Transaction With Strathmore Minerals Corp. Expected This Month
WESTERN SAN JUANS – Korea Electric Power Corp., the largest electric utility in South Korea (and THE largest shareholder of Energy Fuels, Inc.), has announced its approval of Energy Fuels’ acquisition of Strathmore Minerals Corp.
The transaction is expected to take place at special shareholder meetings later this month.
Korea Electric Power is responsible for providing 93 percent of all South Korea’s electricity generation, while it operates and develops nuclear power projects in South Korea and in other places around the world. The South Korean government owns a 51 percent equity interest in Korea Electric Power.
Owning 8.5 percent of all common shares, Korea Electric Power is the largest shareholder of Energy Fuels, Inc., the Canadian mining company planning to build the Piñon Ridge Uranium Mill in the west end of Montrose County.
Owning 11.7 percent of its common shares, Korea Electric Power is also the largest shareholder of Strathmore Minerals, a Canadian resource company that specializes in the acquisition, exploration and development of mining properties in the U.S. As the largest shareholder of both companies, Korea Electric Power announced on July 25 that it had signed two agreements supporting Energy Fuels’ acquisition of Strathmore Minerals. All shareholders of Energy Fuels and Strathmore will be asked to approve the transaction at their special meetings, scheduled for Aug. 13 and Aug. 20, respectively.
Assuming the acquisition is completed, according to Energy Fuels, Korea Electric Power will hold approximately 9.1 percent of the common shares of Energy Fuels, which will appoint a director that is to be nominated by Korea Electric Power to join the Energy Fuels Board of Directors.
“We are very pleased that KEPCO supports Energy Fuels' acquisition of Strathmore,” said Stephen P. Antony, president and CEO of Energy Fuels. “KEPCO is recognized as a world leader in nuclear power development. We look forward to expanding our relationship with this high-quality organization.”
Already billed as the largest conventional uranium producer in the U.S., Strathmore is the latest acquisition in Energy Fuels’ growing portfolio. Just before the close of 2012, Energy Fuels announced that it was working to acquire a 19.9 percent interest in Virginia Energy, the owner of the largest known uranium deposit in the U.S. located in south central Virginia.
Through the acquisition of all of the U.S.-based uranium mining and production assets of Denison Mines Corp. in June 2012, Energy Fuels now owns and controls the White Mesa uranium mill, which is the only operating uranium mill in the U.S.
In addition, through its February 2012 acquisition of Titan Uranium Inc., Energy Fuels acquired the Sheep Mountain Project, one of the largest uranium development projects in the U.S.
Through the Strathmore acquisition, Energy Fuels expects to elevate project synergies that could come from combining Strathmore’s Gas Hills Project with Energy Fuels’ Sheep Mountain Project in Wyoming. The two lie only 28 miles away and could create opportunities for savings through co-development capital and targeting a larger combined annual production profile in excess of the 1.5 million lbs. per year currently outlined in the Sheep Mountain Prefeasibility Study.
Located in Blanding, Utah, Energy Fuels White Mesa Uranium Mill is located close to Strathmore’s advanced stage Roca Honda uranium project in New Mexico. This project, according to Energy Fuels, is one of the largest and highest-grade uranium projects in the U.S.
“It is rare to find an acquisition that offers the magnitude of synergies that we believe exist between Energy Fuels and Strathmore,” Antony said. “I am very excited about the merits of this transaction and the opportunity it represents for the shareholders of both companies. It is consistent with our corporate strategy and significantly strengthens the company's long- term production profile throughout the Four Corners region of the southwest U.S. and in Wyoming. Strathmore is recognized for building a quality portfolio of U.S. uranium projects, and I look forward to working with them and their partners to realize the many synergies and to capitalize on the strengths that are created by this transaction.”
Energy Fuels has received for a second time a radioactive materials license from the Colorado Department of Public Health and Environment to build the Piñon Ridge Uranium Mill in Montrose County’s Paradox Valley. A construction plan and a decommission plan has been submitted to the state department and is currently up for public review. If all goes to plan, the Energy Fuels will open the mill in 2017, and will be the first uranium mill to be opened in the U.S. in over 30 years.