Geology of the Shea Creek uranium deposits: an expanding uranium district in the western Athabasca Basin

Shea Creek deposits

G l f h Sh C k iGeology of the Shea Creek uranium deposits: an expanding uranium district in

the Western Athabasca Basinthe Western Athabasca Basin

David Rhys, Sierd Eriks and Luke van der MeerUEX Corporation

Saskatchewan Geological Survey Open House, Nov. 29, 2010

Shea Creek deposits

Forward-Looking StatementsThis presentation contains “forward-looking statements” that are based on UEX’s currentexpectations, estimates, forecasts and projections. These forward-looking statementsinclude statements regarding UEX’s resource estimates, outlook for our future operations,plans and timing for the commencement or advancement of exploration activities on ourproperties, and other expectations, intention and plans that are not historical fact. Thewords “estimates”, “projects”, “expects”, “intends”, “believes”, “plans”, or their negatives orother comparable words and phrases are intended to identify forward-looking statements.other comparable words and phrases are intended to identify forward looking statements.Such forward-looking statements are based on certain factors and assumptions and aresubject to risks, uncertainties and other factors that could cause actual results to differmaterially from future results expressed or implied by such forward-looking statements.Important factors that could cause actual results to differ materially from UEX’s expectationsi l d t i ti l ti t i t t ti f d ill lt d l dditi l d illiinclude uncertainties relating to interpretation of drill results and geology, additional drillingresults, continuity and grade of deposits, public acceptance of uranium as an energy source,fluctuations in uranium prices and currency exchange rates, changes in environmental andother laws affecting uranium exploration and mining, and other risks and uncertaintiesdisclosed in UEX’s Annual Information Form and other filings with the securities commissiongon SEDAR. Many of these factors are beyond the control of UEX. Consequently, all forward-looking statements made in this presentation are qualified by this cautionary statement andthere can be no assurance that actual results or developments anticipated by UEX will berealized. For the reasons set forth above, investors should not place undue reliance on suchforward looking statements Except as required by applicable law UEX disclaims anyforward-looking statements. Except as required by applicable law, UEX disclaims anyintention or obligation to update or revise forward-looking information, whether as a resultof new information, future events or otherwise.

Shea Creek depositsLocation and setting

Shea Creek

Located in the western Athabasca Basin just south of the former Cluff Lake mine site

Most advanced of ten western Athabasca projects that are jointly owned by UEX Corp. (49%) and AREVA Resources Canada

Shea Creek deposits

Location and infrastructureCluff Lake

Project is 13 km south of AREVA’s past producing Cluff

Lake deposits

Lake mine complex, which produced 64 million pounds of U3O8 between 1980 and 2002

Douglas RiverProject

James Creek

Project

Exploration operated by AREVA and run out of the Cluff Lake CampShea

EricaProject

Contiguous with the UEX-AREVA (49%-51% owned) Douglas River and Erica

CreekProject

gprojects

Road accessible with all weather highway 955 runningweather highway 955 running through center of property; airstrip at Cluff Lake

NikitaProject

Shea Creek deposits

History

Project first systematically explored during the early 1990’s by Amok and COGEMA (predecessors to AREVA) with airborne and ground EM surveys identifying the NNW trending Saskatoon Lake Conductorsurveys, identifying the NNW trending Saskatoon Lake Conductor (SLC)

In 1992, second drill hole to test the SLC intersected low grade i i li ti SE f th A d it F ll d illi turanium mineralization SE of the Anne deposit. Follow up drilling to

the northwest intersected the Anne deposit and subsequently Colette.

Between 1994 and 2000, COGEMA drilled 156 holes mainly at Anne and Colette. No drilling between 2001 and 2003 due to low U price.

In 2004, UEX signed an option agreement to earn 49% from AREVA by funding $30 million in exploration. Between 2004 and 2010, more y g pthan 200 drill holes were completed which defined additional mineralization, and led to the discovery and ongoing definition of the Kianna and 58B deposits.

