enCore Energy Corp. (TSX-V: EU) (OTCQB: ENCUF)
(the "
Company") is pleased to provide an update on
material developments affecting the uranium market and its
implications for the long-term outlook of the Company’s portfolio
of significant U.S. uranium assets.
Highlights:
- About 50% of world mine uranium production has been halted and
the spot price of uranium has increased by +30% in less than a
month;
- enCore is well positioned for rising prices with a portfolio of
significant U.S. uranium projects, including ISR amenable
Sandstone-hosted resources, and high-grade Breccia Pipe
properties;
- enCore’s management team has extensive experience in all phases
of the nuclear fuel cycle; and
- enCore has a healthy treasury and no debt.
As a result of the ongoing COVID-19 pandemic,
seven of the world’s ten largest uranium mines have been
temporarily halted, representing approximately 50% of global mined
supply(1). This major reduction in mine supply has
resulted from halted operations in Kazakhstan, Namibia and South
Africa while Cameco’s Cigar Lake Mine in Canada has been placed on
extended care and maintenance.
The ultimate extent of supply reductions has yet
to be determined but is expected to be significant. With demand
continuing at a steady rate, along with a reduction in mined
supply, the Company anticipates significant declines in uranium
inventories. This anticipated decline is likely to accelerate
rising prices in order to incentivize new sources of production. We
have seen early indications of this trend with prices for all forms
of uranium and equivalents having increased substantially in recent
weeks. The uranium spot price has increased by over 30% to US ~$32
per pound as of April 17, 2020 from US ~$24 per pound as of March
23, 2020.
The severity of current supply disruptions
underscores the need for security of supply, a key driver behind
President Trump’s plan to establish a strategic domestic uranium
reserve (See News Release dated February 19, 2020). The Company is
encouraged by the President's initial actions to reinvigorate the
domestic nuclear industry along with his continued emphasis on
removing unnecessary regulations and improving access to critical
minerals on federal land.
enCore Energy’s Significant U.S. Uranium
Portfolio
The Company is well positioned for higher prices
with a portfolio of significant U.S. uranium projects. The
portfolio is highlighted by advanced-stage Crownpoint and Hosta
Butte ISR projects, which hosts Indicated Mineral Resources of 26.6
million pounds contained within 12.7 million tons grading 0.11%
eU308 and Inferred Mineral Resources of 6.1 million pounds
contained within 2.8 million tons grading 0.11% eU308(2).
Importantly, Crownpoint is permitted under a Nuclear Regulatory
Commission License to recover up to 3 million pounds per year.
The Company’s Marquez Project, a past-producing
underground mine within the Grants Mineral Belt of New Mexico,
hosts another large uranium endowment. A 2010 NI 43-101 Technical
Report documented Measured and Indicated Mineral Resources of 9.1
million pounds contained within 3.6 million tons grading 0.13%
eU308, an Inferred Mineral Resource of 4.9 million pounds contained
within 2.2 million tons grading 0.11% eU308 at the project.*
Equally significant, the Company holds a
dominant land position within Northern Arizona, the highest-grade
uranium district in the U.S. with an average recovered grade of
over 0.60% U308, and located within trucking distance to the only
operating uranium mill in the U.S. The Company holds more than 80%
of all current mineral claims within this district with 467 claims
that together with state mineral leases span more than 10,000
acres.
An innovative targeting approach using an
airborne Versatile Time Domain Electromagnetic (VTEM) survey
provided an exploration approach for evaluating the district as a
whole and resulted in 145 validated targets within the Company’s
land package. A total of nine targets have since been drilled with
eight having intersected significant mineralization, an 89% success
ratio.
As reported by the U.S. Geological Survey,
Northern Arizona Breccia Pipes are an important source of uranium
from both an economic and national security perspective. Increasing
access to this large, high-grade uranium endowment, which is
now subjected to a temporary withdrawal dating from Obama
Administration, is consistent with President Trump’s stated goal of
increasing access to critical minerals on Federal lands while at
the same time reinvigorating the domestic uranium mining
industry.
In addition to a strong portfolio of properties,
the Company also controls a leading U.S. proprietary database. The
most recent additions are the Quaterra (Metamin U.S.) and the VANE
Minerals (US) LLC files with emphasis on the northern Arizona
Breccia Pipe District. This vast data collection includes the Union
Carbide worldwide database, the UV Industries database, the W. R.
Grace uranium related files, Uranium files from Federal Resources,
Ranchers Exploration uranium files (Hecla), select Atlas files, and
a number of private collections and small partial collections from
various companies.
A complete list of the Company’s U.S. uranium
holdings with current and historic mineral resources can be
accessed by clicking here.
The enCore Team - A Proven Track Record
in the Uranium Sector
The Company is led by a team of uranium experts
with a proven ability to build value within the domestic uranium
sector. The enCore team was instrumental in advancing Energy Metals
Corp. to compile the largest domestic uranium base in U.S. history
before the company was acquired for $1.8 billion during the last
major uranium bull market.
This experience has allowed the Company to
opportunistically navigate the difficult post-Fukushima uranium
market by selectively acquiring high-upside projects, maintaining
low corporate expenditures and a healthy treasury, which currently
stands at over $3 million in cash with no debt. The team views the
ongoing supply disruptions, along with long-term increases in
demand, as a bullish indicator for the uranium market and the need
for higher prices to incentivize new supply sooner rather than
later.
William M. Sheriff, the Executive Chairman of
enCore Energy, was a pioneer in the uranium renaissance as
co-founder and Chairman of Energy Metals Corp. He was responsible
for compiling the largest domestic uranium resource base in U.S.
history before the company was acquired by Uranium One, where he
continued to serve as a Director.
