U.S. Energy Corp. Closes on Sale of Uranium Properties to sxr Uranium One
Share:
U.S. Energy and Crested Corp. Receive 6.6 Million Uranium One Common Shares and $6.6 Million in Cash
RIVERTON, Wyo., May 1 -- U.S. Energy Corp. (NASDAQ:USEG) and Crested Corp. (BULLETIN BOARD: CBAG) , natural resource exploration and development companies, today announced the April 30, 2007 completion of their sale of certain uranium assets to subsidiaries of sxr Uranium One Inc. ("Uranium One")(Toronto: SXR; Johannesburg Stock Exchange), in accordance with a previously announced definitive Asset Purchase Agreement ("APA"). Uranium One shares closed at a price of $16.65 on the Toronto Stock Exchange on April 30, 2007 (equivalent to approximately $15.04 per share in U.S. Dollars).
"The sale of our uranium properties to Uranium One represents a significant milestone in the execution of our strategy to 'monetize' the values inherent in our portfolio of natural resource properties, either through sale or development," stated Keith Larsen, Chairman and Chief Executive Officer of U.S. Energy Corp. "In addition to the $6.6 million in cash and 6.6 million Uranium One common shares that we received upon completion of the sale of our uranium assets, Uranium One has agreed to pay U.S. Energy and Crested up to $40 million in additional consideration upon the accomplishment of certain future events."
While additional details of the asset sale will be provided in a Form 8-K to be filed with the Securities and Exchange Commission, the primary consideration paid by the Uranium One subsidiaries to U.S. Energy Corp., for itself and as agent for Crested Corp. and various subsidiary companies, included the following:
o $750,000 cash (paid in advance on July 13, 2006);
o 6,607,605 Uranium One common shares;
o A cash payment of $5,020,921, in accordance with a revised agreement
between U.S. Energy Corp., Crested Corp., and Uranium Power Corp.
("UPC") that granted U.S. Energy Corp. and Crested Corp. the right to
transfer all rights, responsibilities and obligations of certain UPC
agreements, including the right to receive all future payments
thereunder (cash plus UPC common shares); and
o $1,585,057 to reimburse U.S. Energy Corp. and Crested Corp. for certain
expenditures since July 10, 2006.
Additional consideration, if and when certain events occur, will include:
o $20 million cash when commercial production occurs at the Shootaring
Canyon Uranium Mill;
o $7.5 million cash on the first delivery to the Shootaring Canyon Mill
following commercial production of mineralized material from any of the
claims sold to the Uranium One subsidiaries; and
o From and after the date that commercial production occurs at the
Shootaring Canyon Mill, a 5% production payment royalty up to but not
more than $12.5 million.
The Uranium One subsidiaries have assumed certain specific liabilities associated with the assets they acquired in the transaction, including future reclamation liabilities associated with the Shootaring Canyon Mill and the Sheep Mountain uranium properties. Following regulatory approval of replacement bonds (for future property reclamation) issued by the Uranium One subsidiaries as the responsible parties, U.S. Energy Corp.'s cash bonds in the approximate amount of $7 million will be released and the cash returned to U.S. Energy Corp. by the regulatory authorities.
Further, on April 25, 2007, U.S. Energy Corp. received approximately $1.26 million from UPC in accordance with a $1 million contractual payment that was due on April 29, 2007 and approximately $260,000 in expenses that were reimbursed. This $1.26 million amount is not included in the proceeds, shown above, from sale of the assets to Uranium One.
"We are delighted to become a shareholder in Uranium One, which has uranium projects in South Africa, Australia, Kazakhstan, the United States and Canada," noted Mark Larsen, President and Chief Operating Officer of U.S. Energy Corp. "This transaction allows us to pursue the development of our other business interests with significantly enhanced liquidity. We are now evaluating several new prospects and we are very pleased with the progress that we are making at our 'world-class' Lucky Jack molybdenum project with Kobex Resources Ltd. Concluding this transaction is a tremendous step forward for our company", he concluded.
Source: U.S. Energy Corp.
CONTACT: Keith G. Larsen, CEO, or Mark Larsen, President, both of U.S.
Energy Corp., +1-307-856-9271
www.usnrg.com
