-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ByzjJCKmDck+yJosb1TcOkn/UqBVoH/w26yIYunA1Vu2bcdgS9xvp/l4t2rHGQpH JKVrCJCwHKjuE1mosUkKug== 0000950134-97-006356.txt : 19970822 0000950134-97-006356.hdr.sgml : 19970822 ACCESSION NUMBER: 0000950134-97-006356 CONFORMED SUBMISSION TYPE: 10-K405/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970821 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: URANIUM RESOURCES INC /DE/ CENTRAL INDEX KEY: 0000839470 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-METALS, MINERALS (NO PETROLEUM) [5050] IRS NUMBER: 752212772 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405/A SEC ACT: SEC FILE NUMBER: 000-17171 FILM NUMBER: 97667267 BUSINESS ADDRESS: STREET 1: 12750 MERIT DRIVE STREET 2: SUITE 1210 CITY: DALLAS STATE: TX ZIP: 75251 BUSINESS PHONE: 2143877777 MAIL ADDRESS: STREET 1: 12750 MERIT DRIVE STREET 2: SUITE 1210 CITY: DALLAS STATE: TX ZIP: 75251 10-K405/A 1 AMENDMENT NO. 1 TO FORM 10-K405 FYE-12/31/96 1 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [Fee required] For the fiscal year ended December 31, 1996 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934 [No fee required] For the transition period from to ---------- ---------- Commission file number 0-17171 URANIUM RESOURCES, INC. (Exact name of Registrant as specified in its Charter) DELAWARE 75-2212772 (State of Incorporation) (I.R.S. Employer Identification No.) 12750 MERIT DRIVE, SUITE 1020, DALLAS, TEXAS 75251 (Address of principal executive offices, including zip code) (972) 387-7777 (Registrant's telephone number, including area code) SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: Common Stock, $.001 par value per share Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X No . ----- ---- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] The aggregate market value of the Common Stock of the Registrant held by nonaffiliates at March 19, 1997 was approximately $52,537,257. Number of shares of Common Stock outstanding as of March 19, 1997: 10,827,527 shares. Documents Incorporated by Reference: Document Location in 10-K -------- ---------------- Proxy Statement for 1997 Annual Meeting of Stockholders Part III ================================================================================ 2 URANIUM RESOURCES, INC. ANNUAL REPORT ON FORM 10-K/A FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996 TABLE OF CONTENTS PART I ITEM 1. BUSINESS. Not Amended ITEM 2. PROPERTIES. South Texas Producing Properties South Texas Development Properties New Mexico Development Properties Santa Fe Properties Reclaimed Properties Reclamation and Restoration Costs and Bonding Requirements ITEM 3. LEGAL PROCEEDINGS Not Amended ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not Amended PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. Not Amended ITEM 6. SELECTED FINANCIAL DATA Not Amended ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Not Amended ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Not Amended ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not Amended
i 3 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Not Amended ITEM 11. EXECUTIVE COMPENSATION Not Amended ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Not Amended ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Not Amended PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K Not Amended SIGNATURES
ii 4 URANIUM RESOURCES, INC. ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996 PART I The "Company" or "Registrant" is used in this report to refer to Uranium Resources, Inc. and its consolidated subsidiaries. Items 1 and 2 contain "forward-looking statements" and are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements include, without limitation, statements relating to management's expectations regarding the Company's reserve base, timing of receipt of mining permits, production capacity of mining operations planned for properties in South Texas and New Mexico and planned dates for commencement of production at such properties, business strategies and other plans and objectives of the Company's management for future operations and activities and other such matters. The words "believes," "plans," "intends," "strategy," "projects," "targets," or "anticipates" and similar expressions identify forward-looking statements. The Company does not undertake to update, revise or correct any of the forward-looking information. Readers are cautioned that such forward- looking statements should be read in conjunction with the Company's disclosures under the heading: "Cautionary Statement for the Purposes of the 'Safe Harbor' Provisions of the Private Securities Litigation Reform Act of 1995" beginning on page 21. Certain terms used in this Form 10-K are defined in the "Glossary of Certain Terms" appearing at the end of Part I hereto. As used herein, "Western World" is a uranium industry term referring to the countries from which statistics are available for the purpose of compilation of data relating to the industry, and generally refers to those countries outside the Republics of the Commonwealth of Independent States (the "CIS"), Eastern Europe and the Peoples Republic of China. ITEM 1. BUSINESS. THE COMPANY GENERAL Uranium Resources, Inc., a Delaware corporation (the "Company"), was formed in 1977 to acquire, explore and develop properties for the mining of uranium in the United States using the in situ leach ("ISL") mining process. The Company is recognized as a leader in the field of ISL mining. In the ISL process, groundwater fortified with oxidizing agents is pumped into the ore body causing the uranium contained in the ore to dissolve. The resulting solution is pumped to the surface where it is further processed to a dried form of uranium which is shipped to conversion facilities for sale to the Company's customers. The ISL process is generally a more cost effective and environmentally benign mining method than conventional mining techniques. From March 1988 until September 1990 the Company produced a total of approximately 1.5 million pounds of uranium from its Kingsville Dome property in South Texas, and from October 1990 through March 1992 it produced a total of approximately 1.1 million pounds of uranium from its Rosita property also located in South Texas. The Kingsville Dome property was shut-in in September 1990 and the Rosita property in March 1992 due to the decline in the uranium spot market price to below the Company's production costs. Generally, the Company sells uranium to electric utilities under long-term contracts that provide for minimum prices which escalate with inflation. See "-Marketing Strategy/Uranium Sales Contracts." From 1988 through March 1992 the Company's production of uranium from the Kingsville Dome and Rosita facilities provided a portion of the uranium inventory required for such sales while these sites were producing. The Company has also purchased a significant amount of uranium through a combination of 1 5 long-term and spot contracts to satisfy its obligations under such contracts. From 1993 through June 1995 such uranium purchases comprised the major source for the Company's uranium deliveries. In anticipation of the firming and increase in the spot price of uranium, in mid 1994 the Company began plans for the resumption of production at its Rosita and Kingsville Dome properties. The spot price of uranium increased from $9.25 per pound as of July 31, 1994, to $11.80 per pound as of May 31, 1995. In June 1995 production was recommenced at the Rosita property and preproduction activities were begun at the Kingsville Dome property with production established in March 1996. Since the re-establishment of production and through December 1996 the Company has produced approximately 1.1 million pounds from Rosita and 860,000 pounds from Kingsville Dome at average production costs of $10.86 and $12.31 per pound, respectively. These production and cost levels establish the Company as the largest and one of the lowest cost producers of uranium concentrates in the United States. It is the only publicly-owned uranium production company in the United States whose activities exclusively involve the commercial ISL production of uranium. As of February 28, 1997, the Company had 156 employees, including its professional staff consisting of ten geologists, six engineers, one chemist, two landmen and two certified public accountants. To support its production, exploration and permitting activities, the Company maintains regional offices in Corpus Christi, Texas and in Albuquerque, New Mexico, and field offices at the Kingsville Dome site, the Rosita site and in Crownpoint, New Mexico. BUSINESS STRATEGY During 1995, the Company developed and began the implementation of a multi-phase strategy to exploit its existing production base and technical expertise and to identify, acquire, permit and develop additional ISL amenable uranium properties that will allow the Company to be a significant uranium producer in the Western World. The Company is implementing its strategy through (i) resuming production at its existing production sites; (ii) making capital expenditures for property exploration, acquisition and development; (iii) permitting additional development sites, which are targeted to commence production during 1998; and (iv) reviewing opportunities to sell uranium outside the United States. After ceasing uranium production in the early 1990s because of depressed market prices, the Company resumed production at Rosita and Kingsville Dome in June 1995 and March 1996, respectively. During the period the Company was not producing uranium, it was able to purchase uranium to fulfill its existing contracts at a price lower than its cost of production. For the year ended December 31, 1996, the Company produced approximately 1.4 million pounds of uranium at an average cost of $12.12 per pound. This production enabled the Company to take advantage of the significant imbalance between the annual level of uranium production and consumption in the Western World and the rise in the spot market price for uranium which at $13.65 per pound as of February 28, 1997 was up approximately 42% over the spot price of $9.65 per pound as of January 31, 1995. The Company estimates that for 1996, its uranium production was approximately 20% of the total U.S. production and approximately 2% of the total Western World production. In June 1996, the Company acquired for $4 million (of which $1 million is recoverable against one-half of future royalties) a mineral lease on the Alta Mesa properties located in South Texas which are estimated by the Company to contain 6.2 million pounds of in-place proven and probable uranium reserves (estimated 4.0 million pounds recoverable). In November 1996 the Company entered into a letter of intent with Santa Fe Pacific Gold Corporation ("Santa Fe") pursuant to which the Company would acquire for exploration and development potential certain uranium mineral interests covering approximately 500,000 acres in northwestern New Mexico in exchange for 1.2 million shares of the Company's Common Stock and a commitment to expend certain amounts on exploration. Approximately one-third of this acreage comprises uranium mineral rights 2 6 and the remaining acreage comprises exploration rights with rights to purchase and develop any uranium mineral interests found. Included in the purchase is an existing royalty obligation from the Company to Santa Fe on certain properties currently under lease from Santa Fe. This transaction was completed in March 1997. The Company has two development projects in South Texas, Vasquez and Alta Mesa, both targeted to commence production in 1998. The Company also has three development projects in two districts in New Mexico, the Churchrock district and the Crownpoint district. Churchrock is targeted to commence production in 1998. Permitting is in process at all such projects. Commencement of production at these properties is subject to timely permitting and the availability of capital. When Alta Mesa, Vasquez and Churchrock reach full production, the Company expects that, based on planned production rates, its total annual production capacity from these operations plus Kingsville Dome will approximate 4.0 million pounds. MARKETING STRATEGY/URANIUM SALES CONTRACTS The Company is aggressively developing a portfolio of sales contracts in support of its production expansion goals. Long-term contracts are a primary focus of the Company. Spot sales will be utilized to manage inventories and optimize revenues. The Company intends to use matched sales in amounts equal to its available quotas through 2003 to maximize profitability. All contracts together will result in a portfolio that is targeted to provide upside market price participation while limiting down-side price risk. As of December 31, 1996, based on prices escalated in accordance with the contract terms through that date, the Company had long-term contracts for approximately $73,359,000 of future sales for deliveries through 2002, as compared with contracts for approximately $37,824,000 as of December 31, 1995, based on prices escalated in accordance with contract terms through that date, in each case excluding the revenue related to the sale of Russian uranium under the matched sale program. The Company has contracts that have a market-related price, with a price ceiling and price floor subject to escalation for between 80%-100% of future inflation. The Company also has contracts with fixed prices which are also subject to escalation for between 80%-100% of future inflation. One other contract is based upon 99% of market price without a floor or a ceiling. The following table provides information concerning the Company's long-term sales contracts from January 1, 1997 through 2002 (excluding the delivery of Russian uranium) with prices escalated through December 31, 1996 and using the December 31, 1996 spot price of uranium for the market price related contracts:
1997 1998 1999 2000 2001 2002 Total ---- ---- ---- ---- ---- ---- ----- Number of customers 7 7 4 3 2 1 N/A Total long-term contracted deliveries 1,423 1,395 704 584 484 150 4,740 (thousands of pounds) Total sales (thousands) $22,116 $22,198 $10,819 $ 8,783 $ 7,222 $2,221 $73,359 Average minimum sales price per pound $ 15.54 $ 15.92 $ 15.36 $ 15.03 $ 14.91 $14.81 $15.47
For deliveries in periods subsequent to 1997, certain buyers have the option to adjust deliveries between 10% to 20%. In general, except for the options of the buyers to decrease deliveries by a specified percentage, and except for force majeure events, the buyers either must take delivery and pay for the entire amount contracted for or, if delivery is refused on any portion of the contract, pay to the Company the difference between the minimum contract price and the amount received by the Company upon the sale of the uranium to a third party. Certain of the contracts also provide the buyer with options to renew beyond the periods reflected in the table. 3 7 Should any of the Company's customers be unable to perform its obligations to purchase and pay for the uranium because of force majeure or otherwise, this could have a material adverse effect on the Company's results of operations if the Company would not be able to sell such material under another long-term contract or in a spot market sale. A significant portion of the Company's contracted sales of uranium from January 1, 1997 through December 31, 2002 are represented by eight long-term contracts with seven different customers, five of which represented 20%, 16%, 15%, 12% and 11% of sales for the year ended December 31, 1996 and four of which represented 23%, 14%, 10% and 10% of sales for the year ended December 31, 1995. As of December 31, 1996, the Company had two outstanding long-term purchase contracts for Russian origin uranium totaling 270,000 pounds with deliveries from 1997 through 1998. These contracts have a price escalation factor related to future inflation. RESERVES The following table sets forth the Company's total in-place proven and probable uranium reserves as of December 31, 1996. The reserves are based on an estimated 65% recovery factor, certain cut-off grades and a price of $16 per pound.
In-Place Reserves as of Recoverable December 31, 1996 Reserves as of Producing (P)/ ---------------------- December 31, Properties Development (D)Proven Probable 1996 - ---------- --------------- ------ -------- -------------- (Amounts in thousands of pounds of U3O8) Texas Kingsville Dome P 709 3,001 2,412 Rosita P 1,761 -- 1,144 Vasquez D 2,248 1,439 2,397 Alta Mesa D 4,346 1,863 4,036 New Mexico Churchrock Section 8 D 6,529 -- 4,244 Section 17 D 3,451 4,992 5,488 Mancos D 4,164 -- 2,707 Crownpoint D 30,758 8,201 25,323 ---------- ---------- ---------- TOTALS 53,966 19,496 47,751 ========== ========== ==========
The foregoing table does not include approximately 14.7 million pounds of proved and probable in-place reserves (estimated 9.6 million pounds recoverable) related to the Santa Fe transaction and 27.0 million pounds of proved and probable in-place reserves (estimated 17.6 million pounds recoverable) contained on acreage adjoining the Crownpoint property for which the Company executed leases with the landowners in 1992. These leases are subject to approval by the U.S. Bureau of Indian Affairs (the "BIA"), with such approval expected in 1997 as a result of the Company's receipt of the Final Environmental Impact Statement (the "FEIS") in March 1997. See Item 2. Properties - New Mexico Development Properties - Crownpoint District. THE ISL MINING PROCESS The ISL mining process, a form of solution mining, differs dramatically from conventional mining techniques. The ISL technique avoids the movement and milling of significant quantities of rock and ore as well as mill tailings waste associated with more traditional mining methods and generally results in a more cost-effective and more environmentally-benign extraction operation in comparison to conventional uranium mining. Historically, the majority of U.S. uranium production resulted from either open pit surface mines or underground shaft operations. These conventional mining methods are, in many cases, 4 8 capital and labor intensive and are not cost competitive with the majority of non-U.S. conventional producers. To the Company's knowledge, there are no conventional U.S. producers today. The ISL process was first tested for the production of uranium in the mid-1960's and was first applied to a commercial-scale project in 1975 in South Texas. The ISL process had become well established in the South Texas uranium district by the late 1970's, where it was employed in connection with approximately twenty commercial projects, including two operated by the Company. In the ISL process, groundwater fortified with oxygen and other solubilizing agents is pumped into a permeable ore body causing the uranium contained in the ore to dissolve. The resulting solution is pumped to the surface where the uranium is removed from the solution and processed to a dried form of uranium which is shipped to conversion facilities for sale to the Company's customers. An ISL project involves several major components: ORE BODY EVALUATION Ore bodies which are currently being mined by the ISL process are associated with groundwater saturated permeable sandstone formations located between 100 and 2,000 feet below the surface. The uranium ore is deposited in a roll front configuration where the groundwater passing through the sandstone passes from a natural environment which is oxidizing to a naturally occurring reducing environment. This change causes the dissolved uranium in the groundwater to become insoluble, and it then attaches to the grains of the sandstone. Some important factors in evaluating an ore body for the ISL process are permeability, the thickness of the ore zone, depth, size, grade of ore, shape of the ore body, nature of uranium mineralization, host rock mineralogy, and the hydrology. These factors are important in determining the design of the wellfield, the type and flow of the leaching solution, and the nature of the surface ISL facilities. WELLFIELD DESIGN The wellfield is the mechanism by which the leaching solution, or lixiviant, is circulated through the ore body. The wellfield consists of a series of injection, production (extraction) and monitoring wells drilled in specified patterns. These patterns will vary primarily with the configuration of the ore and the hydrologic characteristics of each deposit. Determining the wellfield pattern is crucial to minimizing costs and maximizing efficiencies of production. Injection and production wells vary in diameter from four to six inches. Generally, these wells are drilled down to the bottom of the ore zone (through which the lixiviant must be circulated to achieve production). Injection and production wells are cased with polyvinyl chloride ("PVC") or fiberglass casings which are cemented in place from the bottom of the ore zone to the surface. The wells are then completed into the ore zone. LIXIVIANT CHEMISTRY The lixiviant, consisting of native groundwater fortified with an oxidant and an anionic complexing agent, is introduced via the injection wells to the ore bearing aquifer. The oxidant (gaseous oxygen) changes the uranium valence state making the uranium soluble in the lixiviant. The lixiviant (sodium bicarbonate) complexes the original uranium to a soluble ion, uranyl dicarbonate, which dissolves the uranium. The dissolved uranium then flows to the surface with the lixiviant fluid which is circulated through the ore body until economic recovery is achieved. URANIUM RECOVERY PROCESS The uranium recovery process consists of a lixiviant circuit, an elution/precipitation circuit and a drying and packaging process. The lixiviant circuit flows from the ore body, where the uranium is dissolved. The lixiviant stream is then circulated to an ion exchange column on the surface where uranium is extracted from the lixiviant by absorption onto the resin beads of the ion exchange columns. The lixiviant is then refortified and reinjected into the ore body. When the ion exchange column's resin beads are loaded with uranium, the column is removed and placed into the elution circuit where the uranium is 5 9 flushed with a salt water solution which precipitates the uranium from the beads. This leaves the uranium in a slurry, which is then dried and packaged for shipment as uranium powder. WELLFIELD RESTORATION At the conclusion of mining, the mine site is decommissioned and decontaminated and the wellfield is restored and reclaimed. Wellfield restoration involves returning the aquifer to a condition consistent with its pre-mining use and removing evidences of surface disturbance. The restoration of the wellfield can be accomplished by flushing the ore zone for a time with native ground water and/or using reverse osmosis to remove ions, minerals and salts to provide clean water for reinjection to flush the ore zone. Decommissioning and decontamination entail decontamination, dismantling and removal for disposal or reuse of the structures, equipment and materials used at the site during the mining and restoration activities. ENVIRONMENTAL CONSIDERATIONS AND PERMITTING; WATER RIGHTS The production of uranium is subject to extensive regulations, including federal and state (and potentially tribal) environmental regulations, that have a material effect on the economics of the Company's operations and the timing of project development. The Company's primary regulatory costs have been related to obtaining and complying with the regulatory licenses and permits that must be obtained from federal and state agencies prior to the commencement of uranium mining activities. Environmental considerations include the prevention of groundwater contamination (through proper design and operation of the wellfield and monitoring wells to prevent the vertical or horizontal escape of leaching solution from the mining area) and the treatment and disposal of liquid and/or solid discrete surface waste or by-product materials (so-called "11e. (2) by- product material" under federal law). The majority of by-product material that is generated is liquid and generally is disposed of through underground injection wells, by a combination of reverse osmosis, brine concentration and evaporation or, after treatment, by surface deposition or discharge. Any such disposal must be approved by the governing authority having jurisdiction over that aspect of the Company's activities. Once mining is completed, the Company is required to reclaim the surface areas and restore underground water quality to the level of quality mandated by applicable regulations or license requirements. A small amount of solid discrete surface waste materials generated by the ISL process is disposed of by delivery to a licensed by- product material disposal site or to a licensed conventional uranium mill tailings pile. While such sites may not be readily available in the future, the Company believes that any increase in the cost of such disposal will continue to be insignificant relative to total costs of production and will not be a material portion of restoration/reclamation costs. In both Texas and New Mexico there are two primary regulatory authorizations required prior to operations: a radioactive material license and underground injection control ("UIC") permits which relate both to the injection of water for production purposes and to the disposal of by-product material through underground injection wells. Uranium mining is subject to regulation by the U.S. Nuclear Regulatory Commission ("NRC") under the federal Atomic Energy Act ("AEA"); however, the AEA also allows for states with regulatory programs deemed satisfactory by the NRC to take primary responsibility for licensing and regulating certain activities, such as uranium recovery operations. When a state seeks this responsibility, it enters into an agreement with the NRC whereby the NRC agrees to recede from the exercise of most of its counterpart jurisdiction, leaving the matters to be administered by the state. Texas has entered into such an agreement; however, New Mexico is not a party to such an agreement. The federal Safe Drinking Water Act ("SDWA") creates a nationwide regulatory program protecting groundwater which is administered by the U.S. Environmental Protection Agency ("EPA"). To avoid the burden of dual federal and state (or Indian tribal) regulation, the SDWA allows for the permits issued by the UIC regulatory programs of states and Indian tribes determined eligible for treatment as states to suffice in place of a UIC permit required under the SDWA. A state whose UIC program has been determined sufficient for this purpose is said to have been granted "primary enforcement responsibility" or "primacy," and a UIC permit from a state with primacy suffices in lieu of an EPA-issued permit, provided 6 10 the EPA grants, upon request by the permitting state, an "aquifer exemption" or "temporary aquifer designation" modifying the permitting state's UIC program to recognize the temporary placement of mining fluids into the intended mining zone within the horizontal confines of the proposed mining area. Although the EPA's consent to aquifer exemptions or temporary aquifer designations for certain mineral deposits is often issued almost automatically, the EPA may delay or decline to process the state's application if the EPA questions the state's jurisdiction over the mine site. Both Texas and New Mexico have been granted "primacy" for their UIC programs, and the Navajo Nation has been determined eligible for treatment as a state but is not due to submit its program for EPA approval for several years. Until such time as the Navajo Nation has been granted "primacy," ISL uranium mining activities within Navajo Nation jurisdiction will require a UIC permit from the EPA. Despite some procedural differences, the substantive requirements of the Texas, New Mexico and EPA UIC programs are very similar. In addition to its radioactive materials licenses and UIC permit, the Company is also required to obtain from appropriate governmental authorities a number of other permits or exemptions, such as for waste water discharge, land application of treated waste water, or for air emissions. The current environmental regulatory program for the ISL industry is well established. Many ISL mines have gone full cycle through the permit- operating-restoration cycle without any significant environmental impact. However, the public anti-nuclear lobby can make environmental permitting difficult and permit timing less than predictable. In Texas, both the radioactive materials license and the UIC permits required for ISL uranium mining are granted by the Texas Natural Resource Conservation Commission ("TNRCC"), with the concurrence of the NRC required for the licensee's final release from further radioactive materials license obligations after mining and all required decommissioning, decontamination, restoration and reclamation have been completed at a site. The TNRCC also regulates air quality and surface deposition or discharge of treated waste water associated with the ISL mining process. In New Mexico, radioactive materials licensing is handled directly by the NRC, rather than by the State of New Mexico. Furthermore, depending upon whether a site located within New Mexico falls under state or Navajo Nation jurisdiction, the licensure of the UIC aspects of ISL mining may be conducted by either the New Mexico Environmental Department ("NMED") or the EPA or possibly both in case of jurisdictional conflict. The jurisdictional issue when raised as to any development property, could result in litigation between the state and the EPA, with the possibility of delays in the issuance of affected UIC permits. Water is essential to the ISL process. It is readily available in South Texas for the Company's operations and obtaining water rights is not required because water is subject to capture. In New Mexico the use of water rights is administered through the New Mexico State Engineer subject to Indian tribal jurisdictional claims as discussed below. Obtaining new water rights, and the transfer or change in use of existing water rights are carefully and strictly regulated by the State Engineer. The State Engineer may also grant an application for a "temporary water right" which will not establish a vested right but may provide sufficient acre feet per day to fulfill the applicant's water needs. The State Engineer exercises jurisdiction over underground water basins with "reasonably ascertainable boundaries." Accordingly, new appropriations or changes in purpose or place of use or points of diversion of existing water rights, such as those in the San Juan and Gallup Basins where the Company's properties are located, must be obtained by permit from the State Engineer. Applications are required to be published and are subject to hearing if protested. There are three criteria for decision, that the application: (1) not impair existing water rights, (2) not be contrary to the conservation of water within New Mexico, and (3) not be detrimental to the public welfare. Applications may be approved subject to conditions which govern exercise of the water rights. Appeals from decisions of the State Engineer are to the district court of the county in which the work or point of desired appropriation is situated and from there to the New Mexico Court of Appeals. Finally, jurisdiction over water rights may become an issue in New Mexico when an Indian nation, such as the Navajo Nation, objects to the State Engineer's authority to grant or transfer a water right or to award a temporary water right, claiming tribal jurisdiction over Indian country. This issue could result in litigation between the Indian nation and the state which may delay action on water right applications, and, depending on who prevails as to any particular property, could result in a requirement to make applications to the 7 11 appropriate Indian nation and continuing jurisdiction by the Indian nation over use of the water. All of the foregoing issues arise to a greater or lesser extent in connection with the Company's New Mexico properties, as further described below. There can be no assurance that the regulatory permits or licenses in Texas or New Mexico, or the applications for water rights in New Mexico, required for any project of the Company will be approved by the necessary governing authority in the form contemplated by management, or in any other form, or within the time periods necessary to commence timely production. Additionally, regulations and permit requirements are subject to revisions and changes which may materially affect the Company's operations. Any delay or failure in obtaining such permits or water rights could materially and adversely affect the business and operations of the Company. In addition to the costs and responsibilities associated with obtaining and maintaining permits, and the regulation of production activities, the Company is subject to those environmental laws and regulations applicable to the ownership and operation of real property in general, including but not limited to the potential responsibility for the activities of prior owners and operators. THE URANIUM INDUSTRY GENERAL The only significant commercial use for uranium is to fuel nuclear power plants for the generation of electricity. Nuclear plants generated approximately 17% of the world's electricity in 1995, up from less than 2% in 1970 and according to the Uranium Institute ("UI"), through the year 2000 nuclear generating capacity is expected to grow at 1% per annum, primarily as a result of new reactor construction outside the United States and increased efficiencies of existing reactors. As of December 31, 1995 there were 363 nuclear reactors operating in the Western World, 109 of which are in the United States, and another 32 under construction outside of the United States. Uranium consumption by Western World commercial reactors increased from about 60 million pounds in 1981 to approximately 129 million pounds in 1995. Western World consumption is estimated to reach approximately 135 to 150 million pounds by 2001. SUPPLY AND DEMAND 1995 and 1996 were transition years in the uranium market place, signaling the end of a ten year period of significantly depressed product prices. There is no single event that caused this long-anticipated correction. It is the result of numerous factors working in concert over a ten-year period that finally re-established the move toward market equilibrium. From the early 1970's through 1980, the Western World uranium industry was characterized by increasing uranium production fueled by overly optimistic projections of nuclear power growth. From 1970 to 1985, production exceeded consumption by approximately 500 million pounds. By the end of 1985 enough inventory had been amassed to fuel Western World reactor needs for over five years. In response, sales of excess inventory followed and prices plummeted from highs above $40 per pound in 1979 to below $8 per pound in 1992. As prices fell, Western World production declined dramatically from a high of 115 million pounds in 1980 to a low of 57 million pounds by 1994. Since 1985, consumption of uranium in the Western World has exceeded Western World production by over 400 million pounds. In 1995, consumption of uranium in the Western World was 129 million pounds, nearly double the production of 66 million pounds by Western World producers. Accordingly, by the end of 1995, excess inventory levels in the Western World (inventory in excess of preferred levels) had been reduced to less than two years of forward reactor requirements, and excess inventories in the U.S. had been reduced to less than one year of projected forward requirements. Countering the drawdown of Western World inventories and contributing directly to the downturn of market prices was the importation, starting in 1989, of uranium from the Commonwealth of Independent 8 12 States (the "CIS"), and to a lesser extent, from Eastern Europe and mainland China. As the result of an anti-dumping suit in 1991 by the U.S. ("CIS Anti- dumping Suit") against some republics of the CIS, suspension agreements were signed with six CIS republics (Russia, Ukraine, Kazakhstan, Uzbekistan, Kyrgzstan and Tajikistan) in October 1992, which applied price related volume quotas to CIS uranium permitted to be imported into the U.S. The Russian Suspension Agreement was amended in March 1994 allowing for up to 43 million pounds of Russian uranium to be imported into the U.S. over the 10 years beginning March 1994, but only if it is matched with an equal volume of new U.S. production. Based on U.S. consumption for the 1994-2003 period (as reported or projected by the Department of Energy), the matched volumes could account for up to 18% of the supply to the U.S. market during this period. In 1995 the Republics of Kazakhstan and Uzbekistan concluded negotiations to amend their respective suspension agreements. Both amendments lowered initial prices relating to their respective import quotas allowing imports to occur. Additionally, the amendments require that uranium mined in those Republics and enriched in another country for importation in the U.S. will count against their respective quotas. The Uzbekistan amendment replaces the price-tied quota system with one based upon U.S. production rates after October 1997. As U.S. rates increase, additional imports from Uzbekistan are allowed. Although these amendments to the suspension agreements may increase the supply of uranium to the U.S. market, they provide increased predictability concerning CIS imports into the U.S. Due to declining production levels in the CIS republics, uranium from these sources has recently been difficult to obtain. Consequently, the market impact of CIS primary production may be diminishing. In January 1994, the U.S. and Russia entered into an agreement (the "Russian HEU Agreement") to convert highly enriched uranium ("HEU"), derived from dismantling nuclear weapons, into low enriched uranium ("LEU") suitable for use in nuclear power plants. At a projected maximum conversion rate for HEU and LEU, approximately 24 million pounds of uranium will be available to Western World markets, meeting up to 18% of annual requirements by 2001. In 1996 the U.S. Congress passed legislation in compliance with the suspension agreements which allows the converted HEU material to be sold in the U.S. marketplace at an annual rate not to exceed 2 million pounds in 1998, increasing gradually to 20 million pounds in 2009. At this maximum rate, HEU material could supply approximately 40% of annual U.S. reactor requirements projected for 2009. In addition, an uncertain amount of HEU material is allowed to be used in the U.S. for the overfeeding of enrichment facilities and as a source of Russian uranium for matching sales. Industry analysts expect annual Western World consumption to increase to between 135 and 150 million pounds by 2001. The Company estimates that between 30 and 40 million pounds of this demand could be filled by a combination of government stockpiles (including converted Russian and U.S. HEU and inventory sold by the Department of Energy) and imports from CIS republics and former East Bloc countries. To achieve market equilibrium by 2001 primary production in the Western World will need to supply between 95 and 120 million pounds on an annual basis subject to some adjustment for any remaining inventory drawdown and limited uranium reprocessing. Production from existing facilities in the Western World, however, is projected to decline from current levels to approximately 57 million pounds by 2001 as reserves are depleted. New production therefore will have to be brought online to fill a potential annual gap of between 38 and 63 million pounds. While current price levels may sustain 1995 production levels, the Company believes that higher prices will be needed to support the required investment in new higher cost production as lower cost production reserves are depleted. 9 13 The following table shows U.S. production and Western World production and consumption for the years presented. PRODUCTION AND CONSUMPTION OF U(3)O(8)(1) (Western World Countries) (Amounts in millions of pounds of U(3)O(8))
