| Mon 12 Feb 2007, 9:12 | | sxr Uranium One Inc - News Release |
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SXR
SXR
sxr Uranium One Inc - News Release
sxr Uranium One Inc
(Formerly Southern Cross Resources Inc.)
(Incorporated in Canada)
(Registration number: 15096422420)
Share code on the JSE: SXR & ISIN: CA87112P1062
Share code on the TSX: SXR & ISIN: CA87112P1062
390 Bay Street, Suite 1610
Toronto, Ontario M5H 2Y2
UrAsia Energy Ltd.
Suite 3123, 595 Burrard Street
Vancouver, British Columbia V7X 1J1
Trading Symbols:
SXR - Toronto Stock Exchange, JSE Limited (Johannesburg Stock Exchange)
UUU - TSX Venture Exchange, AIM (London Stock Exchange)
News Release
February 12, 2007
Uranium One and UrAsia Energy Announce Combination to Create Emerging
Senior Uranium Company
Toronto, Ontario; Vancouver, British Columbia; Johannesburg, South Africa -
sxr Uranium One Inc. ("Uranium One") and UrAsia Energy Ltd. ("UrAsia") are
pleased to announce that the two companies have entered into a definitive
arrangement agreement whereby Uranium One will acquire all of the
outstanding common shares of UrAsia. The acquisition will result in the
creation of a new, globally diversified uranium producer with an exciting
growth profile and a combined fully diluted market capitalization of
approximately US$5 billion. Subject to shareholder approval, the combined
company will continue under the name of Uranium One Inc. Shareholders are
advised that Uranium One have a primary listing on the Toronto Stock
Exchange ("TSX") and as such are required to adhere to the TSX
Requirements.
Under the terms of the acquisition, UrAsia shareholders will receive 0.45
common shares of Uranium One for each issued share of UrAsia, representing
a value of C$7.05 per share based upon the closing price of Uranium One on
the TSX on February 9, 2007. This represents a 13% premium to the closing
share price of UrAsia`s shares on the TSX Venture Exchange on February 9,
2007 and a 21% premium to the 20 day volume weighted average trading prices
of Uranium One`s and UrAsia`s shares on the TSX and TSX Venture Exchange,
respectively.
Commenting on the terms of the acquisition, UrAsia`s Chairman Mr. Ian
Telfer said:
"The Board of Directors of UrAsia has determined that the transaction is in
the best interest of UrAsia and its shareholders and that the exchange
ratio is fair to the UrAsia shareholders. The Board unanimously recommends
that holders of UrAsia shares vote in favour of the transaction."
Paradigm Capital Inc. has provided a fairness opinion to the Board of
Directors of UrAsia that the consideration offered pursuant to the
transaction is fair, from a financial point of view, to the common
shareholders of UrAsia.
Senior officers and directors of UrAsia have agreed to vote in favour of
the transaction and lock-up as well as support agreements have been
executed.
The new Uranium One will be one of the world`s largest uranium companies
ranked by market capitalization. The profile of Uranium One will be:
* Estimated combined attributable annual production in excess of 7
million pounds U3O8 from five operations in 2008 (Dominion, Akdala,
South Inkai, Kharassan and Honeymoon)
* Estimated cash operating costs of approximately US$10 to US$12 per
pound U3O8 in steady state
* Un-hedged and un-capped sales contracts provide exposure to further
uranium price increases on substantially all projected production
* Attributable proven and probable reserve base of 49 million pounds of
U3O8, indicated resources of 102 million pounds of U3O8 and inferred
resources of 269 million pounds of U3O8
* Substantial Russian P1 resources at South Inkai and Kharassan and
upside potential at Dominion to drive organic resource growth
* A strong balance sheet with a pro forma cash balance of approximately
US$389 million at December 31, 2006
* Industry leading expertise in both conventional and in situ leach
(ISL) mining techniques
Further detailed information on reserves and resources can be found in the
Additional Reserve and Resource Data section below and in the Other Matters
and Cautionary Statement at the end of this release.
The transaction creates an emerging senior uranium company based on the
combined project pipeline. The new Uranium One will provide shareholders
with the benefits of scale through an increased market capitalization. The
combined entity will be the only company in the uranium sector with
production and asset exposure to each of the world`s five largest resource
jurisdictions, namely Kazakhstan, South Africa, Australia, the United
States and Canada.
