Colorado-based Energy Fuels Incorporated has agreed to sell three wholly owned subsidiaries that together make up the Alta Mesa in-situ leaching (ISL) project to Texas-based enCore Energy Corporation for a total of one hundred and twenty million dollars. When the deal closes, Energy Fuels will receive sixty million dollars. They will also receive a secured convertible note for sixty million dollars which will be payable in two years. EnCore will also assume all reclamation liabilities associated with the Alta Mesa project. Energy Fuels acquired the Alta Mesa project from Mesteña Uranium for about thirteen and a half million dollars in 2016.
The fully licensed and constructed Alta Mesa ISL project and central processing facility has an operating capacity of one and a half million pounds of U3O8 per year. The project has inferred resources of sixteen and three quarter million pounds of U3O8.
EnCore’s portfolio includes the licensed and past-producing Rosita and Kingsville Come ISL operations in South Texas as well as the development-stage Dewey-Burdock in South Dakota and Gas Hills in Wyoming projects. EnCore says that the Alta Mesa project can reach commercial production levels with limited required capital in ten months of a production decision. The addition of the Alta Mesa project will boost EnCore’s total uranium processing capacity to three and a half million pounds of U3O8 per year.
William Sheriff is the Executive Chairman of enCore. He said that it will “further cement enCore's commitment to near-term US-based uranium production with our initial focus on South Texas. Alta Mesa will immediately become a flagship asset amongst our large project portfolios.”
Paul Goranson is the CEO of enCore. He said, “Combined with our South Texas operations that are anchored around our Rosita project, this acquisition puts us in an exceptionally strong position to advance towards being a long-term sustainable source of uranium production to fuel clean nuclear energy that will benefit our local communities, the state of Texas, and the United States.”
In addition to uranium, Energy Fuels produces vanadium and is also developing commercial production of rare-earth carbonate as well as looking to develop the separation of radioisotopes from its mineral processing streams. Its assets include the White Mesas Mill in Utah which is the only currently operating conventional uranium mill in the U.S. They also own the Nichols Ranch ISL project in Wyoming which is currently on standby.
Mark Chalmers is the CEO of Energy Fuels. He said that the money from the Alta Mesa project will allow the company to focus on and accelerate its higher priority uranium and vanadium projects. He added that the company is carrying out work towards restarting production at one of more of its projects with production expected to start as soon as 2023. The cash from the Alta Mesa deal will help further fund this ramp-up. The company will also retains some exposure to short-term market upside and optionality at Alta Mesa and enCore through the convertible note.
Energy Fuels also plans to establish an ore purchasing program from future uranium mining from other to maximize currently underutilized capacity at White Mesa according to Chalmers. He said that it will “help to both finance and focus our plans in this regard without dilution associated with equity financings.”