Table 10-2- Massena Grande Drill Holes Summary

13.0 MINERAL PROCESSING AND METALLURGICAL TESTING

The Alta Mesa Uranium Project (the Project) is an ISR facility that was in production from 2005 until being placed on standby in February 2013. As such, actual mineral recovery data is available for several wellfields.  This data is summarized in Table 13-1.

Table 13-1  Actual Mineral Recovery from Alta Mesa

Table 14-1  Alta Mesa and Mesteña Grande Resource Summary

Table 14-2  Alta Mesa Drill Holes Summary

Mesteña Grande

The Mesteña Grande portion of the Project is subdivided into five areas with a total of 460 drill holes. Drill hole spacing at Mesteña Grande is generally wide spaced.  Table 14-3 summarizes the drill results for the Mesteña Grande portion of the Project.

14.2.2 Geologic Modeling

The primary geologic modeling associated with roll-front deposits in Texas is first identifying the sand in which the uranium mineralization is contained.  The geophysical logs obtained following drilling contain gamma data as described in previous sections as well as electrical properties of the rock formations.  A trained geologist can interpret these electrical logs as different rock types and therefore assign a formation or sand unit to a uranium intercept.  The gamma signature and the cuttings logged during drilling can be used to tell what where the drill hole is within the roll front.  The drill hole can be on the oxidized or reduced side of the roll front or within the mineralized "nose" of the roll front.  All this information is used to define geologic continuity and the location of the mineralization.

14.2.3 Grade Capping

Grade capping was not used in estimating the Mineral Resources at the Project. The GT contour method limits the influence of a high-grade sample by containing an outlier GT interval to a single small contour. 

14.2.4 Compositing

Mineralized intercepts meeting a minimum thickness of 1 ft. and grade of 0.02% U₃O₈ were composited to determine the thickness, grade and thus the GT of the drill hole within each sand. If the composite GT met the minimum criteria of 0.3 GT it would be included in the Mineral Resource estimation.

14.2.5 Density

Bulk density data for the Project was determined from a study commissioned by Total Minerals.  EFR used a density factor of 16.5ft³/ton in its Mineral Resource estimates (Total, 1989), while the Mineral Resource in this report uses a value of 17 ft³/ton, which is conservative in that it calculates approximately 3% less tonnage per unit volume. 

14.2.6 Radiometric Equilibrium

Data used in this Mineral Resource relies on PFN log data for determination of uranium grade as this method is a direct measurement of uranium content, not an equivalent radiometric assay; PFN assays are considered by to be reasonably equivalent to chemical assays. PFN assay data is available for 92.8% of the drill data used in the report and thus a correction of drill hole data for DEF is not applicable.

14.2.7 GT Contouring Method

Where drilling density was sufficient to complete GT contour calculations, resource estimates were completed in accordance with industry standards, in areas where this was not possible, trend width was determined from producing wellfields PAA-6 and portions of PAA-4 or average GT values where estimated based on overall averages for all Alta Mesa drill hole data. Estimation parameters used for each resource area are provided in the discussions that follow.

When dealing with ISR Mineral Resources, the contained pounds of uranium are calculated from the GT value applied to the respective area of mineralization with the application of the appropriate bulk density. As such average thickness is not a critical parameter in the determination of the pounds contained but is needed to calculate tonnage and average grade. Based on the typical geometry of the sands, a thickness of 10 feet was assumed for exploration targets and corresponds generally with the average screened interval for wells. Mineral resource tonnages were thus calculated assuming an average thickness of 10 feet unless specific data relating to thickness was available.

14.2.8 Resource Classification

NI 43-101 and S-K 1300standards define a Mineral Resource as a concentration or occurrence of material of economic interest in or on the Earth's crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled.  Based on this definition of Mineral Resources, the Mineral Resources estimated in this Initial Assessment have been classified according to the definitions below which are in accordance with both SEC S-K and NI 43-101 definitions.

Measured mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling. The level of geological certainty associated with a measured mineral resource is sufficient to allow a qualified person to apply modifying factors, as defined in this section, in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit. Because a measured mineral resource has a higher level of confidence than the level of confidence of either an indicated mineral resource or an inferred mineral resource, a measured mineral resource may be converted to a proven mineral reserve or to a probable mineral reserve.

Indicated mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling. The level of geological certainty associated with an indicated mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Because an indicated mineral resource has a lower level of confidence than the level of confidence of a measured mineral resource, an indicated mineral resource may only be converted to a probable mineral reserve.

Inferred mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of geological uncertainty associated with an inferred mineral resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Because an inferred mineral resource has the lowest level of geological confidence of all mineral resources, which prevents the application of the modifying factors in a manner useful for evaluation of economic viability, an inferred mineral resource may not be considered when assessing the economic viability of a mining project and may not be converted to a mineral reserve.

