Within the Sheep Mountain Project area, uranium mineralization is contained in the lower to middle Eocene Battle Spring Formation. The Battle Spring Formation, consisting of upper and lower members (designated the "A" for the lower and "B" for the upper), is a fluvial deposit. Mineralization is hosted by the Battle Spring Formation and has been described extensively since the 1960s and has been termed a "Wyoming Roll Front System." These deposits are often organic-rich, fine grained lenses in tabular, or "roll front," configurations. The uranium mineralization occurs primarily in the lower member of the Battle Spring Formation (Stephens,1964).

The host of uranium mineralization for the Project is the Battle Spring Formation. Most of the mineralization in the Crooks Gap district occurs in roll-front deposits(Bendix, 1982). Roll fronts have an erratic linear distribution but are usually concordant with the bedding. Deposits have been discovered from the surface down to a depth of 1,500 feet (Stephens, 1964). The two major uranium minerals are uranophane and autunite. Exploration drilling indicates that the deeper roll-type deposits are concentrated in synclinal troughs in the lower Battle Spring Formation. Three possible sources for uranium have been suggested: post-Eocene tuffaceous sediments, leached Battle Spring arkoses, and Precambrian granites (Granite Mountains).

Structural controls of uranium occurrences along roll fronts include carbonaceous siltstone beds that provide a local reducing environment for precipitation of uranium-bearing minerals, and abrupt changes in permeability along faults, where impermeable gouge is in contact with permeable sandstones (Stephens, 1964). Uranium has also been localized along the edges of stream channels and at contacts with carbonaceous shales (Bendix, 1982).

The Sheep Underground mine has operated as a conventional underground mine on three separate occasions. No reports of adverse ground conditions, flooding, cave-ins or any other unusual mining conditions are known to EFR. The historic mining method was a modified room and pillar method using conventional techniques. Jacklegs were used to drill out the rounds and underground track haulage was used to transport the mined material to Shaft No. 1.

The mining method proposed going forward is also a conventional method using a modified room and pillar method but utilizing modern mining equipment such as jumbo drills and scoop trams for haulage. A new double entry decline will be constructed starting at the Paydirt Pit and ending below the deposit. Haulage from the mine will be accomplished via a 36-inch conveyor within one of the double declines. The existing shafts will be used for ventilation purposes only, with exhaust fans mounted at both locations. If the existing borehole ventilation shafts can be rehabilitated, they will be used as intake shafts. The deposit is comprised of 16mineralized zones with a total thickness of approximately 350 feet. The deposit will be mined primarily from bottom to top.

Sheep Underground mining method summary:
- Development drifts will utilize dual openings. 10 by 15-foot openings will be used for haulage, and 8 by 10-foot openings will be used for transportation and ventilation.
- Mining panels will utilize multiple entries depending on the width of the zone. Entries will be approximately 12 feet wide, minimum of 6 feet high and averaging 7 feet high.
- Crosscuts will be placed on 100-foot centers.
- Mining will be completed by advance and retreat methods.
- Advance mining is accomplished by driving approximately 12 by 7-foot drifts within zones meeting cutoff grade. Multiple drifts will be driven parallel to one another with crosscuts on 100-foot centers. The parallel drifts will be 27 feet apart on centerline.
- This will leave a pillar with a dimension of approximately 15 feet wide and 90 feet long. On retreat mining, these pillars are removed if they meet cutoff grade.
- Ventilation will be provided by two 500 HP exhaust fans at Sheep No. 1 Shaft and Sheep No. 2 Shaft assisted by multiple portable face fans. Ventilation requirements for this mine are approximately 220,000 cubic feet of air per minute. Fresh air must be directed across each of the working faces and through the drifts designed for personnel transport.
- Mine ventilation which meets standards for removal of diesel emissions will also provide adequate ventilation for radon gas given the anticipated mining grades.
- Blasting of the rock, both for development and mining, will be done by drilling 8 to 12-foot blast holes using jumbo drilling rigs and filling the blast holes with ANFO (Ammonium Nitrate and Fuel Oil).
- Haulage from the working faces to the haulage conveyor or to the loading chutes will utilize 4 cubic yard scoop trams which load, haul and dump mined product.
- Mined product will be hauled through development drifts directly to the decline or to two loading chutes to transport the mined product to the decline. The decline will be equipped with a 36-inch conveyor which will take the mined product and waste, when necessary, to the surface. Haulage drifts will be kept as level as practicable, not exceeding ten percent grades.
- The roof and sidewalls in the drifts, both mining and development, will be supported with rock bolts and wire mesh. A rock bolting machine which can drill holes both vertically and horizontally will place the rock bolts on approximately four-foot centers as the drifts advance. There will be overlap of bolting and wire mesh between each round to ensure proper ground control coverage.
- Boreholes to construct loading chutes or to aid in ventilation will be drilled using raised boring methods.
- Waste rock, whenever possible, will be placed in mined out workings to minimize haulage of hauling the mined waste to the surface. When it is not possible, the waste will be taken to the surface where it will be stockpiled for final reclamation.

Ground Support will, in addition to bolting and meshing, include:
- In areas that do not have mineralized zones directly above them temporary support will be placed such as timbers or concrete cylinders, and the pillars will be removed allowing the roof to ultimately fail.
- In areas with mineralized pods directly overhead, the adjoining rooms will be backfilled using a cemented backfill. The backfill will be a combination of waste rock mixed with three and one-half percent cement and three and one-half percent fly ash. This backfill will exceed the strength of the native rock and prevent the roof from failing and diluting the mineralized pods above them.

The uranium recovery method at the Sheep Mountain Project (the Project) is conventional heap leaching, a process identical to that applied globally for the last five decades to the oxidized ores of copper and gold. This process embodies an oxidant to mobilize uranium minerals from the mined material stacked on the heap pad and dilute sulfuric acid to dissolve the uranium. The uranium-enriched solution is pumped to a recovery plant (mill) for purification and concentration of the uranium to a saleable product, using solvent extraction and precipitation systems. Over a 12 year mine life, the heaps will recover an average of 1.4 million pounds of U3O8annually.

Uranium recovery at Sheep Mountain will include the following processes:
- stacking of mined material on the heap leach pad;
- application of leach solution;
- collection of pregnant leach solution ("PLS");
- filtering of sand and fines from PLS;
- solvent extraction to concentrate and purify ........