One interesting aspect of WUC's annual report is an exhibit...

One interesting aspect of WUC's annual report is an exhibit related to the proposed Pinon Ridge Mill. The exhibit is an extension of the letter of intent between WUC and Pinon Ridge Corporation. The LOI contemplates the mill's processing of WUC ore and ablated concentrate at a cost to be determined, in exchange for WUC's provision of the ablation technology to the Pinon Ridge Mill. More interesting is WUC's agreement to reimburse Pinon Ridge for unspecified pre-development costs presumably related to the mill's licensing efforts.

Pinon Ridge is a private company controlled by George Glasier and Russell Fryer Both are WUC directors and insiders. Any payments flowing from WUC to Pinon Ridge must be disclosed by WUC, but information about the disposition of the funds by Pinon Ridge would not be disclosed to WUC investors.

What has never been fully disclosed by Mr. Glasier is how and why the 2014 acquisition of assets from Energy Fuels was bifurcated between WUC and Pinon Ridge Corporation. In mid-2014, Colorado newspapers covered Glasier and Fryer's purchase of various uranium assets, including mines and the mill license, from Energy Fuels. Details were sparse, but later disclosures by Energy Fuels shed more light on the transactions. In August 2014, Energy Fuels sold the mines, including the Sunday Mines Complex and others, to Pinon Ridge Mining, LLC, the private company that later in the year engineered a reverse takeover of Canadian reporting issuer Homeland Uranium, changing the name to Western Uranium Corporation.

During November 2014, Energy Fuels sold the Pinon Ridge Mill license and related assets to Pinon Ridge Corporation, the private company controlled by Glasier and Fryer. WUC has never disclosed why the mill license was not included with the mines it acquired and instead was purchased by a private, non-reporting company controlled by its two largest shareholders.

It is pure speculation, but could the reason be that the consideration for the mill license was the assumption of debt incurred by Energy Fuels during the licensing process, and that Glasier and Fryer wanted such debt to be held by an off-balance-sheet entity? The fact that the LOI calls for WUC to reimburse Pinon Ridge Corporation raises the questions, why does cash have to be transferred from WUC to Pinon Ridge, and how will this affect WUC shareholders?

The LOI extension includes the subject line: "Definitive Agreement for the Acquisition of Pinon Ridge Resources Corporation (‘PRR’) by Western Uranium Corporation (‘Western’) as contemplated by the Letter of Intent dated November 2, 2017 between Western Uranium Corporation and Pinon Ridge Corporation (“PRC”) (the “Definitive Agreement”). "

The original announcement of the LOI omits any mention of acquiring Pinon Ridge Resources Corporation, the Pinon Ridge Corporation subsidiary that holds the mill license. Is it possible that the plan has evolved from WUC reimbursing certain mill-related costs to WUC purchasing the subsidiary and license from Glasier and Fryer's private company?