Total Western Total U.S. Total U.S. Total Western World World Year Production Consumption Production Consumption ---- ---------- ----------- ---------- -------------- 1979 37.5 20.5 99.7 46.6 1980 43.7 18.8 115.0 41.0 1981 38.5 24.1 114.9 59.9 1982 26.9 24.3 107.8 69.8 1983 21.2 28.7 96.2 76.6 1984 14.9 27.0 101.0 78.4 1985 11.3 33.7 90.7 91.1 1986 13.5 34.9 96.7 97.9 1987 13.0 33.7 92.2 93.8 1988 13.1 39.9 95.5 108.2 1989 13.8 38.0 89.0 104.3 1990 8.9 44.2 73.8 114.0 1991 8.0 44.8 70.0 128.4 1992 5.6 45.2 60.9 123.3 1993 3.1 44.2 57.2 130.8 1994 3.4 40.4 57.8 135.7 1995 6.0 51.1 66.0 128.6 1996(est.) 7.2 45.3 72.9 134.9-143.1
- ------------------ (1) Source: Industry - various publications of Department of Energy/Energy Information Administration ("DOE/EIA"), Trade Tech, UxCo and the Uranium Institute. URANIUM PRICES Spot prices reflect the price at which uranium may be purchased for delivery within one year. Historically, spot prices have been more volatile than long-term contract prices, increasing from $6.00 per pound in 1973 to $43.00 per pound in 1978, then declining to a low of $7.25 per pound in October 1991. The spot price per pound as of February 28, 1997 was $13.65. 10 14 The following graph shows spot prices per pound from 1978 to December 31, 1996, as reported by Trade Tech. [GRAPH] - ---------------- All prices beginning in 1993 represent the nonrestricted origin U(3)O(8) deliveries available to U.S. utilities. Trade Tech began reporting a two-tier price structure soon after the United States and certain Republics of the CIS agreed to import restrictions on uranium produced. The foregoing prices reflect those prices available to U.S. utility consumers. COMPETITION The Company markets uranium to utilities in direct competition with supplies available from various sources worldwide. The Company competes primarily on the basis of price. The Company estimates that for 1996 its uranium production was approximately 20% of the total U.S. production and approximately 2% of the total Western World production. According to the UI, in 1995, six companies, Cameco Corporation, Compagnie Generales des Matieres Nucleaires, Energy Resources of Australia, Ltd., the RTZ Corporation PLC, Uranerzbergbau-GmbH and WMC Limited, produced almost 70% of total Western World output. Virtually all of Western World production was from only eight nations: Canada, Niger, Australia, Namibia, South Africa, United States, France and Gabon. In 1989 the CIS and mainland China began to supply significant quantities of uranium annually into Western World markets. 11 15 ITEM 2. PROPERTIES. SOUTH TEXAS PRODUCING PROPERTIES The Company currently has two producing properties which are located in South Texas, Rosita and Kingsville Dome. The following is a description of those properties. KINGSVILLE DOME The Property. The Kingsville Dome property consists of mineral leases from private landowners (and a small portion owned in fee) on 3,720 gross (3,573 net) acres located in central Kleberg County, Texas. The leases provide for royalties based upon uranium sales. The leases have expiration dates ranging from February 1998 to 2004. With a few minor exceptions, all the leases contain shut-in royalty clauses which permit the Company to extend the leases not held by production by payment of a royalty. The Company was obligated to pay a production payment royalty of $1.00 per pound on the first three million pounds of uranium produced and sold from either Kingsville Dome or Rosita. The Company has produced in excess of three million pounds of uranium from these properties and made the final payment of approximately $730,000 on this obligation in January 1997. Reserves. As of December 31, 1996, the property contained approximately 3.7 million pounds of in-place proven and probable uranium reserves (estimated 2.4 million pounds recoverable). Production History. Initial production commenced in May 1988. In May 1989, due to the continuing decline in the spot price of uranium, the Company deferred development of the next wellfield, and the plant was shut-in in September 1990. Total production from May 1988 through September 1990 was approximately 1.5 million pounds. Wellfield development activities resumed in December 1995, and production commenced in March 1996. Annualized production levels at Kingsville Dome are approximately 1 million pounds; and production was approximately 860,000 pounds from recommencement of production in March 1996 through December 31, 1996. Further Development Potential. As part of the Company's ongoing production activities, it is engaged in significant development and exploration efforts at Kingsville Dome. Exploration is planned northwest of the current production area in 1997. The Company anticipates spending approximately $10.1 million in 1997 and $3.4 million in 1998 for plant capital, permitting, development and land holding costs. Permitting Status. Radioactive material licensing and UIC permit hearings for currently producing areas have been completed, and the necessary permits have been issued. Some minor amendments to the license and permit for further production within the permit area will be required as development proceeds. The term of the license and UIC permit is effectively open-ended. The UIC disposal permit will require renewal in mid-1998, and the Company is in the process of applying for that renewal. Restoration and Reclamation. Restoration of groundwater is planned to commence in early 1997. The Company anticipates spending approximately $750,000 in 1997 and $600,000 in 1998 on such restoration activities. ROSITA The Property. The Rosita property consists of mineral leases on 3,377 gross and net acres located in northeastern Duval County, Texas. All the leases, except minor leases, are held by production. The leases provide for royalties based upon uranium sales. The Company was obligated to pay a production 12 16 payment royalty of $1.00 per pound on the first three million pounds of uranium produced and sold from either Kingsville Dome or Rosita. The balance due of approximately $730,000 under this obligation was paid in January 1997. See the above discussion of Kingsville Dome. Reserves. As of December 31, 1996, the property contained approximately 1.8 million pounds of in-place proven and probable uranium reserves (estimated 1.1 million pounds recoverable). Production History. The Company began initial production at Rosita in October 1990. Total production from Rosita for the eighteen months through March 31, 1992 was approximately 1.1 million pounds. In March 1992, due to depressed uranium prices, the Company shut-in production. Wellfield development activities resumed at Rosita in March 1995, and production recommenced in June 1995. From that date through year-end 1995 approximately 610,000 pounds were produced and production in 1996 totaled 500,000 pounds. Further Development Potential. The Company estimates that there are approximately 300,000 pounds of uranium remaining to be produced from existing operating wellfields at Rosita. In addition, the Company believes that an additional 840,000 pounds of uranium may be recovered from future wellfields at Rosita. Preproduction activities for the new wellfields began in January 1997, with expected production beginning in the first quarter of 1997. The Company expects its existing reserves at Rosita to be fully depleted by mid-1998. The Company anticipates spending approximately $2.1 million for development activities, permitting and land holding costs in 1997 and $238,000 in 1998. Permitting Status. Radioactive materials licensing and UIC permit hearings for currently producing areas have been completed, and the necessary permits have been issued. Some minor amendments for further production within the permit area will be required as development proceeds. The term of the license and UIC permit is effectively open-ended. The UIC disposal permit will require renewal in mid-1997, and the Company has filed its application for such renewal. Restoration and Reclamation. The Company expects to commence initial groundwater restoration in January 1997 and expects to expend approximately $300,000 in 1997 and $345,000 in 1998 on such activities. SOUTH TEXAS DEVELOPMENT PROPERTIES VASQUEZ The Property. The property consists of two mineral leases on 842 gross and net acres located in southwestern Duval County, Texas. One lease expires in January 1998, subject to extension for permitting delays, and the other lease expires in February 2000. The leases provide for royalties based on uranium sales. A potential conflict with respect to the mineral rights has arisen on the Vasquez property. The Company's lease is with the owner of both the surface of the land and 50% of the minerals. The Company believes the minable reserves on this property are within 200 feet of the surface and are, therefore, under Texas law owned by the surface estate. As a result of the surface lease alone, the Company believes it has the right to mine 100% of the minerals under Texas law. Another party, however, owns 50% of the mineral estate and may challenge the Company's ownership of 50% of the minerals. The Company expects to file a quiet title action to resolve this matter. Reserves. As of December 31, 1996, the property contained approximately 3.7 million pounds of in-place proven and probable uranium reserves (estimated 2.4 million pounds recoverable). Development Plan. Production is targeted to commence in 1998. The Company anticipates spending approximately $1.1 million in 1997 and $5.3 million in 1998 for plant construction, permitting, 13 17 development and land holding costs. The Company anticipates having to demonstrate financial surety in connection with these activities of approximately $3.0 million which it expects to meet by posting a bond collaterized by cash in an amount equal to 50% of the bond. Permitting Status. All of the required permit applications have been completed and submitted to the TNRCC. The TNRCC is currently reviewing the applications. The Company expects the permits to be in place in 1997. ALTA MESA The Property. The Alta Mesa property consists of 4,575 gross and net acres located in Brooks County, Texas. The Company has a single mineral lease from the private mineral owner. The lease provides for a royalty based upon uranium sales and requires payment of minimum royalties if production does not begin by certain specified times. The Company paid $4 million for the lease of which $1 million is recoverable against one-half of future royalties. The lease term ends in December 1999 unless production from the property commences by that date (subject to extension for permitting delays). Reserves. As of December 31, 1996, the property contained approximately 6.2 million pounds of in-place proven and probable reserves (estimated 4.0 million pounds recoverable). Development Plan. Construction of the plant and wellfields is projected to take eight months and is scheduled to begin as the various licenses are issued by the TNRCC. Construction of the plant and wellfields is anticipated to begin in the third or fourth quarter of 1997 depending on the progress in licensing with the TNRCC. The Company anticipates spending approximately $6.0 million in 1997 and $4.8 million in 1998 for plant construction, permitting, development and land holding costs. The Company anticipates having to demonstrate financial surety in connection with these activities of approximately $3.0 million which it expects to meet by posting a bond collaterized by cash in an amount equal to 50% of the bond. Permitting Status. The Company filed license applications in the fourth quarter of 1996 and anticipates having the final permits in place in 1998. NEW MEXICO DEVELOPMENT PROPERTIES GENERAL The Company has various interests in properties located in the Churchrock and Crownpoint districts in New Mexico. As to these properties, the Company holds both patented and unpatented mining claims, mineral leases and some surface leases from private parties, the Navajo Nation and Navajo allottees. In addition, the Company signed a letter of intent in November 1996 to acquire from Santa Fe certain uranium mineral interests and exploration rights for uranium on significant acreage in New Mexico, a small portion of which falls within the Churchrock district. This agreement with Santa Fe was finalized in March 1997. In keeping with its overall corporate strategy, the Company's development plan for its New Mexico properties will proceed incrementally, subject to timely permitting, the availability of water rights and the availability of capital. The Company plans to develop the Churchrock district first, with production targeted for 1998, and the Crownpoint district next, with production targeted for 1999. REGULATORY FRAMEWORK NRC License. In New Mexico, uranium production requires a radioactive materials license issued by the NRC. The Company has applied for one NRC license covering all properties located in both the 14 18 Churchrock and Crownpoint districts (except the Mancos property) and has included the properties in both districts (except the Mancos leases) under one Final Environmental Impact Statement (FEIS) which is a prerequisite for the NRC license. The NRC has finalized and completed the publication of the FEIS in the first quarter of 1997. The FEIS is subject to review and comment by the EPA and any cooperating agencies and is available to the public. Upon publication, and in the absence of any litigation concerning the FEIS, the NRC may issue the NRC license. However, the NRC has published notice of an opportunity for a hearing on the license which is currently planned for early 1997. Although the NRC may defer a hearing on licensure until after a license is issued, it is unclear whether the NRC will do so. There can be no assurance that the license will be issued or, if issued, that it will allow for the Company's planned operations, or that, if issued, the license would be issued on a timely basis to permit the Company to meet its targeted production schedule for the Churchrock district. UIC Permit. NMED has jurisdiction under the New Mexico Water Quality Act to regulate UIC activities within the State of New Mexico, and the New Mexico UIC program has received "primary enforcement responsibility" from the EPA under the federal SDWA. However, by the terms of regulations issued by the EPA and the primacy determination made for the State of New Mexico, New Mexico's UIC primacy does not extend to New Mexico's exercise of UIC regulation or permitting over facilities located on "Indian lands," a term whose geographic reach the EPA has defined as coextensive with that of Indian country. Because even a permit issued by a state holding UIC primacy cannot suffice in lieu of a federal UIC permit issued under the SDWA unless the EPA issued a corresponding aquifer exemption or temporary aquifer designation, the EPA's opinion that a site lies within Indian country virtually compels a state UIC applicant to secure an EPA UIC permit for UIC activities to be conducted on such a site. The EPA has announced it may assert that all of the Company's New Mexico development properties lie within Indian country and thus require UIC permits issued by the EPA. In addition to the EPA's assertions, the Navajo Nation claims regulatory jurisdiction over all of the Company's New Mexico development properties. These claims subject the development of the property to further uncertainties, including a potential for delays in UIC permitting until and unless a Navajo regulatory program is promulgated and accepted by the EPA for a determination of primacy. Although a Navajo UIC program may adopt unique application, permitting, and enforcement procedures, it would, nonetheless, be required to impose virtually the same substantive requirements as the Company is prepared to satisfy under existing New Mexico and EPA UIC programs. This dispute over UIC jurisdiction is currently focused on a portion of the Churchrock and Crownpoint properties. Despite this current jurisdictional dispute among the EPA, the State of New Mexico, and the Navajo Nation, the Company maintains good relations with the state of New Mexico, the Navajo Nation, and the EPA. However, there can be no assurance that the jurisdictional dispute will not have a material adverse effect on the Company's development plans in New Mexico. Water Rights. For general information on water rights in New Mexico, see "Business-Environmental Considerations and Permitting; Water Rights." CHURCHROCK DISTRICT The Property. The Churchrock properties encompass 2,225 gross and net acres and include mineral leases, patented mining claims and unpatented mining claims. The properties are located in McKinley County, New Mexico, and consist of three parcels, known as Section 8, Section 17 and Mancos. None of these parcels lies within the area generally recognized as constituting the Navajo Reservation. The Company owns mineral leases for both Sections 17 and the Mancos properties. The surface estate on Section 17 is owned by the Navajo Nation. The Company owns patented and unpatented mining claims on Section 8. The Company is obligated to pay certain royalties based on uranium sales. The unpatented claims currently require an annual payment of $100 per claim payable to the Bureau of Land Management 15 19 to remain in full force and effect and are subject to certain overrides. The Mancos leases can be held indefinitely by paying certain annual royalties after the primary term, which expired in 1994. The Section 17 leases expire in 1998. Production at any time will hold the leases until production ceases. On March 25, 1997, the Company acquired from Santa Fe, the fee mineral interests in Section 17 and Mancos thereby extinguishing certain of the royalty obligations on those properties. Reserves. As of December 31, 1996, Section 8 contained approximately 6.5 million pounds of in-place proven and probable uranium reserves (estimated 4.2 million pounds recoverable), Section 17 contained approximately 8.4 million pounds of in-place proven and probable uranium reserves (estimated 5.5 million pounds recoverable), and the Mancos property contained approximately 4.2 million pounds of in-place proven and probable uranium reserves (estimated 2.7 million pounds recoverable). Development Plan. The New Mexico properties will be developed in accordance with the licenses issued by the NRC. It is anticipated that the first property to be licensed will be Churchrock. Costs related to permitting activities and land holding costs were $600,000 in 1996. The Company anticipates spending approximately $12.3 million in 1997 and $7.3 million in 1998 for plant construction, permitting, development and land holding costs. The Company anticipates having to demonstrate financial surety in connection with these activities of approximately $10.0 million which it expects to meet by posting a bond collaterized by cash in an amount equal to 50% of the bond. Exploration Potential. The measured in-place reserves in Sections 8 and 17 and Mancos encompass only a small portion of the properties owned by the Company. The Company believes that substantial additional mineralization exists on these properties. Because of greater depths, this mineralization is estimated to be recoverable at a higher cost and accordingly require higher uranium prices to make them economical to produce. Water Rights. The Company originally acquired mineral leases on Sections 8 and 17 from United Nuclear Corporation ("UNC") and, in connection therewith, acquired certain rights to use water from UNC. An application to use one of these rights has been the subject of extensive administrative proceedings and litigation with the New Mexico State Engineer and the Navajo Nation over the nature and extent of UNC's water rights. The State Engineer determined that the consumptive use and diversion amount UNC originally sought to transfer for use by the Company were in excess of the rights held by UNC and denied the application on the grounds that the UNC rights were insufficient to support the Company's mining operations. The Company has since revised its water budget to be consistent with the rights of UNC as determined by the State Engineer. The State Engineer has agreed to hear a revised application for the transfer of the water rights within 180 days after the application is submitted. The Company anticipates filing a revised application or applications for new temporary appropriation of water. A claim by the Navajo Nation to jurisdiction over these water rights was denied by the State Engineer and the state district court. These decisions do not preclude such a claim from being made in federal court. Permitting Status. On June 21, 1989 the EPA issued its aquifer exemption covering that portion of the Churchrock site known as Section 8, and on November 1, 1989, NMED issued its permit, covering UIC activities on Section 8. On October 7, 1994, NMED issued an amended permit covering UIC activities on both Section 8 and Section 17. The permit for Section 17 was contested by the Navajo Nation which claimed UIC regulatory jurisdiction over the site, based on the fact that the surface estate is owned by the Navajo Nation. The EPA, acting as an advocate for the Navajo Nation, has asserted the Navajo Nation's claim and has refused to amend its previously issued aquifer exemption covering Section 8 to add the portion of the Churchrock facility on Section 17. The EPA has subsequently announced it may reconsider its issuance of an aquifer exemption covering the Section 8 portion of the Churchrock site. The Company does not plan to pursue permits for Mancos until uranium prices rise. In June 1996 the Company filed with the NMED two applications to renew the permit in two distinct parts, one covering the Section 8 portion and the other the Section 17 portion of Churchrock. This was to assure that the Company maintained a "clear" UIC authorization on the Section 8 portion of the site. 16 20 The surface estate on Section 8 is not owned by the Navajo Nation or Navajo allottees. Because the renewal application was timely filed, the permit covering the Section 8 property has remained continuously in effect pending final determination on the renewal application by the NMED. The Navajo Nation has recently asserted jurisdiction over the UIC for Section 8, claiming that the land lies within a "dependent Indian community." The EPA has not yet taken a position on this issue. This situation could potentially delay or obstruct development of Section 8. The renewal application pertaining to the Section 17 property will be subject to a new administrative review which will ultimately require EPA to re-examine the jurisdictional status. If the EPA does not find the site within NMED jurisdiction, the Company believes the state will file suit for a declaration of UIC jurisdiction over the site. The outcome of this suit may ultimately affect UIC jurisdiction on all Indian lands. CROWNPOINT DISTRICT The Property. The Crownpoint properties are located in the San Juan Basin, 22 miles northeast of the Company's Churchrock deposits and 35 miles northeast of Gallup, New Mexico, adjacent to the town of Crownpoint. The Properties consist of 1,578 gross and net acres, as follows: (a) 162 gross and net acres on Section 24. The Company has 100% of the mineral estate on this acreage pursuant to a combination of a 40% fee interest, a mineral lease on the other 60% of the mineral estate (expiring in April 1997 unless the parties agree to an extension) and unpatented mining claims. This acreage is subject to an obligation of the Company to pay a production payment on the first 50,000 pounds of uranium produced and an override based on uranium sales; (b) 959 gross and net acres on Sections 19 and 29 pursuant to a lease from private mineral owners (expiring August 2007) which provides for royalties and an override based on uranium sales; and (c) 457 gross and net acres of unpatented mining claims in Sections 9, 24 and 25. In addition to the foregoing, the Company has 1,440 gross and net acres of mineral leases (hereinafter referred to as "Unit 1") from Navajo allottees who are the beneficial owners of the surface and mineral rights. The leases are subject to approval by the Bureau of Indian Affairs (the "BIA"). The BIA Area Director is expected to approve the leases after completion of the FEIS. Although not assured, this approval is expected in the second quarter of 1997. These leases expire 10 years after the approval by the BIA. Reserves. With respect to all the Crownpoint acreage except Unit 1, as of December 31, 1996, the property contained approximately 39.0 million pounds of in-place proven and probable reserves (estimated 25.3 million pounds recoverable). The Company estimates that Unit 1 contains approximately 27.0 million pounds of in-place proven and probable reserves (estimated 17.6 million pounds recoverable). The Unit 1 reserves are not included as part of the Company's reserve base. Development Plan. The New Mexico properties will be developed according to the licenses issued by the NRC. It is anticipated that the first property to be licensed will be Churchrock followed by Unit 1 and Crownpoint after 1998. Costs relating to permitting activities and land holding costs were $710,000 in 1996, and are expected to total $200,000 in 1997 and $200,000 in 1998. Water Rights. With respect to Crownpoint, the Company has acquired three applications for appropriations of water which give the Company the first three "positions in line" on the hearings list for the San Juan Basin. Certain aspects of all three applications were protested and are subject to hearings. Water rights relating to Unit 1 involve the issue of the jurisdiction of the Navajo Nation, and this jurisdictional issue might also be present for other parts of Crownpoint. The Company plans to proceed with water rights for Crownpoint at a future date. 17 21 Permitting Status. The application for the NRC license is part of the overall application for both the Churchrock and Crownpoint districts discussed above. The Company had previously submitted UIC permit applications for Sections 19 and 24; however, because of Section 19's proximity to the town of Crownpoint, the Company withdrew these previous applications. The Company has recently submitted a revised UIC permit application for Section 24. There can be no assurance that the UIC permit will be granted. The surface estate on Section 19 and 29 is owned by the Navajo Nation and may be subject to the same jurisdictional dispute as for Section 17 in Churchrock. SANTA FE PROPERTIES GENERAL The Company signed a letter of intent in November 1996 to acquire from Santa Fe certain uranium mineral interests and exploration rights for uranium in New Mexico. This transaction closed in March 1997 and the major components of the transaction include the following detail. The Properties. The properties consist of: (a) 37,000 acres as to which the Company has acquired a fee interest in the entire mineral estate, excluding coal ("Category I Properties"); (b) approximately 140,000 acres as to which the Company has acquired the fee interest in uranium (the "Category II Properties"); and (c) approximately 346,000 acres as to which the Company has acquired the exclusive right to explore for uranium (the "Category III Properties"). The Company is obligated to spend on exploration (or pay to Santa Fe) $200,000 per year for the ten year period starting in March 1997 and $400,000 per year for the seven year period starting in March 2007. This expenditure can be made on any of the Category II or Category III properties. The license is for 17 years, expiring in March 2014. In the event that the sale price of uranium shall exceed $25 per pound for any twelve-month period URI has committed to spend on exploration (or pay to Santa Fe) during the following 5 years an aggregate of $5 million; and in the event that the sale price of uranium shall exceed $30 per pound for any twelve-month period URI has committed to spend on exploration (or pay to Santa Fe) during the following 5 years an aggregate of $10 million. With respect to Category II and Category III properties, at such time as URI shall apply for a mining permit with respect to any such properties Santa Fe has the right to put the remaining mineral interests owned by it (excluding coal) to the Company at a price of $200 per acre for any acreage in any section which is covered by the mining application. The acreage price shall be increased by the same percentage as the percentage increase in the price of uranium on the date of such application over $15.80 per pound. URI has the option to purchase at any time the entire mineral estates (excluding coal) on such properties on the same terms. Santa Fe is obligated to compensate URI in the event that title to uranium or mineral interest on certain of the properties which were obtained from Santa Fe should fail. Reserves. The Company estimates that the Category I Properties contain 14.7 million pounds of proven in-place uranium reserves (estimated 9.6 million pounds recoverable). Development Plan. The planned development strategy is to dove-tail qualified properties from the Santa Fe lands into the production plans for Churchrock and Crownpoint. Exploration Potential. There is significant exploration potential for the Santa Fe properties. Numerous ore grade holes drilled on the properties demonstrates this potential; however, because the depths of the deposits are not delineated, development costs are uncertain. 