Western Uranium has closed the acquisition from HB Syndicate of 7 cateos covering approximately 14,000 hectares located in the La Rioja province of Argentina that demonstrate potential for hosting uranium mineralization.
In addition, the agreement extends to any other uranium properties identified by the HB Syndicate within Argentina over the next two years that, with the company’s agreement, merit acquisition.
In consideration for the acquisition, the company has paid to the members of the HB Syndicate an aggregate of $100,000, an aggregate of 500,000 units of the company (a unit considering of one common share and one-half warrant, each warrant entitling the holder to acquire one additional share of the company at a price of $1 per share for a period of two years from the closing) and a 2% NSR, which with respect to the property the company will have the option to purchase any or all of the NSR at a price of $1m per percentage interest.
The certificates representing the shares and warrants will be subject to a four month hold expiring on June 6, 2010. Until the transfers of the cateos to the company are completed by the Argentina mining authority, the consideration will be held in escrow.
HB syndicate has identified a number of areas in Argentina, which are geologically similar to the producing basins in the western US that have been mined and have produced hundreds of millions of pounds of uranium. These areas have not been subjected to the intense level of exploration or mining by the private sector as in the US.
In addition to the geologic favorability of the area, the provincial government of La Rioja rescinded negative mining regulations and the infrastructure and access are good compared to other prospective areas in Argentina.
Western Uranium said that this represents a sound business opportunity to continue uranium exploration with a minimal outlay of expenditures, which will position the company well when the uranium sector revives. The company intends to engage certain members of the HB Syndicate to carry out exploration on the cateos.