Uranium Energy Corp. (UEC) has entered an agreement with a subsidiary of Rio Tinto plc pursuant to which UEC will acquire the Roughrider uranium development project, located in the Athabasca Basin in Saskatchewan, Canada. Under the terms of the Transaction, upon close, Rio Tinto will receive $80 million in cash and more than 17.8 million UEC common shares, valued at $70 million.
“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,” UEC President and CEO Amir Adnani. “This transaction will 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 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.”
The 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, Adnani explained. UEC is currently engaging with consultants to develop a technical report update in the next few months. Second, UEC intends to progress with permitting and a production study of Roughrider and optimize its integration with UEC’s existing Canadian platform.
The Roughrider 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. during a 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 in September 2011. It estimated an indicated resource of 17.21 million lb of U3O8 (390,000 metric tons (mt) at an average grade of 1.98% U3O8) and an inferred resource of 10.6 million lb of U3O8 (40,000 mt at an average grade of 11.03% U3O8); and for the Roughrider East Zone, an inferred resource of 30.13 million lb of U3O8 (120,000 mt at an average grade of 11.58% U3O8).
When this transaction is completed, UEC will have invested $570 million with the acquisitions of Uranium One Americas, Inc., UEX and Rio Tinto’s Roughrider to build the largest diversified North American focused uranium company.