18 22 RECLAIMED PROPERTIES The Company has completed production and groundwater restoration on its Benavides and Longoria projects in South Texas. The Company is currently completing the final stages of surface reclamation on these projects which the Company believes will not involve material expenditures. On August 28, 1995, Manuel T. Longoria, as owner of the ranch containing the site of the Company's Longoria mine, brought suit against the Company in state district court in Duval County, Texas, asserting claims said to have arisen at various times over the last eighteen years. See "Business- Legal Proceedings." The Company acquired the Section 17 leases in the New Mexico Churchrock district from United Nuclear Corporation ("UNC"). UNC had conducted underground mining for uranium on Section 17 and had reclaimed these properties. In connection with the acquisition, the Company assumed any liability of UNC for any remaining remediation work that might be required. NMED has not determined what, if any, additional remediation will be required under the New Mexico Mining Act. If more remediation work is required, the Company believes it will not involve material expenditures. RECLAMATION AND RESTORATION COSTS AND BONDING REQUIREMENTS Upon completion of production from a wellfield, the Company is obligated under state and federal law to restore the aquifer to a condition consistent with its pre-mining use. This involves restoration of the aquifer, plugging and abandoning the injection and production wells and reclaiming the surface. With respect to operations at Kingsville Dome and Rosita, as well as reclamation and restoration of the Benavides and Longoria projects, the TNRCC requires the Company to provide financial surety to cover the costs of such restoration and reclamation. The surety bond requirement at December 31, 1996 was approximately $5.6 million. The Company fulfills this requirement through the issuance of surety bonds from the United States Fidelity and Guaranty Company ("USF&G") and has deposited as collateral for such bonds cash of approximately $2.8 million. The Company is obligated to fund the cash collateral account with an additional $0.50 for each pound of uranium production until the account accumulates an additional $1.0 million. The Company estimates that its future reclamation liabilities with respect to current operations at December 31, 1996 approximates $4.0 million, which has been charged to earnings. These financial surety obligations are reviewed and revised annually by the TNRCC. The Company anticipates that it will be required to provide financial surety of approximately $3.0 million as a condition to receipt of the requisite permits for the mining of each of the Alta Mesa and Vasquez projects. The Company anticipates that USF&G or other bonding entities will provide the requisite bond under arrangements similar to those in place for Rosita and Kingsville Dome. In New Mexico surety bonding will be required prior to development of the properties. The Company anticipates that it will be required to provide financial surety of approximately $10.0 million as a condition to receipt of the requisite permits for the Churchrock project which it anticipates will be provided by USF&G, or other bonding entities under arrangements similar to those in place for Rosita and Kingsville Dome. The amount of the surety bond is subject to annual review and revision by the NRC and State of New Mexico. ITEM 3. LEGAL PROCEEDINGS On August 28, 1995, Manuel T. Longoria, as owner of the ranch containing the site of the Company's Longoria mine near Bruni in Duval County, Texas, brought suit against the Company in state district court in Duval County, Texas asserting claims said to have arisen at various times over the last 18 years. In the action styled Longoria v. Uranium Resources, Inc., et al., Longoria claims the Company has leased the site knowing that the proposed mining would contaminate the site; that the Company had 19 23 knowingly or negligently conducted mining operations in a manner which contaminated the Longoria property with toxic and hazardous material which present a serious health hazard. The suit asks for remediation of the Longoria property and for unspecified actual and punitive damages. With regard to the claim for remediation, the Company, upon the conclusion of mining at the Longoria site and the nearby sites, began reclamation in the manner required by its permits and by state and federal regulations. Such reclamation is nearing completion. The Company has made provisions for the costs of site reclamation and does not believe the settlement of this lawsuit will result in damages that are materially different than the costs already in the financial statements. On July 12, 1995, the Company filed a lawsuit in the federal district court in Colorado against Professional Bank, a Colorado chartered bank ("ProBank"). The Company believes that ProBank is owned or controlled by Oren L. Benton, the former Chairman of the Company's Board of Directors. In the action styled Uranium Resources, Inc. v. Professional Bank, the Company alleges that ProBank transferred $1,080,000, without the Company's authorization, from the Company's account at ProBank to the accounts maintained at ProBank of various entities and an individual affiliated with Mr. Benton. The Company has recovered $300,000 of the total and is seeking to recover the balance from ProBank. During 1994, the Company encountered liquidity problems that resulted in the Company entering into certain transactions with companies controlled by Mr. Benton (the "Benton Companies"). On February 23, 1995, Benton and various of the Benton Companies filed for protection under Chapter 11 of the Federal Bankruptcy Code (the "Benton Bankruptcy"). In connection with the Benton Bankruptcy, the bankrupt estates have advised the Company that they are reviewing certain transactions entered into by the Company with the Benton Companies. Such a review could potentially result in claims against the Company that could have a material adverse effect on the Company. The Company and the bankrupt estates have entered into a tolling agreement with respect to the possible assertion of such claims. The Company is unable to assess whether any such claim will be asserted, and if asserted, what adverse consequences, if any, might result from such assertion. No claims have been asserted to date. The Company has asserted claims against Benton and the Benton Companies in the bankruptcy proceedings. The Company is subject to periodic inspection by certain regulatory agencies for the purpose of determining compliance by the Company with the conditions of its licenses. In the ordinary course of business, minor violations may occur, however, these are not expected to cause material expenditures. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The 1996 Annual Meeting of Stockholders was held on May 29, 1996, in Corpus Christi, Texas. Shares representing 6,316,306 votes (72.1% of total outstanding) were present in person or by proxy. At the meeting, the Stockholders of the Company elected Leland O. Erdahl, Paul K. Willmott, George R. Ireland and James B. Tompkins to the Board of Directors for a one-year term. In addition, the Company's Stockholders approved the amendment to the Company's restated Certificate of Incorporation to increase the authorized shares of common stock from 12,500,000 shares to 25,000,000 shares and ratified Arthur Andersen LLP as independent accountants for the Company for 1996. The proposal to increase the authorized shares of the Company was approved by a vote of 6,221,019 shares in favor, 86,077 opposed and 9,300 abstaining. The ratification of Arthur Andersen LLP as independent accountants was approved by a vote of 6,310,161 shares in favor, 2,645 opposed and 3,500 abstaining. 20 24 --------------------- CAUTIONARY STATEMENT FOR THE PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 The Company is including the following cautionary statement to take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statement made by, or on behalf of, the Company. The factors identified in this cautionary statement are important factors (but not necessarily all of the important factors) that could cause actual results to differ materially from those expressed in any forward-looking statement made by, or on behalf of, the Company. Where any such forward- looking statement includes a statement of the assumptions or bases underlying such forward-looking statement, the Company cautions that, while it believes such assumptions or bases to be reasonable and makes them in good faith, assumed facts or bases almost always vary from actual results, and the differences between assumed facts or bases and actual results can be material, depending upon the circumstances. Where, in any forward-looking statement, the Company, or its management, expresses an expectation or belief as to the future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will result, or be achieved or accomplished. Taking into account the foregoing, the following are identified as important risk factors that could cause actual results to differ materially from those expressed in any forward-looking statement made by, or on behalf of, the Company: CONTINUING SIGNIFICANT CAPITAL REQUIREMENTS An ISL mining operation requires a substantial amount of capital prior to the commencement of, and in connection with, production of uranium, including costs related to acquiring the rights to mine uranium, securing regulatory permits and licenses, exploration and definitional drilling to determine the underground configuration of the ore body, designing and constructing the uranium processing plant, drilling and developing in order to establish the infrastructure for the production wells for each wellfield and complying with financial surety requirements established by various regulatory agencies regarding the future restoration and reclamation activities for each property. The Company expects to fund some of its 1997 capital requirements from cash flow from operations and the proceeds of the equity placement in December 1996. However, the majority of the capital requirements for new development projects in 1997 and 1998 will require additional sources of capital. There can be no assurance that the Company will raise sufficient capital to fund these capital requirements. POTENTIAL ADVERSE EFFECT OF FEDERAL AND STATE REGULATIONS The development and production of uranium is subject to extensive governmental regulations that materially affect the economics of the Company's operations and the timing of project development. To produce uranium, the Company must secure and maintain multiple permits, obtain adequate water rights and comply with extensive federal, state and potential tribal regulations for environmental protection, including regulations relating to air and water quality, the prevention of groundwater contamination, the reclamation and restoration of wellfield aquifers and the treatment, transportation and disposal of liquid and/or byproduct material and solid wastes generated by the Company's uranium mining and processing activities. To date, the Company's operations have not been materially and adversely affected by the inability to obtain or maintain required permits or water rights, or by any groundwater contamination or the disposal of waste or byproduct material. However, should the Company be unable to obtain or maintain permits or water rights for development of its properties or otherwise fail to adequately handle future environmental issues, the Company's operations could be materially and adversely affected by expenditures or delays in the Company's ability to initiate or continue production at its properties. 21 25 The Company must obtain all necessary permits from the appropriate governmental agency before it can commence production at any of its development properties. The Company's future production is highly dependent on its ability to bring these development properties into production. Applications for permitting of certain of these properties have been filed. There can be no assurances that all the necessary permits will be obtained or that such permits will be obtained in a timely manner. Any significant delays in obtaining the necessary permits could have a material adverse effect upon the Company and its developmental plans for these properties. The Company has expended significant resources, both financial and managerial, to comply with environmental protection laws, regulations and permitting requirements and anticipates that it will be required to continue to do so in the future. Although the Company believes its producing properties comply in all material respects will all relevant permits, licenses and regulations pertaining to worker health and safety as well as those pertaining to the environment, the historical trend toward stricter environmental regulation may continue. The uranium industry is subject to not only the worker health and safety and environmental risks associated with all mining businesses, but also to additional risks uniquely associated with uranium mining and processing. The possibility of more stringent regulations exists in the areas of worker health and safety, the disposal of wastes and byproduct material, the decommissioning, decontamination and reclamation of mining, milling, refining and conversion sites, and other environmental matters, each of which could have a material adverse effect on the costs or the viability of a particular project. The Company is required to provide financial surety to state environmental agencies for plugging wells, groundwater restoration and site decommissioning, decontamination and reclamation. The Company estimates that its current restoration, decommissioning, decontamination and reclamation costs are approximately $3.7 million, which amount the Company has accrued as a liability on its financial statements. The Company satisfied its financial surety requirements imposed by environmental regulators with surety bonds totalling approximately $5.6 million at December 31, 1996, one-half of which is collateralized by the Company with cash. The Company anticipates that its future financial surety requirements will increase significantly as production from the Company's producing sites continues and as future development and production occurs at additional sites in Texas and New Mexico. The amount of the financial surety for each producing property is subject to annual review and revision by regulators. There can be no assurance that the Company will have sufficient capital to meet these future financial surety obligations. RESERVE ESTIMATES Reserve estimates are necessarily imprecise and depend to some extent on statistical inferences drawn from limited drilling, which may prove unreliable; and there can be no assurance that the indicated level of recoveries will be realized. Should the Company encounter mineralization or formations at any of its mines or projects different from those predicted by drilling, sampling and similar examinations, uranium reserve estimates may have to be adjusted and mining plans may have to be altered in a way that could adversely affect the Company's operations. Moreover, short-term operating factors relating to the uranium reserves, such as the need for sequential development of ore bodies and the processing of new or different uranium grades, may adversely affect the Company's profitability in any particular accounting period. NEED TO REPLACE RESERVES The Company's producing uranium mines are, in general, characterized by a series of individual wellfields that produce at differing declining production rates. Each wellfield's production decline rate depends on ore reserve characteristics, and, in the case of the Company, varies from a steep decline rate of six months, to a relatively slow production decline rate of eighteen months. The Company's future uranium reserves and production, and therefore cash flow and income, are highly dependent upon the Company's level of success in exploiting its current reserves and acquiring or developing additional reserves. Reserves 22 26 at the Company's currently producing sites are expected to be depleted in 1999, although there is the potential for developing additional wellfields at Kingsville Dome. There can be no assurance that the Company's development properties will be placed into production or that the Company will be able to continue to find and develop or acquire reserves. COMPETITION There is global competition in the uranium industry for mineral properties, capital, customers and the employment and retention or qualified personnel. In the production and marketing of uranium concentrates there are approximately 15 major uranium-producing entities, some of which are government controlled and some of which are significantly larger and better capitalized than the Company. The Company competes with larger producers in Canada, Australia and Africa, as well as with other U.S. ISL producers of uranium and other producers that recover uranium as a by-product of other mineral recovery processes. The Company also expects to compete with uranium recovered from the de-enrichment of highly enriched uranium obtained from the dismantlement of U.S. and Russian nuclear weapons and sold in the market by the United States Enrichment Corporation and/or the United States Department of Energy, as well as from imports to the United States of uranium from the CIS. The amount of uranium produced by competitors or imported into the United States may have a material impact on uranium prices. URANIUM PRICE VOLATILITY The Company's earnings are dependent on the price of uranium, which is determined primarily by global supply and demand and by the relationship of that price to the Company's costs of production. Historically, uranium prices have been subject to fluctuation, and the price of uranium has been and will continue to be affected by numerous factors beyond the Company's control, including the demand for nuclear power, political and economic conditions, and governmental legislation in uranium producing and consuming countries and production levels and costs of production of other producing companies. Certain of the Company's current long and medium-term contracts have pricing mechanisms related to spot market prices. In recent year's, prior to 1996, imports of uranium, including imports of uranium from the CIS, have resulted in significant downward pressure on uranium prices. The spot market price for uranium has strengthened appreciably since January 1995. Prices have risen from $9.65 per pound as of January 31, 1995 to a high of $16.50 per pound as of May 31, 1996. The spot price as of February 28, 1997 was $13.65 per pound. While the current spot prices of uranium have increased to levels which exceed the Company's cost of uranium production, there is no assurance that such price level will remain at the current level. URANIUM CONTRACTS PROFITABILITY As of December 31, 1996, the Company had contracts for delivery of an estimated 4.7 million pounds of uranium (exclusive of 270,000 pounds of Russian uranium sales made pursuant to the matched sales program) to domestic utilities from January 1, 1997 through 2002. Profitability to the Company on these deliveries will depend on the cost of producing uranium at the Company's mining properties, the Company's ability to produce uranium to meet its sales commitments and the spot market price of uranium. LIMITED MARKET; DEPENDENCE ON A FEW CUSTOMERS The Company's primary source of revenue is derived from its sale of uranium to U.S. nuclear power plants. Uranium's only current commercial use is as fuel for nuclear power reactors. Accordingly, the Company's present and potential customers are electric utilities that operate nuclear power plants. The United States is the world's largest producer of nuclear-generated electricity. As of December 1996, there were 109 nuclear units in the U.S. which generated approximately 22.5% of the country's total electricity 23 27 in 1995. Currently, there are no new nuclear power plants under construction in the U.S. As of December 31, 1995, there were 363 nuclear power plants in the Western World, with 32 power plants being constructed in parts of the world other than the U.S. There can be no assurance that the Company can continue to compete successfully for such customers. A significant portion of the Company's contracted sales of uranium from January 1, 1997 through December 31, 2002 are represented by eight long-term contracts with seven different customers, five of which represent 20%, 16%, 15%, 12% and 11% of sales for the year ended December 31, 1996 and four of which represented 23%, 14%, 10% and 10% of sales for the year ended December 31, 1995. The loss of any of these customers or curtailment of purchases by such customers could have a material adverse effect on the Company's financial condition and results of operations. COMPETITION FROM ALTERNATIVE ENERGY SOURCES AND PUBLIC ACCEPTANCE OF NUCLEAR ENERGY Nuclear energy competes with other sources of energy, including oil and gas, coal and hydro-electricity. These alternative energy sources are to some extent interchangeable with nuclear energy, particularly over the longer term. Lower prices of oil, gas, coal and hydro-electricity for an extended period of time, as well as the possibility of developing in the future other low cost sources for energy, have made and could continue to make nuclear power a less attractive fuel source for the generation of electricity, thus resulting in lower demand for uranium. Furthermore, the growth of the uranium and nuclear power industry beyond or maintenance at its current will depend upon continued and increased acceptance of nuclear technology as a means of generating electricity. Because of unique political, technological and environmental factors that affect the nuclear industry, the industry is subject to public opinion risks which have and could continue to have an adverse impact on the demand for nuclear power and increase the regulation of the nuclear power industry. POTENTIAL ADVERSE IMPACT OF LOSS OF KEY PERSONNEL Certain of the Company's employees have significant experience in the uranium ISL mining industry. The number of individuals with ISL experience is small. The continued success of the Company is dependent upon the efforts of these key individuals, and the loss of any one or more of such persons' services could have a material adverse effect on the Company's business operations and prospects. The Company has not entered into employment contracts with or purchased key man life insurance for any of these individuals. MINING RISKS AND INSURANCE The business of uranium mining generally is subject to a number of risks and hazards, including environmental hazards, industrial accidents, flooding, interruptions due to weather conditions and other acts of nature. Such risks could result in damage to or destruction of the Company's wellfield infrastructure and production facilities, as well as to adjacent properties, personal injury, environmental damage and processing and production delays, causing the Company monetary losses and possible legal liability. While the Company maintains, and intends to continue to maintain, liability, property damage and other insurance consistent with industry practice, no assurance can be given that such insurance will continue to be available, be available at economically acceptable premiums or be adequate to cover any resulting liability. 24 28 GLOSSARY OF CERTAIN TERMS claim . . . . . . . . . . . . . A claim is a tract of land, the right to mine of which is held under the federal General Mining Law of 1872 and applicable local laws. concentrates . . . . . . . . . A product from a uranium mining and milling facility, which is commonly referred to as uranium concentrate or U(3) O(8). conversion . . . . . . . . . . A process whereby uranium concentrates are converted into forms suitable for use as fuel in commercial nuclear reactors. cut-off grade . . . . . . . . . Cut-off grade is determined by the following formula parameters: estimates over the relevant period of mining costs, ore treatment costs, general and administrative costs, refining costs, royalty expenses, process and refining recovery rates and uranium prices. gross acres . . . . . . . . . . Total acres under which the Company has mineral rights and can mine for uranium. Indian country . . . . . . . . A term derived from jurisdictional determinations in criminal law enforcement proceedings under 18 U.S.C. Section 1151 and understood to encompass territory situated within Indian reservations, land owned by Indian allottees and land within a dependent Indian community. lixiviant . . . . . . . . . . . When used in connection with uranium in situ leach mining, a solution that is pumped into a permeable uranium ore body to dissolve uranium in order that a uranium solution can be pumped from production wells. net acres . . . . . . . . . . . Actual acres under lease which may differ from gross acres when fractional mineral interests are not leased. ore . . . . . . . . . . . . . . Naturally occurring material from which a mineral or minerals of economic value can be extracted at a reasonable profit. over feeding . . . . . . . . . Operating enrichment plants in a manner that reduces plant operating costs but increases the amount of uranium required to produce a given quantity of enriched uranium. probable reserves . . . . . . . Reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven (measured) reserves, is high enough to assume continuity between points of observation. 25 29 proven reserves . . . . . . . . Reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well- established. reclamation . . . . . . . . . . Reclamation involves the returning of the surface area of the mining and wellfield operating areas to a condition similar to pre-mining. recoverable reserves . . . . . Reserves that are either proven or probable, are physically minable, and can be profitably recovered under conditions specified at the time of the appraisal, based on a positive feasibility study. The calculation of minable reserves is adjusted for potential mining recovery and dilution. reserve . . . . . . . . . . . . That part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. restoration . . . . . . . . . . Restoration involves returning an aquifer to a condition consistent with its pre-mining use and removing evidences of surface disturbance. The restoration of the wellfield can be accomplished by flushing the ore zone with native ground water and/or using reverse osmosis to remove ions to provide clean water for reinjection to flush the ore zone. resources . . . . . . . . . . . A resource is a concentration of naturally occurring minerals in such a form that economic extraction is currently or potentially feasible. roll front . . . . . . . . . . The configuration of sedimentary uranium ore bodies as they appear within the host sand. A term that depicts an elongate uranium ore mass that is "C" shaped. spot price . . . . . . . . . . The price at which uranium may be purchased for delivery within one year. surety obligations . . . . . . A bond, letter of credit, or financial guarantee posted by a party in favor of a beneficiary to ensure the performance of its or another party's obligations, e.g., reclamation bonds, workers' compensation bond, or guarantees of debt instruments. tailings . . . . . . . . . . . Waste material from a mineral processing mill after the metals and minerals of a commercial nature have been extracted; or that portion of the ore which remains after the valuable minerals have been extracted. Trade Tech . . . . . . . . . . A Denver-based publisher of information for the nuclear fuel industry; the successor to the information services business of Nuexco. 26 30 uranium or uranium concentrates . . . . . . . . . U(3)O(8), or triuranium octoxide. U(3)O(8) . . . . . . . . . . . Triuranium octoxide equivalent contained in uranium concentrates, referred to as uranium concentrate. waste . . . . . . . . . . . . . Barren rock in a mine, or mineralized material that is too low in grade to be mined and milled at a profit. 27 31 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: August 20, 1997 URANIUM RESOURCES, INC. By: /s/ Paul K. Willmott ----------------------------------- Paul K. Willmott, President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature Date - --------- ---- /s/ Paul K. Willmott August 20, 1997 - ----------------------------------------------------- Paul K. Willmott, Director, President and Chief Executive Officer /s/ Thomas H. Ehrlich August 20, 1997 - ----------------------------------------------------- Thomas H. Ehrlich, Vice President - Finance and Chief Financial Officer (Principal Financial and Accounting Officer) /s/ Leland O. Erdahl August 20, 1997 - ----------------------------------------------------- Leland O. Erdahl, Director /s/ George R. Ireland August 20, 1997 - ----------------------------------------------------- George R. Ireland, Director /s/ James B. Tompkins August 20, 1997 - ----------------------------------------------------- James B. Tompkins, Director
28 32 EXHIBIT INDEX
Exhibit Number Description - ------ ----------- 3.1 Restated Certificate of Incorporation of the Company, as amended.(2) 3.2* Restated Bylaws of the Company (filed with the Company's Form S-3 Registration No. 333-17875 on December 16, 1996). 4.1 Registration Rights Agreement dated March 25, 1997 between the Company and Santa Fe Pacific Gold Corporation.(2) 10.1* Amended and Restated Directors Stock Option Plan (filed with the Company's Form S-8 Registration No. 333-00349 on January 22, 1996). 10.2* Amended and Restated Employee's Stock Option Plan (filed with the Company's Form S-8 Registration No. 333-00403 on January 22, 1996). 10.3* 1995 Stock Incentive Plan (filed with the Company's Form S-8 Registration No. 333-00405 on January 22, 1996). 10.4* Non-Qualified Stock Option Agreement dated August 16, 1995, between the Company and Leland O. Erdahl (filed with the Company's Annual Report on Form 10-K dated March 27, 1996). 10.5* Non-Qualified Stock Option Agreement dated May 25, 1995, between the Company and George R. Ireland (filed with the Company's Annual Report on Form 10-K dated March 27, 1996). 10.6* Non-Qualified Stock Option Agreement dated May 25, 1995, between the Company and James B. Tompkins (filed with the Company's Annual Report on Form 10-K dated March 27, 1996). 10.7* Stock Option Agreement dated March 6, 1995 between the Company and James P. Congleton, as amended on May 25, 1995 (filed with the Company's Annual Report on Form 10-K dated March 27, 1996). 10.8* Warrant to Purchase Common Stock dated May 25, 1995, between the Company and Grant Bettingen, Inc. (filed with the Company's Annual Report on Form 10-K dated March 27, 1996). 10.9* Non-Qualified Stock Option Agreement dated July 31, 1995, between the Company and Wallace M. Mays (filed with the Company's Form S-8 Registration Statement No. 33-64481 on November 21, 1995). 10.10* Contract dated as of November 17, 1987 and amended as of May 29, 1992 by Hydro Resources, Inc., a wholly-owned subsidiary of Uranium Resources, Inc., and Public Service of New Mexico (filed with the Company's Form 8 - Amendment to Application or Report as filed with the Securities and Exchange Commission on December 9, 1988).(1) 10.11* Contract for the Purchase of Natural Uranium Concentrates (U3O8) dated April 5, 1994 between Uranium Resources, Inc., URI, Inc. and Pacific Gas & Electric Company (filed with the Company's Annual Report on Form 10-K for the year ended December 31, 1994).(1)
E-1 33
Exhibit Number Description - ------ ----------- 10.11* Contract for the Purchase of Natural Uranium Concentrates (U3O2) dated April 5, 1994 between Uranium Resources, Inc., URI, Inc. and Pacific Gas & Electric Company (filed with the Company's Annual Report on Form 10-K for the year ended December 31, 1994). (1) 10.12* Agreement for the Sale of Uranium Concentrates dated as of August 23, 1990 between OES Fuel, Incorporated, Uranium Resources, Inc. and URI, Inc. (filed with Post-Effective Amendment No. 3 to the Company's Form S-1 Registration Statement as filed with the Securities and Exchange Commission on December 7, 1990).(1) 10.13* U3O8 Sales Agreement dated September 30, 1988 between GPU Nuclear Corporation and URI, Inc. guaranteed by Uranium Resources, Inc. (filed with the Company's Form 8 - Amendment to Application or Report as filed with the Securities and Exchange Commission on December 9, 1988).(1) 10.14* Summary of Supplemental Health Care Plan (filed with Amendment No. 1 to the Company's Form S-1 Registration Statement (File No. 33-32754) as filed with the Securities and Exchange Commission on February 20, 1990). 10.15* Note and Warrant Purchase Agreement entered into May 25, 1995 by and among Lindner Investments, Lindner Dividend Fund and the Company (filed with the Company's Current Report on Form 8-K dated May 25, 1995). 10.16 Loan Agreement entered into June 18, 1996 by and between Lindner Dividend Fund and the Company.(2) 10.17* Uranium Concentrates Sales Agreement dated August 28, 1996 by and between the Company and Georgia Power Company (filed with the Company's Quarterly Report on Form 10-Q/A-2 for the quarter ended September 30, 1996).(1) 10.18* Uranium Concentrates Sales Agreement dated August 21, 1996 by and between the Company and Commonwealth Edison Company (filed with the Company's Quarterly Report on Form 10-Q/A-2 for the quarter ended September 30, 1996).(1) 10.19 Agreement of Santa Fe Pacific Gold Corporation as Uranco, Inc. Shareholder with the Company and Guarantee of the Company dated as of March 25, 1997.(1) 10.20 Stock Exchange Agreement and Plan of Reorganization dated as of March 25, 1997.(2) 10.21 License to Explore and Option to Purchase dated March 21, 1997 between Sante Fe Pacific Gold Corporation and Uranco, Inc.(1) 21.1 Subsidiaries of the Company.(2) 23.1 Consent of Arthur Andersen LLP.(2) 27 Financial Data Schedule.(2)
