BURRO CANYON

An exploration program was being developed to follow up on last year's drill program.

Completed drilling program. A total of 17 holes were drilled, for a cumulative total of 20,303 feet. Of the 16 holes that reached the target Salt Wash formation, 9 encountered significant mineralization, and two can be considered to be wellmineralized. In addition, zones of anomalous radioactivity up to 65 feet in thickness were encountered. The program was designed as a first test of the area, with widely-spaced holes (400 to 800 feet apart). The primary objective was to define the depositional environment prior to more closely-spaced drilling. The thick zones of anomalous radioactivity, located within sandstone horizons, are indicative of a sand channel with reducing capacity, a characteristic that is essential for the deposition of uranium. The substantial hicknesses encountered in the current drill program, when combined with the significant mineralization in 9 of the holes, represent highly encouraging results. To date, no coring has been carried out on the project. Coring will be necessary at a later date to determine whether or not the uranium is in equilibrium. The equilibrium state is an indication of the reliability of gamma ray logging. Typically the older the mineralization, the less likely it is that disequilibrium will affect the relationship between equivalent and the true uranium content. Significant results were reported from SR-1013 from 1142.0-1145.5 ft, a 3.5 ft intercept graded 0.55% eU3O8. Seven of the 17 holes (SR-1001 to SR-1017 reported no signifcant mineralization and one hole was abandoned. Mineralization was reported from the other 9 holes, including SR-1013 above).

Drilling has commenced on a 20 hole, 6,096 m drill program. The target formation is the Salt Wash member of the Cretaceous Morrison formation, toward the centre of a syncline. Historic mining has taken place on the fringes of the syncline, at the Sunday mine complex to the northeast, and the Burro mine to the southwest. The project lands lie between these two mining areas.