JOHANNESBURG (miningweekly.com) – Dual-listed uranium developer Laramide Resources has signed a letter of intent (LoI) with Texas-based miner Uranium Resources to amend the definitive share purchase agreement, signed on April 6, stipulating that Laramide would acquire Uranium Resources’ wholly owned subsidiary Hydro Resources, which holds the Churchrock and Crownpoint properties in New Mexico, in the US.

Under the agreement, Laramide will now, on closing, pay $2.5-million in cash and will issue a three-year promissory note for $5-million – a reduction of $2.25-million from the $7.25-million initially stipulated. The three-year anniversary payments will include $1.5-million, $1.5-million and $2-million in 2017, 2018 and 2019 respectively.

Further, Laramide will now have the option to satisfy up to 50% of these principal payments in common shares, which will be valued based on the volume-weighted average price for Laramide's common stock for the 20 trading days before the respective anniversary of the closing on which each payment is due. Interest payment terms remain the same.

The $250 000 previously advanced by Laramide pursuant to the initial extension agreement will be applied to the $2.5-million payable at closing.

At closing, Laramide will issue common shares and warrants to Uranium Resources valued at $500 000. Laramide will also grant the uranium miner a 4% net smelter return royalty interest on the Churchrock project, valued at $4.5-million, which can be repurchased by Laramide by the first anniversary of closing for $4.95-million.

In addition, the purchase price for the original option by which Uranium Resources could buy Laramide's La Sal project, in Lisbon Valley, Utah will be reduced from $4-million to $3-million, while the option expiration date will be reduced from 15 months after the closing to 12 months after the closing.

Laramide will also grant Uranium Resources a new option to buy Laramide's La Jara Mesa project in New Mexico for $5-million. The expiration date for the option will also be 12 months after the closing.

"In a period of almost unprecedented challenging conditions for uranium companies, we are pleased to have been able to work cooperatively with [Uranium Resources] to fashion this revised transaction – one that should see both sets of shareholders achieve their near-term corporate objectives and also benefit from the ultimate development of this high-quality asset, once industry conditions normalise,” noted Laramide president and CEO Marc Henderson on Tuesday.

“We now look forward to an expeditious closing in 2016 and to getting to work aggressively on advancing Churchrock in 2017."   

The LoI, which is nonbinding at this stage, contemplates that Laramide and Uranium Resources will enter into a binding amendment to the agreement no later than December 9. The closing date for the transaction will be on or around December 22.