Technical Report on the Roca Honda Project, McKinley County, New Mexico, USA

SLR Project No:  138.02544.00006

Prepared by

SLR International Corporation

1658 Cole Blvd, Suite 100

Lakewood, CO  80401

USA

for

Energy Fuels Inc.

25 Union Blvd., Suite 600

Lakewood, CO 80228

USA

Effective Date - December 31, 2021

Signature Date - February 22, 2022

Qualified Persons

Grant A. Malensek, M.Eng, P.Eng.

Mark B. Mathisen, C.P.G.

David M. Robson, P.Eng., MBA

Jeffrey L. Woods, MMSA QP

Phillip E. Brown, C.P.G., R.P.G.

Daniel D. Kapostasy, P.G.

FINAL

Distribution: 1 copy - Energy Fuels Inc.

 1 copy -  SLR International Corporation

CONTENTS

TABLES

FIGURES

APPENDIX TABLES AND FIGURES

1.0 SUMMARY

1.1 Executive Summary

This Technical Report (Technical Report) was prepared by Grant A. Malensek, M.Eng., P.Eng., Mark B. Mathisen, C.P.G., David M. Robson, P.Eng., MBA, Phillip E. Brown, C.P.G., R.P.G., and Jeffrey L. Woods, MMSA QP of SLR International Corporation (SLR) and Daniel Kapostasy, P.G. of Energy Fuels Resources (USA) Inc. (EFR), for Energy Fuels Inc. (Energy Fuels), the parent company of Energy Fuels Resources (USA) Inc., with respect to the Roca Honda Project (Roca Honda or the Project), located in Central New Mexico, USA.  EFR owns 100% of the Project.

EFR's parent company, Energy Fuels Inc., is incorporated in Ontario, Canada.  EFR is a US-based uranium and vanadium exploration and mine development company with projects located in the states of Colorado, Utah, Arizona, Wyoming, Texas, and New Mexico.  EFR is listed on the NYSE American Stock Exchange (symbol: UUUU) and the Toronto Stock Exchange (symbol: EFR).

This Technical Report satisfies the requirements of Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101) and the United States Securities and Exchange Commission's (SEC) Modernized Property Disclosure Requirements for Mining Registrants as described in Subpart 229.1300 of Regulation S-K, Disclosure by Registrants Engaged in Mining Operations (S-K 1300) and Item 601 (b)(96) Technical Report Summary.  The purpose of this Technical Report is to disclose the results of a Preliminary Economic Assessment (PEA) for the Project.  The term PEA is used throughout this Technical Report and is consistent with an Initial Assessment (IA) under S-K 1300.  Grant A. Malensek, M.Eng., P. Eng., Mark B. Mathisen, C.P.G., David M. Robson, P.Eng., MBA, Jeffrey L. Woods, MMSA QP, and Phillip E. Brown, C.P.G., R.P.G. are all Qualified Persons (QPs) within the meaning of both S-K 1300 and NI 43-101 (SLR QPs); Daniel Kapostasy is a Qualified Person (QP) within the meaning of both S-K 1300 and NI 43-101 (EFR QP).

The Project includes the proposed Roca Honda Mine (the Mine) near the city of Grants, New Mexico, and the existing White Mesa Mill (the Mill) near the city of Blanding, Utah.  The Project is currently in the planning and permitting stages and the Mill is on a reduced operating schedule while processing materials as they become available.  When in full operation, the Project is expected to produce four million short tons of uranium ore to be shipped to the White Mesa Mill for processing (to produce concentrate known internationally as yellowcake).  A site visit was carried out to the Roca Honda Project on October 19, 2021, and the Mill on November 11, 2021.

The Roca Honda Mine has a long history of exploration and development with a number of owners since its discovery in the mid-1960s by Kerr-McGee Oil Industries (Kerr-McGee).  Ownership has since passed from Kerr-McGee, its subsidiaries, and successor (Rio Algom) to Western Nuclear Corporation (Western Nuclear) - Section 16 only, U.S. Conoco Inc. (Conoco) - Section 11 only, Strathmore Resources (Strathmore), and Roca Honda Resources (RHR). Since May 2016, EFR has had a 100% interest in the Mine.  The White Mesa uranium/vanadium mill was developed in the late 1970s by Energy Fuels Nuclear, Inc. (EFNI) as a processing option for the many small mines that are located in the Colorado Plateau region. After approximately two and a half years, the Mill ceased ore processing operations altogether due to low uranium prices.  Since 1984, majority ownership interest has alternated between EFNI, Union Carbide Corporation, and Denison Mines Corporation (Denison, previously International Uranium Corporation).  Since August 2012, EFR has controlled 100% of the Mill's assets and liabilities.

It is anticipated the Mine will be developed as an underground operation with an expected 11year mine life.  The mining rate is nominally 400,000 short tons (ton) of mill feed per year, which will be trucked 272 mi to the Mill and produce 28 million pounds (Mlb) of U₃O₈ (2.5 Mlb of U₃O₈ annually) for delivery to end-users.

1.1.1 Conclusions

The SLR QPs offer the following conclusions by area.

1.1.1.1 Geology and Mineral Resources

• The Roca Honda Mine is a significant high grade uranium deposit.

• Drilling to date has intersected localized, high-grade mineralized zones contained within five sandstone units of the Westwater Canyon Member of the Morrison Formation.

• The sampling, sample preparation, and sample analysis programs are appropriate and to industry standards for the style of mineralization.

• Although continuity of mineralization is variable, drilling to date confirms that local continuity exists within individual sandstone units.

• No significant discrepancies were identified with the survey location, lithology, and electric and gamma log interpretations data in historical holes.

• No significant discrepancies were identified with the lithology and electric and gamma log data interpretations in RHR holes.

• Descriptions of recent drilling programs, logging, and sampling procedures have been well documented by RHR, with no significant discrepancies identified.

• There is a low risk of depletion of chemical uranium compared to radiometrically determined uranium in the Roca Honda deposit.

• The sample security, analytical procedures, and QA/QC procedures used by EFR meet industry best practices and are adequate to estimate Mineral Resources.

• The resource database is valid and suitable for Mineral Resource estimation under S-K 1300.

• The assumptions, parameters, and methodology used for the Roca Honda Mineral Resource estimate is appropriate for the style of mineralization and mining methods

• The SLR QP is not aware of any environmental, permitting, legal, title, taxation, socioeconomic, marketing, political, or other relevant factors that could materially affect the current resource estimate.

1.1.1.2 Mining

• The proposed Mine is currently in the planning and permitting stages.

• The mineralization is relatively flat-lying and will be mined with a combination of step room-and-pillar (SRP) and drift-and-fill (DF) extraction methods.

• In the development of the Mineral Resource estimate for this PEA, the SLR QP 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 SRP mining method and 90% recovery for the DF mining method.

• The PEA is based on mining a total of 4.02 million tons of mineralized material, at a grade of 0.36% U₃O₈, containing 28.994 Mlb of U₃O₈.

• The Mine will be accessed from two shafts, one located in Section 16, and the other located in Section 17.  The shaft on Section 17 has been partially developed.

• Mining is partially dependent upon the use of a suitable cemented backfill. Test work to demonstrate that a suitable backfill will be generated before and during the mine development period needs to be completed.

1.1.1.3 Hydrogeology

• The 2016 groundwater model results demonstrate that, over the projected 11 year mine life, the average annual inflow rates of all the mine workings will range from approximately 2,170 gpm to approximately 5,920 gpm with an average of nearly 4,700 gpm. Steinhaus (2014) has estimated the median flow rate extracted from the Wastewater Canyon Formation near the proposed Mine to range from 9 m³/min (2,380 gpm) to 19 m³/min (5,020 gpm) using an analytical model (Theis equation's Copper Jacob straight-line approximation method).

• The permit granted by the New Mexico State Engineer's office to RHR in 2012 for Sections 16, 10, and 9 allows dewatering at a rate of 4,500 gpm.  This permit does not include Section 17.

• Dewatering from the underground mine will cause declines (depressurizing) within the confined aquifer systems of the Westwater Canyon Member (Westwater) of the Morrison Formation, where the mine workings will be developed. The New Mexico Office of the State Engineer determined that the dewatering of the Westwater Canyon Member would impact some domestic wells (RPA, 2015). The maximum drawdown of 10 ft in the Gallup Sandstone is not expected to extend past site boundaries. A 10 ft drawdown in the Dakota Sandstone may occur within a 2,000 ft radius around the shaft. Aquifers overlying and/or underlying the Westwater may be affected insignificantly due to confining units that separate the aquifers. The groundwater flow model simulated that the impact of depressurizing on area streams would be negligible (RPA, 2015).

• Per the court settlement reached between Pueblo of Acoma and RHR, the treated mine water will be piped to the community of Milan to assist in recharging the Rio San Jose. The parties acknowledge that up to 430 gpm may be used for mining operations and retained in the Rio San Jose Basin.  The water produced from depressurizing activities will be treated to state and federal water discharge standards before delivering to users in the Rio San Jose Basin through the pipeline. An influx of this quantity of water into the overlying soil/alluvium found in the irrigated area will likely raise the water table; however, no adverse impact on the water quality of the underlying alluvial Westwater Canyon Member of the Morrison Formation aquifer is expected (NM-MEJDC, 2015).

• Because Mine water will be piped to Milan, treated, and used for aquifer recharge, local shallow aquifers will not be affected. Such aquifers that could otherwise be vulnerable to potential accidental impacts from facility activity or discharged water, include the alluvium, the Point Lookout Sandstone, and the Dalton Sandstone Member of the Crevasse Canyon Formation.

1.1.1.4 Mineral Processing

• The Mill has been in operation since 1981 and is equipped with the required equipment using a proven process for the production of uranium oxide (U₃O₈) product, called "yellowcake".  In addition, although it is not part of the production schedule in this Technical Report, the Mill also has the capacity to produce vanadium pentoxide (V₂O₅).

• Mill operations can receive run-of-mine (ROM) material from the Roca Honda Mine and various other mines. Material will be dumped from trucks on an ore pad at the Mill 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.

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

• The Mill is currently on a reduced operating schedule processing materials as they become available. 

1.1.1.5 Infrastructure

• The Roca Honda Mine and White Mesa Mill are in historically important, uranium-producing regions of central New Mexico and southeastern Utah.  All the regional infrastructure necessary to mine and process commercial quantities of U₃O₈ is in place.

• EFR has been operating the White Mesa tailings cells since 1981, which is currently operating under the requirements of the Utah Department of Environmental Quality Radioactive Materials License (RML). 

1.1.1.6 Environment

• Extensive baseline studies have been completed for the Roca Honda Mine site area.

• Rock characterization studies indicate that waste rock from the Mine will not be acid generating.

• The Draft Environmental Impact Statement (DEIS) for the Mine was published by the U.S. Forest Service (USFS) in February 2013.  A Supplement to the DEIS is expected to be completed in late 2022 or early 2023 with an expected RoD and Final EIS anticipated in 2023. A mine permit is expected to be issued following the RoD and Final EIS.

• Environmental considerations are typical of underground mining and processing facilities and are being addressed in a manner that is reasonable and appropriate for the stage of the Project.

• All required permits for the White Mesa Mill to operate are in place.

• There are no violations or regulatory matters of any significance or that are not being addressed under normal regulatory procedures.

• The EFR QP is not aware of any environmental, permitting, legal, title, taxation, socioeconomic, marketing, political, or other relevant factors that could materially affect the current resource estimate.

1.1.2 Recommendations

The SLR QPs offer the following recommendations by area:

1.1.2.1 Geology and Mineral Resources

The SLR QP makes the following recommendations regarding advancing the Project forward in a non-phased and independent approach.  The proposed work (Table 1-1) would be completed during the four years of preproduction, followed by a final investment decision from Energy Fuels.

Table 1-1: Roca Honda Four-Year Estimated Budget

Energy Fuels Inc. - Roca Honda Project

In addition, the SLR QPs recommend the following which are independent of the proposed budget:

1. Although there is a relatively low risk in assuming that density of mineralized zones is similar to that reported in mining operations east and west of the Roca Honda property, conduct additional density determinations, particularly in the mineralized zones, to confirm and support future resource estimates.

2. Although there is a low risk of depletion of chemical uranium compared to radiometrically determined uranium in the Roca Honda mineralization, complete additional sampling and analyses to supplement results of the limited disequilibrium testing to date.

3. Modify the sample analysis QA/QC protocol to include the regular submission of blanks and standards for future drill programs.

