URANIUM EXPLORATION AND MINING ON THE BUREAU OF LAND MANAGEMENT IN ARIZONA

Favorable environments for the occurrence of uranium minerals on the Colorado Plateau within Arizona are mainly: Sandstone type uranium deposits, and Breccia pipe type uranium deposits. Recently the importance of breccia pipe deposits has far exceeded that of sandstone type deposits. Favorable environments for the occurrence of uranium minerals on the Colorado Plateau within Arizona are mainly: Sandstone type uranium deposits, and Breccia pipe type uranium deposits. Recently the importance of breccia pipe deposits has far exceeded that of sandstone type deposits. Colorado Plateau Uranium Deposits of Arizona

Occur in the Upper Jurassic Morrison Formation and the Upper Triassic Chinle Formation. These deposits typically occur in sandstones and conglomerates deposited along ancient stream channels. Uranium mineralization is often associated with carbonaceous material contained within the sandstone and conglomerates. Occur in the Upper Jurassic Morrison Formation and the Upper Triassic Chinle Formation. These deposits typically occur in sandstones and conglomerates deposited along ancient stream channels. Uranium mineralization is often associated with carbonaceous material contained within the sandstone and conglomerates. Sandstone Type Uranium Deposits

Breccia Pipe Uranium Deposits Are unique geologic features on this portion of the Colorado Plateau created by solution and collapse. The formation of breccia pipes began with karst development in the Mississippian Redwall Limestone. Structural readjustments caused upward propagation of the fractures and faults localized in the Redwall caves, which resulted in the stoping of successively younger units, vertically thousands of feet. The stoping processes, which involved both chemical dissolution and mechanical failure of roof and wall rock, produced a column of brecciated rock within the steep walls of the pipes. Are unique geologic features on this portion of the Colorado Plateau created by solution and collapse. The formation of breccia pipes began with karst development in the Mississippian Redwall Limestone. Structural readjustments caused upward propagation of the fractures and faults localized in the Redwall caves, which resulted in the stoping of successively younger units, vertically thousands of feet. The stoping processes, which involved both chemical dissolution and mechanical failure of roof and wall rock, produced a column of brecciated rock within the steep walls of the pipes.

Breccia Pipe Mineralization Mineralization within breccia pipes has resulted in the formation of uranium, copper, germanium and gallium deposits of economic importance. All mineralization of economic importance appear to be between the Coconino Sandstone and the Supai Group. Mineralization occurs either as discontinuous vertical pods in breccia within the pipe or in annular rings along the outside edge of the pipe. Uraninite is the primary uranium mineral and occurs in the matrix and, to a lesser degree, in clasts within breccia. It occurs in association with copper, arsenic, nickel, lead, zinc and silver. Mineralization within breccia pipes has resulted in the formation of uranium, copper, germanium and gallium deposits of economic importance. All mineralization of economic importance appear to be between the Coconino Sandstone and the Supai Group. Mineralization occurs either as discontinuous vertical pods in breccia within the pipe or in annular rings along the outside edge of the pipe. Uraninite is the primary uranium mineral and occurs in the matrix and, to a lesser degree, in clasts within breccia. It occurs in association with copper, arsenic, nickel, lead, zinc and silver.

Lake Havasu Field Office Universal Uranium: Targeted uranium in sediments of the Artillery Peak Fm. Exploration consisted of 41 core holes on 3 sections. Twenty-six of the drill holes twinned previous holes to confirm the potential for 1.7 million lbs of U3O8 with an average grade of 0.113%. Universal has since abandoned their interest in the property. Uranium King: Exploration proposal for 13 core holes on 4 sections drilling to commence in fall/winter. Approximately 500 new mining claims for uranium have been staked in the past few years. Universal Uranium: Targeted uranium in sediments of the Artillery Peak Fm. Exploration consisted of 41 core holes on 3 sections. Twenty-six of the drill holes twinned previous holes to confirm the potential for 1.7 million lbs of U3O8 with an average grade of 0.113%. Universal has since abandoned their interest in the property. Uranium King: Exploration proposal for 13 core holes on 4 sections drilling to commence in fall/winter. Approximately 500 new mining claims for uranium have been staked in the past few years.

Arizona Strip District Office

Breccia Pipe Exploration Approximately 1000 breccia pipes and collapse features are identified on the Arizona Strip. Only a small percent of breccia pipes are mineralized and of those only a small percent have economic potential. Exploration includes geochemistry, geophysics, radiometrics, aerial photo / Landsat interpretation, and mapping. Approximately 1000 breccia pipes and collapse features are identified on the Arizona Strip. Only a small percent of breccia pipes are mineralized and of those only a small percent have economic potential. Exploration includes geochemistry, geophysics, radiometrics, aerial photo / Landsat interpretation, and mapping.

