Consolidated Uranium Proposed Spin-Out, Labrador Uranium, Continues Consolidation In The Central Mineral Belt With The Acquisition Of Mustang Lake
Consolidated Uranium Inc. (“CUR”, the “Company” or “Consolidated Uranium”) (TSXV: CUR) (OTCQB: CURUF) is pleased to announce that further to its press release on October 18, 2021 regarding the creation and planned spin-out of Labrador Uranium Inc. (“Labrador Uranium” or “LUR”), the Company and LUR have entered into a purchase agreement (the “Purchase Agreement”) with Mega Uranium Ltd. (“Mega”) and its wholly-owned subsidiary, pursuant to which LUR has agreed to acquire Mega’s 66% participating interest in the joint venture (the “JV Interest”) that holds a 100% interest in the Mustang Lake project (the “Mustang Lake Project”), a prospective uranium project located in the Central Mineral Belt of Labrador, approximately 9.5 kilometres northeast of Paladin Energy’s Michelin deposit (the “Mega Transaction”).
Stephen Keith, President and CEO of Labrador Uranium, commented “We are pleased to be able to add Mustang Lake to our portfolio of targets within the Central Mineral Belt. Not only does this transaction provide us with an additional uranium target along strike to Paladin Energy’s existing Michelin deposit, but it also aligns us with yet another exceptional team of asset developers in the uranium sector, Mega Uranium. This joint venture interest was one of our original targets when creating LUR and, with this agreement signed, we can now continue to seek additional growth opportunities. Combining this acquisition with the previously announced acquisitions from Altius Minerals and CUR and our $7 million financing, we believe LUR is well positioned to drive growth for its investors. We look forward to the addition of Mega’s CEO, Richard Patricio, to the Board of Directors of LUR on closing.”
Philip Williams, President and CEO of Consolidated Uranium, commented “Labrador Uranium is quickly becoming one of the leading uranium exploration and development vehicles in the space today. Bolstering the already impressive land package with Mustang Lake is a great move and thanks to strong demand for the recently announced private placement, 2022 is expected to be a busy and exciting year for LUR. At CUR, we remain focused on continuing to unlock and enhance value for our shareholders with a planned focus on initiating restart programs at our past producing mines in the U.S., undertaking work programs at our projects in Canada, Australia and Argentina and continuing to pursue M&A opportunities. Post closing of the recently announced CUR financing, our balance sheet will be significantly strengthened to aggressively pursue these objectives.”
The Mustang Lake Project is host to several uranium prospects consisting of numerous radioactive boulders, and lesser mineralized outcrop. The mineralization is hosted within felsic to intermediate volcanic rocks of the Aillik Group and lesser foliated mafic dykes that cross-cut the succession. The felsic rocks locally resemble those hosting mineralization at the Michelin deposit. The more intermediate rocks display similarities to those hosting mineralization at the Jacques Lake deposit. Three main prospects occur within the area: Mustang Lake, Irving Zone and Mustang Lake North. The project has potential for IOCG-style mineralization. The Mustang Lake Project is host to the highest lake-sediment value for uranium within the entire Michelin-Jacque Lake region. Past diamond drilling has intersected uranium values of 0.12% U3O8 over 9.11 metres.
Terms of the Joint Venture Purchase Agreement
Pursuant to the Purchase Agreement, LUR has agreed to acquire Mega’s 66% interest in the joint venture between Mega and Anthem Resources Inc. (formerly Santoy Resources Ltd.) in exchange for 3,000,000 common shares of LUR (the “LUR Shares”). In addition, Mega is entitled to appoint one nominee to the Board of Directors of LUR. It is expected that on closing of the Mega Transaction Richard Patricio, President and Chief Executive Officers of Mega, will join the Board of Directors of LUR. Completion of the Mega Transaction is subject to certain closing conditions, including, among other things, completion of the previously announced arrangement between the Company and LUR (the “Arrangement”) and the conditional approval from the CSE for the listing of the LUR Shares (the “Listing”).
In the event that the Arrangement and Listing are not completed, Consolidated Uranium has the right (the “Call Right”) to acquire the JV Interest in exchange for $1 million, to be satisfied by the issuance of shares of Consolidated Uranium (the “CUR Shares”) based on the volume-weighted average price of the CUR Shares at the time of the exercise of the Call Right, subject to approval of the TSX Venture Exchange (“TSXV”). Any CUR Shares issued in connection with the Mega Transaction are subject to final approval of the TSXV and will be subject to a hold period expiring four months and one day from the applicable date of issuance.
About Consolidated Uranium Inc.
Consolidated Uranium Inc. (TSXV: CUR) (OTCQB: CURUF) was created in early 2020 to capitalize on an anticipated uranium market resurgence using the proven model of diversified project consolidation. To date, the company has acquired or has the right to acquire uranium projects in Australia, Canada, Argentina and the United States each with significant past expenditures and attractive characteristics for development. Most recently, the Company completed a transformational strategic acquisition and alliance with Energy Fuels Inc (NYSE American: UUUU) (TSX: EFR), a leading U.S.-based uranium mining company, and acquired a portfolio of permitted, past-producing conventional uranium and vanadium mines in Utah and Colorado. These mines are currently on stand-by, ready for rapid restart as market conditions permit, positioning CUR as a near-term uranium producer.
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