Energy Fuels has been reacting positively to strong market conditions for uranium. Credit: Jan Mallander from Pixabay.

Uranium and rare earth elements (REE) producer Energy Fuels has concluded the $120m deal to offload three wholly owned subsidiaries, which hold the Alta Mesa in-situ recovery (ISR) uranium project in Texas, to uranium developer enCore Energy.

The consideration includes a $60m cash payment at closing and the remaining $60m in a secured convertible note payable in two years from the completion of the transaction.

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Proceeds from the sale will be used by Energy Fuels to fund its uranium, vanadium and rare earth business activities through approximately 2024.

The deal was announced last November.

Energy Fuels president and CEO Mark S Chalmers said: “We see our rapidly developing REE business as highly complementary to our primary uranium business. We can utilise our existing facilities to recover uranium and REEs from monazite, which increases our uranium production and also allows us to generate margins from multiple commodities.

“Finally, the $60m secured convertible note Energy Fuels received from enCore at closing provides the company with additional uranium market upside through the potential conversion of the Note into enCore Energy shares at an attractive conversion price.”

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Located on 200,000 acres of private land in south Texas, the fully licensed and constructed past-producing Alta Mesa ISR project and central processing facility has a total operating capacity of 1.5 million pounds (Mlb) of triuranium octoxide (U₃O₈) per annum.

With the acquisition of the Alta Mesa project, enCore plans to strengthen its position as an ISR uranium developer in the US.

enCore CEO and director Paul Goranson said that the deal will more than double enCore’s production capacity in South Texas.

“As we advance towards our Q3/23 production goal at our Rosita ISR uranium processing plant, we will commence work at the Alta Mesa Project with plans to restart production in 2024 with the installation of a fully permitted wellfield.”

The Alta Mesa ISR project has estimated measured and indicated mineral resources of 3.6Mlb of uranium.