U3O8 Corp. Receives Uranium Price Related Payment in CUR Shares
Toronto, Ontario – April 11, 2022 – U3O8 Corp. (NEX: UWE.H), (“U3O8” or the “Company”) is pleased to announce an additional payment in shares related to the sale, in 2021, of the Laguna Salada Deposit in Argentina, to Consolidated Uranium Inc. (“CUR”).
U3O8 has received 728,981 CUR common shares in relation to the sale of Laguna Salada. Those shares have a current market value of C$1,895,351 (based on the April 8, 2022, closing price of C$2.60 per common share). In addition, U3O8 Corp. received 157,213 common shares in Labrador Uranium Inc. (“LUR”), a company that was spun out by CUR on February 22, 2022. The market value of these LUR shares is C$179,223 based on the April 8, 2022, closing price of C$1.14.
As part of the Laguna Salada sale, U3O8 is eligible to receive further payments from CUR contingent on the uranium spot price exceeding certain thresholds.
Contingent Payments
The option agreement for the Laguna Salada Deposit (U3O8 Corp. press release dated December 22, 2021) contained a provision for further payments to be made when the uranium spot price reached and remained above certain thresholds for 30 days or more. The contingent payments are as follows:
- C$505,000 on the uranium price exceeding US$50 per pound. This condition was met at the end of March 2022, which triggered this contingent payment in CUR shares.
- C$758,000 on the uranium price exceeding US$75 per pound (or C$250,000, at U3O8’s election, when the uranium price exceeded US$50 per pound).
- C$1,010,000 on the uranium price exceeding US100 per pound (or C$250,000, at U3O8’s election, when the uranium price exceeded US$50 per pound).
U3O8 Corp.’s board has elected to receive the accelerated payment related to the US$75 per pound and US$100 per pound thresholds, for an additional value of C$500,000 now, rather than wait for the uranium price to reach those higher thresholds. The decision is based on the opinion that the additional CUR shares are of great value now as U3O8 is concluding an internal reorganization, details of which will be announced shortly.
The calculation of the CUR share price used in the issue of the C$1,005,000 share-based payment is $2.684, the weighted average price of CUR shares in the five days up to, and including, March 31, 2022. Hence, this payment will be made through the issuance of 374,441 CUR shares. On the issuance of these shares, U3O8 Corp. will hold 1,103,442 common shares of CUR and 157,213 common shares of LUR.