Church Rock/Mancos
The Church Rock project encompasses about 2,200 gross and net acres. The properties are located in McKinley County, New Mexico, and consist of three parcels, known as Section 8, Section 17 and Mancos. None of these parcels lies within the area generally recognized as constituting the Navajo Reservation. Access to the Church Rock property is via State Highway 566 and access to Mancos is via 4-wheel drive ranch roads west of State Highway 566.
URI owns the mineral estate in fee for the NE 1/4 and the SW 1/4 of the NW 1/4 of Section 17, T16N, R16W. In Section 8, T16N, R16W, the Company owns the SE 1/4 in fee and holds the minerals in the rest of the section, with 26 unpatented federal mining claims (UNC1A through UNC 26). For the Mancos Property, the Company owns the minerals in Section 13, T16N, R17W, in fee, the minerals in the NW 1/4 of Section 7, T16N, R16W, in fee and holds the minerals in the E 1/2 of Section 12, T16N, R17W, with 20 unpatented federal mining claims (KP1A through KP5A, KP19, KP36, 121617-14A through 121617-18A, 121617-20A through 121617-23A and 121617-32A through 121617-35A). The federal unpatented mining claims are all held through the payment of a $125.00 assessment fee each year on each claim.
Mineralization occurs in the Westwater Member of the Morrison Formation at depths of 800 to 1,700 feet. The surface estate on Section 17, Mancos Section 13 and Mancos Section 7 is owned by the United States Government and held in trust for the Navajo Nation. On those sections, URI has royalty obligations ranging from 5% to 6 1/4% and a 2% overriding royalty obligation to the Navajo Nation for surface use agreements. The total royalties on Section 8 depend on the sales price of uranium. Aggregate royalties are potentially as much as 39.25% at the current price of uranium.
In December 2006, Uranium Resources entered into a joint venture with Itochu to jointly develop this property. URI anticipates that Church Rock will be the first of its New Mexico properties to be developed and has invested significant amounts in permitting activities and land holding costs over the past few years. The New Mexico State Engineer approved the Company’s water rights application in October 1999 and granted it sufficient water rights for the life of Church Rock. URI has a radioactive material license for Section 8 at Church Rock; it does not plan to pursue permits for Mancos at this time.
