Uranium Resources Plc Regulatory News (URA)

3 Apr 2006 07:03

Uranium Resources PLC03 April 2006 Uranium Resources plc Farm in Agreement Uranium Resources plc ("URA" or the "Company"), the AIM listed uraniumexploration and development company, has offered a farm in agreement to WesternMetals Limited ("WMT"), a company listed on the Australian Stock Exchange. The directors consider this transaction to be an excellent opportunity for theCompany because it funds the exploration programme, reduces URA's exposure andimportantly will allow the Company to focus on additional opportunities that itis actively pursuing to create increased shareholder value. 1 Farm in Agreement Under the agreement WMT may earn a 40% interest in the Company's Tanzanianprospecting licences by spending AU$2 million on the licences on or before thesecond anniversary of the agreement becoming unconditional. WMT may increaseits interest to 60% by spending a further AU$2 million within a further 2 years. WMT must spend AU$500,000 within 12 months of the completion of the agreement. The agreement is conditional on: 1. WMT obtaining all necessary shareholder approvals including approval toenter into the agreement and all other agreements to be entered into under thefarm in agreement; 2. URA obtaining all necessary shareholder approvals; and 3. Deep Yellow (Tanzania) Limited (a wholly owned subsidiary of theCompany) obtaining all relevant consents under the laws of the Republic ofTanzanian that are required in order for it to enter into the agreement. The directors of WMT have advised URA that they are prohibited by law fromconsidering the offer. Accordingly, they intend to seek a dispensation from theAustralian Securities and Investments Commission and the offer will be put tothe shareholders of WMT in general meeting. This is more fully described inparagraph 5 of this announcement. 2 Work Programme Drake-Brockman Geoinfo Pty Ltd, the Company's consultants, has delineated 5areas in the licences worthy of immediate follow-up. A preliminaryreconnaissance field trip will commence this week. Following this, it is plannedto carry-out detailed mapping, sampling, grid work and trenching to investigatethe anomalies during the 2006 field season. Depending upon these results drilltesting of the most promising targets will be initiated. 3 WMT WMT is a mineral explorer listed on the Australian Stock Exchange. Oncompletion of its fundraising (referred to in paragraph 4 below) it will haveapproximately 373 million ordinary shares in issue and a cash position ofapproximately AU$3.3 million. 4 WMT Fundraising WMT has announced that it has appointed Dalgety Capital, a licensed dealer insecurities, to manage the placement of 100,000,000 ordinary shares in WMT at anissue price of 2.5 cents each to raise approximately AU$2,500,000. The placement will be undertaken in two tranches: • 40,000,000 shares immediately; and • 60,000,000 shares, subject to shareholder approval. Funds raised will be utilised for working capital and, on completion of thetransaction, to finance the initial exploration programme. WMT has announced that it intends to complete the initial placement within 2-3weeks, following the lodgement of a Prospectus, and that it proposed to hold theshareholder meeting in May 2006. 5 WMT Shareholder and Other Approvals WMT has announced that its directors, having a relevant interest in thesecurities of URA, may have a "material personal interest" in the proposal, andaccordingly, pursuant to section 195 of the Corporations Act 2001 of Australia,are unable to form a quorum to consider whether WMT should enter into theagreement. Therefore, WMT must obtain the approval of its shareholders prior tosigning the farm in agreement. WMT also announced that it intends to ask the Australian Securities andInvestment Commission to modify the application of section 195 to enable it tosign the farm in agreement subject to the approval of WMT's shareholders. 6 WMT's Announcement WMT announced the transaction to the Australian Stock Exchange this morning.URA intends to post the full text of WMT's announcement on its website atwww.uraniumresources.co.uk. The directors urge you to read it because itincludes diagrams of the geology and location of the tenements. 7 Change of Directors David Steinepreis has resigned as a director of URA with immediate effect.Similarly, Hugh Warner has resigned as a director of WMT. 8 Technical Overview The information in this section of the announcement that relates to ExplorationResults, Mineral Resources or Ore Reserves is based on information compiled byDr Joseph Drake-Brockman who is a Member of The Australasian Institute of Miningand Metallurgy. Dr Drake-Brockman is employed by Drake-Brockman Geoinfo Pty Ltd.Dr Drake-Brockman has sufficient experience which is relevant to the style ofmineralisation and type of deposit under consideration and to the activity whichhe is undertaking to qualify as a Competent Person as defined in the 2004Edition of the 'Australasian Code for Reporting of Exploration Results, MineralResources and Ore Reserves'. Dr Drake-Brockman consents to the inclusion in thereport of the matters based on his information in the form and context in whichit appears. 8.1 Mtonya Licences and Geology The Mtonya area is located in the southern part of Tanzania between Songea andTunduru. The village of Mtonya is within the main tenement block. The Mtonyaleases cover the contact between the Usagaren basement to the west and theKarroo Luwegu Basin to the east. Uranium deposits of the sandstone-type targetedin the Luwegu Basin comprise more than 30% of currently known uranium depositsin Africa, including Paladin's Kayelekera deposit in Malawi 200km to the west. Uranium mineralization occurs at the Mkuju Prospect (owned by OmegaCorp Limited)to the east and north of the tenement block. The contact zone between outcropsof Usagaran granites and gneiss and the Karroo sediments is covered by thinTertiary to Quaternary deposits. 