PURCHASE AGREEMENT
Exhibit 99.2
This Agreement
dated September 4, 2018 is
made
BETWEEN:
CAMECO CORP., a company existing under
the laws of Canada
(“Cameco”)
AND:
XXXXXXX MINES CORP., a company existing
under the laws of Ontario
(“Xxxxxxx”)
RECITALS
X. Xxxxxxx
Mines Inc., a wholly owned subsidiary of Xxxxxxx Mines Corp.,
Cameco and JCU (Canada) Exploration Company
Limited (“JCU”) are parties to a joint
venture (the “Joint
Venture”) formed pursuant to an agreement dated for
reference December 28, 1978 (the “JV Agreement”), originally between
AGIP Canada Ltd., E&B Explorations Ltd. and Saskatchewan Mining
Development Corporation with respect to the mineral project known
as the Xxxxxxx River project (the “Project”);
B. Cameco
wishes to sell, and Xxxxxxx wishes to purchase, 100% of
Cameco’s interest in the Joint Venture (the
“Cameco JV
Interest”), being a 26.7% interest in the Joint
Venture (and reducing to approximately a 24% interest in the Joint
Venture upon completion of the 2018 work program in accordance with
the terms of the letter agreement dated January 9, 2017) and an
interest in a net profits royalty on the Project, on and subject to
the terms and conditions set forth herein; and
C. Pursuant
section 14.01 of the JV Agreement, JCU and Xxxxxxx have certain
rights of first refusal to the sale of any Participation Interest
(as that term is defined in the JV Agreement) of Cameco and, should
JCU wish to exercise such right, JCU shall be entitled to purchase
its pro-rata interest, being approximately 13.16% of the Cameco JV
Interest (the “JCU
ROFR”).
NOW THEREFORE IN CONSIDERATION of the
premises and mutual agreements in this Agreement, and for good and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged by each Party, the Parties agree as
follows:
ARTICLE
1
INTERPRETATION
“Agreement” means this Purchase
Agreement, together with all the Exhibits and the Schedules
attached thereto.
“Applicable Law” means, with
respect to any Person, property, transaction, event or other
matter, (i) any foreign or domestic constitution, treaty, law,
statute, regulation, code, ordinance, principle of common law,
rule, municipal by-law, Order or other requirement having the force
of law, (ii) any policy, practice, protocol, standard or
guideline of any Governmental Authority which, although not
necessarily having the force of law, is regarded by such
Governmental Authority as requiring compliance as if it had the
force of law (collectively, the “Law”) relating or applicable to
such Person, property, transaction, event or other matter and also
includes, where appropriate, any interpretation of the Law (or any
part thereof) by any Government Authority having jurisdiction over
it, or charged with its administration or
interpretation.
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“Block Trade” means a “block
trade” (as such term is customarily understood in the
securities industry) of a number of Consideration Shares greater
than 500,000 shares.
“Board” means the board of
directors of Xxxxxxx.
“Business Day” means any day except
Saturday, Sunday or any day on which banks are generally not open
for business in the Provinces of Ontario or
Saskatchewan.
“Cameco” means Cameco
Corp.
“Cameco JV Interest” has the
meaning given in the recitals hereto.
“Consideration Shares” has the
meaning set out in Section 2.2.
“Closing” means the completion of
the purchase and sale of the Cameco JV Interest in accordance with
the provisions of this Agreement.
“Closing Date” means the date on
which Closing occurs.
“Closing Time” means 11:00 a.m.
(Toronto time) on the Closing Date, or such other time on the
Closing Date as may be mutually agreed in writing by the
Parties.
“Consent” means any consent,
approval, permit, waiver, ruling, authorization, notice, exemption
or acknowledgement from any Person.
“Damages” means, whether or not
involving a third party claim, any loss, cost, liability, claim,
interest, fine, penalty, assessment, taxes, damages available at
law or in equity (excluding indirect, incidental or consequential
loss, liability, damage or expense, as well as loss of profits,
loss of business opportunity or diminution in value) or expense
(including reasonable costs, fees and expenses of legal counsel on
a full indemnity basis, without reduction for tariff rates or
similar reductions and reasonable costs, fees and expenses of
investigation).
“Xxxxxxx” means Xxxxxxx Mines
Corp.
“Exchanges” means the Toronto Stock
Exchange and NYSE American exchanges.
“Financial Statements” means the
audited consolidated financial statements of Xxxxxxx as at and for
the year ended December 31, 2017, including the notes thereto,
together with the auditor’s report thereon, and the unaudited
consolidated financial statements of Xxxxxxx as at and for the
three and six months ended June 30, 2018, each of which form part
of the Public Disclosure Documents.
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“Governmental Authority”
means:
(a)
any domestic or foreign
government, whether national, federal, provincial, state,
territorial, municipal or local (whether administrative,
legislative, executive or otherwise);
(b)
any agency, authority,
ministry, department, regulatory body, court, central bank, bureau,
board or other instrumentality having legislative, judicial,
taxing, regulatory, prosecutorial or administrative powers or
functions of, or pertaining to, government;
(c)
any court, tribunal,
commission, individual, arbitrator, arbitration panel or other body
having adjudicative, regulatory, judicial, quasi-judicial,
administrative or similar functions; and
(d)
any other body or entity
created under the authority of or otherwise subject to the
jurisdiction of any of the foregoing, including any stock or other
securities exchange or professional association.
“Interim Period” means the period
from the date of this Agreement to the Closing.
“JCU” means JCU (Canada)
Exploration Company Limited.
“JCU ROFR” has the meaning given in
the recitals hereto.
“Joint Venture” has the meaning
given in the recitals hereto.
“JV Agreement” has the meaning
given in the recitals hereto.
“Law” has the meaning set out in
the definition of “Applicable Law”.
“Legal Proceeding” means any
litigation, action, application, suit, investigation, charge,
hearing, claim, complaint, deemed complaint, grievance or
expropriation, or any civil, administrative, regulatory or
criminal, arbitration proceeding or other similar proceeding,
before or by any Governmental Authority and includes any appeal or
review thereof and any application for leave for appeal or
review.
“Liens” has the meaning set out in
Section 3.1(5).
“Order” means any order, directive,
judgment, decree, injunction, decision, ruling, award or writ of
any Governmental Authority.
“Party” means a party to this
Agreement and any reference to a Party includes its successors and
permitted assigns and “Parties” means every
Party.
“Person” is to be broadly
interpreted and includes an individual, a corporation, a
partnership, a trust, an unincorporated organization, a
Governmental Authority, and the executors, administrators or other
legal representatives of an individual in such
capacity.
“Project” has the meaning given in
the recitals hereto.
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“Public Disclosure Documents”
means, collectively, all of the documents which have been filed by
or on behalf of Xxxxxxx with the relevant Securities Regulators
pursuant to the requirements of applicable securities Laws,
including all documents publicly available on Xxxxxxx’x SEDAR
profile.
“Purchase Price” has the meaning
set out in Section 2.2.
“Release Agreement” means the
release agreement between Xxxxxxx and Cameco substantially in the
form attached to this Agreement as Schedule
“A”.
“Sale Notice” has the meaning set
out in Section 2.3(4).
“Sale Response Period” has the
meaning set out in Section 2.3(4).
“Sale Shares” has the meaning set
out in Section 2.3(4).
“Securities Regulators” means,
collectively, the securities commissions or other securities
regulatory authorities in each of the provinces of Canada and in
any other jurisdictions whose securities Laws are applicable to
Xxxxxxx, and the Exchanges.
“SEDAR” means the System for
Electronic Document Analysis and Retrieval of the Canadian
Securities Administrators.