4. Prepare fault modeling once additional data have been obtained to support future mine design work.

5. Digitize historical drilling logs for Sections 9, 10, and 16 at 0.5 ft intervals, similar to the work completed on Section 17 for any future Mineral Resource estimates.

6. Complete additional confirmation drilling at the earliest opportunity to confirm historical drillhole data on all zones.

7. Use a secondary alternative estimation method (ID², ID³, or Ordinary Kriging) as an additional check for the block model validation.

1.1.2.2 Mining and Mineral Reserves

1. Implement a program of additional sampling and laboratory testing concurrently with the definition drilling program to support the geotechnical designs which are based on a limited number of core samples. Boreholes should be located on the centerline of the various proposed ventilation shafts. The cores from these holes will define the different lithologies to be encountered and provide samples for rock strength testing and other needed geotechnical design information. The geotechnical study on the proposed Section 16 shaft core hole was completed in 2012. More detailed geotechnical designs and cost estimates for shaft construction should be completed.

2. Continue to evaluate the feasibility of starting access to the mine operations in Section 17 by way of the existing 1,478 ft deep (14 ft diameter) shaft.

3. Investigate more thoroughly the applicability of using roadheaders, and other selective mining methods that may reduce dilution for development and stope mining. This will reduce the tonnage and increase the grade of mineralized material shipped and processed at the Mill.

1.1.2.3 Hydrogeology

1. Consistent with state and federal regulations requirements, implement environmental monitoring and analysis programs to collect water level and water quality data when the mine site becomes fully operational. 

2. Update on an annual basis the numerical groundwater model based on mine inflows and drawdowns in monitoring wells.

3. Expand the well distribution to confirm the predicted cone of depression. 

4. Develop specific plans for future monitoring of springs, both flow and quality, similar to previous monitoring programs completed on site.

1.1.2.4 Mineral Processing

1. Continue the White Mesa Mill intermittent operations with maintenance program.

2. Evaluate historical operating data to determine possible flowsheet improvements or modifications to improve the mill production rate/economics and make these changes before commencing production.

1.2 Economic Analysis

An economic analysis was performed using the cost estimates presented in this Technical Report. It is important to note that, unlike Mineral Reserves, Mineral Resources do not have demonstrated economic viability.  The PEA is preliminary in nature, and it includes Inferred Mineral Resources that are considered too speculative geologically to have modifying factors applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that this economic assessment will be realized.

The Roca Honda base case cash flow is based on Measured, Indicated, and Inferred Mineral Resources (the latter being 45% of the total).  An alternative case with only Measured and Indicated Mineral Resources is also presented in this Technical Report.

1.2.1 Base Case (Measured, Indicated, and Inferred Mineral Resources)

1.2.1.1 Economic Criteria

An after-tax cash flow projection for the base case has been generated from the life-of-mine (LOM) schedule and capital and operating cost estimates in this Technical Report, and is summarized in the Cash Flow Analysis (Section 19.2). A summary of the key criteria is provided below.

1.2.1.1.1 Revenue

• Total mill feed processed: 4.020 million short tons
• Percent of Inferred Mineral Resource tonnage in LOM: 45%
• Average processing rate: 1,150 stpd
• U₃O₈ head grade: 0.36%
• Average mill recovery: 95%
• Recovered U₃O₈: 27.5 Mlb
• Average annual U₃O₈ sales: 2.5 Mlb/y

• Metal price: US$65.00/lb U₃O₈
• Concentrate shipping cost from the Mill to customer: $683/ton U₃O₈ or $0.34/lb U₃O₈

1.2.1.1.2 Capital and Operating Costs

• Preproduction period of 54 months
• Mine life of 11 years
• LOM capital costs of $482.3 million on first quarter (Q1) 2021 US dollar basis
• LOM operating cost (excluding offsite costs, royalties, and severance taxes) of $945.9 million or $235.29/ton milled on Q1 2021 US dollar basis
• Capital and operating costs are at a AACE International Class 4 accuracy level (-15% to -30% to +20% to 50%).

1.2.1.1.3 Royalties and Severance Taxes

New Mexico mining and private royalties on the value of special minerals extracted were applied as shown below:

• Landowner Gross Royalty (1%)
• Section 9 Gross Royalty (1%)
• Section 16 New Mexico State Lease Royalty (5% of gross less transportation and milling costs)
• New Mexico mining severance tax of 3.5% payable on the "value" of mineral production for New Mexico state leases. The severance tax is currently 3.5% of 50% (net 1.75%) of the taxable value of U₃O₈ produced. The taxable value is based upon the operating cash flow less a development allowance, depreciation, and a processing allowance

1.2.1.1.4 Income Taxes

The economic analysis includes the following assumptions for corporate income taxes (CIT):

• Unit of Production depreciation method was used with total allowance of $475.4 million taken during LOM
• Percentage depletion method was used with total allowance of $136.5 million taken during LOM
• Loss Carry Forwards - Income tax losses may be carried forward indefinitely but may not be used for prior tax years
• Federal tax rate of 21%
• State tax rate of 5.9% (4.66% after federal benefit)

1.2.1.2 Cash Flow Analysis

Table 1-2 presents a summary of the Roca Honda Project base case economics at a U₃O₈ price of $65.00/lb and a production schedule that includes 45% Inferred Mineral Resources and 55% combined Measured and Indicated Mineral Resources.  It is important to note that, unlike Mineral Reserves, Mineral Resources do not have demonstrated economic viability. The economic analysis for the base case contained in this Technical Report is based, in part, on Inferred Resources, and is preliminary in nature.  Inferred Resources are considered too geologically speculative to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves.  There is no certainty that economic forecasts on which this Preliminary Economic Assessment is based will be realized.

On an after-tax basis, the undiscounted cash flow for the base case totals $253.7 million over the mine life.  The after-tax Net Present Value (NPV) at 5% discount rate is $55.9 million and the Internal Rate of Return (IRR) is 7.6%, with simple payback (PB) from start of commercial production (CP) occurring in 8.1 years.

Table 1-2: Base Case After-Tax Cash Flow Summary

Energy Fuels Inc. - Roca Honda Project

The average annual U₃O₈ sales for the base case during the 11 years of operation is 2.5 Mlb per year at an average All-in Sustaining Cost (AISC) of $39.12/lb U₃O₈.

1.2.1.3 Sensitivity Analysis

The Project is most sensitive to head grade, uranium price, and recovery, and only less sensitive to operating cost and capital cost.  The sensitivities to metallurgical recovery, head grade, pounds of U₃O₈, and metal price are nearly identical.

1.2.2 Alternate Case (Measured and Indicated Mineral Resources Only)

The SLR QP also completed a high level analysis of a scenario (the alternate case) with a production schedule that included only Measured and Indicated Mineral Resources, i.e., excluding Inferred Mineral Resources, which comprised 45% of the tons in the base case.  Using the same mining and processing assumptions and operating cost parameters as the base case, the alternate case production schedule has 1.79 million tons at 0.41% U₃O₈ generating 14.0 Mlb U₃O₈ over the same 11 year mine life but at a milling rate of 490 tpd compared to 1,150 tpd in the base case.

As part of the alternate case analysis, it was necessary to scale the base case capital cost estimate (completed for a milling rate of 1,150 tpd) down to the 490 tpd rate in the alternate case.  The SLR QP used the 0.6 capital cost rule as follows:

Alternate Case capital cost = $482 M*(490/1,150)^0.6

Thus, the alternate case capital cost estimate at a milling rate of 490 tpd is $289 million, a reduction of $193 million, or 40%, compared to the base case capital cost estimate.

Table 1-3 presents a summary of the Roca Honda alternate case economics at an U₃O₈ price of $65.00/lb.  On a pre-tax basis, the undiscounted cash flow totals $170 million over the mine life.  The pre-tax NPV at a 5% discount rate is $46.0 million with pre-tax IRR of 8.6%.  On an after-tax basis, the undiscounted cash flow totals $130 million over the mine life.  The after-tax NPV at 5% discount rate is $22.0 million with after-tax IRR of 6.8%.

Table 1-3:  Alternate Case After-Tax Cash Flow Summary

Energy Fuels Inc. - Roca Honda Project

The average annual U₃O₈ sales for the alternate case during the 11 years of operation are 1.3 Mlb per year at an average AISC of $35.07/lb U₃O₈ 

The after-tax cash flow sensitivities for the alternate case are similar in magnitude to the base case with the Project being most sensitive to head grade, uranium price, and recovery, and only slightly less sensitive to operating cost and capital cost at a AACE International Class 4 accuracy level.

1.3 Technical Summary

1.3.1 Property Description and Location

The Roca Honda Project is located in McKinley County, in Central New Mexico, USA, in the Ambrosia Lake subdistrict, immediately northeast of the city of Grants, New Mexico.  The geographic coordinates for the approximate center of the Project are located at latitude 35°22'4.23" N and longitude 107°41'56.62"..  The White Mesa Mill is located in San Juan County, in southeastern Utah, USA, immediately south of the town of Blanding, Utah.  The Mill is located at latitude 37°32'10.49" N and longitude 109°30'11.94" W.  The Project will have the capacity to produce approximately 2.5 Mlb of U₃O₈ annually.

EFR owns 100% interest in the Project comprising of Roca Honda project land holdings totaling 4,440 acres and White Mesa Mill land holdings totalling 5,389 acres.

The Mine is located approximately three miles northwest of the community of San Mateo, New Mexico, in McKinley County, and approximately 22 miles by road northeast of Grants, New Mexico, via State Highway NM 605. The Mill is located approximately six miles south of Blanding, Utah, along US Highway 191 and 290 miles by highway northwest of the Mine.

Climate in the Mine area may be classified as arid to semi-arid continental, characterized by cool, dry winters, and warm, dry summers.  Grants 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.  In the Mill area, the climate of southeastern Utah is classified as dry to arid continental.  Although varying somewhat with elevation and terrain, the climate in the vicinity of the Mill can be considered as semi-arid and typified by warm summers and cold winters.  Blanding has an annual average temperature of 50°F. July is usually the warmest month with an average high of 91°F and low of 61°F, and January is usually the coldest month with an average high of 42°F and low of 22°F. 

The Mine would employ 257 personnel who would be based around the town of Grants, Cibola County, New Mexico, which is the largest community near the Mine area. As of the 2020 census, Cibola County has a population of 27,172 people of which 8,866 people reside in Grants. Additionally, the city of Albuquerque, New Mexico is located approximately 100 miles east of the Mine area and could be a source of most materials and technical support needed for the Project.

To process mill feed from the Mine for the 11 year mine life, the Mill would employ 75 personnel who would be mostly based in the town of Blanding, San Juan County, Utah, and environs. 

The Mine and Mill are located in historically important uranium-producing regions of central New Mexico and southeastern Utah, respectively.  All the infrastructure necessary to mine and process significant commercial quantities of U₃O₈ currently exists.  Infrastructure items include high voltage electrical supplies, water sources, paved roads and highways for transporting ROM mill feed crude ore and finished products, and accommodations for employees.  Local and State infrastructure also includes hospitals, schools, airports, equipment suppliers, fuel suppliers, and communication systems.

The Mine is located at elevations ranging from 7,100 ft above sea level (ft ASL) to 7,680 ft ASL with easterly and southerly dipping slopes. The Mine area is sparsely populated, rural, and largely undeveloped.  The predominant land uses include low-density livestock grazing, hay cultivation, and recreational activities such as hiking, sightseeing, picnicking, and seasonal hunting.  Vegetation in the Mine area consists mainly of grasses, pinyon pine, and juniper trees. 

Material mined at Roca Honda will be trucked 272 mi to EFR's White Mesa Mill in Blanding, Utah for processing.  The Mill is located at elevations ranging from about 5,550 ft ASL to 5,650 ft ASL.  It is located near the center of White Mesa, one of the many finger-like north-south trending mesas that make up the Great Sage Plain located in Utah. The nearly flat upland surface of White Mesa is underlain by resistant sandstone caprock, which forms steep prominent cliffs separating the upland from deeply entrenched intermittent stream courses on the east, south and west.

1.3.2 Land Tenure

EFR owns 100% interest in the Project comprising of Roca Honda project land holdings totaling 4,440 acres and White Mesa Mill land holdings totalling 5,389 acres.

1.3.3 Existing Infrastructure

The Roca Honda project and White Mesa Mill are in historically important, uranium-producing regions of central New Mexico and southeastern Utah.  All the infrastructure necessary to mine and process significant commercial quantities of U₃O₈ is in place.

