Uranium Resources Announces Start of Phase II Drilling at Los Finados Project
Uranium Resources, Inc. (NASDAQ: URRE), announced today that Cameco Resources (NYSE: CCJ) has elected to move forward with Phase II of the three phase exploratory program on the 54,847 acres in Kenedy County, Texas, known as the “Los Finados Project.” The second phase of drilling will begin in December 2011 and is expected to be completed by the end of November 2012. URI has decided to commit an additional $1.5 million in exploration activities during the twelve-month period ended November 30, 2012, in order to maintain the option to lease the property. Under Phase II of the agreement with URI, Cameco will fund $1.0 million toward those exploration activities and will earn an additional 10% interest in Los Finados, raising its interest in the project to 50%. Cameco may elect to fund the entire $1.5 million by moving into Phase III of the program.
Don Ewigleben, President and CEO of URI, commented, “One of our stated goals in Texas is to develop a larger reserve base, and ultimately maximize production in South Texas. Having Cameco opt into the next phase of work strengthens our expectations regarding the potential of commercially viable resources in the district.”
In May 2011, URI entered into a joint venture agreement with Cameco for a three-phase, three-year exploration program on the Los Finados property. The first phase of the drilling program began on June 21 and will be completed by November 30 at a cost of approximately $1 million. A total of 19 holes totaling 24,560 feet have been drilled. Phase I exploratory work used a widely spaced drilling program covering a grid designed to test the potential for uranium mineralization over the 54,847 acre area.
Under the terms of the exploration agreement, Cameco can earn an additional 20% interest in the property in consideration for an additional $1.5 million investment in exploration and development expenses associated with the third and final phase of the project. At the conclusion of the exploration program, the parties may enter into an operating joint venture to develop and produce any discovered uranium resources and reserves. The uranium would be processed at URI's Kingsville Dome or Rosita processing facility, with Cameco's share of production being processed under a toll processing agreement with URI.
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