Energy Fuels Completes Acquisition of Properties Adjacent to Roca Honda Project

- August 4th, 2015

Energy Fuels Inc. (NYSEMKT:UUUU,TSX:EFR) reported the completion of its previously announced acquisition of key mineral properties that are adjacent to its Roca Honda Project in New Mexico.

Energy Fuels Inc. (NYSEMKT:UUUU,TSX:EFR) reported the completion of its previously announced acquisition of key mineral properties that are adjacent to its Roca Honda Project in New Mexico. The Acquired Properties total approximately 4,580 acres (1,854 hectares), and contain significant historical uranium resources, additional exploration potential, and the availability of existing historic mine infrastructure.
As quoted in the press release:

Roca Honda is held by the Company’s 60% subsidiary, Roca Honda Resources LLC (“RHR”), with the remaining 40% held by subsidiaries of Sumitomo Corporation, the Company’s joint venture partner. Under the terms of the joint venture agreement, Energy Fuels will offer the Acquired Properties to be included in the RHR joint venture.
The Acquired Properties, which total approximately 4,580 acres (1,854 hectares), include:
Fee mineral ownership of 640-acres (“Section 17”);
Fee ownership of 36 unpatented lode mining claims; and
A leasehold interest in 131 unpatented lode mining claims.
Under the current base case scenario described in a February 2015 preliminary economic assessment and technical report (“PEA”) prepared in accordance with National Instrument 43-101 – Standards for Disclosure for Mineral Projects (“NI 43-101”), which does not include the Acquired Properties, the Roca Honda Project is expected to have a nine-year mine life with average production of approximately 2.6 million pounds of U3O8 per year. All uranium resources mined from Roca Honda are expected to be processed at the Company’s existing, 100%-owned White Mesa Mill located in southeast Utah.
The Acquired Properties have the potential to significantly enhance the economics of Roca Honda through added uranium resources, increased mine life, and potential mine synergies. In addition, an existing, partially-sunk mine shaft constructed by Kerr-McGee in 1982 to a depth of 1,478 feet on the Acquired Properties may be available for use, which could result in lower capital requirements and reduced operating costs. There is also the potential to expand the uranium resources at Roca Honda through future drilling and exploration on the Acquired Properties. Roca Honda is currently in an advanced stage of permitting, which is expected to be completed in 2017.
Not including the Acquired Properties, the PEA indicates that Roca Honda hosts approximately 1.5 million tons of Measured and Indicated Mineral Resources with an average grade of 0.48% eU3O8 containing 14.6 million pounds of uranium. The project is further estimated to host an additional 1.2 million tons of Inferred Mineral Resources with an average grade of 0.47% eU3O8 containing 11.2 million pounds of uranium.
As previously described in the Company’s May 28, 2015 press release, the Acquired Properties contain additional significant historical resources which were identified on Section 17 by previous operators, including Kerr-McGee. The Company also believes there is the potential to expand the project’s resources further through additional drilling and exploration on the Acquired Properties, which are on-trend with the currently identified resources on Roca Honda and the adjacent Mount Taylor mine.
As consideration for acquiring the Acquired Properties, the Company has delivered to URI:
US$2.5 million cash;
US$375,000 of Energy Fuels common shares;
The royalty held by the Company on certain properties included within later phases of Peninsula Energy’s Lance Uranium Project in Wyoming;
Unpatented lode mining claims adjacent to URI’s Church Rock Project; and
A 4% gross royalty on Section 17, which can be repurchased by Energy Fuels upon payment to URI of US$5.0 million cash at any time in the Company’s sole discretion prior to the date on which the first royalty becomes due.

Energy Fuels President and CEO, Stephen P. Antony, said:

“We are very pleased to have acquired these key properties, since they have the potential to significantly expand the scale and improve the economics of this major U.S. uranium project. We believe we have acquired these properties at an attractive price, since we believe we can achieve enhanced project economics through increased future uranium production, additional exploration potential, and the possible use of existing onsite infrastructure, including a historic mine shaft located on Section 17. We continue to believe that Roca Honda is one of the true ‘flagship’ uranium mining projects in the U.S. today. It boasts high-grades and a large-scale production profile; it is adjacent to the Mount Taylor Mine; and Energy Fuels‘ 100%-owned White Mesa uranium mill, the only conventional uranium mill operating in the U.S. today, is within economic trucking distance. Energy Fuels was the 2nd largest producer of uranium in the U.S. in 2014. We believe Roca Honda has the capability to vault us to the number one spot among U.S. uranium producers as prices rise in the future.”

Click here for the full Energy Fuels Inc. (NYSEMKT:UUUU,TSX:EFR) press release.
Click here for the Energy Fuels Inc. (NYSEMKT:UUUU,TSX:EFR) profile.

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