“Transfer” means (i) any transfer,
sale, assignment, exchange, gift, donation or other disposition,
where possession, legal title, beneficial ownership or the economic
risk or return associated with the disposition passes directly or
indirectly from one Person to another or to the same Person in a
different legal capacity, whether or not for value, whether or not
voluntary and however occurring; or (ii) any agreement, undertaking
or commitment to effect any of the foregoing, and
“Transferred”
and “Transferring” will have the
corresponding meanings.
“Transfer Documents” has the
meaning set out in Section 4.2(2).
1.2 Gender
and Number. In this Agreement,
unless the context requires otherwise, words in one gender include
all genders and words in the singular include the plural and vice
versa.
1.3 Headings
and Table of Contents. The inclusion in
this Agreement of headings of Articles and Sections are for
convenience of reference only and are not intended to be full or
precise descriptions of the text to which they refer.
1.4 Section
References. Unless the context
requires otherwise, references in this Agreement to Sections,
Schedules or Exhibits are to Sections, Schedules or Exhibits of
this Agreement.
1.5 Words
of Inclusion. Wherever the words
“include”,
“includes” or
“including” are
used in this Agreement, they shall be deemed to be followed by the
words “without limitation” and the words following
“include”,
“includes” or
“including”
shall not be considered to set forth an exhaustive
list.
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1.6 References
to this Agreement. The words “hereof”, “herein”, “hereto”, “hereunder”, “hereby” and similar expressions
shall be construed as referring to this Agreement in its entirety
and not to any particular Section or portion of it.
1.7 Statute
References. Unless otherwise
indicated, all references in this Agreement to any statute include
the regulations thereunder, in each case as amended, re-enacted,
consolidated or replaced from time to time and in the case of any
such amendment, re-enactment, consolidation or replacement,
reference herein to a particular provision shall be read as
referring to such amended, re-enacted, consolidated or replaced
provision and also include, unless the context otherwise requires,
all applicable instruments, guidelines, bulletins or policies made
in connection therewith.
1.8 Document
References. All references
herein to any agreement (including this Agreement), document or
instrument mean such agreement, document or instrument as amended,
supplemented, modified, varied, restated or replaced from time to
time in accordance with the terms thereof and, unless otherwise
specified therein, includes all schedules and exhibits attached
thereto.
ARTICLE 2
PURCHASE OF
ASSETS
2.1 Purchase and Sale. At the Closing Time,
on and subject to the terms and conditions of this Agreement,
Cameco shall sell, transfer, assign, deliver and convey to Xxxxxxx,
and Xxxxxxx shall purchase from Cameco, subject to the JCU ROFR,
the Cameco JV Interest and all right, title and interest of Cameco
in and to the Project and the JV Agreement.
2.2 Purchase Price. Subject to adjustment in
the event that JCU exercises the JCU ROFR, the aggregate price
payable by Xxxxxxx to Cameco for the Cameco JV Interest (the
“Purchase
Price”) shall be CAD$15,999,750, which shall be
satisfied by Xxxxxxx through the issuance of 24,615,000 common
shares in the capital of Xxxxxxx (the “Consideration Shares”) at a deemed
price of CAD$0.65 per Consideration Share. Should JCU exercise the
JCU ROFR in respect of the Cameco JV Interest, the Purchase Price
shall be adjusted downwards in proportion to the percentage
interest of the Cameco JV Interest over which the JCU ROFR
applies.
2.3 Restrictions on
Transfer.
(1) Cameco
acknowledges that the certificate(s) representing the Consideration
Shares will bear the following restrictive legends required by
applicable Laws and Exchange requirements:
UNLESS PERMITTED
UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT
TRADE THE SECURITY BEFORE [INSERT
DATE THAT IS FOUR (4) MONTHS AND ONE (1) DAY AFTER CLOSING
DATE].
THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK
EXCHANGE (“TSX”); HOWEVER, THE SAID SECURITIES CANNOT
BE TRADED THROUGH THE FACILITIES OF TSX SINCE THEY ARE NOT FREELY
TRANSFERABLE, AND CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH
SECURITIES IS NOT “GOOD DELIVERY” IN SETTLEMENT OF
TRANSACTIONS ON TSX.
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(2) Cameco
covenants, acknowledges and agrees that, during the period
commencing on the Closing Date and ending on the date which is six
months after the Closing Date, it will not, directly or indirectly,
Transfer any Consideration Shares without first having obtained the
prior written consent of Xxxxxxx, which consent is within the sole
discretion of Xxxxxxx and may be unreasonably
withheld.
(3) Cameco further covenants,
acknowledges and agrees that, for the period commencing on the date
which is six months after the Closing Date and ending on the first
anniversary of the Closing Date, it will not, directly or
indirectly, Transfer any Consideration Shares without (i) first
having obtained the prior written consent of Xxxxxxx, which consent
is within the sole discretion of Xxxxxxx and may be unreasonably
withheld, or (ii) complying with the provisions of Section
2.3(4).
(4) If Cameco wishes to Transfer any
of the Consideration Shares (the “Sale Shares”) during the period
commencing on the date which is six months after the Closing Date
and ending on the first anniversary of the Closing Date, and has
not otherwise obtained the prior written consent of Xxxxxxx as
contemplated in Section 2.3(3) then:
(a)
Cameco will first give
written notice to Xxxxxxx (the “Sale Notice”), specifying the
number of Sale Shares Cameco wishes to sell and the minimum cash
price which Cameco is prepared to accept, and Xxxxxxx will then
have the right for a period of five (5) Business Days after receipt
of the Sale Notice (the “Sale
Response Period”) to designate the purchaser(s) of the
Sale Shares. If Xxxxxxx elects to designate such purchaser(s) of
the Sale Shares, Cameco will be provided, prior to the expiry of
the Sale Response Period, with one or more executed purchase
agreements with respect to the sale of all such Sale Shares which
shall be negotiated in good faith during the Sale Response Period
between such purchaser(s), Xxxxxxx and Cameco, and shall be in form
and substance acceptable to Cameco, acting reasonably. In the event
that Xxxxxxx declines to designate the purchaser(s) for the Sale
Shares or fails to provide Cameco with one or more executed
purchase agreements as required, then Cameco may for a period of
thirty (30) days following the expiry of the Sale Response Period
sell the Sale Shares to other purchasers, at the discretion of
Cameco, provided that the aggregate number of Sale Shares sold in
any one day to other purchasers shall not exceed 10% of the average
daily volume of the common shares of Xxxxxxx traded on the
Exchanges for the 20 trading day period prior to the date of the
Transfer at not less than the minimum cash price specified in its
Sale Notice; or
(b)
Cameco may conduct Transfers
that constitute Block Trades, provided that to the knowledge of
Cameco after commercially reasonable inquiry as to the identity of
each prospective purchaser, the purchaser in any such Block Trade
is: (i) a mutual fund that is a registered investment company under
the United States Investment Company Act of 1940, as amended or
(ii) if the purchaser in any such Block Trade is not a mutual fund
that is a registered investment company under the United States
Investment Company Act of 1940, as amended, then such purchaser,
together with any Persons or group to which the purchaser belongs,
would collectively beneficially own less than 5% of the issued and
outstanding common shares of Xxxxxxx immediately after giving
effect to such Block Trade.
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For greater
certainty, Section 2.3(3) and (4) shall not restrict Cameco from
tendering Consideration Shares to a take-over bid made in
compliance with applicable Laws.
2.4 Covenants. Cameco covenants and agrees,
for a period of one year after the Closing Date, that Cameco
shall:
(a)
vote its Consideration Shares
in favour of the election of the Xxxxxxx’x management’s
proposed nominees for election to the Board at every shareholders
meeting at which directors are to be elected;
(b)
not effect, conduct or
participate in any solicitation of proxies with respect to any
securities of Xxxxxxx (other than any solicitation of proxies
conducted by management of Xxxxxxx) against management’s
proposed nominees for election to the Board; and
(c)
not initiate any shareholder
proposal or takeover bid for securities of Xxxxxxx or otherwise
attempt to cause a change of control of Xxxxxxx.
