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or Name
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Anfield Resources Inc
Symbol ARY
Shares Issued 19,953,322
Close 2014-07-07 C$ 0.38
Market Cap C$ 7,582,262
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Anfield Resources to acquire Utah U mill, assets

2014-08-15 16:36 ET - News Release

Mr. Corey Dias reports

ANFIELD RESOURCES INC. INKS DEAL TO ACQUIRE SHOOTARING CANYON URANIUM MILL AND CONVENTIONAL URANIUM ASSETS

Anfield Resources Inc. has entered into definitive agreements with Uranium One to acquire the Shootaring Canyon uranium mill located in Garfield county, Utah, and a portfolio of conventional uranium assets containing a historical resource estimate of 6.8 million pounds triuranium octoxide. The properties, located in Utah, Arizona and South Dakota, increase Anfield's uranium asset acreage by more than 250 per cent. The deal, which is valued at $5-million (U.S.), will be settled over a period of up to four years with a combination of cash and shares.

This transaction provides a number of strategic advantages to Anfield, including:

  • Potential creation of one of the very few uranium producers in the United States:
    • Shootaring Canyon mill is one of only three licensed uranium mills in the United States, reflecting its scarcity value.
  • The establishment of Anfield as one of the largest owners of uranium properties in the U.S.:
    • Increases Anfield's uranium asset acreage by more than 250 per cent to reach approximately 65,500 acres (approximately 26,507 hectares);
    • Adds a historical estimate of U3O8 resource of 6.8 million pounds;
    • The flagship resource, the Velvet-Wood deposit, contains a historical resource estimate of 4.63 million pounds of measured and indicated U3O8 at an average grade of 0.285 per cent;
    • Past production at Velvet-Wood recovered four million pounds at an average grade of 0.46 per cent U3O8;
  • The location of the acquired assets is positive from a production perspective:
    • The geographical position of both the Shootaring mill and the acquired uranium properties is within one of the historically most prolific uranium production areas in the U.S.
    • Anfield's uranium holdings, which include past-producing mines, lie within a 125-mile radius of the Shootaring mill.
  • The control over the production process from mining to production of yellowcake offers both operational synergies and capital efficiencies;
  • The ability to address the U.S. uranium deficit:
    • Domestic consumption of 57 million pounds of U3O8 per year versus domestic production of only 4.6 million pounds of U3O8 per year.

Anfield's chief executive officer, Corey Dias, commented: "We are extraordinarily excited about this acquisition as it is transformational for the company. With the acquisition of one of only three licensed and permitted uranium mills in the United States, we have significantly accelerated our timeline with regard to becoming a uranium producer. The mill is currently in good condition as it has been on continuous care and maintenance since it ceased operations. Finally, with the recent positive news with regard to Japan's steps towards restarting two of its nuclear reactors, we are confident that uranium will continue to play a significant role in the energy sector both today and into the future."

The Shootaring Canyon mill, located approximately 48 miles (77 kilometres) south of Hanksville, Utah, is a conventional acid-leach facility that is permitted to process up to 750 tonnes of ore per day, with a capacity to process up to 1,000 tonnes per day. The mill was built in 1980 and during its period of operation it produced and sold 27,825 pounds of U3O8. The mill ceased operations in 1982 due to the depressed price of uranium, and has since been kept on care and maintenance. The surface stockpiles at the facility include a historical estimate of 250,000 pounds of U3O8 at an average grade of 0.13 per cent U308.

The portfolio of conventional uranium assets encompasses approximately 48,000 acres (about 19,425 hectares) and consists of: 12 patented mining claims; 1,748 unpatented mining claims in Utah and Arizona; and 17 state mining leases in Utah, Arizona and South Dakota. The portfolio also includes a historical estimate of measured and indicated mineral resource of 6.8 million pounds of U3O8 grading approximately 0.19 per cent U3O8. Finally, surface stockpiles contain uranium ore with a historical mineral resource estimate of approximately 165,000 pounds of U3O8 grading 0.09 per cent U3O8.

