Northwestern and UraMin to join forces

Northwestern Mineral Ventures (NWT-V, NWTMF-O) and UraMin (UMN-T, UMN-L) are setting up a joint venture to explore eight prospective uranium concessions covering 6,773 sq. km in Niger.

The deal will see Toronto-based Northwestern take a 50% stake in the new company, and receive a cash payment of $4.8 million and a 3% net smelter royalty on any production from its Irhazer and In Gall concessions — two of the eight properties in the yet-to-be-named company’s portfolio.

News of the merger follows closely on the heels of Northwestern’s announcement in late May that Irhazer and In Gall returned values from 0.22% to 1% U3O8 from five of 16 surface rock samples collected from outcrops.

For its 50% stake, UraMin is contributing six uranium properties and US$15 million.

After the news was released, Northwestern shares gained a penny to 73 on roughly 1.1 million shares traded. South Africa-based UraMin saw its shares fall 1 to $7.12 on nearly 500,000 shares traded.

Northwestern says its shareholders will benefit from UraMin’s experience in Africa, as it has three uranium development projects under way on the continent.

UraMin is bringing its Trekkopje uranium project in Namibia, Bakouma uranium project in Central African Republic and its Ryst Kuil uranium project in South Africa into feasibility. Trekkopje is the most advanced, with commercial production slated for late 2008.

“With the US$15-million investment from UraMin, we have a solid financial foundation combined with considerable technical resources at our disposal,” Northwestern’s president and chief executive Marek Kreczmer said in a statement.

Kreczmer will take the reins as managing director and chief executive of the new company.

UraMin’s chief executive, Ian Stalker, will step in as the executive deputy chairman and president of the new company.

“By combining our resources in Niger, we not only bring together the highly prospective licence areas of both companies but we also marry Northwestern’s established exploration team in Niger with UraMin’s international mining team,” said Stephen Dattels, deputy chairman of UraMin, in a statement.

The companies say the merger will allow the new company to undertake a “major” exploration program at a faster pace than would have otherwise been possible.

The UraMin properties — Kamas 1 to 4 and Dabala 3 and 4 — are situated along the proven Arlit fault, in the same geographic area as two of Areva’s (ARVCF-O) uranium mines in Niger. The West African country is one of the world’s top uranium-producing nations.

UraMin also has exploration projects in Chad, Niger, Senegal and Mozambique, as well as two exploration projects in Canada.

Northwestern has prospective uranium properties in Niger and Canada and a polymetallic property in Mexico.