2017-05-30_REVISION - M1997032

• Permit No: M1997032
• IBM Index Class Name: Revision
• Doc Date: 5/30/2017
• Doc Name: TC2
• From: Pinon Ridge Mining
• To: DRMS
• Type & Sequence: TC2
• Email Name: DMC
• Email Name: GRM
• Media Type: D
• Archive: No

upon approval of amendment AM-1 which incorporated EFR's Environmental Protection Plan to the
Permit.There has been no additional disturbance nor any amendment to the reclamation plan since the
succession of operators,therefore,the current financial warranty certificate of deposit held by Citizens
Bank of Ouray and renewed for twelve(12) months on August 15,2016, is presumed to be adequate for
the Permit.
B.and C. Explanation for Failure to Resume Operations and Demonstration of Commitment to
Resume Operations within the next Five Years:
EFR submitted a Temporary Cessation Notice to the DRMS for the Permit on November 15, 2013.That
notice cited June 13,2012 as the date which operations ceased and therefore Temporary Cessation
began.That notice was approved by the MLRB on February 19,2014 and in it EFR cited market
conditions and low price of uranium for the reason mining activities had ceased. In June,2012,the value
of uranium U308 was approximately$50.00 per pound, roughly twice the value of the same commodity
today at approximately$22.00 per pound (https://www.uxc.com/).Thus, current market conditions and
low price of uranium remain the principal reason the Company has not resumed production at the
Project. In addition, production and processing costs—including the cost of trucking ore to the only
operating uranium ore processing facility in the United States—currently preclude profitable production
of ore at the Project.
Because of its DRMS permit,the Company views the Project as a near term producing asset which will
resume production when market conditions improve. The Project is geographically located in the
historically uranium and vanadium producing Uravan Mineral Belt and is approximately 100 miles from
the only operating uranium ore processing facility in the United States. While the Company expects
market conditions to improve and the price of uranium ore to increase over the next five years,The
Company has little control over market price and thus is focusing its efforts on reducing the costs of
producing and processing ores in order to permit the Project and resume profitable production even if
low market prices for uranium persist.Additional efforts include committing to extracting the present
and valuable vanadium resource from the Company's Uravan Mineral Belt projects in tandem with the
uranium—these mineral deposits are known to typically contain approximately five (5)times the
vanadium content as compared to the uranium content.
The Company maintains a license to operate and develop the Ablation Mining Technology(AMT)from
its former joint venture partner,Ablation Technologies,and continues to pursue appropriate permitting
for the use of AMT with the Colorado Department of Public Health and Environment and the Nuclear
Regulatory Commission. Preliminary permitting determinations have been made by those agencies and
are currently under review. In addition,the Company continues to actively pursue development and
improvement of AMT to allow the Company to reduce the costs of mining through processing,thereby
enabling it to profitably produce and sell uranium and vanadium at lower market prices. To date,the
Company has invested more than$6 million in the development and improvement of AMT in order to
permit, license,and profitably resume production from the Project and other near term mining assets.
The Company currently projects that utilization of AMT can result in greater than a 25%reduction in
operating cost of producing salable uranium and vanadium from mine through mill. In conjunction with
a new uranium processing facility,overall capital costs would be reduced and mill waste storage
capacity would be increased,bolstering the total life of mill potential. The Company presently
Pinon Ridge Mining, LLC
P.O. Box 825
Nucla,CO 81424