Uranerz Energy Corp. announced Tuesday it closed on a $20 million state loan, paving the way for the Casper-based uranium mining firm to begin production at its Nichols Ranch in northeast Wyoming.
The financing was secured through the Wyoming Industrial Development Revenue Bond program. The loan carries a 5.75 percent interest rate and is scheduled to be fully repaid within seven years.
"This funding will allow us to initiate production at our Nichols Ranch project," Uranerz President and CEO Glenn Catchpole said in a prepared statement announcing the deal.
He said the company expects to begin production at Nicholas Ranch, which straddles Johnson and Campbell counties, in the next few months. The facility is projected to produce between 600,000 to 800,000 pounds of uranium annually in the first years of production. It is permitted to produce up to 2 million pounds annually.
The state stands to benefit significantly from its investment in Nichols Ranch, said Ben Avery, business and industry division director at the Wyoming Business Council, which oversaw the company's bond application.
The facility is expected to employ 60 people and carry a payroll of $30 million over the bond's seven-year life. Nichols Ranch will also contribute $30 million in mineral severance and ad valorem taxes to county and state coffers over that period.
Avery said the state was impressed by Uranerz's significant investment in the project, having spent $100 million on permitting, mineral rights and capital costs. The bond will cover half of the company's $40 million capital, he said.
"They’ve got significant skin in the game," Avery said.
News of the deal temporarily boosted the company's stock, with Uranerz shares reaching a high of $1.20 on Tuesday before falling back to $1.10. That nonetheless represented an improvement over November, with Uranez spending much of the month trading below $1.
The loan is officially a bond. It was issued by Johnson County and bought by the state. The bond document requires Uranerz to pay back the state, with the company's assets serving as its collateral.