NYSE MKT Symbol – UEC
CORPUS CHRISTI, TX,
May 9, 2017 /CNW/ - Uranium Energy
Corp (NYSE MKT: UEC, the "Company" or "UEC") is pleased to announce
that the Company has entered into a definitive Share Purchase
Agreement (the "Agreement") with Pacific Road Resources Funds
("PRRF") to acquire all of the issued and outstanding shares of
Reno Creek Holdings Inc. ("RCHI") and, indirectly thereby, 100% of
its fully permitted Reno Creek in-situ recovery ("ISR") project
located in the Powder River Basin,
Wyoming ("Reno Creek" or the "Project").
Transaction Highlights
- Strengthens UEC's pipeline of low-cost ISR uranium projects
with the addition of Reno Creek, located in the prolific
Powder River Basin in Wyoming.
- Reno Creek hosts an NI 43-101 Measured and Indicated resource
of 27.47 million tons grading 0.041% U3O8
yielding 21.98 million lbs U3O8 at a
grade-thickness (GT) cutoff of 0.20*.
- The NI 43-101 resource report also indicates potential to
expand the resource with additional drilling.
- A Source and By Product Materials License for Reno Creek was
issued in February 2017 from the U.S
Nuclear Regulatory Commission ("NRC"), supported by a Final
Environmental Impact Statement and Record of Decision, to permit
production of up to 2 million lbs. U3O8 per
year.
- Strategically located within the Powder River Basin in
Wyoming, a uranium mining-friendly
state with excellent infrastructure and an experienced labor
force.
- A Pre-Feasibility Study ("PFS")** on Reno Creek completed in
2014 demonstrated strong project economics with low capital and
operating costs consistent with ISR projects in Wyoming. A new and optimized PFS is in
progress and will be completed by UEC.
- Cumulative expenditures to date of approximately $60 million.
- A new partnership with respected mining private equity firm
Pacific Road Resources Funds, who will own approximately 9% of
UEC's common shares at closing.
Amir Adnani, President & CEO,
stated: "The acquisition of Reno Creek creates an industry-leading
diversified pipeline of low-cost ISR uranium projects when combined
with our production-ready South
Texas hub-and-spoke operations and exploration/development
portfolio in Paraguay. The Reno Creek Project presents a rare
opportunity to acquire a large, fully permitted, construction
ready, and strategic low-cost ISR asset located in the United States – a complete set of
attributes for any potential UEC acquisition. The Powder
River Basin of Wyoming has
produced over 85 million lbs U3O8
historically, and is currently home to two of the largest uranium
producers in the world: Cameco and Uranium One (Rosatom). We
commend Pacific Road for their outstanding work to advance the Reno
Creek project over the past seven years, and we welcome them as our
newest shareholder."
"We are very excited about combining Reno Creek with UEC", said
Dan Wilton, Partner at Pacific Road.
"The UEC team has an outstanding track record of consolidating,
developing and operating ISR uranium projects. We believe
they have the right technical, operating and financing capabilities
to deliver the true value of Reno Creek, continuing the excellent
work done by Jim Viellenave's team,
who took the property from an initial resource through to a fully
permitted project. The combination of UEC and Reno Creek
creates one of the most attractive portfolios of
U.S.-based low cost ISR uranium assets and is an important step in
the consolidation of the U.S. ISR uranium sector."
Transaction Details
Under the terms of the Agreement, the Company will issue to
PRRF, in return for PRRF's 97.27% ownership in RCHI (the
"Transaction"), the following:
(i)
|
14.0 million shares
of the Company (the "Share Consideration");
|
(ii)
|
11.0 million warrants
of the Company (the "Warrant Consideration"), with each warrant
entitling the holder to acquire one share of the Company at an
exercise price of $2.30 per share for a period of five years from
closing. The warrants will have an accelerator clause which
provides that, in the event that the closing price of UEC's common
shares on its principally traded exchange is equal to or greater
than $4.00 per share for a period of 20 consecutive trading days,
UEC may accelerate the expiry date of the warrants to within 30
days by providing written notice to the holders; and
|
(iii)
|
a 0.5% net profits
interest royalty, capped at $2.5 million (the "NPI Consideration",
and together with the Share Consideration and the Warrant
Consideration, the "Consideration");
|
Upon completion of the Transaction, PRRF will own approximately
9% of UEC's shares outstanding. PRRF has agreed to certain
voting and resale conditions pursuant to the terms of the
Agreement.
