Azarga Uranium has acquired all of the issued and outstanding shares of URZ Energy, a uranium exploration and development company.
Image: A Azarga Uranium's mine site. Photo: courtesy of Azarga Uranium Corp.
Azarga Uranium has acquired all of the issued and outstanding shares of URZ Energy for consideration of 2.0 Azarga Uranium shares for each URZ Energy share held (the “Exchange Ratio”) pursuant to a court approved plan of arrangement (the “Plan of Arrangement”). Effective immediately, the shares of URZ Energy are no longer trading. In addition to the merger, Azarga Uranium will be making application to the OTCQB for trading in the United States, which is expected within a few weeks.
Blake Steele, CEO, commented, “We would like to thank the shareholders of both Azarga Uranium and URZ Energy for their overwhelming support of this strategic transaction. This merger brings together two companies with a similar goal of developing US-focused in-situ recovery (“ISR”) uranium production at a time when domestic supply has emerged as a critical factor in the push for energy security. URZ Energy’s asset base and management expertise combined with ours will further bolster our growth pipeline and position us to continue to advance the development of the Dewey Burdock Project for the benefit of all shareholders and to create the preeminent ISR uranium development company in America.”
Glenn Catchpole, Chairman, added, “Our (now) collective shareholders, will have an opportunity to share in the success of building this company together. The transaction is timely, with the worldwide growth in nuclear reactor construction and confidence returning to the uranium sector. I look forward to working with the Azarga team.”
Sandra MacKay, Glenn Catchpole and Todd Hilditch will join Joseph Havlin, Delos Cy Jamison and Matthew O’Kane to make up the Azarga Uranium Board of Directors, with Glenn Catchpole acting as Chairman. Richard Clement and Dennis Higgs will continue as advisors to the Company.
Transaction Highlights:
Consolidation of uranium assets with a focus on the US: Combined Measured & Indicated (“M&I”) resources of 30.7 Mlbs U3O8, plus additional Inferred resources of 8.7 Mlbs U3O8, all located in the United States, including high grade M&I resources of 8.6 Mlbs U3O8 at an average grade of 0.25% U3O8 at the advanced permitting-stage Dewey Burdock Project.
Advanced-stage permitting at Dewey Burdock: The Dewey Burdock Project has already received several key permits and is in the process of obtaining final regulatory approvals required for project construction. A NI 43-101 preliminary economic assessment on ISR production at Dewey Burdock completed in 2015 estimated annual production of approximately 1 million lbs U3O8/year.
Pipeline of growth assets with continued exploration potential: The Gas Hills Project, which has been the subject of historical mining, has been recently reinterpreted by URZ Energy for its potential to be mined via ISR methods. An additional pipeline of assets located in Wyoming, including Juniper Ridge and Shirley Basin, provide further uranium optionality.
Amalgamation of sector-leading ISR development and production experience: Through its management, directors and advisors, the new company collectively possesses over 100 years of experience in the exploration, development, permitting, operation and post-mining groundwater restoration of ISR uranium mines.
Strategic platform for further consolidation: Strengthened platform through which to continue to evaluate and consolidate additional low-cost, domestic ISR uranium projects in the United States.
Enhanced market positioning: The combined entity has a more diversified shareholder base, along with a heightened market capitalization to broaden investor and analyst appeal.
Under the terms of the Plan of Arrangement, which is effective today, each former URZ Energy shareholder received 2.0 shares of Azarga Uranium for each URZ Energy share held. Former URZ Energy shareholders now hold approximately 37% (57,920,716) of the issued and outstanding common shares of Azarga Uranium (156,976,361). Former registered shareholders of URZ Energy will be required to submit their share certificates and letters of transmittal to Computershare Investor Services Inc. and follow the instructions in the Joint Information Circular dated 31 May 2018 in order to obtain Azarga Uranium share certificates pursuant to the Plan of Arrangement. In addition, the outstanding options and warrants of URZ Energy have been adjusted in accordance with their terms and the Exchange Ratio such that 4,480,000 outstanding options and 17,110,884 warrants of Azarga Uranium have been reserved for exercise. Effective immediately the shares of URZ Energy have been delisted on the TSX Venture and the OTCQB. Azarga Uranium is taking the steps necessary to list its shares for trading on the OTCQB.
Concurrently, Azarga Uranium issued 11,269,243 common shares to convert the US$1.8 million loan plus accrued interest owing to three Azarga Uranium shareholders and 550,000 common shares as bonus compensation, all as approved by the disinterested shareholders on 29 June 2018.
Finally, Azarga Uranium issued 1,454,393 common shares to settle a portion of the fees payable to financial advisors for this transaction.
Source: Company Press Release