Paladin Energy (ASX:PDN) has inked an all-scrip deal to acquire Canada’s Fission Uranium (TSX:FCU) and list on the Toronto Stock Exchange (TSX).
The Australia-headquartered uranium producer has entered into a definitive arrangement agreement to acquire all of the shares of Fission Uranium in exchange for 0.1076 Paladin shares for each Fission share held.
This values Fission Uranium at C$1.14 billion ($1.25 billion), or C$1.30 per share, which is a 25.8% premium to the closing price of Fission Shares on the TSX last Friday, 21 June, and a 30% premium to the 20-day volume-weighted average price of Fission shares to 21 June.
On completion of the deal, Fission shareholders will own 24% of Paladin, which will have a pro-forma market capitalisation of about US$3.5 billion ($5.26 billion).
Paladin has also applied to list its shares on the TSX so Fission shareholders will receive TSX-listed Paladin shares.
Paladin CEO Ian Purdy says the acquisition, along with the successful restart of the company’s Langer Heinrich Mine in Namibia, is part of its strategy to diversify into top uranium mining jurisdictions.
“Fission is a natural fit for our portfolio with the shallow, high-grade PLS project located in Canada’s Athabasca Basin,” he says.
“The addition of PLS creates a leading Canadian development hub alongside Paladin’s Michelin Project, with exploration upside across all Canadian properties.”
The Athabasca Basin is one the world’s top sources of uranium, currently accounting for about 20% of global supply. The region is home to several major operations, including Cameco’s MacArthur River mine, which is touted as the world’s largest high-grade uranium mine.
Purdy says both sets of shareholders are expected to benefit from the increased scale of the enlarged company, with a combined resource representing “one of the largest amongst pure-play uranium companies globally and a substantially increased international capital markets exposure”.
Fission CEO Ross McElroy says the arrangement significantly de-risks the mine-building financing at PLS.
“With commercial production at Langer Heinrich and further development milestones at PLS, this opportunity will create a diverse pureplay uranium company with current production and a deep pipeline of near and mid-term assets available to investors,” he says.
“Shareholders will have exposure to a producing asset with a long life of mine, located in a politically stable and globally significant uranium jurisdiction with a long history of uranium production, coupled with Fission’s advanced stage, large, near surface, high-grade Triple R deposit at its PLS project located in Canada’s renowned Athabasca Basin.”
Paladin’s Langer Heinrich mine restarted production in March 2024, targeting nameplate production of 6 million pounds of uranium annually over 17 years.
Meanwhile, a previously completed Feasibility Study on Fission’s PLS deposit estimates potential yearly production of 9.1 million pounds of uranium over a 10-year mine life.
The combined company will have a resource inventory of 544 million pounds and a reserve inventory of 157 million pounds.
The transaction is slated for completion in the September 2024 quarter, subject to the satisfaction of all conditions and shareholder approval.
Fission Uranium directors and members of senior management collectively holding 0.7% have indicated their intention to vote in favour of the tie-up.
Following completion, Fission Uranium will be delisted from the TSX, the OTCQX, and the Frankfurt Stock Exchange.
Write to Angela East at Mining.com.au
Images: Fission Uranium Corp.
