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The ultimate goal would be to find the Archean basement rocks that were the source of a very large, high-grade boulder field discovered by JV partner Alpha Minerals.
Merger and acquisition activity have further spurred excitement in the uranium space. On January 16 Fission and Denison Mines TSX:DML announced a binding letter of intent in which Denison would pick up Fission and its 60% interest in the Waterbury Lake uranium project, as well as other east basin properties. Fission, in turn, would create a spinout, keeping its share of the PLS JV, other west basin assets and a property in Peru. The new company would pursue other uranium projects too.
You’re going to see us explore more on the rim of the basin where mineralization can start at 40, 50 metres rather than 200 metres. So we’re excited about the new company.—Fission chairman/CEO Dev Randhawa
“The spinco’s going to be very strong,” Randhawa says. “It’s going to have 50% of Patterson plus a whole bunch of cash. We are looking at a number of projects as we speak. We’re probably going to stay in the Athabasca unless there’s an amazing opportunity outside. We think the western side has not been well-explored. It was a myth, I think, when people thought, ‘We’ve found everything in the west, let’s run over to the east.’ That’s especially so on the rim. You’re going to see us explore more on the rim of the basin where mineralization can start at 40, 50 metres rather than 200 metres. So we’re excited about the new company.”
Even though the market rewarded both companies for the LOI, he says, “I don’t think we’re getting full appreciation yet.” In addition to a proportional interest in the new company, each Fission share would fetch 0.355 of a Denison share. Denison closed February 7 at $1.40.
“I think we’re trading at a discount,” Randhawa says. “Hopefully, as we get closer to the definitive agreement and shareholder vote, that gap will close.” The two companies expect to close the deal by April. (Update: The spin-out company Fission Uranium Corp TSXV:FCU began trading on April 30, 2013.)
The spinout, Fission Uranium Corp, won’t emphasize its acronym. But it will retain Fission’s current technical team. “They’re the brains in this company. That’s why we did the deal the way we did. I think we kept the best exploration project and a great technical team.”
Fission Energy shares opened February 7 at $0.74, a penny below the previous close, then hit a daily high of $0.81 before closing on $0.80.
Alpha Minerals stock opened February 7 on its previous closing price of $2.15, then finished the day on a high of $2.49.
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