Boss will pay approximately $91.3 million in cash to enCore Energy (TSX-V: EU) and its wholly-owned subsidiary enCore Energy US to acquire a 30% stake in the high-grade uranium ISR mine.
To help fund the deal, Boss is raising $205 million via a single tranche share placement and up to a further $10 million via a share purchase plan SPP.
Proceeds from the placement will be used to fund the transaction, an Alta Mesa project restart, exploration activities and working capital, along with enCore equity investment and spend on prompt fission neutron technology as well as production and resource growth initiatives for the Honeymoon project.
Boss Energy’s managing director Duncan Craib said the strategic acquisition has the company well-placed to be a global uranium producer of some significance.
“Given the location, grade, scale, growth potential and historic production, the Alta Mesa project is one of the best ISR projects globally with a near-term pathway to production. It is a project that we have always wanted to be involved in,” he said.
“The deal provides Boss Energy an initial low-risk foothold in the pivotal US uranium industry. The US is determined to become more self-sufficient in uranium and Alta Mesa will play a role in that process.”
“As a minority interest with a highly credentialed operator like enCore, the acquisition allows us to learn and grow in the US whilst still maintaining focus on the continued ramp-up at the Honeymoon project.”
Mr Craib said the local Honeymoon project is progressing on-time and on-budget and, with the addition of the Alta Mesa Project, that Boss is set to become a multi-mine uranium producer in 1H 2024.
“The outlook for the global uranium market remains strong. With two ISR assets expected to come into operation in 1H 2024 in tier one jurisdictions, no punitive legacy off-take agreements, no gearing and our strategic uranium inventory, Boss Energy provides a unique uranium production exposure for investors.”
The transaction will create a 30%/70% incorporated joint venture with enCore as the initial manager, while establishing a strategic relationship between Boss Energy and enCore.
Alta Mesa is located in South Texas—a prolific US district for sandstone-hosted ISR production, having produced ~80 million pounds historically.
The project has 3.41Mlb at 0.109% of the uranium compound triuranium octoxide (U3O8) at measured and indicated levels and 16.97Mlb at 0.120% U3O8 in inferred compliant resources.
The project area is considered to have significant potential for further resource growth and contains capacity to expand the 1.5Mlb-capacity plant after recommencement of production.
This is expected to occur in 1H 2024.
Alta Mesa has produced the third-largest amount of uranium out of all ISR assets in the United States.
The first six production areas produced approximately 4.6Mlb of uranium oxide between 2005 and 2013 via ISR using an alkaline lixiviant processed at the Alta Mesa central processing plant.
Completion of the transaction agreement is expected to occur in February 2024.