Hansen Uranium Deposit

Hansen is part of the larger Hansen/Taylor Ranch Project and has been selected for initial production as the more technically advanced of the deposits in terms of historical permitting and drilling. Hansen was discovered in 1977 and fully permitted for mining by Cyprus Mines Corporation (“Cyprus”) in 1981.

Cyprus drilled more than 1,000 holes and completed three feasibility studies to evaluate Hansen. Cyprus concluded that the Project was economically viable; however, the Project was never brought to production due to low uranium prices at that time. Black Range’s work to date has confirmed the historical work completed by Cyprus.

Development Scenario For Hansen Deposit

Based on the results of a Scoping Study conducted in April 2012 , Black Range has elected to develop Hansen using underground borehole mining with Ablation as it offers clear advantages in operating and capital costs and reduces the environmental impact of the project, which we believe will help streamline the permitting process.

Prepared by TREC, Inc. (“TREC”) of Casper, Wyoming the study evaluated the use of open pit, underground, and underground borehole mining (“UBHM”) with and without the use of Ablation.

Following completion of the Scoping Study, Black Range has determined that because of the considerable benefits arising from capital cost reductions, and further reduced environmental impact the best option for processing the ore after Ablation is in an off-site mill. The Scoping Study incorporated an on-site milling facility.

Whilst the Scoping Study is focused on Hansen, mining using UBHM and Ablation can be applied to all the resources within the Taylor/Hansen Project.

Details Of The Scoping Study

The TREC Scoping Study is preliminary in nature and was used as a planning tool to evaluate the various mining and processing options available to Black Range. The Study incorporated information from the Ablation test work, leaching test work, a UBHM study carried out by Kinley Exploration Inc (“Kinley”), current resources prepared by Tetra Tech, TREC’s internal database, and previous feasibility studies. The engineering and design component of the Scoping Study is estimated at an accuracy level of plus or minus 30%, and TREC has recommended that a contingency of 20% be considered for OPEX and CAPEX.

In preparing the Scoping Study TREC used data form the August 2010 resource estimate prepared by Tetra Tech applying a 750ppm cutoff grade, the estimated Indicated and Inferred Resource is 7,78mt containing 19.72Mlb U₃O₈ at an average grade of 1,270 ppm.

Key Outcomes Of The Study

Capital and operating costs in the Scoping Study are based on uranium production of 2Mlb U₃O₈ per annum and an estimated recovery of 14Mlbs U₃O₈ from Hansen. Key out comes from the Scoping Study are shown below:

• UBHM with Ablation selected as the preferred development option on the basis of capital and operating cost advantages and the reduced environmental impacts resulting from a smaller footprint on site
• Operating costs from the scoping study are estimated at $30/lb U₃O₈ at a production rate of 2Mlb U₃O₈ per annum
• The precision of UBHM mining provides the ability to target higher grade zones several hundred meteres underground with relatively minimal environmental impact
• Continuing Ablation test work confirms recovery of a high-grade, high-value concentrate
• Ablation process recovers approximately 95% of the uranium in 10% of the feed, thus reducing volume of material to be processed in the mill
• High grade concentrate can be transported off site for processing
• Use of Ablation process to separate uranium form gauge materials will streamline the mine permitting process
• Off-site mill selected as preferred processing option - CAPEX can be reduced to under US$80 million

Hansen Further Developments

Following completion of the Scoping Study, Black Range determined that its preferred option for processing the high grade Ablation concentrate will be to transport the concentrate to an off-site mill. If an off-site mill is used, capital costs would then be reduced to under US$80M. There are also considerable benefits in the permitting process arising from further reduced environmental impact on site.