2.5 Interim Period. During the Interim
Period, Cameco shall perform all obligations required to be
performed by Cameco under this Agreement and the JV Agreement,
co-operate with Xxxxxxx in connection therewith, and do all such
other acts and things as may be necessary or desirable in order to
consummate and make effective the transactions contemplated in this
Agreement. For greater
certainty, during the Interim Period, Cameco hereby retains all
right and entitlement under the JV Agreement to:
(a)
(i) receive notice of, attend
and/or vote at meetings of the Management Committee (as defined in
the JV Agreement), (ii) receive technical information on the
Project, and (iii) receive plans or budgets relating to the
Project; and
(b)
receive any information with
respect to the preliminary feasibility study on the Project (the
“PFS”) and
participate in any technical reviews of the PFS and/or Management
Committee votes with regards to approving the PFS.
2.6
Waiver of ROFR. During the Interim
Period, Cameco hereby irrevocably waives its right of first refusal
under article 14 of the JV Agreement with respect to any proposed
or future sale, assignment, transfer, conveyance or other
disposition of JCU’s interest in the Joint Venture and the
Project to Xxxxxxx at a price no greater than the Purchase Price,
calculated on a pro rata basis, and on terms substantially similar
to this Agreement. For greater certainty, in the event that the
Agreement is terminated in accordance with Section 4.8,
Cameco’s right of first refusal under article 14 of the JV
Agreement shall revert and continue in full force and effect in
accordance with its terms in the JV Agreement.
ARTICLE
3
REPRESENTATIONS AND
WARRANTIES
3.1 Representations and Warranties of
Cameco. As a material inducement to Xxxxxxx entering into
this Agreement and completing the transactions contemplated by this
Agreement and acknowledging that Xxxxxxx is entering into this
Agreement in reliance upon the representations and warranties of
Cameco set out in this Section 3.1, Cameco represents and warrants
to Xxxxxxx as follows:
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(1) Due
Formation. Cameco is a corporation duly formed, validly
existing and organized under the laws of its governing jurisdiction
and has the requisite power to execute and deliver this Agreement
and all other agreements and instruments to be executed by it as
contemplated herein and to perform its obligations hereunder and
under all such other agreements and instruments and to own the
Cameco JV Interest. No act or proceeding has been taken or
authorized by or against Cameco by any other Person in connection
with the dissolution, liquidation, winding up, bankruptcy or
insolvency of Cameco or with respect to any amalgamation, merger,
consolidation, arrangement or reorganization of, or relating to,
Cameco and no such proceedings have been threatened by any other
Person.
(2) Authorization.
The execution, delivery and performance of this Agreement and all
other agreements and instruments to be executed by Cameco as
contemplated herein and the completion of the transactions
contemplated hereby and thereby have been duly authorized by
Cameco. No Consent is required in order for Cameco to enter into
this Agreement or to complete its obligations hereunder. The
completion of the transactions contemplated by this Agreement will
not breach any Applicable Law, the articles or by-laws, or similar
documents, of Cameco, or any contract or agreement to which Cameco
is a party.
(3) Enforceability
of Obligations. This Agreement constitutes the valid and
binding obligation of Cameco enforceable against Cameco in
accordance with its terms, subject to limitations on enforcement
imposed by bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of the rights of creditors and others and
to the extent that equitable remedies such as specific performance
and injunctions are only available in the discretion of the court
from which they are sought. Cameco is not an insolvent person
within the meaning of the Bankruptcy and Insolvency Act (Canada)
and will not become an insolvent person as a result of the
Closing.
(4) Right
to Purchase. Other than JCU’s and
Xxxxxxx’x rights
under JV Agreement, no person, firm or corporation, has any
agreement or option or any right capable of becoming an agreement
for the purchase of some or all of the Cameco JV Interest or any
right capable of becoming an agreement for the purchase of
Cameco’s interest in the Joint Venture or the
Project.
Subject to
JCU’s and Xxxxxxx’x rights under JV
Agreement:
(a)
the Cameco JV Interest is
owned by Cameco free and clear of all mortgages, liens, charges,
security interests, adverse claims, pledges or encumbrances of any
kind (collectively, “Liens”);
(b)
Cameco has good and
marketable title to the Cameco JV Interest and will convey to
Xxxxxxx pursuant to this Agreement good and marketable title to the
Cameco JV Interest free and clear of any Liens;
(c)
there are no options,
warrants, agreements, rights or privileges with respect to the
purchase of any of the Cameco JV Interest; and
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(d)
the sale and transfer to
Xxxxxxx of the Cameco JV Interest will not result in the breach of
the provisions of any agreement, indenture, deed, debenture,
mortgage, bond or other document or instrument to which Cameco is a
party or by which it is bound;
(6) Legal
Proceedings. There is no Legal Proceeding in progress,
pending or threatened against or affecting Cameco, or any of its
property or assets or title thereto, nor is there any factual or
legal basis on which any such Legal Proceeding might be commenced
and there is no Order outstanding against or affecting Cameco, or
any of its property or assets which involves or could have an
effect on the Project, the Joint Venture, the JV Agreement and the
parties thereto, the Cameco JV Interest, this Agreement or the
transactions contemplated herein.
(7) Residence.
Cameco is not a non-resident of Canada for purposes of
section 116 of the Income Tax
Act (Canada).
(8) Consideration
Shares. Cameco has been independently advised as to
restrictions with respect to trading in and the restricted period
or statutory hold period applicable to the Consideration Shares
imposed by Applicable Laws in the jurisdiction in which it resides
and the policies of the Exchanges, confirms that no representation
has been made to it by or on behalf of Xxxxxxx with respect
thereto. Cameco acknowledges that it is aware of the
characteristics of the Consideration Shares, the risks relating to
an investment therein, and Cameco agrees that any certificates
representing the Consideration Shares will bear a legend indicating
that the sale of such securities is restricted. Cameco further
acknowledges that it should consult its own legal counsel in its
jurisdiction for full particulars of applicable resale
restrictions.
(9) No
Reliance. Cameco acknowledges that it has conducted to its
satisfaction an independent investigation of the financial
condition, liabilities and results of operations of the Joint
Venture, including the PFS, and of Xxxxxxx and its subsidiaries and
the nature and condition of their respective properties and assets
and businesses and, in making the determination to proceed with the
transactions contemplated by this Agreement, has relied solely on
the results of its own independent investigation and the
representations and warranties set forth in Section 3.2. Cameco
acknowledges that neither Xxxxxxx, nor any other Person, has made
any representation or warranty, express or implied, as to the
accuracy or completeness of any information regarding Xxxxxxx, the
Joint Venture and its subsidiaries, their businesses or other
matters except as expressly provided in Section 3.2. Without
limiting the generality of the foregoing, Cameco hereby
acknowledges and agrees that none of Xxxxxxx, its subsidiaries or
any other Person shall be subject to any liability or any
indemnification claim by Cameco, for any inaccuracy, misstatement
or omission with respect to any estimates, forecasts, projections
or other predictions for the business of the Joint Venture, Xxxxxxx
or its subsidiaries, or materials, documents or information
relating to the business of the Joint Venture, Xxxxxxx or its
subsidiaries or the transactions contemplated hereby, whether
written or oral, made available to Cameco or its representatives in
any data room, presentation by Xxxxxxx, its subsidiaries or any of
their affiliates, discussion or otherwise, except as expressly
covered by a representation or warranty provided by Xxxxxxx in
Sections 3.2 and 3.3.
