{"id":8496,"date":"2023-12-06T11:00:00","date_gmt":"2023-12-06T11:00:00","guid":{"rendered":"https:\/\/encoreuranium.com\/news\/encore-energy-enters-us70-million-transaction-with-boss-energy-proceeds-to-accelerate-company-wide-uranium-production-plans\/"},"modified":"2023-12-06T11:00:00","modified_gmt":"2023-12-06T11:00:00","slug":"encore-energy-enters-us70-million-transaction-with-boss-energy-proceeds-to-accelerate-company-wide-uranium-production-plans","status":"publish","type":"news","link":"https:\/\/encoreuranium.com\/news\/encore-energy-enters-us70-million-transaction-with-boss-energy-proceeds-to-accelerate-company-wide-uranium-production-plans\/","title":{"rendered":"enCore Energy Enters US$70 Million Transaction with Boss Energy; Proceeds to Accelerate Company-Wide Uranium Production Plans"},"content":{"rendered":"
NYSE American:EU DALLAS<\/span><\/span>, Dec. 6, 2023<\/span><\/span> \/CNW\/ – enCore Energy Corp. <\/b>(NYSE American: EU) (TSXV:\u00a0EU) (the "Company<\/b>" or "enCore"<\/b>) is pleased to announce that it has entered into a Master Transaction Agreement ("Agreement") with Boss Energy Limited ("Boss Energy"), a leading Australian emerging ISR uranium producer, which, upon completion, will result in the sale of a 30% ownership interest in enCore’s Alta Mesa project ("Alta Mesa") to Boss Energy for US$60 million<\/span>, an investment of US$10 million<\/span> into enCore common shares by Boss Energy, a loan of up to 200,000 pounds U3<\/sub>O8<\/sub> for enCore’s commercial use over the next year, and the formation of a strategic collaboration on the use and joint development of enCore’s proprietary Prompt Fission Neutron ("PFN") technology for uranium exploration and production.<\/p>\n \n The transaction, expected to be completed in February 2024<\/span>, provides enCore with the financial capacity to significantly accelerate its uranium production pipeline across South Texas<\/span> through the development of multiple satellite operations.\u00a0 In addition, the transaction paves the way for aggressive expansion, consolidation and development of enCore’s Dewey Terrace<\/span> and Dewey-Burdock projects straddling the Wyoming<\/span>–South Dakota<\/span> border and enables the Company to quicken development of its Gas Hills project in Wyoming.\u00a0 \u00a0\u00a0<\/p>\n Alta Mesa is an In Situ Recovery ("ISR") uranium project in South Texas<\/span>, with a fully licensed Central Processing Plan ("CPP") with 1.5 million pounds U3<\/sub>O8<\/sub> per year capacity through the existing ion exchange ("IX") circuit that is planned for restart in early 2024.\u00a0 The CPP has the capacity to process, dry, and package up to 2 million pounds U3<\/sub>O8 <\/sub>per year, and that capacity can be met with the installation of additional IX resin processing circuits similar to those in use at enCore’s Rosita CPP. The project hosts a National Instrument 43-101 resource of 3.41 million pounds at 0.109% U3<\/sub>O8<\/sub> in the Measured and Indicated category with an additional 16.79 million pounds at 0.120% U3<\/sub>O8<\/sub> in the Inferred category, and there is significant potential to grow the mineral resources within the approximately 200,000 acre (80,900 Ha) project area. \u00a0In February 2023<\/span>, enCore acquired the Alta Mesa project for US$120 million<\/span> from Energy Fuels, Inc.<\/p>\n William M. Sheriff<\/span>, Executive Chairman, and Paul Goranson<\/span>, Chief Executive Officer, will host an online webinar on Thursday December 7th, 2023<\/span> at 11:00 AM ET<\/span>. To join the webinar please register at: https:\/\/us02web.zoom.us\/webinar\/register\/WN_LrznPkW1TkaJiL2rWM9fKg<\/a>.<\/p>\n William M. Sheriff<\/span>, enCore’s Executive Chair, stated: "enCore is eager to accelerate its production and development activities across our entire portfolio of assets. This transaction provides enCore with proceeds of US$70 million<\/span> on closing, giving us the financial flexibility to ramp up our efforts in Texas<\/span>, Wyoming<\/span> and South Dakota.\u00a0 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.\u00a0 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<\/span>. In this 70\/30 partnership with Boss Energy, a AUD$1.5 billion market capitalization emerging ISR producer, enCore will continue as manager of the Alta Mesa joint venture.\u00a0 This accretive transaction provides us with the means to expand our future production profile on an aggressively expedited timeline."<\/p>\n Paul Goranson<\/span>, enCore’s Chief Executive Officer, added: "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. Existing licenses, at both the Rosita and Alta Mesa CPPs, enable enCore to more than double the combined production capacity of both CPPs without further permits or license amendments. Deployment of the same satellite IX resin operating process utilized at Rosita will allow the full use of the 2 million pounds of uranium per year processing capacity at Alta Mesa.