Energy Fuels Completes Acquisition of Base Resources for $178M
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Energy Fuels UUUU has acquired Base Resources Limited in exchange for the issuance of its shares totaling $178.4 million in value. The acquisition adds Base Resources’ Toliara Mineral Sand Project to UUUU’s portfolio, complementing its Bahia Mineral Sand Project in Brazil.
These assets, combined with Energy Fuel’s 49% interest in the joint venture to develop the Donald Mineral Sand Project in Australia, will position it as a major producer of rare earth elements (REE), titanium and zirconium. This marks Energy Fuels' effort to diversify its business by expanding its REE production capabilities while maintaining its leadership in uranium.
Energy Fuels Aims to Position Itself for Long-Term Growth in REE
Energy Fuels agreed to acquire Base Resources in April 2024. Base Resources' Toliara project in Madagascar is a world-class, low-cost and large-scale heavy mineral sands project. Apart from its ilmenite, rutile (titanium) and zircon (zirconium) production capability, the project contains a significant amount of monazite. It is a source of the magnet REEs (NdPr, Dy, Tb) used in electric vehicles (EVs) and a variety of clean energy and advanced technologies.
Energy Fuels’ efforts to grow its REE business have been perceived as risky as the sector is highly competitive due to the significant control by China. This raised concerns that the company’s investment returns might fall short of its projections.
The REE market is, however, projected to see solid growth, given the elements’ crucial role in technologies such as EVs, wind turbines and advanced electronics. Energy Fuels’ White Mesa Mill in Utah is the only facility in the United States that can process monazite and produce advanced REE materials. With more than four decades of unmatched experience and expertise in the industry, it is poised well to capitalize on this demand. The increasing focus on developing rare earth supply chains independent of China presents a solid opportunity for UUUU.
UUUU to Ride on Clean Energy Trends
The global push for clean energy and technological advancement will drive significant demand for both uranium and REE.
Energy Fuels has four long-term contracts with major U.S. nuclear utilities that require deliveries of base quantities of 2.8 million pounds of uranium through 2030. The company has been preparing two additional mines in Colorado and Wyoming (Whirlwind and Nichols Ranch) to boost uranium production. It recently reported solid progress in Nichols Ranch, which is expected to start production in 2025. It has a licensed annual capacity of 2 million pounds of uranium.
