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TORONTO, Nov. 2, 2017 /CNW/ - U3O8 Corp.
(TSX: UWE), (OTCQB: UWEFF or temporarily UWEFD)
("U3O8 Corp." or the "Company") reports that the Company raised
gross proceeds of C$517,000 in a
private placement that closed yesterday. Meanwhile, Dr.
Keith Barron, founder, director and
shareholder of U3O8 Corp., has offered to provide a C$1.0 million unsecured operating line of credit
to enable U3O8 Corp. to generate proof of concept uranium and
vanadium products from the Laguna Salada
Deposit.
Dr. Keith Barron commented, "I
believe that the market cap of U3O8 Corp. has fallen to levels well
below the value of the Laguna Salada Deposit, let alone the
Company's other assets. Laguna Salada has a low-cost uranium
production profile, is located in a country that needs uranium to
fuel its expanding nuclear electricity program, and would produce
by-product vanadium into a market that has fallen into long-term
deficit. Raising equity funds to advance Laguna Salada at
these share prices is simply too dilutive to existing shareholders
and therefore I am willing to provide a financing facility to
assist the Company through this period of low uranium commodity
prices."
U3O8 Corp.'s President and CEO, Dr Richard Spencer commented, "Keith's offer is
extremely generous to the Company and its shareholders. This
additional funding comes as a result of Keith having spent
considerable time at Laguna Salada where he gained first-hand
knowledge of the Deposit's potential. Keith is offering the
funds required to complete proof of concept work on the Deposit,
while only being repaid in shares after the Project has been
significantly de-risked."
Current Private Placement
The Company raised gross proceeds of C$517,000 through the issue of 2,068,000 units
("Unit"), with each Unit priced at C$0.25, consisting of a common share ("Common
Share") and one half of one common share purchase warrant
("Warrant"). Each of the 1,034,000 Warrants issued has a term
of 30 months and a strike price of C$0.35 to acquire one Common Share. All
securities issued and issuable pursuant to the private placement
will be subject to a four-month statutory hold period.
Financing Going Forward
Dr. Keith Barron has offered to
provide an unsecured operating line of credit for up to
C$1 million at a zero-interest rate –
a facility to be drawn upon on an as-needed basis, to be paid back
in stock within three years, as a debt settlement subject to
regulatory approval. The objective of making this facility
available to the Company is to ensure that the Company may advance
the Laguna Salada Deposit towards a feasibility study without
excessive dilution that would result from the funds being raised
from a private placement made at current share prices.
Dr. Barron is a director of the Company and therefore, an
"insider", under applicable securities laws. The provision of an
operating line of credit by an insider is considered a "related
party transaction" as such term is defined under MI 61-101. The
Company is relying on exemptions from the formal valuation and
minority shareholder approval requirements provided under MI 61-101
on the basis that the principal amount of the line of credit does
not exceed 25% of the fair market value of the Company's market
capitalization.
Use of Proceeds
The positive preliminary economic assessment ("PEA") that was
completed on Laguna Salada in 2014 identified specific parts of the
process flow sheet that had higher capital and/or operating costs
than anticipated. Finding alternatives for those specific
anomalies provides a compelling opportunity to lower both operating
and capital costs, which are likely to significantly improve the
economics of the Project. The Company's management team,
bolstered by the recent appointment of David Marsh to the Board, with his deep
experience in uranium processing plant design and optimization, has
been studying alternatives that it is now ready to test.
The current and proposed financing will be used to fund that
work program, details of which will be issued in a press release
shortly. Results of the planned test work will be released as
relevant information becomes available over the next six to nine
months.
Technical Information
Cautionary Note: A PEA is preliminary in nature, and
includes inferred mineral resources that are considered too
speculative geologically to have the economic considerations
applied to them that would enable them to be categorized as mineral
reserves, and there is no certainty that the results of the PEA
assessment will be realized.
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 battery commodities in South America. Battery
commodities that occur with uranium resources include vanadium,
nickel, zinc 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:
http://www.facebook.com/u3o8corp, Twitter:
http://www.twitter.com/u3o8corp and YouTube:
http://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."
SOURCE U3O8 Corp.