WESTERN SAN JUANS – Just before the close of the year, the Canadian mining company planning to build a new uranium mill in the West End of Montrose County, Energy Fuels, Inc., announced that it is working to acquire 19.9 percent interest in Virginia Energy.
On Dec. 28, Energy Fuels issued a press release announcing that it has reached “understandings” wherein Virginia Energy will issue and sell 14,285,714 common shares by way of non-brokered private placement financing to Energy Fuels. The deal, which is subject to regulatory approval, comes at a price of 42 cents per common share for an expected aggregate of gross proceeds of up to $6 million.
Virginia Energy is the owner of the Coles Hill uranium project in south central Virginia. The large uranium project holds the largest known uranium deposit in the United States with 133 million pounds of uranium. The proposed investment by Energy Fuels is the latest in a series of investments over the past few years that have made the company the largest pure-play uranium producer in the U.S. and one of the largest holders of uranium resources in the U.S.
According to the press release, Energy Fuels’ investment in Virginia Energy is expected to bring significant expertise to the Coles Hill project from a technical and regulatory perspective on uranium mining, milling and tailings management. Energy Fuels owns the White Mesa uranium mill, near Blanding, Utah, the only operating uranium mill in the U.S. Energy Fuels also has a dominant resource position in three of the most productive historical uranium districts in the US. In addition, Energy Fuels has long-term supply contracts to provide fuel for nuclear power plants owned by a number of U.S. and foreign utilities.
“The Coles Hill uranium project is the largest uranium development project in the U.S. and has strong technical and economic merit,” Energy Fuels Chief Executive Officer Stephen Antony said. “The U.S. is currently the biggest consumer of uranium in the world, yet we import more than 90 percent of our supply requirements. We are pleased to partner with Virginia Energy and help advance the Coles Hill project toward becoming a major domestic uranium producer that is committed to the highest standards of operational safety and environmental protection. We are also confident that the Coles Hill project has the potential to create significant economic value for the state of Virginia and generate strong investment returns for Virginia Energy shareholders.”
Energy Fuels will acquire 9,439,857 common shares of Virginia Energy or approximately 19.9 percent of Virginia Energy upon completion of the offering and will be granted the right to nominate one director for election or appointment to the Board of Directors of Virginia Energy as long as it holds at least 5 percent of the issued and outstanding Common Shares, increasing to 9.9 percent after two years.
In Montrose County, Energy Fuels is waiting to hear if it will receive a radioactive materials license for the proposed Piñon Ridge Uranium Mill in the Paradox Valley after a second public hearing was held last November.