West Largo

The West Largo project is an exploration project that is host to a significant uranium deposit that has appreciable grades. Although considerable exploration was carried out by previous operators on the project additional work remains to be completed at this interesting project. The southern part of the project area is contiguous with the northwestern part of the Ambrosia Lake district, which was the largest uranium-producing area in the United States.

Location

The project is located in west-central New Mexico, about 23 miles (37 kilometers) north of the town of Grants and 75 miles (121 kilometers) northwest of the city of Albuquerque.

Status

The West Largo project is in an inactive status as we await a sustained improvement in the uranium price.

The Property

The West Largo project is comprised of 75 unpatented lode claims and four sections of fee-owned mineral rights, collectively covering an area of approximately 3,840 acres (1,551 hectares). All of the properties that make up the West Largo project are owned directly by the Company. The two blocks of mining claims are situated on lands that are managed by the US Bureau of Land Management (BLM), and as such require annual maintenance payments to the BLM of $155 per claim; there are no other land payments required to maintain our property holdings at West Largo. The surface for two of the sections are Navajo allotments, the surface for one section is held by the US Bureau of Indian Affairs in trust for the Navajo Nation, and the surface of the other section is owned by a local ranch. At the present time we have a surface access agreement with the ranch, but we do not have similar agreements for those parcels that are held for the Navajo Nation or the Navajo allotments, Other than the aforementioned annual mining claim maintenance payments to the BLM and a 2.5 percent production royalty on the single section with the ranch there are no other third-party obligations attached to the project area.

History

Although the project is contiguous with the northwest part of the Ambrosia Lake mining district (which was the location for some of the earliest discoveries in the region) uranium exploration at West Largo was not carried out until 1968. Initial exploration in the project area was undertaken by Gulf Mineral Resources, with additional exploration programs subsequently undertaken by Kerr-McGee, Pathfinder Mines and Santa Fe Minerals. Within the lands we control, these companies drilled nearly 1,600 holes to discover and partially define several sandstone-hosted uranium deposits on the properties. There have been no efforts to develop the uranium mineralization at the project and there is no infrastructure present on the properties.

Geology

Uranium mineralization at the West Largo project is hosted in five sandstone units of the Westwater Canyon Member of the Jurassic-age Morrison Formation, which is the dominant host unit for uranium deposits throughout the Grants mineral belt. The mineralized units are present at depths generally ranging from 1,800 to more than 2,700 feet (548 to 823 meters) below the surface. The mineralization, which appears to have characteristics of ‘‘redistributed’’ deposits or roll fronts, is generally present along a west-northwest trend that extends for a distance of at least 4.25 miles (7 kilometers), and attains a width of up to 500 feet (152 meters).

Environmental and Permits

We do not hold any permits for exploration or recovery activities, and we have not undertaken any environmental or cultural resource surveys to support permit