Azarga Uranium Files Robust PEA for Dewey Burdock Project

VANCOUVER, January 17, 2020 - Azarga Uranium Corp. (TSX:AZZ)(OTCQB:AZZUF)(FRA:P8AA) ("Azarga Uranium" or the "Company") has filed its National Instrument 43-101 ("NI 43-101") Technical Report and Preliminary Economic Assessment ("PEA") for its flagship Dewey Burdock In-situ Recovery ("ISR") Uranium Project in South Dakota, USA (the "Dewey Burdock Project") following the Company's press release dated 4 December 2019.

Highlights:

• Pre-income tax IRR of 55% and NPV of US$171.3 million (at US$55 per pound uranium sales price and 8% discount rate)

• Post-income tax IRR of 50% and NPV of US$147.5 million (at US$55 per pound uranium sales price and 8% discount rate)

• 14.3 million pounds of U₃O₈ production over 16 years; steady state production of approximately 1 million pounds per year achieved in year 3

• Low initial capital expenditures estimated at US$31.7 million

• Direct cash operating costs estimated at US$10.46 per pound of production

Summary of Economics

The base case economic assessment results in a pre-income tax internal rate of return ("IRR") of 55% and a pre-income tax net present value ("NPV") of US$171.3 million when applying an eight percent discount rate. Using the same discount rate, the post-income tax IRR is 50% and the post-income tax NPV is US$147.5 million.

The projected cash flows for the Dewey Burdock Project PEA are positive in the second year of production, two years after the commencement of construction. Initial capital expenditures are estimated at US$31.7 million.

Direct cash operating costs are estimated to be US$10.46 per pound of production, royalties and local taxes (excluding property tax) are estimated to be US$5.15 per pound of production and the total pre-income tax cost of uranium production is estimated to be US$28.88 per pound of production. Income taxes are estimated to be US$3.39 per pound of production and have been calculated on a project basis in accordance with NI 43-101 requirements; therefore, certain tax shelter balances, such as tax loss carry forwards available at the corporate level, have not been considered.

Pre-income tax NPV and IRR Sensitivity to Alternative Uranium Price Scenarios

Cautionary statement: The results of the Dewey Burdock Project PEA are preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The estimated mineral recovery used in the Dewey Burdock Project PEA is based on site-specific laboratory recovery data as well as Azarga Uranium personnel and industry experience at similar facilities. There can be no assurance that recovery at this level will be achieved. There is no certainty that the Dewey Burdock Project PEA will be realized.

Updated Mineral Resource Estimate - 3 December 2019¹

1. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

In addition to the ISR mineral resource estimate, the NI 43-101 resource estimate includes a non-ISR (located above the water table) resource estimate containing Measured resources of 857,186 pounds at 0.060% U₃O_8, Indicated resources of 407,851 pounds at 0.053% U₃O₈ and inferred resources of 114,858 pounds at 0.051% U₃O₈. These resources are not included in the ISR resources presented in the table above and are not included in the economic analysis for the Dewey Burdock Project PEA.

Both the ISR and non-ISR resources were determined using the GT contour method and met the following criteria:

1. 0.02 percent grade cutoff;
2. Occur within the same mineral horizon (roll front);
3. Fall within the 0.20 GT contour; and
4. Extend no farther from the drill hole than the radius of influence specified for each category, i.e., measured, indicated or inferred.

For the purpose of the PEA, the uranium recovery is estimated at 80% for all categories of ISR resources. Therefore, life of mine U₃O₈ production is estimated to be 14.3 million pounds.

Technical Report and PEA

The Dewey Burdock Project Technical Report and PEA has been prepared in accordance with the requirements of NI 43-101 and was independently prepared by Woodard & Curran, Douglass Graves, P.E., a qualified person ("QP") as defined under NI 43-101 and Roughstock Mining Services, Steve Cutler, P.G., a QP as defined under NI 43-101. The Technical Report and PEA titled "NI 43-101 Technical Report, Preliminary Economic Assessment, Dewey-Burdock Uranium ISR Project, South Dakota, USA" has been filed on SEDAR at www.sedar.com and Azarga Uranium's website www.azargauranium.com.

Qualified Person

The disclosure of a scientific and technical nature contained in this press release was approved by Douglass Graves, P.E. and Steve Cutler, P.G., qualified persons as that term is defined under NI 43-101.

About Azarga Uranium Corp.

Azarga Uranium is an integrated uranium exploration and development company that controls ten uranium projects and prospects in the United States of America ("USA") (South Dakota, Wyoming, Utah and Colorado), with a primary focus of developing in-situ recovery uranium projects. The Dewey Burdock in-situ recovery uranium project in South Dakota, USA (the "Dewey Burdock Project"), which is the Company's initial development priority, has received its Nuclear Regulatory Commission License and draft Class III and Class V Underground Injection Control ("UIC") permits from the Environmental Protection Agency (the "EPA") and the Company is in the process of completing other major regulatory permit approvals necessary for the construction of the Dewey Burdock Project, including the final Class III and Class V UIC permits from the EPA.

For more information please visit www.azargauranium.com.

Follow us on Twitter at @AzargaUranium.

For further information, please contact:

Blake Steele, President and CEO
+1 303 790-7528

E-mail: info@azargauranium.com

Disclaimer for Forward-Looking Information

Certain information and statements in this news release may be considered forward-looking information or forward-looking statements for purposes of applicable securities laws (collectively, "forward-looking statements"), which reflect the expectations of management regarding its disclosure and amendments thereto. Forward-looking statements consist of information or statements that are not purely historical, including any information or statements regarding beliefs, plans, expectations or intentions regarding the future. Such information or statements may include, but are not limited to, statements with respect to the Company's Dewey Burdock Project PEA, the future financial or operating performance of the Company and its mineral projects, including the Dewey Burdock Project, the estimation of mineral resources, the timing and amount of estimated future production and capital, operating and exploration expenditures and Azarga Uranium's continued efforts to obtain all major regulatory permit approvals necessary for the construction of the Dewey Burdock Project, including the final Class III and Class V UIC permits from the EPA. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits Azarga Uranium will obtain from them. These forward-looking statements reflect management's current views and are based on certain expectations, estimates and assumptions, which may prove to be incorrect. A number of risks and uncertainties could cause actual results to differ materially from those expressed or implied by the forward-looking statements, including without limitation: the risk that the Dewey Burdock Project is not constructed and the estimated economics of the PEA are not realized, the risk that the estimated economics contained in the PEA do not reflect actual project economics, the risk that Azarga Uranium does not obtain all major regulatory permit approvals necessary for construction of the Dewey Burdock Project, including the final Class III and Class V UIC permits from the EPA, the risk that such statements may prove to be inaccurate and other factors beyond the Company's control. These forward-looking statements are made as of the date of this news release and, except as required by applicable securities laws, Azarga Uranium assumes no obligation to update these forward-looking statements, or to update the reasons why actual results differed from those projected in the forward-looking statements. Additional information about these and other assumptions, risks and uncertainties are set out in the "Risks and Uncertainties" section in the most recent AIF filed with Canadian security regulators.

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this News Release.

SOURCE: Azarga Uranium Corp.