Consolidated Uranium Inc. shared the following update on the option agreement with Mega Uranium Ltd., as revised, that was first announced on May 14th, 2020, and gives Consolidated Uranium the option to purchase a 100% undivided stake in the Ben Lomond and Georgetown uranium assets in Australia.
Image Credit: Red ivory/Shutterstock.com
Consolidated Uranium has finished buying the Ben Lomond project for a total of $3,500,000, which includes $2,500,000 for the option’s exercise and an additional $535,000 for the contract’s spot price contingent payment provisions.
By issuing 1,340,548 common shares of Consolidated at a deemed price of $2.264 per share up to June 10th, 2022, which is the second business day before the date the option was exercised, the total amount of $3,035,000 was satisfied. This price was determined using the five-day volume weighted average price of the common shares.
Additionally, Mega Uranium is entitled to earn certain future payments as a result of the exercise of the option, but only if certain milestones related to the spot price of uranium are met, as stated in the company's news release from May 14th, 2020.
The option to purchase the Ben Lomond project was exercised, triggering Mega’s right to sell the Georgetown project to Consolidated for an additional $500,000, payable in cash or common shares, at Consolidated’s discretion. If Mega exercises this right, it will also be eligible to receive certain future payments based on the achievement of specific milestones connected to the spot price of uranium.
Ben Lomond represents the cornerstone asset for the Company in Queensland where we now have multiple projects in two important uranium districts. We believe that recent legislation introduced in Australia to remove the ban on nuclear power could be an important step in building support for additional uranium mining operations in the country of which CUR would be a beneficiary.
Philip Williams, Chairman and Chief Executive Officer, Consolidated Uranium Inc.
Every security issued in conjunction with the option agreement is subject to a hold period that lasts for four months and one day after the date of issuance.