The Grants district is one of the largest uranium provinces in the world. The Grants district extends from east of Laguna to west of Gallup in the San Juan Basin of New Mexico. Three types of sandstone uranium deposits are recognized: tabular, redistributed (roll-front, fault-related), and remnant-primary.

Primary mineralization deposits are generally irregular, tabular, flat-lying bodies elongated along an east to southeast direction, ranging from thin pods a few feet in thickness and length to bodies several tens or hundreds of feet long. The deposits are roughly parallel to the enclosing beds, but may form rolls (tabular lenses) that cut across bedding. The deposits may occur in more than one layer, form distinct trends, commonly parallel to depositional trends, and occur in clusters. Primary mineralization in the Ambrosia Lake subdistrict consists mostly of uranium-enriched humic matter that coats sand grains and impregnates the sandstone, imparting a dark colour to the rock. The uranium mineralization consists largely of unidentifiable organic-uranium oxide complexes that are light grey-brown to black. A direct correlation exists between uranium content and organic-carbon content by weight percent in the “ores” (Squyres 1970, Kendall 1972).

The uranium found in the Project area is contained within five sandstone units of the Westwater Canyon Member. Zones of mineralization vary from approximately one foot to 32 ft thick, 100 ft to 600 ft wide, and 200 ft to 2,000 ft long. Uranium mineralization in the Project area trends west-northwest, consistent with trends of the fluvial sedimentary structures of the Westwater Canyon Member, and the general trend of mineralization across the Ambrosia Lake sub district.

Core recovery from the 2007 drilling program indicates that uranium occurs in sandstones with large amounts of organic/high carbon material. Non-mineralized host rock is much lighter (light brown to light grey,) and it has background to slightly elevated radiometric readings.

Uranium mineralization consists of dark organic-uranium oxide complexes. The uranium in the Project area is dark grey to black in color and is found between depths of approximately 1,650 ft to 2,600 ft below the surface. Although coffinite and uraninite have been identified in the Grants Mineral Belt, their abundance is not sufficient to account for the total uranium content in a mineralized sample. Admixed and associated with the uranium are enriched amounts of vanadium, molybdenum, copper, selenium, and arsenic in order of decreasing abundance.

Primary mineralization pre-dates, and is not related to, present structural features. There is a possibility of some redistribution and stack ore along faults; however, it appears that most of the Roca Honda mineralization is primary. Redistributed, post-fault, or stack mineralization occurs in the Ambrosia Lake sub district of the Grants Mineral Belt, but is not apparent in the Roca Honda area.

The majority of the Mineral Resources of the Roca Honda deposit are located approximately 2,200 ft below the surface, directly beneath gently sloping washes and a mesa. The mineralization exists in the A, B, C, and D Sandstone units of the Westwater Canyon Member of the Morrison Formation in Sections 9, 10, 11, and 16. The deposit will be mined with a combination of step room-and-pillar (SRP) and drift-and-fill (DF) mining methods.

The deposit will be accessed by a 2,100 ft shaft, located approximately five miles west of the historic Mount Taylor mine. Mining is planned to access the higher grade resources at the base of the deposit and to minimize the surface disturbance. Ground conditions are expected to be fair to poor and primary stopes are expected to be stable at widths of 10 ft to 15 ft. Due to the high value of the resources in Section 10, and to maximize extraction, the use of high strength backfill is proposed. Mining will be done with a first pass of primary stopes followed by pillar extraction after the primary stopes have been backfilled.

Mineral Resources are based on an underground mine design and stope schedule. The Westwater Canyon Member (Westwater) of the Morrison Formation, which hosts the mineralized horizons, is comprised primarily of sandstones with interbedded shales and mudstones. The A and B mineralized horizons are located in the upper area of the Westwater. The C and D mineralized horizons are located in the lower portion of the Westwater. The Recapture Zone is located immediately below the Westwater Canyon member. Due to historical significant difficulties in both developing and maintaining the integrity of drifts in the Recapture Zone, the mine design avoids any excavations in this Zone.

