Energy Fuels Inc. (
TSX: T.EFR,
Stock Forum) announced that Korea Electric Power Corp. (
NYSE: KEP,
Stock Forum) (KEPCO), the largest electric utility in South Korea, has signed two support agreements supporting Energy Fuels' proposed acquisition of Strathmore Minerals Corp. (
TSX: T.STM,
Stock Forum).
As was previously announced on June 11, 2013, Energy Fuels and Strathmore have entered into a definitive arrangement agreement whereby Energy Fuels will acquire all of the issued and outstanding shares of Strathmore by way of a plan of arrangement. The shareholders of Energy Fuels and Strathmore will be asked to approve the transaction at their special meetings to be held on August 13, 2013 and August 20, 2013, respectively.
According to the
Energy Fuels press release, as a result of signing the support agreements, KEPCO has irrevocably agreed to vote their shares of both companies in favour of the transaction. In addition, each director and senior officer of both Energy Fuels and Strathmore have agreed to vote in favour of the transaction.
KEPCO is the largest shareholder of both Energy Fuels and Strathmore, owning 8.5% and 11.7% of the common shares of each respective company
Energy Fuels expects to evaluate potential synergies that might be realized by combining Strathmore’s Gas Hills project, located in central Wyoming, with the company's Sheep Mountain project, located only 28 miles away. Potential synergies include opportunities for savings through co-development capital and targeting a larger combined annual production profile in excess of the 1.5 million pounds per year currently outlined in the Sheep Mountain prefeasibility study.
Assuming the acquisition is completed, KEPCO will hold approximately 9.1% of the common shares of Energy Fuels. Upon completion of the transaction, Energy Fuels will appoint a director, nominated by KEPCO, to join the company's board of directors.
Energy Fuels is America's largest conventional uranium producer, supplying approximately 25% of the uranium produced in the U.S.
On Thursday, Energy Fuels fell 2.8% and was trading at $0.175 a share. The company had a market cap of $131.9 million, based on 753.5 million shares outstanding.