Uranium Energy Corp to Acquire Cue Resources Ltd.

Tuesday, Jan 24, 2012

CORPUS CHRISTI, TX and VANCOUVER, BC, Jan. 23, 2012 /PRNewswire/ - Uranium Energy Corp. (NYSE-AMEX: UEC) and Cue Resources Ltd. (TSX-V: CUE) are pleased to announce that they have entered into an Arrangement Agreement under which UEC will acquire all of the outstanding common shares of CUE by way of a plan of arrangement (the "Arrangement").  Upon completion of the Arrangement, it is anticipated that approximately 2,336,260 shares of UEC's common stock will be issued to former CUE stockholders to acquire CUE and its wholly-owned subsidiary holding an undivided 100% legal and beneficial interest in and to certain concession contracts covering a 230,650-hectare uranium exploration property located in southeastern Paraguay and known as the Yuty Project.

Amir Adnani, UEC President and CEO, stated, "The Company's plan is to make the Yuty Project our second major uranium asset in Paraguay.  CUE's projects and resources will be synergistic with our current operations, and consistent with our development strategy in this stable and business-friendly country.  With share dilution at a low 3.1% for this acquisition, UEC continues to expand and diversify its project portfolio at attractive costs with projects that have been the subject of significant exploration and development."

Robert Tyson, CUE President and CEO, stated, "Since the Fukushima disaster, funding uranium projects has been a challenging task. The severe reduction in enterprise value and share price required CUE's Board of Directors to pursue alternative financing opportunities in the best interests of CUE and our shareholders. Consummation of this relationship with UEC allows for our project to advance.  UEC is a recognized ISR uranium producer with a technical team that has an established record of developing and producing sandstone-hosted uranium deposits."

The Yuty ISR Project

The Yuty ISR Project covers 230,650 hectares and is located approximately 200 kilometers east and southeast of Asunción, the capital of Paraguay.  It is located within the Paraná Basin, which is host to a number of known uranium deposits, including Figueira and Amorinópolis in Brazil. Preliminary studies indicate amenability to extraction by in situ recovery methods, which is the same process currently used by UEC at its Texas operations. CUE has spent over CAD$16 million developing Yuty since 2006.

In 1976, uranium exploration in southeastern Paraguay was initiated by Anschutz Corporation ("Anschutz") of Denver, Colorado, on behalf of a joint venture with Korea Electric Power Corporation and Taiwan Power Company.  This exploration was conducted under an exclusive exploration and exploitation concession covering 162,700 square kilometres, virtually the entire eastern half of Paraguay, and identified several large target areas including the Yuty Project.  In total, approximately 75,000 meters of core and rotary drilling were completed by Anschutz between 1976 and 1983 when further work ceased due to low uranium prices.

In July 2006, CUE acquired an option on the Yuty Project and initiated rotary and diamond drilling programs.  Between 2007 and 2010, CUE completed 256 drill holes totaling 31,000 meters of core and rotary drilling and acquired a 100% interest in the Yuty Project.

The technical information in this news release was prepared in accordance with the Canadian regulatory requirements set out in NI 43-101 and is extracted from the Yuty Technical Report, which is filed on CUE's SEDAR profile and is available for viewing at www.sedar.com. The technical information in this news release and the Yuty Technical Report have been reviewed by each of Chris M. Healey, P. Geo., a director of CUE, and Clyde L. Yancey, P.G., Vice President of Exploration for UEC, each being a qualified person as defined by NI 43-101.  To the best of UEC's knowledge, information, and belief, there is no new material scientific or technical information that would make the disclosure of the mineral resources contained in this news release inaccurate or misleading.  The Yuty Project is described in more detail in the press release of CUE dated August 26, 2011.

Terms of the Arrangement

Under the terms of the Arrangement Agreement, CUE's shareholders will receive 0.0195 of one share of UEC common stock for every one share of CUE common stock.  With 119,808,067 shares of CUE common stock outstanding, it is anticipated that approximately 2,336,260 shares of UEC common stock will be issued to the former CUE shareholders upon completion of the Arrangement, representing approximately 3.1% of the issued and outstanding common stock of UEC.

The Boards of Directors of UEC and CUE have each unanimously approved the Arrangement Agreement and have concluded that the proposed Arrangement is in the best interests of UEC and CUE, respectively.

In conjunction with the Arrangement Agreement, the directors and officers of CUE, together with certain additional shareholders of CUE, have agreed to immediately enter into voting agreements with UEC pursuant to which they will agree to vote their CUE shares in favor of the Arrangement.  The CUE shares which are expected to be subject to voting agreements will represent approximately 51.8% of CUE's outstanding common shares as of January 20, 2012.

The Board of Directors of CUE is expected to provide a written recommendation that the CUE shareholders vote their shares in favor of the Arrangement in the management information circular to be prepared and mailed by CUE in connection with the proposed Arrangement.  The proposed Arrangement will be carried out by way of a court-approved plan of arrangement and will require the approval of shareholders holding at least two-thirds of the CUE shares represented in person or by proxy at a special meeting of CUE shareholders to be called to consider the Arrangement. In addition to shareholder and court approvals, the proposed Arrangement is subject to applicable regulatory approvals and the satisfaction of certain other closing conditions customary in transactions of this nature.

Further information regarding the Arrangement will be contained in the management information circular of CUE to be mailed to CUE shareholders and filed on SEDAR.  The date of the special meeting for shareholders of CUE is presently expected to take place on or about March 26, 2012, with closing expected to occur as soon as possible thereafter.  All shareholders of CUE are urged to read the management information circular once it becomes available as it will contain additional important information concerning the proposed Arrangement.

The foregoing description of the Arrangement Agreement is not complete and is qualified in its entirety by reference to the Arrangement Agreement which will be filed on each of UEC's and CUE's SEDAR profiles and will be available for viewing at www.sedar.com.

UEC expects to apply to list its shares issuable under the proposed Arrangement on the NYSE Amex equities exchange on closing. It is anticipated that the shares of CUE will be delisted from the TSX Venture Exchange following completion of the Arrangement.

SOURCE Uranium Energy Corp