Forte Energy NL

LSE : FTE


April 04, 2014 02:00 ET

Acquisition of Uranium Assets from European Uranium Resources Ltd

                                                                                                        
                                                                                          Forte Energy NL
                                                                                                         
                                                                                                        
4 April 2014

                   Acquisition by Forte Energy of European Uranium Resources Ltd assets
                                                    

Forte  Energy  NL ("Forte" or "the Company") (ASX/AIM: FTE) announces it has entered into a binding  term
sheet  for  the acquisition ("the Acquisition"), of the Uranium assets of European Uranium Resources  Ltd
("European  Uranium"), (together "the Parties"). European Uranium is listed on the Ventures  Exchange  of
the  Toronto  Stock  Exchange (as well as on the OTCQX and Frankfurt exchanges) and has  interests  in  a
portfolio of uranium assets in Slovakia which complement Forte's existing projects.  ..

The  Acquisition  will add significant uranium assets to Forte's development portfolio, with  about  39.7
square kilometres of mineral licences in Slovakia, including the Kuriskova Project. The Acquisition  will
create  a  diversified, larger scale globally focussed exploration and development company  with  a  well
balanced portfolio of uranium assets.

Forte U3O8 existing JORC resources (all at a 100ppm cut-off):

Project            Resource Category        M tonnes         ppm U3O8         Contained U3O8 Mlbs

A238*                         Inferred             45.2              235                          23.4

Bir En Nar                   Indicated              0.5              886                           1.0
                              Inferred              0.8              575                           1.0

Firawa                        Inferred             30.3              295                          19.5

Total                        Indicated              0.5              886                           1.0
                              Inferred             76.3              262                          43.9
                                 Total             76.8              266                          44.9
     * A238NW Anomaly included in the A238 Inferred Resources

European Uranium Slovakian U3O8 NI 43-101 mineral resource estimates ***

Project            Resource Category        M tonnes         ppm U3O8         Contained U3O8 Mlbs

Kuriskova **                 Indicated              2.3            5,550                          28.5
                              Inferred              3.1            1,850                          12.7

Novoveska                     Measured              0.8            1,080                           2.0
Huta **                      Indicated              0.8              970                           1.7
                              Inferred              4.7            1,230                          12.7

Total                         Measured              0.8            1,080                           2.0
                             Indicated              3.1            4,352                          30.2
                              Inferred              7.8            1,477                          25.4
                                 Total             11.7            2,141                          57.6
    ** Kuriskova calculated at 500ppmU cut-off, Novoveska Huta at 600ppmU cut-off
    *** These  mineral  resource estimates are reported in this announcement as "foreign estimates  under
        ASX Listing Rule 5.10
        *       The foreign estimates are not reported in accordance with the JORC Code.
        *       A competent person has not yet undertaken sufficient work to classify the foreign estimates as
                mineral resources or ore reserves in accordance with the JORC Code.
        *       It is uncertain that, following evaluation and/or further exploration work, it will be possible
                to report these estimates as mineral resources or ore reserves in accordance with the JORC Code.

ASX  Listing Rule 5.12 is concerned with the reporting of foreign estimates and specifies the  additional
information that must be provided in a market announcement that contains a foreign estimate.

This information is contained in the Accompanying Notes at the end of the announcement.

The Acquisition will be effected by a purchase by Forte of European Uranium's Slovakian uranium assets on
the following terms:

    1.   Forte will issue 854,875,000 fully paid ordinary shares @ AUD$0.008 per share (approximately
         0.44 pence) with an approximate value of CAD$ 7,000,000 to be distributed on a pro-rata basis to the
         shareholders of European Uranium;
    2.   Forte will issue 61,062,500 fully paid shares@ AUD$0.008 per share (approximately 0.44 pence)
         with an approximate value of CAD$ 500,000  to European Uranium;
    3.   Forte will pay CAD$ 1,000,000 to European Uranium upon completion; and
    4.   Forte will grant European Uranium a 1% production royalty over the licences in perpetuity.

