OREANDA-NEWS. December 16, 2010. JSC Atomredmetzoloto (“ARMZ Uranium Holding”), company authorized by State Corporation for Nuclear Energy to supply Russian nuclear industry with raw materials has entered into friendly acquisition agreement with Mantra Resources Limited company (AXC – MRU, TSX - MRL) , pursuant to which ARMZ Uranium Holding acquires 100% of issued shares of Mantra Resources Limited. Mantra's core asset is the world-class Mkuju River Project in Tanzania which is nearing the completion of a definitive feasibility study.

According to the Agreement, each common share of Mantra will be exchanged for a cash payment in the amount of AUD 8.00 (eight Australian dollars); thus, the value of 100% of issued shares of Mantra Resources Limited is estimated at AUD 1.2 billion (1.197 bil. USD at the exchange rate of Central Bank of the Russian Federation as for 15.12.2010). The acquisition cost represents 15.5% to Mantra’s 20 day volume weighted average price on the Australian Stock Exchange by 14.12.2010.

The directors of Mantra unanimously voted in favour of the transaction. Mantra’s largest shareholder, Highland Park S.A. and its related entities (“Highland Park”), hold approximately 12.4% of Mantra’s outstanding shares and have indicated to the board of Mantra their intention to vote in favour of the Transaction.

The transaction contemplates fulfilling number of standards requirements, including, specifically, transaction approval by General Shareholders Meeting of Mantra Resources Limited, relevant state authorities and court approval. Required approvals include approval from Australian Foreign Investment Committee.

Concurrently with the execution of the Scheme, ARMZ and Uranium One have entered into a definitive put/call option agreement (“Put/Call Agreement”) pursuant to which Uranium One has the right to acquire from ARMZ, and ARMZ has the right to sell to Uranium One, all of the Mantra shares for consideration equal to ARMZ’s acquisition cost. According to the agreement, Uranium One has a call option to acquire Mantra from ARMZ, exercisable at any point within 12 months of closing (subject to extension) of the acquisition of Mantra by ARMZ. The Put/Call Agreement also provides ARMZ with a put option to sell Mantra to Uranium One at the end of the term..

The transaction with Mantra Resources Limited is a part of ARMZ Uranium Holding strategy on diversifying uranium resource base of Rosatom State Corporation. It allows ARMZ Uranium Holding extending its portfolio of assets with low uranium production cost as well as consolidating leading positions of Rosatom State Corporation among world’s natural uranium producers. The transaction is realized within the concept of development of Uranium One as the global platform for ARMZ Uranium Holding growth.

"Our acquisition proposal provides all Mantra shareholders with the opportunity to realize cash consideration at a premium valuation. This transaction also highlights our continuing strong support of Uranium One as its majority shareholder and will allow all of Uranium One’s shareholders and stakeholders to benefit from the acquisition of a high-quality uranium development project on advanced stage.", - Vadim Zhivov, Director General of ARMZ, commented.

Jean Nortier, Chief Executive Officer of Uranium One, in turn, said:

“We believe that the Mkuju River Project ranks among the best uranium development projects in the world. Our option to acquire Mantra from ARMZ provides Uranium One with the opportunity to add this significant development project, located in a mining friendly jurisdiction, to our existing portfolio of world-class operations and complements the long-term growth strategy of the Company. This large-scale project is intended for many years of production and will ensure considerable uranium production volumes at low production costs. Being the project operator, we plan to bring it to production stage quickly, thus increasing shareholders value of Uranium One and ensuring advanced growth rates of our company ".

About ARMZ Uranium Holding

ARMZ Uranium Holding (JSC Atomredmetzoloto) is one of the world's uranium production leaders, among top five of the largest uranium production companies by production volume, and second largest company in terms of uranium raw material base. The Holding is the main supplier of raw uranium to Russian atomic industry and produced 4624 tons of uranium in 2009 at its facilities in Russia and Kazakhstan
JSC Atomredmetzoloto announced in June 2010 its transaction on consolidation of controlling interest in Canadian uranium producing company Uranium One. The transaction which has been already approved by Uranium One shareholders and received required approvals from state regulation bodies is to be closed by the end of 2010.
79.98% of JSC Atomredmetzoloto shares is owned by JSC Atomenergoprom.
Holding enterprises employ over 10 000 people.