3.2 Representations and Warranties of
Xxxxxxx. Xxxxxxx represents and warrants to Cameco as
follows:
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(1) Due
Formation. Xxxxxxx is a corporation duly formed, validly
existing and organized under the laws of its governing jurisdiction
and has the requisite power to execute and deliver this Agreement
and all other agreements and instruments to be executed by it as
contemplated herein and to perform its other obligations hereunder
and under all such other agreements and instruments to own its
property and assets and to carry on business as it is now being
conducted. No act or proceeding has been taken or authorized by or
against Xxxxxxx by any other Person in connection with the
dissolution, liquidation, winding up, bankruptcy or insolvency of
Xxxxxxx or with respect to any amalgamation, merger, consolidation,
arrangement or reorganization of, or relating to, Xxxxxxx and no
such proceedings have been threatened by any other
Person.
(2) Authorization.
The execution, delivery and performance of this Agreement and all
other agreements and instruments to be executed by Xxxxxxx as
contemplated herein and the completion of the transactions
contemplated hereby and thereby have been duly authorized. The
completion of the transactions contemplated by this Agreement will
not breach any Applicable Law or the articles or by-laws, or
similar documents of Xxxxxxx or any contract or agreement to which
Xxxxxxx is a party.
(3) Enforceability
of Obligations. This Agreement constitutes the valid and
binding obligation of Xxxxxxx enforceable against Xxxxxxx in
accordance with its terms, subject to limitations on enforcement
imposed by bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of the rights of creditors and others and
to the extent that equitable remedies such as specific performance
and injunctions are only available in the discretion of the court
from which they are sought. Xxxxxxx is not an insolvent person
within the meaning of the Bankruptcy and Insolvency Act (Canada)
and will not become an insolvent person as a result of the
Closing.
(4) Consideration
Shares. At the Closing Time, the issuance of the
Consideration Shares will have been duly authorized and, when
issued, be issued as fully paid and non-assessable common shares in
the capital of Xxxxxxx.
(5) Shareholder
Approval. Xxxxxxx is not required to obtain shareholder
approval for the transactions contemplated by this
Agreement.
(6) Financial
Statements.
(a)
The Financial Statements have
been prepared in accordance with International Financial Reporting
Standards applied on a consistent basis throughout the periods
involved and present fairly, in all material respects, the
financial condition and performance of Xxxxxxx and its
subsidiaries, on a consolidated basis, as at the dates specified
therein and for the periods then ended. Xxxxxxx does not intend to
correct or restate, nor, to the knowledge of Xxxxxxx, is there any
basis for any correction or restatement of, any aspect of the
Financial Statements.
(b)
There are no off-balance
sheet transactions, arrangements, obligations (including contingent
obligations) or other relationships of Xxxxxxx or any of its
subsidiaries with unconsolidated entities or other
Persons.
(c)
Neither Xxxxxxx nor any of
its subsidiaries has any liabilities, direct or indirect,
contingent or otherwise, not disclosed in the Public Disclosure
Documents, other than liabilities: (i) incurred in the normal
course of business; or (ii) which would not constitute an adverse
material adverse fact in respect of Xxxxxxx.
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(7) Regulatory
and Other Compliance.
(a)
Xxxxxxx is a “reporting
issuer” (or the equivalent) in each of the provinces of
Canada and is not included on a list of defaulting reporting
issuers maintained by the Securities Regulators. Xxxxxxx has not
taken any action to cease to be a reporting issuer in any
jurisdiction in which it is a reporting issuer, and has not
received any notification from a Securities Regulator seeking to
revoke Xxxxxxx’x reporting issuer status.
(b)
Since December 31, 2016, as
of their respective filing dates, each of the Public Disclosure
Documents complied with the requirements of applicable securities
Laws in all material respects and none of the Public Disclosure
Documents contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the
circumstances in which they were made, not misleading. There is no
material change as of the date hereof relating to Xxxxxxx which has
occurred and with respect to which the requisite material change
report has not been filed with the Securities Regulators and made
publicly available on SEDAR. Xxxxxxx has not filed any confidential
material change report or other confidential report with any
Securities Regulator or other Governmental Authority which at the
date hereof remains confidential.
(8) Information.
Xxxxxxx, as operator of the Joint Venture, has provided Cameco with
information in regards to the ongoing operations of the Joint
Venture in accordance with the normal operating practices of the
Joint Venture, which information is believed to be materially
complete. Xxxxxxx has also provided Cameco with information and
current draft or preliminary documentation regarding the ongoing
preparation of the PFS, however Xxxxxxx makes no representation or
warranty regarding the accuracy or completeness of such information
or documentation pending completion of the PFS and its
certification by a Qualified Person.
3.3 Commissions. Each Party represents and
warrants to the other Parties that such other Parties will not be
liable for any brokerage commission, finder’s fee or other
similar payment in connection with the transactions contemplated by
this Agreement because of any action taken by, or agreement or
understanding reached by, that Party.
ARTICLE
4
CLOSING
ARRANGEMENTS
4.1 Closing. The Closing shall take place at
the Closing Time on the Closing Date by exchange of electronically
executed documents, or at such other time on the Closing Date or
such other place as may be agreed to in writing by the
Parties.
4.2 Cameco’s Closing Documents. At the
Closing, Cameco shall deliver or cause to be delivered to Xxxxxxx,
the following documents:
(1) Certificates.
A certificate, duly executed by a senior officer of Cameco,
certifying that the representations and warranties of Cameco set
out in this Agreement are true and correct on and as of the Closing
Date and that all of the terms, covenants and conditions of Cameco
set out in this Agreement have been complied with or performed by,
Cameco on and as of the Closing Date.
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(2) Transfer Documents. A duly executed
general conveyance and such other agreements, conveyances, bills of
sale and/or certificates representing or assignments of (as the
case may be) all of the Cameco JV Interest and all right, title and
interest of Cameco in and to the Project and the JV Agreement duly
endorsed for transfer to Xxxxxxx as reasonably requested by Xxxxxxx
(together, the “Transfer
Documents”).
(3) Approvals.
Any approvals or consents as may be required from any federal,
provincial, municipal or other governmental or administrative
bodies in order to permit the change of ownership of the Cameco JV
Interest herein provided for to be completed without detrimentally
affecting or resulting in the cancellation or termination of any
license or permit held by, or for the benefit of, the Joint
Venture.
(4) JCU
ROFR. Evidence acceptable to Xxxxxxx that JCU has exercised
the JCU ROFR pursuant to the JV Agreement, JCU has waived the JCU
ROFR, or the JCU ROFR has expired.
(5) Other
Closing Documents. Such other assurances and consents,
agreements, documents and instruments as may be contemplated by
this Agreement or as reasonably required by Xxxxxxx to complete the
transactions provided for in this Agreement.
4.3 Xxxxxxx’x Closing Documents. At
the Closing, Xxxxxxx shall deliver or cause to be delivered to the
Vendor Parties, the following documents:
(1) Certificates.
A certificate, duly executed by a senior officer of Xxxxxxx,
certifying that the representations and warranties of Xxxxxxx set
out in this Agreement are true and correct on and as of the Closing
Date and that all of the terms, covenants and conditions of Xxxxxxx
set out in this Agreement have been complied with or performed by,
Xxxxxxx on and as of the Closing Date.
(2) Payment
of Purchase Price. The certificate representing common
shares of Xxxxxxx in satisfaction of the Purchase Price in
accordance with Section 2.2.
(3) Release
Agreement. An executed copy of the Release
Agreement.
(4) Approvals.
Any approvals or consents from any Governmental Authority in order
to permit Xxxxxxx to issue the Consideration Shares comprising the
Purchase Price to Cameco, including approval of the
Exchanges.
