European Uranium Announces Joint Venture with Forte Energy on Slovak Uranium Properties
June 16 2014 - 12:15PM
Business Wire
European Uranium Resources Ltd. (the "Company") (TSXV: EUU)
announces that it has signed a binding Letter of Intent with ASX
and AIM listed Forte Energy NL (“Forte”) whereby Forte will earn a
50% interest in the Company’s Slovakia uranium projects. The
interest will be held through ownership of 50% of EUU’s currently
wholly-owned Slovak subsidiaries, Ludovika Energy and Ludovika
Mining, which hold the mineral licenses comprising the Kuriskova
and Novoveska Huta uranium projects.
“The agreement with Forte Energy provides EUU with its necessary
short-term cash infusion and allows EUU to maintain a 50% interest
in the Kuriskova project without needing to contribute cash until
$3,500,000 million has been spent on the project by Forte. The
transaction preserves value for EUU shareholders while allowing
participation in the project’s upside if the uranium market
improves and development or sale of the project is warranted. EUU
will work closely with Forte on the advancement of the Slovak
uranium properties while also advancing its recently optioned Deli
Jovan North copper-gold project in Serbia (see news release dated
June 2, 2014) and possibly pursuing other mineral exploration and
development opportunities,” said Dorian (Dusty) Nicol, the
Company’s President and CEO.
The principal terms of the earn-in agreement are:
- The Company will transfer 50% of the
shares of each of the two Slovak companies to Forte, the ownership
of which will be governed by a shareholder’s agreement and subject
to forfeiture. If Forte does not make the required expenditures on
the Kuriskova and Novoveska Huta uranium projects, it must transfer
the shares of the Slovak companies back to the Company.
- To acquire its 50% interest in the
projects, Forte must expend a total of $4,000,000 on the following
schedule:
Cash Payments to European
Uranium:
No later than June 20, 2014 $25,000
On signing a definitive agreement, but not
laterthan July 31, 2014
$475,000
Total cash to European Uranium $ 500,000
Work
Commitments:
Year 1 (firm obligation) $350,000
Years 2 – 10, minimum annual
expenditures$350,000 / year unless higher amounts arerequired to
keep licenses in good standing
$3,150,000
Total work commitments $ 3,500,000
Total earn-in expenditure
commitment
$ 4,000,000
- The expenditures can be accelerated by
Forte at Forte’s election. If the parties each agree to sell their
50% interest to a third party, then Forte will pay EUU the
difference between $3,500,000 and expenditures made to date.
- Forte can forfeit its 50% interest to
EUU with no further obligation any time after it has paid EUU
$500,000 and funded the first year minimum work commitment of
$350,000.
- Prior to Forte completing the earn-in
of its 50% interest, exploration and development activities on the
projects will be governed by a Management Committee on which EUU
will have the casting vote until Forte has funded the full
$4,000,000. Forte will be the operator during this period.
The transaction is subject to receipt of applicable regulatory
approvals, including without limitation the approval of the TSX
Venture Exchange. Shareholder approval is not required.
EUROPEAN URANIUM RESOURCES LTD.
"Dusty Nicol"
Dorian L. (Dusty) Nicol, President and CEO
For further information please contact: Dorian (Dusty) Nicol,
at (604) 536-2711, or visit www.euresources.com.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
European Uranium Resources Ltd.Dorian (Dusty) Nicol,
604-536-2711President and CEO