The proposed deal calls for Pioneer shareholders to receive one UEX share for each Pioneer share held; as a result, Pioneer shareholders would collectively hold a 60% interest in the new company.
In return, Pioneer will contribute interests in all its uranium exploration properties, including Riou Lake, Black Lake and Serendipity Lake, which, combined, occupy 655 sq. km near Stony Rapids, Sask. (Ownership of the Riou Lake project is already shared by Cameco and Pioneer.)
For its part, Cameco will chip in its Hidden Bay property for a 40% stake. The company retains the first right of refusal to provide financing for mine development, as well as the first right to mill ore from Hidden Bay at the nearby Rabbit Lake operation. In addition, Cameco will also have the right to market UEX’s share of any uranium production.
Hidden Bay hosts some of the first major uranium discoveries in the Athabasca Basin and, since 1975, has produced 140 million lbs. U3O8 from seven deposits.
UEX plans to fund development projects via a private placement; Cameco and Pioneer have each committed $500,000 to the proposed share offering.
Initially, UEX’s board will consist of four directors: Stephen Sorensen, Graham Thody and Peter Kalbfleisch (currently directors of Pioneer), and Colin Macdonald (Cameco’s vice-president of exploration).
Sorensen will be president and chief executive officer, and will own 12.96% of UEX’s shares; he is also the single-largest shareholder of Pioneer, with 21.6% of that company’s shares.
The annual exploration budget for Riou Lake and Hidden Bay is to be $2 million initially.
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