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The merger of Azarga Uranium (TSX: AZZ; US-OTC: PWURF) and URZ Energy (TSXV: URZ; US-OTC: URZZF) will create a new uranium development company focused on in-situ recovery (ISR) uranium deposits in the United States.

Azarga controls six uranium assets in the U.S. and its flagship project, Dewey Burdock in South Dakota, has received key permits from the Environmental Protection Agency. URZ Energy owns the Gas Hills, Juniper Ridge and Shirley Basin properties in Wyoming and also has properties in Utah and Colorado.

“We think it’s time to put good assets and good people and financial structures together to take advantage of opportunities when the uranium commodity market turns,” says Todd Hilditch, URZ Energy’s executive chairman.

URZ Energy’s CEO, Glenn Catchpole, who has spent the last forty years in the uranium sector, says the business combination will create the preeminent ISR uranium developer in America and that the two companies have been talking about a deal for a few months.

“But Azarga’s Dewey Burdock project has been on my mind for a lot longer than that,” he says, noting that the project was on his radar screen when he was working at a previous company called Uranerz Energy.

“We looked at it then and did a due diligence on it and liked it even more and we put in an offer, which was not successful,” he recalls in an interview. “I was hoping that someday it might come around again and it has. It’s a real company builder. We’ve only been going for about two years as a company … and this is a big leap for us and I can tell you I’m very excited about it.”

Catchpole was the CEO of Uranerz Energy prior to its US$175 million acquisition in 2015 by Energy Fuels (TSX: EFR; NYSE: UUUU). While at Uranerz, Catchpole explored, permitted, built and operated the company’s Nichols Ranch ISR uranium project in Wyoming.

An engineer by training, Catchpole also worked on Cameco‘s (TSX: CCO; NYSE: CCJ) Inkai ISR mine in Kazakhstan, which is held in a joint-venture with the Kazakh government through Kazatomprom. (Catchpole lived in Kazakhstan for six years while general manager of the operation.) Last year Inkai produced 5.5 million pounds U3O8 in 2017. This year it is forecast to produce 6.9 million pounds of U3O8.

Among the things Catchpole likes about Dewey Burdock are its grade (averages 0.25%) and its relatively shallow depth of about 425 feet (129.5 metres).

“The depths weren’t excessive,” he says. “Sometimes with these ISR projects they look good and they have grade and so on, but the depth is such that it increases your operating costs with the drilling. The deeper the well, the more cost.  The last project I was on, it was more like 600 feet (182 metres).”

The project’s average grade of 0.25%, he adds, is “really good in the industry.” “I’ve never had the fortune of being on a project with that kind of grade — I’m used to more of the 0.1% average — so to me it’s got all the elements of a good project.”

The transaction with Azarga Uranium “is timely,” he continues, “with the worldwide growth in nuclear reactor construction and confidence returning to the uranium sector.”

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