Ground Breakers: The uranium mergers are coming!
The budding uranium bull market has sparked a fresh flurry of North American merger and acquisition activity this week.
On Wednesday, Australia’s newest emerging producer Boss (ASX:BOE) announced plans to acquire 30% of TSXV-listed enCore’s high grade Alta Mesa In Situ Recovery (ISR) project in South Texas for US$60m cash.
With the Honeymoon and Alta Mesa projects, $1.4bn capped BOE expects to become a multi-mine uranium producer in 1H 2024.
“The outlook for the global uranium market remains strong,” managing director Duncan Craib says.
“With two ISR assets expected to come into operation in 1H 2014 in tier 1 jurisdictions, no punitive legacy off-take agreements, no gearing and our strategic uranium inventory, Boss Energy provides a unique uranium production exposure for investors.”
92 Energy (ASX: 92E) was the first new uranium company to list on the ASX in more than a decade when it joined the bourse almost three years ago.
92E boss Siobhan Lancaster — part of the Extract team which sold the Husab uranium mine for $2.2 billion – has said its debut and subsequent exploration success in Canada’s Athabasca Basin was the catalyst for many other uranium companies to either IPO or peg ground in one of the world’s highest-grade uranium districts.
92E today announced a merger with TSX-listed ATHA Energy at an implied 78% premium to the last 92E share price, and 70% premium to the 30-day VWAP.
ATHA has concurrently entered a deal with fellow TSX play Latitude Uranium.
The three-way merger will create a leading uranium exploration company “with multi-project exposure across Canada’s top three uranium jurisdictions”.
Assuming completion of the transactions, existing shareholders of ATHA, 92E and Latitude will hold ~49%, 25% and 25% of the merged group, respectively.
The 92E board and its two largest shareholders intend to vote in favour of the deal.
“We are very excited to be part of such a transformative transaction to create an unparalleled uranium exploration company focused on Canada’s three major uranium districts,” Latitude CEO John Jentz says.
“The benefits for LUR shareholders are clear, an immediate increase in value combined with ongoing exposure to one of the most robust portfolios of high-upside uranium assets in the entire sector.
“The combined company will be fully funded with C$64 million in cash and boasts a suite of highly complementary uranium assets across the exploration spectrum.
“The combined company will have increased scale and prospectivity and we believe it will be a go-to name in the uranium exploration industry.”
This follows the completion earlier this week of IsoEnergy’s acquisition of fellow TSXV listed Consolidated Uranium, which has past producing mines in Utah and Colorado.
IsoEnergy is up +1200% since the 2018 discovery of the outrageously high grade (48.61Mlbs at 34.5%) U3O8 Hurricane deposit in the eastern Athabasca Basin.
On average, one cubic metre of Hurricane’s high-grade domain weighs over 4.5 tonnes and contains over 5,200lb of U3O8, the company said last year.
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