07:03:03 EDT Thu 28 Mar 2024
Enter Symbol
or Name
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Consolidated Uranium Inc
Symbol CUR
Shares Issued 99,433,870
Close 2023-05-24 C$ 1.20
Market Cap C$ 119,320,644
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Consolidated Uranium to spin out Premier American

2023-05-24 18:03 ET - News Release

Mr. Philip Williams reports

CONSOLIDATED URANIUM ANNOUNCES PROPOSED SPIN-OUT OF PREMIER AMERICAN URANIUM INC., CREATING A NEW PURE-PLAY U.S. URANIUM COMPANY

Consolidated Uranium Inc. is planning the creation and spinout of Premier American Uranium Inc. (PUR), currently a majority-controlled subsidiary of Consolidated Uranium focused on the acquisition, exploration and development of uranium projects in Wyoming and Colorado.

On May 24, 2023, the company entered into an arrangement agreement with PUR, pursuant to which, among other things, the company has agreed to transfer ownership of certain indirect wholly owned subsidiaries which hold eight U.S. Department of Energy (DOE) leases and certain patented claims located in Colorado to PUR in exchange for 7,753,752 Class A common shares of PUR, a portion of which will be distributed to the company's shareholders on a pro rata basis. PUR intends to apply to list the PUR shares on the TSX Venture Exchange. The TSX-V listing will be subject to PUR fulfilling all of the requirements of the TSX-V.

In addition, Consolidated Uranium and PUR have entered into a purchase agreement with, among others, Premier Uranium Inc., a privately held U.S. uranium-focused project acquisition vehicle, which owns a 100-per-cent interest in the Cyclone project in the Great Divide basin of Wyoming and various mining claims in the Uravan mineral belt of Colorado, pursuant to which PUR has agreed to acquire all of the outstanding shares of Premier.

Separately, PUR has also staked 368 unpatented mining claims, covering approximately 6,940 acres in key areas of the Uravan mineral belt.

Transaction highlights:

  • Stable, long-term shareholder base ahead of public market listing -- backed by Sachem Cove Partners, Consolidated Uranium and additional institutional investor support, PUR is working toward a public listing on the TSX-V.
  • Extensive landholdings in two prominent uranium-producing regions in the United States: PUR plans to explore and develop its large land position in the Great Divide base of Wyoming and the Uravan mineral belt of Colorado.
  • Rich history of past production and historic uranium mineral resources with strong discovery potential:
    • The Cyclone project, in Wyoming, is an in situ recovery (ISR) project composed of approximately 25,500 acres with past work supporting an exploration target with a range of 6.5 million short tons averaging 0.06 per cent U3O8 (7.9 million pounds U3O8) to 10.5 million short tons averaging 0.06 per cent U3O8 (12.6 million lb U3O8) (1). See below for additional details.
    • The Colorado projects include multiple past-producing mines with historic uranium mineral resources and exploration potential.
  • Well-timed opportunity with strong market fundamentals and need for U.S. domestic supply -- uranium fundamentals are the strongest in a decade with a large supply deficit as forecasted by industry and financial analysts. Security of supply following the Russian invasion of Ukraine is driving long-term contracting, a key feature leading up to the previous uranium price rally in 2005 to 2007. PUR presents an attractive opportunity to participate in the anticipated resurgence and advancement of the U.S. uranium industry.
  • Unparalleled experience in the U.S. uranium sector across the team, led by disciplined capital allocators -- PUR will be led by Tim Rotolo, co-founder of Sachem Cove Partners and founder of Lloyd Harbor Capital Management LLC, an SEC (Securities and Exchange Commission) registered investment adviser. Together, the PUR board of directors, management and technical team will have deep technical, operational and permitting expertise in the United States with a record of financing and advancing uranium companies and significant institutional investment experience in the uranium sector.
  • Initiating work programs to advance portfolio in 2023:
    • Cyclone project exploration -- airborne radiometric survey completed in fourth quarter 2022 in preparation for exploration and permitting activities planned for the rest of 2023 and subsequent drilling expected in 2024;
    • Uravan mineral belt exploration:
      • Monogram Mesa -- full data review for on-trend exploration targets with subsequent drilling;
      • Atkinson Mesa -- historical data review in preparation for planned drilling program to delineate the extent of mineralization in the central and northern parts of the properties.
    • Additionally, PUR intends to look to further increase its land position both in Wyoming and the Uravan mineral belt of Colorado.

(1) The potential quantity and grade of this exploration target are conceptual in nature and based on the geologic interpretation that mineralization is sandstone-type mineralization, aerial radiometric anomalies and indications of the presence of oxidation reduction interfaces with mineralization from available drill data. There has been insufficient exploration to define a mineral resource, and it is uncertain if a mineral resource will be delineated.

