Cameco closes deal with Western Uranium (September 17, 2007)

Vancouver — Cameco (CCO-T, CCJ-N) and Western Uranium (WUC-V, WURNF-O) have closed a partnership deal that sees the major investing $21.2 million in the junior.

Cameco has purchased nearly 5.6 million units of Western Uranium at $3.80 apiece; each unit consists of a share and a half-warrant, with each full warrant exercisable at $4.25 for one year.

With its investment, Cameco now holds a 10% interest in Western Uranium.

The partnership gives Cameco the right to earn a 70% interest on any economically viable standalone deposit developed at any of Western’s current projects in Nevada, New Mexico, Nunavut and the Northwest Territories. The earn-in can only take place once a 15-million-lb. U3O8 indicated or measured resource is defined; at the Kings Valley project, in Nevada, or Treeline, in New Mexico, the resource must be in addition to historical resource figures.

To earn in on a deposit and form a joint venture, Cameco must pay Western Uranium at least US$5 per lb. U3O8 for each pound of its 70% share of any resource or reserve outlined in a mine plan. The major will also pay an additional premium related to fluctuations in the Ux Consulting Co. spot price for each pound of its 70% interest of the resource or reserve.

Once a joint venture is started, Cameco will carry Western Uranium through to the feasibility stage.

Assuming Cameco maintains at least a 7.5% equity interest, it will hold the right to maintain its interest level in future Western Uranium financings and will be entitled to a board seat.

Shares of Western Uranium, which had been trading at about half of Cameco’s subscription price, closed up 18% on the news, or 33 higher, at $2.18 apiece. The stock has traded in a 52-week range of $1.00-$4.15.