Bayswater to Acquire
Reno Creek Uranium Project, Wyoming
One of the Best Undeveloped Uranium Deposits
in the Western United States, as Stated by
Tom Pool, a Leading US Uranium Industry Mining Engineer
Vancouver, BC,
August 24, 2009 ? Bayswater Uranium Corporation
(TSX-V: BAY),
(OTC: BYSWF)
is pleased to announce that it has signed letters of intent with Strathmore
Resources (US) Ltd., a wholly owned subsidiary of Strathmore Minerals Corp
(TSX-V: STM), and American Uranium Corp (OTC: ACUC)
to acquire the Reno Creek Uranium Project ("the Project") and its
holding company, AUC LLC. Reno Creek is an advanced, near-surface uranium
project at the permitting/feasibility stage located in the Powder River Basin
in northeastern Wyoming, a well established uranium
development region. The Project comprises NI 43-101 compliant resources of
10.96 million pounds of U3O8 at an average grade of 0.066% U3O8 measured
and indicated and 4.73 million pounds of U3O8 at an average grade of 0.063%
U3O8 inferred. In addition, Reno Creek contains approximately 8.41 million
pounds of U3O8 in historical resources grading approximately 0.083% U3O8. The
Project also has excellent potential to significantly increase resources
through low-risk exploration. An extensive database, deep well injection
permit and a disposal well are being acquired in conjunction with the
resources.
The Reno Creek Project encompasses approximately 17,500 acres of
claims and leases, including 563 unpatented mining claims, four Wyoming State mineral leases, four fee
(private) mineral leases, and five surface access agreements. As the
deposits at Reno Creek are considered to be highly amenable to In-Situ
Recovery (ISR) production, and are located in close proximity to major
infrastructure, power, and other operating ISR facilities, the Project
economics appear to be very robust. The near-ideal geological
characteristics of the uranium deposits which make the resources conducive
to low-cost, minimal-impact ISR mining, combined with the benefits of
nearby infrastructure within a highly favorable
political jurisdiction for uranium mining, are among the chief reasons that
the Reno Creek Project is one of the best undeveloped major uranium
properties in the western United States as stated independently by Tom
Pool, a leading US uranium industry mining engineer. These factors allow
for a fairly predictable 5 year development schedule to production, a
timeline the Company will aggressively pursue.
The aggregate purchase price for a 100% interest in the Reno Creek
Uranium Project is US$32 million. The acquisition price is equivalent to
about US$2.04 per pound of NI 43-101 U3O8 compliant resources. No finder's
fees are payable in respect of the acquisition. The transaction is subject
to, among other things, financing, approval of applicable regulatory
authorities, and approval of Bayswater shareholders, if required, and is
projected to close by mid-December, 2009. Of the aggregate purchase price,
US$30 million in cash is payable to Strathmore for a 100% interest in the
property, AUC LLC and all related assets, and US$2 million, payable US$1
million in cash and US$1 million through the issuance of common shares of
Bayswater, is payable to American Uranium in exchange for its option rights
to the property and a large data base plus a UIC (deep well injection)
permit. A non-refundable deposit of US$250,000 in cash has been paid to
Strathmore in conjunction with the signing of the letter of intent, which
is credited against the US$30 million purchase price.
Strathmore and American Uranium had entered into a joint venture
agreement in 2007 to develop the property, under which American Uranium was
required to spend US$33 million over six years to earn a 60% interest. American
Uranium has invested in the Joint Venture and in separate but related asset
acquisitions, as above, of approximately US$3 million since the
commencement of the joint venture which is currently in good standing. Bayswater's
purchase of the Project will terminate the Strathmore/American Uranium
joint venture.
Bayswater has conducted a preliminary in-house economic evaluation
of the Reno Creek Project, including an ISR facility and central processing
plant producing up to 2 million pounds of U3O8 per year. Based on this
preliminary study, utilizing current long term contract prices for U3O8,
the Company has decided to complete an independent Pre-Feasibility Report
on the deposit prior to closing of the transaction.
