Firm seeking to build uranium mill wants to merge with another

Energy Fuels Resources Inc., the company planning to build a uranium mill in western Colorado, is negotiating to merge with a company holding significant resources in Wyoming.

The merger of Energy Fuels and Titan Uranium Inc., both of which are traded on the Toronto stock exchanges, would “make the combined company one of the largest holders of conventional uranium resources in the United States,” said Curtis Moore, director of communications and legal affairs for Energy Fuels.

Energy Fuels (TSX:EFR) and Titan (TSXVENTURE:TUE,) announced Tuesday they had signed a letter of intent to merge.

Titan Uranium has uranium holdings in the western United States and Canada, including the Sheep Mountain mine in Wyoming, which is expected to begin production of an estimated 1.5 million pounds of uranium oxide per year in 2014.

Energy Fuels has no plans to process the ore produced from the Sheep Mountain mine in Wyoming, Moore said, noting it’s too far away from the mill proposed near Naturita.

The irony of the coincidence that Energy Fuels is considering buying the Sheep Mountain Mine in Wyoming while the Sheep Mountain Alliance based in Telluride is battling the mill hasn’t been lost on Energy Fuels, Moore said, noting the two Sheep Mountains are not connected.

Energy Fuels is looking to its two fully permitted mines, the Whirlwind and Energy Queen Mines in southwest Colorado, for the Piñon Ridge mill in Montrose County. The company also is seeking permitting on the Calliham and Sage mines, both in southeastern Utah.

Energy Fuels is banking on the end of imported uranium from the former Soviet Union in 2013 to drive up demand for domestic uranium, which it hopes to meet with the Naturita mill. There are mills nearer the Wyoming mine that could be revamped to process ore from there, he said.

Given current uranium prices, the merger presents Energy Fuels with a “very good buying opportunity,” Moore said.

Shareholders will have to approve the transaction. Officials with both companies are now performing due-diligence work and the stock exchange is considering whether to approve the merger, Moore said.

If the deal goes forward, existing Titan shareholders will own approximately 42 percent of the issued and outstanding common shares of Energy Fuels, which will then own 100 percent of Titan.

The companies listed potential benefits to the merger as: increased supplies in the United States; greater financial strength; and greater combined management and expertise.


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