The Mineral Resources at the Project have been classified as measured, indicated and inferred for the Alta Mesa Property and indicated and inferred for the Mesteña Grande Property. Measured mineral resources at the Alta Mesa facility and production area are those Mineral Resources calculated by the GT contour method after a well field is fully delineated. In existing well fields such as PAA-2 and PAA-6, the geologic and mineralized continuity defined by tight drill hole spacing, less than 100 feet, is adequate to estimate the mineral resource to a high level of confidence. As such, they could be classified as a measured mineral resource in accordance with NI 43-101 and S-K 1300 standards. In some cases, outside the existing wellfields, the drill density would allow classifications of certain portions of the mineral resource as measured, these areas have been defined as indicated as they are not part of a fully delineated well field. For the purposes of this report measured mineral resources are within existing well fields and represent only that portion of the remaining resource that can reasonably be recovered from the existing wellfields through continued operation of the well fields. EFR considers the remaining mineral resources within the PAA-6 wellfield as having reasonable prospects for future economic extraction. At present it has not been determined whether the PAA-2 meets the criteria for reasonable prospects for future economic extraction. Thus, only the remaining mineral resource within wellfield PAA-6 are considered a current measured mineral resource.

Indicated mineral resources are based on detailed and reliable exploration, sampling, and testing information gathered through appropriate techniques that are spaced closely enough for both geological and grade continuity to be reasonably assumed. Given the nature of the mineralization in the Project area and the demonstrated continuity of mineralization along the REDOX front from the existing wellfields, indicated mineral resources, are those areas where the location of the REDOX front can be  reasonably defined by drill data and where along a continuously mapped REDOX front there are drill holes that intersect the mineralized front and reasonably confirm the presence of mineralization which has reasonable prospects for economic extraction. For the Project, drill hole spacing in areas for which indicated mineral resources are defined range from less than 100 feet to as much as 800 feet along the REDOX front.

Inferred mineral resources are defined as that part of the mineral resource for which quantity and quality can be estimated based on geologic evidence, limited sampling and reasonably assumed but not verified geological and grade continuity. For the Project, the basis of geologic evidence and sampling is drill hole data which is adequate to define the presence and general location of the REDOX front but for which there may not be drill holes which intersect the mineralized front and reasonably confirm the presence on mineralization meeting the criteria for indicated mineral resources. For the Project, drill hole spacing in areas where inferred mineral resources are defined may exceed 800 feet if there is geologic evidence that the REDOX front is present, and its location can reasonably be assumed.

14.2.9 Metal Price

Neither the S-K 1300 nor NI 43-101 rules require a market study for a Technical Report nor preliminary economic assessment respectively.  However, EFR has included this section to determine an appropriate metal price in determining the GT breakeven cut-off grade which, in turn, is used to calculate Mineral Resources for Alta Mesa. 

Uranium does not trade on the open market and many of the private sales contracts are not publicly disclosed since buyers and sellers negotiate contracts privately.  Monthly long-term industry average uranium prices based on the month-end prices are published by Ux Consulting, LLC, and TradeTech, LLC (TradeTech).  As a result, an accepted mining industry practice is to use "Consensus Prices" obtained by collating publicly available commodity price forecasts from credible sources.

The authors use TradeTech, an independent provider of uranium prices and nuclear fuel market information; EFR produces a quarterly uranium market study which is based on their comprehensive knowledge of the factors affecting the nuclear fuel cycle industry globally.

Figure 4-1 and Figure 4-2 provides a Long-Term Uranium Price Forecast through 2039 from TradeTech's Uranium Market Study, 2021: Issue 4. The Forward Availability Model (FAM 1 and 2) forecast differ in assumptions as to how future uranium supply enters the market. "FAM 1 represents a good progression of planned uranium projects incorporating some delays to schedules, while FAM 2 assumes restricted project development because of an unsupportive economic environment." (TradeTech, 2021).  Currently most US producers are in a mode of care and maintenance and numerous facilities globally are also slowing or shutting in production at least on a temporary basis. At this time in the US, no new projects are being constructed, and very few are moving forward with permitting and/or licensing. This condition aligns more with the FAM 2 projections.

Figure 4-1 TradeTech Uranium Market Price Projections- FAM 1 (Nominal US$)

Figure 4-2  TradeTech Uranium Market Price Projections - FAM 2 (2020 US$)

Term forecasts beginning 2026 or later and extending into the future are considered the most reasonable for purposes of this report, as they consider the effects of prices on future existing and new production and long-term contracts with investment-grade nuclear utilities. Therefore, term prices are most appropriate for purposes of this report.

Based on this, the planned production from the project is projected to occur when the price projections under the assumption of FAM 2 are generally more than $65 per pound uranium oxide (year 2037). EFR recommends the use of a long-term uranium price of $65.00 per pound uranium oxide for the GT calculation for Mineral Resources at Alta Mesa.

