RNS Number:0752R
UrAsia Energy Limited
12 February 2007
sxr Uranium One Inc. UrAsia Energy Ltd.
390 Bay Street, Suite 1610 Suite 3123, 595 Burrard Street
Toronto, Ontario M5H 2Y2 Vancouver, British Columbia V7X 1J1
Trading Symbols: SXR - Toronto Stock Exchange, JSE Limited
(Johannesburg Stock Exchange)
UUU - TSX Venture Exchange, AIM (London Stock Exchange)
NEWS RELEASE
February 12, 2007
Uranium One and UrAsia Energy Announce Combination to Create Emerging Senior
Uranium Company
Toronto, Ontario; Vancouver, British Columbia; Johannesburg, South Africa - sxr
Uranium One Inc. ("Uranium One") and UrAsia Energy Ltd. ("UrAsia") are pleased
to announce that the two companies have entered into a definitive arrangement
agreement whereby Uranium One will acquire all of the outstanding common shares
of UrAsia. The acquisition will result in the creation of a new, globally
diversified uranium producer with an exciting growth profile and a combined
fully-diluted market capitalization of approximately US$5 billion. Subject to
shareholder approval, the combined company will continue under the name of
Uranium One Inc.
Under the terms of the acquisition, UrAsia shareholders will receive 0.45 common
shares of Uranium One for each issued share of UrAsia, representing a value of
C$7.05 per share based upon the closing price of Uranium One on the TSX on
February 9, 2007. This represents a 13% premium to the closing share price of
UrAsia's shares on the TSX Venture Exchange on February 9, 2007 and a 21%
premium to the 20 day volume weighted average trading prices of Uranium One's
and UrAsia's shares on the TSX and TSX Venture Exchange, respectively.
The new Uranium One will be one of the world's largest uranium companies ranked
by market capitalization. The profile of Uranium One will be:
* Estimated combined attributable annual production in excess of 7 million
pounds U3O8 from five operations in 2008 (Dominion, Akdala, South Inkai,
Kharassan and Honeymoon)
* Estimated cash operating costs of approximately US$10 to US$12 per pound
U3O8 in steady state
* Un-hedged and un-capped sales contracts provide exposure to further
uranium price increases on substantially all projected production
* Attributable proven and probable reserve base of 49 million pounds of
U3O8, indicated resources of 102 million pounds of U3O8 and inferred
resources of 269 million pounds of U3O8
* Substantial Russian P1 resources at South Inkai and Kharassan and upside
potential at Dominion to drive organic resource growth
* A strong balance sheet with a pro forma cash balance of approximately
US$389 million at December 31, 2006
* Industry leading expertise in both conventional and in situ leach (ISL)
mining techniques
Further detailed information on reserves and resources can be found in the
Additional Reserve and Resource Data section below and in the Other Matters and
Cautionary Statement at the end of this release.
The transaction creates an emerging senior uranium company based on the combined
project pipeline. The new Uranium One will provide shareholders with the
benefits of scale through an increased market capitalization. The combined
entity will be the only company in the uranium sector with production and asset
exposure to each of the world's five largest resource jurisdictions, namely
Kazakhstan, South Africa, Australia, the United States and Canada.
The Board of Directors of UrAsia has determined that the transaction is in the
best interest of UrAsia and its shareholders and that the exchange ratio is fair
to the UrAsia shareholders. The Board unanimously recommends that holders of
UrAsia shares vote in favour of the transaction.
Paradigm Capital Inc. has provided a fairness opinion to the Board of Directors
of UrAsia that the consideration offered pursuant to the transaction is fair,
from a financial point of view, to the common shareholders of UrAsia.
Senior officers and directors of UrAsia have agreed to vote in favour of the
transaction and lock-up as well as support agreements have been executed.
