Mr. Victor Tanaka reports

BAYSWATER TO SELL REMAINING INTEREST IN THE RENO CREEK URANIUM PROJECT TO URANIUM ENERGY CORP.

Bayswater Uranium Corp. has provided the following update. Pacific Road Resources Funds (PRRF) has entered into a definitive share purchase agreement with Uranium Energy Corp. (UEC) to sell all of PRRF's issued and outstanding shares of Reno Creek Holdings Inc. (RCHI) and, indirectly thereby, 100 per cent of the fully permitted Reno Creek in situ recovery (ISR) uranium project located in the Powder River basin, Wyoming.

Bayswater presently owns a 2.73-per-cent interest in RCHI and has received notice from PRRF whereby PRRF has exercised certain drag-along rights requiring Bayswater to sell its 2.73-per-cent interest in RCHI to UEC for prorated consideration identical to the consideration being issued to PRRF.

Transaction details

Under the terms of the agreement, UEC will issue to Bayswater, in return for the company's 2.73-per-cent ownership interest in RCHI, the following:

• 392,927 shares of UEC;
• 308,728 warrants of UEC, with each warrant entitling the holder to acquire one share of UEC at an exercise price of $2.30 (U.S.) per share for a period of five years from closing. The warrants will have an accelerator clause that provides that, in the event that the closing price of UEC's common shares on its principally traded exchange is equal to or greater than $4 (U.S.) per share for a period of 20 consecutive trading days, UEC may accelerate the expiry date of the warrants to within 30 days by providing written notice to the holders;
• At Bayswater's election to be made in writing prior to the closing date for the transaction, a 0.01403-per-cent net profit interest royalty capped at $70,165.50 (U.S.) or the payment of $2,807 (U.S.).

All securities issued to Bayswater are subject to a four-month hold period pursuant to applicable securities legislation, and UEC has agreed to register the UEC shares issuable with the U.S. Securities and Exchange Commission for resale in the United States. Further information about the transaction and the project are available from UEC's May 9, 2017, news release.

Subject to NRC (U.S. Nuclear Regulatory Commission) and receipt of such other regulatory approvals as may be required to complete the transaction, the sale of RCHI is expected to close on or about July 31, 2017.