Uranium One completes purchase of US Energy assets

01 May 2007

sxr Uranium One of Canada has completed its purchase from US Energy of the Shootaring Canyon uranium mill in Utah, as well as several uranium exploration properties in four neighbouring states.


Uranium One has issued 6,607,605 common shares as partial consideration for the purchase. In addition, the company has agreed to pay US Energy $20 million upon the Shootaring Canyon mill reaching commercial production and a further $7.5 million upon the first delivery of ore to the mill from any of the purchased properties. US Energy will also receive a royalty equal to 5% of the gross proceeds from the sale of output from the mill, up to a maximum of $12.5 million.


The Shootaring Canyon mill, located approximately 48 miles south of Hanksville, Utah, is permitted to process up to 750 t of ore per day, but has a capacity to process 1000 t per day. The mill - the last conventional uranium mill to be built in the USA - was commissioned and operated for just four months in 1982, before being mothballed due to declining uranium prices.


Some 30 t of U3O8 were produced and shipped before the mill was put on standby. David Miller, of Strathmore Minerals told World Nuclear News that according to his analysis, he would expect Shootaring to producearound 635 t U3O8 (538 tU) per year after a three-year ramp-upperiod. At present, Miller said, this represents about 25% of US U3O8production.


Production at the mill could recommence in 2008. US Energy had been planning to bring the mill back into production at a cost of $31 million.


The US Energy uranium properties acquired by Uranium One consist of eight separate claim groupings in Utah, Wyoming, Arizona and Colorado. Four of these claim groupings (White Canyon, Henry Mountain, Lisbon Valley and Sage Plains) are wholly-owned by US Energy; the other four (Sheep Mountain, Green River North, Burro Canyon and the Breccia Pipes) are held by US Energy in a joint venture with Uranium Power Corp (UPC). The most advanced of the properties is the Sheep Mountain property in Wyoming.


The acquired assets also include an extensive database containing historical data from past producing uranium mines, as well as exploration data from uranium projects ranging from grassroots to advanced exploration status.


Further information


sxr Uranium One
US Energy Corp