Strengthening U.S. Uranium Position: IsoEnergy's Strategic Acquisition of Anfield

• IsoEnergy Ltd. has announced the acquisition of Anfield Energy Inc., significantly expanding its U.S. uranium production potential.
• The transaction secures ownership of the Shootaring Canyon Mill, one of only three licensed conventional uranium mills in the United States.
• The company's combined portfolio will rank among the largest in the U.S., with substantial increases in mineral resources across all categories.
• The acquisition is expected to create operational synergies and enhance IsoEnergy's position as a multi-asset uranium producer in tier-one jurisdictions.
• This deal is well-timed to capitalize on the strong momentum in the nuclear industry and anticipated rising demand for uranium.

In a move that promises to reshape the North American uranium landscape, IsoEnergy Ltd. (TSX:ISO) has announced its acquisition of Anfield Energy. This strategic transaction, valued at approximately $126.8 million, is set to position IsoEnergy as a leading player in the U.S. uranium market, with expanded near-term production capacity and ownership of a key processing facility.

Expanding Near-Term U.S. Uranium Production Capacity

IsoEnergy Ltd. is a leading, globally diversified uranium company with substantial current and historical mineral resources in top uranium mining jurisdictions of Canada, the U.S., and Australia. The company is advancing its Larocque East Project in Canada's Athabasca Basin, home to the Hurricane deposit, which boasts the world's highest grade Indicated uranium Mineral Resource. IsoEnergy also holds a portfolio of permitted, past-producing conventional uranium and vanadium mines in Utah with a toll milling arrangement in place with Energy Fuels Inc. These mines are currently on stand-by, ready for rapid restart as market conditions permit, positioning IsoEnergy as a near-term uranium producer.

Strategic Rationale Behind the Acquisition

The acquisition of Anfield Energy represents a significant leap forward in IsoEnergy's strategy to become a globally significant, multi-asset uranium producer. With enhanced production potential, increased resource base, and strategic assets like the Shootaring Canyon Mill, IsoEnergy is well-positioned to capitalize on the growing demand for nuclear energy. Investors should consider the company's strengthened position in the U.S. uranium market, its diversified portfolio across tier-one jurisdictions, and its potential for near-term production as key factors in their investment decision-making process.

The combined portfolio resulting from this acquisition is expected to provide substantial increased uranium production potential in the short, medium, and long term. This expansion aligns with IsoEnergy's goal of becoming a multi-asset uranium producer in tier-one jurisdictions. The addition of Anfield's assets, particularly in Utah and Colorado, complements IsoEnergy's existing U.S. operations and creates a robust pipeline of development and exploration-stage projects.

Securing Access to Critical Processing Infrastructure

One of the most significant aspects of this acquisition is IsoEnergy's ownership of the Shootaring Canyon Mill, one of only three licensed, permitted, and constructed conventional uranium mills in the United States. Located in southeastern Utah, the mill is strategically positioned near IsoEnergy's Tony M Mine, potentially creating significant operational synergies. Moreover, a restart application has been submitted to increase the mill's throughput and expand its licensed annual production capacity from 1 million lbs U₃O₈ to 3 million lbs U₃O₈.

The transaction results in a meaningful increase in IsoEnergy's uranium resource base. The combined current mineral resources now stand at 17.0 Mlbs Measured & Indicated (a 157% increase) and 10.6 Mlbs Inferred (a 382% increase). Additionally, historical mineral resources have grown to 152.0 Mlbs Measured & Indicated (a 14% increase) and 40.4 Mlbs Inferred (a 33% increase). This significant resource expansion positions the proforma company among the largest uranium resource holders in the United States.

Capitalizing on Nuclear Industry Momentum

The proximity of the combined portfolio assets in Utah and Colorado is expected to yield immediate operational synergies. These benefits include reduced transportation costs, increased operational flexibility for mining and processing, reduction in G&A on a per lb basis, and risk diversification through multiple production sources. The integration of Anfield's assets with IsoEnergy's existing operations creates a more robust and efficient operational structure.

The timing of this acquisition is particularly favorable, given the strong momentum in the nuclear industry. Recent headlines highlighting increasing demand and support for nuclear power are expected to drive uranium demand and, by extension, prices. This trend coincides with the expected production and development timeline of the combined portfolio, potentially allowing IsoEnergy to capitalize on rising uranium prices as it brings new production online.

Key Assets & Projects

Shootaring Canyon Mill

The Shootaring Canyon Mill, now 100% owned by IsoEnergy through this acquisition, is a cornerstone asset. Located approximately 48 miles south of Hanksville, Utah, and just 4 miles from IsoEnergy's Tony M Mine, this facility is one of only three licensed, permitted, and constructed conventional uranium mills in the United States. Built in 1980 and operated briefly in 1982, the mill has been under care and maintenance since operations ceased. The current restart application aims to increase throughput from 750 stpd to 1,000 stpd and expand licensed annual production capacity significantly.

Velvet-Wood & Slick Rock Uranium Projects

The Velvet-Wood project, located in the Lisbon Valley uranium district of San Juan County, Utah, is a key asset in the combined portfolio. With past production of around 4 Mlbs of U₃O₈ and 5 Mlbs of V₂O₅, this project retains valuable underground infrastructure and represents a potential near-term path to uranium and vanadium production.

