NYSE
American:EU
TSXV:EU
www.encoreuranium.com
DALLAS, Dec. 6, 2023
/PRNewswire/ - enCore Energy Corp. (NYSE American: EU)
(TSXV: EU) (the "Company" or "enCore") is
pleased to announce that it has entered into a Master Transaction
Agreement ("Agreement") with Boss Energy Limited ("Boss Energy"), a
leading Australian emerging ISR uranium producer, which, upon
completion, will result in the sale of a 30% ownership interest in
enCore's Alta Mesa project ("Alta Mesa") to Boss Energy for
US$60 million, an investment of
US$10 million into enCore common
shares by Boss Energy, a loan of up to 200,000 pounds
U3O8 for enCore's commercial use over the
next year, and the formation of a strategic collaboration on the
use and joint development of enCore's proprietary Prompt Fission
Neutron ("PFN") technology for uranium exploration and
production.
![enCore Energy Corp. logo (CNW Group/enCore Energy Corp.) enCore Energy Corp. logo (CNW Group/enCore Energy Corp.)](https://mma.prnewswire.com/media/2293938/enCore_Energy_Corp__enCore%C2%A0Energy_Enters_US_70_Million_Transacti.jpg)
The transaction, expected to be completed in February 2024, provides enCore with the financial
capacity to significantly accelerate its uranium production
pipeline across South Texas
through the development of multiple satellite operations. In
addition, the transaction paves the way for aggressive expansion,
consolidation and development of enCore's Dewey Terrace and Dewey-Burdock projects
straddling the Wyoming-South
Dakota border and enables the Company to quicken development
of its Gas Hills project in Wyoming.
Alta Mesa is an In Situ Recovery ("ISR") uranium project in
South Texas, with a fully licensed
Central Processing Plan ("CPP") with 1.5 million pounds
U3O8 per year capacity through the existing
ion exchange ("IX") circuit that is planned for restart in early
2024. The CPP has the capacity to process, dry, and package
up to 2 million pounds U3O8 per year, and
that capacity can be met with the installation of additional IX
resin processing circuits similar to those in use at enCore's
Rosita CPP. The project hosts a National Instrument 43-101 resource
of 3.41 million pounds at 0.109% U3O8 in the
Measured and Indicated category with an additional 16.79 million
pounds at 0.120% U3O8 in the Inferred
category, and there is significant potential to grow the mineral
resources within the approximately 200,000 acre (80,900 Ha) project
area. In February 2023, enCore
acquired the Alta Mesa project for US$120
million from Energy Fuels, Inc.
William M. Sheriff, Executive
Chairman, and Paul Goranson, Chief
Executive Officer, will host an online webinar on Thursday December 7th, 2023 at 11:00 AM ET. To join the webinar please register
at:
https://us02web.zoom.us/webinar/register/WN_LrznPkW1TkaJiL2rWM9fKg.
William M. Sheriff, enCore's
Executive Chair, stated: "enCore is eager to accelerate its
production and development activities across our entire portfolio
of assets. This transaction provides enCore with proceeds of
US$70 million on closing, giving us
the financial flexibility to ramp up our efforts in Texas, Wyoming and South Dakota. The
accelerated production plan is designed to take advantage of what
is projected to be a very strong uranium market over the next
decade, with the world's rapidly growing focus on nuclear energy as
a clean and reliable energy source. This surge in demand is
coming at a time when the supply of uranium is already tight, with
a heavy reliance on imports through Russia. In this 70/30 partnership with Boss
Energy, a AUD$1.5 billion market capitalization emerging ISR
producer, enCore will continue as manager of the Alta Mesa joint
venture. This accretive transaction provides us with the
means to expand our future production profile on an aggressively
expedited timeline."
Paul Goranson, enCore's Chief
Executive Officer, added: "We are pleased to welcome Boss Energy,
with its experienced management team, as a partner at Alta Mesa,
which hosts a 200,000 acre land position within the heart of the
Texas Uranium Belt. The capital received on closing will allow
enCore to ramp up both exploration and development drilling not
only at Alta Mesa but across our entire US portfolio. Existing
licenses, at both the Rosita and Alta Mesa CPPs, enable enCore to
more than double the combined production capacity of both CPPs
without further permits or license amendments. Deployment of the
same satellite IX resin operating process utilized at Rosita will
allow the full use of the 2 million pounds of uranium per year
processing capacity at Alta Mesa. Finally, we look forward to
collaborating with Boss Energy to advance our proprietary PFN
technology, which provides enCore with the tools to analyze uranium
data in real time, representing a major advantage in cost and time
to install wellfields utilized in the ISR process."
