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Red Rock due £902,000 stake in Uranium Energy Corp following CUE deal

Last updated: 20:39 24 Jan 2012 AEDT, First published: 21:39 24 Jan 2012 AEDT

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Red Rock Resources (LON:RRR) today confirmed that it will receive shares in Uranium Energy Corp (NYSE:UEC) worth around £902,000.

Yesterday, UEC announced a deal to acquire Toronto listed junior Cue Resources (CVE:CUE) in an all paper deal valued at nearly £6 million ($8.9 million).

AIM quoted Red Rock owns 18.9 billion Cue shares, 15.71 per cent of the company. As a result of the deal it will subsequently hold 368,551 UEC shares. At UEC’s current price of US$3.82 they will be worth US$1.4 million, or £902,000.

This value represents a notable premium from the shares book value, last calculated by Red Rock in June 2011, of £727,509. The entire Cue holding was bought by Red Rock for just over £1 million.

CUE has focused on the exploration and development of the Yuty Uranium project in southeastern Paraguay. The project’s Uranium resource currently totals 11.14 million pounds, comprising 8.914 million pounds in the indicated resource category and 2.226 million pounds in the inferred.

This morning on AIM, Red Rock shares gained 1.4 per cent to trade at 3.17p each.

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