Wyoming uranium deposits are roll-front uranium deposits as defined in the “World Distribution of Uranium Deposits (UDEPO) with Uranium Deposit Classification”, (IAEA, 2009). Uranium deposits in the Gas Hills were formed by the classic Wyoming-type roll-fronts. Rollfronts are irregular in shape,roughly tabular and elongated, and range from thin pods and a few feet in width and length, to bodies several hundred or thousands of feet in length. The deposits are roughly parallel to the enclosing beds but may form rolls that cut across bedding. Roll-front deposits are typified by a C-shaped morphology in which the outside of the C extends downgradient in the direction of historic groundwater flow and the tails extend up-gradient of historic groundwater flow. The tails are typically caught up in the finer sand and silt deposits that grade into over and underlying mudstones, whereas the heart of the roll-front (higher grade mineralization) lies within the more porous and permeable sandstones toward the middle of the fluvial deposits.

The Gas Hills uranium deposits are present in an arkosic sandstone facies, the Puddle Springs member of the Wind River formation (e.g. King and Austin, 1966; Armstrong, 1970). Knowledge of the distribution of this member is of great importance in the search for uranium deposits, as permeability determines whether a rock is a favorable or unfavorable host. Fine-grained, only slightly permeable rocks are unfavorable hosts. Highly porous conglomerates, on the other hand, appear to be too permeable to be a good host rock.

Drilling in the west Gas Hills indicates that the favorable arkosic sandstone host passes westward into unfavorable silty facies. A local sandstone facies has been found within the silty facies, and a small area containing uranium (Jeep deposit) has been found in the sandy facies. Thus, the favorable host for mineralization in the above-mentioned deposits is bounded on the north by an erosional pinch out; on the east by a change of facies to an unfavorable silty sandstone host; on the south by a subsurface onlap pinch out; and on the west by change of facies to an unfavorable silty sandstone host.

Uranium mineralization in the Gas Hills is present in bodies usually referred to as “rolls” (e.g. King and Austin, 1966; Armstrong, 1970). In vertical cross section they are irregularly crescent or “C” shaped. Rolls are the result of oxidized and soluble uranium being transported by ground water to a location within a permeable sandstone host where a reaction within a reducing environment occurs and insoluble reduced, uranium minerals are deposited. The contact between oxidized and reduced conditions is the “roll front”.

In the body of the crescent, individual rolls range from a few inches to many feet in vertical thickness. Average thickness of a well mineralized roll is 10 to 15 feet; many rolls thicker than 20 feet have been mined. The upper and lower tails of the crescent thin away from the body of the crescent. In the Gas Hills the lower tail normally is greatly extended and thins gradually, whereas the upper tail is typically short and thins abruptly.

Rolls ordinarily are stacked en echelon, forming multiple mineralized bodies. A series of stacked rolls can be thought of as a frontal system. The number of rolls and vertical separation between them can be large or small, and as a result, mineralization may occur through a large stratigraphic interval. In the Central Gas Hills, uranium mineralization has been found in a stratigraphic interval almost 300 feet thick. Most rolls are stacked so that each successively higher roll is displaced in the direction of convexity and the volume of bleached rock narrows with depth. Each roll in a stack has its own front and each front in plan-view has its own sinuosity. The different fronts occur in the same general area, but the detailed sinuosity of one roll is independent of the sinuosity of other rolls.

Un-oxidized mineralization is dark and usually the darker, the higher the grade. The uranium minerals are very fine grained uraninite and a little coffinite. The only non-silicate gangue minerals present in significant amounts are fine-grained pyrite and marcasite, and they are intimately mixed with uranium minerals. These minerals coat detrital sand grains and fill interstices of the host rock. Oxidized mineralization is present near surface and was mined when production in the district first started. Most production came from un-oxidized mineralization and essentially all present mineralization of potential economic interest is contained in un-oxidized mineralization.

Azarga plans to use the ISR mining technique with a low pH lixiviant at the Project. There is no excavation of ore and no mining dilution with this method. Only minerals that can be taken into solution are recovered.

