TORONTO, Nov. 22, 2013 /CNW/ - Vena Resources Inc. (the "Company" or "Vena") (TSX: VEM) (Peru: VEM) (Germany: V1RA) (USA: VNARF) announces that it has entered into a share purchase agreement with Azincourt Uranium Inc. (TSXV: AAZ) ("Azincourt") to sell the Company's 50% equity interest in Minergia S.A.C. ("Minergia"), a joint venture company owned by the Company and Cameco Global Exploration Ltd. ("CGE"), which owns and operates the Macusani and Muñani uranium projects in the Puno department of southeastern Peru.
Under the terms of the share purchase agreement, Azincourt will acquire Vena's 50% ownership in Minergia in exchange for a total consideration of $1,000,000, of which $750,000 will be payable in 2,525,252 common shares (the "Payment Shares") in the capital of Azincourt which number of common shares was determined based on the volume weighted average trading price of such common shares for the 10 days immediately prior to signing of the share purchase agreement, and $250,000 in cash on closing.
The closing of the purchase and sale transaction under the share purchase agreement is subject to a number of conditions, including the termination of its joint venture with Cameco Corporation and CGE and various related agreements with respect to Minergia, and the contemporaneous sale by CGE of its 50% interest in Minergia to Azincourt. The share purchase agreement also provides that Juan Vegarra, Vena's Chairman and CEO will be appointed as a director of Azincourt.
In a related transaction, CGE granted to the Company the right to purchase 100% of the common shares in the capital of Azincourt that it will receive as consideration for the sale of its interest in Minergia to Azincourt for a period of five months post the closing date at a price equal to the purchase price plus an amount equal to 50% of the positive amount, if any, by which the market price exceeds the purchase price.
Vena will continue to operate the Macusani and Muñani uranium projects in Peru under the tutelage of Ted O'Connor. Azincourt has agreed to invest between $1.5 and $2.0 million in the projects annually.
Under the share purchase agreement, Vena agreed to a voluntary resale restriction, whereby none of the Payment Shares may be traded during the first 12 months following the date of issuance and, from such time, the Payment Shares become freely tradeable as to 15% on that 12 month date, an additional 15% on each of the 15th, 18th, 21st and 24th months, and the remaining 25% on the 27th month following the date of issuance.
Juan Vegarra, Vena's Chairman and CEO stated, "The divestment of Minergia is part of our strategy to spin off our uranium assets and combine them with other assets in other countries with significant upside. We are very pleased and fortunate to have made this deal with Azincourt, a company that is headed by Ted O'Connor, an individual with 19 years experience in the uranium business and the former Director of Cameco's Corporate Development Group who was responsible for overseeing Cameco's significant investment in Minergia. Ted and his management are very well regarded in the uranium industry and they have built a significant portfolio of exciting uranium assets in anticipation of a turnaround in the uranium market. Vena believes that its stake in Azincourt will result in significant upside to Vena shareholders in the coming years."
Azincourt is a uranium exploration company that has been focused on exploration of the Patterson Lake (PLN) property, located in Canada's Athabasca Basin, in partnership with Fission Uranium Corp (TSXV: FCU). Azincourt's management and board have a strong track record of success. In addition to Ted O'Connor, the board of directors also includes Ian Stalker, former CEO of UraMin, a company that was acquired by the Areva Group for US$2.5 billion in 2007 and Dev Randhawa, founder of Strathmore Minerals Corp., a company that spun out its Canadian uranium assets to form Fission Energy Corp., and which was recently acquired by Energy Fuels.
In other news, the Company would also like to extend its gratitude for the significant contribution made to Vena over the last several years by David Bent who recently resigned. Silvia Dedios has assumed the responsibilities of General Manager, Peru operations and Walter Cuba, a geologist with nine years of experience focused on the Company's day to day uranium exploration activities will assume the responsibilities of uranium project manager and will work closely with Ted O'Connor, CEO and President of Azincourt, to continue the development of Minergia's uranium assets.
This press release contains forward-looking statements. More particularly, this press release contains statements that include, but are not limited to, the sale of the Vena's 50% interest in Minergia S.A.C. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", anticipate", "estimate", "may", "will", "would", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. The forward-looking statements are based on certain key expectations and assumptions made by Vena. Although Vena believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Vena can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. In addition to other risks that may affect the forward-looking statements in this press release are those set out in Vena's management discussion and analysis of the financial condition and results of operations for the three and nine month periods ended September 30, 2013 and its annual information form for the year ended December 31, 2012, which are available at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and Vena undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
SOURCE Vena Resources Inc.