TORONTO, May 23, 2017 /CNW/ - U3O8 Corp.
(TSX: UWE), (OTCQB: UWEFF) ("U3O8 Corp." or the "Company") announces that it will seek shareholder approval to
undertake a restructuring of its common shares at its Annual and Special Meeting scheduled to be held at 11am on Thursday June 22 at 20 Toronto Street Second Floor, Toronto, Ontario M5C 2B8.
The proposed share consolidation includes three steps to achieve two things:
- To reduce the number of accounts that hold a small number of shares in the Company, which have a disproportionately high
maintenance cost; and
- To consolidate 20 current common shares to one new share.
Reduction in the Number of Small Accounts
U3O8 Corp. has a large shareholder base that resulted from Company acquiring what are now its lead projects from Mega Uranium
Ltd. ("Mega") in 2010. The projects were purchased with U3O8 Corp. shares, and Mega chose to distribute that stock as a
dividend in kind to its shareholders. The result is that U3O8 Corp. now has 18,500 shareholders, 13,500 of whom hold less
than 1,000 shares. The Company incurs significant printing and mailing costs for each shareholder meeting with such a large
shareholder base, and the Company intends to reduce the number of small accounts by seeking shareholder permission to implement
Steps 1 and 2 as described below:
Step 1: is a consolidation of 1,000 current common shares to 1 new share. Since the Company would not issue
fractional shares, the 13,500 shareholders with accounts of less than 1,000 shares, representing 0.8% of the Company's issued and
outstanding shares, would be flagged for payout for the value of their shares based on the market price;
Step 2: Immediately after the 1,000 for 1 consolidation, each share would be split by 1,000, to get back to the
original share count minus the 0.8% that was held in accounts with less than 1,000 shares. The sole reason for doing steps
1 and 2 is to allow the Company to pay out the 13,500 shareholders who hold less than 1,000 shares in a cost-effective way,
leaving the Company with about 5,000 shareholders.
A smaller shareholder base makes it far more practical and cost-effective for the Company to issue shares in spinout
companies, such as South American Silica, in which U3O8 Corp holds 39%, to its shareholders. It would also allow for
capital to be raised through rights offerings, in which all shareholders may acquire additional shares in the Company, and not
only through private placements, in which only Accredited Investors may participate.
Step 3: Immediately after Steps 1 and 2, twenty common shares of the Corporation would be consolidated to one new
share. Again, no fractional shares would be issued, and shareholders would not be paid out for fractional shares because it would
cost the Company approximately $10 to issue and mail each cheque, whereas the maximum value that a
shareholder could lose is that of 19 shares, which at current prices, are worth 67c.
The Company is providing this early warning to allow shareholders who hold fewer than 1,000 shares, ample time to increase
their shareholding to at least 1,000 shares by June 22, 2017. To incentivize shareholders to
purchase more shares, the Company intends to use the Existing Shareholder Prospectus Exemption through which shares are made
available for purchase to all existing shareholders, excluding investment funds, up to a limit of $15,000 per shareholder. A shareholder may purchase shares to a value greater than this limit if he or
she has obtained appropriate advice from a registered investment dealer. Shares purchased under this rule are subject to a
four-month hold period. Further details will be provided in a separate press release in due course.
Conclusion
Richard Spencer, President & CEO of U3O8 Corp. commented; "The Board is recommending that
shareholders approve the capital restructuring proposal so as to strengthen the appeal of the Company to a broader spectrum of
intuitional investors. It is hoped that the capital restructuring will lead to a revaluation of the Company based on:
- The outstanding technical results released on the Laguna Salada Project in Argentina
earlier in the year with the discovery of gravels that are richer than those that yielded the lowest estimated cash costs of
production in the preliminary economic assessmenti;
- The uranium price having bottomed in December 2016 and, in addition, the price of battery
commodities rising in response to the current 10% per year growth in the battery manufacturing industry; and
- The pro-business government in Argentina where the Buenos
Aires stock exchange has surged 65% in the 18 months since President Macri's government was inaugurated and which is
committed to increasing the share of nuclear in the country's energy mix."
Technical Information
Dr. Richard Spencer, P.Geo., CGeol., President and CEO of U3O8 Corp. and a Qualified Person as
defined by National Instrument 43-101, has approved the technical information in this news release relating to the Laguna Salada
Deposit and the related PEA.
