TITAN URANIUM INC. 
By
Toronto, Ontario and Vancouver, British Columbia - Energy
Fuels Inc. ("Energy Fuels" or "EFR")
(EFR:TSX) and Titan Uranium Inc. ("Titan")
(TUE:TSX-V) today announced they have entered into a Letter
of Intent (the "LOI") to pursue a transaction
whereby EFR will acquire by way of a plan of arrangement all
of the outstanding common shares of Titan (the
"Transaction"). Upon completion of the Transaction,
existing Titan shareholders will own approximately 42% of the
issued and outstanding common shares of EFR, which will then
own 100% of Titan.
Energy Fuels and Titan believe that the Transaction will
provide a number of significant benefits to the shareholders
of both companies, including the following:
- Increased scale and market presence in the uranium sector
- Enhanced near-term production profile
- Focus on US production with low political risk
- Creation of a strong platform for continued uranium consolidation within the US
- Greater financial strength
- Combined management experience and expertise
On completion of the Transaction, Titan shareholders will
receive 0.68 common shares of EFR for each whole common share
of Titan. Based on the 20 day volume weighted average prices
and the closing prices of each company's common shares on
the TSX and TSX-V, on October 24, 2011, this share exchange
ratio represents a premium of 26.3% and 33.6%, respectively,
to the Titan shareholders.
Steve Antony, President and CEO of Energy Fuels commented,
"Energy Fuels is very pleased to be able to add
Titan's very significant NI 43-101 mineral resource to
our pool of assets, and to increase our presence in the
conventional uranium mining space. Following the Transaction
the combined company will have 37 million pounds of measured
and indicated resources and 4.3 million pounds of inferred
resources, placing the combined company among the largest
holders of NI 43-101 compliant uranium resources in the
US."
Chris Healey, President and CEO of Titan added, "We at
Titan are excited at the potential to be part of a growing
future producer, moving towards our stated goal of being part
of a mid-tier uranium producer, with assets recoverable by
conventional mining techniques and located in the
US."
Overview of EFR and Titan and their Assets
Energy Fuels Resources
The Energy Fuels management team has extensive permitting and
operating experience in conventional mining, and has
concentrated on developing the first uranium mill to be
licensed in the US in 30 years. Its Piñon Ridge
uranium/vanadium mill, 12 miles west of Naturita in the
Paradox Valley of western Colorado was granted its final
radioactive materials license on March 7, 2011.
At the same time the Energy Fuels team has assembled uranium
properties in western Colorado, eastern Utah, and northern
Arizona. Energy Fuels has filed NI 43-101 Technical Reports
documenting 1,309,000 tons of measured and indicated resource
at a grade of 0.25% (6,538,000 lbs. contained U3O8) and
986,000 tons of inferred resource at a grade of 0.22%
(4,346,000 lbs. contained U3O8). Significant historical
production in this region came from several miners including
Union Carbide, Atlas Minerals, and Pioneer-
Uravan and major historic resources also remain in place to
be developed.
Additionally, Energy Fuels has two fully permitted mines, the
Whirlwind and Energy Queen Mines and has initiated permitting
on two additional mines, the Calliham and the Sage, both in
southeastern Utah.
Stephen P. Antony, President and CEO of Energy Fuels, is
Energy Fuels' Qualified Person (as defined by National
Instrument 43-101) for uranium projects and is responsible
for the technical information related to EFR's assets
contained in this release.
Titan Uranium Inc.
Titan has focused on exploring and developing uranium
properties in the western USA. Its major asset is a 100%
interest in the Sheep Mountain uranium mine in the Crooks Gap
Mining District of Fremont County, Wyoming. The Sheep
Mountain mine has an NI 43-101 compliant Indicated Resource
of 13,841,000 tons at an average grade of 0.110% eU3O8, (30.4
million pounds contained U3O8). The technical report on the
Sheep Mountain uranium project, dated January 20, 2011 was
prepared for Titan by BRS Inc. Additional information
including the estimation method and cut-off grade may be
found in the report which has been filed on SEDAR.
The Sheep Mountain project is currently at an advanced stage
of permitting. Production expected to commence in 2014, with
a peak production rate of 1.5 million pounds U3O8 per
year.
Titan also has significant interests in uranium exploration
projects in Utah, Wyoming, Arizona and Saskatchewan.
The Titan management team brings extensive uranium
exploration and production experience, including both
conventional and in-situ recovery mining, to the company.
Chris M. Healey, PG (Wyoming), President and CEO for
Titan, is Titan's Qualified Person (as defined by
National Instrument 43-101) for uranium projects and is
responsible for the technical information related to
Titan's assets contained in this release.
