LAKEWOOD, CO, March 7, 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
definitive agreement to acquire Mesteña Uranium, LLC
("Mesteña"), a well-known, closely-held uranium producer
that operates the Alta Mesa ISR Project ("Alta Mesa")
located in Brooks and Jim Hogg Counties, Texas (the "Transaction").
Pursuant to the Transaction, Energy Fuels will issue 4,551,284
common shares of the Company to the current owners of
Mesteña. The closing of the Transaction is expected to occur
on or before May 4, 2016, subject to
the receipt of all applicable regulatory and stock exchange
approvals and the satisfaction of certain other conditions to
closing.
(Photo: http://photos.prnewswire.com/prnh/20160307/340869)
Transaction Highlights
- Acquisition of Mesteña will further cement Energy Fuels'
position as the dominant integrated uranium producer in the
U.S.
- Alta Mesa is a fully-permitted
and constructed in situ recovery ("ISR") operation
and processing facility, with a well-established track record of
lower cost uranium production.
- Alta Mesa will diversify Energy
Fuels' operations into a 3rd production center, along
with the Nichols Ranch ISR Project (Wyoming) and the White Mesa Mill (Utah).
- Fully-licensed and constructed ISR processing facility that has
an operating capacity of 1.5 million pounds of uranium per
year.
- Alta Mesa is currently on
standby and ready to resume production, as market conditions
warrant. It can reach commercial production levels with
limited required capital within six months of a production
decision.
- Control of a large land package totaling 195,501 contiguous
acres, including 4,575-acres currently under a lease and mining
permit and 190,926-acres under a lease-option and
exploration/testing permit.
- Mesteña has extensive exploration results across the area that
have identified significant uranium resources that Energy Fuels
expects can be recovered at lower costs, as market conditions
warrant.
- Between Alta Mesa, Nichols Ranch, and the White Mesa Mill, Energy
Fuels' licensed processing capacity will exceed 11.5 million pounds
of uranium per year.
- Alta Mesa produced a total of
4.6 million pounds of uranium between October 2005 and November
2013, including 1 million pounds of uranium per year over a
two year period.
- Mesteña's operations are located on private land, with 100% of
minerals owned in fee, and in a supportive jurisdiction with
primary regulatory authority residing with the State of Texas.
- With low holding costs, Mesteña provides fully permitted
lower-cost production scalability that can be brought into
production as uranium prices improve, thereby improving Energy
Fuels' ability to respond to improvements in market conditions and
at lower prices.
Stephen P. Antony, President and
CEO of Energy Fuels commented: "Since we acquired Uranerz
Energy Corporation in June 2015,
Energy Fuels has not only added uranium production at the lower end
of our cost curve, we've also gained valuable experience in the ISR
uranium business. Mesteña is well-known within the U.S.
nuclear industry and has an impressive record of recent
production. Most importantly, the Alta Mesa Project is
fully-permitted and constructed, and ready to go into production
within a short period of time. We believe this transaction
creates significant value for our shareholders, as we are acquiring
operational processing facilities and permitted resources, which
would otherwise take many years and tens of millions of dollars to
permit and construct ourselves. I should also mention that
our current Executive Vice President of ISR Operations in
Wyoming, Paul Goranson, oversaw the Alta Mesa Project for
several years. He has intimate knowledge of the operations,
including its costs, production profile and in-ground uranium
resources. In my view, Mesteña was the next logical
acquisition in growing Energy Fuels' ISR capability. We look
forward to closing the transaction within the next few months."
Cantor Fitzgerald Canada Corporation and Haywood Securities Inc.
are acting as financial advisors to Energy Fuels, and Raymond James
Ltd. is acting as financial advisor to Mesteña in connection with
the Transaction.
There is an existing June 1, 2014
historical resource estimate for a portion of the properties,
prepared by Douglas L. Beahm, P.E., P.G., that is not currently
compliant with National Instrument 43-101 – Standards for
Disclosure of Mineral Projects ("NI 43-101"). This recent
historical estimate shows that the Alta Mesa Project currently
contains 1.6 million tons of Measured and Indicated Mineral
Resources with an average grade of 0.11%
eU3O8 containing 3.6 million pounds of
uranium, in addition to 7.0 million tons of Inferred Mineral
Resources with an average grade of 0.12%
eU3O8 containing 16.8 million pounds of
uranium. In addition, the technical report summarizes the
resources currently contained in certain exploration targets,
including 2.6 million tons of material with an average grade
ranging from 0.08% - 0.12% eU3O8 containing
4.1 – 6.6 million pounds of uranium (see disclosure below
relating to reliance on historical resource
estimates).
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 a qualified person has
not done sufficient work to classify the historical resource
estimate referred to above as a current estimate of mineral
resources or mineral reserves, and as such the Company is not
treating it as a current estimate of mineral reserves or mineral
resources. However, the Company believes the estimate is
relevant and reliable, as it was prepared within the last two years
by a reputable mining consultant. In order to upgrade and
verify this historical estimate and classify it as a current
mineral resource estimate, the Company needs to perform further
evaluations of the report and confirm that its underlying
assumptions continue to be reasonable and that the report is
complete and current. The Company expects to perform this
evaluation and update the historical report to a NI 43-101
compliant technical report, which is expected to be filed on
SEDAR.
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".
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 Mesteña and
to realize the expected benefits of the acquisition; the expected
timelines for the development and recommencement of production at
the Alta Mesa Project; the expected capital requirements, costs or
production at the Alta Mesa Project; estimates relating to current
mineral resources; expectations regarding exploration potential;
expectations regarding holding costs, 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 Mesteña and to realize the expected
benefits of the acquisition; the expected timelines for the
development and recommencement of production at the Alta Mesa
Project; the expected, capital requirements, costs or production at
the Alta Mesa Project; estimates relating to current mineral
resources; expectations regarding exploration potential;
expectations regarding holding costs, 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.