enCore Energy Corp. (TSXV:EU; OTCQB:ENCUF) (the
“
Company”) is pleased to announce that effective
September 1, 2020 it has entered into a binding letter of intent
(“Agreement”) with Westwater Resources Inc. (Nasdaq: WWR)
(“Westwater”) to acquire all of Westwater’s United States uranium
assets. These assets include two two licensed Texas-based
uranium production facilities, mineral exploration leases in Texas,
and more than 270 square miles (180,000 acres) of patented mineral
rights in New Mexico with four projects containing significant
historical mineral estimates. This acquisition will more than
double the Company’s current mineral rights and holdings with
historical mineral estimates, and add two already licensed uranium
production facilities.
William M. Sheriff, Executive Chairman of enCore
Energy stated, “This transformational acquisition will on
completion be the first significant step building enCore into a
domestic uranium producer. Our experienced and accomplished
management team believes that a major change is coming in the
uranium market in the next 12 to 24 months. In addition to
the key acquisition of licensed production facilities in Texas,
enCore will hold the leading land position in New Mexico,
consolidating the large Santa Fe and Frisco railroad “checkerboard”
mineral rights land grant running through most of the Grants
mineral belt.
“As market conditions continue to improve, we
look forward to updating the Rosita, Texas processing facilities
and restarting uranium production in one of the most favorable
uranium districts in the United States. It is not a
coincidence that modern commercial in-situ recovery (ISR)
operations originated in South Texas,” added enCore Energy’s Chief
Executive Officer, Dennis Stover. “While active exploration in the
district has long been curtailed by market conditions, south Texas
remains underexplored and one of the most prospective in the
country for further uranium discoveries. This coupled with
geologic characteristics well suited to ISR creates exceptional
opportunities for enCore Energy Corp.”
Christopher M. Jones, President and Chief
Executive Officer of Westwater, said, “We are happy to place these
uranium assets in the hands of a company like enCore where they can
be developed further as part of a larger, consolidated land
position, while we devote our full focus and attention on advancing
our battery-grade graphite product business and our Coosa Graphite
Project in Alabama. We are excited to continue our
participation in the uranium sector as a significant shareholder of
enCore and royalty holder, while transferring responsibility for
remaining reclamation to them. We believe that the enCore
organization has a strong foundation of highly experienced former
operators of uranium mines and processing facilities, and we are
putting this business in good hands.”
To view maps of the property acquisitions please visit:
https://www.encoreenergycorp.com/_resources/images/EU%20NR20-08%20Maps.pdf
The Texas Production
Assets
Two licensed Texas uranium production facilities
are being acquired, the Kingsville plant in Kleberg County, Texas
and the Rosita plant in Duval County, Texas. Both facilities were
established to process Ion Exchange resin from multiple satellite
facilities. Each facility has an operating capacity of
800,000 pounds U3O8 per year. The package also includes
several key mineralized leaseholds with excellent exploration
potential and deposits on which historic mineral estimates exist,
an extensive Texas database, and key equipment including PFN
logging trucks, resin transfer trucks and remote ion exchange
facilities.
New Mexico Assets
The Westwater acquisition, combined with
enCore’s already existing large New Mexico holdings, will on
closing make the company the dominant holder of high-quality
uranium properties in New Mexico. The New Mexico assets in the
transaction include more than 175,000 acres of deeded mineral
estate (formerly the Santa Fe railroad “checkerboard” land grant),
4200 acres of surface and/or mineral leases and 1200 acres of
mining claims, encompassing much of the uranium-rich Grants mineral
belt shown on the attached map, as well as an extensive and
comprehensive database. Properties being acquired with
significant in place historic uranium mineral estimates include the
Nose Rock, West Largo and Ambrosia Lake projects in McKinley County
and the Juan Tafoya project in Cibola, McKinley and Sandoval
Counties.
