Mark S. Chalmers, President and CEO of Energy Fuels stated:
“We are pleased that the Base shareholders voted overwhelmingly to approve Energy Fuels’ combination with Base Resources. We believe that the combined company will clearly emerge as a world-leader in producing several of the critical minerals and materials needed for the clean energy transition. The Toliara, Bahia and Donald projects are expected to become large-scale, world-class, and low-cost heavy mineral sand projects in the coming years, producing titanium, zirconium and rare earth minerals. Energy Fuels is uniquely placed in the world to unlock the value of the rare earth minerals (monazite and xenotime) at our White Mesa Mill, and we have proven our ability to recover and produce advanced separated rare earth materials in the USA. I am also very pleased to see recent improvements in REE prices, with the price of NdPr recently increasing to $60.21 per kilogram.
We look forward to completing the next steps in our acquisition of Base Resources and closing the Transaction on October 2, 2024.”
Base Shareholders Overwhelming Vote in Favor of Combination with Energy Fuels:
As previously announced on April 21, 2024, Energy Fuels entered into an agreement to acquire 100% of the issued shares of Base in consideration of the issuance by the Company of 0.026 Energy Fuels Common Shares for every Base share held and the payment by Base of a special dividend of AUD $0.065 per Base share (the “Transaction“). The Transaction is to be effected by way of a scheme of arrangement under Australia’s Corporations Act (the “Scheme“).
At their September 5, 2024 meeting, the shareholders of Base overwhelmingly voted in favor of the Scheme, with 99.88% of the votes cast by Base shareholders in favor of the transaction, and 93.18% of the Base shareholders present and voting (in person or by proxy) in favor of the transaction. Both voting results significantly exceed the requirements for shareholder approval, being more than 75% of the votes cast and more than 50% of the shareholders present.
As a next step, Base will apply to the Federal Court of Australia (the “Court“) for approval of the Scheme, which is scheduled to occur on September 12, 2024. If the Court approves the Scheme, a copy of the Court order will be lodged with the Australian Securities and Investments Commission (“ASIC“) and the Scheme will become effective, which is expected to occur on September 13, 2024. As a result, September 13, 2024 is expected to be Base’s last day of trading on the Australian Stock Exchange (“ASX“). The Special Dividend (AUD$0.065 per share) is expected to be paid to Base shareholders on October 1, 2024, and Closing of the Transaction is expected to occur on October 2, 2024. The closing remains subject to this Court approval and other routine conditions.
All Required Regulatory Approvals have been Obtained:
On July 1, 2024, Base received notice from the Competition Authority of Kenya that it had approved the proposed combination pursuant to the Competition Act of Kenya. On August 21 2024, Base announced that Energy Fuels had received written confirmation from the Foreign Investment Review Board that the Australian government has no objections to the proposed combination, and on August 27, 2024, Base received confirmation from the Malagasy Competition Council that it does not object to the proposed combination of Energy Fuels and Base and that the Transaction may proceed. As a result, all the regulatory conditions precedent to the Scheme are considered satisfied, and there are no remaining regulatory approval conditions precedent to implementation of the Scheme and closing of the Transaction.
The acquisition of Base Resources and its 100%-owned Toliara Mineral Sand Project in Madagascar (“Toliara“), together with the Company’s 100%-owned Bahia Mineral Sand Project in Brazil (“Bahia“) and the Company’s recently announced joint venture with Astron Corporation to develop the Donald Mineral Sand Project in Australia (“Donald“), is expected to transform Energy Fuels into a world-leader in REE’s, titanium, and zirconium production, while maintaining it’s position as a leading U.S. uranium mining producer. The Toliara, Bahia, and Donald projects are heavy mineral sand (“HMS“) projects that, upon development, will primarily produce titanium and zirconium minerals, including ilmenite, rutile, and zircon. Subject to receipt of further permitting and development, these HMS projects are also expected to produce a valuable monazite sand byproduct, which is one of the best sources of the “magnet” REE’s used in electric vehicles (“EVs“), plug-in hybrid vehicles, direct-drive wind energy, and other technologies. The Toliara Project is expected to be Energy Fuels’ cornerstone source of monazite supply, providing a long-term and large-scale supply of monazite to the Company’s White Mesa Mill in Utah (the “Mill“) for processing into REE oxides and other advanced REE materials, along with the recovery of contained uranium. As the monazite is expected to be a very low-cost byproduct of Toliara’s primary ilmenite and zircon production, the production of REE oxides at the Mill is expected to be low-cost and globally competitive. The Toliara Project is subject to negotiation of fiscal terms with the Madagascar government and the receipt of certain Madagascar government approvals and actions before a current suspension on activities at the Toliara Project will be lifted and development may occur.
Energy Fuels Successfully Commissions REE Separation Circuit; Turns Focus to Uranium Production for the Remainder of 2024:
During Q2- and Q3-2024, the Company successfully commissioned an REE separation circuit at its 100%-owned White Mesa Mill. This “Phase 1” circuit has the capacity to produce up to 1,000 metric tons (“tonnes“) of separated NdPr per year. During commissioning, the Company recovered, dried, and packaged approximately 40 tonnes of high-purity, on-spec separated NdPr. The Company estimates that it recovered an additional 10 to 20 tonnes of separated NdPr, which remains in circuit and will be packaged at a later date. This 50 – 60 tonnes of NdPr production exceeds the Company’s original guidance of 25 – 35 tonnes by over 40%.
The Company is currently in the process of shifting its production focus at the Mill from REE’s to uranium. During 2024, the Company expects to produce 150,000 to 500,000 pounds of U3O8 from stockpiled alternate feed materials and conventional ore. In addition, ore production and underground development at its Pinyon Plain and La Sal mines continues on schedule and on budget.
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