World Wide to take helm of Tselinny uranium project

Following a 5-month due diligence review, World Wide Minerals (WWS-T) has decided to assume management of the Tselinny uranium operations in north-central Kazakhstan.

Under an agreement with Tselinny, a state-owned mining company, World Wide will manage the facilities for two years in exchange for expenses and a fee of not more than US$300,000 per year. At the end of 1998, World Wide can continue to manage the project in exchange for 6% of gross revenue or buy a 90% stake in Tselinny for US$47.25 million.

The Tselinny uranium empire includes processing facilities, a coal-fired power station and several underground mines with estimated reserves of 75 million tonnes grading 0.12% uranium.

Using a selective mining plan, World Wide plans to increase the mill-head grade to at least 0.3%. At this cutoff, the amount of ore processed will be about 1 million tonnes per year (half of the design capacity of the Tselinny mill).

By comparison, Cameco’s Rabbit Lake operation in Saskatchewan processed just over 205,000 tonnes at a millhead grade of 1.9% last year.

World Wide expects production to begin in the first quarter of 1997. Full production, at a rate of 6.8 million lb. U3O8 per year, will begin 18 months later.

The company also plans to expand existing, on-site heap-leach facilities to produce additional uranium from low-grade ore.

If World Wide opts to buy Tselinny, the US$47.3-million purchase price would be offset by any debt assumptions or working capital provided by the Toronto-based company. World Wide estimates the net purchase price would then be US$3 million, with payment deferred until 1999-2000.