enCore Energy Signs Binding Agreement to Acquire Westwater Resources’ Uranium Production & Resource Assets
NEWS RELEASE 20-08
TSX.V: EU
September 9th, 2020
www.encoreenergycorp.com
enCore Energy Signs Binding Agreement to
Acquire Westwater Resources’ Uranium Production & Resource Assets
September 9th, 2020 - Vancouver, B.C. – enCore Energy Corp. (TSXV:EU; OTCQB:ENCUF) (the
“Company”) is pleased to announce that effective September 1, 2020 it has entered into a binding letter
of intent (“Agreement”) with Westwater Resources Inc. (Nasdaq: WWR) (“Westwater”) to acquire all of
Westwater’s United States uranium assets. These assets include two two licensed Texas-based uranium
production facilities, mineral exploration leases in Texas, and more than 270 square miles (180,000
acres) of patented mineral rights in New Mexico with fou r projects conta ining significant historical
mineral estimates . This acquisition will more than double the Company’s current mineral rights and
holdings with historical mineral estimates, and add two already licensed uranium production facilities.
William M. Sheriff, E xecutive Chairman of enCore Energy stated “This transformational acquisition will
on completion be the first significant step building e nCore into a domestic uranium producer. Our
experienced and accomplished management team believes that a major change is coming in the
uranium market in the next 12 to 24 months. In addition to the key acquisition of licensed production
facilities in Texas, enCore will hold the leading land position in New Mexico, consolidating the large
Santa Fe and Frisco railroad “checkerboard” mineral rights land grant running through most of the
Grants mineral belt.
“As market conditions continue to improve, we look forward to updating the Rosita, Texas processing
facilities and restarting uranium production in one of the most favorable uranium districts in the United
States. It is not a coincidence that modern commercial in -situ recovery (ISR) operations originated in
South Texas,” added enCore Energy’s Chief Executive Officer, Dennis Stover. “While active exploration in
the district has long been curtailed by market conditions, south Texas remains underexplored and one of
the most prospective in the country for further uranium discoveries . This coupled with geologic
characteristics well suited to ISR creates exceptional opportunities for enCore Energy Corp.”
Christopher M. Jones, President and Chief Executive Officer of Westwater said “We are happy to place
these uranium assets in the hands of a company like enCore where they can be developed further as
part of a larg er, consolidated land position, while we devote our full focus and attention on advancing
our battery -grade graphite product business and our Coosa Graphite Project in Alabama. We are
excited to continue our participation in the uranium sector as a sign ificant shareholder of enCore and
royalty holder, while transferring responsibility for remaining reclamation to them. We believe that the
enCore organization has a strong foundation of highly experienced former operators of uranium mines
and processing facilities, and we are putting this business in good hands.”
To view maps of the property acquisitions please visit:
https://www.encoreenergycorp.com/_resources/images/EU%20NR20-08%20Maps.pdf
The Texas Production Assets
Two licensed Texas uranium production facilities are being acquired , the Kingsville plant in Kleberg
County, Texas and the Rosita plant in Duval County, Texas. Both facilities were established to process Ion
Exchange resin from multiple satellite facilities. Each facility has an operating capacity of 800,000
pounds U3O8 per year. The package also includes several key mineralized leaseholds with excellent
exploration potential and deposits on which historic mineral estimates exist, an extensive Texas
database, and key equipment including PFN logging trucks, resin transfer trucks and remote ion
exchange facilities.
New Mexico Assets
The Westwater acquisition, combined with enCore’s already existi ng large New Mexico holdings, will on
closing make the company the dominant holder of high -quality uranium properties in New Mexico. The
New Mexico assets in the transaction include more than 175,000 acres of deeded mineral estate
(formerly the Santa Fe railroad “checkerboard” land grant), 4200 acres of surface and/or mineral leases
and 1200 acres of mining claims, encompassing much of the uranium -rich Grants mineral belt shown on
the attached map, as well as an extensive and comprehensive database. Properties being acquired with
significant in place historic uranium mineral estimates include the Nose Rock, West Largo and Ambrosia
Lake projects in McKinley County and the Juan Tafoya project in Cibola, McKinley and Sandoval
Counties.