By way of certain 'drag along' rights, the Company will acquire
the remaining 2.73% of RCHI from Bayswater Uranium Corporation for
pro-rated consideration identical to the Consideration being issued
to PRRF. The Transaction is subject to NRC approval and is expected
to close on or about July 31,
2017.
Reno Creek ISR Project Overview
The Reno Creek ISR Project is located in the Powder River Basin,
Campbell County, Wyoming,
approximately 80 miles northeast of Casper. PRRF undertook significant project
advancement since 2010 when they acquired the project, including
expenditures targeting land acquisition, resource development, a
pre-feasibility study, and permitting, which culminated in the NRC
issuing a source and byproduct materials license to construct and
operate an ISR uranium facility in February
2017.
The source materials license was the last major permit required
to proceed with the development of the Project. The permits allow
Reno Creek to process up to 2 million pounds of uranium a year from
five resource units: North Reno Creek, Southwest Reno Creek,
Moore, Bing, and Pine Tree. Within
the five resource units are 16 proposed production units and
associated wellfields, header houses, and a central processing
plant.
History of the Project
Substantial historical exploration, development, and project
permitting work has been completed on the Reno Creek property,
beginning in the late 1960s and continuing to present.
Approximately 10,000 exploration drill holes have been completed by
various operators over time, who continued to advance the project
by drilling and growing land and mineral interests to nearly 16,000
acres by 2007. Since PRRF took control of the Project, mineral and
surface land holdings have grown to approximately 22,000 acres,
including a 40-acre company-owned central processing plant
site.
Summary of Mineral Resources
In July 2016, PRRF commissioned an
updated Technical Report completed by Behre
Dolbear & Company (USA), Inc. on Reno Creek titled "Technical
Report and Audit of Resources of the Reno Creek ISR Project,
Campbell County, Wyoming, USA"
(the "Current Technical Report"). Over $60
million has been expended on the Project to date, including
completion of more than 10,000 drill holes. Data from drilling,
including survey coordinates, collar elevations, depths, and grade
of uranium intercepts, have been incorporated into the database
that forms the current resource estimate at Reno Creek (Table
1).
Table 1(1)
Class
|
Tons
(millions)
|
Weighted Average
Thickness (feet)
|
Weighted Average
Grade (% U3O8)
|
Pounds
U3O8 (millions)
|
Measured &
Indicated
|
27.47
|
12.3
|
0.041
|
21.98
|
Inferred
|
1.36
|
10.6
|
0.034
|
0.93
|
1 Cut-off
of greater or equal to 0.20 grade x thickness per
intercept
|
The inferred resources are found principally in underexplored
portions of the Reno Creek property, along extensive identified
redox fronts. The authors of the July
2016 Reno Creek resource estimate recommend continuing
exploration along these trends, with the expectation of further
contributions to the reported resource base; given the known
mineralization occurs in a continuous sandstone present across all
of the Reno Creek, Moore, and Bing
resource units.
The technical information in this news release has been prepared
in accordance with the Canadian regulatory requirements set out in
NI 43-101 and was reviewed by Clyde L.
Yancey, P.G., Vice President-Exploration for the Company, a
Qualified Person under NI 43-101.
Advisors and Counsel
Haywood Securities Inc. is acting as financial advisor to the
Company. McMillan LLP and Holland
& Hart LLP are acting as legal advisors to the Company.
Osler, Hoskin & Harcourt LLP
is acting as legal advisor to PRRF.
About Uranium Energy Corp
Uranium Energy Corp is a U.S.-based uranium mining and
exploration company. The Company's fully-licensed Hobson
Processing Facility is central to all of its projects in
South Texas, including the
Palangana ISR mine, the permitted Goliad ISR project and the
development-stage Burke Hollow ISR project. Additionally, the
Company controls a pipeline of advanced-stage projects in
Arizona, Colorado and Paraguay. The Company's operations are
managed by professionals with a recognized profile for excellence
in their industry, a profile based on many decades of hands-on
experience in the key facets of uranium exploration, development
and mining.
About Pacific Road Resources Funds
The Pacific Road Resources Funds are private equity funds
investing in the global mining industry. They provide expansion and
buyout capital for mining projects, mining related infrastructure
and mining services businesses located throughout the world. The
team is located in Sydney,
Australia and Vancouver,
Canada.
PRRF's position in RCHI is held by Pacific Road Capital A Pty
Ltd., as trustee for Pacific Road Resources Fund A, Pacific Road
Capital B Pty Ltd., as trustee for Pacific Road Resources Fund B,
and Pacific Road Holdings S.à.r.l., a Luxembourg corporation.
