In the Project area, the primary hosts for uranium mineralization are arkosic sandstones of the Eocene-age Wind River Formation. This formation was unconformably deposited on gently-dipping shales and sandstones of the Cretaceous-age Niobrara and Frontier Formations. The White River Formation unconformably overlies the Wind River Formation and outcrops on the surface throughout most of the Project, with thicknesses ranging from a thin veneer in the FAB Resource Area to over 250 ft. in Area 5.

The Wind River sediments in the Project area were deposited as part of a large fluvial depositional system. The lithology of the Wind River Formation is characterized by thick, medium to coarse-grained, arkosic sandstones separated by thick claystone units. Sandstones and claystones are typically 20 - 75 ft. thick. Minor thin lignite and very carbonaceous shale beds occur locally. These fluvial sediments are located within a large northwest-trending paleochannel system with gentle 1° dip to the north.

All uranium mineralization at the Project occurs as roll front deposits. Virtually all significant mineralization, including all of the past production, is hosted by the Main Sand or the Lower Sand. Limited uranium mineralization has also been encountered in the less dominant upper Wind River Formation sandstones and in sandstones of the overlying White River Formation. These upper sandstones, however, are viewed as marginal targets and evaluation to date has been limited.

Each of the primary host sands is occupied by a regional roll front alteration system which closely follows the depositional patterns established by Wind River-age fluvial paleo channels. The alteration systems, in turn, develop multiple stacked roll fronts at their terminal ends or lateral edges, such that the Main Sand has as many as ten distinct roll fronts and the Lower Sand up to five roll fronts.

Uranium mineralization identified throughout the District occurs as roll front-type deposits. Because of the extensive uranium exploration activities conducted in the Shirley Basin during the early years of the U.S. uranium industry (the late 1950s through early 1960s), many of the fundamental concepts of the roll front model were developed by early Shirley Basin geologists studying the underground and open pit workings.

The mining method is uranium ISR. There is no excavation of ore and no mining dilution with this method. Only minerals that can be taken into solution are recovered.

URE plans to use the ISR mining technique at the Project. Shirley Basin Mining District was the site of the first successful, commercial ISR operations in the U.S. From 1963-1970, 1.5 million lbs. of uranium were produced through ISR methods. This historical production demonstrated the host Wind River Formation sandstones and the hydrological conditions of the site to be suitable for ISR production.

ISR is employed because this technique allows for the low cost and effective recovery of roll front mineralization. An additional benefit is that ISR is relatively environmentally benign when compared to conventional open pit or underground recovery techniques. ISR does not require the installation of tailings facilities or significant surface disturbance.

This mining method utilizes injection wells to introduce a lixiviant into the mineralized zone. The lixiviant is made of native groundwater fortified with oxygen as an oxidizer, sodium bicarbonate as a complexing agent, and carbon dioxide for pH control. The oxidizer converts the uranium compounds from a relatively insoluble +4 valence state to a soluble +6 valence state. The complexing agent bonds with the uranium to form uranyl carbonate, which is highly soluble. The dissolved uranyl carbonate is then recovered through a series of new production wells and piped to a processing plant where the uranyl carbonate is removed from the solution using ion exchange. The groundwater is re-fortified with the oxidizer and complexing agent and sent back to the wellfield to recover additional uranium.

In order to use the ISR technique, the mineralized body must be saturated with groundwater, transmissive to water flow, and amenable to dissolution by an acceptable lixiviant. While not a requirement, it is beneficial if the production zone aquifer is relatively confined by overlying and underlying aquitards so it is easier to maintain control of the mining lixiviant. In addition to numerous historical monitor wells, URE completed 13 monitor wells at the Project in 2014 to determine the elevation of the water tables. The natural hydrostatic pressure within the Main and Lower Sands cause the water to rise in the well casing to approximately 145 to 240 ft. bgs. The Main and Lower Sands are completely saturated at the Project. Five hydrogeologic pump tests were performed within the Project in 2014 to demonstrate that the Main and Lower Sands are sufficiently transmissive to allow the lixiviant to flow through the production zone and dissolve the uranium mineral. The transmissivity of these sands measured during these pump tests ranged from 2,460 to 8,300 gpd/ft. This range of transmissivities is consistent with the rates at other successful ISR operations. Production well flow rates observed to date confirm aquifer characteristics are suitable for uranium ISR mining. Several agitation leach (bottle-roll) tests have been carried out on core samples from the Project to ensure leachability with an acceptable lixiviant. Test results show that recoveries of approximately 80% can be expected.

ISR operations consist of four major solution circuits. Because the Project will be a satellite to URE’s Lost Creek Mine, only the first major solution circuit will be located at the Project. Loaded resin will be contract transported to the Lost Creek Mine, where the remainder of the processing will be completed. The four major solution circuits are:
1. Uranium recovery/extraction circuit (IX);
2. Elution circuit to remove the uranium from the IX resin;
3. Yellowcake precipitation circuit; and the
4. Dewatering, drying and packaging circuit.

IX Circuit – The IX circuit will be housed in a metal building which will also house the resin transfer equipment as well as the restoration circuit. Uranium liberated from the underground deposits is extracted from the pregnant solution in the 6,000 gpm IX circuit. Subsequently, the barren lixiviant is reconstituted to the proper bicarbonate strength, as needed, and pH is corrected using carbon dioxide prior to bei ........