The acquisition will increase Uranium One’s state production from its Kazakhstan assets by approximately 60%, from 10 million pounds to around 16 million pounds. Total cash costs per pound sold are expected to remain less than $20 per pound on a consolidated basis.
Uranium One expects to realize management and operating synergies upon integration of these assets, especially at Akbastau, which is contiguous to the company’s Karatau uranium mine.
Pursuant to the transaction, ARMZ will contribute its interests in the Akbastau and Zarechnoye joint ventures and $610m in cash, in return for 356 million new common shares of Uranium One. Following closing, Uranium One will pay a special cash dividend of at least $1.06 per share to shareholders other than ARMZ.
Jean Nortier, CEO of Uranium One said: “The acquisition of 50% stakes in two additional, high quality and long life ISR mines strengthens Uranium One’s asset portfolio and positions the company to be among the world’s top 5 uranium producers by 2011, as our Kazakh assets ramp up to full capacity.”
In connection with the transaction, Uranium One and ARMZ have also agreed to amend the offtake agreement between the parties, to provide ARMZ with increased offtake rights commensurate with its increased equity ownership interest in Uranium One.
