SXR moves to acquire UrAsia (February 12, 2007)

SXR Uranium One (SXR-T, SXR-J) has offered to take over UrAsia Energy (UUU-T, UUU-L) to create a $5-billion uranium company that would have early production from Australia and South Africa, and advanced projects in Central Asia.

SXR’s bid is 0.45 of a share for each share of UrAsia, with the successor company to be called Uranium One. The imputed value based on closing prices of the two companies is $7.05 per share, a 13% premium over UrAsia’s market value. UrAsia shareholders will have about 40% of the shares in the new company, and three of the nine directors on the board.

UrAsia has a 70% interest in the Akdala and South Inkai uranium projects in southern Kazakhstan, and a 30% interest in another Kazakh project, Kharassan. Akdala is currently in production as an in-situ-leach mine, in joint venture with the Kazakh state uranium producer, Kazatomprom; it sold 1.3 million lb. U₃O₈ in the twelve months ended Oct. 31/06.

Both South Inkai and Kharassan are currently in development as in-situ-leach mines, and are expected to go into production late this year. South Inkai is slated to produce 1.6 million lb. and Kharassan 1.9 million lb. U₃O₈ annually once they are in production.

SXR’s Honeymoon uranium project in South Australia is scheduled to go into production in early 2008, at about 880,000 lb. annually. A feasibility study on its Dominion project in South Africa suggested production of 3.8 million lb. annually.

Both companies have sales contracts for anticipated production in hand, mainly at market prices.