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The Company owns 24 unpatented lode mining claims in San Juan and Dolores Counties, Colorado immediately southeast of Bolam Pass.

Description and Location

The claims are located at an elevation of 11,000 feet above mean sea level and are accessible by a dirt road that is maintained during the summer months by the United States Forest Service. The property, which is referred to as the Graysill Property, encompasses the historic Graysill Mine, a past producer of vanadium and uranium ore. The Graysill Mine is known to have produced vanadium and by-product uranium during a period of approximately twenty years after World War II. Before the mine ceased production, approximately 32,000 tons of ore were mined with a reported grade of 2.41% vanadium pentoxide and 0.09% uranium oxide. In 1989, representatives of the United States Department of the Interior, Bureau of Mines Division, examined a number of abandoned mines in the San Juan National Forest, one of which was the Graysill Mine. Subsequently, in 1992, the Bureau of Mines produced a Mineral Land Assessment Open File Report titled "Mineral Appraisal of San Juan National Forest, Colorado". Most of the information relating to the Graysill Mine and the geology and mineralization of the general area within which the Graysill Property is located was obtained from this Open File Report.

The property is underlain by a gently dipping assemblage of Paleozoic and Mesozoic sedimentary rocks within which vanadium and uranium occurs in many of the rock units in a stratabound manner, exhibiting little or no apparent relationship to regional structural trends. Although vanadium and uranium occurrences are ubiquitous and are known to exist in over 20 distinctly different sedimentary units in the vicinity of the property of American Uranium, the Pennsylvanian-Permian Rico Formation and the Upper Jurassic Entrada Sandstone are the only formations which have been mined previously for vanadium and uranium. Most of the past production has come from the Entrada Sandstone. Historically, there have been a number of uraniferous vanadium deposits developed in the Entrada Sandstone along a sinuous trend extending in a north-south direction for over 100 miles. This trend coincides with a major structural feature representing a transitional zone between the Colorado Plateau and the Southern Rocky Mountain physiographic provinces.



During the past 50 years, the general region within which the property is located has been subjected to several periods of extensive exploration. The major programs were carried out by Vanadium Corporation of America during the late 1940's and early 1950's, and by Atlas Corporation in the late 1970s. Although the collective efforts of these companies resulted in the discovery and definition of significant, high grade vanadium reserves containing a high incidence of uranium, a major decline in the market for these commodities in the early 1980s eliminated all interest in the area at that time.

Concurrent with the height of exploration, uranium mining in the project area was initiated on a small scale in the 1940s and peaked in the late 1950s. Sporadic production of vanadium and uranium continued into the 1970s. Incomplete production records from the Graysill Mine, the largest producer in the area, indicate that a total of 32,000 tons yielding approximately 52,000 pounds of uranium oxide and in excess of 1.5 million pounds of vanadium pentoxide were produced before the mine ceased operations because of low vanadium and uranium prices. Based on analyses of the results of the drilling completed by Vanadium Corporation of America, a third party had previously estimated a possible geological resource of 400,000 tons averaging 2.5% vanadium pentoxide. This ore body may also contain large uranium resources with an estimated grade of 0.08%, the reported grade at the Graysill Mine. These estimates would equate to an in-ground resource of 20 million pounds of vanadium pentoxide and 640,000 pounds of uranium oxide.

Based on the results of the previous exploration on the property coupled with the widespread distribution of vanadium and uranium within the Entrada Sandstone in the Graysill area, it is possible that a significant increase in the vanadium and uranium reserves can be attained with further exploration on the property.