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Uranium Energy Corp announced that, effective on October 25, 2011, the Company has entered into a Property Purchase Agreement with three Paraguayan companies 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.
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 $7,500. 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. Drilling commenced on the fully-controlled portion of the project area on October 1 this year. Prior to and concurrent with the initiation of the drilling program, a detailed regional structural analysis and a carborne radiometric/spectrographic survey were completed across the Project under the direction of Dr. Bernie Schmeling, professional geophysicist and a member of the Company’s advisory board for Paraguay. These surveys, coupled with the historical data, have aided in the initial exploratory hole placement. These holes are being drilled on east-west oriented “fences,” with spacings between holes ranging from one-half to one kilometer. Initially, four east-west fences are planned, with several kilometers between fences. The drilling program is anticipated to extend into the first quarter of 2012. |
