By Cinthia Stimson
Douglas Budget
Via- Wyoming News Exchange

DOUGLAS — In a move that may mean a huge upswing in uranium mining in Converse County and Wyoming, Uranium Energy Corporation (UEC) has entered into an agreement with Russia’s Uranium One Investments Inc., a subsidiary of Uranium One, to acquire all issued and outstanding shares of Uranium One Americas, Inc. (U1A) for a total purchase price of $112 million in cash and the replacement of $19 million in reclamation bonding.

Uranium One is the world’s fourth largest uranium producer and part of Russia’s State Atomic Energy Corporation, Rosatom.

The deal will add approximately 100,000 acres in Wyoming’s prolific uranium producing Powder River and Great Divide Basins consisting of dozens of under-explored, mineralized brownfield projects, backed by detailed databases of historic uranium exploration and development programs, thus greatly enhancing the potential for resource expansion, according to a press release from UEC Nov. 9.

The company said U1A’s assets are primarily situated in the Powder River Basin of Wyoming, known to be the most productive in-situ recovery (ISR) uranium mining district in the western hemisphere.

The venture will position UEC, a U.S. corporation headquartered in Texas, as the largest American uranium mining company amid a new era of domestic and global support for clean-air nuclear energy as essential to the realization of a low-carbon global economy.

It will also create Wyoming hub-and-spoke operations for UEC, company officials stated, which are anchored by U1A’s Irigaray plant, located about 90 miles north/northeast of Casper, one of the largest central processing facilities in the United States with a licensed capacity of 2.5 million pounds U3O8 per year.

The deal incorporates U1A’s production-ready assets including the Christensen Ranch ISR project with four fully installed well fields and six additional permitted or development stage satellite ISR projects, combining with UEC’s Reno Creek Project.

UEC officials said they anticipate a significant capital expenditure savings and deep operating synergies with UEC’s permitted and nearby Reno Creek ISR Project which is 45 miles away from the Irigaray plant.

The U1A portfolio of projects includes, among other assets, seven projects in the Powder River Basin, three of which are fully permitted, and five in the Great Divide Basin:

• • The Willow Creek area is comprised of the Irigaray and Christensen Ranch projects currently under care and maintenance by U1A. The project is located in the Powder River Basin in Campbell and Johnson Counties;
• • The Moore Ranch Project is fully permitted and was previously developed by Conoco in the early 1980’s. The project is located in the Powder River Basin in Campbell County;
• • The Ludeman Project is located in Converse County and is comprised of the former  Leuenberger, North Platte and Peterson projects developed in the late 1970s by various other operators. ISR pilot plant operations were previously carried out at the Leuenberger and North Platte properties. Most of the project area was held by Power Resources (Cameco) until 2003, after which Energy Metals (precursor to U1A) acquired the properties;
• • The Allemand-Ross Project is located in Converse County within the Southern Powder River Basin. The project was originally drilled and developed by Conoco beginning in the late 1960’s. The mineralized trends are northerly extensions of those at the Smith Ranch – Highland Project of Cameco’s;
• • The Barge Project is located in Converse County, in the southern Powder River Basin. It is near the site of the former Bear Creek Uranium Mine operated by Rocky Mountain Energy in the 1970s and 80s. The mineralization is within deeper trends not developed previously;
• • The Jab Project is located in the Great Divide Basin and in Sweetwater County. The project area was extensively explored during the 1970s through the mid-1980s with the principal exploratory work and drilling completed by Union Carbide Corporation (UCC) and Western Nuclear Corporation (WNC). In 2006 and 2007, Uranium One conducted exploratory and verification drilling on portions of the project.

Other highlights of the agreement include securing approximately 37.6 million pounds of U3O8 in historically estimated measured and indicated resources and 4.3 million pounds U3O8 in historically estimated inferred resources with considerable growth potential based on independent technical reports prepared for U1A.

UEC President/CEO Amir Adnani said he and his company are happy about obtaining the uranium resources in the United States.

“. . . after a comprehensive and competitive bidding process, Uranium One elected to work with UEC to undertake the successful sale of their substantial uranium assets in the United States. This is a highly accretive transaction for UEC and represents great value to our shareholders. The purchase price is equal to only 12% of our current enterprise value, yet the acquisition doubles the size of our production capacity in three key categories: total number of permitted U.S. ISR projects, resources and processing infrastructure. The opportunity to acquire an advanced asset base of this quality from one of the global leaders in the nuclear energy sector is highly rare in the uranium sector anywhere in the world, let alone in our own home jurisdiction of the United States,” Adnani said.

The Powder River Basin assets are some of the lowest-cost U.S. projects along with fast restart capabilities in the most productive region of the western hemisphere for in-situ recovery of uranium, he stated.

“With this Acquisition, our U.S. ISR production profile increases to 6.5 million pounds U3O8 per year based on licensed and installed capacity of our Wyoming and South Texas huband-spoke operations. Combined with our physical uranium holdings of 4.1 million pounds of U.S. warehoused uranium, we now have the unparalleled ability to provide reliable domestic supply to the U.S. Uranium Reserve as well as re-emerging demand from American and global nuclear utilities,” Adnani said.

UEC Chairman and former U.S. Energy Secretary Spencer Abraham said the successful transaction between UEC and Uranium One made for a very proud day.

“We’ve been working for a considerable time to acquire this important portfolio. It is rewarding for our company to see it come to fruition. We believe this achievement will accelerate and strengthen the development of domestic uranium production that can supply U.S. origin uranium for a full range of America’s uranium requirements,” Abraham said.

Closing of the deal is subject to certain regulatory approvals. The acquisition is fully funded with UEC’s existing balance sheet, which as of Oct. 26 had over $235 million cash and market value liquid assets, according to UEC.