A low pH field demonstration commenced during the September 2020 quarter and will operate over the following 12 to 18 months in an unmined area of Mine Unit 1 (MU1A). The 2019 FLT successfully demonstrated the potential for low pH mining, recovery and groundwater restoration at Lance in an area that was previously operated using alkaline ISR methods.

MU1A contains an estimated JORC Code 2012 compliant resource of 44,000 pounds U₃O₈.

The primary objective of the MU1A low pH field demonstration is to confirm the optimal operating conditions as indicated by the laboratory studies completed in 2019 and 2020.

MU1A will be used to:

• Demonstrate acid consumption requirements on a full-scale production pattern basis
• Demonstrate the effectiveness of oxidant addition with the low pH lixiviant
• Demonstrate the use of existing ponds as the preferred, lowest cost option of managing solids typically encountered during the acidification process at low pH ISR operations
• Demonstrate the use of the preferred ion exchange resin under low pH operating conditions using uranium rich solutions sourced from MU1A; and
• Continue to evaluate other value accretion optimisation concepts for future low pH commercial operations, including activities aimed at increasing the uranium concentration level supplied to ion exchange columns and recovery of sulphuric acid to reduce future acid requirements and costs

The overall performance of the MU1A field demonstration to date has been meeting expectations and the exercise is providing meaningful technical results which will be directly applicable to future commercial operations.

The field demonstration commenced in early August 2020 with three new full-scale ISR (in-situ recovery) patterns prepared within a previously unmined area of our Mine Unit 1. The design flow rate is 25 gallons per minute (GPM) per pattern or 75 GPM in total, and this has been successfully maintained.

Acid is used to decompose naturally occurring carbonate minerals and the bicarbonate contained in the local groundwater system to reach the pH target of 2.0, the point where uranium solubility is readily achieved. Within the MU1A field demonstration area the groundwater system pH has been lowered from above 8.0 to below 4.0 and bicarbonate is no longer present in the production stream.

An oxidant (gaseous oxygen) is being introduced to elevate the oxidation potential of the groundwater system in order to achieve the ideal conditions for uranium solubility. Gaseous oxygen was selected as the initial oxidant in the field demonstration as the addition system was present and available from prior alkaline ISR operations at the site. The oxidation potential target has not yet been achieved and an addition system for an alternative stronger oxidant, as used in our laboratory studies, is being prepared to enhance the rate of oxidation potential change.

There have been no significant issues with fine solids generation in the production stream and the use of a settlement pond as part of the solids management system is performing to expectations.

Uranium solubility and production solution grades are expected to increase as the MU1A field demonstration nears the target pH and oxidation levels and at that point the uranium recovery ion exchange demonstration plant will be activated.