US uranium developer enCore Energy has agreed to sell a 30% stake in its Alta Mesa project in Texas to Boss Energy for $70m.
The companies signed a master transaction agreement in this regard.
As consideration, Boss Energy will pay $60m in cash and acquire $10m worth of shares in enCore, at $3.9 apiece, through a private placement.
Boss Energy will also loan out up to 200,000 pounds (90,718kg) of uranium to enCore for the latter’s commercial use in 2024. This is intended to give enCore the flexibility to optimise contracts and potential spot sales.
The loan, along with 9% interest, can be repaid in cash or in kind using uranium.
The two companies also agreed to partner on the use and joint development of enCore's Prompt Fission Neutron technology for uranium exploration and production.
The deal is due to close in February next year, giving enCore the financial capability to expedite its uranium production pipeline across South Texas.
enCore Energy executive chair William M Sheriff said: “enCore is eager to accelerate its production and development activities across our entire portfolio of assets. This transaction provides enCore with proceeds of $70m on closing, giving us the financial flexibility to ramp up our efforts in Texas, Wyoming and South Dakota.
“The accelerated production plan is designed to take advantage of what is projected to be a very strong uranium market over the next decade, with the world's rapidly growing focus on nuclear energy as a clean and reliable energy source. This surge in demand is coming at a time when the supply of uranium is already tight, with a heavy reliance on imports through Russia.
“In this 70/30 partnership with Boss Energy, a A$1.5bn [$984.56m] market capitalisation emerging ISR [in-situ recovery] producer, enCore will continue as manager of the Alta Mesa joint venture. This accretive transaction provides us with the means to expand our future production profile on an aggressively expedited timeline.”
Alta Mesa is a fully licensed and constructed ISR uranium plant, located on nearly 200,000 acres of private land.
It is expected to begin production in the first half of next year.
The Alta Mesa plant can produce up to 1.5 million pounds of triuranium octoxide (U3O8) annually, using the existing ion exchange (IX) circuit, which is planned to restart early next year.
With the fully licensed central processing plant, its production could increase to up to two million pounds per year.
The project hosts a resource of 3.41 million pounds of U3O8 at 0.109% in measured and indicated categories.
There is an additional 16.79 million pounds at 0.12% of U3O8 in inferred category.
In November 2022, enCore agreed to acquire the Alta Mesa project from Energy Fuels for $120m. The deal was part of enCore’s plans to speed up production of uranium and rare earth elements.
