This morning, Uranium Energy and CUE Resources Ltd. (TSX-V: CUE) announced that UEC's acquisition of CUE by way of a plan of arrangement has officially closed. CUE is now a wholly-owned subsidiary of UEC. In exchange, UEC will issue 2,345,926 UEC common shares to former CUE shareholders as well as 171,303 UEC shares to settle certain debts of CUE. CUE, through its wholly-owned subsidiary, held an undivided 100% legal and beneficial interest in and to certain concession contracts covering a 230,650-hectare uranium exploration property located in southeastern Paraguay known as the Yuty ISR Project.
"Given the proximity of the Yuty project to our Coronel Oviedo property, this transaction enables clear operational synergies and allows us to consider implementing the hub-and-spoke production strategy we have successfully deployed in South Texas. We believe that Paraguay is host to a highly prospective, large-scale ISR-amenable uranium district with mineralization that is very similar to that of South Texas. In addition, consistent with other recent UEC project acquisitions, we have acquired an asset with an extensive defined resource at an attractive price. Given the 11-million pound total resource at Yuty, the Company now has both an exploration and development focus in this business-oriented, stable country. We're excited about the opportunities that lie ahead," stated President and CEO Amir Adnani.
Covering 230,650 hectares, the Yuty ISR Project is located approximately 200 kilometers east and southeast of Asunción, the capital of Paraguay. It is positioned within the Paraná Basin, which is host to a number of known uranium deposits, including Figueira and Amorinópolis in Brazil. Preliminary studies indicate amenability to extraction by in situ recovery (NYSEMKT:ISR) methods, which is the same process currently used by UEC at its South Texas operations. According to today's press release, CUE has spent more than CAD$16 million developing Yuty since 2006.
Between 2007 and 2010, CUE completed 256 drill holes totaling 31,000 meters of core and rotary drilling and acquired a 100% interest in the Yuty Project. The current resource for the Yuty Project was finalized in a technical report prepared for CUE titled "Updated Technical Report on the Yuty Uranium Project, Republic of Paraguay" dated August 24, 2011. This report shows an average grade and resource at the Yuty Project as follows:
Measured Resource 2.054M tonnes @ 0.062 % eU3O8 containing 2.801M lbs eU3O8
Indicated Resource 5.783M tonnes @ 0.048 % eU3O8 containing 6.113M lbs eU3O8
Inferred Resource 2.139M tonnes @ 0.047 % eU3O8 containing 2.226M lbs eU3O8
Investors seeking additional information on the now completed plan of arrangement should see UEC's news release dated January 23, 2012.
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