NOTE

MINERAL RIGHTS AND PROPERTIES

Mineral Rights

July 31, 2019,

we had mineral rights in the States of Arizona, Colorado, New Mexico, Texas and Wyoming, in Canada and in Paraguay. These mineral rights were acquired through staking and purchase, lease or option agreements and are subject to varying royalty interests, some of which are indexed to the sale price of uranium. At

July 31, 2019,

annual maintenance payments of approximately

$2,666,000

were required to maintain these mineral rights.

The carrying value of these mineral rights and properties are as follows:

	July 31, 2019			July 31, 2018
Mineral Rights and Properties
Palangana Mine	$	6,027,784		$	6,285,898
Goliad Project		8,689,127			8,689,127
Burke Hollow Project		1,495,750			1,495,750
Longhorn Project		116,870			116,870
Salvo Project		14,905			14,905
Anderson Project		3,470,373			9,154,268
Workman Creek Project		699,854			1,657,500
Los Cuatros Project		257,250			257,250
Slick Rock Project		-			646,650
Reno Creek Project		31,527,870			31,527,870
Diabase Project		546,938			546,938
Yuty Project		11,947,144			11,947,144
Oviedo Project		1,133,412			1,133,412
Alto Paraná Titanium Project		1,433,030			1,433,030
Other Property Acquisitions		91,080			91,080
		67,451,387			74,997,692
Accumulated Depletion		(3,929,884	)		(3,929,884	)
		63,521,503			71,067,808

Databases		2,410,038			2,410,038
Accumulated Amortization		(2,409,188	)		(2,405,192	)
		850			4,846

Land Use Agreements		404,310			404,310
Accumulated Amortization		(389,768	)		(354,388	)
		14,542			49,922
	$	63,536,895		$	71,122,576

We have

not

established proven or probable reserves, as defined by the SEC under Industry Guide

for any of our mineral projects. We have established the existence of mineralized materials for certain uranium projects, including the Palangana Mine. Since we commenced uranium extraction at the Palangana Mine without having established proven or probable reserves, there

may

be greater inherent uncertainty as to whether or

not

any mineralized material can be economically extracted as originally planned and anticipated.

The Palangana Mine has been the Company’s sole source for the uranium concentrates sold to generate sales revenues during Fiscal

2012,

Fiscal

2013

and Fiscal

2015,

with

sales revenues generated during any other fiscal years. The economic viability of the Company’s mining activities, including the expected duration and profitability of the Palangana Mine and of any future satellite ISR mines, such as the Burke Hollow and Goliad Projects, located within the South Texas Uranium Belt, and the Reno Creek Project in Wyoming, have many risks and uncertainties. These include, but are

not

limited to: (i) a significant, prolonged decrease in the market price of uranium; (ii) difficulty in marketing and/or selling uranium concentrates; (iii) significantly higher than expected capital costs to construct the mine and/or processing plant; (iv) significantly higher than expected extraction costs; (v) significantly lower than expected uranium extraction; (vi) significant delays, reductions or stoppages of uranium extraction activities; and (vii) the introduction of significantly more stringent regulatory laws and regulations. Our mining activities

may

change as a result of any

one

or more of these risks and uncertainties and there is

assurance that any ore body that we extract mineralized materials from will result in profitable mining activities.

During Fiscal

2019,

we completed a royalty purchase agreement (the "Royalty Purchase Agreement") with Uranium Royalty Corp. (“URC”), a private entity investing in the uranium sector which our Company has the ability to exercise significant influence over URC’s operating and financing policies. In connection with the purchase by URC from our Company of a

net smelter return royalty, for uranium only, on each of our Slick Rock, Workman Creek and Anderson Projects, on

December 4, 2018,

we closed the Royalty Purchase Agreement and received

12,000,000

common shares of URC (the “Consideration Shares”) with a fair value of

$9,077,842.