The Slick Rock property, an advanced-stage conventional uranium and vanadium project in San Miguel County, Colorado, further diversifies the portfolio. Covering approximately 5,333 acres, this project targets uranium/vanadium mineralization within the Salt Wash member of the Morrison Formation.

Financial & Transaction Details

Under the terms of the transaction, Anfield shareholders will receive 0.031 of a common share of IsoEnergy for each Anfield share held. This exchange ratio implies consideration of $0.103 per Anfield Share, representing a premium of 32.1% based on the 20-day volume-weighted average trading prices. The implied fully-diluted in-the-money equity value of the transaction is approximately $126.8 million.

Post-transaction, existing shareholders of IsoEnergy and Anfield will own approximately 83.8% and 16.2% of the outstanding IsoEnergy shares, respectively, on a fully-diluted in-the-money basis. This structure allows Anfield shareholders to maintain exposure to their assets while gaining access to IsoEnergy's broader portfolio and operational expertise.

Governance & Leadership

The transaction has received unanimous approval from the boards of directors of both IsoEnergy and Anfield. Independent fairness opinions have been provided to support the financial fairness of the transaction from the perspective of both companies' shareholders. The leadership of the combined entity will leverage the strengths of both management teams, ensuring a smooth integration and execution of the expanded strategy.

Benefits for Shareholders

The global shift towards nuclear power as a clean, reliable energy source is creating a favorable environment for uranium producers. IsoEnergy's CEO, Philip Williams, emphasized that the outlook for uranium has never been stronger, making this acquisition a pivotal move at the right time. The combined company will be well-positioned to meet the anticipated rising demand for uranium, supported by a diverse portfolio of assets at various stages of development.

IsoEnergy Shareholders:

• Secures ownership of the strategically located Shootaring Canyon Mill
• Diversifies access to processing facilities, boosting near-term production capacity
• Strengthens IsoEnergy's ranking among U.S. uranium players in terms of production capacity and resources
• Potential for re-rating due to de-risking of near-term production and increased scale
• Creation of a larger platform with greater access to capital and liquidity

Anfield Shareholders:

• Immediate and attractive premium on share value
• Exposure to a larger, more diversified portfolio of high-quality uranium assets
• Entry into the Athabasca Basin through IsoEnergy's high-grade Hurricane deposit
• Accelerated path to potential production and synergies with IsoEnergy's Utah assets
• Participation in a larger platform with greater scale for M&A and market presence

The transaction will be effected through a court-approved plan of arrangement under the Business Corporations Act (British Columbia). It requires approval from at least 66 2/3% of Anfield shareholders and a simple majority of IsoEnergy shareholders. Regulatory approvals, including those from the Toronto Stock Exchange and the TSX Venture Exchange, are also necessary.

Key shareholders, including enCore Energy Corp., NexGen Energy Ltd., and Mega Uranium Ltd., representing significant portions of both companies' outstanding shares, have entered into voting support agreements in favor of the transaction. The deal is expected to close in the fourth quarter of 2024, subject to satisfying all closing conditions.

Financing & Bridge Loan

To support Anfield's working capital needs through to the closing of the transaction, IsoEnergy has provided a bridge loan of approximately $6.0 million. This loan, with a 15% per annum interest rate and a maturity date of April 1, 2025, is secured by Anfield's assets and guaranteed by certain subsidiaries. IsoEnergy has also agreed to provide an indemnity for up to US$3 million in principal with respect to certain of Anfield's property obligations.

Conclusion

For investors considering IsoEnergy in light of this acquisition, several key points emerge:

• Enhanced Market Position: The transaction significantly boosts IsoEnergy's position in the U.S. uranium market, providing near-term production potential and critical processing infrastructure.
• Resource Growth: The substantial increase in mineral resources across all categories strengthens IsoEnergy's long-term production potential and asset value.
• Operational Synergies: The complementary nature of the combined portfolio is expected to yield cost savings and operational efficiencies, potentially improving profitability.
• Market Timing: With growing support for nuclear energy and anticipated increases in uranium demand, IsoEnergy is positioning itself to capitalize on favorable market conditions.
• Diversification: The expanded portfolio across tier-one jurisdictions in Canada, the U.S., and Australia provides risk mitigation and multiple avenues for growth.
• Management Expertise: The combined expertise of both management teams provides a strong foundation for executing the company's growth strategy.
• Potential for Re-rating: The increased scale, near-term production potential, and strategic assets may lead to a re-evaluation of IsoEnergy's market valuation.

In conclusion, IsoEnergy's acquisition of Anfield Energy represents a transformative move that positions the company as a leading player in the North American uranium sector. With enhanced production capacity, a strengthened resource base, and strategic assets like the Shootaring Canyon Mill, IsoEnergy is well-equipped to meet the growing demand for uranium in a market increasingly focused on nuclear energy as a clean power source. For investors seeking exposure to the uranium sector, IsoEnergy now offers a compelling combination of near-term production potential, resource growth, and strategic positioning in key uranium-producing regions.