Project Summary

The Dawn Lake project is a large, early-stage exploration stage project located in northern Saskatchewan in Canada, approximately 700 km north of Saskatoon. The majority of the project grounds cover an area approximately between the McClean Lake mill and Cigar Lake mine. The Dawn Lake project is a Joint Venture operated by Cameco Corporation and partnered with Orano Canada Ltd.

Cameco has one deposit with current resources stated on the project. The Tamarack deposit is disclosed as of December 31, 2020, at 17.9 Mlbs U3O8 of indicated resources at an average grade of 4.42% U3O8, and a further 1.0 Mlbs U3O8 of inferred resources. The deposit is unconformity-related at approximately 175 to 200 m depth, located 10 km to the southwest of the McClean Lake mill.

No uranium has been produced from the project to date and Cameco has stated no production plans for the currently defined Tamarack deposit.

Royalty Option Details

Uranium Royalty Corp. has the option to acquire a sliding scale 10% to 20% Net Profits Interest (“NPI”) on a 7.5% share of overall uranium production from the project lands. The option to acquire this royalty is exercisable at any time until May 7, 2024.

The sliding scale royalty percentage for the Dawn Lake royalty is based upon historical production and recoverable reserves on the combined Dawn Lake and Waterbury Lake/Cigar Lake project lands, with the royalty rate having already achieved the maximum of 20% as the Cigar Lake mine has achieved the production and reserve threshold. The sliding royalty percentage will decrease to 10% upon production of 200 Mlbs U3O8 from the combined Dawn Lake and Cigar Lake/Waterbury project lands (Cameco has reported 93 Mlbs production to date). For further clarity, production from Cigar Lake will be considered to adjust the royalty percentage on Dawn Lake. As a profit based NPI interest, this royalty is calculated based upon generated revenue, with deductions for certain expenses and costs, which include cumulative expense accounts, including development costs. The royalty will only generate revenue to the holder after cumulative expenses are exhausted.

The Dawn Lake Royalty option does not apply to the entirety of the project lands. However, the Company believes that the Dawn Lake Royalty applies to substantially all areas of the project underlying the existing deposits and areas underlying estimates of mineral reserve and mineral resource.

Project History

The original joint venture established over the Dawn Lake 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.

The Dawn Lake project has been active since 1977, with the first significant uranium deposit discovered in 1978 when unconformity-associated uranium mineralization was intersected on what later became known as the 11, 11A, 11B and 14 Zones of the Dawn Lake deposit. The Dawn Lake deposits continued to be delineated and advanced up until development of a series of historical resource estimates between 1997 and 2000. Cameco does not currently attribute resources to the Dawn Lake deposits. The Tamarack deposit was subsequently discovered in 1999 and delineated over the following eight years.

On March 26, 2018, IsoEnergy announced that they had purchased a portion of the Dawn Lake project grounds, deemed the North Dawn Lake Block, which comprised 33 claims from the original Dawn Lake Joint Venture project. The Dawn Lake royalty option acquired by Uranium Royalty Corp. does not cover the portion of the historical project sold to IsoEnergy.

Historical resource estimates for the Dawn Lake deposits are not currently stated by Cameco. Several smaller zones of mineralization have been discovered on the project, most notable being the La Rocque Lake (29.87% U3O8 over 7.0 m in hole Q22-040), Natona Bay (5.56% U3O8 over 5.25 m in hole Q27B-030) and Thorburn Lake (3.2% U3O8 over 8.8 m in hole Q14A-026). These historical deposits do not have resources assigned to them under the framework of NI-43-101.

Note on Technical Disclosure

Unless otherwise indicated, the scientific and technical information disclosed herein regarding the Dawn Lake project has been derived from Cameco’s Annual Information Form for the year ended December 31, 2020, and Cameco's other public disclosures, copies of which are available under its profile on SEDAR. Other sources include the IsoEnergy News Release titled “IsoEnergy to Acquire Dawn Lake North Block to Expand Geiger Property in the Athabasca Basin”, announced on March 26, 2018, and historical uranium deposit information outlined in the Saskatchewan Mineral Deposit Index (SMDI).