Transaction Terms
The key terms of the Agreement include:
- A joint venture on Alta Mesa with enCore holding a 70% joint
venture interest and remaining the project manager, and Boss Energy
holding a 30% joint venture interest in exchange for a payment of
US$60 million to enCore;
- A private placement by Boss Energy of US$10 million into enCore shares at a price of
US$3.90 per share;
- A Strategic Collaboration Agreement on the use and joint
technological advancement of enCore's proprietary PFN technology
for real-time uranium analysis;
- A loan from Boss Energy to enCore of up to 200,000 pounds of
physical uranium at commercial rates from Boss Energy's strategic
stockpile, allowing enCore the flexibility to optimize its
contracts and potential spot sales. The loan can be repaid in cash
or in kind with uranium.
Pursuant to the Agreement, enCore will establish a new
subsidiary (the "JV Company") to hold the Alta Mesa project that
will, on closing, be owned 70% by an existing subsidiary of enCore
and 30% by a new US subsidiary of Boss Energy. In
consideration for its 30% interest in the JV Company, Boss Energy
will, on closing, pay enCore US$60
million in cash, and concurrently purchase US$10 million in common shares of enCore at a
price of US$3.90 per common
share. enCore will act as Manager of the JV Company for
so long as enCore remains majority owner and will be entitled to
customary management fees. The JV Company will distribute
uranium from production at Alta Mesa on a pro-rata basis to enCore
and Boss Energy's ownership interest. Dilution of a party's
interest below 10% will result in the right of the other party to
acquire that interest or that interest being converted to a 1%
production royalty on Alta Mesa.
In connection with the Agreement, the parties will enter into a
uranium loan agreement providing for up to 200,000 pounds of
uranium to be loaned by Boss Energy to enCore. The loan plus
interest of 9% will be repayable in 12 months in cash or uranium at
the election of Boss Energy.
The parties will also enter into a strategic collaboration
agreement providing for the joint collaboration and research to
develop the Company's PFN technology, to be funded equally by each
party.
Closing of the transactions contemplated under the Agreement is
expected to occur in February of 2024 and may be extended in
certain circumstances. Closing is subject to certain
customary conditions, including certain regulatory approvals and
stock exchange approvals, in addition to Boss Energy completing a
financing to fund the cash payments on closing. The Agreement also
provides for customary deal protections and a break fee in the
event the funding condition is not met.
Alta Mesa ISR Uranium Central
Processing Plant ("Alta Mesa CPP") & Wellfield
The Alta Mesa CPP and Wellfield hosts a fully licensed and
constructed ISR uranium plant, located on approximately 200,000
acres of private land in the state of Texas. Alta Mesa will be enCore's second
producing location, planned for production in the first half of
2024 following the recently announced resumption of uranium
production at the South Texas Rosita Uranium Processing Plant
("Rosita").
Primary operating capacity at the Alta Mesa CPP is 1.5 million
pounds of U3O8 (uranium) per year with
additional back-end capacity of 0.5 million pounds of
U3O8 per year, using feed from remote
satellite IX facilities that can be installed across the
approximately 200,000 acre project area or on other projects.
This will utilize fully the CPP's existing capacity of 2 million
pounds of U3O8 per year.
Alta Mesa CPP and Wellfield highlights:
- The Alta Mesa CPP is enCore's third fully licensed production
facility, along with the Rosita CPP and Kingsville Dome CPP, all
located in the business-friendly state of Texas. There are only eleven (11) licensed and
constructed uranium production facilities in the United States (US);
- Advancing the Alta Mesa CPP, in conjunction with planned
production in 2023 at the Rosita CPP, will cement enCore's position
as the early leader in ISR uranium production in the United States;
- Alta Mesa CPP's operations are located on private land, with
100% of minerals privately owned, and in a supportive jurisdiction
with primary regulatory authority residing with the State of Texas;
- The Alta Mesa CPP utilizes well-known ISR technology to extract
uranium in a non-invasive process using natural groundwater and
oxygen, coupled with a proven ion exchange process, to recover the
uranium.