A summary of the significant historic mineral estimates follows:
To view historic mineral estimates please visit:
http://www.encoreenergycorp.com/_resources/images/WWR%20Historic%20Resources.png
Historic estimates on (a) Ambrosia Lake used circle tangent method and cut -off grades ranging from
0.03% to 0.10% over variable intervals and on a per section basis; (b) Juan de Foya used polygonal
method and a cut -off gr ade of 0.05% ov er a six foot interval; (c) West Largo did not include a cutoff
grade and used a general outline method described by the US Atomic Energy Commission; and (d) Nose
Rock used polygonal method and a cutoff grade of 0.07% over a six foot interval. Although the historical
estimates above are believed to have been calculated and completed to industry standards at the time of
their publication, and are considered reliable based on such standards, a qualified person has not done
sufficient work to c lassify any o f the historic estimates listed above as current mineral resource
estimates. Current definitions of measured, indicated and inferred resources have changed since the
date of the report and the impact of those changes on historical estimates has not been assessed by the
Company. Additional work, including review of existing exploration data and additional drilling is
required to update the historical estimate to a current mineral resource. The Company does not treat
these historical estimates as current mineral resource estimates.
Located in New Mexico, the Grants mineral belt is an approximately 100 -mile-long northwesterly
trending belt of sandstone -hosted uranium deposits that have been the largest source of uranium
production in the United States. During the period of mining activity in the Grants mineral belt, between
the early 1950s and the mid -2000s, more than eighty underground and open pit mines were developed
and operated. At various times during the past productive life of the be lt, as many as six uranium
processing mills were built and operated by Anaconda Company, Homestake Mining Company, Kerr-
McGee, Phillips Petroleum, Sohio, Western Nuclear and United Nuclear. For perspective, the Grants
mineral belt has previously produced approximately 340 million pounds of uranium oxide, being more
uranium than any other district in the U.S. A and ranking in the top ten world -wide. Additional
exploration is warranted throughout the district as it remains amongst the most prospective in the
United States.
Terms of the Transaction
Pursuant to the Agreement, the Company would acquire seven Westwater subsidiaries, holding all of
Westwater’s United States uranium assets, in exchange for (i) the issuance of US$1,450,000 of enCore
shares at a price per share to be determined on the closing date of the transaction, (ii) the grant of a 2%
net smelter return royalty on mineral rights held by the subsidiaries in the State of New Mexico,
excluding the Juan Tafoya and Cebolleta projects; and (iii) the grant of a 2.5% net profits interest on the
Juan Tafoya and Cebolleta projects.
In addition, the Company and Westwater will work to reduce and replace existing reclamation bonds on
Westwater’s uranium projects totaling approximately US$9.25 million. Up on replacemen t of the
reclamation bonds, Westwater will pay enCore US$3 million in cash. The amount of the reclamation
bonds may be reduced by Westwater prior to closing through completion of reclamation work, in which
event the Company will issue additio nal consideration shares priced as at the closing date, as follows:
US$500,000 in Company shares upon Westwater completing scheduled 2020 Texas reclamation
activities; and an additional US$250,000 in Company shares for every US$1,000,000 reduction of the
current required bond amount.
The final Agreement is expected to be completed by year end 2020 and is dependent on final due
diligence completion.
Completion of the transaction is subject to a number of conditions, including, but not limited to receipt
of T SXV approval, satisfactory arrangements being in place for the replacement of the reclamation
bonds, and completion of due diligence on the mineral projects and the Uranium Subsidiaries by the
Company.
Dr. Douglas H. Underhill, CPG, a Qualified Person as defined by National Instrument 43-101 and Chief
Geologist for the Company, has reviewed, verified, and approved disclosure of the technical information
contained in this news release.
