Vancouver's Uranium One Inc. (TSX:UUU) plans to acquire 50% interest in the Karatau Uranium mine from a Russian company in a cash and share deal worth approximately $455 million.
Uranium One's deal with JSC Atomredmetzoloto (ARMZ), a Russian state-owned uranium mining company, will be paid with 117 million Uranium One shares plus US$90 million in cash. The agreement also provides for a contingent payment to ARMZ of up to US$60 million, payable in three equal tranches between 2010 and 2012 subject to post-closing tax-related adjustments.
The Karatau project produced 1.7 million pounds of uranium last year and is expected to yield 3.3 million pounds this year at a total cash cost of $15 per pound. The mine is expected to reach 5.2 million pounds of production by 2011.
As a result of the deal, ARMZ will have a 16.6% interest in Uranium One and will have one member of the board appointed by ARMZ. The deal, which is subject to legal due diligence, customary closing conditions and regulatory and shareholder approvals, is expected to close in December.
Uranium One has agreed to appoint a second ARMZ representative to the board in 2010, subject to shareholder approval.
Uranium One's share price range during the past week: between $2.36 and $2.83; 52-week high: $5.04; 52-week low: $0.60.