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Uranium merger set, increases likelihood of new Gas Hills mine
Aug 29, 2013 - By Eric Blom, Staff Writer
Two uranium mining companies with development plans for Fremont County are set to merge.
Energy Fuels's acquisition of Strathmore Minerals passed two regulatory hurdles this month. The companies expect to finalize the merger Friday.
Strathmore chief executive officer Dave Miller said the companies had satisfied all government agencies that oversee the transaction, and there are no more barriers to the merger.
The companies have received approval from two organizations in the last 10 days.
On Tuesday, the Committee on Foreign Investment in Canada, a Canadian regulatory agency, gave Energy Fuels a clearance letter allowing the merger. The Supreme Court of British Columbia issued a final order Aug. 21 finding the transaction to be fair to Strathmore shareholders and approving the merger.
Canadian regulatory agencies have oversight over Strathmore because its headquarters is in Canada, but its mining operations are primarily in Wyoming and New Mexico.
The merger will bring about changes for Strathmore.
"Since uranium prices are weak, we will have a reduction in all our offices," Miller said. "Energy Fuels has a main office in Denver so a lot of the projects will be handled out of Denver."
Strathmore is developing a uranium mine in the Gas Hills area and has a Riverton office. Energy Fuels of Denver owns the Sheep Mountain site eight miles south of Jeffrey City where it plans to build a uranium mine.
"The merged company has a much better chance of bringing the (Gas Hills) mine online when the uranium price improves," Miller said.
Development is more a function of the price of uranium than anything else, Miller said, and the current price is low.
An environmental impact statement study is under way for Strathmore's local mine, and the Bureau of Land Management is receiving public comment on the matter until Sept. 9.
Miller believes the new company will continue to develop its projects in Fremont County.
"(Energy Fuels) is still very interested in pushing the Gas Hills (mine), and they own the Sheep Mountain mine," Miller said.
Talks for the merger began confidentially in December, and the companies announced their intention to join forces in February.
"They approached us," Miller said about Energy Fuels. "They like our asset base in New Mexico and Wyoming, and they thought there were a lot of synergies."
According to a plan announced in June, Energy Fuels would acquire all common shares of Strathmore and give shareholders 1.47 common shares of Energy Fuels for each one of Strathmore they own. In the end, Strathmore shareholders would own 21 percent of Energy Fuels common shares.
Besides undergoing regulatory scrutiny, the merger also had to satisfy the companies' owners.
On Aug. 20, 99.3 percent of Strathmore shareholders approved the merger. Owners of stock in Energy Fuels voted to support the plan on Aug. 13, with 99.31 percent approving it.