Anfield Resources Raises $1 Million; Close to Finalizing Uranium One Asset Purchase

Anfield Resources (TSXV:ARY,OTCQB:ANLDF) and Uranium One (TSX:UUU) signed initial paperwork for an asset purchase agreement just over a year ago, but the deal is now close to being finalized. 
Anfield announced Thursday that it has met the financial conditions of the deal by raising $1,050,000. The company has completed a non-brokered private placement of $500,000 worth of secured convertible debentures at an interest rate of 15 percent, as well as a fully subscribed, non-brokered private placement of $550,000.
“As part of the transaction and part of the closing requirements of the TSX Venture, we needed to demonstrate that we had enough working capital to close the transaction and meeting our financial obligations for the next six months. So the million dollars was raised in order to address that issue, and we managed to get that done via a combination of equity and debt,” Anfield CEO Corey Dias told the Investing News Network.
“We both tapped existing investors and sought new investors in order to get the funds in place, and with the funding now complete, we are now able to apply for final approval from the TSX Venture. We have had conditional approval for the transaction for a number of months, but this funding was the last step in that process. We anticipate a response from the Exchange with regard to our application within the next couple of weeks,” he added.
Securing financing during the summer is no easy task, especially when the markets are this dire. Dias attributed the company’s success to its strong shareholder base, as well as outside entities that see the potential of what Anfield is trying to achieve and appreciate the assets it is acquiring. Dias also recognized a financial contribution from Uranium One that helped bring the transaction to this final stage.
“Uranium One has done a great job with us with regard to advancing the transaction. There was a time when we had to seek a significant amount of funding to move the transaction forward, but now Uranium One providing a vast majority of funding in order to facilitate the closing,” he said. “Without Uranium One’s cooperation this would have been very difficult to do.”

Exciting assets added to roster

Being this close to finalization is definitely exciting, especially given the assets Anfield will acquire. One of those is the Shootaring Canyon mill in Utah, which is only one of three uranium mills located in the US.
“The Shootaring Canyon mill is one of only three licensed, permitted and constructed conventional uranium mills in the US. That in itself provides scarcity value. White Mesa, the one operating mill, is owned by Energy Fuels (TSX:EFR), and the third mill is the Sweetwater mill in Wyoming, owned by BHP Billiton is not operating,” Dias explained. “The logical plan for us is to get the mill up and running in order to start generating revenues and uranium. We see this as a unique opportunity because, in general, it is very difficult to go from being an explorer and developer to a uranium producer without spending a great deal of time and a lot of money. Licensing, permitting [and] construction could potentially take anywhere from seven to 10 years, notwithstanding the fact is there would be a lot of opposition from environmental groups.”
By acquiring the mill, Anfield will skip a significant portion of the long process and costs associated with building its own mill, allowing the company to instead focus on refurbishing Shootaring Canyon and working to advance its new assets. Those include the Velvet-Wood project, a 50-percent interest in the Wate Breccia Pipe joint venture, the Frank M uranium project, royalty interests in four uranium development projects and additional uranium exploration targets in Southeastern Utah, Arizona and South Dakota.

A long time coming

As mentioned, this deal has been in the works since August of last year, and while Dias said he didn’t anticipate the process taking quite this long, it may have its advantages. The delay was partially caused by the state of the market, which made it very difficult to raise the necessary funds last fall and into the beginning of this year — and while the market has yet to turn, there are a number of catalysts pushing it in a positive direction.
Besides major factors like reactor restarts in Japan and new plants being built in China, the US uranium market will also likely see some shifts moving forward.
“Given that the US imports 90 percent of its uranium now and the potential disruption of delivery from areas of the world which may be considered politically or economically unstable, I think that US-based nuclear utilities may look internally, if there is availability from producers, in order to get secure supply,” Dias said. “I seems a number of the utilities are looking to start negotiating pricing or new contracts to meet their needs for the 2017/2018 starting timeframe. It bodes well for us because I think it will take some time for us to refurbish the mill and prepare for it to get back into production and perhaps it will dovetail with those contract needs.”

Next steps

Naturally, the finalization of the asset agreement will be the next immediate step for Anfield, with the anticipated timeline for TSX Venture approval being just a couple weeks if everything goes smoothly.
After that, the company will focus on first assessing the refurbishment requirements for Shootaring Canyon and then determining the timeline to get it back into production. Dias said Anfield will also be reviewing the historical reports completed for the various assets it’s set to acquire, which have never been published for public consumption, and consider upgrading and publicly publishing new reports. The primary mine it will be acquiring is the Velvet-Wood project, which has already undergone an amended NI 43-101 technical report. Anfield has also already engaged BRS to complete the preliminary economic assessment for the project.
Dias encouraged investors to look at the assets Anfield will be acquiring, and noted that considering their value, he expects that there will be some kind of market correction in order to realign the company with its near-term producing peers.
“I think investors should really assess the suite of assets Anfield is buying. Right now Anfield has a market cap of roughly $2 million and has acquired assets that have transacted for over $100 million in the past. I think that given the assets Anfield is acquiring, when you compare it to other producers or near-term producers and look at the differential of market caps between Anfield and its peer group, there is a massive disconnect between the two.”
At end of day Thursday, Anfield Resources’ share price was up 18.75 percent to close at $0.095.
 
Securities Disclosure: I, Kristen Moran, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Anfield Resources is a client of the Investing News Network. This article is not paid for content.
Related reading:
Anfield Resources Joins the Ranks of Near-term Uranium Producers