The fair value of the Consideration Shares, net of transaction costs of

$55,787,

was allocated to the respective underlying projects based on their identified mineral resources as follows:

Fair value of Consideration Shares	$	9,077,842
Transaction costs		55,787
Net consideration	$	9,022,055

Net consideration allocation to:	Allocation %			Net Consideration Allocation
Anderson Project		63	%	$	5,683,895
Workman Creek Project		12	%		1,082,646
Slick Rock Project		25	%		2,255,514
		100	%	$	9,022,055

The net consideration allocation amounts have reduced the carrying value of the Anderson Project by

$5,683,895,

the Workman Creek Project by

$1,082,646

and the Slick Rock Project by

$676,650.

The net consideration of

$2,255,514

allocated to the Slick Rock Project exceeded its carrying value of

$676,650

$1,578,864,

which was recorded as a gain on disposition of asset and included in the Consolidated Statement of Operations for Fiscal

2019.

During Fiscal

2017,

we abandoned the Nichols Project located in Texas and certain non-core mineral interests at projects located in Arizona, Colorado and New Mexico with a combined acquisition cost of

$297,942.

As a result, an impairment loss on mineral properties of

$297,942

was reported on the Consolidated Statements of Operations and Comprehensive Loss.

Mineral property expenditures incurred by major projects were as follows:

	Year Ended July 31,
	2019			2018		2017
Mineral Property Expenditures
Palangana Mine	$	1,027,139		$	1,047,635	$	880,633
Goliad Project		96,789			105,264		114,286
Burke Hollow Project		1,616,601			675,605		1,020,965
Longhorn Project		45,848			14,401		32,796
Salvo Project		35,923			36,056		37,551
Anderson Project		81,414			68,167		68,303
Workman Creek Project		30,709			31,300		31,265
Slick Rock Project		53,843			52,218		44,231
Reno Creek Project		655,807			1,278,959		-
Yuty Project		102,882			425,298		365,517
Oviedo Project		288,324			119,082		331,798
Alto Paraná Titanium Project		168,956			175,768		800,023
Other Mineral Property Expenditures		557,497			522,398		580,275
Revaluation of Asset Retirement Obligations		(274,195	)		-		(187,255	)
	$	4,487,537		$	4,552,151	$	4,120,388

●

Palangana Mine, Texas

We hold various mining lease and surface use agreements granting us the exclusive right to explore, develop and mine for uranium at the Palangana Mine, a

6,987

acre property located in Duval County, Texas, approximately

100

miles south of our Hobson Processing Facility. These agreements are subject to certain royalty and overriding royalty interests indexed to the sale price of uranium and generally have an initial

five

-year term with extension provisions.

During Fiscal

2019,

the asset retirement obligations (“ARO”) for the Palangana Mine was revised due to changes in the estimated timing of restoration and reclamation at the Palangana Mine. As a result, the corresponding mineral rights and properties was reduced by

$258,114

and a credit amount for re-valuation of the ARO totaling

$274,195

was recognized as a result of a downward adjustment to the fully depleted underlying mineral rights and properties, which was recorded against the mineral property expenditures for the Palangana Mine. Refer to Note

11:

Asset Retirement Obligations.

During Fiscal

2017,

the ARO for the Palangana Mine was revised due to changes in the estimated timing of restoration and reclamation of the Palangana Mine. As a result, a credit amount for re-valuation of the ARO totaling

$187,255

was recognized as a result of a downward adjustment to fully depleted underlying mineral rights and properties, which was recorded against the mineral property expenditures for the Palangana Mine.

During Fiscal

2019,

Fiscal

2018

and Fiscal

2017,

we continued with reduced operations at the Palangana Mine to capture residual uranium only. As a result,

depletion for the Palangana Mine was recorded on our consolidated financial statements.

July 31, 2019,

capitalized costs of the Palangana Mine were

$6,027,784

(

July 31, 2018:

$6,285,898

), less accumulated depletion of

$3,929,884

(

July 31, 2018:

$3,929,884

), for a net book value of

$2,097,900

(

July 31, 2018:

$2,356,014

●

Goliad Project, Texas

We hold various mining lease and surface use agreements granting us the exclusive right to explore, develop and mine for uranium at the Goliad Project, a

995

acre property located in Goliad County, Texas. These agreements are subject to certain fixed royalty interests based on net proceeds from sales or indexed to the sale price of uranium and have an initial

five

-year term with extension provisions.

