Boss Energy will pay $60m in cash and purchase enCore shares worth $10m, at $3.9 per share, through a private placement, and will loan out up to 200,000lb (90,718kg) of uranium to enCore for commercial use in 2024, to support potential spot sales
enCore to sell 30% of Alta Mesa project to Boss Energy. (Credit: Artyom Korshunov on Unsplash)
US-based in-situ recovery (ISR) uranium producer enCore Energy has agreed to sell a 30% stake in the Alta Mesa project to Australian uranium producer Boss Energy for $70m.
Under the terms of the master transaction agreement, Boss Energy will pay $60m in cash and purchase enCore shares worth $10m, at $3.9 per share, through a private placement.
The Australian uranium producer will loan out up to 200,000lb (90,718kg) of uranium to enCore for commercial use in 2024, allowing it to optimise contracts and potential spot sales.
The two companies also agreed to collaborate on the use and joint development of enCore’s unique Prompt Fission Neutron (PFN) technology for uranium exploration and production.
The transaction is expected to be completed in February 2024, subject to certain customary conditions, including regulatory approvals and stock exchange approvals.
enCore said that the transaction provides the financial capacity to advance its uranium production pipeline across South Texas through multiple satellite operations.
In addition, the transaction facilitates the expansion, consolidation and development of the US Uranium producer’s Dewey Terrace and Dewey-Burdock projects.
enCore executive chair William Sheriff said: “This transaction provides enCore with proceeds of $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, an AUD$1.5 billion market capitalisation emerging ISR producer, enCore will continue as manager of the Alta Mesa joint venture.”
In February this year, enCore acquired the Alta Mesa project, located on 200,000 acres of private land in the state of Texas, from Energy Fuels, for a total of $120m.
The project has a fully licensed central processing plant (CPP) with 1.5 million pounds U3O8 per annum capacity, through the existing ion exchange (IX) circuit to be restarted in early 2024.
With the installation of additional IX resin processing circuits similar to those in use at enCore’s Rosita CPP, Alta Mesa CPP can also up to two million pounds of U3O8 per annum.
The project hosts a Measured and Indicated resource of 3.41 million pounds at 0.109% U3O8, and an Inferred resource of 16.79 million pounds at 0.120% U3O8, with a potential to grow.
enCore CEO Paul Goranson said: “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.
“Finally, we look forward to collaborating with Boss Energy to advance our proprietary PFN technology, which provides enCore with the tools to analyse uranium data in real time, representing a major advantage in cost and time to install wellfields utilised in the ISR process.”