LAKEWOOD,
CO, March 4, 2016 /CNW/
- Energy Fuels Inc. (NYSE MKT:UUUU; TSX:EFR) ("Energy
Fuels" or the "Company"), a leading producer of uranium in
the United States, is pleased to
announce that it has entered into a non-binding Letter of Intent
with Sumitomo Corporation ("Sumitomo") to acquire its 40% interest
in the Company's Roca Honda Project, which would increase the
Company's interest in this project to 100%.
The Roca Honda Project is one of the largest and
highest-grade uranium projects in the U.S., boasting an attractive
project cost profile and total expected production of approximately
25 million pounds of uranium over a nine year mine life, under
improved market conditions, according to a February 27, 2015 Technical Report and
Preliminary Economic Analysis for the Roca Honda Project (the
"PEA"), prepared in accordance with National Instrument 43-101,
Standards of Disclosure for Mineral Projects ("NI 43-101")
(see disclosure below relating to reliance on a PEA).
Upon completion of this acquisition, Energy Fuels
will own 100% of the Roca Honda Project, thereby increasing the
resources held across its entire portfolio by 6.8% (Measured &
Indicated) and 12.4% (Inferred). According to the PEA, the
Roca Honda Project holds a total of 1.5 million tons of Measured
and Indicated Mineral Resources with an average grade of 0.48%
U3O8 containing 14.6 million pounds of
uranium, together with 1.2 million tons of Inferred Mineral
Resources with an average grade of 0.47%
U3O8, containing 11.2 million pounds of
uranium. The project is currently at an advanced stage of
permitting.
In addition, as previously announced, the Company
recently acquired properties adjacent to the Roca Honda Project
that contain significant additional historical resources.
According to a 2007 report prepared by Uranium Resources Inc.,
these adjacent properties contain approximately 0.7 million tons at
a grade of 0.34% eU3O8, containing 4.8
million pounds of uranium. These properties also contain
existing mine infrastructure and excellent exploration prospects,
which have the potential to enlarge the scope of the project and
further improve upon the economics currently described in the PEA
(see disclosure below relating to reliance on historical
resource estimates).
The Roca Honda Project is within shipping
distance of the Company's 100%-owned White Mesa Mill, where mined
material can be processed into uranium concentrate
(U3O8) and sold to nuclear utilities.
Energy Fuels' acquisition of 100% of the Roca Honda Project
provides the Company with a number of benefits, primarily by
providing Energy Fuels with complete control over the project, and
by allowing the Company to completely internalize the benefits from
utilizing its wholly-owned White Mesa Mill to process resources
from the Roca Honda Project. The White Mesa Mill is the only
licensed conventional uranium mill currently operating in the
U.S.
As consideration for the 40% interest that Energy
Fuels will acquire, Energy Fuels will pay to Sumitomo (i) US1.0
million in cash; (ii) US$1.5 million
in common shares of the Company; and (iii) US$4.5 million of cash upon the first commercial
production of uranium from the Roca Honda Project. Closing of
the acquisition is expected to occur in April 2016, and is conditional upon final
Sumitomo approvals, negotiation and execution of definitive
agreements, and receipt of applicable regulatory and stock exchange
approvals.
Sumitomo has indicated to Energy Fuels that they
are divesting of their interests in a number of development-stage
mining assets around the World, including the Roca Honda Project,
in order to focus their asset portfolio more on producing
assets.
Stephen P. Antony,
Energy Fuels' President and CEO stated: "With the expected
acquisition of the remaining interest in the Roca Honda Project
from Sumitomo, we will have obtained 100% control over a
World-class uranium project in the advanced stages of
permitting. This is particularly valuable to us, because we
also own the only operating mill that can produce the uranium
extracted from the Roca Honda Project. The Roca Honda Project
is an important factor in our strategy of combining large-scale
optionality and leverage to improving uranium markets, with our
lower cost production from the Nichols Ranch Project, alternate
feed materials, and certain of our Arizona Strip conventional
properties."
"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."
About Energy Fuels: Energy Fuels is
a leading integrated US-based uranium mining company, supplying
U3O8 to major nuclear utilities. Energy
Fuels operates two of America's key uranium production centers, the
White Mesa Mill in Utah and the
Nichols Ranch Processing Facility in Wyoming. The White Mesa
Mill is the only conventional uranium mill operating in the U.S.
today and has a licensed capacity of over 8 million pounds of
U3O8 per year. The Nichols Ranch
Processing Facility, acquired in the Company's acquisition of
Uranerz Energy Corporation, is an in situ recovery ("ISR")
production center with a licensed capacity of 2 million pounds of
U3O8 per year. Energy Fuels also has
the largest NI 43-101 compliant uranium resource portfolio in the
U.S. among producers, and uranium mining projects located in a
number of Western U.S. states, including one producing ISR project,
mines on standby, and mineral properties in various stages of
permitting and development. The Company's common shares are
listed on the NYSE MKT under the trading symbol "UUUU", and on the
Toronto Stock Exchange under the trading symbol "EFR".
