2 Jan 2015 07:00
Rose Petroleum plc (AIM: ROSE)
("Rose" or the "Company")
Agreement to Sell Interest in Wate Mining Company LLC
Rose Petroleum plc, the AIM-listed (Ticker: ROSE) natural resources company, is pleased to announce that its wholly owned subsidiary VANE Minerals (US) LLC ("VANE") has signed a Purchase and Sale Agreement (the "Agreement") to sell its 50% interest in the Wate breccia pipe uranium project (the "Wate project") to EFR Arizona Strip LLC ("EFR"), a subsidiary of Energy Fuels Inc. The Wate project is owned and operated by Wate Mining Company LLC ("Wate") which is owned jointly (50:50) by VANE and Uranium One Americas, Inc ("U1"). VANE is the Manager of Wate.
Highlights:
· Total sale price of US$1.5 million consisting of:
- US$750,000 cash on closing, and
- 2% production royalty capped at US$750,000
· Closing date expected to be 16 January 2015
The Wate project has a NI 43-101 compliant resource of 1.118m lbs eU3O8 at an average grade of 0.79% eU3O8. The deposit was initially discovered in the 1980s in a drilling campaign carried out by Rocky Mountain Energy, a subsidiary of Union Pacific Resources and relinquished during a period of depressed uranium prices. The project was re-started by VANE and U1 in 2009, whereby further drilling was conducted and the NI 43-101 resource was subsequently established by Wate.
Under the terms of the Agreement, the transaction is set to close on 16 January 2015 (the "Closing"). At Closing, EFR will transfer US$750,000 to VANE, plus VANE's portion of the funds remaining in the Wate operating account and execute a royalty agreement for a two per cent contractual royalty capped at US$750,000, giving a total sale price of US$1.5M. EFR retains absolute right to purchase the royalty for US$750,000 cash, less any previously paid royalty. Timing of royalty payments cannot be anticipated at this time until further progress has been made on the production plans for the Wate project. The proceeds from the sale of the Wate project will be used for working capital and further exploration expenditures on both mining and oil & gas.
Matthew Idiens, CEO, commented: "We are pleased to announce the signing of the SPA with Energy Fuels, thereby moving forward with our intent to divest our uranium assets, as previously announced, and concentrate on our oil and gas projects which continue to gain momentum as well as our base and precious metals projects. The proceeds of the sale will be utilised in both the mining and oil & gas divisions, on the mining side, specifically pushing forward the porphyry exploration programme in Mexico. I would like to take this opportunity to wish our shareholders a very happy New Year and we look for to updating the market further as we move into 2015."
For further information, please contact:
Rose Petroleum plc Matthew Idiens, CEO
| +44 (0) 20 7225 4590 |
Allenby Capital (Nominated Adviser & Broker) Jeremy Porter / Alex Price | +44 (0) 20 3328 5656 |
Lionsgate Communications (Public Relations) Jonathan Charles / Lynn Carratt | +44 (0) 20 3697 1209 |
About Rose Petroleum
Rose Petroleum plc (AIM Ticker: ROSE) is focusing on developing its oil & gas portfolio, while seeking to create value from its existing mining portfolio.
In March 2014, Rose signed a farm-in agreement under which its newly formed subsidiary, Rose Petroleum (Utah) LLC, can earn 75% of certain oil, gas and hydrocarbon leases covering approximately 230,000 acres in Grand and Emery Counties, Utah, USA, within the Paradox and Uinta basins.
In May 2014, Rose published the results of its reserve report prepared by Ryder Scott Company on the Mancos and Paradox Oil & Gas Projects. Unrisked Prospective (Recoverable) Hydrocarbon Resources on a Best Case (P50 equivalent) basis for the collective total Mancos Shale and Paradox Formation combined was 1,452.86 MMBO (million barrels of oil) and 4,791.85 BCFG (billion cubic feet of gas).
In June 2014, the Company successfully raised £6.5m by way of an oversubscribed conditional placing and subscription to develop the Mancos and Paradox assets in Eastern Utah, and the completion of a further £3.5m fundraise was announced on 5 December 2014.
In October 2014, Rose acquired 100% of the assets of a privately owned SEP - Cisco Dome, LLC and various other associated entities for US$1.5 million in cash. The acquired assets included 11,000.02 gross / 8,250.02 net acres of highly prospective Mancos acreage, a gas compression station and gas processing plant as well as 17 producing wells and 35 shut-in wells.
Management intends to build on these projects to establish a balanced international asset portfolio. For further information please consult the Company's website: www.rosepetroleum.com