The royalty is a production royalty equal to one percent (1%) of the gross value of the production of uranium- or vanadium-bearing ores and other mineral products mined or extracted from the subject area. Gross value is calculated based upon actual or deemed proceeds, less certain allowable deductions.  

In lieu of the royalty payment, URC may at its election, on an annual basis, take its royalty as an in-kind production royalty of concentrates with 30 days notice prior to the beginning of the calendar year.

The royalty covers approximately 546 acres, or approximately 6% of the overall La Sal project area.

In its Annual Report on Form 10-K for the year ended December 31, 2021, Energy Fuels disclosed that it pursued a small-scale test mining campaign targeting vanadium at its La Sal Complex in 2018 and early 2019, along with rehabilitation of existing mine workings, including the Energy Queen shaft, which ceased in early 2020. Energy Fuels has indicated the project is currently on standby pending improvements in market conditions.

Energy Fuels further stated that the mineral facilities at the La Sal Project are all existing facilities in historic mining areas, and approvals by the Bureau of Land Management and the U.S. Forest Service have been obtained under Environmental Assessments and Finding of No Significant Impacts (FONSI’s) under The United States National Environmental Policy Act of 1969.  Energy Fuels’ further disclosure that the Energy Queen Mine workings and shaft are currently flooded and will need to be dewatered prior to mining.

Numerous underground mines near outcrops in the eastern part of the La Sal Trend (La Sal Creek Canyon District) extracted vanadium and uranium during the early 1900s. Deeper deposits of the central La Sal Trend (the area of the La Sal Project) were discovered in the 1960s and developed for production in the 1970s through vertical shafts and declines. The Energy Queen mine, then known as the Hecla Shaft, was started in 1979 by the Union Carbide/Hecla Joint Venture. The Energy Queen mine stopped production in 1983 due to inadequate uranium prices. Low uranium and vanadium prices forced all production throughout the district to cease about 1991.

Denison began producing from the Pandora Mine in 2006 and later from the Beaver Shaft/La Sal decline following its acquisition by International Uranium Corporation. Ore production by Denison and by Energy Fuels (following its acquisition of Denison’s U.S. Mining Division) between 2006 and 2012 from the mines in the La Sal Project area totaled approximately 412,000 tons (1,658,000 lbs U₃O₈ at an average grade of 0.20% U₃O₈ and 8,431,000 lbs V₂O₅ at an average grade of 1.02% V₂O₅). From 2008 through mid-2012, Denison drilled 220 exploration and fill-in (confirmation) holes in the project area. Energy Fuels drilled another 27 holes on the Energy Queen property and the State land to the northwest of the Energy Queen from 2007 through 2012. Due to declining uranium prices, production ceased in October 2012 at the Beaver/La Sal Mines and in December 2012 at the Pandora Mine.

The La Sal Technical Report included a resource estimate for the Energy Queen project area. The resource estimated included 0.97 Mlbs U₃O₈ of measured resources from 262,000 tons of ore grading 0.19% U₃O₈, 0.27 Mlbs U₃O₈ of indicated resources from 81,000 tons grading 0.17% U₃O₈, and 0.08 Mlbs U₃O₈ of Inferred resources from 43,000 tons of ore grading 0.09% U₃O₈. The Company's royalty does not apply to the entire area of such estimates (see above).