Consolidated Uranium Announces Proposed Spin-Out of Labrador Uranium Inc., Creating a New Labrador Focused Uranium Explorer and Developer

• Exercises Option on the Moran Lake Uranium and Vanadium Project
• Labrador Uranium Enters Agreement with Altius Minerals to Acquire Land Position in the Central Mineral Belt

Consolidated Uranium Inc. (“CUR”, the “Company” or “Consolidated Uranium”) (TSXV: CUR) (OTCQB: CURUF – https://www.commodity-tv.com/ondemand/companies/profil/consolidated-uranium-inc/) is pleased to announce the creation and planned spin-out of Labrador Uranium Inc. (“Labrador Uranium” or “LUR”), currently a majority-controlled subsidiary of CUR focused on the consolidation, exploration and development of uranium projects in Labrador. In connection with the proposed spin-out of LUR, the Company has provided notice to exercise its option pursuant to the option agreement announced on November 18, 2020 (the “Option Agreement”) to acquire 100% of the Moran Lake project (the “Moran Lake Project”).

To effect the spin-out, the Company has entered into an arrangement agreement with LUR (the “Arrangement Agreement”), pursuant to which among other things the Company will transfer ownership of Moran Lake Project to LUR in exchange for common shares of LUR (“LUR Shares”) which the Company intends to distribute to its shareholders on a pro rata basis (the “Arrangement”). The Company also intends to apply to list the LUR Shares (the “Listing”) on the Canadian Securities Exchange (the “CSE”). The Listing will be subject to LUR fulfilling all of the requirements of the CSE.

In addition, the Company and Labrador Uranium have entered into a purchase agreement (the “Altius Agreement”) with Altius Resources Inc., a wholly-owned subsidiary or Altius Minerals Corporation (“Altius”), pursuant to which LUR has agreed to acquire from Altius a 100% interest in the Central Mineral Belt Uranium-Copper Project (the “CMB Project”) and the Notakwanon project (the “Notakwanon Project” together, the “Altius Projects”), both located in Labrador (the “Altius Transaction”).

Transaction Highlights:

• Labrador Uranium Formed as New Entrant into Resurgent Uranium Market – Purpose built to explore for and develop uranium in Labrador, it is anticipated to hold a dominant land position in the Central Mineral Belt of Labrador (the “CMB”), a well-known uranium and multi-commodity metal district.
• Moran Lake Expected to Form Cornerstone Project – Located on the western side of the CMB, the Moran Lake Project hosts historical uranium and vanadium mineral resources. LUR intends to focus on confirming and potentially expanding the known historic mineral resources as well as exploring the property more generally. See “Technical Disclosure and Qualified Person” below.
• Agreement with Altius Expected to Secure Large Land Position – The ~125,000 hectare CMB Project is located adjacent to the Moran Lake Project to the east, west and south and spans to Paladin Energy’s Michelin Project in the east. In addition, the Notakwanon Project, located in Northern Labrador, is drill ready with previous evidence of high-grade uranium on surface.
• Proposed Spin-Out of Labrador Uranium is an Attempt to Unlock Value for CUR Shareholders – LUR is being spun out as a stand-alone, CSE-listed uranium exploration and development company, with CUR shareholders receiving their pro-rata portion of the LUR Shares issued to the Company.
• Experienced Team in Place – Under the leadership of Stephen Keith as Chief Executive Officer and Philip Williams as Chairman, the LUR management team and anticipated board of directors has decades of experience in exploration, development, and finance, with a significant focus on uranium.
• Summer 2021 Work Programs Completed Setting Up For Active 2022 – Work programs completed this summer at the Moran Lake Project and the CMB Project included: collecting and analysing data from decades of historical exploration work on the CMB Project by previous owners and government programs and field work to verify the >140 targets generated by this data collection and analysis. Results pending from this work are expected to be used in designing an aggressive field exploration program for 2022.