The most advanced asset in this portfolio is the Velvet-Wood deposit. Between 1979 and 1984, approximately 400,000 tons of ore were mined from the Velvet deposit at grades of 0.46 per cent U3O8 and 0.64 per cent divanadium pentoxide (recovering approximately four million pounds of U3O8 and five million pounds of V2O5). Some underground infrastructure is already in place at the Velvet mine including a 3,500-foot-long 12-foot-by-nine-foot decline to the orebody. The remaining historical mineral resources of the combined Velvet and Wood mines have been estimated to comprise 4.6 million pounds of U3O8 at a grade of 0.285 per cent U3O8 (measured and indicated resource) and 638,500 pounds of U3O8 at a grade of 0.173 per cent U3O8 (inferred resource).

Other acquired uranium assets include the Frank M deposit, located approximately 12 kilometres north of the mill, with a historical mineral resource estimate of 2.2 million pounds of U3O8 at a grade of 0.101 per cent U3O8. Also included are the Wate and Findlay Tank breccia pipes in northern Arizona. Approximately 1.4 million pounds of the historical resource estimates are attributable to Uranium One's interest in these two breccia pipes. Importantly, the grade of mineralization at these breccia pipe deposits is typically higher than other U.S. deposits (in this case 0.76 per cent U3O8 and 0.23 per cent U3O8, respectively). All historical resources referenced in this report are from technical reports prepared by known mineral exploration and mining consulting firms using current Canadian Institute of Mining, Metallurgy and Petroleum standards and terminology. The company intends to work with the same groups to complete the reports such that they comply with all requirements of National Instrument 43-101. The table summarizes the historical estimate of U3O8 resources present at these properties.

                                               HISTORICAL RESOURCE ESTIMATE

                    Measured                   Indicated                 Inferred            Total measured + indicated
 
Deposit      Tons   Grade      U3O8      Tons   Grade      U3O8     Tons   Grade      U3O8      Tons   Grade       U3O8
                  (% U3O8)      (lb)          (% U3O8)      (lb)         (% U3O8)      (lb)          (% U3O8)       (lb)
 
Velvet    363,000   0.271 1,966,000    71,000   0.384   548,000  174,000   0.174   604,000   434,000   0.290  2,514,000
Wood                                  377,000   0.280 2,113,000   11,000   0.157    34,500   377,000   0.280  2,113,000
Frank M                             1,095,000   0.101 2,210,000   42,000    0.09    75,000 1,095,000   0.101  2,210,000 
Findlay 
Tank                                                             211,000   0.226   954,000
50% of 
Wate 
breccia 
pipe                                                              29,000   0.760   443,000
Total     363,000   0.271 1,966,000 1,543,000         4,871,000  467,000         2,110,500 1,906,000          6,837,000

The company executed definitive agreements with Uranium One to acquire the assets upon the following terms: Anfield will issue to Uranium One the equivalent of $1-million (U.S.) in Anfield shares upon closing; and Anfield will make cash payments to Uranium One of $4-million (U.S.), with $2-million (U.S.) to be paid upon the earlier of July 1, 2017, or the restart of commercial production at the mill (defined as the Shootaring mill operating for 60 consecutive days at 60 per cent of capacity, or 450 tonnes per day) and $2-million (U.S.) to be paid upon the earlier of July 1, 2019, or 24 months following the restart of commercial production at the mill. The company also agrees to make cash deposits to replace the long-term government reclamation bonds that are currently in place over the mill as a surety. A $5-million (U.S.) deposit will be made to the current bond-providing institution at closing, and within 24 months following closing, the company will make an additional deposit to cover the remaining amount of the reclamation bonds.

Contemporaneous with this agreement, Anfield, Uranium One and U.S. Energy have entered into an amended assignment and assumption agreement whereby Anfield will assume the obligations of Uranium One relative to Uranium One's agreements with U.S. Energy under revised terms negotiated between Anfield and U.S. Energy. These terms state that: Anfield will, upon closing, issue $2.5-million (U.S.) in Anfield shares to U.S. Energy, to be held in escrow and released over a period of 36 months from closing; Anfield will make cash payments of $5-million (U.S.) in two tranches of $2.5-million (U.S.), with the first following 18 months of commercial production and the second following 36 months of commercial production.

The acquisition is subject to regulatory approval.

Disclaimer

Anfield is not treating the historical estimate as current mineral resources or mineral reserves. A qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves.

R. Tim Henneberry, PGeo, adviser to Anfield, is a qualified person as defined in National Instrument 43-101, who has reviewed and approved the technical content of this news release.

We seek Safe Harbor.

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