3. RESTATEMENT

The Company determined that the capitalization of development costs primarily on its New Mexico mineral properties and to a lesser extent on its South Texas mineral properties was not in accordance with U.S. GAAP. As a result, the Company has amended and restated its consolidated financial statements for the years ended December 31, 2012, 2011 and 2010, to reflect a cumulative adjustment to mineral property expenditures of $8,974,000 up to December 31, 2012. These adjustments to property expenditures were previously capitalized as property, plant and equipment.

The Company has also restated the March 31, 2013 and 2012 and the June 30, 2013and 2012 interim financial statements to expense certain costs previously capitalized as mineral property development costs. The Company has determined that its capitalization of these expenditures was not in accordance with U.S. GAAP. As a result, the Company has amended and restated the interim consolidated balance sheet as of June 30, 2013 to expense $673,000 of costs incurred during the six month period ended June 30, 2013 that were previously capitalized as development costs to mineral property expenses. The interim consolidated statements of operations for the six-month period ended June 30, 2013 and 2012 were amended and restated to expense $673,000 and $2,177,000, respectively, of costs previously capitalized as development costs to mineral property expenses. Corresponding changes were made to the interim statements of cash flows for the six-months ended June 30, 2013 and 2012.

Consolidated Balance Sheet

	June 30, 2013
	As Reported		Adjustment		As Restated
	$		$		$
Assets
Property, plant and equipment	109,566,339		(9,647,304	)	99,919,035
Total Assets	53,837,593		(9,647,304	)	44,190,289
Shareholders’ equity
Accumulated deficit	(170,199,086	)	(9,647,304	)	(179,846,390	)
Total shareholders’ equity	46,316,280		(9,647,304	)	36,668,976
Total liabilities and shareholders’ equity	53,837,593		(9,647,304	)	44,190,289

Consolidated Statement of Operations

	Three Months Ended June 30, 2013
	As Reported		Adjustment		As Restated
	$		$		$
Mineral property expenses	652,455		350,114		1,002,569
Total cost of uranium sales	1,854,942		350,114		2,205,056
Loss from operations before corporate expenses	(1,854,942	)	(350,114	)	(2,205,056	)
Loss from operations	(3,831,987	)	(350,114	)	(4,182,101	)
Net loss	(3,846,586	)	(350,114	)	(4,196,700	)

Basic and diluted net loss per common share	(0.19	)	(0.02	)	(0.21	)

Consolidated Statement of Operations

	Six Months Ended June 30, 2013
	As Reported		Adjustment		As Restated
	$		$		$
Mineral property expenses	751,360		672,969		1,424,329
Total cost of uranium sales	3,093,827		672,969		3,766,796
Loss from operations before corporate expenses	(3,093,827	)	(672,969	)	(3,766,796	)
Loss from operations	(7,752,087	)	(672,969	)	(8,425,056	)
Net loss	(7,997,178	)	(672,969	)	(8,670,147	)

Basic and diluted net loss per common share	(0.43	)	(0.04	)	(0.47	)

Consolidated Statement of Cash Flows

	Six Months Ended June 30, 2013
	As Reported		Adjustment		As Restated
	$		$		$
Net Loss	(7,997,178	)	(672,969	)	(8,670,147	)
Additions to uranium properties	(788,213	)	672,969		(115,244	)

Consolidated Statement of Operations

	Three Months Ended June 30, 2012
	As Reported		Adjustment		As Restated
	$		$		$
Mineral property expenses	30,744		1,573,386		1,604,130
Total cost of uranium sales	1,571,642		1,573,386		3,145,028
Loss from operations before corporate expenses	(1,571,642	)	(1,573,386	)	(3,145,028	)
Loss from operations	(3,787,151	)	(1,573,386	)	(5,360,537	)
Net Loss	(3,660,679	)	(1,573,386	)	(5,234,065	)
Basic and diluted net loss per common share	(0.34	)	(0.15	)	(0.49	)

Consolidated Statement of Operations

	Six Months Ended June 30, 2012
	As Reported		Adjustment		As Restated
	$		$		$
Mineral property expenses	57,459		2,176,581		2,234,040
Total cost of uranium sales	2,227,129		2,176,581		4,403,710
Loss from operations before corporate expenses	(2,227,129	)	(2,176,581	)	(4,403,710	)
Loss from operations	(7,487,658	)	(2,176,581	)	(9,664,239	)
Net loss	(7,267,149	)	(2,176,581	)	(9,443,730	)
Basic and diluted net loss per common share	(0.71	)	(0.21	)	(0.92	)

Consolidated Statement of Cash Flows

	Six Months Ended June 30, 2012
	As Reported		Adjustment		As Restated
	$		$		$
Net loss	(7,267,149	)	(2,176,581	)	(9,443,730	)
Additions to uranium properties	(3,155,448	)	2,176,581		(978,867	)