(Casper Star Tribune, January 7) – The new firm will bear Energy Fuels’ name, though the companies said Uranerz management team would be retained to oversee operations in Wyoming.
The new firm will bear Energy Fuels’ name, though the companies said Uranerz management team would be retained to oversee operations in Wyoming. Under the agreement, Uranerz shareholders will own 55 percent of the new company, with Energy Fuels’ investors owning the remaining 45 percent.
The move comes amid a depressed market for U308, the yellowcake uranium used to fuel nuclear reactors, which has prompted some producers to lay off employees, consolidate operations and shelve expansion plans. It also marries two companies with distinctly different operations.
Uranerz began production at its Nichols Ranch facility in northeast Wyoming in early 2014. Nichols Ranch is an in situ mine, where uranium is gleaned from the ground by pumping water into uranium-bearing rock, dissolving it and pumping water laden with uranium to the surface, where the two are separated. Energy Fuels, by contrast, runs a conventional uranium mine, White Mesa Mill, in southeastern Utah.
Conventional mines generally cost more to operate compared with their in situ counterparts. Wyoming’s operations have been insulated somewhat to low U308 prices by their ability to control costs.
The two companies touted the diversity of the new firm’s operations in a release announcing the merger.
“The combined asset base of the company, anchored by two distinct production centers, will be better positioned to create shareholder value in the current low uranium price environment while maintaining what Energy Fuels and Uranerz believe is substantial organic production growth potential at higher uranium prices,” the pair said.
The new company will be overseen by Energy Fuels’ executives. Uranerz executives Dennis Higgs, Glenn Catchpole and Paul Saxton will be nominated to the board of the new firm, the release said.
Nichols Ranch, straddling the Johnson and Campbell County line, produced 97,000 pounds of yellowcake uranium in the third quarter of 2014. The company reported sales of 75,000 pounds for the quarter and revenues of $3.9 million.
The merger is expected to be completed in the second quarter of 2015.