enCore Energy (EU) - Big Move towards Big Uranium Production in USA

enCore Energy Corp. is a junior exploration and development company focused on the advancement of its assets located in the United States. The company prides itself on being a diversified In-Situ recovery uranium company aiming to reach production at its Rosita processing plant, located in Texas by 2023. The company’s asset portfolio consists amongst others of the Rosita processing plant, the Dewey-Burdock project located in South Dakota, the Gas Hills project located in Wyoming, the Rosita and Kingsville Dome project located in Texas, the Crownpoint and Hosta Butte project located in New Mexico and the recently acquired Alta Mesa In-Situ Recovery uranium project located in South Texas.

The company on the 14th of November 2022, announced that it had entered into a definitive agreement to acquire the Alta Mesa In-Situ Recovery uranium project from Energy Fuels Inc. The transaction consists of a total consideration worth USD$ 120 million, with the company believing that the acquisition will further assist it in establishing itself as a leading US ISR uranium company. The transaction also includes the acquisition of the Alta Mesa ISR processing plant, which has an operating capacity of 1.5 million pounds of uranium per year.

The project highlights include a mineral resource estimate of 3.41 million pounds of U3O8 in the measured and indicated category as well as 16.79 million pounds of U3O8 in the Inferred category. The acquisition of the project leads to the company having three of the eleven fully licensed uranium production facilities in the USA within its asset portfolio.

The Alta Mesa In-Situ Recovery uranium project is currently on standby and can easily and at a low capital cost be set into production, reaching commercial production levels within 10 months of a production decision.

The company believes that the 2023 uranium market will bring more engagement from utility companies. The fundamentals of the market have changed due to the geopolitical factors at play in eastern Europe, with various utility companies having started to secure supply from alternative sources as well as giving attention to the ESG factors including the stability of the country of origin for the uranium. enCore Energy Corp. believes that the US uranium market is at an ideal time for the company to enter the market. The company will, through using its two production assets, the Rosita processing facility and the Alta Mesa processing facility, be able to provide a reliable source of uranium to utilities in the near future.

enCore Energy Corp. believes that the Alta Mesa In-Situ Recovery uranium project holds great potential. The company believes that the project’s location, resources and infrastructure not only add capacity to its portfolio but also the potential for near-term production.  

Alta Mesa In-Situ Recovery uranium project acquisition

enCore Energy Corp. on the 14th of November 2022, announced that it had entered into a definitive agreement to acquire the Alta Mesa In-Situ Recovery uranium project from Energy Fuels Inc. The transaction consists of a total consideration worth USD$ 120 million, with the company believing that the acquisition will further assist it in establishing itself as a leading ISR uranium company in the USA. The transaction also includes the acquisition of the Alta Mesa ISR processing plant, which has an operating capacity of 1.5 million pounds of uranium per year.

The project highlights include a mineral resource estimate of 3.41 million pounds of U3O8 in the measured and indicated category as well as 16.79 million pounds of U3O8 in the Inferred category. The acquisition of the project leads to the company owning three of the eleven fully licensed uranium production facilities in the USA within its asset portfolio.

William Sheriff, the Executive Chairman of enCore Energy Corp. explains that the significance of the acquisition is the acquisition’s impact on the company’s total production capacity, more than doubling it.

“It is certainly an asset that we're familiar with. It adds to our Texas base of production, our existing 2 plants, there are 11 in the US, we had 2 already, this is a third, and it more than doubles our production capacity. It brings in a substantial amount of production, starting in 2024, so it really is accretive on a number of levels. We've done quite a bit of work in the M&A space, and we have a history of doing that. This was just the most natural addition.”

Paul Goranson the CEO of enCore Energy Corp. explains that the acquisition of the Alta Mesa In-Situ Recovery uranium project by the company from Energy Fuels Inc. is beneficial for both parties, with Energy Fuels Inc. being able to monetize an asset and re-allocate the funds to its priority projects, whilst enCore Energy Corp. has gained a valuable asset.

“I think both companies see this as a win-win. Energy Fuels can take and monetize an asset they have and use that to reinvest into their projects and priorities, but for us, it brings about a really solid production facility that has significant resources, low-cost production history and infrastructure that's already installed, so it really provides a boost for our production pipeline. We are already continuing in Texas on our Rosita project and our other projects in South Texas are moving along, therefore, this will bring added capacity and production in the near term, which is where we see the opportunity in the markets happening.”