Commenting on the transaction, Neal Froneman, Uranium One CEO said:
"The combination of Uranium One and UrAsia creates a new, globally
diversified uranium company with compelling investment appeal. With
imminent production from Dominion in South Africa, combined with an
established production profile from the Akdala ISL mine, the new Uranium
One will be an exciting low-cost, growth-oriented uranium company, with
five mines in operation by Q1 2008. As a result of this acquisition, the
competitive advantages of the new Uranium One will be significant, as we
will have the technical and financial capabilities to pursue further value
enhancing growth opportunities, both organically and through further
consolidation."
Phillip Shirvington, CEO of UrAsia added:
"The new Uranium One will be the pre-eminent growth company in the sector,
with an unrivalled production growth profile. The Company is well
positioned to gain maximum benefit from rising uranium prices. As a
director of the new Uranium One, I look forward to contributing to its
continued development and growth."
Summary of the Transaction
The business combination of Uranium One and UrAsia will be completed by way
of a statutory plan of arrangement under the Business Corporations Act
(British Columbia) whereby each UrAsia common share will be exchanged for
0.45 Uranium One common shares. After completion of the transaction, it is
expected that current Uranium One shareholders will own approximately 40%
of the combined company and current UrAsia shareholders will own
approximately 60%.
The combination has been unanimously approved by the Boards of Directors of
both Uranium One and UrAsia and will be subject to, among other things,
approval by a two-thirds majority of holders of UrAsia common shares and
regulatory approvals. A meeting of UrAsia shareholders to approve the
transaction will be held on or about May 15, 2007. The notice of meeting,
information circular and related materials is expected to be mailed in mid-
April, 2007.
Paradigm Capital Inc. has provided an opinion to the Board of Directors of
UrAsia that the consideration offered pursuant to the transaction is fair,
from a financial point of view, to the common shareholders of UrAsia.
The Board of Directors of Uranium One has determined that this transaction
is in the best interests of Uranium One shareholders and BMO Capital
Markets has provided an opinion to the Board of Directors of Uranium One
that the consideration offered pursuant to the arrangement is fair, from a
financial point of view, to Uranium One.
If the transaction is not completed, UrAsia has agreed to pay a break fee
to Uranium One under certain circumstances of US$90 million. UrAsia has
also provided Uranium One with certain other customary rights, including a
right to match competing offers.
As the new Uranium One will have a significant United Kingdom and
continental European shareholder base, the company will investigate all
available alternatives to facilitate continued liquidity for these
shareholders.
Management Team and Board of Directors
Neal Froneman will continue as President and Chief Executive Officer of the
combined company.
The Board of Directors of the new Uranium One will ultimately consist of
nine members, comprising three nominees of UrAsia and six nominees of
Uranium One. Ian Telfer will be Non-Executive Chairman and Phillip
Shirvington will be one of the UrAsia nominees to the Uranium One Board.
Frank Giustra resigned from the Board of UrAsia effective February 11, 2007
in order to permit the UrAsia Board to pursue this transaction without any
perception of conflict, as he is also Chairman of Endeavour Financial
(UrAsia`s financial advisor). Mr. Giustra has confirmed to Uranium One and
the UrAsia Board his continued support for the transaction and will assist
UrAsia, as financial advisor, to bring the transaction to a timely and
successful conclusion. Messrs. Telfer and Shirvington and a third nominee
from UrAsia will join Andrew Adams, Ken Williamson, David Hodgson, Terry
Rosenberg and Mark Wheatley as Non-Executive Directors of the new Uranium
One. At closing, the Board of Directors will be comprised of eight members
with the ninth member (one of the Uranium One nominees), being nominated at
the next AGM.
Advisors and Counsel
Uranium One`s exclusive financial advisor is BMO Capital Markets and its
legal counsel is Fasken Martineau DuMoulin LLP. UrAsia`s financial
advisors are Endeavour Financial International Corporation, Canaccord Adams
Limited and Paradigm Capital Inc. and its legal counsel is Stikeman Elliott
LLP.
Conference Call
A conference call will be held on February 12, 2007 at 11:00 AM Eastern
time to discuss this transaction. A copy of the presentation is available
on www.uranium1.com.
Via Telephone:
The local dial-in number will be 416-340-2217. The North American toll
free dial-in will be 1-866-696-5910. International participants must dial
their international access code followed by 800-8989-6336. The passcode
for the live call is 3214593 followed by the number sign.
A replay of the conference call will be available for one week at 416-695-
5800 (local) or 1-800-408-3053 (North America toll free). The passcode for
the replay is 3214593 followed by the number sign.
