(TheNewswire)
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UEX Shareholders will receive 0.0831 of one UEC Shareper UEX Share owned, representing a significant premium ofapproximately 50% and will create the largest diversified NorthAmerican-focused uranium company
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UEX Securityholders are encouraged to vote well inadvance of the proxy deadline of August 5, 2022 at 10:00 a.m.(Vancouver time)
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UEX Securityholders who have questions or needassistance in voting should contact Laurel Hill Advisory Group bytelephone at 1-877-452-7184 (North American Toll Free) or 1-416-304-0211 (Outside North America), or by email at assistance@laurelhill.com
Saskatoon, Saskatchewan – TheNewswire - July 13, 2022 – UEX Corporation (TSX:UEX) (OTC:UEXCF) (“ UEX ” or the “ Company ”) is pleasedto announce the mailing of its management information circular (the“ Circular ”) and related proxy materials for the special meeting (the“ Meeting ”) of UEX securityholders (the “ UEX Securityholders ”) in connection with thepreviously announced plan of arrangement (the “ Arrangement ”) under section 192 of the Canada business CorporationsAct (the “ CBCA ”) whereby UEC2022 Acquisition Corp. (the “ Purchaser ”), a wholly-owned subsidiary ofUranium Energy Corp. (“ UEC ”), will, among other things, acquire allof the issued and outstanding shares (the “ UEX Shares ”) of theCompany, and in return UEX shareholders (the “ UEX Shareholders ”)will receive, for each UEX Share held, 0.0831 of one share(“ UEC Share ”) of UEC as consideration (the “ Consideration ”).
The Consideration implies a price of approximately$0.43 per UEX Share and a premium of approximately 50% based on theclosing price of the UEX Shares and the UEC Shares on the TorontoStock Exchange (the “ TSX ”) and the NYSE American Exchange (the“ NYSE American ”), respectively, and the USD:CAD exchange rate aspublished by the Bank of Canada on June 10, 2022, the last trading dayprior to announcement of the proposed Arrangement. In connection withthe Arrangement, at the Meeting, UEX Shareholders will also be askedto approve a reduction in the stated capital of the UEX Shares so thatUEX may use the arrangement provisions contained in the CBCA.
The Arrangement is to be completed pursuant to anarrangement agreement dated June 13, 2022, as amended, among theCompany, UEC and the Purchaser (the “ Arrangement Agreement ”), a copy of which is availableunder the Company’s profile on SEDAR at www.sedar.com .
On completion of the Arrangement, former UEXShareholders are expected to hold approximately 14% of the outstandingUEC Shares (based on the issued and outstanding UEC Shares as of thedate hereof).
The Board of Directors of UEX (the “ Board ”), afterconsultation with its financial and legal advisors, and after carefulconsideration of, among other factors, the fairness opinions of TDSecurities Inc. and Sprott Capital Partners (collectively, the“ FinancialAdvisors ”), has unanimously determined thatthe Arrangement is in the best interests of UEX, that the terms andconditions of the Arrangement are procedurally and substantively fairand reasonable to the UEX Securityholders, and that the Considerationbeing offered to UEX Securityholders is fair, from a financial pointof view, to the UEX Securityholders and has unanimously approved theArrangement and recommends that the UEX Securityholders vote FOR theArrangement.
REASONS TO SUPPORT THEARRANGEMENT
Significant Premium toShareholders. UEC has offered UEX Shareholders asignificant premium to the UEX Share price. The Consideration to bereceived by the UEX Shareholders represents a premium of approximately50% based on the closing trading price of UEC Shares on the NYSEAmerican and the closing trading price of UEX Shares on the TSX onJune 10, 2022 (being the last trading day prior to the announcement ofthe Arrangement) and a premium of approximately 49% to the volumeweighted average price of UEX Shares on the TSX for the 20-day periodending on June 10, 2022.
Benefits of Owning UECShares. This presents a compelling opportunityfor UEX to become part of an entity whose potential combined valueexceeds the sum of its parts. UEC Shares to be received by UEXShareholders in the Arrangement offer Shareholders thefollowing:
• UEC’s strong balance sheet andliquidity provides UEX with additional capital to fund continuedexploration and growth initiatives at its projects in the AthabascaBasin and Nunavut;
• UEX’s Shareholders will havesubstantial exposure to production-ready uranium assets in the UnitedStates, complementing UEX’s current portfolio of development stageassets in Canada;
• significant premium to market andpotential for re-rating of the combined entity that brings together two complementary portfolios in world-class, politicallystable, uranium mining jurisdictions ;
• potential to participate in futureupside of UEX through ownership of UEC Shares; and
• enhanced capital markets presence with apro forma market capitalization in excess of $1.75 billion based onthe market capitalizations of UEX and UEC on June 10, 2022 (the lasttrading day prior to announcement of the Arrangement) with increasedanalysts’ coverage, trading liquidity and a broader investorbase.