Dr. Dennis Stover, Chief Executive Officer, is a
renowned uranium mining expert with a 40-year career focused on
direct involvement with commercial uranium exploration, project
development, and mining operations. Dr. Stover served as Chief
Operating Officer for Energy Metals Corp. and then as Executive
Vice President, Americas for Uranium One, Inc. where he oversaw
commercial development of Uranium One’s substantial U.S. uranium
assets as well other uranium assets in the Americas.
Dr. Douglas Underhill, Chief Geologist, has 50
years of both domestic and international experience with natural
resource exploration, development and analysis, including 40 years
with a specific emphasis on uranium. For a decade, he served as the
Uranium Resource and Production Specialist with the International
Atomic Energy Agency.
Richard Cherry, Board Member and a veteran
nuclear industry executive, has worked for leading companies in the
areas of uranium mining, production, conversion, marketing and
power generation operations for 40 years. Mr. Cherry previously
served as President and CEO of Cotter Corporation and Nuclear Fuels
Corporation, both affiliates of General Atomics Corporation, where
he oversaw their mining and milling operations in Colorado.
Mark Pelizza, Board Member and environmental
expert, has spent 40 years in the uranium industry that involved
with numerous commercial U.S. ISR project. He was responsible for
the permitting and licensing of the Church Rock, Crownpoint and
Unit 1 projects in New Mexico. His licensing efforts led to the
Company’s Crownpoint project receiving an NRC license. He
previously served as Sr. Vice President of Health, Safety and
Environmental Affairs with Uranium Resources, Inc.
Eugene Spiering, Geologist, has over 30 years of
experience including 10 years focused on uranium in the U.S.
Significantly, Mr. Spiering oversaw the application of VTEM aerial
surveys to the Company’s large land holdings in Northern Arizona
and subsequent drilling that led to two new discoveries and
revolutionized the exploration approach for this district, with an
89% success rate.
Gordon R. Peake, Director of Lands, previously
served as Vice‐President of Lands for Uranium One Americas, Inc.
from 2007 to 2010 and with Energy Metals Corporation (US) from 2004
until 2007. He brings over 40 years of experience in natural
resource exploration, development and production having worked with
major and junior mining companies
For a full list of the extensive team behind
enCore Energy click here.
Nuclear Energy for the 21st
Century
Nuclear power is an important part of the global
energy mix and currently provides nearly 20% of all electricity
generated in the U.S. and 55% of emission-free power, far more than
wind and solar combined. With an increasing global recognition on
the importance of reducing carbon emissions while at the same time
meeting the growing requirements for 24/7 baseload power, nuclear
power is essential for meeting both environmental and economic
initiatives.
Ongoing global expansion, license extensions and
new technological advancements are expanding long-term demand.
Russia, China and India continue to be an area of rapid growth.
These three nations collectively account more than 70% of all new
construction. Even with China’s large-scale nuclear buildout,
nuclear is planned to meet only 4-5% of China’s electricity
demands. By comparison, the U.S. currently generates nearly 20%,
indicating the potential for greater expansion of China’s nuclear
generating capacity.
The U.S. currently operates 96 nuclear power
plants. In 2019 these plants generated a record 809 million
megawatt-hours of electricity, the highest total since the birth of
commercial nuclear power in 1957 while achieving a record-high 93
percent capacity. A total of 88 of the 96 reactors now have been
granted operating life extensions from 40 to 60 years. In December
2019, the Nuclear Regulatory Commission granted the first-ever
license extension to 80 years and subsequently again in March 2020.
The continued lifespan of these reactors, combined with a
world-class safety record, underscores the ability for long-life
power generation and continued demand. Two new state-of-the-art
reactors are also nearing completion in the state of Georgia.
New technological initiatives are providing new
applications for nuclear power, improving the efficiency of
existing operations, and incorporating additional safety measures.
Several accident-tolerant fuel rods have been developed including
Westinghouse’s EnCore fuel rods, now adopted in commercial
applications. Small modular reactors (SMR) are being rapidly
advanced in the design and permitting phase for widescale use and
are attractive due to lower capital costs and the ability to
operate in a variety of locations. A number of other developments
including modern reactor designs have the potential to further
increase demand well into the future.
Investment in Group 11 Technologies
Inc.
The Company has also signed a Letter of Intent
to establish Group 11 Technologies, a U.S.-based technology firm
primarily focused on non-invasive extraction technology utilizing
environmentally friendly liquids to recover gold and other metals.
Encore will hold a 40% interest in Group 11 Technologies while
Enviroleach Technologies (CSE: ETI) (OTCQB: EVLLF) will also hold a
40% interest and Golden Predator Mining Corp. (TSX-V: GPY) (OTCQB:
NTGSF) will hold a 20% interest (See News Release dated March 2nd,
2020).
About enCore Energy Corp.enCore
Energy Corp., with assets based 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 U3O8(1). A portion of these
resources are under NRC license. The Company also holds the Marquez
and Treeline projects in New Mexico as well as the dominate land
position in Arizona with additional other 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.
SheriffExecutive
Chairman972-333-2214info@encoreenergycorp.comwww.encoreenergycorp.com
- According to a briefing by Nuclear Energy Institute and a
combination of publicly stated production forecasts and 2019
production volumes.
- 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.
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.
*Under “Rules and Policies” of NI 43-101
Standards of Disclosure the mineral resource estimate in the report
by M. Hussan Alief, CPG, completed for Strathmore Minerals Corp. in
2010, must be reported as a Historical Resource Estimate. A
Qualified Person has not done sufficient work for enCore to
classify the historical estimate as a current mineral resource
estimate. The Company does not treat this historical estimate as a
current mineral resource estimate, and the estimate should not be
relied upon.
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 laws 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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