the foreign exchange gain (loss) of $199,880 is

primarily due to a swing from a loss in 2020 to a gain in 2021 from holding cash balances in Canadian Dollars during a period when the

currency appreciated and the translation gain from using United States Dollars as the reporting currency.

Foreign exchange (loss) gain for the

year ended December 31, 2022 was a loss of $324,610 as compared to a gain of $89,020 for the year ended December 31, 2021.

foreign exchange loss is primarily due to the strengthening of the U.S.

dollar relative to the Canadian dollar in the 2022

Liquidity and Capital Resources

The Company’s cash balance as of December

31, 2021 was $880,821.

The Company’s cash position is highly dependent on its ability to raise capital through the issuance of

debt and equity and its management of expenditures for mining development and for fulfillment of its public company reporting responsibilities.

Management believes that in order to finance the development of the mining properties and Kinetic Separation, the Company will be required

to raise additional capital by way of debt and/or equity.

The Company could potentially require additional capital if the scope of the

Sunday Mine Complex expands.

This outlook is based on the Company’s current financial position and is subject to change if opportunities

become available based on current exploration program results and/or external opportunities.

Net cash used in operating activities

Net cash used in operating activities was $6,154,665

for the year ended December 31, 2021, as compared with $1,513,626 for the year ended December 31, 2020.

Of the $6,154,665 in net cash

used in operating activities for the year ended December 31, 2021, $2,074,037 is derived from our net loss before non-cash adjustments.

Changes in our operating assets and liabilities for the period primarily include an increase of $4,085,723 in prepaid uranium concentrate

inventory, $269,606 in prepaid expenses and other current assets, an increase of $356,976 in accounts payable and accrued expenses, and

a decrease of $64,620 in deferred revenue.

The Company’s cash and restricted cash

balance as of December 31, 2022 was $10,433,538.

The Company’s cash position is highly dependent on its ability to raise

capital through the issuance of debt and equity and its management of expenditures for mining development and for fulfillment of its

public company reporting responsibilities.

Management believes that in order to finance the development of the mining properties and

Kinetic Separation, to secure regulatory licenses and to construct a conventional mill for the processing of uranium and vanadium,

the Company will be required to raise additional capital by way of debt and/or equity.

Western will also require additional working

capital to continue to scale-up its mining operations at the Sunday Mine Complex.

This outlook is based on the Company’s

current financial position and is subject to change if opportunities become available based on current exploration program results

and/or external opportunities.

Net cash provided by (used in) operating activities

Net cash provided by operating activities was

$4,550,246 for the year ended December 31, 2022, as compared with $6,154,665 used in operating activities for the year ended December

The increase in cash provided by operating activities of $10,704,911 was due to principally to the cash of $7,223,609 received

during 2022, as compared to the use of cash of $4,085,723 from the purchase of the Uranium contract in 2021, partially offset by additional

cash operating expenses incurred during 2022.

Net cash used in investing activities

Net cash used in investing activities was

for the year ended December 31, 2021, as compared with $0 for the year ended December 31, 2020.This capital expenditure relates to purchasing

property and equipment for our mining operations.

$1,045,638 for the year ended December 31, 2022, as compared with $65,000 for the year ended December 31, 2022.

The increase in cash

used in investing activities of $980,638 was due principally to the purchase of mining equipment and vehicles.

Net cash provided by financing activities

Net cash provided by financing activities for

the years ended December 31, 2021 and 2020 were $6,309,143 and $73,116, respectively.

The Company completed three private placements

during 2021 representing aggregate net proceeds of $4,304,279 and received $2,004,864 from the exercise of warrants during the year ended

December 31, 2021.

Net cash provided by financing activities

for the year ended December 31, 2022 and 2021 were $5,632,273 and $6,309,143, respectively.

During the year ended December 31, 2022

we completed a private placement representing aggregate net proceeds of $3,011,878 and received $2,620,395 from the exercise of

warrants, as compared to the year ended December 31, 2021, where we completed private placements of $4,304,279 and received

$2,004,864 from the exercise of warrants.

Reclamation Liability

6 unchanged sentences

costs in connection with the mineral properties.

The Company determined the gross reclamation liabilities of the mineral properties as

of December 31, 2021 and 2020, to be approximately $740,446 and $906,811, respectively.

The Company determined the gross reclamation liabilities of the mineral properties to

be $751,405 and $740,446 as of December 31, 2022 and December 31, 2021, respectively.

On March 2, 2020, the Colorado Mined Land Reclamation

5 unchanged sentences

The Company adjusted the fair value of its reclamation obligation for the Van 4 Mine.

The portion of the reclamation liability related to the Van 4 Mine and its related restricted cash are included in current liabilities

and current assets, respectively, at a value of $75,057.

The Company expects to begin incurring the reclamation liability after 2054

for all mines that are not in reclamation and accordingly, has discounted the gross liabilities over their remaining lives using a discount

rate of 5.4%.

