TORONTO (CP) -- SXR Uranium One Inc. [TSX:SXR] has been granted 30-year mining rights to the 140-square-kilometre Dominion uranium property in South Africa.
The area covered by the new mining licence, about 200 kilometres southwest of Johannesburg, is adjacent to 14 square kilometres held under a previous rights grant.
The government decision ''is a major legislative requirement to our commencing production at Dominion on schedule, and to complete the transformation of Uranium One from a development-stage company into a focused uranium producer,'' CEO Neal Froneman said Wednesday.
''It is clear that the government of South Africa is supportive of its domestic uranium industry and Uranium One is proud to be positioned to become the major player in this sector.''
SXR shares were up 30 cents at C$8.85 in afternoon trading on the Toronto Stock Exchange, with a 52-week high and low of C$11.80 and C$1.11.
Plant commissioning has begun at Dominion, which has a workforce of about 1,300 plus 700 contractor construction workers.
The project's probable reserves are estimated at 31.3 million pounds of uranium oxide, with annual production forecast at 3.8 million pounds at a cash operating cost of US$14.50 per pound.
Uranium One also announced Wednesday that its 71% owned subsidiary Aflease Gold Ltd., which owns the Modder East gold project in South Africa, has received shareholder approval of its Black Economic Empowerment structure.
This provides for 26% participation by black South Africans, with Aflease to receive ''market-related compensation.''
Froneman said the BEE arrangement ''will ensure broad-based participation by historically disadvantaged South Africans, with thousands of ordinary people standing to benefit. As we develop Aflease Gold into a producer of gold, this will bring benefits both for our shareholders and our BEE partners.''
SXR also announced Wednesday it plans to raise C$150.23 million in a bought-deal financing, by issuing 18.1 million shares at C$8.30 each. It is expected to close Oct. 31.
The underwriters have been granted an over-allotment option to additionally purchase up to 15% of the shares at the same price, the company said.
(c) The Canadian Press 2006
