Mining
Monday, February 26th, 2024 5:19 pm EDT
Key Points
- Completion of transactions with Boss Energy Ltd., including the sale of a 30% ownership interest in EnCore’s Alta Mesa project for $60 million USD and a $10 million USD investment in EnCore common shares
- Financial capacity gained to accelerate uranium production pipeline across South Texas and develop multiple satellite operations
- Facilitation of accelerated development of Dewey Terrace, Dewey-Burdock, and Gas Hills projects, enabling EnCore to advance its production portfolio
EnCore Energy Corp. has completed completion of the transactions under the master transaction agreement with Boss Energy Ltd., a leading Australian emerging ISR (in situ recovery) uranium producer, headlined by the sale of a 30-per-cent ownership interest in EnCore’s Alta Mesa project to Boss Energy for $60-million (U.S.) and including an investment of $10 million (U.S.) into EnCore common shares by Boss Energy. The transaction 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 accelerated 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.
Transaction Highlights
EnCore received US$60 million in full payment for Boss Energy’s 30% share of the JV;
EnCore received an additional US$10 million from Boss Energy as payment for a private placement of 2,564,102 EnCore shares;
The formation of a joint venture company owning Alta Mesa with EnCore holding a 70% joint venture interest and remaining the project manager, and Boss Energy holding a 30% joint venture interest.
William M. Sheriff, Executive Chairman, stated: “The completion of the joint venture with Boss Energy comes at a transformational time for EnCore and we look forward to their partnership at the Alta Mesa plant. With zero debt, production underway at the Rosita plant and a healthy treasury, we are in a strong position to advance the production pipeline across our portfolio at a more aggressive pace in 2024. We look forward to a year full of opportunity and growth as the only company in the United States with two operating uranium plants, supplying the essential material to fuel domestic nuclear energy.”
Pursuant to the terms of a Master Transaction Agreement dated December 5, 2023, Boss acquired a 30% equity interest in a new limited liability company (the “JV Company”) that was formed to hold the Alta Mesa project, in exchange for a payment to EnCore of US$60 million. EnCore holds 70% equity in the JV Company. Upon closing of the Transaction, the parties entered into a joint venture agreement (the “JV Agreement”) which will govern the JV Company. Pursuant to the JV Agreement, EnCore will act as manager of the JV Company and will be entitled to a management fee. The JV Company will distribute uranium from production at Alta Mesa on a pro rata basis according to EnCore and Boss Energy’s ownership interest. In the event a party’s interest falls below 10%, the other party shall have a right to either acquire that interest, or elect to have the interest converted into a 1% production royalty at Alta Mesa.
Concurrently with the establishment of the JV Company, the parties entered into a uranium loan agreement providing for up to 200,000 pounds of uranium to be lent by Boss Energy to EnCore. The loan will bear interest of 9% and be repayable in 12 months in cash or uranium at the election of Boss Energy.
Boss also acquired 2,564,102 common shares of EnCore issued from treasury at a price of US$3.90 per share for total proceeds to EnCore of US$10 million. The share price was fixed under the Master Transaction Agreement dated December 5, 2023 with the common shares subject to a four-month statutory hold period, expiring June 27, 2024.
Finally, the parties also entered into a strategic collaboration agreement for the joint collaboration and research to develop the Company’s PFN technology, to be financed equally by each party.
Alta Mesa In-Situ Recovery (“ISR”) Uranium Central Processing Plant (“Alta Mesa”) & Wellfield
The Alta Mesa CPP and Wellfield hosts a fully licensed and constructed In-Situ Recovery (“ISR”) uranium plant, located on 200,000+ acres of private land in the state of Texas. Alta Mesa CPP will be EnCore’s second producing location and work continues to advance the project towards planned production in the second quarter of 2024.
Total operating capacity at the Alta Mesa CPP is 1.5 million lbs. U3O8 (uranium) per year. The Alta Mesa CPP historically produced nearly 5 million lbs U3O8 between 2005 and 2013, after which production was curtailed as a result of low uranium prices. Alta Mesa 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 2,959,000 119,000 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 Meste 5,733,000 0.119 13,601,000 Total Inferred Resources 6,996,000 0.120 16,793,000
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 EnCore Energy Corp.
EnCore Energy Corp., America’s Clean Energy Company(TM), is committed to providing clean, reliable, and affordable domestic nuclear energy as the newest uranium producer in the United States. Uranium production commenced at EnCore’s licensed and past-producing South Texas Rosita Central Processing Plant (“CPP”) in November 2023 with work underway for a planned 2024 restart of uranium production at its licensed and past-producing South Texas Alta Mesa CPP. 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. 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.
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. 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.
We seek Safe Harbor.