Via Webcast:
A live audio webcast of the call will be available at
http://events.startcast.com/events/50/B0001
Additional Reserve and Resource Data
In conjunction with the following tables, readers are also urged to read
the Other Matters and Cautionary Statement at the end of this press
release.
UrAsia Energy Ltd.
Proven Mineral Reserves
Asset Tonnes Grade Contained U Contained
Uranium U3O8
(thousands) (% U) (tonnes U) (million lbs)
Akdala(1) 2,769 0.057 1,590 4.1
(1) Attributable
Probable Mineral Reserves
Asset Tonnes Grade Contained U Contained
Uranium U3O8
(thousands) (% U) (tonnes U) (million lbs)
Akdala(1) 8,966 0.057 5,110 13.3
(1) Attributable
Indicated Mineral Resources(2,3)
Asset Tonnes Grade Contained U Contained
Uranium U3O8
(thousands) (% U) (tonnes U) (million lbs)
Akdala(1) 12,011 0.057 6,850 17.8
Kharassan(1) 791 0.201 1,590 4.1
(1) Attributable
(2) Mineral resources are inclusive of mineral reserves
(3) Mineral resources are not mineral reserves and do not have
demonstrated economic viability
Inferred Mineral Resources(2)
Asset Tonnes Grade Contained U Contained
Uranium U3O8
(thousands) (% U) (tonnes U) (million lbs)
Akdala(1) 6,788 0.062 4,200 10.9
South 40,390 0.043 16,720 43.5
Inkai(1)
Kharassan(1) 9,160 0.095 8,700 22.6
(1) Attributable
(2) Mineral resources are not mineral reserves and do not have
demonstrated economic viability
sxr Uranium One Inc.
Probable Mineral Reserves
Asset Tonnes U3O8 Grade Contained Gold Grade Contained
U3O8 Gold
(thousands) (kg/tonne) (thousands (g/tonne) (thousands
of lbs) of ozs)
Dominion 18,454 0.77 31,327 0.99 589
Indicated Mineral Resources(1,2)
Asset Tonnes U3O8 Grade Contained Gold Grade Contained
U3O8 Gold
(thousands) (kg/tonne) (thousands (g/tonne) (thousands
of lbs) of ozs)
Dominion 36,385 0.81 64,889 0.91 1,060
Dominion 3,375 0.16 1,195 0.51 55
Dumps
Honeymoon 1,200 2.40 6,500 n/a n/a
East 1,200 0.74 2,000 n/a n/a
Kalkaroo
Goulds Dam 1,700 1.20 4,400 n/a n/a
(1) Mineral resources are inclusive of mineral reserves
(2) Mineral resources are not mineral reserves and do not have
demonstrated economic viability
Inferred Mineral Resources (1)
Reef Unit Tonnes U3O8 Grade Contained Gold Grade Contained
U3O8 Gold
(thousands) (kg/tonne) (thousands (g/tonne) (thousands
of lbs) of ozs)
Dominion 219,375 0.38 183,630 0.67 4,752
Billeroo 12,000 0.30 7,900 n/a n/a
(1) Mineral resources are not mineral reserves and do not have
demonstrated economic viability
About Uranium One
Uranium One Inc. is a Canadian uranium and gold resource company with a
primary listing on the Toronto Stock Exchange and a secondary listing on
the JSE Limited (the Johannesburg stock exchange). The Corporation owns the
Dominion Uranium Project in South Africa and the Honeymoon Uranium Project
in South Australia, and is actively pursuing growth opportunities in the
uranium sector in the United States. The Corporation holds an approximate
71.4% interest in Aflease Gold Limited, which owns the Modder East Gold
Project in South Africa. Through a 50/50 joint venture with Pitchstone
Exploration Ltd., the Corporation is also engaged in uranium exploration
activities in the Athabasca Basin of Saskatchewan.
About UrAsia Energy
UrAsia is a Canadian-based uranium producer that offers investors exposure
to low-cost uranium production and growth. The Company creates shareholder
value by focusing on the development and operation of low-cost, in-situ
leach uranium projects in Central Asia. UrAsia is listed on the TSX
Venture Exchange and the Alternative Investment Market (AIM) of the London
Stock Exchange, trading under the symbol UUU on both exchanges.
For further information, please contact:
Neal Froneman Phillip Shirvington
Chief Executive Officer Chief Executive Officer
sxr Uranium One Inc. UrAsia Energy Ltd.
