Uranium Energy Corp Announces Merger to Acquire the Anderson Property in Arizona

NYSE Amex Equities Exchange Symbol – UEC

 

CORPUS CHRISTI, TX, May 6 /PRNewswire-FirstCall/ – Uranium Energy Corp (NYSE-AMEX: UEC) (the “Company” or “UEC”) and Concentric Energy Corp. (“Concentric”)
announced today that their respective boards of directors have approved
a stock-for-stock merger (the “Merger”) to be effected under the laws
of Nevada, and that the companies have signed a definitive Merger
Agreement & Plan of Merger (the “Merger Agreement”).  Upon completion
of the Merger, it is anticipated that approximately 1,253,440 shares of
UEC common stock will be issued to the former Concentric stockholders
to acquire Concentric and its undivided 100% interest in the Anderson
Property, a 5,785-acre mineral claim block located in Yavapai County,
Arizona, with a previous history of small-scale uranium production.

The Anderson Property

The Anderson Property is comprised of 289 contiguous, unpatented lode
mining and placer claims covering 5,785 acres (nine square miles).  It
is located in a remote area of Yavapai County, Arizona, approximately
75 miles northwest of Phoenix.  In 2001, Concentric staked this claim
block, which consolidated portions of the mineral claims held in the
1970s by Minerals Exploration Company (“MinEx”), a subsidiary of Unocal
Corporation, and Urangesellschaft U.S.A., Inc. (“UG”).

Public filings indicate that anomalous radioactivity was first detected
in 1955 near the Anderson Property, which led to small-scale open pit
mining at its north end resulting in a total of 10,758 tons of ore
averaging 0.15% or 33,230 pounds of U(3)O(8) being shipped to Tuba City, Arizona, for custom milling.  Production
ceased in 1959 when the Atomic Energy Commission terminated its ore
purchasing program.  This information was obtained from a report by
Sherborne in 1979 entitled “Major Uranium Discovery in Volcaniclastic
Sediments, Basin and Range Province, Yavapai County, Arizona”.

Since then, over 1,400 exploration drill holes have been completed on
the Anderson Property, including 1,320 downhole gamma surveys and 5,596
chemical assays, almost all of which were completed in the 1970s by
MinEx on the northern section and by UG on the southern section.  In
late 1977, a preliminary feasibility study relating to the northern
section of the Anderson Property was completed for MinEx by
Morrison-Knudsen Company, Inc. (“MK”).  By mid-1978, based on the
favorable economics indicated in the preliminary feasibility study, a
detailed final feasibility study was completed for MinEx by MK which
evaluated a 2,000 ton per day mill to support open pit mining on the
Anderson Property.  In September 1979, UG’s engineering group completed
an internal preliminary feasibility study of an underground mine
relating to the southern section of the Anderson Property.  These
reports are further supported by numerous other positive studies
including third party resource analyses by Chapman, Wood and Griswold,
metallurgical studies and leach pilot tests by Hazen Research. 
However, these historical studies pre-date NI 43-101 and should not be
treated as current.  The Company has not performed the necessary work
to verify these historical studies and the results should not be relied
upon.  By the end of 1979, global and market events led both MinEx and
UG to abandon their mineral claims in the Anderson Property.

In 2006, Concentric conducted the first drill program on the Anderson
Property since the abandonment by MinEx and UG.  A 25-hole drill
program was completed to confirm the historical MinEx exploration
database by “twinning” a significant number of former MinEx drill
holes.  A total of 24 rotary and one core drill holes totalling 8,087
feet were completed.  No confirmation holes were drilled on the former
UG portion of the Anderson Property. In 2008, Concentric commissioned
Mountain States Research & Development International, Inc. to complete
a process engineering assessment, the results of which are presented in
a report entitled “Final Report Preliminary Process Engineering and
Cost Estimates, Anderson Uranium Project, Yavapai County, Arizona.”

Terms of the Merger

Under the terms of the Merger Agreement, Concentric’s stockholders will
receive 0.1075 of one share of UEC common stock for every one share of
Concentric common stock.  With 11,659,905 shares of Concentric common
stock outstanding, it is anticipated that approximately 1,253,440
shares of UEC common stock will be issued to the former Concentric
stockholders upon completion of the Merger, representing approximately
1.7% of the issued and outstanding common stock of UEC.  Based on the
closing market price of UEC’s common stock of $3.20 per share on May 5,
2011, the total share consideration to be issued to Concentric’s
stockholders will have value of approximately $4.011 million.  Upon
completion of the Merger, a wholly-owned subsidiary of UEC will be the
surviving corporation and become vested with all of Concentric’s assets
and property.