(5) Other
Closing Documents. Such other assurances and consents,
agreements, documents and instruments as may be contemplated by
this Agreement or as reasonably required by Cameco to complete the
transactions provided for in this Agreement.
4.4 Xxxxxxx’x Conditions and Covenant to
Satisfy. Xxxxxxx shall not be obligated to complete the
purchase of the Cameco JV Interest pursuant to this Agreement
unless, at or before the Closing Time, each of the conditions
listed below in this Section 4.4 has been satisfied, it being
understood that the said conditions are included for the exclusive
benefit of Xxxxxxx. Cameco shall take all such actions, steps and
proceedings as are reasonably within its control as may be
necessary to ensure that the conditions listed below in this
Section 4.4 are fulfilled at or before the Closing
Time.
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(1) Representations
and Warranties. The representations and warranties of Cameco
in Section 3.1 and Section 3.3 shall be true and correct at the
Closing.
(2) Compliance.
Cameco shall have performed and complied with all of the terms and
conditions in this Agreement on its part to be performed or
complied with at or before the Closing Time, including delivery of
the closing documents listed in Section 4.2.
(3) Approvals.
All approvals required in order to complete the transactions
contemplated by this Agreement, shall have been obtained, on terms
and conditions satisfactory to Xxxxxxx, including the approval of
the Exchanges.
(4) Litigation.
No Order of any Governmental Authority shall have been issued,
granted or made at the Closing Time or be threatened or pending,
against Cameco or the Joint Venture enjoining, restraining, or
preventing the completion of the transactions contemplated by this
Agreement.
(5) Change
of Law. No Governmental Authority shall have enacted,
issued, promulgated, enforced or entered any Law which is then in
effect and has the effect of (i) making the purchase of the Cameco
JV Interest as set out in this Agreement illegal or otherwise
preventing or prohibiting the purchase of the Cameco JV Interest by
Xxxxxxx; or (ii) making the issuance of the Consideration Shares as
contemplated by this Agreement illegal or otherwise preventing or
prohibiting the issuance of the Consideration Shares as
contemplated by this Agreement.
4.5 Condition Not Fulfilled. If any
condition in Section 4.4 has not been fulfilled at or before the
Closing Time or if any such condition is or becomes impossible to
satisfy, other than as a result of the failure of Xxxxxxx to comply
with their obligations under this Agreement, then Xxxxxxx in its
sole discretion may, without limiting any rights or remedies
available to Xxxxxxx at law or in equity, either:
(a)
terminate this Agreement by
notice to Cameco, as provided in Section 4.8; or
(b)
waive compliance with any
such condition without prejudice to their right of termination in
the event of non-fulfilment of any other condition.
4.6 Cameco’s
Conditions and Covenant to Satisfy. Cameco shall not be obligated to complete the
transactions contemplated by this Agreement unless, at or before
the Closing Time, each of the conditions listed below in this
Section 4.6 has
been satisfied, it being understood that the said conditions are
included for the exclusive benefit of Cameco. Xxxxxxx shall take
all such actions, steps and proceedings as are reasonably within
the Xxxxxxx’x control as may be necessary to ensure that the
conditions listed below in this Section 4.6
are fulfilled at or before the
Closing Time.
(1) Representations
and Warranties. The representations and warranties of
Xxxxxxx in Section 3.2 and Section 3.3 shall be true and correct at
the Closing.
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(2) Compliance.
Xxxxxxx shall have performed and complied with all of the terms and
conditions in this Agreement on their part to be performed or
complied with at or before the Closing Time, including delivery of
the closing documents listed in Section 4.3.
(3) Approvals.
All approvals required in order to complete the transactions
contemplated by this Agreement, shall have been obtained, on terms
and conditions satisfactory to Cameco, including the approval of
the Exchanges.
(4) Litigation.
No Order of any Governmental Authority shall have been issued,
granted or made at the Closing Time or be threatened or pending,
against Xxxxxxx or the Joint Venture enjoining, restraining, or
preventing the completion of the transactions contemplated by this
Agreement.
(5) Change
of Law. No Governmental Authority shall have enacted,
issued, promulgated, enforced or entered any Law which is then in
effect and has the effect of (i) making the purchase of the Cameco
JV Interest as set out in this Agreement illegal or otherwise
preventing or prohibiting the purchase of the Cameco JV Interest by
Xxxxxxx; or (ii) making the issuance of the Consideration Shares as
contemplated by this Agreement illegal or otherwise preventing or
prohibiting the issuance of the Consideration Shares as
contemplated by this Agreement.
4.7 Condition Not Fulfilled. If any
condition in Section 4.6 shall not have been fulfilled at or before
the Closing Time or if any such condition is or becomes impossible
to satisfy, other than as a result of the failure of Cameco to
comply with its obligations under this Agreement, then Cameco in
its sole discretion may, without limiting any rights or remedies
available to Cameco at law or in equity, either:
(a)
terminate this Agreement by
notice to Xxxxxxx, as provided in Section 4.8; or
(b)
waive compliance with any
such condition without prejudice to their right of termination in
the event of non-fulfilment of any other condition.
(a)
by the mutual written
agreement of the Parties;
(d)
by written notice from a
Party to the other Party if Closing has not occurred within four
months after the date of this Agreement.
4.9 Effect
of Termination. If this Agreement is
terminated:
(a)
by Xxxxxxx or by Cameco under
Section 4.8, then, subject to Section 4.9(b), all further
obligations of the Parties under this Agreement shall terminate,
except for the obligations under Sections 5.1, 5.2, 5.8, 5.11,
5.12, 5.13, 5.14, 5.15 which shall survive such termination;
or
(b)
by a Party under Section 4.8(b) or
4.8(c) and the right to terminate arose because of a breach of this
Agreement by the other Party (including a breach by the other Party
resulting in a condition in favour of the terminating Party failing
to be satisfied), then, any such claim by such Party against the
other Party for any and all Damages sustained or incurred by the
terminating Party in respect of such breach shall survive such
termination.
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ARTICLE
5
GENERAL
(1) Cameco
covenants and agrees with Xxxxxxx to indemnify and save harmless
Xxxxxxx against all Damages suffered or incurred by Xxxxxxx by
reason of or arising out of any warranties or representations on
the part of Cameco herein being untrue or Cameco failing to fulfil
the covenants set forth herein.
(2) Xxxxxxx
covenants and agrees with Cameco to indemnify and save harmless
Cameco against all Damages suffered or incurred by Cameco by reason
of or arising out of any warranties or representations on the part
of Xxxxxxx herein being untrue or Xxxxxxx failing to fulfil the
covenants set forth herein.
5.2 Expenses. Except as otherwise expressly
provided herein, each Party shall be responsible for all costs and
expenses (including any taxes imposed on such expenses) incurred by
it in connection with the negotiation, preparation, execution,
delivery and performance of this Agreement and the transactions
contemplated by this Agreement (including the fees and
disbursements of legal counsel, bankers, investment bankers,
accountants, brokers and other advisers).
5.3 Public
Announcements. Xxxxxxx shall publicly announce the
transaction contemplated hereby promptly following the execution of
this Agreement, substantially in the form set forth in Schedule B.
Other than as required by applicable securities Laws or as
otherwise previously disclosed, neither Party shall issue any other
press release, or otherwise make filings with any Governmental
Authority, with respect to the transaction contemplated by this
Agreement without first providing a draft of the press release or
other filing to, and consulting with, the other Party. Each Party
shall act reasonably in any such consultations. For greater
certainty, the foregoing shall not restrict a Party's ability to
discuss the transaction in news interviews, statements at
conferences, or in investor presentations or similar
venues.
