April 04, 2014 April 04, 2014
European Uranium Resources Proposes To Sell Slovak Uranium Projects
Vancouver, April 4, 2014 - European Uranium Resources Ltd. (the "Company") (TSXV: EUU) has entered into a binding heads of agreement for the sale of its Kuriskova and Novoveska Huta, Slovakia uranium projects to Forte Energy NL ("Forte") (ASX/AIM: FTE).
This sale represents the sale of the Company's only remaining mineral projects. The Company intends to investigate mineral projects to option or acquire in multiple commodities in the general European area. On completing this transaction, the Company will have its initial funding to implement its business plan.
Forte is an ASX and AIM listed emerging international exploration and development company with a portfolio of uranium assets in the Republics of Mauritania and Guinea, West Africa. Areva has a 4.5 per cent shareholding in Forte. The acquisition of the Company's Slovak uranium assets is a significant expansion of Forte's uranium asset portfolio. This creates a uranium explorer and developer with an enhanced portfolio of project interests and the technical and financial expertise to advance its assets towards production.
Forte is arm's length to Company and there is no finder's fee payable. The agreement is subject to regulatory approval and the approval of the shareholders of both the Company and Forte. The terms of the agreement require that:
- Forte will issue 854,875,000 fully paid ordinary shares with an approximate value of $7,000,000, which the Company intends to distribute on a pro-rata basis to the shareholders of Company;
- Forte will issue 61,062,500 fully paid shares to Company, with an approximate value of $500,000;
- Forte will pay the Company $1,000,000 on closing; and
- Forte will grant Company a 1% production royalty over the Kuriskova and Novoveska Huta uranium licenses in perpetuity.
The sale price is equivalent to approximately $8.5 million before assigning value to the production royalty. The market capitalization of the Company's stock at the time its stock was halted in early December 2013 was $6.3 million. The sale price represents a premium approaching 35%.
Company has offered Forte, and Forte has agreed to complete, an exclusive non-brokered private placement to raise $100,000 through the issuance of 1,111,111 units at a price of $0.09 per unit (the "Unit"). Each Unit will consist of one common share and one-half of one non-transferable common share purchase warrant, with each whole warrant entitling Forte to purchase one additional common share in the capital of the Company at a price of $0.15 for a period of 2 years. The offering is subject to TSX Venture Exchange approval and is intended to close within 7 days.
The Company is negotiating with the TSX Venture Exchange on the timing to resume trading.
EUROPEAN URANIUM RESOURCES LTD.