Denison, Fission argue a merger of equals means a unique position as uranium mid-cap.
Fission Uranium and Denison Mines announced a merger of equals Monday that, if consummated, combines a few, key high-grade assets in a premier uranium mining region of the world in terms of grade. In selling the marriage of two key uranium juniors focused on the Athabasca Basin, the sales pitch was largely focused on the benefit of being a bigger company in a sour mining market.
Fission has emerged in recent years with an important uranium discovery, called Triple R, and first resource that catapulted its prospects as a uranium developer. It has gone from a virtual unknown, chasing a U3O8-mineralized boulder train, to one of the relatively rare junior explorers with a market capitalization counted in the hundreds of millions (~C$400m).
That has helped it catch up to and near equal Denison, a Lundin Group company that has a more established position in the Athabasca Basin. Denison’s assets include another, deeper, but uber grade uranium deposit (60% Wheeler project) and a 22.5% stake in a sizeable uranium toll mill operated by Areva, which processes ore from Cameco’s Cigar Lake mine.
Fission and Denison held a conference call Tuesday and Dev Randhawa, Fission’s president and CEO, was especially keen to drive home the point that Fission was better off as part of a company with access to a mill, additional high-grade Athabasca assets (Wheeler), a larger market cap and a New York listing (Denison’s).
Randhawa argued that the bigger company would gain liquidity and also, with combined assets, be able to throw more weight around in the market from the perspective of buyers interested in uranium assets and the market, where its size might boost its inclusion on mining indices.
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