Uranium Resources Plc Regulatory News (URA)

18 Jul 2005 12:42

Uranium Resources PLC18 July 2005 Uranium Resources plc / Market: AIM / Epic: URA / Sector: Exploration Uranium Resources plc ('Uranium Resources' or 'the Company') Acquiring Prospecting Licences in Tanzania with Uranium Potential Introduction Uranium Resources plc, the AIM listed Australian and African focussed uraniumdevelopment company is acquiring four uranium prospecting licences in Tanzania,which is considered to be one of the more exciting regions in the world toprospect for deposits of this mineral. The Company is acquiring the licencescovering an area of approximately 2,500 km2 through the purchase of Deep YellowTanzania Ltd for £350,000. The consideration is £50,000 cash and 6,000,000 newordinary shares to be issued at an agreed value of 5p per share, valued at£300,000. The acquisition marks the first stage in the Company's strategy ofbuilding a portfolio of uranium deposits and licences with a focus on known butunderdeveloped resources. Details of the licences The licences represent one of the largest uranium exploration land packages inTanzania. The area was identified as highly prospective for uranium by theGerman company Uranerzbergbau GmbH ('Uranerz') during reconnaissance explorationbetween 1978 and 1982. Three of the licences are located in the Mkuju River areain southern Tanzania recognised by Uranerz as one of the two most importanturanium targets in Tanzania. The licences will make the Company the largest landholder in the Mkuju River area. The fourth licence, the Makutapora Prospect,targets uranium in calcrete. The recognition by Uranerz of suitable lithologies in the Tanzanian Karrooformation together with the discovery of uranium mineralization, makes thisparcel of land very prospective and the size of it may be an ideal joint ventureproposition once better defined for a major company seeking land forexploration. Uranium Resources plans to establish an African based exploration team to carryout field work and a geophysical data review, aimed at commencing detailedexploration activities in the second half of the year. The team, led by SouthAfrican based director and uranium specialist Dr Leon Pretorius, will alsoreview further acquisition opportunities in Africa as and when identified. Uranium Resources Chairman, David Steinepreis, said: "The acquisition is partof our strategy of building a substantial uranium focussed portfolio ofexploration and production assets. We have a strong management team with bothfinancial and uranium experience who I believe have the ability to achieve ourcorporate objectives. This is a great deal for us as we believe that Tanzania isone of the most exciting locations for successful uranium exploration in theworld. The area has favourable geology and notably low exploration costs whichcombine to make the licences extremely attractive. "While the gold mining sector has boomed and investment in nickel, platinum andcoal exploration has been extremely strong, uranium exploration in Tanzania isat an early stage. Yet, as well as promising geology, the average historicalexpenditure on uranium exploration in the country has been US$4 per km2 comparedto US$16 per km2 in the western part of Africa and US$224 per km2 in the UnitedStates. "We are currently evaluating a number of other known deposits that we believeare suitable for our investment criteria and will update the market if and whenwe have agreed the terms of further investments." Geology of the Mkuju River Area, Southern Tanzania The Mkuju River licences cover over 2,000km2 of Karroo sediments within theLuwegu and Ruhuhu Basins. Uranerz identified outcropping uranium in the MkujuRiver area. Uranium Resources' tenements cover the prospective Karroo sedimentsalong strike to the south from these outcrops as well as analogous positions tothe west. Uranium deposits of the sandstone-type targeted in the Luwegu Basin comprisemore than 30% of currently known uranium deposits in Africa. In Africa, thesetypes of deposits host in excess of 300,000 tonnes of U3O8 and are principallyhosted by geology analogous to that of the Luwegu and Ruhuhu Basins. Geologically the area consists of Permian age Karroo sedimentary rock. TheKarroo Formations occur throughout southern Africa and drew much attention fromuranium explorers during the 1970s and early 1980s. A number of discoverieswere made and a few taken to full feasibility. The one drawing the mostattention at present is the Kayelekera deposit 200km to the west in Malawi wherePaladin Resources of Australia is undertaking a bankable feasibility study toverify the previous results of the CEGB. The mineralisation is associated with remobilised uranium within sandstone beds,known as "roll-fronts". Lithologically the prospective Karroo sandstones arepart of a thick succession of fluvio-lacustrine sedimentary rocks depositedmostly in shallow water. The sandstones are interbedded and separated byextensive mudstone beds. Low levels of uranium occur throughout theseformations, but not at economic concentrations. However, where folding orerosion has exposed permeable sandstone beds to the surface influx of oxygenatedwaters, the uranium is mobilised and precipitated at the reduction/oxidationfront - hence naming this style of mineralisation "roll-fronts". Theroll-fronts are not static and continue moving down dip over time as the influxof surface water penetrates deeper. Although narrow the roll-fronts are typically high-grade and have extensivelongitudinal continuity. The mineralisation is mainly restricted to sandstonesbounded by mudstones, but the roll-fronts are typically stacked which makesmining them more economic. Geology of Makutapora, Central Tanzania The Makutapora licence covers a palaeo-channel that contains sediments andcalcrete. Previous explorers reviewed samples from water bores in theMakutapora area and identified a 500ppm U3O8 assay in calcrete associated with agroundwater uranium anomaly. Additional assays up to 285 ppm U3O8 have beenreported from shallow trenches within calcrete layers in the Mbuga muds atMakutapora and in adjacent areas. None of these anomalies were followed-up bydrilling. The Company considers that the area contains significant potential forcalcrete-style uranium mineralization. Terms of the Transaction Uranium Resources has entered into a conditional agreement to acquire DeepYellow Tanzania Ltd, the 100% owners of the four licences, in consideration for£350,000 comprising the payment of £50,000 in cash, representing repayment ofpast costs, and the issue of 6,000,000 ordinary shares at an agreed value of 5pper share. The acquisition is subject to due diligence and the approval of theshareholders of Deep Yellow Ltd, the vendor, which is quoted on the AustralianStock Exchange. Application will be made for the new shares to trade on AIM and it is expectedthat dealings in these shares will commence within 14 days of the agreementbecoming unconditional. The new ordinary shares will rank pari passu in allrespects with the existing shares in issue. * * ENDS * * Contacts: Hugh Warner, Uranium Resources plc Tel: +618 9420 9303 Email: hwarner@uraniumresources.co.uk Dr Leon Pretorius, Uranium Resources plc Tel: +27 83 377 3215 +61 419 702 616 Email: lpretorius@uraniumresources.co.uk Ross Warner, Uranium Resources plc Tel: 020 7223 1731 Email: rosswarner@uraniumresources.co.uk Hugo de Salis, St Brides Media & Finance Tel: 020 7242 4477 Email: hugodesalis@sbmf.co.uk Notes: Uranium Resources plc was admitted to AIM on 18 February 2005. It wasestablished to acquire uranium assets on a worldwide basis with a primarygeographical focus on Africa and Australia. The Company will consideracquisitions covering the full range of projects from exploration to productionwith a bias towards known, but undeveloped uranium resources and has an initialgoal to acquire up to 100 million lbs of in-ground uranium. The Board ofDirectors is experienced in identifying and evaluating uranium acquisitionopportunities and possesses the skills to finance and develop a portfolio ofuranium assets. The Company aims to take advantage of the re-organising of theenergy producing market and the increasing need for nuclear energy. Renewedinterest in uranium exploration and mining with the growth in energyrequirements in both the developed and developing worlds means that a shifttoward nuclear generation is increasingly likely. Importantly, nuclear energy isthe only base-load power source that does not produce greenhouse gases. This information is provided by RNS The company news service from the London Stock Exchange