GREENWOOD VILLAGE, COLORADO–(Marketwired – Aug. 2, 2017) – AZARGA URANIUM CORP. (TSX:AZZ)(FRANKFURT:P8AA)(OTC PINK:PWURF) (“Azarga Uranium” or the “Company”) is pleased to announce that its 70% controlled subsidiary, UrAsia in Kyrgyzstan Limited Liability Company (“UrAsia”), has executed an earn-in agreement (the “Agreement”) with Mining Investment Company Alliance (“Alliance”). The Agreement provides Alliance with an earn-in option to acquire a 100% interest in UrAsia’s Kyzyl Ompul Project in the Kyrgyz Republic in exchange for project consideration of US$7.6 million and a two percent net smelter royalty of up to US$5.0 million. The US$7.6 million of project consideration consists of: 1) US$6.0 million of cash payments and 2) US$1.6 million of exploration and development expenditures over a three-year period.
Azarga Uranium’s President and CFO, Blake Steele, commented: “the execution of this Agreement further demonstrates the Company’s strategic focus on its initial development priority, the Dewey Burdock In-Situ Recovery Uranium Project (the “Dewey Burdock Project”), which the Company continues to advance towards construction. The Agreement provides the Company with significant cash payments over a three-year period, which can be deployed towards core strategic initiatives, such as the Dewey Burdock Project, as well as alleviates the Company of the need to fund exploration and development expenditures at the Kyzyl Ompul Project, thereby freeing up further resources. In addition, the Company and our shareholders retain upside from the Kyzyl Ompul Project through the two percent net smelter royalty. Overall, this Agreement helps capitalize the Company over the next three years and reduces the need for potentially dilutive capital raises in the future.”
Under the terms of the Agreement, Alliance may acquire up to a 100% interest in the Kyzyl Ompul Project in exchange for project consideration of US$7.6 million over a three-year period as follows:
|Date||Aggregate Cash Payments (US$)||Date||Aggregate Exploration/Development Expenditures (US$)|
|Within five days of TSX acceptance||$150,000||On or before
December 31, 2017
|Twelve months from TSX acceptance||$510,000||On or before
December 31, 2018
|Twenty-four months from TSX acceptance||$3,258,000||On or before
December 31, 2019
|Thirty-six months from TSX acceptance||$6,000,000||Thirty-six months from TSX acceptance||$1,600,000|
Subject to Alliance acquiring a 100% interest in the Kyzyl Ompul Project for project consideration of US$7.6 million, UrAsia will retain a two percent net smelter royalty. The net smelter royalty is payable on the commencement of commercial production at the Kyzyl Ompul Project and is subject to a minimum royalty of US$2.5 million and a maximum royalty of US$5.0 million. If Alliance fails to make any of the payments under the Agreement, UrAsia will retain its 100% interest in the Kyzyl Ompul Project.
The Agreement is subject to the approval of the Toronto Stock Exchange (“TSX”). No finder’s fees will be paid in connection with this transaction.
About Azarga Uranium Corp.
Azarga Uranium is an integrated uranium exploration and development company that controls six uranium projects, deposits and prospects in the United States of America (South Dakota, Wyoming and Colorado) and the Kyrgyz Republic. The Dewey Burdock in-situ recovery uranium project in South Dakota (the “Dewey Burdock Project”), which is the Company’s initial development priority, has received its Nuclear Regulatory Commission License and draft Class III and Class V Underground Injection Control (“UIC”) permits from the Environmental Protection Agency (“EPA”) and the Company is in the process of completing other major regulatory permit approvals necessary for the construction of the Dewey Burdock Project, including the final Class III and Class V UIC permits from the EPA.