Institutional Shareholder Services, the world’s largest independent proxy advisory firm, identifying corporate governance risks for 39,000 companies in 115 countries, supports Energy Fuels’ (NYSE MKT:UUUU) (TSE:EFR) proposed acquisition of Uranerz Energy (NYSE MKT:URZ) (TSE:URZ).
Uranerz shareholders will get 0.255 common shares of Energy Fuels for each share of Uranerz held. The deal was first announced on January 5 of this year, and it was expected to close by the summer.
ISS has recommended Energy Fuels and Uranerz shareholders approve the transaction at separate special meetings being held by both companies on June 18. EF has advised its shareholders to consult a related Amended Management Information Circular dated May 21, 2015, mailed to Energy Fuels shareholders of record as of April 20, 2015, also available on its website and filed with SEDAR and EDGAR.
Under the terms of the deal, Energy Fuels will buy Uranerz in an all-stock deal valued at roughly US$150 million, creating one of the largest uranium companies in the United States and significantly diversifying its uranium production sources and industry leading resource base.
The deal will build a leading integrated conventional and in-situ recovery uranium mining company in the US, 2nd only to Cameco, and will have a combined NI 43-101 resource base that will be the largest in the US among producers.
Both companies will become stronger by lowering production costs, making the combined entity more competitive on the U.S. and global marketplace.
Energy Fuels operates the only conventional uranium mill in the US, the White Mesa Mill in Utah, and has managed to keep its head above water since 2011 by engaging in targeted production and a cash conservation strategy. Its goal has been to position itself to increase production easily should market conditions improve over an extended time frame.
Uranerz uses a process known as in-situ recovery in which a leaching solution extracts uranium from sandstone uranium deposits in the Powder River Basin area of Wyoming. It is the newest uranium producer in the US.
In addition to the White Mesa mill in Utah and the Nichols Ranch ISR operation in Wyoming, the combined company will also own a producing high-grade uranium mine in Arizona (Pinenut), a high-grade mine in development in Arizona (Canyon), and various additional projects in permitting and development located throughout Utah, Wyoming, Arizona and New Mexico.