DESIGNATED NEWS RELEASE
VANCOUVER, BC, Nov. 17,
2022 /CNW/ - Uranium Royalty Corp.
(NASDAQ: UROY) (TSXV: URC) ("URC" or the "Company")
is pleased to announce that its wholly-owned subsidiary has entered
into an agreement with Anfield Energy Inc. ("Anfield") to acquire a portfolio of
royalties on U.S. projects, comprised of:
- U.S. Conventional Mining Royalty Portfolio:
-
- a 2% gross value royalty on portions of the San Rafael Project,
located in Utah, USA and operated
by Western Uranium & Vanadium Corp.("Western");
- a 2 – 4% sliding scale gross value royalty on portions of the
Whirlwind Project, located in Colorado and Utah,
USA and operated by Energy Fuels Inc. ("Energy
Fuels"); and
- a 1% gross value royalty (applicable to uranium and vanadium
sales) on portions of the Energy Queen project, located in
Utah, USA and operated by Energy
Fuels.
- U.S. In-Situ Recovery (ISR) Royalty:
-
- a 2 – 4% sliding scale royalty on portions of the Dewey Burdock
Project located in South Dakota,
USA and operated by enCore Energy Corp.
("enCore")
The consideration payable to Anfield at closing is US$1.5 million in cash. The closing of the
transaction is subject to customary conditions, including the
approval of the TSX Venture Exchange.
Scott Melbye, Chief Executive
Officer of URC stated: "We are very pleased to enter into this
transaction with Anfield which
expands URC's American uranium interests at a time when heightened
geopolitical risks, and focus on energy independence, put a premium
on uranium assets not under the control, or influence, of
Russia or China."
Mr. Melbye continued: "The Biden Administration continues to
pursue Bipartisan legislative solutions in the United States House and Senate to
revitalize the American domestic nuclear fuel cycle, and these
investments fit squarely in support of those initiatives".
Uranium Energy Corp. holds more than 10% of the outstanding
shares of each of the parties and, therefore, Anfield and URC are considered "Non-Arm's
Length Parties" under the policies of the TSX Venture
Exchange.
The Dewey-Burdock
Project
The Dewey-Burdock Project is an advanced stage ISR uranium
project located in the Edgemont
uranium district of South Dakota,
USA. enCore owns the project through a subsidiary, Azarga
Uranium Corp. ("Azarga"). enCore has disclosed that the
project has been issued its key permits.
The project consists of 12,613 surface acres and 16,962 net
mineral acres. The royalty is calculated based on a sliding scale
of 2 – 4% of the market price of uranium at the time of production,
calculated at 2% of the market price where the market price is less
than US$25 per pound, 3% when the
market price is between US$25 and
US$40 per pound and 4% when the
market price is over US$40 a pound.
The royalty covers a portion of the project, estimated to be
approximately 20% of the current surface area, which the Company
believes is an area of development focus.
The Company also holds an existing royalty equal to 30% net
proceeds received by the payor from the sale of minerals, less
certain deemed production costs, which applies to portions of the
Dewey-Burdock Project. The proposed acquisition is expected to more
than double the Company's overall royalty coverage at the
project.
In its Annual Information Form for the year ended December 31, 2021, enCore disclosed a preliminary
economic assessment for the Dewey-Burdock Project completed by
Azarga in 2020 that included a mineral resource estimate of 17.1
Mlbs of U3O8 in the measured and indicated
categories (7.4 million short tons, at an average grade of 0.116%)
and 0.7 Mlbs in the inferred category (0.65 million short tons at
an average grade of 0.055%). The preliminary economic assessment
stated all values in U.S. dollars and used a constant uranium price
of US$55 per pound. The preliminary
economic assessment estimated post-tax net earnings over the life
of the project of US$324.4 million, a
post-tax internal rate of return of 50% and a net present value of
US$147.5 million applying an 8%
discount rate. enCore has not yet indicated if it will update the
preliminary economic assessment to make the study current after the
acquisition of Azarga. The foregoing preliminary economic
assessment is preliminary in nature and is provided for
illustrative purposes only. The preliminary economic assessment
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 preliminary economic
assessment will be realized.
The San Rafael Project
The San Rafael Project is a development stage project located in
Emery County, Utah. The core
uranium deposit of the San Rafael Uranium Project is the Deep Gold
deposit. The royalty is comprised of a 2% gross value royalty on
136 of 146 unpatented federal mining claims. The gross value is
calculated as either actual proceeds of sales of uranium or
vanadium, less certain expenses relating to weighing, assaying,
analysis, sales brokerage costs, allowable transportation costs and
allowable taxes or, in the case of non-arms' length sales, the
market value of such products as determined in accordance with the
underlying royalty agreement. Royalty payments may be taken in-kind
under the agreement.
Western has disclosed a historic resource estimate for the
entire San Rafael Uranium Project comprised of 758,000 tons at
0.225% U3O8 containing 3,404,600 lbs. in the
indicated category and 453,800 tons at 0.205%
U3O8 containing 1,859,500 lbs.