Infrastructure items include:

• Roca Honda Mine and White Mesa Mill near Grants, New Mexico and Blanding, Utah, respectively
• Power for the Mine will be available at the substation with power coming from the New Mexico Energy grid.  The operating load at the Mine and Mill is 1.6 MW and 1.5 MW, respectively.
• Water supply for both the Mine and Mill consists of a combination of potable water, and water from wells on site.
• Paved roads and highways
• Finished U₃O₈ yellowcake can be transported by truck to customer facilities nationwide
• Cells 1, 2, 3, 4A and 4B at the White Mesa Mill
• Accommodations for employees

Local and State infrastructure such as hospitals, schools, airports, equipment suppliers, fuel suppliers, and communication systems

1.3.4 History

The Roca Honda Mine has a long history of exploration and development with a number of owners.  Kerr-McGee Oil Industries (Kerr-McGee), its subsidiaries, and successor (Rio Algom) completed significant work in from the mid-1960s until 1982 succeeded by Western Nuclear, Conoco, and Strathmore. Roca Honda Resources (RHR) was established on July 26, 2007, when Strathmore (60%) formed a limited liability company with Sumitomo Corporation (40%) and transferred the property to RHR.  In August 2013, EFR acquired a 100% interest in Strathmore, and assumed Strathmore's 60% ownership interest in RHR.  In June 2015, EFR acquired a 100% interest in the mineral properties controlled by Uranium Resource Incorporated (URI).  In May 2016, EFR completed the purchase of Sumitomo Corporation's 40% interest in RHR and, since then, has a 100% interest in the Property.

Material mined at Roca Honda will be trucked to EFR's White Mesa Mill in Blanding, Utah for processing.  The White Mesa uranium/vanadium mill was developed in the late 1970s by Energy Fuels Nuclear, Inc. (EFNI) as a processing option for the many small mines that are located in the Colorado Plateau region. After approximately two and one-half years, the Mill ceased ore processing operations altogether due to low uranium prices.  Since 1984 the Mill has run on selected campaign basis, with majority ownership interest alternating between EFNI, Union Carbide Corporation, and Denison.  Since August 2012, EFR has controlled 100% of the Mill's assets and liabilities.

1.3.5 Geology and Mineralization

More than 340 Mlb of U₃O₈ have been produced from the Grants uranium deposits in New Mexico between 1948 and 2002.  The Grants uranium district is one of the largest uranium provinces in the world.  The Grants uranium district extends from east of Laguna to west of Gallup in the San Juan Basin of New Mexico.  Three types of sandstone uranium deposits are recognized: tabular, redistributed (roll-front, fault-related), and remnant-primary.

Rocks exposed in the Ambrosia Lake subdistrict of the Grants uranium district, which includes the Project area, include 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 Project area are of Late Cretaceous age; these rocks and the Quaternary Period deposits that cover them in some places.

The uranium mineralization found in the Mine area is contained within five sandstone units of the Westwater Canyon Member.  Zones of mineralization vary from approximately one foot to 30 ft thick, 100 ft to 600 ft wide, and 200 ft to 3,000 ft in length in elongated pods.  Uranium mineralization in the Mine area west to east, and northwest to southeast depending on general area within the Mine area, consistent with trends of the fluvial sedimentary structures of the Westwater Canyon Member, and the general trend of mineralization across the Ambrosia Lake subdistrict.

Uranium mineralization in the Mine area is believed to be predominantly primary ("trend") mineralization, with some secondary mineralization due to oxidation and mobilization of uranium near permeable geologic structures.  Uranium mineralization consists of dark organic-uranium oxide complexes.  The uranium in the Mine area is dark grey to black in color and is found between depths of approximately 1,380 ft to 2,600 ft below the surface.

Primary mineralization pre-dates the formation of the Laramide aged structures in the Mine area, with a small amount of vertical offset of mineralization present across the local faults.  There is a possibility of some redistribution and stack ore 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. 

1.3.6 Exploration Status

No exploration or drilling work has been conducted at the Mine since EFR acquired it in August 2013.

EFR is planning a large infill-drilling program of approximately 200 surface drillholes prior to any mining operations taking place at the Mine.  Core recovered from this program will be used for assay checks of geophysical probes, disequilibrium and metallurgical studies, and geotechnical and hydrologic studies to refine mine plans.  This program is being permitted as part of the overall mine permitting process and no timeframe for this drilling has been set.

1.3.7 Mineral Resources

Mineral Resources have been classified in accordance with the definitions for Mineral Resources in S-K 1300, which are consistent with Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Resources and Mineral Reserves dated May 10, 2014 (CIM, 2014) definitions which are incorporated by reference in NI 43-101.  The Mineral Resource estimate is summarized in Table 1-4.

Table 1-4: Attributable Mineral Resource Estimate for Roca Honda - Effective Date
December 31, 2021

Energy Fuels Inc. - Roca Honda Project

Notes:

1. SEC S-K definitions were followed for all Mineral Resource categories.  These definitions are also consistent with CIM (2014) definitions in NI 43-101.

2. Mineral Resources are estimated at a U₃O₈ cut-off grade of 0.19% U₃O₈.

3. A minimum mining thickness of six feet was used, along with $241/ton operating costs, $65/lb U₃O₈ price, and 95% recovery.

4. Bulk density is 0.067 ton/ft³ (15.0 ft³/ton or 2.14 t/m³).

5. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.

6. Mineral Resources are 100% attributable to EFR and are in situ.

7. Numbers may not add due to rounding.

The EFR QP is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could materially affect the Mineral Resource estimate.

1.3.8 Mineral Reserves

There are no current Mineral Reserves at the Roca Honda Project.

1.3.9 Mining Method

This Technical Report includes 4.02 million tons of mineralized material at a diluted grade of 0.36% U₃O₈ containing 28.994 Mlb U₃O₈. To arrive at this estimate, the SLR QP 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 SRP mining method and 90% recovery for the DF mining method. The SLR QP notes that Inferred Resources are considered too geologically speculative to have mining and economic considerations applied to them 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 SRP stoping in the lower grade zones and DF stoping in the higher grade zones. The transition grade was calculated at 0.265% U₃O₈. Stopes with average diluted grades of less than 0.265% U₃O₈ will 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 LOM schedule is based on initiating development from the production shafts located in Section 16 and Section 17. The mining areas in the Southwest mining area will be connected to the Northeast mining area via a 3,600 ft twin decline. Primary development connecting the shaft to the various mineralized zones (including the twin 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 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 eleven 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 simultaneously and dropping to 1,020 stpd when mining from Section 10 only. 

Depressurization of the three main aquifers in the Project area will be accomplished using depressurization wells and underground long holes that supply water to 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 gpm of water at temperatures between 90°F and 95°F.

The deposit will be developed and mined based on single-pass ventilation using a series of separate and independent intake and exhaust networks. The design requires a total of 12 ventilation raises (five in Section 17, three in Section 16, two in Section 9, and three 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. 

1.3.10 Mineral Processing

The White Mesa Mill is currently on a reduced operating schedule processing materials as they become available.  The Mill is in the process of processing Rare Earth materials in part of the circuit, functioning essentially as a pilot plant.  Owing to the work, the facility is sufficiently staffed to initiate production relatively quickly.

The Mill uses a Semi Autogenous (SAG) mill operating in closed circuit with vibratory screens for comminution.  Mill feed is fed to the communication circuit via front end loader. Nameplate production rate for the circuit is 150 short tons per hour (stph).

The Mill uses an atmospheric hot acid leach followed by counter current decantation (CCD) and a clarifier stage to remove suspended solids.  Clarified pregnant leach solution (PLS) reports to the solvent extraction (SX) circuit where uranium and vanadium are extracted from the aqueous solution to an organic phase.  Salt and sulfuric acid are then used to strip the uranium from the organic phase.

After stripping of the uranium from the organic in SX, uranium is precipitated with anhydrous ammonia, dissolved, and re-precipitated to improve product quality.  The resulting precipitate is then washed and dewatered using centrifuges to produce a final U₃O₈ product called "yellowcake". The yellowcake is dried in a multiple hearth dryer and packaged in drums weighing approximately 800 lb to 1,000 lb for shipping to uranium converters.

Tailings from the acid leach plant are stored in permitted 40 acre tailing cells located in the southwest and southern portion of the mill site.  Spent process solutions are stored in the evaporation cells for reuse with excess solutions allowed to evaporate.

1.3.11 Market Studies

The majority of uranium is traded via long-term supply contracts, negotiated privately without disclosing prices and terms.  Spot prices are generally driven by current inventories and speculative short-term buying.  Monthly long-term industry average uranium prices based on the month-end prices are published by Ux Consulting, LLC, and Trade Tech, LLC.  An accepted mining industry practice is to use "Consensus Forecast Prices" obtained by collating commodity price forecasts from credible sources, with the long-term forecast price used for estimating Mineral Reserves, and 10% to 20% higher prices used for estimating Mineral Resources.

For Mineral Resource estimation and cash flow projections, EFR selected a U₃O₈ price of $65.00/lb, on a Cost, Insurance, and Freight (CIF) basis to customer facility, based on independent forecasts showing long-term prices of approximately $55.00/lb.  The SLR QP considers the selected price to be reasonable and consistent with industry practice.

1.3.12 Environmental, Permitting and Social Considerations

A number of permits are required for the operation of Roca Honda Mine to be issued by local, state, and federal agencies including: 

• Mine Operations Plan for the Roca Honda Mine, Record of Decision (RoD) from the U.S. Forest Service (USFS)
• A mine dewatering permit from the State of New Mexico
• A discharge permit from the New Mexico Environment Department (NMED)
• A National Pollutant Discharge Elimination System (NPDES) permit from the U.S. Environmental Protection Agency (EPA)
• A Nationwide 404 permit from the Army Corps of Engineers
• A National Emission Standards for Hazardous Air Pollutants (NESHAP) permit from the EPA

Roca Honda is in an advanced stage of permitting and EFR is anticipating a RoD in 2023 which will be followed by the issuance of other state and federal permits.

The White Mesa Mill is permitted to operate and does so on an intermittent basis when sufficient feed is obtained and market factors warrant.

There are no violations or regulatory matters of any significance or that are not being addressed under normal regulatory procedures.

1.3.13 Capital and Operating Cost Estimates

The base case capital cost estimate summarized in Table 1-5 covers the life of the Project and includes initial capital costs, expansion capital, and end-of-mine-life recovery of working capital.  The Project capital costs are based on 2015 US dollars, based on the previous technical report authored by SLR's predecessor RPA.    For this Technical Report, the SLR QP escalated these costs to Q1 2021 US dollar basis using subscription-based Mining Cost Services (MCS) cost indexes (Infomine, 2021).  In the SLR QP's opinion, inflationary indices since Q1 2021 are too volatile to apply against a long lived asset.  The escalation effect during the five year period (2016 to 2021) is estimated to be 16.3% or $67.4 million over 2015 estimates.

Table 1-5: Capital Cost Estimate

Energy Fuels Inc. - Roca Honda Project

The average LOM operating costs and unit rates are shown in Table 1-6.  The Project operating costs are based on 2015 US dollars, based on the previous technical report authored by SLR's predecessor RPA.  For this Technical Report, the SLR QP escalated these costs to Q1 2021 US dollar basis using MCS cost indexes.  The escalation effect during this five year period (2016 to 2021) is estimated to be 10.3% or $89.0 million for an increase of $21.77/ton milled over 2015 estimates.

Table 1-6: Operating Cost Estimate

Energy Fuels Inc. - Roca Honda Project

2.0 INTRODUCTION

SLR International Corporation (SLR) was retained by Energy Fuels Resources (USA) Inc. (EFR) to prepare a Technical Report on Roca Honda Project (Roca Honda or the Project), located in Central New Mexico, USA, for EFR's parent company, Energy Fuels Inc.  EFR owns 100% of the Project.

This Technical Report satisfies the requirements of Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101) and the United States Securities and Exchange Commission's (SEC) Modernized Property Disclosure Requirements for Mining Registrants as described in Subpart 229.1300 of Regulation S-K, Disclosure by Registrants Engaged in Mining Operations (S-K 1300) and Item 601 (b)(96) Technical Report Summary.  This Technical Report is considered by SLR to meet the requirements of a Preliminary Economic Assessment (PEA) as defined in Canadian NI 43-101 regulations.  The term PEA is used throughout this Technical Report and is consistent with an Initial Assessment (IA) under S-K 1300.

