Uranium Resources, Inc.
 

Ambrosia Lake

Uranium mineralized areas on our properties in the Ambrosia Lake area, and elsewhere in the Grants mineral belt, are primarily hosted in sandstones within the Westwater Canyon Member of the Jurassic-aged Morrison Formation, and to a lesser extent in the Poison Canyon sandstone unit of the Morrison Formation.

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Properties

The project is comprised of the Endy Lease which is comprised of 167 unpatented lode claims and covers 3,382 acres in the eastern portion of the Ambrosia Lake Project; Bonner Lease which is comprised of 181 unpatented lode claims and one state of New Mexico general  lease covering a further 4,132 acres; the Elizabeth Lease which is comprised of eight patented and one unpatented lode claims covering 179 acres; 292 unpatented lode claims for 5,442 acres in the West Ranch area that are owned directly by us; and six sections, comprising approximately 3,840 acres of mineral rights that are also owned by us (surface rights are owned by other parties). The surface lands covering the patented and unpatented claims are managed by the U.S. Bureau of Land Management (‘‘BLM’’), the U.S. Forest Service (‘‘USFS’’) and one private land owner.

The Endy Lease

The Endy Lease, which covers an area of 3,382 acres, is comprised of 167 unpatented lode claims in the eastern portion of the Ambrosia Lake recovery district. Lease provisions include an initial payment of $315,000 on signing of the lease, payments of $100,000 in February 2007 and February 2008 (all of which were previously made), and obligations to pay $75,000 per year thereafter through the term of the lease. The lease has a primary term of ten years, but may be extended up to an additional 65 years provided that payments advance or production royalty payments are made annually. The lease may be terminated at any time without further payment obligations. A 5% production royalty, based on the gross market value of all minerals extracted, is payable for any production from the leased properties.

The Bonner Lease

The Bonner Lease includes 181 unpatented lode claims and one state of New Mexico general lease, covering 4,132 acres of mineral rights in the Ambrosia Lake district in the state of New Mexico. Pursuant to the terms of the Bonner Lease an initial rental payment of $180,000 was made and 65,000 shares of Neutron’s common stock were issued to the owners. Subsequent rental payments have been made in accordance with the terms of the agreement, and all provisions of the lease are in good standing. We are obligated to make an advance royalty payment of $240,000 in 2013 and each year thereafter in order to keep the lease in force. In the event commercial production is achieved during the rental period, then all future rental payments received after commercial production begins will be credited as minimum advance royalty payments. The lease has a primary term of ten years but may be extended up to an additional 65 years provided that Neutron continue to make advance or production royalty payments. Neutron may terminate the lease at any time without future lease obligations. A 5% production royalty based on the gross market value of all minerals extracted is payable for any production from the Bonner Lease properties. The surface overlying the New Mexico general lease is owned by the State of New Mexico.

The Elizabeth Lease

The Elizabeth Lease covers an area of 179 acres and includes eight patented and one unpatented lode claims in the eastern portion of the Ambrosia Lake district. Pursuant to the terms of the lease, a $315,000 bonus payment was made at signing, and subsequent $100,000 advance royalty payments were made in 2008 and 2009. Annual payment obligations, as advanced royalties are now $75,000. The Elizabeth Lease has a primary term of ten years, but may be extended up to an additional 65 years provided that annual advanced royalty payments are made in accordance with the agreement. The lease may be terminated at any time without future obligations. A 5% production royalty, based on the gross market value of all minerals extracted, is payable for any production from the Elizabeth Lease properties. The properties covered by the Elizabeth Lease are patented lode claims, and the surface over them is privately owned.