The net discounted aggregated values as of December 31, 2021 and 2020 were $271,620 and $309,940, respectively.

reclamation liabilities as of December 31, 2021 and 2020 are secured by financial warranties in the amount of $740,446 and $906,811,

respectively.

During the first quarter of 2021, the Company

received notice that its Ferris Haggerty property was no longer considered to be subject to reclamation treatment.

The Company recorded

a discontinuation of the Ferris Haggerty property’s present value of $2,669 during the first quarter 2021.

On April 29, 2021, the

Company moved the Ferris Haggerty $10,000 restricted cash deposit into its cash after receiving payment from the state of Wyoming.

the fourth quarter of 2021, the Company received notice that its Hansen Picnic Tree property was no longer considered to be subject to

reclamation treatment.

The Company recorded a discontinuation of the Hansen Picnic Tree property’s present value of $44,793 during

the fourth quarter of 2021.

On December 29, 2021, the Company moved the $154,936 restricted cash deposit into its cash after receiving

payment from the state of Colorado.

portion of the reclamation liability related to the Van 4 Mine and its related restricted cash are included in current liabilities and

current assets, respectively, at a value of $75,057.

The Company expects to begin incurring the reclamation liability after 2054 for all

mines that are not in reclamation and accordingly, has discounted the gross liabilities over their remaining lives using a discount rate

The net discounted aggregated values as of December 31, 2022 and December 31, 2021 were $300,276 and $271,620, respectively.

The gross reclamation liabilities as of December 31, 2022 and December 31, 2021 are secured by financial warranties in the amount of $751,405

and $740,446, respectively.

Oil and Gas Lease and Easement

The Company entered into an oil and gas lease

that became effective with respect to minerals and mineral rights owned by the Company of approximately 160 surface acres of the Company’s

property in Colorado.

As consideration for entering into the lease, the lessee has agreed to pay the Company a royalty from the lessee’s

revenue attributed to oil and gas produced, saved, and sold attributable to the net mineral interest.

The Company has also received cash

payments from the lessee related to the easement that the Company is recognizing incrementally over the eight year term of the easement.

On June 23, 2020, the same entity as discussed

above elected to extend the oil and gas lease easement for three additional years, commencing on the date the lease would have previously

During 2021, the operator completed all well development stages and each of the eight (8) Blue Teal Fed wells commenced oil

and gas production by mid-August 2021.

During the years ended December 31, 2021 and 2020 the Company recognized

The Company entered into an oil and gas lease that became effective

with respect to minerals and mineral rights owned by the Company of approximately 160 surface acres of the Company’s property in

As consideration for entering into the lease, the lessee has agreed to pay the Company a royalty from the lessee’s revenue

attributed to oil and gas produced, saved, and sold attributable to the net mineral interest.

The Company has also received cash payments

from the lessee related to the easement that the Company is recognizing incrementally over the eight year term of the easement.

On June 23, 2020, the same entity as discussed above elected to extend

the oil and gas lease easement for three additional years, commencing on the date the lease would have previously expired.

the operator completed all well development stages and each of the eight (8) Blue Teal Fed wells commenced oil and gas production by mid-August

During the year ended December 31, 2022 and 2021, the Company recognized

aggregate revenue of $635,363 and $272,142, respectively, under these oil and gas lease arrangements.

On January 31, 2022, the Company

received $207,552 as payment for royalties recognized during the period August 2021 through December 2021.

The Company expects to receive approximately

$60,000 per month going forward in oil and gas royalties, subject to the price of oil and decline rates.

Related Party Transactions

The Company has transacted with related parties

pursuant to service arrangements in the ordinary course of business, as follows:

The Company has transacted with related parties pursuant to service

arrangements in the ordinary course of business, as follows:

Prior to the acquisition of Black Range, Mr.

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in the amount of $340,252 and $362,794 as of December 31, 2022 and 2021, respectively.

The Company has multiple lease arrangements with

Silver Hawk Ltd., an entity which is owned by George Glasier and his wife Kathleen Glasier.

These leases, which are all on a month-to-month

basis, are for the Company’s rental of office, workshop, warehouse and employee housing facilities The Company incurred rent expense

of $55,198 and $34,427 in connection with these arrangement for the years ended December 31, 2022 and 2021, respectively.

The Company is obligated to pay Mr.

Glasier for reimbursable expenses

in the amount of $87,221 and $65,753 December 31, 2022 and 2021, respectively.

Going Concern

The Company has incurred continuing losses from its operations and as of

December 31, 2021, the Company had an accumulated deficit of $13,161,496 and working capital of $4,492,169.

Since inception, the Company has met its liquidity

requirements principally through the issuance of notes and the sale of its common shares.

On February 16, 2021, the Company closed on

a non-brokered private placement of 3,250,000 units at a price of CAD $0.80 per unit.

The aggregate gross proceeds raised in the private

placement amounted to CAD $2,600,000 (USD $1,950,509 in net proceeds).

On March 1, 2021, the Company closed on a non-brokered private

placement of 3,125,000 units at a price of CAD $0.80 per unit.

The aggregate gross proceeds raised in the private placement amounted

to CAD $2,500,000 (USD $1,918,797 in net proceeds).

