Akbastau Mine

The Akbastau Uranium Mine (Akbastau) is located in the Budenovskoye uranium field in the southwestern part of the Chu-Sarysu basin in the Suzak District of the South Kazakhstan Oblast, approximately 400 km northwest of Shymkent, and 200 km east of Kyzyl-Orda Kazakhstan.

Akbastau is an operating in situ recovery mine owned 100% by JV Akbastau OJSC, in which Uranium One has a 50% interest. The balance of the interest in Akbastau is owned by Kazatomprom, the Kazakh State uranium company.  Uranium One acquired its 50% interest in Akbastau in December 2010.

The ultimate production capacity of Akbastau is expected to be 7.8 million pounds (3,000 tonnes U) per year and it is expected that the annualized rate of production will reach this level by 2016.

Mineral Resources

As at April 30, 2010 Akbastau had the following mineral resource estimate as provided by Scott Wilson Roscoe Postle Associates Inc. ("Scott Wilson RPA"):

Table 1 - Akbastau Mineral Resource Estimate
April 30, 2010

Notes:

• Mineral resources based on 0.04 m% (grade x thickness) cut-off per hole and 0.13 m% per resource block.
• Mineral resources account for the depletion of U during pilot test mining.
• Mineral resources that are not Mineral Reserves may not have demonstrated economic viability.
• Mineral Resources are based on CIM definitions.
• Mineral Resources were estimated by Volkovgeologia using the CIS system effective July 1, 2009.
• Mineral Resources were reviewed by Scott Wilson RPA and re-classified as per the CIM definitions.

In Scott Wilson RPA's opinion, there is significant potential to increase the 43-101 mineral resource base based on P1 resources as follows:

• Exploration drilling indicates potential additional mineralization of 40 to 60 million tonnes at 0.07% to 0.10% U containing 35,000 to 50,000 t U (91 to 130 million pounds U₃O₈)
  
  

Geology and Mineralization

The Akbastau deposit is located in the Chy-Sarysu depression, which represents a large Cretaceous-age basin up to 250 km wide and which extends northward for more than 1,000 km from the foothills of the Tien Shan Mountains. The basin is an asymmetric syncline with a broad gently sloping northeast limb and an uplifted southern limb (forming the Karatau Mountains).

Overlying the basement rocks in the area of the Akbastau deposit are Cretaceous and Paleogene sedimentary rocks that host the uranium mineralization. They are composed of lacustrine-alluvial fine- grained sands to gravels, and 10% to 20% clays as narrow beds. The Upper Cretaceous and Lower Paleogene sedimentary rocks have been subdivided into three horizons, namely the Mynkuduk, Inkuduk and Jalpak. The depths below the surface of the three horizons are as follows:

• Mynkuduk horizon ranges from between 410m and 790m below the surface with an approximate thickness of up to 30m;
• Inkuduk horizon occurs at a depth of between 330m and 720m with an approximate thickness of 30 to 100m;
• Jalpak horizon occurs at a depth of between 260m and 670m below the surface with an approximate thickness of 40 to 80m.
  
  

Operations

Uranium is currently being extracted using in situ leaching mining methods.  Sulphuric acid leaching solution is pumped into the ore zone through a network of injection wells and extracted by production wells.  The drill pattern employs three parallel lines of wells wherein the middle line consists of production wells and the two outer lines of wells consist of injection wells.  The pregnant solution recovered by the production wells is then pumped to a covered settling pond and the solution is pumped into the processing plant.

Currently, production fluids are piped to processing facilities at Uranium One's 50% owned Karatau Mine under a toll processing arrangement. The Karatau plant is proximally located with respect to the producing Akbastau wellfields.