By their nature all commodity price assumptions are forward-looking. No forward-looking statement can be guaranteed, and actual future results may vary materially

14.2.10 Cut-off Parameters

The SEC defines cut-off grade as "the grade that distinguishes material deemed to have no economic value (it will not be mined in underground mining or if mined in surface mining, its destination will be the waste dump) from material deemed to have economic value (its ultimate destination during mining will be a processing facility)".

The cut-off criteria used in this report is a minimum grade cut-off of 0.02% U₃O₈ and minimum GT of 0.30. In addition, with respect to reasonable prospects for economic extraction, areas of isolated mineralization with less than an estimated 2,000 pounds uranium will typically not support the cost of well field installation and are therefore not considered in the Mineral Resource estimate.

The calculated cut-off grade for the Project was based on modifying factors including metal prices, metallurgical recoveries, operating costs, and other operational constraints (Table 14.4). Mining costs were based on historical operating costs for the Project.

Table 14-4: Alta Mesa Uranium Project Cut-off Grade Calculation

14.2.11 Reasonable Prospects for Future Economic Extraction

The Project produced approximately 4.6 million pounds of uranium oxide between 2005 and 2013 via in-situ recovery (ISR) mining using an alkaline lixiviant and is processed at a plant located in Alta Mesa. The cut-off criteria applied to the current Mineral Resource estimates is consistent with that applied when the Project was producing uranium. Under the stated cut-off criteria and based on a long-term uranium price of $65.00 per pound uranium oxide, the Mineral Resources stated herein have reasonable prospects for future economic extraction.

The mining and mineral processing methods stated in this report have previously been successfully employed at the project.  The project is a brown-field development located in a State, which tends to favor mining and industrial development. 

For these reasons, the Authors believe that the Alta Mesa Mineral Resources have a low probability of being affected by risk associated with mining; processing; metallurgical; infrastructure; economic; marketing; legal; environmental compliance; plans, negotiations or agreements with local individuals or groups; and governmental factors.  The authors are not aware of any factors including environmental, permitting, taxation, socio-economic, marketing, political, or other factors, which would materially affect the Mineral Resource estimate, herein.

14.3 Mineral Resource Summary

Mineral resources for the Alta Mesa portion of the Project estimated for classifications meeting NI 43-101 and S-K 1300 standards and definitions as measured, indicated, and inferred Mineral Resources, at a 0.30 GT cut-off, are summarized in Table 14-5.

14.3.1 PAA-7 Lower C Sand

The PAA-7 Mineral Resource area is permitted as a wellfield which required expansion of the existing aquifer exemption. The area was drilled on approximately 50 foot by 200-foot centers, across and along the trend, respectively. Mineralization is at a depth of approximately 550 feet. PAA-7 is adjacent to PAA-4. Mineralization in a portion of PAA-4 was estimated using the GT Contour Method. This data was used to determine appropriate parameters for the width, thickness, and GT for Lower C Lower (LCL) and the Lower C Upper (LCU) sands of the Goliad Formation which are mineralized in the area.

Mineral resource estimation parameters PAA-7 at a 0.30 GT cut-off shown in Table 14-6 below.

14.3.2 D Sand

Mineralization in the D sand of the Goliad Formation is defined by drilling within two sub-horizons, the upper and lower sands, DU and DL, respectively. The area is drilled on approximately 50 foot by 200-foot centers, across and along the trend, respectively. Most of the mineralization defined to date is in the DU. Mineralization is at a depth of approximately 550 feet. The average width of mineralization was taken to be equivalent to PAA-7, as discussed previously. The average GT represents average values from drill holes in the D sands above the GT cut-off, 24 drill holes in the DU and 4 in the DL. An average thickness of 10 feet was used. Note that mineralization in the D Sand is projected to extend into the exclusion area. Trend lengths within the exclusion area were excluded from the resource estimate.

Mineral resource estimation parameters for the D sand at a 0.30 GT cut-off are shown in Table 14-7.

14.3.3 Lower C Sand Outside of PAA-7, PAA-6 and PAA-4

The area is defined by drilling on variable centers, across and along the trend, respectively.  Mineralization occurs in the lower C sand of the Goliad Formation at a depth of approximately 525 to 575 feet. The area includes a portion within the PAA-1 wellfield (completed in the Middle C sand but with drilling penetrating the Lower C sand as well). This portion of the Mineral Resource was classified as an indicated Mineral Resource but could have been classified as a measured Mineral Resource based on drill hole spacing. Average thickness and GT for the resource area was determined from the portion of the mineralization within the PAA-1 wellfield. Average width was determined from GT contour estimates of PAA-4 and PAA-6, as discussed previously for the PAA-7 Mineral Resource area.