The Reno Creek Project comprises NI 43-101 compliant resources of
10.96 million pounds of U3O8 at an average grade of 0.066% U3O8 measured
and indicated in 8.27 m
tons and 4.73 million pounds of U3O8 at an average grade of 0.063% U3O8
inferred in 3.80 m
tons in the Reno Creek and Southwest Reno Creek deposits based on separate
reports on the Reno Creek and Southwest Reno Creek Uranium Properties dated
January 30, 2009 by Charles D. Snow, P.G. In addition, the Project contains
approximately 8.41 million pounds of U3O8 in historical resources grading
approximately 0.083% U3O8 in the adjoining Pine Tree Trend as documented by
Pathfinder Resources Ltd. in a 1980 report and Rocky Mountain Energy in a
report dated April, 1986. This historical resource estimate is not
compliant with NI 43-101 and should not be relied upon. The Company
believes there is good potential for converting the historical resources to
NI 43-101 compliant resources and for additional resources in the immediate
vicinity of the known deposits within the property.
The Reno Creek deposits average about 320 feet deep, ranging
from 170 feet
to 450 feet
in depth, are below the water table and are considered to be highly
amenable to In-Situ Recovery (ISR) of uranium. Extensive metallurgical and
engineering studies and a pilot plant operation during the 1980s and 1990s
projected recoveries of up to 76%. The deposits have excellent ISR
characteristics including compact shape, good strike and lateral
continuity, average thickness of about 12 feet (3.66 m) and excellent
permeability, porosity and transmissivity. The
Project is also well located with respect to paved road and power access. The
climate of the Project area is semiarid; and typically the terrain of the
Project area and underlying stratigraphy are both
relatively flat which also provides for ideal conditions for permitting and
ISR mining of uranium. The Project is in the permitting/pre-feasibility stage,
with portions of the environmental baseline, hydrologic testing, and mine
and process engineering completed.
The Project assets being acquired also include a deep well injection
permit (i.e. UIC Permit in the renewal process) for two disposal wells for
the wastes from the ISR operation, plus an abandoned dry oil well that will
serve as one of the deep injection wells. Also included in the Project
assets are complete electronic and paper logs on approximately 1100 drill
holes, additional data on up to 900 more drill holes, and several geologic,
hydrologic, and engineering studies on the Reno Creek and Reno Creek Southwest
deposits. Additional drill hole data is also
available for historical drilling on the Pine Tree Trend.
The regional setting of the Reno Creek Project is highly
favourable-located in close proximity to other major uranium developments
in the western part of the Powder River Basin in central northeastern
Wyoming. Other
projects in the vicinity, within 20 miles to the northwest and 40 miles to the
southeast, include the Christensen Ranch resource project and permitted ISR
and satellite plants, recently announced as sold to Uranium One Inc. (TSX: UUU)
for US$35 million; the Nichols/Hank deposits and ISR facility under
development by Uranerz Energy Corp (AMEX: URZ); the
Moore Ranch deposits and ISR facility under development by Uranium One; and
the operating Smith Ranch/Highland deposits and ISR plant of Cameco Corporation (TSX: CCO),
and a number of past producing conventional mills in the area. Historically,
this portion of the Powder
River Basin has
produced in excess of 100 million pounds U3O8.
The Reno Creek and Pine Tree Trend deposits were discovered and
drilled extensively in the 1970s and 1980s by Utah International (a
predecessor of Areva) and Rocky Mountain Energy
(RME) with its partners Mono Power and Halliburton. RME and partners also
conducted extensive metallurgical testing, demonstrating recoveries up to
76% using a bicarbonate leaching solution or lixiviant.
During the early 1980s, RME and its partners licensed, through the Nuclear
Regulatory Commission (NRC) and the Wyoming Department of Environmental
Quality (WDEQ), and then constructed and operated an ISR pilot plant to
demonstrate the technical and economic feasibility of the project. At the
conclusion of the demonstration, the aquifer was successfully restored in
accordance with NRC and WDEQ regulations and the project was decommissioned
and the license terminated. RME also prepared a feasibility study at the
time, showing that the project was economical using a 71% recovery rate and
uranium prices at $22 per pound of U3O8. In 1992, Energy Fuels acquired the
property from RME & partners and during the late 1990s, Energy Fuels
merged with International Uranium Corporation who prepared a confirmatory
feasibility study and advanced the project close to full licensing, but
abandoned the effort due to very low uranium prices. Prior feasibility
studies by RME and Energy Fuels, although useful, do not indicate current
economic viability of the Project. In 2001, IUC sold the property to Rio Algom who in turn sold it to Power Resources, a wholly
owned subsidiary of Cameco Corporation. Cameco dropped the property in 2003 due to low uranium
prices and Strathmore subsequently staked the current claims covering the
deposits. Strathmore entered into a joint venture with American Uranium on
the project in 2007. American Uranium then acquired a data base and deep
well injection permit from Cameco on the Reno
Creek deposit.
