European Uranium Options Deli Jovan North Gold-Copper Property, Serbia
June 2, 2014 (Source: FSC Wire) — European Uranium Resources Ltd. (the “Company”) (TSXV: EUU) has signed a binding letter of intent for an exploration agreement with option to purchase (the “Transaction”) on the Deli Jovan North gold-copper exploration property in Serbia with Appalachian Resources Balkan doo (“ARB”), a private Serbian company.
Dorian (Dusty) Nicol, President and CEO of the Company said, “The Deli Jovan North will be our first acquisition after arranging the sale of the Company’s Slovak uranium assets. Deli Jovan North is an exciting new play in a well-known, highly prospective region. There is clearly potential for a porphyry copper-gold deposit on the property. Based on geologic setting and mineralization styles on nearby properties, there may also be potential for high sulphidation epithermal and sediment hosted gold mineralization.”
The Deli Jovan North Project
Deli Jovan North (the “Project”) has an area of 100 square kilometres within the Bor Mining Region in central eastern Serbia. It is located within 20 kilometres of three large (+ 800 million tonne) porphyry copper-gold deposits (two currently in production, one with associated smelter) and 25 kilometres from a new copper-gold discovery by a joint venture between Freeport-McMoRan Exploration Corp. (FMEC) and Reservoir Minerals, Inc. (TSX-V:RMC). The attached map shows the location of the Project relative to significant adjacent properties.
Historic sampling on the Project has found high grade copper and gold mineralization (up to about 15% Cu and over 25 gpt Au). Mineralization identified to date has hallmarks of porphyry-style mineralization including potassic alteration, intrusive breccia, and locally development of skarn. Based on the geologic setting and on styles of mineralization on nearby properties, there is also the potential for high sulphidation epithermal and sediment hosted gold mineralization at Deli Jovan North. Several previously undocumented mines are present in the area where semi-massive sulfide mineralization was mined in the early 1950’s. Three holes were drilled near historic workings in the early 1990’s, totaling 388 metres. All intersected mineralization, but had poor core recovery and the program was terminated due to economic conditions (hyper-inflation) at the time.
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The Transaction is considered a fundamental acquisition by the Company and is subject to the approval of the TSX Venture Exchange (the “Exchange”). It is arms length and there is no finder’s fee. ARB will act as operator, under the Company’s direction, during the option phase of the agreement. The binding letter of intent will be superseded by a definitive agreement by June 30, 2014 (the “Agreement”). Pursuant to the Agreement the Company will have up to three years to evaluate the Deli Jovan North project by paying a total of US$260,000 in option payments and by funding US$3 million in work commitments. The first year’s option payment of US$60,000 will be due by June 30, 2014, and the first year’s work commitments of US$500,000 will be an obligation. On completion of the payment of the option payments and work commitments, the Company may exercise its option to purchase 100% of the Project for purchase consideration of US$5 million in a combination of cash, or at the Company’s election, in cash or shares on the following schedule:
- US$1 million: this consisting of US$500,000 cash + US$500,000 in cash or shares at EUU’s election on exercising the option to purchase and;
- US $1.25 million: this consisting of – US $250,000 cash + US $1.0 million in cash or shares at EUU’s election on completion of a positive 43-101 Preliminary Economic Assessment (Scoping Study) not later than 48 months from effective date and;
- US $1.25 million: this consisting of – US $250,000 cash + US $1.0 million in cash or shares at EUU’s election on granting of a Mining License. If Mining License is not granted within 66 months from effective date, then US $250,000 cash and balance when Mining License is granted and;
- US $1.5 million – US $500,000 cash + US $1.0 million in cash or shares at EUU’s election on completion of a Bankable Feasibility Study.
The Company can elect to exercise purchase option early by paying cumulative (but unpaid) Years 1 – 3 option payments in addition to the purchase consideration. ARB will retain a 2% net smelter return production royalty on the Project.
To support the application for approval with the Exchange, the Company has commissioned work to begin on an independently prepared Technical Report on the project (43-101 compliant), expected to be completed by June 30. It is expected that this report will recommend continuation of geologic mapping and geochemical sampling with the expectation of drill targets being identified before the end of 2014.
The Forte Energy NL Proposed Transaction
On May 9, 2014, the Company entered into a Share Purchase Agreement (“SPA”) with Forte Energy NL that superseded a heads of agreement (“HOA”) entered into on April 4, 2014. The SPA contains the principal terms for the Proposed Transaction (being the proposed sale of the Company’s wholly-owned Slovakian subsidiaries, Ludovika Energy and Ludovika Mining (the “Ludovika Entities”), to Forte). The Ludovika Entities are the holders of the mineral licenses located in the Slovak Republic which comprise the Company’s only remaining mineral properties, the Kuriskova and Novaveska Huta (the “Licenses”) uranium projects in Slovakia. The Proposed Transaction will result in the Company disposing of substantially all of its assets.
The EUU Board has determined that the Proposed Transaction is in the best interests of the Company and has recommended that the Company’s shareholders vote for the special resolution at the June 13, 2014, annual general and special meeting. Should EUU shareholders or Forte shareholders fail to approve the special resolution by the requisite majority the Proposed Transaction will not be implemented. Management’s Information Circular for the meeting is on the Company’s web site, www.euresources.com, and on the Company’s profile on www.sedar.com.
If approved, on closing of the Proposed Transaction, the Company will have its initial funding to implement its business plan including the funding of the Deli Jovan North project.
The Company’s President and Chief Executive Officer, Dorian L. (Dusty) Nicol, B.Sc. Geo, MA Geo, a Qualified Person as defined by NI 43-101, has reviewed and approved the exploration information disclosures contained in this Press Release.
EUROPEAN URANIUM RESOURCES LTD.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release contains forward-looking statements that are based on the Corporation’s current expectations and estimates. Forward-looking statements are frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “suggest”, “indicate” and other similar words or statements that certain events or conditions “may” or “will” occur. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from estimated or anticipated events or results implied or expressed in such forward-looking statements. Such factors include, among others: the actual results of current exploration activities; conclusions of economic evaluations; changes in project parameters as plans to continue to be refined; possible variations in ore grade or recovery rates; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing; and fluctuations in metal prices. There may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Corporation disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.
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