Uranium One sells majority stake to RussiaÔÇÖs ARMZ

Canadian miner Uranium One is selling a controlling stake to a Russian state-owned corporation in exchange for interests in two Kazakhstan uranium mines, plus US$610 million in cash.  Through the deal, Uranium One will acquire a 50 percent interest in Akbastau and a 49.67 percent interest in Zarechnoye from JSC Atomredmetzoloto, known as ARMZ. In return ARMZ, which already holds 23.1 percent of Uranium One's outstanding shares, will increase its stake in the Vancouver-based miner to at least 51 percent.  Akbastau is 50 percent owned by state-owned Kazakhstani nuclear company Kazatomprom. Kazatomprom also holds a 49.67 percent interest in the Zarechnoye joint venture.  Addition of the assets will increase Uranium One's production from its Kazakhstan assets by about 60 percent to 16 million pounds per annum.  ARMZ said it will use its majority stake in Uranium One as a platform for future growth and acquisitions. The Russian corporation has agreed not to buy or sell any Uranium One shares for 18 months after the deal closes.  Commenting on the announcement, Jean Nortier, chief executive officer of Uranium One said: ÔÇ£The acquisition of 50 percent stakes in two additional, high quality and long life ISR mines strengthens Uranium OneÔÇÖs asset portfolio and positions the Company to be among the worldÔÇÖs top 5 uranium producers by 2011, as our Kazakh assets ramp up to full capacity.  ÔÇ£I am very pleased that we can also deliver to our shareholders a significant premium to the current value of their shares in the form of a special cash dividend and ongoing participation in the enlarged and enhanced company.ÔÇØ  Vadim Zhivov, director general of ARMZ, added: ÔÇ£I am delighted to announce our agreement to become the majority shareholder of Uranium One. With the strong support of ARMZ, and under the continued leadership of an independent Board and professional management team, I am confident that Uranium One will develop into a leading global uranium producer, to the benefit of all the CompanyÔÇÖs shareholders and stakeholders.ÔÇØ  A majority of Uranium One's board will continue to be comprised of independent directors; however, the board will be reduced to nine directors from 13 and ARMZ will be entitled to appoint three.  The relationship between Uranium One and ARMZ began last June when the Vancouver-based company took a 50 percent stake in Kazakhstan's Karatau Uranium Mine, owned by ARMZ, in exchange for a 19.9 percent interest in Uranium One. Uranium One said that purchase was part of the company's strategy to increase production in uranium-rich areas such as Kazakhstan and Africa.  Uranium One is one of the world's largest publicly traded uranium producers, with a portfolio of assets in Kazakhstan, the US, South Africa and Australia.  ARMZ is the worldÔÇÖs fifth largest uranium producer, with operating mines in Russia and Kazakhstan.