Fairness Opinions. UEX’s Financial Advisors, provided their fairnessopinions to the effect that, as of June 12, 2022, and subject to theassumptions, limitations and qualifications set out in the fairnessopinions, the Consideration to be received by the UEX Shareholders isfair, from a financial point of view, to the UEX Shareholders.
Alternatives to theArrangement. Prior to entering into theArrangement Agreement, UEX evaluated business and strategicopportunities with the objective of maximizing shareholder value in amanner consistent with the best interests of UEX. As part of thatprocess, the Financial Advisors, on behalf of UEX, contacted a numberof companies involved in uranium mining and exploration in order toallow for preliminary discussions to occur regarding potentialtransactions. UEX entered into a number of confidentiality agreementsand established an electronic data room to allow such companies toconduct due diligence. The Board, with the assistance of its legal andfinancial advisors, assessed the alternatives reasonably available toUEX and determined that the Arrangement represents the best currentprospect for maximizing shareholder value.
Likelihood of the Arrangement BeingCompleted. The likelihood of the Arrangementbeing completed is considered by the Board to be high in light of theexperience, reputation and financial capability of UEC and the absenceof significant closing conditions outside the control of the parties,other than necessary shareholder, court and regulatory approvals andexercise of dissent rights.
Other Factors. The Board also considered the Arrangement with reference to thefinancial condition and results of operations of UEX, as well as itsprospects, strategic alternatives and competitive position, includingthe risks involved in achieving those prospects and following thosealternatives in light of current market conditions and UEX’sfinancial position.
Each of the directors and officers of UEX has enteredinto a voting agreement with UEC and the Purchaser pursuant to whicheach has agreed to vote or cause to be voted all of the securities ofUEX held or controlled by them in favour of the ArrangementResolution.
If the UEX Securityholders approve the Arrangement, itis currently anticipated that the Arrangement will be completed inAugust 2022, subject to obtaining court approval, stock exchangeapproval and certain required regulatory approvals, as well as thesatisfaction or waiver of other conditions contained in theArrangement Agreement.
YOUR VOTE IS IMPORTANT REGARDLESS OFTHE NUMBER OF SHARES YOU OWN.
The Meeting will be held on Tuesday, August 9, 2022, at10:00 a.m. (Vancouver time), at the Metropolitan Hotel, 645 HoweStreet, Vancouver, British Columbia. UEX Securityholders areencouraged to vote in advance of the Meeting, in accordance with theinstructions accompanying the form of proxy or voting instruction formmailed to UEX Securityholders together with the Circular and filed under the Company’s profile on SEDAR at www.sedar.com . Further details and voting instructions can be found in theCircular in the section entitled “Information Concerning theMeeting”.
The close of business (Vancouver Time) on June 30, 2022is the record date for the determination of UEX Securityholders whowill be entitled to receive notice of and vote at the Meeting and atany adjournment or postponement of the Meeting.
The deadline for UEX Securityholdersto return their completed proxies or voting instruction forms isFriday, August 5, 2022 at 10:00 a.m. (Vancouver time).
The Circular contains, among otherthings, details concerning the Arrangement, the background to andreasons for the favourable recommendation of the Arrangement by theBoard, the requirements for the Arrangement to become effective, theprocedure for receiving consideration payable under the Arrangement,procedures for voting at the Meeting and other related matters. UEXSecurityholders are urged to carefully review the Circular andaccompanying materials as they contain important information regardingthe Arrangement and its consequences to UEX Securityholders.
SHAREHOLDER QUESTIONS AND VOTINGASSISTANCE
UEX Securityholders who have questions or needassistance in voting should contact Laurel Hill Advisory Group bytelephone at 1-877-452-7184 (North American Toll Free) or 1-416-304-0211 (Outside North America), or by email at assistance@laurelhill.com .
RECEIPT OF INTERIM COURT ORDER
The Company today also announced that on July 8, 2022,it was granted an interim order (the “ Interim Order ”) bythe Supreme Court of British Columbia (the “ Court ”) regardingthe Arrangement. The Interim Order authorizes UEX to proceed withvarious matters, including the holding of the Meeting to consider andvote on the proposed Arrangement.
About UEX
UEX is a Canadian uranium and cobalt exploration anddevelopment company involved in an exceptional portfolio of uraniumprojects.
