Form 8-K URANIUM ENERGY CORP For: Oct 12

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

October 12, 2022
Date of Report (Date of earliest event reported)

 

URANIUM ENERGY CORP.
(Exact name of registrant as specified in its charter)

 

 

 

Registrant’s telephone number, including area code

 

Not applicable.
(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

 

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (Section 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (Section 240.12b-2 of this chapter).

 

Emerging growth company  ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐

 

 

 

 

 

On October 12, 2022, Uranium Energy Corp. (the “Company” or “UEC”) issued a news release announcing that it has entered into a definitive agreement with a subsidiary of Rio Tinto plc (“Rio Tinto”) pursuant to which UEC will acquire 100% of Rio Tinto’s wholly-owned Roughrider uranium development project (“Roughrider” or the “Project”) located in the Athabasca Basin in Saskatchewan, Canada (the “Transaction”).

 

 

 

 

 

 

 

 

 

 

Under the terms of the Transaction, upon close, Rio Tinto will receive $80 million in cash and 17,805,815 UEC common shares, valued at $70 million based on the 5-day VWAP of $3.93 per share as of October 7, 2022. The cash component of the Transaction will be fully funded using UEC’s existing balance sheet, which as of October 10, 2022 was over $173 million in cash and liquid assets.

 

Amir Adnani, President and CEO of UEC, stated: “With this accretive fully funded acquisition of the Roughrider Project, we’re able to achieve multiple objectives: 1) 100% owned, development-stage assets are rare in Canada’s Athabasca basin, and we’re adding a world-class project to anchor our Canadian high-grade conventional business; 2) unlock value from the recently acquired UEX portfolio in the eastern Athabasca Basin as we now have critical mass to advance our production plans; and 3) accelerate production plans for our Canadian high-grade conventional business given the advanced stage of Roughrider and the first-tier ESG, geotechnical and permitting work completed by Rio Tinto since 2012. We thank Rio Tinto for entrusting UEC with the Roughrider Project and welcome them as our new shareholder.”

 

Mr. Adnani concluded: “Our next steps for Roughrider will be to first complete an updated S-K 1300 technical report summary based on over 650 diamond drillholes already completed for a total of approximately 225,000 meters of drilling on the Project. UEC is currently engaging with consultants to develop a technical report update in the next few months. Second, UEC intends to progress permitting and a production study of Roughrider and optimize its integration with UEC’s existing Canadian platform. The acquisition builds on our strategic objective to create the leading Western supplier of secure and 100% unhedged uranium with a two-pronged platform: 1) near-term, fully permitted and low-cost US ISR production; and 2) a Canadian high-grade conventional pipeline.”

 

Notes:

 

 

The Roughrider Project is a development stage, conventional uranium project located in the eastern Athabasca Basin of northern Saskatchewan, Canada; one of the world’s premier uranium mining jurisdictions. The Project is located approximately 13 km west of Orano’s McClean Lake Mill, in close proximity to UEC’s existing Athabasca Basin properties, and covers an area of 597 hectares. The Roughrider West Zone was discovered by Hathor Exploration Ltd. (“Hathor”) during the winter drilling program in February 2008.

 

The Project’s geology is well understood due to the extensive study and drilling campaigns completed by Rio Tinto and Hathor. Hathor completed a Preliminary Economic Assessment, effective September 13, 2011 (the “Historic Roughrider Technical Report”)⁽¹⁾, which included the Roughrider East Zone and Roughrider West Zone and contemplated a conventional mining method. The Historic Roughrider Technical Report is not being treated as current by the Company.

 

 

The Historic Roughrider Technical Report included the following historic NI 43-101 compliant mineral resource estimates:

 

 

 

The 2011 Historic Roughrider Technical Report resource statement did not include the Far East Zone of the deposit, which may represent additional geological upside. Rio Tinto has not disclosed any updated resource or reserve estimates for the Project.

 

 

Rio Tinto continued to advance the Project after its acquisition of Hathor. In July 2013, Rio Tinto submitted a 101-page Advanced Exploration Program proposal for consideration to the Saskatchewan Ministry of Environment.⁽²⁾ The program was intended to initiate an Environmental Impact Assessment (“EIA”) review of the program, with the program intended to provide direct data related to the ore and mine development design. The proposal involved establishment of an upgraded access road, development of an exploration shaft, exploration drifts, operation of a water treatment facility, additional surface support structures and temporary surface storage of both development rock and low-grade waste. A substantial amount of EIA baseline work and community engagement were included in the work submission. The application was accepted, and the project was approved to begin the EIA review process, but no official determination was completed. Rio Tinto subsequently upgraded the access road but did not proceed with the remainder of the proposed program.

 

Notes:

 

 

The technical information in this news release has been reviewed by Clyde L. Yancey, P.G., Vice President-Exploration for the Company, being a Qualified Person under Item 1302 of Regulation S-K.

 

 

The Transaction is subject to closing conditions customary for a transaction of this nature, with closing expected to occur before month end.

 

 

Rothschild & Co and BMO Capital Markets are acting as financial advisor to UEC in connection with the Transaction. McMillan LLP is acting as legal advisor to UEC.

 

A copy of the news release is attached as Exhibit 99.1 hereto.

 

 

 

Not applicable.

 

 

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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.