Mega Uranium has finalised a deal to sell a 35 per cent stake in its Lake Maitland uranium project in Western Australia to three Japanese electricity utilities and Japanese trading house ITOCHU Corporation for US$49 million.
Mega Uranium has finalised a deal to sell a 35 per cent stake in its Lake Maitland uranium project in Western Australia to three Japanese electricity utilities and Japanese trading house ITOCHU Corporation for US$49 million.
Toronto-based Mega said it was on track to begin mining at Lake Maitland in 2011.
The investment deal is subject to Foreign Investment Review Board approval and other regulatory sign-offs.
The Mega announcement is pasted below:
Mega Uranium Ltd. is pleased to announce the completion of final documentation relating to the sale by Mega Uranium to JAURD (the Japan Australia Uranium Resources Development Co. Ltd.) and ITOCHU Corporation (ITOCHU) of 35% of the Lake Maitland Project and announces joint venture to advance the development of the Lake Maitland national instrument 43-101 compliant Inferred Resource of 23.7 million pounds U3O8.
As announced in Mega Uranium's February 27, 2009 press release, JAURD is a Japanese company mandated to acquire uranium resources in Australia on behalf of its shareholders, being three Japanese utilities -- The Kansai Electric Power Company, Incorporated (50%), Kyushu Electric Power Company, Incorporated (25%) and Shikoku Electric Power Company, Incorporation (15%) -- and ITOCHU Corporation (10%), one of the world's largest uranium trading houses.
Stewart Taylor, President of Mega Uranium, commented, "After many months of negotiations, we have reached a favourable deal and are pleased to welcome our Japanese partners to help us advance the Lake Maitland Project to production. JAURD's expertise in the uranium industry and their specific experience of the Australian uranium market make them an ideal partner for us in this project. Their shareholders, Kansai, Kyushu and Shikoku, will have access to uranium produced at Lake Maitland for their own use and ITOCHU will be able to participate in additional uranium off-take arrangements from the project".
Farm-In and Joint Venture Agreement
The final agreements, including a farm-in and joint venture agreement, between Mega Uranium, JAURD and ITOCHU provides for aggregate payments of US$49 million by JAURD and ITOCHU to Mega Uranium in order to earn their aggregate 35% interest in the Lake Maitland Project.
In order to earn a 35% interest, JAURD and ITOCHU will make initial payments to Mega Uranium to fund feasibility studies of the Lake Maitland Project, with further payments in the due course, subject to favorable results in the feasibility studies, including those for the alkaline leaching process.
The definitive agreements remain conditional upon receipt of approvals required under the Foreign Acquisitions and Takeovers Act 1975 and related Australian regulatory approvals.
Chairman and CEO of Mega Uranium, Sheldon Inwentash, stated, "Over the past several months we have continued to develop our Lake Maitland Project and are on track for 2011 production. We are pleased to formally welcome JAURD and ITOCHU as joint venture partners on the project."
Mega Uranium is well financed and, together with JAURD and ITOCHU, can meet the capital expenditure requirements for the Project as set out in the recently completed and announced Lake Maitland scoping study (see press release dated October 21, 2008).
More Information about JAURD
JAURD's three utility partners have an installed nuclear capacity of 17,048 megawatts from 6 nuclear power plants, Kansai 9,768 MW from 3 stations, Kyushu, 5,258 MW from 2 stations and Shikoku, 2,022 MW from 1 station.
More Information about ITOCHU
ITOCHU Corporation, founded in 1858, employs 40,000 people in 153 offices worldwide, involved in domestic trading, import/export, and overseas trading of various products such as textiles, machinery, information and communications-related products, metals, products related to oil and other energy sources, general merchandise, chemicals, and provisions and food. In addition, ITOCHU has made multifaceted investments in insurance agencies, finance, construction, real estate trading, and warehousing as well as operations and businesses incidental or related to those fields. (http://www.itochu.co.jp)
About Mega Uranium
Mega Uranium Ltd. is a Toronto-based mineral resources company with a focus on uranium properties in Australia, Canada, Argentina, Bolivia, Colombia, Mongolia and Cameroon. Further information on Mega can be found on the company's website at www.megauranium.com.
