Macusani Yellowcake Inks Non-Binding LOI with Azincourt Uranium

Macusani Yellowcake Inc. and Azincourt Uranium Inc. are pleased to announce that they have signed a non-binding letter of intent which contemplates the acquisition by Macusani of all of Azincourt's adjacent uranium properties located on the Macusani Plateau in south-eastern Peru in exchange for 68,350,000 common shares of Macusani.

Synergies and Transaction Rationale

Completion of the Transaction is expected to result in substantial synergies, creating significant value for both Macusani and Azincourt shareholders, including:

• On a pro-forma basis, after the acquisition, Macusani would control one of the largest undeveloped uranium projects in the world containing very large measured, indicated and inferred uranium resources, comprising the following:
  • Macusani's 31.47 M lbs of measured and indicated (M&I) contained U₃O₈ and 30.09 M lbs of inferred contained U₃O₈ (refer to Macusani preliminary economic assessment filed on SEDAR on January 15, 2014 for details, including tonnage and grade, Footnote 1 and Table, below) and
  • Azincourt's historical 18.2 M lbs of M&I contained U₃O₈ and 17.4 M lbs of inferred contained U₃O₈ (refer to Azincourt News Release November 22, 2013 filed on SEDAR for details including tonnage and grade, Footnote 2 and Table, below)
  • For a total combined resource of 49.67 M lbs of M&I contained U₃O₈ and 47.49 M lbs of inferred contained U₃O₈.
• Macusani expects that Azincourt's adjacent uranium resources can be easily incorporated into its existing mine plan as contemplated in its January 15, 2014 Preliminary Economic Assessment completed by GBM Minerals Engineering Consultants (the "PEA"), which could result in substantial development and operating efficiencies and economies of scale. See Map below.
• The PEA's base case evaluation shows attractive project economics, including a Pre-Tax Net Present Value of US $708 million ($417 million Post-Tax), a Pre-Tax IRR of 47.5% (32.4% Post-Tax) using an 8% discount rate and $65lb uranium price. Following the closing of the Transaction, it is anticipated that a new Preliminary Economic Assessment will be undertaken on the combined property portfolio, and Macusani and Azincourt currently believe that economic returns will be even stronger as a result of the operational synergies noted above.
• By combining adjacent mineral property claims totalling over 949 km² in one of the largest, most highly prospective uranium districts in the world, Macusani's position as the dominant landholder in the region would be further solidified. Macusani believes that the district offers exceptional exploration prospects.
• Combined Management team and Board of Directors following completion of the Transaction would be complementary, providing Macusani with deep expertise across key competencies including local operations management in Peru, uranium project development and exploration, relationship management with strategic investors and end-users as well as global finance and capital markets.
• The proposed Macusani Board will be closely aligned with shareholders through substantial equity ownership.
• Positions Azincourt shareholders to own two distinct uranium investments with different risk/return characteristics: Macusani, a pure-play, dominant uranium development company focused in Peru; and Azincourt, an Athabasca-focused uranium exploration company.

1. Readers are cautioned that a PEA should not be considered to be a pre-feasibility or feasibility study. The PEA is preliminary in nature and uses inferred resources which are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability. There is no certainty that the results predicted by this PEA will be realized. The mineral resource estimates, upon which the PEA is based, could be materially affected by environmental, geotechnical, permitting, legal, title, taxation, socio-political, marketing or other relevant factors.
2. The historical estimate was prepared and reported under NI 43-101 by Henkle & Associates entitled "Updated Technical Report of the Macusani Uranium Exploration Project", dated October 25, 2011. The resource estimate was prepared using polygon-area method cross-checked by inverse distance squared method, both current industry standard methods. Azincourt will be filing an updated 43-101 report on the Minergia projects in May 2014. A qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves and neither Azincourt nor Macusani is treating the historical estimate as current mineral resources or mineral reserves.

Source: http://www.azincourturanium.com