Stock Exchange Information:
NYSE MKT: UEC
Frankfurt Stock Exchange Symbol:
U6Z
WKN: AØJDRR
ISN: US916896103
*Notice to U.S. Investors
The mineral resources referred to herein have been estimated in
accordance with the definition standards on mineral resources of
the Canadian Institute of Mining, Metallurgy and Petroleum referred
to in NI 43-101 and are not compliant with U.S. Securities and
Exchange Commission (the "SEC") Industry Guide 7 guidelines. In
addition, measured mineral resources, indicated mineral resources
and inferred mineral resources, while recognized and required by
Canadian regulations, are not defined terms under SEC Industry
Guide 7 and are normally not permitted to be used in reports and
registration statements filed with the SEC. Accordingly, we have
not reported them in the United
States. Investors are cautioned not to assume that any part
or all of the mineral resources in these categories will ever be
converted into mineral reserves. These terms have a great amount of
uncertainty as to their existence, and great uncertainty as to
their economic and legal feasibility. In particular, it should be
noted that mineral resources which are not mineral reserves do not
have demonstrated economic viability. It cannot be assumed that all
or any part of measured mineral resources, indicated mineral
resources or inferred mineral resources will ever be upgraded to a
higher category. In accordance with Canadian rules, estimates of
inferred mineral resources cannot form the basis of feasibility or
other economic studies. Investors are cautioned not to assume that
any part of the reported measured mineral resources, indicated
mineral resources or inferred mineral resources referred to herein
are economically or legally mineable.
**PFS
Upon the closing of the Transaction the Company plans to
complete a new and optimized PFS based substantially on the
information provided in the Current Technical Report.
Accordingly, the current PFS cannot be relied upon and should not
be construed to reflect a current PFS in accordance with NI
43-101.
Safe Harbor Statement
Except for the statements of historical fact contained herein,
the information presented in this news release constitutes
"forward-looking statements" as such term is used in applicable
United States and Canadian laws.
These statements relate to analyses and other information that are
based on forecasts of future results, estimates of amounts not yet
determinable and assumptions of management. Any other statements
that express or involve discussions with respect to predictions,
expectations, beliefs, plans, projections, objectives, assumptions
or future events or performance (often, but not always, using words
or phrases such as "expects" or "does not expect", "is expected",
"anticipates" or "does not anticipate", "plans, "estimates" or
"intends", or stating that certain actions, events or results
"may", "could", "would", "might" or "will" be taken, occur or be
achieved) are not statements of historical fact and should be
viewed as "forward-looking statements". Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or
achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking statements. Such risks and other factors
include, among others, the actual results of exploration
activities, variations in the underlying assumptions associated
with the estimation or realization of mineral resources, the
availability of capital to fund programs and the resulting dilution
caused by the raising of capital through the sale of shares,
accidents, labor disputes and other risks of the mining industry
including, without limitation, those associated with the
environment, delays in obtaining governmental approvals, permits or
financing or in the completion of development or construction
activities, title disputes or claims limitations on insurance
coverage. Although the Company has attempted to identify important
factors that could cause actual actions, events or results to
differ materially from those described in forward-looking
statements, there may be other factors that cause actions, events
or results not to be as anticipated, estimated or intended. There
can be no assurance that such statements will prove to be accurate
as actual results and future events could differ materially from
those anticipated in such statements. Accordingly, readers should
not place undue reliance on forward-looking statements contained in
this news release and in any document referred to in this news
release.
Certain matters discussed in this news release and oral
statements made from time to time by representatives of the Company
may constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 and the Federal
securities laws. Although the Company believes that the
expectations reflected in such forward-looking statements are based
upon reasonable assumptions, it can give no assurance that its
expectations will be achieved. Forward-looking information is
subject to certain risks, trends and uncertainties that could cause
actual results to differ materially from those projected. Many of
these factors are beyond the Company's ability to control or
predict. Important factors that may cause actual results to differ
materially and that could impact the Company and the statements
contained in this news release can be found in the Company's
filings with the Securities and Exchange Commission. For
forward-looking statements in this news release, the Company claims
the protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995.
The Company assumes no obligation to update or supplement any
forward-looking statements whether as a result of new information,
future events or otherwise. This press release shall not constitute
an offer to sell or the solicitation of an offer to buy
securities.
SOURCE Uranium Energy Corp