Philip Williams, chairman and chief executive officer of Consolidated Uranium, commented: "We are very excited to announce the spinoff of PUR, in partnership with Sachem Cove. At CUR, our focus in the U.S. has been squarely on readying our past-producing Tony M, Daneros and Rim mines in Utah for production once market conditions warrant. This inherently meant our Colorado DOE leases, with a history of production and strong exploration potential, have received little attention. At the same time, in Premier, Tim and Sachem Cove have assembled a portfolio of projects in Colorado, which complement ours, as well as a compelling land package in the Great Divide basin in Wyoming with large-scale ISR potential. CUR's strategy has been to realize value in our portfolio, either directly by advancing projects to production or through spinouts/divestitures where a compelling strategic rationale could be identified, similar to our Labrador Uranium transaction last year. In PUR, we are convinced that this is a case where one plus one could equal much more than two, and we believe CUR shareholders will be the ultimate beneficiaries when we complete the planned TSX-V listing and direct distribution of PUR shares in the coming months."

Tim Rotolo, chief executive officer of Premier and planned chief executive officer of PUR, commented: "The U.S. was once the global leader in uranium production at over 40 million pounds per year, enough uranium to supply nearly its entire nuclear fleet -- the largest in the world and provider of 20 per cent of U.S. electricity. Today, the U.S. produces almost none of its own domestically consumed uranium as U.S. utilities have turned to buying nearly half of their uranium needs from former Soviet states Russia, Kazakhstan and Uzbekistan. We believe we are on the precipice of a resurgence in domestic production. For the first time in decades, a large supply deficit, which may push uranium prices higher, has converged with a global nuclear renaissance and new-found bipartisan political support to safeguard our domestic nuclear fleet from geopolitical risk of a former Soviet-bloc-dominated nuclear fuel cycle. In respect of this, we started Premier to capitalize on the U.S. uranium resurgence, accumulating projects and waiting for the right time to bring them to market. That time is now, and our partnership with CUR whose projects are complementary sets up an exciting and well-timed launch for PUR."

The arrangement agreement

Pursuant to the arrangement agreement, among other things, Consolidated Uranium has agreed to transfer certain indirect wholly owned subsidiaries which hold the Consolidated Uranium assets to PUR in exchange for 7,753,752 PUR shares. Under the terms of the arrangement, Consolidated Uranium intends to distribute 50 per cent of the PUR shares it receives to its shareholders on a pro rata basis based on the number of Consolidated Uranium shares held at the effective date of the arrangement. There will be no change in Consolidated Uranium shareholders' proportionate ownership in Consolidated Uranium as a result of the arrangement. In addition, holders of options and warrants of Consolidated Uranium as of the effective date of the arrangement will have such securities adjusted in accordance with their terms as a result of the arrangement.

The arrangement will be effected by way of a court-approved plan of arrangement under the Business Corporations Act (Ontario). The arrangement will be subject to regulatory approval, including the approval of the TSX-V for the arrangement and the TSX-V listing, and court approval, as well as approval by not fewer than two-thirds of the votes cast at the annual general and special meeting of the Consolidated Uranium shareholders, anticipated to be held in the third quarter of 2023. Full details of the arrangement will be included in the management information circular to be sent to Consolidated Uranium shareholders in connection with the meeting.

It is anticipated that the arrangement and the TSX-V listing will be completed in the third quarter of 2023.

The Premier agreement

On May 24, 2023, the company and Premier entered into the Premier agreement with PUR, among others, pursuant to which PUR has agreed to acquire all the outstanding shares of Premier in exchange for 12,000 Class B common shares of PUR. Each compressed share carries the right to 1,000 votes per share and is convertible into 1,000 PUR shares, with each PUR share carrying the right to one vote per share. Completion of the Premier transaction is subject to certain closing conditions, including, among other things, completion of the arrangement and the conditional approval of the TSX-V for the TSX-V listing.

About Premier American Uranium Inc.

Proposed management and board of directors:

  • Tim Rotolo, chief executive officer:
    • 15-plus years as an investment professional with background in fund management;
    • Co-founder of Sachem Cove Partners and founder of Lloyd Harbor Capital Management, an SEC registered investment adviser;
    • Founder of North Shore Indices Inc., which launched URNM, a uranium mining exchange-traded fund, in 2019 and raised over $1-billion before selling to New York Stock Exchange-listed Sprott Asset Management;
  • Greg Duras, chief financial officer:
    • 25-plus years in the resource sector in corporate development, financial management and cost control;
  • Marty Tunney, chairman:
    • Mining engineer with significant technical and capital market experience;
    • Current president and chief operating officer of Consolidated Uranium;
  • Michael Harrison, director:
    • 25-plus years of executive, financial and technical experience in the mining industry;
    • Current managing partner at Sprott Inc.;
  • Daniel Nauth, director:
    • Lawyer with a specialty in U.S.-Canada cross-border capital markets, mergers and acquisitions, and corporate and securities transactions and regulatory compliance.

Technical advisers:

  • Ted Wilton:
    • 50-plus years as a senior geologist in the mining industry, including 25-plus in the uranium sector;
    • Involved in discovering eight deposits containing more than 10 million ounces gold in the U.S. and Australia;
  • Mike Neumann:
    • 40-plus years in environmental and regulatory affairs, specialized in uranium mine permitting in the U.S. and Kazakhstan;
    • Gained regulatory approval for expansion of Daneros and compliance for Tony M and Rim mines in Utah;
  • Tyler Johnson:
    • 14-plus years formerly with Denison and Energy Fuels Inc.;
    • Geologist specializing in exploration, mine development and resource estimation on uranium and vanadium projects.

The projects

Wyoming -- Great Divide basin

Wyoming is one of the leading jurisdictions for U.S. uranium production and produced approximately 230 million lb of U3O8 since the first discovery in the 1950s (1). The state ranked 11th of 84 jurisdictions in the Public Policy Perception Index of the Fraser Institute Annual Survey of Mining Companies 2021 (2).

The Great Divide basin is also one of the least exploited of the Wyoming basins known to contain significant deposits of uranium, including the Crooks Gap mining district, the Sweetwater deposit and the Lost Creek ISR mine. Nearby property owners include Uranium Energy Corp. and UR-Energy Inc (1).

(1) Source: Wyoming state geological survey; critical minerals in Wyoming.

(2) Source: the Fraser Institute website.

Cyclone project

The Cyclone project is located approximately 45 miles northwest of Rawlins, Wyo., and 15 miles from the Sweetwater uranium mill. The project covers 25,500 acres comprising: 1,061 claims totalling 21,220 acres and seven state leases covering 4,280 acres.

The uranium deposits in the basin are hosted in flat-lying sandstones of the Battle Spring formation, with a widespread alteration of host sandstones and numerous roll-front uranium deposits associated with altered rocks. Exploration potential remains high on the project with drilling required to follow up on historic work and delineate mineralized zones.

Previous exploration on the project includes approximately 80 holes drilled during 2007 and 2008, with mineralization showing typical grades and thicknesses to uranium deposits found elsewhere in the Great Divide basin. Intersections from exploration on the Rim target include hole UT-8, which intersected 8.0 feet averaging 0.092 per cent U308 equivalent (0.02-per-cent cut-off) or 5.5 ft of 0.121 per cent eU308 at 200 feet from the surface, and hole UT-44, which intersected 7.5 ft averaging 0.081 per cent eU3O8 (0.02-per-cent cut-off grade) or 5.5 ft averaging 0.104 per cent eU308 at a 0.05-per-cent cut-off grade.

Sufficient historical exploration data are available for the North and East claim blocks to define an exploration target, which shows a range of 6.5 million short tons averaging 0.06 per cent U3O8 (7.9 million lb U3O8) to 10.5 million short tons averaging 0.06 per cent U3O8 (12.6 million lb U3O8). The potential quantity and grade of this exploration target are conceptual in nature and based on the geologic interpretation that mineralization is roll-front sandstone-type mineralization, and that mineralization is present as indicated by airborne radiometric anomalies, indications of the presence of oxidation reduction interfaces with associated uranium mineralization as depicted in available historic drill data. There has been insufficient exploration to define a mineral resource, and it is uncertain if a mineral resource will be delineated. For the definition of the exploration target, the following criteria based on direct knowledge and experience in the area and similar sandstone-hosted uranium deposits in the Great Divide basin and other areas of Wyoming were used: (i) a minimum cut-off grade of 0.02 per cent U3O8 and a grade thickness product (GT) of 0.10; (ii) a radiometric disequilibrium factor of one; and (iii) a bulk density of 16 cubic feet per ton.

A detailed review of the historical drill data is planned with permitting under way in preparation for drilling in 2024.

Colorado -- Uravan mineral belt

The Uravan mineral belt of Colorado has a rich history of uranium exploration and production, and produced nearly 80 million lb of U3O8 and more than 400 million lb of V2O5 since 1945 (3). Colorado ranked fifth of 62 jurisdictions in the Investment Attractiveness Index of the Fraser Institute annual survey of mining companies 2022 (4). PUR's projects in Colorado are in the heart of the Uravan mineral belt in proximity to significant infrastructure. Mineralization is hosted in the Salt Wash member of the Morrison formation.

