Mr. Jones continued, "Our groundwater restoration activities in Texas remain on target and prepare us for a future return to production. Concurrently, we will continue our exploration efforts and look at other opportunities as part of our effort to grow our South Texas asset base. After reaching a temporary access agreement a year ago, we are building on our relationship with the Navajo Nation in an effort to reach a comprehensive agreement and to begin to address legacy issues with uranium mining in New Mexico."
Maintaining our focus in New Mexico
With construction plans for the Churchrock Section 8 project currently delayed, URI has continued to focus its efforts on reaching a permanent access agreement with the Navajo Nation and renegotiating agreements with royalty holders of the Section 8, Section 17 and Mancos properties. These priorities are aimed at further de-risking and improving the economics of the Churchrock Section 8 project. Recently, environmental and surveying contractors have been on the site doing some initial work. Section 8 contains 6.5 million pounds of mineralized uranium material at a grade of 0.11% U 3O 8 and is covered by the Company's underground injection control permit and NRC license, both of which are in timely renewal.
Texas restoration activities nearing completion; Tecolote exploration drilling commencesGroundwater restoration activities in Texas are progressing well with final closure of the Rosita project's production areas 1 and 2 targeted for mid- to late-2013. The Company continues restoration activities with stabilization targeted for the fourth quarter of 2013 for all production areas at the Kingsville Dome and Vasquez projects. On January 7, 2013, URI announced the expansion of its lease agreement in Kenedy County, Texas, to include the Tecolote tract which has approximately 22,700 net acres and that it will be a part of the exploration program with Cameco. Concurrently, URI and Cameco agreed to extend their amended exploration agreement to a five-phase, five-year exploration program. Since 2011, Cameco has invested $2.8 million and will invest another $1.5 million to increase its interest to 70% in the expanded program. Phase III, for which Cameco is the exploration operator, commenced this week and is expected to be completed in the fourth quarter of 2013.
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