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Uranium One buys 50% of Russian mine

Miningmx reporter | Tue, 15 Dec 2009 16:05
[miningmx.com] --URANIUM One has bought a 50% stake in the Karatau Uranium Mine from Russia’s state-owned uranium company, JSC Atomredmetzoloto (ARMZ) in return for shares and up to $150m in cash.

The mine, situated in Kazakhstan, is expected to produce 4.6 million pounds in 2010. At full production, Uranium One’s attributable production from Karatau is expected to increase to 2.6 million pounds, due in 2010.

Uranium One, a Toronto-listed uranium firm, will issue 117 million new shares to ARMZ, equal to 19.9% of Uranium One’s current shares in issue. In addition, it will pay $90m in 12 months after agreeing to issue a promissory note for that amount. A further $60m could be paid subject to various tax-related adjustments.

Uranium One has also entered into a long-term offtake agreement with ARMZ which allows the Russians to buy the greater of 50% of Karatau’s annual production or 20% of Uranium One’s available attributable production. ARMZ will have marketing rights over this offtake.

In return, Uranium One has secured a foothold in Russia’s downstream uranium industry. ARMZ has agreed to assist Uranium One in the opening of accounts with Russian uranium converters and to use Russian uranium conversion and enrichment facilities.

This will allow Uranium One to bring uranium oxide quicker to the market and improve cash flow.

Vadim Zhivov, director-general of ARMZ, will join Uranium One’s board with a second representative due to join the Toronto firm’s board in May 2010.


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