Mr. Glenn Catchpole of URZ reports

AZARGA URANIUM AND URZ ENERGY ANNOUNCE MERGER TO CREATE NEW US FOCUSED ISR URANIUM DEVELOPMENT COMPANY

URZ Energy Corp. and Azarga Uranium Corp. have executed a definitive arrangement agreement pursuant to which Azarga Uranium and URZ Energy will merge to form a new U.S.-focused in situ recovery (ISR) uranium development company. The combination will be effected by way of a plan of arrangement completed under the Business Corporations Act (British Columbia) wherein Azarga Uranium will acquire all of the issued and outstanding shares of URZ Energy for consideration of 2.0 Azarga Uranium shares for each URZ Energy share held. Upon completion of the transaction, the board of directors of Azarga Uranium will include three appointees from each company, with Glenn Catchpole, current chief executive officer and director of URZ Energy, to be appointed as chairman. Blake Steele, current president and chief executive officer of Azarga Uranium, will continue in his role as president and chief executive officer of Azarga Uranium.

Mr. Steele commented: "This strategic transaction brings together two companies with a similar goal of developing U.S.-focused ISR uranium production at a time when domestic supply has emerged as a critical factor in the push for energy security. URZ Energy's asset base and management expertise combined with ours will further bolster our growth pipeline and position us to continue to advance the development of Dewey Burdock for the benefit of all shareholders."

Mr. Catchpole added: "We had great success building, and ultimately selling, Uranerz in the past and now we have the opportunity to partner our assets and expertise with Azarga Uranium to create the pre-eminent ISR uranium developer in America. I believe the transaction is timely, with the worldwide growth in nuclear reactor construction and confidence returning to the uranium sector."

Transaction highlights:

• Consolidation of uranium assets with a focus on the United States: Combined measured and indicated (M&I) resources are 30.7 million pounds of triuranium octoxide (U3O8), plus additional inferred resources of 8.7 million pounds U3O8, all located in the United States, including high-grade M&I resources of 8.6 million pounds U3O8 at an average grade of 0.25 per cent U3O8 at the advanced permitting-stage Dewey Burdock project.
• Advanced-stage permitting at Dewey Burdock: The Dewey Burdock project has already received several key permits and is in the process of obtaining final regulatory approvals required for project construction. A National Instrument 43-101 preliminary economic assessment on ISR production at Dewey Burdock completed in 2015 estimated annual production of approximately one million pounds U3O8/year.
• Pipeline of growth assets with continued exploration potential: The Gas Hills project, which has been the subject of historical mining, has been recently reinterpreted by URZ Energy for its potential to be mined via ISR methods. An additional pipeline of assets located in Wyoming, including Juniper Ridge and Shirley basin, provide further uranium optionality.
• Amalgamation of sector-leading ISR development and production experience: Through its management, directors and advisers, the new company will collectively possess over 100 years of experience in the exploration, development, permitting, operation and postmining groundwater restoration of ISR uranium mines.
• Strategic platform for further consolidation: Strengthened platform through which to continue to evaluate and consolidate additional low-cost, domestic ISR uranium projects in the United States.
• Enhanced market positioning: The combined entity will have a more diversified shareholder base, along with a heightened market capitalization to broaden investor and analyst appeal.

Transaction details

Under the terms of the arrangement agreement, URZ Energy shareholders will receive 2.0 shares of Azarga Uranium for each share of URZ Energy held. In addition, outstanding options and warrants of URZ Energy will be adjusted in accordance with their terms such that the number of Azarga Uranium shares received upon exercise and the exercise price will reflect the exchange ratio described above.

The combination will be carried out by way of a court-approved plan of arrangement and will be subject to the approval of at least 66-2/3rds per cent of the votes cast at a special meeting of URZ Energy shareholders. Azarga Uranium shareholder approval will also be required in accordance with the requirements of the Toronto Stock Exchange. Shareholder meetings of both companies are expected to be held in late June, 2018. The transaction is also subject to the conversion of certain liabilities of Azarga Uranium into shares prior to closing, including Azarga Uranium's $1.8-million (U.S.) loan payable to shareholders, which the shareholders have agreed to convert at 25 cents/share, subject to completion of the transaction, as well as applicable regulatory approvals and the satisfaction of other closing conditions customary for transactions of this nature.