About enCore Energy Corp.
enCore Energy Corp., with assets entirely in th e United States , has a 100% interest, free of holding
costs, in 115,000+ acres (46,400 ha) of private mineral rights in New Mexico, including the Crownpoint
and Hosta Butte uranium deposits. These deposits contain an estimated Indicated Mineral Resource of
26.6 million pounds of U3O8 at an average grade of 0.105% e U3O8 6. A portion of these resources are
under NRC license. The Company also holds the Marquez project in New Mexico as well as a dominant
land position in Arizona with additional properties in Ut ah and Wyomin g. The Company owns or has
access to an extensive collection of proprietary North American and global uranium data including the
Union Carbide, US Smelting and Refining, UV Industries, and Rancher’s Exploration databases in
addition to a leading collection of geophysical data for the high -grade Northern Arizona Breccia Pipe
District.
For additional information:
William M. Sheriff
Executive Chairman
972-333-2214
www.encoreenergycorp.com
1. Behre Dolbear & Company (USA) Inc., 2010, Technical Report on the Ambrosia Lake Project of Uranium
Resources Inc., prepared by Robert D. Maxwell, CPG and Bernard J. Guarnera, RPG , CPG.
2. Behre Dolbear & Company (USA) Inc., 2011, Technical Report on the West Largo Project of Uranium
Resources Inc., prepared by Robert D. Maxwell, CPG.
3. Behre Dolbear & Company (USA) Inc., 2011, Technical Report on the Nose Rock Project of Uranium
Resources Inc., prepared by Robert D. Maxwell, CPG.
4. Broad Oak Associates, 2014, NI 43-101 Technical Report on Mineral Resources: Juan Tafoya Uranium
Project, Cibola, McKinley, and Sandoval Counties, New Mexico, USA, reported and effective May 15, 2014,
prepared for Uranium Resources Inc. by Geoffrey S. Carter, P.Eng.
5 Wilton, Dean T., CPG, PG, MAIG, Chief Geologist Westwater Resources, 2018, Technical Report on the
Ambrosia Lake Uranium Project, McKinley County, USA
6 Technical Report, titled, "Crownpoint and Hosta Butte Uranium Project Mineral Resource Technical Report,
McKinley County, New Mexico, USA, Mineral Resource Technical Report - National Instrument 43-101,"
dated May 14, 2012, and authored by Douglas L. Beahm, PEng, PGeo. Note: There have been no material
changes to the technical and scientific information relating to the foregoing projects since the date of the
report, the Company considers the report to be complete and current.
7 McLemore, Virginia T., Prin. Senior Economic Geologist, “Uranium Resources in New Mexic o”, New Mexico
Bureau of Geology & Mineral Resources” which incorporates a table entitled: Estimated uranium
resources in New Mexico, 2017 (updated from McLemore, et al., 2011, 2013
8 M. Mihalsky and S Hall, "Assessment of Undiscovered Sandstone- Hosted Uranium Resources in the Texas
Coastal Plain, 2015" U.S. Department of the Interior, U.S. Geological Survey, ISSN 2327 -6916 (print), Fact
Sheet 2015-3069, November 2015.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements
This news release includes certain forward-looking statements within the meaning of applicable securities law
including the anticipated completion of the transaction and acquisition of the Marquez, Nose Rock and other
properties, and the potential advancement thereof. Forward- looking statements are statements that relate to future,
not past, events. In this context, forward - looking statements often address expected future business and financial
performance, and often contain words such as "anticipate", "believe", "plan", "estimate", "expect", and "intend",
statements that an action or event "may", "might", "could", "should", or "will" be taken or occur, or other similar
expressions. Estimates of mineral resources and reserves are also forward looking statements because they
constitute projections regarding the amount of mi nerals that may be encountered in the future. All statements, other
than statements of historical fact, included herein including, without limitation; statements about the terms and
completion of the transaction are forward-looking statements. By their nat ure, forward-looking statements involve
known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or
achievements, or other future events, to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Forward- looking statements are made
based on management's beliefs, estimates and opinions on the date that statements are made and the respective
companies undertakes no obligation to upda te forward-looking statements if these beliefs, estimates and opinions
or other circumstances should change, except as required by applicable securities laws. Investors are cautioned
against attributing undue certainty to forward-looking statements.