Mike Fagan,
Editor
Dec. 17, 2021
Azarga Uranium (TSX: AZZ)(OTC: AZZUF) — which is in the final stages of being acquired by enCore Energy (TSX-V: EU) (OTC: ENCUF) — has jointly announced a uranium purchase agreement of up to 1.3 million pounds U3O8 from a Fortune 150 US utility.
The uranium purchase agreement, which represents the second purchase agreement executed by EnCore, is a four-year agreement commencing in 2024 and covers up to 1.3 million lbs based on market pricing with a ceiling price significantly higher than the current uranium spot price.
enCore CEO Paul Goranson commented via press release:
"We truly appreciate the confidence in enCore Energy Corp. shown with the execution of our second uranium sales agreement. At enCore, we are building a production pipeline strategy focused on US based ISR uranium production. We have been expanding our growth strategy organically with our near-term production assets in South Texas and through transactions with the assets that Azarga Uranium Corp. will bring to the merged company. This agreement affirms that growth strategy, and it provides a long-term relationship with a large domestic nuclear power utility as it advances sustainable clean energy generation."
The merger makes sense for both companies as an expanded in-situ recovery (ISR) uranium resource base in a stable jurisdiction at a time when uranium prices are rising is accretive to shareholders of both companies.
The proposed amalgamation — which received a 99% in-favor-of vote from AZZ shareholders-of-record — will serve to consolidate an industry leading pipeline of exploration and development stage ISR uranium projects located in the United States, including the licensed Rosita & Kingsville Dome past producing uranium production facilities in South Texas.
Azarga president & CEO Blake Steele commented via press release:
"We are pleased to partner with enCore as a result of this transaction, while realizing a material premium for shareholders in the process. Scale is important in the natural resource sector and this transaction will position the new company among the top uranium miners based in the USA. enCore possesses a great depth of uranium development and mining experience within its management team and board of directors. As such, we are confident that the combined portfolio will be in good hands for the benefit of both sets of shareholders."
The proposed merger also leverages Azarga’s advanced stage Dewey Burdock development project in South Dakota which has been issued its key federal permits; the PEA-stage Gas Hills Project located in Wyoming; and a portfolio of resource stage projects throughout the United States.
The combined company will possess a uranium resource base of 90 million pounds in the Measured & Indicated category, 9.9 million pounds in the Inferred category, and 68.4 million pounds in the historic category.
As we’ve been discussing for months now… 2022 looks to be an exciting and lucrative year for uranium bulls. Now is an opportune time to prepare accordingly.
Check out additional AZZ news, interviews, and much more.
Read our feature report on Azarga Uranium Corp.
Yours in profits,
Mike Fagan
Editor, Resource Stock Digest