Mikhail Stiskin, analyst of Troika Dialog IC

– This deal will benefit both parties

ARMZ Uranium Holding Co. AKA Atomredmetzoloto, the corporation authorized and appointed by Rosatom State Corporation for Nuclear Energy to supply feedstock to the Russian nuclear industry, today announced that it has signed a definitive purchase agreement to sell a 50% interest in the Karatau Uranium Mine in Kazakhstan for consideration of 117 million common shares of Uranium One Inc. ( UUU – Toronto Stock Exchange, JSE Limited [Johannesburg Stock Exchange]) through a private placement and a cash payment of US$ 90 million. The agreement provides for an increase in the cash payment amount in the future depending on the financial results of the Karatau Uranium Mine over the next three years. Thus, ARMZ Uranium Holding Co. acquires a 16.6% interest in Uranium One Inc. with an option to increase it to 19.95%. Concurrently with the purchase agreement, ARMZ Uranium Holding Co. has also entered into a long-term offtake agreement and a framework agreement providing for a strategic relationship with Uranium One, both of which will become effective upon closing of the acquisition.

This deal will benefit both parties: it will help ARMZ to diversify its resources and will reduce risks for the Russian uranium producers and suppliers on the world market. Uranium One will get a goof resource at a good price.