This Letter of Intent involves
Title: CENTENNIAL, Colo., November 9, 2015 ? Uranium Resources, Inc. (NASDAQ:URRE; ASX: URI) announced today that it has entered into a Binding Letter of Intent (LOI) for the sale of its Churchrock and Crownpoint properties in New Mexico to Laramide Resources Limited (TSX: LAM; ASX: LAM)
Industry: Metal Mining Sector: Basic Materials
Uranium Resources to Raise $12.5 Million from Non-Core Asset Sales
CENTENNIAL, Colo., November 9, 2015 – Uranium Resources, Inc. (NASDAQ:URRE; ASX: URI) announced today that it has entered into a Binding Letter of Intent (LOI) for the sale of its Churchrock and Crownpoint properties in New Mexico to Laramide Resources Limited (TSX: LAM; ASX: LAM).
Under the LOI, Uranium Resources (URI) and its subsidiaries have agreed, subject to the execution of definitive documentation, to transfer ownership of URI’s Churchrock and Crownpoint properties to Laramide Resources or its subsidiaries (LAM). URI will receive the following consideration from LAM at closing:
$5.25 million in cash;
$7.25 million promissory note, secured by a deed of trust or mortgage over the properties. The Note has a 3-year term and carries an initial interest rate of 5% which then increases to 10% when Laramide makes a commercial production decision on Churchrock. Principal payments of $2.42 million are due and payable on the anniversary of the closing of the proposed transaction in each of 2017, 2018 and 2019. Interest will be payable on a quarterly basis; provided, however, that no interest will be payable prior to the first principal payment in 2017; and
Assumption of any liabilities for remediation on the subject lands by Laramide.
This sale of the Churchrock and Crownpoint properties continues URI’s proactive M&A strategy, with the sale representing URI’s second asset monetization transaction in 2015. While maintaining a very significant inventory of non-reserve mineralized material which provides the foundation for its future production growth, URI is focused on improving its portfolio alignment with its production experience and expertise in In-Situ Recovery of uranium, targeting operations that fit into the lowest quartile of operating costs.
The proceeds from this sale to Laramide will significantly strengthen the financial position of URI, and assist in funding development of the high-grade, low-cost Temrezli ISR Project in Central Turkey. URI is progressing towards production at the project, subject to receipt of all project permits and completion of development financing.
The significant steps URI has taken in 2015 to realign is project portfolio towards lowest quartile cost assets, including this most recent sale to Laramide, have put the company on a clear path for the future, which coincides favorably with the widely forecast positive outlook for uranium.
Definitive documentation on the terms above is expected to be executed by the end of 2015, with closing anticipated by late Q1 2016, subject to customary conditions, including applicable stock exchange approvals, regulatory approvals for the transfer of the projects to Laramide, and Laramide raising the capital required to close the transaction.
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. With the significant royalties that Laramide already own over the Churchrock Project, this transaction makes a great deal of sense for both companies, and importantly for URI, raises new capital to apply to the progression of the Temrezli Project in a non-dilutive manner.
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“We have a clear focus in moving towards near-term, low-cost uranium production using ISR production methods and this transaction will significantly strengthen our financial position as we accelerate down this path. We are very excited about our just completed merger with Anatolia Energy Ltd. and work is already underway for the relocation of our Rosita processing plant from Texas to Turkey, which will provide significant costs capital costs savings in the development of this world-class ISR project .”
URI and Laramide are working together towards a timely execution of definitive documentation and all approvals required in respect of the transaction, including the transfer of URI’s NRC licence as it pertains to the sale properties. It