Kharasan Mine

Kharasan is an in situ recovery uranium development project located in the Syr-Darya basin in the Suzak region, South Kazakhstan province, approximately 100 km southeast of Kyzylorda and 250 km northwest of Shymkent, Kazakhstan.  The project is owned by the Kyzylkum joint venture, a Kazakh registered limited liability partnership in which Uranium One has a 30% interest. The other 70% interest in Kyzylkum is owned as to 30% by JSC NAC Kazatomprom, Kazakhstan’s state-owned company responsible for the mining and exporting of uranium, and as to 40% by Energy Asia (BVI) Ltd., which is owned by a consortium of Japanese utilities and a trading company.

Production

Pilot production (commissioning) at the Kharasan mine commenced in August 2008.  Commissioning will be completed when a pre-defined operating level, based on the design of the plant, is maintained.  Uranium One is preparing for the submission of the industrial (commercial) production licence application at the end of the year, and expects to receive approval by the end of 2013.

Pursuant to the terms of its subsoil use contract, the production capacity of the Kharasan project is 7,800,000 lbs U₃O₈ (3,000 t U) per year.  The project’s current design capacity is 5,200,000 lbs U₃O₈ (2,000 t U) per year, and its current installed capacity is 2,600,000 lbs U₃O₈ (1,000 t U) per year.

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

Most recently, in 2011, Kharasan produced 1,109,400 lbs U₃O₈ (427 t U), of which 332,800 lbs U₃O₈ (128 t 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 Kharasan project as at December 31, 2011.

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 the report titled “Technical Report on the Kharasan Uranium Mine, Kazakhstan” dated February 14, 2012 (as amended May 2, 2012), prepared for Uranium One by Roscoe Postle Associates Inc. and are subject to the methods, parameters, assumptions, qualifications and procedures which are set out in such report. For a complete description of such methods, parameters, assumptions, qualifications and procedures, reference should be made to the full text of the foregoing reports, 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.