EFR's parent company, Energy Fuels Inc., is incorporated in Ontario, Canada.  EFR is a US-based uranium and vanadium exploration and mine development company with projects located in the states of Colorado, Utah, Arizona, Wyoming, Texas, and New Mexico.  EFR is listed on the NYSE American Stock Exchange (symbol: UUUU) and the Toronto Stock Exchange (symbol: EFR).

The Project includes the proposed Roca Honda Mine (the Mine) near the city of Grants, New Mexico, and the existing White Mesa Mill (the Mill) near the city of Blanding, Utah.  The Project is currently in the planning and permitting stages and the Mill is on a reduced operating schedule while processing materials as they become available.  When in full operation, the Project is expected to produce uranium concentrate known internationally as yellowcake. 

The Roca Honda area has a long history of exploration and development with a number of owners since its first discovery in the mid-1960s by Kerr-McGee Oil Industries (Kerr-McGee).  Ownership has since passed from Kerr-McGee, its subsidiaries, and successor (Rio Algom Mining LLC) to Western Nuclear Corporation (Western Nuclear) -Section 16 only, U.S. Conoco Inc. (Conoco) -Section 11 only, Strathmore Resources (Strathmore), and Roca Honda Resources (RHR). Since May 2016, EFR has had a 100% interest in the Mine.  The White Mesa uranium/vanadium mill was developed in the late 1970s by Energy Fuels Nuclear, Inc. (EFNI) as a processing option for the many small mines that are located in the Colorado Plateau region. After approximately two and a half years, the Mill ceased ore processing operations altogether due to low uranium prices.  Since 1984, majority ownership interest has alternated between EFNI, Union Carbide Corporation, and Denison Mines Corporation (Denison, previously International Uranium Corporation).  Since August 2012, EFR has controlled 100% of the Mill's assets and liabilities.

The proposed Roca Honda Mine underground operation is expected to have a mine life of 11 years with a mining rate of approximately 400 thousand tons of mill feed per year, which will be trucked 272 mi to the Mill which would produce 28 million pounds (Mlb) of U₃O₈ (2.5 Mlb of U₃O₈ annually), for delivery to end-users.

The economic analysis contained in this Technical Report is based, in part, on Inferred Resources, and is preliminary in nature.  Inferred Resources are considered too geologically speculative to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves.  There is no certainty that economic forecasts on which this Preliminary Economic Assessment is based will be realized.

2.1 Sources of Information

Sources of information and data contained in this Technical Report or used in its preparation are from publicly available sources in addition to private information owned by EFR, including that of past property owners.

The QPs, Messers. Malensek, Mathisen, and Kapostasy visited Roca Honda on October 19, 2021, and inspected various parts of the property, however, did not inspect the existing Section 17 infrastructure which was inaccessible at the time of the visit as surface access agreements are still being negotiated by EFR and current landowner. The SLR QPs, Messers. Malensek and Woods visited the Mill on November 11, 2021, and toured the operational areas, mill offices, and tailings storage facility (TSF).  The EFR QP Mr. Kapostasy last visited the White Mesa Mill on September 16 to 17, 2021.

Table 2-1 presents a summary of the QP responsibilities for this Technical Report.

Table 2-1: Summary of QP Responsibilities

Energy Fuels Inc. - Roca Honda Project

During the preparation of this Technical Report, discussions were held with personnel from EFR:

• Gordon Sobering, PE, QP, Senior Mine Engineer

• Dan Kapostasy, P.G., Director of Technical Services

• Timo Groves, PE, Process Engineering, White Mesa Mill

• Steve Snyder, Mill Engineer, White Mesa Mill

• Scott Bakken, P.G., Vice President, Regulatory Affairs

This Technical Report supersedes the previous NI 43-101 Technical Report completed by SLR, as the former Roscoe Postle Associates Inc (RPA), dated October 27, 2016.

The documentation reviewed, and other sources of information, are listed at the end of this Technical Report in Section 27 References.

2.2 List of Abbreviations

The U.S. System for weights and units has been used throughout this Technical Report.  Tons are reported in short tons (ton) of 2,000 lb unless otherwise noted.  All currency in this Technical Report is US dollars (US$) unless otherwise noted.

Abbreviations and acronyms used in this Technical Report are listed below.

3.0 RELIANCE ON OTHER EXPERTS

This Technical Report has been prepared by SLR for EFR.  The information, conclusions, opinions, and estimates contained herein are based on:

• Information available to SLR at the time of preparation of this report,
• Assumptions, conditions, and qualifications as set forth in this report, and
• Data, reports, and other information supplied by EFR and other third party sources.

3.1 Reliance on Information Provided by the Registrant

For the purpose of this Technical Report, the SLR QP has relied on ownership information provided by Energy Fuels Resources (USA) Inc. in a legal opinion by Haynes and Boon dated February 15, 2022, entitled Limited Review of Grants Uranium District Properties located in McKinley County, New Mexico (Roca Honda Claims and Section 17 Mineral Estate, Exhibits A through F.  The opinion was relied on in Section 4 Property Description and Location and the Summary of this Technical Report.  The SLR QP has not researched property title or mineral rights for the Roca Honda Project as it is considered reasonable to rely on EFR's legal counsel who is responsible for maintaining this information.

The SLR QP has relied on EFR for guidance on applicable taxes, royalties, and other government levies or interests, applicable to revenue or income from Roca Honda in the Summary and Section 22.  The taxation calculations in the cash flow model presented in this Technical Report were reviewed and approved by Kara. P. Beck, EFR Tax Manager, in an email dated December 14, 2021, and the SLR QP considers it reasonable to rely on EFR's in house tax manager who deals regularly with the applicable taxes.

The Qualified Persons have taken all appropriate steps, in their professional opinion, to ensure that the above information from Energy Fuels Inc. is sound. Except as provided by applicable laws, any use of this Technical Report by any third party is at that party's sole risk.

4.0 PROPERTY DESCRIPTION AND LOCATION

4.1 Location

4.1.1 Roca Honda Mine

The Roca Honda Mine is located approximately three miles northwest of the community of San Mateo, New Mexico, in McKinley County, and approximately 22 miles by road northeast of Grants, New Mexico (Figure 4-1).

The property is in the east part of the Ambrosia Lake subdistrict of the Grants uranium district in northwest New Mexico.  The Project comprises nearly all of Sections 5, 6, 8, 9, 10, and a narrow strip of Section 11; the New Mexico State Lease, consisting of Section 16; and the fee mineral in Section 17, all in Township 13 North, Range 8 West, New Mexico Principal Meridian (Figure 4-1).

The geographic coordinates for the approximate center of the Project are located at latitude 35°22'4.23" N and longitude 107°41'56.62" W.  All surface data coordinates are NAD 1983 State Plane New Mexico West FIPS 3003 (US feet) system.

4.1.2 White Mesa Mill

The White Mesa Mill is located on 4,816 acres of private land owned by EFR.  This land is located in Township 37 South and 38 South, Range 22 East, Salt Lake Principal Meridian.  The Mill is located approximately six miles south of Blanding, Utah, along US Highway 191.  EFR also holds 253 acres of mill site claims and a 320 acre Utah state lease.  No facilities are planned on the claims or leased land, which will be used as a buffer surrounding the operations (Figure 4-2).

Figure 4-3 shows the relative locations of the Roca Honda Mine and the White Mesa Mill, and the proposed haul route for the Roca Honda mineralized material to the Mill.  The Mine and the Mill are located approximately 290 road miles apart.  Each operation would be considered as a "stand-alone" operation, i.e., each would have its own administration, warehouse, accounting, environmental, and safety staff.

Figure 4-1: Location Map

Figure 4-2: White Mesa Mill Location and Property Map

Figure 4-3: Roca Honda Mine, White Mesa Mill, and Proposed Haul Route Location Map

4.2 Land Tenure

4.2.1 Roca Honda Mine

Since May 27, 2016, the Mine has been held solely by Strathmore Resources (US) Ltd (Strathmore), which is a wholly owned subsidiary of Energy Fuels Inc.  Strathmore acquired the initial portion of the property 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.  Roca Honda Resources LLC (RHR) was established on July 26, 2007, when Strathmore formed a limited liability company with Sumitomo Corporation of Japan and transferred the property to RHR.  Energy Fuels Inc. acquired a 100% interest in Strathmore in August 2013 and assumed Strathmore's 60% ownership interest in RHR.  Energy Fuels Inc. acquired the remaining 40% ownership interest in RHR in May 2016 and is now 100% owner of the Mine.

The Mine covers an area of 4,440 acres and includes 63 unpatented lode-mining claims in Sections 9, 10 and 11; 64 unpatented claims in Sections 5 and 6; 36 unpatented claims in Section 8; one adjoining New Mexico State General Mining Lease in Section 16; and the fee mineral interest in all of Section 17 (Figure 4-4).  The mining claims also extend onto a 9.4 acre narrow strip of Section 11.  The New Mexico State Lease was acquired by David Miller (former Strathmore CEO) on November 30, 2004, and subsequently transferred to Strathmore.  Strathmore subsequently relinquished the lease and acquired it again in December 2015 (HG-0133) for a new 15-year term expiring on December 14, 2030.  The "Rocca Honda" Claims in Sections 5 and 6 were staked by Miller and Associates in September 2004 and assigned to RHR on August 28, 2013.  Strathmore acquired the "Roca Honda" claims in Section 8 and the fee mineral interest in Section 17 on June 26, 2015, from Uranium Resource Incorporated (URI).

Mining claim numbers RH 252, RH 279, RH 306, and RH 333, located in the southern part of Section 10, overlap into the northern part of Section 15, which is privately owned land, therefore, the overlapping portion of these claims is not valid.  The Roca Honda property extends only to the Section 15 boundary. 

Mining claim numbers RH 325 to RH 333 are located along the eastern boundary of Section 10, extending west across the Section 11 line by approximately 150 ft.

The initial 63 unpatented, contiguous mining claims (the Roca Honda group), covering an area of approximately 1,248.5 acres, are located on Sections 9, 10, and 11, which are federally owned lands within the Cibola National Forest administered by the U.S. Forest Service (USFS).  Section 5 is also administered by the USFS while claims in Section 6 are located on U.S. Bureau of Land Management (BLM) land.  Section 8 is split estate, the private surface belonging to Fernandez Ranch.  Sections 5, 6, 9, 10, and 11 are open to the public, with the land used for a variety of purposes including grazing, mineral extraction, hunting, hiking, and other outdoor recreation activities.  All claims are listed in the U.S. BLM Mining Claim Geographic Index Report Mineral and Land Record System (MLRS).  The claims covering Section 9, 10, and part of 11 have a location date of June 29 and 30, 1965.  The claims in Section 8 have location dates of September 10, 1997.  The Roca Honda claims in Sections 5 and 6 were located on September 6, 2004.  The latest assessment year shown in MLRS is 2021 and the claims are shown as "Active".

There is a 1% gross revenue, no deduction royalty payable to the original claim holders for the claims on Section 9.  There are no royalties associated with the claims on Sections 5, 6, 8, 10, or 11.

All claims, which are renewed annually in September of each year, are in good standing until September 1, 2022 (at which time they will be renewed for the following year as a matter of course).  All unpatented mining claims are subject to an annual federal mining claim maintenance fee of $165 per claim payable to the BLM and recording an affidavit and Notice of Intent to hold with the McKinley County Clerk, New Mexico.  County recording fees for the claims are approximately $425 per year.

New Mexico General Mining Lease number HG-0133, located on Section 16, covers an area of 638 acres.  The mining lease has a primary, secondary, tertiary, and quaternary term, each with annual rentals to be paid in advance.  Strathmore first acquired a lease on Section 16 in November 2004 (Lease number HG-0036-002).  As there was no provision to extend the lease past 2019 other than by production, Strathmore dropped the lease as its payment came due in December 2015.  The New Mexico Land Office held an auction of the lease parcel that same month.  Strathmore was the successful bidder, paying a $100,000 bonus.  The new lease has a primary term of three years, and the annual rental is $1.00/acre ($640).  The secondary term for years 4 and 5 will require a payment of $10/acre each year, and the tertiary term, years 6 through 10, will cost $3.00/acre each year.  The lease will have a quaternary term for years 11 through 15 requiring an annual rental of $10.00 per acre plus an escalating advanced royalty of $10.00 per acre per year.  By acquiring the new lease, Strathmore may now hold the land until production can begin up to December 14, 2030.  At the end of the quaternary term, the lease may be automatically extended if production has begun.  The lease stipulates a 5% of gross returns royalty to the State of New Mexico "less actual and reasonable transportation and smelting or reduction costs, up to 50% of the gross returns" for production of uranium, which is designated a "special mineral" in the lease. 

