Uranium Resources Plc agreed to dispose of its Mtonya uranium project in Tanzania to its 55.1% shareholder, Estes Ltd., and become an AIM Rule 15 cash shell.
The independent directors said it had become difficult to secure the funds required to conduct drilling at Mtonya during the currently depressed uranium market.
The company will sell the Mtonya project against a US$1.2 million partial settlement in outstanding loans from Estes of about US$2.1 million, it said Dec. 4.
In addition, Estes will capitalize the remaining debt owed to it of US$870,000 at a price of 0.5 pence per share.
As part of the transaction, the company has raised £900,000 in new equity by placing 200.0 million shares at 0.45 British pence per share. The placement includes a 1-for-2 attaching warrant, exercisable at 0.9 pence apiece.
Admission of the new shares to trading on AIM is expected on or around Dec. 21 and the company's name will change to URA Holdings plc.
Additionally, existing directors Andrew Lewis and James Pratt will step down from the board, while Managing Director and Executive Chairman Alex Gostevskikh will continue with the company.
Peter Redmond will join as chairman and Melissa Sturgess will be appointed executive director, and the board will focus on acquiring a new business.
"The proposed transaction to dispose of the Mtonya project to Estes will allow the company to introduce new funds, appoint new directors, and look to adopt a new strategy to create significant value for shareholders via acquisitions while remaining on AIM," Gostevskikh said.
