DALLAS - enCore Energy Corp. (NASDAQ: EU) (TSXV: EU), known as America’s Clean Energy Company™, a uranium producer with a market capitalization of $290 million, has entered into an agreement with Verdera Energy Corp. to sell a subsidiary that holds multiple uranium projects in New Mexico. According to InvestingPro data, enCore maintains a strong liquidity position with its cash reserves exceeding debt obligations, though the company is currently experiencing rapid cash utilization. The transaction, part of enCore’s strategy to offload non-core assets, involves Verdera acquiring the subsidiary in exchange for 50 million non-voting preferred shares, representing about 73% of Verdera’s current shares, royalties from future production, and a cash payment of $350,000.
The properties included in the deal are the Crownpoint, Hosta Butte, Nose Rock, West Largo, and Ambrosia Lake – Treeline uranium projects. The transaction is anticipated to close by March 31, 2025, given all customary closing conditions are met. This strategic move comes as enCore’s stock has seen significant volatility, with InvestingPro analysis showing a 56% decline over the past six months, despite impressive revenue growth of 163% in the last twelve months. Post-closure, Verdera aims to list on a Canadian stock exchange by December 10, 2025, with a possible extension to January 31, 2026.
Upon Verdera’s successful listing, 15 million of the consideration shares will convert into common shares of the listed company, which enCore will retain. The remaining 35 million shares will convert into common shares and be distributed to enCore shareholders via a stock dividend or similar distribution.
William M. Sheriff, Executive Chairman of enCore, expressed that the divestment allows for a more dedicated focus on the New Mexico projects, which aligns with Verdera’s strategy and operational scope. enCore will continue its uranium extraction efforts in South Texas, while Verdera, led by CEO Tim Gabruch, will focus on the newly acquired assets and work towards community engagement and legislative efforts necessary for development.
The New Mexico properties are situated in the historic Grants Uranium District, with the Crownpoint and Hosta Butte projects already holding significant indicated and inferred mineral resources. The district has historically produced a substantial portion of U.S. uranium, highlighting the potential value of these assets. Based on InvestingPro’s Fair Value analysis, enCore’s current market price suggests the stock is fairly valued. Subscribers to InvestingPro can access 14 additional investment tips and comprehensive financial metrics to better evaluate this strategic transaction’s impact on enCore’s future prospects.
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In other recent news, enCore Energy reported a significant increase in revenue for 2024, reaching $58.3 million, up from $22.1 million in 2023. Despite this revenue growth, the company experienced a net loss of $68.0 million, deepening from the previous year’s loss of $25.6 million. The revenue boost was largely due to the sale of 720,000 pounds of uranium oxide at an average price of $81.00 per pound. Analysts at H.C. Wainwright responded to these financial results by lowering the stock price target to $2.75 from $7.00, while maintaining a Buy rating, suggesting confidence in the company’s potential despite revised financial projections.
The company is also intensifying its uranium extraction efforts in South Texas, particularly at the Alta Mesa project. enCore Energy has accelerated its expansion efforts, focusing on improving uranium recovery rates, with an 80% capture rate achieved in just over four months. Executive Chairman William M. Sheriff confirmed the board’s directive for an aggressive action plan, supported by a team of experienced professionals, including Dr. Dennis Stover and Director Mark Pelizza. Additionally, enCore is in the process of recruiting a new CEO with extensive experience in extractive industries to lead the company forward.
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