Commenting on the transaction, Neal Froneman, Uranium One CEO said:
"The combination of Uranium One and UrAsia creates a new, globally diversified
uranium company with compelling investment appeal. With imminent production from
Dominion in South Africa, combined with an established production profile from
the Akdala ISL mine, the new Uranium One will be an exciting low-cost,
growth-oriented uranium company, with five mines in operation by Q1 2008. As a
result of this acquisition, the competitive advantages of the new Uranium One
will be significant, as we will have the technical and financial capabilities to
pursue further value enhancing growth opportunities, both organically and
through further consolidation."
Phillip Shirvington, CEO of UrAsia added:
"The new Uranium One will be the pre-eminent growth company in the sector, with
an unrivalled production growth profile. The Company is well positioned to gain
maximum benefit from rising uranium prices. As a director of the new Uranium
One, I look forward to contributing to its continued development and growth."
Summary of the Transaction
The business combination of Uranium One and UrAsia will be completed by way of a
statutory plan of arrangement under the Business Corporations Act (British
Columbia) whereby each UrAsia common share will be exchanged for 0.45 Uranium
One common shares. After completion of the transaction, it is expected that
current Uranium One shareholders will own approximately 40% of the combined
company and current UrAsia shareholders will own approximately 60%.
The combination has been unanimously approved by the Boards of Directors of both
Uranium One and UrAsia and will be subject to, among other things, approval by a
two-thirds majority of holders of UrAsia common shares and regulatory approvals.
A meeting of UrAsia shareholders to approve the transaction will be held on or
about May 15, 2007. The notice of meeting, information circular and related
materials is expected to be mailed in mid-April, 2007.
Paradigm Capital Inc. has provided an opinion to the Board of Directors of
UrAsia that the consideration offered pursuant to the transaction is fair, from
a financial point of view, to the common shareholders of UrAsia.
The Board of Directors of Uranium One has determined that this transaction is in
the best interests of Uranium One shareholders and BMO Capital Markets has
provided an opinion to the Board of Directors of Uranium One that the
consideration offered pursuant to the arrangement is fair, from a financial
point of view, to Uranium One.
If the transaction is not completed, UrAsia has agreed to pay a break fee to
Uranium One under certain circumstances of US$90 million. UrAsia has also
provided Uranium One with certain other customary rights, including a right to
match competing offers.
As the new Uranium One will have a significant United Kingdom and continental
European shareholder base, the company will investigate all available
alternatives to facilitate continued liquidity for these shareholders.
Management Team and Board of Directors
Neal Froneman will continue as President and Chief Executive Officer of the
combined company.
The Board of Directors of the new Uranium One will ultimately consist of nine
members, comprising three nominees of UrAsia and six nominees of Uranium One.
Ian Telfer will be Non-Executive Chairman and Phillip Shirvington will be one of
the UrAsia nominees to the Uranium One Board. Frank Giustra resigned from the
Board of UrAsia effective February 11, 2007 in order to permit the UrAsia Board
to pursue this transaction without any perception of conflict, as he is also
Chairman of Endeavour Financial (UrAsia's financial advisor). Mr. Giustra has
confirmed to Uranium One and the UrAsia Board his continued support for the
transaction and will assist UrAsia, as financial advisor, to bring the
transaction to a timely and successful conclusion. Messrs. Telfer and
Shirvington and a third nominee from UrAsia will join Andrew Adams, Ken
Williamson, David Hodgson, Terry Rosenberg and Mark Wheatley as Non-Executive
Directors of the new Uranium One. At closing, the Board of Directors will be
comprised of eight members with the ninth member (one of the Uranium One
nominees), being nominated at the next AGM.
Advisors and Counsel
Uranium One's exclusive financial advisor is BMO Capital Markets and its legal
counsel is Fasken Martineau DuMoulin LLP. UrAsia's financial advisors are
Endeavour Financial International Corporation, Canaccord Adams Limited and
Paradigm Capital Inc. and its legal counsel is Stikeman Elliott LLP.
Conference Call
A conference call will be held on February 12, 2007 at 11:00 AM Eastern time to
discuss this transaction. A copy of the presentation is available on
www.uranium1.com.
