LAKEWOOD, CO, Nov. 13, 2017 /PRNewswire/ - Energy Fuels Inc.
(NYSE American: 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 an agreement (the "Agreement") to acquire all
of the issued and outstanding shares of Excalibur Industries
("Excalibur"). Excalibur holds royalties on the Company's Nichols
Ranch ISR project in Wyoming, as
well as 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 transaction
will occur by way of a merger of Excalibur and Energy Fuels'
wholly-owned subsidiary, EFR Utah, Inc.
Through the transaction, the Company is acquiring a 6% - 8%
sliding-scale gross proceeds production royalty (based on the then
prevailing month-end spot price) on Energy Fuels' Nichols Ranch,
Hank and Doughstick properties (Doughstick is included in the
Company's Jane Dough Project expansion area). This royalty also
applies to the nearby Niles Ranch, Willow
Creek, and Verna Ann uranium
properties also owned by the Company. After closing of the
transaction, the Company plans to extinguish the royalty and will
no longer be required to pay the royalty on future production from
these projects. The Company expects to produce approximately
140,000 to 160,000 pounds of uranium in 2018 from the Nichols Ranch
Project. Further, there are four (4) additional fully-permitted
wellfields at Nichols Ranch and fourteen (14) fully permitted
wellfields at the Company's Jane Dough Project, of which Doughstick
represents a portion, that are expected to be developed as an
extension of Nichols Ranch in the future. The Company's Hank
Project is fully-permitted for eight (8) wellfields that are
expected to be developed as satellite operations to Nichols Ranch
in the future. According to a February
2015 technical report, the Nichols Ranch, Jane Dough, and
Hank Projects contain 3.4 million tons of Measured and Indicated
Mineral Resources with an average grade of 0.115%
U3O8 containing 7.9 million pounds of
uranium, along with 0.6 million tons of Inferred Mineral Resources
with an average grade of 0.10% U3O8
containing 1.1 million pounds of uranium.
Through the transaction, Energy Fuels is also acquiring 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 their Smith Ranch-Highland ISR Project since 2013. Cameco ceased
wellfield development at North Butte in 2016. However, as uranium
prices rise, North Butte should be expected to resume production in
the future. The royalty is based on Cameco's average weighted sales
price on production from these properties. According to Cameco's
2016 Annual Report, the North Butte/Brown Ranch Project contains
6,499 million tons of Measured and Indicated Mineral Resources with
an average grade of 0.07% U3O8 containing
approximately 10.1 million pounds of uranium. Of these resources,
365 million tons are Proven Mineral Reserves with an average grade
of 0.08% U3O8 containing 0.7 million pounds
of uranium. The project also contains significant quantities of
Inferred Mineral Resources. Energy Fuels expects to hold the
royalty on the Cameco properties and receive royalty payments from
future production from those properties.
Stephen P. Antony, CEO of Energy
Fuels stated: "This is a key transaction for Energy Fuels
which has a compelling business case and obvious synergies in both
high and low uranium price environments. First and foremost,
we expect to generate an attractive return on investment through
the acquisition and extinguishment of the royalty on our projects,
as it substantially enhances the operating margin and cash flow
profile of our flagship Wyoming ISR asset base on a life-of-mine
basis. As an added benefit, we will also acquire and hold what is,
in our view, a trophy royalty asset in the US uranium
sector. The 4% gross proceeds royalty on the Cameco-owned
North Butte property is an appealing investment in a quality,
well-known ISR project with extensive production history and
significant in-ground uranium resources. We look forward to
closing this transaction with Excalibur and welcoming Excalibur
shareholders as Energy Fuels shareholders."
As consideration, the Company will deliver to the current
shareholders of Excalibur common shares of Energy Fuels having a
total value of $3.5 Million, as
follows:
- $3.15 million of common shares at
closing, which will be priced based on the volume-weighted average
price ("VWAP") of Energy Fuels' shares on the NYSE American for the
five most recent trading days ending on the last trading day prior
to closing.
- $0.35 million of common shares
nine months following closing, which will be priced based on the
VWAP of Energy Fuels' shares on the NYSE American for the five most
recent trading days ending on the last trading day prior to the
date that is nine months after closing.
The Company will also deliver cash to the shareholders of
Excalibur based on the aggregate amount payable to Excalibur and
its subsidiaries pursuant to the Royalties as of the closing date
of the transaction and based on certain closing
adjustments.
The closing of the transaction is subject to Excalibur
shareholder approval, stock exchange approval, satisfactory
completion by Energy Fuels of its due diligence investigations, the
approval of the Utah Department of Commerce and Division of
Securities, as well as other closing conditions set out in the
Merger Agreement. In addition, holders of at least 45% of the
issued and outstanding shares of Excalibur are required to deliver
lock-up agreements to Energy Fuels, whereby such Excalibur
shareholders may not sell their Energy Fuels shares for six-months
following the closing date. The closing will occur after the
satisfaction or waiver of all conditions, which is expected to
occur within 120 days from today.
The common shares will be issued pursuant to an exemption from
registration under Section 3(a)(10) of the Securities Act of 1933,
as amended (the "Securities Act"). Section 3(a)(10) of the
Securities Act exempts the issuance of securities issued in
exchange for other securities from the registration requirements of
the Securities Act where the terms and conditions of such issuance
and exchange have been approved by a court of competent
jurisdiction, after a hearing on the fairness of the terms and
conditions of such issuance and exchange at which all persons to
whom the securities will be issued have the right to appear.
Energy Fuels anticipates that the fairness hearing will occur
before the Utah Division of Securities during the first quarter of
2018 and will announce the specific date once it has been
established.
About Energy Fuels: Energy Fuels is a
leading integrated US-based uranium mining company, supplying
U3O8 to major nuclear utilities. 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
co-product of its uranium production from certain of its mines on
the Colorado Plateau, as market conditions warrant. The
Company's common shares are listed on the NYSE American 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.
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 in the U.S.; the
expected time to complete the transaction; resource estimates; any
expectations that production or well field development on any of
the properties may resume or occur in the future; any expected
impacts on costs of production and cash flows from the acquisition
of the royalties; 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 in the U.S.; the
expected time to complete the transaction; resource estimates; any
expectations that production or well field development on any of
the properties may resume or occur in the future; any expected
impacts on costs of production and cash flows from the acquisition
of the royalties; and any other statements regarding Energy
Fuels' future expectations, beliefs, goals or prospects;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.
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 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
Report on Form 10-K dated March 9,
2017 for further details.
SOURCE Energy Fuels Inc.