Accessibility

The project is approximately 63 miles west-northwest of the city of Albuquerque, and 16 miles north-northeast of the town of Grants. A paved highway from the town of Milan (Grants) to the village of San Mateo and the Ambrosia Lake area provides excellent access to eastern and northern parts of the project area. Numerous dirt USFS and private ranch roads cross the project lands and provide access to nearly all parts of the project area. Rail service is available from the BNSF Railroad at Grants and Milan, and scheduled air service is available in Albuquerque. The project area is located in the Ambrosia Lake district, which had numerous underground sites and uranium processing mills. Electrical lines cross the project area and provided electricity to the historic mills and mines. All of the historic mills have been dismantled and removed but the remaining electrical power lines could be a source of power. There are no plant facilities or equipment on the properties of the project, including subsurface improvements and equipment. A transcontinental railroad line, operated by the BNSF Railway, parallels US Interstate highway I-40 at Grants and Milan (about 16 miles south of the project area) and regularly scheduled commercial airline service is available in Albuquerque.

History

In the Ambrosia Lake area mineral exploration and development programs (including underground and small-scale open pit extraction and milling) commenced in the early 1950’s and continued into the 1990’s. During that period of time nearly 190 million pounds of U3O8were produced from sandstone and limestone-hosted mineralized areas in the district, and a significant amount of uranium mineralization remains in place in the district. During the period of operation of the Ambrosia Lake district, underground uranium sites were discovered, developed and operated by numerous companies, including Kerr McGee Nuclear, Homestake Mining Company, United Nuclear/UNC Resources, Phillips Petroleum, Ranchers Exploration, and others. Lands that comprise our Ambrosia Lake Project have been explored by several firms (including Conoco, Homestake Mining, Kerr-McGee, Bokum Resources, Pathfinder Mines and United Nuclear Corporation) periodically since the mid 1950’s, and numerous exploration holes have been drilled on our properties. Much of the drilling and related data from several of these historical programs are currently in our possession. We have previously carried out short drilling programs on properties within the Ambrosia Lake project, but we have not undertaken any physical work since 2011.

Elizabeth Target

Considerable exploration drilling was carried out by several companies on the Elizabeth claims between the mid-1950’s and the early 1980’s. The adjoining Section 35 mineralized area was previously extracted by Kerr McGee, the major historical operator in the Ambrosia Lake district, and the Ann Lee/Section 27 underground mines were formerly operated by Phillips Petroleum and United Nuclear/UNC Resources. A portion of the Elizabeth southwest uranium mineralized area was recovered by Kerr McGee and United Nuclear. Various ‘historical’ operators of the Elizabeth claims have prepared mineral resource estimates for the two uranium mineralized areas situated on the claims.

West Endy Target

The West Endy target is comprised of two contiguous blocks of unpatented lode claims and one State of New Mexico general lease (site of the inactive Cliffside site). At least 97 exploration holes have been drilled on the West Endy target by various companies, in particular Enerdyne Corporation, Homestake Mining Company and United Nuclear. Zones of uranium mineralization have been outlined by drilling on the target. The New Mexico general lease is the site of the now-inactive Cliffside underground project that was discovered in 1956 and brought into production in 1960. The Cliffside site was one of the last underground projects to operate in the district and was closed in 1985. Total production from the site has been reported to be over 6 million pounds of U3O8 at an average grade of 0.41% U3O8. Data in URI’s possession, as well as the results from Neutron’s confirmation drilling program, demonstrate that the West Endy uranium mineralized area extends onto the northeast portion of the New Mexico general lease.

Mesa Redonda Target

The Mesa Redonda target is on the western edge of the Ambrosia Lake district. Detailed exploration drilling was carried out in the Mesa Redonda area by Pathfinder Mines, Devilliers Nuclear, Homestake Mining/UNC Resources and private interests in the 1970’s and early 1980’s. This work resulted in the discovery of uranium mineralization on the properties leased by us.

West Ranch Target

The West Ranch target, which is on the western part of the Ambrosia Lake district, is comprised of 223 lode mining claims. In the vicinity of these claims are several small-scale uranium sites that are reported to have operated in the 195’s and 1960s. Additionally there is considerable evidence of exploration conducted by Energy Fuels Nuclear, Phillips Petroleum and United Nuclear during the 1970s.

Property Map