| Fri 23 Feb 2007, 16:20 | | SXR - sxr Uranium One Inc - News Release |
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SXR
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
sxr Uranium One Inc.
390 Bay Street, Suite 1610
Toronto, Ontario M5H 2Y2
Trading Symbol: SXR - Toronto Stock Exchange, JSE Limited (Johannesburg Stock
Exchange)
NEWS RELEASE
February 23, 2007
Uranium One Signs Definitive Agreement to Acquire U.S. Energy Corp.`s
Shootaring Canyon Uranium Mill and U.S. Uranium Properties
Toronto, Ontario and Johannesburg, South Africa -- sxr Uranium One Inc.
("Uranium One") is pleased to announce that it has entered into a definitive
agreement with U.S. Energy Corp. and its affiliate, Crested Corp., for the
purchase of the Shootaring Canyon Uranium Mill in Utah, as well as a land
package comprising approximately 38,763 acres of uranium exploration properties
in Utah, Wyoming, Arizona and Colorado and a substantial database of geological
information with respect to an additional 1,582,036 acres in a five-mile zone
surrounding the purchased properties.
Neal Froneman, Chief Executive Officer of Uranium One, said: "The execution of
this agreement marks a major step forward in our U.S. growth strategy. The
acquisition of the Shootaring Canyon Mill and related uranium property interests
will serve as the foundation for our growth in the United States. We look
forward to closing this transaction and to expanding our U.S. business in line
with our growth strategy."
Terms of the Acquisition
The asset purchase agreement follows a period of detailed due diligence
conducted by Uranium One under an exclusivity agreement entered into between the
parties on July 10, 2006.
Under the asset purchase agreement, Uranium One has agreed to purchase through
certain of its subsidiaries the Shootaring Canyon Mill and related property
interests for consideration equal to 6,607,605 Uranium One common shares plus
the sum of US $750,000 in cash paid by Uranium One on execution of the
exclusivity agreement. In addition, in accordance with the provisions of the
exclusivity agreement, Uranium One has agreed to pay U.S. Energy US $20,000,000
upon the Shootaring Canyon Mill reaching commercial production and US $7,500,000
on the first delivery to the Mill after commercial production of mineralized
material from any of the purchased properties; U.S. Energy will also receive a
royalty equal to 5% of the gross proceeds from the sale of commodities produced
at the Mill, to a maximum amount of US $12,500,000.
The purchase agreement also provides for the assignment of U.S. Energy`s right
to receive US $4,100,000 in cash and 1,500,000 common shares of Uranium Power
Corp. ("UPC") after closing under a purchase and related joint venture agreement
between U.S. Energy and UPC relating to certain of the purchased properties for
a cash payment equal to a 5.25% annual discount rate applied to US $4,100,000
plus the value of such shares (determined with reference to the weighted average
closing price thereof on the TSX Venture Exchange prior to closing). In
addition, in accordance with the provisions of the exclusivity agreement,
Uranium One will on closing reimburse U.S. Energy for certain exploration
expenditures relating to the purchased properties and incurred with Uranium
One`s approval since July 2006.
The purchase agreement also provides that Uranium One and U.S. Energy will enter
into an agreement on closing under which Uranium One will be given the first
opportunity to earn into or fund uranium property interests which may in the
future be owned or acquired by U.S. Energy outside the five mile area
surrounding the purchased properties for a period of two years after closing.
Under this agreement, Uranium One will also have access without charge for a
period of three years to the database of geological information assembled by
U.S. Energy on properties in the western United States beyond the purchased
properties and the area of interest surrounding them.
Closing of the purchase agreement is subject, among other things, to the receipt
of all required governmental and regulatory approvals, including the approval by
the Utah Division of Radiation Control of the transfer of the Mill`s radioactive
materials licence and final acceptance by the Toronto Stock Exchange for the
listing of the Uranium One common shares to be issued on closing.
The Shootaring Canyon Mill
The Shootaring Canyon Mill, located approximately 48 miles south of Hanksville,
Utah, was the last conventional uranium mill to be built in the United States
and is strategically situated amongst several known uranium deposits. The Mill
was commissioned and operated for a period of four months in 1982, meeting all
applicable performance guarantees. Approximately 30 tons of U3O8 were produced
and shipped before the Mill was mothballed due to declining uranium prices. The
Mill has been maintained in excellent condition since being placed on standby.
