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Forte Energy (LON:FTE, ASX:FTE) is set to expand its portfolio as it unveiled a C$8.5mln acquisition of the uranium assets of European Uranium Resources.
The firm has two uranium projects, spanning around 39.7 sq km in Slovakia, and the deal will create a larger, diversified globally focused exploration and development firm, said Forte.
Mark Reilly, Forte's managing director, said it was a first entry for Forte into the highly prospective Slovakian region.
"This creates a uranium explorer and developer with not only an enhanced portfolio of project interests but also the technical expertise and financial strength to advance its assets towards production," he said.
"In addition, the combined business will benefit from deeper technical expertise and a board with experience in developing and building numerous projects.
"Europe is the world's largest per capita consumer of uranium and through this acquisition Forte will be well positioned to take advantage of this in its pursuit to grow and become a premier African and European uranium company ."
European's most advanced project - Kuriskova - currently has an indicated resource of 2.3 million tonnes (Mt) at 5,550ppm (parts per million) uranium for 28.5 million pounds of contained uranium and an inferred resource of 3.1Mt at 1,850 ppm uranium for 12.7Mlbs of contained uranium.
It also has an indicated resource of 2.3Mt at 650ppm molybdenum for 3.3 million pounds of contained molybdenum.
A feasibility report released in January 2012 showed a 1.9 year payback on capital expenditure of US$225mln and a net present value of 276mln at an 8% discount.
Meanwhile, the Novoveska Huta uranium deposit currently has a measured and indicated resource of 1.7Mt at 1,020ppm uranium for 3.7Mlbs contained uranium.
For the acquisition, Forte will issue around 854mln shares at A$0.008 per share (around 0.44 pence) worth around C$ 7mln to European Uranium shareholders. It will also issue around 61mln shares worth around C$$ 500,000 to European Uranium and pay the firm C$1mln upon completion
It will grant the company a 1% production royalty over the licences in perpetuity.
The sale price is equivalent to around C$ 8.5mln. In addition Forte will subscribe for shares in European to the amount of C$ 100,000.
The acquisition is subject to a number of conditions, including that Forte raises a minimum of C$1mln in cash.
Forte's London-listed shares more than doubled on Wednesday after the firm said it expected to announce an acquisition within the next two days. Trading in its Australian shares were suspended pending the announcement.
In London, the shares today eased back around 21% to go to 0.535p.