Mega Uranium to Option Ben Lomond & Georgetown Properties
15 May 2020 - 8:46AM
Mega Uranium Ltd. (MGA: TSX) announces that it has entered into an
agreement with NXGold Ltd. (“
NX”) to grant to NX
(following receipt by NX of the necessary conditional approvals of
the TSX Venture Exchange) a two-year option to purchase Mega’s Ben
Lomond uranium property located in Queensland, Australia (the
“
Ben Lomond Option”). As consideration for
the option grant, Mega will receive from NX $180,000 in cash,
900,000 common shares, 900,000 common share purchase warrants
exercisable for an equal number of common shares (the shares and
warrants are collectively referred to as the “
Option
Securities”, and the number of Option Securities assumes
the completion of a 1-for-10 share consolidation by NX prior to
issuance), an option to sell to NX Mega’s Georgetown uranium
property, also located in Queensland, Australia (the
“
Georgetown Option”), and the right to appoint one
nominee to NX’s board of directors.
The Ben Lomond Option will be conditional upon
and may be exercised by NX subject to the satisfaction of certain
conditions, including the approval of the Australian Foreign
Investment Review Board, failing which the option will terminate
and the Option Securities will be cancelled. NX may exercise
the option and acquire the Ben Lomond property for a price of $2.5
million, payable in cash or common shares (under certain
circumstances), and reimbursement to Mega of expenses incurred in
respect of the property since the execution of the option
agreement. The purchase of the Ben Lomond property is also
subject to contingent payments to Mega of up to $2,385,000, if the
monthly average spot price of uranium reaches US$50, US$75 and
US$100, prior to or after closing of Ben Lomond sale. If the
option is exercised, completion of the sale of the Ben Lomond
property will be subject to the satisfaction of various
conditions.
The Georgetown Option will also be conditional
upon and may be exercised by Mega subject to the satisfaction of
certain conditions, including the approval of the Australian
Foreign Investment Review Board, failing which it will
terminate. If the Ben Lomond Option is exercised, Mega can
exercise the Georgetown Option and sell the Georgetown property to
NX for a price of $500,000, payable in cash or common shares of NX
(under certain circumstances), and reimbursement to Mega of
expenditures in respect of the property since the execution of the
option agreement. The purchase of the Georgetown property by
NX is also subject to contingent payments of up to $1,425,000 if
the monthly average spot price of uranium reaches US$50, US$75 and
US$100, prior to or after closing of the Georgetown sale. If
the Georgetown Option is exercised, completion of the sale of the
Georgetown property will be subject to the satisfaction of various
conditions.
Mega has owned the Ben Lomond and Georgetown
properties since 2005 and operated them under care and maintenance
for several years, while the price of uranium has remained
depressed.
ABOUT MEGA URANIUM LTD.Mega
Uranium Ltd. is a Toronto-based mineral resources company with a
focus on uranium properties in Australia and Canada and a portfolio
of equity investments in uranium-focused public and private
companies. Further information on Mega can be found on the
company’s website at www.megauranium.com.
For further information please contact:
Mega Uranium
Ltd.
Richard Patricio
Chief Executive Officer and
President
T: (416)
643-7630
info@megauranium.com www.megauranium.com
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
INFORMATION
This press release contains forward-looking
information based on current expectations in connection with the
proposed options and underlying property sales (the “Transaction”),
including events which are proposed to occur under the terms of the
agreement. Forward-looking information is often, but not
always, identified by the use of the words “contemplate”,
“estimate”, “expect” and “anticipate” and statements that an event
or result “may”, “will”, “should”, “could” or “might” occur and any
similar expressions or negative variations thereof.
In providing forward-looking information in this
press release, we have made numerous assumptions regarding the
Transaction, which we believe to be reasonable, including
assumptions relating to the satisfaction of conditions to the
option grants and completion of the Transaction and the expected
actions of third parties. Forward-looking information entails
various risks and uncertainties however that could cause actual
results to differ materially from those reflected in the
forward-looking information. Specific risks that could cause actual
results to differ materially from those anticipated or disclosed in
this press release include, but are not limited to failure to
satisfy the conditions to complete the Transaction, including
failure to receive required approvals, and the delay of completion
or failure to complete the Transaction for any other reason.
General risks relating to capital markets, economic conditions, and
regulatory changes may also cause actual results to differ
materially from those anticipated or disclosed in this press
release. Forward-looking information are not guarantees of future
performance, and management’s assumptions upon which such
forward-looking information are based may prove to be
incorrect.
Accordingly, there can be no assurance that
actual events or results will be consistent with the
forward-looking information disclosed herein. In light of the
significant uncertainties inherent in forward-looking information,
any such forward-looking information should not be regarded as
representations by us that our objectives or plans relating to the
rights offering or standby commitment or otherwise will be
achieved. Investors are cautioned not to place undue reliance on
any forward-looking information contained herein and that such
forward-looking information are provided solely for the purpose of
providing information about our current expectations and plans
relating to the future. Readers are cautioned that such information
may not be appropriate for other purposes. In addition,
forward-looking information relates to the date on which they are
made.
We disclaim any intention or obligation to
update or revise any forward-looking information contained in this
press release, whether as a result of new information, future
events or otherwise, except to the extent required by law.
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