| Tue 15 Dec 2009, 14:00 | | UUU - Uranium One Inc - Uranium One Acquires 50% of Karatau Uranium Mine |
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UUU - Uranium One Inc - Uranium One Acquires 50% of Karatau Uranium Mine
Uranium One Inc
(Incorporated in Canada)
(Registration number: 15096422420)
Share code on the JSE: UUU & ISIN: CA91701P1053
Share code on the TSX: UUU & ISIN: CA91701P1053
News Release
December 15, 2009
Uranium One Acquires 50% of Karatau Uranium Mine
Vancouver, British Columbia and Johannesburg, South Africa - Uranium One Inc.
today announced that, following receipt of all required governmental and
regulatory approvals, the Company has closed in escrow the acquisition of a 50%
interest in the Karatau Uranium Mine in Kazakhstan from JSC Atomredmetzoloto
("ARMZ"), the Russian state-owned uranium mining company. In accordance with
the June 14, 2009 purchase agreement between the Company and ARMZ, escrow will
be lifted upon registration of the transfer of the Karatau interest with the
South Kazakhstan Region Department of Justice, which is expected to be completed
later this month.
In connection with today`s closing, Uranium One has issued 117 million common
shares to ARMZ, representing a 19.9% ownership interest in the common shares of
the Company, as well as a US$ 90 million promissory note due not later than 12
months from closing. The purchase agreement also provides for a contingent
payment to ARMZ of up to US$ 60 million, payable in three equal tranches over
the period 2010 to 2012 subject to certain post-closing tax-related adjustments.
Uranium One`s 50% share of production from Karatau in 2010 is expected to be 2.3
million pounds of U3O8 at an average cash cost of approximately US$14 per pound
sold. At full production levels, Uranium One`s share of production from Karatau
is expected to be 2.6 million pounds per year. It is expected that the
annualized rate of production from Karatau will reach this level during 2010.
Concurrently with the execution of the Karatau purchase agreement, Uranium One
also entered into a long-term offtake agreement and a framework agreement with
ARMZ. Both of these agreements have now become effective.
Under the offtake agreement, so long as the framework agreement remains in
effect, ARMZ has an option to purchase on an annual basis, on industry-standard
terms, the greater of 50% of Karatau`s annual production or 20% of Uranium One`s
available attributable production from assets in respect of which it has the
marketing rights.
Under the terms of the framework agreement, Uranium One has been granted a right
of first offer on ARMZ`s assets outside the Russian Federation, in the event
that ARMZ determines to offer any of these for sale in the future.
ARMZ has also agreed to assist Uranium One in the opening of accounts with
Russian uranium converters and to use Russian uranium conversion and enrichment
facilities for the benefit of Uranium One`s customers. Since Uranium One
currently receives payment for its production from customers at conversion
facilities located in North America and Europe, access to Russian facilities
will potentially significantly shorten the time period required for the Company
to turn production into sale proceeds, and assist utility customers with access
to enrichment services, particularly those customers located in Europe and Asia.
As previously announced, in accordance with the purchase agreement, Uranium One
has appointed Vadim Zhivov, Director General of ARMZ, to its board of directors.
The Company has also agreed to appoint a second representative of ARMZ to its
board in May 2010, subject to receipt of shareholder approval to increase the
size of its board by one additional director.
About ARMZ
ARMZ is the world`s fifth largest uranium producer with operating mines in
Russia and Kazakhstan. During 2008, operations in which ARMZ is involved
produced 9.6 million pounds of U3O8. ARMZ is part of Rosatom - the Russian
State Corporation controlling the Russian Federation`s nuclear activities.
Together with its affiliates and subsidiaries, the company employs over 14,000
people.
About Uranium One
Uranium One is one of the world`s largest publicly traded uranium producers,
with a globally diversified portfolio of assets located in Kazakhstan, the
United States, South Africa and Australia.
For further information, please contact:
Jean Nortier
Chief Executive Officer
Tel: + 1 778 384 6217
Chris Sattler
Executive Vice President, Corporate Development and Investor Relations
Tel: + 1 416 350 3657
Cautionary Statement
No stock exchange, securities commission or other regulatory authority has
approved or disapproved the information contained herein.
Forward-looking statements: This press release contains certain forward-looking
statements. Forward-looking statements include but are not limited to those
with respect to the price of uranium, the estimation of mineral resources and
reserves, the realization of mineral reserve estimates, the timing and amount of
estimated future production, costs of production, capital expenditures, costs
and timing of the development of new deposits, success of exploration
activities, permitting time lines, currency fluctuations, requirements for
additional capital, government regulation of mining operations, environmental
risks, unanticipated reclamation expenses, title disputes or claims and
limitations on insurance coverage and the timing and possible outcome of pending
litigation. In certain cases, forward-looking statements can be identified by
the use of words such as "plans", "expects" or "does not expect", "is expected",
"budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or
"does not anticipate", or "believes" or variations of such words and phrases, or
state that certain actions, events or results "may", "could", "would", "might"
or "will" be taken, occur or be achieved. Forward-looking statements involve
known and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of Uranium One to be materially
different from any future results, performance or achievements expressed or
implied by the forward-looking statements. Such risks and uncertainties
include, among others, changes in market conditions, the actual results of
current exploration activities, conclusions of economic evaluations, changes in
project parameters as plans continue to be refined, project cost overruns or
unanticipated costs or expenses, possible variations in grade and ore densities
or recovery rates, failure of plant, equipment or processes to operate as
anticipated, accidents, labour disputes or other risks of the mining industry,
exchange rate and uranium price fluctuations, delays in obtaining government
approvals or financing or in completion of development or construction
activities, changes in, and the effect of government policy, risks relating to
the timing and completion of the transactions described in this press release,
the potential benefits thereof, risks relating to the benefits derived by the
Corporation from the strategic relationship described in this press release,
risks relating to the integration of acquisitions, to international operations,
to the price of uranium as well as those factors referred to in the section
entitled "Risk Factors" in Uranium One`s Annual Information Form for the year
ended December 31, 2008, which is available on SEDAR at www.sedar.com, and
which should be reviewed in conjunction with this document. Although Uranium One
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
forward-looking 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. Uranium One expressly disclaims any intention or obligation to
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except in accordance with applicable
securities laws.
For further information about Uranium One, please visit www.uranium1.com.
Date: 15/12/2009 14:00:01 Produced by the JSE SENS Department.
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