Tuesday 22nd September 2020

Resource Clips

Ambitiously acquisitive

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The Mega/Rockgate merger will need 66.66% support from Rockgate shareholders and 50% plus one from Mega shareholders. Denison claims that 31.5% of Rockgate shareholders intend to oppose the merger and that Sprott U.S. Holdings recommends its clients, who hold about 11.2% of Rockgate, vote no.

Should the merger be rejected, Denison’s offer would stand until October 25. Meanwhile Patterson Lake South, which its JV partners hope to put under a single company by November, would presumably be ripe for plucking.

Whether the expansionist Denison does the plucking is pure speculation. Interestingly the company just missed getting PLS in late 2012, during negotiations to acquire Fission Energy. Then the November 2012 discovery hole hit high radioactivity and massive pitchblende at shallow depth, putting an entirely new perspective on PLS. A re-negotiated deal gave Denison most Fission Energy assets, including its 60% interest in Waterbury Lake. But PLS was exempted from the deal and instead spun out to the newly created Fission Uranium.

Consolidation continues throughout the uranium space

Rockgate Capital’s Falea project in Mali is the object
of rival suitors Mega Uranium and Denison Mines.

At the time Fission Energy chairman/CEO Dev Randhawa (now holding the same positions at Fission Uranium) told ResourceClips.com, “I think Denison’s corporate strategy is to be a dominant player like Cameco and Rio,” adding that “I could see Rio taking a run at Denison,” which holds a 22.5% interest in the Roughrider-vicinity McClean Lake mill.

The proposals and deals continue a run of M&A activity in the uranium space. In early 2012 Rio Tinto NYE:RIO wrapped up its $654-million acquisition of Hathor Exploration, overcoming Cameco Corp TSX:CCO to pick up the Roughrider deposit, which hosts 17.2 million pounds U3O8 indicated and 40.7 million pounds inferred.

A reverse takeover of Clermont Capital that began in December and was completed in April put NexGen on the TSX Venture. Its portfolio includes Rook 1, directly northeast of PLS, and Radio, interpreted to be on the same east-west corridor that hosts Rio’s Roughrider and Denison’s Waterbury Lake J zone.

Last January Denison closed an all-share deal worth $10 million to get JNR Resources, which came with several Saskatchewan properties as well as a couple in Newfoundland.

The same month ARMZ, the mining branch of Russia’s state-owned Rosatom, announced its $1.3-billion offer to buy the 48.6% of Uranium One TSX:UUU that it didn’t already own. The plan would take the Toronto-headquartered company private, along with its properties in Kazakhstan, the United States, Australia and Tanzania, and its production forecast of 13 million pounds next year. Shareholders gave their blessing in March but one last regulatory approval—the company hasn’t revealed which one or from which country—has yet to come through. In June Uranium One said it expected to clear that last hurdle in Q3.

The following May U3O8 Corp TSX:UWE closed its acquisition of Calypso Uranium, thereby expanding its holdings around Argentina’s state-owned Cerro Solo and Sierra Pintada deposits, which U3O8 said could be part of a larger uranium district. The company also gained about $3.3 million in cash.

In early September Energy Fuels TSX:EFR formally closed its acquisition of Strathmore Minerals TSX:STM in an all-share deal worth $29.1 million. The transaction combines their American assets to help move towards Energy Fuels’ goal of becoming the top U.S. uranium producer.

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