A summary of the significant historic mineral
estimates follows:
To view historic mineral estimates please
visit:http://www.encoreenergycorp.com/_resources/images/WWR%20Historic%20Resources.png
Historic estimates on (a) Ambrosia Lake used
circle tangent method and cut-off grades ranging from 0.03% to
0.10% over variable intervals and on a per section basis; (b)
Juan de Foya used polygonal method and a cut-off grade of 0.05%
over a six foot interval; (c) West Largo did not include a cutoff
grade and used a general outline method described by the US Atomic
Energy Commission; and (d) Nose Rock used polygonal method and a
cutoff grade of 0.07% over a six foot interval. Although the
historical estimates above are believed to have been calculated and
completed to industry standards at the time of their publication,
and are considered reliable based on such standards, a qualified
person has not done sufficient work to classify any of the historic
estimates listed above as current mineral resource estimates.
Current definitions of measured, indicated and inferred resources
have changed since the date of the report and the impact of those
changes on historical estimates has not been assessed by the
Company. Additional work, including review of existing
exploration data and additional drilling is required to update the
historical estimate to a current mineral resource. The
Company does not treat these historical estimates as current
mineral resource estimates.
Located in New Mexico, the Grants mineral belt
is an approximately 100-mile-long northwesterly trending belt of
sandstone-hosted uranium deposits that have been the largest source
of uranium production in the United States. During the period of
mining activity in the Grants mineral belt, between the early 1950s
and the mid-2000s, more than eighty underground and open pit mines
were developed and operated. At various times during the past
productive life of the belt, as many as six uranium processing
mills were built and operated by Anaconda Company, Homestake Mining
Company, Kerr-McGee, Phillips Petroleum, Sohio, Western Nuclear and
United Nuclear. For perspective, the Grants mineral belt has
previously produced approximately 340 million pounds of uranium
oxide, being more uranium than any other district in the U.S.A and
ranking in the top ten world-wide. Additional exploration is
warranted throughout the district as it remains amongst the most
prospective in the United States.
Terms of the Transaction
Pursuant to the Agreement, the Company would
acquire seven Westwater subsidiaries, holding all of
Westwater’s United States uranium assets, in exchange for (i)
the issuance of US$1,450,000 of enCore shares at a price per share
to be determined on the closing date of the transaction, (ii) the
grant of a 2% net smelter return royalty on mineral rights held by
the subsidiaries in the State of New Mexico, excluding the Juan
Tafoya and Cebolleta projects; and (iii) the grant of a 2.5% net
profits interest on the Juan Tafoya and Cebolleta
projects.
In addition, the Company and Westwater will work
to reduce and replace existing reclamation bonds on Westwater’s
uranium projects totaling approximately US$9.25 million. Upon
replacement of the reclamation bonds, Westwater will pay enCore
US$3 million in cash. The amount of the reclamation bonds may
be reduced by Westwater prior to closing through completion of
reclamation work, in which event the Company will issue additional
consideration shares priced as at the closing date, as follows:
US$500,000 in Company shares upon Westwater completing scheduled
2020 Texas reclamation activities; and an additional US$250,000 in
Company shares for every US$1,000,000 reduction of the current
required bond amount.
The final Agreement is expected to be completed
by year end 2020 and is dependent on final due diligence
completion.
Completion of the transaction is subject to a
number of conditions, including, but not limited to receipt of TSXV
approval, satisfactory arrangements being in place for the
replacement of the reclamation bonds, and completion of due
diligence on the mineral projects and the Uranium Subsidiaries by
the Company.
Dr. Douglas H. Underhill, CPG, a Qualified Person as defined by
National Instrument 43-101 and Chief Geologist for the Company, has
reviewed, verified, and approved disclosure of the technical
information contained in this news release.
About enCore Energy Corp.
enCore Energy Corp., with assets entirely in the
United States, has a 100% interest, free of holding costs, in
115,000+ acres (46,400 ha) of private mineral rights in New Mexico,
including the Crownpoint and Hosta Butte uranium deposits. These
deposits contain an estimated Indicated Mineral Resource of 26.6
million pounds of U3O8 at an average grade of 0.105% e U3O86. A
portion of these resources are under NRC license. The Company also
holds the Marquez project in New Mexico as well as a dominant land
position in Arizona with additional properties in Utah and Wyoming.
