Junior miner Aflease Gold and Uranium Resources (Aflease) and Southern Cross Resources on Tuesday announced that they have signed a definitive pre-merger agreement providing for the merger of the two companies.
The combination is being done “at-market” based on the recent trading of both companies.
The combined entity, to be named SXR Uranium One, will unite Aflease’s South African uranium and gold assets with the Australian and Canadian uranium properties of Southern Cross Resources.
The new company will be focused on the growth and development of its uranium business, as well as on realising value from its existing gold assets.
SXR Uranium One expects to start uranium production in the first quarter of 2007, and expects to produce at least four million pounds per year of uranium and at least 90 000 troy ounces of gold as by-product from current projects by 2011.
Commenting on the planned merger, Aflease CEO Neal Froneman said: “The combination of these two companies creates a focused uranium company with an international portfolio of attractive uranium assets, from the exploration stage through to the advanced developmental stage.
“In addition to merging our assets, SXR Uranium One brings together the mining expertise of Aflease and the exploration strength of SXR in a combination which will benefit the shareholders of both companies. This transaction also provides definition to our ongoing strategy to become a focused uranium company that’s North American-domiciled and -listed,” Froneman said.
Mark Wheatley, CEO of SXR, said: “This is an exciting development for the shareholders of SXR, as the merged company will provide exposure to the very large Dominion and Rietkuil uranium projects, which have the potential to be in operation for more than 20 years beginning in 2007, to the fully permitted Honeymoon in-situ leach project in South Australia, and to a premier exploration portfolio.
“This portfolio includes a joint venture with properties in the Athabasca Basin, the world’s most prolific uranium region, where a minimum 8 600m of core drilling is scheduled to commence in the last quarter of 2005.
“SXR Uranium One will have a combined portfolio of near-term production assets and quality exploration projects with the critical mass to develop them.
“Neal Froneman is a committed, experienced operator and the combination of personnel from both companies will make for a first-class management and operational team,” Wheatley added. — I-Net Bridge