Energy Fuels Inc. (EFR.TO) and Strathmore Minerals Corp. (STM.TO)(STHJF.PK) Friday announced the signing of a Letter of Intent pursuant to which Energy Fuels and Strathmore have agreed to pursue a transaction whereby Energy Fuels would acquire, by way of a plan of arrangement, all of the issued and outstanding common shares of Strathmore.
Under the terms of the LOI, Strathmore shareholders would receive 1.47 common shares of Energy Fuels for each common share of Strathmore held, resulting in the shareholders of Strathmore owning about 21% of the issued and outstanding shares of Energy Fuels upon completion of the deal.
The consideration represents a premium of 31% based on the 20-day volume weighted average prices on the TSX as of May 22.
Energy Fuels and Strathmore believe the deal will position the newly combined Energy Fuels as the premier pure-play U.S. uranium company, supported by significant current uranium production of 1.175 million lbs. for its current fiscal year, as well as a robust pipeline of development projects.
The U.S. remains the largest consumer of uranium globally, yet it is heavily reliant on imported uranium for over 90% of its supply requirements. Energy Fuels is well-positioned as a large, reliable source of uranium supply within the U.S., currently accounting for over 25% of estimated U.S. production.
Energy Fuels and Strathmore believe the deal will result in significant value creation for the shareholders of both companies through numerous synergies.
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