“It’s really a way for us to raise money, for the future and long term of the project,” Walter Coles Sr. of Virginia Uranium, Inc., told the Virginian-Pilot newspaper.
From The News & Record
Virginia Uranium, Inc. announced late Monday its intention to merge with Santoy Resources, Inc., a Canadian mineral exploration company with interests in uranium, oil, gas, methane and gold deposits in Canada.
The merger, which will involve the exchange of stock, cash and future interests, would give the combined company additional money, expertise and investment backing to open up the Coles Hill deposit in Pittsylvania County for mining. Virginia Uranium has been at the forefront of efforts to overturn Virginia’s 25-year moratorium on uranium mining.
“It’s really a way for us to raise money, for the future and long term of the project,” Walter Coles Sr. of Virginia Uranium, Inc., told the Virginian-Pilot newspaper.
Santoy signed a letter of intent to acquire interests in three entities — Virginia Uranium, Inc., which is based in Virginia and controls the rights to the Coles Hill deposit near Chatham; Virginia Uranium Ltd., a Yukon corporation; and VA Uranium Holdings, Inc., also based in Yukon. Virginia Uranium, Inc. is a wholly owned subsidiary of VA Uranium Holdings, and Virginia Uranium Ltd. holds a 12 percent minority interest in VA Uranium Holdings.
As a result of the deal, Santoy will take a 20 percent stake in VA Uranium Holdings. Santoy will also put up $3.5 million in cash as part of its investments in VA Limited and VA Holdings.
In a statement, Santoy said it “is pleased to proceed with this transaction as it gives the Company a significant position in a uranium project situated in a stable political location.” The Coles Hill uranium deposit, located on Walter Coles’ family farm, is one of the largest untapped uranium deposits in the United States and worth an estimated $10 billion.
The combined company will be led by Norm Reynolds, currently chief executive officer of Virginia Uranium Ltd., Reynolds is expected to be appointed as Chief Executive Officer of the new corporation. Walter Coles Jr., currently Executive Vice President of VU Limited, is expected to be appointed Executive Vice President of the new company. Ron Netolitzky, currently Chief Executive Officer of Santoy, will continue his active involvement in the company as a director. Mike Cathro of Santoy will serve as vice-president of exploration.
The merger of Santoy and Virginia Uranium must be approved by Canadian authorities. The companies expect to remain incorporated in Canada.
Santoy describes itself as a “junior Canadian mineral exploration company” which has focused on four main geographic locations for uranium mining: the Prolific Athabasca Basin in Saskatchewan, Southeast British Columbia, Otish Mountains of Quebec and in the Central Mineral Belt of Labrador. With the price of uranium steadily increasing, the company says it has a record of success in the discovery and development of uranium deposits and “of taking uranium discoveries through to feasibility study.”
The fate of the Coles Hill project will depend on efforts to lift Virginia’s moratorium on uranium mining, which was put in place in 1983 when Marline Uranium last attempted to mine the Coles Hill site. After a proposed feasibility study died this year in the General Assembly, legislators called on the Virginia Coal and Energy Commission to sponsor a feasibility study, to be conducted by the National Academy of Sciences or a similar scientific organization. The scope of the study has yet to be determined, and the Coal and Energy Commission also must determine how the study will be paid for.
http://www.thenewsrecord.com/2008webfiles/20081225uranium.htm
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