The Lower C Sand Outside of PAA-7, PAA-6, and PAA-4 also includes an area for which an Exploration Target has been defined and is described in Section 9.0 (Exploration).

Mineral resource estimation parameters for the Lower C Sand Outside PAA-7, PAA-6, and PAA-4 at a 0.30 GT cut-off are summarized in Table 14-8.

Table 14-8  Lower C Sand Outside PAA-7, PAA-6, and PAA-4 Mineral Resource Estimation Parameters

14.3.4 B Sand

The B sand of the Goliad Formation is present in the majority of the drill holes within the Project and occurs above the C sand, which was mined in the majority of the existing wellfields. The depth of the B sand is less than 500 feet.

Wellfield PAA-5 was completed in the B sand. A GT contour model was developed for portion of the B sand to determine appropriate Mineral Resource estimation parameters for width. Thickness and GT estimation parameters were determined from the average values from some 273 intercepts for the B sand above the minimum GT cut-off. As a cautionary note the recovery from wellfield PAA-5 was considerably lower than the other wellfields within the C sand units. It is not known whether this was a function of the PAA-5 wellfield specifically or the B sand in a more general sense.

Mineral resource estimation parameters for the B Sand at a 0.30 GT cut-off are shown in Table 14-9:

Table 14-9  B Sand Mineral Resource Estimation Parameters

14.3.5 A Sand

Mineralization in the A sand of the Goliad Formation is defined by drilling within two sub-horizons, the upper and lower sands, A1 and A2, respectively. The area is drilled on approximately 50 foot by 200 foot centers or closer, across and along the trend, respectively. Most of the mineralization defined to date is in the A1 sand. The A sand is stratigraphically above the B and C sands and is encountered in the majority of the drill holes within the Project. Mineralization is at a depth of less than 500 feet. The average width of mineralization was taken to be equivalent to PAA-7, as discussed previously. The average thickness and GT parameters represent average values from drill holes in the A sands above the GT cut-off, from 72 intercepts. 

Mineral resource estimation parameters for the A sand at a 0.30 GT cut-off are shown in Table 14-10.

14.3.6 South Alta Mesa

The South Alta Mesa is primarily an exploration target, but within a limited portion of the area, the interpreted REDOX trend, within the E sand of the Goliad, is reasonably defined by drilling. This area meets NI 43-101 and S-K 1300 regulations for classification as an inferred Mineral Resource.

Mineral resource estimation parameters reflecting overall averages for the Alta Mesa drill hole intercepts meeting the minimum GT cut-off criteria are at a width of 35 feet, a thickness of 10 feet, and a GT of 1.00. These parameters were applied to an estimated trend length of 6,125 feet to determine the inferred Mineral Resource for this portion of the South Alta Mesa area.

14.3.7 Mesteña Grande Portion of the Project

Mineral resources for the Mesteña Grande portion of the Project estimated for classifications, meeting NI 43-101 and S-K 1300 standards and definitions as indicated and inferred Mineral Resources, at a 0.30 GT cut-off, as summarized in Table 14-11. Subsequent sections discuss each Mineral Resource area separately.

All estimates are rounded. Mineral resources are not mineral reserves and do not have demonstrated economic viability in accordance with NI 43-101 and S-K 1300 standards. The portion of the Project with defined Measured and Indicated Mineral Resources would support a preliminary feasibility study (PFS) or Feasibility (FS) which could enable them to be categorized as mineral reserves. Inferred Mineral Resources are too speculative to have reasonable prospect for economic extraction applied to them which would enable them to be categorized as mineral reserves. Inferred Mineral Resources could be assessed in the context of a preliminary economic assessment or Initial Assessment which is allowed under NI 43-101 and S-K 1300 rules respectively.

14.3.8 Mesteña Grande - Mineral Resource Estimation Parameters

Mineral resource estimation parameters for Mesteña Grande, including defined mineralization in the Goliad, Oakville, and Catahoula formations, were based on data from the Alta Mesa portion of the Project. This approach was taken as the drilling at Mesteña Grande is wide spaced. As discussed in Section 10 and tabulated on Table 10.2, a total of 460 holes were completed in the Mesteña Grande area of which 14 were above the minimum GT cut-off. The drilling did define REDOX trends appropriate for the estimation of mineralization but was not sufficient to determine a reasonable width and GT for the mineralization. An average width of 35 feet was determined from GT contour estimates of PAA-4 and PAA-6, as discussed previously, and for the PAA-7 Mineral Resource area. An average GT value of 1.2 was derived from the average of the C horizon of the Goliad Formation at Alta Mesa which has been the primary ISR mining horizon (nearly 3,000 intercepts). A thickness of 10 feet was assumed.  Trend lengths were determined for each area from drill hole data as subsequently discussed.

14.3.9 Mesteña Grande - Oakville Formation

The interpreted REDOX trends are defined by approximately 350 drill holes. The majority of the Mineral Resources are classified as inferred although there is one area in the Oakville Central North where closer spaced drilling has reasonably confirmed the presence of mineralization which has reasonable prospect for economic extraction.  This mineralization is within the Oakville 10 sand.

The depth to mineralization in the Oakville Formation occurs at depths from 1,050 to 1,300 feet which is substantially deeper than mineralization in the Goliad Formation both at Mesteña Grande and at Alta Mesa. The increased depth will impact production costs. The authors are aware of several similar ISR projects with similar depths to mineralization and concludes there is a reasonable prospect for economic extraction of these resources; however, production costs will likely be higher than those for Alta Mesa or mineralization in the Goliad at Mesteña Grande.

Mineral resource estimation parameters for the Mesteña Grande, Oakville Formation, at a 0.30 GT cut-off shown in Table 14-12.

Table 14-12  Mesteña Grande and Oakville Formation Mineral Resource Estimation Parameters

14.3.10 Mesteña Grande - Goliad Formation

REDOX trends were defined in the Goliad Formation in the northern portion of Mesteña Grande. The interpreted REDOX trends are defined by approximately 50 drill holes. Mineralization is at depth ranging from 400 to 500 feet. Mineral resources for the Goliad are classified as inferred Mineral Resources and were estimated for the Goliad 10 and Goliad 20 sands.

Mineral resource estimation parameters for the Mesteña Grande, Goliad Formation, at a 0.30 GT cut-off are shown in Table 14-13.

Table 14-13  Mesteña Grande and Goliad Formation Mineral Resource Estimation Parameters

14.3.11 El Sordo - Catahoula Formation

Mineralization in the El Sordo area is in the Catahoula Formation at depths ranging from 450 to 600 feet. The Catahoula Formation is described as primarily composed of volcanic ash-fall tuffs. Regionally, the Catahoula Formation is an important source rock for uranium. BRS  reviewed the geophysical logs for the El Sordo area, and the mineralization is within well- developed sand units and BRS's opinion is that a reasonable prospect for economic extraction via ISR mining is feasible. Mineral resources at El Sordo are classified as inferred Mineral Resources based on the following assumptions:

• An average width of 35 feet was determined from GT contour estimates of PAA-4 and PAA-6, as discussed previously, and for the PAA-7 Mineral Resource area.
• An average GT value of 1.0 was derived from the average of all Alta Mesa data for all horizons (approximately 3,300 intercepts).
• A thickness of 10 feet was assumed.
• Trend lengths are defined by drilling.

Mineral resource estimation parameters for the El Sordo area, at a 0.30 GT cut-off are shown in Table 14-14.

14.4 Opinion of Adequacy

It is the opinion of the authors that the Mineral Resource procedures and calculations are suitable for the purposes of resource estimation under NI 43-101 requirements and S-K 1300 for roll-front uranium deposits mined by in-situ recovery methods.

14.5 Mineral Resource Figures and Drill Hole Locations

Figure 14-3  Alta Mesa Key Map

Figure 14-4 PAA7 LCU

Figure 14-5 Paa7 LCL

Figure 14-6  D Sand

Figure 14-7  Western LC LCU and LCL

Figure 14-8  B Sand

Figure 14-9  A Sand

Figure 14-10  Sam and E Sand

Figure 14-11  Mestena Grande Key Map

Figure 14-12  Oakville North

Figure 14-13  Oakville Central North

Figure 14-14  Oakville Central South

Figure 14-15  Alta Vista

Figure 14-16  Goliad

15.0 MINERAL RESERVE ESTIMATES

There are no Mineral Reserves at the Alta Mesa or Mesteña Grande properties.

16.0 MINING METHODS

This section is not applicable to this Initial Assessment.

17.0 PROCESSING AND RECOVERY METHODS

This Section is not applicable to this Initial Assessment.

18.0 INFRASTRUCTURE

This Section is not applicable to this Initial Assessment.

19.0 MARKET STUDIES

This Section is not applicable to this Initial Assessment.

20.0 ENVIRONMENTAL STUDIES, PERMITTING, AND PLANS, NEGOTIATIONS, OR AGREEMENTS WITH LOCAL INDIVIDUALS OR GROUPS

This Section is not applicable to this Initial Assessment.

21.0 CAPITAL AND OPERATING COSTS

This Section is not applicable to this Initial Assessment.

22.0 ECONOMIC ANALYSIS

This Section is not applicable to this Initial Assessment.

23.0 ADJACENT PROPERTIES

Several ISR mines lie within the South Texas Uranium Province.

23.1 Garcia Property

The mineralized trends in the Goliad Formation continue to the east onto properties not controlled by Alta Mesa LLC.  Chevron conducted exploration drilling in the 1970's on the Garcia property, which is located immediately east of the Alta Mesa project. These exploration efforts identified the presence of several mineralized sands on the Garcia tract. Historical Mineral Resource estimates for this area range from 6.7 million to 9 million pounds.