Stephen P. Antony, P.E., President &
CEO of Energy Fuels, is a Qualified Person as defined by
Canadian National Instrument 43-101 and has reviewed and approved
the technical disclosure contained in this news release.
Readers should be cautioned that the PEA is preliminary in
nature, that it includes inferred mineral resources that are
considered too speculative geologically to have the economic
considerations applied to them that would enable them to be
categorized as mineral reserves, and there is no certainty that the
PEA will be realized. Readers should also be cautioned
that a qualified person has not done sufficient work to classify
this historical estimate as a current estimate of mineral resources
or mineral reserves in accordance with NI 43-101. This
historical resource estimate from 2007 was classified as a
"Probable Reserve." However, this category was applied
without using applicable mining standards and economics, and should
not be considered reserves by industry definition. The
Company believes this historical estimate is relevant and reliable,
as the methodology was well documented and utilized industry
standard practice. However, the methodologies used do not
reflect current best industry practices. The Company does not
consider these historical estimates to be equivalent to current
mineral resources or mineral reserves as defined in NI 43-101, nor
has the Company completed sufficient work to confirm a NI 43-101
compliant resource. Therefore, the historical estimates
cannot, and should not, be relied upon as NI 43-101 resources or
reserves.
Cautionary Note Regarding Forward-Looking
Statements: Certain information contained in this
news release, including: any information relating to the Company
being a leading producer of uranium;the Company's
expectations as to longer term fundamentals in the market and price
projections; scalability, and the Company's ability to be able to
restart or increase production as market conditions warrant; the
ability of the Company to complete the acquisition of the remaining
40% interest in Roca Honda and to
realize the expected benefits of the acquisition; the expected
costs or production of the Company's projects; estimates relating
to current mineral resources; expectations regarding exploration
potential; and any other statements regarding Energy Fuels'
future expectations, beliefs, goals or prospects; constitute
forward-looking information within the meaning of applicable
securities legislation (collectively, "forward-looking
statements"). All statements in this news release that are
not statements of historical fact (including statements containing
the words "expects", "does not expect", "plans", "anticipates",
"does not anticipate", "believes", "intends", "estimates",
"projects", "potential", "scheduled", "forecast", "budget" and
similar expressions) should be considered forward-looking
statements. All such forward-looking statements are subject
to important risk factors and uncertainties, many of which are
beyond Energy Fuels' ability to control or predict. A number
of important factors could cause actual results or events to differ
materially from those indicated or implied by such forward-looking
statements, including without limitation factors relating to:
the Company being a leading producer of uranium; the
Company's expectations as to longer term fundamentals in the market
and price projections; scalability, and the Company's ability to be
able to restart or increase production as market conditions
warrant; the ability of the Company to complete the acquisition of
the remaining 40% interest in Roca
Honda and to realize the expected benefits of the
acquisition; the expected costs or production at the Company's
projects; estimates relating to current mineral resources;
expectations regarding exploration potential; and other risk
factors as described in Energy Fuels' most recent annual
information forms and annual and quarterly financial
reports. Energy Fuels assumes no obligation to update
the information in this communication, except as otherwise required
by law. Additional information identifying risks and
uncertainties is contained in Energy Fuels' filings with the
various securities commissions which are available online at
www.sec.gov and www.sedar.com. Forward-looking statements
are provided for the purpose of providing information about the
current expectations, beliefs and plans of the management of Energy
Fuels relating to the future. Readers are cautioned that such
statements may not be appropriate for other purposes. Readers
are also cautioned not to place undue reliance on these
forward-looking statements, that speak only as of the date
hereof.
Cautionary Note to United States Investors
Concerning Estimates of Measured, Indicated and Inferred
Resources: This news release contains certain disclosure
that has been prepared in accordance with the requirements of
Canadian securities laws, which differ from the requirements of
U.S. securities laws. Unless otherwise indicated, all reserve
and resource estimates included in this news release have been
prepared in accordance with Canadian National Instrument 43-101 –
Standards of Disclosure for Mineral Projects ("NI 43-101") and the
Canadian Institute of Mining, Metallurgy and Petroleum ("CIM")
classification system. Canadian standards, including NI
43-101, differ significantly from the requirements of U.S.
securities laws, and reserve and resource information contained in
this news release may not be comparable to similar information
disclosed by companies reporting only under U.S. standards.
In particular, the term "resource" does not equate to the term
"reserve" under SEC Industry Guide 7. United States investors are cautioned not to
assume that all or any of Measured or Indicated Mineral Resources
will ever be converted into mineral reserves. Investors are
cautioned not to assume that all or any part of an "Inferred
Mineral resource" exists or is economically or legally
minable. Energy Fuels does not hold any Reserves as that term
is defined by SEC Industry Guide 7. Please refer to the
section entitled "Cautionary Note to United States Investors
Concerning Disclosure of Mineral Resources" in the Company's Annual
Information Form dated March 18, 2015
for further details.
SOURCE Energy Fuels Inc.