By: Peter Spina, President, GoldSeek.com, SilverSeek.com & UraniumSeek.com
Uranium Resources (URRE) is set to enter a new era now that a deal to merge with
The merger, first announced in June, 2015 is all set to go ahead after Uranium Resources shareholders voted overwhelmingly in favor of the deal on September 23, 2015. Anatolia shareholders followed up on October 9, 2015 with a virtually unanimous vote in favor of the stock, option, and performance schemes.
"We thank the Anatolia security holders for their strong support for this transaction, making URI the world's next low-cost uranium producer with the Temrezli Project,” said Uranium Resources’ president and CEO Christopher M. Jones.
In the deal Uranium Resources will take over Anatolia in a stock-based scheme giving Anatolia shareholders 0.06579 Uranium Resources shares for each Anatolia share. When the deal closes, which is expected to occur on November 9, 2015, Anatolia shareholders will control approximately 41% of the 50.5 million Uranium Resources shares outstanding post-merger.
Along with combining assets, the deal will see Paul Cronin, current CEO of Anatolia Energy, and Patrick Burke, an Anatolia director, expected to join the board of Uranium Resources as directors.
Once the deal - which was approved by the Federal Court of Australia last week - is closed, the merged expertise and resources of the two companies can be focused on bringing Temrezli to production.
The project already has a prefeasibility study that Anatolia released in February, outlining production of just under 10 million lbs. of uranium over a 12-year mine life from the 4.2 million measured and indicated tonnes grading 0.13% U3O8.
Based on a base case uranium price of $65/lb, the financials showed a pre-tax net present value of $191.1 million using an 8% discount rate, an internal rate of return of 65%, and free cash flow of $345.5 million. Even at $40 uranium the project shows an NPV of $52 million.
“We believe that this project has a compelling cost and return profile and, once operational, would be profitable even in today’s low price environment. That’s really why we got interested,” Uranium Resources’ CEO Christopher Jones told GoldSeek.
The financials are given a big boost by the low investment needed to get the mine up and running compared with North American projects.
The study showed capital costs of $41 million and payback in less than a year thanks to the smaller footprint and infrastructure needs of the planned in-situ operation, while average cash operating costs came in at $16.89 a pound.
And Uranium Resource thinks it can improve on capital costs by shipping its idle Rosita in-situ facility it already owns in Texas over to Turkey. Based on preliminary numbers the company believes that it could reduce projected capital development costs by up to $8 million, or 27%, with the move.
Plus, with the in-house expertise of in-situ mining at Uranium Resources, the company says it won’t need to hire outside engineering for up to $3 million more in savings.
The company still has to finish up the permitting and environmental impact assessment for Temrezli, as well as secure the financing, but with everything appears well underway.
Looking further into the future Mr. Jones sees Temrezli as a potential hub to process uranium material from other targets on the 18,000 hectares of land Anatolia controls in Turkey, including the promising Sefaatli target about 40 km from Temrezli.
And Uranium Resources still has a pipeline of in situ and conventional projects in the U.S., where it controls 207,000 acres in uranium districts in Texas and New Mexico. In all the company has established about 39 million short tons of conventional and ISR rock containing some 119 million lbs. of uranium categorized as non-reserve mineralized material on its various projects in the two states.
In general, these deposits will need higher uranium prices to be developed, but in the meantime Uranium Resources is focused on advancing the Temrezli project into profitable production in the near-term.
With shareholders of Uranium Resources and Anatolia voting overwhelmingly to combine the expertise and resources of the two companies, development of Temrezli looks closer than ever.
President, GoldSeek.com, SilverSeek.com & UraniumSeek.com
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-- Posted Thursday, October 29 2015 | Digg This Article |
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