enCore Energy has agreed to acquire the past-producing Alta Mesa In-Situ Recovery (ISR) uranium project in the US from US-based uranium and rare earth elements (REE) producer Energy Fuels in a $120m deal.

According to the agreed terms, Encore subsidiary enCore Energy US will purchase all of the limited liability company membership stakes in each of the three limited liability companies that jointly own Alta Mesa, from Energy Fuels’ wholly owned subsidiary EFR White Canyon.

These limited liability companies include EFR Alta Mesa , Leoncito Plant, and Leoncito Project.

In exchange, Energy Fuels will receive $60m in cash and a $60m secured vendor take-back convertible promissory note with EFR White Canyon.

EnCore executive chairman William Sheriff said: “This transaction exceeds enCore’s long-stated requirement for any major acquisition to be accretive to shareholders in not only production capacity but also cost and timelines to production and an asset we secure at a compelling valuation.

“Alta Mesa will immediately become a flagship asset amongst our large project portfolio, including our licensed and past-producing Rosita ISR production plant in South Texas, our development-stage Dewey-Burdock and Gas Hills projects in South Dakota and Wyoming, respectively, along with a large resource portfolio in New Mexico.”

Furthermore, enCore will assume the reclamation obligations and surety bonds related to Alta Mesa by paying the cash equivalent to the existing collateral to Energy Fuels.

The acquisition forms part of EnCore’s efforts to accelerate the production of both uranium and rare earth.

The Alta Mesa project comprises a fully licensed and constructed ISR processing facility with an annual capacity of 1.5 million pounds (Mlb) of uranium.

Between 2005 and 2013, the Alta Mesa project produced 5Mlb of U₃O₈. Production was then curtailed due to low uranium prices at the time.

Upon completion of the transaction, EnCore plans to immediately work on resuming operations at the mine.

Energy Fuels plans to sell the asset to enhance its balance sheet and fund the acceleration and expansion of near-term uranium and rare earth production in the US.

Subject to customary closing conditions and clearance by the TSX Venture Exchange, the deal is scheduled for completion by the end of this year or early 2023.