Via Telephone:
The local dial-in number will be 416-340-2217. The North American toll free
dial-in will be 1-866-696-5910. International participants must dial their
international access code followed by 800-8989-6336. The passcode for the live
call is 3214593 followed by the number sign.
A replay of the conference call will be available for one week at 416-695-5800
(local) or 1-800-408-3053 (North America toll free). The passcode for the replay
is 3214593 followed by the number sign.
Via Webcast:
A live audio webcast of the call will be available at http://
events.startcast.com/events/50/B0001
Additional Reserve and Resource Data
In conjunction with the following tables, readers are also urged to read the
Other Matters and Cautionary Statement at the end of this press release.
UrAsia Energy Ltd.
Proven Mineral Reserves
Asset Tonnes Grade Uranium Contained U Contained U3O8
(thousands) (% U) (tonnes U) (million lbs)
Akdala(1) 2,769 0.057 1,590 4.1
(1) Attributable
Probable Mineral Reserves
Asset Tonnes Grade Uranium Contained U Contained U3O8
(thousands) (% U) (tonnes U) (million lbs)
Akdala(1) 8,966 0.057 5,110 13.3
(1) Attributable
Indicated Mineral Resources(2,3)
Asset Tonnes Grade Uranium Contained U Contained U3O8
(thousands) (% U) (tonnes U) (million lbs)
Akdala(1) 12,011 0.057 6,850 17.8
Kharassan(1) 791 0.201 1,590 4.1
(1) Attributable
(2) Mineral resources are inclusive of mineral reserves
(3) Mineral resources are not mineral reserves and do not have demonstrated
economic viability
Inferred Mineral Resources(2)
Asset Tonnes Grade Uranium Contained U Contained U3O8
(thousands) (% U) (tonnes U) (million lbs)
Akdala(1) 6,788 0.062 4,200 10.9
South Inkai(1) 40,390 0.043 16,720 43.5
Kharassan(1) 9,160 0.095 8,700 22.6
(1) Attributable
(2) Mineral resources are not mineral reserves and do not have demonstrated
economic viability
sxr Uranium One Inc.
Probable Mineral Reserves
Asset Tonnes U3O8 Grade Contained U3O8 Gold Grade Contained Gold
(thousands) (kg/tonne) (thousands of lbs) (g/tonne) (thousands of ozs)
Dominion 18,454 0.77 31,327 0.99 589
Indicated Mineral Resources(1,2)
Asset Tonnes U3O8 Contained U3O8 Gold Contained Gold
Grade Grade
(thousands) (kg/ (thousands of (g/tonne) (thousands of
tonne) lbs) ozs)
Dominion 36,385 0.81 64,889 0.91 1,060
Dominion 3,375 0.16 1,195 0.51 55
Dumps
Honeymoon 1,200 2.40 6,500 n/a n/a
East Kalkaroo 1,200 0.74 2,000 n/a n/a
Goulds Dam 1,700 1.20 4,400 n/a n/a
(1) Mineral resources are inclusive of mineral reserves
(2) Mineral resources are not mineral reserves and do not have demonstrated
economic viability
Inferred Mineral Resources(1)
Reef Unit Tonnes U3O8 Grade Contained U3O8 Gold Grade Contained Gold
(thousands) (kg/tonne) (thousands of (g/tonne) (thousands of
lbs) ozs)
Dominion 219,375 0.38 183,630 0.67 4,752
Billeroo 12,000 0.30 7,900 n/a n/a
(1) Mineral resources are not mineral reserves and do not have demonstrated
economic viability
About Uranium One
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). The Corporation 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. The Corporation 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., the Corporation is also
engaged in uranium exploration activities in the Athabasca Basin of
Saskatchewan.
About UrAsia Energy
UrAsia is a Canadian-based uranium producer that offers investors exposure to
low-cost uranium production and growth. The Company creates shareholder value by
focusing on the development and operation of low-cost, in-situ leach uranium
projects in Central Asia. UrAsia is listed on the TSX Venture Exchange and the
Alternative Investment Market (AIM) of the London Stock Exchange, trading under
the symbol UUU on both exchanges.