UEX fully earned its 49% interest in the project in December, 2007

Shea Creek deposits

Resources based on drilling to Dec. 31, 2009

May, 2010 N.I. 43-101 complaint resources for the Kianna, Anne and Colette deposits estimated by K. Palmer, P. Geo. of Golder Associates:

At a cut-off grade of 0.30% U3O8 :Indicated = 1,872,600 tonnes at 1.54% U3O8 (63.57 million pounds U3O8Inferred = 1,068,900 tonnes at 1.04% U3O8 (24.53 million pounds U3O8), , 3 8 ( p 3 8)- At this cutoff, this is the largest pre-development resource in the Athabasca Basin

At a higher cut-off grade of 1.50% U3O8 :Indicated = 509,500 tonnes at 3.78% U3O8 (42.57 million pounds U3O8Inferred = 188,700 tonnes at 2.83% U3O8 (11.77 million pounds U3O8)

The resources exclude results of the 2010 drilling that include expansion of the Kianna deposit and identification of the 58B deposit. Mineralization is still open in many areas – resources are growing and exploration potential isstill open in many areas – resources are growing and exploration potential is exceptional

Shea Creek deposits

Geological setting Property underlain by 400

to 800 m of Athabasca sandstone cover

Underlying basement is Archean to Proterozoic Lloyd Domain granitic and Careen Lake pelitic gneiss

Deposits lie immediately south of the Carswell 58B

meteorite impact structure; no local effects

Beatty River shear zone dominant structure in area; pre-Athabasca mylonite with second and third order t t t thstructures to north;

probable Hudsonian age

Shea Creek depositsNorth property geology Deposits associated with the

NNW trending, moderate WSW dipping Saskatoon L k C d t (“SLC”) th tLake Conductor (“SLC”) that is surrounded by felsicgranitic gneissTh SLC i 30 t 60 thi k The SLC is 30 to 60 m thick and comprises peliticgneisses which are graphite-rich and faulted (R3) in lowerrich and faulted (R3) in lower portions, as well as interlayered garnetiferousgranitic gneissgranitic gneiss

Granitic gneiss in SLC dated at 1930-1910 Ma (Brouandet al 2002)et al., 2002)

SLC offset by NE trending pre-Athabasca mylonites

Shea Creek deposits

Saskatoon Lake conductor cross section,

view north

Granitic gneiss SHE-095-3, 788 to 791.5 m

Graphitic, pyritic

Garnetite : SHE-038A, 742.2 m - 752.1 m

p , pypelitic gneiss

Hole SHE-061A, 766.3 to 764.7 m

Shea Creek depositsPre-Athabasca Deformation history F2 folds SHE-121-2, 800 to 803.3 m

Syn-metamorphic deformation during the 1950-1900 Ma Taltson orogeny comprises

th t di i S1 i itsouthwest dipping S1 gneissosity, overprinted down-dip verging minor F2 folds and S2. May lie on the overturned lower limb of a regional D2 anticline M l it i f l i iof a regional D2 anticline

Retrograde steeply dipping, northeast trending mylonitic shear zones (D3) up to

l t id i t d ith i ht

Mylonite in felsic gneiss SHE-122-1, 898.5

several meters wide associated with right lateral displacements of the SLC.

These are pre-Athabasca shear zones subsidiary to the Beatty River Shear zone

Spatially associated with sheeted EW trending quartz veinlets +/- dravite, and g q ,locally remobilized by late faults, clay alteration associated with uranium

Mylonite cuts S2: SHE-114-5, 960.6 m

Shea Creek deposits

Graphitic, concordant faults Concordant, west-southwest dipping shear zones with pressure solution

fabrics, carbonaceous cataclastic breccia and late clay gouge developed along lower, most graphitic portions of the SLC forming the R3 fault.

