CENTENNIAL, Colo., Dec. 05, 2016 (GLOBE NEWSWIRE) -- Uranium Resources, Inc. (NASDAQ:URRE) (ASX:URI) announced today that it has executed a Letter of Intent (LOI) to amend its Share Purchase Agreement (“Agreement”) with Laramide Resources Ltd. (TSX:LAM) (ASX:LAM) (Laramide) whereby URI is selling its Churchrock and Crownpoint properties in New Mexico. The LOI sets the closing date for December 22, 2016 and amends certain other terms and conditions, including removal of the condition that Laramide have completed a financing before closing. The LOI is non-binding but contemplates that the parties will negotiate and enter into a binding amendment to the Agreement not later than December 9, 2016.
URI and Laramide have agreed to maintain the value of the transaction at $12.5 million but to reduce the cash to be paid and the amount of the promissory note to be issued at closing, in exchange for equity, a royalty and an additional option. Under the amended Agreement, at closing Laramide will acquire Churchrock and Crownpoint for $2.5 million in cash, will issue shares of its common stock and warrants to URI valued at $500,000, will issue URI a 3-year promissory note in the amount of $5 million and will grant URI a 4% net smelter royalty valued at $4.5 million on Churchrock. In addition, Laramide has reduced the price for URI’s option to purchase Laramide’s La Sal project to $3 million and will provide a new option for URI to purchase Laramide’s La Jara Mesa project for $5 million.
The sale of the Churchrock and Crownpoint properties continues URI’s proactive M&A strategy, with the sale representing URI’s third asset monetization transaction in the last three years. URI is focused on improving its uranium portfolio alignment with its production experience and expertise in in-situ recovery of uranium, targeting uranium operations that fit into the lowest quartile of operating costs. The proceeds received from the sale will be used to fund expansion of URI’s energy metals strategy which includes developing its new lithium business while maintaining optionality on the future rising uranium price.
Christopher M. Jones, President and Chief Executive Officer of Uranium Resources, said, “We are pleased to have worked with Laramide to achieve this strategic transaction for our respective shareholders. Churchrock’s new royalty structure significantly improves projects economics, enabling the more rapid development of this project. At the same time, other improvements we have made to the transaction enable URI to more fully participate in the success of this venture.”
Definitive documentation reflecting these amended terms is expected to be executed by December 9, 2016. The closing, now set for December 22, 2016, is subject to customary conditions, including applicable stock exchange approvals, and regulatory approvals for the transfer of the projects to Laramide, including the transfer of URI’s NRC license as it pertains to the sale properties; however, Laramide has removed financing as a condition of closing. If Laramide is unable to close because it has not been able to raise the necessary funds, Laramide would be required to pay the break fee called for in the Agreement.
About Uranium Resources (URI)
URI is focused on developing energy-related metals. The Company has developed a dominant land position in two prospective lithium brine basins in Nevada and Utah in preparation for exploration and potential development of any resources that may be discovered there. URI remains focused on advancing the Temrezli in-situ recovery (ISR) uranium project in Central Turkey when uranium prices permit economic development of this project. URI controls extensive exploration properties in Turkey under nine exploration and operating licenses covering approximately 32,000 acres (over 13,000 ha) with numerous exploration targets, including the potential satellite Sefaatli Project, which is 30 miles (48 km) southwest of the Temrezli Project. In Texas, the Company has two licensed and currently idled processing facilities and approximately 11,000 acres (4,400 ha) of prospective ISR uranium projects. In New Mexico, the Company controls mineral rights encompassing approximately 190,000 acres (76,900 ha) in the prolific Grants Mineral Belt, which is one of the largest concentrations of sandstone-hosted uranium deposits in the world. Incorporated in 1977, URI also owns an extensive uranium information database of historic drill hole logs, assay certificates, maps and technical reports for the Western United States.
Cautionary Statement
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks, uncertainties and assumptions and are identified by words such as "expects," "estimates," "projects," "anticipates," "believes," "could," and other similar words. All statements addressing events or developments that the Company expects or anticipates will occur in the future, including but not limited to statements relating to the execution of definitive documents relating to the amendment to the Agreement, the closing of the transaction with Laramide, including the timing of the closing, and developments at the Company’s projects, including future exploration costs and results, are forward-looking statements. Because they are forward-looking, they should be evaluated in light of important risk factors and uncertainties. These risk factors and uncertainties include, but are not limited to, (a) the Company's ability to raise additional capital in the future; (b) spot price and long-term contract price of uranium and lithium; (c) risks associated with our foreign operations, (d) operating conditions at the Company's projects; (e) government and tribal regulation of the uranium industry, the lithium industry, and the power industry; (f) world-wide uranium and lithium supply and demand, including the supply and demand for lithium based batteries; (g) maintaining sufficient financial assurance in the form of sufficiently collateralized surety instruments; (h) unanticipated geological, processing, regulatory and legal or other problems the Company may encounter in the jurisdictions where the Company operates, including in Texas, New Mexico, Utah, Nevada and Turkey; (i) the ability of the Company to enter into and successfully close acquisitions or other material transactions, including closing the proposed transaction with Laramide; (j) the results of the Company’s lithium brine exploration activities at the Columbus Basin and Sal Rica Projects, and (k) other factors which are more fully described in the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should any of the Company's underlying assumptions prove incorrect, actual results may vary materially from those currently anticipated. In addition, undue reliance should not be placed on the Company's forward-looking statements. Except as required by law, the Company disclaims any obligation to update or publicly announce any revisions to any of the forward-looking statements contained in this news release.