UEX Corporation (TSX:UEX) (OTC:UEXCF) (“UEX” or the “Company”) is pleased to announce that UEX has been notified that the shareholders of Overseas Uranium Resources Development Co., Ltd. (“OURD”) have approved the sale to UEX of OURD’s wholly-owned subsidiary, JCU (Canada) Exploration Company, Limited (“JCU”).
The JCU Transaction
UEX will acquire 100% of the shares of JCU from OURD by paying C$41million and assuming JCU’s existing liabilities (the “JCU Transaction”), under the terms of the share purchase agreement (See April 22, 2021 News Release) and amending agreement (See June 15, 2021 News Release). The transaction is expected to close on or prior to August 3, 2021.
UEX has committed to retaining JCU as a corporate subsidiary in order for JCU to meet its existing joint venture commitments.
Agreement with Denison Mines Corp.
UEX has signed a binding agreement with Denison Mines Corp. (“Denison”) pursuant to which UEX has agreed to sell 50% of the JCU shares to Denison for a purchase price of C$20.5 million (the “UEX Denison Transaction”) following the close of the JCU Transaction (See June 15, 2021 News Release).
Key terms of the UEX Denison Transaction are as follows:
- Denison has agreed to provide UEX with an interest-free three-month term loan of up to C$41 million (the “Term Loan”) to facilitate UEX’s purchase of 100% of the shares of JCU.
- UEX and Denison have agreed to enter into a shareholders’ agreement governing the management of JCU (the “Shareholders’ Agreement”). UEX will be the manager of JCU as long as Denison does not own more than 50% of the shares of JCU.
- A total of C$20.5 million of the amount drawn under the Loan will be retired upon UEX transferring 50% of the JCU shares to Denison following the closing of the JCU Transaction.
- UEX may extend the Term Loan by an additional three months, in which case interest will be charged at a rate of 4% from the date of the initial advance under the Term Loan until maturity.
- All JCU shares owned by UEX will be held by Denison as security against the Term Loan pursuant to a pledge agreement until the Term Loan is repaid in full. The Term Loan is subject to certain customary terms and conditions and contains standard events of default that protect Denison.
- Should the share purchase agreement be terminated, each of Denison and UEX have agreed to provide the other party with the opportunity to participate on a 50/50 basis in subsequent offers made in relation to an alternative acquisition of JCU.
“The approval of the transaction by OURD Shareholders is a historic day for our Company. UEX shareholders have gained exposure to a strengthened portfolio of top tier uranium development projects that combine growth and production potential in the next cycle. Our assets, combined with our new partnership with Denison, on the JCU projects, will make UEX a unique uranium investment opportunity, possessing a strong and sustainable portfolio of exploration, development and future production opportunities in the Athabasca Basin and elsewhere in Canada. The JCU assets position UEX well and complement our existing portfolio of assets, which together, can grow into more substantial pieces of our business over time, as the market, uranium price and contracting cycle, signal the need for more uranium supply.”
–Roger Lemaitre, President & CEO, UEX Corporation
Qualified Persons and Data Acquisition
The technical information in this news release has been reviewed and approved by Roger Lemaitre, P.Eng., P.Geo., UEX’s President and CEO who is considered to be a Qualified Person as defined by National Instrument 43-101.
UEX is a Canadian uranium and cobalt exploration and development company involved in an exceptional portfolio of uranium projects, including a number that are 100% owned and operated by UEX, one joint venture with Orano Canada Inc. (“Orano”) and ALX Uranium Corp. (“ALX”) that is 51.43% owned by UEX, as well as eight joint ventures with Orano, one joint venture with Orano and JCU (Canada) Exploration Company Limited, which are operated by Orano, and one project (Christie Lake), that is 65.55% owned by UEX with JCU (Canada) Exploration Company Limited which is operated by UEX.
The Company is also leading the discovery of cobalt in Canada, with three cobalt-nickel exploration projects located in the Athabasca Basin of northern Saskatchewan, including the only primary cobalt deposit in Canada. The 100% owned West Bear Project was formerly part of UEX’s Hidden Bay Project and contains the West Bear Cobalt-Nickel Deposit and the West Bear Uranium Deposit. UEX also owns 100% of two early stage cobalt exploration projects, the Axis Lake and Key West Projects.
Our portfolio of projects is located in the eastern, western and northern perimeters of the Athabasca Basin, the world’s richest uranium belt, which in 2019 accounted for approximately 12.6% of the global primary uranium production. UEX is currently advancing several uranium deposits in the Athabasca Basin which include the Christie Lake deposits, the Kianna, Anne, Colette and 58B deposits at its currently 49.1%-owned Shea Creek Project (located 50 kilometres north of Fission’s Triple R Deposit and Patterson Lake South Project, and NexGen’s Arrow Deposit), the Horseshoe and Raven deposits located on its 100%-owned Horseshoe-Raven Development Project and the West Bear Uranium Deposit located at its 100%-owned West Bear Project (See Table 3).
JCU is a private company that is actively engaged in uranium exploration and development in Canada. JCU has partnerships with UEX, Orano, Cameco, Denison and others on uranium exploration and development projects in the Athabasca Basin of Northern Saskatchewan including Millennium and Wheeler River and the Kiggavik project in the Thelon Basin in Nunavut.
JCU has a long history in the Canadian uranium exploration and development sector dating back to 2000, when it acquired a portfolio of Canadian uranium exploration and development assets from PNC Exploration (Canada) Co., Ltd. (“PNC Canada”), a wholly-owned subsidiary of Power Reactor and Nuclear Fuel Development Corporation (“PNC”). JCU’s key exploration projects cover an area of 139,346 ha and include a 10% ownership position in the Wheeler River Project (Denison Mines Corp. 90%), a 30.099% ownership stake in Cameco Corporation’s (“Cameco”) Millennium Project (Cameco 69.901%), a 33.8123% ownership in the Kiggavik Project (Orano Canada Inc. 66.1877%), and a 34.4508% interest in UEX’s Christie Lake Project. JCU also owns a minority equity stake in eight other grassroots and mid-stage exploration projects within the Athabasca Basin (see Table 1& 2 and Figure 1).
Source: UEX Corp.