ENERGY FUELS INC

Bullfrog Project risks can be identified in both economic and non-economic terms. Key economic risks were examined by running cash flow sensitivities:

• eU3O8 price

• Mill Recovery

• Head grade

• Operating costs

• Pre-production capital costs

• Mine life

The sensitivity analysis reveals the variations in key economic factors—such as metal prices, operating costs, and recovery rates—that can significantly impact the Bullfrog Project's NPV and IRR. Understanding these sensitivities is crucial for effective risk management and strategic decision-making.

Mining Methods

The Salt Wash Member, which hosts the mineralized horizons, is comprised primarily of sandstones with interbedded shales and mudstones. The Copper Bench and Indian Bench horizons are located in the Upper area of the Salt Wash Member.

It is proposed that the deposit will be developed and mined by two methods: 1) modified room-and-pillar methods using ground support during development to ensure roof stability, especially in weak ground conditions, and 2) drift and fill ("DF") for areas of poor rock quality.

Room-and-pillar mining is a simple, low-capital cost mining method in which mining recoveries of 70% to 90% can be expected, dependent upon the rock strengths and geological structures encountered. Although pillars are anticipated to remain unmined, even with tight backfilling and artificial support, the method is sufficiently flexible to achieve required production rates, control cut-off grades, and maintain safe working conditions. The operational sequence must be modified when mining heights are high (>12 ft) since multi-cuts and stacked pillars (low width-to-height ratios) are required and backfilling must be used to ensure pillar stability. This method becomes a hybrid of the cut-and-fill method in areas where the mineralization is thick (12 ft to 16 ft high), because slender pillars are ineffective for roof support and strong global backfill support must enhance local roof support.

With the wide range of mineralized zone stope thicknesses (from 4 ft to 16 ft) and dips/plunges (from flat to 15°), one of the mining methods selected for the Bullfrog Project for this study is step room and pillar. Permanent pillars will be left in a pre-designed pattern and cemented rockfill ("CRF") will be placed in mined-out areas as backfill. This method, recommended for the lower grade mineralized lenses, allows for mobile equipment to be used effectively in the range of dips/plunges encountered at the Bullfrog Project.

DF mining methods are well suited for selective precision mining in variable-grade areas and are quite flexible, resulting in high extraction ratios. The volume of open ground at any one time is small since drifts are mined and immediately backfilled before adjacent drifts are mined. The development can be placed in the mineralized areas, minimizing waste rock. This method is not well suited for high production rates, unless many stopes are simultaneously opened, which requires a laterally extensive mineralized zone. The cost of local support (roof cabling through multi-cuts) is high because all cuts must be fully supported. DF mining is recommended for the higher-grade mineralized lenses at the Bullfrog Project, where maximum recovery is desired. This method is widely used in other mines with similar ground conditions and will result in higher mining recoveries as the need to leave permanent pillars will be significantly reduced. This method, however, requires a high quality, high strength engineered backfill in order to be successful. For the DF method, a high-strength CRF will be placed in the mined-out areas.

Bulk mining methods were investigated, particularly for the thick (up to 20 ft) zones. One method considered involved mining of the thick zones in staggered primary and secondary panels using engineered cemented backfill. After the evaluation, this method was considered inapplicable due to the weak rock conditions. The low rock strengths and limited stand-up time made this method impractical given the relatively high stope walls, which would be exposed during the benching process.

The minimum thickness used in the development of the Mineral Resource estimate was three feet. The mineralized zones range exceeding thickness of 3 ft to 16 ft, the Deswik.SO used conservative 4 ft height stopes. Mineralized zones with thicknesses from 3 ft to 8 ft will be mined in one pass. Mineralized zones exceeding 12 ft in thickness will be mined in two sequential overhand cuts with each cut being approximately one-half of the overall zone thickness.

In both the Copper Bench and Indian Bench, the mineralized horizons will be further defined using longhole drills from a dedicated drilling horizon located below the mineralized zones.

The proposed LOM schedule was developed based on initiating development from the production decline located adjacent to the mineralized mining zones. The mining areas in Copper Bench and Indian Bench will be connected by means of a 5,400 ft twin decline haulage way. The last section of the decline will become a single haulage way.

Secondary development connecting the shaft to the various mineralized zones (including the twin decline) will be driven 10 ft wide by 12 ft high with 10 ft rounds. Production development connecting the primary development to the mining areas will be individual stopes and will be driven 10 ft wide by 8 ft high with 10 ft rounds.

The mining sequence in each of the eight mining zones is dependent upon the development schedule. Generally, the extraction schedule is sequenced to prioritize the mining of the largest and highest-grade zones in each section of the mine. Where mineralized zones are stacked, they will be mined in a top-down sequence.

Stope mining begins approximately four years after the start of construction and the operating mine life spans 15 years. The production rate averages approximately 10,000 short tons per month over the life of the mine, assuming 350 operating days per year.

Depressurization of the three main aquifers in the mine area will be accomplished using 11 depressurization wells and underground longholes that will supply water to a couple of underground pumping stations that will ultimately feed water to the Copper Bench sump pumps located in one of the declines. It has been estimated that the mine will discharge a nominal 20 gpm of water at temperatures between 70°F and 80°F. An additional 100 gpm will be produced by surface wells, resulting in a total discharge rate as high as 150 gpm.

The deposit will be developed and mined based on single-pass ventilation using a series of separate and independent intake and exhaust networks. The design requires a total of 10 ventilation raises and the twin declines. Intake air will be sourced from the two declines and two of the seven ventilation raises; the fresh air intake raise in Indian Bench will be equipped with emergency evacuation hoisting equipment. The decline to and along the mineralization is approximately 13,500-ft long.