Energy Fuels Acquiring Strathmore Minerals

Drill crew sinks a monitor well hole at Strathmore Minerals’ Roca Honda uranium property in New Mexico.
(Photo courtesy of Strathmore Minerals)
Energy Fuels and Strathmore Minerals have entered into a definitive agreement, where Energy Fuels will acquire Strathmore in an all-share transaction that values Strathmore at about $29 million.

Energy Fuels operates the White Mesa uranium mill near Blanding, Utah. The mill is the only conventional uranium mill currently operating in the United States and has the capacity to process 2,000 st/d of uranium ore. The company also has assets located throughout the western United States, including producing mines and mineral properties in various stages of permitting and development.

Strathmore is advancing two uranium projects toward production: the Roca Honda project in New Mexico and the Gas Hills project in Wyoming. The company also has an extensive property portfolio, primarily in Wyoming and New Mexico.

A preliminary economic assessment of the Roca Honda project, completed in August 2012, assumed that a new uranium mill would be built in New Mexico to process Roca Honda ore. Given that Roca Honda is located within transport distance of the White Mesa mill, Energy Fuels and Strathmore believe combining the companies will provide the option of processing Roca Honda ore at the White Mesa mill, rather than at a newly constructed mill. This could result in significant savings on development capital expenditures and reduce Roca Honda’s permitting timeline and cost.

Based upon certain forecasts contained within the preliminary economic assessment, as well as previous experience in conventional ore processing at the White Mesa Mill, Energy Fuels believes that Roca Honda has the potential to be the largest, and one of the lowest-cost, producing mines in the Energy Fuels asset portfolio.

Completion of the proposed transaction is subject to Energy Fuels and Strathmore shareholder approval and customary court and regulatory approvals, including acceptance by the Toronto Stock Exchange. The companies’ shareholders will be asked to approve the transaction at respective special shareholder meetings in August.

Completion of the transaction would result in current Strathmore shareholders owning about 21% of Energy Fuels.

As featured in Womp 2013 Vol 07 -