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Uranium Equities partners with Cameco Corp. in US$16.5 million deal to develop PhosEnergy Process

Uranium Equities partners with Cameco Corp. in US$16.5 million deal to develop PhosEnergy Process

South Australian-based company Uranium Equities (ASX: UEQ) has secured funding of up to US$16.5 million through uranium giant Cameco Corporation (NYSE: CCJ) for the ongoing development and commercialisation of the PhosEnergy Process.

Under the deal, Cameco will have the right to earn up to 70% of UEQ’s right to take a 90% stake in the technology in two tranches.

Saskatchewan-based Cameco is one of the world’s largest uranium producers and suppliers of conversion services.

The first tranche of US$2.5M will earn Cameco a 10.6% interest with subsequent investment tranches of two lots of US$5M and a final US$4M to see its interest increase incrementally.

Cameco has the option to cease sole funding at the conclusion of each tranche.

If Cameco funds the entire US$16.5M, the company will provide a funding facility for a minimum of 50% of UEQ’s portion of capital expenditure related to the construction of the first commercial plant developed by the joint entity under terms to be determined which would include repayment out of earnings.

A Joint Technical and Commercial Committee is to be established to guide the development which will utilise the significant in-house process engineering expertise of Cameco and UEQ in the field of uranium recovery from phosphate streams.

Shares in Uranium Equities last traded at 16.5c on the Australian Stock Exchange.

The PhosEnergy Process is an innovative patented process for the extraction of uranium as a by-product from phosphate in the production of phosphate based fertilisers.

The global annual production potential of uranium from the phosphate industry is about 20 Mlbs U3O8. This quantity of uranium is mined in phosphate ores but not recovered annually on a worldwide basis.

The major phosphate based fertiliser producers are located in Northern Africa, North America and Asia.

The PhosEnergy Process has been proven to pilot scale with results establishing a robust process capable of achieving high levels of uranium recovery at the lower end of the cost.

Operating cost estimates based on the pilot plant operation results indicate the PhosEnergy Process is capable of producing uranium at operating costs in the order of US$25-$30/lb with over 90% uranium recovery.

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