5.4 Survival.
All provisions of this Agreement and of any other agreement,
certificate or instrument delivered pursuant to this Agreement,
other than the conditions in Article 4 hereof, shall not merge on
Closing but shall survive the execution, delivery and performance
of this Agreement, the Closing and the execution and delivery of
any Transfer Documents or other documents of title and all other
agreements, certificates and instruments delivered pursuant to this
Agreement and the payment of the Consideration Shares for the
Cameco JV Interests Consideration Shares.
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5.5 Notices.
Any notice, consent, waiver, direction or other communication
required or permitted to be given under this Agreement by a Party
hereto shall be in writing and shall be delivered by hand to the
Party hereto to which the notice is to be given at the following
address or sent by email to the following email address or to such
other address or email address as shall be specified by a Party
hereto by like notice. Any notice, consent, waiver, direction or
other communication aforesaid shall, if delivered, be deemed to
have been given and received on the date on which it was delivered
to the address provided herein (if a Business Day or, if not, then
the next succeeding Business Day) and if sent by email be deemed to
have been given and received at the time of receipt (if a Business
Day or, if not, then the next succeeding Business Day) unless
actually received after 4:00 p.m. (Toronto time) at the point of
delivery in which case it shall be deemed to have been given and
received on the next Business Day.
The address for
service of each of the Parties hereto shall be as
follows:
(a)
if to Xxxxxxx:
Xxxxxxx Mines
Corp.
00 Xxxxxxxxxx
Xxxxxx
Xxxxx
0000
Xxxxxxx Xxxxxxx
X0X 0X0
Attention:
Xxxxx Xxxxx
Email:
xxxxxx@xxxxxxxxxxxx.xxx
With a copy
to:
Blake, Xxxxxxx
& Xxxxxxx LLP
000 Xxxxxxx
Xxxxxx, Xxxxx 0000
Three Bentall
Centre
Vancouver,
British Columbia V7Z 1L3
Attention:
Xxxxxx Xxxxxxxxx
Email:
xxxxxx.xxxxxxxxx@xxxxxx.xxx
(b)
if to Cameco:
Cameco
Corp.
2121 –
00xx
Xxxxxx Xxxx
Xxxxxxxxx,
Xxxxxxxxxxxx X0X 0X0
Attention:
General Counsel
Email:
xxxxx_xxxxxxx@xxxxxx.xxx
With a copy
to:
Xxxxxx Xxxxxx
Gervais LLP
1200 Waterfront
Centre
000 Xxxxxxx Xx.,
X.X. Xxx 00000
Xxxxxxxxx,
Xxxxxxx Xxxxxxxx X0X 0X0
Attention:
Xxxx X. Xxxxxxxx
Email:
xxxxxxxxx@xxx.xxx
5.6 Time
of Essence. Time shall be of the essence of this Agreement
in all respects.
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5.7 Further
Assurances. Each Party shall from time to time promptly
execute and deliver or cause to be executed and delivered all such
further documents and instruments and shall do or cause to be done
all such further acts and things in connection with this Agreement
that the other Parties may require as being necessary or desirable
in order to effectively carry out or better evidence or perfect the
full intent and meaning of this Agreement or any provision
hereof.
5.8 Entire Agreement. This Agreement
constitutes the entire agreement between the Parties pertaining to
the subject matter of this Agreement and supersedes all prior
agreements, understandings, negotiations and discussions, whether
oral or written. There are no conditions, representations,
warranties, obligations or other agreements between the Parties in
connection with the subject matter of this Agreement (whether oral
or written, express or implied, statutory or otherwise) except as
explicitly set out in this Agreement.
5.9 Amendment.
No amendment of this Agreement shall be effective unless made in
writing and signed by the Parties.
5.10 Waiver.
A waiver of any default, breach or non-compliance under this
Agreement shall not be effective unless in writing and signed by
the Parties to be bound by the waiver. No waiver shall be inferred
from or implied by any failure to act or delay in acting by a Party
in respect of any default, breach or non-observance or by anything
done or omitted to be done by the other Party. The waiver by a
Party of any default, breach or non-compliance under this Agreement
will not operate as a waiver of that Party’s rights under
this Agreement in respect of any continuing or subsequent default,
breach or non-observance (whether of the same or any other
nature).
5.11 Severability. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction
will, as to that jurisdiction, be ineffective to the extent of such
prohibition or unenforceability and will be severed from the
balance of this Agreement, all without affecting the remaining
provisions of this Agreement or affecting the validity or
enforceability of such provision in any other
jurisdiction.
5.12 Remedies Cumulative. The rights,
remedies, powers and privileges herein provided to a Party are
cumulative and in addition to and not exclusive of or in
substitution for any rights, remedies, powers and privileges
otherwise available to that Party.
5.13 Attornment. Each Party agrees (i) that
any action or proceeding relating to this Agreement must be brought
in a court of competent jurisdiction in the Province of
Saskatchewan, and for that purpose now irrevocably and
unconditionally attorns and submits to the jurisdiction of such
Saskatchewan court; (ii) that it irrevocably waives any right to,
and will not, oppose any such Saskatchewan action or proceeding on
any jurisdictional basis, including forum non conveniens; and (iii) not to
oppose the enforcement against it in any other jurisdiction of any
Order duly obtained from a Saskatchewan court as contemplated by
this Section 5.13.
5.14 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
Province of Saskatchewan and the laws of Canada applicable in such
Province and this Agreement shall be treated, in all respects, as a
Saskatchewan contract.
5.15 Successors and Assigns. This Agreement
shall enure to the benefit of, and be binding on, the Parties and
their respective successors and permitted assigns. None of the
Parties may assign or transfer, whether absolutely, by way of
security or otherwise, all or any part of their respective rights
or obligations under this Agreement without the prior written
consent of the other Parties.
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5.16 Counterparts.
This Agreement may be executed in counterparts, each of which shall
be deemed to be an original and both of which taken together shall
be deemed to constitute one and the same instrument. To evidence
its execution of an original counterpart of this Agreement, a Party
may send a copy of its original signature on the execution page
hereof to the other Parties by facsimile transmission and such
transmission shall constitute delivery of an executed copy of this
Agreement to the receiving Party.
[Signature page
follows.]
51098830.12
IN WITNESS
WHEREOF the Parties have executed this Agreement as of on the date
first above written.
CAMECO CORP.
Signed (“Xxxxx
Xxxxxx”)
Name: Xxxxx
Xxxxxx
Title: Senior
Vice-President and
Chief Operating
Officer
Signed (“Xxxxx
Xxxx”)
Name: Xxxxx
Xxxx
Title:
Senior Vice-President and
Chief Corporate
Officer
XXXXXXX MINES CORP.
Signed (“Xxxxx
Xxxxx”)
Name: Xxxxx
Xxxxx
Title:
President and CEO
51098830.12
A-1
Schedule “A”
Form of Release
Reference is made
to a purchase agreement (the “Purchase Agreement”) dated
September 4, 2018 by and
among Xxxxxxx Mines Corp. (“Xxxxxxx”) and Cameco Corp. (the
“Cameco”).
As a condition
to, and as consideration of the sum of $1.00 of lawful money of
Canada, the completion of the transactions contemplated in the
Purchase Agreement and other good and valuable consideration, the
receipt and adequacy of which are hereby irrevocably acknowledged,
Xxxxxxx on its own behalf and on behalf of Xxxxxxx’x
successors and assigns (herein referred to collectively as the
“Releasor”,
which term includes any one or more of them) hereby releases and
forever discharges (i) Cameco and its present associates and
affiliates (as defined in the Canada Business Corporations Act) and
their respective successors, assigns and predecessors and (ii)
their respective present and former officers, directors,
shareholders, servants, agents and employees and their respective
predecessors, successors, personal representatives and assigns
(collectively, the “Releasees”) of and from all
actions, causes of action, suits, debts, duties, demands, accounts,
bonds, covenants, contracts, demands, proceedings and claims for
injuries, losses, damages, interest, costs, indemnity, fines,
penalties, legal and professional fees and assessments or amounts
of any kind whatsoever (including any loss or damage not yet
ascertained) that the Releasor ever had, now has or can, shall or
may hereafter have for or by reason of or in any way arising out of
any cause, matter or thing whatsoever existing up to the present
time (collectively, the “Claims”) related to the Project
and the Joint Venture (as those terms are defined in the Purchase
Agreement); provided however that nothing contained in this Release
shall operate to release Buyer and its affiliates from any of its
or their obligations under the Purchase Agreement or any Claims
arising in connection therewith.
