U3O8 Corp. Spins Out Its Carina Property in Argentina Into a Frac Sand Focused Company to Maximize Opportunity
29 Mai 2014 - 12:45PM
Marketwired
U3O8 Corp. Spins Out Its Carina Property in Argentina Into a Frac
Sand Focused Company to Maximize Opportunity
Potential for near-term cash flow while creating platform to
capitalize on Argentina's shale oil & gas boom
TORONTO, ONTARIO--(Marketwired - May 29, 2014) - U3O8 Corp.
(TSX:UWE)(OTCQX:UWEFF), a Canadian-based company focused on
exploration and development of uranium resources and associated
commodities in South America, has vended its 100% interest in the
Carina property in Chubut Province, Argentina (Figure 1) to South
American Rare Earth Corp. ("SAREC"), a private investee company of
U3O8 Corp. As consideration for Carina, U3O8 Corp. increases its
ownership in SAREC from 13% to 39% as well as retaining a 7.5% net
smelter royalty ("NSR") on frac sand production from the property.
The Carina concession is prospective for frac sand for potential
use in the extraction of oil and gas from shale.
"The spin out of Carina provides an opportunity to maximize
value from this property by placing it in a company that is focused
on frac sand, rather than holding it as a non-core asset in U3O8
Corp.," said Dr. Richard Spencer, U3O8 Corp's President and CEO.
"The frac sand potential at Carina is within trucking distance of
the Vaca Muerta basin, which is estimated to contain the world's
third largest shale oil and gas resource and represents a large,
emerging market for domestic frac sand supply in Argentina.
Currently, most of the country's frac sand is imported from Brazil,
China and the USA. A joint venture with a local operator on the
Carina property is advancing towards production at no cost to us,
and could generate modest cash flow in the near-term. U3O8 Corp's
immediate priority remains on the completion of the preliminary
economic assessment ("PEA") on the Laguna Salada uranium deposit,
which has taken longer than anticipated due to additional test work
having been required on one component of the uranium-vanadium
extraction process. We expect to announce results of the PEA
imminently."
SAREC acquired the Carina property interest from U3O8 Corp. on
the following terms:
- On the joint venture area of Carina, SAREC receives a 7.5%
gross royalty from the operator;
- U3O8 Corp. receives a 7.5% NSR on any frac sand production from
the whole of the Carina property including the joint venture
block;
- Issuance of 19 million shares of SAREC, increasing U3O8 Corp's
ownership to 39% of SAREC; and
- U3O8 Corp. maintains a right to explore for uranium and
vanadium on the Carina property and a right of first refusal on any
uranium-vanadium mineralization otherwise encountered on the
property.
The transaction is subject to final approval by the Toronto
Stock Exchange.
To view Figure 1 please click on the following link:
http://media3.marketwire.com/docs/0529UWE.pdf
About U3O8
Corp.
U3O8 Corp. is focused on exploration and development of uranium
resources and associated commodities in South America. The
company's uranium resources comprise three deposits defined in
accordance with National Instrument 43-101 located in Colombia,
Argentina and Guyana:
- Berlin Deposit, Colombia - a PEA shows that Berlin could be a
zero cash cost uranium producer thanks to revenue from by-products
of phosphate, vanadium, nickel, rare earths (yttrium and neodymium)
and other metals occurring in the same deposit;
- Laguna Salada Deposit, Argentina - a near surface, free-digging
uranium, vanadium deposit that is potentially amenable to low-cost
mining and processing methods; and
- Kurupung Deposit, Guyana - an initial uranium deposit in a
large emerging uranium district.
Additional information on U3O8 Corp., its mineral resources and
technical reports are available at www.u3o8corp.com. Follow U3O8
Corp. on Facebook: www.facebook.com/u3o8corp, Twitter:
www.twitter.com/u3o8corp and Youtube: www.youtube.com/u3o8corp.
Sources: www.vacamuertashale.com, Professional Logistics
Group.
Forward-Looking Statements
Certain information in this release are forward-looking
statements with respect to the proposed joint venture and
development plans, economic potential and growth targets of U3O8
Corp's current projects. Forward-looking statements consist of
statements that are not purely historical, including statements
regarding beliefs, plans, expectations or intensions for the
future, and include, but not limited to, statements with respect
to: (a) the low-cost, near-term production goal of Laguna Salada,
(b) the Laguna Salada and Berlin PEAs, (c) beneficiation test work
on Laguna Salada, (d) the Carina property, including potential for
near-term production and cash flow, (e) the market opportunities
for uranium and frac sands from Argentina, and (f) the potential of
the Kurupung district in Guyana. Basis for such assumptions include
that: (i) actual results of our exploration, resource goals,
metallurgical testing, economic studies and development activities
will continue to be positive and proceed as planned, (ii) requisite
regulatory and governmental approvals will be received on a timely
basis on terms acceptable to U3O8 Corp., and (iii) economic,
political and industry market conditions will be favourable.
However, such statements are subject to risks and uncertainties
that may cause actual results, performance or developments to
differ materially from those contained in the statements,
including, but not limited to: (1) timing and outcome of the PEA or
that a mine will be achieved on the Laguna Salada Project in
compliance with current Chubut mining law, (2) the Carina property
will not be developed as anticipated and frac sand potential not
realized; (3) risks that a mine will not be achieved on the Berlin
Deposit and other exploration projects, (4) that beneficiation test
work will continue to be favourable and results from small scale
metallurgical testing can be duplicated on a larger scale, (5) the
inherent uncertainties and speculative nature associated with
exploration results, resource estimates, potential resource growth,
future metallurgical test results, changes in project parameters as
plans evolve, (6) volatility of commodity prices, (7) dependence on
regulatory approvals and changes in legislation, environmental
compliance, community support and the political and economic
climate, (8) availability of future financing, and (9) exploration
risk and other factors beyond the control of U3O8 Corp. including
those factors set out in the "Risk Factors" in our Annual
Information Form available on SEDAR at www.sedar.com. Readers are
cautioned that the assumptions used in the preparation of such
information, although considered reasonable at the time of
preparation, may prove to be imprecise and, as such, undue reliance
should not be placed on forward-looking statements. U3O8 Corp.
assumes no obligation to update such information, except as may be
required by law.
U3O8 Corp.Richard SpencerPresident & CEO(416)
868-1491richard@u3o8corp.comU3O8 Corp.Nancy Chan-PalmateerVice
President, Investor Relations(416) 868-1491nancy@u3o8corp.com
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