Philip Williams, President and CEO of CUR, commented “We are pleased to be announcing the partnership with Altius in the formation of Labrador Uranium. We believe that the Central Mineral Belt is an important uranium camp in Canada, which has tremendous exploration potential for uranium and other metals. As CUR focuses on near-term production in the United States, we determined that repositioning the Moran Lake Project as a part of a larger, Labrador-focused exploration portfolio would be the best way to unlock value for our shareholders. We liken this transaction to the original IPO of Aurora Energy in 2006 whose main asset was the Michelin Project. That company garnered a peak market cap of over $1.3b in 2007 and was ultimately taken over by Paladin Energy in 2011.”

Stephen Keith, CEO of LUR commented “I am looking forward to working with such an experienced team on this exciting new uranium exploration vehicle. LUR is expected to have all the underpinnings of a dynamic and successful new player in the resurgent uranium sector; a dominant land position in a prolific camp, historic mineral resources, backing by key uranium and mining industry players in CUR and Altius, and a strong team in place with significant uranium exploration, development and finance experience. Exploration success is driven by strong teams and quality assets. Combining the excellent work completed by, and historical successes of, these companies give me great confidence in the future of Labrador Uranium. I plan on hitting the ground running with the benefit of recently completed work programs on the projects. These programs have already generated over 140 targets setting the stage for an aggressive 2022 exploration season”.

Moran Lake Option Exercise

On October 17, 2021, CUR provided notice to the vendor of the Moran Lake Project that it has exercised the option to acquire the Moran Lake Project, for total consideration of $1,000,000 with $500,000 to be satisfied through the issuance of 191,570 common shares of CUR  (“CUR Shares”), at a deemed price of $2.61 per CUR Share based on the five-day volume weighted average price of the CUR Shares up to October 15, 2021 and $500,000 in cash. In addition, the vendor will be entitled to receive certain future payments contingent upon the attainment of certain milestones tied to the spot price of uranium, as further described in the Company’s press release dated November 18, 2020.

In accordance with the terms of the Option Agreement, the vendor will be granted a 1.5% net smelter returns royalty (the “Moran Lake Royalty”) from the sale of the mineral products extracted or derived from the Moran Lake Project by CUR, which will be transferred to LUR in connection with the Arrangement. CUR shall have the right and option to purchase 0.5% of the Moran Lake Royalty for a price equal to $500,000, which CUR intends to retain following the transfer of the Moran Lake Project to LUR pursuant to the Arrangement.

All CUR securities issued in connection with the Option Agreement are subject to final approval of the TSX Venture Exchange (the “TSXV”) and will be subject to a hold period expiring four months and one day from the applicable date of issuance.

The Arrangement Agreement

Pursuant to the Arrangement Agreement, among other things, CUR has agreed to transfer the Moran Lake Project to LUR in exchange for 16,000,000 LUR Shares. Under the terms of the Arrangement, the CUR shareholders will receive the LUR Shares on a pro-rata basis based on the number of CUR Shares held at the effective date of the Arrangement. There will be no change in CUR shareholders‘ proportionate ownership in CUR as a result of the Arrangement. In addition, holders of options and warrants of CUR as of the effective date of the Arrangement will have such securities adjusted in accordance with their terms as a result of the Arrangement.

The Arrangement will be effected by way of a court-approved plan of arrangement under the Business Corporations Act (Ontario). The Arrangement will be subject to regulatory approval, including the approval of the TSXV, court approval, conditional approval from the CSE for the Listing, as well as approval by not less than two-thirds of the votes cast at the special meeting (the “Meeting”) of the CUR shareholders, anticipated to be held in the first quarter of 2022. Full details of the Arrangement will be included in the management information circular to be sent to CUR shareholders in connection with the Meeting.

It is anticipated that the Arrangement and Listing will be completed in the first quarter of 2022.

