Uranium One enters into cooperation agreement with ARMZ

By AGENCIES

TORONTO- and Johannesburg-listed Uranium One has entered into a coordination and integration agreement with Russia’s JSC Atomredmetzoloto (ARMZ), which owns about 51% of the uranium miner.

Uranium One said on Monday the agreement sets out a framework for enhanced coordination and integration between the parties in six designated areas. These include Uranium One's growth and development strategy, financial reporting and budgeting, marketing and sales, geology and exploration, government relations and communication and human resources.

“The agreement is intended to ensure that the relationship of the parties is conducted in a manner consistent with maintaining Uranium One's status as an independent public issuer, with a continued commitment to governance best practices and the protection of minority shareholder interests,” the company, one of the world's largest publicly traded uranium producers with assets located in Kazakhstan, the US, Australia and Tanzania, said in a statement.

The coordination agreement also extends the governance provisions of the amended and restated framework agreement between the parties dated June 8, 2010.

As a result, the ‘coat-tail’ provisions, the covenant of ARMZ to vote in favour of Uranium One's independent director nominees and ARMZ's obligations not to acquire more Uranium One shares without Uranium One's consent, which would have otherwise expired this month, now remain in effect until December 4, 2013, subject to ARMZ's right to terminate the ‘coat-tail’ and voting covenant with 90 days' prior notice.

The coordination agreement would continue in effect unless terminated by either party on December 4, 2013 or on any following anniversary of that date.

Last month, Canada's No 2 uranium producer reported its profit in the quarter ended March 31 was down by 68% to $4.5-million, or nil a share. That compared with $14-million, or 1c a share, in the year-earlier period.