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Uranium Resources, Inc. (NASDAQ: URRE) (URI) today announced the expansion and extension of its South Texas exploration agreement with Cameco Texas, Inc. (Cameco), a subsidiary of Power Resources, Inc., which is a subsidiary of Cameco Corporation (NYSE: CCJ). Additionally, the Company signed an amendment to its uranium mining lease option in Kenedy County, Texas for the Tecolote tract, approximately 22,700 net acres that will be a part of the exploration program.
“The amendment of our exploration joint venture into Tecolote is significant for many reasons,” stated Terence J. Cryan, Interim President and CEO of URI. “Cameco’s commitment to a 70% interest in the program with the addition of the new property underlies our belief of its stronger potential and our commitment to developing uranium in South Texas. We remain encouraged by the opportunities in the area and believe Tecolote will provide us a platform to grow our assets in South Texas and capitalize on our two processing plants in the region.”
Under the terms of the amended exploration agreement, both parties have agreed to extend the exploration agreement to a five-phase, five-year exploration program to include Tecolote. Cameco has committed $4.3 million to increase its interest to 70% in the expanded program. Cameco will fund and be the exploration operator for Phase III.
In addition to adding the 22,700 acres of Tecolote, the lease option amendment extended the original lease to 60 months with the election date to lease the acreage for production now being November 30, 2015. It requires a minimum exploration obligation of $1.0 million, or 100 exploration wells during Phase III. Phase IV and Phase V require $1.5 million, or 150 exploration wells, and $2.0 million, or 200 exploration wells, respectively. Investment or drilling in excess of the minimum requirement in any year counts toward the following year’s requirements.