The  sale  price  is  equivalent to approximately CAD$ 8,500,000. In addition Forte  will  subscribe  for
1,111,111 shares in the capital of European for a subscription amount of CAD$ 100,000 (based on  a  price
per European share of CAD$ 0.09).

Each  two European Uranium shares subscribed for by Forte shall be issued with one free attaching warrant
having a two year term and a strike price of CAD$ 0.15.

European  Uranium has the right to appoint one non-executive director to the board of directors of  Forte
following completion of the Acquisition, expanding the Forte board from 4 directors to 5 directors. It is
envisaged that any new non-executive director would be appointed on similar terms as Forte's existing non-
executive directors.


Conditions

The Acquisition is subject to a number of conditions, including:

   *       the shareholders of Forte passing all resolutions as are required under the ASX Listing Rules,
           the AIM Rules for Companies, the constitution of Forte and the Corporations Act 2001 to give effect to
           the Acquisition including the issue or payment of the Consideration shares and cash;
   *       the obtaining by the Parties of any requisite consents or the satisfaction of any approval
processes required by any government agency or the legislation of the Slovak Republic;
   *       Forte receiving confirmation:
            o       that Listing Rule 11.1.3 will not apply in respect of the Acquisition; and
            o       that the acquisition will not be treated as a reverse takeover under Rule 14 of AIM Rules for
                    Companies;
   *       Forte completing a capital raising to raise a minimum amount of CAD$ 1,000,000;
   *       receipt by European Uranium of all applicable stock exchange and regulatory approvals;
   *       the approval of a majority of 66 2/3rds of European Uranium's shareholders at a special meeting
           of European Uranium's shareholders to be held to approve the transactions as a plan of arrangement under
           the Business Corporations Act (British Columbia); and
   *       European Uranium determining that the distribution and resale of the shares of Forte to be
           issued to European Uranium's shareholders in connection with these transactions is exempt from the
           prospectus requirements of applicable securities laws.

The Parties are in the process of negotiating the terms of the Final Agreements and notices convening the
relevant shareholder meetings will be announced in due course by Forte and European Uranium.
                                                    
The  Acquisition  has  the support of significant shareholders of both Parties and the  enlarged  Forte's
market  capitalisation  and  enhanced asset base would position it well to execute  on  strategic  growth
plans,  including potential acquisition opportunities. In addition there are expected to  be  significant
synergies in technical expertise gained through the Acquisition.

Commenting on the Acquisition, Mark Reilly, Managing Director of Forte, said:

"The  Acquisition  of European Uranium's Slovakian uranium assets is a significant expansion  of  Forte's
uranium  asset portfolio and is a first entry into the highly prospective Slovakian region. This  creates
an  uranium explorer and developer with not only an enhanced portfolio of project interests but also  the
technical  expertise and financial strength to advance its assets towards production.  In  addition,  the
combined  business will benefit from deeper technical expertise and a Board with experience in developing
and building numerous projects.

Europe  is the world's largest per capita consumer of uranium and through this acquisition Forte will  be
well  positioned  to  take  advantage of this in its pursuit to grow and become  a  premier  African  and
European uranium company."



About Forte Energy NL

Forte is an Australian-based minerals company focussed on the exploration and development of uranium  and
associated bi-products in Mauritania and Guinea in West Africa. The Company has an extensive pipeline  of
assets and total JORC resources of 76.8Mt @ 266ppm U3O8 for 44.9Mlbs contained U3O8 (100ppm cut-off).

Its  flagship assets are the A238 prospect (23.4Mlbs U3O8) and the Bir En Nar project (2.06Mlbs U3O8)  in
Mauritania, and the Firawa Project in Guinea (19.5Mlb U3O8).

