Uranium Assets Sale
On April 30, 2007, U.S. Energy Corp. completed a sale of its uranium assets (the Shootaring Canyon uranium mill in Utah, unpatented uranium claims in Wyoming, Colorado, Arizona and Utah), and USE's contractual rights with Uranium Power Corp., to subsidiaries of Uranium One Inc. (TSX:UUU), for approximately $100,000,000 in UUU stock and cash.
If certain conditions are met by Uranium One, USE will be entitled to receive additional consideration from the sale as follows:
- $20,000,000 cash when commercial production occurs at the Shootaring Canyon Mill (when the Shootaring Canyon Mill has been operating at 60% or more of its design capacity of 750 short tons per day for 60 consecutive days).
- $7,500,000 cash on the first delivery (after commercial production has occurred) of mineralized material from any of the claim properties sold to Uranium One on April 30, 2007 (excluding existing ore stockpiles on the properties).
- From and after commercial production (see above) occurs at the Shootaring Canyon Mill, a production payment royalty (up to but not more than $12,500,000) equal to five percent of (i) the gross value of uranium and vanadium products produced at and sold from the mill; or (ii) mill fees received by Uranium One from third parties for custom milling or tolling arrangements, as applicable. If production is sold to a Uranium One affiliate, partner, or joint venturer, gross value shall be determined by reference to mining industry publications or data.
USE also holds a 4% net profits interest on Rio Tinto's Jackpot uranium property located on Green Mountain in Wyoming.