The Company owns or has access to an extensive collection of
proprietary North American and global uranium data including the
Union Carbide, US Smelting and Refining, UV Industries, and
Rancher’s Exploration databases in addition to a leading collection
of geophysical data for the high-grade Northern Arizona Breccia
Pipe District.
For additional information: William M. Sheriff
Executive Chairman 972-333-2214 info@encoreenergycorp.com
www.encoreenergycorp.com
- Behre Dolbear & Company (USA) Inc., 2010, Technical Report
on the Ambrosia Lake Project of Uranium Resources Inc., prepared by
Robert D. Maxwell, CPG and Bernard J. Guarnera, RPG, CPG.
- Behre Dolbear & Company (USA) Inc., 2011, Technical Report
on the West Largo Project of Uranium Resources Inc., prepared by
Robert D. Maxwell, CPG.
- Behre Dolbear & Company (USA) Inc., 2011, Technical Report
on the Nose Rock Project of Uranium Resources Inc., prepared by
Robert D. Maxwell, CPG.
- Broad Oak Associates, 2014, NI 43-101 Technical Report on
Mineral Resources: Juan Tafoya Uranium Project, Cibola, McKinley,
and Sandoval Counties, New Mexico, USA, reported and effective May
15, 2014, prepared for Uranium Resources Inc. by Geoffrey S.
Carter, P.Eng.
- Wilton, Dean T., CPG, PG, MAIG, Chief Geologist Westwater
Resources, 2018, Technical Report on the Ambrosia Lake Uranium
Project, McKinley County, USA
- Technical Report, titled, "Crownpoint and Hosta Butte Uranium
Project Mineral Resource Technical Report, McKinley County, New
Mexico, USA, Mineral Resource Technical Report - National
Instrument 43-101," dated May 14, 2012, and authored by Douglas L.
Beahm, PEng, PGeo. Note: There have been no material
changes to the technical and scientific information relating to the
foregoing projects since the date of the report, the Company
considers the report to be complete and current.
- McLemore, Virginia T., Prin. Senior Economic Geologist,
“Uranium Resources in New Mexico”, New Mexico Bureau of Geology
& Mineral Resources” which incorporates a table entitled:
Estimated uranium resources in New Mexico, 2017 (updated from
McLemore, et al., 2011, 2013
- M. Mihalsky and S Hall, "Assessment of Undiscovered
Sandstone-Hosted Uranium Resources in the Texas Coastal Plain,
2015" U.S. Department of the Interior, U.S. Geological Survey, ISSN
2327-6916 (print), Fact Sheet 2015-3069, November 2015.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Cautionary Note Regarding Forward-Looking
Statements
This news release includes certain
forward-looking statements within the meaning of applicable
securities law including the anticipated completion of the
transaction and acquisition of the Marquez, Nose Rock and other
properties, and the potential advancement thereof. Forward- looking
statements are statements that relate to future, not past, events.
In this context, forward - looking statements often address
expected future business and financial performance, and often
contain words such as "anticipate", "believe", "plan", "estimate",
"expect", and "intend", statements that an action or event "may",
"might", "could", "should", or "will" be taken or occur, or other
similar expressions. Estimates of mineral resources and reserves
are also forward looking statements because they constitute
projections regarding the amount of minerals that may be
encountered in the future. All statements, other than statements of
historical fact, included herein including, without limitation;
statements about the terms and completion of the transaction are
forward-looking statements. By their nature, forward-looking
statements involve known and unknown risks, uncertainties and other
factors, which may cause the actual results, performance or
achievements, or other future events, to be materially different
from any future results, performance or achievements expressed or
implied by such forward-looking statements. Forward-looking
statements are made based on management's beliefs, estimates and
opinions on the date that statements are made and the respective
companies undertakes no obligation to update forward-looking
statements if these beliefs, estimates and opinions or other
circumstances should change, except as required by applicable
securities laws. Investors are cautioned against attributing undue
certainty to forward-looking statements.
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