8.2 Makutapora Licences and Geology The Makutapora lease lies just north of the town of Dodoma. At Makutapora thelease covers a portion of an infilled rift (half graben) in Precambrianbasement. The infill sediments are of post Tertiary age and are capped by recentblack Mbuga muds. Uranium has been reported from both the Mbugas as well as fromthe deeper sedimentary infill sediments. 8.3 Uranium Targets Mtonya Area Targets Within the Mtonya leases the prime target is the uranium in sandstone model.Simplified this model requires: • a uranium source area (usually granite-gneiss terrain or acidvolcanics), • a weathering and erosional event to release the uranium under oxidizingconditions, • accumulation of porous sediments in an adjacent basin (usuallyfluviatile sandstones), • sufficiently rapid sedimentation to preserve reduced faciescharacterized by pyrite, carbonaceous material and montmorillonite clays, • precipitation of uranium along the interface between oxidized andreduced facies (so called redox front). The nearby Mkuju Prospect is the targeted model of mineralization for the areaand provides the main evidence for the viability of this model. The results atMkuju show that significant amounts of uranium were mobilized from basementrocks and were precipitated within reduced fluviatile sandstones The Mkuju Prospect was discovered by Uranerzbergbau Gmbh (UEB) in 1978. Due tothe surface oxidation only secondary uranium was located. The bestmineralization was located within 1-5 m thick sandstone beds as disseminated mmflecks of carnotite. These bodies can be 0.5-2.5 m thick, 3-15 m wide and 5-25 mlong. Channel samples from trenches range up to 2.18 % U3O8. Mineralization wasalso noted on re-worked mudstone clasts, pyrite concretions and plant fossils.The uranium extends over an area of 5x3 km that indicates that the "uraniumfront" is large enough to generate ore bodies. It is postulated that the uranium at Mkuju was derived from the Usagarenbasement that formed the western boundary of the sedimentation. Airborneradiometric data shows that the granites and gneisses of the Usagaren arefertile for uranium. That implies that the whole of the western margins of theKarroo sediments including any palaeo-channels cut into the basement areprospective for uranium. If at any stage reducing conditions have prevailed,then extensions or repetitions of the known uranium mineralization are possible.URA controls a substantial part of this target zone. A secondary, speculative target is hydrothermal vein and/or metasomatic typeuranium mineralization in the Usagaren basement. Such mineralization has notbeen reported from the area but there are reports of radioactive minerals beingfound in artesian gemstone operations within Tanzania which supports thepossibility of hydrothermal uranium mineralization. Makutapora Targets The Makutapora Prospect falls within the central internal Bahi drainage systemon the Tanganyika Plateau. North-south striking faults of the Tertiary EastAfrican rift system occur throughout the area. The faults exercise a strongcontrol over both the present day topography and the paleo topography. Thefault controlled channels are filled by fluviatile and lacustrine sedimentsinformally classified as the "Kilimantindie Cement". The surface expression isfrequently expressed by black, carbonate and gypsum rich clays that form inshallow local depressions (Mbuga swamps). These frequently fill with waterduring the wet season. Surface uranium anomalies are known from several of theMbugas (including Makutapora). In 1953 the Geological Survey of Tanzania (GST)drilled a diamond hole within the Bahi Depression to research the KilimatindeCement. Subsequent radiometric measurements on the core located a 15 cm sampleof strontianite with a radiometric U3O8 value of 0.24%. This result hasrecently been followed up by Uranex. They have intersected promising results intrenches and RAB drilling. At Makutapora the licence was selected to cover a palaeo-channel that containsblack mbuga muds, quartz sands and calcrete. The main target is defined by auranium in groundwater anomaly with an associated 500 ppm U308 assay in calcretefrom archived water bore cuttings that was identified by UEB during previousexploration in the area. In addition assays up to 285 ppm U308 have beenreported from shallow trenches within calcretes layers in the Mbuga muds atMakutapora and in adjacent areas. None of these anomalies were followed-up bydrilling. Exploration by UEB in 1979 identified the following positive factors for furtherexploration: - uranium rich granites (10-80 ppm U3O8) as source rocks - known occurrences of uranium in drilling (Bahi & Makutapora)indicating mobilization and precipitation of uranium in the sedimentaryenvironment, - known re-mobilization of uranium in the superficial environment, - abundant channel development. Targets are calcrete-like deposits in the near surface sediments and sandstonetype deposits deeper within the infill sediments. The term calcrete-like is usedbecause a direct correlation with the calcrete model is not given. The calcrete model generally requires: • high rates of evaporation, internal drainage and very slow rates ofgroundwater flow giving rise to saline groundwater and to the development ofporous channel calcretes, • at certain points along the channel, within but also adjacent to thecalcretes, U-K-V concentrations reach saturation points resulting in theprecipitation of carnotite. The main questions are whether the drainages are sufficiently stable (given theTertiary rifting) to allow the development of substantial deposits and whetherthey are sufficiently saline to consistently precipitate uranium. **ENDS** Contacts: Ross Warner Uranium Resources plc Tel: 07760 487 769 Hugo de Salis St Brides Media & Finance Ltd Tel: 020 7242 4477 This information is provided by RNS The company news service from the London Stock Exchange