The Releasor
further covenants and agrees not to directly or indirectly, join,
assist, aid or act in concert in any manner whatsoever with any
other person in the making of any claim or demand or in the
bringing of any proceeding or action in any manner whatsoever
against the Releasees or any of them with respect to the matters
released or discharged pursuant to this Release or with respect to
which the Releasor agrees not to make any claim or take any
proceedings.
The Releasor
further covenants and agrees not to make or continue any claim or
complaint or initiate or continue any proceeding against any person
which might be entitled to claim, pursuant to the provisions of any
applicable statute or otherwise, contribution, indemnity or other
relief over against the Releasees or any of them arising out of or
in relation to the matters released or discharged pursuant to this
Release.
The Releasor
hereby represents, warrants and covenants that it has not assigned
and will not assign to any other person any of the Claims that the
Releasor is releasing herein. The Releasor confirms that no
consideration given to it by any Releasee is an admission of
liability or responsibility by any Releasee and any such liability
or responsibility is expressly denied.
Xxxxxxx and
Cameco acknowledge that the facts in respect of which this Release
is made may prove to be other than or different from the facts in
that connection now known or believed by Xxxxxxx or Cameco to be
true. Xxxxxxx and Cameco accept and assume the risk of the facts
being different and agree that this Release shall be in all
respects enforceable and not subject to termination, rescission, or
variation by discovery of any differences in facts.
A-2
If any provision
of this Release or any part of any provision of this Release is
held under any circumstances to be invalid or unenforceable in any
jurisdiction, then (i) such provision or part thereof shall, with
respect to such circumstances and in such jurisdiction, be deemed
amended to conform to applicable laws so as to be valid and
enforceable to the fullest possible extent, (ii) the invalidity or
unenforceability of such provision or part thereof under such
circumstances and in such jurisdiction shall not affect the
validity or enforceability of such provision or part thereof under
any other circumstances or in any other jurisdiction, and (iii)
such invalidity or unenforceability of such provision or part
thereof shall not affect the validity or enforceability of the
remainder of such provision or the validity or enforceability of
any other provision of this Release. Each provision of this Release
is separable from every other provision of this Release, and each
provision of this Release is separable from every other part of
such provision.
This Release
shall be governed by, enforced, construed and interpreted in
accordance with the laws of the Province of
Saskatchewan.
51098830.12
Schedule “B”
 |
Xxxxxxx Mines Corp.
1100 – 00 Xxxxxxxxxx
Xxx
Xxxxxxx, XX X0X 0X0
xxx.xxxxxxxxxxxx.xxx
@DenisonMinesCo
|
PRESS
RELEASE
XXXXXXX
TO INCREASE ITS INTEREST IN
THE XXXXXXX RIVER URANIUM
PROJECT
Toronto, ON –
September 4, 2018 Xxxxxxx
Mines Corp. (“Xxxxxxx” or the “Company”)
(TSX: DML) (NYSE American: DNN) is pleased to announce that
it has entered into an agreement with
Cameco Corp. (“Cameco”) to increase its ownership in
the Xxxxxxx River Uranium Project (“Xxxxxxx River” or
the “Project”) through the acquisition of
Cameco’s minority interest in the Project (the
“Transaction”).
Pursuant
to the terms of the Transaction, and subject to certain rights of
first refusal (“ROFR”) in favor of JCU (Canada)
Exploration Company Limited (“JCU”), Xxxxxxx has agreed
to acquire 100% of Cameco’s interest (expected to be
approximately 24% by the end of 2018) in the Xxxxxxx River Joint
Venture (“Xxxxxxx River JV”), in exchange for the
issuance of 24,615,000 common shares of Xxxxxxx (the
“Consideration Shares”) at a deemed price of $0.65 per
share, for total consideration valued at approximately $16 million
(the “Purchase Price”). The acquisition of
Cameco’s interest in the Xxxxxxx River JV will increase
Xxxxxxx’x interest in the Project to 90% (or approximately
86.84% if JCU exercises its ROFR).
Xxxxx Xxxxx, President and CEO of Xxxxxxx,
commented “We
are pleased to have reached an agreement with Cameco to acquire
their remaining minority interest in Xxxxxxx River. Xxxxxxx, Cameco
and JCU have worked together, since 2004, to advance Xxxxxxx River
to the point of being the largest undeveloped uranium project in
the eastern Athabasca Basin. We believe
this transaction represents a unique opportunity to add to our
existing controlling interest in the Project and offer significant
value accretion to Xxxxxxx shareholders.” Xx. Xxxxx further added, “We
are eager to continue advancing the Project towards a development
decision – with the next step being the planned completion of
a Pre-Feasibility Study before the end of the third
quarter.”
Xxxxxxx River is host to the Phoenix and Gryphon
uranium deposits, which are estimated to contain combined Indicated
Mineral Resources of 132.1 million pounds U3O8
at an average grade of 3.3%
U3O8,
plus combined Inferred Mineral Resources of 3.0 million pounds
U3O8
at an average grade of 1.7%
U3O8.
The Project is situated along the road and power line that runs
between Cameco’s XxXxxxxx River mine and Key Lake mill
complex in northern Saskatchewan, and is a joint venture between
Xxxxxxx (63.3%, increasing to approximately 66% by the end of 2018
under a previously announced earn-in agreement), Cameco (26.7%,
decreasing to approximately 24% by the end of 2018), and JCU
(10%).
Restriction on Xxxxxxx Shares
The
Consideration Shares will be subject to a six month escrow period,
during which time Cameco has agreed to not, directly or indirectly,
transfer any Consideration Shares without the prior written consent
of Xxxxxxx. The transfer of the Consideration Shares is also
restricted for a further six month period, where Xxxxxxx retains
the right, under certain circumstances, to designate a purchaser
upon notice from Cameco of the intent to transfer or sell all or a
portion of the Consideration Shares. The issuance of the
Consideration Shares is subject to the receipt of regulatory
approvals from the TSX and NYSE American stock
exchanges.
Rights of First Refusal
Under
the terms of the Xxxxxxx River JV, JCU’s ROFR allows for JCU
to purchase its proportional interest of Cameco’s share of
the Xxxxxxx River JV alongside of Xxxxxxx. Based on Xxxxxxx’x
expected ownership interest of approximately 66%, and JCU’s
ownership interest of 10%, JCU would have the right to purchase
approximately 13.16% of Cameco’s expected 24% interest in the
Xxxxxxx River JV.
The
Transaction is not conditional on JCU waiving its ROFR.
Accordingly, should JCU elect to exercise the ROFR, the Purchase
Price to be paid to Cameco by Xxxxxxx shall be reduced to
approximately $13.9 million and Xxxxxxx will own approximately
86.84% (rather than 90%) of the Xxxxxxx River JV on completion of
the Transaction.
Advisors & Counsel
Xxxxxxx
Securities Inc. is acting as financial adviser to Xxxxxxx in
connection with the transaction, and Blake, Xxxxxxx & Xxxxxxx
LLP is acting as legal counsel to Xxxxxxx.
