NOTE 3:

ACQUISITON OF ALTO PARANA TITANIUM PROJECT

On March 4, 2016, the Company entered into a share purchase and option agreement (the “Share Purchase and Option Agreement”) with CIC Resources Inc. (the “CICRI”) pursuant to which the Company acquired all of the issued and outstanding shares of JDL Resources Inc. (“JDL”; the “JDL Acquisition” ), a wholly-owned subsidiary of the CICRI. As consideration, the Company issued 1,333,560 restricted common shares and paid $50,000 in cash to CICRI to complete the JDL Acquisition.

Pursuant to the Share Purchase and Options Agreement, the Company was granted an option to acquire all of the issued and outstanding shares of CIC Resources (Paraguay) Inc. (“CIC”; the “CIC Option”), a wholly-owned subsidiary of CICRI. CIC is the beneficial owner of Paraguay Resources Inc. which is the 100% owner of certain titanium mineral concessions (collectively, the “Alto Paraná Titanium Project”), located in the departments of Alto Parana and Canindeyú in the Republic of Paraguay.

On June 29, 2017, the Share Purchase and Option Agreement was amended, among other things, to increase the CIC Option payment from $250,000 to $275,000. On July 7, 2017, the Company exercised the CIC Option to acquire all of the issued and outstanding shares of CIC (the “CIC Acquisition”). As a result, the Company now controls 100% of the Alto Paraná Titanium Project, which covers an area of 174,200 acres under five mining permits.

In accordance with the terms of the Share Purchase and Option Agreement, the Company issued 664,879 restricted common shares of the Company with a fair value of $1,070,455 (the “Consideration”) to settle certain payables totaling $1,021,453, which were comprised of the CIC Option exercise payment of $275,000 and the property maintenance costs of $746,453 (included in Mineral Property Expenditures in Note 4) incurred by CIC since the execution of the Share Purchase and Option Agreement. As a result, a loss of $49,002 on settlement of liabilities was recognized on the consolidated statements of operations and comprehensive loss.

In accordance with ASC 360: Property, Plant and Equipment, the JDL Acquisition in March 2016 and the CIC Acquisition in July 2017 are accounted for as asset acquisitions as it was determined that the operations of JDL and CIC do not meet the definition of a business as defined in ASC 805: Business Combinations.

At March 4, 2016, the fair value of the consideration transferred and its allocation to the identifiable assets acquired and liabilities assumed from JDL are summarized as follows:

Consideration transferred
1,333,560 UEC common shares at $0.92 per share	$	1,226,875
Cash consideration		50,000
Amount payable upon exercise the CIC Option		250,000
Transaction costs		63,090
	$	1,589,965

Assets acquired and liabilities assumed
Cash and cash equivalents	$	3,916
Prepaid expenses		3,804
Land		344,376
Other long-term asset		1,553,388
Due to CIC		(315,519)
	$	1,589,965

Prior to the exercise of the CIC Option, the Company held a variable interest in CIC but was not the primary beneficiary due to the fact that the Company did not have the power over decisions that could significantly affect CIC’s economic performance. Accordingly, at July 31, 2016, the Company did not consolidate the results of CIC and instead reported as other long-term asset of $1,553,388, which effectively represented the amount paid in advance for CIC’s assets totaling $1,303,388 and $250,000 to be paid at that time for the exercise of the CIC Option.

Upon exercise of the CIC Option on July 7, 2017, the fair value of consideration transferred and its allocation to the identifiable assets acquired and liabilities assumed from CIC are summarized as follows:

Consideration transferred
Consideration previously transferred	$	1,303,388
CIC Option exercise payment		275,000
Transaction costs		57,926
	$	1,636,314

Assets acquired and liabilities assumed
Cash	$	34,972
Prepaid expenses		18,727
Due from JDL		279,489
Mineral rights & properties		1,433,030
Accounts payable & accrued liabilities		(26,954)
Asset retirement obligation		(102,950)
	$	1,636,314

Prior to the exercise of the CIC Option, JDL made payments of $36,030 on behalf of CIC and as a result, the balance between JDL and CIC of $315,519, which was reported as other long-term liability at July 31, 2016, was reduced to $279,489 on July 7, 2017. Upon exercise of the CIC Option, the balance between JDL and CIC was eliminated upon consolidation.

In addition to the Consideration, the Company has also granted CICRI a 1.5% net smelter returns royalty (the “Royalty”) on the Alto Parana Titanium Project. The Company has the right, exercisable at any time for a period of six years following exercise of the CIC Option, to acquire 0.5% of the Royalty at a purchase price of $500,000. The Royalty has not been valued as part of the Consideration due to the uncertainty of the timing and amount of Royalty payments.

The Company is required to pay annual maintenance fees totaling $146,000 for the Alto Parana Titanium Project.