TORONTO, March 27, 2014 /CNW/ - Uranium One Inc. ("Uranium One" or the "Company") announced that the Special Inter-District Economic Court for the City of Astana (Republic of Kazakhstan) on March 26, 2014 issued an order having the effect of invalidating the original transfers in 2004 and 2005 from Kazatomprom to the Company's Betpak Dala and Kyzylkum joint ventures of the subsoil use contracts for the Akdala, South Inkai and Kharasan fields.
While the proceedings before the Court were held behind closed doors and only limited information has been made available, Uranium One understands that the ruling was made orally in proceedings brought by the State Prosecutor of the Saryark District of the City of Astana against Betpak Dala, Kyzylkum and Kazatomprom, among other parties, and relates to events which occurred two to three years before Uranium One acquired its interest in the two joint ventures.
Under Kazakh law, the order is automatically stayed and may not be enforced for a period of 15 days and such additional time as it may take to hear an appeal therefrom, and is also subject to further appeals. Both joint ventures intend to vigorously defend themselves in the Kazakhstan courts and plan to file notices appealing the order. The Company considers the lawsuit to be without merit.
Neither Uranium One nor its shareholders are parties to the proceedings. Kazatomprom, the Company's Kazakh state-owned joint venture partner in Kazakhstan, has, however, assured the Company and its shareholders that their legal rights and economic interests will be fully preserved. The Company and its shareholders are now in discussions with Kazatomprom with a view to obtaining new subsoil use rights to the Akdala, South Inkai and Kharasan fields in the event that the order becomes effective. While those discussions are underway, and in order to mitigate the impact on the Company's interests, Kazatomprom, Betpak Dala and Kyzylkum are putting in place temporary arrangements designed to ensure that, notwithstanding the court order, Betpak Dala and Kyzylkum carry on normal business operations and the rate of return to the Company from existing operations is unaffected during this period. The Company's shareholder, Uranium One Holding N.V., and Kazatomprom have signed protocols to this effect and are taking the steps necessary to ensure that scheduled production and deliveries to customers are not affected.
The Company and its shareholders have reserved their rights to take all such steps, and exercise all such remedies available to them, including proceedings under international investment treaties, as they may consider necessary or advisable to protect their legal rights and economic interests in this matter.
About Uranium One
Uranium One is one of the world's largest uranium producers with a globally diversified portfolio of assets located in Kazakhstan, the United States, Australia and Tanzania. ROSATOM State Atomic Energy Corporation, through its affiliates, owns 100% of the outstanding common shares of Uranium One.
Cautionary Statements
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
Forward-looking statements and risk factors: This news release contains certain forward-looking statements. Forward-looking statements include but are not limited to those with respect to the outcome of the appeals of the court order, the probability of a successful appeal of that order, the possibility of concluding and the terms of any new subsoil use contracts which may be entered into with Kazatomprom if the order is not reversed, the price of uranium, the estimation of mineral resources and mineral reserves, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of new deposits, success of exploration activities, permitting time lines, currency fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, the timing and potential effects of proposed transactions, title disputes or claims, limitations on insurance coverage, and the timing and possible outcome of pending litigation. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes" or variations of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of Uranium One to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the reversal of the court order on appeal, the obtaining of new subsoil use rights if the order is not reversed, as well as those factors referred to in the section entitled "Risk Factors" in Uranium One's Annual Information Form for the year ended December 31, 2012, which is available under Uranium One's profile on SEDAR at www.sedar.com, and which should be reviewed in conjunction with this document. There can be no assurance as to whether or on what terms new subsoil use rights might be obtained, and, given the nature of the proceedings, Uranium One cannot assess the probability of a reversal of the order on appeal. If the order is not reversed in full or new subsoil use rights are not granted or alternative arrangements implemented (or are granted or implemented on less favourable terms), or binding agreements with Kazatomprom are not concluded, the effect on Uranium One may be material. Although Uranium One has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking statements. Uranium One expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws.
For further information about Uranium One, please visit www.uranium1.com.
SOURCE: Uranium One Inc.