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Uranium One

Zarechnoye Mine

Zarechnoye is an operating in situ recovery uranium mine located in the Syr-Darya basin in the Otrar region, South Kazakhstan province, approximately 200 km west of Shymkent and 450 km southeast of Kyzylorda, Kazakhstan.  The mine is owned by the Zarechnoye joint venture, a Kazakh registered joint stock company in which Uranium One has a 49.67% interest.  The remaining shares in this company are owned as to 49.67% by JSC NAC Kazatomprom, Kazakhstan’s state-owned company responsible for the mining and exporting of uranium, and 0.66% by an affiliate of the government of Kyrgyzstan.

Production

The mine covers two deposits, Zarechnoye Main, which is in production, and Zarechnoye South, which is under development.

Pilot production at the Zarechnoye mine commenced on January 30, 2009.  The production was entirely from the Zarechnoye Main deposit.

Pursuant to the terms of its subsoil use contract, the current production capacity of the Zarechnoye mine is 2,522,000 lbs U3O8 (970 t U) per year. 

Uranium is extracted at the Zarechnoye mine using the in situ recovery method, and processed using ion exchange technology at the processing facility on site.

Most recently, in 2013, the Zarechnoye mine produced 2,419,500 lbs U3O8 (931 t U), of which 1,201,800 lbs U3O8 (462 tonnes U) was attributable to Uranium One.

Mineral Resources and Mineral Reserves

The following table sets out the mineral resource and mineral reserve estimates for the Zarechnoye mine as of December 31, 2013.

ZARECHNOYE MINE

(as of Dec 31, 2013)

Ore

(000s tonnes)

Grade

(% U)

Tonnes U

Grade (%U3O8)

U3O8

(M lbs)

Reserves

100%

100%

49.67%

100%

49.67%

Proven

33,600

0.003

917

456

0.003

2,384

1,184

Probable

15,300

0.021

3,152

1,566

0.024

8,195

4,070

Proven and Probable

48,900

0.008

4,069

2,021

0.010

10,579

5,255

Resources




Measured

16,786

0.007

1,163

578

0.008

3,023

1,501

Indicated

11,752

0.054

6,334

3,146

0.064

16,467

8,179

Measured and Indicated

28,538

0.026

7,497

3,724

0.031

19,490

9,681

Inferred

9,400

0.048

4,500

2,235

0.056

11,700

5,811

Notes:

(1)   Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.  Inferred Mineral Resources have a great amount of uncertainty as to their existence and as to their economic feasibility.  Under no circumstances can it be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher Mineral Resource category or converted to Mineral Reserves.

(2)   The foregoing Mineral Resource and Mineral Reserve estimates are taken from Uranium One’s Summary of Mineral Resources and Mineral Reserves at June 30th 2013 outlined in "Uranium One Announces a 5% Increase in Q3 2013 Production to 3.2 Million Pounds at an Average Total Cash Cost of $16 per Pound Sold" on November 4, 2013, and are subject to the methods, parameters, assumptions, qualifications and procedures which are set out in such document. For a complete description of such methods, parameters, assumptions, qualifications and procedures, reference should be made to the full text of the foregoing document, which is available for review on SEDAR under Uranium One’s profile located at the following website: www.sedar.com.  Mineral Resources and Mineral Reserves are reported in accordance with Definition Standards on Mineral Resources and Mineral Reserves adopted by the Council of the Canadian Institute of Mining, Metallurgy and Petroleum and National Instrument 43-101 – Standards of Disclosure for Mineral Projects promulgated by the Canadian Securities Administrators.

(3)   The second column for “Tonnes U” and “U3O8” represents the portion of total Mineral Reserves and/or Mineral Resources notionally attributable to Uranium One’s equity interest in the joint venture through which the property is owned in the percentage indicated in this column.