Tel: + 1 416 350 3657 Tel: + 1 604 609 5130
Jean Nortier Sally Eyre
Chief Financial Officer Vice President, Corporate
Affairs
sxr Uranium One Inc. UrAsia Energy Ltd.
Tel: + 27 11 482 3605 Tel: + 1 604 377 2757
Chris Sattler Ben Willey
Vice President, Investor Relations Buchanan Communications
sxr Uranium One Inc. Tel: + 44 (0)207 466 5118
Tel: + 1 416 350 3657
Other Matters and Cautionary Statement
Investors are advised to refer to independent technical reports on Uranium
One`s material properties are available at www.sedar.com for detailed
information with respect to the Corporation`s properties. 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, Consulting Geologist or by Ms. J.M. Smith, P.GEO Sr VP Corporate
Development sxr Uranium One Inc.- both qualified persons for the purposes
of NI 43-101.
Neither Uranium One nor Mr. Heyns or Ms. Smith have done sufficient work to
classify the historical estimates of UrAsia`s P1 resources or Uranium One`s
resources at Dominion as current mineral reserves or resources. Uranium
One does not intend to treat such historical estimates of reserves and
resources as a current estimate and the historical estimates should not be
relied upon.
Scientific and technical information contained herein has been reviewed on
behalf of UrAsia by C. Stewart Wallis, P.Geo. Consulting Geologist - a
Qualified Person for the purpose of NI 43-101. Technical Reports prepared
by Scott Wilson RPA (formerly Roscoe Postle Associates Inc.) in accordance
with NI 43-101. Kharassan Technical Report, dated October 13, 2005, as
revised March 25, 2006; South Inkai Technical Report, October 8, as revised
March 20, 2006; and Akdala Technical Report, dated October 3, 2005 as
revised March 3, 2006. The Technical Reports are available at
www.sedar.com.
Historical estimates referred to herein as Russian P1 resources are derived
from Kazatomprom documents, an entity of the Government of Kazakhstan.
Although Russian P1 Resources do not meet Canadian Institute of Mining,
Metallurgy and Petroleum (CIM) standards on Mineral Resource and Reserve
definitions, they are considered relevant because of previous pilot plant
production, but should not be relied upon. The CIM resource definition
which most closely resembles P1 resources is that of Inferred Resources.
However, there is less confidence attributed to a P1 resource since a P1
resource is estimated on the basis of a lower drill density than an
inferred resource.
No stock exchange, securities commission or other regulatory authority has
approved or disapproved the information contained herein.
Forward-looking statements: Certain of the statements made herein,
including any information as to the Corporation`s future financial or
operating performance, may be forward-looking and subject to important risk
factors and uncertainties, many of which are beyond the Corporation`s
ability to control or predict. Forward-looking statements are necessarily
based on a number of estimates and assumptions that are inherently subject
to significant business, economic and competitive uncertainties and
contingencies. Known and unknown factors could cause actual results to
differ materially from those projected in the forward-looking statements.
Such factors include, among others: gold and uranium price volatility;
impact of any hedging activities, including margin limits and margin calls;
discrepancies between actual and estimated production, between actual and
estimated reserves and resources and between actual and estimated
metallurgical recoveries; changes in national and local government
legislation, taxation, controls, regulations and political or economic
developments in Canada, the United States, South Africa, Australia or other
countries in which the Corporation does or may carry on business in the
future; risks of sovereign investment; the speculative nature of gold and
uranium exploration and development, including the risks of obtaining
necessary licenses and permits; dilution; competition; loss of key
employees; additional funding requirements; and defective title to mineral
claims or property. In addition, there are risks and hazards associated
with the business of gold and uranium exploration, development and mining,
including environmental hazards, industrial accidents, unusual or
unexpected formations, pressures, cave-ins, flooding and gold bullion
losses (and the risk of inadequate insurance or inability to obtain
insurance, to cover these risks), as well as the factors described or
referred to in reports filed by the Corporation with the Canadian
securities administrators. Accordingly, readers should not place undue
reliance on forward-looking statements. The Corporation undertakes no
obligation to update publicly or release any revisions to forward-looking
statements to reflect events or circumstances after the date of this
document or to reflect the occurrence of unanticipated events.
For further information about Uranium One or UrAsia, please visit
www.uranium1.com or www.urasiaenergy.com
Date: 12/02/2007 09:12:23 Produced by the JSE SENS Department.