*Incorporated by reference pursuant to Rule 12b-32 under the Securities and Exchange Act of 1934, as amended. (1)Certain provisions have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. (2)Previously filed. E-2 EX-10.19 2 AGREEMENT DATED MARCH 25, 1997 1 EXHIBIT 10.19 AGREEMENT OF SANTA FE PACIFIC GOLD CORPORATION AS URANCO INC. SHAREHOLDER WITH URANIUM RESOURCES, INC. AND GUARANTEE OF URANIUM RESOURCES, INC. This Agreement is made and entered into effective as of March 25, 1997 between Santa Fe Pacific Gold Corporation, a Delaware corporation ("SFPG"), and Uranium Resources, Inc., a Delaware corporation ("URI"). RECITALS: 1. SFPG owns all of the issued and outstanding shares of capital stock (the "Uranco Stock") of Uranco Inc., a Delaware corporation ("Uranco"). 2. SFPG has heretofore conveyed by deed to Uranco certain mineral interests as specifically set forth herein. This Agreement is the Agreement referred to in those deeds as setting forth the exclusive remedies of the grantee, its successors and assigns, related to the property covered by the deeds. 3. SFPG has heretofore granted an exploration license to Uranco Inc. which imposes certain obligations upon Uranco Inc. 4. Simultaneously herewith, Uranco has entered into a Stock Exchange Agreement and Plan of Reorganization (the "Stock Exchange Agreement") with URI pursuant to which SFPG is to exchange the Uranco Stock for 1,200,000 shares of the common stock, $.001 par value per share, of URI (hereinafter the "URI Shares") (the "Exchange"). 5. As a condition to the Exchange, URI is willing to guarantee the obligations of Uranco under the exploration license provided SFPG agrees to compensate it in the event that the title of Uranco to uranium in place in certain properties, the uranium or mineral interests of which were obtained by Uranco from SFPG, should fail. 6. The parties desire to enter into this Agreement to consummate the Exchange and provide the guarantee by URI of Uranco's obligations under the exploration license. AGREEMENT: NOW, THEREFORE, in consideration of the premises and the mutual promises contained herein, the parties hereto agree as follows: SECTION 1. SFPG TRANSFER OF URANCO STOCK AND INVESTMENT REPRESENTATION. SFPG hereby conveys, transfers and assigns all its right, title and interest in and to the Uranco Stock to URI in consideration of the issuance by URI of the URI Shares, receipt of which is hereby acknowledged by SFPG, in accordance with the terms and conditions set forth in the Stock Exchange Agreement and Plan of Reorganization dated contemporaneously herewith 2 by and between Uranco and URI. SFPG has the knowledge and experience in business and financial matters to meaningfully evaluate the merits and risks of the purchase and acquisition of the URI Shares in exchange and consideration for the Uranco Stock as contemplated hereby. SFPG acknowledges that the URI Shares have been issued by URI without registration or qualification or other filings being made under the Federal Securities Act of 1933, as amended, or the securities or "Blue Sky" laws of any state, in reliance upon specific exemptions therefrom, and in furtherance thereof SFPG represents that the URI Shares received by it have been taken for its own account for investment, with no present intention of a distribution or disposition thereof to others. SFPG agrees that the certificates representing the URI Shares issued to it shall be subject to a stop-transfer order and shall bear a restrictive legend, in substantially the following form: THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), ARE "RESTRICTED SECURITIES," AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR IN A TRANSACTION WHICH, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, IS NOT REQUIRED TO BE REGISTERED UNDER THE ACT. SECTION 2. URI GUARANTEE OF EXPLORATION LICENSE OBLIGATIONS. URI guarantees the performance by Uranco of its obligations under the License to Explore and Option to Purchase granted as of March 21, 1997 from SFPG (the "License"). -2- 3 SECTION 3. [ * ] - ------------------- * Confidential portion consisting of 2 2/3 pages has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. -3- 4 SECTION 4. SFPG REPRESENTATIONS AND WARRANTIES. SFPG represents and warrants to URI that: (a) SFPG has heretofore conveyed to Uranco (i) all of the interest reserved by Santa Fe Pacific Railroad Company in the instruments set forth in the Deeds attached hereto at Schedule 3 but excluding coal in place, including development or mineral rights related thereto (the "Mineral Interests") and further excluding the interests described as excluded in the Deeds but subject to the grants and interests stated in the Deeds; and (ii) title to all geological, geophysical and geochemical data and interpretive data, (except data relating to coal, including the development or mining of coal) (the "Technical Data") relating to the Mineral Interests being conveyed by the Deeds; and has delivered to Uranco all Technical Data presently known by Senior Management of SFPG to be in its possession and will deliver copies of all geological, geophysical and geochemical data and interpretive data for the property included in the License within a reasonable time after a written request from Uranco and/or URI. (b) The Board of Directors of SFPG has approved the transactions set forth in this Agreement and SFPG has the requisite power and authority to enter into this Agreement and to carry out its obligations hereunder. The execution and delivery by SFPG of this Agreement, the performance by SFPG of its obligations hereunder and the consummation by SFPG of the transactions contemplated hereby have, to the extent necessary, been duly authorized by the appropriate corporate action, and no other proceeding on the part of SFPG is necessary for the execution and delivery thereof and the performance of its obligations hereunder. This Agreement is a legal, valid and binding obligation of SFPG, enforceable in accordance with its terms except to the extent enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws of general applicability relating to or affecting the enforcement of creditors' rights and by the effect of general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law). (c) All consents and approvals required for SFPG to enter into this agreement and to carry out the transaction as set forth herein have been obtained. Neither the execution, delivery or performance of this Agreement by SFPG nor the consummation by SFPG of the transactions contemplated hereby will (i) conflict with or result in any breach of any provisions of the Articles of Incorporation or By-laws of SFPG or any of its Subsidiaries, (ii) require any filing with, or permit, authorization, consent or approval of, any court, arbitral tribunal, administrative agency or commission; (iii) require the consent or approval of any person; (iv) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration) -4- 5 under, or result in the creation of any lien or other encumbrance on any of the Mineral Interests pursuant to, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, lease, license, contract, agreement or other instrument or obligation to which SFPG is a party or by which SFPG or its properties or assets may be bound; or (v) violate any order, writ, injunction, decree, statute, rule or regulation applicable to SFPG or by which any of its property or assets is bound. (d) Except as set forth in Schedule 4(d), there is no Proceeding (as defined below) which has been served on SFPG or, to the Actual Knowledge of Senior Management of SFPG, threatened against or involving SFPG involving the Mineral Interests before any court, arbitrator or administrative or governmental body. There are no Proceedings pending or, to the Actual Knowledge of Senior Management of SFPG, threatened against SFPG arising out of or in any way related to this Agreement or any of the transactions contemplated hereby. As used in this Agreement, "Proceeding" means any action, suit, hearing, arbitration or governmental investigation (whether public or private). (e) Senior Management of SFPG has no Actual Knowledge of any failure on the part of Uranco Inc. or its predecessors in title to the mineral interests owned by Uranco Inc. to comply in all material respects with the laws and regulations of federal, state or local governments applicable to such mineral interests, including environmental laws. As used in this section, "Senior Management" includes Chairman, President and Chief Executive Officer Patrick M. James, Executive Vice President and Chief Operating Officer Leroy E. Wilkes, Senior Vice President - Corporate Development Bruce D. Hansen, Vice President - Environmental Quality Tim J. Leftwich, and General Counsel and Secretary Wayne Jarke. As used in this section, "Actual Knowledge" means any personal knowledge, as of the date hereof, without making inquiry of any other person and without review of any records of SFPG or otherwise; and (f) The revenues generated by the Mineral Interests conveyed by SFPG to Uranco on or before the date of this Agreement did not exceed $5,000,000 over the three-year period preceding the date of this Agreement. SECTION 5. URI REPRESENTATIONS AND WARRANTIES. URI represents and warrants to SFPG that: (a) The Board of Directors of URI has approved the transactions set forth in this Agreement and URI has the requisite power and authority to enter into this Agreement and to carry out its obligations hereunder; (b) All consents and approvals required for URI to enter into this agreement and to carry out the transaction as set forth herein have been obtained; -5- 6 (c) Its representations and warranties contained in Article 2, Sections, 2. 1 through 2.9 of the Stock Exchange Agreement and Plan of Reorganization dated effective as of March 25, 1997, by and between Uranco Inc. and URI are true and correct; (d) The URI Shares are fully paid and non-assessable and not subject to preemptive rights; SECTION 6. INDEMNIFICATION BY SFPG AND URI. (a) SFPG agrees to indemnify and hold URI and Uranco harmless against and in respect of (1) any and all damages resulting from any misrepresentation, breach of any representation or warranty or nonfulfillment of any agreement on the part of SFPG under this Agreement or from any misrepresentations in or omission from any certificate furnished by SFPG hereunder; and (2) any and all actions, suits, proceedings, demands, assessments, judgments, costs and other expenses (including reasonable legal fees) incident to the foregoing. (b) URI agrees to indemnify and hold SFPG harmless against and in respect of (1) any and all damages resulting from any misrepresentation, breach of any representation or warranty or nonfulfillment of any agreement on the part of URI under this Agreement or from any misrepresentations in or omission from any certificate furnished by URI hereunder; and (2) any and all actions, suits, proceedings, demands, assessments, judgments, costs and other expenses (including reasonable legal fees) incident to the foregoing. (c) Notice of any claims desired to be asserted by a party seeking indemnification ("Indemnitee") against the other party ("Indemnitor") with respect to any matter for which Indemnitee claims indemnification pursuant to this Section 6 shall be served by Indemnitee upon the Indemnitor promptly. Any such notice shall set forth in reasonable detail the basis for the claim asserted. Within 20 days following its receipt of such notice, the Indemnitor shall send written notice to the Indemnitee stating: (1) Whether in its view the claim is one for which the Indemnitee is entitled to indemnification (a "Covered Claim"), and (2) If it acknowledges that the claim is a Covered Claim whether they choose to dispute its validity by participating in any defense of any action brought by a third party with respect to such claim. If the Indemnitor fails to furnish such notice within such 20-day period, such failure shall constitute its agreement that the claim is a "Covered Claim" and its election not to participate in the defense of any action on the Claim. If Indemnitor fails to furnish such notice or states in such notification that the claim is not a Covered Claim or that it declines to dispute the validity of said Claim, the Indemnitee may defend or settle the claim without the participation of Indemnitor, reserving any rights it might have with respect to indemnification. If Indemnitor acknowledges that the claim -6- 7 is a Covered Claim, then Indemnitor may participate, at its own cost and expense, in any discussions and proceedings relating thereto, provided that it has so notified the Indemnitee of its intention to do so in such notice. If Indemnitor does participate in any discussions and proceedings, Indemnitor shall pay its own costs and expenses in connection therewith. Any settlement or compromise made by the Indemnitee in accordance with this Section 5 without the participation of the Indemnitor or any final judgment or decree entered in any claim, suit or action defended only by the Indemnitee alone shall be deemed to have been consented to by, and shall be obligatory and binding upon, the Indemnitor as fully as if the Indemnitor alone had assumed the defense thereof and a final judgment or decree had been entered in such suit or action, or with regard to such claim by a court of competent jurisdiction for the amount of such settlement or compromise, satisfaction, judgment or decree, subject only to the right of the Indemnitor to dispute that any such claim is a Covered Claim if, but only if, the Indemnitor has served the proper notice within the proper time asserting that the claim is not a Covered Claim. (d) To the extent, if at all, that a court of competent jurisdiction determines that NMSA 1978, Section 56-7-2 (Repl. Pamp. 1996) applies to any provision of this Agreement, then any and all provisions of indemnification shall not indemnify any indemnitee against loss or damages, for: (1) death of bodily injury to persons; or (2) injury to property; or (3) any other loss, damage or expense arising under (i) or (ii) or both; or (4) any combination of these, arising from the sole or concurrent negligence of the indemnitee or the agents or employees of the indemnitee or any independent contractor who is directly responsible to the indemnitee, or from any accident which occurs in operations carried on at the direction or under the supervision of the indemnitee or an employee or representative of the indemnitee or in accordance with methods and means specified by the indemnitee or employees or representations of the indemnitee. (e) To the extent, if at all, that a court of competent jurisdiction determines that NMSA 1978, Section 56-7-1 applies to the indemnification set forth in this Agreement, the indemnification does not apply to liability, claims, damages, losses or expenses, including attorney fees arising out of: (1) the preparation or approval of maps, drawings, opinions, reports, surveys, change orders, designs or specifications by the indemnitee, or the agents or employees of the indemnitee; or -7- 8 (2) the giving of or failure to give directions or instructions by the indemnitee, or the agents or employees of the indemnitee, where such giving or failure to give directions or instructions is the primary cause of bodily injury to persons or damage to property. SECTION 7. COVENANTS OF URI. URI for the two year period commencing on the date of the Exchange or until SFPG disposes of all of the URI Shares acquired in the Exchange, whichever is earlier, will cause Uranco to actively engage in the conduct of the trade or business being conducted by Uranco on the date hereof and will not cause or allow Uranco to take any action, or to fail to take any action, which would, or could with the passage of time, adversely affect the qualification of the Exchange under Section 368(a)(1)(B) of the Internal Revenue Code, including but not limited to the following: (a) Merge or consolidate Uranco with or into any other corporation; (b) Liquidate or partially liquidate Uranco; (c) Cause Uranco to sell or transfer substantially all its assets in a single transaction or series of related transactions; (d) Cause Uranco to redeem or otherwise repurchase any of its capital stock; (e) Cause Uranco to issue additional shares of its stock (except in connection with an issuance pursuant to employee benefit or compensation plans of Uranco; or (f) Cease to engage in the active conduct of the trade or business engaged in by Uranco on the date hereof; unless URI first obtains, and permits to SFPG to review, an opinion of Baker & Hostetler LLP or other law firm of similar repute, or a ruling from the Internal Revenue Service that such transaction will not adversely affect the qualification of the Exchange under Section 368(a)(1)(B) of the Internal Revenue Code. The foregoing shall apply regardless of whether or not the Exchange actually qualifies under Section 368(a)(1)(B) of the Internal Revenue Code. SECTION 8. LEGAL OPINIONS. The following legal opinions have been exchanged by the parties: (a) URI has received the opinion of Modrall, Sperling, Roehl, Harris & Sisk, P.A., counsel to SFPG, dated the Closing Date, substantially to the effect that: -8- 9 (i) SFPG is a corporation, duly organized, validly existing and in good standing under the laws of the State of Delaware; (ii) SFPG has full corporate power and authority to execute, deliver and perform this Agreement and this Agreement has been duly authorized, executed and delivered by SFPG and (assuming due and valid authorization, execution and delivery by URI) constitutes the legal, valid and binding agreement of SFPG, enforceable in accordance with its terms except to the extent enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws of general applicability relating to or affecting the enforcement of creditors' rights and by the effect of general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law). (iii) The execution and performance by SFPG of this Agreement will not violate the Certificate of Incorporation or By-Laws of SFPG, respectively, and, to the knowledge of such counsel, will not violate, result in a breach of or constitute a default under any material lease, mortgage, contract, agreement, instrument, law, rule, regulation, judgment, order or decree to which SFPG is a party or by which they or any of their properties or assets may be bound. (iv) After inquiry of the officers of SFPG, such counsel has no knowledge of any consent, approval, authorization or order of any court or governmental agency or body which has not been obtained but which is required on behalf of SFPG for the consummation of the transactions contemplated by this Agreement. (v) After inquiry of the officers of SFPG, such counsel has no knowledge of any actions, suits or proceedings, pending or threatened against or affecting SFPG by any governmental entity which seek to restrain, prohibit or invalidate the transactions contemplated by this Agreement. (b) SFPG has received the opinion of Baker & Hostetler LLP, counsel to URI, dated the Closing Date, substantially to the effect that: (i) The incorporation, existence and good standing of URI are as stated in this Agreement. (ii) URI has full corporate power and authority to execute, deliver and perform this Agreement and the Stock Exchange Agreement and this Agreement and the Stock Exchange Agreement have been duly authorized, executed and delivered by URI and (assuming due and valid authorization, execution and delivery by Uranco) constitute the legal, valid and binding agreements of URI, enforceable in accordance with their terms except to the extent enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent -9- 10 transfer or other similar laws of general applicability relating to or affecting the enforcement of creditors' rights and by the effect of general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law). (iii) The execution and performance by URI of this Agreement and the Stock Exchange Agreement will not violate the Certificate of Incorporation or ByLaws of URI, respectively, and, to the knowledge of such counsel, will not violate, result in a breach of or constitute a default under any material lease, mortgage, contract, agreement, instrument, law, rule, regulation, judgment, order or decree to which URI is a party or by which it or any of its properties or assets may be bound. (iv) To the knowledge of such counsel, no consent, approval, authorization or order of any court or governmental agency or body which has not been obtained is required on behalf of URI for the consummation of the transactions contemplated by this Agreement or the Stock Exchange Agreement. (v) To the knowledge of such counsel, there are no actions, suits or proceedings, pending or threatened against or affecting URI by any governmental entity which seek to restrain, prohibit or invalidate the transactions contemplated by this Agreement or the Stock Exchange Agreement. (vi) The Shares have been duly authorized and are validly issued and outstanding and are fully paid and nonassessable. (vii) The shares of URI Common Stock issued in the Exchange have been listed on the Nasdaq National Market subject to official notice of issuance. SECTION 9. PUBLIC ANNOUNCEMENTS. URI and SFPG will consult with each other before issuing any press release or otherwise making any public statements with respect to this Agreement or the transactions contemplated hereby and will not issue any such press release or make any such public statement prior to such consultation. Notwithstanding the foregoing, SFPG and URI shall not be prohibited from issuing any press release or making any public statement with respect to this Agreement or the transactions contemplated hereby as may be required under applicable law, but in any such event, SFPG or URI, as the case may be, shall notify the other party prior to taking such action. SECTION 10. NASDAQ NATIONAL MARKET. URI shall use its reasonable best efforts to list on the Nasdaq National Market, upon official notice of issuance, the shares of URI Common Stock to be issued to SFPG in connection with the Exchange. -10- 11 SECTION 11. FEES AND EXPENSES. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses, except as otherwise specifically set forth in this Agreement or in the Registration Rights Agreement. SECTION 12. REASONABLE EFFORTS. Upon the terms and subject to the conditions set forth in this Agreement, each of the parties agrees to use all reasonable efforts after the Closing, to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Exchange and the other transactions contemplated by this Agreement and the prompt satisfaction of the conditions hereto, including (a) the obtaining of all necessary actions or non-actions, waivers, consents and approvals from Governmental Entities and the making of all necessary registrations and filings and the taking of all reasonable steps as may be necessary to obtain an approval or waiver from, or to avoid an action or proceeding by, any Governmental Entity, (b) the obtaining of all necessary consents, approvals or waivers from third parties, and (c) the execution and delivery of any additional instruments necessary to consummate the transactions contemplated by this Agreement. SECTION 13. NOTICES. All notices and other communications hereunder shall be in writing and shall be deemed given on the date of delivery, if delivered personally or faxed during normal business hours of the recipient, or three days after deposit in the U.S. Mail, postage prepaid, if mailed by registered or certified mail (return receipt requested) as follows: (a) if to SFPG, to: Santa Fe Pacific Gold Corporation 6200 Uptown Blvd. NE Albuquerque, New Mexico 87110 Attention: Wayne Jarke, General Counsel Fax No.: (505) 880-5437 with a copy to: Modrall Law Firm 500 Fourth Street NW, Suite 1000 Albuquerque, New Mexico 87102 Attention: John R. Cooney Fax No.: (505) 848-1889 -11- 12 (b) If to URI, to: Uranium Resources, Inc. 12750 Merit Drive, Suite 1020 Box 12 Dallas, Texas 75251 Attention: President Fax No.: (214) 387-7779 with a copy to: Baker & Hostetler LLP 303 East 17th Avenue, Suite 1100 Denver, Colorado 80203 Attention: Alfred C. Chidester Fax No.: (303) 861-7805 SFPG and URI may hereafter notify the other of changes in the information set forth in this section, which changes shall be effective if given in compliance with this section. SECTION 14. ASSIGNABILITY AND PARTIES IN INTEREST. This Agreement shall inure to the benefit of and be binding upon URI and SFPG and their respective successors and assigns. The assigning party shall give notice of such assignment within 20 days after the effective date of assignment. Any assignment shall be of the entire Agreement. SECTION 15. CHOICE OF LAW, CHOICE OF FORUM AND ATTORNEYS' FEES. This Agreement shall be governed by and construed in accordance with the internal law of the State of New Mexico without giving effect to conflicts of law principles thereof. SFPG and URI agree that all litigation arising out of or related to this Agreement for the performance or non-performance of actions contemplated by this Agreement shall be brought in a federal or state court of competent jurisdiction within the state of New Mexico. SFPG and URI consent to jurisdiction of such a court. In any action or proceeding brought to enforce any provision of this Agreement, or where any provision hereof is validly asserted as a defense, the prevailing party shall be entitled to recover reasonable attorneys' fees in addition to any other available remedy. SECTION 16. COUNTERPARTS. This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which shall constitute but one and the same instrument. -12- 13 SECTION 17. COMPLETE AGREEMENT. This agreement is entered into by the parties in connection with a transaction involving the transfer of common stock of Uranco owned by SFPG to URI in exchange for common stock of URI, the grant by URI to SFPG of registration rights with respect to the stock of URI issued to SFPG, the grant by SFPG to Uranco of a license to explore and an option to purchase in exchange for certain commitments by Uranco, and the guarantee by URI of certain obligations of Uranco to SFPG. In order to effect this transaction, certain of the parties have contemporaneously entered into certain agreements, specifically, the Stock Exchange Agreement and Plan of Reorganization (URI and Uranco); this Agreement; the License to Explore and Option to Purchase (SFPG and Uranco); and the Registration Rights Agreement (SFPG and URI). All of such agreements, together with all exhibits or schedules thereto and documents delivered pursuant thereto, contain the entire agreement among the parties with respect to the contemplated transaction, and shall supersede all previous writings and all previous or contemporaneous oral negotiations, commitments, and understandings. SECTION 18. CONFIDENTIALITY AGREEMENT. The Parties have heretofore entered into a Confidentiality Agreement dated August 26, 1996, which is incorporated herein by reference and which shall continue to govern the conduct of the Parties. SECTION 19. INTERPRETATION. The headings in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. SECTION 20. SEVERABILITY. Any provision of this Agreement which is invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction be ineffective as to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions hereof in such jurisdiction or rendering that or any other provision of this Agreement invalid, illegal or unenforceable in any other jurisdiction. -13- 14 SANTA FE PACIFIC GOLD CORPORATION Date: March 25, 1997 By: /s/ Bruce D. Hansen ---------------------------------- Name: Bruce D. Hansen Title: Senior Vice-President- Corporate Development URANIUM RESOURCES, INC. Date: March 25, 1997 By: /s/ Paul K. Willmott ---------------------------------- Name: Paul K. Willmott Title: President -14- 15 Schedule 3 3.1 Category I, McKinley County 3.2 Category I Claims, McKinley County 3.3 Category I, Sandoval County 3.4 Category II, McKinley County 3.5 Category II, Cibola County 3.6 Category II Royalty, Cibola County 3.7 Category II, Sandoval County 3.8 Category II, Bernalillo County -15- 16 EXHIBIT 10.19 Schedule 4(d) Navajo Nation land and jurisdictional claims: Since 1982, the Navajo Nation has asserted title and jurisdictional claims over lands in the checkerboard area in northwestern New Mexico outside the boundaries of the recognized Navajo Reservation, including portions of McKinley County, where some of the mineral interests subject to this Agreement are located. While the federal courts have rejected claims to title to lands, see Navajo Tribe v. New Mexico, 809 F.2d 1455 (10th Cir. 1987), the courts have acknowledged the potential for the exercise of off-reservation civil jurisdiction over non-Indians by the Navajo Nation. See Pittsburg & Midway Coal Mining Co. v. Watchman, 52 F.3d 1531 (10th Cir. 1995); Texaco, Inc. v. Zah, 5 F.3d 1374 (10th Cir. 1993). In view of these assertions, there is the potential that the Navajo Nation will assert title to, or jurisdiction over, the mineral interests subject to this Agreement located in McKinley County, New Mexico. While title claims were rejected, the decision was not on the merits, but was founded on the fact that the United States was immune from suit, that the suit should have been brought under the Indian Claims Commission Act of 1946, and the suit could not proceed against the remaining defendants, including Santa Fe Mining, Inc. , because the United States was an indispensable party. Accordingly, the decision could be read to have barred the claim or remedy, but not the underlying rights to title to the lands. As reflected in Pittsburg & Midway, the Navajo Nation aggressively asserts civil jurisdiction, including taxation and regulatory authority, to off-reservation areas within the territorial confines of the "Navajo Nation" as the Nation defines that term in 7 N.N.C. Section 254. While Santa Fe Pacific Gold Corporation and Uranco Inc. have not attempted to determine whether the mineral interests subject to this agreement would fall within the area over which the Navajo Nation would assert title or jurisdiction, neither company are presently aware of any Navajo Nation claim that would include the mineral interests subject to this Agreement that are located in Bernalillo, Cibola, or Sandoval Counties. 17 EXHIBIT 10.19 AFTER RECORDING RETURN TO: Margaret Lewis Meister Modrall, Sperling, Roehl, Harris & Sisk, P.A. P. O. Box 2168 Albuquerque, New Mexico 87103 DEED Category I McKinley STATE OF NEW MEXICO ) COUNTY OF McKINLEY ) SANTA FE PACIFIC GOLD CORPORATION, successor in interest by name change to Santa Fe Pacific Minerals Corporation, which is successor by merger to Cerrillos Land Company ("Grantor") whose address is 6200 Uptown Boulevard N.E., Suite 400, Albuquerque, New Mexico 87110, for consideration paid, GRANTS to URANCO, INC. ("Grantee"), whose address is 6200 Uptown Boulevard N.E., Suite 400, Albuquerque, New Mexico 87110, all of the interest reserved by Santa Fe Pacific Railroad Company in the instruments described in Exhibit A hereto but only so far as such reservations and exceptions pertain to and cover the real estate in McKinley County, New Mexico more particularly described in Exhibit B hereto, less and except the interests described in Exhibit C hereto and subject to the grants and interests set forth in the instruments set forth in Exhibit D hereto, all of which exhibits are incorporated herein by reference. LIMITATION OF REMEDY. Any warranty of title by the Grantor and any remedies of the Grantee or its successors and assigns related to the property covered by this Deed shall be limited to the remedies set forth in that certain AGREEMENT OF SANTA FE PACIFIC GOLD CORPORATION, AS URANCO, INC. SHAREHOLDER, AND URANIUM RESOURCES, INC., dated effective as of March 25, 1997, (a copy of which is maintained in the offices of Grantor and Grantee and attorneys for Grantor, Modrall, Sperling, Roehl, Harris & Sisk, P.A., 500 Fourth St. N.W., Albuquerque, New Mexico 87102) and shall not include any other rights, damages or claims than those specifically set forth therein. Any rights asserted under the terms of such agreement must be brought within the time period set forth in such agreement. 18 CONVEYANCE DOES NOT INCLUDE COAL IN PLACE, INCLUDING DEVELOPMENT OR MINING RIGHTS. This conveyance does not and is not intended to affect or purport to affect, in any way, coal in place, including development or mining rights related to coal, in any of the property of Grantor or any of its subsidiaries or affiliates including, but not limited to, the San Juan Basin Coal Holding Company, and coal in place and all such rights are EXCEPTED herefrom and RESERVED to Grantor. WITNESS its hand and seal this 21 day of March, 1997. SANTA FE PACIFIC GOLD CORPORATION By:/s/ BRUCE D. HANSEN ------------------------------------ (Seal) Bruce D. Hansen Senior Vice President-Corporate Development STATE OF NEW MEXICO COUNTY OF BERNALILLO This instrument was acknowledged before me on March 21, 1997, by Bruce D. Hansen as Senior Vice President-Corporate Development of Santa Fe Pacific Gold Corporation. (Seal) /s/ JACQUELINE WALSTON ---------------------------------- Jacqueline Walston Notary Public My commission expires: January 28, 1998 ----------------- 19 EXHIBIT A CATEGORY I DEED, MCKINLEY COUNTY Deeds Reserving Mineral Interests Warranty Deed dated October 15, 1945 from Santa Fe Pacific Railroad Company to Fernandez Company, recorded in Book 12 DR, Page 536, in the official records of McKinley County, New Mexico. Warranty Deed dated March 4, 1952 from Santa Fe Pacific Railroad Company to Hazel W. Prewitt, recorded in Book 11 Misc., Page 370, in the official records of McKinley County, New Mexico. Warranty Deed dated May 15, 1945 from Santa Fe Pacific Railroad Company to Harold F. Prewitt and Hazel W. Prewitt, recorded in Book 12 of Deeds, Page 482, in the official records of McKinley County, New Mexico. Warranty Deed dated April 16, 1951 from Santa Fe Pacific Railroad Company to Nabor Marquez. Warranty Deed dated February 6, 1947, from Santa Fe Pacific Railroad Company to Nabor Marquez, recorded in Book 13 of Deeds, Page 165, in the official records of McKinley County, New Mexico. Warranty Deed dated January 16, 1948, from Santa Fe Pacific Railroad Company to W. A. Berryhill, recorded in Book 13 of Deeds, Page 298, in the official records of McKinley County, New Mexico. Warranty Deed dated August 16, 1950, from Santa Fe Pacific Railroad Company to Rose C. Eaves, recorded in Book 10 of W. D., Page 423, in the official records of McKinley County, New Mexico. Warranty Deed dated March 15, 1947, from Santa Fe Pacific Railroad Company to Hazel W. Prewitt, an individual, and Hazel W. Prewitt, Guardian Estate of Joan M. Prewitt, a minor, recorded in Book 13 of Deeds, Page 240, in the official records of McKinley County, New Mexico. Warranty Deed dated May 14, 1929, from Santa Fe Pacific Railroad Company to the United States of America, In Trust for the Navajo Tribe, recorded in Book 7 of Deeds, Page 243, in the official records of McKinley County, New Mexico. Warranty Deed dated November 1, 1948, from Santa Fe Pacific Railroad Company to W. F. Pitt and Susie Bell Pitt, husband and wife, recorded in Book 9 of W. D., Page 53, in the official records of McKinley County, New Mexico. Warranty Deed dated December 1, 1944, from Santa Fe Pacific Railroad to Harold P. Prewitt and Hazel W. Prewitt, recorded in Book 12 of Deeds, Page 440, in the official records of McKinley County, New Mexico. 20 EXHIBIT B CATEGORY I DEED, MCKINLEY COUNTY CONVEYANCE OF ALL MINERALS EXCEPT COAL TO URANCO (Revised 03/10/97) MERIDIAN: NMPM ACRES Township 13 North, Range 8 West ------------------------------- Section 13 Lots 1-4, W/2 NE/4, W/2 SE4, W/2 645.36 Section 15 All 640.00 Section 17 All 640.00 Township 13 North, Range 9 West ------------------------------- Section 1 Lots 1-4, S/2 N/2, S/2 640.80 Section 3 Lots 1-4, S/2 N/2, S/2 640.24 Section 5 Lots 1-4, S/2 N/2, S/2 640.00 Section 7 Lots 1-4, E/2 W/2, E/2 648.08 Section 9 All, except that portion of E/2 and 379.92 East 360 ft. of E/2 W/2 described in Quitclaim Deed to USA dated 3/3/87 Section 11 All 640.00 Section 13 All 640.00 Section 15 All 640.00 Section 17 All 640.00 Township 13 North, Range 10 West -------------------------------- Section 1 Lots 1-4, S/2 N/2, S/2 638.80 Section 3 Lots 1-4, S/2 N/2, S/2 638.16 Section 11 All 640.00 Section 13 All 640.00
B-1 21 Township 14 North, Range 10 West -------------------------------- Section 1 All, except 29.98 ac. in Baca Rail Spur 610.66 Section 3 All 640.88 Section 5 All 640.40 Section 7 All 651.04 Section 9 All 640.00 Section 13 All 640.00 Section 15 All, except 4.484 ac. for gas pipeline 607.54 R/W and 27.973 ac. for Baca Rail Spur Section 17 All 640.00 Section 21 All, except 33.09 ac. in Baca Rail Spur 606.91 Section 23 All 640.00 Section 25 All 640.00 Section 27 All 640.00 Section 29 All, except 32.24 ac. in Baca Rail Spur 607.76 Section 33 All 640.00 Section 35 All 640.00 Township 15 North, Range 10 West -------------------------------- Section 5 All 641.92 Section 7 All 667.36 Section 9 All 640.00 Section 11 All, except 30.73 ac. in Baca Rail Spur 609.27 Section 15 All, except 27.85 ac. in Baca Rail Spur 612.15 Section 17 All 640.00 Section 19 All 665.04 Section 21 All 640.00
B-2 22 Section 27 All 640.00 Section 29 All 640.00 Township 16 North, Range 10 West -------------------------------- Section 7 All 672.48 Section 19 All 669.80 Township 19 North, Range 11 West -------------------------------- Section 10 All 640.00 Section 11 All 640.00 Section 15 All 640.00 Section 17 All 640.00 Section 18 All 637.60 Section 19 All 638.44 Section 20 All 640.00 Section 29 N/2, SW/4, N/2 SE/4, SE/4 SE/4 600.00 Section 30 All 639.20 Section 31 All 638.36 Township 17 North, Range 14 West -------------------------------- Section 13 Lots 1-4 7.32 Section 25 Lots 1-4 11.58 Township 16 North, Range 16 West -------------------------------- Section 7 Lot 4, S/2 and NE/4 of Lot 3, NE/4, 481.14 SE/4, E/2 SW/4, NE/4 SE/4 NW/4, S/2 SE/4 NW/4 Section 7 Lots 1, 2, NW/4 of Lot 3, NE/4 NW/4, 114.78 NW/4 SE/4 NW/4
B-3 23 Section 9 N/2 NW/4, N/2 S/2 NW/4, S/2 SW/4 NW/4, 220.00 SW/4 SE/4 NW/4, N/2 NW/4 SW/4, SW/4 NW/4 SW/4, NW/4 NE/4 SW/4, N/2 NW/4 NE/4, SW/4 NW/4 NE/4 Section 9 SE/4, S/2 NE/4, NE/4 NE/4, SE/4 NW/4 420.00 NE/4, S/2 SW/4, E/2 NE/4 SW/4, SW/4 NE/4 SW/4, SE/4 NW/4 SW/4, SE/4 SE/4 NW/4 Section 17 S/2, N/2 NW,/4, SW/4 NW/4 440.00 Section 17 NE/4, SE/4 NW/4 200.00 Township 16 North, Range 17 West -------------------------------- Section 13 All 640.00 --------- County Total 36,102.99
B-4 24 COMPANY: GOLD STATE: NM COUNTY: SANDOVAL Township 12 North, Range 3 West ------------------------------- Section 19 NW/4, SE/4 320.00 ------ County Total 320.00 ------ GRAND TOTAL: 36,422.99 =========
