enCore and Boss Energy form strategic partnership

Wednesday, 6 December 2023

The key terms of the agreement include the creation of a joint venture on Alta Mesa with enCore holding a 70% interest and remaining the project manager, and Boss holding a 30% interest in exchange for a payment of USD60 million. The joint venture company will distribute uranium from production at Alta Mesa on a pro-rata basis to enCore and Boss Energy's ownership interest.

In addition, Boss will make a private placement of USD10 million into enCore shares at a price of USD3.90 per share. The agreement also sees collaboration on the use and joint technological advancement of enCore's proprietary Prompt Fission Neutron (PFN) technology for real-time uranium analysis, for which Boss will receive an exclusive Australian licence.

Also, Boss will lend up to 200,000 pounds of physical uranium at commercial rates to enCore from its strategic stockpile, allowing enCore the flexibility to optimise its contracts and potential spot sales. The loan plus interest of 9% will be repayable in 12 months in cash or uranium.

The transaction is expected to be completed in February 2024, subject to certain customary conditions, including certain regulatory approvals and stock exchange approvals, in addition to Boss Energy completing a financing to fund the cash payments on closing.

Alta Mesa - which enCore acquired from Energy Fuels Inc for USD120 million in February this year - will be enCore's second producing location, planned for production in the first half of 2024 following the recently announced resumption of uranium production at the South Texas Rosita Uranium Processing Plant.

Primary operating capacity at the Alta Mesa Central Processing Plan (CPP) is 1.5 million pounds of U3O8 per year with additional back-end capacity of 0.5 million pounds of U3O8 per year, using feed from remote satellite ion exchange (IX) facilities that can be installed across the approximately 200,000-acre project area or on other projects. This will utilise fully the CPP's existing capacity of 2 million pounds of U3O8 per year. The Alta Mesa Project has 3.41 million pounds at 0.109% U3O8 measured and indicated and 16.97 million pounds at 0.120% U3O8 inferred NI 43-101 compliant resources.

enCore said the transaction provides it with the financial capacity to significantly accelerate its uranium production pipeline across South Texas through the development of multiple satellite operations. In addition, the transaction paves the way for aggressive expansion, consolidation and development of enCore's Dewey Terrace and Dewey-Burdock projects straddling the Wyoming-South Dakota border and enables the company to quicken development of its Gas Hills project in Wyoming.

"The capital received on closing will allow enCore to ramp up both exploration and development drilling not only at Alta Mesa but across our entire US portfolio," said enCore CEO Paul Goranson. "Existing licences, at both the Rosita and Alta Mesa CPPs, enable enCore to more than double the combined production capacity of both CPPs without further permits or license amendments. Deployment of the same satellite IX resin operating process utilised at Rosita will allow the full use of the 2 million pounds of uranium per year processing capacity at Alta Mesa.

"We look forward to collaborating with Boss Energy to advance our proprietary PFN technology, which provides enCore with the tools to analyse uranium data in real time, representing a major advantage in cost and time to install wellfields utilised in the ISL process."

Boss Energy's Managing Director, Duncan Craib, said: "Given the location, grade, scale, growth potential and historic production, the Alta Mesa Project is one of the best ISL projects globally with a near-term pathway to production. It is a project that we have always wanted to be involved in.

"The deal provides Boss Energy an initial low-risk foothold in the pivotal US uranium industry. The US is determined to become more self-sufficient in uranium and Alta Mesa will play a role in that process."

Boss Energy - which has almost completed development of its Honeymoon Uranium Project in South Australia - said that, with the addition of the Alta Mesa Project, the company is "set to become a multi-mine uranium producer" during the first half of 2024.