(Kitco News) - Uranium Energy Corp (NYSE: UEC) announced today that it has entered into a definitive agreement with a subsidiary of Rio Tinto pursuant to which UEC will acquire 100% of Rio Tinto’s wholly-owned Roughrider uranium development project located in the Athabasca Basin in Saskatchewan, Canada.
The company said that under the terms of the transaction, upon close, Rio Tinto will receive $80 million in cash and 17,805,815 UEC common shares, valued at $70 million based on the 5-day VWAP of $3.93 per share as of October 7, 2022.
The Roughrider project is a development stage, conventional uranium project located in the eastern Athabasca Basin of northern Saskatchewan, Canada; one of the world’s premier uranium mining jurisdictions.
The project is located approximately 13 km west of Orano’s McClean Lake Mill, in close proximity to UEC’s existing Athabasca Basin properties, and covers an area of 597 hectares. The Roughrider West Zone was discovered by Hathor Exploration during the winter drilling program in February 2008.
According to the company’s statement, the Roughrider project has a non-current, historic resource of 58 million lbs at an average grade of 4.73% U3O8. UEC said that the historic resource statement did not include the Far East Zone of the deposit, which may represent additional geological upside.
“Roughrider will be a 100% owned cornerstone asset that when combined with recently acquired UEX Corporation projects in the eastern Athabasca, positions UEC with a critical mass of resources to enhance future production plans. Recently acquired and nearby UEC projects to Roughrider include Raven-Horseshoe, Hidden Bay and Christie Lake,” UEC noted in its press-release.
Importantly, the company added that since acquiring Roughrider in 2012, Rio Tinto advanced substantial pre-production and environmental baseline work including completion of dedicated geotechnical drilling, shaft vs. decline modelling, establishment of hydrogeological monitor wells, terrestrial and aquatic environmental assessments, heritage assessments, species at risk, and conceptual reclamation plan.
“This provides a strong foundation and substantial value for completion of upcoming technical reports, efficiently moving the project forward to a production decision,” UEC pointed out.
The company said its next steps for Roughrider will be to first complete an updated S-K 1300 technical report summary based on over 650 diamond drillholes already completed for a total of approximately 225,000 meters of drilling on the project. Second, UEC intends to progress permitting and a production study of Roughrider and optimize its integration with UEC’s existing Canadian platform.