B-5 25 EXHIBIT C CATEGORY I DEED, MCKINLEY COUNTY Items Not Included in Grant Any interest in or under the property in Section 1 and 15, T.14N., R.10W., as described in the Special Warranty Deed dated November 23, 1983, between Betty Lou Wilcoxson Harris and Phil Harris to SF Coal Corporation, recorded in Book 35 of Deeds, Page 590, in the official records of McKinley County, New Mexico. Any interest in or under the property in Sections 21 and 29, T.14N., R.10W., as described in the Special Warranty Deed dated November 9, 1983, between Leroy Navarre and Billie Ione Navarre and SF Coal Corporation recorded in Book 35 of Deeds, Page 585, in the official records of McKinley County, New Mexico. Any interest in or under the property in Sections 11 and 15, T.15N., R.10W., as described in the Quitclaim Deed dated November 23, 1983, between R. M. Albers and Imogene Albers and SF Coal Corporation, recorded in Book 35, Page 598, in the official records of McKinley County, New Mexico. Any and all right, title and interest retained by Grantor in that certain Surface Use Agreement by and between Santa Fe Pacific Railroad Company and R.M. Albers, et al., dated June 3, 1980, a memorandum of which was recorded at Book 78, Page 252-253 of the official records of McKinley, County, New Mexico. Any and all right, title and interest retained by Grantor in that certain Agreement by and between Santa Fe Pacific Railroad Company and Fernandez Company, Ltd., dated July 31, 1979, a memorandum of which was recorded at Book 76, Page 938 of the official records of McKinley County, New Mexico, which agreement was partially released on April 2, 1982, which release is recorded at Book 52, Pages 961 -962 of the official records of McKinley County New Mexico, and which Agreement was amended on March 2, 1987, a memorandum of which was recorded in Book 90 Misc., Pages 639-642 of the official records of McKinley County, New Mexico. 26 EXHIBIT D CATEGORY I, MCKINLEY COUNTY Items to which Deed is Subject Stipulation in the District Court of McKinley County, New Mexico, case entitled Santa Fe Pacific Railroad Company, a corporation, Plaintiff v. Duane Berryhill and Nelda Berryhill, his wife, et. al., No. 8287, filed for record on July 25, 1953 at 9:30 a.m., recorded in Vol. 93, Folio 225, Valencia County records. Lease Option Agreement dated October 8, 1987, between Cerrillos Land Company and Santa Fe Energy Company, as amended on July 1, 1988, and as amended on December 1, 1989, a memorandum of which is recorded in Book 2, Page 1630, in the official records of McKinley County, New Mexico. Uranium Mining Lease and Agreement dated March 21, 1957, between Santa Fe Pacific Railroad Company and Quinta Corporation, as it affects the NE/4 and SE/4 NW/4 of Section 17, T.16N., R.16W., McKinley County, New Mexico. Surface Owners Agreement dated February 17, 1959 between Santa Fe Pacific Railroad Company and the Navajo Tribe of Indians recorded in Book 36, pages 25-29, in the official records of McKinley County, New Mexico. Waiver of Mineral Development Rights for Taylor Substation Site and Access Roadway dated November 13, 1973, from Santa Fe Pacific Railroad Company to Plains Electric Company, recorded in Book 44, Page 932, in the official records of McKinley County, New Mexico, covering two parcels of land in Lots 3 and 4, Section 1, T.13N., R.10W. Uranium Mining Lease dated December 4, 1980 from Santa Fe Pacific Railroad Company to Teton Exploration Drilling Company covering NE/4 NW/4, Lots 1 and 2, NW/4 SE/4 NW/4 and NW/4 of Lot 3 in Section 7,T.16N., R.16W. and all of Section 13, T.16N., R.17W., McKinley County, New Mexico. Surface Owners Agreement by and between Santa Fe Pacific Railroad Company and Fernandez Company, Ltd., dated July 31, 1979, a memorandum of which was recorded at Book 76, Page 938 of the official records of McKinley County, New Mexico, which agreement was partially released on April 2, 1982, which release is recorded at Book 52, Pages 961-962 of the official records of McKinley County New Mexico, and which Agreement was amended on March 2, 1987, a memorandum of which was recorded in Book 90 Misc., Pages 639-642 of the official records of McKinley County, New Mexico. Surface Use Agreement by and between Santa Fe Pacific Railroad Company and R.M. Albers, et al., dated June 3, 1980, a memorandum of which was recorded at Book 78, Page 252-253 of the official records of McKinley County, New Mexico. 27 Minerals Lease dated May 1, 1993, between Santa Fe Pacific Minerals Corporation and Quivira Mining Company, a memorandum of which is recorded in Book 7 of Comp., Page 439, in the official records of McKinley County, New Mexico, as it covers All of Sections 13, 23, and 25, and a portion of Section 15, T.14N., R.10W. Special Warranty Deed dated June 25, 1993, (effective 6-26-93) from Hospah Coal Company, Santa Fe Pacific Minerals Corporation, Santa Fe Pacific Mining, Inc., The Atchison, Topeka and Santa Fe Railway Company, and the Star Lake Railroad Company to San Juan Basin Coal Holding Company, recorded in Book 6 Comp., Page 8560, of the official records of McKinley County, New Mexico, covering coal and coal development rights or mining rights. Special Warranty Deed dated effective June 25, 1993, from Santa Fe Pacific Minerals Corporation to Hanson Natural Resources Company covering coal and related mining rights in Section 19, T.16N., R. 10W., McKinley County, New Mexico, recorded in Book 6 Comp., Page 8457 in the official records of McKinley County, New Mexico. (SFPG-47567) Special Warranty Deed dated effective June 25, 1993, from Santa Fe Pacific Minerals Corporation to Hanson Natural Resources Company covering coal and related mining rights in Section 7, T.16N. R.10W., recorded in Book 6 Comp., Page 8480, in the official records of McKinley County. (SFPG-47573) Amended and Restated San Juan Basin Agreement dated June 25, 1993, by and between Hospah Coal Company, Hanson Natural Resources Company and Chaco Energy Company. Road Use and Overpass Construction Agreement dated February 16, 1984 between Ranch Road, Inc. and SF Coal Corporation, as it covers Section 21, T.14N. , R.10W., McKinley County, New Mexico. (SFPG-32-001-SR-19) Real Estate Taxes for the years 1997 and subsequent years. 28 AFTER RECORDING RETURN TO: Margaret Lewis Meister Modrall, Sperling, Roehl, Harris & Sisk, P.A. P. O. Box 2168 Albuquerque, New Mexico 87103 DEED Category I Claims McKinley STATE OF NEW MEXICO ) COUNTY OF McKINLEY ) SANTA FE PACIFIC GOLD CORPORATION, successor in interest by name change to Santa Fe Pacific Minerals Corporation, which is successor by merger to Cerrillos Land Company ("Grantor") whose address is 6200 Uptown Boulevard N.E., Suite 400, Albuquerque, New Mexico 87110, for consideration paid, GRANTS to URANCO, INC. ("Grantee"), whose address is 6200 Uptown Boulevard N.E., Suite 400, Albuquerque, New Mexico 87110, all of the interest of Grantor in the instruments described in Exhibit A hereto. LIMITATION OF REMEDY. Any warranty of title by the Grantor and any remedies of the Grantee or its successors and assigns related to the property covered by this Deed shall be limited to the remedies set forth in that certain AGREEMENT OF SANTA FE PACIFIC GOLD CORPORATION, AS URANCO, INC. SHAREHOLDER, AND URANIUM RESOURCES, INC., dated effective as of March 25, 1997, (a copy of which is maintained in the offices of Grantor and Grantee and attorneys for Grantor, Modrall, Sperling, Roehl, Harris & Sisk, P.A., 500 Fourth St. N.W., Albuquerque, New Mexico 87102) and shall not include any other rights, damages or claims than those specifically set forth therein. Any rights asserted under the terms of such agreement must be brought within the time period set forth in such agreement. 29 CONVEYANCE DOES NOT INCLUDE COAL IN PLACE, INCLUDING DEVELOPMENT OR MINING RIGHTS. This conveyance does not and is not intended to affect or purport to affect, in any way, coal in place, including development or mining rights related to coal, in any of the property of Grantor or any of its subsidiaries or affiliates including, but not limited to, the San Juan Basin Coal Holding Company, and coal in place and all such rights are EXCEPTED herefrom and RESERVED to Grantor. WITNESS its hand and seal this 21 day of March, 1997. SANTA FE PACIFIC GOLD CORPORATION By: /s/ BRUCE D. HANSEN ----------------------------------- (Seal) Bruce D. Hansen Senior Vice President-Corporate Development STATE OF NEW MEXICO COUNTY OF BERNALILLO This instrument was acknowledged before me on March 21, 1997, by Bruce D. Hansen as Senior Vice President-Corporate Development of Santa Fe Pacific Gold Corporation. (Seal) /s/ JACQUELINE WALSTON ----------------------------------- Jacqueline Walston Notary Public My commission expires: 01/28/98 --------------- 30 EXHIBIT A MCKINLEY COUNTY, NEW MEXICO WEST LARGO PROJECT 32-010-002 / 32-010-0003
RECORDING DATA BLM SERIAL CLAIM NAMES BOOK PAGE NUMBERS - ----------- -------------- ---------- ID 21 53 1 NMMC 50374 123 620 * amended 123 655 * amended ID 22 53 2 NMMC 50375 123 616 * amended 123 657 * amended ID 23 53 3 NMMC 50376 123 602 * amended 123 659 * amended ID 24 53 4 NMMC 50377 123 618 * amended 123 661 * amended ID 25 53 5 NMMC 50378 123 600 * amended 123 663 * amended ID 26 53 6 NMMC 50379 123 604 * amended 123 665 * amended ID 27 53 7 NMMC 50380 123 606 * amended 123 667 * amended ID 28 53 8 NMMC 50381 123 624 * amended 123 669 * amended ID 29 53 9 NMMC 50382 123 608 * amended 123 671 * amended
31
RECORDING DATA BLM SERIAL CLAIM NAMES BOOK PAGE NUMBERS - ----------- -------------- ---------- ID 30 53 10 NMMC 50383 123 626 * amended 123 673 * amended ID 31 53 11 NMMC 5172 109 775 * amended 122 725 * amended ID 32 53 12 NMMC 5173 109 776 * amended 118 382 * amended ID 33 53 13 NMMC 5174 109 777 * amended ID 34 53 14 NMMC 5175 109 778 * amended ID 35 53 15 NMMC 5176 109 779 * amended ID 36 53 16 NMMC 5177 109 780 * amended ID 37 53 17 NMMC 5178 109 781 * amended ID 38 53 18 NMMC 5179 109 782 * amended 122 723 * amended ID 39 53 19 NMMC 50384 123 594 * amended 123 675 * amended ID 40 53 20 NMMC 50385 123 592 * amended 123 677 * amended ID 41 53 21 NMMC 50386 123 622 * amended 123 679 * amended ID 42 53 22 NMMC 50387 123 598 * amended 123 681 * amended
2 32
RECORDING DATA BLM SERIAL CLAIM NAMES BOOK PAGE NUMBERS - ----------- -------------- ---------- ID 43 53 23 NMMC 50388 123 628 * amended 123 683 * amended ID 44 53 24 NMMC 50389 123 614 * amended 123 685 * amended ID 45 53 25 NMMC 5180 109 783 * amended ID 46 53 26 NMMC 50390 123 635 * amended ID 47 53 27 NMMC 50391 123 637 * amended ID 48 53 28 NMMC 50392 123 639 * amended ID 49 53 29 NMMC 50393 123 641 * amended ID 50 53 30 NMMC 50394 123 643 * amended ID 51 53 31 NMMC 50395 123 590 * amended 123 687 ID 87 79 702 NMMC 50396 123 596 * amended 123 689 * amended ID 88 79 703 NMMC 50397 123 612 * amended 123 691 * amended ID 89 79 704 NMMC 50398 123 610 * amended 123 693 * amended ID 90 79 705 NMMC 50399 123 645 amended
3 33
RECORDING DATA BLM SERIAL CLAIM NAMES BOOK PAGE NUMBERS - ----------- -------------- ---------- ID 91 79 706 NMMC 50400 123 647 * amended ID 95 79 710 NMMC 50403 123 651 * amended ID 96 79 711 NMMC 50401 123 649 * amended ID 97 79 712 NMMC 50402 123 653 * amended ID 52 53 32 NMMC 9098 112 629 * amended 123 697 * amended ID 53 53 33 NMMC 9099 112 630 * amended 123 699 * amended ID 54 53 34 NMMC 9100 112 631 * amended 123 701 * amended ID 55 53 35 NMMC 9101 112 632 * amended 123 703 * amended ID 56 53 36 NMMC 9102 112 633 * amended 123 705 * amended ID 57 53 37 NMMC 9103 112 634 * amended 123 707 * amended ID 58 53 38 NMMC 9104 112 635 * amended 123 709 * amended ID 59 53 39 NMMC 9105 112 636 * amended 123 711 * amended
4 34
RECORDING DATA BLM SERIAL CLAIM NAMES BOOK PAGE NUMBERS - ----------- -------------- ---------- ID 60 53 40 NMMC 9106 112 637 * amended 123 713 * amended ID 61 53 41 NMMC 9107 112 638 * amended 123 715 * amended ID 62 53 42 NMMC 9108 112 639 * amended 123 717 * amended ID 63 53 43 NMMC 9109 112 640 * amended 123 719 * amended ID 64 53 44 NMMC 9110 112 641 * amended 123 721 * amended ID 65 53 45 NMMC 9111 112 642 * amended 123 723 * amended ID 66 53 46 NMMC 9112 112 643 * amended 123 725 * amended ID 67 53 47 NMMC 9113 112 644 * amended 123 727 * amended ID 68 53 48 NMMC 9114 112 645 * amended 123 729 * amended ID 69 53 49 NMMC 9115 112 646 * amended 123 731 * amended ID 70 53 50 NMMC 9116 112 647 * amended 123 733 * amended ID 71 53 51 NMMC 9117 112 648 * amended 123 735 * amended
5 35
RECORDING DATA BLM SERIAL CLAIM NAMES BOOK PAGE NUMBERS - ----------- -------------- ---------- ID 72 53 52 NMMC 9118 112 649 * amended 123 737 * amended ID 73 53 53 NMMC 9119 112 650 * amended 123 739 * amended ID 74 53 54 NMMC 9120 112 651 * amended 123 741 * amended ID 75 53 55 NMMC 9121 112 652 * amended 123 743 * amended ID 76 53 56 NMMC 9122 112 653 * amended 123 745 * amended ID 77 53 57 NMMC 9123 112 654 * amended 123 747 * amended ID 78 53 58 NMMC 9124 112 655 * amended 123 749 * amended ID 79 53 59 NMMC 9125 112 656 * amended 123 751 * amended ID 80 53 60 NMMC 9126 112 657 * amended 123 753 * amended ID 81 53 61 NMMC 9127 112 658 * amended 123 755 * amended ID 82 53 62 NMMC 9128 112 659 * amended 123 757 * amended ID 83 53 63 NMMC 9129 112 660 * amended 123 759 * amended
6 36
RECORDING DATA BLM SERIAL CLAIM NAMES BOOK PAGE NUMBERS - ----------- -------------- ---------- ID 84 53 64 NMMC 9130 112 661 * amended 123 761 * amended ID 85 53 65 NMMC 9131 112 662 * amended 123 763 * amended ID 86 53 66 NMMC 9132 112 663 * amended 123 765 * amended ID 98 112 799 NMMC 9133 123 767 * amended
Located in Sec. 20, 21, 22, 27, 28, 29, 32, 33, 34 15N-10W 7 37 EXHIBIT 10.19 AFTER RECORDING RETURN TO: Margaret Lewis Meister Modrall, Sperling, Roehl, Harris & Sisk, P.A. P. O. Box 2168 Albuquerque, New Mexico 87103 DEED Category I Sandoval STATE OF NEW MEXICO ) COUNTY OF SANDOVAL ) SANTA FE PACIFIC GOLD CORPORATION, successor in interest by name change to Santa Fe Pacific Minerals Corporation, which is successor by merger to Cerrillos Land Company ("Grantor") whose address is 6200 Uptown Boulevard N.E., Suite 400, Albuquerque, New Mexico 87110, for consideration paid, GRANTS to URANCO, INC. ("Grantee"), whose address is 6200 Uptown Boulevard N.E., Suite 400, Albuquerque, New Mexico 87110, all of the interest reserved by Santa Fe Pacific Railroad Company in the instruments described in Exhibit A hereto but only so far as such reservations and exceptions pertain to and cover the real estate in Sandoval County, New Mexico more particularly described in Exhibit B hereto, less and except the interests described in Exhibit C hereto and subject to the grants and interests set forth in the instruments set forth in Exhibit D hereto, all of which exhibits are incorporated herein by reference. LIMITATION OF REMEDY. Any warranty of title by the Grantor and any remedies of the Grantee or its successors and assigns related to the property covered by this Deed shall be limited to the remedies set forth in that certain AGREEMENT OF SANTA FE PACIFIC GOLD CORPORATION, AS URANCO, INC. SHAREHOLDER, AND URANIUM RESOURCES, INC., dated effective as of March 25, 1997, (a copy of which is maintained in the offices of Grantor and Grantee and attorneys for Grantor, Modrall, Sperling, Roehl, Harris & Sisk, P.A., 500 Fourth St. N.W., Albuquerque, New Mexico 87102) and shall not include any other rights, damages or claims than those specifically set forth therein. Any rights asserted under the terms of such agreement must be brought within the time period set forth in that agreement. 38 CONVEYANCE DOES NOT INCLUDE COAL IN PLACE, INCLUDING DEVELOPMENT OR MINING RIGHTS. This conveyance does not and is not intended to affect or purport to affect, in any way, coal in place, including development or mining rights related to coal, in any of the property of Grantor or any of its subsidiaries or affiliates including, but not limited to, the San Juan Basin Coal Holding Company, and coal in place and all such rights are EXCEPTED herefrom and RESERVED to Grantor. WITNESS its hand and seal this 21 day of March, 1997. SANTA FE PACIFIC GOLD CORPORATION By: /s/ BRUCE D. HANSEN ----------------------------------- (Seal) Bruce D. Hansen Senior Vice President-Corporate Development STATE OF NEW MEXICO COUNTY OF BERNALILLO This instrument was acknowledged before me on March 21, 1997, by Bruce D. Hansen as Senior Vice President-Corporate Development of Santa Fe Pacific Gold Corporation. /s/ JACQUELINE WALSTON --------------------------------------- Jacqueline Walston (Seal) Notary Public My commission expires: 01/28/98 --------------- 39 EXHIBIT A CATEGORY I DEED, SANDOVAL COUNTY Deeds Reserving Mineral Interests Warranty Deed dated September 8, 1949, from Santa Fe Pacific Railroad Company to Lou C. Evans. 40 EXHIBIT B CATEGORY I DEED, SANDOVAL COUNTY CONVEYANCE OF ALL MINERALS EXCEPT COAL TO URANCO (Revised 03/10/97) COMPANY: GOLD STATE: NM COUNTY: SANDOVAL
MERIDIAN: NMPM ACRES ----- Township 12 North, Range 3 West ------------------------------- Section 19 NW/4, SE/4 320.00 ------ County Total 320.00 ------
41 EXHIBIT C CATEGORY I DEED, SANDOVAL COUNTY Items Not Included in Grant None 42 EXHIBIT D CATEGORY I DEED, SANDOVAL COUNTY Items to which Deed is Subject Lease Option Agreement dated October 8, 1987, between Cerrillos Land Company and Santa Fe Energy Company, as amended on July 1, 1988, and as amended on December 1, 1989. 43 EXHIBIT 10.19 AFTER RECORDING RETURN TO: Margaret Lewis Meister Modrall, Sperling, Roehl, Harris & Sisk, P.A. P.O. Box 2168 Albuquerque, New Mexico 87103 DEED Category II McKinley STATE OF NEW MEXICO ) COUNTY OF McKINLEY ) SANTA FE PACIFIC GOLD CORPORATION, successor in interest by name change to Santa Fe Pacific Minerals Corporation, which is successor by merger to Cerrillos Land Company ("Grantor") whose address is 6200 Uptown Boulevard N.E., Suite 400, Albuquerque, New Mexico 87110, for consideration paid, GRANTS to URANCO, INC. ("Grantee"), whose address is 6200 Uptown Boulevard N.E., Suite 400, Albuquerque, New Mexico 87110, all of the interest in uranium reserved by Santa Fe Pacific Railroad Company in the instruments described in Exhibit A hereto but only so far as such reservations and exceptions pertain to and cover the real estate in McKinley County, New Mexico more particularly described in Exhibit B hereto (the "Property"), less and except the interests described in Exhibit C hereto and subject to the grants and interests set forth in the instruments set forth in Exhibit D hereto, all of which exhibits are incorporated herein by reference. LIMITATION OF REMEDY. Any warranty of title by the Grantor and any remedies of the Grantee or its successors and assigns related to the property covered by this Deed shall be limited to the remedies set forth in that certain AGREEMENT OF SANTA FE PACIFIC GOLD CORPORATION, AS URANCO, INC. SHAREHOLDER, AND URANIUM RESOURCES, INC., dated effective as of March 25, 1997 and that certain LICENSE TO EXPLORE AND OPTION TO PURCHASE by and between Grantor and Grantee, dated effective as of March 21, 1997 (copies of which are maintained in the offices of Grantor and Grantee and attorneys for Grantor, Modrall, Sperling, Roehl, Harris & Sisk, P.A., 500 Fourth St. N.W., Albuquerque, New Mexico 87102) and shall not include any other rights, damages or claims than those specifically set forth therein. Any rights asserted under the terms of such agreements must be brought within the time period set forth in such agreements. CONVEYANCE SUBJECT TO THE OBLIGATION TO PURCHASE ENTIRE MINERAL ESTATE. The grant of this deed is subject to the following right of Grantor. At such time as Grantee or its successors or assigns applies for a mining permit with respect to the Property or performs any activities on the Property which would require a mining permit, Grantor shall have the right to require Grantee or its successors or assigns to purchase all of the mineral estate (except coal in place including development or mining rights related to coal) owned by Grantor on the portion of the Property which is the subject of the mining permit or activities which would require a mining permit for a purchase price of $200 per acre (the "Purchase 44 Price"), which Purchase Price shall be paid within 30 days after Grantor declares its right to require the purchase. The Purchase Price shall be increased by the same percentage as the percentage increase in the Spot Price of uranium on the date of Grantor's exercise of such right over $15.80 per pound. Grantee shall purchase such portions of property as entire sections or as much of each section as was originally conveyed by Grantor to Grantee. Additionally, Grantor grants to Grantee or its successor and assigns for a period of 99 years from the date of this Deed the option to purchase all of the remaining mineral estate (except coal in place, including development or mining rights related to coal) owned by Grantor in all or any portion of the Property for a total purchase price of $200 per acre (the "Purchase Price"), which Purchase Price will be payable within 30 days after Grantee or its successors or assigns elects to exercise the option to purchase. The Purchase Price shall be increased by the same percentage as the percentage increase in the Spot Price of uranium on the date of Grantor's exercise of such right over $15.80 per pound. Grantee shall purchase such portions of property as entire sections or as much of each section as was originally conveyed by Grantor to Grantee. The Spot Price shall mean that price at which uranium may be purchased for delivery within one year, as reported by TradeTech or its successors in interest, or, in the absence of TradeTech or a successor in interest, another accepted industry publication. CONVEYANCE DOES NOT INCLUDE COAL IN PLACE, INCLUDING DEVELOPMENT OR MINING RIGHTS. This conveyance does not and is not intended to affect or purport to affect, in any way, coal in place, including development or mining rights related to coal, in any of the property of Grantor or any of its subsidiaries or affiliates including, but not limited to, the San Juan Basin Coal Holding Company, and coal in place and all such rights are EXCEPTED herefrom and RESERVED to Grantor. WITNESS its hand and seal this 21st day of March, 1997. SANTA FE PACIFIC GOLD CORPORATION By: /s/ BRUCE D. HANSEN ----------------------------------- (Seal) Bruce D. Hansen Senior Vice President-Corporate Development 45 STATE OF NEW MEXICO COUNTY OF BERNALILLO This instrument was acknowledged before me on March 21, 1997, by Bruce D. Hansen as Senior Vice President Corporate Development of Santa Fe Pacific Gold Corporation. /s/ JACQUELINE WALSTON --------------------------------------- Jacqueline Walston (Seal) Notary Public My commission expires: 01/28/98 ---------------- 46 EXHIBIT A CATEGORY II DEED, MCKINLEY COUNTY Deeds Reserving Mineral Interests Warranty Deed dated January 2, 1946, from Santa Fe Pacific Railroad Company to Tom L. Elkins, recorded in Book 9 of Warranty Deeds, Page 93, in the official records of McKinley County, New Mexico. Warranty Deed dated February 23, 1937, from Santa Fe Pacific Railroad Company to Margaret A. Prewitt, recorded in Book 10 of Deeds, Page 485, in the official records of McKinley County, New Mexico. Warranty Deed dated January 2, 1946, from Santa Fe Pacific Railroad Company to Tom L. Elkins, recorded in Book 12 of Deeds, Page 585, in the official records of McKinley County, New Mexico. Warranty Deed dated January, 20, 1947, from Santa Fe Pacific Railroad Company to Frank Bond & Son, Inc., recorded in Book 13 of Deeds, Page 219, in the official records of McKinley County, New Mexico. Warranty Deed dated July 1, 1948, from Santa Fe Pacific Railroad Company to Hazel W. Prewitt, recorded in Book 9 of Warranty Deeds, Page 30, in the official records of McKinley County, New Mexico. Warranty Deed dated March 29, 1929, from Santa Fe Pacific Railroad Company to Antonio Lucero, recorded in Book 12 of Deeds, Page 516, in the official records of McKinley County, New Mexico. Warranty Deed dated January 2, 1925, from Santa Fe Pacific Railroad Company to H. F. Prewitt. Warranty Deed dated August 11, 1927, from Santa Fe Pacific Railroad Company to Frank Gantar, recorded in Book 7 of Deeds, Page 161, in the official records of McKinley County, New Mexico. Warranty Deed dated January 2, 1946, from Santa Fe Pacific Railroad Company to Gib Graham, recorded in Book 13 of Deeds, Page 13, in the official records of McKinley County, New Mexico. Warranty Deed dated January 26, 1931, from Santa Fe Pacific Railroad Company to The Gallup Country Club, recorded in Book 8 of Deeds, Page 62, in the official records of McKinley County, New Mexico. Warranty Deed dated May 1, 1950, from Santa Fe Pacific Railroad Company to Bert P. Cresto and Emma Cresto, recorded in Book 13 of Deeds, Page 384, in the official records of McKinley County, New Mexico. A-1 47 Warranty deed dated May 1, 1950, from Santa Fe Pacific Railroad Company to C. E. Gurley and Irene J. Gurley, recorded in Book 10 of Warranty Deeds, Page 395, in the official records of McKinley County, New Mexico. Warranty Deed dated May 1, 1950, from Santa Fe Pacific Railroad Company to George Bubany, recorded in Book 13 of Deeds, Page 382, in the official records of McKinley County, New Mexico. Quitclaim Deed dated April 15, 1959, from Santa Fe Pacific Railroad Company to Owners of record, recorded in Book 9, Page 480, in the official records of McKinley County, New Mexico. Warranty Deed dated May 1, 1950, from Santa Fe Pacific Railroad Company to John D. Guest, recorded in Book 13 of Deeds, Page 381, in the official records of McKinley County, New Mexico. Warranty Deed dated March 27, 1950, from Santa Fe Pacific Railroad Company to C. H. Harrell, recorded in Book 10 of Warranty Deeds, Page 366, in the official records of McKinley County, New Mexico. Warranty Deed dated October 20, 1930, from Santa Fe Pacific Railroad Company to John Grenko, recorded in Book 12 of Deeds, Page 428, in the official records of McKinley County, New Mexico. Warranty Deed dated October 5, 1949, from Santa Fe Pacific Railroad Company to Asa Glascock and Howard Wilson, recorded in Book 13 of Deeds, Page 404, in the official records of McKinley County, New Mexico. Warranty Deed dated June 19, 1925, from Santa Fe Pacific Railroad Company to County of McKinley, State of New Mexico. Warranty Deed dated May 16, 1938, from Santa Fe Pacific Railroad Company to Howard Wilson, recorded in Book 11 of Deed Records, Page 489, in the official records of McKinley County, New Mexico. Warranty Deed dated April 5, 1938, from Santa Fe Pacific Railroad Company to L. L. Sabin, recorded in Book 11 of Deeds, Page 636, in the official records of McKinley County, New Mexico. Warranty Deed dated August 19, 1930, from Santa Fe Pacific Railroad Company to Christian Reformed Board of Mission, recorded in Book 7 of Deeds, Page 283, in the official records of McKinley County, New Mexico. Warranty Deed dated August 1, 1946, from Santa Fe Pacific Railroad Company to C. G. Wallace, recorded in Book 9 of Warranty Deeds, Page 7, in the official records of McKinley County, New Mexico. Warranty Deed dated July 12, 1922, from Santa Fe Pacific Railroad Company to County Board of Education of McKinley County, New A-2 48 Mexico, recorded in Book 6 of Deed Records, Page 267, in the official records of McKinley County, New Mexico. Warranty Deed dated July 29, 1952, from Santa Fe Pacific Railroad Company to Thos. M. Kilpatrick and C. F. Knowles, recorded in Book 11 of Warranty Deeds, Page 302, in the official records of McKinley County, New Mexico. Warranty Deed dated May 26, 1926, from Santa Fe Pacific Railroad Company to W.0. Turner. Quitclaim Deed dated January 20, 1975, by and between Santa Fe Pacific Railroad Company and W. O. Turner, covering N/2, SW/4 of Section 35, T.15N., R.19W., McKinley County, New Mexico, recorded in Book 23, Page 68 in the official records thereof. Warranty Deed dated September 1, 1944, from Santa Fe Pacific Railroad Company to Claude Neafus and S. R. Bellmaine, recorded in Book 12 of Deeds, Page 402, in the official records of McKinley County, New Mexico. Warranty Deed dated April 27, 1950, from Santa Fe Pacific Railroad Company to Gib Graham, recorded in Book 10 of Warranty Deeds, Page 378, in the official records of McKinley County, New Mexico. Warranty Deed dated November 7, 1934, from Santa Fe Pacific Railroad Company to L. L. Sabin, recorded in Book 8 of Deeds, Page 274, in the official records of McKinley County, New Mexico. Warranty Deed dated October 15, 1945, from Santa Fe Pacific Railroad Company to Fernandez Company, recorded in Book 12 DR, Page 536, in the official records of McKinley County, New Mexico. Warranty Deed dated March 4, 1952, from Santa Fe Pacific Railroad Company to Hazel W. Prewitt, recorded in Book 11 Misc., Page 370, in the official records of McKinley County, New Mexico. Warranty Deed dated May 15, 1945, from Santa Fe Pacific Railroad Company to Harold F. Prewitt and Hazel W. Prewitt, recorded in Book 12 of Deeds, Page 482, in the official records of McKinley County, New Mexico. Warranty Deed dated January 16, 1948, from Santa Fe Pacific Railroad Company to W. A. Berryhill, recorded in Book 13 of Deeds, Page 298, in the official records of McKinley County, New Mexico. Warranty Deed dated May 14, 1929, from Santa Fe Pacific Railroad Company to the United States of America, In Trust for the Navajo Tribe, recorded in Book 7 of Deeds, Page 243, in the official records of McKinley County, New Mexico. A-3 49 Warranty Deed dated December 1, 1944, from Santa Fe Pacific Railroad to Harold P. Prewitt and Hazel W. Prewitt, recorded in Book 12 of Deeds, Page 440, in the official records of McKinley County, New Mexico. A-4 50 EXHIBIT B CATEGORY II DEED, MCKINLEY COUNTY CONVEYANCE OF URANIUM RIGHTS TO URANCO (Revised 03/10/97) COMPANY: GOLD STATE: NM COUNTY: McKINLEY
MERIDIAN: NMPM ACRES ----- Township 14 North, Range 8 West ------------------------------- Section 10 All 640.00 Township 13 North, Range 10 West -------------------------------- Section 5 Lots 1-4, S/2 N/2, S/2 639.36 Section 7 Lots 1-4, E/2, E/2 W/2 650.24 Section 9 All 640.00 Section 15 All 640.00 Section 17 All 640.00 Section 21 W/2 SW/4 SE/4 NE/4, N/2 NE/4, SW/4 595.00 NE/4, N/2 SE/4 NE/4, NW/4, S/2 SE/4, NW/4 SE/4 Section 27 All 640.00 Section 29 All 640.00 Section 31 Lots 1-4, E/2 W/2, E/2 640.56 Section 33 All 640.00 Section 35 All 640.00 Township 15 North, Range 10 West -------------------------------- Section 1 All, except 31.07 acres in Baca 608.93 Rail Spur Section 3 All 641.00 Section 13 All 640.00
B-1 51 Section 23 All, except 29.81 ac. in Baca Rail 610.19 Spur Section 25 All, except 25.79 ac. in Baca Rail 614.21 Spur Section 31 All 663.60 Section 33 All 640.00 Section 35 All 640.00 Township 16 North, Range 10 West -------------------------------- Section 5 All 639.76 Section 9 All 640.00 Section 15 All 640.00 Section 17 All 640.00 Section 21 All 640.00 Section 23 All 640.00 Section 25 All 640.00 Section 27 All 640.00 Section 29 All 640.00 Section 31 All 667.68 Section 33 All 640.00 Section 35 All 640.00 Township 17 North, Range 10 West -------------------------------- Section 31 Lots 1-4, E/2 W/2, E/2 640.32 Township 13 North, Range 11 West -------------------------------- Section 3 Lots 3, 4, S/2 NW/4 160.98 Section 5 All, except 24.71 ac. in Baca Rail 610.17 Spur Section 7 All that portion lying North and 495.00 East f the AT&SF Railway Co. R/W
B-2 52 Section 9 NE/4, N/2 NW/4, N/2 SE/4, SE/4 SE/4 360.00 Section 9 S/2 NW/4, SW/4, SW/4 SE/4 280.00 Section 15 All 640.00 Section 17 All that portion lying North and 96.71 East of the AT&SF Railway Co. R/W, except 39.63 ac. in Baca Rail Spur Section 17 Lots 5-8, SW/4 SE/4, SW/4 275.53 Section 19 All 640.06 Section 21 All that part lying North and East 199.59 of the AT&SF Railway Co. R/W Section 21 Lots 5-10, NW/4 SW/4 155.74 Section 22 All 640.00 Section 23 All 640.00 Section 24 SE/4, W/2 480.00 Section 25 All 640.00 Section 26 All 640.00 Section 27 All that part lying North and East 549.31 of the AT&SF Railway Co. R/W Section 29 All 640.00 Section 31 All 640.96 Section 33 All 640.00 Section 34 That portion of the E/2 lying South 23.70 and West of the AT&SF Railway Co. R/W Section 34 That portion of the E/2 lying North 283.09 and East of the AT&SF Railway Co. R/W Section 35 All 640.00 Township 15 North, Range 11 West -------------------------------- Section 27 E/2 E/2 160.00
B-3 53 Section 35 NW/4 NW/4 40.00 Township 14 North, Range 13 West -------------------------------- Section 31 All, except 200 ft. R/W of AT&SF 619.15 Ry. Co. Section 35 All that portion lying North and 531.25 East of R/W of AT&SF Ry. Co. Township 14 North, Range 14 West -------------------------------- Section 7 Lots 3, 4, that portion of E/2 SW/4 139.78 lying South & West of AT&SF RR R/W Section 21 All that portion lying North & East 114.06 of AT&SF RR R/W Section 25 All that portion lying North & East 494.75 of AT&SF RR R/W Township 17 North, Range 14 West --------------------------------- Section 1 Lots 1-4 2.02 Section 31 Lots 1-4, S/2 S/2 321.60 Section 33 Lots 1-4, S/2 S/2 317.76 Section 35 Lots 1-4, S/2 S/2 318.20 Township 14 North, Range 15 West -------------------------------- Section 1 Part Northeast of Northeast line of 96.34 AT&SF station grounds at S. Guam, said line parallel to & 1320 ft. northeasterly from centerline of original AT&SF main track, except portion Conveyed by SFPR to AT&SF 8-29-17, recorded in Bk. 5, Pg. 152, and portion of SE SE northeasterly of AT&SF R/W and southeasterly of southeast end of station grounds at S. Guam Township 15 North, Range 15 West -------------------------------- Section 25 All, except 26.55 ac. in R/W 613.45 Section 27 All that portion lying North & East 515.85 of AT&SF RR R/W
B-4 54 Section 35 All that portion lying North & East 197.84 of AT&SF RR R/W Township 17 North, Range 15 West -------------------------------- Section 31 All 315.20 Section 33 All 317.98 Section 35 All 315.20 Township 15 North, Range 16 West -------------------------------- Section 1 All 639.52 Section 3 All 641.90 Section 5 All 638.82 Section 7 All 616.18 Section 9 All 640.00 Section 11 All 640.00 Section 13 Lots 1-4 195.60 Section 15 Lots 1-4 185.28 Section 17 Lots 1-4 174.16 Township 16 North, Range 16 West -------------------------------- Section 1 All 595.20 Section 5 All 606.88 Section 11 All 640.00 Section 13 All 640.00 Section 15 All 640.00 Section 19 All 602.52 Section 21 All 640.00 Section 23 All 640.00 Section 25 All 640.00
B-5 55 Section 27 All 640.00 Section 29 All 640.00 Section 33 All 640.00 Section 35 All 640.00 Township 17 North, Range 16 West -------------------------------- Section 31 Lots 1-4, S/2 S/2 305.28 Section 33 Lots 1-4, S/2 S/2 308.21 Township 14 North, Range 17 West -------------------------------- Section 3 Lots 1-5, SW/4 NW/4, W/2 SW/4 235.56 Section 5 Lots 1-4, S/2 N/2, E/2 SE/4, NW/4 598.88 SE/4, N/2 SW/4 SE/4, W/2 SW/4, NE/4 SW/4, N/2 SE/4 SW/4 Section 7 All 638.12 Section 9 W/2, E/2 SE/4, SW/4 SE/4, N/2 NE/4 480.00 NE/4, E/2 NW/4 NE/4 Section 9 SW/4 NE/4, NW/4 SE/4 80.00 Section 9 S/2 NE/4 NE/4 20.00 Section 9 NW/4 NW/4 NE/4 10.00 Section 9 SW/4 NW/4 NE/4 10.00 Section 15 Lots 1-4, W/2 W/2 236.88 Section 17 All 640.00 Section 19 All 640.88 Section 21 All 640.00 Section 27 Lots 1-4, W/2 W/2 239.82 Section 29 N/2, SW/4 480.00 Section 33 S/2 320.00 Township 15 North, Range 17 West -------------------------------- Section 1 All 689.84
B-6 56 Section 3 All 640.62 Section 7 All 639.94 Section 9 NE/4, S/2 480.00 Section 13 Lots 1-4 164.48 Section 15 Lots 1-6, W/2 W/2, less 24.24 ac. 300.37 in AT&SF RR R/W for East bound main track Section 19 Lots 1, 2, E/2, E/2 NW/4 481.09 Section 21 E/2, W/2 NW/4, S/2 SW/4 480.00 Section 27 W/2 SW/4 80.00 Section 29 All 640.00 Section 31 All 638.84 Township 16 North, Range 17 West -------------------------------- Section 1 All 614.40 Section 3 All 622.04 Section 5 All 624.52 Section 7 All 632.52 Section 9 All 640.00 Section 11 All 640.00 Section 15 All 640.00 Section 17 All 640.00 Section 19 All 636.44 Section 21 All 640.00 Section 25 All 640.00 Section 27 All 640.00 Section 29 All 640.00 Section 31 All 637.44
B-7 57 Section 33 All 640.00 Section 35 All 640.00 Township 17 North, Range 17 West -------------------------------- Section 31 Lots 1-4, S/2 S/2 297.38 Section 33 Lots 1-4, S/2 S/2 307.78 Section 35 Lots 1-4, S/2 S/2 306.02 Township 14 North, Range 18 West -------------------------------- Section 5 All 639.48 Township 15 North, Range 18 West -------------------------------- Section 1 All 638.56 Section 11 NE/4, E/2 NW/4 240.00 Section 23 All 640.00 Section 27 SE/4, NE/4 SW/4 200.00 Section 27 S/2 NE/4, NE/4 NE/4 120.00 Section 27 SE/4 NW/4, S/2 NW/4 NE/4, NW/4 NW/4 70.00 NE/4 Section 27 S/2 NE/4 NW/4 20.00 Section 27 N/2 NE/4 NW/4 20.00 Section 31 NE/4 NE/4 40.00 Section 31 Lots 1-4, SE/4 NE/4, NE/4 NW/4, 436.40 SE/4, SE/4 SW/4 Section 35 E/2, E/2 NW/4 400.00 Township 16 North, Range 18 West -------------------------------- Section 1 All 622.84 Section 3 All 622.72 Section 5 All, except 10.30 acres 614.26
B-8 58 Section 5 That portion lying within 40 ft. & 10.30 on both sides of survey line of Road 32, Section 2 as relocated for construction and known as F.A.P. #146-A Section 7 All, except 10.00 ac. quitclaimed 620.16 to County of McKinley by deed dated 6-19-25 Section 7 That portion lying within 40 ft. & 10.00 on both sides of survey line of Road 32, Section 2 as relocated for construction and known as F.A.P. #146 Section 9 All 640.00 Section 11 All 640.00 Section 13 All 640.00 Section 15 All 640.00 Section 17 All 640.00 Section 19 All 634.08 Section 21 N/2 320.00 Section 23 All 640.00 Section 25 All 640.00 Township 17 North, Range 18 West -------------------------------- Section 31 Lots 1-4, S/2 S/2 290.40 Section 33 Lots 1-4, SW/4 SE/4, S/2 SW/4 255.58 Section 33 N/2 SE/4 SE/4, SE/4 SE/4 SE/4 30.00 Section 35 Lots 1-4, S/2 S/2 298.78 Township 15 North, Range 19 West -------------------------------- Section 7 Lots 3, 4, E/2 SW/4 156.27 Section 17 NE/4, E/2 NW/4, S/2 560.00 Section 19 All 633.40
B-9 59 Section 21 NW/4, SE/4, SW/4 NE/4, W/2 SE/4 389.00 NE/4, W/2 E/2 SE/4 NE/4, except 1 ac. in W/2 E/2 SE/4 NE/4 Section 21 1 ac. tract in W/2 E/2 SE/4 NE/4 1.00 Section 29 All, except AT&SF RR R/W and 512.25 station grounds Section 31 SE/4, NW/4, except AT&SF RR R/W 288.91 Section 33 All 640.00 Section 35 N/2, SW/4 480.00 Township 16 North, Range 19 West -------------------------------- Section 1 All 630.12 Section 3 All 636.30 Section 5 All 637.60 Section 7 All 629.24 Section 9 All 640.00 Section 11 All 640.00 Section 13 All 640.00 Section 15 All 640.00 Section 17 All 640.00 Section 19 All 630.48 Section 23 All 640.00 Section 25 All 640.00 Section 31 All 629.80 Township 17 North, Range 19 West -------------------------------- Section 31 Lots 1-4, S/2 S/2 288.60 Section 33 Lots 1-4, S/2 S/2 290.40 Section 35 Lots 1-4, S/2 S/2 295.58
