enCore Energy Corp. [EUI-TSXV, ENCUF-OTCQB] said Monday it has agreed to acquire all of the outstanding shares of Azarga Uranium Corp. [AZZ-TSX; PWURF-OTC; P8AA-FSE] in a court-approved plan of arrangement.
The companies said the transaction consolidates an industry-leading pipeline of exploration and development-staged in-situ recovery-focused uranium projects located in the United States.
They include the licensed Rosita & Kingsville Dome past producing uranium production facilities in South Texas, the advanced-stage Dewey Burdock development project in South Dakota, which has been issued its key federal permits, the PEA-stage Gas Hills project in Wyoming and a portfolio of resource-stage projects throughout the United States.
The combined company will hold a uranium resource base of 90.0 million pounds in the measured and indicated category, 9.9 million pounds in the inferred category, as well as 68.4 million pounds in the historic category.
Azarga shares rallied sharply on the news, rising 22% or 12 cents to 66 cents on volume of 2.69 million. The shares are trading in a 52-week range of 55 cents and 15.5 cents.
enCore Energy shares also advanced 0.53% or $0.01 to $1.90 on volume of 876,480. The shares trade in a 52-week range of $1.98 to 32 cents.
The two companies are planning to deploy technology known as in-situ recovery (ISR) or solution mining in a bid to recover uranium.
In-situ recovery involves processing the uranium while it is still in the ground through the injection of catalyzing agents into the ore.
In situ-recovery is only possible in porous geological formations (like sandstone) which are amenable to such a technique. On average, the capital spend needed to put an ISR uranium project into production is less than 15% of the cost to build a conventional hard-rock uranium mine.
The combined company will be managed by the current enCore executive team, led by Paul Goranson as CEO and director, William Sheriff as Executive Chairman, Carrie Mierkey as Chief Financial Officer and Dennis Stover as Chief Technical Officer.
Blake Steele, currently President and CEO of Azarga, will continue as a Strategic Advisor to the combined company.
enCore said it intends to see the listing of its shares on the NYSE-AMEX or NASDAQ exchange which may include a share consolidation in order to meet initial listing requirements.
Meanwhile, the combined company is well-positioned to benefit from America’s nuclear renaissance, which boasts bi-partisan political support, and a management team with unrivaled experience in permitting, development and mining of ISR uranium deposits in the U.S.
The combined entity will hold two licensed ISR production facilities and multiple potential satellite exploration and development projects in South Texas. News of the transaction comes after Azarga recently published a preliminary economic assessment for the Gas Hills project in Wyoming.