Item 5.02. Departure of Directors or
Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
On May 17, 2017, the Board of Directors of Energy Fuels Inc.
(the Company) appointed Robert W. Kirkwood and Benjamin Eshleman III to the
Board of Directors of the Company.
In addition, Mr. Kirkwood has been appointed to and Chairs the
Compensation Committee and has also been appointed to the Governance and
Nominating Committee, and Mr. Eshleman has been appointed to both the
Compensation Committee and Governance and Nominating Committee.
Mr. Kirkwood is a principal of the Kirkwood Companies,
including Kirkwood Oil and Gas LLC, Wesco Operating, Inc., and United Nuclear
LLC (United Nuclear). United Nuclear, owns a 19% interest in the Companys
Arkose Mining Venture while the Company owns the remaining 81%. The Company acts
as manager of the Arkose Mining Venture and has management and control over
operations carried out by the Arkose Mining Venture. The Arkose Mining Venture
is a contractual joint venture governed by a venture agreement dated as of
January 15, 2008 entered into by Uranerz Energy Corporation (a subsidiary of the
Company) and United Nuclear (the Venture Agreement).
As part of the Venture Agreement, the Company prepares proposed
programs and budgets on an annual basis. The proposed programs and budgets may
include exploration programs, pre-feasibility studies, feasibility studies, mine
construction, mining, and expansion or modification of operation plans. A
participant may elect to participate in an approved program and budget either
(i) in proportion to the participants respective interest in the Arkose Mining
Venture, or (ii) not at all. In the event that a participant elects not to
participate in a program and budget, then its participating interest in the
Venture Agreement is subject to recalculation in accordance with the Venture
Agreement to reflect the decision not to participate.
The foregoing description of the Venture Agreement does not
purport to be complete and is qualified in its entirety by the full text of the
Venture Agreement, which is filed as Exhibit 99.2 to the Current Report on Form
8-K filed by Uranerz with the United States Securities and Exchange Commission
(the SEC) on January 22, 2008.
United Nuclear contributed $248,745 to the expenses of the Arkose Joint Venture in respect of the fiscal year ended December 31, 2016, and
based on the budget for the fiscal year ended December 31, 2017, it is projected
that United Nuclear will contribute $308,466 in respect of the current fiscal
year.
Mr. Benjamin Eshleman III is President of Mesteña LLC, which
became a shareholder of the Company through the Companys acquisition of Mesteña
Uranium, L.L.C (now Alta Mesa LLC) in June 2016 pursuant to a Membership
Interest Purchase Agreement (the Purchase Agreement) dated March 4, 2016
between Mesteña LLC, Jones Ranch Minerals Unproven, LTD., and Mesteña Unproven
LTD. (collectively the Sellers) and Energy Fuels Holdings Corp, an indirect
subsidiary of the Company (EFHC), whereby EFHC acquired from the Sellers all
the membership interests in Mesteña Uranium, L.L.C., Leoncito Plant, L.L.C., and
Leoncito Project, L.L.C. (the Acquired Companies), in consideration of the
issuance of 4,551,284 common shares of the Company to or to the direction of the
Sellers (of which 4,303,032 common shares of the Company are currently held by
the Sellers). In connection with the Purchase Agreement, one of the Acquired
Companies, Leoncito Project, L.L.C. entered into an Amended and Restated Uranium
Testing Permit and Lease Option Agreement with Mesteña Unproven, Ltd., Jones
Ranch Minerals Unproven, Ltd and Mesteña Proven, Ltd. (collectively the
Grantors), which requires Leoncito Project, L.L.C., to make a payment in the
amount of $600,000 to the Grantors in June 2019 (of which up to 50% may be paid
in common shares of the Company at the Companys election). The Grantors are
managed by Mesteña LLC.
Pursuant to the Purchase Agreement, the acquired properties
(the Alta Mesa Properties) held by the Acquired Companies are subject to a
royalty of 3.125% of the value of the recovered U
3
O
8
from
the Alta Mesa Properties sold at a price of $65.00 per pound or less, 6.25% of
the value of the recovered U
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8
from the Alta Mesa
Properties sold at a price greater than $65.00 per pound and up to and including
$95.00 per pound, and 7.5% of the value of the recovered U
3
O
8
from the Alta Mesa Properties sold at a price
greater than $95.00 per pound. The royalties are held by the Sellers, and Mr. Eshleman and his extended family hold all of the ownership interests in the
Sellers. In addition, Mr. Eshleman and certain members of his extended family
are parties to surface use agreements that entitle them to surface use payments
from the Acquired Companies in certain circumstances. The Alta Mesa Properties
are currently being maintained on care and maintenance to enable the Company to
restart operations as market conditions warrant. Due to the price of U
3
O
8
, the
Company did not pay any royalty payments or surface use
payments to
the Sellers or to Mr. Eshleman or his immediate family members in the fiscal year
ended December 31, 2016 and does not anticipate paying any royalty payments or
surface use payments to the Sellers or to Mr. Eshleman or his immediate family
members during the fiscal year ending December 31, 2017.
The foregoing description of the Purchase Agreement does not
purport to be complete and is qualified in its entirety to the full text of the
Purchase Agreement, which is filed as Exhibit 10.1 to the Companys Current
Report on Form 8-K filed with the SEC on March 8, 2016.