Bayswater plans to bring Reno Creek into production by 2015 subject
to positive feasibility results. This lead time is based on current
environmental and regulatory processes for permitting and licensing ISR
operations in Wyoming.
Following closing of the acquisition, the Company plans detailed scoping
sessions with the regulatory agencies in preparation for completing
baseline environmental, hydrological, and engineering activities during
2010 and 2011. Environmental baseline studies that have been previously
started and will be completed by the Company include flora and fauna,
soils, archaeological and cultural resources, surface and ground water
hydrology, wetlands, water and air quality and meteorology. The Project has
already received a permit to install baseline ground water monitoring wells
which will be used for both hydrologic and water quality studies, including
any necessary pump tests. Additional mine and plant facility engineering
required for licensing will be completed during the time period. The
Company plans to submit its applications for permits and licenses by the
end of 2011. The Project should advance to the feasibility stage during
2014 with construction to follow and production to commence in 2015.
Bayswater has a strong management and technical team, cumulatively
with over 100 years of combined experience in exploration, permitting,
development and operation of uranium production, plus a group of
industry-leading consultants with uranium experience in the U.S.A, Canada, and
overseas. Upon closing, the Company plans to immediately begin the process
of building out its environmental, engineering and production staff to
serve the Reno Creek Project and to complement its existing management
team.
George M. Leary, President of Bayswater stated, "The
acquisition of the Reno Creek Uranium Project is a strategic and important
growth step for the Company commensurate with our stated goals of acquiring
advanced uranium projects with near-term production potential and building
a major uranium company. The Reno Creek Project is at the
permitting/pre-feasibility stage and will be Bayswater's flag-ship project
with a time-line to production within 5 years-commencing with completion of
base line environmental and engineering studies to be initiated upon
closing of the acquisition. The Company also plans to bring its nearby
Elkhorn/Alzada Project to the feasibility stage
over the same period of time."
In connection with the acquisition, Bayswater will enter into a
consulting agreement until closing of the transaction with American Uranium
for services to facilitate the completion of the transaction at a cost of
US$30,000 per month and intends to enter into a further consultancy agreement
with American Uranium for the marketing of uranium produced from the Reno
Creek Uranium Project.
Financing of up to CDN$50 million is required to complete the
acquisition of the Reno Creek Project and for related working capital in
order to advance the Project pursuant to the production time-line. To raise
the needed capital, Bayswater plans to undergo a restructuring, including a
consolidation of the Company's share capital. Any consolidation of
Bayswater's share capital will be subject to regulatory and shareholder
approval.
Bayswater's exploration activities are conducted under the
supervision of George M. Leary, M.Sc. P. Eng. (BC), President of the
Company, and Victor Tanaka, B.Sc. P.Geo. (B.C.),
Chief Operating Officer of the Company. Both are qualified persons under NI
43-101. George Leary is the qualified person responsible for the technical
information in this news release.
About Bayswater Uranium Corporation - The Super
Junior Uranium CompanyT
Bayswater Uranium Corporation is an international uranium exploration and
development company. The Company owns several advanced uranium properties
in the United States
with significant historical resources that may be amenable to ISR and/or
conventional mining. As well, Bayswater is the only uranium company to have
major landholdings in each of Canada's
most important producing and exploration regions - the Athabasca Basin,
the Central Mineral Belt, and the Thelon Basin.
Bayswater combines a balanced portfolio of advanced and exploration
projects with the uranium expertise of its technical and managerial teams. To
capitalize on current market conditions and strong growth of the nuclear
industry, the Company is pursuing acquisition opportunities of
advanced-stage uranium projects with near-term production potential. Bayswater's
vision is to build a major international uranium company. Shares of the
Company are listed on the TSX Venture Exchange under the symbol
"BAY". For further information visit www.bayswateruranium.com.
On behalf of the Board of:
BAYSWATER URANIUM CORPORATION
George M. Leary
President
For further information contact:
John Gomez
Manager, Investor Relations
Telephone: (604) 687-2153
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or accuracy of
this release.
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