enCore Energy Corp (TSX-V:EU, NYSE-A:EU) told investors it has made a formal production decision for the resumption of uranium production from its Alta Mesa Processing Plant in early 2024.
The company said Alta Mesa will be its second producing location following the resumption of uranium production at the South Texas Rosita Uranium Processing Plan, scheduled for 2023.
"My previous experience includes building and successfully operating Alta Mesa. I am confident that we have everything necessary within our control for a production restart, and enCore can quickly advance the project,” enCore CEO Paul Goranson said in a statement. “The enCore team began initial assessment work in November 2022, preparing for the start of work immediately following the closing of the acquisition of the Alta Mesa Processing Plant and Project.
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The company said work underway at the Alta Mesa Processing Plant includes the construction of equipment staging areas and drill pads in the fully permitted Production Authorization Area (PAA), planned for initial production due to its proximal location adjacent to the plant. Development drilling, production and injection well installation will start this month, it added.
Concurrently, enCore said its technical staff are identifying equipment maintenance and limited repair needs at the Alta Mesa Processing Plant involving the ion exchange system, uranium precipitation, drying and packaging circuits to restart production after having been on standby since 2013.
Alta Mesa Processing Plant and Project highlights include:
- The Alta Mesa Processing Plant is enCore's third fully licensed production facility, along with Rosita and Kingsville Dome, all located in the business-friendly state of Texas. There are only 11 licensed and constructed uranium production facilities in all the US;
- The Alta Mesa Processing Plant can reach commercial production levels with limited required capital, from funds on hand, within an estimated 10 months of the production decision;
- Advancing the Alta Mesa Processing Plant, in conjunction with planned production in 2023 at the Rosita Uranium Processing Plant, will cement enCore Energy's position as the early leader in In-Situ Recovery (ISR) uranium production in the US;
- Alta Mesa's operations are located on private land, with 100% of minerals privately owned, and in a supportive jurisdiction with primary regulatory authority residing with the state of Texas; and
- The Alta Mesa Processing Plant utilizes well-known ISR technology to extract uranium in a non-invasive process through the use of natural groundwater and oxygen, coupled with a proven ion exchange process, to recover the uranium.
The company noted that Alta Mesa project is a fully licensed and constructed ISR uranium project and central processing facility currently on standby, located on over 203,000 acres of private land in the state of Texas. The total operating capacity is 1.5 million pounds (lbs) U3O8 (uranium) per year. Alta Mesa historically produced nearly 5 million lbs of U3O8 between 2005 and 2013, when full production was curtailed as a result of low uranium prices at the time.
“It is an exciting time at enCore. Our 2023 startup of production at Rosita and now, the decision to proceed at Alta Mesa, will bring a reliable domestic low-carbon energy source to South Texas and the United States when it is most needed,” Goranson added.
Subscription receipt offering
Following its February 2023 announcement of the conversion of 23,277,000 subscription receipts issued on December 6, 2022, at C$3 per subscription receipt, enCore advised that it paid an aggregate of C$4,050,000 in cash commissions to Canaccord Genuity (C$2,025,000), Haywood Securities (C$810,000), Cantor Fitzgerald Canada (C$364,500), PI Financial (C$364,500), Clarus Securities (C$324,000), and Red Cloud Securities (C$162,000).
The company said 50% of the cash commission was paid on closing of the subscription receipt offering, and the balance of the cash commission, with interest earned, has been released from escrow to the underwriters.
It also paid an aggregate of C$24,600 in cash commissions to Haywood Securities (C$12,000) and Canaccord Genuity (C$12,600) in connection with the non-brokered portion of the subscription receipt offering.
enCore Energy is the most diversified In-Situ Recovery (ISR) uranium development company in the United States and is focused on becoming the next uranium producer in 2023 from its licensed and past-producing South Texas Rosita Processing Plant.
Contact the author at stephen.gunnion@proactiveinvestors.com