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U.S. Energy/Crested Shareholders Hear Upbeat Uranium Report
UPC Participation, Drilling, Mill Reactivation on Track
RIVERTON, Wyo., July 27 /PRNewswire-FirstCall/ -- High uranium prices,
increased financial participation by Uranium Power Corp., exploration drilling
in Wyoming to establish verifiable resources and progress on the reopening and
upgrading of the Shootaring Canyon mill highlighted an upbeat uranium report to
the shareholders and directors of U.S. Energy Corp. and Crested Corp. July 22.
U.S. Energy Corp. (NASDAQ:USEG) and Crested Corp. (OTC:CBAG) (BULLETIN BOARD:
CBAG) held their annual shareholders and directors meetings at the companies'
Riverton, Wyoming headquarters. The two companies often combine their
resources, d/b/a USECC, in natural resource ventures.
Uranium prices are at levels not seen in decades -- in excess of $30 per pound
long-term and nearly that high on the spot market -- in recent weeks.
World-wide demand for uranium currently outstrips production by approximately
40%, and the deficit is expected to grow as developing nations, particularly
China, increasingly turn to nuclear-powered electric generation over the next
two decades.
"USECC has conserved its uranium assets over the past 20 years because we
firmly believed that this day would come," U.S. Energy president Keith Larsen
told the directors. "Solid, verifiable assets and experience in the industry
are traits that distinguish USECC," Larsen said. "We are positioned for
growth, and we are determined to make the most of this opportunity."
Larsen described several major uranium initiatives to the shareholders and
directors:
1. USECC has entered into a three-part financial agreement with Uranium Power
Corp. (TSX-V: UPC) to develop uranium prospects:
a.) UPC has optioned half of USECC's Sheep Mountain property for
$4,050,000 and four million shares of UPC stock. To date USECC
has received $850,000 in cash, and the first installment of one
million shares of UPC stock has been transferred to USECC. The
next payment of $800,000 in cash and 750,000 shares of UPC stock
is scheduled for June 29, 2006.
b.) UPC has an option to participate in up to 20 uranium ventures at
up to $500,000 per venture with USECC, up to a total of $10
million. To date, UPC has provided $500,000 for exploratory
drilling at Sheep Mountain.
c.) Long-term uranium prices have remained above $30 per pound for a
minimum of 30 days, triggering additional purchase payments to
USECC of $3 million by UPC in two installments of $1.5 million
each on April 29, 2006 and October 29, 2009.
2. USECC has committed to exploratory drilling to delineate the extent
and grade of its uranium resources at Sheep Mountain in Wyoming and
on several thousand acres of claims in Utah. Drilling at Sheep
Mountain will commence this month. Drilling in Utah is scheduled for
this fall. USECC has staked over 12,000 acres of uranium lode mining
claims in Utah.
3. Shootaring Canyon, the company's uranium processing mill in
southeastern Utah, has been mothballed since the 1980s, when it was
the last uranium processing mill built in the United States. USECC
is now exploring various means to raise $25 million dollars to
refurbish and upgrade the mill over the next two years. The company
is readying permit applications to the state of Utah for work on the
mill and for upgrading the existing tailings cells to current
environmental standards. At full capacity the mill is expected
produce up to 1.5 million pounds of uranium annually.
4. Burgeoning demand for vanadium had pushed prices for to $26 per pound
by early June, and prices are expected to remain strong. Anticipated
uranium ore feeds for the Shootaring mill are rich in vanadium
content, so a vanadium processing circuit will be added to the
existing uranium facility. The mill is expected to produce up to 4.2
million pounds of vanadium per year.
U.S. Energy Corp. has roots in the uranium mining industry dating back over
four decades. USECC also holds assets in gold through Sutter Gold Mining Inc.
(TSX: SGM) and a position in oil and gas through its equity ownership in
Enterra Energy Trust (Nasdaq: EENC; TSX: ENT.UN) and Pinnacle Gas Resources.
The company also anticipates receiving a world-class molybdenum deposit at Mt.
Emmons, Colorado in 2005.
The shareholders of U.S. Energy Corp. re-elected incumbents Don C. Anderson,
Michael J. Feinstein and H. Russell Fraser to the Board of Directors. The
shareholders of Crested Corp. re-elected incumbent Daniel P. Svilar to the
Board of Directors. The shareholders of both companies voted to ratify the
directors' appointment of the accounting firm of Epstein, Weber & Conover, PLC
as auditors for both companies.
ABOUT U.S. ENERGY CORP. AND CRESTED CORP.
U.S. Energy Corp. and its majority owned subsidiary, Crested Corp., are engaged
in a joint venture to conduct various business operations as USECC. Through
their subsidiaries, Sutter Gold Mining Inc., Plateau Resources Limited, U.S.
Moly Corp and USECC, they own interests or properties prospective for gold,
uranium, vanadium and molybdenum.
This news release includes statements which may constitute "forward- looking"
statements, usually containing the words "believe," "estimate," "project,"
"expect," or similar expressions. These statements are made pursuant to the
safe harbor provision of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements inherently involve risks and uncertainties that could
cause actual results to differ materially from the forward-looking statements.
Factors that would cause or contribute to such differences include, but are not
limited to, future trends in mineral prices, the availability of capital,
competitive factors, and other risks.
The profitable mining and processing of uranium and vanadium will depend on
many factors: Obtaining properties in proximity to the Shootaring mill to keep
transportation costs economic; delineation through extensive drilling and
sampling of sufficient volumes of mineralized material, with sufficient grades,
to make mining and processing economic over time; continued sustained high
prices for uranium oxide and vanadium; obtaining the capital required to
upgrade the Shootaring mill and add a vanadium circuit; and obtaining and
continued compliance with operating permits. The profitable mining and
processing of gold will depend on many factors, including receipt of final
permits and keeping in compliance with permit conditions; delineation through
extensive drilling and sampling of sufficient volumes of mineralized material,
with sufficient grades, to make mining and processing economic over time;
continued sustained high prices for gold; and obtaining the capital required to
initiate and sustain mining operations and build and operate a gold processing
mill.
We have not yet obtained feasibility studies on any of our mineral properties.
These studies would establish the economic viability, or not, of the different
properties based on extensive drilling and sampling, the design and costs to
build and operate gold and uranium/vanadium mills, the cost of capital, and
other factors. Feasibility studies can take many months to complete. We have
not established any reserves (economic deposits of mineralized materials) on
any of our uranium/vanadium or gold properties, and future studies may indicate
that some or all of the properties will not be economic to put into production.
The molybdenum property has had extensive work conducted by prior owners, but
this data will have to be updated to determine the viability of starting mining
operations. Obtaining mining and other permits to begin mining the molybdenum
property may be very difficult, and, like any mining operation, capital
requirements for a molybdenum mining operation will be substantial.
By making these forward-looking statements, the Companies undertake no
obligation to update these statements for revision or changes after the date of
this release.
DATASOURCE: U.S. Energy Corp.
CONTACT: Keith G. Larsen, President, or Don Warfield, Director of
Corporate Relations, +1-307-856-9271, , both of U.S. Energy
Corp.