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enCore Energy (TSXV: EU; NYSE American: EU) said on Wednesday it will sell 30% of its Alta Mesa project in South Texas to Australia’s Boss Energy (ASX: BOE) for $70 million.
enCore acquired the Alta Mesa project from Energy Fuels (TSX: EFR) in February 2023. The project has an annual production capacity of 1.5 million lb. of uranium oxide.
Boss Energy will pay $60 million in cash, invest $10 million into enCore shares at $3.90 per share, and loan the company up to 200,000 lb. of uranium oxide for enCore’s commercial use over the next year.
enCore will use the net proceeds from the deal, expected to be completed in February 2024, to accelerate its uranium production pipeline in South Texas and develop other projects.
“The accelerated production plan is designed to take advantage of what is projected to be a very strong uranium market over the next decade,” said enCore executive chair William Sheriff in a news release.
enCore will also establish a new unit to hold the Alta Mesa project and it will be jointly owned by the two companies.
The company officially became a uranium producer last week with the restart of the South Texas Rosita in-situ uranium central processing plant.
The Rosita plant is located about 60 miles from Corpus Christi, Texas, where enCore is headquartered. It has a capacity of 800,000 lb. of uranium oxide per year and the ability to expand capacity within the existing licence.
The company is anticipating its first shipment to occur over the course of the next 45 to 60 days. The uranium price has seen a relentless rise to $81 per lb. from under $50 per lb. at the start of the year as a gap between supply and demand emerges.
Shares of enCore rose 2.4% in New York on Wednesday morning. The uranium company has a market capitalization of $672 million.
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