LAKEWOOD, CO, Aug. 14, 2018 /CNW/ - Energy Fuels Inc.
(NYSE American: UUUU; TSX: EFR) ("Energy Fuels" or the
"Company"), a leading producer of uranium and vanadium in
the United States, is pleased to
announce that it has completed the previously announced acquisition
from Excalibur Industries ("Excalibur") of royalties on the
Company's 100%-owned Nichols Ranch in situ recovery ("ISR")
project in Wyoming ("Nichols
Ranch"), along with royalties on several operating, standby, and
advanced-stage ISR projects in Wyoming owned and operated by Power Resources,
Inc., a wholly-owned subsidiary of Cameco Corporation
(collectively, the "Royalties"). The Company has also provided the
State of Wyoming with a notice of
its intent to repay and retire its Wyoming Industrial Development
Revenue Bond ("Wyoming Debt"), which has a balance of $8.3 million as of the date of this release.
Acquisition of Royalties:
Today, the Company acquired a 6% - 8% sliding-scale gross
proceeds production royalty on its Nichols Ranch, Hank and
Doughstick properties (Doughstick is a part of the Company's Jane
Dough Project expansion area). This royalty also applies to the
nearby Niles Ranch, Willow Creek,
and Verna Ann properties, which are
important pipeline uranium properties also owned by the Company.
Acquisition of this royalty is expected to significantly decrease
the Company's cost of production at Nichols Ranch. Energy Fuels
also acquired the 4% gross proceeds production royalty on Cameco's
North Butte/Brown Ranch Project ("North Butte"), the Ruby Ranch
Project, and the Greasewood property. North Butte is a fully
permitted and operational project that has been operated by Cameco
as a satellite to its Smith Ranch-Highland ISR Project since 2013.
In November 2017, the Company
announced that this transaction was to occur by way of a merger of
Excalibur with an Energy Fuels subsidiary. However, the parties
subsequently agreed to structure the transaction as a purchase of
assets.
At the closing today, the Company delivered to Excalibur 995,619
common shares of Energy Fuels having a total value of $2.90 Million, which were priced at $3.26 per share based on the volume-weighted
average price ("VWAP") of Energy Fuels' shares on the NYSE American
for the five trading days ending on August
13, 2018, as well as approximately $25,000 cash for all accrued but unpaid royalties
owing to Excalibur at the time of the closing. In addition, the
Company is holding back another 107,221 common shares having a
total value of $0.35 million which,
pending the satisfaction of certain conditions, will be released to
Excalibur six months following the date of closing. These shares
were likewise priced at $3.26 per
share based on the VWAP of Energy Fuels' shares on the NYSE
American for the five trading days ending on August 13, 2018.
Notice of Repayment of Wyoming Debt:
On August 10, 2018, the Company
provided notice to the State of
Wyoming that it intends to repay and retire the entire
outstanding principal balance of its Wyoming Industrial Development
Revenue Bond ("Wyoming Debt") within the next 30 – 60 days. The
Wyoming Debt, which is secured by the Company's Nichols Ranch
Project, currently has a principal balance of $8.3 million. As of June
30, 2018, the Company reported approximately $55.25 million of working capital, including cash
and cash equivalents of $43.2
million, and the Company previously announced its intent to
use a portion of its working capital to repay debt, including the
Wyoming Debt. Repayment of this loan will reduce the Company's
short- and long-term debt and avoid significant future
interest.
Mark S. Chalmers, President and
CEO of Energy Fuels stated: "Today, we strengthened our position in
Wyoming by adding to our assets
and announcing our intent to retire debt. We believe today's
acquisition of the Royalties will be extremely accretive for Energy
Fuels as uranium prices rise, whether due to global supply and
demand fundamentals or through remedies associated with the current
U.S. government investigation into uranium imports into the U.S. As
Energy Fuels increases production, today's acquisition of the 6% -
8% royalty on Nichols Ranch together with our other Wyoming projects will significantly enhance
our operating margins and cash flow profiles. Furthermore, the
acquisition of the 4% gross production royalty on Cameco's
properties, including North Butte which has an extensive production
history and significant in-ground resources, should result in an
attractive return on investment for Energy Fuels and our
shareholders. Cameco has stated that all of their projects in
Wyoming could achieve up to 4
million pounds of production per year within 18 – 24 months of a
production decision. A significant portion of this production would
likely come from the Cameco properties on which we now hold a
royalty, resulting in a very rapid payback on this royalty in an
improved market. Energy Fuels' leverage to increasing uranium
prices just became much stronger with today's acquisition of the
Royalties.
"In sum this quarter, Energy Fuels is deploying almost
$12 million of capital into the
State of Wyoming. Furthermore, by
lowering the costs at our projects, we are in a position to make
future investments in Wyoming
sooner than we were before. We are committed to Wyoming and its people, and we look forward to
continuing to operate responsibly in the State for many years to
come."
About Energy Fuels: Energy Fuels is a leading
integrated US-based uranium mining company, supplying
U3O8 to major nuclear utilities. Its
corporate offices are in Denver,
Colorado, and all of its assets and employees are in the
western United States. Energy
Fuels holds three of America's key uranium production centers, the
White Mesa Mill in Utah, the
Nichols Ranch Processing Facility in Wyoming, and the Alta Mesa Project in
Texas. 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 is an ISR production center with a licensed capacity of 2
million pounds of U3O8 per year. Alta Mesa is an ISR production center currently
on care and maintenance. 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 also produces vanadium as a by-product of
its uranium production from certain of its mines on the Colorado
Plateau, as market conditions warrant. The primary trading market
for Energy Fuels' common shares is the NYSE American under the
trading symbol "UUUU", and the Company's common shares are also
listed on the Toronto Stock Exchange under the trading symbol
"EFR". Energy Fuels' website is www.energyfuels.com.
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 and vanadium in the U.S.;
the Company's intent to repay and retire its Wyoming Debt; any
expectation that the acquisition of the Royalties will be
accretive, will decrease the Company's cost of production, will
enhance the Company's operating margins and cash flow profile, or
will result in an attractive return on investment; any expectations
about future production from the Cameco properties and the pay-back
on the Royalties; any expectations about increases in uranium
prices or the Company's leverage to any increases in uranium
prices; any expectations about the outcome of the current U.S.
government investigation into uranium imports into the
U.S.; 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 and vanadium in the U.S.; the
Company's intent to repay and retire its Wyoming Debt; any
expectation that the acquisition of the Royalties will be
accretive, will decrease the Company's cost of production, will
enhance the Company's operating margins and cash flow profile, or
will result in an attractive return on investment; any expectations
about future production from the Cameco properties and the pay-back
on the Royalties; any expectations about increases in uranium
prices or the Company's leverage to any increases in uranium
prices; any expectations about the outcome of the current U.S.
government investigation into uranium imports into the
U.S.; and other risk factors as described in
Energy Fuels' most recent annual report on Form 10-K 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.
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SOURCE Energy Fuels Inc.