About U3O8 Corp.
U3O8 Corp. is focused on exploration and development of deposits of uranium and associated commodities in South America.
Potential by-products from uranium production include commodities used in the energy storage industry – in the manufacture of
batteries - such as nickel, vanadium and phosphate. The Company's mineral resources estimates were made in accordance with
National Instrument 43-101, and are contained in three deposits:
- Laguna Salada Deposit, Argentina – a PEA shows this near surface, free-digging
uranium - vanadium deposit has low production-cost potential;
- Berlin Deposit, Colombia – a PEA shows that Berlin
also has low-cost uranium production potential due to revenue that would be generated from by-products of phosphate, vanadium,
nickel, rare earths (yttrium and neodymium) and other metals that occur within the deposit; and
- Kurupung Deposit, Guyana – a uranium resource has been estimated in four veins
within a uranium-zirconium vein system. Resources have been estimated on four veins, while consistent mineralization of the
same type has been intersected in scout drilling of an additional six veins, while yet other veins require first-time
exploration drilling.
Information on U3O8 Corp., its resources and technical reports are available at www.u3o8corp.com and on SEDAR at www.sedar.com. Follow U3O8 Corp. on Facebook: www.facebook.com/u3o8corp, Twitter: www.twitter.com/u3o8corp and YouTube: www.youtube.com/u3o8corp.
Forward-Looking Statements
This news release includes certain "forward looking statements" related with the development plans, economic potential and
growth targets of U3O8 Corp's projects. Forward-looking statements consist of statements that are not purely historical,
including statements regarding beliefs, plans, expectations or intensions for the future, and include, but not limited to,
statements with respect to: (a) the low-cost and near-term development of Laguna Salada, (b) the Laguna Salada and Berlin PEAs,
(c) the potential of the Kurupung district in Guyana, (d) impact of the U- pgradeTM process on expected capital
and operating expenditures, and (e) the price and market for uranium. These statements are based on assumptions, including
that: (i) a ctual results of our exploration, resource goals, metallurgical testing, economic studies and development
activities will continue to be positive and proceed as planned, and assumptions in the Laguna Salada and Berlin PEAs prove to be
accurate, (ii) a joint venture will be formed with the provincial petroleum and mining company on the Argentina project, (iii)
requisite regulatory and governmental approvals will be received on a timely basis on terms acceptable to U3O8 Corp., (iv)
economic, political and industry market conditions will be favourable, and (v) financial markets and the market for uranium will
improve for junior resource companies in the short-term. Such statements are subject to risks and uncertainties that may cause
actual results, performance or developments to differ materially from those contained in such statements, including, but not
limited to: (1) changes in general economic and financial market conditions, (2) changes in demand and prices for minerals, (3)
the Company's ability to establish appropriate joint venture partnerships, (4) litigation, regulatory, and legislative
developments, dependence on regulatory approvals, and changes in environmental compliance requirements, community support and the
political and economic climate, (5) the inherent uncertainties and speculative nature associated with exploration results,
resource estimates, potential resource growth, future metallurgical test results, changes in project parameters as plans evolve,
(6) competitive developments, (7) availability of future financing, (8) exploration risks, and other factors beyond the control
of U3O8 Corp. including those factors set out in the "Risk Factors" in our Annual Information Form available on SEDAR at
www.sedar.com. Readers are cautioned that the assumptions used in the preparation of such information, although considered
reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on
forward-looking statements. U3O8 Corp. assumes no obligation to update such information, except as may be required by law. For
more information on the above-noted PEAs, refer to the September 18, 2014 technical report titled "Preliminary Economic
Assessment of the Laguna Salada Uranium-Vanadium Deposit, Chubut Province, Argentina" and the January 18, 2013 technical report
titled "U3O8 Corp. Preliminary Economic Assessment on the Berlin Deposit, Colombia."
i September 18, 2014 technical report: "Preliminary Economic Assessment of the
Laguna Salada Uranium Vanadium Deposit, Chubut Province, Argentina." Available on www.sedar.com or at www.u3o8corp.com/technical-reports
SOURCE U3O8 Corp.
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