TORONTO, May 23, 2017 /CNW/ - U3O8 Corp.
(TSX: UWE), (OTCQB: UWEFF) ("U3O8 Corp." or the
"Company") announces that it will seek shareholder approval to
undertake a restructuring of its common shares at its Annual and
Special Meeting scheduled to be held at 11am on Thursday June
22 at 20 Toronto Street Second Floor, Toronto, Ontario M5C 2B8.
The proposed share consolidation includes three steps to achieve
two things:
- To reduce the number of accounts that hold a small number of
shares in the Company, which have a disproportionately high
maintenance cost; and
- To consolidate 20 current common shares to one new share.
Reduction in the Number of Small Accounts
U3O8 Corp. has a large shareholder base that resulted from
Company acquiring what are now its lead projects from Mega Uranium
Ltd. ("Mega") in 2010. The projects were purchased with U3O8
Corp. shares, and Mega chose to distribute that stock as a dividend
in kind to its shareholders. The result is that U3O8 Corp.
now has 18,500 shareholders, 13,500 of whom hold less than 1,000
shares. The Company incurs significant printing and mailing
costs for each shareholder meeting with such a large shareholder
base, and the Company intends to reduce the number of small
accounts by seeking shareholder permission to implement Steps 1 and
2 as described below:
Step 1: is a consolidation of 1,000 current common shares
to 1 new share. Since the Company would not issue fractional
shares, the 13,500 shareholders with accounts of less than 1,000
shares, representing 0.8% of the Company's issued and outstanding
shares, would be flagged for payout for the value of their shares
based on the market price;
Step 2: Immediately after the 1,000 for 1 consolidation,
each share would be split by 1,000, to get back to the original
share count minus the 0.8% that was held in accounts with less than
1,000 shares. The sole reason for doing steps 1 and 2 is to
allow the Company to pay out the 13,500 shareholders who hold less
than 1,000 shares in a cost-effective way, leaving the Company with
about 5,000 shareholders.
A smaller shareholder base makes it far more practical and
cost-effective for the Company to issue shares in spinout
companies, such as South American Silica, in which U3O8 Corp holds
39%, to its shareholders. It would also allow for capital to
be raised through rights offerings, in which all shareholders may
acquire additional shares in the Company, and not only through
private placements, in which only Accredited Investors may
participate.
Step 3: Immediately after Steps 1 and 2, twenty common
shares of the Corporation would be consolidated to one new share.
Again, no fractional shares would be issued, and shareholders would
not be paid out for fractional shares because it would cost the
Company approximately $10 to issue
and mail each cheque, whereas the maximum value that a shareholder
could lose is that of 19 shares, which at current prices, are worth
67c.
The Company is providing this early warning to allow
shareholders who hold fewer than 1,000 shares, ample time to
increase their shareholding to at least 1,000 shares by
June 22, 2017. To incentivize
shareholders to purchase more shares, the Company intends to use
the Existing Shareholder Prospectus Exemption through which shares
are made available for purchase to all existing shareholders,
excluding investment funds, up to a limit of $15,000 per shareholder. A shareholder may
purchase shares to a value greater than this limit if he or she has
obtained appropriate advice from a registered investment
dealer. Shares purchased under this rule are subject to a
four-month hold period. Further details will be provided in a
separate press release in due course.
Conclusion
Richard Spencer, President &
CEO of U3O8 Corp. commented; "The Board is recommending that
shareholders approve the capital restructuring proposal so as to
strengthen the appeal of the Company to a broader spectrum of
intuitional investors. It is hoped that the capital
restructuring will lead to a revaluation of the Company based
on:
- The outstanding technical results released on the Laguna Salada
Project in Argentina earlier in
the year with the discovery of gravels that are richer than those
that yielded the lowest estimated cash costs of production in the
preliminary economic assessmenti;
- The uranium price having bottomed in December 2016 and, in addition, the price of
battery commodities rising in response to the current 10% per year
growth in the battery manufacturing industry; and
- The pro-business government in Argentina where the Buenos Aires stock exchange has surged 65% in
the 18 months since President Macri's government was inaugurated
and which is committed to increasing the share of nuclear in the
country's energy mix."
Technical Information
Dr. Richard Spencer, P.Geo.,
CGeol., President and CEO of U3O8 Corp. and a Qualified Person as
defined by National Instrument 43-101, has approved the technical
information in this news release relating to the Laguna Salada
Deposit and the related PEA.
