Uranium Resources (URRE) to Acquire Second Lithium Brine Project

September 21, 2016 4:17 PM EDT
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Uranium Resources, Inc. (Nasdaq: URRE) announced today that it has entered into an agreement to acquire certain placer mining claims comprising the Sal Rica lithium brine project from Mesa Exploration Corporation. The project is comprised of approximately 9,800 acres (3,960 hectares) of placer mining claims covering a highly prospective target for lithium-enriched brines in the Pilot Valley region of northwestern Utah. The target area is situated within a region of known brine-hosted lithium mineralization and is approximately 25 miles (40 kilometers) north of the town of Wendover, Utah in Box Elder County.

Under the terms of the agreement between URI and Mesa Exploration, URI will acquire an undivided 100 percent interest in the Sal Rica project, subject to a 2 percent net smelter return royalty (NSR), for the following consideration:

  • $50,000 cash paid to Mesa at closing;
  • 100,000 URI restricted shares at closing, with a registration statement to be filed with the SEC within 28 days of issue;
  • And 100,000 restricted shares at the first anniversary date of closing, with a registration statement to be filed with the SEC within 28 days of issue;
  • Closing is expected on or before October 21, 2016, subject to customary closing conditions.

Results from a shallow drilling program carried out by Quintana Petroleum in 1966 on the Sal Rica Project demonstrated the widespread presence of significant levels of lithium in brines associated with near surface aquifers. Geophysical studies by the University of Utah between 1957 and 1961 indicate that in the project area basin-fill sediments, which are potential host rocks for lithium enriched brines, have a depth range of up to 5,300 feet (1,615 meters). With lithium assay values ranging from 22 to 81 parts per million (ppm), as sampled by Quintana Petroleum over 13 drill holes, the data clearly demonstrates the high technical merit of the Sal Rica target area. Confirmation brine samples recently collected by Mesa Exploration personnel returned lithium grades averaging 66 ppm lithium, with values as high as 80 ppm, consistent with the results Quintana obtained from their previous drilling. Initial sampling of sediments in the project area by URI personnel also yielded lithium values ranging from 82 ppm to 213 ppm Li. All of the samples collected from the programs of Mesa Exploration and Uranium Resources were analyzed by ALS Minerals, Reno, Nevada USA.

The acquisition of the Sal Rica Project along with the recently acquired Nina claims in Nevada enhances URI’s intent to expand and broaden its corporate efforts to develop energy metal commodities, complimentary to the Company’s existing business operations and extensive technical expertise, in order to create increased shareholder value through exposure to rapidly expanding global energy demand. URI has rapidly advanced its internal program of lithium brine target identification, exploration and evaluation, and is now actively acquiring additional lithium prospects to build a robust and prospective lithium project portfolio.

About the Sal Rica Project:

The Sal Rica Project is located approximately 25 miles (40 kilometers) north of Wendover, Utah and 100 miles (160 kilometers) west-northwest of Salt Lake City. URI staff initially identified the Sal Rica Project target area through literature reviews of historical geological and geochemical data from the US Geological Survey as well as other public and private information sources, followed by field reconnaissance of the target area. As such, the Sal Rica Project area fulfills many of the technical criteria of the Company’s geological model for lithium-enriched brine deposits. The Pilot Valley, site of the Sal Rica project, is a closed drainage basin covering an area of approximately 130 square miles (337 square kilometers) and whose geology is dominated by lake and evaporite sediments that have been sources of potash and salt. In 1966 Quintana Petroleum carried out a shallow auger drilling program to evaluate the potential for shallow potash-enriched brines in the target area. During the course of their drilling program all of the brine samples collected from the drill holes were analyzed for a range of elements, including lithium. An analysis of the geochemical results from this “historical” drilling program indicated the wide-spread presence of lithium-enriched brines, ranging from 22 to 81 parts per million lithium in 13 drill holes. Recent “offset sampling” of the historic Quintana drill holes by Mesa Exploration confirmed the range of Quintana’s assay results. Mesa Exploration’s samples were analyzed by ALS Minerals at their analytic facility located in Reno, Nevada.

Sediment samples collected by URI personnel from the target area ranged from 82 to 213 ppm lithium as determined through geochemical analyses carried out by ALS Minerals. These recently completed assay results also confirm the range and magnitude of results obtained by the US Geological Survey, and Quintana, indicating the high quality and technical merits of the Sal Rica project. These results warrant future investigation to further characterize the potential for lithium-enriched brines in the subsurface environment. Near term exploration by URI at the Sal Rica Project will focus on the chemical characterization of the lithium bearing brine aquifers, as well as the vertical and lateral extent of lithium-bearing brines. The Sal Rica project is geologically similar to Nevada’s Clayton Valley, the site of Albemarle Corporation’s Silver Peak lithium-brine mine; the only lithium brine production facility in the United States. This acquisition provides URI with a second cornerstone project, with its previously announced Nina Project in Nevada, from which a complete lithium resource portfolio can be built.

About the Lithium Market

Lithium is a critical component for the manufacture of batteries for electrical storage and used in a wide range of devices ranging from cell phones to automobiles. The battery market is expected to grow 500% over the next 10 years, with lithium batteries accounting for 35% of this growth. At the same time, the transportation sub-market alone is expected to experience a 23% compounded annual growth rate during this same period, according to Bloomberg.

With large battery plants such as Tesla’s “Gigafactory” near Reno, Nevada and Faraday Motor Works’ proposed facility near Las Vegas, Nevada – URI’s Sal Rica Project is well placed within the evolving lithium brine production and consumption industry in the United States.

Lithium enriched brines are proven to be less expensive to explore for, develop and operate than other sources of lithium, such as lithium rich pegmatites and hectorite clays. This advantage of brines is coupled with a small environmental footprint and minimal carbon emissions, which makes ISR mining of brines an attractive method for producing lithium.

For more on the Lithium Market please go to our Company’s website located at www.uraniumresources.com.

Taking advantage of URI’s Expertise

With nearly forty years of corporate experience in the exploration, development, operation and restoration of ISR uranium recovery operations, URI is uniquely qualified to expand its business ventures into the lithium brine business. URI is positioned to take advantage of its extensive expertise in:

  • Design, construction, and operation of well fields;
  • The extraction and recovery (hydrometallurgy) of metals from groundwater;
  • Exploration of mineral properties; and
  • Permitting of new projects on privately-owned properties and lands administered by the US Bureau of Land Management and the US Forest Service.

The URI team has successfully explored for a wide range of mineral commodities, from industrial and agricultural minerals, precious metals, uranium and, now, lithium, in the United States and throughout the world. Using a disciplined approach, URI has centered its geological focus to locales, like those found in Utah and Nevada, that fit a preferred geologic criteria and have the potential to host economic resources of lithium. Furthermore, the Company’s decades of wellfield design, management, and hydrometallurgical operations experience is directly transferrable to lithium brine extraction and processing. In addition, the Company’s existing facilities also present value in a diversification into lithium, as demonstrated in the use of the existing in-house analytical laboratory at the Kingsville Dome Mine to provide rapid analysis of brine screening samples collected as part of ongoing exploration and evaluation activities.

Christopher M. Jones, President and Chief Executive Officer, said “Continuing our expansion into the lithium brine exploration business strengthens our portfolio of high-value projects. Diversifying our mineral project pipeline while maintaining our uranium business portfolio in readiness for the predicted price rise allows investors increased exposure to the energy industry. We remain optimistic about this new chapter in our development of URI.”

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

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