B-10 60 Township 16 North, Range 20 West -------------------------------- Section 1 All 638.12 Section 13 All 640.00 Section 17 SW/4 160.00 Section 19 All 640.92 Section 21 W/2 W/2 160.00 Section 25 All 640.00 Section 27 S/2 SW/4, NW/4 SW/4, S/2 SE/4, 240.00 NE/4 SE/4 Section 29 All 640.00 Section 31 All 638.00 Section 33 All 640.00 Section 35 All 640.00 Township 16 North, Range 21 West -------------------------------- Section 1 W/2 322.00 Section 3 All 123.86 Section 11 N/2, N/2 SW/4, SW/4 SW/4 440.00 Section 15 Lots 1-4 128.06 Section 23 All 640.00 Section 25 All 640.00 Section 27 Lots 1-4 128.80 Section 35 All 640.00 ------ County Total 105,447.60 ==========
B-11 61 EXHIBIT C CATEGORY II DEED, MCKINLEY COUNTY Items Not Included in Grant Less and Except any interest in or under the property in Sections 1, 23, and 25, T.15N., R.10W., as described in the Quitclaim Deed dated November 23, 1983, between R. M. Albers and Imogene Albers and SF Coal Corporation, recorded in book 35, Page 598, in the official records of McKinley County, New Mexico. Less and Except any interest in or under the property in Sections 5 and 17, T.13N., R.11W. , as described in the Special Warranty Deed dated November 8, 1983, between Donald J. Elkins and Gwen Elkins and SF Coal Corporation, recorded in Book 35, Page 567, in the official records of McKinley County, New Mexico. 62 EXHIBIT D CATEGORY II DEED, MCKINLEY COUNTY Items to which Deed is Subject Stipulation in the District Court of McKinley County, New Mexico, case entitled Santa Fe Pacific Railroad Company, a corporation, plaintiff v. Duane Berryhill and Nelda Berryhill, his wife, el al., filed for record on July 25, 1952 at 9:30 a.m., recorded in Vol. 93, Folio 225, Valencia County records. Agreement dated May 1, 1964, by and between Santa Fe Pacific Railroad Company and The Gallup Country Club, covering certain land in Section 23, T.15N., R.18W., McKinley County, New Mexico. (SFP-42117) Agreement dated November 26, 1957, by and between Santa Fe Pacific Railroad Company and C. E. Gurley and Irene J. Gurley, covering property in Section 27, T.15N., R.18W., McKinley County, New Mexico. (SFP-42215-A) Agreement dated April 16, 1959 by and between Santa Fe Pacific Railroad Company and George Bubany, covering certain lands in Section 27, T.15N., R.18W., McKinley County, New Mexico. SFP-42216-B) Agreement dated May 1, 1959, by and between Santa Fe Pacific Railroad Company and John D. Guest, covering property in the NW/4 of Section 27, T.15N., R.18W., McKinley County, New Mexico. (SFP-42217-A) Agreement dated October 14, 1965, by and between Santa Fe Pacific Railroad Company and Howard Wilson covering a parcel of land in Section 7, T.16N., R.18W., McKinley County, New Mexico. (SFP-39456-A) [Section not being conveyed] Amended and Restated San Juan Basin Agreement dated June 25, 1993, by and between Hospah Coal Company and Chaco Energy Company. Lease Option Agreement dated October 8, 1987, between Cerrillos Land Company and Santa Fe Energy Company, as amended on July 1, 1988, and as amended on December 1, 1989, a memorandum of which is recorded in book 2, Page 1630, in the official records of McKinley County, New Mexico. Special Warranty Deed dated June 25, 1993, from Hospah Coal Company, Santa Fe Pacific Minerals Corporation, Santa Fe Pacific Mining, Inc., The Atchison, Topeka and Santa Fe Railway Company, and the Star Lake Railroad Company to San Juan Basin Coal Holding D-1 63 Company, recorded in Book 6 Comp., Page 8560, of the official records of McKinley County, New Mexico, covering coal and coal development rights or mining rights. Special Warranty Deed dated June 24, 1993, from Santa Fe Pacific Minerals Corporation to Hanson Natural Resources Company covering coal and related mining rights in Sections 17, 25, 33 and 35, T.16N., R.10W., and Section 3, T.15N., R.10W., McKinley County, New Mexico. Special Warranty Deed dated June 24, 1993, from Santa Fe Pacific Minerals Corporation to Hanson Natural Resources Company covering coal and relating mining rights in Section 1, T.15N., R.10W., and Sections 9, 21, 23, 27 and 29, T.16N., R.10W., recorded in Book 6 Comp., Page 8480, in the official records of McKinley County, New Mexico. Oil and Gas Lease dated May 1, 1975, from Santa Fe Pacific Railroad Company to Tenneco Oil Company, covering Section 25, T.16N., R.10W, McKinley County, New Mexico. (SFP-9951) Real Estate Taxes for the years 1997 and subsequent years. D-2 64 EXHIBIT 10.19 AFTER RECORDING RETURN TO: Margaret Lewis Meister Modrall, Sperling, Roehl, Harris & Sisk, P.A. P. O. Box 2168 Albuquerque, New Mexico 87103 DEED Category II Cibola STATE OF NEW MEXICO ) COUNTY OF CIBOLA ) SANTA FE PACIFIC GOLD CORPORATION, successor in interest by name change to Santa Fe Pacific Minerals Corporation, which is successor by merger to Cerrillos Land Company ("Grantor") whose address is 6200 Uptown Boulevard N.E., Suite 400, Albuquerque, New Mexico 87110, for consideration paid, GRANTS to URANCO, INC. ("Grantee"), whose address is 6200 Uptown Boulevard N.E., Suite 400, Albuquerque, New Mexico 87110, all of the interest in uranium reserved by Santa Fe Pacific Railroad Company in the instruments described in Exhibit A hereto but only so far as such reservations and exceptions pertain to and cover the real estate in Cibola County, New Mexico more particularly described in Exhibit B hereto (the "Property"), less and except the interests described in Exhibit C hereto and subject to the grants and interests set forth in the instruments set forth in Exhibit D hereto, all of which exhibits are incorporated herein by reference. LIMITATION OF REMEDY. Any warranty of title by the Grantor and any remedies of the Grantee or its successors and assigns related to the property covered by this Deed shall be limited to the remedies set forth in that certain AGREEMENT OF SANTA FE PACIFIC GOLD CORPORATION, AS URANCO, INC. SHAREHOLDER, AND URANIUM RESOURCES, INC., dated effective as of March 25, 1997 and that certain LICENSE TO EXPLORE AND OPTION TO PURCHASE by and between Grantor and Grantee, dated effective as of March 21, 1997, (copies of which are maintained in the offices of Grantor and Grantee and attorneys for Grantor, Modrall, Sperling, Roehl, Harris & Sisk, P.A., 500 Fourth St. N.W., Albuquerque, New Mexico 87102) and shall not include any other rights, damages or claims than those specifically set forth therein. Any rights asserted under the terms of such agreements must be brought within the time period set forth in such agreements. CONVEYANCE SUBJECT TO THE OBLIGATION TO PURCHASE ENTIRE MINERAL ESTATE. The grant of this deed is subject to the following right of Grantor. At such time as Grantee or its successors or assigns applies for a mining permit with respect to the Property or performs any activities on the Property which would require a mining permit, Grantor shall have the right to require Grantee or its successors or assigns to purchase all of the mineral estate (except coal in place, including development or mining rights related to coal) owned by Grantor on the portion of the Property which is the subject of the mining permit or activities which would require a mining permit for a purchase price of $200 per acre (the "Purchase 65 Price"), which Purchase Price shall be paid within 30 days after Grantor declares its right to require the purchase. The Purchase Price shall be increased by the same percentage as the percentage increase in the Spot Price of uranium on the date of Grantor's exercise of such right over $15.80 per pound. Grantee shall purchase such portions of property as entire sections or as much of each section as was originally conveyed by Grantor to Grantee. Additionally, Grantor grants to Grantee or its successor and assigns for a period of 99 years from the date of this Deed the option to purchase all of the remaining mineral estate (except coal in place, including development or mining rights related to coal) owned by Grantor in all or any portion of the Property for a total purchase price of $200 per acre (the "Purchase Price"), which Purchase Price will be payable within 30 days after Grantee or its successors or assigns elects to exercise the option to purchase. The Purchase Price shall be increased by the same percentage as the percentage increase in the Spot Price of uranium on the date of Grantor's exercise of such right over $15.80 per pound. Grantee shall purchase such portions of property as entire sections or as much of each section as was originally conveyed by Grantor to Grantee. The Spot Price shall mean that price at which uranium may be purchased for delivery within one year, as reported by TradeTech or its successors in interest, or, in the absence of TradeTech or a successor in interest, another accepted industry publication. CONVEYANCE DOES NOT INCLUDE COAL IN PLACE, INCLUDING DEVELOPMENT OR MINING RIGHTS. This Conveyance does not and is not intended to affect or purport to affect, in any way, coal in place, including development or mining rights related to coal, in any of the property of Grantor or any of its subsidiaries or affiliates including, but not limited to, the San Juan Basin Coal Holding Company, and coal in place and all such rights are EXCEPTED herefrom and RESERVED to Grantor. WITNESS its hand and seal this 21st day of March, 1997. SANTA FE PACIFIC GOLD CORPORATION By:/s/ BRUCE D. HANSEN ------------------------------------ (Seal) Bruce D. Hansen Senior Vice President-Corporate Development 66 STATE OF NEW MEXICO COUNTY OF BERNALILLO This instrument was acknowledged before me on March 21, 1997, by Bruce D. Hansen as Senior Vice President-Corporate Development of Santa Fe Pacific Gold Corporation. /s/ JACQUELINE WALSTON --------------------------------------- Jacqueline Walston (Seal) Notary Public My commission expires: 01/28/98 ---------------- 67 EXHIBIT A CATEGORY II DEED, CIBOLA COUNTY Deeds Reserving Mineral Rights Warranty Deed dated June 15, 1943, from Santa Fe Pacific Railroad Company to C.P. Duran and Jose M. Chavez. Warranty Deed dated May 1, 1946, from Santa Fe Pacific Railroad Company to C. P. Duran and Jose M. Chavez. 68 EXHIBIT B CATEGORY II DEED, CIBOLA COUNTY CONVEYANCE OF URANIUM RIGHTS TO URANCO (Revised 03/10/97) COMPANY: GOLD STATE: NM COUNTY: CIBOLA
MERIDIAN: NMPM ACRES ----- Township 11 North, Range 7 West ------------------------------- Section 31 Lots 1-4, E/2 NW/4, E/2 SW/4, NE/4, 634.52 SE/4 Township 11 North, Range 8 West ------------------------------- Section 25 All 640.00 ------ County Total 1,274.52
69 EXHIBIT C CATEGORY II DEED, CIBOLA COUNTY Items Not Included in Grant NONE 70 EXHIBIT D CATEGORY II DEED, CIBOLA COUNTY Items to which Deed is Subject Lease Option Agreement dated October 8, 1987 between Cerrillos Land Co. and Santa Fe Energy Co., as amended on July 1, 1988, and as amended on December 1, 1989, a memorandum in the official records of McKinley County, New Mexico. Real Estate Taxes for the years 1997 and subsequent years. 71 EXHIBIT 10.19 AFTER RECORDING RETURN TO: Margaret Lewis Meister Modrall, Sperling, Roehl, Harris & Sisk, P.A. P. O. Box 2168 Albuquerque, New Mexico 87103 ROYALTY DEED Category II Royalty Cibola STATE OF NEW MEXICO ) COUNTY OF CIBOLA ) SANTA FE PACIFIC GOLD CORPORATION, successor in interest by name change to Santa Fe Pacific Minerals Corporation, which is successor by merger to Cerrillos Land Company ("Grantor") whose address is 6200 Uptown Boulevard N.E., Suite 400, Albuquerque, New Mexico 87110, for consideration paid, GRANTS to URANCO, INC. ("Grantee"), whose address is 6200 Uptown Boulevard N.E., Suite 400, Albuquerque, New Mexico 87110, all of the royalty interest received by Santa Fe Pacific Railroad Company in the instrument described in Exhibit A hereto but only so far as such grant pertains to and covers the real estate in Cibola County, New Mexico more particularly described in Exhibit B hereto (the "Property"), less and except the interests described in Exhibit C hereto and subject to the grants and interests set forth in the instruments set forth in Exhibit D hereto, all of which exhibits are incorporated herein by reference. LIMITATION OF REMEDY. Any warranty of title by the Grantor and any remedies of the Grantee or its successors and assigns related to the property covered by this Deed shall be limited to the remedies set forth in that certain AGREEMENT OF SANTA FE PACIFIC GOLD CORPORATION, AS URANCO, INC. SHAREHOLDER, AND URANIUM RESOURCES, INC., dated effective as of March 25, 1997 and that certain LICENSE TO EXPLORE AND OPTION TO PURCHASE by and between Grantor and Grantee, dated effective as of March 21, 1997 (copies of which are maintained in the offices of Grantor and Grantee and attorneys for Grantor, Modrall, Sperling, Roehl, Harris & Sisk, P.A., 500 Fourth St. N.W., Albuquerque, New Mexico 87102) and shall not include any other rights, damages or claims than those specifically set forth therein. Any rights asserted under the terms of such agreements must be brought within the time period set forth in such agreements. CONVEYANCE DOES NOT INCLUDE COAL IN PLACE, INCLUDING DEVELOPMENT OR MINING RIGHTS. This conveyance does not and is not intended to affect or purport to affect, in any way, coal in place, including development or mining rights related to coal, in any of the property of Grantor or any of its subsidiaries or affiliates including, but not limited to, the San Juan Basin Coal Holding Company, and coal in place and all such rights are EXCEPTED herefrom and RESERVED to Grantor. 72 WITNESS its hand and seal this 21st day of March, 1997. SANTA FE PACIFIC GOLD CORPORATION By: /s/ BRUCE D. HANSEN ----------------------------------- (Seal) Bruce D. Hansen Senior Vice President-Corporate Development STATE OF NEW MEXICO COUNTY OF BERNALILLO This instrument was acknowledged before me on March 21 1997, by Bruce D. Hansen as Senior Vice President-Corporate Development of Santa Fe Pacific Gold Corporation. /s/ JACQUELINE WALSTON --------------------------------------- Jacqueline Walston (Seal) Notary Public My commission expires: 01/28/98 ---------------- 73 EXHIBIT A CATEGORY II DEED, CIBOLA COUNTY Deeds Reserving Mineral Rights Grant of Royalty dated February 10, 1983 from Gulf Oil Corporation to Santa Fe Pacific Railroad recorded in Book 1 of Misc., Page 3534 in the official records of Cibola County, New Mexico. 74 EXHIBIT B CATEGORY II ROYALTY DEED, CIBOLA COUNTY CONVEYANCE OF URANIUM RIGHTS TO URANCO (Revised 03/10/97) Township 13 North, Range 8 West ------------------------------- Section 25 Lots 5, 6, 8, 9, 10, E/2 NE/4 234.52 **Royalty Interest Only**
75 EXHIBIT C CATEGORY II DEED, CIBOLA COUNTY Items Not Included in Grant NONE 76 EXHIBIT D CATEGORY II DEED, CIBOLA COUNTY Items to which Deed is Subject Real Estate Taxes for the years 1997 and subsequent years. 77 EXHIBIT 10.19 AFTER RECORDING RETURN TO: Margaret Lewis Meister Modrall, Sperling, Roehl, Harris & Sisk, P.A. P. O. Box 2168 Albuquerque, New Mexico 87103 DEED Category II Sandoval STATE OF NEW MEXICO ) COUNTY OF SANDOVAL ) SANTA FE PACIFIC GOLD CORPORATION, successor in interest by name change to Santa Fe Pacific Minerals Corporation, which is successor by merger to Cerrillos Land Company ("Grantor") whose address is 6200 Uptown Boulevard N. E., Suite 400, Albuquerque, New Mexico 87110, for consideration paid, GRANTS to URANCO, INC. ("Grantee"), whose address is 6200 Uptown Boulevard N.E., Suite 400, Albuquerque, New Mexico 87110, all of the interest in uranium reserved by Santa Fe Pacific Railroad Company in the instruments described in Exhibit A hereto but only so far as such reservations and exceptions pertain to and cover the real estate in Sandoval County, New Mexico more particularly described in Exhibit B hereto (the "Property"), less and except the interests described in Exhibit C hereto and subject to the grants and interests set forth in the instruments set forth in Exhibit D hereto, all of which exhibits are incorporated herein by reference. LIMITATION OF REMEDY. Any warranty of title by the Grantor and any remedies of the Grantee or its successors and assigns related to the property covered by this Deed shall be limited to the remedies set forth in that certain AGREEMENT OF SANTA FE PACIFIC GOLD CORPORATION, AS URANCO, INC. SHAREHOLDER, AND URANIUM RESOURCES, INC., dated effective as of March 25, 1997 and that certain LICENSE TO EXPLORE AND OPTION TO PURCHASE by and between Grantor and Grantee, dated effective as of March 21, 1997 (copies of which are maintained in the offices of Grantor and Grantee and attorneys for Grantor, Modrall, Sperling, Roehl, Harris & Sisk, P.A., 500 Fourth St. N.W., Albuquerque, New Mexico 87102) and shall not include any other rights, damages or claims than those specifically set forth therein. Any rights asserted under the terms of such agreements must be brought within the time period set forth in such agreements. CONVEYANCE SUBJECT TO THE OBLIGATION TO PURCHASE ENTIRE MINERAL ESTATE. The grant of this deed is subject to the following right of Grantor. At such time as Grantee or its successors or assigns applies for a mining permit with respect to the Property or performs any activities on the Property which would require a mining permit, Grantor shall have the right to require Grantee or its successors or assigns to purchase all of the mineral estate (except coal in place, including development or mining rights related to coal) owned by Grantor on the portion of the Property which is the subject of the mining permit or activities which would require a mining permit for a purchase price of $200 per acre (the "Purchase 78 Price"), which Purchase Price shall be paid within 30 days after Grantor declares its right to require the purchase. The Purchase Price shall be increased by the same percentage as the percentage increase in the Spot Price of uranium on the date of Grantor's exercise of such right over $15.80 per pound. Grantee shall purchase such portions of property as entire sections or as much of each section as was originally conveyed by Grantor to Grantee. Additionally, Grantor grants to Grantee or its successor and assigns for a period of 99 years from the date of this Deed the option to purchase all of the remaining mineral estate (except coal in place, including development or mining rights related to coal) owned by Grantor in all or any portion of the Property for a total purchase price of $200 per acre (the "Purchase Price"), which Purchase Price will be payable within 30 days after Grantee or its successors or assigns elects to exercise the option to purchase. The Purchase Price shall be increased by the same percentage as the percentage increase in the Spot Price of uranium on the date of Grantor's exercise of such right over $15.80 per pound. Grantee shall purchase such portions of property as entire sections or as much of each section as was originally conveyed by Grantor to Grantee. The Spot Price shall mean that price at which uranium may be purchased for delivery within one year, as reported by TradeTech or its successors in interest, or, in the absence of TradeTech or a successor in interest, another accepted industry publication. CONVEYANCE DOES NOT INCLUDE COAL IN PLACE, INCLUDING DEVELOPMENT OR MINING RIGHTS. This conveyance does not and is not intended to affect or purport to affect, in any way, coal in place, including development or mining rights related to coal, in any of the property of Grantor or any of its subsidiaries or affiliates including, but not limited to, the San Juan Basin Coal Holding Company, and coal in place and all such rights are EXCEPTED herefrom and RESERVED to Grantor. WITNESS its hand and seal this 21st day of March, 1997. SANTA FE PACIFIC GOLD CORPORATION By: /s/ BRUCE D. HANSEN ----------------------------------- (Seal) Bruce D. Hansen Senior Vice President-Corporate Development 79 STATE OF NEW MEXICO COUNTY OF BERNALILLO This instrument was acknowledged before me on March 21, 1997, by Bruce D. Hansen as Senior Vice President-Corporate Development of Santa Fe Pacific Gold Corporation. /s/ JACQUELINE WALSTON ---------------------------- Jacqueline Walston (Seal) Notary Public My commission expires: 01/28/98 --------------- 80 EXHIBIT A CATEGORY II DEED, SANDOVAL COUNTY Deeds Reserving Mineral Interests Warranty Deed dated August 2, 1948, from Santa Fe Pacific Railroad Company to Frank Bond & Son, Inc., recorded in Volume 6 of Deed Records, Page 120. Warranty Deed dated April 1, 1949, from Santa Fe Pacific Railroad Company to Benjamin Benavidez, Abel Benavidez and Moises Benavidez, recorded in Volume 9 of Deed Records, Page 903, in the official records of Sandoval County, New Mexico. Warranty Deed dated December 6, 1938, from Santa Fe Pacific Railroad Company to Frank Bond and Son, recorded in Volume 5 of Deed Records, Page 42, in the official records of Sandoval County, New Mexico. Warranty Deed dated May 15, 1943, from Santa Fe Pacific Railroad Company to Frank Bond & Son, Ltd. Warranty Deed dated April 1, 1949, from Santa Fe Pacific Railroad Company to Faustino Benavidez, recorded in Volume 6 of Deed Records, Page 169, in the official records of Sandoval County, New Mexico. Warranty Deed dated December 15, 1943, from Santa Fe Pacific Railroad Company to Benjamin Benavidez, recorded in Volume 5 of Deed Records, Page 494, in the official records of Sandoval County, New Mexico. Warranty Deed dated November 1, 1949, from Santa Fe Pacific Railroad Company to O. F. Sandoval and Porfirio Sandoval. 81 EXHIBIT B CATEGORY II DEED, SANDOVAL COUNTY CONVEYANCE OF URANIUM RIGHTS TO URANCO (Revised 11/7/96) COMPANY: GOLD STATE: NM COUNTY: SANDOVAL
MERIDIAN: NMPM ACRES ----- Township 12 North, Range 1 East ------------------------------- Section 5 Lots 7, 8 SE/4, S/2 NW/4, Lot 6 451.11 NE/4, Lot 3 NW/4, Lot 5 NE/4, Lot 4 NW/4, SW/4 Section 6 All 614.74 Section 7 All 615.68 Section 8 Lots 1-4, NW/4, W/2 SW/4 354.06 Section 17 Lots 1-4 171.63 Section 18 All 614.56 Section 19 All 611.44 Section 20 Lots 1-4 178.14 Section 29 Lots 1-4, W/2 SW/4, SE/4 SW/4 253.05 Section 30 All 613.28 Section 31 All 616.80 Township 13 North, Range 1 East ------------------------------- Section 4 All 647.16 Section 5 All 650.80 Section 6 All 615.05 Section 7 All 599.88 Section 8 All 640.00 Section 9 All 640.00
B-1 82 Section 17 All 640.00 Section 18 All 600.68 Section 19 All 602.52 Section 20 All 640.00 Section 21 All 640.00 Section 28 All 640.00 Section 29 All 640.00 Section 30 All 606.27 Section 31 All, except North 300 ft. of 555.09 Section Section 33 All 534.92 Township 14 North, Range 1 East ------------------------------- Section 5 Lots 1-4, S/2 N/2, SE/4, NE/4 SW/4 531.88 Section 5 NW/4 SW/4, S/2 SW/4 120.00 Township 12 North, Range 1 West ------------------------------- Section 1 Lots 1-4, S/2 N/2, S/2 641.98 Section 3 Lots 1-4, S/2 N/2, S/2 647.18 Section 4 Lots 1-8 343.57 Section 9 Lots 1-8 341.56 Section 10 NE/4, NE/4 SE/4, W/2 SE/4, W/2 600.00 Section 11 All 640.00 Section 12 All 640.00 Section 13 All 640.00 Section 14 NE/4, S/2 480.00 Section 15 All 640.00 Section 21 Lots 1-8 341.64 Section 22 All 640.00
B-2 83 Section 23 All 640.00 Section 24 All 640.00 Section 25 All 640.00 Section 26 All 640.00 Section 27 E/2, E/2 SW/4 400.00 Section 27 NW/4, W/2 SW/4 240.00 Section 28 Lots 1-8 345.84 Section 33 Lots 1-8 344.52 Section 34 All 640.00 Section 35 W/2 320.00 Section 35 E/2 320.00 Township 13 North, Range 1 West ------------------------------- Section 12 All 640.00 Section 14 All 640.00 Section 22 N/2 320.00 Section 22 E/2 SE/4, N/2 SW/4 160.00 Section 24 All 640.00 Section 26 N/2, W/2 SE/4, SW/4 560.00 Section 28 Lots 1-4, E/2 338.88 Section 34 All, except North 300 ft. of 603.64 Section --------- County Total 31,307.55
B-3 84 EXHIBIT C CATEGORY II DEED, SANDOVAL COUNTY Items Not Included in Grant NONE 85 EXHIBIT D CATEGORY II DEED, SANDOVAL COUNTY Items to which Deed is Subject Lease Option Agreement dated October 8, 1987 between Cerrillos Land Co. and Santa Fe Energy Co., as amended on July 1, 1988, and as amended on December 1, 1989, a memorandum of which is recorded in Book 2, page 1630, in the official records of McKinley County, New Mexico. Surface and mineral limitation contained in Warranty Deed dated October 29, 1979 from Santa Fe Pacific Railroad to Paragon Resources, Incorporated covering certain lands in Section 28 and 29-13N-1E, Sandoval Co., NM. Real Estate taxes for years 1997 and subsequent years. 86 EXHIBIT 10.19 AFTER RECORDING RETURN TO: Margaret Lewis Meister Modrall, Sperling, Roehl, Harris & Sisk, P.A. P. O. Box 2168 Albuquerque, New Mexico 87103 DEED Category II Bernalillo STATE OF NEW MEXICO ) COUNTY OF BERNALILLO ) SANTA FE PACIFIC GOLD CORPORATION, successor in interest by name change to Santa Fe Pacific Minerals Corporation, which is successor by merger to Cerrillos Land Company ("Grantor") whose address is 6200 Uptown Boulevard N. E., Suite 400, Albuquerque, New Mexico 87110, for consideration paid, GRANTS to URANCO, INC. ("Grantee"), whose address is 6200 Uptown Boulevard N.E., Suite 400, Albuquerque, New Mexico 87110, all of the interest in uranium reserved by Santa Fe Pacific Railroad Company in the instruments described in Exhibit A hereto but only so far as such reservations and exceptions pertain to and cover the real estate in Bernalillo County, New Mexico more particularly described in Exhibit B hereto (the "Property"), less and except the interests described in Exhibit C hereto and subject to the grants and interests set forth in the instruments set forth in Exhibit D hereto, all of which exhibits are incorporated herein by reference. LIMITATION OF REMEDY. Any warranty of title by the Grantor and any remedies of the Grantee or its successors and assigns related to the property covered by this Deed shall be limited to the remedies set forth in that certain AGREEMENT OF SANTA FE PACIFIC GOLD CORPORATION, AS URANCO, INC. SHAREHOLDER, AND URANIUM RESOURCES, INC., dated effective as of March 25, 1997 and that certain LICENSE TO EXPLORE AND OPTION TO PURCHASE by and between Grantor and Grantee, dated effective as of March 21, 1997 (copies of which are maintained in the offices of Grantor and Grantee and attorneys for Grantor, Modrall, Sperling, Roehl, Harris & Sisk, P.A., 500 Fourth St. N.W., Albuquerque, New Mexico 87102) and shall not include any other rights, damages or claims than those specifically set forth therein. Any rights asserted under the terms of such agreements must be brought within the time period set forth in such agreements. CONVEYANCE SUBJECT TO THE OBLIGATION TO PURCHASE ENTIRE MINERAL ESTATE. The grant of this deed is subject to the following right of Grantor. At such time as Grantee or its successors or assigns applies for a mining permit with respect to the Property or performs any activities on the Property which would require a mining permit, Grantor shall have the right to require Grantee or its successors or assigns to purchase all of the mineral estate (except coal in place, including development or mining rights related to coal) owned by Grantor on the portion of the Property which is the subject of the mining permit or activities which would require a mining permit for a purchase price of $200 per acre (the "Purchase 87 Price"), which Purchase Price shall be paid within 30 days after Grantor declares its right to require the purchase. The Purchase Price shall be increased by the same percentage as the percentage increase in the Spot Price of uranium on the date of Grantor's exercise of such right over $15.80 per pound. Grantee shall purchase such portions of property as entire sections or as much of each section as was originally conveyed by Grantor to Grantee. Additionally, Grantor grants to Grantee or its successor and assigns for a period of 99 years from the date of this Deed the option to purchase all of the remaining mineral estate (except coal in place, including development or mining rights related to coal) owned by Grantor in all or any portion of the Property for a total purchase price of $200 per acre (the "Purchase Price"), which Purchase Price will be payable within 30 days after Grantee or its successors or assigns elects to exercise the option to purchase. The Purchase Price shall be increased by the same percentage as the percentage increase in the Spot Price of uranium on the date of Grantor's exercise of such right over $15.80 per pound. Grantee shall purchase such portions of property as entire sections or as much of each section as was originally conveyed by Grantor to Grantee. The Spot Price shall mean that price at which uranium may be purchased for delivery within one year, as reported by TradeTech or its successors in interest, or, in the absence of Trade Tech or a successor in interest, another accepted industry publication. CONVEYANCE DOES NOT INCLUDE COAL IN PLACE, INCLUDING DEVELOPMENT OR MINING RIGHTS. This conveyance does not and is not intended to affect or purport to affect, in any way, coal in place, including development or mining rights related to coal, in any of the property of Grantor or any of its subsidiaries or affiliates including, but not limited to, the San Juan Basin Coal Holding Company, and coal in place and all such rights are EXCEPTED herefrom and RESERVED to Grantor. WITNESS its hand and seal this 21st day of March, 1997. SANTA FE PACIFIC GOLD CORPORATION By: /s/ BRUCE D. HANSEN ----------------------------------- (Seal) Bruce D. Hansen Senior Vice President-Corporate Development 88 STATE OF NEW MEXICO COUNTY OF BERNALILLO This instrument was acknowledged before me on March 21, 1997, by Bruce D. Hansen as Senior Vice President- Corporate Development of Santa Fe Pacific Gold Corporation. (Seal) /s/ JACQUELINE WALSTON --------------------------------------- Notary Public My commission expires: 01/28/98 ---------------- 89 EXHIBIT A CATEGORY II DEED, BERNALILLO COUNTY Deeds Reserving Mineral Interests Warranty Deed dated January 27, 1949, from Santa Fe Pacific Railroad Company to Sam R. Angell, Sr. 90 EXHIBIT B CATEGORY II DEED, BERNALILLO COUNTY CONVEYANCE OF URANIUM RIGHTS TO URANCO (Revised 11/7/96) COMPANY: GOLD STATE: NM COUNTY: BERNALILLO
MERIDIAN: NMPM ACRES ----- Township 11 North, Range 1 East ------------------------------- Section 5 Lots 3-7, SW/4 NW/4, NW/4 SW/4 257.09 Section 7 All 623.58 Section 19 All 622.72 Township 11 North, Range 1 West ------------------------------- Section 1 Lots 1-4, S/2 NE/4, S/2 NW/4, SE/4, 634.78 SW/4 Section 3 Lots 1-4, S/2 NE/4, S/2 NW/4, SE/4, 626.78 SW/4 Section 9 Lots 1-4, E/2 NE/4, E/2 SE/4 332.78 Section 11 All 640.00 Section 13 All 640.00 Section 15 All 640.00 Section 21 Lots 1-4, E/2 NE/4, E/2 SE/4 319.66 Section 23 All 640.00 Section 25 Lots 1-4, N/2 NE/4, N/2 NW/4 181.60 Section 27 Lots 1-4, N/2 NE/4, N/2 NW/4 180.40 -------- County Total 6,339.39