The  Company  is  quoted on the Australian Stock Exchange (ASX: FTE) and AIM market of the  London  Stock
Exchange (AIM: FTE). For more information, visit www.forteenergy.com.au


About European Uranium's assets

European Uranium has 2 project areas in Slovakia, namely Kuriskova and Novoveska Huta, of which Kuriskova
is the most advanced. The projects are held in two wholly owned subsidiaries of European Uranium that are
registered in the Slovak Republic.

The  Kuriskova project consists of 32 square kilometres of mineral licenses situated approximately 10  km
northwest  of  the  city  of  Kosice,  a regional industrial centre in East-Central  Slovakia.  Kuriskova
currently  has  an indicated resource of 2.3Mt @ 5,550ppm U3O8 for 28.5Mlbs contained U3O8 (500ppmU  cut-
off) and an inferred resource of 3.1Mt @ 1,850ppm U3O8 for 12.7Mlbs contained U3O8 (500ppmU cut-off).  It
also  has  an  indicated resource of 2.3Mt @ 650ppm molybdenum for 3.3Mlbs contained  molybdenum  and  an
inferred  resource of 3.0Mt @ 330ppm molybdenum for 2.2Mlbs contained molybdenum associated with  uranium
resource blocks above 500ppmU cut-off.

The  summary  results of a preliminary feasibility study prepared for Kuriskova released in January  2012
are as follows:

        - IRR 30.8%
        - 1.9 year payback on CAPEX of $US 225m
        - NPV $US 276m at 8% discount.
        - Base case price $US 68/lb U3O8
        - First 4 year operating costs $US 16.68/lb U3O8
        - Life of Mine operating costs $US 22.98/lb U3O8

The Novoveska Huta uranium deposit is located at the western end of the Carpathian uranium belt, about 50
kilometres northwest of Kuriskova and near the town of Spisska Nova Ves, The deposit consists of a mining
license  over  one  square  kilometre  and a surrounding fifteen square  kilometre  exploration  license.
Novoveska  Huta  currently  has a measured and indicated resource of 1.7Mt @ 1,020ppm  U3O8  for  3.7Mlbs
contained U3O8 (600ppmU cut-off) and an inferred resource of 4.7Mt @ 1,230ppm U3O8 for 12.7Mlbs contained
U3O8  (600ppmU  cut-off).  It  also has an inferred resource of 6.1Mt @  210ppm  molybdenum  for  2.9Mlbs
contained molybdenum associated with uranium resource blocks above 600ppmU cut-off.


In  addition, in late 2012, European Uranium signed a memorandum of understanding (MOU) with the Ministry
of Economy of the Slovak Republic that included the following:

    *       If the feasibility study and environmental impact assessment are positive, then the Project will
            be able to advance in conformance with the Slovak Republic's National Energy Strategy.

    *       The  ministry will support reasonable use of domestic energy minerals with the aim to reduce
            Slovakia's current dependence on imports. Slovakia currently relies on imported Nuclear power for 50% of
            its domestic power consumption.
        
    *       European Uranium and the Ministry will endeavour to find a mechanism for collaboration that will
            allow uranium production from Kuriskova to be developed for the benefit of Slovakia's energy future. This
            could be a production off-take agreement, a partnership with a Slovak entity or other mutually agreed
            arrangements.

Some additional information on Slovakia:

         - Population: 5.4 million
         - EU member
         - Excellent infrastructure and manufacturing centres
         - 23% flat corporate tax rate
         - 3rd largest user of nuclear energy per capita, producing 50% of its electricity
         - 4 reactors currently operating at 2 plants, with future reactors planned.