●

Burke Hollow Project, Texas

We hold various mining lease and surface use agreements granting us the exclusive right to explore, develop and mine for uranium at the Burke Hollow Project, a

19,335

acre property located in Bee County, Texas. These agreements are subject to fixed royalty interests based on net proceeds from sales and have an initial

five

-year term with extension provisions.

●

Longhorn Project, Texas

We hold various mining lease and surface use agreements granting us the exclusive right to explore, develop and mine for uranium at the Longhorn Project, a

651

acre property located in Live Oak County, Texas. These agreements are subject to certain royalty interests indexed to the sale price of uranium and have an initial

five

-year term with extension provisions.

●

Salvo Project, Texas

We hold various mining lease and surface use agreements granting us the exclusive right to explore, develop and mine for uranium at the Salvo Project, a

1,514

acre property located in Bee County, Texas. These agreements are subject to certain royalty interests indexed to the sale price of uranium and have an initial

five

-year term with extension provisions.

●

Anderson Project, Arizona

We hold an undivided

100%

interest in contiguous mineral lode claims and state leases in the Anderson Project, a

8,268

acre property located in Yavapai County, Arizona.

During Fiscal

2019,

in connection with the closing of the Royalty Purchase Agreement with URC, and as a result of allocation of the net consideration amount to the Anderson Project based on its identified mineral resources, the carrying value of the Anderson Project was reduced by

$5,683,895

$3,470,373

July 31, 2019

from

$9,154,268

July 31, 2018.

●

Workman Creek Project, Arizona

We hold an undivided

100%

interest in contiguous mineral lode claims in the Workman Creek Project, a

4,036

acre property located in Gila County, Arizona. The Workman Creek Project is subject to a

3.0%

net smelter royalty requiring an annual advance royalty payment of

$50,000

for

2016

and

2017,

and

$100,000

thereafter. We have an exclusive right and option to acquire

1.5%

of the net smelter royalty for

$1,000,000

at any time until

January 21, 2024.

Additionally, certain individuals hold an option to acquire a

0.5%

net smelter royalty exercisable by paying the Company the sum of

$333,340

at any time until

January 21, 2024.

During Fiscal

2019,

we paid

$125,000

in cash as advance royalty payments for the Workman Creek Project. During Fiscal

2018,

we paid

$75,000

in cash and issued

46,134

shares with a fair value of

$61,820

and, during Fiscal

2017,

we issued

46,800

shares with a fair value of

$48,672

as advance royalty payments for the Workman Creek Project, which were capitalized as Mineral Rights and Properties on our Consolidated Balance Sheet.

During Fiscal

2019,

in connection with the closing of the Royalty Purchase Agreement with URC, and as a result of allocation of the net consideration amount to the Workman Creek Project based on its identified mineral resources, the carrying value of the Workman Creek Project was reduced by

$1,082,646.

July 31, 2019,

the carrying value of the Workman Creek Project was

$699,854

(

July 31, 2018:

$1,657,500

●

Los Cuatros Project, Arizona

We hold an undivided

100%

interest in a state lease in the Los Cuatros Project, a

640

acre property located in Maricopa County, Arizona.

●

Slick Rock Project, Colorado

We hold an undivided

100%

interest in contiguous mineral lode claims in the Slick Rock Project, a

5,333

acre property located in San Miguel County, Colorado. Certain claims of the Slick Rock Project are subject to a

1.0%

3.0%

net smelter royalty, the latter requiring an annual advance royalty payment of beginning in

November 2017.

We paid advance royalty payments of

$30,000

and

$31,000,

respectively, during Fiscal

2019

and Fiscal

2018,

which were capitalized as Mineral Rights and Properties on the Consolidated Balance Sheets for those fiscal years.

During Fiscal

2019,

in connection with the closing of the Royalty Purchase Agreement with URC, and as a result of allocation of the net consideration amount of

$2,255,514

to the Slick Rock Project based on its identified mineral resources, the carrying value of the Slick Rock Project was reduced by

$676,650,

and a gain on disposition of asset of

$1,578,864

was recognized and included in the Consolidated Statement of Operations and Comprehensive Loss for Fiscal

2019.