On December 17, 2021, the Company closed on a non-brokered private placement of 372,966

units at a price of CAD $1.60 per unit.

The aggregate gross proceeds raised in the private placement amounted to CAD $596,746 (USD $434,973

in net proceeds).

During the year ended December 31, 2021, the Company received $2,004,864 in proceeds from the exercise of warrants.

With the exception of the quarter ending June 30, 2022, we had incurred

losses from our operations and as of December 31, 2022, the Company had an accumulated deficit of $13,875,263 and working capital of $9,568,963.

Since inception, the Company has met its liquidity requirements principally

through the issuance of notes and the sale of its common shares.

On January 20, 2022, the Company closed on a non-brokered private placement

of 2,495,575 units at a price of CAD $1.60 per unit.

The aggregate gross proceeds raised in the private placement amounted to CAD $3,992,920

(USD $3,011,878 in net proceeds).

During the year ended December 31, 2022, the Company received $2,620,395 in proceeds from the exercise

In April 2022, the Company delivered 125,000 lbs of uranium concentrate from its prepaid uranium concentrate inventory.

during the year ended December 31, 2022, the Company recorded revenue of $7,223,609 (at a price of approximately $57 per pound).

during the year ended December 31, 2022, the Company earned oil and gas royalty payments of $635,363.

The Company’s ability to continue its operations

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Management’s plans

include seeking to procure additional funds through debt and equity financings, to secure regulatory approval to fully utilize its Kinetic

Separation and to initiate the processing of ore to generate operating cash flows.

There are no assurances that the Company will

be able to raise capital on terms acceptable to the Company or at all, or that cash flows generated from its operations will be sufficient

to meet its current operating costs and required debt service.

If the Company is unable to obtain sufficient amounts of additional capital,

it may be required to reduce the scope of its planned product development, which could harm its financial condition and operating results,

or it may not be able to continue to fund its ongoing operations.

These conditions raise substantial doubt about the Company’s

ability to continue as a going concern to sustain operations for at least one year from the issuance of the accompanying financial statements.

The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

include seeking to procure additional funds through debt and equity financings, to secure regulatory approval licenses to fully utilize

its Kinetic Separation, to construct a conventional mill for the processing of uranium and vanadium and to incorporate Kinetic Separation

in the processing of ore to generate operating cash flows.

Western will need additional capital to continue ongoing mining operations

by its in-house mining team at the Sunday Mine Complex while simultaneously permitting and construction a processing plant.

There are no assurances that the Company will be able to raise capital

on terms acceptable to the Company or at all, or that cash flows generated from its operations will be sufficient to meet its current

operating costs and required debt service.

If the Company is unable to obtain sufficient amounts of additional capital, it may be required

to reduce the scope of its planned product development, which could harm its financial condition and operating results, or it may not

be able to continue to fund its ongoing operations.

These conditions raise substantial doubt about the Company’s ability to continue

as a going concern to sustain operations for at least one year from the issuance of the accompanying financial statements.

The accompanying

consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

Off Balance Sheet Arrangements

As of December 31, 2021, there were no off-balance

sheet transactions.

The Company has not entered into any specialized financial agreements to minimize its investment risk, currency risk

or commodity risk.

As of December 31, 2022, there were no off-balance sheet transactions.

The Company has not entered into any specialized financial agreements to minimize its investment risk, currency risk or commodity risk.

Critical Accounting Estimates and Policies

The preparation of these consolidated financial

statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities

at the date of the consolidated financial statements and reported amounts of expenses during the reporting period.

Significant assumptions about the future and

other sources of estimation uncertainty that management has made at the end of the reporting period, that could result in a material

adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, include,

but are not limited to, the following:

fair value of transactions involving common shares, assessment of the useful life and evaluation

for impairment of intangible assets, valuation and impairment assessments on mineral properties, deferred contingent consideration, the

reclamation liability, valuation of stock-based compensation, valuation of available-for-sale securities and valuation of long-term debt,

HST and asset retirement obligations.

Other areas requiring estimates include allocations of expenditures, depletion and amortization

of mineral rights and properties.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The preparation of these consolidated financial statements requires

management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date

of the consolidated financial statements and reported amounts of expenses during the reporting period.

Significant assumptions about the future and other

sources of estimation uncertainty that management has made at the end of the reporting period, that could result in a material adjustment

to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, include, but are not

limited to, the following:

fair value of transactions involving common shares, assessment of the useful life and evaluation for impairment

of intangible assets, valuation and impairment assessments on mineral properties, deferred contingent consideration, the reclamation liability,

valuation of stock-based compensation, valuation of available-for-sale securities and valuation of long-term debt, HST and asset retirement

Other areas requiring estimates include allocations of expenditures, depletion and amortization of mineral rights and properties

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

Not applicable.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

This information appears following Item 17 of

this report and is included herein by reference.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

FINANCIAL STATEMENTS AND SUPPLEMENTARY

This information appears following Item 17 of this report and is included

herein by reference.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis