UUUU Energy Fuels Inc

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 40-F

[   ]  Registration statement pursuant to Section 12 of the Securities Exchange Act of 1934 or

[X]  Annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934

For the twelve months ended December 31, 2014

Commission File Number 001-36204

Energy Fuels Inc.
(Exact name of registrant as specified in its charter)

225 Union Blvd., Suite 600
Lakewood, CO 80228
(303) 389-4130
(Address and telephone number of registrant’s principal executive offices)

Energy Fuels Resources (USA) Inc.
225 Union Blvd., Suite 600
Lakewood, CO 80228
(303) 389-4130
(Name, address (including zip code) and telephone number (including
area code) of agent for service in the United States)

Securities to be registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

For annual reports, indicate by check mark the information filed with this form:

[ X ]  Annual Information Form               [ X ]  Audited Annual Financial Statements

Indicate the number of outstanding shares of each of the registrant’s classes of capital or common stock as of the close of the period covered by the annual report: 19,677,552

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.

Yes  [ X ]  No  [  ] 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  [  ]  No  [  ]

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FORWARD LOOKING STATEMENTS

This Annual Report on Form 40-F and the Exhibits attached hereto contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation, which may not be based on historical fact. Readers can identify many of these statements by looking for words such as “believe”, “expects”, “will”, “intends”, “projects”, “anticipates”, “estimates”, “continues” or similar words or the negative thereof. Statements that are not based on historical fact contained in this Annual Report, including through documents incorporated by reference are forward-looking statements that involve risks and uncertainties that could cause actual events or results to differ materially from estimated or anticipated events or results reflected in the forward-looking statements. Such forward-looking statements reflect our current view with respect to future events and include, among other things, statements regarding targets, estimates and/or assumptions in respect of reserves and/or resources, and are based on estimates and/or assumptions related to future economic, market and other conditions that, while considered reasonable by us, are inherently subject to risks and uncertainties, including significant business, economic, competitive, political and social uncertainties and contingencies.

The forward-looking statements and forward-looking information contained in this Annual Report and the documents incorporated by reference herein are expressly qualified by this cautionary statement. Energy Fuels Inc. (the “Corporation” or the “Registrant”) does not undertake any obligation to publicly update or revise any forward looking statements to reflect actual results, changes in assumptions or changes in other factors affecting any forward looking statements or information except as expressly required by applicable securities laws. If the Corporation does update one or more forward looking statements, no inference should be drawn that the Corporation will make additional updates with respect to those or other forward looking statements. Readers are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein.

DIFFERENCES IN UNITED STATES AND CANADIAN REPORTING PRACTICES

The Registrant is permitted, under a multijurisdictional disclosure system adopted by the United States, to prepare this report in accordance with Canadian disclosure requirements, which are different from those of the United States. The Registrant prepares its financial statements, which are filed with this report on Form 40-F in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and the audit is subject to Canadian auditing and auditor independence standards.

RESOURCE AND RESERVE ESTIMATES

The terms “measured”, “indicated” and “inferred” resources are Canadian mining terms as defined in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) CIM Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as may be amended from time to time by the CIM. These definitions differ from the definitions in the United States Securities & Exchange Commission (“Commission”) Industry Guide 7 under the Securities Act of 1933. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies.

Accordingly, information contained in this report and the documents incorporated by reference herein containing descriptions of our mineral deposits may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder. United States investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted into mineral reserves. United States investors are also cautioned not to assume that all of any part of an inferred mineral resource exists, or is economically or legally mineable.

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DOCUMENTS FILED PURSUANT TO GENERAL INSTRUCTIONS

The following documents, filed as Exhibits 99.1, 99.2, and 99.3 to this Annual Report on Form 40-F, are hereby incorporated by reference into this Annual Report on Form 40-F

CERTIFICATIONS AND DISCLOSURE REGARDING CONTROLS AND PROCEDURES

As of the end of the period covered by this Annual Report on Form 40-F, an evaluation was carried out under the supervision of and with the participation of the Corporation’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of the Corporation’s disclosure controls and procedures (as defined in Rule 13a – 15(e) and Rule 15d – 15(e) under the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, the CEO and the CFO have concluded that as of the end of the period covered by this Annual Report on Form 40-F, the Corporation’s disclosure controls and procedures were effective in ensuring that: (i) information required to be disclosed by the Corporation in reports that it files or submits to the Commission under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms and (ii) material information required to be disclosed in its reports filed under the Exchange Act is accumulated and communicated to its management, including its CEO and CFO, as appropriate, to allow for accurate and timely decisions regarding required disclosure.

It should be noted that while the CEO and CFO believe that the Corporation’s disclosure controls and procedures provide a reasonable level of assurance that they are effective, they do not expect that the Corporation’s disclosure controls and procedures or internal control over financial reporting will prevent all errors and fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act. The Corporation’s management has employed a framework consistent with Exchange Act Rule 13a-15(c), to evaluate the Corporation’s internal control over financial reporting described below. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Corporation’s assets that could have a material effect on the financial statements. It should be noted that a control system, no matter how well conceived or operated, can only provide reasonable assurance, not absolute assurance, that the objectives of the control system are met. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.

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The senior executive officers, including the Corporations’ CEO and CFO, conducted an evaluation of the effectiveness, design and operation of the Corporation’s internal control over financial reporting as of December 31, 2014, based on the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Based on this evaluation, management has concluded that the Corporation’s internal control over financial reporting was effective as of December 31, 2014 and no material weaknesses were discovered.

It should be noted that while the Corporation’s CEO and CFO believe that the Corporation’s internal controls over financial reporting provide a reasonable level of assurance that they are effective, they do not expect that the Corporation’s internal controls over financial reporting will prevent all errors and fraud.

This annual report does not include an attestation report of the Corporation’s registered independent public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Corporation’s registered independent public accounting firm as the Corporation qualifies as an “emerging growth company” under the Jumpstart Our Business Start-ups Act of 2012.

During the year ended December 31, 2014, there were no changes in the Corporation’s internal control over financial reporting that materially affected, or are likely to materially affect, the Corporation’s internal control over financial reporting.

NOTICES PURSUANT TO REGULATION BTR

There were no notices required by Rule 104 of Regulation BTR that the Registrant sent during the year ended December 31, 2014 concerning any equity security subject to a blackout period under Rule 101 of Regulation BTR

AUDIT COMMITTEE FINANCIAL EXPERT

The Corporation’s Board has determined that Lawrence A. Goldberg, Bruce D. Hansen, and Paul A. Carroll qualify as financial experts (as defined in Item 407(d)(5) of Regulation S-K under the Exchange Act), are financially sophisticated, as determined in accordance with Section 803B(2)(iii) of the NYSE MKT Company Guide (the “Company Guide”), and are independent (as determined under Exchange Act Rule 10A-3 and section 803A of the Company Guide).

The Commission has indicated that the designation or identification of a person as an audit committee financial expert does not make such person an “expert” for any purpose, impose any duties, obligations or liability on such person that are greater than those imposed on members of the audit committee and the board of directors who do not carry this designation or identification, or affect the duties, obligations or liability of any other member of the audit committee or board of directors.

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CODE OF ETHICS

The Corporation has adopted a written Code of Business Conduct and Ethics that constitutes a “code of ethics” as defined in Form 40-F, and by which it and all directors, officers and employees of the Corporation are required to abide.

The Corporation’s Code of Business Conduct and Ethics is available for viewing on the Corporation’s website at http://www.energyfuels.com/_resources/governance/code_ethics.pdf and is available in print to any shareholder who requests a copy from the Corporate Secretary of the Corporation by contacting the Corporation by phone at (303) 389-4130 or email at dfrydenlund@energyfuels.com.

All amendments to the Code of Business Conduct and Ethics and all waivers of the Code of Business Conduct and Ethics with respect to any of the officers covered by it will be posted on the Corporation’s website within five business days of the amendment or waiver, and provided in print to any shareholder who requests them.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The required tabular disclosure is included on page 195 of the Corporation’s Annual Information Form for the year ended December 31, 2014, filed as Exhibit 99.1 to this Annual Report on Form 40-F and is incorporated herein by reference.

OFF-BALANCE SHEET TRANSACTIONS

The Registrant does not have any off-balance sheet transactions.

PRE-APPROVAL POLICES AND PROCEDURES

The required disclosure is included on page 195 of the Corporation’s Annual Information Form for the fiscal year ended December 31, 2014, filed as Exhibit 99.1 to this Annual Report on Form 40-F and is incorporated herein by reference.

TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

The following table lists as of December 31, 2014 information with respect to the Registrant’s known contractual obligations:

IDENTIFICATION OF THE AUDIT COMMITTEE

The Corporation’s Board of Directors has a separately designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The members of the Corporation’s Audit Committee are identified under the heading “Composition of the Audit Committee” in the Corporation’s Annual Information Form, attached hereto as Exhibit 99.1. The full text of the Corporation’s Audit Committee Charter is attached to the Corporation’s AIF, filed as Exhibit 99.1 and incorporated by reference in this annual report on Form 40-F.

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MINE SAFETY DISCLOSURE

The information concerning mine safety violations or other regulatory matters required by Item 16 of General Instruction B to Form 40-F is included in Exhibit 99.6 to this Annual Report on Form 40-F.

CORPORATE GOVERNANCE

The Corporation’s Board of Directors (the “Board”) is responsible for the Corporation’s Corporate Governance policies and has a separately designated standing Compensation Committee, Governance and Nominating Committee, Audit Committee, and Environment, Health and Safety Committee. The Board has determined that all of the members of the Compensation Committee, Nominating and Corporate Governance Committee, and Audit Committee, are independent, based on the criteria for independence prescribed by section 803A of the Company Guide and Section 805(c) of the Company Guide, as applicable.

Compensation Committee

The primary objective of the Compensation Committee is to assist the Board in administering the Corporation’s executive and director compensation program, succession planning for executive management, development and retention of senior management, reviewing the performance of senior management, recommending compensation for the Chief Executive Officer, and reviewing and approving individual compensation for other executive officers. The Corporation’s Compensation Committee is comprised of Richard J. Patricio (chairman), J. Birks Bovaird, and Bruce D. Hansen. The Corporation’s CEO cannot be present during the Compensation Committee’s deliberations or vote regarding the CEO’s compensation.

Governance and Nominating Committee

The Governance and Nominating Committee is appointed by the Board to assist the Board in developing the Corporation’s approach to corporate governance, including developing and monitoring a set of corporate governance principles and guidelines that are specifically applicable to the Corporation, and to identify and recommend to the Board qualified nominees for appointment or election as directors. The members of the Governance and Nominating Committee are Ron F. Hochstein (chairman), Mark E. Goodman and Richard J. Patricio.

Environment, Health and Safety Committee

The Environment, Health and Safety Committee is appointed by the Board to assist the Board in fulfilling its oversight responsibilities for environmental, health and safety matters, and to oversee the development and implementation of policies and best practices relating to environmental, health and safety issues in order to ensure compliance with applicable laws, regulations and policies in the jurisdictions in which the Corporation carries on business. The Environment, Health and Safety Committee consists of Ron F. Hochstein (chairman), Stephen P. Antony, and Mark E. Goodman.

NYSE MKT CORPORATE GOVERNANCE

The Corporation’s common shares are listed on the NYSE MKT. Section 110 of the Company Guide permits the NYSE MKT to consider the laws, customs and practices of foreign issuers in relaxing certain NYSE MKT listing criteria, and to grant exemptions from NYSE MKT listing criteria based on these considerations. A company seeking relief under these provisions is required to provide written certification from independent local counsel that the non-complying practice is not prohibited by home country law. A description of the significant ways in which the Corporation’s governance practices differ from those followed by domestic companies pursuant to NYSE MKT standards is as follows:

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Shareholder Meeting Quorum Requirement: The NYSE MKT minimum quorum requirement for a shareholder meeting is one-third of the outstanding shares of common stock. A quorum for a meeting of shareholders of the Corporation, as set forth in its bylaws, is two shareholders entitled to vote at the meeting, whether present in person or represented by proxy.

Proxy Delivery Requirement: The NYSE MKT requires the solicitation of proxies and delivery of proxy statements for all shareholder meetings, and requires that these proxies shall be solicited pursuant to a proxy statement that conforms to SEC proxy rules. The Corporation is a “foreign private issuer” as defined in Rule 3b-4 under the Exchange Act, and the equity securities of the Corporation are accordingly exempt from the proxy rules set forth in Sections 14(a), 14(b), 14(c) and 14(f) of the Exchange Act. The Corporation solicits proxies in accordance with applicable rules and regulations in Canada.

The foregoing are consistent with the laws, customs and practices in Canada.

In addition, the Corporation may from time-to-time seek relief from NYSE MKT corporate governance requirements on specific transactions under Section 110 of the Company Guide by providing written certification from independent local counsel that the non-complying practice is not prohibited by our home country law, in which case, the Corporation shall make the disclosure of such transactions available on the Corporation’s website at http://www.energyfuels.com/ and/or in its annual report. Information contained on its website is not part of this annual report.

UNDERTAKINGS

The Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities registered pursuant to Form 40-F; the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.

CONSENT TO SERVICE OF PROCESS

The Corporation filed an Appointment of Agent for Service of Process and Undertaking on Form F-X with respect to the class of securities in relation to which the obligation to file the Form 40-F arises. Any change to the name or address of the agent for service of process will be communicated promptly to the Commission by amendment to Form F-X referencing the Corporation’s file number.

SIGNATURES

Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

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EXHIBIT INDEX

The following documents are being filed with the Commission as exhibits to this annual report on Form 40-F.

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ENERGY FUELS INC.

2014 ANNUAL INFORMATION FORM

DATED MARCH 18, 2015

IN RESPECT OF THE FINANCIAL YEAR
ENDED DECEMBER 31, 2014

In 2013, Energy Fuels Inc. (“Energy Fuels” or the “Company”) changed its fiscal year-end from September 30 to December 31, to better align the Company’s year-end with the year-ends of its major uranium customers, certain material subsidiaries and industry peers. As a result of this change, the Company’s financial year for 2013 was the fifteen month period beginning on October 1, 2012 and ending on December 31, 2013 (“FY 2013”). The Company’s most recent financial year is the twelve month period beginning on January 1, 2014 and ending on December 31, 2014 (“FY 2014”). Therefore, FY 2014 results are not full comparable to FY 2013

All amounts stated in this Annual Information Form (“AIF”) are in United States dollars, unless otherwise indicated.

Effective November 5, 2013, the Company amended its Articles to consolidate the issued and outstanding common shares of the Company on the basis of one post-consolidation common share for every 50 pre-consolidation common shares (the “Share Consolidation”). All data for periods prior to November 5, 2013 relating to numbers of common shares, prices of common shares, number of stock options and warrants, exercise prices of stock options and warrants and conversion prices of convertible debentures set forth in this AIF have been adjusted to give retroactive effect to the Share Consolidation. For the purpose of giving retroactive effect to the Share Consolidation, the Company has rounded fractional shares to the nearest whole share and rounded fractional price information to the nearest cent, with fractions of 0.5 or greater rounded up and fractions of less than 0.5 rounded down. As a result of such rounding actual amounts may differ. Unless otherwise indicated, references in this AIF (but not necessarily the documents incorporated by reference herein) to “Common Share” are to the common shares of the Company after giving effect to the Share Consolidation.

Financial information is presented in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board as Issued by the International Accounting Standards Board (“IFRS”).

The definitions of certain terms used in this AIF are set forth in Appendix B – Glossary.

This AIF is dated March 18, 2015. Except as otherwise indicated, the information contained in this AIF is stated as at December 31, 2014.

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This AIF, including the documents incorporated herein by reference, contains forward looking information and forward looking statements within the meaning of applicable Canadian and United States securities laws. Those statements appear in a number of places in this AIF and in the documents incorporated herein by reference and include, but are not limited to, statements and information regarding the Company’s current intent, belief or expectations primarily with respect to:

• the Company’s business objectives and plans;
• exploration and development plans and expenditures;
• estimation of Mineral Resources and Mineral Reserves;
• mineral grades;
• the Company’s expectations regarding additions to its Mineral Resources and Mineral Reserves through acquisitions and development;
• success of the Company's permitting efforts, including receipt of regulatory approvals, permits and licenses and treatment under governmental regulatory regimes and the expected timeframes for receipt of such approvals, permits, licenses and treatments;
• possible impacts of regulatory actions;
• capital expenditures;
• expansion plans;
• success of the Company's mining and/or milling operations;
• availability of equipment and supplies;
• availability of alternate feed materials for processing;
• the Company’s processing technologies;
• future production costs, including costs of labor, energy, materials and supplies;
• future effective tax rates;
• future benefits costs;
• future royalties payable;
• the outcome and possible impacts of disputes and legal proceedings in which the Company is involved;
• the timing and amount of estimated future production, including Energy Fuels’ expectations regarding expected price levels required to support production and the Company’s ability to increase production as market conditions warrant;
• sales volumes and future uranium and vanadium prices and treatment charges;
• the Company’s expectations with regard to obtaining term sales contracts for uranium;
• future trends in the Company’s industry;
• global economic growth and industrial demand;
• global growth in and/or attitudes towards nuclear energy;
• changes in global uranium and vanadium and concentrate inventories;
• expected market fundamentals, including the supply and demand for uranium and vanadium;
• the Company’s and industry expectations relating to future prices of uranium and vanadium;
• currency exchange rates;
• environmental risks;
• reclamation costs, including unanticipated reclamation expenses;
• collateral requirements for surety bonds;
• property status, including holding costs, disputes or claims;
• the adequacy of insurance coverage; and

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• legal proceedings and the potential outcomes therefrom.

In certain cases, forward looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “is likely”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, “continue”, or “believes”, and similar expressions, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”.

Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Energy Fuels believes that the expectations reflected in this forward-looking information are reasonable, but no assurance can be given that these expectations will prove to be correct, and such forward-looking information included in, or incorporated by reference into, this AIF should not be unduly relied upon. This information speaks only as of the date of this AIF.

Readers are cautioned that it would be unreasonable to rely on any such forward looking statements and information as creating any legal rights, and that the statements and information are not guarantees and may involve known and unknown risks and uncertainties, and that actual results are likely to differ (and may differ materially) and objectives and strategies may differ or change from those expressed or implied in the forward looking statements or information as a result of various factors. Such risks and uncertainties include risks generally encountered in the exploration, development and operation of mineral properties and processing facilities such as:

• risks associated with mineral and resource estimates, including the risk of errors in assumptions or methodologies
• risks associated with estimating production, forecasting future price levels necessary to support production, and the Company’s ability to increase production in response to any increases in commodity prices or other market conditions;
• uncertainties and liabilities inherent in mining operations;
• geological, technical and processing problems, including unanticipated metallurgical difficulties, ground control problems, process upsets and equipment malfunctions;
• risks associated with labour costs, labour disturbances and unavailability of skilled labour;
• risks associated with the availability and/or fluctuations in the costs of raw materials and consumables used in the Company's production processes;
• risks associated with environmental compliance and permitting, including those created by changes in environmental legislation and regulation and delays in obtaining permits and licenses that could impact expected production levels or increases in expected production levels;
• actions taken by regulatory authorities with respect to mining and processing activities;
• risks associated with the Company’s dependence on third parties in the provision of transportation and other critical services;
• title risks;
• risks associated with the ability of the Company to extend or renew mineral leases on favorable terms or at all;
• risks associated with the ability of the Company to negotiate access rights on certain properties on favorable terms or at all;
• the adequacy of insurance coverage;
• uncertainty as to reclamation and decommissioning liabilities;
• the ability of the Company’s bonding companies to require increases in the collateral required to secure reclamation obligations;
• the potential for, and outcome of, litigation and other legal proceedings, including potential injunctions pending the outcome of such litigation and proceedings;

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• the ability of Energy Fuels to meet its obligations to its creditors;
• risks associated with the Company’s relationships with its business and joint venture partners;
• failure to obtain industry partner, government and other third party consents and approvals, when required;
• competition for, among other things, capital, acquisitions of mineral reserves, undeveloped lands and skilled personnel;
• failure to complete proposed acquisitions and incorrect assessments of the value of completed acquisitions;
• risks posed by fluctuations in exchange rates and interest rates, as well as general economic conditions;
• risks inherent in the Company’s and industry’s forecasts or predictions of future uranium and vanadium price levels;
• fluctuations in the market prices of uranium and vanadium, which are cyclical and subject to substantial price fluctuations;
• failure to obtain suitable term contracts for the sale of uranium;
• risks associated with asset impairment as a result of decreases in uranium prices;
• risks associated with lack of access to markets and the ability to access capital;
• the market price of Energy Fuels’ securities;
• public resistance to nuclear energy or uranium mining;
• risks relating to the timing and ability to consummate the Company’s pending acquisition of Uranerz Energy Corp.;
• uranium industry competition and international trade restrictions; and
• the other factors discussed under “Risk Factors” in this AIF.

Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward looking statements contained in this AIF.

Such statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to, the following assumptions:

• that there is no material deterioration in general business and economic conditions;
• that there is no unanticipated fluctuation of interest rates and foreign exchange rates;
• that the supply and demand for, deliveries of, and the level and volatility of prices of uranium, vanadium and the Company’s other primary metals and minerals develop as expected;
• that uranium and vanadium prices required to reach, sustain or increase expected or forecasted production levels are realized as expected;
• that the Company is able to enter into suitable term contracts for the sale of uranium;
• that the Company receives regulatory and governmental approvals for the Company’s development projects and other operations on a timely basis;
• that the Company is able to operate its mineral properties and processing facilities as expected;
• that existing licenses and permits are maintained and renewed as required;
• that existing mineral leases are maintained and renewed as required;
• that access to properties is obtained and maintained as required;
• that the Company is able to obtain financing for the Company’s development projects on reasonable terms;
• that the Company is able to procure mining equipment and operating supplies in sufficient quantities and on a timely basis;

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• that engineering and construction timetables and capital costs for the Company’s development and expansion projects and restarting projects on standby, are not incorrectly estimated or affected by unforeseen circumstances;
• that costs of closure of various operations are accurately estimated;
• that there are no unanticipated changes in collateral requirements for surety bonds;
• that there are no unanticipated changes to market competition;
• that the Company’s reserve and resource estimates are within reasonable bounds of accuracy (including with respect to size, grade and recoverability) and that the geological, operational and price assumptions on which these are based are reasonable;
• that environmental and other administrative and legal proceedings or disputes are satisfactorily resolved; and
• that the Company maintains ongoing relations with its employees and with its business and joint venture partners.

All written and oral forward looking statements or information attributable to the Company or persons acting on the Company’s behalf are expressly qualified in their entirety by the foregoing cautionary statements.

Forward looking statements speak only as of the date the statements are made. You should not put undue reliance on any forward looking statements.

The Company cautions that the foregoing list of assumptions, risks and uncertainties is not exhaustive. Additional information on these and other factors which could affect operations or financial results are included under the heading “Risk Factors”. The forward-looking statements and forward-looking information contained in this AIF and the documents incorporated by reference herein are expressly qualified by this cautionary statement. The Company does not undertake any obligation to publicly update or revise any forward looking statements to reflect actual results, changes in assumptions or changes in other factors affecting any forward looking statements or information except as expressly required by applicable securities laws. If the Company does update one or more forward looking statements, no inference should be drawn that the Company will make additional updates with respect to those or other forward looking statements.

Statements relating to "Mineral Reserves" or "Mineral Resources" are deemed to be forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions, that the Mineral Reserves and Mineral Resources described may be profitably produced in the future.

This AIF has been prepared in accordance with the requirements of Canadian securities laws, which differ from the requirements of United States’ securities laws. Unless otherwise indicated, all reserve and resource estimates included in this AIF, and in the documents incorporated by reference herein, have been prepared in accordance with Canadian National Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum classification system. NI 43-101 is a rule developed by the Canadian Securities Administrators (the “CSA”) which establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects.

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Canadian standards, including NI 43-101, differ significantly from the requirements of the United States Securities and Exchange Commission (the “SEC”), and reserve and resource information contained or incorporated by reference in this AIF, and in the documents incorporated by reference herein, may not be comparable to similar information disclosed by companies reporting under United States standards. In particular, and without limiting the generality of the foregoing, the term “resource” does not equate to the term “reserve” under SEC Industry Guide 7. Under United States standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made.

The SEC’s disclosure standards under Industry Guide 7 normally do not permit the inclusion of information concerning “Measured Mineral Resources”, “Indicated Mineral Resources” or “Inferred Mineral Resources” or other descriptions of the amount of mineralization in mineral deposits that do not constitute “reserves” by United States standards in documents filed with the SEC. United States investors should also understand that “Inferred Mineral Resources” have a great amount of uncertainty as to their existence and as to their economic and legal feasibility. It cannot be assumed that all or any part of an “Inferred Mineral Resource” will ever be upgraded to a higher category. Under Canadian rules, estimated “Inferred Mineral Resources” may not form the basis of feasibility or prefeasibility studies. United States investors are cautioned not to assume that all or any part of Measured or Indicated Mineral Resources will ever be converted into mineral reserves. Investors are cautioned not to assume that all or any part of an “Inferred Mineral Resource” exists or is economically or legally mineable.

Disclosure of “contained pounds” or “contained ounces” in a resource estimate is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC standards as in place tonnage and grade without reference to unit measures. The requirements of NI 43-101 for identification of “reserves” are also not the same as those of the SEC, and reserves reported by the Company in compliance with NI 43-101 may not qualify as “reserves” under SEC standards. Accordingly, information concerning mineral deposits set forth herein may not be comparable to information made public by companies that report in accordance with United States standards.

INCORPORATION

Energy Fuels was incorporated on June 24, 1987 in the province of Alberta under the name Volcanic Metals Exploration Inc. On September 2, 2005, the Company was continued under the Business Corporations Act (Ontario). On May 26, 2006, Volcanic Metals Exploration Inc. changed its name to Energy Fuels Inc. On November 5, 2013, the Company amended its Articles to consolidate the issued and outstanding Common Shares on the basis of one post-consolidation Common Share for every 50 pre-consolidation Common Shares.

The registered and head office of Energy Fuels is located at 2 Toronto Street, Suite 500, Toronto, Ontario, M5C 2B6, Canada. Energy Fuels’ conducts its business and owns its assets in the United States through its U.S. subsidiaries, which have their principal place of business and corporate office at 225 Union Blvd., Suite 600, Lakewood, Colorado 80228, USA. Energy Fuels’ website address is www.energyfuels.com.

Energy Fuels is a reporting issuer in all of the Canadian provinces. Energy Fuels’ common shares (the “Common Shares”) are listed on the Toronto Stock Exchange (the “TSX”) under the symbol “EFR” and on the NYSE MKT under the symbol “UUUU”. In addition, Energy Fuels’ convertible debentures are listed on the TSX under the symbol “EFR.DB”. See “Market for Securities – Debentures”. Options on Energy Fuels’ common shares are traded on The Chicago Board Options Exchange. The Designated Primary Market Maker for the options is Group One Trading, LP. KCG Americas LLC is the Company’s Market Maker on the NYSE MKT.

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The Company conducts its business and owns its properties through a number of subsidiaries. A diagram depicting the organizational structure of the Company and its active subsidiaries, including the name, country of incorporation and proportion of ownership interest, is included as Exhibit 1 to this AIF. Energy Fuels also owns a number of inactive subsidiaries which have no material liabilities or assets and do not engage in any material business activities.

SUBSIDIARIES

All of the Company’s U.S. assets are held directly or indirectly through the Company’s wholly-owned subsidiaries Energy Fuels Holdings Corp. (“EF Holdings”) and Strathmore Minerals Corp. (“Strathmore”). See “Exhibit 1”. EF Holdings and Strathmore hold all or a portion of their uranium mining and milling assets through a number of additional subsidiaries. The principal assets of the Company are held as follows:

• the White Mesa Mill, a 2,000-ton per day uranium and vanadium processing facility located near Blanding, Utah (the “White Mesa Mill” or “Mill”) through EFR White Mesa LLC;
• the Colorado Plateau properties, including the Whirlwind Mine, the La Sal Project, the Sage Plain Project, and other exploration and development properties in the Colorado Plateau district, through EFR Colorado Plateau LLC (“EFR Colorado Plateau”), and its subsidiaries West Lisbon, LLC and Colorado Plateau Partners LLC (“CPP”);
• the Gas Hills Project, Juniper Ridge Project, and the Company’s 60% interest in the Roca Honda Project through Strathmore Resources (US) Ltd. (“Strathmore US”);
• the Sheep Mountain Project through Energy Fuels Wyoming Inc. (“EF Wyoming”);
• the Daneros Mine in the White Canyon district of southeastern Utah, and other exploration properties in that district through EFR White Canyon Corp (“EFR White Canyon”);
• the Arizona Strip properties, including the Arizona 1 Mine, the Pinenut Mine, the Canyon Project, and the Company’s 50% interest in the Wate Project, through EFR Arizona Strip LLC (“EFR Arizona Strip”), and its subsidiaries Arizona Strip Partners LLC (“ASP”) and Arizona Strip Resources JV, LLC (“ASR”);
• the Henry Mountains Complex in southern Utah and other exploration properties through EFR Henry Mountains LLC (“EFR Henry Mountains”);
• the Copper King Project through Wyoming Gold Mining Company Inc. (“Wyoming Gold”); and
• miscellaneous properties through EFR Properties LLC.

All of the U.S. properties are operated by Energy Fuels Resources (USA) Inc. (“EFUSA”), a wholly-owned subsidiary of EF Holdings.

In addition, the Company holds a 16.5% equity interest in Virginia Energy Resources Inc. (“Virginia Energy”) (TSX.V:VUI; OTCQX:VEGYF).

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THREE YEAR HISTORY

Fiscal Year Ended September 30, 2012

During the year ended September 30, 2012 (“FY 2012”), the Company and Titan Uranium Inc. (“Titan”) entered into a business combination agreement dated December 5, 2011, whereby Energy Fuels agreed to acquire, by way of a plan of arrangement, all of the outstanding common shares of Titan. The acquisition was completed on February 29, 2012. Titan’s principal asset was the Sheep Mountain Project in Wyoming. The Company issued an aggregate of 1,781,280 Common Shares in connection with the acquisition of Titan.

On March 1, 2012, Energy Fuels completed the Updated Preliminary Feasibility Study dated April 13, 2012 for the Sheep Mountain Project (“2012 PFS”), which reported the Probable Mineral Reserve for the Sheep Mountain Project at 18.4million lbs. U₃O₈ contained in 7.5 million tons at an average grade of 0.123% eU₃O₈. Total Indicated Resources are 12.9 million tons containing 30.3 million lbs. U₃O₈ at an average grade of 0.117% e U₃O₈, which includes the Probable Mineral Reserve number described above. See “Mineral Projects – Sheep Mountain Project” below.

On June 21, 2012, the Company completed a private placement of 710,010 subscription receipts at a price of Cdn$11.50 per subscription receipt for gross total proceeds of $8.01 million. Each subscription receipt was exchangeable upon completion of the acquisition of Denison’s US Mining Division described below for one Common Share and one-half of one warrant. Each whole warrant entitles the holder to purchase one additional Common Share at a price of Cdn$13.25 until June 22, 2015. The Company used the net proceeds of $7.11 million for working capital and general corporate purposes related to operations of the US Mining Division, defined below.

On June 29, 2012, the Company completed the acquisition of all of the mining assets and operations located in the United States (the “US Mining Division”) of Denison Mines Corp. (“Denison”). The Company acquired the US Mining Division through the acquisition of all of the issued and outstanding shares of Denison’s subsidiaries, Denison Mines Holdings Corp. (“DMHC”) and White Canyon Uranium Limited (“WCUL”), and the assignment of all amounts owing to Denison or any affiliate of Denison (other than DHMC, WCUL or any direct or indirect subsidiary of DMHC), in exchange for the issuance of an aggregate of 8,508,817 Common Shares. Upon completion of the acquisition, two additional directors were appointed to the Board of Directors of Energy Fuels. After completion of the acquisition, Energy Fuels changed the name of DMHC to Energy Fuels Holdings Corp. (“EF Holdings”). The transaction was accounted for as a business combination with the Company identified as the acquirer, owing to the fact that post-transaction Energy Fuels now met the criteria of a business. WCUL was wound up in 2014.

As a result of the Denison acquisition, the Company acquired the White Mesa Mill (the “Mill”), an operating mill central to its existing Colorado, Utah and Arizona holdings, as well as significant producing, developmental and exploration properties in the same area, including the Henry Mountains Complex, the Daneros Mine, the La Sal Project and the Arizona Strip Properties. See “Mineral Projects” below. The Mill, along with the properties in the proximate area, represents the Company’s White Mesa Mill cash generating unit.

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On July 3, 2012, the Company entered into an underwriting agreement with a syndicate of underwriters whereby the underwriters agreed to purchase, on a bought deal basis, 22,000 floating-rate convertible unsecured subordinated debentures (“Debentures”) at a price per Debenture of Cdn$1,000 for total gross proceeds of $21.55 million. The transaction closed on July 24, 2012, and the Company received net proceeds of $19.19 million, net of the underwriters’ fees and expenses. The principal amount of the Debentures are convertible into Common Shares at the option of the holder at a conversion price of Cdn$15.00 per share. The Company used the net proceeds of the offering for sustaining capital for the Company's existing mine operations, mine permitting and development of the Company's existing properties, repayment of certain indebtedness, and for working capital and general corporate purposes. The Debentures mature on June 30, 2017 and are convertible into Common Shares at any time prior to maturity at a conversion price of Cdn$15.00 per Common Share.

As a result of the acquisition of the US Mining Division from Denison on June 29, 2012, Energy Fuels became a producing company. Energy Fuels’ uranium production in the period from the acquisition (June 29, 2012) through September 30, 2012 was 310,480 pounds of U₃O₈. During this same period, uranium sales totaled 447,000 pounds of U₃O₈ at an average realized price of $55.83 per pound of U₃O₈. There was no vanadium produced or sold during this same period.

At the time of the acquisition by the Company, the US Mining Division was producing uranium ore at its Arizona 1 Mine in Arizona and Daneros Mine in Utah, and was producing uranium and vanadium ore at its La Sal Project in Utah, which includes the Beaver and Pandora mines. Also at the time of the acquisition, the US Mining Division was developing and refurbishing its Pinenut mine in Arizona.

Period from October 1, 2012 to December 31, 2013

During the period from October 1, 2012 to December 31, 2013 (“FY 2013”), the Company acquired the interests of Aldershot Resources Ltd. (“Aldershot”) in the Sage Plain Project for $0.75 million in cash, the cancellation of debt owed by Aldershot to Energy Fuels, and 70,551 Common Shares. In the transaction, Energy Fuels acquired Aldershot’s ownership interest in CPP and ASP, two 50/50 joint ventures between subsidiaries of Energy Fuels and Aldershot. CPP holds a portion of the properties in the Sage Plain Project area, including the Calliham lease, the Crain lease, and three SITLA Leases. As a result of the acquisition, Energy Fuels then owned 100% of the Sage Plain Project, which is located about 15-miles northeast of Monticello, Utah and about 54 road miles from the Mill. In addition, Energy Fuels acquired Aldershot’s interest in ASP which holds several prospective exploration properties in northern Arizona. During FY 2014, the Company sold the Sage mine portion of the Sage Plain Project, retaining the Calliham mine. See “ Energy Fuels’ Business - Mineral Projects – The Sage Plain Project” below.

During the quarter ended December 31, 2012, the Company placed the Daneros Mine and the Beaver and Pandora mines in the La Sal Project on standby status due to lower uranium spot market prices.

On January 28, 2013, Energy Fuels acquired a 16.5% interest in Virginia Energy Resources Inc. (“Virginia Energy”) (TSX.V:VUI; OTCQX:VEGYF) as part of a non-brokered private placement financing. Energy Fuels acquired 9,439,857 common shares of Virginia Energy at a price of Cdn$0.42 per share, for an aggregate subscription price of $4.16 million. The subscription price was satisfied by a combination of $0.25 million of cash and the issuance of 437,028 common shares of Energy Fuels.

Shaft sinking operations at the Company’s Canyon Project in Arizona commenced in early April 2013, and were placed on standby in November 2013, due to market conditions and to simplify and lessen the expense of litigation. Up to that point, the shaft had been sunk to a depth of 280 feet, and all surface development on the project had been completed, including the head-frame, the hoist, the evaporation ponds, environmental monitoring facilities and all buildings. By stipulation agreement, the Company agreed to maintain such activities on standby until the earlier of a decision by the Arizona District Court on the merits of the current litigation at the Canyon Project or December 31, 2014 (later extended to April 15, 2015). See “Legal Proceedings and Regulatory Actions – Canyon Project” below.

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On June 11, 2013, the Company entered into a definitive arrangement agreement to acquire by way of a plan of arrangement all of the issued and outstanding shares of Strathmore Minerals Corp. (“Strathmore”). The transaction was completed on August 30, 2014.

On June 13, 2013, the Company completed a bought deal private placement of units of the Company (“Units”) pursuant to an underwriting agreement with Dundee Securities Ltd., Haywood Securities Inc. and Cantor Fitzgerald Canada Corporation. A total of 947,616 Units were issued at a price of Cdn$7.00 per Unit for total gross proceeds of $6.52 million. Each Unit consisted of one Common Share and one-half of one common share purchase warrant. Each whole warrant entitles the holder thereof to acquire one Common Share at a price of Cdn$9.50 at any time until June 15, 2015.

On June 26, 2013, Energy Fuels’ Common Shares began trading in the United States on the OTCQX under the symbol “EFRFF”. The Company’s Common Shares traded on the OTCQX until they commenced trading on the NYSE MKT. See below for discussion of NYSE MKT listing.

On October 16, 2013, the Company completed a public offering of 625,000 common shares at a price of Cdn$8.00 per share for aggregate gross proceeds of $4.83 million. The offering was conducted by way of a short form prospectus dated October 9, 2013 through a syndicate of underwriters comprised of Dundee Securities Ltd., Cantor Fitzgerald Canada Corporation and Haywood Securities Inc. An aggregate of 30,963 compensation warrants were issued to the Underwriters. Each compensation warrant entitles the holder to purchase one Common Share at a price of Cdn$8.00 per share until October 16, 2015.

During FY 2013, the Company changed its fiscal year-end from September 30 to December 31, to better align the Company’s year-end with the year-ends of its major uranium customers, certain material subsidiaries and industry peers. As a result of this change, the Company’s prior financial year is the 15-month period beginning on October 1, 2012 and ending on December 31, 2013.

In order to facilitate a listing of the Company’s Common Shares on the NYSE MKT, effective November 5, 2013, the Company completed a consolidation of its common shares on the basis of 50 pre-consolidation common shares for each one post-consolidation Common Share. The Share Consolidation was approved by the shareholders of the Company at a special meeting of shareholders held on October 30, 2013 The Common Shares of Energy Fuels began trading on the Toronto Stock Exchange (“TSX”) on a post-consolidated basis on November 5, 2013.

On December 4, 2013, Energy Fuels’ Common Shares began trading on the NYSE MKT stock exchange, under the ticker symbol “UUUU”.

On December 17, 2013, Energy Fuels announced that it had entered into a Strategic Relationship Agreement (the “SRA”) with Korea Electric Power Corporation (“KEPCO”). KEPCO is the largest electric utility in South Korea, responsible for 93% of South Korea’s electricity generation and the development of nuclear projects worldwide. The key objectives of the SRA are to establish a long-term and strategic collaborative relationship and to promote the development of each company’s businesses. The SRA addresses a number of areas of interest for both Energy Fuels and KEPCO, including the development of Energy Fuels’ Wyoming projects, KEPCO’s seat on the board of directors of Energy Fuels, visitation and secondment rights, and future qualified bidding by Energy Fuels on uranium concentrate supply contracts for KEPCO and its affiliates.

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Fiscal Year Ended December 31, 2014

On March 3, 2014, the Company completed the replacement of its $28.17 million regulatory bonding portfolio, utilizing two different qualified sureties. As a result of the bond replacement program, $12.34 million of previously restricted cash was released for use by the Company. Prior bonding arrangements, covering all of the Company’s mines and mills, required the Company to post 100% cash collateral to back the currently outstanding $26.72 million undiscounted decommissioning liability.

On March 28, 2014, the Company filed on SEDAR an updated mineral resource estimate on its La Sal Project, titled “Technical Report on La Sal District Project (including the Pandora, Beaver, and Energy Queen Projects), San Juan County, Utah, U.S.A.”, increasing the Company’s measured and indicated uranium and vanadium resources by about 2.7 million and 15.5 million pounds, respectively, and an updated mineral resource estimate and preliminary economic assessment on its Juniper Ridge Project, titled “Juniper Ridge Uranium Project, Carbon County, Wyoming, U.S.A.”, increasing the Company’s indicated mineral resources by nearly 1 million pounds.

On March 28, 2014, the Company announced that it had filed a preliminary short form base shelf prospectus with the securities commissions in each of the provinces and territories of Canada, except Quebec, for an aggregate offering of up to US$100 million. The final prospectus was receipted on April 9, 2014 and the corresponding registration statement on Form F-10 went effective on April 10, 2014. Under the base shelf prospectus, the Company may issue common shares, warrants, subscription receipts, preferred shares, debt securities, or any combination of such securities as units, in amounts, at prices, and on terms to be determined based on market conditions at the time of sale, and as set forth in an accompanying prospectus supplement, during the 25-month period that the base shelf prospectus remains effective. The Company has not issued any securities under this prospectus to date.

On July 2, 2014, Energy Fuels announced the creation of a joint venture to facilitate the future development or sale of the Copper King copper/gold project in Wyoming. The Company contributed the Copper King Project to CK Mining Corp. (“CK Mining”), a newly formed private company, in consideration of $1.50 million in cash and newly issued common shares of CK Mining, representing 50% of its issued and outstanding shares after giving effect to such issuance. A private investor group with experience in developing gold projects and building mining companies holds the other 50% of CK Mining.

On August 20, 2014, the Company announced the completion of a sale of certain non-core uranium assets to Piñon Ridge Mining, LLC, a company owned by a private investor group led by Baobab Asset Management LLC and George Glasier, the former President and CEO of Energy Fuels. The transaction involved certain mining assets located along the Colorado-Utah border including the Sunday Mines Complex, the Willhunt project, the San Rafael project, the Sage mine (comprising a portion of the Sage Plain Project), the Van 4 mine, the Farmer Girl project, the Dunn project, and the Yellow Cat project. The Company received cash and other consideration totaling $1.50 million, plus another $0.15 million of cash to reimburse the Company for certain pre-closing expenses. The Company also retained a 1% production royalty on all of the properties and received an additional $0.23 million cash from the return of bond collateral. In addition, the Company entered into a toll milling agreement with Piñon Ridge Mining, LLC, under which Piñon Ridge Mining, LLC has the right to mill any ore produced from those properties at the Mill.

On November 7, 2014, the Company announced the completion of the sale of the radioactive materials license for the proposed Piñon Ridge mill and related assets (the “Piñon Ridge Project”) through the sale of the Company’s wholly owned subsidiary, Energy Fuels Resources Corporation, to Piñon Ridge Corporation, a company owned by a private investor group led by Baobab Asset Management LLC and George Glasier. The Piñon Ridge Project was the only asset held by Energy Fuels Resources Corporation at the time of the sale.

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Events Subsequent to December 31, 2014

On January 4, 2015, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Uranerz Energy Corporation (“Uranerz”), a Nevada corporation, and EFR Nevada Corp., a Nevada corporation and wholly owned subsidiary of the Company (“Merger Sub”). The Merger Agreement provides for a business combination between Uranerz and Merger Sub whereby the Company will acquire all of the issued and outstanding shares of Uranerz. See “Proposed Acquisition of Uranerz Energy Corporation” below.

On February 17, 2015, the Company announced that it had acquired a 50% interest in the Wate uranium deposit (the “Wate Project”) from VANE Minerals (US) LLC (“VANE”). The Wate Project is held in the Wate Mining Company, LLC joint venture (“WMCL”). The other 50% of WMCL is held by Uranium One Americas, Inc. As consideration for the 50% interest in WMCL, the Company paid VANE $0.25 million cash at closing, along with a $0.50 million non-interest-bearing promissory note, payable in two equal installments of $0.25 million each on the first and second anniversaries of the note, and a 2% production royalty on the 50% interest in the Wate Project being acquired. The royalty can be purchased by Energy Fuels upon payment to VANE of an additional $0.75 million. In addition, upon the satisfaction of certain permitting milestones and other conditions, the amounts due under the note will be accelerated, and the Company will pay to VANE an additional $0.25 million cash. If Energy Fuels elects not to make the payments under the note, it will be required to transfer the WMCL interest back to VANE.

PROPOSED ACQUISITION OF URANERZ ENERGY CORPORATION

Merger Agreement

On January 4, 2015, the Company entered into the Merger Agreement with Uranerz and Merger Sub. The Merger Agreement provides for a business combination whereby Merger Sub will merge with and into Uranerz (the “Merger”), and as a result Uranerz will continue as the surviving operating corporation and as a wholly owned subsidiary of the Company.

Pursuant to the Merger Agreement, at the effective time of the Merger, each issued and outstanding share of Uranerz (“Uranerz Common Stock”)will be canceled and extinguished and automatically converted into the right to receive 0.255 common shares of the Company (the “Exchange Ratio”).

The completion of the Merger will be subject to the approval of at least a majority of the holders of the outstanding Common Shares of the Company voted at a special meeting of the shareholders of the Company to be called later in 2015 to consider the Merger, as well as the approval of at least a majority of the holders of the outstanding Uranerz Common Stock and at least a majority of the votes cast by Uranerz’s shareholders, excluding directors and officers of Uranerz, at a special meeting to be called later this year to consider the Merger.

The Merger Agreement provides that, upon consummation of the Merger, the Company shall cause three nominees of Uranerz to be appointed to the board of directors of the Company.

In addition to the approval of the shareholders of each of the Company and Uranerz, as described above, the completion of the Merger will be subject to satisfaction of other customary closing conditions, including, among others:

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• The declaration by the SEC of the effectiveness of the Registration Statement on Form F-4 to be filed by the Company with the SEC in connection with the Merger,

• The Common Shares of the Company to be issued in connection with the Merger, and to be issued upon exercise of the assumed Uranerz options and Uranerz warrants, will have been approved (or conditionally approved, as applicable) for listing on the NYSE MKT and the TSX, and

• The receipt of all regulatory approvals necessary for completion of the Merger.

Each of the Company and Uranerz has agreed to customary and generally reciprocal representations, warranties and covenants in the Merger Agreement. Among these covenants, both the Company and Uranerz have agreed to conduct their respective businesses in the ordinary course during the period between the execution of the Merger Agreement and the closing of the Merger.

The Merger Agreement contains customary deal support provisions, including a reciprocal break fee of $5.00 million payable if the Merger is not completed under certain circumstances. In addition, the Merger Agreement includes customary and reciprocal non-solicitation covenants, as well as a reciprocal right to match any superior proposal that may arise.

The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which has been filed with the SEC and can be found at www.sec.gov and with the Canadian Securities Administrators on SEDAR and can be found under the Company’s profile at www.sedar.com.

Support Agreements

Concurrent with the execution of the Merger Agreement:

• The Company entered into support agreements with directors and certain officers of Uranerz, pursuant to which each securityholder agreed, upon the terms and subject to the conditions set forth therein, (a) to vote their Uranerz Common Stock in favor of the Merger, and (b) to not sell or otherwise transfer their shares pending completion of the Merger. The securityholders of Uranerz entering into the voting agreements collectively hold approximately 4.0% of the outstanding shares of Uranerz.

• Uranerz entered into support agreements with certain directors and officers of the Company, pursuant to which each securityholder agreed upon the terms and subject to the conditions set forth therein, (a) to vote their shares of Common Shares of the Company for the Merger, and (b) to not sell or otherwise transfer their common shares of the Company pending completion of the Merger. The shareholders of the Company entering into voting agreements collectively hold approximately 0.4% of the outstanding shares of the Company.

Additional Important Information for Investors and Stockholders Related to the Merger

On January 5, 2015, the Company announced a transaction whereby it would acquire all of the issued and outstanding shares of Uranerz Energy Corp. This annual information form is for informational purposes only and does not constitute an offer to purchase, a solicitation of an offer to sell the shares of common stock of Uranerz or a solicitation of any proxy, vote or approval. Energy Fuels will file with the SEC a registration statement on Form F-4 that will include a proxy statement of Uranerz that also constitutes a prospectus of Energy Fuels. Energy Fuels and Uranerz also plan to file with or furnish other documents to securities regulatory authorities in Canada and the United States regarding the proposed transaction.

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INVESTORS AND STOCKHOLDERS OF URANERZ ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.

Anyone may obtain free copies of these documents when available free of charge under Energy Fuels’ profile on SEDAR at www.sedar.com or EDGAR at www.sec.gov, or by accessing Energy Fuels’ website at www.energyfuels.com under the heading “Investors” and from Energy Fuels directly by contacting Curtis Moore, Investor Relations: (303) 974-2140. Documents will also be available free of charge under Uranerz’ profile on EDGAR at www.sec.gov or on SEDAR at www.sedar.com, or by accessing Uranerz’ website at www.uranerz.com under the heading “Investors” and from Uranerz directly by contacting Derek Iwanaka, Investor Relations: (800) 689-1659. Energy Fuels, Uranerz, their respective directors and certain of their executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Uranerz in connection with the proposed transaction. Information about the directors and executive officers of Uranerz is set forth in its proxy statement for its 2014 annual meeting of shareholders, which was filed with the SEC on April 29, 2014 and in Uranerz Annual Report on Form 10-K which was filed with the SEC on March 16, 2015. Information about the directors and executive officers of the Company can be found in this annual information form and in the Company’s 2014 management information circular dated March 26, 2014, which is available at www.sedar.com and www.sec.gov. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.

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OVERVIEW

Energy Fuels is engaged in uranium mining, milling, development, permitting and exploration. The Company owns an operating uranium mine, uranium and uranium/vanadium mines on standby, projects in permitting and development, and exploration properties located in the United States. Energy Fuels also owns the White Mesa Mill in Utah, which is the only operating uranium mill in the United States. Energy Fuels also produces vanadium as a co-product from some of its mines in Colorado and Utah. In addition, Energy Fuels recycles other uranium-bearing materials, not derived from conventional ore, referred to as "alternate feed materials", for the recovery of uranium, alone or in combination with other metals, at its White Mesa Mill.

The Company’s principal assets as of December 31, 2014 include the following:

• the White Mesa Mill, a 2,000 ton per day uranium and vanadium processing facility located near Blanding, Utah;
• the Arizona Strip uranium properties, in north central Arizona, including the Pinenut mine (the “Pinenut Mine”), a producing uranium mine, the Arizona 1 mine (the “Arizona 1 Mine”), a recently producing uranium mine which was placed on standby due to the depletion of its economic mineral resource, the Canyon Project (the “Canyon Project”), which is a permitted and partially developed mining project, and a 50% interest in the Wate Project (the “Wate Project”), which is a breccia pipe deposit in the permitting stage;
• the La Sal Project, Whirlwind Mine, Sage Plain Project and other Colorado Plateau uranium/vanadium properties, straddling the southwestern Colorado and southeastern Utah border (the “Colorado Plateau”), in addition to nearby exploration properties;
• the Daneros Mine in the White Canyon district in southeastern Utah , in addition to nearby exploration properties;
• the Henry Mountains Complex uranium properties, in south central Utah near the town of Ticaboo (the “Henry Mountains Complex”);
• a 60% interest in the Roca Honda property, in New Mexico, near the town of Grants (the “Roca Honda Project”);
• the Sheep Mountain Project (the “Sheep Mountain Project”), located near Jeffrey City, Wyoming, which includes a proposed open pit mine, an underground mine, and the operation of a uranium processing facility utilizing heap leach recovery;
• the Gas Hills and Juniper Ridge projects in Wyoming; and
• uranium sales contracts, alternate feed processing contracts, and joint venture agreements.

Company Strategy

Energy Fuels intends to continue to strengthen its position as the leading uranium mining company focused on the United States. The Company expects to accomplish this through:

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In response to current market uncertainty, the Company expects to continue cash conservation efforts until additional sustained improvement in uranium market conditions is observed. In addition, the Company is continuing to manage its operations and assets conservatively, maintaining its substantial uranium resource base, and scheduling uranium production at the White Mesa Mill as market conditions warrant.

Production and Operations

The White Mesa Mill has historically operated on a campaign basis, whereby mineral processing occurs as mill feed, contract requirements, and market conditions warrant.

The Company expects the current mineral processing campaign at the White Mesa Mill to conclude in the first half of 2015, resulting in the production of approximately 200,000 pounds of finished goods. Once the current campaign concludes at the White Mesa Mill, the Company expects to continue to receive and stockpile ore from the Pinenut mine and alternate feed materials. In addition, the Company expects to continue making U₃O₈ deliveries, as required by the Company’s existing long-term contracts. At this time, the Company does not expect to schedule a mineral processing campaign during the remainder of FY-2015, though the Company is maintaining the flexibility to resume processing stockpiled or other materials at the White Mesa Mill should market conditions warrant.

The Company plans to continue mining at the Pinenut mine until the economic resources are depleted, which is now estimated to occur in the second quarter of 2015, due to higher estimates of resources at the mine. The ore mined at the Pinenut mine is being shipped to the White Mesa Mill and stockpiled for processing in a planned 2016 campaign.

The Company has three existing long-term contracts, which require future deliveries of 800,000 pounds in FY-2015, 450,000 pounds in FY-2016 and 420,000 pounds in FY-2017. Of these amounts, a total of 770,000 pounds is required to be produced by the Company, while Energy Fuels has the option to fulfill the remaining 900,000 pounds from production and/or purchase. At December 31, 2014, the Company has approximately 800,000 pounds of produced finished goods inventory, of which 770,000 pounds will be held for delivery into the contracts that require produced pounds.

For the 800,000 pounds of FY-2015 deliveries, the Company anticipates utilizing 500,000 pounds of produced material on hand and has contracted for the purchase of 300,000 pounds of U₃O₈. Additionally, asdiscussed above, the Company expects to produce approximately 200,000 pounds in the final months of its present campaign.

For the FY-2016 and FY-2017 contractual deliveries, the Company plans to utilize the 500,000 pounds of finished goods inventory expected to be on hand at the end of FY-2015 and to produce a minimum of 370,000 pounds of U₃O₈ in a future mill campaign at the White Mesa Mill, from ore mined from the Pinenut mine and the expected receipt of alternate feed materials, both as discussed above. While the Company expects to produce the 370,000 pounds required, the Company may elect to purchase all or a portion of this material in the spot market. This flexibility will allow the Company to monitor market conditions to determine the most favorable and economic approach to fulfilling these remaining deliveries.

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The Company also plans to continue to maintain, and update as necessary, all permits on its other existing mines. These mines will remain on standby until market conditions improve or the material can be sold into long-term contracts at pricing that supports production. As previously announced, expenditures for permitting activities for new mines have been adjusted to coincide with expected dates of production based on price forecasts. The Company plans to spend $1.10 million on permitting in FY-2015. The Company is continuing to monitor corporate and field overhead to coincide with these lower levels of activity.

Sales

The Company forecasts FY-2015 sales to be approximately 800,000 pounds of U₃O₈, all of which will be sold into its three existing long-term contracts discussed above. Energy Fuels expects to receive an average realized price of $57.45 per pound of U₃O₈ sold during FY-2015 across all of its contracts. The average expected realized price per pound is not subject to any decrease resulting from declines in future U₃O₈  spot and/or term prices, due to the minimum floor prices now in effect in each of the Company’s contracts. The Company does not expect to make any sales into the spot market during FY-2015, it will continue to monitor market conditions for opportunistic sales if economically justified.

One of the Company’s three existing long-term contracts is expected to expire after the 2015 deliveries are completed in the 3rd quarter of 2015. The Company is currently seeking to extend this contract if suitable pricing can be obtained. While the Company also continues to pursue new sources of revenue, including new uranium sales contracts and expansion of its alternate feed business.

MARKETING

Energy Fuels utilizes a number of resources to assess uranium market conditions, including two independent market consultants, Ux Consulting Company (“Ux”) and TradeTech (“TradeTech”). Uranium is a commodity that trades on the spot and term markets, typically on privately negotiated transactions between buyers and sellers. Spot uranium transactions typically involve deliveries that occur immediately and up to 12 months in the future. Term uranium transactions typically involve deliveries that occur more than 12 months in the future, with long-term transactions involving delivery terms of at least three years.

According to data from TradeTech, uranium prices during 2014 were generally flat. Spot prices began the year at $34.50per pound of U₃O₈ and ended the year at $35.50 per year, reaching a high of $44.00 per pound for the week of November 14, 2014 and a low of $28.10 per pound for the week of June 20, 2014. Long-term U₃O₈ prices began and ended 2014 at $50.00 per pound, reaching a low price of $44.00 per pound in June, July and August. The high long-term price for 2014 was $50.00 per pound. Uranium markets in 2014 were generally weak, which the Company believes was the result of excess uranium supplies in the market caused by large quantities of secondary supplies, the availability of low-priced spot material, the delayed restart of Japanese reactors, insufficient producer cut-backs and generally weak demand.

The Company’s marketing strategy is to seek a base of earnings and cash flow through sales of a portion of its production into term contracts, with market-related formulas when available, and to gain further exposure to increasing uranium prices through future spot sales for the remainder of the Company’s production. In addition, the Company has the ability to bring additional production online in the future in response to increasing prices, which production can be sold on a spot or term basis. The Company’s current existing term contracts utilize market-related formulas with base, floor and ceiling prices, some of which are escalated at the rate of inflation. During 2014, the pricing on all three of the Company’s term contracts were at their floors. The Company sold 800,000 pounds of U₃O₈ at a weighted- average price of $57.19. In 2015, the Company expects to sell a total of 800,000 pounds of U₃O₈ into these same three contracts at pricing expected to average approximately $57.45 based on current forecasts of price inflation.

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World demand for clean, reliable, and affordable baseload electricity is growing. As a result of the expected growth of nuclear energy, the Company believes the long-term fundamentals of the uranium industry are very positive. The Company believes prices must rise to higher levels to support the new primary production that will be required to meet the increasing demand we expect to see as more nuclear units are constructed around the world. Currently, world demand exceeds primary uranium mine production, with the gap being bridged by secondary supplies, or uranium stockpiles in various forms that have already been mined. As these stockpiles are drawn down, more primary mine production is expected to be required to meet demand over the long-term. The Company believes uranium prices will need to rise to levels that cover development costs and the costs of production. Even if prices rise to these levels, it may be difficult for suppliers to respond in a timely manner, as it typically requires many years to bring new mines into production. This is expected to put further pressure on prices to increase.

However in the short- and medium-terms, challenges remain, and the world is oversupplied with uranium, mainly due to large quantities of secondary and other inelastic supplies (including enricher underfeeding), insufficient producer cut-backs, premature reactors shutdowns, delays in new reactor construction, and decreased demand due to Japanese reactors remaining offline for longer than expected. In addition, there is a great deal of uncertainty in uranium prices regarding the timing and level of the recovery, as fundamental, political, technical and other factors could cause prices to be significantly above or below currently expected ranges. This has generally resulted in depressed prices, which has resulted in reductions in production from a number of uranium producers.

Nevertheless, the Company believes market fundamentals are correcting, which may have begun when spot prices increased during the second half of 2014 and are continuing into 2015. The Company believes utilities have significant uncovered reactor requirements beginning in about 2017, which will be a new source of fundamental demand expected to increase levels of market activity in the short- and medium-terms.

OPERATIONS

White Mesa Mill

The White Mesa Mill is a fully licensed uranium and vanadium processing facility located in southeastern Utah, near the Colorado Plateau District, the Henry Mountains Complex, the Grants District, the Arizona Strip and the White Canyon district, and is approximately six miles south of the city of Blanding, Utah. The Mill is the only fully operational and licensed conventional uranium mill in the US, and is capable of functioning independent of off-site support except for commercial power from Rocky Mountain Power and supplemental water supply from the City of Blanding, Utah, and the San Juan Water Conservancy District.

Off-site infrastructure includes paved highway access from State Highway 191, and right-of-ways for commercial power and a water supply pipeline from Recapture Reservoir, which brings up to 1,000 acre- feet of water per year to the mill site. The Mill also has four deep (2,000+ ft) water supply wells which supply process water during normal operations. In addition to the Mill processing equipment, which includes the grinding and leaching circuits, CCD (liquid–solid separation), solvent extraction, and precipitation and drying circuits, the Mill has several days reagent storage for sulfuric acid, ammonia, salt, soda ash, caustic soda, ammonium sulfate, flocculants, kerosene, amines, and liquefied natural gas (LNG).

The on-site infrastructure also includes an ore stockpile area capable of storing up to 450,000 tons of ore, and existing tailings capacity of approximately 3.5 million tons of solids. In addition, the mill has approximately 90 acres of evaporation capacity.

Construction of the Mill began in 1979, and conventionally-mined uranium/vanadium ore was first processed in May 1980. The Mill has been operated on a campaign basis since its initial start-up due to variable uranium market conditions.

In addition to the conventional ore circuit, the Mill has a separate vanadium co-product recovery circuit. The Mill also has a third circuit for processing certain types of alternate feed materials, which was built in 2009. This circuit enables the Mill to process both conventional ore and alternate feed materials simultaneously. See “Operations – White Mesa Mill – Alternate Feed Materials” below.

The Mill is licensed to process an average of 2,000 tons of ore per day and to produce over 8.0 million pounds of U3O8 per year. In full operation, the Mill employs approximately 150 people.

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Current Condition and Operating Status

In late 2006, Denison, the previous owner of the White Mesa Mill, began a program to refurbish the mill. The refurbishment program included the purchase of mobile equipment, restoration of the vanadium roasting, fusion and packaging circuits, replacement of major pumps and component drives, modernization of the Mill’s instrumentation and process control systems, and completion of relining tailings Cell 4A. The total cost of the refurbishment program was approximately $31.0 million and was completed in 2008.

In April 2008, the Mill began processing uranium/vanadium conventional ore and producing uranium concentrate in the form of U₃O₈. Production of vanadium began in July 2008 after completion of the refurbishment of the vanadium circuit. Processing of conventional ore continued through the end of March 2009 when the Mill was shut down for approximately thirty days for relining of the semi-autogenous grinding Mill and other maintenance activities. Processing of conventional ore recommenced near the end of April 2009, but was discontinued near the end of May for the remainder of 2009 due to a decline in uranium prices at the time. The Mill began processing conventional ore again in March 2010 and continued through June 2011. Conventional ore processing recommenced in November 2011 and continued until early March 2012, at which time it ceased for routine maintenance at the Mill. Conventional ore processing recommenced at the Mill in August 2012 and continued until early June 2013. Processing conventional ore began again in May 2014 and continued through August 2014. The alternate feed circuit processed materials from January through December 2014, and is expected to continue processing alternate feed materials through August 2015.

Energy Fuels acquired the Mill on June 29, 2012. All production after that date has been for the account of Energy Fuels. From June 30, 2012 through December 2012, the Mill processed approximately 16,016 tons of ore from the Arizona 1 Mine, 25,543 tons from the Daneros Mine, 16,046 tons from the Pandora Mine (La Sal Project), and 32,122 tons from the Beaver Mine (La Sal Project).

During calendar 2013 the Mill processed 18,370 tons of Arizona 1 ore, 2,052 tons of Pinenut ore, 11,181 tons of Daneros ore, 41,782 tons of Pandora ore, 40,669 tons of Beaver ore, and 8,894 tons of purchased ore.

During calendar year 2014 the Mill processed 11,517 tons of ore from the Arizona 1 Mine, and 37,751 tons of ore from the Pinenut Mine. See “Operations – White Mesa Mill – Ore Purchase and Toll Milling” below.

Since June 29, 2012, the Mill has processed five different alternate feed materials, plus one campaign of off specification yellowcake material, using the separate alternate feed circuit built in 2008, as well as the main Mill circuit after conventional ore processing was completed in August of 2014.

Production at the Mill over the past five years is shown below. (Note, only production since June 30, 2012 has been for the account of Energy Fuels).

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Notes:

Mill License

The Mill operates under a Radioactive Materials License issued by the State of Utah (the “Mill License”). The Mill License came up for renewal on March 31, 2007. A License Renewal Application was submitted to the Utah Department of Environmental Quality (“UDEQ”), Division of Radiation Control (the “DRC”) on February 28, 2007. The Mill License renewal process remains underway. The Mill License remains in effect in its current form during the renewal process.

Tailings Disposal & Evaporation Ponds

Synthetic lined cells are used to contain tailings and solutions for evaporation. The Company operates two tailings cells during normal operations. As each tailings cell is filled, the water is drawn off and pumped to an evaporation pond and the tailings solids are allowed to dry. As each tailings cell reaches final capacity, reclamation begins with the placement of interim cover over the tailings. Additional cells are excavated, and the overburden is used to reclaim previous cells. In this way, there is an ongoing reclamation process.

In June 2007, refurbishment of Cell 4A, which was originally built in 1989, commenced. The refurbishment was completed in August 2008, and an operating permit from the DRC was issued in September 2008. The cell has been in operation since that time and provides approximately 2.0 million tons of tailings capacity.

The licensing process for tailings Cell 4B was commenced in 2009. In late October 2009, UDEQ issued its approval to commence the earthwork for Cell 4B. Approval to complete the earthwork and commence placement of the cell liners was received in June 2010. Construction of the cell was completed in December 2010 and final approval to begin use of the cell was received in January 2011. Cell 4B is currently only being used for additional evaporation capacity, and is not being used for tailings disposal.

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Upon commencement of tailings disposal, Cell 4B will provide approximately 2.0 million tons of tailings capacity.

Environmental

In 1999, some chloroform contamination was detected in the groundwater at the White Mesa Mill site that appears to have resulted from the operation of a temporary laboratory facility located at the site prior to and during the construction of the Mill and from septic drain fields that were used for laboratory and sanitary wastes prior to construction of the Mill’s tailings cells. Elevated concentrations of nitrate and chloride were also observed in some monitoring wells at the Mill site in 2008, a number of which were up-gradient of the mill’s tailings cells. In addition, the Mill has reported consecutive exceedances of Groundwater Compliance Limits (“GWCLs”) under the Mill’s Groundwater Discharge Permit (“GWDP”) for several constituents in several wells, and there is a decreasing trend in pH in a number of wells across the Mill site that have caused the pH in a number of compliance monitoring wells to have dropped below their GWCLs. These exceedances and pH trends include wells that are upgradient of the Mill facilities and are currently being evaluated. See “Mineral Projects – Environmental and Safety Matters in the United States” below.

Alternate Feed Materials

The Mill License gives the Company the right to process other uranium-bearing materials known as “alternate feed materials” pursuant to an Alternate Feed Guidance adopted by the U.S. Nuclear Regulatory Commission (“NRC”). Alternate feed materials are uranium-bearing materials, which usually are classified as waste products by the generators of the materials. All alternate feed materials processed by the Mill involve the recovery of natural uranium. The Mill License does not permit the processing of uranium-bearing materials that have gone through enrichment. Requiring a routine amendment to the Mill License for each different alternate feed material, the Company can process these uranium-bearing materials and recover uranium, in some cases, at a fraction of the cost of processing conventional ore. In other cases, the generators of the alternate feed materials are willing to pay a recycling fee to the Company to process these materials to recover uranium and then dispose of the remaining by-product in the Mill’s licensed tailings cells, rather than directly disposing of the materials at a disposal site. By working with the Company and taking the recycling approach, the suppliers of alternate feed materials can significantly reduce their remediation costs, as there are only a limited number of disposal sites for uranium-bearing materials in the United States. Alternate feed materials are particularly attractive to Energy Fuels because they carry no associated mining costs.

To date, the Mill has received 16 license amendments, authorizing the Mill to process 19 different alternate feed materials. Of these amendments, ten involve the processing of feeds provided by nuclear fuel cycle facilities and private industry, and one has involved the processing of material from the United States Department of Energy (“DOE”). These ten feed materials have been relatively high in uranium content and relatively low in volume. The remaining five amendments have been to allow the Mill to process uranium-bearing soils from former defense sites, known as FUSRAP sites, which were being remediated by the U.S. Army Corps of Engineers. These materials are typically relatively low in uranium content but relatively high in volume.

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Energy Fuels’ Mines & Projects

Energy Fuels is involved primarily in eight mining districts in the United States: the Henry Mountains, Grants, Arizona Strip, White Canyon, Crooks Gap, Gas Hills, Colorado Plateau, and Poison Basin Districts. The mineral properties that are currently material to the Company are:

• the Tony M Mine and the Bullfrog property (both in the Henry Mountains Complex), in the Henry Mountains District of southern Utah;
• a 60% interests in the Roca Honda Project, in the Grants District of northwest New Mexico;
• the Pinenut Mine, the Canyon Mine, the Arizona 1 Mine, a 50% interest in the Wate Project, and the EZ1 and EZ2 properties, in the Arizona Strip District of northern Arizona;
• the Daneros Mine, in the White Canyon District of southern Utah;
• the Sheep Mountain Project in the Crooks Gap District of central Wyoming;
• the Gas Hills Project in the Gas Hills District of central Wyoming;
• the La Sal Project (Energy Queen, Beaver, and Pandora Mines) the Whirlwind Mine, and Sage Plain Project, in the Colorado Plateau District of southeast Utah and southwest Colorado; and
• the Juniper Ridge Project in the Poison Basin District of south central Wyoming.

These mines and projects are shown on the map and are described in further detail below.

Henry Mountains

The Tony M mine commenced mining in 2007 and continued through March 2009, at which time the mine was placed on standby, due to market conditions. During that period, mined ore, as well as ore from historic stockpiles at the site, was shipped to the White Mesa Mill. The mine remains on care and maintenance at this time. The adjacent Bullfrog property is currently in the permitting stage. See “Mineral Projects – Henry Mountains Complex” below.

Roca Honda

No ore has been produced from the Roca Honda Project in New Mexico since the Company’s acquisition in August 2013 No commercial mining has ever occurred on the property. The property is currently in the permitting stage. See “Mineral Projects – Roca Honda Project” below.

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Arizona Strip

Mining at the Company’s Pinenut Mine commenced in July of 2013 and is expected to continue through the first half of 2015, at which time the economic resources are expected to be depleted. Development at the Canyon Project recommenced in early 2013 and was temporarily suspended in November of 2013. On February 6, 2015, the Company announced plans to restart development at the Canyon Project. To complete the mine, the Company expects to sink an additional 1,200 feet of shaft, install a ventilation shaft, and complete underground development. Mining of the Company’s Arizona 1 Mine commenced in December 2009, and continued until the mine was placed on standby in February 2014 due to the depletion of the currently identified resource. The Wate Project and EZ1 and EZ2 properties are in the permitting stage. See “Mineral Projects – Arizona Strip” below.

Daneros

The first ore from the Daneros Mine in the White Canyon District was delivered to the White Mesa Mill in December 2009, when the project was owned by Utah Energy Corp. and a toll milling campaign was conducted in the second half of 2010. In June 2011, Denison acquired Utah Energy Corp. and continued to operate the mine, with ore from the mine being processed at the White Mesa Mill. The Daneros Mine is now owned by the Company. The mine was placed on standby in October 2012. See “Mineral Projects – Daneros Mine” below.

Sheep Mountain

No ore has been mined at the Sheep Mountain Project in Wyoming since the Company’s acquisition in February 2012. The last mining on the property occurred in the 1980’s. The property is currently in the permitting stage. See “ Mineral Projects – Sheep Mountain Project” below.

Gas Hills

No ore has been mined at the Gas Hills Project in Wyoming since the Company’s acquisition in August 2013. The last mining on the property occurred in the 1980’s. See “Mineral Projects – Gas Hills Project” below.

Colorado Plateau

In June 2006, Denison, the previous owner and operator of some mines on the Colorado Plateau, announced that it was restarting mining activity in the United States with the re-opening of several mines in the Colorado Plateau District. Over a twelve month period, Denison re-opened five mines in the Colorado Plateau District. In late 2008, Denison began rehabilitation of the Beaver mine, which began shipping ore to the White Mesa Mill in February 2009. As a result of declining uranium prices, Denison placed the Rim mine on standby in March 2009. In October 2012, Energy Fuels placed the Beaver mine on standby, due to decreases in commodity prices. The Pandora mine was placed on standby in December 2012. All of the mines are maintained so that they can be restarted with little relative effort or development costs. The Whirlwind Project was refurbished by the Company in 2008, and remains on standby status. The Energy Queen and Sage Plain Projects have not operated in recent years. See “Mineral Projects - Whirlwind”, “Mineral Projects – La Sal Project”, “Mineral Projects – Sage Plain Project”, below.

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Juniper Ridge

No ore has been mined at the Juniper Ridge Project in Wyoming since the Company’s acquisition in August 2013. The last mining on the property occurred in the 1970’s. See “Mineral Projects – Juniper Ridge Project” below.

Mine Production

The following table shows ore production from the mines currently⁽¹⁾ owned by the Company from 2010 to December 31, 2014:

Notes:

Ore Purchase and Toll Milling

In July 2007, an ore purchase program was initiated to provide additional mill feed for the White Mesa Mill, including a schedule listing the price to be paid per ton and adjusted periodically in response to changing factors such as uranium and vanadium prices, milling cost, and uranium and vanadium recoveries. The Company expects to continue this program, as market conditions warrant.

110 tons of ore were received under the Company’s ore purchase program in 2010, and 589 tons were received in 2011. 1,602 tons of ore were received under this program in FY-2012, with the ore lots closed out and paid for in October 2012, at an average grade of 0.265% U₃O₈. In FY-2013, the Company purchased 8,500 tons of ore at an average grade of 0.23% U₃O₈ from two sources in Colorado and Utah. No ore was purchased from any independent miners in 2014.

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Mineral Exploration

Energy Fuels holds a number of exploration properties in the Colorado Plateau, White Canyon, Gas Hills, Grants, and Arizona Strip Districts. Exploration drilling has been conducted in the Colorado Plateau and Wyoming Districts in recent years, with the majority of the work directed toward brownfield drilling to extend active mining areas.

Energy Fuels has conducted intermittent exploration drilling on numerous projects in the period from February 2007 through December 2013. Several of those projects have been abandoned or sold; therefore, will no longer be discussed. No exploration drilling was performed in 2014. The projects currently held by the Company where exploration drilling has been conducted include: the Whirlwind Mine; Energy Queen Mine, Torbyn property (on Tenderfoot Mesa); HC claims; and DOE Lease C-G-26 (on Calamity Mesa) – New Verde Mine; and the Sage Plain Project (which includes drilling on the Calliham lease, Crain lease, and Skidmore lease). In addition, prior to Energy Fuels’ acquisition of these projects, Denison performed exploration drilling on a number of the properties in the US Mining Division, including the Sunday Complex and La Sal Project and underground core drilling at the Arizona 1 Mine. The Company’s predecessors conducted exploration drilling at several additional properties, including Sheep Mountain (by Titan) and Roca Honda Juniper Ridge and Gas Hills (by Strathmore).

In 2014, limited exploration drilling was completed at the Arizona 1 Mine and Pinenut Mine (underground core drilling). In the Arizona Strip District, Energy Fuels holds a 100% interest in several claims blocks, all of which host confirmed breccia pipes features. Mineralization has been encountered in past drilling on a number of these features, and additional deep drilling is required to confirm mineral resources. Energy Fuels plans to drill six deep exploration holes in the future, to confirm a known discovery and to support mineral resource estimation, on a breccia pipe known as DB-1, although no drilling is planned for FY-2015. See “Mineral Projects – Non-Material Mineral Properties – Exploration Properties” below.

Other Projects

In addition to the foregoing, the Company has conducted permitting operations on the following three projects:

Sheep Mountain Project:

The Company is permitting the Sheep Mountain Project, an underground and open pit uranium development project located in Wyoming. In FY-2013, the Company submitted a revised Plan of Operations (“PO”) to the BLM, which included redesign of the heap leach processing area and potential transportation of the ore to an off-site processing facility. The revision is expected to give the Company more flexibility in processing the resource. The Environmental Impact Statement (“EIS”) for the project is being prepared by the BLM and a third-party contractor. A revision to the Wyoming mine permit was submitted to the Wyoming Land Quality Division in January 2014 and is currently being reviewed by the agency. Baseline studies and design of the processing and heap leach facility have been completed for the NRC license application. Submittal of the license application has been temporarily deferred as the Company evaluates alternatives for processing the ore. The Company is also conducting care and maintenance activities on the Sheep Mountain Project site. See “Mineral Projects – Sheep Mountain Project” below.

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Roca Honda Project:

The Roca Honda project is at an advanced stage of permitting. The Draft Environmental Impact Statement (“DEIS”) was completed by the USFS in February 2013, and the Company expects the Final Environmental Impact Statement (“FEIS”) to be published by year’s end 2016. Other major permits required for Roca Honda include a Permit to Mine to be issued by the New Mexico Mining and Minerals Division, a Discharge Permit to be issued by the New Mexico Environment Department, and a Mine Dewatering Permit issued by the New Mexico State Engineer’s Office. The Mine Dewatering Permit was approved in December 2013 but appealed by the Acoma Pueblo in January 2014. RHR subsequently proposed a new alternative for discharging treated mine water that would benefit a number of downstream users including the Acoma Pueblo. As a result, the Acoma Pueblo agreed to withdraw the dewatering permit appeal in February 2015.

The two other major permits are in the agency review stage with a draft Discharge Permit expected in mid-to late-2015, and the Permit to Mine expected in mid-2017 following approval of the FEIS. Permit approvals from the U.S. Army Corps of Engineers and the U.S. Environmental Protection Agency are also required for discharge of treated mine water associated with mine development and operation. Applications for these two permits are also presently undergoing agency review. See “Mineral Projects – Roca Honda Project” below.

Henry Mountains Project:

The Company is currently completing environmental baseline studies and preparing mine plans for permitting purposes for the Bullfrog portion of the Henry Mountains Complex. The approved permitting schedule is based on having the BLM Plan of Operations (“PO”), the UDOGM Large Mine Notice of Intention (“NOI”), and other required state and federal permit applications submitted in mid-2015. The Company is also conducting care and maintenance activities on the Henry Mountains Project site. See “Mineral Projects – Henry Mountains Project” below.

MINERAL PROJECTS

Richard White, CPG#08792, the Company’s Chief Geologist, is a “Qualified Person” in accordance with the requirements of NI 43-101, and is responsible for the disclosure of scientific or technical information concerning mineral projects in this AIF.

Summary of Mineral Reserves and Resources

The following tables show the Company's estimate of Mineral Reserves and Mineral Resources as of December 31, 2014. NI 43-101 requires mining companies to disclose Mineral Reserves and Mineral Resources using the subcategories of Proven Mineral Reserves, Probable Mineral Reserves, Measured Mineral Resources, Indicated Mineral Resources and Inferred Mineral Resources. Energy Fuels reports Mineral Reserves and Mineral Resources separately. Properties sold or otherwise disposed of during 2014 have been removed from the tables. Removed properties include: San Rafael, Willhunt, Farmer Girl, Dunn, Dalton Pass, Sky, and the Sage mine claims portion of Sage Plain.

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Probable Mineral Reserve Estimates -- Uranium

Mineral Resource Estimate --Uranium^(2)(3)(4)

Mineral Resource Estimate – Vanadium^(2)(3)(4)

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Mineral Resource Estimate – Gold and Copper

Copper King Project-Measured and Indicated Resources^(2(12))

Copper King Project-Inferred Resources^(2(12))

Notes:

(1) “White Mesa – Ore Stockpile” includes stockpiled uranium ore which has been mined from the Pinenut Mine, where mineral reserve and mineral resource estimates have been prepared in accordance with NI 43-101.
(2) Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
(3) The Measured and Indicated Mineral Resources were estimated at various block cut-off grades specifically appropriate to the deposit type.
(4) The Inferred Mineral Resources were estimated at various block cut-off grades specifically appropriate to the deposit type.
(5) La Sal includes Energy Queen, Redd Block, Beaver, and Pandora
(6) Sage Plain includes the Calliham, Skidmore, and Crain leases. The Sage mine claims have been sold, and therefore have been removed from this table.
(7) The Sheep Mountain Indicated Mineral Resource includes Probable Mineral Reserves of 18,365,000 lbs. eU₃O₈ in 7,453,000 tons at a grade of 0.123% .
(8) The Arizona 1 Mine was placed on standby in February 2014 due to the depletion of the economic resources.
(9) The Pinenut quantity includes Mineral Resources remaining in-place (12,200 tons at a grade of 0.52% U₃O₈ containing 126,500 lbs) as well as the on-site surface stockpile of broken material.
(10) The number shown represents the total mineral resources for the Roca Honda Project. Energy Fuels owns 60% of the project.
(11) The number shown represents the total mineral resources for the Wate Project. Energy Fuels owns 50% of the project.
(12) The number shown represent the total mineral resources for the Copper King Project. The Company hold a 50% interest in the project.

Except as stated below, the Mineral Reserve and Mineral Resource information shown above is as reported in the various technical reports prepared in accordance with NI 43-101 (the “Technical Reports”) by qualified persons employed by Peter Geosciences, BRS Engineering, Chlumsky, Armbrust, and Meyer, Alinco GeoServices, Mine Development Associates, SRK Consulting (US) Inc., and Roscoe Postle Associates Inc. See “Mineral Projects” below.

The White Mesa Ore Stockpile – All ore previously stockpiled at White Mesa was fed to process in mid-2014. Following completion of that mill run a new Ore Stockpile began. The White Mesa Ore Stockpile reported in the table above consists of ore mined after August 2014 from the Pinenut Mine and shipped in December 2014 to the White Mesa Mill. Mineral Reserve and Resource information in the Technical Reports has been adjusted to reflect ore mined into Ore Stockpile and updated, in the case of the Arizona 1 and Pinenut Mines, by Company personnel.

The reconciliations shown below detail the changes from the Company’s Mineral Reserve and Mineral Resource estimates reported as of December 31, 2013.

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Reconciliation of Energy Fuels’ Uranium Mineral Reserves

Notes:

Reconciliation of Energy Fuels’ Uranium Mineral Resources

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Notes:

30

Reconciliation of Energy Fuels’ Vanadium Mineral Resources⁽⁴⁾

Notes:

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The Henry Mountains Complex

The Henry Mountains Complex is 100% owned by Energy Fuels. It is comprised of the Bullfrog property, hosting the Indian Bench and the Copper Bench deposits, and the Tony M property, hosting the Southwest deposit and the Tony M deposit and mine. Except as noted, the following description of the Henry Mountains Complex is based on the technical report dated June 27, 2012 titled “Technical Report on the Henry Mountains Complex Uranium Property, Utah, U.S.A.”, prepared by William E. Roscoe, Ph.D., P.Eng., Douglas H. Underhill, Ph.D., C.P.G. and Thomas C. Pool, P.E. of Roscoe Postle Associates Inc. (“RPA”) in accordance with NI 43-101 (the “Henry Mountains Technical Report”). Each of the authors of the Henry Mountains Technical Report is “independent” of Energy Fuels and a “qualified person” for purposes of NI 43-101. The report contains mineral resource estimates for the Indian Bench, Copper Bench, Southwest and Tony M deposits. The Henry Mountains Technical Report is available on SEDAR at www.sedar.com.

Property Description and Location

Henry Mountains

The property comprising Energy Fuels’ Henry Mountains Complex Property is located in eastern Garfield County, Utah. The Property consists of one Utah State Mineral Lease for Section 16, Township 35 South, Range 11 East (T35S R11E), Salt Lake Meridian (SLM), and 202 unpatented Federal lode mining claims. The latter consist of 137 B.F., 19 Bull, 19 Star, two Frog (comprising the Bullfrog property), 17 TIC and eight Ticaboo claims (including fractions); the TIC and Ticaboo claims being associated with the Tony M deposit. The claims and state lease comprise one contiguous property located in T34S, R11E and T35S, R11E, SLM. The Utah State Section 16 includes 638.54 acres, and the 202 unpatented lode mining claims consist of about (3,667.18 acres not specified in the Technical Report, for a total land holding of 4,305.72 acres). The surface rights are owned by the federal government, administered by the U.S. Bureau of Land Management (BLM), with the exception of the state lease which has associated state surface rights.

There is no royalty burden for the 185 claims that comprise the Bullfrog property, as well as for the Ticaboo claims. All unpatented mining claims are subject to an annual federal mining claim maintenance fee of $140/claim (BLM raised the fee to $155/claim in 2014) plus approximately $10/claim for county filing fees. Energy Fuels also indicated that there are no outstanding environmental liabilities for the properties. The 17 TIC claims are held by Energy Fuels, subject to an annual advance minimum royalty. The uranium production royalty burden is 4% yellowcake gross value less taxes and certain other deductions. The vanadium production royalty burden is 2% gross value less certain deductions. The Utah State Lease has an annual rental of $640, plus an escalating annual advance minimum royalty based on the uranium spot price. The uranium royalty is 8% of gross value less certain deductions. The vanadium royalty is 4% of gross value less certain deductions.

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Denison received the necessary permits to restart the Tony M Mine in September 2007. Major permits for the operation include an approved Plan of Operations and Finding of No Significant Impact (FONSI) from the BLM, a Large Mine permit with the Utah Division of Oil, Gas and Mining (DOGM), and an approved ground water discharge permit with the Utah Division of Water Quality (DWQ). A reclamation bond of $708,537 is in place.

Accessibility, Climate, Local Resources, Infrastructure and Physiography

Road access to the property is by paved Highway 276, running between Hanksville and Bullfrog Basin Marina, Utah. An unimproved gravel road maintained by Garfield County extends west from Highway 276, passes by the portal of the Tony M Mine, and extends northerly across the property, the northern end of which is crossed by another county road. The property is located in a relatively remote area of Utah, and the infrastructure is limited. The town site of Ticaboo, Utah, is located approximately five miles south of Energy Fuels’ mineral property. It is used by Energy Fuels to provide housing and municipal services for the Tony M Mine staff. The next closest community is Hanksville, Utah, a small town of a few hundred people, located about 40 miles north of the Property. During operation of the Tony M Mine, electricity was generated locally, as is the case for Ticaboo. Materials and supplies are transported to the site by truck about 275 miles from Salt Lake City, and about 190 miles from Grand Junction, Colorado. The distance to the Energy Fuels White Mesa Uranium-Vanadium Processing Facility near Blanding, Utah, is 117 miles.

The climate is distinctly arid, with an average annual precipitation of approximately 8 in. including about 12 in. of snow. The vegetation consists primarily of small plants including some of the major varieties of blackbrush, sagebrush, and rabbit brush. A few small junipers are also present. Relief over the combined Henry Mountains Property is approximately 2,250 ft. (the Technical Report erroneously reported 800ft.). The elevation on the property ranges from 4,550 ft. above sea level (asl) at the portal of the Tony M Mine, near the southern end of the property, to 6,800 ft. asl over the northern end of the Property. The terrain is typical canyon lands topography, with some areas deeply dissected by gullies and headwalls of canyons and the rest consisting of gently undulating gravel benches covering the northern part of the project area. The terrain in several parts of the Property is particularly rugged and inaccessible and is the primary reason for the irregular pattern of surface drill holes in parts of the Property.

History

In 1970 and 1971, Rioamex Corporation conducted a 40 hole drilling program in an east-west zone extending across the southerly end of the Bullfrog property and the northerly end of the Tony M–Frank M property. Some of these holes intercepted significant uranium mineralization. 2005. The Bullfrog properties were initially explored by Exxon Minerals Company (Exxon), while the Tony M deposit was explored and developed by Plateau, a subsidiary of Consumers Power Company (Consumers) of Michigan. Following the discovery of the Tony M uranium deposit in 1977, Plateau Resources Ltd. (Plateau) developed the Tony M Mine from September 1, 1977, to about May 1984, when development was suspended. By January 31, 1983, over 18 miles of mine workings were developed, and a total of approximately 237,000 tons of muck was extracted with an average chemically adjusted grade of 0.121% U₃O₈ containing about 573,500 pounds U₃O₈.The Tony M Mine is accessed via two parallel declines extending about 10,200 ft. into the deposit. The mine was allowed to flood after development was suspended in 1984. The southern one-half of the mine remained dry, as it is located above the static water table.

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Denison acquired the Bullfrog properties when it purchased most of the assets of Energy Fuels Nuclear Inc. (EFNI) in 1997. In February 2005, Denison acquired the former Plateau properties bringing them under common ownership with the Bullfrog properties. Following rehabilitation work at the Tony M Mine and re-establishment of surface facilities in 2006, Denison received operational permits, reopened the mine and commenced mining in September 2007. In November 2008, Denison announced that the operations at the Tony M Mine would be suspended due to uranium and economic market conditions. During its September 2007 to December 2008 reactivation, cleanup and mining, Denison extracted 162,384 tons at radiometric grade of 0.131% containing 429,112 pounds U₃O₈ from within existingworkings and from the previously stockpiled material. This material was trucked to Denison’s White Mesa Mill for processing. In June 2012, Energy Fuels acquired all of Denison Mines Corp.’s (Denison) mining assets and operations in the United States.

No pre-production mine development has been conducted on the Southwest portion of the Tony M-Southwest deposit or on the Copper Bench-Indian Bench deposit located further north.

Geologic Setting

Exposed rocks in the project area are Jurassic and Cretaceous in age. Host rocks for the Copper Bench-Indian Bench and Tony M-Southwest uranium-vanadium deposits are Upper Jurassic sandstones of the Salt Wash Member of the Morrison Formation. This formation is located within the Colorado Plateau. Early Tertiary fluvial and lacustrine sedimentation within the deeper parts of local basins was followed in mid-Tertiary time by laccolithic intrusion and extensive volcanism. Intrusions of diorite and monazite porphyry penetrated the sediments at several sites to form the laccolithic mountains of the central Colorado Plateau.

The Morrison Formation is a complex fluvial deposit of Late Jurassic age. In outcrop, the Salt Wash is exposed as one or more massive, ledge-forming sandstones, generally interbedded with laterally persistent siltstones or mudstones. The lower Salt Wash is approximately 150 ft. thick in the Property area, thinning and becoming less sandy northward from the project area. Sandstones comprise 80% of the sequence, with siltstones and mudstones making up the remainder. Significant uranium mineralization occurs only in this lower unit.

Exploration

Surface drilling using rotary tricone technology, together with radiometric gamma logging, was the primary exploration method used to discover and delineate uranium on the Henry Mountains Complex Property. With receipt of all permits in September 2007, Denison commenced work underground in the Tony M Mine as is described in Section 6 History. This work includes a long-hole drilling program to discover and delineate mineralization within about 100 ft. of underground workings. Energy Fuels has carried out no (exploration) work on the Property.

Mineralization

Uranium mineralization in the Henry Mountains Complex property is hosted by favourable sandstone horizons containing detrital organic debris. Mineralization primarily consists of coffinite, with minor uraninite which usually occurs in close association with vanadium mineralization. Mineralization occurs as intergranular disseminations, as well as coatings and/or cement on and between sand grains and organic debris. Vanadium occurs as montroseite (hydrous vanadium oxide) and vanadium chlorite in primary mineralized zones located below the water table (i.e., the northern portion of the Tony M deposit). Historic production records from the U.S. Atomic Energy Commission for the South Henry Mountains district suggest that the vanadium content of the district is relatively low. Based on the review of the available analyses, RRA is of the opinion that the V₂O₅:U₃O₈ ratio ranges from 1.3:1 to about 2.0:1 in the Henry Mountains Complex deposits, and that the concentration of vanadium is therefore too low to be economic at current prices.

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The Henry Mountains Complex vanadium-uranium deposits consist of two extensive elongate, tabular zones containing a large concentration of mineralization. The Tony M–Southwest deposit extends for a distance of approximately 2.5 miles along a north-south trend and has a maximum width of about 3,000 ft. The larger Copper Bench-Indian Bench deposit extends approximately 3.5 miles along a northwesterly trend to the northeast of the Tony M–Southwest deposit.

Drilling

The Southwest and Copper Bench deposits are delineated by drilling on approximately100 ft. centers. The Indian Bench deposit is delineated by drilling on approximately 200 ft. centers. In some areas, the rugged terrain made access difficult, resulting in an irregular drill pattern.

Exxon commenced drilling on the Bullfrog property in 1977. Before it sold the property to Atlas in July 1982, Exxon had drilled 1,782 holes. From July 1982 to July 1983, Atlas completed 112 drill holes delineating the Southwest and Copper Bench deposits on approximately 100 ft. centers. After July 1983, Atlas completed an additional 49 core hole drilling program throughout the Bullfrog property, as well as a 133 rotary drill hole program to delineate the Indian Bench deposit on approximately 200 ft. centers. A total of 2,232 drill holes were completed on the Bullfrog property. In February 1977, drilling commenced in what was to become the Tony M deposit. Subsequently, Plateau drilled more than 2,000 rotary drill holes totaling about 1,000,000ft. Over 1,200 holes were drilled in the Tony M area.

Records indicate that a total of 81 core holes were drilled in the Southwest, Copper Bench, and Indian Bench deposits, while 25 core holes were drilled in the vicinity of the Tony M deposit. The core holes provided samples of the mineralized zone for chemical and amenability testing.

Energy Fuels carried out no surface drilling on the properties.

Sampling and Analysis

The original downhole gamma logging of surface holes was done on the Bullfrog property by Century Geophysical Corp. (Century) and Professional Logging Services, Inc. (PLS) under contract to Exxon. Atlas also contracted Century for this service. Standard logging suites included radiometric gamma, resistivity and self-potential measurements, supplemented by neutron-neutron surveys for dry holes. Deviation surveys were conducted for most of the holes. Century used its CompuLog system consisting of truck-mounted radiometric logging equipment, including a digital computer.

Assays of samples from core drilling were collected by company geologists and submitted to various commercial labs for analysis. Results of these analyses were compared to eU3O8 values from gamma logs to evaluate radiometric equilibrium, logging tool performance, and validity of gamma logging. Testing done includes leach amenability studies, settling, and filtration tests.

Plateau had developed written procedures for the analysis of core to define such factors as carbonate content, and gamma probe versus chemical uranium content. Exxon found that the radioactive disequilibrium of potentially economic grade intercepts in cores, measured as the ratio of chemical U3O₈ to log radiometric equivalent (eU3O8), varied from 0.80 to 1.35 and averaged 1.06, close to the equilibrium value of 1.0. Milne (1990) reported that, while the investigation by Atlas of samples from core from an additional 40 drill holes was incomplete at the time, Atlas had identified no significant disequilibrium problem.

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RPA is of the opinion that, based on the information available, the original gamma log data and subsequent conversion to eU₃O₈% values are reliable but slightly conservative estimates of the uranium U₃O₈ grade. Furthermore, there is no evidence that radiometric disequilibrium would be expected to negatively affect the uranium resource estimates of the Tony M-Southwest and Copper Bench-Indian Bench deposits. RPA is also of the opinion that the disequilibrium should be taken into consideration when mining is conducted in the Tony M Mine in areas that are above the static water table.

Security of Samples

Procedures followed by Exxon, Atlas, and Plateau, together with their contractors Century and PLS, were well documented and at the time followed best practices and standards of companies participating in uranium exploration and development. Onsite collection of the downhole gamma data and onsite data conversion limit the possibility of sample contamination or tampering.

Mineral Resource Estimates

Mineral Resources of the Tony M-Southwest deposit were estimated in 2009 by Denison using the GT contour method and audited by Scott Wilson RPA in the 2009 Technical Report. Mineral Resources of the Copper Bench-Indian Bench deposit were estimated in 1993 by ENFI using the polygonal block method and audited by Scott Wilson RPA in the 2006 Technical Report.

The Mineral Resources were classified as Indicated and Inferred categories. They are reported at a cut-off grade of 0.10% eU₃O₈ over a minimum thickness of 2 ft. and minimum GT (grade times thickness product) of 0.2 ft.% eU₃O₈for the Tony M- Southwest deposit and at a cut-off grade of 0.20% eU₃O₈over a minimum thickness of 4 ft. and minimum GT (grade times thickness product) of 0.8ft.% eU₃O₈ for the Copper Bench-Indian Bench deposit. Total Indicated Resources are 2.41 million tons at an average grade of 0.27% eU₃O₈containing 12.80 million pounds eU₃O₈. Additional Inferred Resources total 1.61 million tons at an average grade of 0.25% eU₃O₈ containing 8.08 million pounds eU₃O₈.

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Henry Mountains Complex Mineral Resource Estimates^{(1) (2) (3)}

Notes:

The basis for resource estimation of the Tony M part of the Tony M-Southwest deposit was the gamma logs from 1,082 rotary drill holes located on the properties comprising the Tony M deposit. A total of 24 core holes were drilled to recover samples for chemical and geologic analysis and to establish stratigraphic relationships. The basis for resource estimation on the Southwest part of the Tony M-Southwest deposit was the gamma logs from 589 rotary drill holes located on the properties comprising the Southwest deposit (Table 14-2). A total of 32 core holes were drilled to recover samples for chemical and geologic analysis and to establish stratigraphic relationships.

Mineral Resources of the Tony M-Southwest deposit have been estimated using the contour method. A tonnage factor of 15 ft.³/ton was applied to give a tonnage for each lens. A cut-off grade of 0.10% eU₃O₈was applied to the indicated and inferred blocks. Only those blocks with grades above this cut-off were included in the resources.

The basis for resource estimation on the Copper Bench-Indian Bench deposit is the gamma logs from 1,193 rotary drill holes (Table 14-5). A total of 49 core holes were drilled to recover samples for chemical and geologic analysis and to establish stratigraphic relationships.

EFNI estimated the Copper Bench-Indian Bench mineral resources using circles of influence on plans of each of the three deposits. Where the circles of influence overlapped, polygons were drawn. The volume determination is based on circles of influence drawn about the drill hole intercept meeting the cut-off. A radius of 100 ft. was used in estimating resources for the Copper Bench deposit, while a radius of 125 ft. was used to estimate resources for the Indian Bench deposit. EFNI used a density factor of 15.0 ft.³/ton to convert volumes in cubic feet to short tons for the Copper Bench-Indian Bench resource estimate.

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The EFNI resource estimate was audited by RPA and accepted as a current Mineral Resource estimate for Energy Fuels.

Mining Operations

The following section has been prepared by the Company and is not based on the Henry Mountains Technical Report

The Tony M Mine was developed from 1977 to 1983 with a double entry system by two parallel declines spaced 50 ft. apart. The declines measure 9 ft. by 12 ft. in cross- section, have crosscuts on 50 ft. centers, have a minus 3% grade, serve as the primary fresh air intake, and are 10,200 ft. in length.

Access to the individual mining areas is through 8 ft. by 10 ft. laterals driven at right angles to the mine entries. The laterals also provide access for long-hole drilling and detailed information for mine planning and stope development. The mine was planned as a random room and pillar operation with pillar extraction by a retreat system.

Mining equipment consisted of slushers and rubber-tired, five- to ten-ton capacity load- haul-dump (LHD) units. Exhaust ventilation was provided by five bored ventilation shafts, six feet in diameter, each with a 75-HP exhaust fan mounted at the shaft collar.

By early 2007, work on reactivating the Tony M Mine was carried out by Denison, and surface and underground rehabilitation and repairs were conducted. Surface facilities to support mine operations were constructed, including administration and maintenance facilities, site power and communications, an evaporation pond for disposal of mine water. Worker housing was established in the town of Ticaboo, Utah. As rehabilitation work advanced in the mine, ventilation was re-established. The water level in the mine had risen to historic pre-mine levels, and upon reaching the flooded workings, mine dewatering was also initiated. During the rehabilitation work, limited amounts of “cleanup ore” were removed. As areas of the mine were made ready for mining, production increased steadily. Dewatering continued at an average rate of 125 gpm during operation. Denison placed the Tony M Mine on temporary closure status at the end of November 2008. The mine is being maintained in a state ready to resume operations when uranium prices improve. Mine supervisory staff have been retained at the site to keep the mine in a ready state.

The White Mesa Mill is located six miles south of Blanding in southeastern Utah. The mill was designed to treat 2,000 tons of ore per day. The basic mill process is a sulfuric acid leach with solvent extraction recovery of uranium and vanadium. 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 acid leach. The first, or pre-leach, circuit, consisting of two mechanically agitated tanks, utilizes pregnant (high-grade) strong acid solution from the countercurrent decantation (“CCD”) circuit which serves both to initiate the leaching process and to neutralize excess acid. The pre-leach circuit discharges to a 125-ft. thickener where the underflow solids are pumped to the second stage leach and the overflow solution is pumped to clarification, filtration, and solvent extraction circuits. A hot strong acid leach is used in the second stage leach unit, which consists of seven mechanically agitated tanks having a retention time of 24 hours. Free acid is controlled at 70 grams per litre and the temperature is maintained at 75°C. Leached pulp is washed and thickened in the CCD circuit, which consists of eight high capacity thickeners. Underflow from the final thickener at 50% solids is discharged to the tailings area. Overflow from the first thickener (pregnant solution) is returned to the pre-leach tanks. The solvent extraction (SX) circuit consists of four extraction stages in which uranium in pregnant solution is transferred to the organic phase, a mixture consisting of 2.5% amine, 2.5% isodeconal, and 95% kerosene. Loaded organic is pumped to six stages of stripping by a 1.5 molar sodium chloride solution, and thence to a continuous ammonia precipitation circuit. Precipitated uranium is settled, thickened, centrifuged, and dried at 1,200F. The final product at about 95% U₃O₈ is packed into 55-gallon drums for shipment.

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Permitting

Bullfrog Property:

The Company is currently completing environmental baseline studies and preparing mine plans for permitting purposes. The approved permitting schedule is based on having the BLM Plan of Operations (“PO”), the UDOGM Large Mine Notice of Intention (“NOI”), and other required state and federal permit applications submitted in mid-2015.

Tony M Property:

The original Tony M mine permit was allowed to lapse. Subsequently, the previous operator filed for exploration permits with UDOGM and the BLM. These permits were granted by UDOGM and the BLM on December 2, 2005 and March 6, 2006, respectively, which enabled the previous operator to regain access, inspect and begin rehabilitation of the Tony M underground workings. The previous operator also began the permitting process for the Tony M mine. The permit application was submitted in November 2006 and a Record of Decision (“RoD”) and approved Plan of Operations were received in September 2007.

The PO was challenged by the Center for Water Advocacy and the Utah Chapter of the Sierra Club, which requested a Utah State BLM Director Review and a stay of the decision approving the Final PO for the Tony M mine. On November 21, 2007, the BLM State Director issued a decision vacating the previously issued permit and remanded the case to the Field Office in order that the Environmental Assessment (“EA”) for the Tony M Mine PO could be amended and a new RoD issued. As a result of this decision to vacate and renew, the request for stay was considered moot. The new decision was issued by the BLM on November 23, 2007 approving the PO for the mine. The new decision was once again appealed by the Center for Water Advocacy and the Utah Chapter of the Sierra Club. The Utah State Director issued a decision denying the appeal and upholding the PO on February 19, 2008.

Permit applications for a Phase 2 expansion were submitted to the BLM and UDOGM in 2008. The expansion was approved by the UDOGM in 2009, but the previous operator subsequently requested that BLM review of the application be deferred given the market conditions at that time. The Company is currently evaluating plans to re-submit the application to the BLM at a future date in 2014, but for a much smaller expansion plan consisting of additional ventilation shafts, associated access roads, and expansion of the evaporation pond.

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Roca Honda Project

Except as noted, the following description of the Roca Honda Project is based on a technical report titled "Technical Report on the Roca Honda Project, McKinley County, New Mexico, U.S.A." dated February 27, 2015, prepared by Barton G. Stone, C.P.G., Robert Michaud, P.Eng., Stuart E. Collins, P.E., and Mark B. Mathisen, C.P.G., all of Roscoe Postle Associates (“RPA”) in accordance with NI 43-101 (the “Roca Honda Technical Report”). The technical report includes an updated mineral resource estimate and the results of a Preliminary Economic Assessment ("PEA") for the uranium resources outlined to date at the Roca Honda Project in New Mexico. Each of the authors of the Roca Honda Technical Report is a “qualified person” and is “independent” of the Company within the meaning of NI 43-101. Harold R. Roberts, P.E., Executive Vice President and Chief Operating Officer of the Company is a coauthor of the PEA; however, the independent authors of the Report have assumed overall responsibility for all items of the technical report, and the Report is therefore an independent technical report under NI 43-101.

The Roca Honda Project was acquired by the Company on August 29, 2013 as a result of the acquisition of Strathmore by Energy Fuels. See “General Development of the Business” above.

Property Description and Location

The Roca Honda uranium project is located approximately three miles northwest of the community of San Mateo, New Mexico, near the southern boundary of McKinley County and north of the Cibola County boundary, and approximately 22 miles by road northeast of Grants, New Mexico. The property is located in the east part of the Ambrosia Lake subdistrict of the Grants Mineral Belt in northwest New Mexico and comprises nearly all of Sections 9, 10, and a narrow strip of Section 11, and a New Mexico State Lease, consisting of Section 16, all in Township 13 North – Range 8 West (T13N-R8W), New Mexico Principal Meridian.

The White Mesa Mill, where the ore from the project is expected to be milled, is located on 4,816 acres of private land owned by Energy Fuels. This land is located in Township 37S and 38S Range 22E Salt Lake Principal Meridian. The mill is located approximately six miles south of Blanding, Utah along US Highway 191. Energy Fuels also holds 253 acres of mill site claims and a 320 acre Utah state lease. No facilities are planned on the mill site claims or leased land, which will be used as a buffer to the operations.

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Land Tenure

The Roca Honda property is held by RHR, which is jointly owned by Energy Fuels’ wholly- owned subsidiary Strathmore Resources, U.S. Ltd. (60%) and Sumitomo’s subsidiaries SC Clean Energy and Summit New Energy Holding, LLC (40%). RHR was established on July 26, 2007, when Strathmore formed a limited liability company with Sumitomo and transferred the property to RHR.

The Roca Honda property covers an area of 1,886.5 acres, and includes 63 unpatented lode mining claims in Sections 9 and 10, and one adjoining New Mexico State General Mining Lease in Section 16. The mining claims also extend onto a 9.4 acre narrow strip of Section 11. Strathmore acquired the mining claims on March 12, 2004, from Rio Algom Mining LLC (Rio Algom), a successor to Kerr-McGee Corporation (Kerr-McGee), which had staked the claims in 1965 and had continuously maintained them. The New Mexico State Lease was acquired by David Miller (former Strathmore CEO) on November 30, 2004, and subsequently transferred to Strathmore.

The Roca Honda State Lease (No. HG-0036-002) is located on Section 16 and covers an area of 638 acres. The surface of Section 16 is leased to Fernandez Company, Ltd. (“Fernandez”) as rangeland for grazing. The area covered by the Fernandez lease is also referred to as “Lee Ranch”. The lease has a primary, secondary, tertiary, and quaternary term, each with rentals to be paid in advance. The lease is currently in the quaternary term of five years (expiring on November 29, 2019) and for so long thereafter as minerals are produced or mined in paying quantities. The lease will therefore expire on November 29, 2019 and have to be renewed, unless minerals are being produced or mined in paying quantities at that time. New Mexico law provides a preferential right of a lessee of a mineral lease to renew a lease on state lands.

There is a New Mexico mining royalty payable on the “value” of mineral production for New Mexico state leases. The royalty is based upon the operating cash flow less a development allowance, depreciation, and a processing allowance. New Mexico mining and private royalties on value of minerals extracted are shown below:

• Section 9 Gross Royalty (1%); and
• Section 16 New Mexico State Lease Royalty (5%).

The White Mesa Mill is located approximately six miles south of Blanding, Utah on a parcel of land encompassing all or part of Sections 21, 22, 27, 28, 29, 32, and 33 of T37S, R22E, and Sections 4, 5, 6, 8, 9, and 16 of Township 38 South, Range 22 East, Salt Lake Base and Meridian. Additional land is controlled by 46 mill site claims. Total White Mesa Mill land holdings are approximately 5,375 acres.

Roca Honda Existing Infrastructure

Old drill roads were previously established across the property, and an electrical line transects the northern half of Section 16 in the Project area. The line continues on the west side of the Project area into Section 17, where it terminates, and on the east side of Section 16 through the northwest quarter of Section 15 and along the southern section boundary of Section 10. Three monitor water wells were drilled by RHR in 2007, and are located on Section 16. Other items installed by RHR include a permanent electrical weather station and a high volume TSP and PM₁₀ air samplers. Three, dry man-made impoundments are also located on Section 16. More than 400 historic drill exploration holes were completed on the property from the late 1960’s to the early 1980’s. As the mine has not yet been developed or operated, there are no mine workings, existing tailings ponds, waste deposits or other improvements or facilities at the site.

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White Mesa Mill Infrastructure

See “Energy Fuels’ Business – Operations” above.

Accessibility, Climate, Local Resources and Physiography

The Roca Honda Project is currently accessed by public roads, highways and across private land held by Fernandez. It is located approximately 17 air miles and 22 road miles northeast of Grants, New Mexico. The southern portion of the project, on Section 16, can be reached by traveling north from Milan on New Mexico State Highway 605 toward the town of San Mateo to mile marker 18 and then north on a public gravel road. Access rights from Highway 605 onto Section 16 are subject to negotiations with the surface lease-holder, Fernandez. A temporary access agreement across the Fernandez properties, which allows access on a limited basis, is currently in place and will expire on January 1, 2016. RHR and the landowner are currently in the process of negotiating a long-term access agreement across the Fernandez properties, which will be required before mine development can commence.

The north part of the project can be reached by traveling 23.5 miles from Milan, New Mexico, on paved public Highway 605, and then west on US Forest Service roads to the southeast corner of Section 10. There are numerous drill roads that provide access to different portions of Sections 9 and 10, many of which will require maintenance. Old drill roads were previously established across the property, and an electrical line transects the northern half of Section 16 in the project area. The line continues on the west side of the project area into Section 17, where it terminates, and on the east side of Section 16 through the northwest quarter of Section 15 and along the southern section boundary of Section 10. Surface rights held are sufficient for expected mining operations and waste disposal areas. No milling operations are expected to occur on the site. Therefore, no areas for tailings storage, heap leach pads or processing plants are expected to be required.

The climate in the Roca Honda project area may be classified as arid to semi-arid continental, characterized by cool, dry winters, and warm, dry summers. On average, the Roca Honda property receives approximately 11 inches of precipitation annually, most of which occurs during thunderstorms in July and August. Winter is the driest season with an average of approximately 13 inches of snow falling annually, mostly during December through February. Grants, New Mexico has an annual average temperature of 50°F, with an average summer high of 87°F and low of 52°F, and average winter high of 47°F and low of 18°F. Year-round operations are expected.

The community of Grants, New Mexico, located in Cibola County, is the largest community near the Roca Honda Project. As of the 2010 census, there are 8,772 people residing in Grants, where supplies can be obtained and personnel experienced in open pit and underground mining, construction and mineral processing are available.

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The Roca Honda Project area is sparsely populated, rural and largely undeveloped. The predominant land uses include low density grazing and cultivation, and recreational activities such as hiking, sightseeing, and seasonal hunting. The Roca Honda property has moderately rough topography in Sections 9 and 10 and consists of shaly slopes below ledge-forming sandstone beds, as mesas, that dip 7° to 11° northeast. Elevations range from 7,100 feet to 7,800 feet. Section 9 consists mostly of steep slopes in the west and south, with a large sandstone mesa in the north central part. Section 10 consists mostly of the dip-slope of a sandstone bed that dips from 8° to 11° east. Section 16 has less topographic relief, with elevations ranging from 7,100 to 7,300 feet and easterly dipping slopes. Vegetation in the Roca Honda project area consists of grasses, piñon pine and juniper trees.

History

Kerr-McGee Oil Industries, Inc. (“Kerr-McGee”) staked the Roca Honda unpatented mining claims in Sections 9 and 10 in June 1965. Kerr-McGee, its subsidiaries, and successor in interest Rio Algom had held the claims until the property was acquired by Strathmore on March 12, 2004. Energy Fuels acquired a 100% interest in Strathmore in September 2013, assuming Strathmore’s 60% ownership interest in RHR and becoming the Project operator.

Drilling on the property began in 1966. Kerr-McGee performed a number of rotary drill hole exploration programs from 1966 to 1985. In Section 9, the first drill hole was completed in July 1966. Discovery was made in drill hole number 7 completed on August 2, 1970, which encountered mineralization at a depth of 1,900 ft. From 1966 to 1982, a total of 187 drill holes were completed for a total of 388,374 ft.

In Section 10, the first hole was drilled in October 1967. Discovery was made in drill hole number 6 completed on March 19, 1974, which encountered mineralization at a depth of 2,318 ft. From 1967 to 1985, a total of 175 drill holes were completed for a total of 459,535 ft.

In Section 16, the first drilling was in the 1950s by Rare Metals, which drilled 13 holes, including two that intercepted high-grade uranium mineralization at depths of 1,531 ft. and 1,566 ft. No records of the total drilled footage were located. Subsequently, Western Nuclear acquired a mining lease for Section 16 from the State and began drilling in 1968, with the first drill hole completed on August 17, 1968. The second drill hole intercepted high- grade uranium mineralization at a depth of 1,587 ft. From 1968 through September 1970, Western Nuclear drilled 63 holes totalling 121,164 ft., not including six abandoned holes totaling 7,835 ft. Two of the drill holes reported cored intervals, but the cores and analyses were not available.

From the mid 1960s to 2011, a total of 444 drill holes totaling over 971,300 ft. were completed on the three Sections of the Roca Honda property.

There have been several historical mineral resource estimates prepared for the property, all of which predated NI 43-101. In 2012, RPA prepared a Mineral Resource estimate and reported it in a NI 43-101 Technical Report prepared for Strathmore. That estimate is superseded by the Mineral Resource estimate in Table 1-1.

No historic production has occurred on the property.

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Geological Setting and Mineralization

The Roca Honda Project area is located in the southeast part of the Ambrosia Lake subdistrict of the Grants uranium district and is near the boundary between the Chaco slope and the Acoma sag tectonic features. This subdistrict 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 subdistrict of the Grants Mineral Belt, which includes the Roca Honda 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 32 ft. thick, 100 ft. to 600 ft. wide, and 200 ft. to 2,000 ft. long. Uranium mineralization in the Project area trends west-northwest, consistent with trends of the fluvial sedimentary structures of the Westwater Canyon Member, and the general trend of mineralization across the Ambrosia Lake subdistrict.

Core recovery from the 2007 drilling program indicates that uranium occurs in sandstones with large amounts of organic/high carbon material. Non-mineralized host rock is much lighter (light brown to light grey) 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 grey to black in color, and is found between depths of approximately 1,650 ft. and 2,600 ft. below the surface.

Primary mineralization pre-dates, 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 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 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 area are offset by faults.

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

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Exploration

No additional exploration work or activities have been conducted on the Roca Honda property since November 2011, when a core drill hole was completed in Section 16 for geotechnical studies.

A few widely spaced holes that were previously drilled in the central part of Section 16 intersected mineralization in the A and B1 sands grading over 0.10% U₃O₈ across a minimum thickness of six feet. Based on this drilling, an exploration potential of 600,000 tons to 800,000 tons at 0.30% U₃O₈ to 0.40% U₃O₈was identified, containing four million pounds of uranium. RPA notes that the potential quantity and grade identified are conceptual in nature and additional exploration is required to define a Mineral Resource.

Drilling

Drilling on the Roca Honda project has been conducted in phases by Rare Metals, Kerr-McGee, Western Nuclear and RHR from 1966 to 2011, and consists of 443 drill holes totaling 970,954 feet. A drill summary table by section is included below.

• Section 9: Kerr-McGee (1966 to 1982), 187 holes, 388,849 feet
• Section 10: Kerr-McGee (1967 to 1985), 175 holes, 450,838 feet
• Section 16: Western Nuclear (1968 to 1970), 63 holes, 121,164 feet
• Section 16: Rare Metals (1950s), 13 holes, unknown footage
• Section 16: RHR (2007), 4 holes, 8,050 feet
• Section 16: RHR (2011), 1 hole, 2,053 feet

Previous drilling on the Roca Honda property was performed by Kerr-McGee on Sections 9 and 10, and by Rare Metals and Western Nuclear on Section 16 using rotary mud drilling with truck-mounted drills contracted by local drilling companies. Kerr-McGee files contain detailed records of drilling results. Drill logs are available for three holes completed by Rare Metals in the 1950’s. For the Western Nuclear drilling, complete files of drill summary sheets containing intercepted grade, thickness, zone, and alteration (oxidation) for each mineralized interval is available.

RHR drilled four pilot holes, on Section 16, of which three were completed as monitor wells totaling 8,050 ft for environmental baseline and monitoring purposes in Section 16 from June through November 2007. One drill hole was located outside of known mineralization and three holes were located within mineralized areas.

The entire thickness of the Westwater Sandstone, except for zones with no recovery, was cored in the pilot holes for these wells. The cores are PQ diameter (3.345 in.) and were taken principally for laboratory testing of hydraulic conductivity, effective porosity, density, and chemical analysis.

The four pilot holes were probed by Jet West Geophysical Services, LLC (Jet West), Farmington, New Mexico, for gamma, resistivity, deviation, standard potential, and temperature.

In November 2011, a core hole (S14-Jmw-CH-11) was drilled at the Section 16 shaft location (Figure 10-2). The hole was drilled to a depth of 2,053 ft. Core was tested at Advanced Terra Testing for numerous geotechnical properties and a geotechnical report was issued in June 2012.

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Sampling and Analysis

All mineralized intercepts used for historical resource estimates were calculated by Kerr-McGee from gamma-ray logs probed for each drill hole. Each log consists of gamma-ray, resistivity, and spontaneous-potential curves plotted by depth. The resistivity and spontaneous-potential curves provide bed boundaries and are mainly used for correlation of sandstone units and mineralized zones between drill holes.

The equivalent U₃O₈ (eU₃O₈) content was calculated by Kerr-McGee following the industry standard method developed originally by the U.S. Atomic Energy Commission (Kerr-McGee manual, undated). For mineralized zones greater than two feet thick, an upper and lower boundary was initially determined by choosing a point approximately one-half of the height from background to peak of the anomaly. The counts per second (cps) were determined for each one-foot interval and then divided by the number of intervals to calculate an average cps for the anomaly. The counts per second (cps) were converted to percent eU₃O₈ using the appropriate Kerr-McGee charts for the specific logging unit used.

Based on Kerr-McGee’s extensive operating experience in the Ambrosia Lake sub district of the Grants Mineral Belt there were no historical concerns regarding disequilibrium for gamma ray results. Additionally, RHR core showed no major negative disequilibrium. Therefore, based on this information, no disequilibrium factor has been applied to the Roca Honda eU₃O₈ gamma logs and/or assays.

RHR has results of analyses of chemical equilibrium from four samples from three core holes (totalling 17 ft of mineralized core) located in Section 16. Results indicate positive average equilibrium (chemU₃O₈/eU₃O₈) for the four samples.

Based on a review of available reports describing the state of chemical equilibrium for uranium in the vicinity of the Roca Honda deposit and in similar deposits with primary-type uranium mineralization, RPA considers it probable that the Roca Honda deposit taken as a whole, will have an average state of equilibrium that is slightly favorable with regard to chemical uranium versus eU₃O₈.

RPA is of the opinion that there is a low risk of negative equilibrium (chemical uranium lower than radiometrically determined uranium) in the Roca Honda deposit. Additional sampling and analyses are recommended to supplement results of the limited disequilibrium testing conducted by RHR.

RHR completed four pilot holes in 2007 and one geotechnical hole in 2011 (not included in resource database, because it was completed after the resource computation) as discussed in detail in Section 10 Drilling. Most of the Westwater Sandstone was cored at PQ diameter (39/32 in.) and collected for laboratory testing of hydraulic conductivity, effective porosity, density and chemical analysis.

RHR developed stringent in-house standard operating procedures for core handling (including collecting, sampling, processing, and archiving core), and decontamination of small equipment used for sampling. The following sections summarize RHR’s standard operating procedures.

The standard operating procedures provide guidance for proper and consistent core collection practices, and to ensure that proper core handling procedures, quality control, and required documentation are undertaken. The RHR lead geologist was responsible for implementing the core handling and sampling procedures.

The RHR field geologist was responsible for ensuring that all standard operating procedures were conducted in accordance with Strathmore standards, under the direction of the RHR Lead Geologist.

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The field geologist observed the core from the time it was pulled from the hole until it was transported to a locked storage facility adjoining RHR’s Grant, New Mexico geology office.

Core intervals selected for sampling were split in half lengthwise with a hydraulic splitter. One half was sent for analysis, with the other half logged and archived with the remaining core. Core samples were inserted into sample bags labelled with the well identification, core run number, date, and core interval. Core intervals sampled for laboratory analysis were sealed to preserve the natural state of the core.

A sample block is placed in the location of the sampled core and labelled with the boring or well identification, date, depth intervals, sample identification, sample type, and the name of the individual or organization receiving the sample.

Each core box is photographed using a digital camera and includes a color bar, scale and label containing the borehole designation, box number, box interval, and the date of the photograph. All photography logs and photographs are archived by RHR.

Core Box and Custody Record Forms are completed before the core box is closed and sealed.

All records and forms are reviewed by the field geologist for accuracy and completeness.

Security of Samples

RHR implemented and followed strict standard operating procedures as documents in Standard Operation Procedure 006 “Sampling handling, packaging, shipping, and chain of custody” The Standard Operating Procedure outlines the preparation of environmental and waste characterization samples for shipment to the offsite analytical laboratory, and the chain of custody procedures to follow from the sample collection stage to the entry of results into the RHR database.

Mineral Reserve and Resource Estimates

RPA prepared an updated NI 43-101 compliant Mineral Resource estimate for the Roca Honda deposit in the Roca Honda Technical Report. The updated Mineral Resource estimate for the Roca Honda deposit effective as at February 4, 2015, is summarized in Table 1-1. Mineral Resources are constrained by wireframes generated around individual mineralized zones within five sand horizons designated as A, B1, B2, C, and D sands.

Notes:

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The Mineral Resource estimate and classification are in accordance with the CIM definitions. There are no Mineral Reserves on the property at this time.

RPA noted that it is not aware of any known environmental, permitting, legal, title, taxation, socioeconomic, marketing, political, or other relevant factors that could materially affect the current resource estimate.

Mining Operations

Mining Methods

The PEA includes 2.033 million tons of Measured and Indicated Mineral Resources at a diluted grade of 0.365% U₃O₈ and 1.400 million tons of Inferred Resources at a diluted grade of 0.355% U₃O₈. To arrive at this estimate, RPA used a diluted cut-off grade of 0.110% U₃O₈, a minimum mining thickness of six feet, and the historical mining recovery of 85% for the step room-and-pillar mining method and 90% recovery for the drift-and-fill mining method. RPA notes that Inferred Resources are considered too geologically speculative to have mining and economic considerations applied to them and to be categorized as Mineral Reserves.

Dilution is estimated to average 17.1% at a grade of 0.030% U₃O₈.This includes both low grade and waste material. Dilution estimates are based on one foot of overbreak in the roof and six inches in the floor of all single lift stopes. In the case of multi-lift stopes, the initial cuts include only six inches of dilution from the floor of the drift. The final cut includes both floor dilution and roof dilution. Average minimum stope height is six feet.

The mineralization is relatively flat-lying and will be mined using both step room-and-pillar (SRP) stoping in the lower grade zones and drift-and-fill (DF) stoping in the higher grade zones. The transition grade has been calculated at 0.265% U₃O₈. Stopes with average diluted grades of less than 0.265% U₃O₈will be mined using the SRP method. Stopes with average diluted grades higher 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 mineralized zones range in thickness from 6 ft. to 21 ft. Zones in the 6 ft. to 12 ft. thickness range 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 schedule (24 hours/day, 7 days per week) is based on initiating development from the production shaft located in Section 16. The mining areas in the Southwest mining area will be connected to the Northeast mining area via a 3,600 ft. double decline. Primary development connecting the shaft to the various mineralized zones (including the double decline) will be driven 10 ft. wide by 12 ft. high to allow for infrastructure. Stope access development connecting the primary development to the individual stopes will be driven 10 ft. wide by 10 ft. high. The base case for the project has a production life of approximately nine years at an average rate of 1,085 stpd.

The mining sequence in each area is dependent upon the development schedule, but in general, prioritizes the mining of the largest and highest grade zones in each area of the mine. There is also a requirement to sequence the mining of any stacked 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 1,030 stpd during the time that mining occurs in Sections 9 and 16 only, increasing to 1,200 stpd when mining in Sections 9, 16, and 10 are mined simultaneously then dropping to 1,020 stpd when mining from Section 10 only.

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Depressurization of the three main aquifers in the Project area will be accomplished by the use of up to 15 depressurization wells and underground long holes that supply water to eleven underground pumping stations that ultimately feed water to the Section 16 shaft sump pumps, and three discharge pump stations located in the shaft. It has been estimated that the mine will discharge a nominal 2,500 US gpm of water at temperatures between 90ºF and 95ºF. An additional 2,000 gpm will be produced by surface wells so the total discharge rate is anticipated to be up to 4,500 gpm.

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.

Metallurgy and Processing

The White Mesa Mill utilizes agitated hot acid leach and solvent extraction to recover uranium. Historical metallurgical tests and White Mesa Mill production records confirm this processing method will recover 95% of the contained uranium.

The Energy Fuels’ owned White Mesa Mill is located near Blanding, Utah, 275 mi from the Roca Honda Project.

Operations at the White Mesa Mill can receive run-of-mine (RoM) material from the Roca Honda Project and various other mines. Material will be dumped from trucks on an ore pad area and stockpiled by type to be blended as needed. Material will be weighed, sampled, and probed for uranium grade. The ore pad area has an approximate capacity of 450,000 tons.

Material will be withdrawn from the stockpiles by CAT 980 (or equivalent) front end loader and fed to a SAG mill at a rate of up to 2,500 stpd. The ground material, which will be in slurry with water, will be placed in agitated storage tanks and fed to the leaching circuit.

The leaching will be conducted in eight, 25 ft. diameter by 26 ft. high agitated leach tanks using sulfuric acid, steam, and sodium chlorate. After leaching, the slurry proceeds to the CCD washing circuit to recover the dissolved uranium values. Once the uranium is recovered, the tailings solids are sent to the tailings cells. The pregnant solution recovered in the CCD circuit is clarified, and then treated in an SX circuit to increase the concentration of uranium in solution and remove impurities.

Uranium is precipitated from the SX pregnant strip solution using ammonia for pH control. Precipitated uranium is sent to a thickener and a centrifuge for washing and dewatering. The uranium is then dried in a multi-hearth dryer and the resulting “yellowcake” is placed in 55- gallon sealed drums for shipment.

The White Mesa Mill was constructed in 1977-1980 and is currently fully operational. Additional tailings storage capacity is required to handle the Roca Honda material, and these tailing cells are designed and identical to the two most recently approved cells, but the design has not been submitted to Utah Department of Environmental Quality (DEQ) for approval. All other mill infrastructure items are already in place at the White Mesa Mill.

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Capital and Operating Costs

Total production from the project is estimated to be 3.432 million tons of ore, yielding approximately 23.5 million recovered pounds of U₃O₈ over the expected nine-year life of the mine.

The following summarizes the capital cost estimate for the Project.

CAPITAL COST ESTIMATE
Roca Honda Resources LLC – Roca Honda Project

The average LoM operating costs and the annual estimated operating costs are shown in Table 1-7. The LoM average operating cost includes mining, processing at the White Mesa Mill, general and administration, and freight of the product to a point of sale at the White Mesa Mill located near Blanding, Utah.

TABLE 1-7 OPERATING COST ESTIMATE
Roca Honda Resources LLC – Roca Honda Project

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Payback is expected to occur early in the fifth year of production.

Permitting

The Roca Honda project is at an advanced stage of permitting. The Draft Environmental Impact Statement (“DEIS”) was completed by the USFS in February 2013, and the company expects the Final Environmental Impact Statement (“FEIS”) to be published by year’s end 2016. Other major permits required for Roca Honda include a Permit to Mine to be issued by the New Mexico Mining and Minerals Division, a Discharge Permit issued by the New Mexico Environment Department, and a Mine Dewatering Permit issued by the New Mexico State Engineer’s Office. The Mine Dewatering Permit was approved in December 2013 but appealed by the Acoma Pueblo in January 2014. RHR subsequently proposed a new alternative for discharging treated mine water that would benefit a number of downstream users including the Acoma Pueblo. As a result, the Acoma Pueblo agreed to withdraw the dewatering permit appeal in February 2015. See “Legal Proceedings and Regulatory Actions” below for further discussion on the Acoma Pueblo appeal.

The two other major permits are in the agency review stage with a draft Discharge Permit expected in mid-to late 2015, and the Permit to Mine expected in mid-2017 following after approval of the FEIS in mid-2017. Permit approvals from the U.S. Army Corps of Engineers and the U.S. Environmental Protection Agency are also required for discharge of treated mine water associated with mine development and operation. Applications for these two permits are also presently undergoing agency review.

As the project has not yet been developed or operated, the Company is not aware of any environmental liabilities of any significance at the project.

No permitting is required to start milling Roca Honda material at the White Mesa Mill. The White Mesa Mill is fully permitted with the State of Utah, and has all the necessary operating licenses for a conventional uranium mill. As additional tailings storage capacity will eventually be required over the life of the mine, an Amendment to the White Mesa Mill’s Radioactive Materials License issued by the Utah Division of Radiation Control will be required to construct the next tailing cells. Designs for the next two cells are complete.

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The Arizona Strip

Except as noted, the following descriptions of the Pinenut Mine, Arizona 1 Mine, and Canyon Project are based on a technical report titled “Technical Report on the Arizona Strip Uranium Project, Arizona, U.S.A.”, dated June 27, 2012, prepared by Thomas C. Pool, P.E and David A. Ross, M.Sc., P.Geo. of RPA in accordance with NI 43-101 (the “Arizona Strip Technical Report”). Each of the authors of the Arizona Strip Technical Report are a “qualified person” and is “independent” of the Company within the meaning of NI 43-101. Except as noted, the following description of the EZ Complex is based on a technical report titled “Technical Report on the EZ1 and EZ2 Breccia Pipes, Arizona Strip District, U.S.A.”, dated June 27, 2012, prepared by David A. Ross, M.Sc., P.Geo. and Christopher Moreton, Ph.D, P.Geo. of RPA in accordance with NI 43-101 (the “EZ Technical Report”). Each of the authors of the EZ Technical Report is a “qualified person” and is “independent” of the Company within the meaning of NI 43-101. Except as noted, the following descriptions of the Wate Project are based on a technical report titled “NI 43-101 Technical Report on Resources Wate Uranium Breccia Pipe-Northern Arizona, USA” dated March 10, 2015, prepared by SRK Consulting (US) Inc., (the “Wate Technical Report”). Each of the authors of the Wate Technical Report are a “qualified person” and is “independent” of the Company within the meaning of NI 43-101

Energy Fuels has a 100% interest in a number of breccia pipe uranium deposits in the Arizona Strip District of northwestern Arizona, including: Arizona 1, Canyon, Pinenut, EZ 1, EZ 2, WHAT, DB 1, Kanab North, John, Lisa, Otto, Why and Not. These breccia pipe deposits, in addition to another deposit in Arizona called Moonshine Springs, were acquired by Denison from Pathfinder Mines Corp. (“Pathfinder”) in 2007. Moonshine Springs is a sandstone hosted deposit near the surface, gradually becoming deeper toward the north. All of these properties were subsequently acquired by Energy Fuels in its June 2012 acquisition of Denison’s US Mining Division. Energy Fuels also owns a 50% interest in and is the manager of the Wate Project.

The Arizona Strip is an area largely bounded on the north by the Arizona/Utah state line; on the east by the Colorado River and Marble Canyon; on the west by the Grand Wash Cliffs; and on the south by a midpoint between the city of Flagstaff and the Grand Canyon. The area encompasses approximately 13,000 square miles.

Since 1980, when mine development first began at the Hack Canyon II mine, the Arizona Strip has produced in excess of 21 million pounds of uranium from eight mines. Of these mines, Hack Canyon I, II, and III, Pigeon and Hermit are depleted and have been reclaimed. In addition, the Kanab North mine is depleted and in reclamation. The Arizona 1 mine was placed on standby by the Company in February 2014 due to the depletion of the economic resource.

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Ore from the Arizona Strip mines is hauled by truck from the mine sites to the Company’s White Mesa Mill. The Arizona 1 and Pinenut Mines are approximately 307 road miles, the Canyon Project is 325 road miles, and the Wate Project is approximately 390 road miles from the Mill.

The Arizona Strip mines are held by Energy Fuels on unpatented claims located on land managed by the BLM and U.S. Forest Service (“USFS”), except for the Wate Project, which is located on an Arizona State lease, and the Moonshine Springs deposit, which is held by a combination of mineral claims and a mineral lease. There is a 3.5% yellowcake royalty on the Canyon property. The Wate Project is expected to have a royalty on the Arizona State lease, but the royalty amount has not yet been established. In addition, the Company’s 50% interest in the Wate Project is subject to an additional 2% royalty, which may be purchased by the Company for $750,000.

Mining operations began at Arizona 1 in late 2009 and continued until February 2014 at which time the project was placed on standby. At Pinenut, mine development activities began in late 2010. Ore production commenced in the summer of 2013 and is expected to continue until second quarter 2015 at which time ore production is expected to have recovered all economical resources. The mine will subsequently be reclaimed. At the Canyon mine, all surface facilities for shaft sinking are in place, and shaft sinking commenced in February 2013, at a depth of 50 feet below the surface. Development progressed to a depth of 280 feet during 2013. In November 2013, shaft sinking at Canyon was placed on standby. On February 6, 2015, the Company announced plans to restart mining activities at the Canyon mine. To complete the mine, the Company expects to sink an additional 1,200 feet of shaft, install a ventilation shaft, and complete underground development. Reclamation has begun at the Kanab North mine and all that remains is to remove surface waste rock, grade the surface and re-vegetate. The EZ Complex and Wate Project are both currently in the permitting process. The What, DB-1, Why, John, Not, Lisa, Otto and Moonshine Springs properties have no development on site or plans for permitting at this time.

Property Description and Location

Prior to 1995, EFN located and developed to various stages, numerous uranium mineralized breccia pipe structures in northwestern Arizona, between Utah and the Grand Canyon, an area termed the “Arizona Strip.” Most of Energy Fuels’ breccia pipes are between the town of Fredonia, on the Arizona-Utah state line, and Grand Canyon National Park. Two deposits, Canyon and Wate, are located south of the national park.

Arizona 1 is located in Mojave County, Arizona, about 45 miles southwest from Fredonia, Arizona by unsurfaced road. Energy Fuels’ property position consists of 10 unpatented mining claims covering approximately 207 acres, located on land managed by the U.S. Bureau of Land Management (“BLM”).

Pinenut consists of 10 unpatented mining claims encompassing 207 acres, located on land managed by the BLM. It is located 45 miles south of Fredonia in Mojave County, Arizona and is accessible via an unsurfaced road.

The Canyon project is in north central Arizona, 153 miles north of Phoenix and six miles south of Tusayan, Arizona in the Kaibab National Forest, Coconino County and is accessible by an unsurfaced road. The Canyon site consists of nine unpatented mining claims encompassing approximately 186 acres, located on land managed by the U.S. Forest Service (“USFS”). There is a 3.5% yellowcake royalty on the Canyon property.

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The EZ Complex is also located in Mohave County, Arizona, about 30 miles southwest of Fredonia, Arizona. The EZ Complex is comprised of 12 unpatented mining claims covering approximately 248 acres, located on land managed by the BLM. There is a 1.0% yellowcake royalty on the EZ Complex properties.

The Wate Project (“Wate”) is located on Arizona State land in northwestern Arizona, south of the Grand Canyon National Park in Coconino County. Wate is approximately 5 miles northwest of Indian Route 18, which runs northeast from Route 66. Wate is held by the Company under Arizona State Mineral Lease Application 11-116806.

Holding costs for the Arizona 1, Pinenut, Canyon and EZ properties are minimal and consist entirely of annual fees for unpatented mining claims ($140 per claim per year – the BLM increased fees to $155 per claim per year in 2014) and county filing fees (approximately $10 per claim per year). Unpatented mining claims expire annually, but are subject to indefinite annual renewal by filing appropriate documents and paying the fees described above. In addition, holders of unpatented mining claims are generally granted surface access to conduct mineral exploration and mining activities.

Mine development of uranium-bearing breccia pipes of the Arizona Strip requires a minimum of surface disturbance, typically less than 20 acres, and has little if any impact on groundwater since most of the mines are relatively dry. The overall environmental impact is small. Nevertheless, the Grand Canyon area is environmentally sensitive in many ways and the permitting, development, and operation of a uranium mine is a contentious issue. Environmental liabilities at the four mines not yet completely reclaimed are bonded at their total expected reclamation cost.

Arizona 1 is a fully developed mine, with the production shaft having been completed for about 1,250 ft. of its proposed final 1,650 ft. depth. In February 2014, the Arizona 1 was placed in standby due to the depletion of the economic resource. Drill stations were cut near the current shaft bottom and some 40,000 ft. of drilling, including 34,000 ft. of percussion and 6,000 ft. of core drilling, were completed from that point. The mine is located in Sections 22 and 23, T36N, R5W, Mojave County, Arizona, about 45 mi. southwest of Fredonia by unsurfaced road. A headframe, hoist, compressor, and fully-sunk shaft are in place. Haulage distance from Arizona 1 to the White Mesa mill at Blanding, Utah, is 307 mi.

The Canyon Project is a partially developed mine with: a headframe, a hoist, a compressor and a partially sunk shaft. The site is located in Sections 19 and 20, T29N, R3E, Coconino County, Arizona. The haulage distance from Canyon to the White Mesa mill at Blanding, Utah, is 325 mi.

Pinenut is a fully developed underground mine which produced 25,807 tons of ore at an average grade of 1.02% U₃O₈  containing 526,350 pounds U₃O₈ in 1989. The Pinenut Mine was placed into production by Energy Fuels in the summer of 2013 (productions since then is reported in the resource update table below and elsewhere in the text). A hoist, headframe, fully developed shaft and compressor are in place. Pinenut is located in an unsurveyed portion of T36N, R4W, Mojave County, Arizona, about 45 mi. south of Fredonia by unsurfaced road. The haulage distance from Pinenut to the White Mesa mill at Blanding, Utah, is 317 mi.

There is no infrastructure currently on the EZ property. The proposed disturbance for the EZ property will be between 20 acres and 40 acres. A series of permits and approvals will be required from the BLM, ADEQ, Mohave County and other agencies. The haulage distance from the EZ property to the White Mesa Mill at Blanding, Utah, is approximately 305 miles.

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There is no infrastructure currently on the Wate property. The proposed disturbance for the Wate property will be approximately 20 acres. The Wate Project is currently awaiting an Arizona State Land Department lease, which will confer the right to mine and ship ores and to conduct all support operations, similar to a mining permit in other jurisdictions. The haulage distance from the Wate property to the White Mesa Mill at Blanding, Utah, is approximately 390 miles.

Accessibility, Local Resources, Physiography and Infrastructure

Climate in northern Arizona is semi-arid, with cold winters and hot summers. January temperatures range from about 7° F to 57° F and July temperatures range from 52° F to 97° F. Annual precipitation, mostly in the form of rain but some snow, is about 12 inches. Vegetation on the plateaus is primarily open piñon juniper woodland and shrubs. Mining operations can be conducted on a year around basis.

The region north of the Grand Canyon is very sparsely populated. Due to the inaccessibility and low population, infrastructure is not well developed. The nearest commercial centers to the Kanab and Fredonia area are the towns of St. George and Cedar City, Utah, both approximately 88 miles to the northwest by road. The White Mesa Mill is approximately 275 miles by road from Fredonia and about 325 and 390 miles by road from the Canyon Project and Wate Project, respectively.

History

Uranium exploration and mining of breccia pipe uranium deposits started in 1951 when a geologist employed by the U.S. Geological Survey noted uranium ore on the dump of an old copper prospect on the South Rim of the Grand Canyon of Northern Arizona. The prospect was inside the Grand Canyon National Park, but on fee land that predated the park. A mining firm acquired the prospect and then mined a significant high grade uranium deposit, called the Orphan Mine. By the time mining ended in the early 1960s, 4.26 million pounds of U₃O₈ and some minor amounts of copper and silver had been produced.

After the discovery of the first deposit in the 1950s, an extensive search for other deposits was made by the government and industry, but only a few low grade prospects were found. Exploration started again in the early 1970s. In the mid-1970s, Western Nuclear Inc. (“Western Nuclear”) acquired the Hack Canyon prospect located about 25 miles north of the Grand Canyon and found high grade uranium mineralization offsetting an old shallow copper/uranium site. In the next few years, a second deposit was found approximately one mile away.

EFN acquired the Hack Canyon property from Western Nuclear in December 1980. Development started promptly, and the Hack Canyon mine was in production by the end of 1981.

The Kanab North deposit was discovered in 1981, but development did not begin until late 1984. Kanab North was fully developed in 1988 and operated until December 1990 when it was placed on standby. Production totalled about 2.8million pounds of U₃O₈ at an average grade of just over 0.50% U₃O₈. The site was placed in reclamation by the Company in late 2013.

EFN explored the Arizona 1 deposit with a total of 253 drill holes, including: 18 core holes from underground drill stations with a total footage of 6,122 feet; 17 rotary holes from surface with a total footage of 25,289 feet; and 218 long holes from underground drill stations with a total footage of 36,189 feet. Mine development of the Arizona 1 ore body began in 1990 but was suspended in 1992, with the shaft at a depth of 1,254 feet.

In February 2014, the Arizona 1 was placed on standby due to the depletion of the economic resource. Production at Arizona 1 totaled about 111,800 tons at an average grade of 0.613% U₃O₈, yielding approximately 1,371,000 lbs. of U₃O₈.

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The Canyon deposit is located on mining claims that EFN acquired in 1982. Drilling completed by EFN in 1983 identified a significant deposit. EFN drilled an additional 36 holes from May 1983 through April 1985 to delineate the uranium mineralization and to determine placement of the mine shaft and water supply well. Additional drilling of six holes was completed in 1994. Development of the site was discontinued as a result of low uranium prices.

The Pinenut Mine was developed in 1989 after 29 holes were drilled from the surface. A shaft was then sunk to 1380 feet and five development drifts were excavated. Four hundred and eighty three long holes were drilled to define the ore body and mining of a large, high grade ore zone was commenced on the lowest level. In 1991, due to dropping uranium prices, the mine was put on standby after having produced 25,807 tons of ore at an average grade of 1.02% U₃O₈ containing 526,350 pounds U₃O₈ in 1989. Since the Technical Report, mining at the Pinenut Mine re-commenced in mid-2013 and is expected to continue until the second quarter of 2015. Since 1989 a total of 76,550 tons of ore at an average grade of 0.71 U₃O₈, containing approximately 1,084,500 pounds of U₃O₈ have been produced from the mine.

The Wate Project was discovered in the mid 1980’s by Rocky Mountain Energy and contains several drill holes with + 0.50% eU₃O₈ mineralization grades and an exploration potential (historically estimated resources) of between 70,000 tons grading 0.80% eU₃O₈(1.1 million contained pounds eU₃O₈), and 146,000 tons grading 0.83% eU₃O₈ (2.4 million contained pounds eU₃O₈). Historical drilling encountered reported “ore grade” mineralization in 17 of 23 drill holes.

The EZ Complex was drilled in the 1980s by Pathfinder. Pathfinder drilled 81 holes for a total of 139,118 feet. Pathfinder entered into a joint venture with EFN and prepared mineral resource estimates for the two deposits in 1988. At the time of International Uranium Corporation’s (“IUC”) acquisition of EFN’s mining properties in 1997, the EFN/Pathfinder joint venture was terminated and control of the EZ 1 and EZ 2 projects reverted back to Pathfinder. Denison acquired the EZ 1 and EZ 2 projects from Pathfinder in 2007.

EFN identified and investigated more than 4,000 circular features in northern Arizona. About 110 of the most prospective features were explored by deep drilling, and approximately 50% of those drilled were shown to contain uranium mineralization. Ultimately, nine deposits were deemed worthy of development. Total mine production from the EFN breccia pipes from 1980 through 1991 was approximately 19.1 million pounds U₃O₈ at an average grade of just over 0.60% U₃O₈.

Most of the EFN assets were acquired by Denison’s predecessor IUC in 1997 and by the Company in June 2012 upon acquisition of the US Mining Division. Since that time, Denison and then Energy Fuels has maintained ownership of the Kanab North, Pinenut, Arizona 1, and Canyon deposits. All other EFN breccia pipe prospects were dropped by Denison. In addition to the EFN breccia pipe deposits, Denison acquired several additional breccia pipe deposits (EZ 1, EZ 2, WHAT, WHY, NOT, John, Lisa, Otto and DB 1) and one sandstone type deposit (Moonshine Springs) from Pathfinder, all of which were acquired by Energy Fuels as part of the US Mining Division. In February, 2015, the Company acquired its 50% interest in the Wate Project from VANE Minerals US, LLC.

Geological Setting

Parts of two distinct physiographic provinces are found within Arizona: the Basin and Range province in the southern and western edge of the state, and the Colorado Plateau province in most of northern and central Arizona. The Arizona Strip lies within the Colorado Plateau province.

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Surface exposures within the Arizona Strip reveal sedimentary and volcanic rocks ranging in age from upper Paleozoic to Quaternary; the area is largely underlain by Mississippian through Triassic sedimentary rocks. However, exposed within the Grand Canyon are older rocks reaching Precambrian in age.

Paleozoic sedimentary rocks of northern Arizona are host to thousands of breccia pipes. These deposits are known to extend from the Mississippian Redwall Limestone to the Triassic Chinle Formation, which makes about 4,000 feet of section. However, because of erosion and other factors, no single deposit has been observed cutting through the entire section. No deposit is known to occur above the Chinle Formation or below the Redwall Limestone.

Breccia pipes within the Arizona Strip are vertical or near vertical, circular to elliptical bodies of broken rock. Broken rock is comprised of slabs and rotated angular blocks and fragments of surrounding and stratigraphically higher formations. Surrounding the blocks and slabs making up the breccia is a matrix of fine material comprised of surrounding and overlying rock from various formations. The matrix has been cemented by silicification and calcification for the most part.

Breccia pipes are comprised of three interrelated features: a basinal or structurally shallow depression at surface (designated by some as a collapse cone); a breccia pipe which underlies the structural depression; and annular fracture rings which occur outside of, but at the margin of the pipes. Annular fracture rings are commonly, but not always, mineralized. The structural depression may range in diameter up to 0.5 miles or more, whereas breccia pipe diameters range up to about 600 feet; the normal range is 200 feet to 300 feet.

Mineralized breccia pipes found to date appear to occur in clusters or trends. Spacing between breccia pipes ranges from hundreds of feet within a cluster to several miles within a trend. Pipe location may have been controlled by deep seated faults, but karstification of the Redwall Limestone in Mississippian and Permian times is considered to have initiated formation of the numerous and widespread breccia pipes in the region.

Arizona 1, in common with all other breccia pipes within the Arizona Strip, was believed by EFN to have had its origin as a solution collapse of the Redwall Limestone. This collapse worked its way upward through the overlying formations where the throat diameter is on the order of 200 feet to 300 feet. Vertical displacement in the throat averages about 175 feet. Uranium mineralization is distributed irregularly over a depth interval of approximately 650 feet mainly at the level of the Hermit Shale formation to a maximum depth of about 1,400 feet from surface.

At the Canyon deposit, the surface expression of the pipe is a broad shallow depression in the Permian Kaibab Formation. The pipe is essentially vertical with an average diameter of less than 200 feet, but it is considerably narrower through the Coconino and Hermit horizons (80 feet). The cross sectional area is probably between 20,000 and 25,000 square feet. The pipe extends for at least 2,300 feet from the Toroweap limestone to the upper Redwall horizons. The ultimate depth of the deposit is unknown. Mineralization extends vertically over about 1,700 vertical feet, with ore grade mineralization found mainly in the Coconino, Hermit, and Esplanade horizons and at the margins of the pipe in fracture zones. Sulphide zones are found scattered throughout the pipe but are especially concentrated (sulphide cap) near the Toroweap Coconino contact, where the cap averages 20 feet thick and consists of pyrite and bravoite, an iron-nickel sulphide. The ore assemblage consists of uranium-pyrite-hematite with massive copper sulphide mineralization common in and near the ore zone. The strongest mineralization appears to occur in the lower Hermit-upper Esplanade horizons in an annular fracture zone.

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Potentially Economic grade intercepts at the Pinenut deposit occur between depths of 880 ft to 1,370 ft. The entire vertical extent of the potential mine, when complete, will be less than 600 ft. The uppermost part of the deposit consists of several isolated ore pods, some of which may be associated with ring fractures. Other significant yet less prolific mineralization occurs within the pipe structure proper, but is generally isolated and sporadic down to 900 ft. The area of the widest mineralization is found at 1,000 ft. and measures approximately 262 ft. along its major axis and 152 ft. along its minor axis.

Below 900 ft. and to the bottom of the mineralization, the central part of the mineralized zone is consistent. At its widest, it measures 220 ft. in long dimension and 140 ft. in short dimension. This main section tapers down to dimensions of 100 ft. by 40 ft. at an elevation of approximately 1,120 ft.

At the Wate Project, Kaibab Limestone crops out at the surface throughout the breccia pipe. It is overlain by occasional, small outcrops of the maroon redbeds of the Moenkopi Formation, and where it has subsided into caved sinkholes or breccia pipes. Drill logs describe both surface formations and deeper formations.

Uranium mineralization in the EZ 1 and EZ 2 deposits is located primarily in the Coconino and Hermit horizons. Uranium mineralization in EZ1 occurs at two distinct vertical intervals. The Upper zone is contained within a 400-foot interval 1,170 to 1,560 feet below surface and at its widest point has a diameter of approximately 183 feet. The Lower zone is at a depth of 1,812 to 2,143 feet and at its widest point has a diameter of 45 feet. At EZ2, the mineralization occurs in three distinct zones: an Upper, Middle and Lower zone. The larger Upper zone is mushroom shaped and is approximately 300 feet wide at its widest point and occurs from 952 feet to 1,153 feet below surface. The Middle zone is made up of two central deposits surrounded by multiple ring deposits. The Middle zone array of deposits occurs between depths of 1,194 to 1,356 feet. The Lower zone also is a mushroom shaped deposit from 1,417 to 1,512 feet.

Exploration

Denison did not carry out any exploration on the properties since the acquisitions in 1997 and 2007, respectively, nor has the Company to date. Some exploration was conducted on the Wate Project in the mid 1980’s and mid 2000’s. Please see “History” above for information on historic drill programs.

Exploration for breccia pipes in northern Arizona typically begins with a search for surface expressions of circular features. This search was aided by geologic mapping, Landsat aerial photography, thermal infrared imagery, geochemical testing, and certain geophysical methods such as resistivity, Very Low Frequency (VLF), and time domain electromagnetics. Other techniques tested included: geobotany, microbiology, and biogeochemistry. All of these methods were utilized to identify surface expressions of breccia pipes. The key element of the process was to zero in on the throat of the pipe as a locus for drilling from the surface since the throat is usually associated directly with the center of the collapse.

Mineralization

In the breccia pipe deposits, uranium occurs largely as blebs, streaks, small veins, and fine disseminations of uraninite/pitchblende. Mineralization is mainly confined to matrix material, but may extend into clasts and larger breccia fragments, particularly where these fragments are of Coconino sandstone. An extensive suite of anomalous elements has also been reported, including: silver, arsenic, barium, cadmium, cobalt, chromium, cesium, copper, mercury, molybdenum, nickel, lead, antimony, selenium, strontium, vanadium, and zinc. In addition, many of the rare earth elements are consistently enriched in uranium-mineralized samples. Within some pipes copper occurs in sufficient concentrations to be economic. Silver is almost always anomalously high and some of the pipes carry potentially economic grades. Within many pipes, there is a definite mineralogical zoning in and around the uranium mineralization.

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The Pipes are surrounded by bleached zones where unaltered red sediments contrast sharply with grey-green bleached material. Age dating and disequilibrium determinations indicate that remobilization of uranium has occurred. Uranium concentrations in the upper levels of a pipe tend to be in equilibrium. With depth, disequilibrium in the deposits increases in favour of the chemical assays.

Uranium mineralization within Arizona 1 extends significantly in the vertical dimension. Continuous drill hole intersections of several tens of feet with grades exceeding 1.00% eU₃O₈ or more are not uncommon. The maximum continuous surface drill hole intersection was 92.5 feet at an average grade of 1.55% eU₃O₈. On average, the 17 drill holes from surface which had intersected uranium mineralization recorded 75 feet of 0.62% eU₃O₈.

Uranium mineralization at the Pinenut deposit includes ore bearing intercepts, the uppermost of which is at an elevation of 4563 ft. above sea level (depth from surface = 879 ft.); and the lowermost of which occurs at 4074 ft. (1,372 ft. depth). The uppermost part of the mine consists of several isolated ore bodies which may be associated with a “ring fracture” system. Other, less prolific mineralized material occurs within the pipe body proper but remains isolated and sporadic down to elevation 4440 ft. Below 4440 ft. elevation and to the bottom of the mineralization the central part of the ore body remains consistent. At its widest it measures 220 ft. in long dimension and 140 ft. in short dimension. This main section tapers slowly down to dimensions 100 ft. by 40 ft. at an elevation of approximately 4220 ft., below which historical mining has removed all ore grade material.

Uranium mineralization at Canyon is concentrated in three stratigraphic levels: Coconino, Hermit/Esplanade, and a lower zone. Mineralization extends vertically from a depth of 600 feet to over 2,100 feet. Intercepts range widely up to several tens of feet with grades in excess of 1.00% eU₃O₈.Twenty-two drill holes from surface encountered uranium mineralization averaging 100 feet of 0.45% eU₃O₈.

Uranium mineralization at the Wate Project shows nearly vertical circular to elliptical column of brecciated rock that has a slight plunge to the north with a diameter of 170 ft. at 1,200 ft. in depth, narrows to 60 ft. in diameter at 1,600 ft. depth, and expands to 160 ft. diameter at 1,700 ft. depth and below. The Hermit shale/Esplanade sandstone contact is at about 1,500 ft. in depth, which is approximately the location of the best thickness and grade of mineralization. The average grade for uranium mineralization is +0.80% eU₃O₈.

Uranium mineralization in EZ1 occurs at two distinct vertical intervals. The Upper zone is contained within a 400-foot interval 1,170 to 1,560 feet below surface and at its widest point has a diameter of approximately 183 feet. The Lower zone is at a depth of 1,812 to 2,143 feet and at its widest point has a diameter of 45 feet. At EZ2, the mineralization occurs in three distinct zones: an Upper, Middle and Lower zone. The larger Upper zone is mushroom shaped and is approximately 300 feet wide at its widest point and occurs from 952 feet to 1,153 feet below surface. The Middle zone is made up of two central deposits surrounded by multiple ring deposits. The Middle zone array of deposits occurs between depths of 1,194 to 1,356 feet. The Lower zone also is a mushroom shaped deposit from 1,417 to 1,512 feet.

Drilling

Shallow drilling was often conducted to locate the center of the collapse feature as a guide to the throat of the underlying breccia pipe. The basic tool for exploring breccia pipes in northern Arizona is deep rotary drilling supplemented by core drilling, to a depth of 2,000 feet or more from surface. Prospective pipes were usually first tested with three drill holes. If no mineralization was present, the effort was abandoned.

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Exploration drilling of breccia pipes is a difficult process. Substantial depths, approximately 2,000 feet, small targets, approximately 200 feet in diameter, and non-homogeneous rock formations combine to limit the accuracy of the drilling process. The presence of cavernous and brecciated sediments near the present land surface can result in loss of circulation of drilling fluid; as a result, much drilling is conducted “blind.” Periodic “spot cores” are taken to determine whether or not holes are within the target structure or have drifted away from the pipe. Indeed, most pipes cannot be completely drilled out from the surface due to deviation from desired targets. All drill holes are surveyed for deviation and logged with gamma logging equipment.

If surface drilling provides sufficient encouragement that a mine can be developed, on that basis a vertical shaft is sunk or drilled to its ultimate depth and underground drill stations are established at various levels to provide platforms for further exploration and delineation drilling. Drilling from underground stations typically utilizes large bore percussion drills. The resulting drill holes, out to as much as approximately 300 feet or so, are then gamma logged and surveyed as a supplement to surface drilling.

Energy Fuels’ drilling activities at the Arizona 1 and Pinenut mines have focused on underground drilling. No recent drilling has occurred at the Canyon or EZ properties. A total of 23 drillholes were drilled at the Wate Project in the mid 1980’s, to depths up to 2,000 ft. Eleven holes were drilled in the mid 2000’s.

EFN explored the Arizona 1 pipe with a total of 253 drill holes, including: 18 core holes from underground drill stations with a total footage of 6,122 ft.; 17 rotary holes from surface with a total footage of 25,289 ft., and 218 long holes from underground drill stations with a total footage of 36,189 ft. Thus, total drill footage drilled at Arizona 1 amounts to about 67,600 ft. Mine development of the Arizona 1 deposit began in 1990 but was suspended in 1992, with the shaft at a depth of 1,254 ft. Denison recommenced development work on the Arizona 1 deposit in April 2007 and restarted mining operations in 2009 when the air quality permit was received. The Canyon deposit is located on mining claims that EFN acquired from Gulf Mineral Resources Company (“Gulf”) in 1982. Gulf drilled eight exploration holes at the site from 1978 through May 1982 but found only low-grade uranium in this pipe. Additional drilling completed by EFN in 1983 identified a major deposit. EFN drilled a further 36 holes from May 1983 through April 1985 to delineate the uranium mineralization and to determine placement of the mine shaft and water supply well. Additional drilling of six holes was completed in 1994. In the 1980s, Pathfinder Mines Corporation (Pathfinder) explored the EZ1 and EZ2 deposits. Pathfinder drill-tested the EZ1 pipe with 34 rotary holes for a total of 63,100 ft (19,235 m) and the EZ2 pipe with 47 rotary holes for a total of 76,018 ft (23,169 m). Energy Fuels has not drilled any holes on the two EZ deposits since it acquired the property.

Sampling Method and Approach

All the historical drill holes on Energy Fuels’ Arizona Strip breccia pipe properties were gamma logged and surveyed for deviation. These data provide the basic building blocks from which quantities of mineralized material are estimated. Core holes were drilled to supplement this data, to provide information for determination of disequilibrium, and to accommodate material for metallurgical testing. This process was consistent with industry standards at the time and the work carried out by EFN is judged by RPA to have been of suitable quality.

All of the basic data for calculation of quantities and grades of mineralized material for the Arizona 1, Pinenut, Canyon, Wate and EZ1 and EZ2 deposits was derived directly by gamma log interpretation.

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Numerous checks were completed on this data by means of chemical assays, closed-can assays, and various beta gamma analyses.

RPA noted in the two technical reports that all gamma log grades listed and discussed utilize an eU₃O₈ characterization. SRK Consulting noted in its technical report for the Wate Project that gamma log grades listed and discussed utilize an eU₃O₈ characterization. The “e” preceding U₃O₈ indicates that the respective grades are “equivalent” U₃O₈ grades based on an assumed direct correlation between gamma-ray intensity, as measured by the gamma logging tools, and uranium content. Such is not always the case and the correlation must always be checked by chemical and radiometric assays of core samples or by direct neutron activation means. EFN performed extensive checks on core and the available results seem to confirm the general correlation, but detailed test results are not available for review.

Industry standards for uranium exploration in the western United States are based almost completely on the gamma logging process with a number of checks, including: (i) frequent calibration of logging tools, (ii) core drilling and chemical analysis of core as a check on gamma log values and the potential for disequilibrium; (iii) possible closed-can analysis as an adjunct to chemical assays; and (iv) possible gamma logging by different tools and/or companies.

Security of Samples

There are no specific provisions for security of data or samples other than those employed for confidentiality. The previous property owners are deemed to have met or exceeded industry standards for the exploration process.

Mineral Resource and Mineral Reserve Estimates

Initial Mineral Resource estimates were prepared for the Arizona 1, Canyon, Pinenut and EZ Complex deposits using historical drill hole data provided by Energy Fuels. RPA interpreted a set of cross sections and plan views to construct 3-D grade-shell wireframe models at 0.2% eU₃O₈. Variogram parameters were interpreted and eU₃O₈ grades were estimated in the block model using kriging. The grade-shell wireframes were used to constrain the grade interpolation. All blocks within the 0.2% eU₃O₈ grade-shellwireframes, regardless of grade, were included in the Mineral Resource estimate.

Mineral Resource estimates were prepared for the Wate Project using drill hole data provided to SRK Consulting by VANE Minerals (US) LLC, the Company’s predecessor in the Wate Project. SRK Consulting created wireframe shapes of mineralization using all drillhole data at a cutoff of 0.15%eU₃O₈.

There are no Mineral Reserves estimated at any of the six deposits at this time. Due to difficulties encountered in validating historical data, all Mineral Resources were classified as Inferred despite dense drilling from underground in some areas. In June 2012, RPA estimated the Inferred Mineral Resources for Arizona 1, Canyon, Pinenut, EZ-1 and EZ-2, as shown in the table below. The current resources following mining at Arizona 1 and Pinenut after the June 2012 RPA estimate is shown in the Mineral Resource Update table in the next subsection. In March 2015 SRK Consulting estimated the Inferred Mineral Resources for Wate shown below.

Arizona Strip Inferred Mineral Resource Estimates ⁽¹⁾⁽⁴⁾

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Notes:

The Mineral Resource estimates for the EZ1, and EZ2 mines may be materially affected by the mineral withdrawal described in “Energy Fuels’ Business – Government Regulations – Land Tenure” below. In the event the EZ1 and EZ2, properties are found to not have valid, existing rights, the Mineral Resource estimates for those properties may be reduced to zero.

In its feasibility studies of the various Arizona Strip breccia pipes compiled during the 1980s and 1990s, EFN typically used a cut-off grade of 0.15% U₃O₈. A reasonable cut-off grade for long term sustainable market conditions would be approximately 0.20% U₃O₈. This cut-off grade was applied by RPA to the Arizona 1, Canyon, Pinenut, EZ1 and EZ2 breccia pipe deposits. RPA applied a tonnage factor of 13 ft.3 which had been used in the historical resources and substantiated by Hack Canyon mines’ production data. SRK Consulting used a cut-off grade of 0.15% eU₃O₈ for the Wate Project technical report.

Mineral Resource and Reserve Update

Since the Mineral Resource estimates were prepared by RPA, the Mineral Resources have been updated for the Pinenut and Canyon operations by the Company. Furthermore, at Arizona 1, mining operations have been underway since late 2009. In February 2014, the Arizona 1 Mine was placed on standby due to the depletion of the economic resources. The Pinenut was in full operation throughout 2014 and is expected to continue to produce through the second quarter of 2015. As a result of the updates and the mining operations, the following illustrates the current Mineral Resource estimates for the Arizona Strip properties.

Arizona Strip Inferred Mineral Resource Estimate Update

Notes:

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Mining Operations

The Discussion provided here by the Company has been updated since the Technical Report

The Arizona 1 and Pinenut deposits are mined using a combination of long hole and shrinkage stoping as described in Section 6 “History” contained in the Arizona Strip Technical Report. The Pinenut mine is projected to operate through the 2^nd quarter of 2015. The Arizona 1 Mine is now on care and maintenance.

The Pinenut Mine is a producing underground uranium mine. The Pinenut Mine was partially developed in the late 1980’s, and a limited amount of selective mining was conducted. A shaft was sunk to a depth of 1,350 feet and a high grade pod was mined in late summer 1988, yielding about 25,500 tons grading 1.03% U₃O₈ containing about 526,000 pounds. Following extraction of the high grade pod, the mine was placed on standby in 1989. In November 2010, a production decision was made on the Pinenut Mine. Expansion of the storm water storage pond and rehabilitation of the surface facilities were completed in 2011. Following the filing of the Technical Report, first ore production resumed in June 2013. From the resumption of mining to the end of calendar year 2014, production amounted to about 50,750 tons at an average grade of 0.55% U₃O₈. Uranium production is expected to total approximately 268,000 additional pounds U₃O₈ by the time the mine is expected to recover all economic resources; projected to be in the 2nd quarter 2015.

The Canyon Project is a permitted and partially-developed uranium mine. Surface facilities were constructed in 1986, and the shaft was collared and sunk to approximately 50 feet, prior to the mine being placed on standby in 1992. After the Technical Report was written, Energy Fuels resumed development of the Canyon Project in 2013. Activities included refurbishment of the evaporation pond and recertification of site mechanical and electrical installations. Shaft sinking begin in February 2013, with a total of 224 feet of shaft advanced during FY 2013. The development was stopped in November 2013 due to the continuing low market price of uranium. On February 6, 2015, the Company announced plans to restart mining activities at Canyon. To complete the mine, the Company expects to sink an additional 1,200 feet of shaft, install a ventilation shaft, and complete underground development.

The Kanab North mine is in reclamation and a closure plan has been approved for reclamation of the mine site. Reclamation is currently underway.

There are no infrastructure or mining operations in place at the Wate Project, EZ Complex or other of Energy Fuels Arizona Strip properties.

Permitting

Prior to 2009, the Arizona 1 Mine had received all permits necessary to mine, with the exception of an air quality permit. The air quality permit was issued by the Arizona Department of Environmental Quality (“ADEQ”) after a period of public comment, in September 2009, and renewed in 2014. The Arizona 1 Mine has an Individual Aquifer Protection Permit with ADEQ and an approved PO with the BLM. A National Emissions Standards for Hazardous Air Pollutants (NESHAPs) application for radon emissions was submitted to the EPA in April 2013 when it became apparent that the life of mine ore production would exceed the exemption threshold of 100,000 tons. That application was approved by the EPA on July 1, 2013.

The Pinenut Mine and Canyon Project are located on public lands managed by the BLM and USFS, respectively. Both mines have approved POs with these agencies. In September 2009, the groundwater General permits were received for the stormwater storage ponds for both mines. Air Quality Permits for the Pinenut and Canyon projects were issued by ADEQ in March 2011. EPA’s approval of the Pinenut Mine NESHAP’s application for radon emissions was obtained in April 2011. Although the Canyon Mine is estimated to contain 82,800 tons of ore, which is less than the 100,000 tons of ore required to trigger the need for a NESHAP’s approval, the Company nevertheless plans to voluntarily submit an application for NESHAP’s approval for the Canyon Mine in the first quarter of 2015, in order to be prepared in the event the total tons of ore over the life of the mine were to exceed 100,000 tons.

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The Wate Project is currently awaiting an Arizona State Land Department lease, which will confer the right to mine and ship ores and to conduct all support operations, similar to a mining permit in other jurisdictions. In addition to the state lease, the Company expects to move forward to acquire additional state aquifer protection and air quality permits.

The BLM had previously accepted the PO for the EZ1/EZ2 deposits as complete; however, the PO is currently being revised to reflect a new mining plan in which the EZ1 deposit will be mined first rather than concurrently with the EZ2 deposit. The revised PO will need to be determined complete by the BLM and a Mineral Examination will need to be completed by the BLM for the project before an Environmental Impact Statement (“EIS”) can be initiated.

In July 2009, the BLM issued a Notice of Proposed Withdrawal (“2009 Notice”). See “Government Regulation – Land Tenure – United States” below. In January 2012, the Secretary of the Interior implemented the withdrawal of approximately one million acres of public land in the Arizona Strip from mineral entry proposed in the 2009 Notice, subject to valid existing rights. To confirm the rights to proceed with development and mining on its existing valid rights, the USFS completed a Mineral Examination for the Canyon Project, which confirmed that the mineral claims underlying the Canyon Project are valid existing rights. Mineral examinations have not been required by BLM on the Arizona 1 and Pinenut mines, as they had previously approved Plans of Operations. Mineral examinations need to be completed by the BLM for the EZ Complex and other Company projects within the withdrawal area, prior to further permitting on those projects. The Wate Project is not located within the withdrawal area, and as a result, will not require a mineral examination and is not otherwise impacted by the withdrawal.

Metallurgical Testing

Test work completed on samples from the Canyon pipe during 1984 indicated 99% leach extraction with 25 g/l of free acid at a pH of 0.8. Leach retention time was 48 hours at 70oC with a sodium chlorate addition of 16 pounds per ton.

Recovery Methods

All mineralized material produced from the Arizona 1, Pinenut, Canyon, Wate, and EZ deposits on the Arizona Strip will be processed at Energy Fuels’ White Mesa mill near Blanding, southeastern Utah. The White Mesa mill is located six miles south of Blanding. Due to uranium market variability, the Mill has frequently operated on a campaign basis in order to provide intervals for stockpiling sufficient ore to operate the mill at capacity. Treatment of higher grade ores from the Arizona Strip required certain minor modification to the leaching circuit and is at a rate somewhat lower than nominal capacity. The basic mill process is a sulfuric acid leach with solvent extraction recovery of uranium and vanadium. 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 acid leach. The first, or pre-leach, circuit, consisting of two mechanically agitated tanks, utilizes pregnant (high-grade) strong acid solution from the countercurrent decantation (“CCD”) circuit which serves both to initiate the leaching process and to neutralize excess acid. The pre-leach circuit discharges to a 125-ft. thickener where the underflow solids are pumped to the second stage leach and the overflow solution is pumped to clarification, filtration, and solvent extraction circuits. A hot strong acid leach is used in the second stage leach unit, which consists of seven mechanically agitated tanks having a retention time of 24 hours. Free acid is controlled at 70 grams per litre and the temperature is maintained at 75°C. Leached pulp is washed and thickened in the CCD circuit, which consists of eight high capacity thickeners. Underflow from the final thickener at 50% solids is discharged to the tailings area. Overflow from the first thickener (pregnant solution) is returned to the pre-leach tanks. The solvent extraction (SX) circuit consists of four extraction stages in which uranium in pregnant solution is transferred to the organic phase, a mixture consisting of 2.5% amine, 2.5% isodeconal, and 95% kerosene. Loaded organic is pumped to six stages of stripping by a 1.5 molar sodium chloride solution, and thence to a continuous ammonia precipitation circuit. Precipitated uranium is settled, thickened, centrifuged, and dried at 1,200°F. The final product at about 95% U₃O₈ is packed into 55-gallon drums for shipment.

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Current and Contemplated Exploration and Development Activities

Energy Fuels plans to continue mining at the Pinenut mine until mid-2015, at which time the mine is expected to have recovered all economic mineralized material. No additional exploration activities are expected at this project.

At the Canyon Project, preparations have begun to restart active mining operations at the Canyon mine. Surface development at the Canon mine, including a headframe, evaporation pond, hoist, environmental controls, and an office/maintenance facility is in place, and approximately 280 feet of shaft has been sunk. To complete the mine, the Company expects to sink an additional 1,200 feet of shaft, install a ventilation shaft, and complete underground development. The Canyon Project is estimated to contain 1.63 million pounds of uranium with an average grade of 0.98% eU₃O₈. In November 2013, the Company entered into a stipulation agreement, which was extended in November 2014, under which the Company has agreed to keep shaft sinking operations on standby until the earlier of the date the District Court issues a final appealable order on the merits of the Plaintiffs’ claims, or April 15, 2015, and the Plaintiffs have agreed to stay their appeal and Emergency Motions. See Legal Proceeding and Regulatory Actions section below for further detail on the Canyon Project litigation.

At the Arizona 1 Mine, ore production has ceased due to the depletion of the economic resource. The Company completed additional drilling to determine if additional resources remain on the property. Low-grade resources are known to exist at depths below the deepest mine workings, but are considered uneconomic under current market conditions.

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The Daneros Mine

Unless otherwise stated, the following description of the Daneros Mine is derived from a technical report titled “The Daneros Mine Project, San Juan County, Utah, U.S.A.”, dated July 18, 2012, prepared by Douglas C. Peters, Certified Professional Geologist, of Peters Geosciences, Golden, Colorado in accordance with NI 43-101 (the “Daneros Mine Technical Report”). The author of the Daneros Mine Technical Report is a “qualified person” and is “independent” of the Company within the meaning of NI 43-101. The Daneros Mine Technical Report is available on SEDAR at www.sedar.com.

Project Location and Description

The property is in the Red Canyon portion of the White Canyon District. EFI holds a 100% interest in various groups of mining claims, including Daneros and adjoining historical mine sites which can be developed in conjunction with the Daneros project.

The project comprises 219 unpatented mining claims located on federal land administered by the U.S. Bureau of Land Management (BLM) in San Juan County, Utah, totaling 4,300 acres. (Since the Technical Report was written, EFI has reduced the property position around the periphery, without affecting the Mineral Resource as described in the Technical Report. EFI added a Utah State mineral lease of 640 acres in Section 32, T36S, R16E. The property now consists of 141 unpatented mining claims plus the State lease totaling approximately 3,450 acres.). The Daneros Mine is located 4.8 miles from Fry Canyon, Utah and is accessed via Radium King Road for approximately 14 miles, which is maintained by San Juan County. The property lies in Sections 1, (11, and 12 were dropped in 2014) T37S, R15E, SLM, Sections (4 dropped in 2014), 5, 6, 7, 8, (10, 11, 15, 17 dropped in 2014), and 18, T37S, R16E. (and Section 31 and 33, T36S, R16E dropped in 2014). The mining claims are maintained by making annual payments of US$140 per claim to BLM due September 1st each year (BLM increase the fee to $155/claim in 2014) and a nominal filing fee at the county level, within 30 days of the BLM filing, of about $10 per claim. Work expenditures are not required. Holders of unpatented mining claims are generally granted surface access to conduct mineral exploration and mining activities. However, additional mine permits and plans are generally required prior to conducting exploration or mining activities on such claims. EFI’s holdings in the White Canyon District include the actively producing Daneros Mine and adjoining and nearby exploration properties.

A number of the claims bear production royalties. Claims hosting Daneros deposit are subject to royalties ranging between 15% of "market value" of the ore and 2.5% of gross proceeds as described in further detail in the Daneros Mine Technical report. Other claims are owned by EFI without encumbrances. The State lease added since the Technical Report carries the standard Utah royalty of 8% on uranium and 4% on vanadium.

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Accessibility, Climate, Local Resources, Infrastructure and Physiography

The Daneros Mine is located 4.8 miles from Fry Canyon, Utah and is accessed via Radium King Road for approximately 14 miles, which is maintained by San Juan County. The mine facilities consist of a modular trailer for the mine office, two reinforced mine portals, a generator building, and an equipment storage and maintenance building. Two ventilation shafts daylight on the topographic bench above the mine. The bench above the mine, where past drilling also had been conducted, is accessed by a dirt road connecting to the mine access road south of the mine portal area. The ore shipping distance from Daneros to the Company’s White Mesa Mill is 65 miles along county roads and state highways.

The semi-arid climate of the White Canyon area is characterized by large daily and yearly temperature ranges and total annual precipitation of approximately 10 to 16 inches, mostly as sporadic, intense summer thunderstorms typical of the Colorado Plateau region. Winter snowfall is moderate and rarely stays on the ground very long. Weather conditions pose no impediment to year round work on the property.

Apart from previous mining activities, the only commercial land use purposes are cattle grazing and tourism activities such as hiking and mountain biking. Due to a shortage of water and thin soils, much of the White Canyon area is unsuitable for agriculture.

The project area is remotely located relative to water and power infrastructure. Housing for mine workers is mostly in camp trailers in Fry Canyon or they commute from Blanding, Utah 65-miles to the east or farther. Blanding is a town large enough to host regional industrial activities including stores and supply houses of sufficient size and inventory to meet most of the needs of an operation the size of the Daneros mine.

The project area is located along a north-south trending canyon which is a tributary to Red Canyon, also known as Bullseye Canyon. The Red Canyon drainage flows westerly for approximately 25 miles to the Colorado River where it joins Lake Powell at the head of Good Hope Bay. The mine portal area comprises steeply sloping, rocky ground and scree along the eastern slope of Bullseye Canyon. Very steep to vertical, and at times overhanging, cliffs 400 feet high rise from the slope about 250 feet above the portal.

Vegetation in the project area consists of sagebrush, juniper and piñon in the hills and slopes, while desert grasses, forbs, and shrubs are evident within the valley floors and on the mesa tops. Elevations in the region range from about 5,300 feet at the Fry Canyon townsite to over 7,000 feet on the surrounding mesa tops. The mine portal is at about 5,750 feet above sea level.

Sufficient surface rights are in place for contemplated mining operations and waste storage. Since no milling activities are contemplated on the project, no areas are required for tailings storage, heap leach pads, or processing plant sites.

History

The White Canyon mining district has a long history of exploration and mining. From 1949–1987 production from the district was 2,259,822 tons at an average grade of 0.24% U₃O₈ for a total of 11,069,032 lbs. placing it second, behind Lisbon Valley, for uranium production from the Chinle Formation on the Colorado Plateau.

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The properties in the area remained idle until 1946. From 1948 until 1951, White Canyon and the nearby Red Canyon and Deer Flat areas were subject to intense exploration. The AEC ore procurement program ended on December 31, 1970 and during the early 1970s minimum production was recorded from the district. Production from the district started picking up again by 1974 when the demand for uranium picked up due to nuclear power generation. Exploration and production once again increased in the White Canyon District. In 1974, Utah Power and Light Company (“UP&L”) began to acquire properties in the White Canyon District, which included 100% interest in the Spook-Bullseye property and 60% interest in the Lark-Royal property both located near the Daneros property in Red Canyon. Between 1975 and 1985, Utah Power & Light conducted several phases of drilling leading to definition of the Lark, Royal, and Bullseye deposits near the modern day Daneros Mine. UP&L never started mining operations in the White Canyon District due to the collapse of the uranium price by 1982. By 1987 the last mines in the White Canyon district closed due to declining economics, socio-political factors and competition from lower cost producers. Following 1987, the properties were idle and little or no exploration activity took place in the White Canyon District. In 1993 UP&L dropped their mining claims in the White Canyon District. In October 1993, Eugene and Merwin Shumway staked the Daneros claims that covered the deposits UP&L had discovered. Eugene and Merwin Shumway quitclaimed their claims to predecessors of White Canyon Uranium (WCU), Wilene and Mike Shumway, Terry Leach, and James Lammert in March, 1994. No exploration or development took place between 1994 and 2005. From 2005 to 2007, these predecessors of WCU began acquiring properties with known historic mineral deposits in the White Canyon District. In 2007, Utah Commodities Pty, Ltd. who later changed their name to White Canyon Uranium Limited, which operates in the United States through its wholly owned subsidiary Utah Energy Corporation, acquired 100% interest of the Daneros claims. In December 2008, White Canyon purchased 33 claims, known as the Lark-Royal Project, an extension of the Daneros Project, from Uranium One. The Daneros Mine was developed and placed into active production by Utah Energy Corporation.

WCU gathered the necessary environmental data and submitted applications for approvals to open an underground mine at Daneros. A Plan of Operation (PO) was submitted to the BLM and was approved in May, 2009, following which UEC commenced active mine development, including driving a decline into the main deposit at Daneros. The first loads of ore from Daneros were delivered to White Mesa Mill in December, 2009, then operated by Denison Mines. In January 2010, Denison entered into a toll milling agreement with UEC, which was then a wholly-owned subsidiary of WCUL. See “Energy Fuels’ Business – Operations – Ore Purchase and Toll Milling” above.

In 2011, Denison acquired all of the issued and outstanding shares of WCUL. In June 2012, Energy Fuels acquired all of the issued and outstanding shares of WCUL as part of its acquisition of the US Mining Division, including the Daneros Mine and WCUL’s subsidiary UEC (which is now called EFR White Canyon Corp.) keeping the mine in operation using the same contractors (until placing it on standby in October 2012 after the Technical Report was written. Production by Denison and EFI from 2010 through 2012 was approximately 123,000 tons at an average grade of 0.288% U₃O₈ containing about 708,000 lbs.)

Geological Setting

Major uranium deposits of the east-central Colorado Plateau District occur principally in two fluvial sandstone sequences. The older is located at or near the base of the Upper Triassic Chinle Formation and the other occurs in the Late Jurassic Salt Wash Member of the Morrison Formation. The main uranium-bearing unit at the Daneros Mine and throughout the White Canyon district is the fluvial Shinarump Member, a basal, sandstone-conglomerate sequence deposited in a complex stream system which unconformably overlies and locally scours into oxidized sedimentary units of the Moenkopi Formation.

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The Shinarump Member consists of predominantly trough-crossbedded, coarse-grained sandstone and minor gray, carbonaceous mudstone and is interpreted as a valley-fill sequence overlain by deposits of a braided stream system. Uranium mineralization appears to be related to low-energy depositional environments in that uranium is localized in fluvial sandstones that lie beneath organic-rich lacustrine-marsh mudstones and carbonaceous delta-front sediments. The reducing environment preserved in these facies played an important role in the localization of uranium.

Uranium deposits consist of closely-spaced, lenticular ore pods which are generally concordant with bedding in paleochannel sediments. Single ore pods range from a few feet to a few hundred feet in length and from less than one to more than 10 feet in thickness. Deposits range in size from a few tons to more than 600,000 tons. The Shinarump deposits generally have low vanadium content, and are therefore not processed for vanadium recovery.

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 fine-grained 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. Historical production from the White Canyon District exceeds 11 million pounds U₃O_8.

Exploration

Exploration for uranium has been going on in the White Canyon area since the late 1940s. Prospectors used Geiger counters to investigate outcrops of the Shinarump Sandstone. Several macroscopic guides to exploration were channel “scouring”, conglomerate pebble type and carbon content; all characteristic of the Shinarump Ss. Where the bench and slopes above the Shinarump were accessible, percussion, core, and rotary drilling were used to explore for and define channels that weren’t exposed in the outcrop. Access routes were constructed to the top of some mesas where deeper rotary drilling was used to access the Shinarump at depth. The history of exploration is closely tied to the AEC buying program, opening and closing of the several processing facilities in the region, and the fluctuation of the price of uranium.

Information on hand regarding the uranium assets of White Canyon Exploration indicated that the Daneros project had been subject to extensive shallow drilling for uranium by UP&L. White Canyon initiated confirmation drilling at its Daneros project in June, 2007. Based on the success of this initial drilling, 38 more holes were drilled in 2008, which provided the basis for mineral resource estimates relied upon by White Canyon to commence mine development work at Daneros.

Mineralization

Uraninite (pitchblende) is by far the dominant primary uranium mineral in the Shinarump deposits. It occurs as distinct grains, fine-grained coatings on and pore-fillings between detrital quartz grains, partial replacement of feldspar grains, and as replacement in carbonized wood and other remains of organic matter. Metallic sulfide minerals are often abundant. Where secondary oxidation has occurred, minor amounts of uranyl carbonates, sulfates, and phosphates are found. The source of the uranium is not well established. Overlying shaley units of the Chinle contain clays derived from volcanic ash that is uraniferous. The source area of the arkosic sediments was also a uranium-rich province.

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Drilling

In the early 1950s, the US Atomic Energy Commission conducted exploratory drilling in the White Canyon area resulting in a number of promising uranium discoveries. The area in and around Bullseye Canyon, where Daneros is located, has been a target of this exploration drilling since that time. Between 1975 and 1985 Utah Power & Light (“UP&L”) explored within and around Bullseye Canyon area resulting in a number of promising uranium discoveries. The area in and around Bullseye Canyon, where Daneros is located, has been a target of this exploration drilling since that time. Also during the AEC exploration programs, companies were encouraged to mine exploration drifts along promising geologic trends or channels. As part of this exploration drifting, a company would drill “exploration long-holes” underground, to better define a chosen mineralized zone. Several of these prospects around the EFI property were drilled in this manner. The Spook Prospect, the Bullseye Prospect and the Cove (Lark) Prospect were all mined and drilled in this manner along the Cairns Channel (Texas Zinc and Minerals Map of 1961). Between 1975 and 1985 Utah Power & Light (UP&L) explored within and around Bullseye Canyon. UP&L drilled 595 diamond drill holes with an average depth of 510 feet and, following industry standard procedures, logged all holes using down-hole geophysical (gamma) probes to identify radioactive horizons. Anomalous horizons were sampled and analyzed for uranium. WCU began drilling programs in Bullseye Canyon during 2007. The first program drilled 8 holes within the five Daneros claims. A second program, in 2008 drilled 16 diamond drill holes and 1 rotary drill hole. Finally, a third program, also in 2008, drilled 11 diamond drill holes and 9 rotary drill holes.

Energy Fuels received an electronic database from WCUL containing both the results of their recent drilling programs (Daneros holes) as well as a spread-sheet containing name, location and interval grade data of the historic UP&L data. AutoCAD Civil 3D was then used to convert the drill hole collars of the historic drill holes to the current coordinate system and compared the results to the current survey of several historic drill hole collars. After slight adjustments for rotation between the two state plane coordinate systems, it was found that the converted drill hole collars fell within two feet of the surveyed collars. Energy Fuels considers its conversion method, as well as its survey method, sound, and as a result considers the historic UP&L data set satisfactory for use in the Daneros Mine Technical Report. For the historic drill holes from UP&L, it was assumed that the holes were vertical and an assumed survey of straight down was assigned them. It should be noted that, having reviewed the actual down hole survey for the Daneros holes, lateral deviation at Daneros is minimal. Energy Fuels has combined both the recent drilling by WCU with the appropriate historic drill hole data from UP&L to create the database used for the Daneros Mine Technical Report. All down hole grade data used for the Daneros Mine Technical Report is based on gamma probe results.

Exploration Notices have also been approved for brown fields drilling around the Daneros mine. These Notices cover the Daneros and the Lark and Royal claim areas. Energy Fuels is reviewing plans for additional surface drilling in the Daneros mine area.

Sampling and Analysis

Industry standards for uranium exploration in the western United States are based almost completely on the gamma logging process with a number of checks, including: 1) frequent calibration of logging tools, 2) core drilling and chemical analysis of core as a check on gamma log values and the potential for disequilibrium; 3) possible closed-can analysis as an adjunct to chemical assays; and 4) possible gamma logging by different tools and/or companies. The radiometric (gamma) probe measures gamma radiation which is emitted during the natural radioactive decay of uranium. The gamma radiation is detected by a sodium iodide crystal, which when struck by a gamma ray emits a pulse of light. This pulse of light is amplified by a photomultiplier tube, which outputs a current pulse. The gamma probe is lowered to the bottom of a drill hole and data is recorded as the tool is withdrawn up the hole. The current pulse is carried up a conductive cable and processed by a logging system computer which stores the raw gamma counts per second (“cps”) data. If the gamma radiation emitted by the daughter products of uranium is in balance with the actual uranium content of the measured interval, then uranium grade can be calculated solely from the gamma intensity measurement. The result is an indirect measurement of uranium content within the sphere of measurement of the gamma detector.

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Energy Fuels used the GAMLOG computer program to interpret gamma-ray logs. The GAMLOG program was developed by the U.S. Atomic Energy Commission. The essence of the method is a trial-and-error iterative process by which U₃O₈ grades are determined for a series of 1/2-foot or 1-foot layers which can be considered to comprise the zone under analysis. The objective of the iterative process is to find a grade for each separate layer such that an imaginary set of separate gamma-ray anomalies (one from each separate layer) could be composited to form an over-all anomaly which would closely match the real anomaly under analysis. Energy Fuels accepts the validity of the GAMLOG program. There are no specific provisions for security of data or samples other than those employed for confidentiality. The previous property owner, Denison Mines, is deemed to have met or exceeded industry standards for the exploration program.

Security of Sampling

All uranium exploration technical information is obtained, verified and compiled under a formal QA/QC assurance and quality control program in the southwestern United States.

The basis of the indirect uranium grade calculation (referred to as "eU₃O₈" or "equivalent U₃O₈") is the sensitivity of the sodium iodide crystal used in each individual probe. Each probe's sensitivity is measured against a known set of standard "test pits," with various known grades of uranium mineralization, located at the DOE's Grand Junction, Colorado office. The ratio of cps to known uranium grade is referred to as the probe "K-Factor", and this value is determined for every gamma probe when it is first manufactured and is also periodically checked throughout the operating life of each probe. Application of the K-Factor, along with other probe correction factors, allows for immediate grade estimation in the field as each drill hole is logged. Energy Fuels received the raw data file for the Daneros drill hole set from Hawkins Geophysical. The data were processed using Gamlog which converts cps (counts per second) data into equivalent eU₃O₈. All factors affecting the gamma flux down hole are accounted for using the Gamlog program and the results are industry standard acceptable.

Mineral Resource Estimate

Energy Fuels published an Inferred Mineral Resource for the Daneros property on July 19, 2012, soon after the property was acquired from Denison, reporting 156,000 tons of mineralized material at an average grade of 0.263% eU₃O₈for a total of 824,100 lbs. of U₃O₈. The current resource estimate, after taking into account production from 2010 through October 17, 2012, is 155,724 tons at an average grade of 0.212% eU₃O₈ for a total of 661,000 lbs. of U₃O₈.

Energy Fuels has prepared resource estimates for the Daneros Project, located in Bullseye Canyon of southeastern Utah. This resource estimate was prepared using both historical as well as recent data. The Daneros Mine Technical report presents the raw data and model wireframe creation methods. The suitability of the interpolation technique and search strategies is also presented. Energy Fuels created a wireframe model of the mineralized zone based on the outside bound of a 0.15%^eU3^O8^{GT contour as} well as the stratigraphic boundaries within which the known mineralization occurs; the Shinarump Sandstone member of the Triassic Chinle Formation. The raw data in the DAN database was composited over 2 foot run-length intervals to generate a preliminary database necessary to create a preliminary block model. A 0.15% eU₃O₈ grade-shell was created and superimposed upon the boundaries of the GT contourand the stratigraphic surfaces to create a wireframe model of the mineralized zone in which to place the following block model and grade interpolation. The Energy Fuels Daneros database contains two sets of drill holes totaling 300 drill holes, totaling 141,087 feet. Drill holes in the DAN series have had downhole as well as collar surveys, down-hole gamma and resistance surveys and, where available, have had their core assayed. The second set of drill holes are named the “125” series and the “LR” series holes. This last set of holes is historic in nature and their locations, as well as their reported gamma-logged intervals are historic and the down-hole data contained could not be verified.

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As of 07-17-12 the operating costs for uranium production from Daneros are approximately $300.00 per ton of ore grade material. Energy Fuels assumes a reasonable price for their product, U₃O₈ at $60.00/lb. Therefore, 0.25% U₃O₈ is considered a reasonable cutoff grade. Energy Fuels considers the base of the Shinarump Sandstone to be the lowest horizon at which economic mineralization occurs in the Bullseye Canyon area and therefore represents a solid boundary beyond which (above) compositing of the Daneros database should begin. There are several population breaks present with the most significant being at the approximately the 97th percentile corresponding to a grade of 0.8% eU₃O₈. Energy Fuels considers this a reasonable capping level to avoid the adverse effects of high grade outliers on the data population. Grades above 0.8% eU₃O₈ were assigned this value and remain a part of the working dataset. Capping the raw grade dataset at 0.8% eU₃O₈ set back fifty values or 4% of the individual data in the dataset. Energy Fuels used Vulcan 3D Mine Modeling software to create the resource estimate. A block model was created where each block was 50 ft. by 50 ft. by 5 ft., with 5 ft. by 5 ft. by 2.5 ft. subblocks. However, as the grade in conglomerate type uranium deposits has shown a proclivity to follow “channels”, the block model was oriented such that it reflects the general direction and dip of the suspected channel structure in the immediate vicinity of the Daneros deposit Average grade was compared between the raw ^eU3^O8values, the average composite values and the average grades of the blocks All resources are reported as Inferred Mineral Resources.

INFERRED MINERAL RESOURCES – JULY 2012
Energy Fuels Inc– Daneros Deposit

Notes:

EFI believes this resource estimate has been prepared using industry standard best practices and is therefore, acceptable. (After completion of the Technical Report in June 2012, mining continued through October 2012. The remaining Inferred Mineral Resource estimate following that mining is approximately 156,000 tons of material at an average grade of 0.21% U₃O₈ containing 661,000 pounds of U₃O₈.)

Mining Operations

The mining of all resources in the Daneros Project are by conventional underground methods. These methods have been used very successfully in the region for over 70 years. The nature of the Shinarump uranium deposits require a random room and pillar mining configuration. The deposits have irregular shapes and occur within several close-spaced, flat or slight-dipping horizons. Uranium mineralization often rolls between horizons. The use of rubber-tired equipment allows the miners to follow the ore easily in the slight dips and to ramp up or down to the other horizons. The deposit is accessed from the surface through a 450 feet long decline at a gradient of -15%. The Shinarump sandstones are usually quite competent rock and require only moderate ground support. The overlying mudstones are less competent, so the decline is often supported by square set timber or steel arch and timber lagging. The Shinarump deposits are usually thinner than the mining height needed for personnel and equipment access. Therefore, the ore is mined by a split-shooting method. The mine also employs a underground long hole exploration drilling program, reaching out as much as 400 feet ahead of and adjacent to the workings, as guided by the mine geologist.

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UEC gathered the necessary environmental data and obtained the approvals to open an underground uranium mine at Daneros in May 2009, following which UEC commenced active mine development, including driving a decline into the main Daneros deposit. The first loads of ore from the Daneros Mine were delivered to the White Mesa Mill in December 2009, and a toll milling campaign was conducted in the second half of 2010. The Daneros Mine is now operated by Energy Fuels, and, prior to being placed on standby, ore from the mine was delivered to the White Mesa Mill and processed for Energy Fuels’ account in 2013

Metallurgical Process

The White Mesa Mill owned by Energy Fuels is located six miles south of Blanding, Utah, 65 road miles from the Daneros Mine. 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 basic mill process is a sulphuric acid leach with solvent extraction recovery of uranium and vanadium. 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 acid leach. The first, or pre-leach, circuit, consisting of two mechanically agitated tanks, utilizes pregnant (high-grade) strong acid solution from the countercurrent decantation (“CCD”) circuit which serves both to initiate the leaching process and to neutralize excess acid. The pre-leach circuit discharges to a 125-ft.thickener where the underflow solids are pumped to the second stage leach and the overflow solution is pumped to clarification, filtration, and solvent extraction circuits. A hot strong acid leach is used in the second stage leach unit, which consists of seven mechanically agitated tanks having a retention time of 24 hours. Free acid is controlled at 70 grams per litre and the temperature is maintained at 75°C. Leached pulp is washed and thickened in the CCD circuit, which consists of eight high-capacity thickeners. Underflow from the final thickener at 50% solids is discharged to the tailings area. Overflow from the first thickener (pregnant solution) is returned to the pre-leach tanks. The solvent extraction (SX) circuit consists of four extraction stages in which uranium in pregnant solution is transferred to the organic phase, a mixture consisting of 2.5% amine, 2.5% isodeconal, and 95% kerosene. Loaded organic is pumped to six stages of stripping by a 1.5 molar sodium chloride solution, and thence to a continuous ammonia precipitation circuit. Precipitated uranium is settled, thickened, centrifuged, and dried at 1,200°F. The final product at about 95% U₃O₈ is packed into 55-gallon drums for shipment.

Permitting

The primary permits required for mining operations at Daneros include a Large Mine NOI issued UDOGM and a PO approved by the BLM. The BLM PO required document preparation and public notice of an EA. The permits obtained by UEC were for the initial stage of operations and contemplated eventual expansion of the mining operations, with the inclusion of additional surface area for support facilities. The Daneros Mine does not discharge any water, so no discharge permit is required.

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Following approval of the PO by the BLM, an appeal of the BLM approval was filed by Uranium Watch and associated non-government organizations. The appeal was ultimately denied by the Utah BLM State office, and appealed by Uranium Watch (and others) to the Department of Interior Board of Land Appeals, which denied the appeal on September 26, 2012.

Permitting for mine expansion began in 2012 with the submittal of a construction application to the Utah Division of Air Quality (“UDAQ”) and EPA for radon emissions. This application, which was approved in 2^nd Quarter 2012 requires monitoring and annual reporting of radon emissions from the mine’s ventilation system. An air permit application was submitted to UDAQ for other regulated air emissions (e.g., fugitive dust, volatile organic compounds) and approved in 4^th Quarter 2012. In 1^st Quarter 2013, an amended PO and a Large Mine NOI were submitted to the BLM and UDOGM, respectively. An EA is currently being conducted for the proposed mine expansion. The Company expects these amendments to be approved in mid- to late-2015.

Current and Contemplated Exploration and Development Activities after the 2012 Technical Report

The mine is fully permitted and developed. The Company is maintaining the project on care and maintenance. Additional permitting is ongoing as described above. Energy Fuels has reviewed the remaining resources and has evaluated prospective areas for future exploration drilling. There are no plans to perform any drilling in 2015.

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The Sheep Mountain Project

Unless otherwise stated, the following description of the Sheep Mountain Project is derived from a technical report titled “Sheep Mountain Uranium Project, Fremont County, Wyoming, USA, Updated Preliminary Feasibility Study, National Instrument 43-101 Technical Report”, dated April 13, 2012 and, prepared by Douglas L. Beahm, P.E., P.G., Principal Engineer of BRS Engineering in accordance with NI 43-101 (the “Sheep Mountain Technical Report”, also referred to herein as the “2012 PFS”). The author of the Sheep Mountain Technical Report is a “qualified person” and is “independent” of the Company within the meaning of NI 43-101. The Sheep Mountain Technical Report is available on SEDAR at www.sedar.com.

Overview

The Sheep Mountain Project was acquired on February 29, 2012, as a result of the merger transaction between Energy Fuels and Titan. Titan acquired the Sheep Mountain Project in two transactions in 2009. A 50% working interest was acquired when Titan completed a business combination with Uranium Power Corp. (“UPC”) on July 31, 2009. UPC is now a wholly-owned subsidiary of Energy Fuels. At that time, UPC and UPC’s US subsidiary (then called UPC Uranium (USA) Inc. and now called Energy Fuels Wyoming Inc.) became wholly-owned subsidiaries of Titan. The remaining 50% was owned by Uranium One Inc. which was UPC’s joint venture partner for the property. On October 1, 2009, Titan acquired Uranium One Inc.’s 50% interest in the property, giving Titan a 100% interest. On February 29, 2012, Energy Fuels acquired Titan (and its subsidiaries) at which point the Sheep Mountain Project became 100% owned by the Company.

Project Description and Location

The Sheep Mountain Project is located eight miles south of Jeffrey City, Wyoming within the Wyoming Basin physiographic province at the northern edge of the Great Divide Basin in central Wyoming. The project is located in portions of Sections 8, 9, 15, 16, 17, 20, 21, 22, 27, 28, 29, 30, 31, 32, and 33, Township 28 North, Range 92 West. The mineral properties are comprised of 192 unpatented mining claims (the Company added 13 claims to the 179 reported in the Technical Report) on land administered by the BLM, approximately 640 acres of State of Wyoming leases and approximately 630 acres of private lease lands. In February 2012, Energy Fuels purchased 320 acres of private surface overlaying some of the Federal minerals covered by 18 of the claims. The purchased parcel includes the SW¼ SW¼ Section 28 and SE¼, E½ SW¼, and NW¼ SW¼ Section 29, T28N, R92W. Payments have been made through January 2015; a final payment of $5,000 is due in January 2016. The combination of land holdings (including the 13 new claims) comprises approximately 4,675 acres and gives Energy Fuels mineral rights to resources as defined in the Congo Pit and the Sheep Underground mine areas.

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To maintain these mineral rights, the Company must comply with the state lease provisions including annual payments with respect to the State of Wyoming leases; private leases; BLM and Fremont County, as well as Wyoming filing and/or annual payment requirements to maintain the validity of the unpatented mining lode claims as follows. Mining claims are subject to annual filing requirements and payment of a fee of $140.00 per claim (the BLM increased the annual fee to $155/claim in 2014). Unpatented mining claims expire annually, but are subject to indefinite annual renewal by filing appropriate documents and paying the fees described above. ML 0-15536 will expire on 1/1/2024. Annual Payments to maintain ML 0-15536 are $2,560 per year. Private lease will expire 11/20/2015 (and for as long as minerals are being produced). The private lease may be extended for an additional ten year term by the Company making a delay rental payment of $10,000. Properties covered by Private Lease include: Township 28 North, Range 92 West, 6th PM; Section 20: S½SW¼; Section 29: NW¼, SW¼SW¼; Section 30: SE¼NE¼, E½SE¼; Section 31: E½NE¼; Section 32: E½NE¼; Section 33: S½NW¼. Payments $10,000 per year as annual delay rentals. Per examination of original private lease dated 11/20/1975 between McIntosh Cattle Company and Western Nuclear Inc.

The project is subject to an overall sliding scale royalty of 1% to 4% due to Western Nuclear, based on the Nuclear Exchange Corporation Exchange Value. This royalty is currently at its maximum rate of 4%. A Royalty under a private lease is due to McIntosh (to Ellen Fox and Jennifer McIntosh, as heirs) of 7.5% of the mined value of uranium ores in raw, crude form (which equals 50% of the average sales price of uranium concentrate made during the previous month). According to a Surface Owners Agreement, to William and Jennifer McIntosh, 1% of the proceeds received from the sale of all uranium mined, shipped and sold from claims under the surface owned by the grantors. Per the “Surface Owners Agreement” dated 1/27/1970 between Bessie McIntosh, Phyllis DeWalt, William McIntosh, and John McIntosh (grantors) and Western Nuclear Inc. (grantee), amended on 4/14/1981 by “Amendment of Surface Owner’s Agreement” between William and Jennifer McIntosh (as successors to grantors above) and Western Nuclear Inc. and ratified by “Ratification of Surface Owner's Agreement" on 4/16/2007 by Ellen Fox (as heir of William McIntosh) and US Energy (as successor to Western Nuclear). Under Wyoming state lease ML 0-15536, there is a royalty of 5% of the quantity or gross realization value of the U₃O₈, based on the total arms-length consideration received for uranium products sold for shipping point.

Additional information regarding land tenure is described in the Sheep Mountain technical Report.

The Company is subject to liabilities for mine and exploration reclamation at the Sheep Mountain Project. The Company maintains four (4) bonds with the State of Wyoming as security for these liabilities. The Company files annual reports with the State of Wyoming, and the amount of the bonds may be adjusted annually to endure sufficient surety is in place to cover the full cost of reclamation. The Company’s reclamation of the exploration drilling performed by Titan was deemed complete in October 2014; the drilling permit was terminated and the bond fully released. Uranium mining in Wyoming is subject to both a gross products (county) and mineral severance tax (state). At the federal level: aggregate corporate profit from mining ventures is taxable at corporate income tax rates, i.e. individual mining projects are not assessed federal income tax but rather the corporate entity is assessed as a whole. For mineral properties: depletion tax credits are available on a cost or percentage basis whichever is greater. The percentage depletion tax credit for uranium is 22%, among the highest for mineral commodities, IRS Pub. 535.

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Accessibility, Climate, Local Resources, Infrastructure, and Physiology

The Sheep Mountain Project is located at approximate Latitude 42°24’ North and Longitude 107° 49’ West, within the Wyoming Basin physiographic province in the Great Divide Basin at the northern edge of the Great Divide Basin. The project is approximately eight miles south of Jeffrey City, Wyoming. The nearest commercial airport is located in Riverton, Wyoming approximately 56 miles from Jeffrey City on a paved two-lane state highway. The project is accessible via 2-wheel drive on existing county and two-track roads.

The Sheep Mountain Project falls within the intermountain semi-desert weather province, with average maximum temperatures ranging from 31.1 °F (January and December) to 84.9 °F (July), average minimum temperatures ranging from 9.1 °F (January) to 49.2 °F (July), and average total precipitation ranging from 0.36 -inches (January) to 2.04 -inches (May). The Company has established an on-site remote weather station and has recorded temperature, precipitation (rain and snow), barometric pressure, and wind speed since 2010. The topography consists of rounded hills with moderate to steep slopes. Elevations range from 6,600 feet to 8,000 feet above sea level. The ground is sparsely vegetated with sage and grasses and occasional small to medium sized pine trees at higher elevations. Year-round operations are contemplated for the Sheep Mountain Project.

Telephone, electric and natural gas service adequate for the planned mine and mineral processing operations have been established at the Sheep Mountain Project. Electric service and a waterline have been extended via right-of-way issued by the BLM in 2011 to both the Sheep 1 and 2 shafts. Adequate water rights are held by the Company for planned mining and mineral processing operations but need to be updated with the Wyoming State Engineer with respect to type of industrial use, points of diversion, and points of use.

The Company believes that sufficient surface rights are in place for all contemplated mining operations including tailings storage areas, waste disposal, heap leach pads, and potential processing sites.

History

The Sheep Mountain Project was operated as an underground and open pit mine at various times in the 1970’s and 1980’s. 5,063,813 tons of ore was mined and milled, yielding 17,385,116 pounds of uranium at an average grade of 0.17% U₃O₈. Mining was suspended in 1988 and the mine has been on care and maintenance since that time.

Uranium was first discovered in the Crooks Gap district, which includes the Sheep Mountain Project, in 1953 (Bendix, 1982). While the original discoveries were aided by aerial and ground radiometric surveys, exploration activities were primarily related to drilling and exploratory trenching. Three companies dominated the district by the mid-1950’s: Western Nuclear Inc. (“Western Nuclear”), Phelps Dodge Corporation (“Phelps Dodge”), and Continental Uranium Corporation (“Continental”). Western Nuclear built the Split Rock mill at Jeffrey City in 1957 and initiated production from the Paydirt pit in 1961, Golden Goose 1 in 1966, and Golden Goose 2 in 1970. Phelps Dodge was the principal shareholder and operator of the Green Mountain Uranium Corporation’s Ravine Mine which began production in 1956. Continental developed the Seismic Pit in 1956, the Seismic Mine in 1957, and Reserve Mine in 1961 and the Congo Decline in 1968. In 1967, Continental acquired the Phelps Dodge properties and in 1972, Western Nuclear acquired all of Continental’s Crooks Gap holdings. During the mid-1970’s Phelps Dodge acquired an interest in Western Nuclear which began work on the Sheep Mountain I in 1974, the McIntosh Pit in 1975, and Sheep Mountain II in 1976. Western Nuclear ceased production from the area in 1982. Western Nuclear production from the Sheep Mountain I is reported to have been 312,701 tons at 0.107% U₃O₈. Subsequent to the closure of the Sheep Mountain I by Western Nuclear, during April to September 1987, Pathfinder Mines Corporation (“Pathfinder”) mined a reported 12,959 tons, containing 39,898 lbs. of uranium at an average grade of 0.154% U₃O₈ from Sheep Mountain I. U.S. Energy-Crested Corp. (“USECC”) acquired the properties from Western Nuclear in 1988 and during May to October 1988, USECC mined 23,000 tons from Sheep Mountain I, recovering 100,000 lbs. of uranium for a mill head grade of 0.216%U₃O₈. The material was treated at Pathfinder’s Shirley Basin mill, 130 miles east of the mine. The Sheep Mountain I mine was allowed to flood in April 2007. UPC (then known as Bell Coast Capital) acquired a 50% interest in the property from USECC in late 2007. USECC later sold all of its uranium assets to Uranium One Inc. Titan acquired UPC’s 50% interest in the property when it acquired UPC by a plan of arrangement in July 2009. Titan acquired Uranium One Inc.’s interest in the Sheep Mountain Project in September 2009.

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Geological Setting

A primary component of the geology for the Sheep Mountain Project is the Battle Spring Formation. Battle Spring is Eocene in age. Prior to deposition of the Battle Spring Formation and subsequent younger Tertiary formations, underlying Paleocene, Cretaceous, and older formations were deformed during the Laramide Orogeny. During the Laramide Orogeny, faults, including the Emigrant Thrust Fault at the northern end of the project area, were active and displaced sediments by over 20,000 feet. Coincident with this mountain building event, Paleocene and older formations were folded in a series of echelon anticlines and synclines, generally trending from southeast to northwest. The Battle Spring Formation was deposited unconformably on an erosional landscape influenced by these pre-depositional features. Initial stream channels transporting clastic sediments from the Granite Mountains formed in the synclinal valleys. The geologic setting of the Sheep Mountain Project is important in that it controlled uranium mineralization by focusing movement of the groundwaters which emplaced the uranium into the stream channels which had developed on the pre-tertiary landscape. The Battle Spring Formation and associated mineralization at Sheep Mountain is bounded to the east by the western flank of the Sheep Mountain Syncline and to the west by the Spring Creek Anticline. To the north the system is cut off by erosion. To the south the Battle Spring continues into the northern portions of the Great Divide Basin. Mineralization occurs throughout the lower A Member of the Battle Spring Formation and is locally up to 1,500 feet thick. The upper B Member is present only in portions of the project and may be up to 500 feet thick. Although arkosic sandstone is the preferred host, uranium has been extracted from all lithologies. Grade and thickness are extremely variable depending on whether the samples are taken from the nose or the tails of a roll front. Typically the deposits range from 50 feet to 200 feet along a strike, five feet to eight feet in height, and 20 feet to 100 feet in width. Deposits in the Sheep Mountain area occur in stacked horizons from 7,127 feet in elevation down to 6,050 feet in elevation.

Exploration

To the author’s knowledge, no relevant exploration work other than drilling has been conducted on the property in recent years. The Project is located within a brownfield site which has experienced past mine production and extensive exploration and development drilling. The initial discovery was based on aerial and ground radiometric surveys in the 1950's, but since that time exploratory work on the site has been primarily drilling.

During the National Uranium Resource Evaluation (“NURE”) program conducted by the DOE in the late 1970’s and early 1980’s, the project area and vicinity were evaluated. This evaluation included aerial gamma, magnetic, and gravimetric surveys, soil and surface water geochemical surveys and sampling, and geologic studies and classification of environments favorable for uranium mineralization. Additional information on exploration is included in the “Drilling” subsection below.

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Mineralization

Most of the mineralization in the Crooks Gap district occurs in roll-front deposits. Roll fronts have an erratic linear distribution but are usually concordant with the bedding. Deposits have been discovered from the surface down to a depth of 1,500 feet. The two major uranium minerals are uranophane and autunite. Exploration drilling indicated that the deeper roll-type deposits are concentrated in synclinal troughs in the lower Battle Spring Formation. Three possible sources for uranium have been suggested: post-Eocene tuffaceous sediments, leached Battle Spring arkoses, and Precambrian granites. Structural controls of uranium occurrences along roll fronts include carbonaceous siltstone beds that provide a local reducing environment for precipitation of uranium-bearing minerals, and abrupt changes in permeability along faults, where impermeable gouge is in contact with permeable sandstones. Uranium has also been localized along the edges of stream channels and at contacts with carbonaceous shales

Drilling

Approximately 4,000 holes were drilled in the project area historically (prior to 1988), most of which were open-hole rotary drilling, reliant upon down-hole geophysical logging to determine equivalent uranium grade %eU₃O₈. However, some core drilling for chemical analysis was also completed. The drill maps show hole locations at the surface and downhole drift, the thickness and radiometric grade of uranium measured in weight percent U₃O₈, elevation to the bottom of the mineralized intercept, collar elevation, and elevation of the bottom of the hole.

In 2006, UPC completed a drilling program consisting of 19 holes totaling 12,072 feet. Two of the 19 holes were located in Section 28 with the purpose of confirming the mineralization within the Sheep Underground mine area. The remaining 17 holes were completed in the planned Congo Pit to test both shallow mineralization and to explore a deeper mineralized horizon. This 2006 drilling has confirmed the presence of mineralization in the shallow horizons of the Congo Pit area and has identified and extended roll front mineralization in the 58 sand along strike.

Following the acquisition of UPC by Titan, five holes were drilled in the Congo Pit area in 2009 for a total of 1,700 feet. In situ mineral grades for 2009 drilling were determined by geophysical logging including both conventional gamma logging and state of the art Uranium Spectrum Analysis Tool. Titan, now known as Energy Fuels Wyoming Inc. also drilled in the Congo Pit area in 2010 62 exploratory drill holes and 5 monitor wells and 2011 73 exploratory drill holes and 5 monitor wells. There were a total of 140 exploration holes drilled between 2009 and 2011, which total about 44,000 feet.

Sampling and Analysis

The majority of the sample data available for the evaluation of resources for the Sheep Mountain Project is the historic geophysical log data. For the Congo Pit, Sheep Underground, and Sun Mc areas, the majority of the hard copy logs were reviewed both for data verification and for geologic interpretation. The majority of the Sheep Underground logs were also available as scanned images. In addition, the data includes an extensive collection of detailed mine and drill maps, both surface and underground. The underground maps show the extent of mining by date and include rib and longhole data. All pertinent maps with respect to mine design, extent of mining, drill maps, and mapping related to the mine permit have been scanned and rectified digitally. This data is stored at the Company’s Riverton, Wyoming office Mineral resource and reserve estimates for the Sheep Mountain Project are based on radiometric data. As discussed in Sections 14 and 24 of the Sheep Mountain Technical Report, available data indicates that variations in radiometric equlibrium are local in their effect which impacts the mining grade control program but does not appreciably affect the overall mineral resources or reserves. Confirmatory drilling in accordance with NI 43-101 began in 2005. The author did not observe this drilling but has reviewed the geologic and geophysical log data and finds the data to have been collected in accordance with current industry practice and to be reliable. This data confirms historical drilling results and is current and applicable to this Preliminary Feasibility Study. The reader should note that it is common industry practice for the exploration and evaluation of uranium mineralization in the US to rely upon downhole geophysical log data for the determination of the thickness and grade of mineralization. The sampling and assay methods described herein were for the purposes of developing bulk composite samples for metallurgical testing and environmental testing. Downhole geophysical log data was converted to equivalent uranium assays in half foot increments for geophysical logs with digital data. Geophysical logs with only analog data were interpreted using standard methods set out originally by the AEC. The primary method employed for this project is referred to as the half amplitude method. In the case of the half amplitude method the sample thickness is determined by the log signature and while interpreted to the nearest half foot the thickness of the sample varies. The author of the Sheep Mountain Technical Report was trained in this methodology through a short course conducted by Century Geophysical Corporation of Tulsa, Oklahoma and has extensive experience in the interpretation of geophysical logs.

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With respect to the 2009 drilling program completed by Titan, drilling and sampling was observed by and/or completed by Titan and BRS personnel, including the author and employees under his direct supervision. These were completed by rotary air drilling to depths exceeding 300 feet using a top drive rotary drilling rig. The drill cuttings were collected continuously during the drilling process, in two foot increments. Over 500 pounds of mineralized material was collected for metallurgical testing. Drill samples for overburden testing were split with a standard rifling splitter with half of the sample sent to Energy Laboratories Inc. of Casper, Wyoming, an independent certified commercial analytical laboratory, for testing in accordance with WDEQ guidelines and the remainder was sealed in plastic bags and is currently stored in an on-site warehouse facility. Drill samples for metallurgical testing were stored and sealed in new 5 gallon plastic buckets. Samples within the mineralized zones as determined by gamma and USAT logging were delivered to Lyntek’s facility in Denver, Colorado for further assay and testing by BRS personnel. A chain of custody was established. Representative sample splits were prepared for chemical assay and were delivered to Energy Laboratories Inc. of Casper, Wyoming, an independent certified commercial analytical laboratory, for assay utilizing standard protocol and adhering to a chain of custody. These assays were used in the selection of samples for metallurgical testing. In addition to the samples from the Congo Pit drilling, mineralized stockpiles from mine material at the Sheep I shaft was sampled, assayed, and utilized for metallurgical testing. Seven samples of the Sheep I stockpile were collected ranging in grade from 0.022 to 0.067% U₃O₈ and averaging 0.045 % U₃O₈Bottle roll leach tests have been completed for composite samples selected to represent mineralization at both the Congo Pit and Sheep Underground. The remaining samples, with the exception of reserves sample splits, were utilized in the column leach testing for heap leach amenability.

Security of Samples

Titan has the complete hard copy data set which was passed through the chain of property title from Western Nuclear Corporation; through US Energy Crested Corporation (“USECC”); through the joint venture between UPC and U1; to Titan through its acquisition of UPC and acquisition of U1’s share of the property; and ultimately to Energy Fuels, though its acquisition of Titan. Assays of blind duplicates of select samples and check assays, at Hazen Research, a separate and independent commercial laboratory were completed. The results of the assays compared favorably. The assay data was generally not used to verify the radiometric data as this had already been done using the USAT data. A general comparison of assay data to USAT data was completed and the results were comparable. Radiometric equilibrium determinations are discussed in Section 24 of the Technical Report. No samples were collected during the 2010 drilling program. Drill cuttings were logged in the field. All holes were logged by a commercial geophysical logging company. Geophysical log data was provided in both hard copy and electronic format with the down-hole count data converted to ½ foot equivalent %U₃O₈ grades. In 2011 both rotary and reverse circulation drilling was completed. Bulk samples from the reverse circulation drilling have been retained in sealed containers stored at the site for further metallurgical testing but no chemical assays have been completed as of the effective date of the Sheep Mountain Technical Report.

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Mineral Resource and Mineral Reserve Estimates

The mineral resource estimates presented herein have been completed in accordance with CIM Standards and NI 43-101. Based on the drill density, the apparent continuity of the mineralization along trends, geologic correlation and modeling of the deposit, a review of historic mining with respect to current resource projections, and verification drilling, the Mineral Resource estimate herein meets CIM criteria as an Indicated Mineral Resource.

Mineral Resources

Geologic interpretation of the mineralized host sands was used, along with the intercepts that met the minimum cutoff grade and thickness, to develop a geologic model in which to estimate the mineral resources at the Sheep Mountain Project. The three-dimensional locations along the drill hole drift of all mineralized intercepts were plotted in AutoCAD TM. Each intercept was evaluated based on its geophysical log expression and location relative to adjacent intercepts. Whenever possible, geophysical logs were used to correlate and project intercepts between drill holes. Intercepts that met the minimum grade cutoff but were isolated above or below the host sand horizons; where data sets were incomplete; which did not fully penetrate the host sand were excluded from the mineralized envelope. The mineralized envelope was created by using the top and bottom of each intercept that was within the geologic host sands. The intercepts that were used to make this envelope were then used in the resource estimate GT Contour Method. The Contour Method is a well-established approach for estimating uranium resources and has been in use since the 1950s in the US.

The current geologic and resource model is a 3D model based on geologic interpretation of 18 mineralized zones in the Congo area and 17 mineralized zones in the Sheep area. Mineralized zones from Sheep were projectable down dip to the Sun Mc Area. Once the data were separated by zone an initial area of influence of 50 feet (maximum 25 foot radius or 50 foot diameter) was applied to each drill hole by zone at its drifted location to establish an initial geologic limit to the projection of mineralization. Refinement of the geologic limit and projection of mineralization along trend was then based on specific correlation and interpretation of geophysical logs on a hole by hole basis.

Drill spacing in the Congo (open pit areas) range from roughly 50 foot centers to greater than 100 foot centers. Drill spacing at Sheep Underground area varies from roughly 200 foot centers to over 400 foot centers. Drilling depths at Congo are typically less than 400 feet in the northern portions of the area to generally over 600 feet to the south. Drilling depths at Sheep exceed 1,000 feet but are typically less than 1,500 feet. Drilling depths at Sun Mc are variable depending on terrain but are typically less than 1,000 feet. The Congo mineralized thickness ranges from one foot to over 19 feet. Grade varies from the minimum grade cutoff of 0.1% eU₃O₈ to a maximum reported grade of 1.87% eU₃O₈. The Sheep Underground data set is composed of a total of 485 drill holes based on data from 483 historic drill holes and two confirmatory drill holes completed in 2005. Of the 485 drill holes, only 33 were barren and 452 contained mineralization of at least 0.5 -feet of 0.05% eU₃O₈. Sheep Underground mineralized thickness ranges from 0.5 feet to over 26.5 feet. Grade varies from the minimum grade cutoff of 0.05% eU₃O₈ to a maximum reported grade of 2.19% eU₃O₈.

The uranium quantities and grades are reported as equivalent U₃O₈ (eU₃O₈), as measured by downhole gamma logging. In the fall of 2009, five rotary percussion holes were drilled on the property to study disequilibrium. Downhole logging of the drill holes was completed using standard gamma technology as well as a Uranium Spectral Analysis Tool (USAT), both supplied by Century Wireline of Tulsa OK. The USAT tool gives a direct measurement of uranium content and therefore allows determination of the equilibrium state of the uranium mineralization intersected in the hole. A total of 34 intervals were measured, showing an overall moderate positive disequilibrium (thus the true chemical grade of the mineralization is slightly higher than the equivalent grade determined by the gamma tool). The results of the resource estimates were not adjusted to account for this positive disequilibrium. Equilibrium data does show some local distribution of uranium values within mineralized zones. The ore control program recommended for this project will account for such variations. Previous studies (RPA 2005 and 2006) also concluded that no adjustment for radiometric equilibrium was necessary.

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A unit weight of 16 cubic feet per ton was assumed for all mineral resource and reserve calculations. This assumption was based on data from feasibility studies prepared by previous operators on the mining and production history of the mines within the Sheep Mountain Project

Below is a summary of the total Indicated Mineral Resource estimated for the Sheep Mountain Project:

This estimate includes deletion of the portions of the mineral resource model which falls within the historic mine limits in the Congo Pit estimated to have removed some 25% of the initial resource estimate and the total reported mined tonnage from the Sheep I underground mine. From review of the Sheep I and II as-built mine plans, it was apparent that little or no ore was mined at Sheep II and that only development work was completed. Historic underground mining in the Sun Mc area is estimated to have removed some 10% of the total resource. Although in many cases the mine maps showed remnant pillars, none of these areas were included in the mineral resource estimate. Thus, the estimate of current mineral resources is conservative with respect to the exclusion of areas affected by historic mining. Estimated mineral resources for potential open pit areas were diluted to a minimum mining thickness of two feet and a cutoff grade of 0.05%U₃O₈.equates to a 0.10 GT cutoff.

Mineral Reserves

The estimate of mineral reserve for the Sheep Underground is unchanged from the previous reports (BRS, 2010 and 2011). With respect to the open pit mineral reserves, mineral resources for the Congo, North Gap, and South Congo areas were combined into a single comprehensive mineral resource model. Open pit mine designs and sequencing was completed for all areas, and the resultant mineral reserve estimate reflects the current open pit mine designs and economic evaluations.

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Below is a summary of the total Probable Mineral Reserve estimate for the Sheep Mountain Project:

The Probable Mineral Reserves are fully included in the total Indicated Mineral Resources for the Congo Pit and are not additive to that total. The Probable Mineral Reserve is that portion of the Indicated Mineral Resource that is economic under current cost and pricing conditions. The cutoff grade of 0.05% eU₃O₈ at a minimum mining height of 2 foot equates to a 0.10 GT cutoff for the Congo Pit. The cutoff grade of 0.05% eU₃O₈ at a minimum mining height of 6 foot equals a 0.30 GT cutoff used for the Sheep Underground.

Mine Cutoff Grade

As the operating cost per ton varies substantially between the open pit and underground it is appropriate to have separate grade cutoff criteria for the two operations. The following table provides a calculation of breakeven cutoff grades for both the open pit and underground mines based on current cost forecasts and a sales price of $65 per pound. The costs per ton reflect operating costs only and do not include capital write off. The calculation of breakeven cutoff grade allows for a constant tail or loss in the mineral processing of 0.01 %U₃O₈. Note that staff and support costs are included in the open pit mining costs. Incremental underground mining costs are solely related to underground mining and mineral processing costs.

From this evaluation, and other factors such as minimum mining thickness, the mine design cutoffs were set above the minimum breakeven cutoff grades at:

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Based on these parameters, the average grade mined from a combined open pit and underground operation is estimated at 0.123 e%U₃O₈. As mining proceeds, mineralized material encountered below the mine GT cutoff, which has to be excavated as part of the mine plan and would otherwise be disposed of as mine waste, could be salvaged at grades as low as the calculated breakeven grades of 0.024 %U₃O₈ and 0.046 %U₃O₈ for the open pit and underground mines, respectively. Without an increase in sales price or a decrease in operating costs, material salvaged at lesser grade would not be profitable. The mineral reserve as stated herein does not include the potential mineralized material, which may be salvaged, which meets the breakeven grade cutoff but is less than the design GT cutoff.

The project is a brown-field development located in a state which tends to favor mining and industrial development. The project has been well received locally and will also provide substantial revenues to both Fremont County and the State of Wyoming in addition to providing long term employment for the region. The author was not aware of any factors including environmental, permitting, taxation, socioeconomic, marketing, political, or other factors which would materially affect the mineral resource estimate, herein.

Mining Operations

A Plan of Operation (“PO”) was submitted and has been accepted as complete by the U.S. Bureau of Land Management (“BLM”), and preparation of an Environmental Impact Statement (“EIS”) is underway with completion anticipated for late 2015. The Company has submitted a revision of its existing Mine Permit 381C to the Wyoming Department of Environmental Quality (“WDEQ”). The permit revision will address improvements to the mine plan, including the proposed uranium recovery facility. Development of an application to the NRC for a combined Source Material and By-product Material License to construct and operate the uranium recovery facility is at an advanced stage of development. This license will allow the Company to process the uranium ore and produce yellowcake at the Sheep Mountain Project site. The subsequent review and approval process for this license by NRC is anticipated to take approximately three years. Submittal of the license application to the NRC is on hold pending the Company’s evaluation of off-site processing options for this project.

The Sheep Mountain Project includes the Congo Pit, a proposed open pit development, and the reopening of the existing Sheep Underground mine. Although alternatives were considered, the recommended uranium recovery method includes the processing of mined materials via an on-site heap leach facility. Mined product from the underground and open pit mine operations will be commingled at the stockpile site located near the underground portal and in close proximity to the pit. At the stockpile the mine product will be sized if needed, blended, and then conveyed via a covered overland conveyor system to the heap leach pad where it will be stacked on a double lined pad for leaching. The primary lixiviant will be sulfuric acid. Concentrated leach solution will be collected by gravity in a double lined collection pond and then transferred to the mineral processing facility for extraction and drying. The final product produced will be a uranium oxide, commonly referred to as yellowcake. Since the Technical Report was completed Energy Fuels has acquired the White Mesa Mill uranium processing plant in Blanding, Utah which creates the option to transport loaded resin to White Mesa for striping, drying, and packaging of yellowcake.

The preferred alternative for the development of the Sheep Mountain Project begins the operation with the open pit and heap leach facility and brings the underground mine into operation some 5 years later such that the forecasted end of mining for both the open pit and underground coincide. This approach defers a substantial amount of initial capital, minimizes risk, and allows for a gradual startup of site activities while maximizing resource recovery. Having the end of mining coincide for both operations optimizes the fixed costs of personnel and facilities. A preliminary feasibility study for the project has been completed which includes the preliminary design and sequencing of the open pit and underground mine operations and the heap leach mineral processing facility. Designs and sequencing are inclusive of pre-production, production, and decommissioning and reclamation.

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The current mine design for the Congo Pit includes typical highwall heights in the range of 100 to 400 feet, and reaches a maximum depth of 600 feet in localized areas in the southeast pit corner. The open pit design employs similar design parameters and mining equipment configurations to those used successfully in past Wyoming conventional mine operations. Highwall design is based upon the performance of past projects in the Sheep Mountain and Gas Hills districts, and includes an average highwall slope of 0.7:1, which reflects the average of a 10-foot bench width and 50-foot wall at a 0.5:1 slope. Current data indicates that ground water flow will average less than 150 gpm and will not be encountered until pit 6. The proposed primary stripping fleet consists of scrapers supported by dozers and motor graders. The nominal capacity of this configuration is capable of excavation and placement of over 5 million cubic yards of material on an annual basis. Mining will be completed in a selective manner with a 2 cubic-yard bucket on a medium-size excavator loading two 35 ton articulated mine haul trucks.

The mining method proposed going forward is also a conventional method using a modified room and pillar method, but utilizing modern mining equipment such as jumbo drills and 7 cubic-yard scooptrams for haulage. A new double entry decline will be constructed starting at the Paydirt Pit and ending below the deposit. Haulage from the mine will be accomplished via a 36 inch conveyor within one of the double declines. The existing shafts will be used for ventilation purposes only, with exhaust fans mounted at both locations. If the existing borehole ventilation shafts can be rehabilitated, they will be used as intake shafts.

Risks related to permitting and licensing the project are low as the project is a brown-field development located in a state which tends to favor mining and industrial development. The project has been well received locally and will also provide substantial revenues to both Fremont County and the State of Wyoming in addition to providing long term employment for the region. The project development is timed well with respect to the market and substantial increases in financial return may be realized in what is being forecast as a rising market.

Feasibility Study

On March 1, 2012, Energy Fuels announced the results of the 2012 PFS for the Sheep Mountain Project which updated a previous prefeasibility study on the property prepared in 2010. The 2012 PFS increased the Probable Mineral Reserve to 18.4 million lbs. U₃O₈ (7.5 million tons at an average grade of 0.123% eU₃O₈). Total Indicated Resource is 12.9 million tons containing 30.3 million lbs. U₃O₈ at an average grade of 0.117% eU₃O₈, which includes the Probable Mineral Reserve of 18.4 million lbs. U₃O₈ (7.5 million tons at an average grade of 0.123% eU₃O₈). Under the 2012 PFS, the base plan design provides for concurrent development of both the underground and open pit deposits. The base plan generates an expected pre-tax IRR of 42%, with an expected pre-tax Net Present Value NPV of $201 million at a 7% discount rate, and an expected pre-tax NPV of $146 million at a 10% discount rate. CAPEX are expected to be $109 million.

The Company is considering a modified plan which would be expected to require a much reduced initial CAPEX of $61 million. The modified plan initially develops the open pit only, and delays producing the underground deposit until the 5^th year of operations. The modified plan would be expected to generate a pre-tax IRR of 35%, with pre-tax NPV’s of $174 million at a 7% discount rate and $118 million at a 10% discount rate.

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Highlights of the 2012 PFS base plan include:

• 2012 PFS estimates are based on estimated capital and operating costs for a uranium mine, utilizing both conventional open pit and underground mining methods and heap leach recovery, with a maximum annual capacity of 1.5 million lbs. of U₃O₈;
• The financial model is based on a long-term uranium price of $65.00/lb. based on historical average prices over the three years prior to the date of the 2012 PFS, and supported by published reports of securities analysts at the time;
• Updated Probable Mineral Reserve of 7,453,000 tons at an average grade of 0.123% eU₃O₈, containing 18,365,000 lbs. of U₃O₈, compared to the originally reported (April 12, 2010) 6,393,000 tons at an average grade of 0.111% eU₃O₈, containing 14,186,000 lbs. of U₃O₈, an increase of 29.6% in Probable Mineral Reserve over the 2010 prefeasibility study;
• Initial mine life: 15 years, compared to the originally reported 11 years. Average production rate will be approximately 264,000 tons of mineralized material per year;
• Open pit stripping ratio: 8.1 bank cubic yards per pound mined;
• Estimated capital cost: $109 million including allowances for contingency and risk, compared to the originally reported $118 million;
• Estimated operating cost: $32.31 per lb. recovered, as compared to the originally reported $28.67 per lb. recovered;
• Estimated pre-tax NPV at a 7% discount rate: $201 million, as compared to the originally reported $101 million; and
• Estimated pre-tax IRR: 42%, as compared to the originally reported 25%.
• Estimated pre-tax payback period: 3 years, at a discount rate of 5%, as compared to the originally reported 5 years at the same discount rate.

Pre-tax NPV and IRR sensitivities are as follows:

In summary, the primary changes in the 2012 PFS that improve economics as compared to the previous 2010 prefeasibility study:

• Use of a $65/lb. selling price rather than the $60/lb. price used originally;
• Open pit pounds nearly doubled, based on the increased Probable Mineral Reserve;
• Mine life was extended by 4 years with the expanded Probable Mineral Reserve; and
• Average grade for the project increased from 0.111% eU₃O₈ to 0.123% eU₃O₈.

The 2012 PFS was prepared by a group of consultants led by BRS Inc., an independent engineering consulting firm based in Riverton, Wyoming, in collaboration with Western States Mining Consultants and Lyntek Inc. This group also prepared the 2010 prefeasibility study. The 2012 PFS was filed on SEDAR on April 13, 2012.

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Permitting

In June 2010, Titan commenced baseline environmental studies to support an application to the NRC for a Source Material and By-product Material License. Work was also initiated on a revision to the existing WDEQ Mine Permit as well as a Plan of Operations (“PO”) for the BLM. Baseline studies included wildlife and vegetation surveys, air quality and meteorological monitoring, ground and surface water monitoring, radiological monitoring, and cultural resource surveys.

Submission of the PO to the BLM was made in June 2011. The PO was accepted as complete by the BLM, and an EIS was initiated in August 2011. Energy Fuels revised the PO in July 2012, consistent with the modified plan presented in the 2012 PFS. In July 2013, the PO was again revised to reflect a new waste rock disposal layout for the open pit mine and an improved and more economical heap leach and processing facility. The revised PO also included the option of transporting ore off-site for processing. Work on the EIS is ongoing with a Draft EIS scheduled to be released for public comment in early 2015.

In October 2011, Titan submitted a draft revision to its existing Mine Permit 381C to WDEQ. WDEQ then provided Titan with review comments as part of its “courtesy review”. The permit revision was completed in 2013 and resubmitted in January 2014. The revision includes expansion of surface and underground mining operations and an updated reclamation plan consistent with current reclamation practices. The Company expects approval of the Mine Permit modification in mid-2015.

Development of an application to the NRC for a combined Source Material and By-product Material License to construct and operate the uranium recovery facility is in an advanced stage of preparation. This license will allow Energy Fuels to process the uranium ore and produce yellowcake at the Sheep Mountain Project site. The draft application to NRC for a Source Material license was reviewed in detail by the NRC in October 2011. The NRC audit report identified areas where additional information is to be provided. The review and approval process for this license by the NRC is anticipated to take approximately three years. Submittal of the license application to the NRC is on hold pending the Company’s evaluation of off-site processing options for this project.

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Gas Hills Project

Unless stated otherwise, the following description of the Gas Hills Project is derived from a technical report titled “National Instrument 43-101 Technical Report Update of Gas Hills Uranium Project Fremont and Natrona Counties, Wyoming, USA”, dated March 22, 2013 (the “Gas Hills Technical Report”), prepared by Richard L. Nielsen, PhD., CPG, Thomas C. Pool, P.E., Robert L. Sandefur, P.E., and Matthew P. Reilly, P.E., in accordance with NI 43-101 (the “Gas Hills Technical Report”). The technical report includes an updated NI 43-101 compliant mineral resource estimate. Each of the authors of the Gas Hills Technical Report is a “qualified person” and is “independent” of the Company within the meaning of NI 43-101. The Gas Hills Technical Report is available under Strathmore’s profile on SEDAR at www.sedar.com.

The Gas Hills Project was acquired on August 29, 2013 as a result of the merger transaction between Energy Fuels and Strathmore.

Property Description and Location

The Gas Hills project, located in Fremont and Natrona Counties, Wyoming, totals approximately 14,600 acres and consists of 701 unpatented lode mining claims, one State of Wyoming mineral lease, and one private mineral lease. The property at the date of the Technical Report consisted of 1,711 unpatented claims and a total acreage of about 36,000 acres. The Company has dropped claims in the periphery areas, especially areas of deep, expensive drilling due to the soft uranium market and the sparseness of exploration funding. None of the claims dropped affect the mineral resources as stated in the Technical Report since all of the claims covering the resources have been kept. The properties are in central Wyoming within Townships 32-33 North, Ranges 89-91 West, 6th Principal Meridian.

Of the 701 claims, 607 are unpatented lode mining claims owned 100% by the Company and are located on public lands administered by the U.S. Bureau of Land Management (“BLM”). Ninety-four (94) of the claims are located on split estate lands where the surface is privately owned, but the federal government owns the mineral rights. The claims are listed in the BLM Mining Claim Geographic Index Report (“LR2000”). The latest assessment year is 2015 and the claims are shown as “Active”. Holding costs for the claims include a claim maintenance fee of US$140.00 per claim payable to the BLM before September 1 of each calendar year (BLM increased the fee to $155/claim in 2014) and the recording of an affidavit and Notice of Intent to Hold with the Fremont or Natrona County, Wyoming clerk (as applicable) at a cost of about $10 per claim. Unpatented mining claims expire annually, but are subject to indefinite annual renewal by filing appropriate documents and paying the fees described above.

Strathmore entered into an agreement with Elmhurst Financial Group Inc. (“Elmhurst”) on October 31, 2007 to purchase 155 unpatented lode mining claims located in the Rock Hill part of the Gas Hills Project and 18 additional nearby claims were staked on behalf of Elmhurst, of which 173 are still held by the Company. A net production royalty of 5% was assigned to Elmhurst on these claims. No other royalties encumber any other claims in the Gas Hills project.

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Strathmore acquired the State of Wyoming Mineral Lease No. 0-42121 (the “Wyoming State Lease”) on April 2, 2007. The lease covers approximately 320 acres in Section 36, Township 33 North, Range 90 West. The Wyoming State Lease is in place until it expires on April 1, 2017. The Wyoming State Lease has a royalty of 5% payable to the State of Wyoming.

On July 28, 2010, Strathmore entered into a mineral lease agreement with James D. Sherlock, Mary Freezer and Donna Robeson as Trustees for South Pass Land and Livestock Company for two parcels of land: 40-acres at the Jeep Project and 40-acres at the Day Loma Project (the “Sherlock Lease”). The Lease is good for an initial 10-year period with indefinite 10-year renewal periods. The mineral owner was granted a 5% net production royalty. As the mineral lease holder does not hold title to the surface of these two parcels, Strathmore entered into a Surface Use and Access Agreement (“SUA”) with the surface holder, Philp Sheep Company. The SUA also includes additional lands at the Loco Lee and Rock Hill projects where Strathmore controls the mineral rights but not the surface estates.

Significant previous drilling and mine production has occurred on and adjacent to the Company’s claims in the Gas Hills. These surface disturbances mainly consist of drill roads, drill sites, haul roads, spoil dumps, and reclaimed, mined-out open-pits. On the Company’s claims, the drill pits have been reclaimed as required by State law. All physical work performed by the company is covered by bonds filed with the Wyoming Department of Environmental Quality (“WDEQ”) and the BLM. Several legacy reclamation programs of historic mining activities are ongoing in the Gas Hills area, including on lands controlled by the Company. These programs are carried out by the WDEQ and its Abandoned Mine Lands Division (“AML”) with cooperation from the BLM. In addition, several former mill tailings sites on adjacent lands have been or will be reclaimed and transferred to the U.S. Department of Energy (“DOE”) for long-term care and maintenance. All of this reclamation activity is performed at the sole cost of the state and federal government.

Prior to any exploration or drilling activities in the Gas Hills project, the Company is required to apply for drilling permits with the WDEQ Land Quality Division (“WDEQ-LQD”) and the BLM. Prior to the issuance of any permit, a reclamation bond is posted by the Company. Strathmore applied for and was granted eight drilling permits covering parts of six properties in the Gas Hills project. Reclamation of the disturbed areas has resulted in significant reductions in the bonds. EFR has two permits still open (some permits have been consolidated or released since the Technical Report was written); drilling can resume at any time, but will require increasing the bonds. Strathmore received BLM approval of the Plan of Operations on February 11, 2013.

Strathmore submitted a preliminary Permit to Mine Application with the state of Wyoming, Department of Environmental Quality, Land Quality Division (WDEQ-LQD) and a preliminary Plan of Operations to the BLM on October 31, 2012. The Company’s preliminary Plan of Operations submitted to the BLM was withdrawn on March 13, 2014, and the Permit to Mine Application was withdrawn from the WDEQ-LQD in early 2014.

For Energy Fuels’ proposed Gas Hills Heap Leach Recovery Facility, the US Nuclear Regulatory Commission (US NRC) has the responsibility to issue a source material license to “receive title to, receive, possess, use, transfer, or deliver any source material after removal from its place of deposit in nature” (CFR 40.1 and 40.3).

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Accessibility, Climate, Local Resources, Infrastructure and Physiography

The Gas Hills project is accessible via public roads and highways. The Gas Hills uranium district is near the geographic center of Wyoming. It is partly in Fremont County and partly in Natrona County, midway between the cities of Casper and Riverton. Altitude ranges from about 6,000 feet to over 8,000 feet. A steep north-facing escarpment from 400 to 500 feet high above the surrounding lands, called the Beaver Divide, extends from the southwestern part of the district to the east-central and southeastern parts. The areas north and south of the Beaver Divide are gently rolling semi-arid sagebrush-covered desert.

Climate in the Gas Hills uranium district is continental semi-arid, with annual precipitation of 8-12 inches, mostly falling in the form of late autumnal to early spring snows. The summer months are typically hot, dry and clear except for infrequent rains. Because of the dry climate, almost all of the streams in the area are ephemeral, flowing only during storm events or spring snow melt. Winters are cold and summers are hot. Year-round open-pit mining operations were successfully carried out previously in the Gas Hills uranium district. Studies have found most common native vegetation is sagebrush and to a lesser extent, rabbit brush. No threatened or endangered plants were found on the properties. The Greater Sage Grouse, present in the general area of the project, is being considered for listing as a threatened or endangered species.

Extensive natural resources production in Wyoming provides a highly skilled labor force in the region. Population centers within two hours of the Gas Hills Project include Casper, Riverton, Lander and Rawlins, where labor, equipment and supplies may be obtained. Paved roads from these cities extend to the edge of the Gas Hills Project area. Access and haul roads within the project are graded gravel and are maintained by the State, County and mining companies operating in the area. Functioning power lines, natural gas lines, telephone and fiber optic cable are present or and near the Gas Hills Project area. Several wells producing water for domestic and industrial uses are on or close to the Gas Hills Project area.

History

The Gas Hills uranium district has historically been one of the major uranium mining and production regions of the United States. Total district-wide production totaled approximately 100 million lbs. of uranium from the mid-1950’s to the late 1980’s. Following the initial discovery of uranium in the district in 1953, a staking rush ensued, thousands of mining claims were staked within a few months, and exploration exposed numerous near-surface oxidized deposits. Shipments of ore were sent to Edgemont, South Dakota, or to Vitro’s mill in Salt Lake City, Utah. By 1959, there were five uranium mills operating in the region: Lucky Mc, Split Rock, Susquehanna, Federal-American Partners, and Globe, Inc. In the early-1980’s, the spot price of uranium dropped, and the Wyoming uranium mills were placed on standby and eventually dismantled. The last mill production in the Gas Hills uranium district occurred in 1988 at Lucky Mc. Extensive mill site mine reclamation occurred from the late 1980’s until the present time.

More than 100,000 exploration and development holes were drilled in the Gas Hills from the mid-1950’s to 1979. Since 1990 only a few hundred holes have been drilled, nearly all by Strathmore and Cameco.

The Day Loma uranium mineralization was discovered in the 1950’s and was later owned by Western Nuclear Inc., later acquired by Phelps-Dodge. Mining by open pit and underground continued to 1977 and resulted in the total production of 498,381 tons with a grade of 0.248%, yielding 3,284,593 pounds of U₃O₈. In 1978, Energy Fuels Nuclear (no relation to the Company) entered into an agreement to purchase the Day Loma properties from Western Nuclear and initiated an aggressive drill program in 1978. In April 1979, Pathfinder Mines completed 200 holes at Day Loma, confirming additional mineralization.

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Three mining companies, Gas Hills Uranium, Federal Resources, and Radorock Uranium, formed a partnership and constructed the central Gas Hills uranium mill. Through various reorganizations, this group later became known as Federal-American Partners (“FAP”). FAP signed an agreement with the Tennessee Valley Authority (“TVA”) in the early 1970’s to develop uranium ores in the Gas Hills area. In the early 1980’s TVA acquired all of the mining interests of FAP and subsequently sold them to Power Resources Inc. (“PRI”, which was later acquired by Cameco Corporation) in 1991. Cameco maintained many of the claims until the early 2000’s, when they dropped their rights to mineralization deemed too shallow for in-situ recovery (Loco-Lee and Bullrush), in addition to those claims considered too close to previously mined open pits (Andria, George-Ver, Day Loma, Sunset) and mineralization at greater depths (Beaver Rim).

The Loco-Lee deposit lies adjacent to the Day Loma property and was part of the FAP property. Loco-Lee was sold to PRI/Cameco. Cameco dropped the mineral rights to Loco-Lee, which were later staked by Strathmore. Past production figures for Loco-Lee are not available. American Nuclear reportedly drilled 1,508 holes in Day Loma that provided information for the historical tonnage and grade estimates. Although, not complete, Strathmore was able to acquire information on 652 holes from Cameco. FAP designed a Loco-Lee pit in preparation for mining, and it is evident from shape and extent of the proposed pit that many of the missing holes contain significant uranium mineralization.

Bullrush consists of several separate uranium deposits about one to two miles west of George-Ver at the northwestern extreme of Strathmore’s Gas Hills area. They are located on property that once was part of FAP, Western Nuclear’s (acquired later by FAP), and Union Carbide’s historical land positions. There has been significant historical production from the property, predominantly by open-pit methods and to a lesser extent by underground mining. The FAP portion was sold to PRI in 1991. Cameco dropped the mineral rights to Bullrush, and these were later staked by Strathmore. FAP had previously acquired the Western Nuclear mineral rights in the 1960s. Production records are very limited; however, by 1961 Western Nuclear mined 105,300 tons grading 0.196% for 412,000 pounds of uranium from four shallow open-pit mines. Later, FAP mined additional deposits on their portion (Bullrush, Sagebrush, Tablestakes) of the current property; final production numbers are unknown. On the west side of the Bullrush Property, Union Carbide developed uranium deposits by open-pit mining. Their “George” pits were excavated in the early 1980s to a depth of ~200-250 feet; final production numbers are unknown.

Jeep is a relatively small uranium deposit located about three miles southwest of Day Loma. It is located on property that once was part of the FAP land position. There has been no historical uranium production from this property.

The Rock Hill deposits located in the northeast part of the Gas Hills project area lie north of Cameco’s planned in-situ mining area. The deposits were discovered in the 1950’s as surface outcrop radiometric anomalies. In the 1960’s Vipoint Mining Company’s (“Vipoint”) drilling defined several near surface uranium deposits. Adobe Oil and Gas Company (“Adobe”) in 1975 entered into an agreement with Vipont to develop an open pit mine. During 1977-1981, Adobe drilled about 500 development holes in addition to 50 core holes to delineate two deposits (Rock Hill and Red Horse) adjacent to several mined by Union Carbide and Utah Int’l/Pathfinder. Total past production from the Rock Hill property is unknown.

Strathmore’s property includes portions of the Beaver Rim area, which is located to the south of the target areas previously discussed herein. CAM estimated that approximately 500 to 750 holes were drilled above Beaver Rim prior to 1980. The Allegretti claim group was previously owned by Adobe. Uranium mineralization in the Wind River formation was located by drilling in six horizons, each containing roll type uranium mineralization. Two separate areas about 5,000 feet apart were explored by historical drilling. Twenty exploration holes were drilled in the north area, some of which were located on Strathmore or the Company’s property. Of the twenty holes, 18 encountered evidence of mineralization on four levels. The depth of mineralization is about 1,200 feet.

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Geologic Setting

The Gas Hills Uranium District, located in central Wyoming, is about 100 square miles in area and is located within the Wind River Basin that is bounded on the north by the Owl Creek Mountains, on the west by the Wind River Mountains, and on the south by the Granite Mountains, part of the Sweetwater uplift. These mountain ranges consist of Precambrian crystalline basement rocks overlain by unmetamorphosed, mainly marine, Paleozoic and Mesozoic sedimentary rocks Mountain ranges around the Wind River basin were uplifted during the late Cretaceous to early Tertiary Laramide orogeny. Erosion from these basement-cored uplifts deposited terrestrial clastic sediments of the Eocene Wind River formation unconformably upon tilted and deformed Paleozoic-Mesozoic rocks. Arkosic sandstones and conglomerates are common in the Eocene Wind River formation and suggest that alluvial fan deposits helped fill the basin. The coarse clastic rocks are up to 1,800 feet thick in the Gas Hills area and pinch out against Paleozoic/Mesozoic rocks south of the Gas Hills. The arkosic sandstones of the Wind River Formation are the host rocks for all economic important quantities of uranium mineralization in the Gas Hills.

Mineralized trends are developed in the arkosic facies. The Bullrush, Day Loma and Loco-Lee deposits are hosted in the Puddle Springs member in the west Gas Hills trend. The George-Ver deposit is located in the Puddle Springs member in the Central trend; and the Rock Hill deposit is located in the Puddle Springs member in the eastern Gas Hills trend.

The uranium deposits are roll-front type, crescent-shaped in vertical cross section, and with a linear sinuous pattern in plan view. Roll-type uranium deposits are formed where oxidized and soluble uranium is carried down a permeable sandstone bed to a point where it meets reducing conditions. Uranium is reduced and deposited as uraninite and coffinite along the roll-front.

The majority of uranium deposits targeted for eventual production lie at depths from surface to approximately 450 feet in the main part of the Gas Hills Project. Depths to mineralization reach 1,200 feet below the prospective Beaver Rim to the south.

Exploration

Uranium was discovered in the Gas Hills near the center of the district at the north end of what later became known as the Central Gas Hills. As exploration continued, uranium was found at widely scattered localities and after a while it became evident that uranium occurrences were concentrated in three separate areas: a western area, a central area, and an eastern area. Following the initial discovery of uranium in the district in 1953, a staking rush ensued, thousands of mining claims were staked within a few months, and exploration exposed numerous near-surface oxidized deposits. Exploration for roll-front uranium deposits requires drilling for discovery, development and definition of economic deposits. Initial drilling is wide spaced to gather geologic information, including presence of alteration bleaching, traces of mineralization and stratigraphic information. The latter along with the gamma signature from the logging probe, is used to guide location of subsequent drill holes. This is standard procedures in exploration for roll-front uranium deposits. Application of current and historical exploration information, and known geological controls on mineralization, suggest that additional U₃O₈ could be present in already-identified trends, in addition to areas where sparse drill information is available, where geological conditions appear favorable.

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Strathmore’s exploration activities focused primarily on the George-Ver, Frazier LaMac, Loco-Lee, Day Loma, Bull-Rush, Rock Hill, Andrea, Sunset, Table-Stakes areas within the main Gas Hills area. All of these properties have a significant historical resource and at least several hundred historical holes in each property. Beginning in 2007 and continuing to the present, Strathmore’s exploration for uranium in the Gas Hills has involved confirmation drilling of previously-explored areas, along with some step-out drilling in other areas. Definition of the water table, preliminary metallurgical tests, and design of a proposed heap-leach pad and recovery plant were initiated by Strathmore. Exploration and confirmation drilling, in addition to permitting activities were completed as part of a US$8 million program formally announced by Strathmore on June 26, 2012 as a part of a strategic venture with Korea Electric Power Corporation (“KEPCO”).

Strathmore utilized a prompt-fission-neutron (“PFN”) logging tool, gamma-ray probing tools, and select chemical assays for the measurement of uranium in the Gas Hills project. Equivalent uranium values, expressed as eU₃O₈, were obtained from down-hole gamma-ray probes, assuming that uranium and its daughter products are in radiogenic equilibrium. The probes were standardized and calibrated using test pits operated by U.S. Department of Energy, located in Casper, Wyoming and Grand Junction, Colorado. Many drill holes completed subsequent to November 11, 2011 were logged using a PFN logging tool which gives a direct reading of uranium content.

Strathmore carried out confirmation and development drilling on the Day Loma, George-Ver, Loco-Lee, Jeep and Rock Hill properties. Each of these areas has been the site of past mine production and have historical mineral tonnage estimates. Most of the holes were rotary-drilled, with some reverse-circulation holes and a few cored sections. Strathmore drilling for each of the five areas is summarized below.

Mineralization

Uranium mineralization in the Gas Hills is present in bodies usually referred to as “rolls.” In vertical cross section, they are irregularly crescent 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 called the “roll front”. Reduced uranium minerals, uraninite and a little coffinite are concentrated in the sandstone matrix in the crescent roll. A concave contact separates the roll from adjacent bleached and oxidized host rock barren of uranium. This contact is the “roll-front”. Upper and lower boundaries of mineralization generally are beds of impermeable mudstone. Individual rolls can be a few feet to tens of feet thick. In plan, rolls can be traced for several thousand feet.

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 horns of the crescent thin away from the body of the crescent. In the Gas Hills, the lower horn normally is greatly extended and thins gradually, whereas the upper horn is short and thins abruptly.

On the concave side of a crescent-shaped mineralized body, relatively light gray colored altered host rock is present. The contact is a slightly irregular narrow zone, and the change from uranium-bearing to bleached or altered rock normally takes place within a distance of three inches or less.

On the convex side of a crescent shape mineralized body, relatively dark greenish-gray unbleached (unaltered) rock is present. The contact between uranium-bearing and unbleached or unaltered rock is an extremely irregular interfingering, mostly gradational feature but the contact between individual fingers of mineralized rock and unbleached host may be moderately sharp. The fingers of mineralized rock point in the direction of unbleached rock; this direction can be thought of as the direction in which the roll is facing.

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Uranium is not distributed uniformly throughout a roll, rather, it is typically concentrated in the body of the crescent close to the concave side. High-grade mineralization locally contains several percent U₃O₈ per ton. The grade progressively decreases away from the high-grade zone.

Drilling

More than 100,000 exploration and development holes were drilled in the Gas Hills from the mid-1950’s to 1979. Since 1990 only a few hundred holes have been drilled, nearly all by Strathmore and Cameco.

Strathmore’s drilling was successful in better-defining mineralized areas and in defining NI 43-101 compliant mineral resources.

Strathmore’s practice was to drill holes by conventional rotary drill rigs using air, foam or circulating drilling mud.

Holes drilled for environmental monitoring of water are designated with a number followed by MW in the Gas Hills Technical Report and are included in the numbering sequence that includes all holes. All holes, including MW holes were logged by gamma probes, and at times, by the PFN probe. Late in 2011 and throughout the 2012 drilling campaign, Strathmore searched for historic drill holes in the principal target areas in the field. When found, these holes were reamed or re-drilled and logged with gamma ray probe and with the PFN tool. Locations of the holes were established with GPS surveying. These recovered historic holes are identified by WO in the respective hole number within the Gas Hills Technical Report. Beginning in May 2012, prior to the effective date of the Gas Hills Technical Report, Strathmore used GAA Wireline Inc. to log holes, and to verify the Strathmore gamma and PFN readings. CAM concluded from its study of all PFN and gamma readings data from Strathmore’s drilling that disequilibrium effects are present and that actual amount of uranium in the drilled deposits may be greater than those indicated by the gamma-ray probe.

Strathmore drilled 60 rotary holes and three core holes in the Bullrush area in 2012. All holes were logged with a gamma ray probe and a PFN tool. Eleven confirmation rotary holes and one core hole were drilled in the area of the historic pit designed by FAP. Strathmore drilled 49 rotary exploration holes and two core holes in the Bullrush West-29 target area. These holes were drilled in a grid pattern, with lines spaced 200 feet apart and holes located at intervals of 200 feet along the lines.

In October 2010, Strathmore initiated drilling on the Day Loma Property. Nine holes were drilled; seven confirmation holes and two monitor wells. The seven holes were drilled to confirm mineralization at the Property and to extend the southeast trend into untested areas. The two monitor wells were drilled for baseline water quality data collection and analysis as required for mine permit submittal, and were all logged for uranium. Two areas within the Day Loma area are considered to have potential for commercial uranium mineralization. One area lies immediately east and south of the old open pit mine, called the Day Loma Southeast Extension target. Thirty-eight holes were drilled in this area, including one core hole in 2012. The second exploration target area drilled was the Northeast target and 25 holes were drilled in this area, including one core hole in 2012. Other holes were drilled across the greater property to confirm the mineralization indicated by the historical database.

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Drilling at George-Ver took place from 2007 to 2010. A total of 25 holes were drilled including seven core holes. Uranium mineralization varies from 0.007% to 0.261% eU₃O₈. Generally, chemical assays ofcore are higher than the gamma-ray probe measurements. Drilling at the George-Ver property in 2011 and 2012 was concentrated in three areas located north, west, and South of the historic Lucky Mc open pit. Twelve rotary holes and seven core holes were drilled in the area located north and northwest of the old Lucky Mc open pit. The holes were logged with both gamma probe and PFN tools. Twenty-four rotary holes were drilled west of the old open pit and 17 rotary holes were drilled south of the old Lucky Mc open pit. All rotary holes were logged with gamma-ray and PFN probes.

The Loco-Lee property was drilled with 15 holes in 2010 and 2011 with three being core. Gamma-ray probe readings vary from 0.019 to 0.404% eU₃O₈. The 11 holes drilled in 2011 also were logged with a PFN probe to obtain disequilibrium information. The PFN readings generally were greater than the gamma-ray probe. Sixty-five rotary holes and seven core holes were drilled at Loco-Lee in 2011 and 2012. Thirty-eight rotary holes and six core holes were drilled to confirm mineralization in the known area of extensive historic drilling located to the northeast of the old open pits. These holes were drilled on a grid with lines spaced 100 feet apart and holes located 100 feet apart along the lines. In addition, thirteen exploration rotary holes also were drilled in a potential mineral target area north and west of the known mineralized area with extensive historic drilling.

Strathmore started drilling the Rock Hill Property in April 2011. Twelve holes were drilled by reverse-circulation across the Rock Hill deposit to confirm existing historical drilling, retrieval of samples for overburden characterization (mine permit requirement), and for recovery of mineralized samples for mill amenability and column leach tests. The holes are located very close to the claim boundary against adjacent land controlled by others. Strathmore probed each of the twelve 2011 holes, using their standard gamma and PFN logging tools. Strathmore drilled 26 more confirmation rotary holes and four core holes in 2012 at the Rock Hill deposit; each of the holes was logged by gamma and PFN probes. Generally PFN probe readings were higher in uranium values than provided by gamma-ray probes. An additional eight (8) confirmation rotary holes were drilled to the southwest of the Rock Hill mineralization in an area previously mined by Utah International and planned for mining by Union Carbide.

The Tablestakes Project Area is located southeast of Strathmore’s past-proposed Gas Hills uranium recovery facility. Part of the target is an area called Amazon by FAP. Strathmore drilled 13 holes in this Amazon target area in 2012. Holes are widely spaced and drilled on grid lines spaced 400 feet apart, and holes located 400 feet apart on the grid lines. Six (6) additional holes were drilled to the west, in an area of pit highwalls not mined previously by Union Carbide and FAP. All holes were logged with gamma and PFN logging probes.

Strathmore drilled 40 development holes at the Jeep property in 2007. All holes were logged by standard gamma-ray probe, and readings of up to 0.058% eU₃O₈ were obtained.

Strathmore carried out exploration drilling at several targets south of the Beaver Rim Divide during the summer and autumn of 2012. Location, geologic favorability and previous historic drill testing justified additional exploration in the area. Strathmore drilled 12 rotary exploration holes in the West Diamond target and three rotary exploration holes in the East Diamond area. Nineteen rotary exploration holes were drilled in the South Black Mountain target area. All holes were logged with the gamma probe and several with the PFN tool. No core holes were drilled south of Beaver Rim.

Please refer to the Gas Hills Technical Report for the results of all drilling.

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Sampling and Analysis

Historical Data

The bulk of the drilling on the property was undertaken prior to 1980, and is considered “historical” under NI 43-101. Sedimentary roll uranium deposits were historically sampled by measuring the quantity of radiation emitted along the length of a drill hole, and converting these measurements into equivalent grade and thickness of uranium mineralization. Standard logs consist of recordings of gamma, self-potential and resistivity. Equivalent U₃O₈ content was calculated from gamma logs using industry-standard methods developed by the U.S. AEC. Some check analyses were done by fluorimetric chemical analyses and closed-can radiometric analyses. Any differences between the two analyses would indicate a radiogenic disequilibrium situation where gamma logs did not provide an accurate analysis of the quantity of uranium present. Chemical analyses for uranium were historically done at ISO-certified laboratories.

Strathmore Data

Strathmore’s practice was to drill holes by conventional rotary drill rigs using air, foam or circulating drilling mud. The cuttings were collected over 5 foot intervals and laid out on the ground in rows of 20 samples (100 feet) by the driller. The site geologist examined cuttings in the field to determine rock type and geochemical alteration. Between 2007 and November 11 2011, Strathmore, logged all its holes with gamma-ray probes. A few core holes were drilled to supplement the gamma data, and to provide material for metallurgical testing. Strathmore implemented PFN logging, and select core assaying, in addition to gamma logging. PFN analysis assesses the quantity of uranium present surrounding a drill hole directly by measuring neutrons fissioned from the U₂₃₅ isotope, thus aiding in determining any disequilibrium which may be present. In May 2011, Strathmore started drilling in the Gas Hills, specifically on the Day Loma, George-Ver, Loco-Lee, Bullrush, and Rock Hill properties, using a reverse-circulation drill rig. A total of 41 holes were drilled and logged with gamma and PFN tools during the summer 2011. Samples were collected for mine and mill permitting requirements. This method allows bulk samples to be collected from surface to total depth (varies from 100-450 feet). The retrieved mineralized samples are substantial in size and can be used for mill amenability and column leach testing to determine the ideal leachant and mill scenario.

Data Verification

Validation of the drill hole database is a key element in preparation of an NI 43-101 report. The drill hole database for the Gas Hills project consists of thousands of historical drill holes with gamma logs, mostly from the 1970s, but also with some from as early as the 1950s. It is recognized that gamma logs are indirect measurements of the amount of uranium present and must be validated. Typically, this process consists of comparing equivalent uranium determined from gamma log interpretations with chemical analyses of rock core recovered from core holes. This process is subject to some degree of uncertainty because the gamma logs and the chemical assays are obtained from different samples: core from the drill hole itself and gamma readings from the material surrounding the hole.

CAM undertook a rigorous statistical comparison of Strathmore’s drilling results with those of historical operators, as shown in Section 12 of the Gas Hills Technical Report. The comparison also included comparison of historical chemical assays of historical drill core with gamma logs of the cored intervals, and comparison of Strathmore’s gamma and PFN logging of the dual-probed intervals. As a result of these studies, CAM concluded that the historical drilling at Day Loma and Rock Hill, augmented by Strathmore’s drilling, were suitable for use in Mineral Resource estimation. There was not sufficient comparative data from George-Ver, Loco Lee, or Jeep to allow estimation of compliant Mineral Resources in these three areas.

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A series of 37 laboratory cross-checks between Hazen and IML are available for Strathmore core. This correspondence provides a high degree of confidence in the chemical assay data base.

Metallurgical Studies

The Company’s concept is to mine uranium-bearing material by open-pit and underground methods, heap-leach the mined material, and recover uranium by ion exchange. Strathmore previously contracted Lyntek Inc. of Denver, Colorado, to conduct preliminary metallurgical tests by bottle-roll and column-leach to assess uranium recoveries. Eight composite samples were prepared from drill cuttings obtained from drilling at Bullrush-Tablestakes, Day Loma, George-Ver, Loco-Lee and Rock Hill properties. These were submitted to InterMountain Labs in Sheridan, Wyoming and to Lyntek for metallurgical test work. Results of preliminary bottle-roll tests indicate average recoveries of 89.2%; overall reagent consumption is low.

Security of Samples

The historical sampling, logging, and gamma-probing were subject to the normal industrial security controls typical of the 1950’s to 1970’s. Strathmore’s security practices involved: awareness of chain-of-custody issues, limited access to logging tools through locked storage as approved by the NRC, and continuing calibration of logging tools to assure that no tampering occurred. All drill hole physical samples were locked in storage until sent for laboratory testing.

Beginning in May 2012, Strathmore utilized third-party independent PFN and gamma logging provided by GAA Wireline Inc. of Casper, Wyoming. GAA operated their own logging equipment and at times, provided loggers who operated Strathmore’s company-owned PFN logging truck. GAA provided calibration documentation of test pit runs, which were also reviewed by CAM. The Strathmore PFN and gamma probes from which this data is derived have been frequently calibrated at the Casper and Grand Junction DOE test pits and have shown, with a few exceptions, very little drift between calibrations.

Mineral Resource and Mineral Reserve Estimates

Below is a summary of the total Indicated Mineral Resources estimated for the Gas Hills Project:

Below is a summary of the total Inferred Mineral Resources estimated for the Gas Hills Project⁽¹⁾: