Uranium Royalty to acquire additional royalty on Churchrock project for $3.5M

Uranium Royalty announced that it has entered into a binding royalty purchase agreement to acquire an additional royalty on a portion of the Churchrock uranium project owned indirectly by Laramide Resources in New Mexico. The Churchrock project is an advanced stage, ISR uranium project located in the Grants Mineral Belt of New Mexico, 12 miles northeast of Gallup, New Mexico. Laramide has disclosed that the Churchrock Project and nearby properties represent one of the largest and highest-grade undeveloped ISR uranium projects in the United States. The royalty is structured as a gross overriding royalty of 6% “Mine Price”, which anticipates recovery of reasonable and actual costs to transport the mineral to the final point of sale. The royalty covers the 10 patented mining claims in Section 8 property that comprise New Mexico Mineral Survey 2220 on the Churchrock Project. Total consideration payable by the company under the transaction is $3.5M, which will be satisfied by the company on closing by paying $1.75M in cash to each of the vendors, each of whom owns an undivided one-half interest in the royalty. The purchase price for the royalty will be funded from cash and liquid assets on hand. The recently released technical report on the Churchrock project highlights a total inferred mineral resource of 50.8M pounds U3O8 for the project, including an Inferred Resource of 10.22 Mlbs U3O8 on Section 8 alone. The preliminary economic assessment is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that such preliminary economic assessment will be realized. The Churchrock technical report, includes a preliminary economic assessment that estimates a Life of Mine production total of 31.2 Mlbs U3O8, with recovered metal per year of 975,000 pounds U3O8 from the Crownpoint Central Processing Plant, and a mine life of 32 years. Closing of the transaction is subject to, among other things, the satisfaction of customary closing conditions and is expected to occur before the end of July. Each of the vendors owns an undivided one-half interest in a uranium royalty of 6% mine price on part of the S2NE4; part of the E2SW4: part of the SE4NW4 and SE4, Section 8, T16N, R16W, N.M.P.M., McKinley County, New Mexico. The royalty covers the 10 patented mining claims in Section 8 that comprise New Mexico Mineral Survey 2220 on the Churchrock project. The royalty is structured as a gross overriding royalty of 6% “mine price”, which anticipates revenues based on contract sales and recovery of certain reasonable and actual costs to transport the mineral to the final point of sale.