The surface of Section 17, also referred to as the Lee Ranch, is leased to Fernandez Company, Ltd. (Fernandez) as rangeland for grazing.  Table 4-1 lists the mineral claims covering the Roca Honda Project.  Figure 4-4 shows the Roca Honda land holdings.

Table 4-1: List of Claims held by Energy Fuels

Energy Fuels Inc. - Roca Honda Project

Figure 4-4: Land Tenure Map 

4.2.2 White Mesa Mill

The Mill is located approximately six miles south of Blanding, Utah, on US Highway 191 on a parcel of land, owned by EFR, encompassing all or part of Sections 21, 22, 27, 28, 29, 32, and 33 of Township 37 South, Range 22 East, and Sections 4, 5, 6, 8, 9, and 16 of Township 38 South, Range 22 East, Salt Lake Base and Meridian, shown in Figure 4-2 and described as follows:

• In Township 37 South, Range 22 East, Salt Lake Base and Meridian:

• the south half of the south half of Section 21
• the southeast quarter of the southeast quarter of Section 22
• the northwest quarter of the northwest quarter and lots 1 and 4 of Section 27, all that part of the southwest quarter of the northwest quarter and the northwest quarter of the southwest quarter of Section 27 lying west of Utah State Highway 163
• the northeast quarter of the northwest quarter, the south half of the northwest quarter, the northeast quarter and the south half of Section 28
• the southeast quarter of the southeast quarter of Section 29
• the east half of Section 32 and all of Section 33

• In Township 38 South, Range 22 East, Salt Lake Base and Meridian:

• lots 1 through 4, inclusive, the south half of the north half, the southwest quarter, the west half of the southeast quarter, the west half of the east half of the southeast quarter and the west half of the east half of the east half of the southeast quarter of Section 4
• lots 1 through 4, inclusive, the south half of the north half and the south half of Section 5 (all)
• lots 1 and 2, the south half of the northeast quarter and the south half of Section 6 (E1/2)
• the northeast quarter of Section 8
• all of Section 9
• all of Section 16

Additional land is controlled by 46 mill site claims, which are active for the 2021 assessment year.  Total White Mesa Mill land holdings cover approximately 5,389 acres.  Holding costs for the 46 claims include a claim maintenance fee of $165.00 per claim payable to the BLM before September 1 of each calendar year.  All claims are in good standing until September 1, 2022 (Table 4-2).

Table 4-2: List of White Mesa Mill Claims held by Energy Fuels

Energy Fuels Inc. - Roca Honda Project

4.3 Required Permits and Status

A permit application was submitted in October 2009 to the State of New Mexico Mining and Minerals Division of the Energy, Minerals and Natural Resources Department.  The permit application included:

• Baseline Data Report and Supplements
• Mine Operations Plan
• Reclamation Plan
• Sampling and Analysis Plan

A Plan of Operations (PoO), which addresses various aspects of environmental assessment, protection, and analysis related to the Project, was submitted to the U.S. Forest Service, Cibola National Forest, at the same time.  Details regarding these permits can be found in Section 20.0 of this report. 

Additionally, in order to construct and operate the Roca Honda Mine, the following permits are required from various state and federal agencies:

• A mine dewatering permit from the New Mexico State Engineer's Office (issued December 2013)
• A discharge permit from the New Mexico Environment Department (NMED)
• A National Pollutant Discharge Elimination System (NPDES) permit from Region 6 of the U.S. Environmental Protection Agency (EPA)

• A Nationwide 404 permit from the Army Corps of Engineers to modify the Rio San Jose at the discharge point of the dewatering pipeline (Figure 4-5)
• A National Emission Standards for Hazardous Air Pollutants (NESHAP) permit from the EPA.

Figure 4-5: Proposed Pipeline Route

4.4 Royalties

Royalties are described in Section 3.2.  Table 4-3 details the royalties below.

Table 4-3: Roca Honda Project Royalty Summary

Energy Fuels Inc. - Roca Honda Project

Notes:

1. All sections are in Township 13 North, Range 8 West, New Mexico Principal Meridian.

4.5 Other Significant Factors and Risks

The EFR QP is not aware of any environmental liabilities on the property.  The Roca Honda Mine is in an advanced stage of permitting and has yet to obtain the permits necessary to operate the Mine.

There are no violations or regulatory matters of any significance or that are not being addressed under normal regulatory procedures.

5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

The Roca Honda Mine is located approximately 17 mi (22 mi by road) northeast of Grants, New Mexico.  The southern part of the property, located on Sections 16 and 17, can be reached by travelling north from Milan, New Mexico, on State Highway 605 toward the town of San Mateo to mile marker 18 and then north on a private gravel road. 

When mining commences, it is proposed that mill feed produced at the Mine will be shipped to EFR's fully licensed and operating White Mesa Mill in Blanding, Utah.  The haulage distance from the Mine to the Mill is approximately 250 mi.

5.1 Accessibility

5.1.1 Roca Honda Mine

Access rights from Highway 605 onto Section 16 have been subject to temporary agreements with the surface owner, Fernandez, the latest of which expired on December 31, 2015.  When Strathmore acquired the mineral rights to Section 17 in the URI transaction, it understood it acquired surface access rights to Section 17 and Section 16, which would provide all necessary access.  EFR is in discussions with Fernandez to determine whether any further access rights may be required. 

The north part of the Roca Honda property can be reached by travelling 23.5 miles from Milan, New Mexico, on paved public Highway 605, and then west on USFS dirt roads to the southeast corner of Section 10 (Figure 4-1).  There are numerous drill roads that provide access to different parts of Sections 9 and 10, many of which require maintenance.

5.1.2 White Mesa Mill

The White Mesa Mill is accessed by US Highway 191.  The majority of mill employees live in Blanding, Utah, and surrounding communities. The Mill is serviced by commercial line power, and all other supplies are trucked to the site. Ranching is the primary land use surrounding the Mill and tourism is the primary economy of Blanding, Utah, excluding uranium processing and State and Federal government services.

5.2 Vegetation

5.2.1 Roca Honda Mine

Vegetation in the Roca Honda Project area consists of grasses, piñon pine and juniper trees.

5.2.2 White Mesa Mill

The natural vegetation presently occurring within a 25-mile (40-km) radius of the Mill site is very similar to that of the region, characterized by pinyon-juniper woodland integrating with big sagebrush (Artemisia tridentata) communities.

5.3 Climate

5.3.1 Roca Honda Mine

Climate in the Project area may be classified as arid to semi-arid continental, characterized by cool, dry winters, and warm, dry summers.  The area is in the north end of Climate Division 4 (Southwestern Mountains) for New Mexico (Sheppard et al., 1999).  Abundant sunshine, low relative humidity, and large annual and diurnal ranges in temperature are characteristics of this climate division, which is a significant distance from any source of oceanic moisture (600 mi from the Pacific Ocean and 800 mi from the Gulf of Mexico). 

On average, the Project area receives approximately 11 in. of precipitation annually, the majority occurring with thunderstorms in July and August.  Winter is the driest season, with an average of approximately 13 in. of snow falling annually, mostly during December through February.  Snow is light on the valley floors and increases at higher elevations on the nearby mesas and mountains.

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. Operations may be conducted throughout the year.

5.3.2 White Mesa Mill

The climate of southeastern Utah is classified as dry to arid continental.  Although varying somewhat with elevation and terrain, the climate in the vicinity of the Mill can be considered as semi-arid with normal annual precipitation of about 13.3 in. Most precipitation is in the form of rain with snowfall accounting for about 29% of the annual total precipitation.  There are two separate rainfall seasons in the region, the first in late summer and early autumn (August to October) and the second during the winter months (December to March).  The mean annual relative humidity is about 44% and is normally highest in January and lowest in July. 

The weather in the Blanding, Utah, area is typified by warm summers and cold winters.  The National Weather Service Station in Blanding, Utah, is located about 6.25 mi north of the Mill.  Data from the station is considered representative of the local weather conditions.

The mean annual temperature in Blanding was 50.3°F, based on the current Period of Record Summary (1904 to 2006).  January is usually the coldest month, and July is usually the warmest month.  The town of Blanding, Utah, has an approximate area of 2.4 mi.², temperatures average 53°F, and it has a precipitation average of 14 in.  Operations at White Mesa Mill can be conducted throughout the year.

5.4 Local Resources

5.4.1 Roca Honda Mine

The community of Grants, located in Cibola County, is the largest community near the Mine area.  As of the 2020 census, there are 8,866 people residing in Grants, New Mexico, where personnel experienced in open pit and underground mining, construction, and mineral processing are available.  Additionally, the city of Albuquerque is located approximately 100 mi east of the Project area and could be a source of most materials and technical support needed for the Project.

5.4.2 White Mesa Mill

The Mill is the only fully licensed and operating conventional uranium mill in the United States, and only one of three fully licensed mills and the only operating conventional uranium mill in North America.  The facility has a licensed capacity of 2,000 stpd and can produce up to eight million pounds of uranium per year.  The Mill also has a co-recovery circuit to produce vanadium from Colorado Plateau ores, and an alternate feed circuit to process other uranium-bearing materials, such as those derived from uranium conversion and other metal processing.

The Mill is strategically located in Blanding, Utah, central to the uranium mines of the Four Corners region of the United States. The Mill was constructed in 1980 by EFNI.  In 2007, a $31 million refurbishment of the facility was completed.  To extract uranium (U3O8) and vanadium (V₂O₅), the Mill utilizes sulfuric acid leaching and a solvent extraction recovery process.  The uranium is purchased by utility companies and shipped to conversion facilities as the next step in the production of fuel for nuclear power.  The vanadium is shipped mostly to steel and alloy manufacturers.

In full operation, the Mill employs about 150 people.  Blanding is a town in San Juan County, Utah, United States, where personnel experienced in mill operations are available.  The population was approximately 3,500 in 2020, making it the most populated town in San Juan County. 

5.5 Infrastructure

5.5.1 Roca Honda Project Site

There is limited infrastructure related to historical operations within the Roca Honda project area.  A partially completed shaft (completed to a depth of 1,478 ft) and shop buildings exist in the northeast quarter of Section 17.  The remaining infrastructure is limited to a very good gravel access road and existing drill roads of varying quality.  High voltage power lines run across the northern extent of the Project area and low voltage lines cross through Section 17.  Water for drilling is generally sourced either from the town of Milan, or from local ranch wells.  Dewatering for any future mine development will source a greater quantity of water than is required for ongoing operations.

A monitoring well network composed of three wells, completed in the Westwater Canyon Member of the Morrison Formation (Westwater), was installed in 2007 to 2008 by RHR. 

5.5.2 White Mesa Mill

The Mill was constructed from 1979 to 1980 and is a fully functioning uranium/vanadium mill.  The Mill 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 and the San Juan Water Conservancy District. Off-site infrastructure includes paved highway access from US Highway 191, and rights-of-way 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, counter current decantation (CCD), 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 Liquified Natural Gas (LNG).  The on-site infrastructure also includes an ore stockpile area and existing TSF.

5.6 Physiography

5.6.1 Roca Honda Project Site

The Mine area is sparsely populated, rural, and largely undeveloped. The predominant land uses include low-density livestock grazing, hay cultivation, and recreational activities such as hiking, sightseeing, and seasonal hunting.

The proposed Mine area has moderately rough topography in Sections 9 and 10 and consists of shale slopes below ledge-forming sandstone beds, forming mesas that dip 7° to 11° northeast.  Section 9 consists mostly of steep slopes in the west and south, with a large sandstone mesa, named Jesus Mesa, in the north-central part.  Section 10 consists mostly of the dip-slope of a sandstone bed that dips from 8° to 11° due east.  Sections 16 and 17 have less topographic relief because they lie mainly below the mesas. Surface elevations range from 7,100 ft to 7,680 ft and with easterly and southerly dipping slopes (Fitch, 2010).

Jesus Mesa occupies approximately half of Section 9 and slopes into Section 10.  The top and upper portion of the mesa is sparsely vegetated, with the slopes along the southern perimeter of the mesa consisting of sandstone ledges with areas of exposed shale. The landscape along the southwest, north, and southeast perimeters of the mesa are moderately vegetated, with the slopes dissected by drainages ranging from a few feet to 40 ft deep.

The rough topography is not expected to adversely impact mining operation activities. 

