Currently operating conventional uranium mill
Completion of the transaction, announced yesterday, is expected to take place in the second quarter of this year. It will bring together Energy Fuels' operating White Mesa uranium and vanadium mill in Utah - the only currently operating conventional uranium mill in the USA - and Uranerz's Nichols Ranch ISL project in Wyoming, which started operating last year.
The companies claim that the merger will create the largest NI 43-101 uranium resource base in the USA. Energy Fuels is currently mining uranium at Pinenut in Arizona, with further conventional assets including the Canyon Mine (Arizona), the Sheep Mountain Project (Wyoming), the Henry Mountains Project (Utah) and the Roca Honda Project (New Mexico), all of which are seen as pipeline projects. Canyon is fully permitted and partially developed but currently on standby, while Sheep Mountain and Roca Honda are in the permitting process. Henry Mountains, a group of uranium properties including existing underground workings and surface development, is currently under care and maintenance.
Uranerz's assets in Wyoming's Powder River Basin include the Jane Dough and Hank uranium deposits, which are contiguous with Nichols Ranch, plus projects at West North Butte and Reno Creek. Hank is permitted, while Jane Dough is undergoing permitting.
White Mesa accounts for some 20% of US uranium production, although Energy Fuels said in November that it did not expect any new processing campaigns to begin at the mill this year after the completion of the current one. With uranium sales contracts already in place to 2020, Uranerz and Energy Fuels say that the combination of their asset bases should position the company well in the "current low uranium price environment" while maintaining the potential to scale up production as market conditions improve.
Energy Fuels president and CEO Stephen Antony said that the merged company would be better able to respond to the "dynamic and volatile" uranium market, while Uranerz executive chairman Dennis Higgs said the transaction would create a "unique" uranium producer. "Together, we believe we can create a stronger company from the perspective of resources, diversification of production sources, production scalability, growth, working capital and market capitalization," he said.