(3) Source: William L. Chenoweth, 1981, "The Uranium-Vanadium Deposits of the Uravan Mineral Belt and Adjacent Areas, Colorado and Utah. In New Mexico Geological Society Guidebook 32, Western Slope, Colorado," and Craig S. Goodnight, William L. Chenoweth, Richard D. Davyault and Edward T. Cotter, 2005: "Geologic Road Log for Uravan Mineral Belt Field Trip, West-Central, Colorado," Rocky Mountain section of the Geologic Society of America.

(4) Source: the Fraser Institute website.

Monogram Mesa

The Monogram Mesa project covers approximately 7,431 acres and consists of 361 mining claims.

The property includes multiple historic mines on the northeast and the West (Bull Canyon) sides of Monogram Mesa. The historic mines are generally stable and dry, with numerous mineralized zones exposed. The property is strategically located within several miles of a paved highway with mine roads and power lines crossing the property. Historical drilling data indicate the presence of numerous exploration targets.

An exploration drilling program to confirm and potentially expand currently known mineralization is planned with the potential to acquire surrounding properties, further consolidating the area.

Atkinson Mesa project

The Atkinson Mesa project covers 5,863 acres, including 128 unpatented lode mining claims and four DOE leases. The project also includes approximately 2,702 acres and 18 patented (fee simple) mining claims spanning 360 acres. Several past-producing mines are present on the property, including the King Solomon mine, a large-scale underground mine that was one of the most significant uranium producers in the entire Uravan mineral belt (5). The property is situated within one of the most substantial uranium-vanadium production areas within the entire Uravan mineral belt (5).

(5) Source: Craig S. Goodnight, William L. Chenoweth, Rochard D. Davyault and Edward T. Cotter, 2005; Geologic Road Log for Uravan Mineral Belt Field Trip, West-Central Colorado; Rocky Mountain section of the Geological Society of America.

Outlaw Mesa and Slick Rock projects

The Outlaw Mesa and Slick Rock projects are located at the northern and southern ends of the Uravan mineral belt, respectively. Outlaw Mesa covers 5,759 acres with two DOE leases, and Slick Rock covers 1,226 acres with two DOE leases.

Both projects include historic production from multiple mines, including the Spud Patch mines in the Slick Rock area and the Calamity Mesa mines in the Outlaw mesa-Calamity Mesa area. All leases contain uranium and vanadium mineralization. In January, 2020, a new 10-year lease was signed with the DOE, providing long-term potential for the project.

Technical disclosure and qualified person

The scientific and technical information contained in this news release was reviewed and approved by Dean T. Wilton: PG, CPG, MAIG, a consultant of Consolidated Uranium who is a qualified person (as defined in National Instrument 43-101 (Standards of Disclosure for Mineral Projects).

The data disclosed in this news release are related to historical drilling results. Consolidated Uranium has not undertaken any independent investigation of the sampling, nor has it independently analyzed the results of the historical exploration work to verify the results. Consolidated Uranium considers these historical drill results relevant as the company is using these data as a guide to plan exploration programs. The company's current and future exploration work includes verification of the historical data through drilling.

About Premier American Uranium Inc.

Premier American, a subsidiary of Consolidated Uranium, is focused on the consolidation, exploration and development of uranium projects in the United States. One of PUR's key strengths lies in the agreements it has to acquire extensive landholdings in two prominent uranium-producing regions in the United States: the Great Divide basin of Wyoming and the Uravan mineral belt of Colorado. With a rich history of past production and historic uranium mineral resources, PUR is initiating work programs to advance its portfolio in 2023.

Backed by Sachem Cove Partners, Consolidated Uranium, additional institutional investors and an unparalleled team with U.S. uranium experience, PUR has an entry into the market that comes at a well-timed opportunity as uranium fundamentals are currently the strongest they have been in a decade.

PUR intends to apply to list its shares on the TSX-V, cementing its position as a leading U.S. uranium player.

About Consolidated Uranium Inc.

Consolidated Uranium (TSX-V: CUR) (OTCQX: CURUF) was created in early 2020 to capitalize on an anticipated uranium market resurgence using the proven model of diversified project consolidation. To date, Consolidated Uranium has acquired or has the right to acquire uranium projects in Australia, Canada, Argentina and the United States, each with significant past expenditures and attractive characteristics for development.

Consolidated Uranium completed a transformational strategic acquisition and alliance with Energy Fuels, a leading United States-based uranium mining company, and acquired a portfolio of permitted, past-producing conventional uranium and vanadium mines in Utah and Colorado. These mines are currently on standby, ready for rapid restart as market conditions permit, positioning Consolidated Uranium as a near-term uranium producer.

We seek Safe Harbor.

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