Mega Uranium to Sell Lake Maitland Uranium Project to Toro Energy
Published : August 12, 2013
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TORONTO, ONTARIO--(Marketwired - Aug. 12, 2013) - Mega Uranium Ltd. (News - Market indicators) ("Mega" or the "Company") is pleased to announce that it has entered into a binding term sheet with Toro Energy Limited ("Toro") (ASX:TOE) to sell its Lake Maitland Uranium Project ("Lake Maitland") in Western Australia to Toro for 415 million ordinary shares of Toro (the "Transaction"). Upon completion of the Transaction, Mega will own approximately 28% of the issued and outstanding shares of Toro.

Toro is an Australian uranium company listed on the Australian Stock Exchange. Toro's flagship and wholly-owned Wiluna uranium project is located 30 km southeast of Wiluna in Central Western Australia and approximately 90 km north-west of Lake Maitland. Toro has updated prefeasibility estimates and the process engineering phase of the definitive feasibility study complete for mining of two shallow calcrete deposits, Lake Way and Centipede, for which all government environmental approvals have been received.

Highlights of the Transaction

  • Consolidates quality Western Australian uranium assets and expands Mega's uranium interests into an enlarged Wiluna project development;
  • Environmental permits for Toro's first two deposits at the Wiluna project, Centipede and Lake Way, have already been granted, which potentially shortens the development time-frame for Lake Maitland;
  • Operational synergies potential across geologically similar projects;
  • Opportunity for significant capital savings due to the requirement for only one central processing facility to treat ore from Lake Maitland and Toro's Wiluna deposits; and
  • Potential further benefit for Mega as shareholder in the enlarged Toro.

Stewart Taylor, Mega's President said, "Mega is pleased to partner with Toro on the development of Wiluna. Given the proximities and similarities of the main deposits, the integration of Lake Maitland into the broader Wiluna Project is expected to unlock benefits for both Toro and Mega shareholders."

The Transaction is conditional upon the receipt of various approvals, including the approval of Toro shareholders, Mega's Project Partners (as defined below) consenting to and not exercising any pre-emptive rights that they may have in connection with the Transaction, and other customary closing conditions. The Transaction has the support of Toro's major shareholder, OZ Minerals Limited, which has a 39% equity interest in Toro, and which has confirmed that, subject to the independent expert report obtained by Toro indicating that the acquisition is fair and reasonable and no superior proposal emerging, it intends to vote in favour of the Transaction. On completion of the Transaction, OZ Minerals will hold a 28.5% interest in Toro.

Mega understands that following completion of the Transaction, Toro's focus will be to work towards implementation of the already approved Wiluna Project and to commence studies to optimise the inclusion of Lake Maitland within the overall Wiluna Project over time. This will include reviewing optimal mine planning and investigating the opportunity to expand the capacity of the Wiluna Project above Toro's currently planned 1.3 Mtpa processing capacity. 

The Transaction does not impact upon Mega's previously announced proposed merger with Rockgate Capital Corp. (see June 6, 2013 press release), which the parties continue to work toward.

Key Terms of the Transaction

The Transaction is expected to be effected by Toro's subsidiary, Nova Energy Pty Ltd, acquiring 100% of the issued capital of Mega's subsidiary, Redport Exploration Pty Ltd ("Redport"). Redport, through its 100% owned subsidiaries, will own the relevant Lake Maitland tenements and associated assets and rights and at completion will have a surplus cash balance of $1.5 million. Consideration for the Transaction is 415 million fully paid ordinary shares in Toro.

On completion of the Transaction, Mega will hold a 28% equity interest in Toro. Toro has agreed to grant Mega rights to appoint two nominees to the Toro board of directors for so long as Mega maintains at least a 22% interest in Toro. Initially, Mega's Executive Vice President - Corporate Affairs, Richard Patricio, and Executive Vice President - Australia, Richard Homsany, will join the board of Toro as non-executive directors. Mega has also agreed to a 12-month escrow of its Toro shares, with customary market exceptions, and to a standstill which limits Mega's capacity to acquire further Toro shares within the next 2 years.

