Butler Ranch Project

The Butler Ranch Project is located in the Karnes County mining district, which was historically one of the largest uranium-producing areas in Texas. Mineralization at the Butler Ranch Project is hosted in the Jackson Group. The mineralization is below the water table and is believed to be amenable to in-situ recovery (ISR), based upon historic results from nearby ISR mines in the same geologic units.

South Texas Properties

Location

The Butler Ranch Project is located in the southwestern end of the Karnes County uranium mining area, about 45 (72 kilometers) miles southeast of the city of San Antonio and 12 miles (19 kilometers) northeast of the town of Kenedy.

Status

An initial exploration drilling program was carried out in 2015 on one lease at Butler Ranch. Narrow zones of roll front style mineralization were encountered in the target horizon, and the results of the exploration program provided the opportunity to advance our understanding of the mineral potential of the project area. Exploration activities will ensue when uranium prices allow.

Exploration activities are planned to continue when uranium prices allow.

Geology

The South Texas Uranium Province is an arcuate belt of sandstone-hosted uranium deposits that are hosted in clastic rocks ranging in age from Eocene to Miocene and Pliocene. The belt, which is 30 miles (48 kilometers) or more in width and more than 160 miles (257 kilometers) in length, parallels the present-day coast of the Gulf of Mexico.

Uranium mineralization is hosted in fluvial sandstones of the Eocene-age Jackson Group, the Oligocene/Miocene-age Catahoula Formation, Miocene-age Oakville Formation and Miocene/Pliocene-age Goliad Formation. Major channel systems through the region as well as high-angle fault zones and salt domes along the Gulf of Mexico coastal plain combined to localize uranium mineralization into distinct deposits and concentrations of deposits that constitute mining districts.

Uranium deposits occur as “roll-fronts” in the more porous and permeable sandstones, and they have been localized by concentrations of organic plant debris in the sandstones, or where hydrocarbon gasses have migrated upward into the host rocks along high-angle faults. The host rocks have shallow easterly to southeasterly dips. On the up-dip (westerly to north-westerly) portions of the South Texas uranium province, certain deposits were oxidized, particularly at or near outcrops, but were generally not oxidized for those deposits positioned below the water table. Most of the targets on the Company’s exploration projects are situated below the water table.

An important aspect of many of the uranium deposits in the region, especially those below the water table, is that many have actual grades of mineralization that are higher than the radiometric-derived grades.

Environmental and Permitting Status

Any future in-situ recovery project will require permits and licenses from the Texas Commission on Environmental Quality (TCEQ).