The Altius Agreements

On October 17, 2021, the Company and Labrador Uranium entered into the Altius Agreement with Altius pursuant to which LUR has agreed to acquire the Altius Projects from Altius in exchange for 8,000,000 LUR Shares and a 2% gross overriding royalty on the CMB Project. Completion of the Altius Transaction is subject to certain closing conditions including, among other things, completion of the Arrangement and the conditional approval from the CSE for the Listing.

In the event that the Arrangement and Listing are not completed, Altius has the right (the “Put Right”) to require CUR to acquire the Altius Projects in exchange for $3,000,000 to be satisfied by the issuance of CUR Shares based on the volume weighted average price of the CUR Shares at the time of the exercise of the Put Right, subject to approval of the TSXV. In the event that the Put Right is not exercised by Altius, CUR has the right to acquire the Altius Projects on the same terms and conditions as the Put Right, subject to approval of the TSXV. Any CUR securities issued in connection with the Altius Transaction are subject to final approval of the TSXV and will be subject to a hold period expiring four months and one day from the applicable date of issuance.

Additionally, Altius, LUR and CUR have agreed on an area of interest whereby the two companies will work together in generating new targets and claims to bring to LUR.

In connection with closing of the Altius Transaction,  LUR and Altius have agreed to enter into an investor rights agreement pursuant to which, for so long as Altius’ equity ownership in LUR remains at or above 10%, Altius will be entitled to equity participation rights to maintain its pro rata equity ownership in LUR. Altius has also agreed to certain resale restrictions on the LUR Shares it will hold and to provide voting support in certain circumstances.

About Labrador Uranium Inc.

Management and Board of Directors

– Stephen Keith P.Eng, Chief Executive Officer

• Experienced engineer, investment banker and executive with over 20 years in the natural resources industry.
• Lead Director of Aura Minerals Inc., Director of Sterling Metals Corp.
• Previous positions include President and CEO of several public companies, including Rio Verde Minerals Development Corp., which Mr. Keith co-founded and took from a small private company, making several acquisitions and a public listing on the Toronto Stock Exchange through to its eventual sale to one of Brazil’s largest private equity firms.

– Greg Duras, Chief Financial Officer

• Over 10 years of corporate and project finance experience in the resource sector.
• Currently the CFO of Consolidated Uranium
• Previous positions include, VP of Finance and Administration at S.C. Rosia Montana Gold Corporation S.A. (RMGC) as well as Controller of TSX-listed Gabriel Resources Ltd. and High River Gold Mines Ltd.

– Philip Williams CFA, Chairman

• Over 20 years of mining and finance industry experience.
• Currently the President, CEO & Chairman of Consolidated Uranium.
• Extensive uranium and metals and mining experience in corporate development, as a sell-side research analyst, in fund management, investment banking.

The Projects

Moran Lake Project (Uranium-Vanadium)

The Moran Lake Project is an advanced-stage exploration project located within the Central Mineral Belt of Labrador, approximately 140 km north of the town of Happy Valley-Goose Bay and 85 km southwest of the coastal community of Postville on Kaipokok Bay. Access to the property is by helicopter and float plane out of Goose Bay.

Uranium was first discovered near Moran Lake by British Newfoundland Exploration Limited (Brinex) who conducted prospecting, geological mapping and radiometric surveying in the area from 1956 to 1958. The uranium mineralization is structurally controlled, typically hosted within fracture systems and to a lesser extent within shear zones. In outcrop, it is clear that local faulting, brecciation and alteration, all of uncertain age, are associated with the U-Cu mineralization at the Moran Lake C Zone. The mineralization is epigenetic and occurs in mafic volcanics of the Joe Pond Formation, Moran Lake Group, as well as in overlying sedimentary rocks of the Heggart Lake Formation, Bruce River Group.