Project Partners' Position Regarding Lake Maitland

In June 2009, Mega entered into a series of agreements with JAURD International Lake Maitland Project Pty Ltd ("JAURD") and Itochu Minerals & Energy of Australia Pty Ltd ("IMEA") (together the "Project Partners"). Under those agreements, the Project Partners hold an option to acquire a 35% interest in Lake Maitland for approximately US$49 million (of which US$39 million remains payable) which can be exercised at any time up to a decision to mine on Lake Maitland. If the Project Partners exercise their option to acquire an interest in Lake Maitland, they will be entitled to various rights over the development of, and offtake from, Lake Maitland and are obliged to contribute financing for their share of costs for the development of Lake Maitland in order to maintain their respective joint venture interests in Lake Maitland.

In addition, the Project Partners hold certain pre-emptive and consent rights that may apply to the Transaction.

Conditions Precedent to Completion

The conditions precedent to completion of the Transaction include, but are not limited to:

  • Toro shareholder approval under ASX LR7.1 and s611 Item 7 of the Corporations Act;
  • Any necessary FIRB approval required by Mega and Toro in relation to the transaction; and
  • The Project Partners consenting to the Transaction and not exercising any pre-emptive rights that may apply.

Timing

It is anticipated that a meeting of Toro shareholders will be held in early October 2013 at which Toro shareholders will be asked to approve the Transaction. It is expected that completion of the Transaction would occur soon thereafter, subject to the satisfaction or waiver of all conditions precedent to completion.

Break-Fees

Reciprocal break fees of $1.0 million are payable in certain circumstances by each of Mega and Toro.

Mega Advisors

Dundee Capital Markets is acting as financial advisor to Mega. 

Mega Uranium Ltd.

Mega Uranium Ltd. is a Canadian mineral resources company listed on the TSX, with a focus on uranium properties. Mega has a global presence with projects in Australia at feasibility and pre-feasibility stages, and exploration projects in Australia, Canada and Cameroon. Currently, Mega is focused on the development of two of its Australian projects, Lake Maitland located in Western Australia and Ben Lomond located in Queensland. Mega has a farm in and joint venture with JAURD and IMEA on the Lake Maitland Project. Further information on Mega can be found on the company's website at www.megauranium.com.

NOTE REGARDING FORWARD-LOOKING INFORMATION

This news release contains "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" as such term is defined in applicable Canadian securities laws (together referred to herein as "forward-looking statements"). Except for statements of historical fact relating to Mega or Toro, information contained herein constitutes forward-looking statements. Forward-looking statements are characterized by words such as "plan," "expect", "budget", "target", "project", "intend," "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements in this news release include, but are not limited to, statements relating to completion of the combination of Mega and Toro and the expected timing of completion, statements regarding the anticipated completion date of a feasibility studies regarding the Wiluna project, statements regarding the shareholding of Mega at closing, statements regarding the expected benefits to Mega shareholders of the proposed transaction. Forward-looking statements are based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made, and are inherently subject to a variety of risks and uncertainties and other known and unknown factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include (i) that Mega and Toro will complete the proposed transaction described herein, (ii) political developments, whether generally or in respect of the mining industry specifically, in Australia not consistent with Mega and Toro's current expectations, (iii) Mega's and Toro's expectations in connection with the projects discussed herein being met, (iv) the impact of general business and economic conditions, global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future conditions, fluctuating metal prices and currency exchange rates, (v) the value that the Mega will realize from its Toro shareholdings, (vi) changes in project parameters as plans continue to be refined,(vii) the continued employment of key Mega and Toro employees, as well as those risk factors discussed or referred to in Mega's annual Management's Discussion and Analysis and Annual Information Form for their respective most recently completed year end filed with the applicable securities regulatory authorities and available at www.sedar.com. Although Mega has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended.

There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Mega does not undertake any obligation to update forward-looking statements if circumstances or management's estimates, assumptions or opinions should change, except as required by applicable law. The reader is cautioned not to place undue reliance on forward-looking statements. The forward-looking information contained herein is presented for the purpose of assisting investors in understanding Mega's expected financial and operational performance and results as at and for the periods ended on the dates presented in their respective plans and objectives and may not be appropriate for other purposes.

Stewart Taylor, Mega's President and Qualified person under NI43-101, is responsible for this release and has verified the contents disclosed.



