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Company to control 987,000 acres of highly prospective uranium-bearing region with similar geology to South Texas Uranium Belt
Previously announced 10,000-meter drilling program has now commenced on portion of district acquired earlier this year
CORPUS CHRISTI, TX,
Oct. 31, 2011 /PRNewswire/ - Uranium Energy Corp (NYSE-AMEX: UEC, the "Company") is pleased to announce that, effective on
October 25, 2011, the Company has entered into a Property Purchase Agreement (the "Purchase Agreement") with three Paraguayan companies (collectively, the "Vendors") pursuant to which the Company's Paraguayan subsidiary proposes to acquire, subject to a gross overriding royalty, a 100% legal and beneficial interest in and to a total of six unencumbered prospecting permits covering approximately 740,000 acres which are located in the area of Coronel Oviedo,
Paraguay (collectively, the "Property" and in the aggregate the "Acquisition").
The Property interests being acquired are contiguous on the northwest, west and east of the Company's 247,000-acre Coronel Oviedo Project in central
Paraguay, which was acquired as announced in May this year. This proposed acquisition increases the Company's total land package held in
Paraguay to 987,000 acres.
The Purchase Agreement is subject to normal conditions precedent to closing which include, without limitation, prior satisfactory due diligence and approvals by MOPC, the ministry in
Paraguay with jurisdiction over mining, and NYSE Amex. The total purchase price for the Property interests is the issuance of 100,000 restricted common shares in the capital of the Company and cash payment of
The Company has also agreed to provide the Vendors with a royalty interest in the amount of one and one-half percent (1.5%) of the gross proceeds received by the Company in connection with any uranium which is produced and sold from any of the mineral interests in the Property. The Company also has the exclusive right and option at any time to acquire one-half percent (0.5%) of the aggregate royalty interest for
$500,000 and, in addition, the Vendors have granted the Company a right of first refusal to acquire all or any portion of the remaining one percent (1.0%) royalty interest.
The area being acquired received reconnaissance exploration by Anschutz Corporation from 1976 to 1983. This work included an airborne radiometric and magnetic survey, detailed Track Etch surveys, geochemical stream sediment and soil sampling, and drilling. A total of 18 wide-spaced holes were drilled on this new property by Anschutz with eight showing uranium mineralization. The area has also been covered by the Company's recently completed carborne radiometric survey, which outlined several promising drilling target areas. All of this historical and recent data has been compiled by Company geologists, and, upon completion of the acquisition, will be incorporated into the ongoing 10,000-meter drilling program.