Reverse shear sense indicators; probable both pre-Athabasca and post-Athabasca displacements. Early displacement may have been coeval with mylonites.y

Fluid flow and sericite-clay alteration coeval with shear zone activity

R3 shear zone, SHE-114-2, 738.5 to 740.3 m Oblique fabrics imply reverse kinematics

SHE-123-6, 771.4 m

Shea Creek deposits Reverse displacement along

R3 structure + remobilizedR3 structure + remobilized mylonites offsets unconformity approximately 30 to 50 m

Interaction of re erse fa lts Interaction of reverse faults and earlier NE trending mylonites where they intersect: sites for uraniumintersect: sites for uranium

Unconformity elevation map

Shea Creek depositsUranium mineralizationMi li ti tli d t Mineralization outlined to date along a 3 km strike length of the Saskatoon Lake conductorconductor

Four deposits currently known: Anne, Kianna, 58B and Coletteand Colette

Mineralization comprises unconformity, basement and perched mineralization stylesperched mineralization styles

Unconformity mineralization traced continuously over >1 km from SE Anne to Kiannakm from SE Anne to Kianna

Many areas open, gaps in testing between Kianna, 58B and Coletteand Colette

Open to NW (Douglas Project) and SE

Shea Creek deposits

Shea Creek deposits display the full range of stacked mineralization styles seen in the Athabasca Basin: Unconformity

mineralization (UC) is developed along and east of th S k t L kthe Saskatoon Lake Conductor Basement mineralization

(UB) d l d i l i(UB) developed mainly in footwall of conductor Alteration plume developed

above: may contain multipleabove: may contain multiple alteration fronts and perched mineralization (UP) Low concentrations of Ni As Low concentrations of Ni-As-

Co : “basement signature”, local high Au (up to 56 g/t Au)

Shea Creek schematic cross section looking NNW showing typical features

Shea Creek depositsUnconformity mineralization

Most extensive style, pancake-like zone straddle the unconformity, replacing basal sandstone and upper basementSHE-115-3, 744-746 m: Kianna deposit

In highest grade areas occurs as nodules and massive pitchblende +/- coffinite aggregates in red-orange hematite-clay matrix

Fragments and also matrix replacement in chlorite-dravite-clay matrix sandstone breccia

Syn-faulting timing suggested by texturesSHE-95-3, 721 m: Anne deposit y g g gg y

SHE-114-3, 749.2 to 749.4 m:

SHE-102-01, samples from 718-721 m

pressure solution fabrics along R3 fault overprint mineralized chlorite-

dravite breccia

Shea Creek deposits

SHE-115-3 interceptBleached sandstone, Illit d i t dIllite dominated

Shea Creek depositsBasement mineralization

Developed mainly in granitic gneiss in the footwall of the SLC in areas of intense clay-chlorite alteration, may exploit earlier faults

Intercepts so far up to 200 m below the unconformity

Mineralization in east-west to ENE trending, SHE-096-03, 761 -764 m

steep to moderate north dipping veins, and in WSW dipping concordant zones along faults, lithologies: intercepts form W plunging oreshoots

Pitchblende + hematite +/- coffinite veins and disseminations

SHE-115-11, 862.2-865.3 m NEqual Area(Schmidt)( )

SHE-123-02, 786.7 m, Kianna South SHE-115-06, 877.5 m, Kianna Axial N = 96

Shea Creek deposits

Perched mineralization

Flat-lying lenses of mineralization in Athabasca sandstone “perched” up to 60 b th f it l t60 m above the unconformity; least voluminous style of mineralization but may be very high grade

Often stacked above areas of basement mineralization and thickest unconformity mineralizationSHE-114-5, 680 .1 to 687.7 m = 27.7% U3O8

Occur in clay-chlorite alteration often above chlorite breccias, alternate with hematite and pyrite redox fronts in

