08.06.2010, 19:00
ARMZ Uranium Holding Co. Acquires 51% Interest in Uranium One Inc.
OREANDA-NEWS. June 08, 2010. JSC “Atomredmetzoloto” (”ARMZ”) hereinafter referred to as ARMZ, the mining arm of Rosatom State Corporation, today announced the signing of a definitive purchase and subscription agreement with Uranium One Inc. (UUU – Toronto Stock Exchange, Johannesburg Stock Exchange), (“Uranium One”) under which ARMZ will contribute its 50% interest in the JSC Akbastau Uranium Mine (“Akbastau”) and 49.7% interest in the JSC Zarechnoye Uranium Mine (“Zarechnoye”), both located in southern Kazakhstan, and USD 610 million in cash, in return for 356 million new common shares of Uranium One. Upon completion of the transaction, ARMZ will own not less than a 51% interest in Uranium One. ARMZ currently holds 23.1% of Uranium One’s outstanding common shares.
Upon completion of the transaction, ARMZ will own a controlling interest in one of the world’s largest uranium mining corporations with low production cash costs (less than USD 20 per pound U3O8 on a consolidated basis). In connection with the transaction, Uranium One and ARMZ have also agreed to amend the existing offtake agreement between the parties, to provide ARMZ with increased offtake rights commensurate with its increased equity ownership interest in Uranium One.
Recognizing the importance of world class corporate governance in a publicly traded company the Parties have agreed to a package of minority protections and that, upon completion of the transaction, the Board of Uranium One will be reduced from thirteen to nine directors but continue to have a majority of independent directors (a total of five, two of whom will be nominated by ARMZ), including Ian Telfer, who will continue as Chairman, and that Jean Nortier will continue as Chief Executive Officer. ARMZ will also be entitled to three additional nominees to the Board of Uranium One.
The transaction is subject to the required regulatory approvals of the Republic of Kazakhstan (the Ministry of Industry and New Technologies, the Competition Protection Agency), approval under the Investment Canada Act, clearance by the Committee on Foreign Investment of the United States, TSX and JSE approvals and other usual and customary closing conditions, including anti-trust approvals in a number of jurisdictions. The transaction is expected to be completed before the end of 2010.
Rosatom State Corporation has been actively increasing its activity in the international arena: it presently ranks first in the world in the number of nuclear power plants simultaneously under construction outside of Russia, provides 40% of global services in uranium enrichment and represents 17% of the world’s nuclear fuel fabrication capacity. Bettering Rosatom’s uranium mining asset portfolio will ensure adequate feedstock catering for the needs of the nuclear industry.
Vadim Zhivov, Director General of ARMZ, commented:
“Developing and operating projects in the Republic of Kazakhstan – in full cooperation with ARMZ’s strategic partner Kazatomprom – is a priority for ARMZ. We are confident that Rosatom’s controlling interest in Uranium One will allow it to further strengthen its excellent relationship with its partners in Kazakhstan and to open up new promising avenues for cooperation”.
Upon completion of the transaction, ARMZ will own a controlling interest in one of the world’s largest uranium mining corporations with low production cash costs (less than USD 20 per pound U3O8 on a consolidated basis). In connection with the transaction, Uranium One and ARMZ have also agreed to amend the existing offtake agreement between the parties, to provide ARMZ with increased offtake rights commensurate with its increased equity ownership interest in Uranium One.
Recognizing the importance of world class corporate governance in a publicly traded company the Parties have agreed to a package of minority protections and that, upon completion of the transaction, the Board of Uranium One will be reduced from thirteen to nine directors but continue to have a majority of independent directors (a total of five, two of whom will be nominated by ARMZ), including Ian Telfer, who will continue as Chairman, and that Jean Nortier will continue as Chief Executive Officer. ARMZ will also be entitled to three additional nominees to the Board of Uranium One.
The transaction is subject to the required regulatory approvals of the Republic of Kazakhstan (the Ministry of Industry and New Technologies, the Competition Protection Agency), approval under the Investment Canada Act, clearance by the Committee on Foreign Investment of the United States, TSX and JSE approvals and other usual and customary closing conditions, including anti-trust approvals in a number of jurisdictions. The transaction is expected to be completed before the end of 2010.
Rosatom State Corporation has been actively increasing its activity in the international arena: it presently ranks first in the world in the number of nuclear power plants simultaneously under construction outside of Russia, provides 40% of global services in uranium enrichment and represents 17% of the world’s nuclear fuel fabrication capacity. Bettering Rosatom’s uranium mining asset portfolio will ensure adequate feedstock catering for the needs of the nuclear industry.
Vadim Zhivov, Director General of ARMZ, commented:
“Developing and operating projects in the Republic of Kazakhstan – in full cooperation with ARMZ’s strategic partner Kazatomprom – is a priority for ARMZ. We are confident that Rosatom’s controlling interest in Uranium One will allow it to further strengthen its excellent relationship with its partners in Kazakhstan and to open up new promising avenues for cooperation”.
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