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"This agreement strengthens our efforts to identify new uranium reserves for the future. Cameco gains the right to participate in the exploration of new regions and adds the expertise of a solid technical team to our knowledge base."

Cameco President & CEO on UNOR investment

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Cameco Invests in Exploration

On June 19, 2006, Cameco, the world’s largest uranium producer, acquired 19.5% of UNOR and Jerry Grandey, President & CEO of Cameco said, “this agreement strengthens our efforts to identify new uranium reserves for the future. Cameco gains the right to participate in the exploration of new regions and adds the expertise of a solid technical team to our knowledge base.”

The 19.5% investment by Cameco in UNOR and the Strategic Alliance Agreement between the companies provides to UNOR ongoing uranium technical knowledge, guidance and exploration opportunities.

The Cameco Investment

On March 31, 2006, UNOR entered into a Memorandum of Understanding with Cameco Corporation to form a strategic alliance and for Cameco to subscribe for a non-brokered private placement of shares representing a 19.5% ownership of the Company at a price of $0.40 per share. On May 9, 2006, UNOR announced that the parties had executed a binding subscription agreement in which Cameco subscribed for 19.5% of the outstanding shares of UNOR for aggregate gross proceeds of $9,162,765. A special meeting of shareholders on June 16, 2006 approved the Cameco transaction and the closing of the transaction occurred on June 19, 2006. At the closing of this non-brokered private placement the companies entered into a Strategic Alliance Agreement. The Strategic Alliance Agreement includes the following terms and conditions:

  1. for as long as Cameco maintains ownership of at least 16% of the issued and outstanding shares of UNOR, Cameco will have the right to participate in any future equity issuances by UNOR, to match any equity or debt funding required by UNOR for development of a mine, to operate any mine developed, to provide milling capacity and to market any uranium produced by UNOR;
  2. for as long as Cameco maintains ownership of at least 10% of the issued and outstanding shares of UNOR , Cameco will have the right to nominate one person for election to the board of directors of UNOR and UNOR will consult with Cameco concerning exploration, development and mining technical work programs; and
  3. each party will have first right of refusal to purchase from the other any uranium exploration projects the other may wish to sell in a specified area of western Nunavut or eastern North West Territories.

UNOR/Cameco Joint Technical Committee

On September 22, 2006, UNOR and Cameco Corporation established a Joint Technical Committee (JTC) to facilitate consultations between the companies with respect to technical work programs. The JTC is comprised of four members with two senior exploration personnel from both companies. The JTC duties are to review and recommend exploration plans and budgets for UNOR.

UNOR/Cameco Joint Venture Agreements

  1. On October 23, 2006, UNOR announced that it has entered into an option agreement with Cameco Corporation on uranium mineral claims held by Cameco covering 521,500 acres in western Nunavut (the Property) which adjoins the northwest corner of UNOR’s wholly owned Coppermine River claim block. The Option Agreement is subject to the following terms and conditions:
    • To earn a 60% interest in the Property, UNOR must incur exploration and development expenditures of $3.0 million by March 31, 2010, of which a minimum of $2.0 million must be incurred on or before June 30, 2008.
    • UNOR is the operator subject to the guidance of a joint UNOR/Cameco Technical Committee and the Strategic Alliance Agreement between the parties.
    • The parties will establish a joint venture on the date UNOR has exercised its earn-in rights of 60%.
    • Cameco has the right within 90 days after the joint venture has either operated for two years or incurred $3.0 million of expenditures on the Property to earn back 15% by investing an additional $3.0 million to increase its interest to 55% and reduce UNOR’s interest in the Property to 45%.
  2. On February 28, 2007 UNOR announced that it has entered into a letter agreement with Cameco Corporation to establish a joint venture to explore for uranium on 27 Prospecting Permits currently held by Cameco covering 1,588,000 acres on Baffin Island, Nunavut, Canada. With its Nunavut uranium focus and expertise, UNOR now has 2,743,000 acres under uranium exploration within the territory.

    The joint venture agreement includes the following provisions:
    • The formation of a management committee comprised of two representatives from each party.
    • UNOR will be the operator of the joint venture.
    • The operator will be subject to the general control and direction of the Joint Technical Committee established pursuant to the Strategic Alliance Agreement dated June 19, 2006 between the parties.
    • The initial participating interest of the parties will be Cameco 51% and UNOR 49%. Cameco has the right, exercisable within 90 days after the joint venture has either operated for four years or incurred $6.0 million of expenditures on the property, to increase its interest in the joint venture to 65% and reduce UNOR’s interest to 35% by committing to incur an additional $6.0 million on exploration and development of the property during a two-year period following the date on which Cameco makes such election.

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