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Wednesday, April 10, 2013
UEX Secures Right to Fund $18 Million in Additional Drilling at Shea Creek
UEX Corporation ("UEX") is pleased to announce that AREVA Resources Canada Inc. ("AREVA") has granted UEX an option to increase UEX's interest in the nine Western Athabasca Projects, which include the Shea Creek Project ("Shea Creek"), to 49.9% through the expenditure by UEX of an aggregate of $18.0 million (the "Additional Expenditures") on exploration drilling intended to advance the four known Shea Creek deposits. This amendment to the Western Athabasca Joint Venture ("Joint Venture") has the effect of providing UEX, for the next several years, a measure of budget control for new exploration programs on the important Shea Creek deposit trend.
These Additional Expenditures would be supplementary to any annual budget proposed by AREVA, as operator, for exploration and development under the current Joint Venture. Consequently, the amendment will enable the annual shared budgets to focus on other highly prospective targets along the 33 km long Saskatoon Lake Conductor located on Shea Creek or along the many other conductors on the jointly owned projects.
"This agreement provides UEX with a multi-year opportunity to build upon our past successes with AREVA by continuing exploration intended to expand known Shea Creek resources while concurrently seeking new uranium deposits," said Graham Thody, President and CEO of UEX.
Under this amendment, UEX may propose a budget amount of up to $4.0 million in any single year without the prior approval of AREVA. The $18.0 million may be spent over the six-year period ending December 31, 2018. UEX's interest in the Western Athabasca Projects will increase at the end of each calendar year, pro-rata, based on the amount of Additional Expenditures incurred in such year. AREVA and UEX will jointly develop these drilling programs and intend to focus efforts at Shea Creek.
Also under this amendment and during the six-year option period, AREVA has agreed to propose a minimum annual budget (to be shared pro-rata) of not less than $2.0 million for the Western Athabasca Projects, inclusive of Shea Creek, provided that UEX proposes to spend at least $2.0 million of Additional Expenditures in the same year and the average weekly spot price of U3O8 for the year ended September 30th prior to such year is not less than $40 per pound of U3O8.
Should additional highly prospective mineralized areas be discovered on the Shea Creek Project, or at any of the other eight projects governed by the Joint Venture, UEX and AREVA may jointly agree to spend a portion of the Additional Expenditures in advancing such prospective areas.
UEX and AREVA previously announced an approved $3.1 million budget for exploration to be conducted south of the Anne Deposit beginning this spring and consisting of a $0.5 million geophysical program and a $2.6 million drilling program (see UEX news release dated March 20, 2013). With the announcement of this amendment to the Joint Venture, UEX and AREVA will be discussing an additional drilling program, expected to follow this previously announced exploration work, and UEX estimates the first budget for Additional Expenditures in 2013 to be between $2.0 million and $3.0 million. It is anticipated that this additional drilling program will focus, for 2013, on the numerous opportunities to expand the Shea Creek resources, including follow up of the Kianna East and Upper Kianna East zones discovered during the 2012 program.
Should UEX expend the full $18.0 million of Additional Expenditures over the six-year option period, UEX, in addition to the potential expansion of its known resources, will also increase its current in-ground resources of U3O8 at Shea Creek by just under 1%.
This news release has been reviewed and approved by R. Sierd Eriks, P.Geo., UEX's Vice-President of Exploration who is a Qualified Person as defined by National Instrument 43-101.
Shea Creek Project
Shea Creek hosts the Kianna, Anne, Colette and 58B deposits, and is the most advanced of the nine 49%-owned Western Athabasca uranium projects joint-ventured with the project operator, AREVA Resources Canada Inc. The Shea Creek deposits form part of a world class uranium system in which mineralization has been defined over a strike length exceeding three kilometres along the Saskatoon Lake graphitic conductor in the northern part of the project. Most areas of mineralization continue to be open and have high potential for both expansion and discovery of new zones.
Effective December 31, 2009, UEX reported a combined National Instrument 43-101 ("N.I. 43-101") compliant mineral resource estimate for the Kianna, Anne and Colette deposits of 63.6 million pounds U3O8 in the Indicated Mineral Resource category and an additional 24.5 million pounds U3O8 in the Inferred Mineral Resource category at a cut-off of 0.3% U3O8 (see UEX news release dated May 26, 2010). Further details concerning these resources are provided below.
UEX now anticipates that an updated mineral resource estimate will be completed early in the second quarter of 2013.
