| Wed 15 Dec 2010, 15:33 | | UUU - Uranium One Inc - Uranium One enters into option agreement to acquire |
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UUU - Uranium One Inc - Uranium One enters into option agreement to acquire
Mantra Resources from ARMZ
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, 2010
Uranium One Enters into Option Agreement to Acquire Mantra Resources from ARMZ
Vancouver, British Columbia and Johannesburg, South Africa - Uranium One Inc.
("Uranium One") and JSC Atomredmetzoloto ("ARMZ") today jointly announced that
ARMZ has entered into a definitive agreement to acquire all of the issued shares
of Mantra Resources Limited ("Mantra") pursuant to an Australian Scheme of
Arrangement ("Scheme"). Mantra`s core asset is the world-class Mkuju River
Project in Tanzania which is nearing the completion of a definitive feasibility
study.
Concurrently with the execution of the Scheme, ARMZ and Uranium One have entered
into a definitive put/call option agreement ("Put/Call Agreement") pursuant to
which Uranium One has the right to acquire from ARMZ, and ARMZ has the right to
sell to Uranium One, all of the Mantra shares for consideration equal to ARMZ`s
acquisition cost plus certain additional expenditures.
Enhancing and Diversifying Uranium One`s Production Base
The joint strategy of Uranium One and ARMZ is to create a world-leading
diversified uranium production company with high quality mines and development
projects. Based on Mantra`s current public disclosure for the Mkuju River
Project, this transaction:
- Increases Uranium One`s NI 43-101 compliant measured and indicated
resources by 68% and inferred resources by 34%
- Enhances Uranium One`s attractive diversified portfolio of assets with
mines in Kazakhstan, the United States and Australia and the addition of a
new development project in Tanzania
- Increases Uranium One`s steady state annual production range to
approximately 22 - 26 million pounds from approximately 18 - 20 million
pounds
- Maintains Uranium One`s industry leading total cash costs at approximately
US$20 per pound sold on a consolidated basis
Uranium One has completed extensive due diligence on Mantra and believes that
the Mkuju River Project has excellent potential to increase the current resource
base, as well as the ultimate steady state production rate.
Jean Nortier, Chief Executive Officer of Uranium One, said:
"Uranium One believes that the Mkuju River Project ranks among the best uranium
development projects in the world. Our option to acquire Mantra from ARMZ
provides Uranium One with the opportunity to add this significant development
project, located in a mining friendly jurisdiction, to our existing portfolio of
world-class operations and complements the long-term growth strategy of the
Company."
Vadim Zhivov, Director General of ARMZ, commented:
"Our acquisition proposal provides all Mantra shareholders with the opportunity
to realize cash consideration at a premium valuation. This transaction also
highlights our continuing strong support of Uranium One as its majority
shareholder and will allow all of Uranium One`s shareholders and stakeholders to
benefit from the acquisition of a high-quality uranium development project."
Mkuju River Project Overview
- Large-scale uranium development project located in southern Tanzania
- NI 43-101 compliant resource base of 65.5 million pounds of measured and
indicated resource and 35.9 million pounds of inferred resource (refer to
Appendix A for details)
- Completed pre-feasibility study with estimated Phase 1 production of 3.7
million pounds per year
- Planned usage of low-cost conventional resin-in-pulp processing
- Currently investigating viability of Phase 2 production growth via heap
leach
- Large land package with attractive exploration potential
Key Terms of the Put/Call Agreement
The Put/Call Agreement between Uranium One and ARMZ:
- provides Uranium One with an opportunity to acquire a world-class uranium
development project at a fixed cost in a rising uranium price environment
- gives Uranium One flexibility with respect to the timing and consideration
to satisfy the exercise price, subject to ARMZ maintaining its ownership
stake of not less than 51%
Uranium One has a call option to acquire Mantra from ARMZ, exercisable at any
point within 12 months of closing (subject to extension) of the acquisition of
Mantra by ARMZ. The Put/Call Agreement also provides ARMZ with a put option to
sell Mantra to Uranium One at the end of the term.
The purchase price to be paid upon exercise of either the put or call option
will be equal to ARMZ`s acquisition cost of Mantra, including any additional
expenditures contributed by ARMZ to Mantra or its properties and interest
thereon at a rate of 2.65% per annum.
The exercise of the put or call option will constitute a related party
transaction under applicable Canadian securities legislation. Accordingly, the
exercise of the put and call options is subject to Uranium One minority
shareholder approval, as well as to required regulatory approvals.
Uranium One will endeavour to seek shareholder approval following completion of
the acquisition of Mantra by ARMZ, including majority of minority approval, at
the earliest date upon which an Independent Committee of the Board of Directors
is prepared to recommend that Uranium One minority shareholders vote in favour
of the exercise of the Put/Call Agreement.
Uranium One will become the operator of the Mkuju River Project immediately upon
completion of the acquisition of Mantra by ARMZ, and will be responsible for the
continued advancement of the Mkuju River Project towards commencement of
production.
