CORPUS CHRISTI, TX, July 10, 2017 /CNW/ - Uranium Energy Corp (NYSE MKT: UEC, the "Company" or "UEC") is pleased to announce that the Company has exercised its previously disclosed option (the "Option") to acquire all of the issued and outstanding shares of CIC Resources (Paraguay) Inc. ("CIC"), a wholly-owned subsidiary of CIC Resources Inc. (the "Vendor"), in accordance with the terms and conditions of the Company's share purchase and option agreement (the "Share Purchase and Option Agreement") with the Vendor, dated March 4, 2016, as amended. As a result, UEC now controls 100% of the Alto Paraná Titanium Project (the "Property") located in the departments of Alto Paraná and Canindeyú in the Republic of Paraguay.
Amir Adnani, President & CEO, stated: "Over the last 5 years we have invested in assembling a team of technical and local experts in Paraguay to advance our ISR uranium portfolio. The acquisition of the Alto Parana project in no way reflects a change in the strategic direction of UEC, rather an opportunity to acquire a large, advanced asset within a familiar jurisdiction. Leveraging our in-country presence and know-how, we identified a timely and strategic opportunity to consolidate over 70,000 hectares making up the Alto Parana titanium project and its pilot plant for the benefit of UEC shareholders. Approximately $25 million has been invested in this project to date by CIC Resources and its former JV partner, Tronox. The UEC team and advisors have spent a considerable amount of time reviewing these assets, and in the coming months we will update the market on our go-forward plans to unlock value at Alto Paraná."
In accordance with the terms of the Share Purchase and Option Agreement, the Company has issued to the Vendor 664,879 restricted common shares of the Company (each, a "Share"), at a deemed issuance price of $1.5363 per Share, for aggregate consideration of $1,021,453 (the "Consideration"). The Consideration represents (i) the Company's Option exercise payment of $275,000 and (ii) the reimbursement by the Company to the Vendor of all Property maintenance costs incurred since execution of the Share Purchase and Option Agreement. In addition to the Consideration, the Company has also granted the Vendor a 1.5% net smelter returns royalty (the "Royalty") on the Property. The Company has the right, exercisable at any time for a period of six years following exercise of the Option, to acquire one-half percent (0.5%) of the Royalty at a purchase price of $500,000.
The Company previously acquired all of the issued and outstanding shares of JDL Resources Inc. ("JDR"), also a wholly-owned subsidiary of the Vendor, pursuant to the terms of the Share Purchase and Option Agreement, in June 2016. The Company acquired JDR in exchange for a cash payment of $50,000 and the issuance of 1,333,360 Shares to the Vendor. JDR holds additional titanium mineral property concessions that lie adjacent to and contiguous with the Property.
The Alto Paraná Titanium Project is an advanced exploration stage project located in eastern Paraguay, within the department of Alto Paraná, approximately 100 km north of Ciudad del Este. The Property covers an area of 70,498 ha of land under five mining permits granted by the Ministry of Public Works and Communications, Paraguay. The project is near Itaipu, the second largest hydro-electric dam in the world and a source of cost-effective power. Work to date on the Property has included an extensive program of pitting and auger drilling, development of a small test mine, construction of a pilot plant to evaluate the proposed beneficiation flow sheet, bench scale smelting tests, production of approximately 110 tonnes of concentrate for a large scale smelting tests and associated engineering, marketing, logistical and environmental work.
UEC will now be working on preparing a proposed NI 43-101 Technical Report for the Property which will be released before the end of 2017 and is continuing to evaluate options to further unlock the potential value of these acquisitions.
Titanium can be alloyed with iron, aluminum, vanadium and molybdenum, among other elements, to produce strong, lightweight alloys for aerospace applications (jet engines, missiles, and spacecrafts). Of all the mined and synthetic titanium minerals, only 5% is used to produce titanium metal. The remaining 95% is used to manufacture pure titanium dioxides – a pigment that enhances brightness and opacity in paints and inks, paper, and plastics, and even in food products and cosmetics. It is also the metal used in the body of Apple's MacBook line – helping achieve a lightweight frame. The rally in pigment markets has had a significant impact on feedstocks, resulting in increasing demand, declining inventories and increasing prices, led by spot prices in China. From the commercial perspective, ilmenite is the most important ore of titanium, since ilmenite is the main source of titanium dioxide. At the time, UEC executed its Share Purchase and Option Agreement, spot ilmenite prices bottomed at US$60/t towards the end of 2015/early 2016. According to Bloomberg, ilmenite bulk concentrate is now priced at approximately US$178/t.
About Uranium Energy Corp.
Uranium Energy Corp. is a U.S.-based uranium mining and exploration company. The Company's fully-licensed Hobson Processing Facility is central to all of its projects in South Texas, including the Palangana ISR mine, the permitted Goliad ISR project and the development-stage Burke Hollow ISR project. Additionally, the Company controls a pipeline of advanced-stage projects in Arizona, Colorado and Paraguay. The Company's operations are managed by professionals with a recognized profile for excellence in their industry, a profile based on many decades of hands-on experience in the key facets of uranium exploration, development and mining.
