USEG Update

Last week, U.S. Energy Corp. (Nasdaq: USEG) announced that it was postponing its Q2 conference call from Friday, August 15th to Friday, August 21st. Today it looks like we found out why, from this press release: "U.S. Energy Corp. Signs Exploration Development and Mine Operating Agreement With Thompson Creek Metals Company Inc."

As I mentioned in the comment thread of an earlier post ("A Conversation with the CEO of USEG"), the company's plan had been to partner with a larger mining company that would cover the bulk of the development costs of the Lucky Jack molybdenum project in return for the bulk of the potential proceeds from the mine; the agreement announced today gives Thompson Creek (NYSE: TC; TSX: TCM.TO) the option to be that partner. Under the terms of the agreement, if USEG and Thompson Creek develop the mine, Thompson Creek has the option of acquiring up to a 75% interest in the mine if it spends $393.5 million in development costs and pays USEG $6.5 million in option payments.