5.6.2 White Mesa Mill

The Mill site is located near the center of White Mesa, one of the many finger-like north-south trending mesas that make up the Great Sage Plain located in Utah. The nearly flat upland surface of White Mesa is underlain by resistant sandstone caprock, which forms steep prominent cliffs separating the upland from deeply entrenched intermittent stream courses on the east, south and west.

Surface elevations across the Mill site range from about 5,550 ft ASL to 5,650 ft ASL and the gently rolling surface slopes to the south at a rate of approximately 60 feet per mile.

Maximum relief between the mesa's surface and Cottonwood Canyon on the west is approximately 750 ft where Westwater Creek joins Cottonwood Wash. These two streams and their tributaries drain the west and south sides of White Mesa. Drainage on the east is provided by Recapture Creek and its tributaries. Both Cottonwood Wash and Recapture Creeks are normally intermittent streams and flow south to the San Juan River, however, Cottonwood Wash has been known to flow perennially in the vicinity during wet years.

6.0 HISTORY

6.1 Prior Ownership

Kerr-McGee staked the Roca Honda unpatented mining claims in Sections 9 and 10 on June 29 and 30, 1965.  Kerr-McGee, its subsidiaries, and successor (Rio Algom) completed significant exploration and development work in Sections 3, 4, 5, 6, 8, 9, 10, 16, and 17, T13N, R8W, from the mid-1960s until 1982 and held the claims on Sections 9, 10, and 16 until the properties were acquired by Strathmore on March 12, 2004.

Section 16, T13N, R8W, is owned by the State of New Mexico.  State Mining Leases for Section 16 were issued to various companies over the years.  Rare Metals Corporation (Rare Metals) held a State Mining Lease in the 1950s and performed the first exploration drilling on the Section.  Subsequently, Western Nuclear Corporation (Western Nuclear) held a State Mining Lease during the period 1968 to lease expiration on May 21, 1971.  Reserve Oil and Minerals Corporation (Reserve) owned a 25% carried interest in the lease at that time.  Western Nuclear and Reserve acquired another lease on Section 16 in October 1979 with a 15-year expiration date of October 2, 1994.  During the lease period, an assignment was made to a company named U.Q.I.T.U., and further, the lease was cancelled or relinquished on February 15, 1990, before its expiration date (New Mexico State Land Office form, March 20, 2006).  Quivira Mining Company (Quivira), a wholly owned subsidiary of Kerr-McGee, acquired lease number Q-1414 effective July 1, 1990, with a 15-year term expiration date of July 1, 2005 (signed New Mexico State Lease Document).  Kerr-McGee cancelled or relinquished the lease on November 11, 2000, before the date of expiration.  David Miller (former CEO of Strathmore) acquired a new State Mining Lease for Section 16, Lease Number HG 0036-002 in November 2004 and subsequently assigned the lease to Strathmore.  Strathmore dropped that lease in December 2015.  A new 15-year lease on the parcel, HG-0133, was acquired that same month by Strathmore.

RHR was established on July 26, 2007, when Strathmore (60%) formed a limited liability company with Sumitomo Corporation (40%) and transferred the lease to RHR.

Conoco purchased Sections 11 and 12 on the property from the Homestake Mining Company (Homestake) in the early 1970s and explored them until 1981.  Other historical drilling activity within the Project area or off trend has been done in the past but cannot be attributed to a specific operator at this time due to a lack of records.

URI gained control of Sections 13, 15 and 17, T13N, R8W, in 1997 as part of the acquisition of the Uranco Inc. properties in New Mexico.  Section 8 was procured through staking of new claims (Roca Honda Claims) in 1997.  This was the extent of the land position that URI held in the Project area from 1996 through 2012, for a total at the time of 2,560 non-contiguous acres.

URI obtained control of the rest of the Mine area (positions in Sections 2, 3, 4, 5, 6, 11, and 12, T13N, R8W; Sections 31 and 32, T14N, R8W) through the acquisition of Neutron Energy Inc. (NEI) in 2012.  The NEI land position in the Project area consisted of leased claims from Enerdyne Endy Claims LLC, which were acquired by NEI in February 2006.  In 2014, URI divested itself of the Section 13 and 15 properties through a land trade with Rio Grande Resources Corp. in exchange for other property assets in Texas.

In August 2013, EFR acquired a 100% interest in Strathmore and assumed Strathmore's 60% ownership interest in RHR.  In June 2015, EFR acquired a 100% interest in the mineral properties controlled by URI.  In May 2016, EFR completed the purchase of Sumitomo Corporation's 40% interest in RHR.

The White Mesa uranium/vanadium mill was developed in the late 1970s by ENFI as a processing option for the many small mines that are located in the Colorado Plateau region. At the time of its construction, it was anticipated that high uranium prices would stimulate ore production, however, prices started to decline about the same time as mill operations commenced in the late 1970s.

As uranium prices fell, mines near the White Mesa Mill region were affected, and mine output declined. After approximately two and one-half years, the Mill ceased ore processing operations altogether, began to recycle solution, and entered a total shutdown phase. In 1984, a majority ownership interest was acquired by Union Carbide Corporation's (UCC) Metals Division, which later became Umetco Minerals Corporation (Umetco), a wholly- owned subsidiary of UCC. This partnership continued until May 26, 1994, when EFNI reassumed complete ownership. In May 1997, Denison and its affiliates purchased the assets of EFNI, and Denison was the owner of the White Mesa Mill facility until 2012. In August 2012, EFR purchased all of White Mesa Mill's assets and liabilities.

6.2 Exploration and Development History

Most of the historical exploration at the Mine area was completed by four separate companies: Kerr-McGee, Western Nuclear, Conoco, and Strathmore.  Exploration by the four companies is discussed below.  A fifth company, Rare Metals, did some exploration work on Section 16, but that data has not been found.

6.2.1 Kerr-McGee

Kerr-McGee completed significant exploration and development work on Sections 3, 4, 5, 6, 8, 9, 10, 16, and 17, T13N, R8W, from the mid-1960s until 1992.  The land position on Section 17 was leased from Santa Fe at the time.  During its work program, Kerr-McGee drilled approximately 1,200 drillholes across the 3,840 acres it controlled on Sections 5, 6, 8, 9, 10, 16, and 17, and an unknown number of drillholes on Sections 3 and 4.

In July of 1966, the first drillhole was completed on Section 9 of the Mine property.  Discovery was made in drillhole number 7 completed on August 2, 1970, which encountered mineralization at a depth of 1,900 ft.  From 1966 to 1982, 188 drillholes were completed for a total of 389,736 ft. In Section 10, the first hole was drilled in October 1967.  Discovery was made in drillhole number 6 completed on March 19, 1974, which encountered mineralization at a depth of 2,318 ft.  From 1967 to 1985, 178 drillholes were completed for a total of 429,215 ft.

Kerr-McGee advanced the project, named the Lee Mine, to a feasibility level study.  In 1981, Kerr-McGee began construction of the Lee Mine with the development of a 14 ft diameter shaft in the northeast quarter of Section 17.  In 1982, the project was abandoned prior to completion of the shaft due to soft uranium market conditions.  The shaft penetrated the Westwater of the Morrison Formation to a total depth of 1,478 ft; the shaft's planned depth was 1,655 ft.  The shaft was sealed at surface and no further work was completed.

6.2.2 Western Nuclear

The first drilling on Section 16 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 can be located.  Subsequently, Western Nuclear acquired a mining lease for Section 16 from the State and began drilling in 1968, with the first drillhole completed on August 17, 1968.  The second drillhole intercepted high-grade uranium mineralization at a depth of 1,587 ft.  From 1968 through September 1970, Western Nuclear drilled 70 holes totaling 115,455 ft, including 10 abandoned holes that did not reach the target bed (Recapture Member).  Two of the drillholes reported cored intervals, but the cores and analyses are not available.

6.2.3 Conoco

In the early 1970s, Conoco acquired land in the area including Sections 2, 11, and 12, T13N, R8W, a portion of which was purchased from Homestake.  Initial exploration was completed by drilling north-south fences on Section 2 and into Section 11.  Activities were limited to minimal assessment drilling until 1979, when the major discovery and development work by Kerr-McGee was ongoing at the Lee Mine, directly to the west of Conoco's land position.  Conoco then refocused drilling on the western half of Section 11, intercepting uranium mineralization of significant grade and thickness. Drilling continued until 1981, extending the mineralization trend from Section 10 across the southwest quarter of Section 11.

Although Conoco did not feel it had the success it had hoped for, it remained optimistic about the local area as stated in an internal Conoco report from that time (Wentworth, 1982):

Despite previous disappointments, our Roca Honda and Jan claim blocks are believed to represent one of the better uranium prospects left in the Grants Mineral Belt.  The property is well situated along the projected Westwater mineral trend in an area of interpreted favorable stratigraphy where the potential exists for large rich tabular ore bodies…

6.2.4 Strathmore Resources

From June to November 2007, RHR, 60% owned by Strathmore, drilled four pilot holes on Section 16.  Three holes were completed as monitoring wells totalling 8,050 ft for environmental baseline and monitoring purposes.  One drillhole was located outside of the known mineralization and three holes were located within mineralized areas.  Drill sites were chosen based on their proximity to existing roads to limit disturbance.  Drilling was conducted by Stewart Brothers Drilling, based in Grants, New Mexico.

When completing the four pilot holes, RHR cored the Westwater Sandstone in each of the holes.

The cored holes were PQ-diameter (3.345 in.) and had samples taken principally for laboratory testing of hydraulic conductivity, effective porosity, density, and chemical analysis.

The four pilot holes were logged by Jet West Geophysical Services, LLC (Jet West) of 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 to a depth of 2,053 ft.  Core was tested at Advanced Terra Testing for numerous geotechnical properties and a geotechnical report was issued by URS in June 2012.

6.3 Past Production

No production from uranium mineralization has taken place at the Project.

7.0 GEOLOGICAL SETTING AND MINERALIZATION

7.1 Regional Geology

The Project is located in the southeast part of the Ambrosia Lake subdistrict of the Grants uranium district (McLemore and Chenoweth, 1989) 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.  Figure 7-1 presents the regional geology of the Project.

Bounding the San Juan Basin to the south-southwest is the Zuni uplift, where rocks as old as Precambrian are exposed 25 mi to 30 mi southwest of the Project area.  Less than five miles to the east and south of the Project area, Neogene volcanic rocks of the Mount Taylor volcanic field cap Horace Mesa and Mesa Chivato.  On the Chaco slope, sedimentary strata mainly of Mesozoic age dip gently northeast into the central part of the San Juan Basin.  The Project area is structurally complex and is included in the part of the subdistrict that is described as the most folded and faulted part of the Chaco slope. 

The San Juan Basin and bounding structures were largely formed during the Laramide orogeny near the end of the Late Cretaceous through Eocene Period (Lorenz and Cooper 2003).  This Laramide tectonism produced compression of the San Juan Basin between the San Juan and Zuni uplifts, resulting in faults and fold axes oriented north to north-northeast.  The more intensively faulted east part of the Chaco slope may be related to the development of the McCarty's syncline, which lies just east of the faulted Fernandez monocline (Kirk and Condon, 1986). 

The San Rafael fault zone cuts the Fernandez monocline and has right-lateral displacement as evidence of shear near the San Juan Basin margin.  Other faults in or near the Project area are mostly normal with dip-slip displacement and vertical movement less than 40 ft.  The large, northeast-striking San Mateo normal fault about two miles west of the Project area has vertical displacement of as much as 450 ft (Santos, 1970).  Strata in the Project area along the Fernandez monocline dip east to southeast at four to eight degrees toward the McCarty's syncline, an expression of the Acoma sag (Santos, 1966a and 1966b). 

The Morrison Formation outcrops near the south edge of the San Juan Basin and dips gently northward into the basin.  Formations of Late Cretaceous age that overlie the Morrison Formation, in ascending order, are Dakota Sandstone, Mancos Shale, Gallup Sandstone, Crevasse Canyon Formation, Point Lookout Sandstone, and Menefee Formation. The Gallup Sandstone, Crevasse Canyon Formation, Point Lookout Sandstone, and Menefee Formation compose the Mesaverde Group.  Figure 7-2 presents the regional stratigraphy.  Figure 7-3 is a cross section of the geology pertaining to the property.

The Morrison Formation was deposited in a continental environment, mainly under fluvial conditions.  These deposits were derived from an uplifted arc terrane to the west and locally from the Mogollon highlands to the south (Lucas, 2004).  The Zuni uplift, currently bordering the San Juan Basin to the southwest, did not exist in Late Jurassic time and therefore was not a source for Morrison Formation sediments. 

