Energy Fuels Inc. (TSX: EFR)("Energy Fuels" or the "Company") and
Magnum Uranium Corp. (TSX VENTURE: MM) ("Magnum Uranium") are
pleased to announce that the companies have entered into a
preliminary agreement providing for Energy Fuels to acquire all of
the outstanding shares of Magnum Uranium in an all share
transaction. This agreement has been approved by the Boards of
Directors of both companies. The combination of these two companies
will significantly enhance one of the largest conventional uranium
mining companies operating in the United States. Magnum Uranium
shares will be acquired at a share exchange ratio of 0.78 shares of
Energy Fuels for each Magnum Uranium share. Based on the currently
outstanding shares of Magnum Uranium, Energy Fuels would issue
approximately 23.33 million shares to acquire all of the currently
outstanding Magnum Uranium shares. Magnum Uranium's outstanding
options and warrants will be adjusted in accordance with their
terms so that the number of Energy Fuels shares to be received upon
exercise will proportionately reflect the share exchange ratio
described above. It is anticipated that this transaction will close
no later than July 31, 2009.
The combined entity will retain the "Energy Fuels, Inc." name
and trading symbol (EFR) on the Toronto Stock Exchange, and will
have the following assets:
- Cash (estimated at CAD$13.5 million) which will significantly
enhance the balance sheet of Energy Fuels and allow the Company to
weather the current downturn in the uranium market.
- Significant addition of NI 43-101 compliant resources:
----------------------------------------------------------------------
NI 43-101 Compliant Resource
----------------------------------------------------------------------
Measured & Inferred Measured & Inferred
COMPANY Indicated U3O8 Lbs. Indicated Tons
U3O8 Lbs. Tons
----------------------------------------------------------------------
Energy Fuels 2.7 million 2.3 million 504,586 497,600
----------------------------------------------------------------------
Magnum Uranium 1.4 million 1.1 million 334,200 316,900
----------------------------------------------------------------------
NEW TOTAL 4.1 million 3.4 million 838,786 814,500
----------------------------------------------------------------------
% INCREASE 52% 48% 66% 64%
----------------------------------------------------------------------
Importantly, Magnum Uranium's NI 43-101 compliant resources are
located at a single property, the San Rafael Property, which is in
close proximity to the planned Pion Ridge mill. Subject to a final
feasibility study, the 838,786 tons of Measured & Indicated
(M&I) resources have the potential to supply mill feed material
for the Pion Ridge mill at a 500 tpd rate (175,000 tpy) for almost
5 years. Should the 814,500 Inferred tons be converted to
economically feasible M&I tons, it would represent an
additional 5 years of mill supply. The San Rafael Property also
contains additional historic resources which may be converted to NI
43-101 compliant resources in the future. (The Reader is cautioned
that a feasibility study has not been completed and there is no
certainty the operations would be economically viable.)
- Two fully-permitted conventional uranium mines in the Colorado
Plateau and an implemented plan to build a 1,000 ton per day
uranium milling complex that is currently in the licensing
stage.
- Historic uranium resources totaling 26.6 million lbs (although
considered relevant, the Reader is cautioned that this resource
estimate is historical in nature, does not comply with the
guidelines of National Instrument 43-101 and should not be relied
upon. Further, this estimate has not been verified by Qualified
Persons of either Magnum Uranium or Energy Fuels).
- Approximately 55,000 acres of prospective uranium properties
in Colorado, Utah, Arizona, Wyoming, Idaho, and New Mexico,
including three properties in close proximity to Cameco's Smith
Ranch ISL mine in the Powder River Basin of Wyoming.
- Exploration properties in Saskatchewan's Athabasca Basin,
totaling approximately 50,000 acres and located northwest of
operating uranium mines at McClean Lake and Rabbit Lake. The
primary target, known as the Stony Road Property, is currently
being drilled by Magnum Uranium's joint venture partner, Triex
Minerals Corp.
