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Investors are unsure whether Australia-based Paladin Energy Ltd.’s proposed acquisition of Fission Uranium Corp. will succeed, as Ottawa conducts a make-or-break national security review on the transaction, with Chinese influence under scrutiny on both sides of the deal.
In June, Paladin reached a friendly agreement to buy Kelowna, B.C.-based Fission in an all-stock transaction worth $1.14-billion. Fission is developing the Patterson Lake South (PLS) uranium project in the Athabasca Basin region of Saskatchewan, which is projected to eventually account for about 5 per cent of global supply.
When Paladin announced the transaction, it had hoped to close the deal by the end of September because it banked on it not raising any red flags during the initial security review period by Ottawa. But in October, both companies announced that the deal was being subject to an extended review by Canadian Industry Minister François-Philippe Champagne under section 25.3 of the Investment Canada Act, which means he believes there are reasonable grounds the transaction could be injurious to national security.
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