Uranium Energy and Concentric Energy Corp. (“Concentric”) are pleased to announce the completion of the stock-for-stock merger (the “Merger”) effected under the laws of Nevada on September 9, 2011.
Under the Merger, which was previously announced on May 6, 2011, UEC has issued 1,253,440 common shares of the Company to the former Concentric stockholders to acquire Concentric. The sole purpose of the Merger is to acquire Concentric’s undivided 100% interest in the Anderson Property, a 7,581-acre mineral claim block located in Yavapai County, Arizona, with a previous history of small-scale uranium production.
President and CEO Amir Adnani stated, “With the acquisition of the Anderson project, UEC is now the leading uranium player in Arizona, as well as in South Texas. Arizona is both a business and energy-friendly state. Three of the largest nuclear power plants in the U.S. are in Arizona, and all three plants have recently received their 20-year license extensions. The current temporary downturn in the uranium market is providing the Company with an excellent opportunity to make strategic acquisitions at a viable cost, and this includes the Anderson Property. As these new projects come on-line, they bolster the Company’s already strong and diversified project portfolio of mining, development and exploration-stage properties to ensure on-going rapid growth.”
Company geologists are currently compiling all data, rectifying historic bore hole coordinates, and initiating development of an up-to-date three-dimensional model of the Anderson mineralization. The results of these efforts will eventually culminate in an updated NI 43-101 Technical Report. Concurrent with these efforts, planning for various environmental baseline studies is underway and field implementation of these studies should occur during the final quarter of this year.
The Anderson Property
The Anderson Property covers 7,581 acres (or 11.85 square miles) and is comprised of 370 contiguous, unpatented lode mining and placer claims. It is located in Yavapai County, approximately 75 miles northwest of Phoenix. In 2001, Concentric staked this claim block, which consolidated portions of the mineral claims held in the 1970s by Minerals Exploration Company (“MinEx”), a subsidiary of Unocal Corporation, and Urangesellschaft U.S.A., Inc. (“UG”).
The Anderson Property has a long history. In the 1950’s the Property hosted a small-scale open pit mining operation which resulted in a total of 10,758 tons of ore averaging 0.15% or 33,230 pounds of U3O8 being shipped to Tuba City, Arizona, for custom milling. Production ceased in 1959 when the Atomic Energy Commission terminated its ore purchasing program.
Since then, over 1,400 exploration drill holes have been completed on the Anderson Property, including 1,320 downhole gamma surveys and 5,596 chemical assays. Almost all of these were completed in the 1970s by MinEx on the Property’s northern section and by UG on the southern section.
In the late 1970’s the Property was brought to the feasibility stage twice, however, by the end of 1979, global and market events led both MinEx and UG to abandon their mineral claims in the Anderson Property.
In 2006, Concentric conducted the first drill program on the Anderson Property since the abandonment by MinEx and UG. A 25-hole drill program was completed to confirm the historical MinEx exploration database by “twinning” a significant number of former MinEx drill holes. A total of 24 rotary holes and one core hole, totaling 8,087 feet, were completed. No confirmation holes were drilled on the former UG portion of the Anderson Property. In 2008, Concentric commissioned Mountain States Research Development International, Inc. to complete a process engineering assessment, the results of which are presented in a report entitled “Final Report Preliminary Process Engineering and Cost Estimates, Anderson Uranium Project, Yavapai County, Arizona.”
Terms of the Merger
In accordance with the terms of a Merger Agreement and Plan of Merger between Concentric and UEC (the “Merger Agreement”), UEC Concentric Merge Corp., a wholly-owned subsidiary of UEC, is the surviving corporation of the Merger and is now vested with all of Concentric’s assets and property. Pursuant to the Merger Agreement, Concentric’s stockholders received 0.1075 of one share of UEC common stock for every one share of Concentric common stock. With 11,659,905 shares of Concentric common stock outstanding immediately prior to the Merger, UEC has issued 1,253,440 common shares of the Company to the former Concentric stockholders, representing approximately 1.7% of the issued and outstanding common stock of UEC. In addition, UEC has issued 375,834 common stock purchase warrants (the “UEC Exchange Warrants”) to the former holders of Concentric common stock purchase warrants (the “Concentric Warrants”) based on the exchange ratio of 0.1075 of one UEC Exchange Warrant for every one Concentric Warrant. The exercise price of each UEC Exchange Warrant has been determined by dividing the per share exercise price of the corresponding Concentric Warrant by 0.1075, yielding exercise prices that range between $9.30 and $65.12.
To satisfy a condition of the Merger Agreement, the Company contemporaneously completed the full assignment to UEC of Global Uranium Corp.’s (“Global”) rights (the “Rights”) under the terms and conditions of an underlying Option and Joint Venture Agreement dated April 13, 2010 between Global and Concentric, with respect to the Anderson Property. Pursuant to an Acquisition Agreement with Global (the “Global Acquisition Agreement”) to acquire the Rights, UEC has delivered to Global (i) an initial payment of $150,000, (ii) a further $200,000 payment releasing and assigning to the Company the security previously granted by Concentric to Global and (iii) 350,000 restricted shares of the Company’s common stock along with a final payment of $150,000.
The foregoing description of the Merger, the Merger Agreement and the Global Acquisition Agreement is not complete and is qualified in its entirety by reference to the Merger Agreement and the Global Acquisition Agreement, as applicable.
The technical information in this news release has been prepared in accordance with the Canadian regulatory requirements set out in NI 43-101 and reviewed by Clyde L. Yancey, P.G., Vice President-Exploration for the Company, a QP under NI 43-101 standards.
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