The Roca Honda Project area is located in the southeast part of the Ambrosia Lake sub-district of the Grants uranium district and is near the boundary between the Chaco slope and the Acoma sag tectonic features. This sub-district is in the southeastern part of the Colorado Plateau physiographic province and is mostly on the south flank (referred to as the Chaco slope) of the San Juan Basin.

Rocks exposed in the Ambrosia Lake sub-district of the Grants Mineral Belt, which includes the Roca Honda Project area, comprise marine and non-marine sediments of Late Cretaceous age, unconformably overlying the uranium-bearing Upper Jurassic Morrison Formation. The uppermost sequence of conformable strata consists of the Mesaverde Group, Mancos Shale, and Dakota Sandstone. All rocks that outcrop at the Roca Honda Project area are of Late Cretaceous age.

The uranium found in the Roca Honda Project area is contained within five sandstone units of the Westwater Canyon Member. Zones of mineralization vary from approximately one foot to 30 feet thick, 100 feet to 600 feet wide, and 200 feet to 3,000 feet in length. Uranium mineralization in the Project area trends west-northwest, consistent with trends of the fluvial sedimentary structureso 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/highcarbon material. Non-mineralized host rock is much lighter (light brown to light gray) and has background to slightly elevated radiometric readings.

Uranium mineralization consists of unidentifiable organic-uranium oxide complexes. The uranium in the project area is dark gray t black in color and is found between depths of approximately 1,450 feet and 2,600 feet below the surface. Primary mineralization predates, and is not related to, present structural features. There is a possibility of some redistribution and stack mineralization along faults; however, it appears that most of the Roca Honda Project mineralization is primary.

Paleochannels that contain quartz-rich, arkosic, fluvial sandstones are the primary mineralization control associated with this trend.Previous mining operations within the immediate area suggest that faults in the Roca Honda Project area associated with the San Mateo fault zone post-date the emplacement of uranium. Therefore, it may be expected that mineralized zones in the Roca Honda Project area are offset by faults.

The mineralization is typically confined to sandstones in the Westwater Canyon Member, although there is some overlap into theshales that divide the sandstones and some minor extension (less than 10 feet) into the underlying Recapture Member. The mineralization is contained in the Westwater Canyon Member sandstones across theProject area, but in Sections 9 and 16, the mineralization is typically found in the upper sandstones (A, B1, and B2), as it is in Section 17, also. In Section 10, the A and B sandstones pinch out in some areas due to thickening of the overlying Brushy Basin Member. Mineralization is in the middle and western portions of Section 10 and is typically in the lower sandstones (sands C and D).

Sedimentary features may exhibit control on a small scale. At the nearby Johnny M mine, a sandstone scour feature truncates underlying black mineralization, indicating nearly syngenetic deposition of uranium mineralization with the sandstone beds.

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.

The mining operation is designed on the basis of an average 1,090 stpd operation with a nine year mine life. The milling operation is designed for 2,000 stpd operation.

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 deposit will be developed and mined on the basis of single-pass ventilation using a series of separate and independent intake and exhaust networks. The design requires a total of five exhaust ventilation raises (three in Section 9 and two in Section 10) as well as an intake ventilation raise in Section 10. Two of the ventilation raises, one in Section 16 and one in Section 10, will be equipped with emergency evacuation hoisting equipment. Midway through the mine life, one of the raises in Section 9 will be converted from exhaust to intake.

The mining will be done with rubber-tired mechanized equipment to provide operational flexibility. Broken mineralized material will be hauled and deposited in an ore pass leading to a skip pocket chamber. At each of the two, skip loading pockets, located on either the 5340 or 5260 shaft stations, 15 in. fine mineralized material will be stored in a 650 ton storage area. From the shaft stations, the mineralized material will be transported to surface by a vertical shaft double drum hoist.

Once the mineralized material is hoisted to the surface, it will be transferred into highway trucks, which will deliver the material to the White Mesa Mill.

The key design criteria for the Roca Honda Project were:
• Mine capacity up to 1,200 stpd and process plant capacity up to 2,000 stpd (700,000 stpa)
• 227,000 st in year one, approximately 400,000 stpa, thereafter
• Nine-year mine life
• Mine production from Sections 9, 16, and 10.
• Mechanized mining
• Double-drum shaft hoisting of mineralized material to the surface and highway truck haulage to the White Mesa Mill
• Backfill, where needed for maximum extraction

Stopes were designed with flat footwalls and were oriented in each of the three areas to maximize the mineralized extraction and minimize dilution due to the variations in the footwall of the Section 10. Stopes will be accessed through a system of ramps located outside the Mineral Resources in Sections 9, 16, and 10, plus a small part in Section 11. The access ramps will connect to a haulage drift and also to ventilation raises to the surface. For each stope, a short stope access will be driven to the first cut and then slashed to access subsequent cuts above or below the initial cut.

Mine ventilation will be achieved with surface fans located at exhaust raise locations. Fresh air will enter the mine via the Section 16 production shaft or an intake ventilation raise.

GRINDING
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.

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.

Ore will be hauled from the Roca Honda Mine to the White Mesa Mill in 24-ton highway haul trucks. When trucks arrive at the White Mesa Mill, they are weighed and probed prior to stockpiling. Samples are collected to measure the dry weight, and to perform amenability testing for process control. Trucks are washed in a contained area, and scanned for gamma radiation prior to leaving the White Mesa Mill site.

LEACHING
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, ........