3 8

sandstone

Often occur along up dip projection of basement-hosted faults into the sandstone columnPyrite replacing hematite in redox

front spatially associated with perched mineralization

Shea Creek deposits

Anne and Kianna deposits:

l h iplan map showing deposit setting

and unconformity ygrade-thickness

contours

Shea Creek deposits

Anne section 6750Nlooking NNW

UnconformityUnconformity mineralization with basement zone “roots” of concordant mineralization

Fragments of sandstone locally occur in basement breccia mineralization up tobreccia mineralization up to 50 m below unconformity: faults open and permeable into basement

Perched mineralization at up dip projection of R3 fault

Shea Creek deposits

Anne section 6875Nlooking NNW

Thick, high grade zones of discordant basement mineralization extendmineralization extend downward from the unconformity mineralization and join jconcordant basement mineralization below in granite gneiss

Shea Creek depositsKianna section

l ki tlooking west Stacked

mineralization –perched, unconformity and basement

EW trending, steeply dipping basement mineralization exploits corridor of pre-mineral mylonites to depths of >200 m b l f itbelow unconformity

Additional mineralization recently indentified in new zones to the north

Shea Creek deposits

Kianna wireframe model: view northeast

Shea Creek depositsColette south section 8670N, view NNW Area shows stacking of ea s o s stac g o

unconformity, perched and open basement mineralization

Shea Creek deposits

Exploration potential: North Colette-Douglas River

Vertical exagerration

sand

ston

e

exagerration x2.5

Ath

abas

ca

58BDGS 10 i t t

Bas

emen

t

1 to >10 ppm U >20% chlorite (modal XRD in clay-sized fraction)

Kianna

58BColetteDGS-10 intercept0.53% eU3O8/3.7 m

y )

Long section looking NE along Shea Creek trend:Chlorite + anomalous U plume extends to >500 m

above Colette and Douglas projects (Robbins, 1997)

Plan map: little drilling northof Colette Deposit on

Douglas project

Shea Creek deposits

Property scale targets58B

Outside immediate area of deposits, SLC is untested or only very sparsely tested, with only 23

58B

very sparsely tested, with only 23 widely spaced holes along >20 km of strike length

Anomalous radioactivity and Anomalous radioactivity and prospective alteration in several drill holes

Parallel conductors to west and Parallel conductors to west and east

Near deposit upside: e.g. G 100Geotechnical holes 100 m west and 150 m east of Kianna intersected unconformity mineralization (0 63% eU O /0 7mineralization (0.63% eU3O8/0.7 m) and 3 m of dravite-rich breccia, respectively

Shea Creek deposits

Conclusions: a growing district Warning: forward looking statements!

Cluff Lake and Shea Creek form a significant and growing western Athabasca uranium district

Most production historically at Cluff from basement style mineralization –suggests further potential at Shea

Mineralization open in many areas, both in basement and at p yunconformity, including new zones in the basement north of Kianna, and open basement mineralization down dip in south Colette from 2007 intercepts such as 3.23% U3O8 over 8.0 metres in drill hole SHE-111-06.

5+ km of Shea Creek trend along the SLC on Douglas River property nearly completely untested, 400 m of strike length between Kianna and 58B tested by only one drill hole, and >10 km south southeast of Anne y ytested by only a few drill holes (including the Shea “discovery hole” SHE-02 = 0.73% U3O8/0.7 m) : significant exploration upside

Parallel conductors with alteration, resistivity lows (e.g. Klark Lake)Parallel conductors with alteration, resistivity lows (e.g. Klark Lake)

$7.9 million budget for 2011 exploration at Shea and $9.7 million total for West Athabasca – should be an exciting year

Shea Creek deposits

Acknowledgements

Thanks to the AREVA team for its ongoing discoveries, discussions and contributions.

In particular John Robbins SheldonIn particular John Robbins, Sheldon Modeland, Erwin Koning and Jeff Carroll

Leo Horn Ke in Palmer and Dan Bald inLeo Horn, Kevin Palmer and Dan Baldwin also have contributed significantly

We also thank the management and directors of both companies for their

continued support of the projectcontinued support of the project