Rio Tinto sells Roughrider project to Uranium Energy for $109 million

Uranium. Stock Image.

Uranium Energy (NYSE: UEC) has agreed to purchase 100% of the Roughrider project in Saskatchewan for C$150 million ($109.2m) from Rio Tinto (NYSE: RIO; LSE: RIO; ASX: RIO). Rio will receive C$80 million in cash and C$70 million in Uranium Energy stock.

The Roughrider uranium project is located 13 km west of the McClean Lake uranium mill. It has a historic resource of 58 million lb. uranium oxide (U3O8) at an average grade of 4.73% U3O8 in all categories. (This estimate is not NI 43-101 compliant.)

Uranium Energy recently outbid Denison Mines (TSX: DML) for UEX Corp. (TSX: UEX), whose assets include the Raven-Horseshoe Hidden Bay and Christie Lake properties in the Athabasca Basin. Together, these assets are viewed by Uranium Energy as a potential means to increasing its uranium production.

Uranium Energy is planning its next steps at Roughrider, namely updating the technical report summary by including 225,000 metres of diamond drilling completed on the property. The company also plans to proceed with permitting for in situ recovery (ISR) at Roughrider.

“The acquisition [of Roughrider] builds on our strategic objective to create the leading Western supplier of secure and 100% unhedged uranium with a two-pronged platform: 1) near-term, fully permitted and low-cost US ISR production; and 2) a Canadian high-grade conventional pipeline,” Uranium Energy president and CEO Amir Adnani said in a release.