Option Agreement

Boomerang Option Agreement 

In July 2005 (Effective January 1, 2005), the Corporation entered into the Boomerang Option Agreement with Cameco Corporation (Cameco) whereby Cameco was granted an option to earn an aggregate 60% interest in the Corporation's 100% owned Boomerang uranium property by funding a cumulative ten million dollars ($10,000,000) in exploration expenditures.  The agreement consists of two options: (1) the first option granted Cameco the exclusive right to earn a 51% interest in the Boomerang project property by funding $6,000,000 in exploration expenditures over six years and (2) the second option grants Cameco the exclusive right to earn an additional 9% interest in the Boomerang project property by funding an additional $4,000,000 in exploration expenditures.  Upon Cameco earning either a 51% or 60% interest, a joint venture will be formed between Cameco and the Corporation with the parties funding their pro-rata share of future exploration expenditures. The Corporation is currently the operator with the responsibility to plan, organize and carry out Annual Exploration Programs on behalf of Cameco. Cameco has funded 100% of the exploration expenditures to the extent of its minimum earn-in amount through 2008.

From 2005 through December 31, 2007, Cameco funded and aggregate of $5,974,402 in exploration expenditures.  During the three months ended March 31, 2008, Cameco fulfilled its expenditure obligations under the First Option to acquire 51% in the Boomerang uranium property.  On May 27, 2008, Cameco committed to incur an additional $4,000,000 in exploration expenditures to earn an additional 9% interest in the Boomerang property pursuant to the Second Option of Boomerang Option Agreement.

On November 3, 2008, Cameco subsequently notified the Corporation that they would not pursue the Second Option based on current economic uncertainties and their own budgetary reasons. However, under the terms of the Boomerang Option Agreement, Cameco was responsible for funding the approved 2008 Program and Budget through December 31, 2008. Effective November 1, 2008, a Joint Venture will be consummated between Cameco and the Corporation based on the parties (collectively Cameco and Uravan) respective cost share of 51% and 49%. It was agreed by Cameco that the Corporation will remain as Operator of the Boomerang Joint Venture. For the twelve months ending December 31, 2008 Cameco funded $1,260,661 in exploration expenditures resulting in an aggregate expenditure of $7,235,063 on the Boomerang project.