91 EXHIBIT C CATEGORY II DEED, BERNALILLO COUNTY Items Not Included in Grant NONE 92 EXHIBIT D CATEGORY II DEED, BERNALILLO COUNTY Items to which Deed is Subject Lease Option Agreement dated 10-08-97 between Cerrillos Land Co. and Santa Fe Energy Co., as amended on July 1, 1988, and as amended on December 1, 1989, a memorandum of which is recorded in Book 2, page 1630, in the official records of McKinley County, New Mexico. Real Estate Taxes for the years 1997 and subsequent years. EX-10.21 3 LICENSE TO EXPLORE AND OPTION TO PURCHASE 1 EXHIBIT 10.21 LICENSE TO EXPLORE AND OPTION TO PURCHASE THIS LICENSE TO EXPLORE AND OPTION TO PURCHASE ("LICENSE") is dated and effective March 21, 1997 by and between Santa Fe Pacific Gold Corporation, a Delaware corporation ("Licensor") and Uranco, Inc., a Delaware corporation ("Licensee"). RECITALS A. The property interest which is the subject of this License is described in Exhibit A to this License and shall be referred to as "Licensed Premises" for purposes of this License unless otherwise specified. B. Licensor wishes to allow Licensee to explore for uranium on the Licensed Premises, all on the terms and conditions hereinafter set forth. C. In consideration for the grant of the License and other valuable consideration, Licensor shall require exploration by Licensee on the Licensed Premises and other designated lands set forth in Exhibit B as to which Licensor has conveyed the uranium estate to Licensee (the "Category II Property"), all on the terms and conditions hereinafter set forth. The Licensed Premises and the Category II Property shall be collectively referred to herein as the "Exploration Property." D. Licensor wishes to grant Licensee the option to purchase the mineral estate owned by Licensor, (except coal in place, including development or mining rights related to coal) in the Licensed Premises and to impose on Licensee the obligation to purchase the mineral estate owned by Licensor, (except coal in place, including development or mining rights related to coal) before Licensee obtains any mining permit or performs any activities which would require a mining permit on any portion of the Licensed Premises. NOW, THEREFORE, for adequate consideration, the receipt and sufficiency of which is hereby acknowledged, and in consideration for the mutual promises of Licensor and Licensee stated in this License, Licensor and Licensee agree as follows: 1. GRANT OF LICENSE. a. Licensor hereby grants to Licensee, for a term of seventeen (17) years, commencing on the date of the execution hereof, the exclusive right to explore, sample and test the Licensed Premises for uranium and to use geological, geophysical and geochemical data and interpretive data (except data relating to coal, including the development or mining of coal), which has been provided from Licensor to Licensee. b. Licensor does not warrant the title to or quiet possession by Licensee of the Licensed Premises or the uranium or any other minerals on or in the Licensed Premises. Except 2 as provided in that certain Agreement of Santa Fe Pacific Gold Corporation, as Uranco, Inc. Shareholder and Uranium Resources, Inc. dated effective as of March 25, 1997 (the "Shareholder Agreement") and under this License, Licensor shall in no event become liable for damages arising from any lack or failure of title in the Licensor to the Licensed Premises, the inability of Licensee to explore for uranium or eviction of the Licensee from the Licensed Premises for any reason. c. The rights of Licensee under this License shall be subject to the right of Licensor to use the Licensed Premises for any and all purposes not detrimental to Licensee's use of the Licensed Premises for the purposes permitted in Paragraph 1 of this License. Licensor may lease to third parties the mineral estate other than uranium on the Exploration Property; provided, however, that except for coal in place, including development or mining rights related to coal, Licensor shall not sell any of the mineral estate on the Exploration Property to any party except Licensee, its successors and assigns until such time as Licensee's right and obligation to purchase the remaining mineral estate is relinquished or terminated pursuant to the terms of this License. d. Licensee accepts this License subject to the aforesaid terms and provisions and also subject to the terms and provisions of the deed or deeds by which Licensor reserved the minerals in the Licensed Property and all other grants and encumbrances set forth in Exhibit C to this License. 2. LICENSEE'S OBLIGATIONS. As a part of the consideration for the grant of this License, Licensee agrees: a. Assumption of Licensor's Obligations to Others: By commencing operations on any part of the Licensed Premises, Licensee assumes all obligations of Licensor related to or arising out of Licensee's operations, if any, to the surface owner or third party minerals owners of that portion of the Licensed Premises to be affected by such operation(s), and agrees to pay any such third party surface and mineral owners for any and all damages for which it or Licensor would be liable as a result of Licensee's operations. Any amounts which Licensor shall be required to pay to any surface or mineral owners by reason of the action or inaction of Licensee, its agents, employees, subcontractors and representatives, related to or arising out of Licensee's activities, shall be reimbursed to Licensor within thirty (30) days after written demand for reimbursement is made by Licensor upon Licensee. b. Approval of Agreements Affecting Licensor: To obtain Licensor's approval of any proposed agreement prior to Licensee entering into any permanent arrangement with any owner of the surface overlying any of the Licensed Premises, which approval will not be unreasonably withheld. c. Insurance: To carry and maintain at all times the following insurance coverage which shall name Licensor as an additional named insured: -2- 3 (i) Worker's Compensation including Occupational Disease with a minimum limit liability of $100,000 for Employers Liability or an amount required by the State of New Mexico, whichever is higher; (ii) Comprehensive General Liability with limits not less than $1,000,000 combined single limit, including: (a) Blanket Contractual Liability (b) Personal Injury (c) Independent Contractors (d) Removal of the "XCU" Exclusions; (iii) Automobile Liability with limits not less than $1,000,000 combined single limit including all owned, non-owned and hired automobiles; (iv) "All Risk" physical damage insurance on all surface facilities, (v) Excess Umbrella Liability coverage with limits of not less than $5 million covering its operations under this License. Prior to January 1 of each year during the term, Licensee shall provide to Licensor evidence that the required insurance is in effect. d. OPERATIONS IN ACCORDANCE WITH LAW: To comply with all applicable statutes, regulations, rules and orders of all governmental bodies with jurisdiction over the Licensed Premises related to Licensee's operations on the Licensed Premises, regardless of when they become or became effective, including, without limitation, those relating to health, safety, noise, environmental protection, waste disposal, and water and air quality. Licensee shall furnish Licensor with satisfactory evidence of such compliance upon request of Licensor. Should any discharge, leakage, spillage, emission or pollution of any type occur upon or from the Licensed Premises due to Licensee's use and occupance, Licensee, at its expense, shall clean and restore the Licensed Premises to standards equal to or exceeding standards imposed by any governmental body having jurisdiction over the Licensed Premises. e. MINING PERMIT: Licensee shall not perform any activities which require a mining permit on any portion of the Licensed Premises until the Purchase Price has been paid and a deed as set forth in Paragraph 4 of this License has been recorded. f. DISCHARGE OF LIENS: To discharge, remove, satisfy and take all other action to eliminate and prevent any and all liens and encumbrances, except those existing prior to the date of this License or resulting from taxes not yet due and payable, which attach to or are imposed against any interest owned by Licensor in any portion of the Licensed Premises, that arise out of Licensee's acts or omissions. If any person threatens any action which might result in the imposition or attachment of any such lien or encumbrance, Licensee shall, at its sole expense, -3- 4 take all reasonable action necessary to prevent the imposition or attachment of any such lien or encumbrance. Licensee shall have the right to contest in good faith the imposition of any such lien or encumbrance. g. Upon purchase by Licensee pursuant to Section 4 of this License of the remaining mineral estate (except coal in place, including development or mining rights related to coal) in all or a portion of the Licensed Premises, such property purchased shall no longer be subject to the terms of this License, except for the provisions of Section 6 of this License. 3. MULTIPLE USE. a. Licensee shall carry out all activities and operations on the Exploration Property in a manner compatible with the multiple use of the Exploration Property and shall avoid interference with the operations of any third parties who began or begin operations on the Exploration Property before Licensee. If Licensee knowingly encounters any minerals that are owned by a party other than Licensor, Licensee shall report such substances in its semi-annual report to Licensor pursuant to Paragraph 6 of this License and shall take all reasonable steps necessary to prevent any waste of such minerals. If any portion of the Exploration Property is determined to contain any substance owned by a third party, and that third party desires to explore for, develop, mine, remove or process such substance, Licensee shall in good faith attempt to adjust the timing, planning, location and construction of its operations to permit the exploration, development, mining, removing or processing of the substance. b. Licensor shall include a provision substantially similar to 3(a) herein in any grant of rights to any third party affecting any part of the Exploration Property to the end that the obligations placed upon Licensee under the terms hereof shall be mutually binding upon Licensee and any party hereafter acquiring an interest in the lands within the Exploration Property. 4. GRANT OF OPTION TO PURCHASE AND OBLIGATION TO PURCHASE. a. The "Spot Price" of uranium as used in this License shall mean that price at which uranium may be purchased for delivery within one year, as reported by TradeTech or its successor in interest or, in the absence of TradeTech or a successor in interest, another accepted industry publication. b. At such time as Licensee applies for a mining permit with respect to any of the Licensed Premises or performs any activities which would require a mining permit, Licensor shall have the right to require the Licensee to purchase all of the mineral estate (except coal in place, including development or mining rights related to coal) owned by Licensor in the Licensed Premises which is the subject of a mining permit or activities which would require a mining permit. The purchase price shall be $200 per acre (the "Purchase Price"). Licensee shall purchase such portions of property as entire sections of land, or as much of the section as is licensed pursuant to this License. The Purchase Price shall be paid within 30 days after Licensor gives notice to Licensee that it elects to exercise the option to require purchase. The -4- 5 Purchase Price shall be increased by the same percentage as the percentage increase in the Spot Price of uranium on the date of Licensor's exercise of such option over $15.80 per pound. Upon payment of the full Purchase Price, Licensor shall (i) execute and deliver to Licensee a deed in the form of Exhibit D attached to this License which shall be made subject to all matters of which Licensor has notice at the time of the conveyance, including but not limited to the instruments set forth in Exhibit C attached to this License, and (ii) convey title to all geological, geophysical and geochemical data and interpretive data (except data relating to coal, including the development or mining of coal) related to the mineral interests being conveyed. c. Licensor grants to Licensee during the term of this License the sole and exclusive option to purchase all of the remaining mineral estate (except coal in place, including development or mining rights related to coal) owned by Licensor in the Licensed Premises, or any part thereof, under the same terms and conditions set forth in Section 4(b) of this Agreement, except that Licensee shall not be obligated to apply for a mining permit before exercising this option. d. The exercise of this option as to a part of the Licensed Premises shall not extinguish Licensee's option to thereafter acquire, from time to time, all or any part of the remainder of the Licensed Premises. 5. EXPLORATION COMMITMENT. a. Licensee shall expend not less than $200,000 per year in exploration on the Exploration Property for License Years 1 through 10. Licensee shall expend not less than $400,000 per year on the Exploration Property for License Years 11 through 17. A License Year shall run from the date this License is signed and each anniversary of that date through the day preceding the anniversary date of the signing of this License. A breach of Licensee's obligation to perform the exploration requirements set forth in this Paragraph 5 shall only give rise to a right by Santa Fe to terminate this License and shall not give rise to any other remedies in law or in equity. b. Additionally, if the Spot Price for uranium shall exceed $25 per pound for any consecutive twelve-month period, Licensee shall spend on exploration (or pay to Licensor) during the 5 years following an aggregate of $5 million on the Licensed Premises. In the event that the Spot Price for uranium shall exceed $30 per pound for any twelve-month period, Licensee shall commit to spend on exploration (or shall pay Licensor) during the following 5 years an aggregate of $10 million on the Licensed Premises, (All expenditures on exploration required pursuant to this Paragraph 5 shall be referred to herein as the "Exploration Expenditures"). c. Licensee shall have the right to credit any Exploration Expenditures in one year in excess of required amounts to future years. The requirements for Exploration Expenditures shall be separate from any amounts paid for the purchase of the uranium or mineral estate from Licensor, and any such purchase price shall not be credited toward the Exploration Expenditures. -5- 6 The obligations in this Section 5 regarding Exploration Expenditures shall terminate upon the termination of this License. d. Licensee shall determine the manner, places and means by which Licensee makes Exploration Expenditures. Such Exploration Expenditures shall be made and conducted reasonably in accordance with mining industry standards. 6. [ * ] 7. INSPECTION OF LICENSED PREMISES, BOOKS AND RECORDS OF LICENSEE. Licensor or its authorized representatives may enter, during ordinary business hours, into or upon all parts of the Licensed Premises for the purposes of making inspections or visual surveys or taking samples. Licensee shall, at Licensee's cost, assist Licensor or its representatives in the conduct of any inspections, visual surveys or samplings. Licensee shall furnish summary reports to Licensor, including maps, drill hole logs and reports showing all factual data concerning exploration activities on the Exploration Property, including, but not limited to, amounts spent on exploration. Licensee shall furnish such reports at semiannual intervals on January I and July 1 of each year of the License. Each report shall be complete as of the preceding calendar half. Licensee shall maintain complete and accurate books and records of Licensee's activities on or related to the Exploration Property and the exploration or discovery of uranium or other minerals and amounts expended in exploration. Licensor shall have the right to inspect, review and copy, at Licensor's expense, during ordinary business hours, all books and records related to Licensee's activities on the Exploration Property. While Licensee shall faithfully and truthfully report to Licensor the information required by this paragraph, no liability will be incurred by Licensee because of the inaccuracy of any analysis or interpretation of any such information or the inadvertent omission of any information, the omission of which will not make the information furnished substantially misleading. The requirements of this section are not applicable to any portion of the Licensed Premises purchased by Uranco pursuant to this License after the date it is purchased. - ----------------- * Confidential portion consisting of 1 1/2 pages has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. -6- 7 8. LICENSEE'S INDEMNIFICATION OF LICENSOR. a. Licensee shall indemnify, hold harmless and defend Licensor against all liability, cost and expense (including without limitation any fines, penalties, judgments, third party claims, litigation cost and attorney fees) incurred by Licensor as a result of: (i) the use of the Exploration Property by Licensee, its agents, employees or invitees; or any discharge, leakage, spillage, emission or pollution, caused by Licensee's operation on the Licensed Premises, regardless of whether such liability, cost or expense arises during or after the term of this License. (ii) Licensee's breach of any provision of this License. b. Licensee shall pay all amounts due Licensor under this Paragraph within 30 days after any such amounts become due and, upon failure to make such payment within such time, all amounts due shall become a lien upon all property of the Licensee upon the Licensed Premises. c. Licensor may post notices of non-liability on the Licensed Premises to the extent that such posting is permitted by applicable law, and Licensee shall not disturb or damage any of Licensor's postings. 9. LIMITATION ON INDEMNIFICATION. a. To the extent, if at all, that a court of competent jurisdiction determines that NMSA 1978, Section 56-7-2 (Repl. Pamp. 1996) applies to any provision of this Agreement, then any and all provisions of indemnification shall not indemnify any indemnitee against loss or damages, for: (i) death of bodily injury to persons; or (ii) injury to property; or (iii) any other loss, damage or expense arising under (i) or (ii) or both; or (iv) any combination of these, arising from the sole or concurrent negligence of the indemnitee or the agents or employees of the indemnitee or any -7- 8 independent contractor who is directly responsible to the indemnitee, or from any accident which occurs in operations carried on at the direction or under the supervision of the indemnitee or an employee or representative of the indemnitee or in accordance with methods and means specified by the indemnitee or employees or representations of the indemnitee. b. To the extent, if at all, that a court of competent Jurisdiction determines that NMSA 1978, Section 56-7-1 applies to the indemnification set forth in this License, the indemnification does not apply to liability, claims, damages, losses or expenses, including attorney fees arising out of: (i) the preparation or approval of maps, drawings, opinions, reports, surveys, change orders, designs or specifications by the indemnitee, or the agents or employees of the indemnitee; or (ii) the giving of or failure to give directions or instructions by the indemnitee, or the agents or employees of the indemnitee, where such giving or failure to give directions or instructions is the primary cause of bodily injury to persons or damage to property. 10. LICENSEE'S OBLIGATIONS UPON SURRENDER. Upon expiration, termination or cancellation of this License, Licensee shall surrender the Licensed Premises in good order and condition and with respect to Licensee's operations conducted thereon, in compliance with all governmental laws, ordinances, rules, regulations, requirements and orders affecting conditions or the activities of Licensee on the Licensed Premises, including, but not limited to, those relating to conservation of lands and waters and air and water quality, which are in effect and become effective during the term hereof. Licensee shall have 3 months from the date of expiration, termination or cancellation to remove all its machinery, tools, facilities and improvements from the Licensed Premises; provided, however, that no tools, machinery, facilities or improvements shall be removed while Licensee may be in any manner indebted to Licensor under any obligation imposed by this License. Licensee shall also post appropriate warning signs at or near all surface openings created by it and provide such other safeguards to persons and property. 11. NOTICES. a. Any notice to be given by Licensor to Licensee shall be property served when addressed to Uranco, Inc., c/o Uranium Resources, Inc. at 12750 Merit Drive, Suite 1020, Dallas, Texas 75251, Attn: President or any other address Licensee provides in writing to Licensor. -8- 9 With a copy to Alfred C. Chidester, Baker and Hostetler LLP, 303 East 17th Avenue, Suite 1100, Denver, Colorado 80203-1264. With a copy to J.W. Cooper, Cooper and Cooper, Suite 1550, Frost Bank Plaza, Corpus Christi, Texas 78470. b. Any notice to be given by Licensee to Licensor shall be properly served when addressed to Santa Fe Pacific Gold Corporation, 6200 Uptown Boulevard, NE, Suite 400, Albuquerque, New Mexico 87110, Attn: Wayne Jarke or any other address Licensor provides in writing to Licensee. With a copy to Modrall, Sperling, Roehl, Harris & Sisk, P.A., P. 0. Box 2168, Albuquerque, New Mexico 87103, Attn: John R. Cooney. c. Notices shall be effective upon personal delivery or other receipt by either party. 12. LICENSEE NOT RELEASED BY TERMINATION. No termination, expiration or cancellation of this License shall release Licensee from any liability or obligation under this License, whether of indemnity or otherwise, resulting from or relating to any acts, omissions or events happening prior to the date of termination, expiration or cancellation, except that the requirements to pay Exploration Expenditures terminate upon termination of the License. 13. EVENTS OF DEFAULT. a. If Licensee (i) performs any actions which give rise to the need for a mining permit pursuant to any applicable law without obtaining a mining permit, (ii) releases hazardous substance or waste, as those terms are defined in any applicable federal, state or local law or ordinance, on the Licensed Premises, (iii) contaminates ground or surface water so that it does not meet drinking water standards of applicable law, (iv) causes harm to an endangered species as defined in applicable law, or (v) fails to comply with any term or condition of this License or fulfill any obligation under this License, including without limitation Section 2(d) and Section 3(a) of this License (other than failure to make a payment of money when due), Licensee is in default under the terms of this License. If Licensee fails to cure such default within 30 days after the completion of the conference set forth in Section 18 herein and the receipt of notice from Licensor specifying the nature of the default, Licensor may cancel this License by written notice to Licensee. If the default cannot be completely corrected within the 30 day period, this License shall not be cancelled, provided Licensee commences correction or mitigation of the default fall within the 30 day period and thereafter proceeds with reasonable diligence and in good faith and effects the remedy as soon as practicable. -9- 10 b. In the event correction is not reasonably possible, adequate mitigation satisfactory to Licensor which is commenced and completed pursuant to Section 13a of this License shall be accepted as a cure for default. c. If Licensee fails to make any payment of money to Licensor when due, Licensor may cancel this License upon written notice to Licensee and Licensee's failure to pay the full amount due within 30 days after Licensee's receipt of Licensor's notice. In no event shall cancellation be the exclusive remedy of Licensor. d. Commercial frustration, commercial impracticability or the occurrence of unforeseen events, rendering performance of this License uneconomical, shall not constitute an excuse of nonperformance of any obligation imposed by this License. In the event Licensor or Licensee is prevented from performing any obligations under this License other than payment of money, by an event or occurrence which is beyond the reasonable control of the prevented party and which cannot reasonably be overcome through the exercise of due diligence, performance of that obligation shall be excused for so long as the effects of the event or occurrence prevent performance. 14. CONTINUATION OF PERFORMANCE DURING PERIOD OF BREACH. Licensor and Licensee shall continue to perform and not withhold performance during periods of breach. Continuation of performance, including the receipt of any payment by a nonbreaching party with knowledge of the breach, shall not constitute a waiver of any rights under this License. Notwithstanding the foregoing, if Licensee breaches this License, Licensor may seek to obtain appropriate judicial action, including restraining orders, injunctions and other decrees, to prevent Licensee from continuing operations on the Licensed Premises which cause or imminently threaten to cause irreparable damage to the Licensed Premises or waste of minerals. 15. CHOICE OF LAW AND CHOICE OF FORUM. This License shall be governed by and construed in accordance with the internal law of the State of New Mexico without giving effect to conflicts of law principles thereof. Licensor and Licensee agree that all litigation arising out of or related to this License for the performance or non-performance of actions contemplated by this License shall be brought in a federal or state court of competent jurisdiction within the state of New Mexico. Licensor and Licensee consent to Jurisdiction of such a court. In any action or proceeding brought to enforce any provision of this License, or where any provision hereof is validly asserted as a defense, the prevailing party shall be entitled to recover reasonable attorneys' fees in addition to any other available remedy. 16. ASSIGNMENT OF LICENSE. Licensee shall not assign its rights and/or obligations under this License without the prior written consent of Licensor, which consent shall not be unreasonably withheld. -10- 11 17. MODIFICATION OF LICENSE. Only written modification of this License duly authorized and signed by Licensor and Licensee shall be effective. No writing shall constitute a modification unless the writing is expressly identified as a modification with specific reference to the provisions of this License to be modified. No modification shall be effective prior to the date the modification is signed by Licensor and Licensee, unless the modification expressly provides. 18. EXECUTIVE CONFERENCE. In the event of any dispute arising between the parties regarding matters set forth in this License, the parties agree that before a request for relief is filed in a court of law or this License is terminated for an Event of Default, an executive from each party with the authority to address and attempt to resolve the dispute will meet in an attempt to reach a resolution of the dispute satisfactory to both parties. This provision shall not be construed to require a meeting with any third parties, such as a mediator or arbitrator. 19. INTEGRATION CLAUSE. This License is entered into by the parties in connection with a transaction involving the transfer of common stock of Licensee owned by Licensor to Uranium Resources, Inc. ("URI") in exchange for common stock of URI, the grant by URI to Licensor of registration rights with respect to the stock of URI to be issued to Licensor, the grant by Licensor to Licensee of a license to explore and an option to purchase in exchange for certain commitments by Licensee, and the guarantee by URI of certain obligations of Licensee to Licensor. In order to effect this transaction, certain of the parties have contemporaneously entered into certain agreements, specifically, the Stock Exchange Agreement and Plan of Reorganization (URI and Licensee), the Agreement of SFPG as Uranco Shareholder and Guarantee of URI (Licensor and URI); the License to Explore and Option to Purchase (Licensor and Licensee); and the Registration Rights Agreement (Licensor and URI). All of such agreements, together with all exhibits or schedules thereto and documents delivered pursuant thereto, contain the entire agreement among the parties with respect to the contemplated transaction, and shall supersede all previous writings and all previous or contemporaneous oral negotiations, commitments, and understandings. 20. MEMORANDUM OF LICENSE. Contemporaneously with executing this License, Licensor and Licensee shall execute a Memorandum of License setting forth certain provisions of this License, and either party may choose to record such Memorandum. 21. COUNTERPARTS. This License may be executed in any number of counterparts, each of which shall be deemed to be an original. -11- 12 LICENSOR: SANTA FE PACIFIC GOLD CORPORATION By:/s/ Bruce D. Hansen ------------------------------ Title: Senior Vice President - ------------------------ Corporate Development ------------------------ LICENSEE: URANCO, INC. By:/s/ Bruce D. Hansen ------------------------------ Title:President --------------------------- -12- 13 LIST OF EXHIBITS TO BE ATTACHED: Exhibit A Description of Licensed Premises Exhibit B Description of Category II Property Exhibit C Matters to Which the License is Made Subject Exhibit D Form of Deed Exhibit E Instruments Granting Surface Rights and Retaining Mineral Rights -13- 14 EXHIBIT A TO LICENSE TO EXPLORE AND OPTION TO PURCHASE CATEGORY 3 LANDS (REVISED 03/10/97) COMPANY: GOLD STATE: NM COUNTY: MCKINLEY
MERIDIAN: NMPM ACRES ----- Township 17 North, Range 5 West ------------------------------- Section 5 LOTS 1-4,S/2 NE/4, S/2 NW/4, SE/4, SW/4 639.68 Section 7 LOTS 1-4, E/2, E/2 W/2 649.16 Section 8 ALL 640.00 Section 9 ALL 640.00 Section 17 ALL 640.00 Section 18 ALL 647.16 Section 19 LOTS 1-4, E/2, E/2 W/2 644.48 Section 20 ALL 640.00 Section 21 ALL 640.00 Section 28 ALL 640.00 Section 29 ALL 640.00 Section 30 ALL 641.44 Section 31 LOTS 1-4, E/2 NW/4, E/2 SW/4, NE/4, SE/4 639.76 Section 32 S/2 SW/4 80.00 Section 33 ALL 640.00 Township 19 North, Range 5 West ------------------------------- Section 19 LOTS 1, 2, E/2 NW/4 162.06
A-1 15 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Section 19 LOTS 3, 4, E/2 SW/4 162.02 Section 29 ALL 640.00 Section 30 ALL 645.24 Section 31 LOTS 1-4, E/2 NW/4, E/2 SW/4, NE/4, SE/4 649.04 Section 33 ALL 640.00 Township 14 North, Range 6 West ------------------------------- Section 5 LOTS 1-8, S/2 N/2, S/2 648.24 Township 15 North, Range 6 West ------------------------------- Section 5 LOTS 1, 2, NW/4 NW/4 102.24 Section 6 LOTS 1, 2, 3, NE/4, NW/4 SE/4, W/2 611.13 Section 7 LOTS 1-4, NE/4 NW/4, W/2 NW/4 237.80 Section 8 LOT 1 14.66 Section 15 LOTS 1-4 142.76 Section 17 LOT 1 4.78 Section 17 LOTS 2-8, W/2 SE/4 357.96 Section 19 LOTS 1-4 114.38 Section 19 SE/4 SE/4 40.00 Section 21 ALL 640.00 Section 22 SE/4, W/2 480.00 Section 23 ALL 640.00 Section 27 ALL 640.00 Section 29 LOTS 1-4 28.00 Section 29 LOTS 5-8, W/2 E/2, W/2 666.40
A-2 16 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Section 31 ALL 640.00 Section 33 N-E/4, W/2 480.00 Township 16 North, Range 6 West ------------------------------- Section 1 ALL 640.00 Section 3 ALL 640.00 Section 4 ALL 640.00 Section 5 LOTS 1-4,W/2 E/2, W/2 584.00 Section 5 LOTS 5-8 45.16 Section 6 ALL 640.00 Section 7 LOTS 1-4,E/2 NW/4, E/2 SW/4, NE/4, SE/4 639.46 Section 8 ALL 628.56 Section 9 ALL 640.00 Section 10 ALL 640.00 Section 11 ALL 640.00 Section 13 ALL 640.00 Section 14 NE/4, N/2 SE/4 240.00 Section 15 ALL 640.00 Section 17 LOTS 1-4, W/2 E/2 267.40 Section 17 W/2 320.00 Section 17 LOTS 5-8 42.12 Section 18 ALL 638.66 Section 19 LOTS 1-4, E/2 NW/4, E/2 SW/4, NE/4, SE/4 639.84 Section 20 ALL 632.20
A-3 17 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Section 21 W/2 320.00 Section 21 NE/4 160.00 Section 22 NE/4, W/2 480.00 Section 23 ALL 640.00 Section 25 LOTS 1-4, N/2, N/2 S/2 521.12 Section 26 LOTS 1-4, N/2, N/2 S/2 530.20 Section 27 LOTS 1-4, N/2, N/2 S/2 537.88 Section 28 N/2, N/2 SE/4 400.00 Section 29 LOTS 1-7, W/2 NE/4, NW/4, NW/4 SE/4, N/2 SW/4 582.82 Section 29 LOTS 8-14 131.60 Section 30 LOTS 1-6, 9-11, NE/4, E/2 NW/4, N/2 SE/4, NE/4 SW/4 666.50 Section 31 ALL 640.00 Township 17 North, Range 6 West ------------------------------- Section 1 LOTS 1-4, S/2 NE/4, S/2 NW/4, SE/4, SW/4 640.72 Section 3 LOTS 1-4, S/2 NE/4, S/2 NW/4, SE/4, SW/4 641.12 Section 4 ALL 641.12 Section 5 LOTS 1-7, SW/4 NE/4, S/2 NW/4, W/2 SE/4, SW/4 588.88 Section 5 LOTS 8-11 43.26 Section 6 ALL 641.44 Section 7 LOTS 1-4, E/2 NW/4, E/2 SW/4, NE/4, SE/4 641.00 Section 12 ALL 640.00 Section 13 ALL 640.00
A-4 18 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Township 18 North, Range 6 West ------------------------------- Section 1 LOTS 1-4, S/2 NE/4, S/2 NW/4, SE/4, SW/4 640.28 Section 2 LOTS 1-4 160.98 Section 3 LOTS 1-4, S/2 NE/4, S/2 NW/4, SE/4, SW/4 640.64 Section 4 ALL 640.76 Section 5 LOTS 1-4, S/2 NE/4, S/2 NW/4, SE/4, SW/4 640.80 Section 6 ALL 638.76 Section 7 NE/4, E/2 SE/4 240.00 Section 8 ALL 640.00 Section 9 ALL 640.00 Section 11 ALL 640.00 Section 13 W/2 W/2 160.00 Section 14 NE/4 160.00 Section 15 N/2 320.00 Section 17 NE/4, N/2 NW/4 240.00 Section 27 ALL 640.00 Section 28 ALL 640.00 Section 29 ALL 640.00 Section 30 ALL 633.20 Section 31 LOTS 1-4, E/2 NW/4, E/2 SW/4, NE/4, SE/4 631.76 Section 32 ALL 640.00 Section 33 ALL 640.00 Section 35 ALL 640.00
A-5 19 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Section 36 N/2, SW/4 480.00 Township 19 North, Range 6 West ------------------------------- Section 8 SE/4 160.00 Section 13 ALL 640.00 Section 14 ALL 640.00 Section 15 ALL 640.00 Section 17 ALL 640.00 Section 18 ALL 639.44 Section 19 LOTS 1-4,-E/2 NW/4, E/2 SW/4, NE/4, SE/4 638.88 Section 21 ALL 640.00 Section 22 ALL 640.00 Section 23 ALL 640.00 Section 24 ALL 640.00 Section 25 ALL 640.00 Section 26 ALL 640.00 Section 27 ALL 640.00 Section 28 ALL 640.00 Section 29 ALL 640.00 Section 30 ALL 639.68 Section 31 LOTS 1-4, E/2 NW/4, E/2 SW/4, NE/4, SE/4 639.28 Section 33 ALL 640.00 Section 34 ALL 640.00 Section 35 ALL 640.00
A-6 20 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Township 15 North, Range 7 West ------------------------------- Section 12 N/2 SW/4, SE/4 240.00 Section 12 S/2 SW/4, N/2 400.00 Township 17 North, Range 7 West ------------------------------- Section 1 LOTS 1-4, S/2 NE/4, S/2 NW/4, SE/4, SW/4 638.68 Section 3 LOTS 1-4, S/2 NE/4, S/2 NW/4, SE/4, SW/4 642.40 Section 4 ALL 642.96 Section 5 LOTS 1-4, S/2 NE/4, S/2 NW/4, SE/4, SW/4 643.80 Section 6 ALL 635.07 Section 7 LOTS 1-4, E/2 NW/4, E/2 SW/4, NE/4, SE/4 645.36 Section 8 ALL 640.00 Section 9 N/2, SE/4 480.00 Section 9 SW/4 160.00 Section 10 ALL 640.00 Section 11 ALL 640.00 Section 12 ALL 640.00 Section 13 ALL 640.00 Section 14 ALL 640.00 Section 15 ALL 640.00 Section 17 ALL 640.00 Section 18 ALL 644.24 Section 19 LOTS 1-4, E/2 NW/4, E/2 SW/4, NE/4, SE/4 642.52 Section 20 ALL 640.00
A-7 21 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Section 21 ALL 640.00 Section 22 ALL 640.00 Section 23 ALL 640.00 Section 24 ALL 640.00 Section 25 ALL 640.00 Section 26 N/2 NE/4, SW/4 NE/4, NW/4, S/2 600.00 Section 27 ALL 640.00 Section 28 ALL 640.00 Section 29 ALL 640.00 Section 30 ALL 640.88 Section 31 LOTS 1-4, E/2 NW/4, E/2 SW/4, NE/4, SE/4 640.20 Section 33 ALL 640.00 Section 34 ALL 640.00 Section 35 ALL 640.00 Township 18 North, Range 7 West ------------------------------- Section 1 LOTS 1-4, S/2 NE/4, S/2 NW/4, SE/4, SW/4 639.60 Section 3 LOTS 1-4, S/2 NE/4, S/2 NW/4, S/2 636.40 Section 4 ALL 635.60 Section 5 LOTS 1-4, S/2 NE/4, S/2 NW/4, S/2 633.38 Section 9 NW/4 160.00 Section 19 LOTS 1-4, E/2 NW/4, E/2 SW/4, E/2 642.88 Section 20 ALL 640.00 Section 21 ALL 640.00
A-8 22 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Section 22 ALL 640.00 Section 23 ALL 640.00 Section 25 ALL 640.00 Section 26 ALL 640.00 Section 27 ALL 640.00 Section 28 ALL 640.00 Section 29 ALL 640.00 Section 30 E/2 320.00 Section 31 LOTS 1-4, E/2 NW/4, E/2 SW/4, E/2 644.56 Section 32 ALL 640.00 Section 33 ALL 640.00 Section 34 ALL 640.00 Section 35 ALL 640.00 Township 19 North, Range 7 West ------------------------------- Section 13 LOTS 1-4, W/2 NE/4, W/2 SE/4, W/2 635.96 Section 14 S/2, NE/4 480.00 Section 23 ALL 640.00 Section 25 LOTS 1-4, W/2 NE/4, W/2 SE/4, W/2 637.88 Section 27 SE/4 160.00 Section 29 ALL 640.00 Section 31 LOTS 1-14, NE/4, E/2 NW/4 692.02 Section 33 N/2 320.00 Section 33 LOTS 1-12 362.88
A-9 23 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Section 34 ALL 669.80 Section 35 LOTS 1-4, N/2 SE/4, N/2 SW/4, N/2 657.80 Township 20 North, Range 7 West ------------------------------- Section 22 ALL 640.00 Section 26 ALL 640.00 Section 27 ALL 640.00 Section 34 ALL 640.00 Section 35 ALL 640.00 Township 17 North, Range 8 West ------------------------------- Section 1 LOTS 1-4, S/2 N/2, S/2 639.60 Section 2 ALL 639.04 Section 3 LOTS 1-4, S/2 N/2, S/2 637.12 Section 5 LOTS 1-4, S/2 N/2, S/2 636.88 Section 7 LOTS 1-4, E/2 W/2, E/2 637.56 Section 9 ALL 640.00 Section 10 ALL 640.00 Section 11 ALL 640.00 Section 12 ALL 640.00 Section 13 ALL 640.00 Section 14 ALL 640.00 Section 15 ALL 640.00 Section 21 ALL 640.00 Section 22 ALL 640.00
A-10 24 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Section 23 ALL 640.00 Section 24 ALL 640.00 Section 25 ALL 640.00 Section 26 ALL 640.00 Section 27 ALL 640.00 Section 28 ALL 640.00 Section 33 ALL 640.00 Section 34 ALL 640.00 Section 35 ALL 640.00 Township 18 North, Range 8 West ------------------------------- Section 13 ALL 640.00 Section 15 ALL 640.00 Section 17 ALL 640.00 Section 18 LOTS 1-4, E/2, E/2 W/2 637.40 Section 19 LOTS 1-4, E/2, E/2 W/2 638.18 Section 20 ALL 640.00 Section 21 ALL 640.00 Section 22 ALL 640.00 Section 23 ALL 640.00 Section 24 ALL 640.00 Section 25 ALL 640.00 Section 26 ALL 640.00 Section 27 ALL 640.00
A-11 25 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Section 28 ALL 640.00 Section 29 ALL 640.00 Section 30 ALL 638.66 Section 31 LOTS 1-4, E/2 W/2, E/2 628.48 Section 32 ALL 640.00 Section 33 ALL 640.00 Section 34 ALL 640.00 Section 35 ALL 640.00 Township 19 North, Range 8 West ------------------------------- Section 4 ALL 621.87 Section 5 LOTS 1-7, S/2 NE/4, SE/4 NW/4, SE/4, E/2 SW/4 656.01 Section 6 ALL 624.29 Section 7 LOTS 1-7, NE/4, E/2 NW/4, N/2 SE/4, NE/4 SW/4 616.89 Section 8 ALL 647.46 Section 9 LOTS 1-4, E/2 NW/4 209.56 Section 17 ALL 640.00 Section 21 NE/4, N/2 SE/4, W/2 560.00 Township 20 North, Range 8 West ------------------------------- Section 5 LOTS 1-4, S/2 N/2, S/2 642.00 Section 6 ALL 639.60 Section 7 LOTS 1-4, E/2 W/2, E/2 641.08 Section 8 ALL 640.00 Section 17 ALL 640.00
A-12 26 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Section 18 ALL 642.52 Section 19 LOTS 1-4, E/2 W/2, E/2 642.64 Section 20 ALL 640.00 Section 21 ALL 640.00 Section 28 ALL 640.00 Section 29 ALL 640.00 Section 30 ALL 640.64 Section 31 LOTS 1-4, E/2 W/2, E/2 644.44 Section 33 ALL 640.00 Township 16 North, Range 9 West ------------------------------- Section 18 ALL 620.56 Section 20 ALL 640.00 Township 17 North, Range 9 West ------------------------------- Section 1 LOTS 1-11, SW/4 NE/4, S/2 NW/4, W/2 SE/4, SW/4, 675.87 LESS 11.928 ACRES IN NW/4 SW/4 AND W/2 NW/4 Section 1 11.928 ACRES IN NW/4 SW/4 AND W/2 NW/4 11.93 Section 3 LOTS 1-4, S/2 N/2, S/2 637.44 Section 4 ALL 637.92 Section 5 ALL 637.44 Section 6 ALL 628.36 Section 7 LOTS 1-4, E/2 W/2, E/2 628.64 Section 8 ALL 640.00
A-13 27 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Section 9 ALL 640.00 Section 10 ALL 640.00 Section 11 NE/4 160.00 Section 11 NW/4, S/2 480.00 Section 13 LOTS 1-8, W/2 E/2, W/2 686.12 Section 14 ALL 640.00 Section 15 ALL 640.00 Section 17 ALL 640.00 Section 18 ALL 632.56 Section 19 LOTS 1-4, E/2, E/2 W/2 636.16 Section 20 ALL 640.00 Section 21 ALL 640.00 Section 22 ALL 640.00 Section 23 ALL 640.00 Section 24 ALL 686.68 Section 25 LOTS 1-8, W/2 E/2, W/2 688.28 Section 26 ALL 640.00 Section 27 ALL 640.00 Section 28 ALL 640.00 Section 29 ALL 640.00 Township 18 North, Range 9 West ------------------------------- Section 1 LOTS 1-4, S/2 N/2, S/2 640.36 Section 3 LOTS 1-4, S/2 N/2, S/2 639.76
A-14 28 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Section 5 LOTS 1-4, S/2 N/2, S/2 638.88 Section 6 ALL 664.77 Section 7 LOTS 1-4, E/2 W/2, E/2 669.40 Section 8 ALL 640.00 Section 9 S/2 320.00 Section 9 N/2 320.00 Section 11 ALL 640.00 Section 13 ALL 640.00 Section 15 ALL 640.00 Section 17 N/2 320.00 Section 17 S/2 320.00 Section 18 LOTS 1, 2, NE/4, E/2 NW/4 336.17 Section 18 LOTS 3, 4, SE/4, E/2 SW/4 337.23 Section 19 LOTS 1-4, E/2 W/2, E/2 677.92 Section 21 ALL 640.00 Section 23 ALL 640.00 Section 25 ALL 640.00 Section 27 ALL 640.00 Section 29 ALL 640.00 Section 30 LOTS 1-4, E/2 W/2, E/2 682.32 Section 31 LOTS 1-4, E/2, E/2 W/2 686.44 Section 33 ALL 640.00 Section 35 ALL 640.00