For further information, please contact:
Neal Froneman Phillip Shirvington
Chief Executive Officer Chief Executive Officer
sxr Uranium One Inc. UrAsia Energy Ltd.
Tel: + 1 416 350 3657 Tel: + 1 604 609 5130
Jean Nortier Sally Eyre
Chief Financial Officer Vice President, Corporate Affairs
sxr Uranium One Inc. UrAsia Energy Ltd.
Tel: + 27 11 482 3605 Tel: + 1 604 377 2757
Chris Sattler Ben Willey
Vice President, Investor Relations Buchanan Communications
sxr Uranium One Inc. Tel: + 44 (0)207 466 5118
Tel: + 1 416 350 3657
Other Matters and Cautionary Statement
Investors are advised to refer to independent technical reports on Uranium One's
material properties are available at www.sedar.com for detailed information with
respect to the Corporation's properties. Those technical reports provide the
date of each resource or reserve estimate, details of the key assumptions,
methods and parameters used in the estimates, details of quality and grade or
quality of each resource or reserve 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 technical reports also provide 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 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 mineral resource will be ever be upgraded to a higher category.
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 Mr. M.H.G. Heyns, Pr.Sci.Nat. (SACNASP), MSAIMM, MGSSA,
Consulting Geologist or by Ms. J.M. Smith, P.GEO Sr VP Corporate Development sxr
Uranium One Inc.- both qualified persons for the purposes of NI 43-101.
Neither Uranium One nor Mr. Heyns or Ms. Smith have done sufficient work to
classify the historical estimates of UrAsia's P1 resources or Uranium One's
resources at Dominion as current mineral reserves or resources. Uranium One does
not intend to treat such historical estimates of reserves and resources as a
current estimate and the historical estimates should not be relied upon.
Scientific and technical information contained herein has been reviewed on
behalf of UrAsia by C. Stewart Wallis, P.Geo. Consulting Geologist - a Qualified
Person for the purpose of NI 43-101. Technical Reports prepared by Scott Wilson
RPA (formerly Roscoe Postle Associates Inc.) in accordance with NI 43-101.
Kharassan Technical Report, dated October 13, 2005, as revised March 25, 2006;
South Inkai Technical Report, October 8, as revised March 20, 2006; and Akdala
Technical Report, dated October 3, 2005 as revised March 3, 2006. The Technical
Reports are available at www.sedar.com.
Historical estimates referred to herein as Russian P1 resources are derived from
Kazatomprom documents, an entity of the Government of Kazakhstan. Although
Russian P1 Resources do not meet Canadian Institute of Mining, Metallurgy and
Petroleum (CIM) standards on Mineral Resource and Reserve definitions, they are
considered relevant because of previous pilot plant production, but should not
be relied upon. The CIM resource definition which most closely resembles P1
resources is that of Inferred Resources. However, there is less confidence
attributed to a P1 resource since a P1 resource is estimated on the basis of a
lower drill density than an inferred resource.
No stock exchange, securities commission or other regulatory authority has
approved or disapproved the information contained herein.
Forward-looking statements: Certain of the statements made herein, including any
information as to the Corporation's future financial or operating performance,
may be forward-looking and subject to important risk factors and uncertainties,
many of which are beyond the Corporation's ability to control or predict.
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: gold and uranium
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
Canada, the United States, South Africa, Australia or other countries in which
the Corporation does or may carry on business in the future; risks of sovereign
investment; the speculative nature of gold and uranium exploration and
development, including the risks of obtaining necessary licenses 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 gold and uranium 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 the Corporation with the Canadian securities administrators.
Accordingly, readers should not place undue reliance on forward-looking
statements. The Corporation 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 events.
For further information about Uranium One or UrAsia, please visit
www.uranium1.com or www.urasiaenergy.com
This information is provided by RNS
The company news service from the London Stock Exchange
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