News
RNS Announcements
Farm in Agreement
03 April 2006
Uranium Resources plc ('URA' or the 'Company'), the AIM listed uranium exploration and development company, has offered a farm in agreement to Western Metals Limited ('WMT'), a company listed on the Australian Stock Exchange.
The directors consider this transaction to be an excellent opportunity for the Company because it funds the exploration programme, reduces URA's exposure and importantly will allow the Company to focus on additional opportunities that it is actively pursuing to create increased shareholder value.
1 Farm in Agreement
VUnder the agreement WMT may earn a 40% interest in the Company's Tanzanian prospecting licences by spending AU$2 million on the licences on or before the second anniversary of the agreement becoming unconditional. WMT may increase its interest to 60% by spending a further AU$2 million within a further 2 years. WMT must spend AU$500,000 within 12 months of the completion of the agreement.
The agreement is conditional on:
- WMT obtaining all necessary shareholder approvals including approval to enter into the agreement and all other agreements to be entered into under the farm in agreement;
- URA obtaining all necessary shareholder approvals; and
- Deep Yellow (Tanzania) Limited (a wholly owned subsidiary of the Company) obtaining all relevant consents under the laws of the Republic of Tanzanian that are required in order for it to enter into the agreement. The directors of WMT have advised URA that they are prohibited by law from considering the offer. Accordingly, they intend to seek a dispensation from the Australian Securities and Investments Commission and the offer will be put to the shareholders of WMT in general meeting. This is more fully described in paragraph 5 of this announcement.
2 Work Programme
Drake-Brockman Geoinfo Pty Ltd, the Company's consultants, has delineated 5 areas in the licences worthy of immediate follow-up. A preliminary reconnaissance field trip will commence this week. Following this, it is planned to carry-out detailed mapping, sampling, grid work and trenching to investigate the anomalies during the 2006 field season. Depending upon these results drill testing of the most promising targets will be initiated.
3 WMT
WMT is a mineral explorer listed on the Australian Stock Exchange. On completion of its fundraising (referred to in paragraph 4 below) it will have approximately 373 million ordinary shares in issue and a cash position of approximately AU$3.3 million.
4 WMT Fundraising
WMT has announced that it has appointed Dalgety Capital, a licensed dealer in securities, to manage the placement of 100,000,000 ordinary shares in WMT at an issue price of 2.5 cents each to raise approximately AU$2,500,000.
The placement will be undertaken in two tranches:
- 40,000,000 shares immediately; and
- 60,000,000 shares, subject to shareholder approval.
Funds raised will be utilised for working capital and, on completion of the transaction, to finance the initial exploration programme.
WMT has announced that it intends to complete the initial placement within 2-3 weeks, following the lodgement of a Prospectus, and that it proposed to hold the shareholder meeting in May 2006.
5 WMT Shareholder and Other Approvals
WMT has announced that its directors, having a relevant interest in the securities of URA, may have a 'material personal interest' in the proposal, and accordingly, pursuant to section 195 of the Corporations Act 2001 of Australia, are unable to form a quorum to consider whether WMT should enter into the agreement. Therefore, WMT must obtain the approval of its shareholders prior to signing the farm in agreement.
WMT also announced that it intends to ask the Australian Securities and Investment Commission to modify the application of section 195 to enable it to sign the farm in agreement subject to the approval of WMT's shareholders.
6 WMT's Announcement
WMT announced the transaction to the Australian Stock Exchange this morning. URA intends to post the full text of WMT's announcement on its website at www.uraniumresources.co.uk. The directors urge you to read it because it includes diagrams of the geology and location of the tenements.
7 Change of Directors
David Steinepreis has resigned as a director of URA with immediate effect. Similarly, Hugh Warner has resigned as a director of WMT.
8 Technical Overview
The information in this section of the announcement that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Dr Joseph Drake-Brockman who is a Member of The Australasian Institute of Mining and Metallurgy. Dr Drake-Brockman is employed by Drake-Brockman Geoinfo Pty Ltd. Dr Drake-Brockman has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Dr Drake-Brockman consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
8.1 Mtonya Licences and Geology
The Mtonya area is located in the southern part of Tanzania between Songea and south_selous. The village of Mtonya is within the main tenement block. The Mtonya leases cover the contact between the Usagaren basement to the west and the Karroo Luwegu Basin to the east. Uranium deposits of the sandstone-type targeted in the Luwegu Basin comprise more than 30% of currently known uranium deposits in Africa, including Paladin's Kayelekera deposit in Malawi 200km to the west.
Uranium mineralization occurs at the Mkuju Prospect (owned by OmegaCorp Limited) to the east and north of the tenement block. The contact zone between outcrops of Usagaran granites and gneiss and the Karroo sediments is covered by thin Tertiary to Quaternary deposits.
8.2 Makutapora Licences and Geology
The Makutapora lease lies just north of the town of Dodoma. At Makutapora the lease covers a portion of an infilled rift (half graben) in Precambrian basement. The infill sediments are of post Tertiary age and are capped by recent black Mbuga muds. Uranium has been reported from both the Mbugas as well as from the deeper sedimentary infill sediments.
8.3 Uranium Targets
Mtonya Area Targets
Within the Mtonya leases the prime target is the uranium in sandstone model. Simplified this model requires:
- a uranium source area (usually granite-gneiss terrain or acid volcanics),
- a weathering and erosional event to release the uranium under oxidizing conditions,
- accumulation of porous sediments in an adjacent basin (usually fluviatile sandstones),
- sufficiently rapid sedimentation to preserve reduced facies characterized by pyrite, carbonaceous material and montmorillonite clays,
- precipitation of uranium along the interface between oxidized and reduced facies (so called redox front).
The Mkuju Prospect was discovered by Uranerzbergbau Gmbh (UEB) in 1978. Due to the surface oxidation only secondary uranium was located. The best mineralization was located within 1-5 m thick sandstone beds as disseminated mm flecks of carnotite. These bodies can be 0.5-2.5 m thick, 3-15 m wide and 5-25 m long. Channel samples from trenches range up to 2.18 % U3O8. Mineralization was also noted on re-worked mudstone clasts, pyrite concretions and plant fossils. The uranium extends over an area of 5x3 km that indicates that the 'uranium front' is large enough to generate ore bodies.
It is postulated that the uranium at Mkuju was derived from the Usagaren basement that formed the western boundary of the sedimentation. Airborne radiometric data shows that the granites and gneisses of the Usagaren are fertile for uranium. That implies that the whole of the western margins of the Karroo sediments including any palaeo-channels cut into the basement are prospective for uranium. If at any stage reducing conditions have prevailed, then extensions or repetitions of the known uranium mineralization are possible. URA controls a substantial part of this target zone.
A secondary, speculative target is hydrothermal vein and/or metasomatic type uranium mineralization in the Usagaren basement. Such mineralization has not been reported from the area but there are reports of radioactive minerals being found in artesian gemstone operations within Tanzania which supports the possibility of hydrothermal uranium mineralization.
Makutapora Targets
The Makutapora Prospect falls within the central internal Bahi drainage system on the Tanganyika Plateau. North-south striking faults of the Tertiary East African rift system occur throughout the area. The faults exercise a strong control over both the present day topography and the paleo topography. The fault controlled channels are filled by fluviatile and lacustrine sediments informally classified as the 'Kilimantindie Cement'. The surface expression is frequently expressed by black, carbonate and gypsum rich clays that form in shallow local depressions (Mbuga swamps). These frequently fill with water during the wet season. Surface uranium anomalies are known from several of the Mbugas (including Makutapora). In 1953 the Geological Survey of Tanzania (GST) drilled a diamond hole within the Bahi Depression to research the Kilimatinde Cement. Subsequent radiometric measurements on the core located a 15 cm sample of strontianite with a radiometric U3O8 value of 0.24%. This result has recently been followed up by Uranex. They have intersected promising results in trenches and RAB drilling.
At Makutapora the licence was selected to cover a palaeo-channel that contains black mbuga muds, quartz sands and calcrete. The main target is defined by a uranium in groundwater anomaly with an associated 500 ppm U308 assay in calcrete from archived water bore cuttings that was identified by UEB during previous exploration in the area. In addition assays up to 285 ppm U308 have been reported from shallow trenches within calcretes layers in the Mbuga muds at Makutapora and in adjacent areas. None of these anomalies were followed-up by drilling.
Exploration by UEB in 1979 identified the following positive factors for further exploration:
- uranium rich granites (10-80 ppm U3O8) as source rocks
- known occurrences of uranium in drilling (Bahi & Makutapora) indicating mobilization and precipitation of uranium in the sedimentary environment,
- known re-mobilization of uranium in the superficial environment,
- abundant channel development.
Targets are calcrete-like deposits in the near surface sediments and sandstone type deposits deeper within the infill sediments. The term calcrete-like is used because a direct correlation with the calcrete model is not given.
The calcrete model generally requires:
- high rates of evaporation, internal drainage and very slow rates of groundwater flow giving rise to saline groundwater and to the development of porous channel calcretes,
- at certain points along the channel, within but also adjacent to the calcretes, U-K-V concentrations reach saturation points resulting in the precipitation of carnotite.
The main questions are whether the drainages are sufficiently stable (given the Tertiary rifting) to allow the development of substantial deposits and whether they are sufficiently saline to consistently precipitate uranium.
| Contacts: | ||||
| Ross Warner |  |
Uranium Resources plc | |
Tel: 07760 487 769 |
| Hugo de Salis | St Brides Media & Finance Ltd | Tel: 020 7242 4477 |