A-15 29 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Township 19 North, Range 9 West ------------------------------- Section 1 LOTS 1-4, S/2 N/2, S/2 639.08 Section 4 ALL 641.44 Section 5 LOTS 1-4, S/2 N/2, S/2 642.28 Section 6 ALL 645.29 Section 7 LOTS 1-4, E/2, E/2 W/2 646.72 Section 8 ALL 640.00 Section 9 ALL 640.00 Section 17 ALL 640.00 Section 18 ALL 649.92 Section 19 LOTS 1-4, E/2, E/2 W/2 653.84 Section 20 ALL 640.00 Section 21 ALL 640.00 Section 28 ALL 640.00 Section 29 ALL 640.00 Section 30 LOTS 3, 4, E/2, E/2 W/2 569.41 Section 31 LOTS 1-4, E/2, E/2 W/2 661.76 Section 33 ALL 640.00 Township 20 North, Range 9 West ------------------------------- Section 1 LOTS 1-4, S/2 N/2, S/2 641.04 Section 2 NW/4 SE/4, S/2 SE/4 120.00 Section 3 LOTS 1-4, S/2 N/2, S/2 643.40 Section 5 LOTS 1-4, S/2 N/2, SE/4 483.76
A-16 30 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Section 7 LOTS 3, 4, E/2 SW/4 154.64 Section 10 ALL 640.00 Section 11 ALL 640.00 Section 12 ALL 640.00 Section 13 ALL 640.00 Section 14 ALL 640.00 Section 15 ALL 640.00 Section 17 S/2 320.00 Section 18 LOTS 1-4, SE/4, E/2 W/2 471.32 Section 19 LOTS 1-4, E/2, E/2 W/2 634.60 Section 20 S/2 320.00 Section 20 N/2 320.00 Section 21 ALL 640.00 Section 22 ALL 640.00 Section 23 ALL 640.00 Section 24 ALL 640.00 Section 25 ALL 640.00 Section 26 ALL 640.00 Section 27 ALL 640.00 Section 29 ALL 640.00 Section 31 LOTS 1-4, E/2, E/2 W/2 640.36 Section 33 ALL 640.00 Section 34 ALL 640.00
A-17 31 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Section 35 ALL 640.00 Township 16 North, Range 10 West -------------------------------- Section 3 ALL 625.92 Section 11 ALL 640.00 Section 13 ALL 640.00 Township 17 North, Range 10 West -------------------------------- Section 1 LOTS 1-4, S/2 N/2, S/2 639.44 Section 2 LOTS 1-4, S/2 N/2, S/2 638.56 Section 3 LOTS 1-4, S/2 N/2, S/2 638.08 Section 4 LOTS 1-4, S/2 N/2, S/2 638.48 Section 5 LOTS 1-4, S/2 N/2, S/2 638.72 Section 6 LOTS 1-7, S/2 NE/4, SE/4 NW/4, SE/4, E/2 SW/4 636.95 Section 7 LOTS 1-4, E/2 W/2, E/2 637.76 Section 8 ALL 640.00 Section 9 ALL 640.00 Section 10 ALL 640.00 Section 11 ALL 640.00 Section 12 ALL 640.00 Section 13 ALL 640.00 Section 14 ALL 640.00 Section 15 ALL 640.00 Section 17 ALL 640.00 Section 18 LOTS 1-4, E/2 W/2, E/2 638.32
A-18 32 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Section 23 ALL 640.00 Section 24 ALL 640.00 Section 30 LOT 4, SE/4 SW/4, S/2 SE/4 160.09 Section 33 ALL 640.00 Section 34 S/2, SE/4 NW/4, W/2 NW/4, SE/4 NE/4 480.00 Township 18 North, Range 10 West -------------------------------- Section 1 ALL 622.23 Section 3 ALL 629.36 Section 4 LOTS 1, 2, S/2 NE/4, SE/4 316.90 Section 5 ALL 639.76 Section 6 ALL 621.18 Section 7 ALL 621.52 Section 8 ALL 640.00 Section 9 ALL 640.00 Section 10 SW/4 160.00 Section 10 N/2, SE/4 480.00 Section 11 ALL 640.00 Section 12 ALL 648.29 Section 13 LOTS 3, 4, W/2 SE/4, SW/4 323.12 Section 13 LOTS 1, 2, W/2 NE/4, NW/4 323.12 Section 14 N/2 320.00 Section 14 S/2 320.00 Section 15 N/2 320.00
A-19 33 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Section 15 S/2 320.00 Section 17 N/2 320.00 Section 17 S/2 NORTH OF NM STATE HWY 57 162.60 Section 17 S/2 SOUTH OF NM STATE HWY 57 157.40 Section 19 LOTS 1-4, E/2 W/2, E/2 626.88 Section 21 ALL 640.00 Section 22 E/2, SW/4 480.00 Section 22 SE/4 NW/4 40.00 Section 23 ALL 640.00 Section 24 LOTS 1-4, W/2 E/2, W/2 642.86 Section 25 LOTS 1-4, W/2 E/2, W/2 639.56 Section 26 ALL 640.00 Section 27 ALL 640.00 Section 28 E/2 320.00 Section 28 W/2 320.00 Section 29 ALL 640.00 Section 30 LOTS 1-4, E/2 W/2, E/2 631.20 Section 31 LOTS 1-4, E/2 W/2, E/2 635.04 Section 33 ALL 640.00 Section 34 ALL 640.00 Section 35 ALL 640.00 Township 19 North, Range 10 West -------------------------------- Section 1 ALL 639.60
A-20 34 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Section 3 ALL 638.72 Section 4 ALL 639.00 Section 5 ALL 639.32 Section 6 ALL 636.84 Section 7 ALL 637.52 Section 8 ALL 640.00 Section 9 ALL 640.00 Section 10 N/2 N/2, SE/4 NE/4, SW/4 NW/4, NE/4 SE/4, NW/4 480.00 SW/4, S/2 S/2 Section 11 ALL 640.00 Section 12 ALL 640.00 Section 13 ALL 640.00 Section 14 ALL 640.00 Section 15 ALL 640.00 Section 17 ALL 640.00 Section 18 ALL 637.32 Section 19 ALL 637.92 Section 20 ALL 640.00 Section 21 ALL 640.00 Section 22 ALL 640.00 Section 23 ALL 640.00 Section 24 ALL 640.00 Section 25 ALL 640.00
A-21 35 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Section 26 NW/4 SE/4, S/2 SE/4, SW/4 280.00 Section 26 N/2, NE/4 SE/4 360.00 Section 27 ALL 640.00 Section 28 NE/4, N/2 SE/4, SW/4 SE/4, W/2 600.00 Section 29 ALL 640.00 Section 30 ALL 637.68 Section 31 ALL 637.32 Section 33 ALL 640.00 Section 34 ALL 640.00 Section 35 ALL 640.00 Township 20 North, Range 10 West -------------------------------- Section 3 ALL, EXCEPT 50.20 ACRES IN THE NE/4 LYING 592.96 NORTHEASTERLY OF THE 6400' ELEVATION CONTOUR LINE, DESCRIBED IN QUITCLAIM DEED DATED 3/3/1987 TO USA Section 4 ALL 642.00 Section 5 ALL 641.48 Section 7 ALL 638.28 Section 8 ALL 640.00 Section 9 ALL 640.00 Section 10 ALL 640.00 Section 11 ALL 640.00 Section 12 ALL, EXCEPT 192.4 ACRES IN N/2 AND SE/4 447.60 LYING NORTHEASTERLY OF THE 6400' ELEVATION CONTOUR LINE, DESCRIBED IN QUITCLAIM DEED DATED 3/3/1987 TO USA
A-22 36 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Section 13 ALL 640.00 Section 14 ALL 640.00 Section 15 ALL 640.00 Section 17 ALL 640.00 Section 18 ALL 638.84 Section 19 ALL 638.92 Section 21 ALL 640.00 Section 22 ALL 640.00 Section 23 ALL 640.00 Section 24 ALL 640.00 Section 25 ALL 640.00 Section 26 ALL 640.00 Section 27 ALL 640.00 Section 29 ALL 640.00 Section 31 ALL 637.40 Section 33 ALL 640.00 Section 34 ALL 640.00 Section 35 ALL 640.00 Township 18 North, Range 11 West -------------------------------- Section 1 ALL 639.36 Section 3 ALL 638.32 Section 4 ALL 639.04 Section 5 ALL 638.80
A-23 37 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Section 6 ALL 636.64 Section 7 ALL 637.84 Section 8 ALL 640.00 Section 9 ALL 640.00 Section 10 ALL 640.00 Section 11 ALL 640.00 Section 12 ALL 640.00 Section 13 ALL 640.00 Section 14 ALL 640.00 Section 15 ALL 640.00 Section 17 ALL 640.00 Section 19 ALL 639.36 Section 20 ALL 640.00 Section 21 ALL 640.00 Section 22 ALL 640.00 Section 23 ALL 640.00 Section 24 SW/4 160.00 Section 25 ALL 640.00 Section 26 ALL 640.00 Section 27 ALL 640.00 Section 28 ALL 640.00 Section 29 ALL 640.00 Section 30 ALL 638.40
A-24 38 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Section 31 ALL 638.80 Section 33 ALL 640.00 Section 34 ALL 640.00 Section 35 ALL 640.00 Township 19 North, Range 11 West -------------------------------- Section 1 ALL 639.76 Section 3 ALL 638.68 Section 4 ALL 639.20 Section 5 ALL 639.88 Section 6 ALL 636.80 Section 7 ALL 637.88 Section 8 ALL 640.00 Section 9 ALL 640.00 Section 12 ALL 640.00 Section 13 ALL 640.00 Section 14 ALL 640.00 Section 21 ALL 640.00 Section 22 ALL 640.00 Section 23 ALL 640.00 Section 24 ALL 640.00 Section 25 ALL 640.00 Section 26 NE/4, N/2 NW/4, SE/4 NW/4, S/2 600.00 Section 27 ALL 640.00
A-25 39 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Section 28 ALL 640.00 Section 33 ALL 640.00 Section 34 ALL 640.00 Section 35 ALL 640.00 Township 20 North, Range 11 West -------------------------------- Section 1 ALL 642.56 Section 3 ALL 642.32 Section 4 ALL 643.16 Section 5 ALL 643.64 Section 6 ALL 644.20 Section 7 ALL 639.16 Section 8 ALL 640.00 Section 9 ALL 640.00 Section 10 NW/4, S/2 480.00 Section 10 NE/4 160.00 Section 11 ALL 640.00 Section 12 S/2 320.00 Section 12 N/2 320.00 Section 13 ALL 640.00 Section 14 ALL 640.00 Section 15 ALL 640.00 Section 17 ALL 640.00 Section 18 ALL 638.40
A-26 40 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Section 19 ALL 637.32 Section 20 ALL 640.00 Section 21 ALL 640.00 Section 22 S/2, NW/4, S/2 NE/4, NW/4 NE/4 600.00 Section 23 E/2, SW/4, E/2 NW/4, SW/4 NW/4, E/2 NW/4 NW/4 620.00 Section 24 ALL 640.00 Section 25 ALL 640.00 Section 26 N/2, SW/4, W/2 SE/4 560.00 Section 27 ALL 640.00 Section 28 ALL 640.00 Section 29 ALL 640.00 Section 30 ALL 636.12 Section 31 ALL 635.16 Section 33 ALL 640.00 Section 34 ALL 640.00 Section 35 ALL 640.00 Township 20 North, Range 13 West -------------------------------- Section 1 LOTS 1-4, S/2 N/2, S/2 641.74 Section 3 LOTS 1-4, S/2 N/2, S/2 643.20 Section 5 LOTS 1-4, S/2 N/2, S/2 648.22 Section 7 LOTS 1, 3, 4, NE/4 NW/4, E/2 SW/4, SE/4, N/2 NE/4, 529.57 SE/4 NE/4, E/2 SW/4 NE/4 Section 9 ALL 640.00
A-27 41 COMPANY: GOLD STATE: NM COUNTY: MCKINLEY Section 11 ALL 640.00 Section 13 ALL 640.00 Section 15 ALL 640.00 Section 17 ALL 640.00 Section 19 LOTS 1-4,.E/2 W/2, E/2 622.34 Section 21 ALL 640.00 Section 23 ALL 640.00 Section 25 ALL 640.00 Section 27 ALL 640.00 Section 29 ALL 640.00 Section 31 LOTS 1-4, E/2 W/2, E/2 621.18 Section 33 ALL 640.00 Section 35 ALL 640.00 ------------ GRAND TOTAL 344,323.88
A-28 42 EXHIBIT 10.21 EXHIBIT B TO LICENSE TO EXPLORE AND OPTION TO PURCHASE CATEGORY 2 LANDS (REVISED 03/13/97) COMPANY: GOLD STATE: NM COUNTY: McKINLEY
MERIDIAN: NMPM ACRES ----- Township 14 North, Range 8 West ------------------------------- Section 10 All 640.00 Township 13 North, Range 10 West -------------------------------- Section 5 Lots 1-4, S/2 N/2, S/2 639.36 Section 7 Lots 1-4, E/2, E/2 W/2 650.24 Section 9 All 640.00 Section 15 All 640.00 Section 17 All 640.00 Section 21 W/2 SW/4 SE/4 NE/4, N/2 NE/4, SW/4 595.00 NE/4, N/2 SE/4 NE/4, NW/4, S/2 SE/4, NW/4 SE/4 Section 27 All 640.00 Section 29 All 640.00 Section 31 Lots 1-4, E/2 W/2, E/2 640.56 Section 33 All 640.00 Section 35 All 640.00 Township 15 North, Range 10 West -------------------------------- Section 1 All, except 31.07 acres in Baca 608.93 Rail Spur Section 3 All 641.00 Section 13 All 640.00 Section 23 All, except 29.81 ac. in Baca Rail 610.19 Spur
B-1 43 Section 25 All, except 25.79 ac. in Baca Rail 614.21 Spur Section 31 All 663.60 Section 33 All 640.00 Section 35 All 640.00 Township 16 North, Range 10 West -------------------------------- Section 5 All 639.76 Section 9 All 640.00 Section 15 All 640.00 Section 17 All 640.00 Section 21 All 640.00 Section 23 All 640.00 Section 25 All 640.00 Section 27 All 640.00 Section 29 All 640.00 Section 31 All 667.68 Section 33 All 640.00 Section 35 All 640.00 Township 17 North, Range 10 West -------------------------------- Section 31 Lots 1-4, E/2 W/2, E/2 640.32 Township 13 North, Range 11 West -------------------------------- Section 3 Lots 3, 4, S/2 NW/4 160.98 Section 5 All, except 24.71 ac. in Baca Rail 610.17 Spur Section 7 All that portion lying North and 495.00 East of the AT&SF Railway Co. R/W Section 9 NE/4, N/2 NW/4, N/2 SE/4, SE/4 SE/4 360.00
B-2 44 Section 9 S/2 NW/4, SW/4, SW/4 SE/4 280.00 Section 15 All 640.00 Section 17 All that portion lying North and 96.71 East of the AT&SF Railway Co. R/W, except 39.63 ac. in Baca Rail Spur Section 17 Lots 5-8, SW/4 SE/4, SW/4 275.53 Section 19 All 640.06 Section 21 All that part lying North and East 199.59 of the AT&SF Railway Co. R/W Section 21 Lots 5-10, NW/4 SW/4 155.74 Section 22 All 640.00 Section 23 All 640.00 Section 24 SE/4, W/2 480.00 Section 25 All 640.00 Section 26 All 640.00 Section 27 All that part lying North and East 549.31 of the AT&SF Railway Co. R/W Section 29 All 640.00 Section 31 All 640.96 Section 33 All 640.00 Section 34 That portion of the E/2 lying South 23.70 and West of the AT&SF Railway Co. R/W Section 34 That portion of the E/2 lying North 283.09 and East of the AT&SF Railway Co. R/W Section 35 All 640.00 Township 15 North, Range 11 West -------------------------------- Section 27 E/2 E/2 160.00 Section 35 NW/4 NW/4 40.00
B-3 45 Township 14 North, Range 13 West -------------------------------- Section 31 All, except 200 ft. R/W of AT&SF 619.15 Ry. Co. Section 35 All that portion lying North and 531.25 East of R/W of AT&SF Ry. Co. Township 14 North, Range 14 West -------------------------------- Section 7 Lots 3, 4, that portion of E/2 SW/4 139.78 lying South & West of AT&SF RR R/W Section 21 All that portion lying North & East 114.06 of AT&SF RR R/W Section 25 All that portion lying North & East 494.75 of AT&SF RR R/W Township 17 North, Range 14 West -------------------------------- Section 1 Lots 1-4 2.02 Section 31 Lots 1-4, S/2 S/2 321.60 Section 33 Lots 1-4, S/2 S/2 317.76 Section 35 Lots 1-4, S/2 S/2 318.20 Township 14 North, Range 15 West -------------------------------- Section 1 Part Northeast of Northeast line of 96.34 AT&SF station grounds at S. Guam, said line parallel to & 1320 ft. northeasterly from centerline of original AT&SF main track, except portion conveyed by SFPR to AT&SF 8-29-17, recorded in Bk. 5, Pg. 152, and portion of SE SE northeasterly of AT&SF R/W and southeasterly of southeast end of station grounds at S. Guam Township 15 North, Range 15 West -------------------------------- Section 25 All, except 26.55 ac. in R/W 613.45 Section 27 All that portion lying North & East 515.85 of AT&SF RR R/W Section 35 All that portion lying North & East 197.84 of AT&SF RR R/W
B-4 46 Township 17 North, Range 15 West -------------------------------- Section 31 All 315.20 Section 33 All 317.98 Section 35 All 315.20 Township 15 North, Range 16 West -------------------------------- Section 1 All 639.52 Section 3 All 641.90 Section 5 All 638.82 Section 7 All 616.18 Section 9 All 640.00 Section 11 All 640.00 Section 13 Lots 1-4 195.60 Section 15 Lots 1-4 185.28 Section 17 Lots 1-4 174.16 Township 16 North, Range 16 West --------------------------------- Section 1 All 595.20 Section 5 All 606.88 Section 11 All 640.00 Section 13 All 640.00 Section 15 All 640.00 Section 19 All 602.52 Section 21 All 640.00 Section 23 All 640.00 Section 25 All 640.00 Section 27 All 640.00
B-5 47 Section 29 All 640.00 Section 33 All 640.00 Section 35 All 640.00 Township 17 North, Range 16 West -------------------------------- Section 31 Lots 1-4, S/2 S/2 305.28 Section 33 Lots 1-4, S/2 S/2 308.21 Township 14 North, Range 17 West -------------------------------- Section 3 Lots 1-5, SW/4 NW/4, W/2 SW/4 235.56 Section 5 Lots 1-4, S/2 N/2, E/2 SE/4, NW/4 598.88 SE/4, N/2 SW/4 SE/4, W/2 SW/4, NE/4 SW/4, N/2 SE/4 SW/4 Section 7 All 638.12 Section 9 W/2, E/2 SE/4, SW/4 SE/4, N/2 NE/4 480.00 NE/4, E/2 NW/4 NE/4 Section 9 SW/4 NE/4, NW/4 SE/4 80.00 Section 9 S/2 NE/4 NE/4 20.00 Section 9 NW/4 NW/4 NE/4 10.00 Section 9 SW/4 NW/4 NE/4 10.00 Section 15 Lots 1-4, W/2 W/2 236.88 Section 17 All 640.00 Section 19 All 640.88 Section 21 All 640.00 Section 27 Lots 1-4, W/2 W/2 239.82 Section 29 N/2, SW/4 480.00 Section 33 S/2 320.00 Township 15 North, Range 17 West -------------------------------- Section 1 All 689.84 Section 3 All 640.42
B-6 48 Section 7 All 639.94 Section 9 NE/4, S/2 480.00 Section 13 Lots 1-4 164.48 Section 15 Lots 1-6, W/2 W/2, less 24.24 ac. 300.37 in AT&SF RR R/W for East bound main track Section 19 Lots 1, 2, E/2, E/2 NW/4 481.09 Section 21 E/2, W/2 NW/4, S/2 SW/4 480.00 Section 27 W/2 SW/4 80.00 Section 29 All 640.00 Section 31 All 638.84 Township 16 North, Range 17 West -------------------------------- Section 1 All 614.40 Section 3 All 622.04 Section 5 All 624.52 Section 7 All 632.52 Section 9 All 640.00 Section 11 All 640.00 Section 15 All 640.00 Section 17 All 640.00 Section 19 All 636.44 Section 21 All 640.00 Section 25 All 640.00 Section 27 All 640.00 Section 29 All 640.00 Section 31 All 637.44 Section 33 All 640.00
B-7 49 Section 35 All 640.00 Township 17 North, Range 17 West -------------------------------- Section 31 Lots 1-4, S/2 S/2 297.38 Section 33 Lots 1-4, S/2 S/2 307.78 Section 35 Lots 1-4, S/2 S/2 306.02 Township 14 North, Range 18 West -------------------------------- Section 5 All 639.48 Township 15 North, Range 18 West -------------------------------- Section 1 All 638.56 Section 11 NE/4, E/2 NW/4 240.00 Section 23 All 640.00 Section 27 SE/4, NE/4 SW/4 200.00 Section 27 S/2 NE/4, NE/4 NE/4 120.00 Section 27 SE/4 NW/4, S/2 NW/4 NE/4, NW/4 NW/4 70.00 NE/4 Section 27 S/2 NE/4 NW/4 20.00 Section 27 N/2 NE/4 NW/4 20.00 Section 31 NE/4 NE/4 40.00 Section 31 Lots 1-4, SE/4 NE/4, NE/4 NW/4, 436.40 SE/4, SE/4 SW/4 Section 35 E/2, E/2 NW/4 400.00 Township 16 North, Range 18 West -------------------------------- Section 1 All 622.84 Section 3 All 622.72 Section 5 All, except 10.30 acres 614.26
B-8 50 Section 5 That portion lying within 40 ft. & 10.30 on both sides of survey line of Road 32, Section 2 as relocated for construction and known as F.A.P. #146-A Section 7 All, except 10.00 ac. quitclaimed 620.16 to County of McKinley by deed dated 6-19-25 Section 7 That portion lying within 40 ft. & 10.00 on both sides of survey line of Road 32, Section 2 as relocated for construction and known as F.A.P. #146 Section 9 All 640.00 Section 11 All 640.00 Section 13 All 640.00 Section 15 All 640.00 Section 17 All 640.00 Section 19 All 634.08 Section 21 N/2 320.00 Section 23 All 640.00 Section 25 All 640.00 Township 17 North, Range 18 West -------------------------------- Section 31 Lots 1-4, S/2 S/2 290.40 Section 33 Lots 1-4, SW/4 SE/4, S/2 SW/4 255.58 Section 33 N/2 SE/4 SE/4, SE/4 SE/4 SE/4 30.00 Section 35 Lots 1-4, S/2 S/2 298.78 Township 15 North, Range 19 West -------------------------------- Section 7 Lots 3, 4, E/2 SW/4 156.27 Section 17 NE/4, E/2 NW/4, S/2 560.00 Section 19 All 633.40
B-9 51 Section 21 NW/4, SE/4, SW/4 NE/4, W/2 SE/4 389.00 NE/4, W/2 E/2 SE/4 NE/4, except 1 ac. in W/2 E/2 SE/4 NE/4 Section 21 1 ac. tract in W/2 E/2 SE/4 NE/4 1.00 Section 29 All, except AT&SF RR R/W and 512.25 station grounds Section 31 SE/4, NW/4, except AT&SF RR R/W 288.91 Section 33 All 640.00 Section 35 N/2, SW,/4 480.00 Township 16 North, Range 19 West -------------------------------- Section 1 All 630.12 Section 3 All 636.30 Section 5 All 637.60 Section 7 All 629.24 Section 9 All 640.00 Section 11 All 640.00 Section 13 All 640.00 Section 15 All 640.00 Section 17 All 640.00 Section 19 All 630.48 Section 23 All 640.00 Section 25 All 640.00 Section 31 All 629.80 Township 17 North, Range 19 West -------------------------------- Section 31 Lots 1-4, S/2 S/2 288.60 Section 33 Lots 1-4, S/2 S/2 290.40 Section 35 Lots 1-4, S/2 S/2 295.58
B-10 52 Township 16 North, Range 20 West -------------------------------- Section 1 All 638.12 Section 13 All 640.00 Section 17 SW/4 160.00 Section 19 All 640.92 Section 21 W/2 W/2 160.00 Section 25 All 640.00 Section 27 S/2 SW/4, NW/4 SW/4, S/2 SE/4, 240.00 NE/4 SE/4 Section 29 All 640.00 Section 31 All 638.00 Section 33 All 640.00 Section 35 All 640.00 Township 16 North, Range 21 West -------------------------------- Section 1 W/2 322.00 Section 3 All 123.86 Section 11 N/2, N/2 SW/4, SW/4 SW/4 440.00 Section 15 Lots 1-4 128.06 Section 23 All 640.00 Section 25 All 640.00 Section 27 Lots 1-4 128.80 Section 35 All 640.00 ---------- County Total 105,447.60 ==========
B-11 53 EXHIBIT B TO LICENSE TO EXPLORE AND OPTION TO PURCHASE CATEGORY 2 LANDS (Revised 03/13/97) COMPANY: GOLD STATE: NM COUNTY: CIBOLA
MERIDIAN: NMPM ACRES ----- Township 11 North, Range 7 West ------------------------------- Section 31 Lots 1-4, E/2 NW/4, E/2 SW/4, NE/4, 634.52 SE/4 Township 11 North, Range 8 West ------------------------------- Section 25 All 640.00 County Total 1,274.52 --------
B-12 54 EXHIBIT B TO LICENSE TO EXPLORE AND OPTION TO PURCHASE CATEGORY 2 LANDS (Revised 03/13/97) Township 13 North, Range 8 West ------------------------------- Section 25 Lots 5, 6, 8, 9, 10, E/2 NE/4 234.52 **Royalty Interest Only**
B-13 55 EXHIBIT B TO LICENSE TO EXPLORE AND OPTION TO PURCHASE CATEGORY 2 LANDS (Revised 3/13/97) COMPANY: GOLD STATE: NM COUNTY: SANDOVAL
MERIDIAN: NMPM ACRES ----- Township 12 North, Range 1 East ------------------------------- Section 5 Lots 7, 8 SE/4, S/2 NW/4, Lot 6 451.11 NE/4, Lot 3 NW/4, Lot 5 NE/4, Lot 4 NW/4, SW/4 Section 6 All 614.74 Section 7 All 615.68 Section 8 Lots 1-4, NW/4, W/2 SW/4 354.06 Section 17 Lots 1-4 171.63 Section 18 All 614.56 Section 19 All 611.44 Section 20 Lots 1-4 178.14 Section 29 Lots 1-4, W/2 SW/4, SE/4 SW/4 253.05 Section 30 All 613.28 Section 31 All 616.80 Township 13 North, Range 1 East ------------------------------- Section 4 All 647.16 Section 5 All 650.80 Section 6 All 615.05 Section 7 All 599.88 Section 8 All 640.00 Section 9 All 640.00 Section 17 All 640.00
B-14 56 Section 18 All 600.68 Section 19 All 602.52 Section 20 All 640.00 Section 21 All 640.00 Section 28 All 640.00 Section 29 All 640.00 Section 30 All 606.27 Section 31 All, except North 300 ft. of 555.09 Section Section 33 All 534.92 Township 14 North, Range 1 East ------------------------------- Section 5 Lots 1-4, S/2 N/2, SE/4, NE/4 SW/4 531.88 Section 5 NW/4 SW/4, S/2 SW/4 120.00 Township 12 North, Range 1 West ------------------------------- Section 1 Lots 1-4,, S/2 N/2, S/2 641.98 Section 3 Lots 1-4, S/2 N/2, S/2 647.18 Section 4 Lots 1-8 343.57 Section 9 Lots 1-8 341.56 Section 10 NE/4, NE/4 SE/4, W/2 SE/4, W/2 600.00 Section 11 All 640.00 Section 12 All 640.00 Section 13 All 640.00 Section 14 NE/4, S/2 480.00 Section 15 All 640.00 Section 21 Lots 1-8 341.64 Section 22 All 640.00
B-15 57 Section 23 All 640.00 Section 24 All 640.00 Section 25 All 640.00 Section 26 All 640.00 Section 27 E/2, E/2 SW/4 400.00 Section 27 NW/4, W/2 SW/4 240.00 Section 28 Lots 1-8 345.84 Section 33 Lots 1-8 344.52 Section 34 All 640.00 Section 35 W/2 320.00 Section 35 E/2 320.00 Township 13 North, Range 1 West ------------------------------- Section 12 All 640.00 Section 14 All 640.00 Section 22 N/2 320.00 Section 22 E/2 SE/4, N/2 SW/4 160.00 Section 24 All 640.00 Section 26 N/2, W/2 SE/4, SW/4 560.00 Section 28 Lots 1-4, E/2 338.88 Section 34 All, except North 300 ft. of 603.64 Section ------ County Total 31,307.55 ---------
B-16 58 EXHIBIT B TO LICENSE TO EXPLORE AND OPTION TO PURCHASE CATEGORY 2 LANDS (Revised 3/13/97) COMPANY: GOLD STATE: NM COUNTY: BERNALILLO
MERIDIAN: NMPM ACRES ----- Township 11 North, Range 1 East ------------------------------- Section 5 Lots 3-7, SW/4 NW/4, NW/4 SW/4 257.09 Section 7 All 623.58 Section 19 All 622.72 Township 11 North, Range 1 West ------------------------------- Section 1 Lots 1-4, S/2 NE/4, S/2 NW/4, SE/4, 634.78 SW/4 Section 3 Lots 1-4, S/2 NE/4, S/2 NW/4, SE/4, 626.78 SW/4 Section 9 Lots 1-4, E/2 NE/4, E/2 SE/4 332.78 Section 11 All 640.00 Section 13 All 640.00 Section 15 All 640.00 Section 21 Lots 1-4, E/2 NE/4, E/2 SE/4 319.66 Section 23 All 640.00 Section 25 Lots 1-4, N/2 NE/4, N/2 NW/4 181.60 Section 27 Lots 1-4, N/2 NE/4, N/2 NW/4 180.40 -------- County Total 6,339.39 --------
B-17 59 McKinley County, New Mexico EXHIBIT C LICENSE TO EXPLORE AND OPTION TO PURCHASE Lease Option Agreement dated October 8, 1987, between Cerrillos Land Company and Santa Fe Energy Company, as amended on July 1, 1988, and as amended on December 1, 1989, a memorandum of which is recorded in Book 2, Page 1630, in the official records of McKinley County, New Mexico. Special Warranty Deed dated June 25, 1993, from Hospah Coal Company, Santa Fe Pacific Minerals Corporation, Santa Fe Pacific Mining, Inc., The Atchison, Topeka and Santa Fe Railway Company, and the Star Lake Railroad Company to San Juan Basin Coal Holding Company, recorded in Book 6 Comp., Page 8560, of the official records of McKinley County, New Mexico, covering coal and coal development rights or mining rights. Special Warranty Deed dated June 24, 1993, from Santa Fe Pacific Minerals Corporation to Hanson Natural Resources Company covering coal and related mining rights in Section 18, T.17N., R.10W., Section 31, T.18N., R.10W., Sections 19, 20, 21, 26, 27, 28, 29, 30, 31, 33, 34 and 35, T.18N., R.11 W., McKinley County, New Mexico. Special Warranty Deed dated June 24, 1993, from Santa Fe Pacific Minerals Corporation to Hanson Natural Resources Company covering coal and related mining rights in Sections 18 and 20, T.16N., R.9W., Section 13, T.16N., R.10W., Sections 6, 7, 8, 15 and 17, T.17N., R.10W., Sections 13 and 14, T.19N., R.6W., Section 31, T.15N., R.6W., recorded in Book 6 Comp., Page 8480, in the official records of McKinley County, New Mexico. Amended and Restated San Juan Basin Agreement dated June 25, 1993, by and between Hospah Coal Company and Chaco Energy Company. Grazing Lease dated October 1, 1973, from Santa Fe Pacific Railroad Company to Tesoro Petroleum, covering Section 1, T.17N., R.9W., McKinley County, New Mexico. Surface Lease dated April 23, 1992, from Cerrillos Land Company to Giant Industries covering 2.96 acres in Section 1, T.17N., R.9W., McKinley County, New Mexico. Easement dated May 1, 1974, from Santa Fe Pacific Railroad Company to Tenneco Oil Company, covering 2.17 acres in NE/4 of Section 1, T.17N., R.9W., McKinley County, New Mexico. Right of Way Agreement dated March 4, 1957, from Santa Fe Pacific Railroad Company to El Paso Natural Gas Products Company, covering a portion of Section 1, T.17N., R.9W., C-1 60 McKinley County, New Mexico. Oil and Gas Lease dated July 19, 1979, from Santa Fe Pacific Railroad Company to Rio Colorado Oil and Gas Company, covering Sections 19, 20, 21, 28 and 29, T17N, R9W, McKinley County, New Mexico. Oil and Gas Lease dated September 16, 1953, from Santa Fe Pacific Railroad Company to N.T. Grier and Marjorie M. Grier (Brana Corp.), covering the S/2 of Section 20, and the N/2 of Section 29, T20N, R9W, McKinley County, New Mexico. Oil and Gas Lease dated May 26, 1967, from Santa Fe Pacific Railroad Company to Henry S. Birdseye (Brana Corp.), covering the SE/4 of Section 21, SW/4 of Section 22, and the NW/4 of Section 27, from the surface to 600 feet, McKinley County, New Mexico. Oil and Gas Lease dated January 1, 1966, from Santa Fe Pacific Railroad Company to Tenneco Oil Company, covering the W2, SW/4 of Section 11, Sections 13 and 24, T17N, R9W, and Section 7, T17N, R8W, McKinley County, New Mexico. Oil and Gas Lease dated June 1, 1972, from Santa Fe Pacific Railroad Company to Tenneco Oil Company covering the S/2 of Section 29, the N/2 NE/4 of Section 31, and the NW/4 NW/4 of Section 33, T20N, R9W, McKinley County, New Mexico. Oil and Gas Lease dated October 10, 1973, from Santa Fe Pacific Railroad Company to Tenneco Oil Company, covering Sections 17, 18, 19, 20, the N12, SW/4 of Section 21, Section 27, the N/2, N/2 SE/4 of Section 28, Sections 29 and 30, T16N, R6W, McKinley County, New Mexico. Oil and Gas Lease dated May 1, 1975, from Santa Fe Pacific Railroad Company to Tenneco Oil Company, covering Sections 18 and 20, T16N, R9W, and Section 13, T16N, R10W, McKinley County, New Mexico. Oil and Gas Lease dated November 23, 1923 from Santa Fe Pacific Railroad Company to Paul C. Hancock, covering Section 1, T17N, R9W, McKinley County, New Mexico. Oil and Gas Lease dated February 1, 1938, from Santa Fe Pacific Railroad Company to Clarence B. Osborne, et al, covering Lots 2, 3 and 4, the E/2 SW/4 of Section 31, T18N, R8W, McKinley County, New Mexico. Oil and Gas Lease dated March 3, 1965, from Santa Fe Pacific Railroad Company to Tesoro Petroleum Corporation, covering the N/2 and SW/4 of Section 5, the N/2 and SW/4 of Section 7, and the N/2 and SW/4 of Section 9, T17N, R8W, McKinley County, New Mexico. C-2 61 Surface Owners Agreement by and between Santa Fe Pacific Railroad Company and Fernandez Company, Ltd., dated July 31, 1979, a memorandum of which was recorded at Book 76, Page 938 of the official records of Mckinley County, New Mexico, which agreement was partially released on April 2, 1982, which release is recorded at Book 52, Pages 961-962 of the official records of Mckinley County New Mexico, and which Agreement was amended on March 2, 1987, a memorandum of which was recorded in Book 90 Misc., Pages 639-642 of the official records of McKinley County, New Mexico. Surface Use Agreement by and between Santa Fe Pacific Railroad Company and R.M. Albers, et al., dated June 3, 1980, a memorandum of which was recorded at Book 78, Page 252-253 of the official records of McKinley County, New Mexico. C-3 62 EXHIBIT D TO LICENSE TO EXPLORE AND OPTION TO PURCHASE DEED Category III STATE OF NEW MEXICO ) COUNTY OF McKINLEY ) SANTA FE PACIFIC GOLD CORPORATION, successor in interest by name change to Santa Fe Pacific Minerals corporation, which is successor by merger to Cerrillos Land Company ("Grantor") whose address is 6200 Uptown Boulevard N.E., Suite 400, Albuquerque, New Mexico 87110, for consideration paid, GRANTS to URANCO, INC. ("Grantee"), whose address is 6200 Uptown Boulevard N.E., Suite 400, Albuquerque, New Mexico 87110, all of the interest reserved by Santa Fe Pacific Railroad Company in the instruments described in Exhibit A hereto but only so far as such reservations and exceptions pertain to and cover the real estate in McKinley County, New Mexico more particularly described in Exhibit B hereto, less and except the interests described in Exhibit C hereto and subject to the grants and interests set forth in the instruments set forth in Exhibit D hereto, all of which exhibits are incorporated herein by reference. LIMITATION OF REMEDY. Any warranty of title by the Grantor and any remedies of the Grantee or its successors and assigns related to the property covered by this Deed shall be limited to the remedies set forth in that certain AGREEMENT OF SANTA FE PACIFIC GOLD CORPORATION, AS URANCO, INC. SHAREHOLDER, AND URANIUM RESOURCES, INC., dated effective as of March 25, 1997 and that certain LICENSE TO EXPLORE AND OPTION TO PURCHASE by and between Grantor and Grantee, dated effective as of March 21, 1997 (copies of which are maintained in the offices of Grantor and Grantee and attorneys for Grantor, Modrall, Sperling, Roehl, Harris & Sisk, P.A., 500 Fourth St. N.W., Albuquerque, New Mexico 87102) and shall not include any other rights, damages or claims than those specifically set forth therein. Any rights asserted under the terms of such agreements must be brought within the time period set forth in those agreements. CONVEYANCE DOES NOT INCLUDE COAL IN PLACE, INCLUDING DEVELOPMENT OR MINING RIGHTS. This conveyance does not and is not intended to affect or purport to affect, in any way, coal in place, including development or mining rights related to coal, in any of the property of Grantor or any of its subsidiaries or affiliates 63 including, but not limited to, the San Juan Basin Coal Holding Company, and coal in place and all such rights are EXCEPTED herefrom and RESERVED to Grantor. WITNESS its hand and seal this ________ day of March, 1997. SANTA FE PACIFIC GOLD CORPORATION By: ----------------------------------- (Seal) Bruce D. Hansen Senior Vice President-Corporate Development STATE OF NEW MEXICO COUNTY OF BERNALILLO This instrument was acknowledged before me on March ________, 1997, by Bruce D. Hansen as Senior Vice President-Corporate Development of Santa Fe Pacific Gold Corporation. --------------------------------------- (Seal) Notary Public My commission expires: ---------------- 64 McKinley County, New Mexico EXHIBIT E LICENSE TO EXPLORE AND OPTION TO PURCHASE Warranty Deed dated April 11, 1922, from Santa Fe Pacific Railroad Company to Ruby Oil Company, recorded in Book 6 of Deeds, Page 240, in the official records of McKinley County, New Mexico. Warranty Deed dated May 4, 1927, from Santa Fe Pacific Railroad Company to Frances E. Nixon, recorded in Book 7 of Deeds, Page 70, in the official records of McKinley County, New Mexico. Warranty Deed dated December 12, 1928, from Santa Fe Pacific Railroad Company to Geo. E. Bruce and H.F. Prewitt. Warranty Deed dated March 15, 1938, from Santa Fe Pacific Railroad Company to Mike Michael. Warranty Deed dated February 27, 1941, from Santa Fe Pacific Railroad Company to Mike Michael and Azize Michael, recorded in Book 12 of Deeds, Page 37, in the official records of McKinley County, New Mexico. Warranty deed dated January 7, 1942, from Santa Fe Pacific Railroad Company to R. G. Smith, Jr., recorded in Book 12 of Deeds, Page 456, in the official records of McKinley County, New Mexico. Warranty Deed dated October 1, 1942, from Santa Fe Pacific Railroad Company to I.K. Westbrook, recorded in Book 12 of Deeds, Page 208, in the official records of McKinley County, New Mexico. Warranty Deed dated May 1, 1944, from Santa Fe Pacific Railroad Company to Edward Sargent, recorded in Book 12 of Deeds, Page 365, in the official records of McKinley County, New Mexico. Warranty Deed dated April 10, 1945, from Santa Fe Pacific Railroad Company to Harold F. Prewitt and Hazel W. Prewitt, recorded in Book 12 of Deeds, Page 476, in the official records of McKinley County, New Mexico. Warranty Deed dated July 7, 1945, from Santa Fe Pacific Railroad Company to Muriel E. Buck, recorded in Book 12 of Deeds, Page 499, in the official records of McKinley County, New Mexico. E-1 65 Warranty Deed dated June 1, 1946, from Santa Fe Pacific Railroad Company to Emery Floyd Burnham, recorded in Book 10 of Warranty Deeds, Page 368, in the official records of McKinley County, New Mexico. Warranty Deed dated January 15, 1947, from Santa Fe Pacific Railroad Company to John Snyder and George E. Wood, recorded in Book 13 of Deeds, Page 172, in the official records of McKinley County, New Mexico. Warranty Deed dated January 15, 1947, from Santa Fe Pacific Railroad Company to Tom Snyder, recorded in Book 13 of Deeds, Page 173, in the official records of McKinley County, New Mexico. Warranty Deed dated March 15, 1947, from Santa Fe Pacific Railroad Company to R. E. Albers and W. M. B. Albers, recorded in Book 13 of Deeds, Page 235, in the official records of McKinley County, New Mexico. Warranty Deed dated June 1, 1948, from Santa Fe Pacific Railroad Company to Tom Morris, recorded in Book 9 of Warranty Deeds, Page 23, in the official records of McKinley County, New Mexico. Warranty Deed dated December 28, 1948, from Santa Fe Pacific Railroad Company to Jean Carrica and Company, recorded in Book 13 of Deeds, Page 339, in the official records of McKinley County, New Mexico. Warranty Deed dated January 4, 1949, from Santa Fe Pacific Railroad Company to I.K. Westbrook, recorded in Book 13 of Deeds, Page 341, in the official records of McKinley County, New Mexico. Warranty Deed dated April 22, 1949, from Santa Fe Pacific Railroad Company to Gates A. Davis, recorded in Book 9 of Warranty Deeds, Page 87, in the official records of McKinley County, New Mexico. Warranty Deed dated May 13, 1949, from Santa Fe Pacific Railroad Company to Chaco Land and Cattle Company, recorded in Book 9 of Warranty Deeds, Page 90, in the official records of McKinley County, New Mexico. Warranty Deed dated August 1, 1949, from Santa Fe Pacific Railroad Company to Chaco Land and Cattle Company, recorded in Book 10 of Warranty Deeds, Page 325, in the official records of McKinley County, New Mexico. Warranty Deed dated August 1, 1949, from Santa Fe Pacific Railroad Company to Star Lake Land and Livestock Company, recorded in Book 10 of Warranty Deeds, Page 327, in the official records of McKinley County, New Mexico. E-2 66 Warranty Deed dated January 2, 1950, from Santa Fe Pacific Railroad Company to Charlie Arviso, recorded in Book 10 of Warranty Deeds, Page 354, in the official records of McKinley County, New Mexico. Warranty Deed dated January 1, 1950, from Santa Fe Pacific Railroad Company to Emery Floyd Burnham, recorded in Book 11 of Misc., page 195, in the official records of McKinley County, New Mexico. Warranty Deed dated August 10, 1988, from Santa Fe Pacific Railroad Company to State Highway Department of New Mexico. Warranty Deed dated October 15, 1945, from Santa Fe Pacific Railroad Company to Fernandez Company, recorded in Book 12 DR, Page 536, in the official records of McKinley County, New Mexico. Warranty Deed dated March 4, 1952, from Santa Fe Pacific Railroad Company to Hazel W. Prewitt, recorded in Book 11 Misc., Page 370, in the official records of McKinley County, New Mexico. Warranty Deed dated March 15, 1947, from Santa Fe Pacific Railroad Company to Hazel W. Prewitt, an individual, and Hazel W. Prewitt, Guardian Estate of Joan M. Prewitt, a minor, recorded in Book 13 of Deeds, Page 240, in the official records of McKinley County, New Mexico. Warranty Deed dated November 1, 1948, from Santa Fe Pacific Railroad Company to W. F. Pitt and Susie Bell Pitt, husband and wife, recorded in book 9 of W. D., Page 53, in the official records of McKinley County, New Mexico. Warranty Deed dated January 20, 1947, from Santa Fe Pacific Railroad Company to Frank Bond & Son, Inc., recorded in book 13 of Deeds, Page 219, in the official records of McKinley County, New Mexico. E-3 -----END PRIVACY-ENHANCED MESSAGE-----