Energy Fuels heads into 2016 on the strength of its two conventional and in-situ recovery (ISR) production centers, compelling uranium market fundamentals, and excellent leverage to increasing uranium prices.
The company recently announced that its board and management accumulated over one million shares of Energy Fuels late in 2015, representing over 2% of the issued and outstanding shares of the company. In addition, it recently sold certain of its non-core uranium assets to enCore Energy (CVE:EU). These are conventional uranium deposits that did not fit into the company’s long-term business plans, due to various technical and economic considerations, though Energy Fuels still stands to profit from these projects, thanks to an agreement between the pair.
Energy Fuels and enCore entered into a conditional toll milling agreement whereby enCore will pay Energy Fuels a fee to process material produced from these deposits at Energy Fuels’ White Mesa Mill, which is the only licensed and operational conventional uranium mill in the US.
The Gold Newsletter's editor, Brien Lundin, noted that as consideration Energy Fuels received $329,960 cash and 14.25 million shares of enCore, representing 19.9% of its issued and outstanding shares.
In the meantime, Energy Fuels will continue to focus on its higher-grade, lower-cost and larger-scale projects, such as its Canyon mine in Arizona, which boasts uranium grades in excess of 1%; its Nichols Ranch ISR operation in Wyoming; and its three large-scale conventional projects which have between 20 million and 30+ million pounds of uranium in the ground – each.
enCore will assume all liabilities on the disposed of properties, including all debts, obligations and environmental claims, leaving Energy Fuels "still very much a buy" in Lundin's view.