Toronto, Ontario - May 23rd, 2017 - U3O8 Corp. (TSX: UWE), (OTCQB: UWEFF) ("U3O8 Corp." or the "Company") announces that it will seek shareholder approval to undertake a restructuring of its common shares at its Annual and Special Meeting scheduled to be held at 11am on Thursday June 22 at 20 Toronto Street Second Floor, Toronto, Ontario M5C 2B8.

 

U3O8 Corp. has a large shareholder base that resulted from Company acquiring what are now its lead projects from Mega Uranium Ltd. ("Mega") in 2010.  The projects were purchased with U3O8 Corp. shares, and Mega chose to distribute that stock as a dividend in kind to its shareholders.  The result is that U3O8 Corp. now has 18,500 shareholders, 13,500 of whom hold less than 1,000 shares.  The Company incurs significant printing and mailing costs for each shareholder meeting with such a large shareholder base, and the Company intends to reduce the number of small accounts by seeking shareholder permission to implement Steps 1 and 2 as described below: 

 

Step 1: is a consolidation of 1,000 current common shares to 1 new share.  Since the Company would not issue fractional shares, the 13,500 shareholders with accounts of less than 1,000 shares, representing 0.8% of the Company's issued and outstanding shares, would be flagged for payout for the value of their shares based on the market price;

 

Step 2: Immediately after the 1,000 for 1 consolidation, each share would be split by 1,000, to get back to the original share count minus the 0.8% that was held in accounts with less than 1,000 shares.  The sole reason for doing steps 1 and 2 is to allow the Company to pay out the 13,500 shareholders who hold less than 1,000 shares in a cost-effective way, leaving the Company with about 5,000 shareholders.

 

A smaller shareholder base makes it far more practical and cost-effective for the Company to issue shares in spinout companies, such as South American Silica, in which U3O8 Corp holds 39%, to its shareholders.  It would also allow for capital to be raised through rights offerings, in which all shareholders may acquire additional shares in the Company, and not only through private placements, in which only Accredited Investors may participate.

 

Step 3: Immediately after Steps 1 and 2, twenty common shares of the Corporation would be consolidated to one new share. Again, no fractional shares would be issued, and shareholders would not be paid out for fractional shares because it would cost the Company approximately $10 to issue and mail each cheque, whereas the maximum value that a shareholder could lose is that of 19 shares, which at current prices, are worth 67c.

 

The Company is providing this early warning to allow shareholders who hold fewer than 1,000 shares, ample time to increase their shareholding to at least 1,000 shares by June 22, 2017.  To incentivize shareholders to purchase more shares, the Company intends to use the Existing Shareholder Prospectus Exemption through which shares are made available for purchase to all existing shareholders, excluding investment funds, up to a limit of $15,000 per shareholder.  A shareholder may purchase shares to a value greater than this limit if he or she has obtained appropriate advice from a registered investment dealer.  Shares purchased under this rule are subject to a four-month hold period.  Further details will be provided in a separate press release in due course. 

 

 

Richard Spencer, President & CEO of U3O8 Corp. commented; "The Board is recommending that shareholders approve the capital restructuring proposal so as to strengthen the appeal of the Company to a broader spectrum of intuitional investors.  It is hoped that the capital restructuring will lead to a revaluation of the Company based on:

 

Dr. Richard Spencer, P.Geo., CGeol., President and CEO of U3O8 Corp. and a Qualified Person as defined by National Instrument 43-101, has approved the technical information in this news release relating to the Laguna Salada Deposit and the related PEA.