enCore Energy Corp. (NYSE American: EU) (TSXV: EU) sold its Marquez-Juan Tafoya Uranium Project in New Mexico to Anfield Energy Inc. (TSXV: AEC) (OTCQB: ANLDF) for $5 million.
The Texas-based company said on Thursday that it delivered total of $4 million of the cash payment on closing, and will deliver an extra $1 million by late September.
The transaction was completed based on a share purchase agreement in early June. According to the terms of the agreement, Anfield acquired all the existing shares of Neutron Energy Inc., a subsidiary of the company. Neutron Energy Inc. owns the Marquez-Juan Tafoya Uranium Project as its only asset.
“The sale of the Marquez-Juan Tafoya Uranium Project represents the third successful transaction in enCore’s ongoing program of divesting established quality uranium assets that are not in its production pipeline,” said William M. Sheriff, executive chairman of enCore Energy.
“This transaction provides us with both cash and participation as a significant shareholder in one of only three licensed conventional uranium mills in the United States.”
enCore share were flat at $3.08 on Thursday on the TSX Venture Exchange.
As part of the agreement with Anfield, enCore retains the right to have one seat on Anfield’s board of directors. This right will continue as long as the company holds at least 10 per cent of the issued shares of Anfield.
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Acquisition helps Anfield continue its near-term strategy
“With a global nuclear renaissance under way, we believe that our pursuit of advanced uranium deposits that will facilitate near-term uranium production is critical at this time as the global uranium supply deficit continues to grow,” said Corey Dias, the CEO of Anfield.
“As Kazakhstan pivots east to support China in its robust nuclear growth plans, an important piece of U.S. utility uranium supply is increasingly at risk. This scenario highlights an unquestionable opportunity for uranium producers in the U.S.”
Dias said that Anfield will continue advancing its near-term strategy, which revolves around its advanced Utah and Colorado uranium and vanadium projects.
These projects are supported by Anfield’s Shootaring Canyon mill, one of only three licensed conventional mills in the U.S. Additionally, Anfield has a longer-term production strategy that involves acquiring complementary assets to further enhance its uranium and vanadium resources for the Shootaring Canyon mill.
Dias said that Marquez-Juan Tafoya will not only complement its existing asset portfolio but also play a crucial role in its long-term uranium production strategy.
Anfield Energy shares were also fat at $0.05 on Thursday on the TSX Venture Exchange.
The expansion and establishment of nuclear energy programs in various nations have increased the demand for uranium as it is the primary fuel for nuclear reactors. This resurgence in nuclear power has brought uranium into the spotlight.
The demand for uranium has been surpassing its supply, leading to a supply deficit. Factors contributing to this deficit include the closure of uranium mines, limited investment in exploration and development and delays in bringing new mines into production.
Kazatomprom (LSE: KAP) in Kazakhstan is the world’s largest producer of uranium, providing over 40 per cent of global primary uranium supply in 2019 from its operations in Kazakhstan. Others operating in the space include the Cameco Corporation (TSX: CCO) (NYSE: CCJ), Energy Fuels Inc. (TSX: EFR) (NYSE: UUUU) and Denison Mines Corp (TSX: DML) (NYSE American: DNN)
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