Such estimates were prepared before the implementation of the SEC's S-K or Canada's NI 43-101 standards

and do not necessarily use the categories for mineral reserve and Mineral Resource reporting as defined by those standards. The author considers this to be a historic Mineral Resource estimate and should not be relied upon. The authors of this report have not been unable to verify this information and this information is not necessarily indicative of the mineralization on the Project.

24.0 OTHER RELEVANT DATA AND INFORMATION

24.1 Hydrogeology

There has been no hydrologic study on the project site, however pump tests are completed on each well-field as part of the permit application.

24.2 Geotechnical

There has been no geotechnical study on the mineralized zones at Alta Mesa.

25.0 INTERPRETATION AND CONCLUSIONS

The Project is located within the South Texas Uranium Province and includes both the Alta mesa and Mesteña Grande project areas.  Uranium mineralization occurs within known host formations common to the province which have been mined by conventional and ISR methods. Significant Mineral Resources remain within the Project area which may be tributary to the Alta Mesa central processing facility which is fully licensed and operated from 2005 producing approximately 4.6 million pounds of uranium oxide until production standby in February 2013.

Mineral resources have been estimated for both the Alta Mesa and Mesteña Grande areas in accordance with NI 43-101 and S-K 1300 standards and definitions as summarized in Table 1-1 and Table 14-1 and classified as measured, indicated, and inferred. Only the Alta Mesa property has had previous ISR mining. No pre-feasibility study or feasibility study has been completed in accordance with NI 43-101 or S-K 1300 requirements, thus no mineral reserves are stated in this report.

Notes:

1. NI 43-101 and S-K 1300 definitions were followed for all Mineral Resource categories.

2. Mineral Resources are estimated at a 0.3 GT (0.02% U₃O₈ minimum)

3. Mineral Resources are estimated using a long-term Uranium price of US$65 per pound

4. Total measured Mineral Resource is that portion of the in-place or in situ Mineral Resources that is estimated to be recoverable within existing well fields. Wellfield recovery factors have not been applied to indicated and inferred Mineral Resources

5. Bulk density is 0.0588 tons/ft³ (17.0 ft³/ton)

6. Mineral Resources are exclusive of Mineral Reserves and do not have demonstrated economic viability.

7. Numbers may not add due to rounding

Measured Mineral Resources are limited to fully delineated well fields in the Alta Mesa portion of the Project. While additional Mineral Resources may remain in additional well fields, only the remaining Mineral Resources in well field PAA-6 are considered to meet reasonable prospects for future economic extraction and are thus the only measured Mineral Resources included in the Mineral Resource summary.

Indicated and inferred Mineral Resources have been estimated for both the Alta Mesa and Mestena Grande portions of the project using minimum grade and GT cut-offs based on reasonable prospects for future economic extraction.

Mineral resources at Alta Mesa are near the existing Central Processing Facility. Future development and extraction of Mineral Resources at Mesteña Grande would require the design, permitting and construction of a satellite facility.

In addition to the estimated Mineral Resources, Exploration Targets have been defined in the South Alta Mesa area of the Alta Mesa Project. The Exploration Target for the Project estimated is summarized in Table 25-2.

Table 25-2  Project Total Exploration Target

Note: The tonnages, grades, and contained pounds of uranium for exploration targets are estimates and could change as proposed exploration activities are completed.  They should not be construed to reflect a calculated Mineral Resource (measured, indicated or inferred). The potential quantities and grades for exploration targets are conceptual in nature, as there has been insufficient work to date to define a NI 43-101 or S-K 1300 compliant resource. Furthermore, it is uncertain if additional exploration will result in any of the exploration targets being delineated as a Mineral Resource.

The authors consider the data and information available for this report to be accurate and reliable for the purposes of estimating Mineral Resources for the Project.

The authors feel the risks to put the Alta Mesa portion of the Project into production are low since all permits for operating including licenses to resume plant operations at the existing Alta Mesa ISR production facility.  For each new wellfield a production area authorization (PAA) permit will need to be obtained through the permitting process with the TCEQ.

However, the Mesteña Grande portion of the Project, which will operate as a satellite facility to the Alta Mesa ISR facility, will require full permitting prior to production and operation of its well fields.

The Project does have some risks similar in nature to other mining projects in general and uranium mining projects specifically, including:

• Future commodity demand and pricing;
• Environmental and political acceptance of the project;
• Variance in capital and operating costs; and
• Mine and mineral processing recovery and dilution.

