NOTE

MINERAL RIGHTS AND PROPERTIES

Mineral Rights

July 31, 2020,

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, 2020,

annual maintenance payments of approximately

$1,506,000

were required to maintain these mineral rights.

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

	July 31, 2020			July 31, 2019
Mineral Rights and Properties
Palangana Mine	$	6,027,784		$	6,027,784
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			3,470,373
Workman Creek Project		799,854			699,854
Los Cuatros Project		257,250			257,250
Slick Rock Project		30,000			-
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
		67,581,387			67,451,387
Accumulated Depletion		(3,929,884	)		(3,929,884	)
		63,651,503			63,521,503

Databases		2,410,038			2,410,038
Accumulated Amortization		(2,410,038	)		(2,409,188	)
		-			850

Land Use Agreements		48,770			404,310
Accumulated Amortization		(44,770	)		(389,768	)
		4,000			14,542
	$	63,655,503		$	63,536,895

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 to generate sales revenues from uranium concentrates. The Palangana Mine generated 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 the year ended

July 31, 2019 (

“Fiscal

2019”

), we completed a royalty purchase agreement (the "Royalty Purchase Agreement") whereby Uranium Royalty Corp (“URC”) purchased from our Company a

net smelter return royalty, for uranium only, on each of our Slick Rock Project, Workman Creek Project and Anderson Project. URC is an entity investing in the uranium sector over which our Company has the ability to exercise significant influence. Refer to Note

Equity-Accounted Investment herein. 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 then carrying value of

$676,650

$1,578,864,

which was recorded as a gain on disposition of asset and included in our Consolidated Statements of Operations and Comprehensive Loss for Fiscal

2019.

Mineral property expenditures incurred by major projects were as follows:

	Year Ended July 31,
	2020		2019			2018
Mineral Property Expenditures
Palangana Mine	$	1,342,927	$	1,027,139		$	1,047,635
Goliad Project		190,278		96,789			105,264
Burke Hollow Project		1,130,467		1,616,601			675,605
Longhorn Project		17,023		45,848			14,401
Salvo Project		28,318		35,923			36,056
Anderson Project		71,170		81,414			68,167
Workman Creek Project		32,700		30,709			31,300
Slick Rock Project		52,521		53,843			52,218
Reno Creek Project		596,551		655,807			1,278,959
Yuty Project		65,679		102,882			425,298
Oviedo Project		350,211		288,324			119,082
Alto Paraná Titanium Project		230,350		168,956			175,768
Other Mineral Property Expenditures		474,208		557,497			522,398
Revaluation of Asset Retirement Obligations		-		(274,195	)		-
	$	4,582,403	$	4,487,537		$	4,552,151

United States Projects

●

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 herein.

During Fiscal

2020,

Fiscal

2019,

and Fiscal

2018,

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.

●

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 sales 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

1,340

acre property located in Bee County, Texas. These agreements are subject to certain royalty interests indexed to the sales 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 at 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, the carrying value of the Anderson Project was reduced from

$9,154,268

July 31, 2018

$5,683,895

to a carrying value of

$3,470,373

July 31, 2019

and

July 31, 2020.

●

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

2020,

advance royalty payments of

$100,000

(Fiscal

2019:

$125,000

) were capitalized as Mineral Rights and Properties and added to the carrying value of the Workman Creek Project.

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, the carrying value of the Workman Creek Project was reduced by

$1,082,646.

●

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 beginning in

November 2017.

During Fiscal

2020

and Fiscal

2019,

advance royalty payments of

$30,000

and

$30,000,

respectively, were capitalized as Mineral Rights and Properties on our 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, 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 our Consolidated Statements of Operations and Comprehensive Loss for Fiscal

2019.

●

Reno Creek Project, Wyoming

The consolidated Reno Creek Project consists 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

18,763

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.

Canadian Project

●

Diabase Project, Canada

We hold a

100%

interest in the Diabase Project which covers an area of

54,236

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 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 have filed certain applications and appeals 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

174,200

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.