The acquisition of Uranium One’s assets in Utah, Arizona and South Dakota increases Anfield’s uranium asset acreage by more than 250 percent, establishing the junior exploration and acquisition company as one of the largest uranium property landholders in the United States.
Furthermore, as the company notes in its press release, the location of the assets is a boon from a production perspective — the Shootaring mill and properties lie within the most prolific uranium production area in the US, and are also in close proximity to the company’s other holdings. Investors can expect to see Anfield work towards getting the historic resource for the Uranium One assets upgraded to a NI 43-101 resource.
Acquiring Uranium One’s assets gives Anfield a portfolio of conventional uranium assets with a historic resource estimate of 6.8 million ounces of U3O8. However, the highlight of the deal is the Shootaring mill, which gives the company an added edge, particularly since there are only three licensed conventional uranium mills in the US.
Anfield Resources CEO Corey Dias, who is encouraged by the news, told Uranium Investing News that “it’s great for our investors and great for the company.”
“The way we look at it is that uranium mills are very different from copper or gold mills. There is a very limited number of uranium mills available that are producing. There were 44 in the 1980s and now there are essentially three in the US,” Dias explained, adding, “now all of a sudden Anfield is in the near-term production business. The mill has significant value because nobody is building these mills. So we skipped a whole bunch of time and effort by acquiring this mill today.”
Looking towards the future, Dias spoke about his rough timeline to get the mill up and running, explaining that he expects it to take about two years to bring the mill up to date.
“The mill was built in the 1980s and operated until 1982. Then it was put on care and maintenance,” Dias said, noting that because the mill is for uranium it has been closely monitored by the department of Radiation Control even though it’s been on care and maintenance. That means currently the main issue stopping Anfield from turning the lights on is that the technology is older, “so the refurbishing has to take place.”
Of course, given that uranium prices haven’t exactly rallied to the highs investors have been told to expect, Anfield does have some time to spare with bringing the mill up to today’s standards.
But once the mill does get going, Anfield is in a good position to make the most of it. Shootaring is a 750-tonne-per-day mill, which means that its production is limited to about 1 million pounds per year. However, as a result the company will have a greater chance of running the mill at peak efficiency when it’s fully operational.
Per the terms of the agreement, Anfield will issue Uranium One the equivalent of US$1 million in shares; upon closing, it will make cash payments to Uranium One of US$4 million, with US$2 million to be paid either by July 1, 2017 or at the restart of commercial production at the mill — whichever comes first. The company will also pay US$2 million on the earlier of July 1, 2019 or 24 months following the restart of production of the mill.
Anfield will also be making cash deposits to replace the long-term government reclamation bonds that are currently in place over the mill as a surety. A deposit of US$5 million will be made to the current bond-providing institution at the closing, and within 24 months following the closing Anfield will make an additional deposit to cover the remaining amounts of the reclamation bonds.
Following the news, Anfield is still on a trading halt.
Securities Disclosure: I, Vivien Diniz, hold no investment interest in any of the companies mentioned in this article.
Editorial Disclosure: Anfield Resources is an advertising client of the Investing News Network. This article was not written as part of any advertising campaign and is not paid-for content.
Peninsula Energy (ASX:PEN) is set to be the ASX’s next uranium producer. Its flagship Lance Projects in Wyoming is headed towards production in 2015, with purchasing contracts secured for 2015 to 2024.Connect here and don't miss their next catalyst!Learn More