VANCOUVER — Uranium One has signed a definitive purchase agreement to acquire a 50% interest in the Karatau uranium mine in Kazakhstan from JSC Atomredmetzoloto (ARMZ), the Russian state-owned mining company. Following the acquisition, Uranium One says its 2010 production will jump by 35% to 7.5 million lb, and its weighted average cash operating costs will drop to less than $US20 per pound sold.
Uranium One will pay for its share of Karatau mine by issuing 117 million common shares and making a cash payment (or promissory note) of US$90 million. It may also pay up to an additional US$60 million between 2010 and 2012 subject to certain post-closing tax related adjustments. ARMZ will hold an indirect 16.6% interest in Uranium One when the deal closes.
Uranium One and ARMZ also signed an off take agreement giving ARMZ an option to purchase annually the greater of 50% of uranium production from Karatau or 20% of Uranium One's total production. ARMZ is also facilitating Uranium One's introduction to Russian uranium conversion and enrichment facilities.
The owner of the other 50% of the Karatau mine is Kazatomprom, the Kazakhstan state-owned mining company.
Test mining at Karatau began in December 2006. This year output is expected to be 3.6 million lb U3O8, and could be ramped up to 5.2 million lb/year. The 43-101-compliant indicated resource is 9.86 million tonnes grading 0.115% U plus an inferred resource of 880,000 tonnes grading 0.088% U.
Uranium One's office in Kazakhstan is located at 180 Dostyk Ave, Suite 100, Almaty 050051; the phone number is 7-7272-980-095. Or visit the company's website at www.Uranium1.com.