On Monday, Energy Fuels (NYSE: UUUU) (TSX: EFR) announced that it has entered into a definitive agreement to sell its Alta Mesa uranium in-situ recovery project to enCore Energy for total consideration of $120 million.
Energy Fuels said that this transaction is significant for the company, as the cash received is expected to fully finance much of the company’s uranium, REE, vanadium and medical isotope business plans for the next two to three years without diluting shareholders.
According to a news release, Energy Fuels acquired Alta Mesa in 2016 for approximately $13.6 million of shares, and currently carries this project on its balance sheet at $8.2 million.
“The transaction represents an exceptional return on investment for Energy Fuels, and the value metrics of the transaction compare favorably against precedent transactions within the uranium sector,” the company noted in a statement.
Energy Fuels added it expects to replace the expected uranium production from Alta Mesa through permitting and production from its existing larger mining projects, ore purchases, toll milling arrangements, additional alternate feed and clean-up material, and potentially other transactions as market conditions may warrant.
Alta Mesa is a fully licensed and constructed uranium project located on over 200,000 acres of private land, regulated by the State of Texas. The project has a total operating capacity of 1.5 million pounds of uranium per year, with nearly 5 million pounds of past uranium production (2005 – 2013).
The company pointed out that the project is being maintained in a state of readiness to resume production once market conditions warrant.
The transaction is expected to close by the end of 2022 or early 2023.
Energy Fuels indicated it is a leading U.S.-based uranium mining company, supplying U3O8 to major nuclear utilities. The company also produces vanadium from certain of its projects, as market conditions warrant, and is ramping up to full commercial-scale production of rare earth carbonate.
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