US-based uranium developer enCore Energy has agreed to acquire all of the issued and outstanding common shares of Azarga Uranium to create a ‘top-tier’ uranium in-situ recovery (ISR) mining company in America.
According to the definitive arrangement agreement, Azarga shareholders will receive 0.375 shares of enCore for each share held.
This implies a consideration of $0.57 (C$0.71) per Azarga share, based on the closing price of enCore shares on 3 September 2021.
The agreement includes standard deal protection provisions, including non-solicitation, right-to-match, and fiduciary out provisions.
It also includes certain customary conditions, representations and covenants in addition to a $4m termination fee payable to enCore in certain circumstances.
The merged entity is estimated to hold a uranium resource base of 90 million pounds (Mlb) in the measured and indicated category, 9.9Mlb in the inferred category, and 68.4Mlb in the historic category.
It will have multiple assets at various stages of development. These include the licensed Rosita and Kingsville Dome past-producing uranium production facilities in south Texas.
It will also hold the advanced stage Dewey Burdock development project in South Dakota, the PEA-staged Gas Hills Project in Wyoming, and resource staged projects throughout the US.
enCore CEO Paul Goranson said: “Dewey Burdock is an excellent ISR uranium project and we look forward to building upon Azarga’s successes to create additional value through development progress and eventually production.
“In addition to the execution of plans for near term production in Texas and a dominant mineral position in New Mexico, this combination will see enCore take another leap forward towards realising the goal of becoming a larger and more diversified uranium development company during a time of positive sentiment for nuclear energy.”
The deal has already secured clearance from the two companies’ boards.
It now awaits regulatory and shareholders’ approvals, with completion expected in November 2021.
The combined business will be led by the existing enCore executive team. Azarga president and CEO Blake Steele will continue as a strategic adviser to the merged group.