Uranium Resources’ Merger with Anatolia Energy a Clear Winner

The following interview of Mr. Christopher Jones, President and CEO of Uranium Resources Inc. (NASDAQ:URRE) was conducted by phone and email in the week ending August 6, 2015. Uranium Resources (NASDAQ:URRE) is a small cap uranium company focused on closing a proposed merger with Anatolia Energy (ASX:AEK). If the proposed merger closes (anticipated in late September), the resulting company would have a market cap of about US$ 41 million.

Importantly, all references to the merger and pro forma company are subject to the likely, but to be determined consummation of the merger. Words like, should, would, could, anticipated, possible, might, expected, and proposed (and others) are deemed to apply, as appropriate. As this is a verbal / email interview, those conditional terms may not have been used in every reference. Mr. Jones, URI’s management team and Board believe that the merger is likely to close, especially as the support of key shareholders of both companies has been obtained.

Christopher Jones joined Uranium Resources as President and CEO in April, 2013. Mr. Jones has more than 30 years of experience in positions of increasing responsibility in senior management as CEO and in operational leadership roles in the mining and energy industries. He is a member of the American Institute of Mining, Metallurgical, and Petroleum Engineers and is a Professional Engineer registered in Utah and Alberta. Mr. Jones received a Bachelor of Science in Mining Engineering at the South Dakota School of Mines and an MBA from Colorado State University. Please see applicable disclosure(s) at the end of the interview.

Please describe Uranium Resources, Inc., Anatolia Energy Limited and the proposed combined company. 

On June 3, 2015, we announced a transformational merger of Uranium Resources and Anatolia Energy Ltd to create the next ISR uranium producer in the world and a leading international uranium developer with high-quality ISR and conventional uranium projects. The merger would create a dual listed (NASDAQ + ASX) company that has the lowest Enterprise Value per in-situ pound of uranium amongst its uranium peers.

URI shareholders would benefit from near-term production from Anatolia’s low-cost, high-grade Temrezli ISR Project in Turkey. Temrezli’s all-in costs of approximately $30 per pound in Anatolia’s NI 43-101 compliant Pre-Feasibility Study puts the project in the lowest cost quartile in the industry. Temrezli would allow URI to resume production sooner than would otherwise be possible. There is also considerable exploration upside in the greater Temrezli district. We would target construction and initial production as soon as possible, aligning with analysts’ estimates for a uranium price recovery.

Anatolia shareholders would benefit from URI’s vast uranium resources within projects in the major uranium districts of Texas and New Mexico and two licensed processing plants in Texas. There are substantial cap-ex synergies, lowering the estimated $41 million start-up capital for Temrezli by as much as $11 million from relocating URI’s idled Rosita processing plant to Turkey and using our internal engineering experience and expertise. Anatolia shareholders would gain improved liquidity through URI’s U.S. NASDAQ listing. The U.S is the world’s largest nuclear market, highly dependent on imported uranium. Anatolia shareholders would gain exposure to URI’s extensive inventory of uranium resources in the U.S.

The expanded URI would benefit all shareholders from a larger pipeline and large resources in some of the best uranium districts in Turkey and the U.S. We would have a geopolitically diversified and stronger platform for organic growth and corporate transactions and be more favorably positioned with customers. We appreciate the support of major shareholder Resource Capital Funds, one of the world’s largest mining-focused private equity funds. RCF owns 24% of URI. The merger is also supported by Anatolia’s major shareholders, Azarga Uranium, Sprott Asset Management and RMB Resources.

Eric Sprott
Eric Sprott
Sprott Asset Management