There is a risk that additional drilling may not locate additional Mineral Resources and that mineralization may not be found or may not be continuous along the REDOX boundary and that the actual grade times thickness (GT) along the trends will fall outside the estimated range, either higher or lower. A substantial portion of the Mineral Resource is based on wide-spaced drilling and has been classified as inferred. Inferred Mineral Resources are too speculative to have economic considerations applied to them which would enable them to be categorized as mineral reserves. Inferred Mineral Resources can be assessed in the context of a Initial Assessment study which is allowed under a Preliminary Economic Assessment in accordance NI 43-101 and S-K 1300 requirements. The tonnages, grades, and contained pounds of uranium, as stated in this report, for exploration targets should not be construed to reflect a calculated Mineral Resource (inferred, indicated, or measured). The potential quantities and grades for exploration targets, as stated in this report, are conceptual in nature, and there has been insufficient work to date to define an NI 43-101 or S-K 1300 compliant resource. Furthermore, it is uncertain if additional exploration will result in any of the exploration targets being delineated as a Mineral Resource.

The authors are not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors which would materially affect the Mineral Resource estimates presented in this report. To the author's knowledge there are no other significant factors that may affect access, title, or the right or ability to perform work on the property provided the conditions of all mineral leases and options, and relevant operating permits and licenses, are met. The reader is cautioned that additional drilling may or may not result in discovery of an economic Mineral Resource on the property.

26.0 RECOMMENDATIONS

Recommendations which follow separately are for the restart of operations at the Alta Mesa Facility and continued exploration and delineation drilling. These recommendations are independent of one another.

26.1 Restart of operations at the Alta Mesa Facility:

The following recommendations presume the Alta Mesa Central Processing facility is to resume production under favorable market conditions.  Under this scenario the following phased work program is recommended.

Phase 1 - Restart Alta Mesa Operations

• Updating of existing operating permits and licenses as necessary to authorize well field and plant operations.

• Rehabilitation and modernization of the Alta Mesa processing facility and rehabilitation of the PAA-6 wellfield to allow for resumption of production from PAA-6.

• Estimated cost: $980,000

Phase 2 - Delineate PAA-7 to allow for start of production in PAA-7

• Advance well field delineation and initiate installation of initial wellfields to allow for production start-up at PAA-7 including.

  • PAA-7 Upper LCU1 indicated resource area

  • PAA-7 Upper LCU2 indicated resource area

  • PAA-7 Lower LCU1 indicated resource area

  • PAA-7 Lower LCU2 indicated resource area

• Estimated cost: $12,000,000

Phase 3 - Complete exploration of Alta Mesa inferred Mineral Resource areas

Assumptions for the purposes of estimating the costs of drilling program assume that drilling will be completed across the trend on close spacing and along the trend at a greater spacing (referred to as fence drilling) and include:

• Drilling Inferred Mineral Resources to drill hole density of Indicated Mineral Resources

• Requires 5 holes per 200 feet of trend length

• Approximate 500-600 foot depth, $5,000 per drill hole, approximately $10 per foot

• Approximate 1,000-1,200 foot depth per drill hole, $15,000 per drill hole, approximately $15 per foot

Table 26-1 provides cost estimates each of the areas recommended for delineation drilling within the overall Alta Mesa project area.

26.2 Exploration and delineation drilling:

Concurrent with or after Phase 3, continued exploration of the Mesteña Grande is recommended. This would include delineation drilling of the Oakville Central indicated resource area sufficiently to define the mineralization and complete sufficient geological, metallurgical, and hydrological studies to preliminarily assess the economics of future extraction. Presuming positive results, it is recommended that exploration of a sufficient portion of the Mesteña Grande inferred resources areas be conducted to define sufficient Mineral Resources to support a preliminary feasibility study for a satellite facility at Mesteña Grande. The estimated costs to complete the foregoing recommendations are summarized in Table 26-2.

Table 26-2  Cost Estimates to Elevate Inferred Mineral Resources to Measured and Indicated Mineral Resources

It is also recommended that EFR conducts further exploration drilling to gain additional information about exploration targets to possibly upgrade these areas to Mineral Resources. Exploration targets have been defined primarily in the South Alta Mesa area of the Alta Mesa Project. The estimated costs to complete the foregoing recommendations are summarized in Table 26-3.

Table 26-3 summarizes the costs associated with additional drilling of the inferred Mineral Resources and Exploration Targets.

Table 26-3  Cost for Exploration Target Drilling to Elevate to Inferred Mineral Resources

The cost estimates for exploratory and delineation drilling assume that the entirety of each trend would need to be drilled including all holes along a fence. Drilling would likely begin in the most prospective locations and, assuming successful results, work away along trend. If drilling were unsuccessful, drilling would likely be curtailed. Also, if a drill hole penetrated the planned drill target along a fence, then the additional drill holes planned along that fence would not be needed.  Conversely, if the planned drill target was not penetrated with the planned fence additional drilling may be required. 