The Mill is an acid leach facility with a 750 tons per day throughput capacity
that could be upgraded to an estimated throughput rate of 1,000 tons per day.
There is also the potential to add a vanadium processing circuit to the existing
Mill infrastructure. The Mill currently has a reclamation licence, which U.S.
Energy is working to convert to an operating licence subject to applicable
regulatory approval.
The U.S. Energy Uranium Properties
The U.S. Energy uranium properties consist of eight separate claim groupings in
Utah, Wyoming, Arizona and Colorado. Four of these claim groupings (White
Canyon, Henry Mountain, Lisbon Valley and Sage Plains) are wholly-owned by U.S.
Energy; the other four (Sheep Mountain, Green River North, Burro Canyon and the
Breccia Pipes) are held by U.S. Energy in the joint venture with UPC.
The most advanced of the U.S. Energy properties is the Sheep Mountain property
in Wyoming. On August 29, 2006, UPC announced the completion by Scott Wilson
Roscoe Postle Associates, Inc. of an NI 43-101-compliant mineral resource
estimate (the "Resource Estimate") for the Sheep Mountain property, comprising
inferred mineral resources of 4.56 MT grading 0.17% eU3O8 (15.6 million pounds
of contained metal) contained in the Sheep 1 and 2 deposits.
The acquired assets also include an extensive database containing historical
data from past producing uranium mines, as well as exploration data from uranium
projects ranging from grassroots to advanced exploration status.
About sxr Uranium One
sxr 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). Uranium One 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 and Kazakhstan. Uranium One 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., Uranium
One is also engaged in uranium exploration activities in the Athabasca Basin of
Saskatchewan.
For further information please contact:
Neal Froneman Chris Sattler
Chief Executive Officer Vice President, Investor Relations
Tel: + 27 11 482 3605 Tel: +1 416 350 3657
Other Matters and Cautionary Statement
Readers are advised to refer to the Resource Estimate, which is set out in the
technical report entitled "Technical Report on the Sheep Mountain Uranium
Project, Wyoming" prepared by Scott Wilson RPA for UPC and dated October 10,
2006. The Resource Estimate is available under UPC`s profile located at
www.sedar.com. The Resource Estimate provides the date of the estimate, details
of the key assumptions, methods and parameters used in the estimate, details of
grade or quality and quantity of each resource 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 Resource Estimate also provides 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 measured or
indicated resources or 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
resource will ever be upgraded to a higher category. Under Canadian rules,
estimates of inferred mineral resources may not form the basis of feasibility or
pre-feasibility studies or economic studies except for preliminary assessments
as defined under NI 43-101. 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 Ms. J.M. Smith, P.Geo., Senior Vice President,
Corporate Development, sxr Uranium One Inc., who is a qualified person for the
purposes of NI 43-101.
No stock exchange, securities commission or other regulatory authority has
approved or disapproved the information contained herein.
The Uranium One common shares described in this release have not been registered
under the United States Securities Act of 1933, as amended, and may not be
offered or sold in the United States or to a U.S. person absent such
registration or an available exemption therefrom.
Forward-looking statements: Certain of the statements made herein, including any
information as to Uranium One`s future financial or operating performance and
statements regarding the timing and completion of the U.S. Energy transaction,
may be forward-looking and subject to important risk factors and uncertainties,
many of which are beyond Uranium One`s ability to control or predict. In
addition, resource estimates may be forward-looking statements (or forward-
looking information) to the extent that they constitute estimates of
mineralization that may be discovered in the future. 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, uranium and gold 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 South Africa,
Australia, the United States, Canada or other countries in which Uranium One
does or may carry on business in the future, risks of sovereign investment, the
speculative nature of uranium and gold exploration and development including the
risks of obtaining necessary licences 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 uranium and gold 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 Uranium One
with the Canadian securities administrators. Accordingly, readers should not
place undue reliance on forward-looking statements. Uranium One 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 costs.
To receive the Corporation`s news releases by email, please register on Uranium
One`s website - www.uranium1.com.
Date: 23/02/2007 16:20:04 Produced by the JSE SENS Department.