Within five days of signing the arrangement agreement, URZ Energy has also agreed to advance Azarga Uranium $465,000 (U.S.) by way of a secured loan.

The arrangement agreement includes customary provisions, including reciprocal non-solicitation, right to match and fiduciary-out provisions, as well as standard representations, covenants and conditions for a transaction of this nature. Both parties have agreed to pay a termination fee of $825,000 (U.S.) upon the occurrence of certain terminating events.

Certain shareholders, including directors and officers, of each of Azarga Uranium and URZ Energy, holding a total of 37.7 per cent and 8.2 per cent, respectively, have entered into voting and support agreements to, among other things, vote their shares held in favour of the transaction. In addition, these shareholders have agreed to lock up their shareholdings for a period of time extending until 180 days after closing of the transaction.

The boards of directors of both Azarga Uranium and URZ Energy have each determined that the proposed transaction is in the best interest of their respective shareholders, having taken into account advice from their financial and legal advisers, as applicable, and have each unanimously approved the transaction and recommend that their respective shareholders vote in favour of the transaction.

Full details of the arrangement will be included in management information circulars to be filed by each of Azarga Uranium and URZ Energy with regulatory authorities and mailed to each party's respective shareholders in accordance with applicable securities laws. It is expected that the management information circulars for each party will be mailed to shareholders by late May, 2018.

The transaction is expected to be completed in July, 2018, or such other date as the parties may agree.

Advisers and counsel

Blake, Cassels & Graydon LLP is acting as legal counsel to Azarga Uranium.

Haywood Securities Inc. is acting as financial adviser to URZ Energy, and has provided a fairness opinion to the board of directors of URZ Energy that, as of the date thereof and subject to the assumptions, limitations and qualifications set out therein, the transaction is fair, from a financial point of view, to the shareholders of URZ Energy. Gowling WLG (Canada) LLP is acting as legal counsel to URZ Energy.

Qualified persons and technical information

The Azarga Uranium technical information in this news release has been prepared in accordance with the Canadian regulatory requirements set out in NI 43-101 and was reviewed by John Mays, PE, chief operating officer of Azarga Uranium and a qualified person under NI 43-101.

The URZ Energy technical information in this news release has been prepared in accordance with the Canadian regulatory requirements set out in NI 43-101 and was reviewed by Mr. Catchpole, a qualified person under NI 43-101.

Scientific or technical information contained herein relating to the Dewey Burdock project is derived from the April 21, 2015, technical report titled "NI 43-101 Technical Report, Preliminary Economic Assessment, Dewey-Burdock Uranium ISR Project, South Dakota, USA."

Mineral resources that are not mineral reserves do not have demonstrated economic viability.

About Azarga Uranium Corp.

Azarga Uranium is an integrated uranium exploration and development company that controls six uranium projects, deposits and prospects in the United States (South Dakota, Wyoming and Colorado) and the Kyrgyz Republic. The Dewey Burdock in situ recovery uranium project in South Dakota, which is the company's initial development priority, has received its nuclear regulatory commission licence and draft Class 3 and Class 5 underground injection control (UIC) permits from the Environmental Protection Agency (EPA), and the company is in the process of completing other major regulatory permit approvals necessary for the construction of the Dewey Burdock project, including the final Class 3 and Class 5 UIC permits from the EPA.

About URZ Energy Corp.

URZ Energy is a uranium exploration and development company that is primarily engaged in the evaluation, acquisition and development of prospective ISR uranium properties in the United States. URZ Energy owns the Gas Hills, Juniper Ridge and Shirley basin properties in Wyoming as well as properties in Utah and Colorado. Mr. Catchpole is a licensed engineer with 40 years of uranium experience, including extensive work with Cameco Corp. on its Inkai project in Kazakhstan. Additionally, Mr. Catchpole was the former chief executive officer of Uranerz Energy Corp. prior to its $175-million (U.S.) acquisition by Energy Fuels Inc. in 2015.

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