Uranium mineralization at the C Zone mainly occurs in two distinct zones, referred to as the Upper C (“UC”) and Lower C (“LC”). Mineralization in the UC is hosted within brecciated, hematite altered and/or bleached mafic volcanics and hematitic cherts of the Joe Pond Formation, while mineralization in the structurally underlying LC is hosted predominantly within chloritized (reduced) sandstones of the Heggart Lake Formation. The UC also contains vanadium mineralization hosted mainly by hematized and brecciated mafic volcanic rocks of the Joe Pond Formation and brecciated gabbro or diabasic intrusives. In many areas, the vanadium concentration is directly proportional to the intensity of hematization and brecciation. The occurrence of vanadium mineralization may coincide with, but is not restricted to, zones of uranium mineralization.

In January 2011 (revised March 2011), Crosshair Exploration & Mining Corp. published a report entitled “Technical Report on the Central Mineral Belt (CMB) Uranium – Vanadium Project, Labrador, Canada”, which includes the mineral resource estimate set out in the table below for the C Zone. This mineral resource estimate is considered to be a “historical estimate” as defined under NI 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). A Qualified Person has not done sufficient work to classify the historical estimate as a current mineral resource, and CUR is not treating the historical estimate as a current mineral resource. An updated technical report in prepared in accordance with NI 43-101 is underway and is expected to be completed in the fourth quarter of 2021. See below under “Technical Disclosure and Qualified Person”.

CMB Project (Uranium and Other Metals)

The CMB Project comprises ~125,000 hectares covering a significant portion of the Central Mineral Belt in Labrador.  There are several known uranium prospects along the CMB which have been identified over decades of historical work in the region.  To date, LUR, in combination with Altius, CUR and its advisors, has generated more than 140 targets meriting further exploration work. 

We believe the CMB is a globally significant Copper and Uranium region.  It is an approximately 260 km long by 75 km wide belt endowed with hundreds of copper, uranium, silver, gold, REE, iron and molybdenum showings.  It overlies the junction of four major geological provinces and affected by major magmatic and orogenic events.  Originally recognized for its copper potential, copper exploration was mostly displaced in favour of uranium in the early 2000s.  This land package contains numerous occurrences of copper, gold, silver, uranium, iron and REEs, with copper, gold and magnetite content showing a strong positive correlation.  Uranium occurs with hematite and/or albite dominant alteration, in breccias or along shear zones.

Notakwanon Project (Uranium)

Located in northern Labrador, approximately 60 km west of the Labrador coast, the Notakwanon Project straddles the Churchill and Nain Provinces boundary.  The Notakwanon Project is accessible by float plane or helicopter from Hopedale, Nain or Happy Valley-Goose Bay.

Previous exploration has identified a cluster of uranium prospects with greater than 20 occurrences.  Three main zones with traces of high-grade uranium mineralization have been identified.  These historical exploration results include:

• Rumble: Grab samples have returned values of up to 3.49% U3O8 and saw-cut channel samples have yielded up to 0.48% U3O8 over 2.5 metres.
• Old School: Grab samples have yielded up to 2.08% U3O8.
• Notak-1: Grab samples have yielded up to 1.81% U3O8

Overall, the Notakwanon prospect is an untested, drill-ready, multi-target project with similarities to basement-style uranium deposits.

Technical Disclosure and Qualified Person

The scientific and technical information contained in this news release was reviewed and approved by Peter Mullens (FAusIMM), CUR’s VP Business Development, who is a “Qualified Person” (as defined in NI 43-101). 

The mineral resource estimate contained in this presentation is considered to be a “historical estimate” as defined under NI 43-101, and has been derived from a report entitled “Technical Report on the Central Mineral Belt (Cmb) Uranium – Vanadium Project, Labrador, Canada” dated January 20, 2011 as revised March 10, 2011 prepared for Crosshair Exploration & Mining Corp. The historical estimate was prepared by C. Stewart Wallis P. Geo, Barry A. Sparkes, P. Geo., Gary H. Giroux, P. Eng. (Qualified Person) using three-dimensional block models utilizing ordinary kriging to interpolate grades into each 10m x 10m x 4m high block. For the purpose of the vanadium mineral resource estimate, a vanadium specific model was created in the Upper C rock package above the C Zone thrust fault. The vanadium model is based on a wireframe solid defining the vanadium mineralized envelope using an external cut-off of approximately 0.1% V2O5. For the purposes of the estimates, a specific gravity of 2.83 was used.

