OREANDA-NEWS. June 16, 2009. This week ARMZ Uranium Holding (Atomredmetzoloto OJSC) and Uranium One Inc. (Canada) will hold a road-show for the investors of their alliance, Director for Corporate Development of ARMZ Oleg Fedyashin said during a press-conference in Moscow on June 15 2009. The road-show has set off today simultaneously in Northern America (the United States and Canada) and Europe.

As was reported earlier, ARMZ Uranium Holding Co. AKA Atomredmetzoloto, the corporation authorized and appointed by Rosatom State Corporation for Nuclear Energy to supply feedstock to the Russian nuclear industry, has announced that it has signed a definitive purchase agreement to sell a 50% interest in the Karatau Uranium Mine in Kazakhstan for consideration of 117 million common shares of Uranium One Inc. ( UUU – Toronto Stock Exchange, JSE Limited [Johannesburg Stock Exchange]) through a private placement and a cash payment of US\\$ 90 million. The agreement provides for an increase in the cash payment amount in the future depending on the financial results of the Karatau Uranium Mine over the next three years. Thus, ARMZ Uranium Holding Co. acquires a 16.6% interest in Uranium One Inc. with an option to increase it to 19.95%.

Concurrently with the purchase agreement, ARMZ Uranium Holding Co. has also entered into a long-term offtake agreement and a framework agreement providing for a strategic relationship with Uranium One, both of which will become effective upon closing of the acquisition.

The offtake agreement provides ARMZ Uranium Holding Co. with an option to purchase, on industry-standard terms, the greater of 50% of uranium concentrate produced by the Karatau Uranium Mine (equal to 1000 tonnes at full capacity) or up to 20% of Uranium One’s available attributable production from assets in respect of which Uranium One has the marketing rights, including Karatau. Therefore, the offtake agreement allows ARMZ Uranium Holding Co. to access – as of 2014 — an amount of uranium greater than that secured by ARMZ’s 50% interest in the Karatau Uranium Mine in Kazakhstan.

Resource-wise, ARMZ Uranium Holding Co. will contribute 24,901 tonnes of reserves and resources of uranium (through its 50% interest in the Karatau Uranium Mine), in return for a 20% interest in Uranium One’s total resource base equal to 52,266 tonnes. This represents a 4,9% increase in the total resource base of ARMZ Uranium Holding Co. from 561,835 tons to 589,200 tons. Furthermore, this growth is being achieved with ARMZ gaining access to uranium resources that are lower cost than Russia’s current uranium reserves and provides broader geographical diversification.

The framework agreement providing for a strategic relationship between ARMZ Uranium Holding Co. and Uranium One Inc. grants ARMZ the right to appoint two representatives to the Uranium One board of directors. The parties have also agreed that ARMZ Uranium Holding Co. will second two representatives to Uranium One, with one position in Kazakhstan.


Closing of the acquisition is subject to the approval of regulatory authorities as follows: the Ministry of Energy and Mineral Resources of the Republic of Kazakhstan; the Competition Protection Agency of the Republic of Kazakhstan; Foreign Investment Review Board (FIRB) of Australia, as well as certain other regulatory and stock exchange regulatory approvals. The aforementioned regulatory and stock exchange regulatory approvals are expected no later than Q4 of 2009.