Uranium Resources, Inc. (NASDAQ:URRE; ASX:URI) announced today
that it has entered into a Binding Letter of Intent (LOI) for the sale
of its Churchrock and Crownpoint properties in New Mexico to Laramide
Resources Limited (TSX: LAM; ASX: LAM).
Under the LOI, Uranium Resources (URI) and its subsidiaries have agreed,
subject to the execution of definitive documentation, to transfer
ownership of URI’s Churchrock and Crownpoint properties to Laramide
Resources or its subsidiaries (LAM). URI will receive the following
consideration from LAM at closing:
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$5.25 million in cash;
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$7.25 million promissory note, secured by a deed of trust or mortgage
over the properties. The Note has a 3-year term and carries an initial
interest rate of 5% which then increases to 10% when Laramide makes a
commercial production decision on Churchrock. Principal payments of
$2.42 million are due and payable on the anniversary of the closing of
the proposed transaction in each of 2017, 2018 and 2019. Interest will
be payable on a quarterly basis; provided, however, that no interest
will be payable prior to the first principal payment in 2017; and
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Assumption of any liabilities for remediation on the subject lands by
Laramide.
This sale of the Churchrock and Crownpoint properties continues URI’s
proactive M&A strategy, with the sale representing URI’s second asset
monetization transaction in 2015. While maintaining a very significant
inventory of non-reserve mineralized material which provides the
foundation for its future production growth, URI is focused on improving
its portfolio alignment with its production experience and expertise in
In-Situ Recovery of uranium, targeting operations that fit into the
lowest quartile of operating costs.
The proceeds from this sale to Laramide will significantly strengthen
the financial position of URI, and assist in funding development of the
high-grade, low-cost Temrezli ISR Project in Central Turkey. URI is
progressing towards production at the project, subject to receipt of all
project permits and completion of development financing.
The significant steps URI has taken in 2015 to realign is project
portfolio towards lowest quartile cost assets, including this most
recent sale to Laramide, have put the company on a clear path for the
future, which coincides favorably with the widely forecast positive
outlook for uranium.
Definitive documentation on the terms above is expected to be executed
by the end of 2015, with closing anticipated by late Q1 2016, subject to
customary conditions, including applicable stock exchange approvals,
regulatory approvals for the transfer of the projects to Laramide, and
Laramide raising the capital required to close the transaction.
Christopher M. Jones, President and Chief Executive Officer of Uranium
Resources, said,
“We are pleased to have worked with Laramide to achieve this
strategic transaction for our respective shareholders. With the
significant royalties that Laramide already own over the Churchrock
Project, this transaction makes a great deal of sense for both
companies, and importantly for URI, raises new capital to apply to the
progression of the Temrezli Project in a non-dilutive manner.
“We have a clear focus in moving towards near-term, low-cost uranium
production using ISR production methods and this transaction will
significantly strengthen our financial position as we accelerate down
this path. We are very excited about our just completed merger
with Anatolia Energy Ltd. and work is already underway for the
relocation of our Rosita processing plant from Texas to Turkey, which
will provide significant costs capital costs savings in the development
of this world-class ISR project.”
URI and Laramide are working together towards a timely execution of
definitive documentation and all approvals required in respect of the
transaction, including the transfer of URI’s NRC licence as it pertains
to the sale properties. It is expected that the transaction will close
in late Q1 2016.
About Uranium Resources
Uranium Resources, Inc. (URI) is focused on advancing to near-term
production the Temrezli in-situ recovery (ISR) project in Central
Turkey. URI also controls extensive exploration properties under nine
exploration and operating licenses covering approximately 44,700 acres
(over 18,000 ha) with numerous exploration targets, including the
potential satellite Sefaatli Project, which is 25 miles (40 km)
southwest of the Temrezli Project. In Texas, the Company has two
licensed and currently idled processing facilities and approximately
17,000 acres (6,900 ha) of prospective ISR projects. In New Mexico, the
Company controls minerals rights encompassing approximately 186,000
acres (75,300 ha) in the prolific Grants Mineral Belt in New Mexico,
which holds one of the largest concentrations of sandstone-hosted
uranium deposits in the world. Incorporated in 1977, URI also owns an
extensive uranium information database of historic drill hole logs,
assay certificates, maps and technical reports for the Western United
States.
Cautionary Statement
This news release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements are subject to risks, uncertainties and assumptions and are
identified by words such as "expects," "estimates," "projects,"
"anticipates," "believes," "could," and other similar words. All
statements addressing operating performance, events or developments that
the Company expects or anticipates will occur in the future, including
but not limited to statements relating to the proposed transaction
between URI and Laramide, including entry into and the terms and
conditions of definitive documentation and the timing of definitive
documentation and closing, the benefits of the combination with Anatolia
Energy, the timing, occurrence or cost of production at the Company’s
properties, including the timing of construction, permits and initial
production at the Temrezli Project, the timing and conclusions of the
updated technical report and economic analysis at the Temrezli Project,
the potential relocation of the Rosita plant to Turkey, and the
availability of financing to the Company are forward-looking statements.
Because they are forward-looking, they should be evaluated in light of
important risk factors and uncertainties. These risk factors and
uncertainties include, but are not limited to, (a) the Company's ability
to raise additional capital in the future; (b) spot price and long-term
contract price of uranium; (c) the Company's ability to reach agreements
with current royalty holders; (d) operating conditions at the Company's
projects; (e) government and tribal regulation of the uranium industry
and the nuclear power industry; (f) world-wide uranium supply and
demand; (g) maintaining sufficient financial assurance in the form of
sufficiently collateralized surety instruments; (h) unanticipated
geological, processing, regulatory and legal or other problems the
Company may encounter, including in Turkey; (i) the ability of the
Company to enter into and successfully close acquisitions or other
material transactions, including the proposed transaction with Laramide,
and other factors which are more fully described in the Company's Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings
with the Securities and Exchange Commission. Should one or more of these
risks or uncertainties materialize, or should any of the Company's
underlying assumptions prove incorrect, actual results may vary
materially from those currently anticipated. In addition, undue reliance
should not be placed on the Company's forward-looking statements. Except
as required by law, the Company disclaims any obligation to update or
publicly announce any revisions to any of the forward-looking statements
contained in this news release.
Competent Person
Technical information in this release as well as references to mineral
resources in Texas and New Mexico are based on information compiled by
Dean T. “Ted” Wilton (CPG-7659), who is Chief Geologist and Vice
President of URI, and a Qualified Person under Canada National
Instrument 43-101. Mr. Wilton is a Professional Geologist in the State
of Wyoming and is a Certified Professional Geologist by the American
Institute of Professional Geologists a Recognized Overseas Professional
Organization (ROPO) as listed by the ASX. Mr. Wilton has over 40 years
of minerals industry experience, including more than 5 years of
experience that are relevant to the style of mineralization and type of
deposit under consideration. He is a Competent Person as defined in the
2012 Edition of the “Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves”. Mr. Wilton consents to the
inclusion in this release of the matters based on their information in
the form and context in which it appears.
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