About UEX
UEX is a Canadian uranium exploration and development company actively involved in 17 uranium projects, including six that are 100% owned and operated by UEX, one joint venture with AREVA that is operated by UEX, as well as nine joint-ventured with AREVA and one joint venture with AREVA and JCU (Canada) Exploration Company, Limited, which are operated by AREVA. The 17 projects, totaling 264,363 hectares (653,255 acres), are located in the eastern, western and northern perimeters of the Athabasca Basin, the world's richest uranium belt, which accounts for approximately 15% of the global primary uranium production. UEX is currently advancing several uranium deposits in the Athabasca Basin which include the Kianna, Anne, Colette and 58B deposits at its 49%-owned Shea Creek Project, and the Horseshoe, Raven and West Bear deposits located at its 100%-owned Hidden Bay Project. UEX currently has a cash position of approximately $10.9 million.
UEX's two major projects have mineral resource estimates as follows:
UEX Corporation - Indicated Mineral Resources (1) (2) (3)
| Project |
Tonnes |
Grade
U3O8 (%) |
Total
U3O8 (lbs) |
UEX�s share
U3O8 (lbs) |
| Shea Creek (4) |
1,872,600 |
1.540 |
63,572,000 |
31,150,280 |
| Hidden Bay (5) |
10,372,500 |
0.160 |
36,623,000 |
36,623,000 |
| TOTAL INDICATED |
12,245,100 |
0.371 |
100,195,000 |
67,773,280 |
UEX Corporation - Inferred Mineral Resources (1) (2) (3)
| Project |
Tonnes |
Grade
U3O8 (%) |
Total
U3O8 (lbs) |
UEX�s share
U3O8 (lbs) |
| Shea Creek (4) |
1,068,900 |
1.041 |
24,525,000 |
12,017,250 |
| Hidden Bay (5) |
1,109,200 |
0.111 |
2,715,000 |
2,715,000 |
| TOTAL INFERRED |
2,178,100 |
0.567 |
27,240,000 |
14,732,250 |
Notes:
(1) The mineral resource estimates follow the requirements of National Instrument 43-101 - Standards of Disclosure for Mineral Projects and classifications follow CIM definition standards.
(2) The Shea Creek mineral resources were estimated at a cut-off of 0.30% U3O8.
(3) The Hidden Bay mineral resources were estimated at a cut-off of 0.05% U3O8.
(4) The Shea Creek mineral resource estimates are included in the Shea Creek Technical Report with an effective date of May 26, 2010 which was filed on SEDAR at www.sedar.com on July 9, 2010.
(5) The Hidden Bay mineral resource estimates are included in the Hidden Bay Technical Report with an effective date of February 15, 2011 which was filed on SEDAR at www.sedar.com on February 23, 2011.
About AREVA Resources Canada Inc.
AREVA, a uranium exploration, mining and milling company, is a subsidiary of AREVA group, the global nuclear industry leader with an expanding presence in the renewable energies field, and 48,000 employees worldwide to help supply safer, cleaner and more economical energy to the greatest number of people. AREVA group, through its Canadian subsidiary, has significant interests in several uranium deposits in the Athabasca Basin, including the McClean Lake, Midwest and Shea Creek deposits operated by AREVA, as well as the McArthur River and Cigar Lake deposits operated by Cameco Corporation. AREVA also holds a majority interest in the Kiggavik deposits in Nunavut.
FOR FURTHER INFORMATION PLEASE CONTACT
Graham C. Thody
President & CEO
(604) 669-2349
Forward-Looking Information
This news release may contain statements that constitute "forward-looking information" for the purposes of Canadian securities laws. Such statements are based on UEX's current expectations, estimates, forecasts and projections. Such forward-looking information includes statements regarding UEX's mineral resource and mineral reserve estimates, outlook for our future operations, plans and timing for exploration activities, and other expectations, intention and plans that are not historical fact. The words "estimates", "projects", "expects", "intends", "believes", "plans", or their negatives or other comparable words and phrases are intended to identify forward-looking information. Such forward-looking information is based on certain factors and assumptions and is subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking information. Important factors that could cause actual results to differ materially from UEX's expectations include uncertainties relating to interpretation of drill results and geology, additional drilling results, continuity and grade of deposits, participation in joint ventures, reliance on other companies as operators, public acceptance of uranium as an energy source, fluctuations in uranium prices and currency exchange rates, changes in environmental and other laws affecting uranium exploration and mining, and other risks and uncertainties disclosed in UEX's Annual Information Form and other filings with the applicable Canadian securities commissions on SEDAR. Many of these factors are beyond the control of UEX. Consequently, all forward-looking information contained in this news release is qualified by this cautionary statement and there can be no assurance that actual results or developments anticipated by UEX will be realized. For the reasons set forth above, investors should not place undue reliance on such forward-looking information. Except as required by applicable law, UEX disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise.
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