Formations of Late Cretaceous age were deposited in or on the margin of the Western Interior Seaway, a shallow continental sea, and the formations represent transgressive or regressive episodes of the Seaway.  The Mancos Shale and its several tongues were deposited on the shallow marine sea bottom, and the formations of the Mesaverde Group were deposited along the western shoreline of the Seaway.

Figure 7-1: Regional Geologic Map

Figure 7-2: Regional Stratigraphic Column

Figure 7-3: Cross Section of Local Geology

7.2 Local Geology

7.2.1 Stratigraphy

Rocks exposed in the Ambrosia Lake subdistrict of the Grants uranium district, which includes the Project area, include marine and non-marine sediments of Late Cretaceous age, unconformably overlying the uranium-bearing Upper Jurassic Morrison Formation. In this section, geologic units are discussed from youngest to oldest.  The uppermost sequence of conformable strata consists of the Mesaverde Group, Mancos Shale, and Dakota Sandstone.  All rocks that outcrop at the Project area are of Late Cretaceous age; these rocks and the Quaternary Period deposits that cover them in some places are shown in the geologic map in Figure 7-1.

The formations and members and their approximate depth from the surface are shown in the stratigraphic section in Figure 7-2, which is based on historical drilling in the area. The Menefee Formation does not outcrop in the Project area, but a partial thickness of it is below Quaternary colluvium as sub-crop in the southeast quarter of Section 10.  Due to the inter-tonguing nature of some of the Cretaceous units in the area, some members or tongues of the Mancos Shale and Dakota Sandstone are included in sequence within the dominant formation in the discussion below.

Approximate thicknesses for the formations and members are provided in Table 7-1.  These thicknesses were determined from geologic mapping by Santos (1966a and 1966b), borehole data from 2007 drilling by RHR in Section 16, and borehole data from historical drilling by Kerr-McGee and Western Nuclear.

Table 7-1: Stratigraphy found at the Roca Honda Project

Energy Fuels Inc. - Roca Honda Project

7.2.1.1 Alluvium

Quaternary alluvial material overlies bedrock throughout the San Mateo Creek valley, and although it probably accepts and transmits groundwater from precipitation to underlying bedrock units, it is most likely unsaturated except near San Mateo Creek.  San Mateo Creek alluvial materials consist of unconsolidated sands and silts.  Well logs indicate this material is from 10 ft to 80 ft thick, although it may be significantly thicker in some areas (OSE, 2008). 

7.2.1.2 Menefee Formation

The Menefee Formation, an upper unit of the Mesaverde Group, consists of two members, the Allison Member and the Cleary Coal Member, which underlies the Allison Member.  The formation consists of thin to thick sandstone beds interbedded with shale and coal seams.  Geophysical logs from the San Juan Basin indicate that the formation typically consists of approximately 30% sandstone, 65% shale, and less than 5% coal (Brod and Stone, 1981).  Beds of the Allison Member do not outcrop in the Project area, but are farther to the north, in the central San Juan Basin.  Beds of the Cleary Coal Member outcrop east and south of the Roca Honda area on the east flank of the Fernandez monocline.  In the Project area, this member occurs as sub-crop beneath Quaternary colluvium in the southeast quarter of Section 10. 

7.2.1.3 Point Lookout Sandstone

The Point Lookout Sandstone is a regressive marine beach sandstone in the middle of the Mesaverde Group.  The Point Lookout Sandstone generally consists of light grey, thick bedded, very fine to medium grained, locally cross-bedded sandstone.  This unit is as much as 120 ft thick in the Project area.  A resistant cap of Point Lookout Sandstone forms the top of Jesus Mesa in the Project area and represents the dip slope.  Just east of Jesus Mesa, the steeper slope that dips to the southeast in Section 10 represents the dip slope of the Point Lookout Sandstone along the Fernandez Monocline.

7.2.1.4 Crevasse Canyon Formation

The Crevasse Canyon Formation is a lower unit of the Mesaverde Group that outcrops through much of the west part of the Roca Honda Project area.  The unit consists of the following members (from youngest to oldest): the Gibson Coal Member, Dalton Sandstone Member, Borrego Pass Lentil, and the Dilco Coal Member.  The Mulatto Tongue of the Mancos Shale is below the Dalton Sandstone Member and above the Borrego Pass Lentil.  The Mulatto Tongue is approximately 300 ft thick in the Project area and is a marine deposit representing a transgression of the Western Interior Seaway.

The Gibson Coal Member Is as much as 240 ft thick in the area of interest and outcrops mainly on the steep slopes of the Jesus Mesa.  The Dalton Sandstone Member, a regressive marine beach sandstone, is as much as 100 ft thick. 

Shale and silty sandstone of the Mulatto Tongue of the Mancos Shale outcrop on gentle slopes and are covered in places by Quaternary alluvium and colluvium in the southwest part of the Roca Honda area. Below the Mulatto Tongue is the Borrego Pass Lentil, a transgressive marine sandstone that was previously referred to as the Stray sandstone of local usage (Santos, 1966a).  Boreholes drilled in 2007 in the Project area indicate that the Borrego Pass Lentil is about 40 ft thick.  The entire thickness of the Mulatto Tongue is not exposed in the western part of the Project area because several normal faults disrupt the sequence.  Therefore, it is not known whether the Borrego Pass Lentil, which lies just below the Mulatto Tongue, outcrops in that area. 

The Dilco Coal Member has an average thickness of about 120 ft and outcrops in Section 17.  The member contains thin sandstone, shale, and discontinuous coal beds representative of a backshore swamp environment associated with a regression of the Western Interior Seaway (Fassett, 1989).

7.2.1.5 Gallup Sandstone

The lowest formation of the Mesaverde Group is the Gallup Sandstone, which is solely in the subsurface in the Roca Honda Project area and is separated into two units by the thin Pescado Tongue of the Mancos Shale. The upper unit (or main body) of the Gallup Sandstone is a regressive marine beach sandstone that is fine to medium grained and is about 75 ft thick. The Pescado Tongue, approximately 20 ft thick, consists of thin alternating and interfingering beds of sandstone, siltstone, and shale. A thin, fine to coarse grained sandstone (average thickness of approximately 10 ft) forms the basal bed of the Gallup Sandstone and marks a brief regression of the Western Interior Seaway. The upper Gallup sandstone is a regional aquifer with good water quality water.

7.2.1.6 Mancos Shale

The main body of Mancos Shale represents the full transgression of the Western Interior Seaway and, in the Roca Honda area, its subsurface thickness averages approximately 710 ft.  The marine deposits of this formation consist mainly of dark grey to black silty shale with minor interbedded sandstone.  In the southern San Juan Basin, the lower part of the Mancos Shale is intertongued with the underlying upper part of the Dakota Sandstone. The intertongued units generally represent a transgressive rock sequence (Landis et al., 1973). 

In the subsurface of the Project area, the main body of Mancos Shale is underlain by the Twowells Sandstone Tongue of the Dakota Sandstone (Pike 1947), which is about 50 ft thick.  Underlying the Twowells Sandstone Tongue is the Whitewater Arroyo Shale Tongue of the Mancos Shale (Owen, 1966), which is about 150 ft thick.  In the Project area, the base of the Mancos Shale is considered to be the base of the Whitewater Arroyo Shale Tongue. 

7.2.1.7 Dakota Sandstone

Marine shoreface deposits of Dakota Sandstone are composed mainly of fine-grained gray sandstone.  In the subsurface in the Project area, the Dakota Sandstone is approximately 50 ft thick. In the main Ambrosia Lake subdistrict about five miles northwest of the Roca Honda area, the Dakota Sandstone is composed of four members (Landis et al., 1973).  For ease of presentation, the four members are not shown in Figure 7-2.  The four members are in descending stratigraphic order: Paguate Sandstone Tongue of the Dakota Sandstone, Clay Mesa Shale Tongue of the Mancos Shale, Cubero Sandstone Tongue of the Dakota Sandstone, and Oak Canyon Member of the Dakota Sandstone.  The Dakota Sandstone is the lowermost Upper Cretaceous formation, unconformably overlies the Upper Jurassic Morrison Formation, and is a regional aquifer with poor quality water from the overlying Gallup Sandstone.

7.2.1.8 Morrison Formation

The Upper Jurassic Morrison Formation is comprised of four members that are recognized by the U. S. Geologic Survey (USGS) in the Grants uranium district.  These members are, in descending order, Jackpile Sandstone Member, Brushy Basin Member, Westwater Canyon Member, and Recapture Member.  The Jackpile Sandstone Member, the uppermost fluvial sandstone in the formation, was not deposited in the Ambrosia Lake subdistrict, but was deposited east of Mount Taylor, where it hosts uranium mineralization in the Laguna subdistrict.

The uppermost member of the Morrison Formation in the roca Honda area is the Brushy Basin Member.  The mostly greenish-grey, mudstone-dominated Brushy Basin Member is variable in thickness (22 ft to 269 ft), but the average thickness is approximately 105 ft, based on historical drilling in the area. 

The fluvial/lacustrine deposits of the Brushy Basin Member are underlain by the Westwater Canyon Member, which hosts the uranium deposits in the Roca Honda area.  The fluvial, sandstone dominated Westwater Canyon Member is approximately 100 ft to 250 ft thick under the Mine area, and consists of grey, light yellow-brown and reddish grey arkosic sandstone (Fitch, 2006).  The Westwater Canyon Member is informally subdivided into sandstone and shale units.  The sandstone units, which contain the uranium mineralization, have grains composed of quartz (~61%), feldspar (~35%), chert (~3%), and heavy minerals (<1%).  The Recapture Member is composed of greyish-red siltstone and claystone.

Figure 7-4 is a detailed stratigraphic section of the Upper Jurassic Stratigraphy of the Roca Honda Mine.

Figure 7-4: Roca Honda Upper-Jurassic Stratigraphy

7.2.2 Structural Geology

Regional structures in the Grants uranium district, specifically the Ambrosia Lake subdistrict west of the Property, formed during the Mesozoic and continued developing into the Tertiary.  This period of deformation is coincident with the formation of the San Juan Basin.  Most of these structures are related to the uplift of the Zuni Mountains, which has been periodically active since Pennsylvanian time (Santos, 1970).  Structures associated with this period of Mesozoic-Tertiary deformation include normal faults; transform faults, as well as pre- and post-Dakota Sandstone folds.  The regional trend of the major structures throughout the Grants uranium district is to the north-northeast but varies widely.

There are four major fault systems in the Ambrosia Lake subdistrict.  The two nearest the Roca Honda project, the San Mateo and San Rafael fault zones, are located to the west and south of the project respectively.  The San Mateo fault zone is composed of normal faults with throw down to the east, and has a maximum vertical offset of 450 ft.  Additionally, thinning of the Brushy Basin Member on opposite sides of this zone suggest that there is some lateral movement associated with this fault zone as well.  This would suggest this overall fault zone is a right-lateral oblique fault zone with large components of both horizontal and vertical motion.  The San Rafael fault zone, the largest in the region, differs in that most if not all movement is horizontal, with up to 20,000 ft of right-lateral displacement (Santos, 1970).

Pre-Dakota folding is not present in the Ambrosia Lake subdistrict, but is common in the Laguna Sub-district, approximately 30 mi to the southeast.  There pre-Dakota folds have a maximum amplitude greater than 100 ft (Santos, 1970).  Within the Ambrosia Lake subdistrict, the major period of folding occurred following deposition of the Late Cretaceous Dakota Sandstone.  The two largest folds in the region, the McCartys Syncline and the Ambrosia Dome, formed during this period of deformation, and have structural relief greater than 1,000 ft (Santos, 1970).  A third smaller fold, the San Mateo Dome, is located north of the Roca Honda project and dips east-southeast into the McCartys Syncline, giving local bedding a 7° to 11° dip (Falk, 1978).

Geologic structures at the Mine are associated with regional deformation, which occurred during the late Cretaceous, following deposition of the geologic strata seen at the Mine. There is no evidence of recent activity.  The primary structures are high angle, north to northeast trending normal faults that cut across the western portion of Sections 9 and 16, with no major faults evident on Section 10.

Maximum offset along these faults is approximately 150 ft and has been estimated from the location of lithological contacts along a north-trending fault in Section 17 and adjacent borehole data.  Down dip offsets to the west and northwest have been interpreted for all faults at the Mine.