For further information contact:

Mark Reilly                                      Geoff Nash/Ben Thompson
Managing Director                                Elizabeth Johnson (broking)
Forte Energy NL                                  finnCap
Tel: +61 (0)8 9322 4071                          Tel: +44 (0)207 220 0500


Bobby Morse/Gordon Poole                         Oliver Morse/Trinity McIntyre
Buchanan                                         RFC Ambrian Ltd
Tel: +44 (0) 207 466 5000                        (AIM Nominated Adviser to the Company)
                                                 Tel: +61 (0) 8 9480 2500


Forte Energy NL

Suite 3, Level 3
1292 Hay Street
West Perth WA 6005
Ph: +61 (0)8 9322 4071
Fax: +61 (0)8 9322 4073
Email: info@forteenergy.com.au
Web: www.forteenergy.com.au

Note:
The information in this report that relates to the reporting of Mineral Resources is based on information
compiled  or  reviewed by Mr. Galen White, who is a Fellow of the Australasian Institute  of  Mining  and
Metallurgy (FAusIMM). Mr White is the Principal Geologist of CSA Global (UK) Ltd. CSA Global have an  on-
going  role  as geological consultants to Forte Energy NL. Mr. White has sufficient experience  which  is
relevant to the style of mineralisation and type of deposit under consideration and to the activity which
he  is  undertaking to qualify as a Competent Person as defined in the 2004 Edition of the  'Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr. White consents to the
inclusion  in  this report of the matters based on his information in the form and context  in  which  it
appears.

The  information in this announcement that relates to the reporting of foreign mineral resource estimates
is  provided  under  ASX listing rule 5.12 and is an accurate representation of the  available  data  and
studies for the Kuriskova and Novoveska Huta uranium deposits and is based on information reviewed by  Mr
Dorian  (Dusty) Nicol. Mr Nicol is President and CEO of European Uranium Resources Ltd.  Mr  Nicol  is  a
Fellow  of  the AusIMM, a Registered Member of the SME, a Certified Professional Geologist, a  Registered
Geologist in the state of Wyoming, USA and is a Qualified Person under NI 43-101.


Accompanying Notes to Foreign Mineral Resource Estimates

1. ASX Listing Rule 5.12.1 - Provide the source and date of the foreign estimates.

These  foreign mineral resource estimates are based on official geological reports completed for European
Uranium in 2011 and 2012.

Kuriskova

Preliminary  Feasibility Study ("PFS") for the Kuriskova Project, Eastern Slovakia prepared for  European
Uranium  by Dr. Rex Bryan, Ph.D. and Dr. Richard W. Jolk, P.E. of Tetra Tech, Inc. The report titled  "NI
43-101 Technical Report, Kuriskova Uranium Project" is dated effective March 13, 2012.

Novoveska Huta

"Technical  Report  Mineral  Resource  Novoveska Huta Uranium Project  east-Central  Slovakia"  is  dated
effective  October  17, 2011. The resource estimate was prepared by Ravi Sharma, Tournigan's  Manager  of
Resources  and  Reserves, and has been reviewed, audited and approved by Tetra Tech, Inc.  The  technical
report was completed by Dr. Rex Bryan, Ph.D. and Dr. Richard Jolk, PE Ph.D. of Tetra Tech MM, Inc.'s

2.  ASX Listing Rule 5.12.2 - if the foreign estimates use categories of mineralisation other than  those
defined in Appendix 5A (JORC Code) provide an explanation of the differences.

The  system  of  classification of mineral resources in Canada, NI 43-101,  uses  similar  categories  of
mineralisation to those in the JORC Code.

3.  ASX  Listing  Rule  5.12.3 - Provide the relevance and materiality of the foreign  estimates  to  the
entity.

The  addition  of  the  cumulative mineral resources subject to the foreign estimates  outlined  in  this
document  will  result  in an increase in the Company's total uranium resource base  of  128%  which  the
Company  considers material and requiring disclosure. The average resource grades are also  substantially
higher than those of the Company's existing resource base. Also the Kuriskova project is further advanced
than the Company's existing projects as a PFS has been prepared for it.

4.  ASX Listing Rule 5.12.4 - Detail the reliability of the foreign estimates, including by reference  to
any  of  the  criteria  in  Table 1 of Appendix 5A (JORC Code) which are relevant  to  understanding  the
reliability of the foreign estimates.

