The McArthur River Royalty is a 1% GORR on a 9.063% share of uranium production from the McArthur River project derived from Orano’s current 30.195% production interest in the project. The royalty payor is Orano. The McArthur River Royalty includes an option for the holder to receive physical uranium as payment. Included in the royalty is the option to take physical uranium “in kind” with notice.

Uranium Royalty Corp. (“URC”) believes that the royalty covers the majority of the current project, with the exception of a portion of claims S-105655 and S-105656 of the currently defined McArthur River project lands. The McArthur River Royalty includes most of the area known as the McArthur River mine and URC believes that the royalty applies to the entirety of the reported reserves at the mine other than portions that are covered by the adjacent Read Lake project area. The McArthur Technical Report identified the reserves attributable to the Read Lake area as approximately 0.35 Mlbs, which represents approximately 0.09% of existing stated reserves for McArthur River.

In Cameco's management's discussion and analysis for the year ended December 31, 2022, Cameco stated total packaged production from McArthur River and Key Lake in 2022 was 1.1 million pounds (of which 0.8 million pounds was Cameco’s share) as the mine and mill resumed production. Cameco further stated updated production plans for the McArthur River operation, disclosing potential production of 15.0 million pounds (100% basis) in annual production in 2023, 40% below the licensed capacity of the Key Lake mill (25 million pounds per year). Cameco further states 18.0 million pounds of production is projected for McArthur River in 2024.

In addition, Cameco has stated additional risks in that, with the extended period of time the asset was on care and maintenance, there is continued uncertainty regarding the timing of a successful ramp up to planned production and the associated costs. In addition, inflation, the availability of personnel with the necessary skills and experience, and the potential impact of supply chain challenges on the availability of materials and reagents carry with them the risks of not achieving Cameco’s production plans, production delays and increased costs. In addition, Cameco disclosed that its collective agreement with the United Steelworkers local 8914 expired in December 2022. There is a risk to the production plan if Cameco is unable to reach an agreement and there is a labour dispute. In further disclosure, the current operating licence from the CNSC for both Key Lake and McArthur River expire in October 2023. The relicensing process is under way for both sites, and Cameco expects a decision from the CNSC later in 2023. Cameco does not expect any interruption or significant risks from this process.

Cameco's management's discussion and analysis for the year ended December 31, 2022 states updated NI 43-101 ore reserves for the McArthur River operation, with proven reserves of 329.9 million pounds of U₃O₈ (2138.3 thousand tonnes at an average grade of 7.00% U₃O₈) and probable reserves of 64.0 million pounds of U₃O₈ (530.7 thousand tonnes at an average grade of 5.47% U₃O₈). The updated ore reserve was estimated by Cameco using a metal price assumption of US$53/lb U₃O₈ and are based on an exchange rate of US$1.00 to $1.26. Ore reserves are reported on a 100% ownership basis.

Cameco also states an updated mineral resource estimate for the McArthur River operation with measured resources of 3.7 million pounds of U₃O₈ (74.9 thousand tonnes at an average grade of 2.23% U₃O₈) and indicated resources of 3.1 million pounds of U₃O₈ (63.0 thousand tonnes at an average grade of 2.23% U₃O₈). The measured and indicated U₃O₈ mineral resources do not include those mineral resources modified to produce the ore reserves (as reported above) and are reported on a 100% ownership basis.

The original joint venture established over the McArthur River area in 1976 was the Keefe-Henday joint venture between Canadian Kelvin Resources Ltd. and Asamera Oil Corporation Ltd. The Keefe Lake Joint Venture was later divided into three separate project areas, the Dawn Lake, McArthur River, and Waterbury Lake project areas. Cameco began construction and development of the McArthur River mine in 1997. Federal authorities issued the operating licence and mining began at the project in December 1999 and commercial production was achieved on November 1, 2000.

Cameco has disclosed that there have been two notable water inflow incidents at the McArthur River mine. The first occurred in April of 2003, as increased water inflow due to a rock fall in a new development area (Bay 12 located just above the 530-metre level) began to flood the lower portions of the mine, including the underground grinding circuit area. Cameco further disclosed that additional dewatering capacity was installed, and the flooded areas were dewatered and repaired, with mining resumed in July 2003, with the excess water inflow sealed off in July 2004. According to Cameco's disclosure, a second inflow occurred in November 2008, when there was a small water inflow in the lower Zone 4 development area on the 590-metre level, which did not impact production, but did delay local development for approximately one year. Cameco further disclosed that, in January 2010, the inflow was sealed off and local development was resumed. In 2013, federal authorities granted a 10-year renewal of the licenses for McArthur River and the Cameco operated Key Lake mill.

Cameco disclosed that in 2018, a decision was made by the operator to suspend production at the mine and mill for an indeterminate duration. It further disclosed that a restart of the mine and mill is a commercial decision that will be based upon Cameco’s ability to commit its share of production from the operation under acceptable long-term contracts and to benefit from the favourable life of mine economics it provides.

In Cameco’s management's discussion and analysis for the year ended December 31, 2022, Cameco disclosed The McArthur River and Key Lake operation was in a state of safe care and maintenance from 2018 through 2021 due to weak market conditions. They further stated that through most of 2022, Cameco undertook the necessary operational readiness activities prior to restarting production. In November 2022, Cameco announced that the first pounds of uranium ore from the McArthur River mine had been milled and packaged at the Key Lake mill, marking the achievement of initial production as the facilities transitioned back into normal operations.

In addition to the resources outlined at the McArthur River Mine, several historical uranium deposits and showings have been discovered on the project. These include the P2 Main, BJ Lake, and Harrigan Zone deposits. These historical deposits do not have current resources attributed to them.