Transaction Details
Pursuant to the LOI, the parties have agreed to enter into
exclusive negotiations with a view to entering into a
definitive agreement in respect of the Transaction (the
"Merger Agreement"). The execution of the Merger
Agreement is subject to the following conditions:
- the entering into of support agreements with all directors and officers of Titan and with the two largest shareholders of Titan;
- the entering into of support agreements with all directors and officers of Energy Fuels and with the two largest shareholders of Energy Fuels;
- the prior approval by the boards of directors of each of Titan and Energy Fuels;
- the satisfaction of each party with the results of its due diligence investigations of the other party.
The three largest shareholders of Titan, Pinetree Capital
Ltd., Mega Uranium Ltd., together with their CEO Sheldon
Inwentash, also the Chairman of the Board of Titan, who
collectively own approximately 19% of Titan's outstanding
common shares, and the two largest shareholders of Energy
Fuels, Dundee Resources Limited and Pinetree Capital Ltd.,
who collectively own approximately 24% of Energy Fuels'
outstanding common shares, have indicated their willingness
to enter into support agreements in respect of the
Transaction.
The LOI also provides that, upon signing of the Merger
Agreement and satisfaction of certain conditions, EFR will
lend Titan up to US$1,500,000 in the form of a secured bridge
loan. The loan would be secured against Titan's Sheep
Mountain project, bear interest a rate of 5% per annum
payable at maturity and mature upon the earlier of (i) the
closing of the Transaction and (ii) February 28, 2012. The
LOI also permits Titan to obtain interim debt financing of up
to US$1,000,000 prior to signing of the Merger Agreement.
Following execution of the Merger Agreement, it is
anticipated that completion of the Transaction will be
subject to the following additional conditions:
- approval of the Transaction by Titan shareholders;
- approval of the Transaction by Energy Fuels shareholders;
- court approval of the plan of arrangement; and
- receipt of all required regulatory approvals, including acceptance by the Toronto Stock Exchange and TSX Venture Exchange.
The Merger Agreement will contain customary deal protection
mechanisms, including a break fee payable in certain events,
non-solicitation provisions and a right to match any superior
proposal.
Dundee Securities Ltd. is acting as financial advisor to
Energy Fuels.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain information contained in this news release, including
any information relating to the proposed Transaction between
Energy Fuels and Titan, the benefits and synergies of the
Transaction, future opportunities for the combined company
and any other statements regarding Energy Fuels' and
Titan's future expectations, beliefs, goals or prospects
constitute forward-looking information within the meaning of
applicable securities legislation (collectively,
"forward-looking statements"). All statements in
this news release that are not statements of historical fact
(including statements containing the words
"expects", "does not expect",
"plans", "anticipates", "does not
anticipate", "believes", "intends",
"estimates", "estimates",
"projects", "potential",
"scheduled", "forecast",
"budget" and similar expressions) should be
considered forward-looking statements. All such
forward-looking statements are subject to important risk
factors and uncertainties, many of which are beyond Energy
Fuels' and Titan's ability to control or predict. A
number of important factors could cause actual results or
events to differ materially from those indicated or implied
by such forward-looking statements, including without
limitation: the parties' ability to consummate the
Transaction; the conditions to the completion of the
Transaction, including the receipt of shareholder approval,
court approval or the regulatory approvals required for the
Transaction may not be obtained on the terms expected or on
the anticipated schedule; the parties' ability to meet
expectations regarding the timing, completion and accounting
and tax treatments of the Transaction; the volatility of the
international marketplace; and any other factors described in
Energy Fuels' and Titan's most recent annual and
quarterly financial reports.
Energy Fuels and Titan assume no obligation to update the
information in this communication, except as otherwise
required by law. Additional information identifying risks and
uncertainties is contained in Energy Fuels' and
Titan's respective filings with the various provincial
securities commissions which are available online at www.sedar.com. Forward-looking
statements are provided for the purpose of providing
information about the current expectations, beliefs and plans
of the management of each of Energy Fuels and Titan relating
to the future. Readers are cautioned that such statements may
not be appropriate for other purposes. Readers are also
cautioned not to place undue reliance on these
forward-looking statements, that speak only as of the date
hereof.
This news release and the information contained herein does
not constitute an offer of securities for sale in the United
Sates and securities may not be offered or sold in the United
States absent registration or exemption from
registration.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
For further information please contact
For Energy Fuels Inc.
Stephen P. Antony, President & CEO
Phone No.: (303) 974-2140
Email: s.antony@energyfuels.com
For Titan Uranium Inc.
Chris M. Healey, President & CEO
Phone No.: (604) 925-1810
Email: cmhealey@titanuranium.com