About Xxxxxxx River
Xxxxxxx River is the largest undeveloped uranium project in the
infrastructure rich eastern portion of the Athabasca Basin region,
in northern Saskatchewan – including combined Indicated
Mineral Resources of 132.1 million pounds U3O8 at an average
grade of 3.3% U3O8, plus combined
Inferred Mineral Resources of 3.0 million pounds U3O8 at an average
grade of 1.7% U3O8. The
project is host to the high-grade Gryphon and Phoenix uranium
deposits (discovered by Xxxxxxx in 2014 and 2008, respectively),
and is a joint venture between Xxxxxxx (63.3% and operator), Cameco
(26.7%), and JCU (10%).
A Pre-Feasibility Study ("PFS") was initiated for the Xxxxxxx River
project in Q3'2016 and is expected to be completed during
Q3’2018. Prior to initiation of the PFS, a Preliminary
Economic Assessment ("PEA") was completed in 2016, which considered
the potential economic merit of co-developing the high-grade
Gryphon and Phoenix deposits as a single underground mining
operation. The PEA returned a base case pre-tax Internal Rate of
Return ("IRR") of 20.4% based on the then current long term
contract price of uranium (US$44.00 per pound U3O8), and Xxxxxxx'x
60% share of estimated initial capital expenditures ("CAPEX") of
CAD$336M (CAD$560M on 100% basis).
The PEA is preliminary in nature and includes inferred mineral
resources that are considered too speculative geologically to have
the economic considerations applied to them to be categorized as
mineral reserves, and there is no certainty that the preliminary
economic assessment will be realized. Mineral resources are not
mineral reserves and do not have demonstrated economic
viability.
In January, 2017, Xxxxxxx entered into an agreement with its
Xxxxxxx River Joint Venture partners, Cameco and JCU, to fund 75%
of Joint Venture expenses in 2017 and 2018 (ordinarily 60%) in
exchange for an increase in Xxxxxxx'x interest in the project to up
to approximately 66%. Under the terms of the agreement, Cameco will
fund 50% of its ordinary 30% share in 2017 and 2018, and JCU is
expected to continue to fund its 10% interest in the project.
Pursuant to the agreement, as at December 31, 2017, Xxxxxxx had
increased its interest in the Xxxxxxx River project from 60% to
63.3%.
Further details regarding the Xxxxxxx River project are provided in
the NI 43-101 Technical Report for the Xxxxxxx River project titled
"Technical Report with an Updated Resource Estimate for the Xxxxxxx
River Property, Northern Saskatchewan, Canada" dated March 15, 2018
with an effective date of March 9, 2018. A copy of this
report is available on Xxxxxxx'x website and under its profile on
SEDAR at xxx.xxxxx.xxx and on XXXXX at xxx.xxx.xxx/xxxxx.xxxxx.
Xxxx Xxxxxx, MSc, P.Geo, Pr.Sci.Nat., Xxxxxxx'x Vice President,
Exploration, who is a Qualified Person in accordance with the
requirements of NI 43-101 has reviewed and approved the technical
information contained in this release.
About Xxxxxxx
Xxxxxxx is a uranium exploration and development company with
interests focused in the Athabasca Basin region of northern
Saskatchewan, Canada. In addition to its 63.3% owned Xxxxxxx River
project, which ranks as the largest undeveloped high-grade uranium
project in the infrastructure rich eastern portion of the Athabasca
Basin region, Xxxxxxx'x Athabasca Basin exploration portfolio
consists of numerous projects covering approximately 321,000
hectares. Xxxxxxx'x interests in Athabasca Basin also include a
22.5% ownership interest in the XxXxxxx Lake joint venture
(“MLJV”), which includes several uranium deposits and
the XxXxxxx Lake uranium mill, which is currently processing ore
from the Cigar Lake mine under a toll milling agreement, plus a
25.17% interest in the Midwest and Midwest A deposits, and a 65.45%
interest in the J Zone deposit and Huskie discovery on the
Waterbury Lake property. Each of Midwest, Midwest A, J Zone and
Huskie are located within 20 kilometres of the XxXxxxx Lake
mill.
Xxxxxxx is also engaged in mine decommissioning and environmental
services through its Xxxxxxx Environmental Services division and is
the manager of Uranium Participation Corp., a publicly traded
company which invests in uranium oxide and uranium
hexafluoride.
For more information, please contact
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Xxxxx
Xxxxx
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(416) 979-1991 ext.
362
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President
and Chief Executive Officer
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Xxxxxx
Xxxxx
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(000) 000-0000
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Investor
Relations
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Follow Xxxxxxx on Twitter
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@DenisonMinesCo
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Cautionary Statement Regarding Forward-Looking
Statements
Certain information contained in this press release constitutes
"forward-looking information", within the meaning of the United
States Private Securities Litigation Reform Act of 1995 and similar
Canadian legislation concerning the business, operations and
financial performance and condition of Xxxxxxx. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as "plans", "expects", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates", or
"believes", or the negatives and/or variations of such words and
phrases, or state that certain actions, events or results "may",
"could", "would", "might" or "will be taken", "occur", "be
achieved" or "has the potential to". In particular, this press
release contains forward-looking information pertaining to the
following: Xxxxxxx’x percentage interest in its properties
and its plans and agreements with its joint venture partners; the
proposed transaction with Cameco, including its terms, conditions,
and likelihood and anticipated effect of its completion; effect of
completion; the interests of JCU and its rights under the terms of
the Xxxxxxx River JV; estimates of Xxxxxxx'x mineral resources and
the results of its PEA; and plans and objectives with respect to
preparing a PFS to assess on a preliminary basis the potential for
project development. Statements relating to "mineral reserves" or
"mineral resources" are deemed to be forward-looking information,
as they involve the implied assessment, based on certain estimates
and assumptions that the mineral reserves and mineral resources
described can be profitably produced in the future.
Forward looking statements are based on the opinions and estimates
of management as of the date such statements are made, and they are
subject to known and unknown risks, uncertainties and other factors
that may cause the actual results, performance or achievements of
Xxxxxxx to be materially different from those expressed or implied
by forward-looking statements. Xxxxxxx believes that the
expectations reflected in this forward-looking information are
reasonable but no assurance can be given that these expectations
will prove to be accurate and may differ materially from those
anticipated in this forward looking information. For a discussion
in respect of risks and other factors that could influence
forward-looking events, please refer to the factors discussed in
Xxxxxxx'x Annual Information Form dated March 27, 2018 under the
heading "Risk Factors". These factors are not, and should not be
construed as being exhaustive. Accordingly, readers should not
place undue reliance on forward-looking statements.
The forward-looking
information contained in this press release is expressly qualified
by this cautionary statement. Any forward-looking information and
the assumptions made with respect thereto speaks only as of the
date of this press release. Xxxxxxx does not undertake any
obligation to publicly update or revise any forward-looking
information after the date of this press release to conform such
information to actual results or to changes in Xxxxxxx'x
expectations except as otherwise required by applicable
legislation.
Cautionary Note to United States
Investors Concerning Estimates of Measured, Indicated and Inferred
Mineral Resources: This press release may use the terms
“measured”, “indicated” and
“inferred” mineral resources. United States investors
are advised that while such terms are recognized and required by
Canadian regulations, the United States Securities and Exchange
Commission does not recognize them. “Inferred mineral
resources” have a great amount of uncertainty as to their
existence, and as to their economic and legal feasibility. It
cannot be assumed that all or any part of an inferred mineral
resource will ever be upgraded to a higher category. Under Canadian
rules, estimates of inferred mineral resources may not form the
basis of feasibility or other economic studies. United States
investors are cautioned not to assume that all or any part of
measured or indicated mineral resources will ever be converted into
mineral reserves. United States investors are also cautioned not to
assume that all or any part of an inferred mineral resource exists,
or is economically or legally mineable.
51098830.12