A Qualified Person has not done sufficient work to classify the historical estimate as a current mineral resource, and CUR is not treating the historical estimate as a current mineral resource. The Company would need to conduct an exploration program, including twinning of historical drill holes in order to verify the Moran Lake historical estimate as a current mineral resource.

About Consolidated Uranium Inc.

Consolidated Uranium Inc. (TSXV: CUR) (OTCQB: CURUF) was created in early 2020 to capitalize on an anticipated uranium market resurgence using the proven model of diversified project consolidation. To date, the company has acquired or has the right to acquire uranium projects in Australia, Canada, Argentina and the United States each with significant past expenditures and attractive characteristics for development. Most recently, the Company entered a transformational strategic acquisition agreement and alliance with Energy Fuels Inc (NYSE American: UUUU) (TSX: EFR), a leading U.S.-based uranium mining company, to acquire a portfolio of permitted, past-producing conventional uranium and vanadium mines in the Utah and Colorado. These mines are currently on stand-by, ready for rapid restart as market conditions permit, positioning CUR as a near-term uranium producer.

Philip Williams
President and CEO
+1 778 383 3057
pwilliams@consolidateduranium.com

In Europe:
Swiss Resource Capital AG
Jochen Staiger
info@resource-capital.ch
www.resource-capital.ch

Neither TSX Venture Exchange nor its Regulations Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Statement Regarding Forward-Looking Information.

This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. “Forward-looking information” includes, but is not limited to, statements with respect to the completion of the Arrangement and the Altius Transaction; the anticipated timing of the Meeting, closing of the Arrangement and the Listing; the anticipated timing of a technical report on the Moran Lake project. the anticipated benefits of the Arrangement for CUR shareholders; the satisfaction or waiver of  the closing conditions set out in the Arrangement Agreement and the purchase agreement for the Altius Projects, including receipt of all regulatory approvals; the field exploration program anticipated for 2022; the anticipated management team and board of directors of LUR; and the satisfaction final approval of the Agreement by the TSX Venture Exchange and other activities, events or developments that the Company expects or anticipates will or may occur in the future. Generally, but not always, forward-looking information and statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or the negative connotation thereof or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved” or the negative connotation thereof. Such forward-looking information and statements are based on numerous assumptions, including the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary regulatory, court and shareholder approvals; the ability of the parties to satisfy, in a timely manner, the other conditions to the completion of the Arrangement, the Listing and the Altius Transaction; that general business and economic conditions will not change in a material adverse manner, that financing will be available if and when needed and on reasonable terms, and that third party contractors, equipment and supplies and governmental and other approvals required to conduct the Company’s planned exploration activities will be available on reasonable terms and in a timely manner. Although the assumptions made by the Company in providing forward-looking information or making forward-looking statements are considered reasonable by management at the time, there can be no assurance that such assumptions will prove to be accurate.

Forward-looking information and statements also involve known and unknown risks and uncertainties and other factors, which may cause actual events or results in future periods to differ materially from any projections of future events or results expressed or implied by such forward-looking information or statements, including, among others: the diversion of management time on Transaction-related issues; expectations regarding negative operating cash flow and dependence on third party financing, uncertainty of additional financing, no known mineral reserves or resources, reliance on key management and other personnel, potential downturns in economic conditions, actual results of exploration activities being different than anticipated, changes in exploration programs based upon results, and risks generally associated with the mineral exploration industry, environmental risks, changes in laws and regulations, community relations and delays in obtaining governmental or other approvals.

Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information or implied by forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking statements or information. The Company undertakes no obligation to update or reissue forward-looking information as a result of new information or events except as required by applicable securities laws.