Areva buying East Asias Mongolian uranium projects for $83 million

Vancouver – French energy giant Areva (ARVCF-Q) must like what it sees on neighbour East Asia Minerals‘ (EAS-V, EAIAF-O) Ooshiin Govi uranium property in southeastern Mongolia after inking a deal to purchase it from the junior for $83 million.

Located in the southeastern Mongolian province of Dornogovi, the 2,613-sq. km Ooshiin Govi tenements were acquired by East Asia less than one year ago, in late-2006, based on three significant radiometric anomalies identified during Russian surveys in the 1990s.

Two of the anomalies are extensions of interpreted favourable stratigraphy extending from Arevas adjacent property to the north. The other radiometric anomaly is on the southern portion of East Asia’s ground.

East Asia completed a ground radiometric survey in late-2006 confirming the historic airborne work and defined a more than 2 km wide uranium and total count anomaly extending south from an area of active drilling on Arevas property. About half of the total anomaly is on East Asias property.

A 15-hole drill program by the junior in early 2007 intersected a thick sequence of unconsolidated sand-hosted uranium mineralization with clay and lignitic intervals. Drilling showed a sizeable and laterally continuous redox (reduction-oxidation) front with anomalous radioactivity that is beneath the water table. Favourable porous host rock (unconsolidated sand) sandwiched between impermeable stratigraphy (clay layers), and significant size potential shows mineralization may be amenable to low cost in-situ leach (ISL) mining methods.

The model for mineralization at Ooshiin Govi is in a large, flat, buried paleochannel.

The $83-million deal will see Areva buy East Asias Mongolian subsidiary EAM Energy, subject to shareholder approval, which also holds the Bayan Uul, Elgenii, Ikh Khet and Airag-1 uranium tenements.

Certain shareholders of East Asia including directors and officers, representing approximately 43.8% of the companys issued and outstanding shares, have entered into irrevocable lockup agreements with Arevas subsidiary Compagnie Franaise de Mines et Metaux to vote in favour of the offer.

East Asias acquired its four Ooshiin Govi tenements for payments requirements of US$500,000 for each of three and US$750,000 for a forth. Terms also had a signing payment of US$50,000 for each tenement plus staged annual payments over a three year term. The vendor retains a 0.75% net smelter return royalty.

East Asia intends to dividend out at least 85% of the after-tax proceeds of the sale to its shareholders. With about 54 million shares outstanding on a fully diluted basis, shareholders would likely see a cash pay out of well over $1.00 per share held.

The junior will retain its Ingiin-Nars, Ulaan Nuur, and Enger uranium properties in Mongolia that contain historic resources (Ingiin-Nars and Ulaan Nuur) and have shown strong drill results (Enger). East Asia also holds its Khok Adar copper project in western Mongolia and is joint ventured in five epithermal gold and porphyry copper-gold projects in Indonesia.

Shares of East Asia were halted at $1.80 apiece prior to the announcement giving the company a market capitalization of about $79 million prior to being brought back to trade. Over the past year the stock has a trading range of 35-$2.09.