2012-10-01_REVISION - M1977306 (20)

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Nine foot high by twelve foot wide drifts will be driven through known ore - bearing zones to provide access for production mining. The drifts also provide access for geologic mapping, long -hole drilling, rib scanning, and sample collection. This geologic data will be used to develop a detailed mining plan and a stope development strategy for each drift. The ore will be mined using a modified room - and - pillar system. This mining method is a common method for mining in uranium - bearing sandstone, and is designed to follow the irregular configuration of the individual ore bodies. The ore seams vary in height with an average seam thickness of approximately three feet. The waste to ore ratio also varies depending on the thickness of the ore and splits within the ore seams. The mines in this area have typically averaged 3 to 3.5 tons of waste per 1 ton of ore. A small amount of water enters the mine workings from two sources. The majority of the water comes from the Salt Wash formation immediately below the ore zone. Additionally, some water comes from the Brushy Basin and Burro Canyon formations, via drill holes and ventilation shaft #1. This is discussed in greater detail in Exhibit U. Surface and Underground Mining Equipment The following equipment may be used at the mine operation: • Two to five 2 cubic yard load - haul -dump (LHD) underground loaders • Two to four 7 -ton haul trucks • Two to four drill buggies • One boss buggy • One single boom jumbo drill Note: 1. A backhoe and/or hydraulic excavator will be brought onsite as needed to perform maintenance activities. 2. Miscellaneous rental and contract equipment will be brought to the mine site as needed. These could include fuel trucks, propane trucks, boom trucks, maintenance vehicles, welders, pipe equipment, electrical man lifts for working on power lines, contract venthole drilling equipment, exploratory drilling equipment, material delivery trucks, and concrete and gravel trucks. Jacklegs operating on compressed air will be utilized to drill the blast holes and rock -bolt holes in the drifts and production areas. A larger jumbo drill may also be used in the development areas if conditions warrant. The ore averages about three feet in thickness but the drifts are approximately nine feet in height while the stopes or rooms are a minimum of six to seven feet in height. In order to avoid excessive dilution of the ore, much of the waste will need to be drilled and shot separately from the ore using what is referred to as "split shooting." Blasting operations will be conducted in accordance with MSHA regulations. Blast holes will be loaded with a blasting cap, chemical booster, and a mixture of ammonium nitrate D -3