The dip along the Fernandez Monocline varies from approximately 3° to 4° in the western portion of the property, to as much as 20° in Section 10.  Possible minor accommodation faults related to the monocline may be encountered in the subsurface on Section 10, however, offsets should be minor.

Previous detailed structural geology work by Kerr-McGee on Section 17 indicates complex normal fault geometry, with the potential for some apparent structures to have formed as stress relief and in strike slip duplexes along bends in transform faults when reviewed at a larger scale (Carter, 2016).

7.3 Mineralization

The uranium mineralization found in the Mine area is contained within five sandstone units of the Westwater Canyon Member.  Zones of mineralization vary from approximately one foot to 30 ft thick, 100 ft to 600 ft wide, and 200 ft to 3,000 ft in length in elongated pods.  Uranium mineralization in the Mine area west to east, and northwest to southeast depending on general area within the Mine area, 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 it has background to slightly elevated radiometric readings.

Uranium mineralization in the Mine area is believed to be predominantly primary ("trend") mineralization, with some secondary mineralization due to oxidation and mobilization of uranium near permeable geologic structures.  Uranium mineralization consists of dark organic-uranium oxide complexes.  The uranium in the Mine area is dark grey to black in color and is found between depths of approximately 1,380 ft to 2,600 ft below the surface.  Although coffinite and uraninite have been identified in the Grants uranium district, their abundance is not sufficient to account for the total uranium content in a mineralized sample.  Admixed and associated with the uranium are enriched amounts of vanadium, molybdenum, copper, selenium, and arsenic, in order of decreasing abundance.

The primary mineralization pre-dates the formation of the Laramide aged structures in the Mine area, with a small amount of vertical offset of mineralization present across the local faults.  There is a possibility of some redistribution and stack ore along faults, however, it appears that most of the Roca Honda mineralization is primary.  Redistributed, post-fault, or stack mineralization occurs in the Ambrosia Lake subdistrict of the Grants uranium district, but is not apparent in the Roca Honda area.

7.3.1 Mineralization Controls

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.

Mineralization is generally confined to the fluvial sandstones of the Westwater Canyon Member and the Poison Canyon Sandstone of the Brushy Basin Member, though there may be some localized seepage into the under/overlying shales and mudstones, as well as some minor extension (less than 10 ft) of mineralization into the underlying Recapture Member.  Within the Mine area, the Westwater Canyon Member contains as many as seven individual sandstones, which the uranium mineralization is spread across.  In Sections 9 and 16, the mineralization is typically found in the upper sandstones (A, B1, and B2).  In the north-central portion of the Mine area (Section 10 and 11), the mineralization is concentrated in the lower sandstone units (C and D) due to a pinching out of the upper sands and a thickening of the Brushy Basin Member.  In the far western area of the project (Section 17), the uranium mineralization is generally in the upper two to three sandstones (A, B1 and B2), with very few mineralized occurrences in the lower half of the Westwater Canyon Member.  To the east of the Mine area, the mineralization is spread across all of the sandstone units (including the Poison Canyon Sandstone); this area also appears to be in a region of overall mineral convergence at multiple horizons within the Westwater Canyon Member and observed within the Mount Taylor Mine (Riese, 1977).

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.  In places, uranium mineralization is related to clay-gall (cobbles) layers within the host sandstone.

Geochemical environments in the host sandstone also play an important role in controlling the location of the uranium mineralization.  Historical mining operations at both the Johnny M Mine and the Mount Taylor Mine indicate that the uranium mineralization is generally located within a “halo” of reduced (“bleached”) ground.  This reduced ground is reflected by light grey sandstone hues and blue-green reduced rims on clay-galls containing ferric iron.

8.0 DEPOSIT TYPES

More than 340 Mlb of U₃O₈ have been produced from the Grants uranium deposits in New Mexico between 1948 and 2002.  The Grants uranium district is one of the largest uranium provinces in the world.  The Grants uranium district extends from east of Laguna to west of Gallup in the San Juan Basin of New Mexico.  Three types of sandstone uranium deposits are recognized: tabular, redistributed (roll-front, fault-related), and remnant-primary. The tabular deposits formed during the Jurassic Westwater Canyon time period.  Subsequently, oxidizing solutions moved down dip, modifying tabular deposits into redistributed roll-front and fault-related deposits. Evidence, including age dates and geochemistry of the uranium deposits, suggests that redistributed deposits could have been formed shortly after deposition in the early Cretaceous Period and from a second oxidation front during the mid-Tertiary Period (McLemore, 2010)

Primary mineralization deposits are generally irregular, tabular, flat-lying bodies elongated along an east to southeast direction, ranging from thin pods a few feet in thickness and length to bodies several tens or hundreds of feet long.  The deposits are roughly parallel to the enclosing beds but may form rolls (tabular lenses) that cut across bedding.  The deposits may occur in more than one layer, form distinct trends, commonly parallel to depositional trends, and occur in clusters.  Primary mineralization in the Ambrosia Lake subdistrict consists mostly of uranium-enriched humic matter that coats sand grains and impregnates the sandstone, imparting a dark color to the rock.  The uranium mineralization consists largely of unidentifiable organic-uranium oxide complexes that are light grey-brown to black.  A direct correlation exists between uranium content and organic-carbon content by weight percent in the "ores" (Squyres, 1970; Kendall, 1972).

9.0 EXPLORATION

9.1 Exploration

EFR has not conducted any exploration activities on the Project since acquiring the properties in August 2013.

9.2 Geotechnical and Hydrogeology

Geotechnical designs for the Mine are based on the laboratory testing of a limited number of core samples.  Section 16.3 Mine Design and Section 16.5 Geotechnical Parameters provide additional information. 

Hydrogeologic studies are discussed in Section 16.6.

10.0 DRILLING

No exploration or drilling work has been conducted at the Mine since EFR acquired it in August 2013.

EFR is planning a large infill-drilling program of approximately 200 surface drillholes prior to any mining operations taking place at the Mine.  Core recovered from this planned program will be used for assay checks of geophysical probes, disequilibrium and metallurgical studies, and geotechnical and hydrologic studies to refine mine plans.  This program is being permitted as part of the overall mine permitting process and no timeframe for this drilling has been set.

Drillhole collar locations are recorded on the original drill logs and radiometric logs created at the time of drilling, including easting and northing coordinates in local grid or modified NAD 1983 New Mexico West State Plane FIBPS 3003 (US feet) and elevation of collar in feet above sea level.  The SLR QP is not aware of any drillhole orientation surveys as downhole deviation surveys are not typically conducted as all drillholes are vertical.

10.1 Historic Drilling

Historical exploration drilling within the project area generally utilized truck mounted mud rotary drills with holes 4 ¾ in. in diameter.  The holes were drilled through the Westwater Canyon Member and several feet into the underlying non-hosting Recapture Member of the Morrison Formation.  Sample cuttings were typically taken at five-foot intervals by the driller and laid out on the ground in piles for each interval in rows of 20 samples, or 100 ft.  Upon completion of a drillhole, the hole was logged using natural gamma log, determining uranium grade through industry standard grade calculation methods (equivalent uranium = eU₃O₈), and verifying with laboratory assays (chemical uranium = cU₃O₈). 

Drilling on the Roca Honda property has been conducted in phases by Rare Metals, Kerr-McGee, Western Nuclear, and RHR from 1950 to 2011, and consists of 1,450 surface drillholes totalling more than 2,312,000 ft.  EFR holds a large database of historical data from the various operators of the Mine area, including those listed in Table 10-1 by Section.  In total, there are 1,790 originals or copies of drill logs for the Mine area in the database.  Many of the remaining drill logs, and specifically those from Sections 5, 6, and 8, are still held by EFR as part of the historical Kerr-McGee database acquired by the company. 

EFR holds the gamma-ray logging calibration data for the Kerr-McGee drilling in the San Mateo Valley.  Kerr-McGee did not place the calibration data on each individual drillhole log header, but rather listed the probe identification number, which could be traced back to a calibration log that contained all pertinent data on that probe to determine eU₃O₈. A discussion of gamma-logging and calibration data is described in Section 11.1.1 of this Technical Report.

In addition to the historical exploration drilling data, EFR holds numerous internal reports, resource estimates, geologic maps, and mine planning documents prepared by multiple companies and their consultants across the project area.  The SLR QP is not aware of any drilling or sampling errors that could materially impact the accuracy and reliability of the mineral resource estimate but does recommend completing additional confirmation drilling at the earliest opportunity to confirm historical drillhole data on all zones.

A drill summary table by Section is included in Table 10-2.  Figure 10-1 shows the locations of drillholes by Section for the Mine.

Table 10-1: Drilling at and Near the Roca Honda Mine by Section

Energy Fuels Inc. - Roca Honda Project

Notes:

1. Portions of Sections 3 & 4, T13N, R08W and Sections 31 & 32, T14N, R08W, are no longer controlled by EFR

Table 10-2: Summary of Exploration Drilling Completed at Roca Honda

Energy Fuels Inc. - Roca Honda Project

Figure 10-1: Drillhole Location Map 

11.0 SAMPLE PREPARATION, ANALYSES, AND SECURITY

11.1 Sample Preparation and Analysis

11.1.1 Gamma Logging

The standard procedure for sampling uranium deposits in the United States involves drilling a hole and running a gamma probe down hole to produce a gamma log.  The data gained from the gamma log, typically counts per second (cps), can be converted to a percent equivalent U₃O₈ (%eU₃O₈) using calibration data specific to each probe.  This method limits the amount of core needed to evaluate a uranium deposit.  It is common practice to use this data in place of core assay data for Mineral Resource estimates.  Typically, core is only collected to validate gamma log data, determine disequilibrium, or for use in amenability or geotechnical studies.  As mentioned in Sections 9.0 and 10.0, EFR has not conducted any exploration work at the Roca Honda Mine, however drilling and coring completed by Strathmore Resources/RHR is addressed in this Section, as well as discussions on procedures and methods used to estimate the Mineral Resource.   

Drilling for uranium is unique in that core does not need to be recovered from a hole to determine the metal content.  Due to the radioactive nature of uranium, probes that measure the decay products or "daughters" can be read with a downhole gamma probe, a process referred to as gamma logging.  While gamma probes do not measure the direct uranium content, the data collected (in cps) can be used along with probe calibration data to determine an equivalent U₃O₈ grade in percent (%eU₃O₈).  These grades are very reliable as long as there is not a disequilibrium problem in the area.  Gamma logging is common in non-uranium drilling and is typically used to discern rock types.

11.1.1.1 Calibration

For the gamma probes to report accurate %eU₃O₈ values the gamma probes must be calibrated regularly.  The probes are calibrated by running the probes in test pits maintained historically by the U.S. Atomic Energy Commission (AEC) and currently by the U.S. Department of Energy (DOE).  Test pits are in Grand Junction, Colorado, Grants, New Mexico, and Casper, Wyoming.  The test pits have known %U₃O₈ values, which are measured by the probes.  A dead time (DT) and K-factor can be calculated based on running the probes in the test pits.  These values are necessary to convert cps to %eU₃O₈. The DT accounts for the size of the hole and the decay that occurs in the space between the probe and the wall rock.  DT is measured in microseconds (μsec) while the K-factor is simply a calibration coefficient used to convert the DT corrected cps to %eU₃O₈. 

Quarterly or semi-annual calibration of a gamma probe is usually sufficient; however, calibration should be done more frequently if variations in data are observed or if the probe is damaged.

11.1.1.2 Method

Following the completion of a rotary hole, a geophysical logging truck will be positioned over the open hole and a probe will be lowered to the hole's total depth.  In uranium deposits, these probes take different readings, including gamma, resistivity, standard potential, and hole deviation.  Only gamma is used in grade calculation.  Once the probe is at the bottom of the hole, the probe begins recording as it raised.  The quality of the data is impacted by the speed the probe is removed from the hole.  Experience shows a speed of 20 feet per minute (ft/min) is adequate to obtain data for resource modeling.  Data is recorded in cps, which is a measurement of uranium decay of uranium daughter products, specifically Bismuth-24. That data is then processed using the calibration factors to calculate a eU₃O₈ grade. Historically, eU₃O₈ grades were calculated using the AEC half amplitude method, which gives a grade over a thickness.  Currently, the eU₃O₈ grades tend to be calculated on 0.5-foot intervals by software. Depending on the manufacturer of the probe truck and instrumentation, different methods are used to calculate the eU₃O₈ grade, however all, including the AEC method are based on two equations: 

• The first equation calculated the DT corrected cps (N) from the dead time determined as part of the calibration process