●

Reno Creek Project, Wyoming

August 9, 2017,

we completed the acquisition of the issued and outstanding shares of Reno Creek Holdings Inc. (“RCHI”) and, indirectly thereby,

100%

of the fully permitted Reno Creek Project, located in the Powder River Basin, Wyoming, from each of the Pacific Roads Resources Funds (collectively, “PRRF” (as defined therein); as to

97.27%

of RCHI) and Bayswater Holdings Inc. (as to the remaining

2.73%

of RCHI; and, collectively with PRRF, the “Reno Creek Vendors”), in accordance with the terms and conditions of a certain Share Purchase Agreement, dated

May 9, 2017,

as amended by a certain Amending Agreement, dated

August 7, 2017 (

collectively, the “Share Purchase Agreement”; and, collectively, the “Reno Creek Acquisition”).

Pursuant to the terms of the original Share Purchase Agreement, we agreed to reimburse all costs and expenses (the “Reimbursable Expenses”) incurred by RCHI and its subsidiaries in the ordinary course of business from the effective date of the Share Purchase Agreement to closing, and, pursuant to the Amending Agreement, we also agreed with that the amount to be distributed from RCHI’s subsidiaries to RCHI at closing totaled

$1,743,666,

which was comprised of the Reimbursable Expenses and the amount of cash on hand held by RCHI’s subsidiaries at the time.

Consideration paid in connection with the completion of the Reno Creek Acquisition included the following:

●

a cash payment of

$909,930;

●

14,392,927

shares of the Company issued to the Reno Creek Vendors;

●

an additional

241,821

shares of the Company in settlement of certain insurance costs of

$340,000

incurred by the Company and RCHI at closing;

●

11,308,728

warrants (each a “Warrant”), with each Warrant entitling the holder to acquire

one

share of the Company at an exercise price of

$2.30

per share for a period of

five

years from the date of issuance. The Warrants have an accelerator clause which provides that, in the event that the closing price of the shares of the Company on its principally traded exchange is equal to or greater than

$4.00

per share for a period of

consecutive trading days, we

may

accelerate the expiry date of the Warrants to within

days by providing written notice to the holders;

●

0.5%

net profits interest royalty, capped at

$2.5

million; and

●

transaction costs of

$779,509,

of which

$283,013

was paid by the issuance of

217,702

shares of the Company.

In connection with the Reno Creek Acquisition, we also issued

353,160

common shares in settlement of the Reimbursable Expenses totalling

$483,829,

which is included in the mineral property expenditures on our Consolidated Statements of Operations and Comprehensive Loss.

In accordance with ASC

360:

Property, Plant and Equipment, the Reno Creek Acquisition was accounted for as an asset acquisition as it was determined that the operations of the Reno Creek Project do

not

meet the definition of a business as defined in ASC

805:

Business Combinations.

The fair value of the consideration paid and the allocation to the identifiable assets acquired and liabilities assumed by virtue of the Reno Creek Acquisition are summarized as follows:

Consideration paid
14,634,748 UEC common shares at $1.37 per share	$	20,049,605
11,308,728 UEC share purchase warrants at $0.45 per warrant		5,088,928
Cash payment		909,930
Transaction costs		779,509
	$	26,827,972

Assets acquired and liabilities assumed
Cash and cash equivalents	$	1,247,170
Prepaid expenses		319,874
Restricted cash		73,973
Land and buildings		370,085
Mineral rights and properties		25,553,807
Asset retirement obligations		(73,973	)
Deferred tax liabilities		(662,964	)
	$	26,827,972

March 14, 2019,

we entered into a Securities Exchange Agreement (as further delineated below) with the PRRF whereby the PRRF exchanged their collective

11,000,000

outstanding Warrants, which had an expiry date of

August 9, 2022,

for an aggregate of

750,000

shares of the Company (each, a “Share”), at a fair value of

$1.33

per Share.