As previously reported, enCore continues work on the
refurbishment of the processing circuits. The elution circuit, used
to strip uranium from the ion exchange beads, has been completed,
and represents a significant milestone in the pathway for
production restart. All the process pumps for the startup IX
circuit have been rebuilt and replaced, including the main
injection pumps. We anticipate completing the refurbishment of the
startup portion of the IX circuit before the end of 2023.
The yellowcake processing circuit refurbishment has started with
the rebuilding of key components of the yellowcake storage systems
and ordering of long lead time items such as the filter press and
yellowcake transfer pumps. Refurbishment work commenced on the
yellowcake drying system, and that work is expected to be completed
just prior to the anticipated production restart date.
Within Production Authorization Area 7 (PAA-7), enCore is
installing injection and production wells in the wellfield and has
received and staged the equipment to install the pipelines to
connect the wellfield to the Alta Mesa CPP. All the necessary
equipment for the startup of production in the PAA-7 wellfield has
been received or has been ordered with a confirmed delivery
schedule.
Alta Mesa &
Mesteña Grande Mineral
Resource Summary (0.30 GT cut-off)1,2
|
Tons
|
Avg.
Grade
(%
U3O8)
|
Pounds
|
Total Measured Mineral
Resource1
|
54,000
|
0.152
|
164,000
|
Alta Mesa Indicated
Mineral Resource
|
1,397,000
|
0.106
|
2,959,000
|
Mesteña Grande
Indicated Mineral Resource
|
119,000
|
0.120
|
287,000
|
Total Measured &
Indicated Resources
|
1,570,000
|
0.109
|
3,410,000
|
Alta Mesa Inferred
Mineral Resource
|
1,263,000
|
0.126
|
3,192,000
|
Mesteña Grande Inferred
Mineral Resource
|
5,733,000
|
0.119
|
13,601,000
|
Total Inferred
Resources
|
6,996,000
|
0.120
|
16,793,000
|
1,2 Represents that portion
of the in-place mineral resource that are estimated to be
recoverable within existing wellfields. Wellfield recovery factors
have not been applied to indicated and inferred mineral resources.
As reported in the NI-43-101 Technical Report Summary for
the Alta Mesa Uranium Project, Brooks and Jim Hogg Counties, Texas,
USA completed by Doug Beahm, PE, PG, of BRS Engineering. (Effective
January 19, 2023). 2. Grade
Thickness, or GT, is defined as the product of the mineral grade,
as % U3O8, multiplied by the thickness, in
feet, of the mineralization. Bold type represents potentially
ISR recoverable uranium with a Grade Thickness of >0.3 which is
considered suitable for inclusion in a
wellfield.
|
To view enCore's South Texas
projects please visit: bit.ly/3fV9fTg.
The Company advises that it is not basing its production
decisions at Alta Mesa CPP or Rosita CPP on a feasibility study of
mineral reserves demonstrating economic and technical viability.
The production decision is based on known past ISR and processing
operations at these two production facilities and surrounding
lands. However, the Company understands that there is increased
uncertainty, and consequently a higher risk of failure, when
production is undertaken in advance of a feasibility study.
The Company has determined to proceed with a production decision
based on past operations at the Alta Mesa CPP and Rosita CPP,
including past ISR operations in the known mineral resource
areas.
Recommendations By the Board of
Directors and Fairness Opinion
The Board of Directors of enCore (the "Board"), after
consultation with its financial and legal advisors, has unanimously
approved the transaction. The Board, in conducting its review of
the transaction, was advised by Haywood Securities Inc. ("Haywood")
and received a fairness opinion from Haywood which determined that,
in Haywood's opinion, based
upon and subject to the assumptions, limitations and qualifications
set out therein, the consideration to be received by enCore in
connection with the transaction is fair to enCore from a financial
point of view. Hunton Andrews Kurth LLP and Morton Law LLP are
acting as legal advisors to enCore in connection with the
Transaction.
John M. Seeley, Ph.D., P.G.,
C.P.G., enCore's Manager of Geology and Exploration, and a
Qualified Person under NI 43-101, has reviewed and approved the
technical disclosure in this news release on behalf of the
Company.
About Boss Energy
Limited
Boss Energy (ASX: BOE; OTCQX: BQSSF) with a market
capitalization of ~A$1.5 billion, has
almost completed development of its Honeymoon Uranium Project in
South Australia. The project is on
time and on budget. Annual production at Honeymoon is forecast to
ramp up to 2.45Mlbs of U3O8. For
more information please visit www.bossenergy.com.