The foreign estimates were prepared in accordance with Canadian National Instrument 43-101.  The resource
estimates  are  less than 5 years old and the geological practices and criteria used to calculate  43-101
resources  are similar to those used to calculate JORC resources.  Therefore the quality and accuracy  of
the foreign resources are expected to be high.

The  foreign estimates were prepared by qualified persons who are well known within the uranium  industry
worldwide.   There are no significant differences between the criteria listed in Table 1 of  Appendix  5A
(JORC Code) and those that were used in the preparation of the foreign estimates.


5.  ASX  Listing Rule 5.12.5 - To the extent known provide a summary of the work programs  on  which  the
foreign  estimates are based and a summary of the key assumptions, mining and processing parameters,  and
methods used to prepare the foreign estimates.

Kuriskova
    *    The  deposit was discovered in the 1980's by the (then) Czechoslovakian State uranium mining
         authority.  During this time, 53 diamond holes were drilled totalling approximately 17,000m.
    *    EUU (and its predecessor company Tournigan Energy Ltd.) during the years 2005 - 2011 drilled an
         additional 125 diamond holes in the property totalling about 41,670 m.
    *    Using data from 13 (out of 53) of the historic drill holes, a 43-101 compliant resource estimate
         was prepared in 2008, which was then updated with additional drill data in 2011.
    *    A 43-101 compliant Prefeasibility Study was prepared in 2012.  The 2011 resource estimate was
         used as the basis from which an underground reserve was estimated using mining, metallurgical and
         capital cost factors.  In compliance with 43-101 standards, the Inferred portion of the resource 
         was excluded from the reserve estimate.

Novoveska Huta
    *    The deposit was discovered in 1952 by the (then) Czechoslovakian State uranium mining authority.
    *    During the 1950's, various surface exploration programmes were conducted, several adits were
         excavated and two shafts were sunk with some development drifting. Some 300 tonnes of mineralized
         material were extracted for metallurgical testing.
    *    During the 1970's and 1980's, there were several campaigns of surface and underground drilling.
         In 1989, exploration activity at Novoveska Huta was stopped and the underground workings were allowed to
         flood.
    *    EUU's predecessor company Tournigan Energy Ltd. Conducted surface diamond drilling on the
         deposit from 2006 to 2011.  During this time, 17 diamond holes totalling 8897 m were drilled.  These
         comprise 7 twin holes drilled to verify historical drill holes, 2 twin holes designed to verify data from
         the historic shaft, 2 exploration holes drilled into the western block and 6 stepout holes (of which 5
         were completed) that were drilled to explore and extend the deposit to the east.
    *    A 43-101 compliant resource estimate was prepared in 2011.

6.  ASX  Listing  Rule  5.12.6 - Are there any more recent estimates or data  relevant  to  the  reported
mineralisation available to the entity.

The Company is not aware of any more recent estimates or data relevant to the reported mineralisation for
either of the Slovakian uranium projects.

7.  ASX Listing Rule 5.12.7 - Detail the evaluation and/or exploration work that needs to be completed to
verify  the foreign estimates as mineral resources or ore reserves in accordance with Appendix  5A  (JORC
Code).

The  Company intends to undertake a comprehensive review of existing data and reports in relation to  the
foreign  estimates of mineral resources and the PFS prepared for Kuriskova. Based on the results  of  the
review,  the  Company  will  determine whether any further ground exploration  activities,  metallurgical
testing  or mining studies are required to verify the existing mineral resources. The Company  will  then
carry  out  the  identified  further activities and, if required, recalculate the  mineral  resources  in
accordance with JORC Code.

8.  ASX  Listing Rule 5.12.8 - Explain the proposed timing of any evaluation and/or exploration work  the
entity intends to undertake and how the entity intends to undertake that work.

The  data  review will commence following completion of the acquisition of the Slovakian  uranium  assets
from European Uranium. It is anticipated that the mineral resources will be JORC Compliant by June 2015.

Contact Information

  • Forte Energy NL