Uranium Energy’s upgraded offer trumps Denison in race to acquire UEX


Uranium Energy’s latest offer brought an end to the three-way contest

Uranium producers have witnessed an increasing demand for the commodity in the past year.
Uranium producers have witnessed an increasing demand for the commodity in the past year. Photo by Martin Divisek/Bloomberg files

U.S.-based Uranium Energy Corp. is a step closer to acquiring Saskatchewan-based uranium explorer UEX Corp. after making an improved offer Monday that trumped a bid from Canadian miner Denison Mines Corp.

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If UEX shareholders, who will be voting on the acquisition on Tuesday, accept the new offer, they will receive 0.0890 Uranium Energy shares for each UEX share, which is higher than the previous offer of 0.0831 UEC shares for each UEX share, and is about 49 cents per UEX share.

“We are pleased to have come to an agreement … the completion of this transaction will create the largest, diversified North American focused uranium company,” UEC’s CEO Amir Adnani said in a press release on Monday.

In June, Corpus Christi, Texas-based Uranium Energy said that it had entered into an all-share deal with Saskatoon-based UEX with an aim to enter the Canadian market. However, Denison Mines entered the race with an undisclosed proposal which UEX described as “superior” on July 29.

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Uranium Energy’s latest offer on Aug. 8 brought an end to the three-way contest.

“While it is puzzling that the UEX board was not compelled by the premium offer made by Denison, we are nevertheless happy to see exploration assets in the Athabasca Basin so coveted by other industry participants,” Denison CEO David Cates said in a press release.

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Denison’s goal was to acquire 100 per cent of its flagship Wheeler River project, which it says is the largest undeveloped uranium property in the eastern portion of the Athabasca Basin in northern Saskatchewan. It currently owns 95 per cent of the project, while UEX owns the rest.

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UEX CEO Roger Lemaitre believes that the merger with Uranium Energy will create the “go-to” name in the uranium industry.

UEX’s assets are all in the Athabasca Basin and include a 49.1 per cent interest in the Shea Creek project, which hosts about 67.6 million pounds of uranium in indicated resources and 82.8 per cent ownership in the Christie Lake project, which contains 20.4 million pounds of uranium in inferred resources.

Some of its more advanced projects include the Kiggavik and the Millenium, in which the company owns 16.9 per cent and 15 per cent interest respectively. Both these projects are in the feasibility stage, the final phase before a project aims to begin construction.

Uranium producers such as Cameco Corp. have witnessed an increasing demand for the commodity in the past year. In its quarterly call on July 27, Cameco’s CEO said that companies struggling to access renewable energy were gradually turning towards nuclear for electricity.

• Email: nkarim@postmedia.com | Twitter: naimonthefield

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