Mega Uranium Ltd. - Investor Relations
Richard Patricio
Executive Vice President, Corporate Affairs
(416) 643-7630
info@megauranium.com
www.megauranium.com
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Mega Uranium Ltd.

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CODE : MGA.TO
ISIN : CA58516W1041
CUSIP : 58516W104
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Mega Uranium is a uranium exploration company based in Canada.

Mega Uranium holds various exploration projects in Argentina, in Australia, in Bolivia, in Brazil, in Canada, in Colombia and in Guinea.

Its main asset in development is LAKE MAITLAND in Australia and its main exploration properties are KINGOONYA, HARRIS BLUFF, GUNBARREL BASIN, OASIS, NEUTRAL JUNCTION, BOWGAN PROJECT, KINTYRE PROJECT, COOLBRO, TALLARINGA SOUTH/NORTH, GARFORD, INDOOROOPILLY, HALF MOON LAKE, PETERLUMBO HILL, CORUNNA NORTH, OLD WARTAKA, IRON KNOB, UNO, GEORGETOWN, MAUREEN and BEN LOMOND in Australia, KITONGO PROSPECT, LOLODORF and TEUBANG in Cameroon and WEST MICMAC, GREENWICH, THELON, LAC DES ILES, BRUCE RIVER, MAURICE POINT, AILLIK EAST, MUSTANG LAKE, ADAIR, IGOR and JOBURKE in Canada.

Mega Uranium is listed in Canada, in Germany and in United States of America. Its market capitalisation is CA$ 62.8 millions as of today (US$ 50.2 millions, € 44.0 millions).

Its stock quote reached its highest recent level on April 13, 2007 at CA$ 8.68, and its lowest recent point on March 20, 2020 at CA$ 0.05.

Mega Uranium has 285 670 016 shares outstanding.

