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Energy Fuels Agrees to Buy Strathmore for $28 Million

Energy Fuels Inc., a uranium producer with operations in the U.S., signed a letter of intent to buy Strathmore Minerals Corp. for C$29.1 million ($28.2 million) in stock to add properties in Wyoming and New Mexico.

Strathmore investors will receive 1.47 shares of Toronto-based Energy Fuels for each share they own, the companies said in a joint statement today. The deal, which is subject to a definitive agreement, represents a 31 percent premium to Vancouver-based Strathmore’s stock, based on closing prices yesterday.

Companies exploring for metals and minerals are being starved of cash after market values plunged this year as commodity prices, including uranium, declined. Strathmore had C$2.95 million in cash at the end of March, 45 percent less than it held as of Dec. 31, according to company filings.

The transaction will allow for operational synergies between Energy Fuels’ White Mesa uranium mill and Strathmore’s Roca Honda project in New Mexico, Rob Chang, a Toronto-based analyst at Cantor Fitzgerald LP, said in an e-mail today.

Strathmore gained 31 percent to 24 cents in Toronto. Energy Fuels rose 6.3 percent to 17 cents.

Uranium, which slid to a seven-year low of $40.25 a pound on April 24, has declined 5.8 percent this year, to $40.75, according to Metal Bulletin data. The price climbed as high as $138 in June 2007.

Energy Fuels’ financial advisers on the deal are Haywood Securities Inc. and Dundee Securities Ltd. and its legal adviser is Borden Ladner Gervais LLP. Strathmore is being advised by Raymond James Ltd. and Blake, Cassels & Graydon LLP.

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