This mining method utilizes injection wells to introduce a lixiviant into the mineralized zone. These advantages include potential for higher recovery, shorter leaching duration, lower lixiviant and oxidant requirements, constituent-specific advantages during groundwater restoration, and a higher degree of natural attenuation than alkaline lixiviant. The lixiviant is made of native groundwater fortified with a complexing agent such as sulfuric acid. The complexing agent bonds with the uranium to form uranyl sulfate, which is then recovered through a series of production wells and piped to a processing plant where the uranyl sulfate is removed from solution using ion exchange. The groundwater is re-fortified with the complexing agent and recirculated to the wellfield to recover additional uranium.

The most fundamental component of ISR mine development and production is the production pattern. A pattern consists of one production well and multiple injection wells which feed lixiviant back to the production well. Injection wells are commonly shared by multiple production wells. Header houses serve multiple patterns and function as both distribution points for injection flow and collection points for production flow. The processing or satellite plant feeds injection lixiviantto the header houses for distribution to the injection wells and also receives and processes production flow from the header houses.

The Project will be developed using both 5-spot and 7-spot wellfield patterns. The planned 5-spot wellfield pattern configuration consists of four injection wells 100 ft apart squarely placed around a central production well, resulting in a pattern area of approximately 10,000 ft2. The planned 7- spot wellfield pattern configuration consists of six injection wells spaced 115 ft apart in a hexagonal configuration around a central production well resulting in a pattern area of approximately 34,360 ft2. Actual pattern geometry may vary depending on field conditions. Based on preliminary wellfield designs, it is anticipated that incorporating both 5-spot and 7-spot patterns into the wellfield design will result in an average pattern size of approximately 17,000 ft2 for the Project. The pattern size was used in conjunction with the total acreage associated with the resources that may potentially be mined with ISR methods to estimate the total number of patterns necessary for the Project.

Pipelines transport the wellfield solutions to and from the planned satellite IX plant at the Central Unit and to the disposal well.

The Project-wide wellfield area has been divided into four resource areas with ISR amenable mineralization. Based on an average pattern area of approximately 17,000 ft2 theProject would require an estimated 863 patterns. Within these mine units, 1,726 injection wells and 863 production wells are estimated, using a 2:1 injection to production well ratio, for a total of 2,589 wells. The number of wells in each unit are based the assumption that 100 percent of South Black Mountain wellfields are 5-spot patterns, 50 percent of Jeep wellfields are 5 spot patterns, 20 percent of Central Unit wellfields are 5 spot patterns, and 36 percent of the West Unit wellfields are 5 spot patterns. The average estimated well depth and completion thickness for the Project are approximately 380 ft. and 7.5 ft., respectively. The number of patterns estimated for each resource area is then used to calculate an average resource per pattern and an average recoverable resource per pattern. The Project is estimated to have an overall average under pattern resource of 9,475 lbs./pattern and an average recoverable resource of 7,580 lbs./pattern.

Production is estimated to begin in Year 1 and continue into Year 7. Annual production is estimated to be approximately one million pounds per year. Restoration and reclamation activities are scheduled to start soon after production is completed in a mine unit. Final decommissioning will occur simultaneously with reclamation of the last production area.

ISR operations consist of four major solution circuits, ion exchange to extract uranium from the mining solution, an elution circuit to remove uranium from the IX resin, a yellowcake precipitation circuit, and a dewatering, drying, and packaging circuit. Because the Project will be a satellite facility to Azarga’s Dewey-Burdock Project, only the first major solution circuit (the IX circuit) will be located at the Project. Loaded resin will be transported to the Dewey-Burdock Project, where the uranium will be eluted, precipitated, dried, and packaged.

Production fluid containing dissolved uranyl sulfate from the wellfields is pumped to the satellite IX plant for beneficiation. The satellite plant will have an available flow rate of 4,400 gpm. However, the planned average production flow rate for the Project is approximately 2,400 gpm.

IX Circuit – The IX circuit will be housed in a metal building which will also house the resin transfer equipment as well as the re ........