The Sheep Mountain mine has a NI 43-101 compliant Inferred Resource of 15.6 million pounds U3O8 (4,560,000 tons at an average grade of 0.17% eU3O8). The mine is fully licenced and permitted, and can be brought back into production at an early date.
Additional historical resources have been identified on the Sheep Mountain property, which total 6.5 million pounds U3O8, and are located in the North Gap area of the property. These historical resources were prepared before implementation of National Instrument 43-101. Recent independent verification of the data has not been performed and USECC/UPC have not completed sufficient exploration work to verify the historical estimate. The historical resources were prepared to industry standards at the time and are considered relevant today. USECC/UPC are not treating the historical estimates as NI 43-101 defined resources verified by a qualified person and they should not be relied upon. The potential quantity is conceptual in nature, there has been insufficient interpretive work to define a mineral resource and it is uncertain if further work on will result in the zone being delineated as a mineral resource.
Uranium was first found in the Crooks Gap district, which includes the Sheep Mountain area, in 1955. There are numerous former open pit and underground mines in the area of property. Many miles of drifts still exist to access the old workings, and to provide headings for new development. It should be noted, however, that only a small portion of the mineralization on the actual Sheep Mountain mines was ever mined.
Production reports for the period from 1976 to 1982 vary from 13.8 million lbs to 17.4 million lbs of uranium. Production ceased in 1982 and U.S. Energy Corp. acquired the properties from Western Nuclear in 1988. During May to October 1988, the Company mined 23,000 tons from Sheep Mountain 1, recovering 100,000 lbs of uranium for a mill head grade of 0.216% U3O8.
The property consists of approximately 2150 acres of unpatented mining claims and a state lease. A 12,000 foot drilling program was completed in the fall of 2005, which successfully outlined a deeper mineral trend, and which could potentially add to the resources of the project.
