Uranium Royalty completes Sweetwater deal, adding 5M acres and cash flow

Uranium Royalty Corp. completed its Sweetwater transaction on July 27, creating a combined uranium and land royalty company with about 5.4 million acres and five operating mines that generate immediate cash flow.

"This extensive land ownership, encompassing one of the world's largest known trona resources, is expected to provide steady cash flows to advance our uranium aspirations at a time of significant nuclear energy growth," Scott Melbye, chief executive officer, president and director of New URC, said.

Under the arrangement, affiliates of Orion Resource Partners LP and Ontario Teachers' Pension Plan contributed their roughly 92% interest in the Sweetwater Entities to a newly formed U.S.-domiciled parent company. Each URC shareholder received one New URC share per existing share. The company drew US$40 million from a US$50 million Bank of Montreal credit facility to fund cash consideration and transaction expenses.

The transaction transforms URC from a pure uranium royalty stream into a diversified land company with trona, oil and gas, critical minerals and renewable development optionality. Soda ash operations are advancing expansions expected to boost attributable production capacity by more than 60% without additional capital from New URC.

The land package covers Wyoming's Green River Basin, the world's largest known trona deposit, with approximately 850,000 acres of fee surface rights and about 4.5 million acres of mineral rights in fee. The five operating mines rank among the lowest on the global cost curve, the company said.

Uranium Energy Corp., which held 28,967,375 URC shares representing about 18.36% of outstanding stock before the deal, exchanged its holdings for New URC shares. Orion and Ontario Teachers' become the company's two largest shareholders.

The bridge loan matures Jan. 31, 2027, after which the BMO facility converts to a revolving credit line with an accordion feature allowing an additional US$25 million. Borrowings bear interest at the base rate or adjusted term SOFR plus 1.25% to 3.75% per annum.

New URC's common stock begins trading on Nasdaq on July 28. URC shares will be delisted from the TSX at the close of market the same day, and the company has applied to cease being a reporting issuer under Canadian securities laws.

The Wyoming land position also provides potential for uranium exploration in the leading U.S. state for uranium production and resources, giving New URC an element of control uncommon in the royalty sector.

This article is for informational purposes only and does not constitute investment advice.