Fission Uranium Corp. is closing in on a landmark deal with a Chinese company that would represent China’s first direct investment into a Canadian uranium firm.
Fission and state-owned CGN Mining Company Ltd. have signed a letter of intent for CGN to acquire a 19.9 per cent stake in Fission for $82.2 million. The two sides also plan to enter an offtake agreement in which CGN would buy uranium output from Fission’s Patterson Lake South (PLS) property in Saskatchewan.
Companies often sign letters of intent that never turn into firm deals, but Fission chief executive Dev Randhawa said it is “highly likely” this transaction will close next month. CGN announced the deal publicly on Monday, and it put the money in trust with Fission’s lawyers, he added.
CGN is controlled by China General Nuclear Power Corp., one of China’s two giant nuclear power firms. The company raised US$3.2 billion in an initial public offering last year, and is involved in many clean energy ventures.
“You can’t pick a better partner on the world stage when it comes to utilities than CGN,” Randhawa said in an interview.
Kelowna, B.C.-based Fission has said for months that it wants to get an investment from a Chinese partner. Randhawa does not want to sell his company while the uranium market is so depressed, and this investment means he will not have to return to the market for cash over the next two or three years.
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