The Alta Mesa In-Situ Recovery uranium project is currently on standby and can easily and at a low capital cost be set into production, reaching commercial production levels within 10 months of a production decision.

2023 market

The company believes that the 2023 uranium market will bring more engagement from utility companies. Goranson explains that the fundamentals of the market have changed due to the geopolitical factors at play in eastern Europe, with various utility companies having started to secure supply from alternative sources as well as giving attention to the ESG factors including the stability of the country of origin for the uranium.

“I think 2023 is going to bring more utility engagement in the market. I say that because, as we all know, the fundamentals of the uranium market have globally changed dramatically as a result of what's happening in Eastern Europe right now, and the repercussions of that. We're seeing a fundamental change in potential supply sources. By and large, I have talked to several utilities that have said that they're refocusing back, first of all, to secure supply chains, focusing on North American supply chains. On top of that, because of what's going on in Europe, the management or the shareholders of a lot of these utilities are really focusing on ESG and are looking for something that helps them meet their ESG criteria, and getting your uranium from unstable governments, or at least governments who aren't considered to be in a social responsibility area, now is a measure that they're gauging against.”

Taking advantage of the US energy market

enCore Energy Corp. believes that the US uranium market is at an ideal time for the company to enter the market. The company will, through using its two production assets, the Rosita processing facility and the Alta Mesa processing facility, be able to provide a reliable source of uranium to utilities in the near future. The Rosita processing facility of the company is located 60 miles west of Corpus Christi, Texas and is a licensed and past-producing ISR plant. The plant is scheduled to initiate production by 2023, with it being fed from various satellite deposits in the South Texas area.

“The way we take advantage is by using our two production assets and making them available to the market. At Rosita, we refurbished the plant and we're putting in well fields now to start producing uranium. We are doing the same thing with Alta Mesa, when we start there it's going to be bringing this capacity back. Right now in the US, I believe the last quarterly EIA report said that 3,000lb were produced in the third quarter of 2022, and that means that nothing's happening, so we've got to bring that capacity back. By focusing on our lower-cost properties, we're able to let that supply prepare to go into the market. We want to be the place that the utilities come to look for reliable and also near-term production and feed that they can rely on and not on something that's going to take years to get into production.”

Sheriff explains that the company was created with the intent to acquire producing assets in such a way to advance to production at an accelerated rate.

“It's been the fundamental objective and execution of the company to build not only a portfolio of properties but a portfolio of production assets that are permitted. We aren't starting at the beginning, we aren't having to fund the CapEx, and we're incredibly well-staffed to execute on this. It's just a fact that our people will be able to execute on this.”

Sheriff further explains that in order for the company to look at a possible acquisition, the project needs to meet one of three criteria, namely capacity of production, timeline to production or cost of production.

“In terms of the properties and the additions, again, I've been saying for the last year, in order for anything to be added on the M&A front, it's got to be accretive on one of three levels: capacity of production, timeline to production or cost of production, and in this instance, we've got all three of those in the same transaction, which is just ideal.”

Future

enCore Energy Corp. plans to continue advancing its projects towards production and plans to continue with exploration initiatives as it progresses. Sheriff explains that the company was built to generate cash flow through production and as such all future exploration initiatives will be aimed at increasing capacity and production at its projects.  

“We've got a 5 million pounds per year production profile. We are pushing on 40 years of material in front of us. We will be doing a bit of exploration on the project, as an example, our most recent acquisition: they did a bit of exploration back when the property was owned by a private company. We very successfully identified 52 miles of roll front and were able to really work on about 15% of that and develop a double-digit billion pounds of resources out of it. We've got 45 miles of roll front identified on this project, it's a huge project. 200,000 acres, private surface, right in the middle of the Texas uranium belt, the most favourable state to be working in permit-wise and business-wise. It fits right in with our operation centres already, so it's not another cost centre in terms of location. It's ideal for us.”

Goranson believes that the Alta Mesa In-Situ Recovery uranium project holds great potential. The company believes that the project’s location, resources and infrastructure not only add capacity to its portfolio but also the potential for near-term production.  

“I've been associated with this project twice before in my career, once with the original private owner, Mestena Uranium, and secondly, with Energy Fuels. I still believe that the value of this property has not been fully tapped yet. There are a lot of upsides to it, and it brings not only capacity to us, but near-term production. I believe that in South Texas, it puts us in the cornerstone of production capacity and long-term life of uranium assets in the area, not just because of the scale but also, I believe, there's quite a bit more value to be unlocked.”

To find out more, go to the enCore Energy website