22 Jan 2009 07:00
Uranium Resources plc / Market: AIM / Epic: URA / Sector: Exploration
22 January 2009
Uranium Resources plc ("URA" or "the Company")
Signs Option Agreement for Rio Tinto to Explore for Coal
on the Company's Exploration Licence Areas in Southern Tanzania
Uranium Resources plc, the AIM listed exploration and development company, is pleased to announce that it has entered into an option agreement with Rio Tinto Mining and Exploration Limited ("RTX"), whereby RTX has the right to exclusively explore for coal at, and farm in to, 2,938 km² of the Company's exploration licence areas in southern Tanzania ("RTX Option Agreement"). The RTX Option Agreement relates to all coal contained within the Mtonya and Ruhuhu farm-in licence areas and is in addition to URA's current uranium farm-in agreement with Western Metals Ltd ("WMT") ("Original WMT Agreement") which continues to progress well. The RTX Option Agreement does not relate to the Bindi, Ruvuma and Ngaka project areas, which URA continues to develop with WMT and its local partners.
Overview
Signed 12 month option agreement for RTX to explore for coal and elect to enter farm-in agreement
Farm-in area encompasses 2,938 km² of URA's exploration licences in Southern Tanzania
RTX has right to earn 51% interest by sole funding US$7,000,000 in exploration expenditure within four years of signing farm-in and a further right to earn an additional 29% by completing a pre-feasibility study
Western Metals continues to develop uranium potential and recent results returned further high grade uranium intercepts
URA's Managing Director Alex Gostevskikh said, "I believe this agreement with Rio Tinto to explore the coal potential of our licence areas in southern Tanzania further underpins the value of our exploration assets. By signing the agreement, we not only establish a relationship with a major but also have exposure to the upside potential of any economic coal deposits discovered in this highly prospective region, while not committing to the associated high levels of capital expenditure. Importantly, the deal complements the uranium exploration being conducted by Western Metals which continues to yield high grade uranium intercepts and consolidates our commitment to the energy resource sector, which we believe still maintains strong fundamentals for the future."
Terms of the Agreement
The agreement provides RTX with the sole right to explore the Company's licences for coal for a 12 month period from the date on which the agreement becomes unconditional. During this period RTX may elect to farm in, which would permit RTX to earn a 51% interest in the coal discovered within the licence areas, and the relevant exploration data by sole funding US$7,000,000 in exploration expenditure within four years of electing to farm in. In addition, RTX may earn a further 29% interest by sole funding and completing a pre-feasibility study.
RTX may withdraw from the agreement at any time within the twelve-month timeframe after spending US$200,000. If, having earned its initial 51% interest, RTX withdraws prior to earning the additional 29% interest, it must sell its 51% interest.
The agreement sets out a regime whereby the uranium exploration and production programme with WMT is afforded protection against any adverse affects from the coal exploration and production programme.
Minerals and licences the subject of the agreement
The Original WMT Agreement relates only to uranium, thorium, vanadium, molybdenum, and strontium. URA reserved a 100% interest in all other minerals contained within those licences including coal. Accordingly, WMT does not participate in the new option and farm-in agreement which URA has signed with RTX.
The agreement with RTX relates only to the licences that were the subject of the Original WMT Agreement together with all successive renewals and substitute licences. The agreement with RTX does not apply to the Ruvuma, Bindi and Ngaka JV Areas which URA continues to develop in accordance with its arrangements with WMT.
The position is summarised in the tables below:
| JV Partners & Ownership Uranium & Related Minerals | |||||
| JV Description | WMT | URA | Local Partner | Rio Tinto | Land Area (sqkm) |
| Farm-in Areas (subject of WMT JV agreement and RTX agreement) | 60% | 40% | - | - | 2,938 |
| 42.5% JV Areas (Ruvuma and Bindi) | 42.5% | 42.5% | 15% | - | 9,589 |
| 45% JV Areas (Ngaka) | 45% | 45% | 10% | - | 211 |
| 12,738 | |||||
| Rest of Tanzania | URA and WMT consider Tanzania to be an area of mutual interest so each of URA & WMT will offer the other an equal share in any future uranium opportunity in Tanzania. | Country wide | |||
| JV Partners & Ownership Coal Rights | |||||
| JV Description | WMT | URA | Local Partner | Rio Tinto | Land Area (sqkm) |
| Farm-in Areas (subject of WMT JV agreement and RTX agreement) | - | 100% | - | Earning initial 51% | 2,938 |
| 42.5% JV Areas (Ruvuma and Bindi) | 42.5% | 42.5% | 15% | - | 9,589 |
| 45% JV Areas (Ngaka) | 45% | 45% | 10% | - | 211 |
| 12,738 | |||||
**ENDS**
For further information please visit www.uraniumresources.co.uk or contact:
| Alex Gostevskikh | Uranium Resources plc | Tel: +44 (0) 7990 713 377 |
| James Pratt | Uranium Resources plc | Tel: +61 (0) 412 743 382 |
| Ross Warner | Uranium Resources plc | Tel: +44 (0) 7760 487 769 |
| Hugh Warner | Uranium Resources plc | Tel: +33 (0) 643 916 003 |
| Hugh Oram | Ambrian Partners Limited | Tel: +44 (0) 20 7634 4705 |
| Hugo de Salis | St Brides Media & Finance Ltd | Tel: +44 (0) 20 7236 1177 |
| Felicity Edwards | St Brides Media & Finance Ltd | Tel: +44 (0) 20 7236 1177 |
Notes to editors
Uranium Resources plc is an AIM listed uranium exploration and development company. It is the Company's strategy to advance its existing assets and strengthen its portfolio via opportunist acquisition. Uranium Resources has uranium licences in the highly prospective Karoo Basin in Southern Tanzania where it currently has a land package in excess of 12,500 sq km.