URANIUM COULD BECOME THE DARLING METAL OF 2013
Those of you holding uranium stocks should be smiling as takeovers
and mergers were announced this January that gave a lift in stock
prices of those involved and other uranium explorers who could
be possible candidates for such transactions. Out of the Saskatchewan
Athabasca Basin saw Denison Mines Corp. (DML-TSX-V) sign a binding
letter of intent, pursuant to which Denison will acquire a portfolio
of uranium exploration projects from Fission Energy (FIS-TSX-V),
as well as Fission's exploration interests in all other properties
in the eastern part of the Athabasca Basin, its interests in two
joint ventures in Namibia, plus its assets in Quebec and Nunavut.
Denison has agreed to offer shareholders of Fission 0.335 shares
of Denison for each share of Fission held, conditional upon, among
other things, certain assets of Fission being spun out to a new
company (NewCo) to be held pro rata by current Fission shareholders.
NewCo assets will include, among others, a 50% interest in the
Patterson Lake (PLS) property located in the western Athabasca
basin. The transaction values the assets at approximately $70
million based on the closing price of Denison on January 15, 2013.
Denison is a uranium exploration and development company with
interests in projects in Saskatchewan, Zambia and Mongolia. Denison
has 22.5% ownership interest in the McClean Lake uranium mill,
located in northern Saskatchewan, which is one of the world's
largest uranium processing facilities. Partners comprise operator/manager
AREVA Resources Canada Inc (70%) and OURD (Canada) Ltd. (7.5%).
The plant is licensed to produce 8.0 million pounds of uranium
per year and designed to process the high grade Cigar Lake uranium
ores without down blending. The McClean Lake mill is on standby
and schedule for operational startup this fall. Denison's flagship
exploration project is the world class Phoenix deposit located
on its 60% owned Wheeler River project in the Athabasca Basin.
Fission has been a successful uranium explorer with holdings in
Saskatchewan, Quebec, Alberta, Peru and Namibia. Their Patterson
Lake South Project in the Athabasca Basin with partner Alpha Minerals
Inc. (AMW-TSX-V) has recently reported high grade uranium drill
hole intersections which triggered the Denison takeover.
Denison stock rose a few pennies to $1.50 with the announcement,
up from $1.25 at years' end. Fission traded up to 76-77 cents
in mid-January up from the 60 cent range. Alpha performed the
best trading up to $2.10 - 2.20 in mid-January, up from $1.75
at years' end.
A second Canadian company to enter the merger regime saw Uranium
One Inc. (UUU-TSX-V) enter into a definitive agreement with Atomredmetzoloto
and its affiliate, Effective Energy N.V. ( ARMZ) under which the
company would be taken private pursuant to a plan of arrangement.
ARMZ and its affiliates currently hold own 51.4 % of the Uranium
One common shares. ARMZ will acquire all outstanding shares for
$2.86 per share, representing a 32% premium to the 20-day volume
weighted average price of the shares on the TSE for the period
ending January 11, 2013. Uranium One has a globally diversified
portfolio of assets located in Kazakhstan, USA, and Australia.
Uranium One stock bounced around the two dollar range in 2012
and closed at years' end at $2.34 and in mid-January rose to around
The fall out effects of the above was felt with stocks like Kivalliq
Energy Corp (KIV-TSX-V) and UEX Corp (UEX-TSX-V) that rose with
the above merger announcements. KIV reported some increased resource
uranium estimates from the their Nunavut projects with the stock
up a nickel to 40 cents, and UEX upgraded their Shea Creek Project,
western Athabasca Basin with an uplift of 7 cents to 80 cents.
Moving over to China I read with interest an article titled -
Foreign uranium exploration steps up a notch. China's National
Nuclear Corporation (CNNC) is fast tracking its uranium mining
exploration in Australia, Africa and Central Asia in a bid to
meet growing demand for the element.
In the wake of the European debt crisis, the state-owned energy
company says it has good opportunities to expand its foreign mining
operations. China is expected to start building inland nuclear
power plants during the 13th Five-Year-Plan (2016-20) at earliest,
and is conducting research and risk evaluation on the construction
of the inland nuclear power plants. China imported 16,126 tonnes
of uranium in 2011, down 6% from the previous year, with 95% of
its uranium imports coming from Kazakhstan, Namibia, Australia
So what does all this mean- uranium once the darling environmental
savior but confronted with Fukushima disasters will soon be forgotten
as energy demands continue to be increased. South Korea will be
adding eleven new reactors to their present 23 in operation now
providing a third of the energy needs. To the speculative investor
uranium should not be neglected Good luck and successful investing.