\u00a0Finally, we look forward to collaborating with Boss Energy to advance our proprietary PFN technology, which provides enCore with the tools to analyze uranium data in real time, representing a major advantage in cost and time to install wellfields utilized in the ISR process."<\/p>\n The key terms of the Agreement include:<\/p>\n Pursuant to the Agreement, enCore will establish a new subsidiary (the "JV Company") to hold the Alta Mesa project that will, on closing, be owned 70% by an existing subsidiary of enCore and 30% by a new US subsidiary of Boss Energy. \u00a0In consideration for its 30% interest in the JV Company, Boss Energy will, on closing, pay enCore US$60 million<\/span> in cash, and concurrently purchase US$10 million<\/span> in common shares of enCore at a price of US$3.90<\/span> per common share.\u00a0 \u00a0enCore will act as Manager of the JV Company for so long as enCore remains majority owner and will be entitled to customary management fees.\u00a0 The JV Company will distribute uranium from production at Alta Mesa on a pro-rata basis to enCore and Boss Energy’s ownership interest.\u00a0 Dilution of a party’s interest below 10% will result in the right of the other party to acquire that interest or that interest being converted to a 1% production royalty on Alta Mesa. \u00a0<\/p>\n In connection with the Agreement, the parties will enter into a uranium loan agreement providing for up to 200,000 pounds of uranium to be loaned by Boss Energy to enCore.\u00a0 The loan plus interest of 9% will be repayable in 12 months in cash or uranium at the election of Boss Energy.<\/p>\n The parties will also enter into a strategic collaboration agreement providing for the joint collaboration and research to develop the Company’s PFN technology, to be funded equally by each party.<\/p>\n Closing of the transactions contemplated under the Agreement is expected to occur in February of 2024 and may be extended in certain circumstances.\u00a0 Closing is subject to certain customary conditions, including certain regulatory approvals and stock exchange approvals, in addition to Boss Energy completing a financing to fund the cash payments on closing. The Agreement also provides for customary deal protections and a break fee in the event the funding condition is not met.<\/p>\n The Alta Mesa CPP and Wellfield hosts a fully licensed and constructed ISR uranium plant, located on approximately 200,000 acres of private land in the state of Texas<\/span>. Alta Mesa will be enCore’s second producing location, planned for production in the first half of 2024 following the recently announced resumption of uranium production at the South Texas Rosita Uranium Processing Plant ("Rosita").<\/p>\n Primary operating capacity at the Alta Mesa CPP is 1.5 million pounds of U3<\/sub>O8<\/sub> (uranium) per year with additional back-end capacity of 0.5 million pounds of U3<\/sub>O8 <\/sub>per year, using feed from remote satellite IX facilities that can be installed across the approximately 200,000 acre project area or on other projects.\u00a0 This will utilize fully the CPP’s existing capacity of 2 million pounds of U3<\/sub>O8<\/sub> per year.\u00a0<\/p>\n Alta Mesa CPP and Wellfield highlights:<\/b><\/p>\n As previously reported, enCore continues work on the refurbishment of the processing circuits. The elution circuit, used to strip uranium from the ion exchange beads, has been completed, and represents a significant milestone in the pathway for production restart. All the process pumps for the startup IX circuit have been rebuilt and replaced, including the main injection pumps. We anticipate completing the refurbishment of the startup portion of the IX circuit before the end of 2023.<\/p>\n The yellowcake processing circuit refurbishment has started with the rebuilding of key components of the yellowcake storage systems and ordering of long lead time items such as the filter press and yellowcake transfer pumps. Refurbishment work commenced on the yellowcake drying system, and that work is expected to be completed just prior to the anticipated production restart date.<\/p>\n Within Production Authorization Area 7 (PAA-7), enCore is installing injection and production wells in the wellfield and has received and staged the equipment to install the pipelines to connect the wellfield to the Alta Mesa CPP. All the necessary equipment for the startup of production in the PAA-7 wellfield has been received or has been ordered with a confirmed delivery schedule.<\/p>\n
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