Laramide Resources to Acquire a Substantial Portfolio of ISR Projects in New Mexico
Nov 10, 2015
Listed (TSX:LAM; ASX:LAM)
TORONTO, Nov. 10, 2015 /CNW/ - Laramide Resources Ltd. ("Laramide" or the "Company") (LAM: TSX/ ASX) is pleased to announce it has entered into a binding Letter of Intent ("LOI") with Uranium Resources Inc. ("URI") pursuant to which Laramide will acquire 100% of an advanced stage portfolio of high-quality In Situ Recovery ("ISR") projects in New Mexico (the "Proposed Transaction"). The properties are principally comprised of the Church Rock and Crownpoint projects, in addition to nearby assets, which have near-term development potential and significant mineral resources. The properties are located within a large land package in the heart of the Grants Mining District in McKinley County, New Mexico, one of the most historically significant uranium-producing districts in the U.S.
These projects have been previously burdened by significant net smelter royalties, specifically the sliding scale royalty, held by Laramide of up to 25% of gross revenue covering certain areas of the properties. The combination of Laramide's New Mexico uranium royalty portfolio and these projects is synergistic and creates an ISR division operating in a tier one jurisdiction with significantly enhanced overall project economics.
Total consideration to be paid by Laramide to URI is US$12.5 million, over a three-year period, from the anniversary of closing. The targeted closing date of the Proposed Transaction is March 31, 2016 (the "Closing"). The consideration will include a combination of cash, shares, a promissory note (the "Note"), and an option for URI to acquire Laramide's La Sal project in Utah for US$4M, which would reduce the amount owed of the Note. Further terms related to the consideration to be paid by Laramide are summarized below in this press release.
As consideration for acquiring the properties, the Company will deliver to URI the following at Closing:
Marc Henderson, President and Chief Executive Officer, said, "We are pleased to introduce the Church Rock and Crownpoint group of properties as a new cornerstone asset cementing our strategy of developing low-cost uranium assets in tier one jurisdictions.
"Church Rock complements our flagship asset in Australia, Westmoreland, and our conventional hard rock projects in New Mexico and Utah, being a near term development asset."
Chief Operating Officer, Bryn Jones, said, "I am extremely excited about the addition of the Church Rock – Crownpoint projects to our portfolio. We now have an asset base that gives us size, scale and diversity – all within quality locations.
"The quality of the companies involved in the previous stages of the projects' development gives the Laramide team a lot of confidence in being able to quickly confirm the resources and progress to development phase should a feasibility support a production decision," he stated.
Completion of a definitive agreement and due diligence is expected in mid-December. Transfer of NRC license is expected on or before March 31, 2016. The Proposed Transaction remains subject to Toronto Stock Exchange and ASX approval.
The Definitive documents will provide for a US$250,000 mutual break fee payable in the event the Proposed Transaction does not close as a result of a breach by either party of its obligations under the Definitive documents.
Dundee Securities Ltd. acted as strategic advisor to Laramide in conjunction with this acquisition and Irwin Lowy LLP acted as legal advisor in Canada and Comeau, Maldegen, Templeman & Indall in the U.S.
Historical Resource Estimates
The table below summarizes the historical and foreign resource estimates which are applicable to the Properties subject to the Proposed Transaction. The discussion that follows addresses the TSX and ASX requirements for the reporting of these types of resource estimates.
The estimates are historical/foreign estimates and are not reported in accordance with the JORC Code. A qualified person has not completed sufficient work to classify these historic mineral resources as current mineral resources or in accordance with the JORC code; and the Company is not treating the historic resources as current. It is uncertain that following evaluation and/or further exploration work that these foreign estimates will be able to be reported as mineral resources in accordance with the JORC Code.
Relevance, Reliability and Materiality of the Historical or Foreign Estimates
Given the high quality of the historic work completed and the respective mining companies' reputations, the Company believes the resource estimates to be both relevant and reliable. The Company believes that both the exploration undertaken and the initial resource calculations appear to have been undertaken professionally and to industry best practice. The historical estimates are relevant and material to Laramide, as when the purchase is completed, they will represent a major component of the resources under the control of the Company.
Categories of Mineralisation
The company believes that the categories of mineralisation reported in the resource calculations shown in the above table are similar to the JORC code (2012) classifications and the classifications under NI 43-101.
No more recent information or estimates than the reports described in the table are available.
Summary of work programs and key assumptions, parameters, and methods used to prepare estimates
Historical exploration work programs relating to the preparation of historical resource estimates are summarised below:
The Company is comfortable that the resource estimation methods used for the historical resource calculations and the cut-off grade and GTs employed are appropriate for the style of deposit. The polygonal method and its variant, the general outline method were in general use for resource calculation in the Grants Mineral Belt by the U.S. A.E.C. (Department of Energy), Ranchers Exploration and Development Corporation and other companies.
In all cases exploration was performed by drilling vertical holes from the surface using truck mounted rotary mud drill rigs. Holes were then logged using downhole measurements of gamma radiation to determine the equivalent value of mineralisation. Most operators also logged resistivity and spontaneous potential. On some projects intervals of mineralisation were cored to obtain samples for laboratory analysis of U3O8, radiometric U3O8, other elements of interest, and metallurgical testing.
Further work required to verify the historical foreign estimates as current mineral resources and proposed timing of that work.
To verify the historical resource estimates for reporting as current resources under NI 43-101 or JORC the Company considers the following steps to be necessary:
The company intends to complete the work required to report current resources under the NI 43-101 and JORC Code within 12 months of the Closing subject to access requirements and market conditions being favourable.
The technical information in this news release has been prepared in accordance with the Canadian regulatory requirements set out in NI 43-101. The information has been reviewed and approved by Bryn Jones, MMinEng, FAusIMM a Qualified Person under the definition established by National Instrument 43 101 and JORC. Mr. Jones is the Chief Operating Officer of the Company and a Fellow of the Australasian Institute of Mining and Metallurgy.
The information in the market announcement that relates to the reporting of Historical or Foreign Estimates is provided under ASX listing rules 5.12.2 to 5.12.7 and is an accurate representation of the available data and studies for the group of properties subject to the Proposed Transaction based upon information compiled by Mr. Jones. Mr. Jones has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr. Jones consents to the inclusion in this release of the matters based on his information in the form and context in which it appears.
To learn more about Laramide, please visit the Company's website at www.laramide.com.
Laramide is engaged in the exploration and development of high-quality uranium assets. Its wholly owned uranium assets are in Australia and the United States. Laramide's portfolio of advanced uranium projects have been chosen for their production potential. Its flagship project, Westmoreland, in Queensland, Australia, is one of the largest projects currently held by a junior mining company. Its U.S. assets include La Jara Mesa in Grants, New Mexico, and La Sal in the Lisbon Valley district of Utah. Its portfolio also includes joint venture, strategic equity positions and royalty participation in uranium development and exploration companies that provide additional geographic diversification and uranium exposure for shareholders.
Forward-looking Statements and Cautionary Language
This News Release contains forward looking statements which are subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward looking statements. The Company does not intend to update this information and disclaims any legal liability to the contrary.
SOURCE Laramide Resources Ltd.
For further information: Marc Henderson, President and Chief Executive Officer, Toronto, Canada +1 (416) 599 7363; Bryn Jones, Chief Operating Officer, Brisbane, Australia, P: (07) 3831 3407; Greg Ferron, Vice-President, Investor Relations, Toronto, Canada +1 (416) 599 7363