It is a condition precedent to the completion of the Merger that the
Company is able to achieve a contemporaneous closing of the full
assignment to UEC of Global Uranium Corp.’s (“Global”) rights (the
“Rights”) under the terms and conditions of an underlying Option and
Joint Venture Agreement dated April 13, 2010 between Global and
Concentric, with respect to the Anderson Property.  As a consequence,
the Company has recently entered into an Acquisition Agreement with
Global (the “Global Acquisition Agreement”) to acquire such Rights in
consideration of UEC’s delivery to Global of (i) an initial payment of
$150,000, (ii) a further $200,000 payment thereby releasing and
assigning to the Company any security previously granted by Concentric
to Global and (iii) 350,000 restricted shares of the Company’s common
stock and a final payment of $150,000 at the closing of the Merger.

The Merger is subject to various other conditions, including: the
approval of the stockholders of Concentric; completion within 30 days
by each party, to its satisfaction, of due diligence investigation of
the other party’s business and affairs to determine the feasibility,
economic or otherwise, of the Merger; the number of holders of
Concentric common stock exercising dissent rights available to them
under Nevada law shall not exceed 5% of the total issued and
outstanding shares of Concentric common stock; and other customary
conditions.  In addition, each party’s obligation to consummate the
Merger is subject to the accuracy of the representations and warranties
of the other party and material compliance of the other party with its
covenants.

The ratio (the “Exchange Ratio”) which determines the number of shares
of UEC common stock that are to be issued on completion of the Merger
for all of the shares of Concentric common stock is subject to
reduction by the shares of Concentric common stock held by those
stockholders, if any, who elect to exercise dissent rights under Nevada
law.  The Exchange Ratio also may be adjusted by good faith negotiation
between the parties, if required, having regard to the results of the
due diligence investigation of either party’s business and affairs by
the other party.

The Merger Agreement also contemplates that: (a) all of the outstanding
common stock purchase warrants of Concentric (the “Concentric
Warrants”) will be disposed of by the holders thereof in consideration
for the issuance by UEC of non-transferable common stock purchase
warrants (the “UEC Exchange Warrants”).  The number of UEC Exchange
Warrants issuable will be determined with reference to the Exchange
Ratio.  Currently, the Exchange Ratio is anticipated to be 0.1075 of
one UEC Exchange Warrant for every one Concentric Warrant.  The
exercise price of each UEC Exchange Warrant is anticipated to be
determined by dividing the per share exercise price of the
corresponding Concentric Warrants by 0.1075, subject to adjustment if
the Exchange Ratio is adjusted.

The foregoing description of the Merger and the Merger Agreement is not
complete and is qualified in its entirety by reference to the Merger
Agreement.

The technical information in this news release has been prepared in
accordance with the Canadian regulatory requirements set out in NI
43-101 and reviewed by Clyde L. Yancey, P.G., Vice
President-Exploration for the Company, a QP under NI 43-101 standards.

About Uranium Energy Corp.

Uranium Energy Corp. is a U.S.-based uranium production, development and
exploration company operating North America’s newest emerging uranium
mine.  The Company’s fully licensed and permitted Hobson processing
facility is central to all of its projects in South Texas, including
the Palangana in-situ recovery project, which has just initiated
production, and the Goliad in-situ recovery project which has been
granted its Mine Permit and is in the final stages of mine permitting
for production.  The Company’s operations are managed by professionals
with a recognized profile for excellence in their industry, a profile
based on many decades of hands-on experience in the key facets of
uranium exploration, development and mining.

Safe Harbor Statement

Except for the statements of historical fact contained herein, the
information presented in this news release constitutes “forward-looking
statements” as such term is used in applicable United States and
Canadian laws. These statements relate to analyses and other
information that are based on forecasts of future results, estimates of
amounts not yet determinable and assumptions of management. Any other
statements that express or involve discussions with respect to
predictions, expectations, beliefs, plans, projections, objectives,
assumptions or future events or performance (often, but not always,
using words or phrases such as “expects” or “does not expect”, “is
expected”, “anticipates” or “does not anticipate”, “plans, “estimates”
or “intends”, or stating that certain actions, events or results “may”,
“could”, “would”, “might” or “will” be taken, occur or be achieved) are
not statements of historical fact and should be viewed as
“forward-looking statements”. Such forward looking statements involve
known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the company to
be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements.