May 1, 2018,

we completed a purchase agreement (the “NRC Purchase Agreement”) with Uranerz Energy Corporation (“Uranerz”), a wholly owned subsidiary of Energy Fuels Inc., whereby we acquired

100%

of its advanced stage North Reno Creek Project (the “NRC Acquisition”) located immediately adjacent to and within our existing Reno Creek Project permitting boundary in the Powder River Basin, Wyoming.

In accordance with ASC

360:

Property, Plant and Equipment, the NRC Acquisition was accounted for as an asset acquisition. In connection with the closing of the NRC Purchase Agreement, we paid total consideration of

$5,974,063,

consisting of

$2,940,000

in cash,

1,625,531

shares with a fair value of

$2,617,105

and transaction costs of

$416,958,

which were capitalized as Mineral Rights and Properties and added to the acquisition costs of the existing Reno Creek Project. As a result, capitalized acquisition costs of the consolidated Reno Creek Project totaled

$31,527,870

July 31, 2019

and

2018.

The consolidated Reno Creek Project is comprised of U.S. federal mineral lode claims, state mineral leases, various private mineral leases and certain surface use agreements which grant us the exclusive right to explore, develop and mine for uranium on a

19,769

acre area in Campbell County, Wyoming. The mineral leases and surface use agreements are subject to certain royalty interests with terms ranging from

five

years, some of which have extension provisions.

●

Diabase Project, Canada

During Fiscal

2018,

we completed a definitive purchase agreement (the “Diabase Purchase Agreement”) with Nuinsco Resources Limited to acquire

100%

of the Diabase project (the “Diabase Project”) (the “Diabase Acquisition”).

In accordance with ASC

360:

Property, Plant and Equipment, the Diabase Acquisition was accounted for as an asset acquisition. Consideration paid in connection with the Diabase Acquisition totaled

$546,938,

consisting of

$239,120

in cash,

164,767

shares with a fair value of

$232,321

and transaction costs of

$75,497,

which were capitalized as Mineral Rights and Properties on our consolidated balance sheet.

Concurrently with the closing of the Diabase Acquisition, URC was granted an exclusive right and option to acquire a

100%

royalty on the Diabase Project by paying

$125,000

Canadian dollars to the original royalty holder of the Diabase Project at the closing date together with

$1,750,000

Canadian dollars on or before the date

four

years after the closing date.

The Diabase Project covers an area of

56,106

acres in

claim blocks located on the southern rim of the Athabasca Basin uranium district in Saskatchewan, Canada.

Paraguay Projects

During Fiscal

2018

and Fiscal

2019,

we have had communications and filings with the Ministry of Public Works and Communications (“MOPC”), the mining regulator in Paraguay, whereby the former MOPC took the position that certain concessions forming part of the Company’s Yuty and Alto Parana projects were

not

eligible for extension as to exploration or continuation to exploitation in their current stages. While we remain fully committed to our development path forward in Paraguay, we caused our legal counsel to file an appeal in Paraguay to reverse the MOPC’s position in order to protect our continuing rights in those concessions.

●

Yuty Project, Paraguay

The Yuty Project is a

289,680

acre property under

one

exploitation concession located in Paraguay. The Yuty Project is subject to an overriding royalty of

$0.21

per pound of uranium produced from the Yuty Project.

●

Oviedo Project, Paraguay

The Oviedo Project is a

223,749

acre property under

one

exploration permit located in Paraguay. The Oviedo Project is subject to a

1.5%

gross overriding royalty over which we have an exclusive right and option at any time to acquire

0.5%

for

$166,667

and a right of

first

refusal to acquire all or any portion of the remaining

1.0%.

●

Alto Paran

Titanium Project, Paraguay

The Alto Paraná Titanium Project is a

464,548

acre property under certain titanium mineral concessions, located in the departments of Alto Parana and Canindeyú in Paraguay. The Alto Paraná Titanium Project is subject to a

1.5%

net smelter returns royalty. We have the right, exercisable to

July 2023,

to acquire

0.5%

of the net smelter royalty at a purchase price of

$500,000.