Uranium Energy acquires licensed Reno Creek project
10 May 2017
Uranium Energy Corp (UEC) has entered a definitive share purchase agreement with Pacific Road Resources Funds to acquire all issued and outstanding shares of Reno Creek Holdings. The agreement allows UEC to buy 100% of Pacific Road's fully permitted Reno Creek in-situ leach (ISL) project in the Powder River Basin, Wyoming. Pacific Road, a mining private equity firm, will own about 9% of UEC's common shares at closing of the transaction.
Announcing the agreement yesterday, UEC said Reno Creek hosts an NI 43-101 measured and indicated resource of 27.47 million tons grading 0.041% U3O8 yielding 21.98 million lbs U3O8 at a grade-thickness cut-off of 0.20. The NI 43-101 resource report also indicates potential to expand the resource with additional drilling.
The US Nuclear Regulatory Commission issued a Source and By-Product Materials Licence for Reno Creek in February. This was supported by a final environmental impact statement and record of decision to permit production of up to 2 million lbs U3O8 per year.
A pre-feasibility study on Reno Creek, completed in 2014, demonstrated strong project economics with low capital and operating costs consistent with ISL projects in Wyoming, UEC said. An updated pre-feasibility study is in progress.
Amir Adnani, president and CEO of Corpus Christi, Texas-headquartered UEC, said the acquisition of Reno Creek creates an "industry-leading diversified pipeline" of low-cost ISL uranium projects when combined with its "production-ready" South Texas hub-and-spoke operations and exploration/development portfolio in Paraguay.
The Reno Creek Project presents a "rare opportunity" to acquire a large, fully permitted, construction ready, and strategic low-cost ISL asset located in the USA, he said, describing them as a "complete set of attributes" for any potential UEC acquisition. He noted that the Powder River Basin has produced over 85 million lbs U3O8 historically, and is currently home to two of the largest uranium producers in the world - Canada's Cameco and Russia's Uranium One.
Dan Wilton, partner at Pacific Road, said the UEC team "has the right technical, operating and financing capabilities to deliver the true value of Reno Creek". The combination of UEC and Reno Creek creates "one of the most attractive portfolios" of USA-based low cost ISR uranium assets, he said, and is an important step in the consolidation of the country's ISL uranium sector.
The source materials licence was the last major permit required to proceed with the development of the project, allowing Reno Creek to process up to 2 million pounds of uranium a year from five resource units - North Reno Creek, Southwest Reno Creek, Moore, Bing, and Pine Tree. Within the five resource units are 16 proposed production units and associated wellfields, header houses, and a central processing plant.
The project has involved cumulative expenditures to date of about $60 million.
Researched and written
by World Nuclear News