Forward-looking statements included in this news release consist of
statements relating to the proposed merger, including the exchange
ratio that will govern the number of shares of UEC common stock that
are to be issued on completion of the merger for all of the shares of
Concentric common stock.  The completion of the merger is subject to
various conditions precedent, as detailed above.  Other risks and
uncertainties for the Company include, but are not limited to, the
actual results of exploration activities, variations in the underlying
assumptions associated with the estimation or realization of mineral
resources, the availability of capital to fund programs and the
resulting dilution caused by the raising of capital through the sale of
shares, accidents, labor disputes and other risks of the mining
industry including, without limitation, those associated with the
environment, delays in obtaining governmental approvals, permits or
financing or in the completion of development or construction
activities, title disputes or claims limitations on insurance coverage.
Although the company has attempted to identify important factors that
could cause actual actions, events or results to differ materially from
those described in forward-looking statements, there may be other
factors that cause actions, events or results not to be as anticipated,
estimated or intended. There can be no assurance that such statements
will prove to be accurate as actual results and future events could
differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking
statements contained in this news release and in any document referred
to in this news release.

Certain matters discussed in this news release and oral statements made
from time to time by representatives of the company may constitute
forward-looking statements within the meaning of the private securities
litigation Reform Act of 1995 and the Federal securities laws. Although
the Company believes that the expectations reflected in such
forward-looking statements are based upon reasonable assumptions, it
can give no assurance that its expectations will be achieved. 
Forward-looking information is subject to certain risks, trends and
uncertainties that could cause actual results to differ materially from
those projected. Many of these factors are beyond the company’s ability
to control or predict. Important factors that may cause actual results
to differ materially and that could impact the company and the
statements contained in this news release can be found in the Company’s
filings with the Securities and Exchange Commission. For
forward-looking statements in this news release, the Company claims the
protection of the safe harbor for forward-looking statements contained
in the Private Securities Litigation Reform Act of 1995. The Company
assumes no obligation to update or supplement any forward-looking
statements whether as a result of new information, future events or
otherwise.

This news release has been prepared by management of the Company who
takes full responsibility for its contents.  Neither the SEC nor the
British Columbia Securities Commission approves or disapproves of the
contents of this news release.  This news release shall not constitute
an offer to sell or the solicitation of an offer to buy, nor shall
there be any sale of securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.

IMPORTANT ADDITIONAL INFORMATION WILL BE FILED WITH THE SEC

IN CONNECTION WITH THE PROPOSED MERGER, UEC INTENDS TO FILE RELEVANT
MATERIALS WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION
(THE “SEC”), INCLUDING A REGISTRATION STATEMENT ON FORM S-4 (THE
“REGISTRATION STATEMENT”), WHICH WILL INCLUDE A PRELIMINARY PROSPECTUS
AND RELATED MATERIALS TO REGISTER THE SECURITIES OF UEC TO BE ISSUED IN
EXCHANGE FOR SECURITIES OF CONCENTRIC.  THE REGISTRATION STATEMENT WILL
INCORPORATE A PROXY STATEMENT (THE “PROXY STATEMENT”) THAT CONCENTRIC
PLANS TO FILE WITH THE SEC AND MAIL TO ITS STOCKHOLDERS IN CONNECTION
WITH OBTAINING STOCKHOLDER APPROVAL OF THE PROPOSED MERGER.  THE
REGISTRATION STATEMENT AND THE PROXY STATEMENT WILL CONTAIN IMPORTANT
INFORMATION ABOUT UEC, CONCENTRIC, THE MERGER AND RELATED MATTERS.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION
STATEMENT AND THE PROXY STATEMENT CAREFULLY WHEN THEY ARE AVAILABLE. 
INVESTORS AND SECURITY HOLDERS WILL BE ABLE TO OBTAIN FREE COPIES OF
THE REGISTRATION STATEMENT AND THE PROXY STATEMENT WHEN THEY BECOME
AVAILABLE, AND OTHER DOCUMENTS FILED WITH THE SEC BY UEC AND
CONCENTRIC, THROUGH THE WEB SITE MAINTAINED BY THE SEC AT WWW.SEC.GOV.  DOCUMENTS FILED BY UEC WITH THE SEC MAY BE OBTAINED FREE OF CHARGE BY
CONTACTING THE COMPANY AT: URANIUM ENERGY CORP.; ATTENTION: MR. MARK
KATSUMATA, CFO; 500 NORTH SHORELINE, SUITE 800N, CORPUS CHRISTI, TEXAS,
78401, TEL:  (512) 828.6980.

CONCENTRIC, AND ITS DIRECTORS AND EXECUTIVE OFFICERS, MAY BE DEEMED TO
BE PARTICIPANTS IN THE SOLICITATION OF PROXIES FROM CONCENTRIC’S
STOCKHOLDERS IN CONNECTION WITH THE TRANSACTION DESCRIBED HEREIN.
INFORMATION REGARDING ANY SPECIAL INTERESTS OF THESE DIRECTORS AND
EXECUTIVE OFFICERS IN THE TRANSACTION DESCRIBED HEREIN WILL BE INCLUDED
IN THE PROXY STATEMENT DESCRIBED ABOVE.

SOURCE Uranium Energy Corp