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DEVEX RESOURCES LIMITED M&A Activity 2007
64768_rns_2007-06-19_f1e13114-1e47-4d93-bb92-e87bce9ff15d.pdf
M&A Activity
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Uranium Equities acquires stake in developing technology to extract
uranium from phosphoric acid
20 June 2007
| ERTHAL HENRICH AND | uranium from phosphoric acid. below US\$20 per pound. |
Agreement reached to secure up to 90% in Urtek LLC, a company actively engaged in the development of new technologies to extract Urtek is a private Denver-based company, which began testwork in the 1990's under the direction of significant shareholder and principal, Tom Pool, who is also Chairman of International Nuclear Inc, internationally respected consultants to the uranium industry. Worldwide, phosphate deposits are known to contain, commercially extractable, levels of $U_3O_8$ . Historically, production of up to 4.5 million pounds per annum has been derived from phosphoric acid. Uranium production as a by product from phosphates substantially ceased globally in the late 1990's as the price of uranium declined |
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| Capital Structure | Uranium Equities Limited (ABN 74 009 799 553) |
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| Listed Capital 189.4M - ordinary shares |
Adelaide Office: | Perth Office: |
| Unlisted Capital performance shares EXE 13.63 roptions |
Level 6 West 50 Grenfell Street Adelaide South Australia 5000 +618 8110 0700 ħ. f: +618 8110 0777 w: www.uel.com.au [email protected] e: Mark Chalmers, Managing Director Contact: |
Level 2 1292 Hay Street West Perth Western Australia 6005 t: $+61893223990$ $f: +61893225800$ 0417861482 |
MEDIA RELEASE
(20 June 2007)
Uranium Equities Limited ('UEQ') has secured the right to increase its strategic stake in Urtek LLC (Urtek) from 16.7% to 90% on the terms set out below.
Urtek is a private Denver-based company, actively engaged in the development of new technology to extract uranium from certain phosphate ores. A significant shareholder and principal of Urtek is Tom Pool, Chairman of USA based, consulting group, International Nuclear Inc, internationally respected experts in the uranium industry.
Urtek began testwork in the 1990's, and is currently conducting tests on uraniumbearing phosphoric acid streams from commercial phosphate operations. This work is being performed, under the direction of Tom Pool, through agreements with the Australian Nuclear Science & Technology Organization (ANSTO) and OED Occtech Services Pty Ltd (QED). ANSTO and QED are internationally recognized in the fields of uranium processing and chemical / physical separation technologies respectively.
Historically, significant uranium production has been derived from phosphoric acid with global production peaking at more than 4.5 million lbs $U_3O_8$ per annum in the period between 1978 and 1983. Production from these by-product sources substantially ceased globally in the late 1990's as the price of uranium declined below US\$20 per pound and the prevailing extraction technologies, with their high capital and operating costs, failed to compete with more conventional sources of uranium.
The recent increase in uranium price and the application of new technologies has the potential to rejuvenate and build this sector of the uranium industry.
The terms of agreement between UEO and the shareholders of Urtek enable UEO to move to a 90% shareholding in Urtek on the following basis:
- $\mathbf{1}$ . UEQ funding laboratory scale proof of concept.
- $\overline{2}$ . Upon Urtek securing the right, with a commercial producer of phosphoric acid, to evaluate the viability of any new technology developed by Urtek to recover uranium from phosphoric acid and if successful proceed to a commercial development (a "Development Agreement"), UEQ shall:
- 2.1 Issue 1 million fully paid shares and 1 million options to the non UEQ shareholders of Urtek. The options shall be excerciseable at a price equal to the 30 day VWAP of UEQ preceding the securing of a Development Agreement. Upon issue of the shares and options, UEQ shall move to a 30% interest in Urtek.
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2.2 Fund as sole contributor to expenditure operating or capital costs incurred by Urtek in evaluating the technology, pilot, plant test work or establishing commercial production up to US\$15million (subject to its right to cease as sole contributor after laboratory scale proof of concept).
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2.2.1 Upon expenditure of US\$5 million, UEQ shall move to a 50% interest in Urtek.
- Upon expenditure of US\$10 million, UEO shall move to $2.2.2$ a 60% interest in Urtek
- Upon expenditure of US\$15 million, UEQ shall move to $2.2.3$ a 90% interest in Urtek.
Mark Chalmers, UEQ's Managing Director, said: "UEQ is delighted to be in the position to participate in the development of improved uranium extraction technologies from phosphoric acid streams. It is well documented that the solvent extraction technology used in the past had high capital and operating cost structures, and posed difficulties from an operational perspective. UEQ, through its in-house metallurgical and chemical engineering expertise and its involvement with Urtek, will apply new approaches to the extraction process which hold the potential to resolve these issues and improve cost structures."
"Urtek, with it's highly experienced uranium principals, has done an excellent job in securing the world-class expertise of both OED and ANSTO to assist and drive the development of new and improved technology to a successful outcome. This is exactly the type of 'arrangement' that UEQ strives to conclude; putting together the experience, technology and potentially quality sources of uranium that can eventually lead to new uranium production" Mark Chalmers said.
Further enguires can be directed to:
Mark S. Chalmers, Managing Director, Uranium Equities Limited Mobile: 0417 861 482