Uranium Royalty Corp. (NASDAQ: UROY) (TSX: URC) ("URC") is pleased to announce that it acquired an existing royalty on the Millennium and Cree Extension Uranium Projects in Saskatchewan, Canada (the "Projects") from a third-party industrial gas company for total cash consideration of $6 million.
Highlights:
- The acquired royalty is a net profit interest (NPI) of 10% on an approximate 20.6955% participating interest in the Projects. The royalty becomes payable after recovery of all qualifying preproduction expenditures incurred after the establishment of the royalty.
- The Millennium Project hosts an Indicated Mineral Resource of 75.9 million pounds U3O8 at an average grade of 2.39% U3O8 and an Inferred Resource of 29.0 Mlbs U3O8 at an average grade of 3.19% U3O8, which places it among the largest undeveloped uranium projects globally. (1)
- Cameco Corporation Inc. ("Cameco"), the operator of the Projects, submitted an Environmental Impact Statement ("EIS") application in 2009 for the project, anticipated to produce 150,000 to 200,000 tonnes of ore per year with a submitted potential mine life of 10 years.(2)
- The acquisition of the royalty on these two Projects provides URC exposure to approximately 12,800 hectares of ground in the highly prospective Athabasca Basin, with well-respected operators, and in one of the top mining jurisdictions in the world.
Scott Melbye, Chief Executive Officer of URC stated: "We are very excited to acquire this significant royalty on the Millennium and Cree Extension Projects. Cameco has previously completed substantial development work on the Millennium project and it remains one of the largest undeveloped projects in Cameco's portfolio. It represents an important potential contributor to the future global production pipeline. The transaction is another example of our ability to leverage the URC team's experience and networks to source and execute accretive uranium royalty transactions."
The Millennium Project
The Millennium Project is an advanced stage, conventional uranium project located 36 km northwest of Cameco's Key Lake Mill in Saskatchewan, Canada. The project is a joint venture between Cameco and Japan Canada Uranium ("JCU"). Cameco's equity share is stated at 69.9% and Cameco is the operator of the project. Cameco is one of the largest global providers of the uranium fuel needed to energize a clean-air world. JCU is a Canadian exploration company with a focus on Saskatchewan's Athabasca Basin, jointly owned by Uranium Energy Corp. and Denison Mines Corp. ("Denison").
Cameco has disclosed that the Millennium Project hosts estimated resources of 1.4 million tonnes at an average grade of 2.39% U3O8 for a total of 75.9 million pounds U3O8 in the indicated category and 0.4 million tons at an average grade of 3.19% U3O8 for a total of 29.0 Mlbs U3O8 in the inferred category. These estimates are on reported on a 100% basis.
Cameco has disclosed that it submitted a draft EIS submission for the project in 2009, which submission included anticipated production of 150,000 to 200,000 tonnes of ore per year with a submitted potential mine life of 10 years. Cameco chose to pull the EIS application on May 15, 2014, due to market conditions at the time.
The Cree Extension Project
The Cree Extension Project is an Exploration stage project located 36 km northwest of Cameco's Key Lake Mill. The project is a joint venture among Cameco, Orano Canada Inc., and JCU. The land is located west of Denison's Wheeler River project and southwest of Cameco's McArthur River project.
The Millennium and Cree Extension Royalty
The royalty is a 10% NPI on an approximate 20.6955% participating interest in the Projects, which participating interest was previously transferred to the existing owners in 1992. As a profit-based NPI interest, the acquired royalty is calculated based upon generated revenue, with deductions for certain expenses and costs, which include cumulative expense accounts, including development costs.