ARMZ Uranium Holding Co.’s Transaction With Uranium One Approved by Ministry of Energy and Mineral Resources of Kazakhstan

News Release

ARMZ Uranium Holding Co.’s Transaction With Uranium One Approved by Ministry of Energy and Mineral Resources of Kazakhstan

Moscow, Russia — ARMZ Uranium Holding Co. today announced that the Ministry of Energy and Mineral Resources of the Republic of Kazakhstan has approved the transaction whereby Uranium One Inc. has agreed to purchase from ARMZ Uranium Holding Co., AKA Atomredmetzoloto, a 50% joint venture interest in the Karatau Uranium Mine for consideration which includes an interest in Uranium One equity.

Subject to approvals from the Competition Protection Agency of the Republic of Kazakhstan and the Australian Foreign Investment Review Board and to the satisfaction of usual and customary closing conditions, ARMZ Uranium Holding Co. expects to close the transaction before the end of 2009.

As previously announced, on June 15, 2009, ARMZ Uranium Holding Co. which is the mining arm of Rosatom State Corporation, signed a definitive purchase agreement to sell a 50% interest in the Karatau Uranium Mine in Kazakhstan for consideration of 117 million common shares of Uranium One Inc. (UUU – Toronto Stock Exchange, JSE Limited [Johannesburg Stock Exchange]) through a private placement and a cash payment of US$ 90 million (or equivalent promissory note due within one year of closing). The agreement provides for a contingent payment to ARMZ Uranium Holding Co. of up to $60 million, payable in three equal tranches over the next three years subject to certain post-closing tax-related adjustments. Thus, ARMZ Uranium Holding Co. will acquire a 16.6% to 19.95% interest in Uranium One Inc., depending on the timing of Uranium One’s transaction with a consortium of Japanese corporations.

In welcoming the decision made by the Ministry of Energy and Mineral Resources of the Republic of Kazakhstan, Director General Vadim Zhivov of ARMZ Uranium Holding Co. stressed, ‘The closing of the transaction brings Rosatom State Corporation in partnership with Uranium One to the second place among foreign uranium producers operating in Kazakhstan in the terms of uranium resource base. Most importantly, this strategic relationship forms a global platform for Rosatom’s further expansion in the world’s uranium markets. After the deal is closed, the Russian nuclear industry’s uranium resources will have increased by 15% since the start of the international expansion, which commenced earlier this year’.

The Karatau Uranium Mine

Karatau is located in close proximity to the Akdala and South Inkai Mines of Uranium One’s 70% owned Betpak Dala joint venture. Karatau commenced commercial production in 2008 and produced 1.7 million pounds U₃O₈ in that year. For 2009, Karatau is expected to produce approximately 3.6 million pounds U₃O_8, at a total cash cost per pound sold of approximately $15 per pound. Karatau is expected to reach annualized steady state production of 5.2 million pounds of U₃O₈ per year during 2010. 

The other 50% interest in Karatau is held by Kazatomprom, the Kazakh-stated owned mining company which also holds joint venture interests in Uranium One’s other Kazakh mines and projects.

In 2008, the Kazakhstan State Committee on Reserves approved a resource at Karatau of 28.3 million pounds U₃O₈ in the C1 category, 19.0 million pounds U₃O₈ in the C2 category and additional P1 resources of 82.2 million pounds U₃O₈.

About ARMZ Uranium Holding Co.

ARMZ is the world’s fifth largest uranium producer with operating mines in Russia and Kazakhstan. During 2008, operations in which ARMZ is involved produced 3.687 tonnes of uranium (9.6 million pounds of U₃O₈). It is owned by Rosatom, the Russian State Corporation for Nuclear Energy, and is appointed and authorized by Rosatom to supply fuel for the Russian nuclear industry.

About Uranium One

Uranium One is one of the world’s largest publicly traded uranium producers with a globally diversified portfolio of assets located in Kazakhstan, the United States, South Africa and Australia.