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Financings of Mega Uranium Ltd.
3/14/2011Announces Closing of Flow-Through Financing
2/17/2011Announces Increase To Flow-Through Financing
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Nominations of Mega Uranium Ltd.
3/19/2013Announces Election of Directors
Project news of Mega Uranium Ltd.
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3/27/2012(Ben Lomond)Plans Drill Program at Ben Lomond Project in Queensland Foll...
10/26/2011(Lake Maitland)on the Lake Maitland Uranium Project
6/21/2011(Lake Maitland)Provides Update on the Lake Maitland Uranium Project
10/25/2010(Lake Maitland)Environmental Scoping Document For Mega’s Lake Maitland Uran...
1/12/2010(Bruce River)Provides Update On Canadian Exploration
4/8/2010(Lake Maitland)Lake Maitland Project Update
9/24/2009(Kitongo Prospect)Wide Drill Intersections in the Salaki Uranium Prospect in C...
8/7/2009(Lake Maitland)No Objection Received from the Foreign Investment Review Boa...
6/19/2009(Lake Maitland)Agreements for the Sale of 35% of the Lake Maitland Resource...
3/3/2009(Kitongo Prospect)Provides Update on Exploration Activities in Cameroon
2/27/2009(Lake Maitland)To Sell 35% of Lake Maitland Resource for US$49 Million to J...
2/5/2009(Patagonia Uranium)Update On Exploration Activities In Chubut Province, Argenti...
1/15/2009(Georgetown)On Georgetown Project, Queensland, Australia
10/22/2008(Lake Maitland)Announces Results of Scoping Study of Lake Maitland Uranium ...
6/26/2008(Patagonia Uranium)Extensive Shallow Uranium Mineralization Delineated in Argen...
4/7/2008(Ben Lomond)Update on Progress on Mega’s Uranium Resource Development Pr...
2/20/2006(Ben Lomond)Announces closing of Ben Lomond uranium-molybdenum resource ...
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12/21/2015Dec 21, 2015 Mega Uranium Ltd. Announces Appointment Of CFO ...
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7/30/2015Jul 30, 2015 Cameco Australia Pty Ltd Earns 51% Interest In ...
7/30/2015Cameco Australia Pty Ltd Earns 51% Interest in Kintyre Rocks...
7/13/2015Jul 13, 2015 Mega Uranium Announces Completion Of Private Pl...
3/23/2015Mar 23, 2015 Mega Announces Results Of Annual And Special Sh...
3/23/2015Announces Results of Annual and Special Shareholder Meeting
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3/19/2015Mar 19, 2015 Mega Uranium Ltd. Announces Director Retirement...
3/19/2015Mega Uranium Ltd. Announces Director Retirements
3/6/2015Announces Management Rationalization
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2/13/2015Feb 13, 2015 Mega Uranium Ltd. Announces New By-Law Read Mor...
2/13/2015Mega Uranium Ltd. Announces New By-Law
2/13/2015Announces New By-Law
7/7/2014Mega Uranium Ltd. Acquires Securities of Macusani Yellowcake...
3/19/2014Mar 19, 2014 Mega Announces Election Of Directors & Corporat...
3/19/2014Mega Announces Election of Directors & Corporate Update
9/24/2013Announces Termination of Arrangement Agreement with Rockgate...
7/11/2013and Cameco Australia Pty Ltd Enter Farm in and Joint Venture...
5/14/2013Releases Unaudited Results for the Three and Six Months Ende...
4/23/2013Acquires Securities of NexGen Energy Ltd.
2/12/2013Releases Unaudited Results For The Three Months Ended Decemb...
11/8/2012Announces High Grade Uranium Mineralization Confirmed on Nor...
10/22/2012State Government Lifts Ban on Uranium Mining in Queensland
10/22/2012State Government Lifts Ban on Uranium Mining in Queensland
8/14/2012Releases Unaudited Results for the Three and Nine Months End...
8/9/2012to Sell Canadian Projects to NexGen Energy to Create the Pre...
5/12/2012Releases Unaudited Results for the Three and Six Months Ende...
5/9/2012Drilling Discovers Basement-Hosted Uranium on the NW Athabas...
3/29/2012Announces Reconfirmation Of Shareholder Rights Plan
3/16/2012Releases Unaudited Results for the Three Months Ended Decemb...
3/12/2012Nunatsiavut Assembly Lifts Uranium Moratorium in Labrador
2/23/2012Completes Acquisition of Canadian Exploration Assets
1/23/2012Commences Drill Program on Northwest Athabasca Property
1/4/2012to Acquire Portfolio of Canadian Exploration Assets from Tit...
12/18/2011Releases Audited Results for the Year Ended September 30=2C ...
12/15/2011Provides Update on Canadian Exploration
8/12/2011Releases Unaudited Results for the Three and Nine Months End...
5/13/2011Releases Unaudited Results for the Three and Six Months Ende...
2/16/2011Provides Australian Update
2/15/2011Releases Unaudited Results For The Three Months Ended Decemb...
1/6/2011Acquires Securities Of Tournigan Energy Ltd.
8/13/2010Releases Unaudited Results For The Three And Nine Months End...
4/8/2010Acquires Securities of U308 Corp.
4/8/2010Completes South American Asset Sale and Declares Dividend-in...
2/12/2010Releases Unaudited Results For The Three Months Ended Decemb...
1/11/2010Acquires Securities Of Macusani Yellowcake Inc.
10/7/2009Proposed Public Offering of Units
8/13/2009Unaudited Results For The Three And Nine Months Ended June 3...
5/13/2009Unaudited Results For The Three And Six Months Ended March 3...
3/18/2009Acquires Securities Of Titan Uranium Inc.
2/13/2009Releases Unaudited Results For The Three Months Ended Decemb...
11/13/2008Join Mega Uranium at the San Francisco Hard Assets Conferenc...
9/15/2008Removal Of The Uranium Mine Development Ban In Western Austr...
6/17/2008Drilling Underway Close To Rio Tinto’s Kintyre Uranium Resou...
5/13/2008Provides Update on Colombia Properties
5/6/2008Announces Closing of Energentia Resources Acquisition
4/4/2008 And Energentia Resources Inc. Sign Acquisition Agreement
3/25/2008$44 Million Uranium Exploration Budget on Mega’s Properties ...
5/22/2007Kaminak Options Washburn Project to Mega Uranium Ltd.
4/2/2007Airborne Survey Detects Numerous Untested Radiometric Anomal...
4/4/2006New deaty gold zones Shebandowan camp, Thunder Bay, Ontario
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