CENTENNIAL, Colo., October 20, 2016 – Uranium Resources, Inc. (URI) (Nasdaq: URRE; ASX: URI), announced today that it closed the previously announced transaction to acquire certain placer mining claims in Utah comprising the Sal Rica lithium brine project from Mesa Exploration Corporation (Mesa Exploration) (TSX-V: MSA; OTCPK: MSAJF). As previously announced, pursuant to the terms of the agreement between URI and Mesa Exploration, URI acquired a 100 percent interest in the Sal Rica project, subject to a 2 percent net smelter return royalty (NSR), for the following consideration:
- $50,000 cash paid to Mesa on October 19, 2016;
- 100,000 URI restricted shares issued on October 19, 2016, with a registration statement to be filed with the SEC by November 16, 2016;
- An additional 100,000 restricted shares to be issued on October 19, 2017, with a registration statement to be filed with the SEC by November 16, 2017.
Christopher M. Jones, President and Chief Executive Officer of URI, said “Continuing our expansion into the lithium brine exploration business strengthens our portfolio of high-value projects. Diversifying our mineral project pipeline, while maintaining our uranium business portfolio in readiness for the predicted price rise, allows investors increased opportunities to benefit from clean energy development. We remain optimistic about this new chapter for URI.”
About the Sal Rica Project:
The Sal Rica project is comprised of approximately 9,800 acres (3,960 hectares) of placer mining claims covering a prospective target for lithium-enriched brines in the Pilot Valley region of northwestern Utah. The target area is situated within a region of known brine-hosted lithium mineralization and is approximately 25 miles (40 kilometers) north of the town of Wendover, Utah in Box Elder County.
Results from a shallow drilling program carried out by Quintana Petroleum in 1966 on the Sal Rica project demonstrated the widespread presence of significant levels of lithium in brines associated with near surface aquifers. Geophysical studies by the University of Utah between 1957 and 1961 indicate that in the project area basin-fill sediments, which are potential host rocks for lithium enriched brines, have a depth range of 5,300 feet (1,615 meters). With lithium assay values ranging from 22 to 81 parts per million (ppm) in brine, as sampled by Quintana Petroleum over 13 drill holes, the data demonstrates the technical merit of the Sal Rica target area. Confirmation brine samples recently collected by Mesa Exploration returned lithium grades averaging 66 ppm lithium, with values as high as 80 ppm, consistent with the Quintana drill results. Initial sampling of sediments in the project area by URI personnel also yielded lithium values ranging from 82 ppm to 213 ppm lithium. All of the samples collected from the programs of Mesa Exploration and URI were analyzed by ALS Minerals, located in Reno, Nevada.
URI will continue lithium brine exploration activities at the Sal Rica project, with the intent of evaluating the project area for deeper brine horizons having lithium enrichment. Preliminary plans for 2017 include geophysical surveys to map the basin fill, followed by a drilling program and hydrogeological testing. The Company will provide further information on these activities as progress warrants.
About the Lithium Market
Lithium is a critical component for the manufacture of batteries for electrical storage and used in a wide range of devices ranging from cell phones to automobiles. The battery market is expected to grow 500% over the next 10 years, with lithium batteries accounting for 35% of this growth. At the same time, the transportation sub-market alone is expected to experience a 23% compounded annual growth rate during this same period, according to Bloomberg.
With large battery plants such as Tesla’s “Gigafactory” near Reno, Nevada and Faraday Motor Works’ proposed facility near Las Vegas, Nevada – URI’s Sal Rica Project is well placed within the evolving lithium brine production and consumption industry in the United States.
Lithium enriched brines are proven to be less expensive to explore for, develop and operate than other sources of lithium, such as lithium rich pegmatites and hectorite clays. This advantage of brines is coupled with a small environmental footprint and minimal carbon emissions, which makes ISR mining of brines an attractive method for producing lithium.
About Uranium Resources (URI)
URI is focused on developing energy-related metals. In addition to the Sal Rica and Columbus Basin lithium projects, URI remains focused on advancing the Temrezli in-situ recovery (ISR) uranium project in Central Turkey. URI controls extensive exploration properties under nine exploration and operating licenses covering approximately 32,000 acres (over 13,000 ha) with numerous exploration targets, including the potential satellite Sefaatli Project, which is 30 miles (48 km) southwest of the Temrezli Project. In Texas, the Company has two licensed and currently idled processing facilities and approximately 11,000 acres (4,400 ha) of prospective ISR uranium projects. In New Mexico, the Company controls mineral rights encompassing approximately 190,000 acres (76,900 ha) in the prolific Grants Mineral Belt, which is one of the largest concentrations of sandstone-hosted uranium deposits in the world. Incorporated in 1977, URI also owns an extensive uranium information database of historic drill hole logs, assay certificates, maps and technical reports for the Western United States.
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks, uncertainties and assumptions and are identified by words such as "expects," "estimates," "projects," "anticipates," "believes," "could," and other similar words. All statements addressing events or developments that the Company expects or anticipates will occur in the future, including but not limited to statements relating to the future financing of the Company, the Company’s expected burn rate, and developments at the Company’s projects are forward-looking statements. Because they are forward-looking, they should be evaluated in light of important risk factors and uncertainties. These risk factors and uncertainties include, but are not limited to, (a) the Company's ability to raise additional capital in the future; (b) spot price and long-term contract price of lithium and uranium; (c) risks associated with our foreign operations, (d) operating conditions at the Company's projects; (e) government and tribal regulation of the uranium industry, the lithium industry, and the power industry; (f) world-wide uranium and lithium supply and demand, including the supply and demand for lithium based batteries; (g) maintaining sufficient financial assurance in the form of sufficiently collateralized surety instruments; (h) unanticipated geological, processing, regulatory and legal or other problems the Company may encounter, including in Utah and Turkey; (i) the ability of the Company to enter into and successfully close acquisitions or other material transactions, including closing the proposed transactions with Laramide and receiving payment under the extension agreement to the purchase and sale agreement; (j) the results of the Company’s lithium brine exploration activities at the Sal Rica project, and (k) other factors which are more fully described in the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should any of the Company's underlying assumptions prove incorrect, actual results may vary materially from those currently anticipated. In addition, undue reliance should not be placed on the Company's forward-looking statements. Except as required by law, the Company disclaims any obligation to update or publicly announce any revisions to any of the forward-looking statements contained in this news release.
Competent Person’s Statement
Technical information in this press release is based on data reviewed by Dean T. Wilton, who is Chief Geologist and Vice President of Uranium Resources, Inc. Mr. Wilton is a “Qualified Person” as defined by Canadian National Instrument 43-101, and a “Competent Person” as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC Code). He is a Certified Professional Geologist (CPG-7659), as designated by the American Institute of Professional Geologists, and is a Member of the Australian Institute of Geoscientists (MAIG #6384). Mr. Wilton has appropriate experience that is relevant to the evaluation of the style of mineral deposits relating to this document. Mr. Wilton consents to the inclusion in this release of the matters based on their information in the form and context in which they appear.
Uranium Resources Contact:
Christopher M. Jones, President and CEO Jeff Vigil, CFO and VP Finance