The transaction is to be effected pursuant to a plan of
arrangement under the Business Corporations Act (British Columbia),
which will require approval of the shareholders of Magnum Uranium
holding at least 66 2/3% of the issued shares of Magnum Uranium
being voted at a shareholders meeting being in favour of the
transaction. Completion of the transaction is subject to a number
of other conditions precedent, including completion of a due
diligence review to the satisfaction of each party, execution of a
definitive agreement, receipt by Magnum Uranium of a favourable
fairness opinion, shareholder approval of Energy Fuels, if required
by the Toronto Stock Exchange, and receipt of all necessary
shareholder, stock exchange, court and regulatory approvals.
Full details of the offer will be included in the formal
Arrangement Agreement and Management Information Circular to be
filed with the regulatory authorities and mailed to Magnum Uranium
shareholders in accordance with applicable securities laws.
George Glasier, Energy Fuels' President and CEO commented that,
"I am excited and optimistic about this acquisition. Combining with
Magnum Uranium creates a much bigger platform to implement our
business plan, and allows the combined entity to be stronger for
longer. Energy Fuels continues to actively pursue our strategy,
even in these down times, and continues to deliver on our goal of
becoming the next fully integrated conventional uranium producer in
the US. This is the first acquisition in the Company's strategy to
leverage its strong management team and its strong cash position to
consolidate the US conventional uranium business."
Craig Lindsay, Magnum Uranium's President and CEO, added: "The
combination of our portfolio of exploration and development
properties with Energy Fuels' permitted uranium mines and
advanced-stage milling strategy will significantly enhance the
ability of the enlarged entity to capitalize on the strengthening
global nuclear power sector".
In connection with the proposed business combination, Evans
& Evans, Inc. has been retained to provide a fairness opinion
to the special committee of the Board of Directors of Magnum
Uranium. Legal advice to the Board of Directors of Magnum Uranium
is being provided by DuMoulin Black LLP. Legal advice to the Board
of Directors of Energy Fuels is being provided by Beach, Hepburn
LLP.
Stephen P. Antony, P.E., a Qualified Person as defined by
National Instrument 43-101, has reviewed and approved the content
of this press release as it pertains to Energy Fuels. John R.
Carden, Ph.D., P.Geo., a Qualified Person as defined by National
Instrument 43-101, has reviewed and approved the content of this
press release as it pertains to Magnum Uranium.
Energy Fuels Inc. is a Toronto-based uranium and vanadium
mineral development company actively rehabilitating and developing
formerly producing mines. With more than 46,000 acres of highly
prospective uranium and vanadium property located in the states of
Colorado, Utah and Arizona, the Company has a full pipeline of
additional development prospects. Energy Fuels, through its
wholly-owned Colorado subsidiary, Energy Fuels Resources
Corporation, has assembled this property portfolio along with a
first class management team, including highly skilled technical
mining and milling professionals based in Lakewood and Nucla,
Colorado and Kanab, Utah.
Magnum Uranium is a Vancouver-based minerals exploration company
focused on the acquisition and development of uranium assets in
North America. Currently, Magnum's primary property holdings are
located in the Western United States, specifically Wyoming, Utah,
Idaho, and New Mexico, and in Canada's Athabasca Basin.
This news release contains certain "Forward-Looking Statements"
within the meaning of Section 21E of the United States Securities
Exchange Act of 1934, as amended and "Forward Looking Information"
within the meaning of applicable Canadian securities legislation.
All statements, other than statements of historical fact, included
herein are forward-looking statements and forward looking
information that involve various risks and uncertainties. There can
be no assurance that such statements will prove to be accurate, and
actual results and future events could differ materially from those
anticipated in such statements. Important factors that could cause
actual results to differ materially from the Company's expectations
are disclosed in the Company's documents filed from time to time
with the British Columbia, Alberta and Ontario Securities
Commissions.
Contacts: Energy Fuels Inc. Gary Steele Investor Relations (303)
974-2147 or Toll free: 1-888-864-2125 Email:
investorinfo@energyfuels.com Website: www.energyfuels.com Magnum
Uranium Corp. Craig Lindsay President & CEO (604) 683-2507
Email: info@magnumuranium.com Website: www.magnumuranium.com
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