Uranium Energy and Cue Resources Ltd. are pleased to announce that they have entered into an Arrangement Agreement under which UEC will acquire all of the outstanding common shares of CUE by way of a plan of arrangement (the “Arrangement”). Upon completion of the Arrangement, it is anticipated that approximately 2,336,260 shares of UEC’s common stock will be issued to former CUE stockholders to acquire CUE and its wholly-owned subsidiary holding an undivided 100% legal and beneficial interest in and to certain concession contracts covering a 230,650-hectare uranium exploration property located in southeastern Paraguay and known as the Yuty Project.
Amir Adnani, UEC President and CEO, stated, “The Company’s plan is to make the Yuty Project our second major uranium asset in Paraguay. CUE’s projects and resources will be synergistic with our current operations, and consistent with our development strategy in this stable and business-friendly country. With share dilution at a low 3.1% for this acquisition, UEC continues to expand and diversify its project portfolio at attractive costs with projects that have been the subject of significant exploration and development.”
Robert Tyson, CUE President and CEO, stated, “Since the Fukushima disaster, funding uranium projects has been a challenging task. The severe reduction in enterprise value and share price required CUE’s Board of Directors to pursue alternative financing opportunities in the best interests of CUE and our shareholders. Consummation of this relationship with UEC allows for our project to advance. UEC is a recognized ISR uranium producer with a technical team that has an established record of developing and producing sandstone-hosted uranium deposits.”
The Yuty ISR Project
The Yuty ISR Project covers 230,650 hectares and is located approximately 200 kilometers east and southeast of Asunción, the capital of Paraguay. It is located within the Paraná Basin, which is host to a number of known uranium deposits, including Figueira and Amorinópolis in Brazil. Preliminary studies indicate amenability to extraction by in situ recovery methods, which is the same process currently used by UEC at its Texas operations. CUE has spent over CAD$16 million developing Yuty since 2006.
In 1976, uranium exploration in southeastern Paraguay was initiated by Anschutz Corporation (“Anschutz”) of Denver, Colorado, on behalf of a joint venture with Korea Electric Power Corporation and Taiwan Power Company. This exploration was conducted under an exclusive exploration and exploitation concession covering 162,700 square kilometres, virtually the entire eastern half of Paraguay, and identified several large target areas including the Yuty Project. In total, approximately 75,000 meters of core and rotary drilling were completed by Anschutz between 1976 and 1983 when further work ceased due to low uranium prices.
In July 2006, CUE acquired an option on the Yuty Project and initiated rotary and diamond drilling programs. Between 2007 and 2010, CUE completed 256 drill holes totaling 31,000 meters of core and rotary drilling and acquired a 100% interest in the Yuty Project.
The current resource for the Yuty Project is 8.914 Million lbs of eU308 Measured plus Indicated, and 2.226 Million lbs of eU308 Inferred, which has been finalized in a technical report prepared for CUE titled “Updated Technical Report on the Yuty Uranium Project, Republic of Paraguay” dated August 24, 2011 (the “Yuty Technical Report”). The Yuty Technical Report shows an increased average grade and resource at the Yuty Project as follows:
| Measured Resource 2.054M tonnes @ 0.062 % eU3O8 containing 2.801M lbs eU3O8 Indicated Resource 5.783M tonnes @ 0.048 % eU3O8 containing 6.113M lbs eU3O8 Inferred Resource 2.139M tonnes @ 0.047 % eU3O8 containing 2.226M lbs eU3O8 |
The technical information in this news release was prepared in accordance with the Canadian regulatory requirements set out in NI 43-101 and is extracted from the Yuty Technical Report, which is filed on CUE’s SEDAR profile and is available for viewing at www.sedar.com. The technical information in this news release and the Yuty Technical Report have been reviewed by each of Chris M. Healey, P. Geo., a director of CUE, and Clyde L. Yancey, P.G., Vice President of Exploration for UEC, each being a qualified person as defined by NI 43-101. To the best of UEC’s knowledge, information, and belief, there is no new material scientific or technical information that would make the disclosure of the mineral resources contained in this news release inaccurate or misleading. The Yuty Project is described in more detail in the press release of CUE dated August 26, 2011.
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