Exploration Notices and Plans Since April 2004 more than 8,000 new mining claims have been located on the Arizona Strip for uranium. Since September 2005, the Arizona Strip Field Office has received 72 Notices and one Plan for uranium exploration. Approximately 300 exploratory drill holes have been proposed, of which about 250 holes have been drilled. Since April 2004 more than 8,000 new mining claims have been located on the Arizona Strip for uranium. Since September 2005, the Arizona Strip Field Office has received 72 Notices and one Plan for uranium exploration. Approximately 300 exploratory drill holes have been proposed, of which about 250 holes have been drilled.

Drilling for Breccia Pipes Once the target is located the presence of the breccia pipe is confirmed by drilling. Shallow stratigraphic holes are usually drilled first to confirm the geometry of the throat. Deep diamond core holes are then drilled to define the ore body and estimate resources and reserves. During the 70’s and 80’s more than 1,200 holes were drilled on the Arizona Strip exploring for breccia pipes. Once the target is located the presence of the breccia pipe is confirmed by drilling. Shallow stratigraphic holes are usually drilled first to confirm the geometry of the throat. Deep diamond core holes are then drilled to define the ore body and estimate resources and reserves. During the 70’s and 80’s more than 1,200 holes were drilled on the Arizona Strip exploring for breccia pipes.

Depth (feet) Shallow drilling locates the pipe throat Surface geological mapping and imagery defines a target Deep drilling defines the orebody Breccia Pipe Exploration

Arizona Strip Breccia Pipe Mines In the 70’s through the early 90’s extensive uranium exploration resulted in the discovery of numerous pipes. Energy Fuels Nuclear (EFN) developed six uranium mines from eight breccia pipes during the 80’s and 90’s. EFN's production from these mines totaled million tons of ore with an average grade of 0.65% U3O8 containing million pounds of U3O8. In the 70’s through the early 90’s extensive uranium exploration resulted in the discovery of numerous pipes. Energy Fuels Nuclear (EFN) developed six uranium mines from eight breccia pipes during the 80’s and 90’s. EFN's production from these mines totaled million tons of ore with an average grade of 0.65% U3O8 containing million pounds of U3O8. Hermit Kanab N. Pigeon Hermit

Uranium Production from Breccia Pipes on the Arizona Strip Of the six mines three were closed and have been reclaimed (Hack Mine Complex Pigeon Mine and Hermit Mine). The other three (Kanab North Mine, Arizona 1 Mine and Pinenut Mine) were shut down and put on “care and maintenance”. These mines are now owned by Denison Mine (USA) Inc., (Denison). Of the six mines three were closed and have been reclaimed (Hack Mine Complex Pigeon Mine and Hermit Mine). The other three (Kanab North Mine, Arizona 1 Mine and Pinenut Mine) were shut down and put on “care and maintenance”. These mines are now owned by Denison Mine (USA) Inc., (Denison).

Proven Reserves from Breccia Pipes on the Arizona Strip Denison has announced they intend to re-open the Arizona 1 mine during 2008 and then re-open the Pinenut mine and evaluate Kanab North. The proven reserves in the Arizona 1, Pinenut and Kanab North mines are estimated to be 190,000 tons of ore with an average grade of 0.522% U3O8 containing 1.98 million pounds of U3O8. Denison has announced they intend to re-open the Arizona 1 mine during 2008 and then re-open the Pinenut mine and evaluate Kanab North. The proven reserves in the Arizona 1, Pinenut and Kanab North mines are estimated to be 190,000 tons of ore with an average grade of 0.522% U3O8 containing 1.98 million pounds of U3O8.

Proposed New Mine Development on the Arizona Strip Denison visited the Arizona Strip Field Office to discuss the development of a new mining operation. The new mine includes the EZ-1, EZ-2 and WHAT pipes and would entail sinking a single shaft and drifting horizontally into the three deposits. Denison visited the Arizona Strip Field Office to discuss the development of a new mining operation. The new mine includes the EZ-1, EZ-2 and WHAT pipes and would entail sinking a single shaft and drifting horizontally into the three deposits.

Why the Arizona Strip Exploration quick and economical High grades and small mines –Typical ore grade ± 0.60% U3O8 –Relatively short development time –Small footprint (mine complex is < 20 acres) –Easy reclamation ( waste put back in mine ) –Ore body is more than 1000 ft. above regional aquifer. Exploration quick and economical High grades and small mines –Typical ore grade ± 0.60% U3O8 –Relatively short development time –Small footprint (mine complex is < 20 acres) –Easy reclamation ( waste put back in mine ) –Ore body is more than 1000 ft. above regional aquifer.

Issues Affecting Mining on the Arizona Strip June 25, 2008, The House Natural Resources Committee adopted a resolution to require the Secretary of Interior to withdraw more than 1 million acres of public lands adjacent to the Grand Canyon National Park from the operation of the mining law, subject to valid existing rights.