Canadian uranium firms announce acquisition

Kelly Sloan, The Business Times

A Canadian company that plans to build a uranium processing mill in Western Colorado has announced efforts to acquire another company with substantial uranium holdings in the United States.

Energy Fuels announced a notice of intent to acquire Strathmore Minerals Corp. Officials from the companies say the transaction will take Energy Fuels, already the largest convention uranium producer in the U.S., to an even higher level.

Energy Fuels, based in Toronto, and Strathmore Minerals, based in Vancouver, both are publicly traded on the Toronto Stock Exchange.

Under the terms of the acquisition agreement, Energy Fuels will obtain all of the issued and outstanding common shares of Strathmore stock. Strathmore stockholders would acquire 21 percent ownership of all Energy Fuels issued and outstanding shares. The deal is expected to be completed in August.

“It is rare to find an acquisition that offers the magnitude of synergies that we believe exist between Energy Fuels and Strathmore,” said Stephen Antony, president and chief executive officer of Energy Fuels. “I am very excited about the merits of this transaction and the opportunity it represents for the shareholders of both companies.”

David Miller, CEO of Strathmore, agreed. “We are excited to enter into this transaction with Energy Fuels, which represents a strong fit with Strathmore’s asset base and a significant step forward in both the near- and long-term development of our U.S. uranium portfolio.”

Energy Fuels operates the White Mesa uranium mill near Blanding, Utah, the only conventional uranium processing plant in the United States. Energy Fuels also owns uranium mining interests in the Four Corners Region of Colorado, Utah and Arizona as well as in Wyoming. Strathmore owns uranium holdings in Northwest New Mexico and Southern Wyoming.

The acquisition is expected to bolster the Energy Fuels long-term production profile in the Four Corners region and Wyoming.

Energy Fuels has proposed constructing the Pinon Ridge uranium mill about 12 miles west of Naturita in Montrose County. If completed, the mill would be the first new facility of its kind in the U.S. in 30 years. It’s estimated the mill could create a total of 1,100 direct and indirect jobs in the region.

The project has been held up in court, however, by repeated lawsuits challenging the issuance of various permits.

The latest challenge, concerning the Colorado Department of Public Health and Environment’s granting of a radioactive materials license, was upheld by a Denver District Court in June 2012, pending an administrative hearing. Following that hearing, which took place in November 2012, the permit was re-issued in April.

While none of the legal challenges to the proposed mill has been successful, the delays postponed construction of the mill long enough for uranium prices to drop sufficiently to make construction unprofitable until prices rebound.

While the U.S. remains the largest consumer of uranium in the world, more than 90 percent of that demand is met by foreign supplies.