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Energy Fuels and Magnum Uranium complete merger

Author: Dorothy Kosich, Mineweb.com

The merger between North American uranium junior companies Energy Fuels (TSX-EFR) and Magnum Uranium was completed this week.

The combined company will retain the Energy Fuels Inc, name and trading symbol; along with Cdn$13.5 million in cash.

The two companies now have combined measured and indicated U₃O₈ assets of 4.1 million pounds, two permitted conventional uranium mines on the Colorado Plateau and an implemented plan to build a 1,000tpd uranium milling complex now in the permitting stage.

The new company will also have 55,000 acres of uranium properties in Colorado, Utah, Arizona, Wyoming, Idaho and New Mexico, including three properties near Cameco's Smith Patch ISL mine in the Powder River Basin of Wyoming. In addition, the company will have 50,000 acres of exploration properties in the Athabasca Basin located northwest of the McClean Lake and Rabbit Lake uranium mines.

In a news release Thursday, Energy Fuels said the all-share transaction provides the company "with significantly more resource to develop for mill feed at the company's Piñon Ridge mill, and more cash to develop the mills and mines."

"Additionally, the company now has a Wyoming ISR property with exciting potential and is a partner in an exploration project in Canada's Athabasca Basin," Energy Fuels said.

At the time the transaction was announced on March 30^th, Craig Lindsay, Magnum Uranium's president and CEO, said, "The combination of our portfolio of exploration and development properties with Energy Fuels' permitted uranium mines and advanced-stage milling strategy will significantly enhance the ability of the enlarged entity to capitalize on the strengthening global nuclear power sector."

Magnum shareholders will receive 0.78 Energy Fuel shares for each Magnum common share held.

Energy Fuels also received more good news Wednesday when the Montrose County Planning Commission unanimously recommended that the county commission approve the Piñon Ridge mill. The Montrose County Commission is expected to commence its review of the mill plan shortly.

Opponents of the mill--who include actress Darryl Hannah, who maintains a home in a nearby county--fear the mill would threaten public health. However, supporters have noted the potential for economic growth and better wages from uranium mining and milling.

The Grand Junction Daily Sentinel reported the planning commission's approval included 16 conditions-such as groundwater mitigation and public requirements-as well as certification of the mill operation by the State of Colorado. The mill would be located on 880 acres 12 miles from Paradox, Colorado, and seven miles east of Bedrock.

Energy Fuels is hoping production can begin in 2012.

Mineweb is a web-based international mining publication focusing on mining financial and corporate news and comment.