Rosita

The Rosita and Rosita South properties consist of mineral leases from private landowners on about 2,075 gross and net acres (775 acres in Rosita and 1,300 acres in Rosita South) located in north-central Duval County, Texas.

The leases provide for sliding scale royalties based on a percentage of uranium sales. Royalty percentages on average increase from 6.25% up to 18.25% when uranium prices reach $80.00 per pound. The leases have expiration dates ranging from 2012 to 2015. We are holding these leases by payment of rentals ranging from $10 to $30 per acre. Initial production at Rosita commenced in 1990 and continued until July 1999, when depressed uranium prices led to the suspension of production. Mineralization is found in the Goliad Formation at depths of 125 to 350 feet.

A radioactive material license and an underground injection control permit have been issued for the Rosita property. The underground injection control permit is being amended to include the Rosita South property. Production is expected to resume in areas already included in existing Production Area Authorizations. As new areas are proposed for production, additional authorizations under the permit will be required.