The transition grade was calculated at 0.265% U3O8. Stopes with average diluted grades of less than 0.265% U3O8 will be mined using the SRP method. Stopes with average diluted grades greater than 0.265% U3O8 will be mined using the DF method. With the SRP method, permanent pillars will be left in a pre-designed pattern and low-strength cemented rockfill (CRF) will be placed in mined-out areas as backfill. For the DF method, a high-strength CRF will be placed in the mined-out areas. The minimum thickness used in the development of the Mineral Resource estimate was six feet. The mineralized zones range in thickness from 6 ft to 21 ft. Mineralized zones with thicknesses from 6 ft to 12 ft will be mined in one pass. Mineralized zones exceeding 12 ft in thickness will be mined in two sequential overhand cuts with each cut being approximately one half of the overall zone thickness.

The Life of Mine (LoM) schedule was developed on the basis of initiating development from the production shaft located in Section 16. The mining areas in Sections 9/16 will be connected to Section 10 by means of a 3,600 ft double decline haulageway. Primary development connecting the shaft to the various mineralized zones (including the double decline) will be driven 10 ft wide by 12 ft high. Stope access development connecting the primary development to the individual stopes will be driven 10 ft wide by 10 ft high.

The mining sequence in each Section is dependent upon the development schedule but, in general, is sequenced to prioritize the mining of the largest and highest grade zones in each section of the mine. There is also a requirement to sequence the mining of any stacked ore zones from top down.

Stope mining begins approximately four years after the start of construction and the operating mine life spans nine years. The production rate averages approximately 900 st per milling-day during the time that mining occurs in Sections 9 and 16 only, increases to 1,040 st per milling-day when Sections 9, 16, and 10 are mined simultaneously, and drops to 800 st per milling-day when mining from Section 10 only.

The ore produced from the Roca Honda Project is planned to be milled at the Energy Fuels’ owned White Mesa Mill. The White Mesa Mill is currently operated on a campaign basis to produce yellowcake (U3O8). It can also process alternate feed materials.

A front end loader will transfer the mineralized material from the stockpiles to the White Mesa Mill through the 20 in. stationary grizzly and into the ore receiving hopper. The ore is then transferred to the 6 ft by 18 ft diameter semi-autogenous grinding (SAG) mill via a 54 in. wide conveyor belt. Water is added with the ore into the SAG mill where the grinding is accomplished. The SAG mill is operated in closed circuit with vibrating screens. The coarse material, P80 +28 mesh (28 openings per linear inch) is returned back to the SAG mill for additional grinding and the P80 -28 mesh portion is pumped to the pulp (wet) storage tanks. The pulp storage tanks are three 35 ft diameter by 35 ft high mechanically agitated tanks. These tanks serve two basic purposes. First, they provide storage capacity for the ore prior to chemical processing; and second, they provide a facility for blending the various types of ore prior to processing.

From the pulp storage tanks, pre-leach and leaching are employed to dissolve the uranium. A hot, strong acid treatment is utilized in the second stage in order to obtain adequate recoveries. This results in high concentrations of free acid in solution. Therefore, a first stage "acid kill" is employed, which is referred to as pre-leach. Ore from the pulp storage tanks is metered into the pre-leach tanks at the desired flow rate. The slurried ore from the pulp storage tanks will usually be about 50% solids mixed with 50% water. This slurry is mixed in the pre-leach tanks with a strong acid solution from the counter current decantation (CCD) circuit resulting in a density of approximately 22% solids. This step is employed to neutralize the excess acid from the second stage leach with raw ore. By doing this, not only is the excess acid partially neutralized, but some leaching occurs in the pre-leach circuit, and less acid is needed in the second stage leach. The pre-leach ore flows by gravity to the pre-leach thickener. Here, flocculent is added and the solids are separated from the liquid. The underflow solids are pumped into the second stage leach circuit where acid, heat, and an oxidant (sodium chlorate) are added. About three hours retention time is expected to be needed in the seven second stage leach tanks. Each tank has an agitator to keep the solids in suspension. The discharge from the leach circuit is a slurry consisting of solids and a sulfuric acid solution with dissolved uranium and vanadium. The leach slurry is then pumped to the CCD circuit for washing and solid liquid separation. The liquid or solution from the pre-leach thickener overflow is pumped first to the clarifier and then the SX feed tank.