Key Terms of the Scheme Implementation Agreement
ARMZ and Mantra have entered into a Scheme Implementation Agreement which sets
out, among other things, the terms under which the acquisition of the Mantra
shares will be undertaken. Under the Scheme, each common share of Mantra will
be exchanged for a cash payment in the amount of A$8.00, representing a 15.5%
premium to Mantra`s 20 day volume weighted average price on the Australian Stock
Exchange. The transaction values Mantra at approximately A$1.2 billion and is
expected to close during Q2 2011.
The transaction between ARMZ and Mantra has been unanimously approved by the
Board of Directors of Mantra subject to the receipt of an independent expert
opining that the transaction is in the best interests of Mantra shareholders.
The directors of Mantra intend to vote in favour of the Scheme. Mantra`s
largest shareholder, Highland Park S.A. and its related entities ("Highland
Park"), hold approximately 13.5% of Mantra`s outstanding fully-diluted shares
and have indicated to the board of Mantra their intention to vote in favour of
the Scheme, subject to the absence of a Superior Proposal as determined by the
Mantra Board of Directors.
Advisors
BMO Capital Markets is acting as the financial advisor to ARMZ and Uranium One
with respect to the acquisition of Mantra. Credit Suisse Securities (Canada),
Inc. is also acting as Uranium One`s financial advisor with respect to the
Put/Call Agreement with ARMZ.
ARMZ`s legal advisors are Stikeman Elliott LLP, Blake Dawson and FB Attorneys
(Tanzanian legal advisors). Uranium One`s legal advisors are Fasken Martineau
DuMoulin LLP, Allens Arthur Robinson and Ishengoma, Karume, Masha & Magai
Advocates (Tanzanian legal advisors) with respect to these transactions.
Conference Call Details
Uranium One will be hosting a conference call and webcast to discuss the
Mantra transaction on Wednesday, December 15, 2010 starting at 11:00 a.m.
(Eastern Time). Participants may join the call by dialling toll free
1-888-231-8191 or 1-647-427-7450 for local calls or calls from outside
Canada and the United States. A live webcast of the call will be available
through CNW Group`s website at: www.newswire.ca/en/webcast
A recording of the conference call will be available for replay for a one week
period beginning at approximately 2:00 p.m. (Eastern Time) on December 15, 2010
by dialling toll free 1-800-642-1687 or 1-416-849-0833 for local calls or calls
from outside Canada and the United States. The pass code for the replay is
32532104. A replay of the webcast will be available through a link on our
website at www.uranium1.com
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, and Australia.
For further information, please contact:
Jean Nortier
Chief Executive Officer
Tel: +1 604 601 5642
Chris Sattler
Executive Vice President, Corporate Development & Investor Relations
Tel: +1 416 350 3657
Sponsor
Nedbank Capital
Appendix A
Mkuju River Reserves & Resources as of November 2010
Tonnes Grade Contained U3O8
(millions) (ppm U3O8) (M lbs)
Measured Resource 40.9 442 39.9
Indicated Resource 26.8 433 25.6
Total Measured & 67.7 439 65.5
Indicated
Inferred 41.2 395 35.9
Source: Mantra press release on November 16, 2010 as prepared by independent
consultants CSA Global Pty Ltd (`CSA`) and is reported in accordance with
NI 43-101
Cautionary Statement
No stock exchange, securities commission or other regulatory authority has
approved or disapproved the information contained herein.
Investors are advised to refer to independent technical reports containing
detailed information with respect to the material properties of Uranium One.
These technical reports are available under the profiles of Uranium One Inc.,
UrAsia Energy Ltd, at www.sedar.com. Those technical reports provide the date
of each resource or reserve estimate, details of the key assumptions, methods
and parameters used in the estimates, details of quality and grade or quality
of each resource or reserve and a general discussion of the extent to which
the estimate may be materially affected by any known environmental, permitting,
legal, taxation, socio-political, marketing, or other relevant issues. The
technical reports also provide information with respect to data verification
in the estimation.
This document uses the terms "measured", "indicated" and "inferred" resources
as defined in accordance with National Instrument 43-101 - Standards of
Disclosure for Mineral Projects. United States investors are advised that
while these terms are recognized and
required by Canadian regulations, the SEC does not recognize them. Investors
are cautioned not to assume that all or any part of the
mineral deposits in these categories will ever be converted into reserves.
In addition, "inferred resources" have a great amount of
uncertainty as to their existence and economic and legal feasibility and it
cannot be assumed that all or any part of an inferred mineral resource will be
ever be upgraded to a higher category. Investors are cautioned not to assume
that all or any part of an inferred resource exists or is economically or
legally mineable. Mineral resources are not mineral reserves and do not have
demonstrated economic viability.
Scientific and technical information contained herein has been reviewed on
behalf of Uranium One by Mr. M.H.G. Heyns, Pr.Sci.Nat.
(SACNASP), MSAIMM, MGSSA, Senior Vice President of Uranium One Inc., a
Qualified Person for the purposes of NI 43-101.
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, the completion
of the transaction described in this press release, the actual results of
current exploration activities, conclusions of economic evaluations, changes
in project parameters as plans continue to be refined, 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, delays in obtaining government approvals or financing
or in completion of development or construction activities, risks relating
to the integration of acquisitions, to international operations, to prices
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, 2009, 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: 15/12/2010 15:33:01 Produced by the JSE SENS Department.
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