WESTERN SLOPE – Energy Fuels Inc., the Toronto-based company planning to build the Piñon Ridge Uranium Mill in Montrose County, announced this week that it has entered into an agreement to acquire all Denison Mines Corporation’s mining assets and operations located in the U.S., including the White Mesa uranium and vanadium mill in Blanding, Utah.
Once the acquisition is finalized, Energy Fuels officials say they believe the company will become the largest pure-play uranium producer in the U.S., and one of the largest holders of uranium resources in the U.S.
“This transaction is transformational for Energy Fuels, and reshapes the landscape of the uranium sector within the U.S.,” Steve Antony, president and chief executive officer of Energy Fuels, said in a statement released to The Watch. “It combines the highly strategic asset of the only operating uranium mill in the U.S., White Mesa, with a significant resource base that substantially increases White Mesa's available feedstock. The result is an unmatched production growth profile and the opportunity for both Energy Fuels and Denison shareholders to benefit from the clear operational synergies that result from this transaction. I look forward to working with Denison's U.S. team to maximize the benefits of this important combination.”
In exchange for the assets, Energy Fuels will transfer 425,441,494 common shares to Denison, to be distributed to Denison shareholders on a pro rata basis as a return of capital in the course of the reorganization. Denison shareholders will receive approximately 1.106 common shares of Energy Fuels for each common share of Denison owned, and will, in aggregate, own approximately 66.5 percent of the issued common shares of Energy Fuels.
“This transaction is an important step forward for Denison,” said Ron Hochstein, president and CEO of Denison. “The company has evolved on two parallel but different tracks, being both an exploration and development entity with a global footprint and an established producer in the United States. We are pleased to have the opportunity to combine our U.S. operations with such a complimentary set of assets and people. I'm excited about the opportunities that lie ahead for both Denison and Energy Fuels shareholders and believe that this transaction only serves to strengthen the operations of both companies.”
While Energy Fuels continues to defend legal challenges to the validity of the Radioactive Materials License it received from the Colorado Department of Public Health and Environment in March 2011, Energy Fuels spokesman Curtis Moore said Tuesday the acquisition will not affect company plans for the Piñon Ridge Uranium Mill.
“This transition doesn’t change anything with Piñon Ridge,” Moore said. “Energy Fuels will continue on with defending the license and seeking ways to build the mill.”
Furthermore, he said the acquisition will significantly shift Energy Fuels from “uranium developer to uranium producer.”
Last year, Energy Fuels acquired Titan Uranium, Inc., and its assets, including the Sheep Mountain mine in Fremont County, Wyo., and interests in uranium exploration projects in Utah, Wyoming, Arizona and Saskatchewan. After that expansion, Energy Fuels had about 61,000 acres of prospective uranium and vanadium properties in the West as well as 32,000 additional acres in Canada.
The Sheep Mountain Project is still in the permitting process, with production from that mine expected to begin in 2015, with a peak production rate of 1.5 million pounds of uranium a year. Energy Fuels’ Colorado Plateau properties additionally contain a measured recourse of 1,951,486 tons.
Now, adding to its expanded portfolio, Energy Fuels will acquire Denison’s White Mesa Mill in Blanding, which is the only conventional uranium mill operating in the U.S. It is permitted to process 2,000 tons of ore a day, producing eight million pounds of uranium per year. Along with White Mesa Mill, Energy Fuels will acquire Denison’s Colorado Plateau mines, located along the Colorado/Utah order; the Daneros uranium mine in southeastern Utah; the Arizona Strip properties; and the Henry Mountains uranium complex in southern Utah. The Henry Mountains complex is Denison’s largest resource in the U.S. with 12.8 million pounds of indicated uranium resources.
Completion of the acquisition, according to Energy Fuels, is subject to a number of conditions and contingencies, many of which are beyond the control of Denison and Energy Fuels. Although it is the intention of Denison and Energy Fuels to proceed as expeditiously as possible toward completion of the transaction, there currently is no guarantee that the transaction will be completed.
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