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Abstract
On March 9, 2006 Energy Metals and Quincy executed an Agreement and Plan of Merger whereby Quincy will become a wholly-owned subsidiary of Energy Metals, with shareholders of Quincy receiving 0.20 shares of Energy Metals for each Quincy share. In addition, Energy Metals will assume all of Quincy's outstanding warrants and options, subject to appropriate adjustments to the number of shares issuable on exercise and the exercise price. In connection with the merger Quincy will obtain the agreement of certain shareholders, holding in the aggregate not less than 30% of the outstanding Quincy shares, to vote in favour of the acquisition.
Effective March 10, 2006, Energy Metals has completed the acquisition of all of the issued and outstanding shares of Standard by way of plan of arrangement under the laws of British Columbia. In order to complete the transaction, Standard was required to obtain shareholder approval and court approval, which were both obtained on March 10, 2006. Pursuant to the plan of arrangement, Energy Metals has acquired all of the issued and outstanding common shares of Standard, on the basis of 0.64 common shares of Energy Metals for each common share of Standard. In addition Energy Metals will exchange all of the outstanding employee stock options of Standard for employee stock options of Energy Metals, with appropriate adjustments to the number of shares issuable on exercise and the exercise price.
The acquisition of Standard, including Standard's 99% interest in the joint venture with Everest Exploration Inc., allows Energy Metals to proceed towards establishing a uranium processing facility in south Texas as part of its objective of becoming an in-situ leach ("ISL") uranium producer. The Everest joint venture will provide Energy Metals with access to the facilities and expertise necessary to permit Energy Metals to move from a resource development company to a uranium producer. Through Standard's 99% ownership in the joint venture, Energy Metals plans to use the Hobson plant, an existing recovery facility located near Hobson, Texas, to produce uranium oxide product from ISL solution recovered from the Palangana property located in Duval county, Texas. The joint venture company owns the Hobson plant, as well as Palangana mining leases and an extensive Texas uranium exploration database. Strategically, this transaction puts Energy Metals in a strong position for growth in the ISL mining sector at a time of increasing energy demands and uranium prices.