About enCore Energy
Corp.
enCore Energy Corp., America's Clean Energy Company™, is
committed to providing clean, reliable, and affordable domestic
nuclear energy as the newest uranium producer in the United States. enCore solely utilizes
In-Situ Recovery ("ISR") for uranium extraction, a well-known and
proven technology co-developed by the leaders at enCore Energy.
In-Situ Recovery extracts uranium in a non-invasive process using
natural groundwater and oxygen, coupled with a proven ion exchange
process, to recover the uranium. Uranium production commenced at
enCore's licensed and past-producing South Texas Rosita Central
Processing Plant (CPP) in November
2023 and at its licensed and past-producing South Texas Alta
Mesa CPP in 2024.
Future projects in enCore's production pipeline include the
Dewey-Burdock project in South
Dakota and the Gas Hills project in Wyoming, along with significant uranium
resource endowments in New Mexico
providing long term opportunities. The enCore team is led by
industry experts with extensive knowledge and experience in all
aspects of ISR uranium operations and the nuclear fuel cycle.
enCore diligently works to realize value from other owned assets,
including our proprietary uranium database that includes technical
information from many past producing companies, from our various
non-core assets, and by leveraging our ISR expertise in researching
opportunities that support the use of this technology as applied to
other metals. enCore is also committed to working with local
communities and indigenous governments to create positive impact
from corporate developments.
www.encoreuranium.com
Cautionary Note Regarding Forward Looking
Statements:
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Certain information contained in this news release,
including: any information relating to the Company being a leading
uranium company, statements regarding future or potential
production, and any other statements regarding future expectations,
beliefs, goals or prospects; may constitute "forward-looking
information" and "forward-looking statements" within the meaning of
applicable Canadian and United
States securities laws and regulations (collectively,
"forward-looking statements"). All statements in this news release
that are not statements of historical fact (including statements
containing the words "expects", "is expected", "does not expect",
"plans", "anticipates", "does not anticipate", "believes",
"intends", "estimates", "projects", "potential", "scheduled",
"forecast", "budget" and similar expressions or variations
(including negative variations) of such words and phrases, or
statements that certain actions, events or results "may", "could",
"would", "might" or "will" be taken) should be considered
forward-looking statements. Such forward-looking statements include
statements regarding completion of the transactions contemplated in
the Agreement, and regarding our planned extraction and production
operations. All such forward-looking statements are subject
to important risk factors and uncertainties, many of which are
beyond the company's ability to control or predict. Forward-looking
statements necessarily involve known and unknown risks, including,
without limitation, risks associated with general economic
conditions; adverse industry events; future legislative and
regulatory developments; the ability of the parties to the
Agreement to satisfy all conditions to closing of the transactions
contemplated therein, the ability of enCore to implement its
business strategies; including commencement of production at Alta
Mesa in the planned time frames or at all; the expansion of
operations to satellite locations; and other risks. 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 access to capital risks in
connection with the Agreement and otherwise, exploration and
development risks, changes in commodity prices, access to skilled
mining personnel, the results of exploration and development
activities; production risks; uninsured risks; regulatory risks;
defects in title; the availability of materials and equipment,
timeliness of government approvals and unanticipated environmental
impacts on operations; litigation risks; risks posed by the
economic and political environments in which the Company operates
and intends to operate; increased competition; assumptions
regarding market trends and the expected demand and desires for the
Company's products and proposed products; reliance on industry
equipment manufacturers, suppliers and others; the failure to
adequately protect intellectual property; the failure to adequately
manage future growth; adverse market conditions, the failure to
satisfy ongoing regulatory requirements and factors relating to
forward looking statements listed above which include risks as
disclosed in the Company's annual information form filings. Should
one or more of these risks materialize, or should assumptions
underlying the forward-looking statements prove incorrect, actual
results may vary materially from those described herein as
intended, planned, anticipated, believed, estimated or expected.
The Company assumes no obligation to update the information in this
communication, except as required by law. Additional information
identifying risks and uncertainties is contained in filings by the
Company 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 management. Such
statements may not be appropriate for other purposes and readers
should not place undue reliance on these forward-looking
statements, that speak only as of the date hereof, as there can be
no assurance that the plans, intentions or expectations upon which
they are based will occur. Such information, although considered
reasonable by management at the time of preparation, may prove to
be incorrect and actual results may differ materially from those
anticipated. Forward-looking statements contained in this news
release are expressly qualified by this cautionary
statement.
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SOURCE enCore Energy Corp.