NOTE

: COMMITMENTS AND CONTINGENCIES

We are renting or leasing various office or storage space located in the United States, Canada and Paraguay with approximate monthly payments of

$21,000.

Office lease agreements for the United States and Canada expire between

April 2020

and

July 2021.

The aggregate minimum rental and lease payments over the next

five

fiscal years are as follows:

Fiscal 2019	$	59,351
Fiscal 2020		222,738
Fiscal 2021		177,774
Fiscal 2022		-
Fiscal 2023		-
	$	459,863

We are committed to paying our key executives a total of

$703,000

per year for various management services.

We are subject to ordinary routine litigation incidental to our business. Except as disclosed below, we are

not

aware of any material legal proceedings pending or that have been threatened against the Company.

On or about

March 9, 2011,

the Texas Commission on Environmental Quality (the “TCEQ”) granted the Company’s applications for a Class III Injection Well Permit, Production Area Authorization and Aquifer Exemption for its Goliad Project. On or about

December 4, 2012,

the U.S. Environmental Protection Agency (the “EPA”) concurred with the TCEQ issuance of the Aquifer Exemption permit (the “AE”). With the receipt of this concurrence, the final authorization required for uranium extraction, the Goliad Project achieved fully-permitted status. On or about

May 24, 2011,

a group of petitioners, inclusive of Goliad County, appealed the TCEQ action to the

250

District Court in Travis County, Texas. A motion filed by the Company to intervene in this matter was granted. The petitioners’ appeal lay dormant until on or about

June 14, 2013,

when the petitioners filed their initial brief in support of their position. On or about

January 18, 2013,

a different group of petitioners, exclusive of Goliad County, filed a petition for review with the Court of Appeals for the Fifth Circuit in the United States (the “Fifth Circuit”) to appeal the EPA’s decision. On or about

March 5, 2013,

a motion filed by the Company to intervene in this matter was granted. The parties attempted to resolve both appeals, to facilitate discussions and avoid further legal costs. The parties jointly agreed, through mediation initially conducted through the Fifth Circuit on or about

August 8, 2013,

to abate the proceedings in the State District Court. On or about

August 21, 2013,

the State District Court agreed to abate the proceedings. The EPA subsequently filed a motion to remand without vacatur with the Fifth Circuit wherein the EPA’s stated purpose was to elicit additional public input and further explain its rationale for the approval. In requesting the remand without vacatur, which would allow the AE to remain in place during the review period, the EPA denied the existence of legal error and stated that it was unaware of any additional information that would merit reversal of the AE. The Company and the TCEQ filed a request to the Fifth Circuit for the motion to remand without vacatur, and if granted, to be limited to a

-day review period. On

December 9, 2013,

by way of a procedural order from a

three

-judge panel of the Fifth Circuit, the Court granted the remand without vacatur and initially limited the review period to

days. In

March

2014,

at the EPA’s request, the Fifth Circuit extended the EPA’s time period for review and additionally, during that same period, the Company conducted a joint groundwater survey of the site, the result of which reaffirmed the Company’s previously filed groundwater direction studies. On or about

June 17, 2014,

the EPA reaffirmed its earlier decision to uphold the granting of the Company’s existing AE, with the exception of a northwestern portion containing less than

10%

of the uranium resource which was withdrawn, but

not

denied, from the AE area until additional information is provided in the normal course of mine development. On or about

September 9, 2014,

the petitioners filed a status report with the State District Court which included a request to remove the stay agreed to in

August 2013

and to set a briefing schedule (the “Status Report”). In that Status Report, the petitioners also stated that they had decided

not

to pursue their appeal at the Fifth Circuit. The Company continues to believe that the pending appeal is without merit and is continuing as planned towards uranium extraction at its fully-permitted Goliad Project.

On or about

October 2, 2015,

Marnie W. McMahon filed a stockholder derivative complaint on behalf of the Company against the Company’s Board of Directors, executive management and

three

of its vice presidents (the “Company parties”) in the District Court of Nevada (the “Nevada Derivative Case”) seeking unspecified damages on behalf of the Company against the Company parties for allegedly breaching their fiduciary duties to the Company with respect to allegations previously made in a prior class action complaint as against the Company and

two

of its executive officers which was dismissed in

September

2016

(the “Securities Case”). On

January 21, 2016,

the Court granted the Company’s motion to stay the Nevada Derivative Case pending the outcome of what was then a federal derivative case involving the same Company parties with similar allegations. Following the voluntary dismissal of the federal derivative case in

November 2017,

Ms. McMahon filed an amended complaint on

February 10, 2017,

which again asserted that the Company’s directors breached their fiduciary duties relating to the factual allegations in the Securities Case. The Company filed a motion to dismiss and on

September 13, 2017,

the Court granted the Company’s motion to dismiss the Nevada Derivative Case. On or about

October 5, 2017,

the plaintiff filed a notice of appeal with the Court. On

June 14, 2018,

the plaintiff filed the Appellant’s opening brief in the Supreme Court of Nevada. In response on

August 2018,

we filed our answering brief. On

February 22, 2019,

the Nevada Supreme Court issued an Order Of Affirmance affirming the Reno, Nevada trial court’s dismissal of the Nevada Derivative Case. The time for the plaintiff to seek reconsideration of the Nevada Supreme Court's decision has expired and the court has closed the case.

The Company has had communications and filings with the Ministry of Public Works and Communications (“MOPC”), the mining regulator in Paraguay, whereby the MOPC is taking the position that certain concessions forming part of the Company’s Yuty and Alto Parana projects are

not

eligible for extension as to exploration or continuation to exploitation in their current stages. While the Company remains fully committed to its development path forward in Paraguay, it caused its legal counsel to file an appeal in Paraguay to reverse the MOPC’s position in order to protect the Company’s continuing rights in those concessions. In the interim the Company also continues to conduct its business in a manner to comply with all applicable mining laws in Paraguay.

At any given time, we

may

enter into negotiations to settle outstanding legal proceedings and any resulting accruals will be estimated based on the relevant facts and circumstances applicable at that time. We do

not

expect that such settlements will, individually or in the aggregate, have a material effect on our financial position, results of operations or cash flows.