U3O8 in the inferred category.
The estimate was set forth in a historic technical report
prepared for Pinon Ridge Mining LLC titled "NI 43-101 Technical
Report on the San Rafael Uranium Project" with an effective date of
November 19, 2014. The Company is
treating such estimate as historical in nature and notes that a
qualified person has not done sufficient work to classify the
historical estimates as current mineral resources. The Company is
referencing such historic estimate for illustrative purposes, as
the Company believes it provides readers with relevant information
regarding the San Rafael Project. There are numerous uncertainties
inherent in the historical estimate, which is subject to all of the
assumptions, parameters and methods used to prepare such historical
estimate.
About Uranium Royalty
Corp.
Uranium Royalty Corp. is the world's only uranium-focused
royalty and streaming company and the only pure-play uranium listed
company on the Nasdaq. URC provides investors with uranium
commodity price exposure through strategic acquisitions in uranium
interests, including royalties, streams, debt and equity in uranium
companies, as well as through holdings of physical uranium. The
Company is well positioned as a capital provider to an industry
needing massive investments in global productive capacity to meet
the growing need for uranium as fuel for carbon-free nuclear
energy. URC has deep industry knowledge and expertise to identify
and evaluate investment opportunities in the uranium industry. The
Company's management and the Board include individuals with decades
of combined experience in the uranium and nuclear energy sectors,
including specific expertise in mine finance, project
identification and evaluation, mine development and uranium sales
and trading.
Website: www.UraniumRoyalty.com
Note on Technical
Disclosure
Darcy Hirsekorn, the Company's
Chief Technical Officer, has supervised the preparation of and
reviewed the technical information contained in this presentation.
He holds a B.Sc. in Geology from the University of Saskatchewan, is a qualified person
as defined in National Instrument 43-101 and is registered as a
professional geoscientist in Saskatchewan.
Except where otherwise stated, information respecting the
Dewey-Burdock project has been derived from a technical report
titled "Preliminary Economic Assessment, Dewey-Burdock Uranium ISR
Project, South Dakota, U.S.A.",
with an effective date of December 3,
2019, and from other the public disclosures of enCore Energy
and Azarga. Information regarding the other projects referenced
herein has been derived from the public disclosures of the
applicable operator or owner. As a royalty holder, the Company has
limited, if any, access to the properties subject to its interests.
The Company generally relies on publicly available information
regarding these properties and related operations and generally has
no ability to independently verify such information. In addition,
such publicly available information may relate to a larger property
area than that covered by the Company's interests.
Unless otherwise indicated, the technical and scientific
disclosure contained or referenced herein has been prepared in
accordance with NI 43-101, which differs significantly from the
requirements of the U.S. Securities and Exchange Commission
applicable to U.S. domestic issuers Accordingly, the scientific and
technical information contained or referenced in this press release
may not be comparable to similar information made public by U.S.
companies subject to the reporting and disclosure requirements of
the SEC. "Inferred mineral resources" have a great amount of
uncertainty as to their existence and great uncertainty as to
their economic and legal feasibility. It cannot be assumed that
all or any part of an inferred mineral resource will ever be
upgraded to a higher category.
Forward Looking
Statements
Certain statements in this news release may constitute
"forward-looking information", including those regarding the
Company's expectations regarding the transaction contemplated
herein, the benefits thereof and expectations regarding the
development of uranium and nuclear policy in the U.S..
Forward-looking information includes statements that address or
discuss activities, events or developments that the Company expects
or anticipates may occur in the future. When used in this news
release, words such as "estimates", "expects", "plans",
"anticipates", "will", "believes", "intends" "should", "could",
"may" and other similar terminology are intended to identify such
forward-looking information. Statements constituting
forward-looking information reflect the current expectations and
beliefs of the Company's management. These statements involve
significant uncertainties, known and unknown risks, uncertainties
and other factors and, therefore, actual results, performance or
achievements of the Company and its industry may be materially
different from those implied by such forward-looking statements.
They should not be read as a guarantee of future performance or
results, and will not necessarily be an accurate indication of
whether or not such results will be achieved. A number of factors
could cause actual results to differ materially from such
forward-looking information, including, without limitation, any
inability to satisfy the conditions to the transaction announced
herein, risks inherent to royalty companies, uranium price
volatility, risks related to the operators of the projects
underlying the Company's existing and proposed interests and those
other risks described in filings with Canadian securities
regulators and the U.S. Securities and Exchange Commission. These
risks, as well as others, could cause actual results and events to
vary significantly. Accordingly, readers should exercise caution in
relying upon forward-looking information and the Company undertakes
no obligation to publicly revise them to reflect subsequent events
or circumstances, except as required by law.
Neither the TSX Venture Exchange (the "TSX-V") nor its
Regulation Services Provider (as that term is defined in policies
of the TSX-V) accepts responsibility for the adequacy or accuracy
of this release.
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SOURCE Uranium Royalty Corp.