27.0 REFERENCES

Publications Cited in this report:

1. Beahm, Douglas L, BRS Engineering, "Alta Mesa Uranium Project Technical Report, Mineral Resources and Exploration Target, National Instrument 43-101, Brooks and Jim Hogg Counties, Texas, USA", June 1, 2014, prepared on behalf of Mesteña Uranium LLC

2. Collins, J. and H. Talbot, U2007 Conference, Corpus Christi, Presented by Mestena Uranium LLC

3. Hosman, R.L., and Weiss, J.S.,1991, Geohydrologic units of the Mississippi Embayment and Texas Coastal uplands aquifer systems, South Central United State-regional aquifer system analysis- Gulf Coastal Plain:  U.S. Geological Survey Professional Paper 1416-B, 1996.

4. Brogdon, L.D., C.A. Jones, and J.V Quick, "Uranium favorability by lithofacies analysis, Oakville and Goliad Formations, South Texas:  Gulf Coast Association of Geological Societies, 1977.

5. Smith, G. E., W. E. Galloway, and C. D. Henry, Regional hydrodynamics and hydrochemistry of the uranium-bearing Oakville Aquifer (Miocene) of South Texas: The University of Texas at Austin, Bureau of Economic Geology Report of Investigations No. 124, 1982.

6. Galloway, W. E., Epigenetic zonation and fluid flow history of uranium-bearing fluvial aquifer systems, south Texas uranium province: The University of Texas at Austin, Bureau of Economic Geology Report of Investigations No. 119, 1982.

7. Galloway, W. E., Catahoula Formation of the Texas coastal plain: depositional systems, composition, structural development, ground-water flow history, and uranium deposition: The University of Texas at Austin, Bureau of Economic Geology Report of Investigations No. 87, 1977.

8. Galloway, W. E., R. J. Finley, and C. D. Henry, South Texas uranium province geologic perspective: The University of Texas at Austin, Bureau of Economic Geology Guidebook No. 18, 1979.

9. McBride, E. F., W. L. Lindemann, and P. S. Freeman, Lithology and petrology of the Gueydan (Catahoula) Formation in south Texas: The University of Texas at Austin, Bureau of Economic Geology Report of Investigations No. 63, 1968.

10. Eargle, D. H., Stratigraphy of Jackson Group (Eocene), South-Central, Texas: American Association of Petroleum Geologists Bulletin, 43, 1959.

11. Fisher, W. L., C. V. Proctor, W. E. Galloway, and J. S. Nagle, Depositional systems in the Jackson Group of Texas-Their relationship to oil, gas, and uranium: Gulf Coast Association of Geological Societies Transactions, 20, 1970.

12. Kreitler, C. W., T. J. Jackson, P. W. Dickerson, and J. G. Blount, Hydrogeology and hydrochemistry of the Falls City uranium mine tailings remedial action project, Karnes County, Texas: The University of Texas at Austin, Bureau of Economic Geology, prepared for the Texas Department of Health under agreement No IAC(92-93)-0389, September, 1992.

13. De Voto, R. H. "Uranium Geology and Exploration" Colorado School of Mines, 1978.

14. Finch, W. I., Uranium provinces of North America-their definition, distribution, and models: U.S. Geological Survey Bulletin 2141, 1996.

15. Finch, W. I. and Davis, J. F., "Sandstone Type Uranium Deposits - An Introduction" in Geological Environments of Sandstone-Type Uranium Deposits Technical Document, Vienna: IAEA, 1985.

16. Granger, H. C., Warren, C. G., "Zoning in the Altered Tongue Associated with Roll-Type Uranium Deposits" in Formation of Uranium Ore Deposits, Sedimentary Basins and Sandston-Type Deposits, IAEA, 1974.

17. IAEA, "World Distribution of Uranium Deposits (UDEPO) with Uranium Deposit Classification" 2009 Edition, Vienna: IAEA, 2009.

18. Nicot, J. P., et al, "Geological and Geographical Attributes of the South Texas Uranium Province", Prepared for the Texas Commission on Environmental Quality, Bureau of Economic Geology, April, 2010.

19. McKay, A. D. et al, "Resource Estimates for In Situ Leach Uranium Projects and Reporting Under the JORC Code", Bulletin November/December 2007.

20. Stoeser, D.B., Shock, Nancy, Green, G.N., Dumonceaux, G. M., and Heran, W.D., in press, A Digital Geologic Map Database for the State of Texas: U.S. Geological Survey Data Series.

21. US Securities and Exchange Commission, 17 CFR Parts 229, 230, 239 and 249, Modernization of Property Disclosures for Mining Registrants.

22. TradeTech, Uranium Market Study, 2021: Issue 4.

Unpublished Reports:

1. Goranson, P., Mesteña Uranium LLC, Internal Memorandum Re: Review of Reserve Estimates, July 2007.

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