The CCD circuit consists of a series of thickeners in which the pulp (underflow) goes in one direction, while the uranium/vanadium bearing solution (overflow) goes in a counter current direction. The solids settle to the bottom of the first thickener tank and flocculant is added to each thickener feed to increase the settling rate of the solids. As the pulp is pumped from one thickener to the next, it is gradually depleted of its uranium and vanadium. When the pulp leaves the last thickener, it is essentially barren waste that is disposed of in the tailings cells. Eight thickeners are utilized in the CCD circuit to wash the acidic uranium bearing liquids from the leached solids. Water or barren solutions are added to the No. 8 thickener and flow counter-current to the solids. As the solution advances toward the No. 1 thickener it carries the dissolved uranium. Conversely the solids become washed of the uranium as they advance toward the last thickener. By the time the solids are washed through the seven stages of thickening they are 99% free of soluble uranium and may be pumped to the tailings pond. The clear overflow solution from No. 1 CCD thickener advances through the pre-leach circuit and pre-leach thickener as previously explained and to the clarifier, which is an additional thickener giving one more step in order to settle any suspended solids prior to advancing the solution to the solvent extraction (SX) circuit.

Tailings solutions (approximately 50% solids) are pumped to the tailings cells for permanent disposal. The sands are allowed to settle and the solutions are transferred to the evaporation cells prior to reuse in the milling process.

The primary purpose of the uranium solvent extraction (SX) circuit is to concentrate the uranium. This circuit has two functions. First, the uranium is transferred from the aqueous acid solution to an immiscible organic liquid by ion exchange. Alamine 336 is a long chain tertiary amine that is used to extract the uranium compound. Then a reverse ion exchange process strips the uranium from the solvent, using aqueous sodium carbonate. As previously noted, the solution extraction (SX) circuit is utilized to selectively remove the dissolved uranium from the clarified leach solution. Dissolved uranium is loaded on kerosene advancing counter currently to the leach solution. The uranium-loaded kerosene and leach solution are allowed to settle where the loaded kerosene floats to the top allowing for separation. The uranium barren leach solution is pumped back to the CCD circuit to be used as wash water. The loaded organic is transferred to the stripping circuit where acidified brine (stripping solution) is added and strips the uranium from the kerosene. Within the SX circuit, the uranium concentrations increase by a factor of four when loading on the kerosene and again by a factor of ten when removed by the stripping solution. The barren kerosene is returned to the start of the SX circuit. The loaded strip solution is transferred to the precipitation circuit.

With respect to impurities removal, the SX circuit of the White Mesa Mill is highly selective to uranium and consistently produces yellowcake in the 98% to 99% purity range. This includes ores that contain vanadium, arsenic, and selenium which have shown to be problematic with other uranium recovery methods. The White Mesa Mill has a vanadium recovery circuit, but it is only operated when the head grades are greater than 2 g/L vanadium. This high of a head grade is only expected when the vanadium to uranium ratio is greater than 3:1. Vanadium recovery is not anticipated from the Roca Honda mineralized material based on the low vanadium content.

In the precipitation circuit the uranium, which up to this point has been in solution, is caused to precipitate or actually "fall out" of the solution. The addition of ammonia, air, and heat to the precipitation circuit causes the uranium to become insoluble in the acid strip solution. During precipitation, the uranium solution is continuously agitated to keep the solid particles of uranium in suspension. Leaving the precipitation circuit, the uranium, now a solid particle in suspension, rather than in solution, is pumped to a two-stage thickener circuit where the solid uranium particles are allowed to settle to the bottom of the tank. From the bottom of the thickener tank the precipitated uranium in the form of a slurry, about 50% solids, is pumped to an acid re dissolve tank and then mixed with wash water again. The solution is then precipitated again with ammonia and allowed to settle in the second thickener. The slurry from the second thickener is de-watered in a centrifuge. From this centrifuge, the solid uranium product is pumped to the multiple hearth dryer. In the dryer, the product is dried at approximately 1,200ºF, which dewaters the uranium oxide further and also burns off additional impurities.