Energy Fuels acquisitions cement US position

08 March 2016

Energy Fuels is to take full ownership of the Roca Honda uranium project in New Mexico and has also announced that it is to acquire Mesteña Uranium, operator of the Alta Mesa in-situ leach (ISL) uranium project in Texas.

The company announced on 4 March that it had signed a non-binding letter of intent to buy Sumitomo Corporation's 40% interest in Roca Honda, giving it 100% ownership of the project. In return, Energy Fuels will pay Sumitomo $1.0 million in cash; $1.5 million in common shares; and $4.5 million in cash upon the first commercial production of uranium from the project. Closing of the acquisition is expected to occur next month, and is conditional upon final Sumitomo approvals, the negotiation and execution of definitive agreements, and receipt of applicable regulatory and stock exchange approvals.

Energy Fuels describes Roca Honda, in north-western New Mexico, as one of the largest and highest grade uranium development projects in the USA, with 14.6 million pounds U3O8 (5615 tU) of measured and indicated resources and 11.2 million pounds (4308 tU) of inferred resources. The project is undergoing permitting and is within shipping distance of Energy Fuels' wholly owned White Mesa uranium mill in Utah. Last year Energy Fuels acquired properties adjacent to the project which it says contain "significant additional historical resources".

The company said that acquisition of 100% of Roca Honda, as well as providing it with complete control over the project, would allow it to "completely internalize" the benefits from using White Mesa - the only licensed conventional uranium mill currently operating in the USA - to process resources from Roca Honda.

Sumitomo had indicated to Energy Fuels that it is divesting of its interests in "a number of development-stage mining assets" around the world in order to focus on producing assets, the company said. "We have appreciated Sumitomo's participation in the Roca Honda Project over the years as a valued joint venture partner. We understand and respect Sumitomo's decision to change its business focus. We will be very pleased to be able to obtain complete control over this major project on the terms negotiated with Sumitomo," Energy Fuels president and CEO Stephen Antony said.

Mesteña purchase

Energy Fuels announced yesterday that it has entered into a definitive agreement to acquire Mesteña Uranium, and will issue 4,551,284 common shares of the company to the current owners of Mesteña. The transaction is expected to take place on or before 4 May, subject to the receipt of all applicable regulatory and stock exchange approvals and the satisfaction of other conditions.

Mesteña owns Alta Mesa, a fully permitted and constructed ISL operation and uranium processing facility with an operating capacity of 1.5 million pounds U3O8 (577 tU) per year. It is currently on standby, and has not produced uranium since 2013, but Energy Fuels said that it is ready to resume production, as market conditions warrant, and can reach commercial production levels within six months of a production decision.

The company said that Alta Mesa would diversify its operations into a third production centre, along with the Nichols Ranch ISL project in Wyoming and the White Mesa mill, and would "further cement Energy Fuels' position as the dominant integrated uranium producer in the US."

With the acquisition of Alta Mesa, Energy Fuels' total licensed uranium processing capacity will exceed 11.5 million pounds U3O8 (4423 tU) per year.

The company said in its guidance for the 2016 financial year, published yesterday, that it expects to produce about 950,000 pounds U3O8 (365 tU) in 2016, including 350,000 pounds U3O8 (135 tU) from Nichols Ranch and 600,000 pounds U3O8 (231 tU) from White Mesa using previously mined stockpiled material. This is up from 2015's production of 468,000 pounds U3O8 (180 tU), which included 296,000 pounds U3O8 (114 tU) produced at White Mesa (72,000 pounds of which were toll processed for a third party), and 172,000 pounds U3O8 (66 tU) produced at Nichols Ranch after Energy Fuels' acquisition of Uranerz in June 2015.

Researched and written
by World Nuclear News