About U3O8 Corp.
U3O8 Corp. is focused on exploration and development of deposits
of uranium and associated commodities in South America.
Potential by-products from uranium production include commodities
used in the energy storage industry – in the manufacture of
batteries - such as nickel, vanadium and phosphate. The
Company's mineral resources estimates were made in accordance with
National Instrument 43-101, and are contained in three
deposits:
- Laguna Salada Deposit, Argentina – a PEA shows this near surface,
free-digging uranium - vanadium deposit has low production-cost
potential;
- Berlin Deposit, Colombia – a PEA shows that Berlin also has low-cost uranium production
potential due to revenue that would be generated from by-products
of phosphate, vanadium, nickel, rare earths (yttrium and neodymium)
and other metals that occur within the deposit; and
- Kurupung Deposit, Guyana – a uranium resource has been
estimated in four veins within a uranium-zirconium vein system.
Resources have been estimated on four veins, while consistent
mineralization of the same type has been intersected in scout
drilling of an additional six veins, while yet other veins require
first-time exploration drilling.
Information on U3O8 Corp., its resources and technical reports
are available at www.u3o8corp.com and on SEDAR at
www.sedar.com. Follow U3O8 Corp. on Facebook:
www.facebook.com/u3o8corp, Twitter: www.twitter.com/u3o8corp
and YouTube: www.youtube.com/u3o8corp.
Forward-Looking Statements
This news release includes certain "forward looking
statements" related with the development plans, economic potential
and growth targets of U3O8 Corp's projects. Forward-looking
statements consist of statements that are not purely historical,
including statements regarding beliefs, plans, expectations or
intensions for the future, and include, but not limited to,
statements with respect to: (a) the low-cost and near-term
development of Laguna Salada, (b) the Laguna Salada and Berlin
PEAs, (c) the potential of the Kurupung district in Guyana, (d)
impact of the U- pgradeTM process on expected
capital and operating expenditures, and (e) the price and market
for uranium. These statements are based on assumptions, including
that: (i) actual results of our exploration, resource goals,
metallurgical testing, economic studies and development activities
will continue to be positive and proceed as planned, and
assumptions in the Laguna Salada and Berlin PEAs prove to be
accurate, (ii) a joint venture will be formed with the provincial
petroleum and mining company on the Argentina project, (iii)
requisite regulatory and governmental approvals will be received on
a timely basis on terms acceptable to U3O8 Corp., (iv) economic,
political and industry market conditions will be favourable, and
(v) financial markets and the market for uranium will improve for
junior resource companies in the short-term. Such statements are
subject to risks and uncertainties that may cause actual results,
performance or developments to differ materially from those
contained in such statements, including, but not limited to: (1)
changes in general economic and financial market conditions, (2)
changes in demand and prices for minerals, (3) the Company's
ability to establish appropriate joint venture partnerships, (4)
litigation, regulatory, and legislative developments, dependence on
regulatory approvals, and changes in environmental compliance
requirements, community support and the political and economic
climate, (5) the inherent uncertainties and speculative nature
associated with exploration results, resource estimates, potential
resource growth, future metallurgical test results, changes in
project parameters as plans evolve, (6) competitive developments,
(7) availability of future financing, (8) exploration risks, and
other factors beyond the control of U3O8 Corp. including those
factors set out in the "Risk Factors" in our Annual Information
Form available on SEDAR at www.sedar.com. Readers are cautioned
that the assumptions used in the preparation of such information,
although considered reasonable at the time of preparation, may
prove to be imprecise and, as such, undue reliance should not be
placed on forward-looking statements. U3O8 Corp. assumes no
obligation to update such information, except as may be required by
law. For more information on the above-noted PEAs, refer to the
September 18, 2014 technical report titled "Preliminary Economic
Assessment of the Laguna Salada Uranium-Vanadium Deposit, Chubut
Province, Argentina" and the January 18, 2013 technical report
titled "U3O8 Corp. Preliminary Economic Assessment on the Berlin
Deposit, Colombia."
i September 18, 2014
technical report: "Preliminary Economic Assessment of the
Laguna Salada Uranium Vanadium Deposit, Chubut Province,
Argentina." Available on
www.sedar.com or at
www.u3o8corp.com/technical-reports
SOURCE U3O8 Corp.