Ambrosia Lake Project

The Company’s Ambrosia Lake project is situated within an area of very strong sandstone-hosted uranium mineralization, and at the location of the largest uranium-producing area in the United States. Uranium mineralization at our properties in the Ambrosia Lake area, and elsewhere in the Grants mineral belt, are primarily hosted in sandstones within the Westwater Canyon Member of the Jurassic-aged Morrison Formation, and to a lesser extent in the Poison Canyon sandstone unit of the Morrison Formation.

The Property

The Ambrosia Lake project is comprised of fee (deeded) mineral rights owned directly by the Company, covering an area of approximately 24,175 acres (9,767 hectares). The surface rights covering the fee mineral rights are held by two ranching organizations, one mining company, and a small portion held by Navajo ranchers, The Company’s right to access to its mineral estate is provided for in the deeds to the properties. A surface access agreement for a portion of our properties provides has a provision for payment of a 2 percent production royalty to the surface owner; otherwise there are no royalty obligations attached to the properties. As the properties are owned outright by the Company there are no payments required to hold these lands

History

In the Ambrosia Lake area, mineral exploration and development programs (including underground and small-scale open pit extraction and milling) commenced in the early 1950’s and continued into the 1990’s. During that period of time nearly 190 million pounds of U3O8 were produced from sandstone and limestone-hosted mineralized areas in the district, and a significant amount of uranium mineralization remains in place. During the period of operation of the Ambrosia Lake district, underground uranium sites were discovered, developed and operated by numerous companies, including Kerr-McGee Nuclear, Homestake Mining Company, United Nuclear/UNC Resources, Phillips Petroleum, Ranchers Exploration, and others. Lands that comprise our Ambrosia Lake Project have been explored by several firms (including Conoco, Homestake Mining, Kerr-McGee, Bokum Resources, Pathfinder Mines and United Nuclear Corporation) periodically since the mid 1950’s, and numerous exploration holes have been drilled on our properties. Much of the drilling and related data from several of these historical programs are currently in our possession. We have previously carried out short drilling programs on properties within the Ambrosia Lake project, but we have not undertaken any physical work since 2011.

Geology

The Ambrosia Lake project area is the site of extensive sandstone-hosted uranium deposits that have been the single largest source of uranium in the United States. The uranium deposits of the area occur in three general “styles” of mineralization: 1) “trend” type deposits that are generally a few feet thick, many 10s to 100s of feet wide and many 100s to more than 1,000 feet long; 2) “redistributed” deposits, which are irregular-shaped bodies that may be several 10s of feet thick and 100s of feet in width and length; or 3) roll fronts which are sinuous bodies that are a few feet thick, a few 10s of feet in width and 1000s of feet in length. The trend and roll front styles of uranium deposits in the Ambrosia Lake area are often associated with organic matter (humate) that localized the mineralization

The deposits are hosted in sandstones of the Westwater Canyon Member of the Jurassic-age Morrison Formation, and in the Poison Canyon sandstone, which is also a unit of the Morrison Formation.

Project Environmental and Permitting Status

Parts of the project lands were previously mined for uranium by other companies, and these locations have been reclaimed by the previous operators. There are no standing environmental remediation orders for any of the project lands pending.

Status

Ambrosia Lake is comprised of a comprehensive property position that is interspersed within a former mining district that was the largest uranium producing area in the United States. While there is no mining currently being done on our properties or adjoining lands the project remains an attractive exploration target area.

We are evaluating the mineral resource potential of our properties.