Denison Mines (DML:TSX) agreed to buy Fission Uranium (FCU:TSX) for approximately C$483 million Monday, in one of the largest uranium deals in years.
The merger will involve the two companies being renamed Denison Energy Corp. and be equally owned by Denison and Fission shareholders.
Dev Randhawa, Chairman & CEO of Fission, who will become the CEO of the new Denison, stated:
“This merger will create the uranium industry’s leading exploration and development company at a time when the sector is poised for growth.”
Fission traded as low as $0.65 per share in October of 2014, making Denison’s bid of $1.26 per share a near double.
Despite the price of the merger, Fission Uranium was trading at just $0.99 per share Tuesday morning – up 2% on volume of 6.6 million shares traded.
With global markets, including all commodities in free fall Tuesday, investors were taking a measured approach to both stocks.
Uranium explorers consolidate in Northern Saskatchewan
Northern Saskatchewan’s Athabasca Basin has remained a hot spot for uranium exploration in recent years, despite uranium prices bouncing along the bottom of a near 10-year decline.
We wrote about the Athabasca Basin’s long-term potential in October of 2013 in an article titled Athabasca Basin to Potentially Receive Billions in EU Investment. Below is a short excerpt:
“The Canadian uranium sector, specifically the Athabasca Basin of Saskatchewan, got some great news Friday, October 18th. The recently approved trade deal by Stephen Harper and the Canadian government is believed to begin immediately benefiting uranium miners in the Athabasca Basin.
Saskatchewan Premier Brad Wall wasted no time, saying a new trade deal with the European Union could mean billions for the uranium industry, and his province.”
Click here to read more.
This story was a significant boon to the region in a time when the majority of commodities, specifically uranium, were out of favor.
With Fission and Denison assets now consolidated, another successful uranium explorer, NexGen Energy was reaping the benefits of some added attention this week. The company owns a portfolio of highly prospective uranium exploration assets in the Athabasca Basin, of Northern Saskatchewan.
Two back to back discoveries, the Arrow Discovery in February 2014 and Bow Discovery in March 2015, put NexGen Energy on the map at a time when the majority of uranium exploration companies were falling out of favor. The company’s share price has performed exceptionally well in the past 12 months, rising from a low of $0.265 per share last July to a recent high of $0.89 on June 29th.
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NexGen Energy shares catch bid after Denison and Fission deal
NexGen Energy Ltd. (NXE:TSXV) has defied the odds thus far in 2015, having now risen to become one of the largest junior resource stocks by market cap on the TSX Venture. Its share price has held strong and reacted positively to the merger between Denison and Fission.
NexGen Energy traded within 8 cents of its 52-week high Tuesday morning, as its market cap ballooned to about $195 million.
This is impressive considering commodities are down across the board, the Canadian dollar was getting hammered for its second day in a row and uranium prices remained depressed at U3O8 Price (lb) US$36.50.
NexGen Energy confirms Additional High Grade Uranium at Arrow and Bow
On June 30th, NexGen Energy reported the final assays from the successful winter program on its Rook I property, Athabasca Basin, Saskatchewan. Below is a short excerpt:
“Highlights:
- AR-15-45b confirms the presence of broad, high grade uranium mineralization in the A2 shear between AR-15-41 and AR-15-44b intersecting 37.5 m at 2.46% U3O8 (403.0 to 440.5 m which included 16.5 m at 5.34% U3O8 (417.5 to 434.0 m);
- AR-15-43a intersected uranium mineralization in the A2 shear that consisted of 25.5 m at 1.43% U3O8 (437.0 to 462.5 m);
- The Arrow zone is currently 515 m by 215 m with the vertical extent of mineralization commencing from 100 m and extending down to 920 m, and is open in all directions (a 90 second 3D video of Arrow generated from Leapfrog is available for viewing on the Company website);
- Uranium mineralization confirmed at the Bow discovery, where drilling is currently focused to the northeast on land;
- Five rigs are now turning at Rook I as part of the 25,000 m, $9 Million summer drill program which commenced on June 8, 2015
- The Company is well financed with working capital of $30 Million”
Click here to read the entire press release.
NexGen Energy is looking to expand upon its Bow discovery this summer and play off the growing interest in Saskatchewan’s Athabasca Basin.
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