Canada-based International Consolidated Uranium (CUR) and Energy Fuels on 15 July announced that CUR has entered into a definitive asset purchase agreement with certain wholly-owned subsidiaries of Energy Fuels through which it will acquire a portfolio of conventional uranium projects in Utah and Colorado. In connection with the closing of the transaction, the companies also agreed to enter into toll-milling and operating agreements with respect to the projects which positions CUR as a potential near-term US uranium producer subject to an improvement in uranium market conditions and/or CUR entering into acceptable uranium supply agreements.
The acquisition and alliance is expected to establish CUR as a new player in the US uranium sector. Although the US is the world’s largest generator of nuclear power, and thus the largest consumer of uranium, domestic production of uranium is almost non-existent. . In late 2020, the US government approved the proposed establishment of a national strategic uranium reserve. Uranium mined by CUR, at one of the acquired projects, and processed into natural uranium concentrates at Energy Fuels’ White Mesa Mill located near Blanding, Utah, is expected to qualify for the proposed reserve.
The portfolio of acquired projects includes, among other assets, the following three permitted, past-producing mines in Utah, which are expected to be the immediate focus of CUR: Tony M Mine (Henry Mountains area of southeastern Utah), a fully-developed and permitted underground mine that operated most recently in 2008; Daneros Mine (White Canyon District), a fully-developed and permitted underground mine that was most recently in production in 2013; Rim Mine (East Canyon portion of the Uravan Mineral Belt) a fully-developed and permitted underground mine that was most recently in production in 2009.
With the toll-milling agreement, CUR will become the only current US uranium developer (other than Energy Fuels) with guaranteed access to Energy Fuels’ White Mesa Mill, which is the only US permitted and operating conventional uranium mill. The operating agreements will allow the projects to continue to be managed by Energy Fuels, ensuring a smooth transition.
The consideration payable to Energy Fuels for the acquisition of the projects and for securing the toll-milling and operating agreements includes $2 million payable at closing, CAD6 million ($4,75m) of deferred cash payable over time, CAD5 million of deferred cash payable on commencement of commercial production, and such number of CUR shares that results in Energy Fuels holding 19.9% of the outstanding CUR common shares immediately after closing. CUR will also pay Energy Fuels a management fee, along with a toll milling fee for ore produced at the Projects in the future.