The Daneros uranium deposit can be classified as Phanerozoic Sandstone; Tabular/Peneconcordant; Basal-channel Type in the classification scheme of Dahlkamp (1993). The Shinarump Member of the Chinle is the only host rock horizon with this type of deposit on the property. The property is not known to hold any potential for any other type of deposit.

The uranium deposit at the Daneros Mine, like nearly all others in the White Canyon district, is in the lower part of the Shinarump, especially where it has scoured into the Moenkopi. The lithology, facies, sedimentary structures, and locations within the channel deposits all were important in controlling the migration of fluids and localization of the deposits. Coarser-grained rock is more favorable than finegrained sand or silt units. Most of the uranium mineralization is overlying impermeable siltstones of the Moenkopi or local siltstone lenses internal of the Shinarump. The lateral edges of channels where they are bounded by mudstones are also favorable locations for mineralization. Sandstones and conglomerates bounded on the top by siltstones or clay layers are also favorable. Intersections of channels and meanders have been found to be favored locations. The most favorable sites are in the coarser sandstone/conglomerates adjacent to finer sediments that contain vegetal matter. The uranium was transported into the area in oxidized groundwaters. The permeability differences related to the grain size of the various f ........

The Daneros mine operated from 2009 until October 2012 when the mine was placed on standby. The Daneros deposit is accessed from the surface through a 450-foot long decline at a gradient of -15%. During this time period random room and pillar mining was employed, as was typical for the deposits in the local region. Mining utilized rubber tired loaders and small trucks to transport mineralized material to the surface, where it was loaded into over-the-road trucks, covered by a secure tarpaulin and transported to the WMM.

The Shinarump deposits are usually thinner than the mining height needed for personnel and equipment access; therefore, the mineralized material was mined by a split-shooting method. The split-shooting mining method involves assessing each face as the stopes advance by the mine geologist, engineer, mine foreman, or experienced lead-miner. Because the grades and thickness of the typical Shinarump uranium deposits are highly variable, they are usually unpredictable from one round to the next. (A round is a complete mining cycle of drillblast-muck-ground support, if needed to be ready to drill again; a normal round advances a face about 6 feet.). Typically, the thickness of the mineralized material was less than the height needed to advance the stope. As the stope face was being drilled, the blast holes were probed with a Geiger Counter probe in order to estimate the U3O8 grade. The uranium mineralization is usually dark gray to black. The minera ........

The milling operation involves grinding the ore into a fine slurry and then leaching it with sulfuric acid to separate the metals from the remaining rock. Uranium and vanadium are then recovered from solution in separate solvent extraction processes. The uranium is precipitated as a U3O8 concentrate, “yellow cake”, which is dried and sealed in 55-gallon steel drums for transport off-site.

The White Mesa Mill owned by EFI is located six miles south of Blanding, Utah, 65 road miles from the Daneros Mine. Its construction by Energy Fuels Nuclear Inc. was based on the anticipated reopening of many small low-grade mines on the Colorado Plateau, and the mill was designed to treat 2,000 tons of ore per day. The mill has operated at rates in excess of the 2,000 tons per day design rate.

Run-of-mine ore is reduced to minus 28 mesh in a six-foot by 18-ft. diameter semiautogenous grinding (SAG) mill. Leaching of the ore is accomplished in two stages: a pre-leach and a hot ........