UEX’s directly-owned portfolio of projects is locatedin the eastern, western and northern perimeters of the AthabascaBasin, the world's richest uranium region which in 2020 accounted forapproximately 8.1% of the global primary uranium production. Inaddition to advancing its uranium development projects through itsownership interest in JCU, UEX is currently advancing several otheruranium deposits in the Athabasca Basin which include the Paul Bay,Ken Pen and ?rora deposits at the Christie Lake Project , the Kianna,Anne, Colette and 58B deposits at its currently 49.1%-owned Shea CreekProject, the Horseshoe and Raven deposits located on its 100%-ownedHorseshoe-Raven Project and the West Bear Uranium Deposit located atits 100%-owned West Bear Project.
UEX is also 50:50 co-owner of JCU (Canada) ExplorationCompany, Limited (“JCU”). JCU’s portfolio of projects includesinterests in some of Canada’s key future uranium developmentprojects, notably a 30.099% interest in Cameco’s Millennium Project,a 10% interest in Denison’s Wheeler River Project, and a 33.8123%interest in Orano Canada’s Kiggavik Project, located in the ThelonBasin in Nunavut, as well as minority interests in nine othergrassroots uranium projects in the Athabasca Basin.
UEX is also leading the discovery of cobalt in Canada,with three cobalt-nickel exploration projects located in the AthabascaBasin of northern Saskatchewan, including the only primary cobaltdeposit in Canada. The 100% owned West Bear Project hosts the WestBear Cobalt-Nickel Deposit, the newly discovered Michael Lake Co-NiZone, and the West Bear Uranium Deposit. UEX also owns 100% of twoearly-stage cobalt exploration projects, the Axis Lake and Key WestProjects.
Forward-Looking StatementCautions:
This news release contains statements that constitute“forward-looking information” for the purposes of Canadiansecurities laws. These forward?lookingstatements or information relate to, among other things: theanticipated benefits of the Arrangement to UEC, UEX and theirrespective securityholders; the timing and receipt of required UEXShareholder, UEX Securityholder, Court, stock exchange and regulatoryapprovals for the Arrangement; the ability of UEC and UEX to satisfythe other conditions to, and to complete, the Arrangement; theanticipated timing of closing of the Arrangement; and future growthpotential for UEC and its businesses.
In respect of the forward?looking informationconcerning the anticipated completion of the proposed Arrangement andthe anticipated timing for completion of the Arrangement, the Companyhas provided them in reliance on certain assumptions that it believesare reasonable at this time, including assumptions as to the abilityof UEX to receive, in a timely manner, the necessary UEX Shareholder,UEX Securityholder, Court, stock exchange and regulatory approvals;and the ability of the parties to satisfy, in a timely manner, theother conditions to the closing of the Arrangement. Timing of thesematters may change for a number of reasons, including the inability tosecure the necessary UEX Shareholder, UEX Securityholder, Court, stockexchange and regulatory approvals in the time assumed or the need foradditional time to satisfy the other conditions to the completion ofthe Arrangement. Accordingly, readers should not place undue relianceon the forward?looking information contained in this news releaseconcerning these times.
These statements reflect the Company’s current viewswith respect to future events and are inherently subject tosignificant business, economic, competitive, political and socialuncertainties and contingencies. Such factors include, the synergiesexpected from the Arrangement not being realized; business integrationrisks; fluctuations in general macro?economic conditions;fluctuations in securities markets and the market price of UEC Shares;fluctuations in the spot and forward price of uranium or certain othercommodities (such as natural gas, fuel oil and electricity);fluctuations in the currency markets (such as the Canadian dollar andthe U.S. dollar); changes in national and local government,legislation, taxation, controls, regulations and political or economicdevelopments in Canada and the United States; operating or technicaldifficulties in connection with mining or development activities;risks and hazards associated with the business of mineral exploration,development and mining (including environmental hazards and industrialaccidents); risks relating to the credit worthiness or financialcondition of suppliers, refiners and other parties with whom theparties do business; inability to obtain adequate insurance to coverrisks and hazards; and the presence of laws and regulations that mayimpose restrictions on mining, availability and increasing costsassociated with mining inputs and labour; the speculative nature ofmineral exploration and development, including the risks of obtainingnecessary licenses, permits and approvals from government authorities;title to properties; and the factors identified under the caption“Risk Factors” in UEX’s Annual Information Form. In addition,the failure of UEX to comply with the terms of the ArrangementAgreement may result in UEX being required to pay a termination fee toUEC, the result of which could have a material adverse effect onUEX’s financial position and results of operations and its ability to fund growth prospects and currentoperations. Although the Company has attempted to identify importantfactors that could cause actual results to differ materially, theremay be other factors that cause results not to be anticipated,estimated or intended. The Company does not intend, and does notassume any obligation, to update this forward?looking information toreflect changes in assumptions or changes in circumstances or anyother events affecting such information, other than as required byapplicable law.
For further information, pleasecontact:
Roger Lemaitre
President & CEO
(306) 979-3849
www.uexcorp.com
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